Whats going to happen when America can't borrow anymore money?

[Toddsterpatriot]

Ok so we're 18 trillion dollars in debt most of which is owed to china. So with the situation in Greece whats going to happen when we can't pay back that debt? I know we are a much bigger country and have a higher GDP but we spend and owe so much money that not even the billions of dollars the government collects in tax is enough , so we end up borrowing more and printing more money which is decreasing the value of the dollar if I'm not wrong.

Actually, the dollar is getting stronger and stronger right now.

We are the cleanest shirt in a pile of dirty shirts. While our debt is bad, it is nothing compared to the rest of the developed world. There is a currency war on right now. A race to the bottom, and we are losing.

What i meant about china is that out of all the countries we owe them the most most money I know that most of our debt is owed to ourselves and how come they say that the coming economic collapse is gonna be 10x worse than the great depression

Well, for the past six years someone has predicted another crash every five minutes. The law of averages says a doom and gloom prediction will eventually coincide with the next crash.

A wise man once said you can predict what the next crash will be, or you can predict when the next crash will be, but you cannot predict both at the same time.

I will tell you what the next crash will be.

The next crash will be the implosion of the Fed's bond bubble. As interest rates rise, the bonds that were bought during the bubble (ZIRP, QE I, QE II, QE III, QE Infinity, etc.), will suddenly become worth a lot less than the price that was paid for them.

Just like with housing, those bonds will be "underwater".

And just like with the housing bubble, there will be a loud POP! A much bigger pop, too, because the bond bubble dwarfs the housing bubble.

Now...the Fed (Ben Bernake, actually) swore they could handle the collapse of the bond bubble. Helicopter Ben swore with 100 percent confidence (literally) that we would have a soft landing.

Yeah. Just like Bush said we would have a soft landing from the housing bubble collapse. Go figure.

I don't buy it.

There is no way the Fed will be able to sell all those bonds and not lose a shitload of money. In fact, we are going to have to invent a new term because "shitload" won't even approach the disastrous losses of the bond bubble's fallout.

And that's not to mention the derivatives built on the bond bubble.

By the way, those "conservative" funds in your 401k portfolio? Those ones that say they invest in bonds? You better read the fine print. You will find a lot of "conservative" bond funds invest in bond derivatives.

Anyway, that's my guesstimate about the next crash. And I really do pray every day I am very, very wrong.

There is no way the Fed will be able to sell all those bonds and not lose a shitload of money.

Ok so we're 18 trillion dollars in debt most of which is owed to china. So with the situation in Greece whats going to happen when we can't pay back that debt? I know we are a much bigger country and have a higher GDP but we spend and owe so much money that not even the billions of dollars the government collects in tax is enough , so we end up borrowing more and printing more money which is decreasing the value of the dollar if I'm not wrong.

Actually, the dollar is getting stronger and stronger right now.

We are the cleanest shirt in a pile of dirty shirts. While our debt is bad, it is nothing compared to the rest of the developed world. There is a currency war on right now. A race to the bottom, and we are losing.

What i meant about china is that out of all the countries we owe them the most most money I know that most of our debt is owed to ourselves and how come they say that the coming economic collapse is gonna be 10x worse than the great depression

Well, for the past six years someone has predicted another crash every five minutes. The law of averages says a doom and gloom prediction will eventually coincide with the next crash.

A wise man once said you can predict what the next crash will be, or you can predict when the next crash will be, but you cannot predict both at the same time.

I will tell you what the next crash will be.

The next crash will be the implosion of the Fed's bond bubble. As interest rates rise, the bonds that were bought during the bubble (ZIRP, QE I, QE II, QE III, QE Infinity, etc.), will suddenly become worth a lot less than the price that was paid for them.

Just like with housing, those bonds will be "underwater".

And just like with the housing bubble, there will be a loud POP! A much bigger pop, too, because the bond bubble dwarfs the housing bubble.

Now...the Fed (Ben Bernake, actually) swore they could handle the collapse of the bond bubble. Helicopter Ben swore with 100 percent confidence (literally) that we would have a soft landing.

Yeah. Just like Bush said we would have a soft landing from the housing bubble collapse. Go figure.

I don't buy it.

There is no way the Fed will be able to sell all those bonds and not lose a shitload of money. In fact, we are going to have to invent a new term because "shitload" won't even approach the disastrous losses of the bond bubble's fallout.

And that's not to mention the derivatives built on the bond bubble.

By the way, those "conservative" funds in your 401k portfolio? Those ones that say they invest in bonds? You better read the fine print. You will find a lot of "conservative" bond funds invest in bond derivatives.

Anyway, that's my guesstimate about the next crash. And I really do pray every day I am very, very wrong.

There is no way the Fed will be able to sell all those bonds and not lose a shitload of money.

Why does the Fed have to sell any of the bonds, let alone all of them?

 

[Antares]

When they stop "creating" money there will be a reset, a very LARGE reset.

 

[Toddsterpatriot]

When they stop "creating" money there will be a reset, a very LARGE reset.

The Fed stopped expanding their balance sheet in October.

 

[Flash]

The only way to get out of massive debt like the US has is to promote massive inflation. I think the Democrats have that planned for the future.

 

[Mr Natural]

1. Sell Alaska to Russia or Canada.

2. Sell Hawaii to Japan.

3. Sell Texas to Mexico.

Those three should be enough.

 

[Antares]

When they stop "creating" money there will be a reset, a very LARGE reset.

The Fed stopped expanding their balance sheet in October.

