Is It Too Late?

[Luddly Neddite]

I think a better question to be asking is this, "What happens when we default?"

I'm not completely convinced it will be all that bad for the average American. It's sort of like not getting your allowance as a kid...what are you going to do? Leave home? What are our creditors going to do? Not sell their cheap imports here? I'm sure they'll find fertile markets in Burkina Fasso and Cuba for their (just looking at my desks) clock radios, electic fans, cell phone, Citizen watches, etc...

I'm sure I'll get clobbered for saying as much but we're all sort of in the same boat finance-wise (other countries and us I mean). The old saying goes like this: If you owe me $10 and can't pay it, you've got a problem. If you owe me $10,000,000 and can't pay it, WE've got a problem meaning that I likely owe a lot of that $10M to someone else.

Default (or practically default) hasn't worked out too well for the average Greek, whose standard of living has gone back to the 1950s. It would be monumental.

Most American's standard of living has not risen, or gotten better since the 50s while a very small percent has continued to rise through the roof. The majority of Americans are supporting the very few.

Thankfully, we have a president who is on the side of the poor and middle class. Now if the Rs would just get out of the way, stop filibustering jobs bills, maybe even introduce a jobs bill - Wouldn't that be nice? Instead, everything the R does is aimed at making it worse and/or taking away freedoms.

They don't care and won't listen, but write your congress person and demand that they stop screwing us with anti-freedom and anti-rights bills.

 

[Luddly Neddite]

Also meant to comment on the op ... Why lose hope when its clear that we are making progress every single day? In spite of the R's obstruction, Obama has been able to make a small dent in the deficit. And, in spite of the Rs fighting the creation of jobs, Obama has done exactly that - created jobs.

We need more and we it faster but that's not going to happen. Rs won't let it.

 

[HereAmIAmMe]

Oh for all the doom and gloom. Can none of you see that we are about to embark on a long period of massive economic growth? The federal debt is not at all unmanageable. When the economy does pick up, tax revenues will increase dramatically and spending on safety net programs will decrease. When these two things happen, the vast majority of the yearly deficit will disappear. The rest we will be able to work on.

Now why am I so optimistic? There are a number of things that are happening in the economy that are going to create the perfect storm for what I believe will be a long period of a booming economy. The first of these is the fact that Americans have been paying down their personal debt. This is happening slowly because so many are out of work or underemployed, but despite that, Americans are slowly but surely paying down their debts. At the same time, American business is stockpiling trillions of dollars in cash. They don't see any demand to warrant spending that money on expansion at the moment, but much of that is because everyone is paying down debt rather than spending money.

Add to that the fact that we are becoming less reliant on foreign energy and that it is actually getting cheaper, and now you should start to understand what lies ahead, and that is an economy where personal debt has been paid down so people begin spending money again, business starts expanding, and with lower energy costs, the whole thing takes off.

One last thing to add to this. Young people have been holding off on starting families, because they feel they cannot afford it. This is going to change also, and even if they don't feel they can afford it, at some point they will start their families whether they can afford them or not. That will add to demand in a very big way, and this will get the economy growing like we haven't seen for some time. As for how many young people there are, the number is around 75 million who are currently between the age of 20 and 35. You should ask yourself why Warren Buffet is fairly optimistic about the future. He is not some stupid old man who just got lucky. He understands how the economy works and he sees what I see. He knows this economy is going to take off like a rocket and we're not that far off from it starting.

Just a small thought, but how are the young who are supposed to jump start demand going to pay for it when they have an increasingly huge pile of student loans to pay off first?

 

[FA_Q2]

As Keynesian Economics advocates, you are SUPPOSED to pay that debt incurred from a large recession during the good times. An important part of a stable economic plan that we have, as a nation, simply ignored.

I wouldn't say ignored--the question was put before the nation and considered relatively recently.

Paying down that debt obviously requires taking in more revenue than needed to pay the government's expenses in a given year. We once had a boring candidate who suggested using that surplus revenue to start paying down the debt. His opponent suggested eliminating the surplus: "The people of America have been overcharged, and, on their behalf, I'm here asking for a refund."

Which did you vote for?

And you think that there would have been large differences? When was the last time that our debt decreased?

We had a politician making baseless promises as they always do and none of that would have materialized at all. Yes, we have completely ignored this. Completely and utterly.

 

[Underhill]

I am starting to give up hope (and lose interest) that anything can be done to reverse our economic decline. We seem to be on a set course through 2016, after which our financial obligations and debt will have exceeded any reasonable expectation of our economy's ability to support.

Are we like a hopelessly underwater homeowner who lost his job and has been putting his mortgage payments on a credit card? Will we keep doing this until we hit our credit limit and then wait for our creditors to foreclose? I know people who have done this and came out pretty well, so maybe this is the way to go.

