CDZ How much can the US spend

[Onyx]

I've heard projections that the US debt will increase anywhere between 10 trillion to 30 trillion under Donald Trump. While ten trillion sounds more reasonable, it brings up an important question.

How much more debt can the US take out before its triple AAA credit rating begins to suffer? Can the US pay for another war?

 

[Weatherman2020]

I've heard projections that the US debt will increase anywhere between 10 trillion to 30 trillion under Donald Trump. While ten trillion sounds more reasonable, it brings up an important question.

How much more debt can the US take out before its triple AAA credit rating begins to suffer? Can the US pay for another war?

They slept for 8 years and now they awaken.

S&P Strips U.S. of Top Credit Rating

 

[Onyx]

They slept for 8 years and now they awaken.

S&P Strips U.S. of Top Credit Rating

That article is from 2011. The United States has a triple AAA credit rating in almost every index.

*S&P still has the US at AA+

 

[Weatherman2020]

They slept for 8 years and now they awaken.

S&P Strips U.S. of Top Credit Rating

That article is from 2011. The United States has a triple AAA credit rating in every index to my knowledge.

OMG, a whole 5 1/2 years ago, ANCIENT NEWS!
And no, S&P still has a reduced credit rating for the Obama economy.

 

[Onyx]

And no, S&P still has a reduced credit rating for the Obama economy.

Alright, so the US has a AA+ credit rating with S&P. The majority of indexes have the US credit rating at triple AAA.

The question remains. How much more debt can the US government sustain before there is an uncontested drop in the credit rating?

 

[Weatherman2020]

And no, S&P still has a reduced credit rating for the Obama economy.

Alright, so the US has a AA+ credit rating with S&P. The majority of indexes have the US credit rating at triple AAA.

The question remains. How much more debt can the US government sustain before there is an uncontested drop in the credit rating?

I'm sorry, but this sudden urge to discuss wars and economy that started Nov 8 is hysterical.

 

[Onyx]

I'm sorry, but this sudden urge to discuss wars and economy that started Nov 8 is hysterical.

The US was not expecting a 10 trillion $ increase in debt before November 8th.

 

[Weatherman2020]

 

[Onyx]

View attachment 112561

What point are you trying to make with that graph? Are you trying to deflect from the huge increase in federal spending that will take place under Donald Trump, and how difficult it will be to pay back debts?

 

[Weatherman2020]

 

[Staidhup]

Liberals when in power are not concerned about the national debt or deficit spending its only when they are not in control that they become concerned. So where were all this liberals chanting about deficits and debt over the previous 8 years?

 

[Onyx]

I was naive to think there could be a serious discussion on this.

 

[Staidhup]

Waiting for your serious discussion, oh wise clairvoyant one please elaborate on what your crystal ball has to say and how you would correct what has yet to happen?

 

[FA_Q2]

I was naive to think there could be a serious discussion on this.

Yes, you were.

The debt has been exploding over the last 16 years and suddenly asking that question when the government transitions over is disingenuous at best.


Were you worried about it 8 years ago when we got started on this path?

Anyway, we can actually sustain it because we are the worlds reserve currency. A better question to ask is how long until the world gets tired of the way we have been treating our fiscal policy and designates a new reserve currency. THAT is when our debt becomes a real problem - the day we no long have the power to control what it means.

 

[Onyx]

The debt has been exploding over the last 16 years and suddenly asking that question when the government transitions over is disingenuous at best

Were you worried about it 8 years ago when we got started on this path?

1. I was in fact discussing this during the Obama administration
2. I am not worried about the debt. I hope the US credit rating does go down
3. There were not plans for a ten trillion debt increase until Donald Trump

Man, you are really intellectually dishonest.

Anyway, we can actually sustain it because we are the worlds reserve currency. A better question to ask is how long until the world gets tired of the way we have been treating our fiscal policy and designates a new reserve currency

I've actually heard this argument several times when I was debating it under the Obama administration (intellectually dishonest). If the US debt keeps piling up, then the US wont be the reserve currency for much longer, which is why that is a rather moot point.

 

[william the wie]

View attachment 112563

One of the major problems neither of you are mentioning is that right this minute two Blue Wall States, CA and IL are in non-bond default. Either tax reform or inability to come up with matching funds for various forms of federal aid will cause a gigantic economic problem, possibly before the 2018 election.

 

[Toronado3800]

I've heard projections that the US debt will increase anywhere between 10 trillion to 30 trillion under Donald Trump. While ten trillion sounds more reasonable, it brings up an important question.

How much more debt can the US take out before its triple AAA credit rating begins to suffer? Can the US pay for another war?

The answer probably lies in interest rates. Consider the mortgage payment on a house at 5% interest vs when it balloons to 15%.

I like the debt to gdp charts.

Is there a chart showing debt cost with interest to gdp?

 

[william the wie]

I'm sure there is but I don't know where

 

[usmbguest5318]

While ten trillion sounds more reasonable

I don't know if it's more "reasonable" or not, but if the estimates of $10-$30 trillion are accurate, $10T is preferred.

Can the US pay for another war?

Well, the short answer is "as much as the rest of the world will allow." The dollar's status as the world's prevailing reserve currency has become a facet of U.S. power, allowing the United States to borrow effortlessly and sustain an assertive foreign policy. But the capital inflows associated with the dollar's reserve-currency status have created a vulnerability, too, opening the door to a foreign sell-off of U.S. securities that could drive up U.S. interest rates. Accordingly, it comes down to this: if the U.S. doesn't piss off the wrong nations, the debt it can carry has no material limit provided it's assumed for prudent ends.

The predicted outstripping of public debt relative to national GDP among rich nations, not just the U.S., has in recent years have wrought a resurgence of the popularity of austerity, long a thing that follows a cycle as do hemlines, spurring policymakers to stem spending growth and increase tax revenues. [1] Is this concern warranted? Well, the conventional wisdom says no, but Rogoff, Bulow, Obstfeld, Reinhart have argued yes. Most notably and directly in “Growth in a Time of Debt” (summary here), Rogoff and Reinhart assert sovereign debt creates a burden on the rest of the economy.

The rigor of their analysis, for as compelling as it seems, leaves out a key element: they don't offer the barest evidence or illustration of how public indebtedness restrains growth. Both Shiller and Krugman have remarked upon this gap. They are correct and even Rogoff's devotees must admit that deeper consideration is needed to take Rogoff's notions as convincingly conclusive. While debt matters, nobody denies that, the precise way it impinges upon an economy isn't as clear-cut as Reinhart-Rogoff would have us believe.

How much public debt is too much? There is no straightforward answer: state and public investor capriciousness, foreign policy actions and their impacts, productivity, savings ratios, pension holdings, etc. all factor into the equation. It's been typically understood that many countries, especially the U.S., can afford to have significantly higher ratios of government debt to national income. Of course, the way in which we calculate these debt/income ratios may also be misleading, but so far, I'm not aware of anyone having come up with new, sustainable and accepted alternatives.

Able to afford it, however, is a pragmatically critical question, but equally important are the answers to the normative questions about assumptions of public debt. Perhaps there is a better place for inquiry in a venue such as this.

Note:

1. That is, of course, except Trump who aims to reduce debt via his proposal of the perennially with taxpayers popular notion of decreasing tax rates while also increasing federal defense outlays. The solvency of his ideas in this regard are predicated, presumably, on his regulatory retrenchments and tax cuts catalyzing sufficiently greater inflows to offset the tax rate reductions. That idea violates the rationally arrived at empiricism of even the most fancifully optimistic projections, and Trump nor his factotums have offered any competing rigorous analysis to the contrary.