National Debt exceeds GDP

[DSGE]

If creditors didn't expect that the US would be able to pay off the debt, they wouldn't lend to the US. We see the opposite; everybody flooding to buy US Treasuries.

Do you plan on being in this downturn for the next 30 years? Even so, growth at at least 1.5% will still happen. But sooner or later the Fed will get off it's arse and close the output gap.

That's just the thing. As shit-poor as we are right now, we're still the best bet going, if you're a gambling man. The problem is, gambling is foolish if your best bet is a bad hand.

First off, what are you talking about gambling for? People buy treasuries because they want a safe place to park their assets and earn a little interest. If they wanted to gamble, they'd pick any other asset to invest in. Second, what do you mean the US is the best bet? There are loads of countries whose economy is in much better shape.

This downturn will likely improve a little, but with our aging population and the number of government dependent folks we have, relative to the number of income and tax revenue generators, it's unlikely that we will ever again be monetarily stable long-term.

You'll have to make some structural reforms, yes, but if buyers of treasury bonds (people who want somewhere safe to go) expected any sort of default in the future, they'd go somewhere else. They'd buy government bonds from any of the other countries with safe debt.

 

[lizzie]

First off, what are you talking about gambling for? People buy treasuries because they want a safe place to park their assets and earn a little interest. If they wanted to gamble, they'd pick any other asset to invest in. Second, what do you mean the US is the best bet? There are loads of countries whose economy is in much better shape.

This downturn will likely improve a little, but with our aging population and the number of government dependent folks we have, relative to the number of income and tax revenue generators, it's unlikely that we will ever again be monetarily stable long-term.

You'll have to make some structural reforms, yes, but if buyers of treasury bonds (people who want somewhere safe to go) expected any sort of default in the future, they'd go somewhere else. They'd buy government bonds from any of the other countries with safe debt.

In the current global economy, there is no safe debt imo. We appear to be following the lead of European countries unfortunately. Just because we're a little behind them, it doesn't mean that we are any safer than they are long-term. There won't likely be any structural reforms, because our populace has become entitlement-minded as a whole, and all the money we are pouring into entitlement programs is not something that is negotiable. It is owed debt, and it's in real money to real people.

 

[DSGE]

First off, what are you talking about gambling for? People buy treasuries because they want a safe place to park their assets and earn a little interest. If they wanted to gamble, they'd pick any other asset to invest in. Second, what do you mean the US is the best bet? There are loads of countries whose economy is in much better shape.

This downturn will likely improve a little, but with our aging population and the number of government dependent folks we have, relative to the number of income and tax revenue generators, it's unlikely that we will ever again be monetarily stable long-term.

You'll have to make some structural reforms, yes, but if buyers of treasury bonds (people who want somewhere safe to go) expected any sort of default in the future, they'd go somewhere else. They'd buy government bonds from any of the other countries with safe debt.

In the current global economy, there is no safe debt imo.

There's lots of debt with effectively zero default risk. Either way, it's not relevant. All that was necessary for my point was that people would start buying debt which was more safe than treasuries.

We appear to be following the lead of European countries unfortunately. Just because we're a little behind them, it doesn't mean that we are any safer than they are long-term. There won't likely be any structural reforms, because our populace has become entitlement-minded as a whole, and all the money we are pouring into entitlement programs is not something that is negotiable. It is owed debt, and it's in real money to real people.

Here's the thing right: there are more countries in the world than just America. How about actually looking at one of those other countries, seeing how different programs are working for them, and actually adopt them yourselves. You talk about an "entitlement-minded" population, but that's basically every developed country. Yet outside the US, you'll find countries with extensive entitlements that don't have long run sustainability problems. All this fucking doom and gloom is bullshit. In Australia we have universal healthcare, superannuation with social security pensions as a safety net, an equally ageing population, interest free loans covering the cost of university, and reasonably extensive welfare. Our debt as a percentage of GDP, since that's what everybody seems interested in using, is around 20%. And up until the GFC we were running large budget surpluses. Structural reform doesn't mean scrapping things completely, it means reforming the structure of them into something more sustainable.

 

[Faun]

Sheesh .. this is hardly a good sign to me but alas Obama/Democrats push for even more national debt..

I'm thinking we are screwed...so Democrats/Obamanomics fans, explain how this is a good thing..

-------------------------

Fiscal watchdogs and Republican lawmakers are expressing dismay at new figures showing the U.S. debt has now exceeded the nation's economic output, a threshold used by President Obama's fiscal commission in 2010 to warn that massive federal deficit spending would sink the U.S. economy.

According to the Bureau of Economic Analysis, the U.S. gross domestic product reached $15.17 trillion at the end of the third quarter 2011. That number is higher today, though a formal report on fourth quarter 2011 growth still has yet to be released. But with the national debt currently at $15.23 trillion and set to go up with the president's latest debt ceiling increase, the 100 percent GDP-to-debt threshold has been reached.