Seriously, do any of you, Left or Right, think we can keep on this course indefinitely? If not, what are our options, or is it too late?

Do NOT lose hope.

As the fiscal mess is ENTIRELY MANMADE, this contrivance we call the national debt is as FAKE as our democracy.

No, I am not being glib, I am not kidding one bit.

There is more than enough wealth. its the system we have of sharing it that must be solved.

So, in your opinion, we don’t have a debt problem because the real problem is that we don’t take enough wealth from the people and redistribute it?

Sorry but that is crazy. There is no redistribution problem. We have been redistributing the crap out of our wealth for decades. It is not working. We have a real deficit problem. The government has outgrown the economy almost every single year, tax receipts have fully recovered already and we are still running trillion dollar debts. Tax receipts hit 2.4 trillion in 2012 and have only been higher in 2 other years. 07-08 they were 2.5 and that was entirely based on a false economy of lies.

There is a REAL deficit problem and I cannot fathom how you can ignore it? How do you rationalize the debt increasing a trillion dollars a year as meaningless? Our spending level a full 45 percent over receipts!

That is NOT sustainable and yet we don’t see anything pointing to a change any time soon. If only we could steal more from people to pay that off right? That does not work. I am sorry but there is no way to tax our way to that king of cash.

I think both are real problems.

We used to transfer wealth effectively. We just don't anymore.

But the debt is a real problem too. I'm not convinced it's as serious as some here think, but it is an issue.

It's a problem with a military that is acting as security for most of the rest of the world. It's a problem because we spend trillions on banks but squabble about whether to save Social Security or not.

Our economy is driven by corporate greed as is our debt, and yet people keep talking about entitlements as the problem. It's bunk. We have a temporary problem with baby boomers. Beyond that our entitlements could use some tweaks but aren't in bad shape.

Where we have gone insane is military spending. And while some may claim we need it, I would say for what? Forget about loosing our status as a super power. At the rate we are going our GDP per capita could be closer to that in Serbia than that of Norway.

So we spend through the nose because we are afraid of a threat to our democracy. But the same spending is the number 1 threat to our economy that supports that democracy.

We have put ourselves in the position of the worlds policemen. A position we cannot sustain. Wonder why North Korea is heating up? Shorty may be crazy but he knows we can't afford another war. The same is true with Iran. 20 years ago, we could have taken them both on. Now we can't even entertain the thought with any serious intent.

The lie we have been fed is that entitlements are the problem. In the short term they are a problem, mainly because of the baby boomers and the economic downturn. But the reason this problem is so monumentally hard to face is bloated military spending.

 

[MeadHallPirate]

I am starting to give up hope (and lose interest) that anything can be done to reverse our economic decline. We seem to be on a set course through 2016, after which our financial obligations and debt will have exceeded any reasonable expectation of our economy's ability to support.

Are we like a hopelessly underwater homeowner who lost his job and has been putting his mortgage payments on a credit card? Will we keep doing this until we hit our credit limit and then wait for our creditors to foreclose? I know people who have done this and came out pretty well, so maybe this is the way to go.

Seriously, do any of you, Left or Right, think we can keep on this course indefinitely? If not, what are our options, or is it too late?

ahoy Jwoodie,

we've been on this course, more or less, fer the last forty years...almost half a century.

i think things will be alrighty, matey. it won't be the end 'o the world, or anythin' like that. i believe thar will still be football on sundays and folks will still have the right to bear arms.

i think what ye will see, eventually, will be the last 'o the Baby Boomers and the mass 'o Generation X linkin' thar armadas and beatin' to quarters to fight off younger generations in this country - as the youth feel vexed at the way old people tend to inhale the entirety 'o the nation's financial resources, leavin' nothin' fer the future.

that will be an interestin' political confrontation, but with luck at least some 'o this board won't live to see it. they'll leave this mortal coil under the warm blanket 'o Medicare and Social Security, a pile 'o unpaid invoices billed to future taxpayers, and it won't be thar problem.

aye.

- MeadHallPirate

 

[jwoodie]

Shiver me timbers, but methinks ye might have a point!

 

[ecinicola]

our situation is certainly in dire shape and a crucial one. When you are in debt this deep, it is imparative to stop spending and cut back. Unfortunately these politicians only want us to cut back and not them. The sum of money going out to these politicians is outragious, and the cuts should start with them. And why should they continue to get salaries once they are outta office also? That needs to stop. Why should we be paying for secret service for them once they leave office also? And they need to stop taking vacations like they do and we pay for their intire familys vacations. the cuts need to start with them.