Republicans Blast Obama After National Debt Surpasses Economic Output | Fox News

Deficits don't matter.

 

[Lumpy 1]

Sheesh .. this is hardly a good sign to me but alas Obama/Democrats push for even more national debt..

I'm thinking we are screwed...so Democrats/Obamanomics fans, explain how this is a good thing..

-------------------------

Fiscal watchdogs and Republican lawmakers are expressing dismay at new figures showing the U.S. debt has now exceeded the nation's economic output, a threshold used by President Obama's fiscal commission in 2010 to warn that massive federal deficit spending would sink the U.S. economy.

According to the Bureau of Economic Analysis, the U.S. gross domestic product reached $15.17 trillion at the end of the third quarter 2011. That number is higher today, though a formal report on fourth quarter 2011 growth still has yet to be released. But with the national debt currently at $15.23 trillion and set to go up with the president's latest debt ceiling increase, the 100 percent GDP-to-debt threshold has been reached.

Republicans Blast Obama After National Debt Surpasses Economic Output | Fox News

Deficits don't matter.

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

 

[Lumpy 1]

Japan's debt is over 200% of GDP. It's not important what it is as a percentage of GDP. Debt is a stock, GDP is a flow.

I admit that economics is hardly my strong suit. I'd appreciate if you explained a little better...It's not really a good sign, I would presume...Japan has been suffering for many years as far as I understand..

Holy Shit Batman!!!

[ame=http://www.youtube.com/watch?v=5g5BgqexYcA&feature=related]Batman - Flies - YouTube[/ame]
Batman - Flies

Not to worry Intense.. there's method to my madness...

 

[Faun]

Sheesh .. this is hardly a good sign to me but alas Obama/Democrats push for even more national debt..

I'm thinking we are screwed...so Democrats/Obamanomics fans, explain how this is a good thing..

-------------------------

Fiscal watchdogs and Republican lawmakers are expressing dismay at new figures showing the U.S. debt has now exceeded the nation's economic output, a threshold used by President Obama's fiscal commission in 2010 to warn that massive federal deficit spending would sink the U.S. economy.

According to the Bureau of Economic Analysis, the U.S. gross domestic product reached $15.17 trillion at the end of the third quarter 2011. That number is higher today, though a formal report on fourth quarter 2011 growth still has yet to be released. But with the national debt currently at $15.23 trillion and set to go up with the president's latest debt ceiling increase, the 100 percent GDP-to-debt threshold has been reached.

Republicans Blast Obama After National Debt Surpasses Economic Output | Fox News

Deficits don't matter.

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

 

[Intense]

Deficits don't matter.

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

Not at all. RINO's maybe, trying to fit in and be accepted by the Left? When do Democrats complain? When they see Moderates Imitating them, stealing their thunder. I think you all are stupid and have no foresight. When you spend money like a drunken Sailor, no offense BikerSailor, the least you can do is have something to show for it. Instead you piss it away.

 

[Faun]

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

Not at all. RINO's maybe, trying to fit in and be accepted by the Left? When do Democrats complain? When they see Moderates Imitating them, stealing their thunder. I think you all are stupid and have no foresight. When you spend money like a drunken Sailor, no offense BikerSailor, the least you can do is have something to show for it. Instead you piss it away.

Oh? Which Conservatives lambasted Reagan when he tripled the debt. When Bush Sr. added as much as Reagan but in half the time. When Bush Jr. added more than Reagan, his dad, and Clinton combined ....

 

[Lumpy 1]

Deficits don't matter.

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

Gads.. you call that an explanation...

Well excuuuuse me but I feel you kinda avoided the question...

 

[Lumpy 1]

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

Not at all. RINO's maybe, trying to fit in and be accepted by the Left? When do Democrats complain? When they see Moderates Imitating them, stealing their thunder. I think you all are stupid and have no foresight. When you spend money like a drunken Sailor, no offense BikerSailor, the least you can do is have something to show for it. Instead you piss it away.

Oh? Which Conservatives lambasted Reagan when he tripled the debt. When Bush Sr. added as much as Reagan but in half the time. When Bush Jr. added more than Reagan, his dad, and Clinton combined ....

lets see.. in 3 years Obama has increased the national debt by 33% according to you..

I'd ask you to explain hows that's a "Good Thing" but why bother...

Reagan, Clinton, Bush jr... 8years as Pres. ... Obama, far too much already..

 

[Faun]

Not at all. RINO's maybe, trying to fit in and be accepted by the Left? When do Democrats complain? When they see Moderates Imitating them, stealing their thunder. I think you all are stupid and have no foresight. When you spend money like a drunken Sailor, no offense BikerSailor, the least you can do is have something to show for it. Instead you piss it away.

Oh? Which Conservatives lambasted Reagan when he tripled the debt. When Bush Sr. added as much as Reagan but in half the time. When Bush Jr. added more than Reagan, his dad, and Clinton combined ....

lets see.. in 3 years Obama has increased the national debt by 33% according to you..

I ask you to explain hows that's a "Good Thing" but why bother...

Reagan, Clinton, Bush jr... 8years as Pres. ... Obama, far too much already..

That's it? Just 33%

Sounds right in line with other presidents ...

Carter: 29%
Reagan: 52%
GHW Bush: 41%
Clinton: 19%
Bush: 22%

What's so special about Obama?

 

[code1211]

Oh, okay. So you just have the same reading comprehension problem as Edward. I'll say it one more time for the hard of hearing. It is not important what the level of debt is as a percentage of GDP. It's not like 100% of GDP is a magic number that means you're suddenly living beyond your means. Japan's debt is over 200% of GDP, yet people are still lending to them. Debt is a stock variable. GDP is a flow variable. Obviously having lots of debt isn't good, but expressing that debt as a percentage of GDP is meaningless.

I'll say it as simply as I can so you can comprehend. It is apparent that with the exception of Bullshitting, you have no marketable skills. The meaning of uncontrolled spending surpassing what your total earnings are, is that if you do not adjust, you are living on borrowed time. Hamilton type scheming or Scamming, Farrakhan Math, will not save you from the consequences of your actions. There is no substitute for "Value for Value", no matter how you package it, or how far you search for those gullible enough to trust you, the truth will catch up.

There's no hope for you. I don't know how modern schooling could have left somebody so far behind.

You've apparently never interviewed people for entry level positions.

 

[code1211]

Why is it used?

I cant see how a country or a household can sustain itself if its giving out more than its taking in.

I don't remember ever seeing it used in the economics community. As far as I know it's just the media that uses it.

Yeah see there's the confusion. That's why I tried to enforce that debt is a stock and GDP is a flow. It doesn't mean you're giving out more than you're taking in. It means that the stock of debt is equal to your annual intake. Take a house loan for example. Say a $200,000 loan to buy a house (your debt) on an income of $50,000 a year (your GDP). Your debt when you buy the house is 400% of your yearly income (your GDP). Does that mean you're living beyond your means? Obviously not. You have 20 years to pay your debt. And over those 20 years, you'll likely get raises and have more income each year.

But we don't pay off our national debt, nor does it look like we will be having more income each year for quite some time. In the meantime, our debt keeps growing in proportion to our revenues generated.

What makes this doubly impressive is that the GDP has risen since the Big 0 took office.

His genius is that no matter how good things could get, he manages to make them worse at a geometric rate.

In future years, the Obama Touch will be the antonym of the Midas Touch. This guy is a regular savant.

 

[code1211]

Deficits don't matter.

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

So, 2/3 in 230 years and that last 1/3 in 3 years.

Yeah. Nothing problematic there.

 

[EdwardBaiamonte]

It is not important what the level of debt is as a percentage of GDP.

Of course thats perfectly idiotic. The ratio gives us a good idea whether a society has the resources or economic base to pay its debt.

If we woke up tomorrow to find that European debt was actually
300-2000 % GDP it would trigger an instant depression.

USA debt at 100% is critical because at a tax rate of 20% of GDP,
100% of taxes would be needed to take 8 years to pay off the debt assuming no Federal spending for anything else: military SS Medicare, etc.

 

[Faun]

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

So, 2/3 in 230 years and that last 1/3 in 3 years.

Yeah. Nothing problematic there.

Wasn't a problem when Reagan did it. Wasn't a problem when GHW Bush did it. Put a Democrat in office who builds up debt like a Republican and Conservatives go running for the hills like the world is coming to an end.

 

[EdwardBaiamonte]

I'm guessing you haven't read this thread, personally, I've learned a lot from reading it.

One thing I've learned is that you're wrong, especially at the rate of deficit spending over the past 4 years.

I wonder why Democrats only care about deficit spending and the national debt when their out of power, it's kinda fishy. Perhaps you could explain it...

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

So, 2/3 in 230 years and that last 1/3 in 3 years.

Yeah. Nothing problematic there.

Certainly there is nothing at all problematic about a guy who voted to the left of Bernie Sanders, had 2 communist parents, and is on track to pile up more debt than all other Presidents combined!!

 

[Faun]

I can only guess it's the same reason the only time Conservatives and Republicans complain about the debt is when a Democrat is in office.

We already had 2/3rds of today's debt when Obama became president. When Democrats complained, they were greeted with the same thing I said to you earlier ...

"Deficits don't matter."

So, 2/3 in 230 years and that last 1/3 in 3 years.

Yeah. Nothing problematic there.

Certainly there is nothing at all problematic about a guy with who voted to the left of Bernie Sanders and had 2 communist parents on track to pile up more debt than all other Presidents combined!!

Reagan's parents were Commies?? Who knew¿

 

[EdwardBaiamonte]

Reagan's parents were Commies?? Who knew¿

actually BO had two communist parents and his debt will be more than all other American presidents combined

"The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic." -Barak Obama