You are correct, thank you

 

[g5000]

Why does the Fed have to sell any of the bonds, let alone all of them?

To control inflation.

 

[g5000]

The only way to get out of massive debt like the US has is to promote massive inflation. I think the Democrats have that planned for the future.

The inflation plan is not exclusively a Democratic one.

But yes, there are only six ways for a government to get out of debt, and devaluation is the favorite in the absence of GDP growth.

 

[g5000]

Moon Bats never worry about paying back money. They think everything is free.

Only the willfully blind believe our massive debt is solely because of "moon bats".

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

 

[g5000]

When they stop "creating" money there will be a reset, a very LARGE reset.

A great deal of the money that has been created since 2008 has been buried in the back yard, and that is why we have not yet seen any serious inflation.

Once the economy gets some steam going, that money is going to be dug up out of the back yard and put into circulation. Then we will start seeing some real inflation as the velocity of money increases.

And then the Fed is going to have a helluva job getting that under control.

 

[SwimExpert]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

Now ^^THIS^^ continues to be bullshit.

 

[g5000]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

Now ^^THIS^^ continues to be bullshit.

Nope. Tax expenditures add up to at least $1.2 trillion every year, and are paid for by heavy borrowing and higher tax rates.

 

[Flash]

Moon Bats never worry about paying back money. They think everything is free.

Only the willfully blind believe our massive debt is solely because of "moon bats".

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

I am sorry but all the money that is made in the US is not the property of the US government. The government is not automatically entitled to more of the money that I make than is already required by law.

The problem is not that we tax too little but that we spend too much. That is a concept that seems to elude most Moon Bats.

 

[Flash]

The only way to get out of massive debt like the US has is to promote massive inflation. I think the Democrats have that planned for the future.

The inflation plan is not exclusively a Democratic one.

But yes, there are only six ways for a government to get out of debt, and devaluation is the favorite in the absence of GDP growth.

It is the big spending Liberals that have ran up this debt to astronomical levels and you are right they are not all Democrats but the Democrats do drive that train for the most part. Stupid Republicans go along with it instead of putting a stop to it.

 

[Where_r_my_Keys]

Ok so we're 18 trillion dollars in debt most of which is owed to china. So with the situation in Greece whats going to happen when we can't pay back that debt? I know we are a much bigger country and have a higher GDP but we spend and owe so much money that not even the billions of dollars the government collects in tax is enough , so we end up borrowing more and printing more money which is decreasing the value of the dollar if I'm not wrong. So my question is whats going to happen when we cant borrow anymore money, is the economy going to tank?

ps
What i meant about china is that out of all the countries we owe them the most most money I know that most of our debt is owed to ourselves and how come they say that the coming economic collapse is gonna be 10x worse than the great depression

Think of it as stored shift, a principle of nature where energy is stored, until the resisting force can no longer oppose it.

The Left abused the power of the Federal Government and the Federal Reserve to subsidize the losses resulting from Leftist (unprincipled) policies set upon the financial industry, that precluded the means for the market to correct. Now the problem is MUCH worse, with MUCH more debt in play and fewer options.

The failure will come when the market can no longer sustain the near 0% interest, and when that happens, just like when the real estate values went to and beyond the point where the market could sustain them.

You can expect it shortly after the GOP takes the Presidency in 2017. This will, like the last catastrophic failures of socialist policy, in 2001 and 2008, result in the Intellectually Less Fortunate, blame the GOP... because 'they were in charge!".

And it will be truly: Catastrophic.

 

[SwimExpert]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

Now ^^THIS^^ continues to be bullshit.

Nope. Tax expenditures add up to at least $1.2 trillion every year, and are paid for by heavy borrowing and higher tax rates.

*shakes head*

This is Franco and Steve McGarrett level thinking. You're using so wide and vague and so ridiculously dumbed down conceptualizations, your position could just as easily support the premise that god gets fucked in the ass by a Persian unicorn on Tuesdays at supper time.

There are specifics, then there are generalities. There are deductions, then there are tax expenditures. Deductions are general rules whereby basic taxation is assessed. For example, the first $10,000 of income is nontaxable. This is a general rule. On the other hand, if you bought three houses in the past year off the profits of the sale of a boat at least 45 feet long but more than seven years old, and use two houses as alternating residences while the third has been unoccupied for 9 of the past 12 months, with no more than 2 consecutive months of occupancy, and the difference between the year the house was built and the year of your birth comes out to be an even number not equal to 6, and the house is currently either blue or brown and a second color.....that is a tax expenditure.

Tax expenditures are specific exceptions to general taxation that only apply to a select qualified individuals or entities, typically for the purpose of using government policy to encourage or compensate certain behaviors, or to hand out political favors.

 

[g5000]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

I am sorry but all the money that is made in the US is not the property of the US government.

Tax expenditures are a transfer of wealth.

Every dollar you deduct or exempt from your taxes is a dollar someone else has to make up for, or it has to be borrowed, no matter how small the federal budget.

That money you think is yours that you are keeping is actually coming out of someone else's pocket. You are leeching.

 

[g5000]

There are specifics, then there are generalities. There are deductions, then there are tax expenditures. Deductions are general rules whereby basic taxation is assessed. For example, the first $10,000 of income is nontaxable.

And tax rates have to be higher because of that to make up the difference for that exemption.

On the other hand, if you bought three houses in the past year off the profits of the sale of a boat at least 45 feet long but more than seven years old, and use two houses as alternating residences while the third has been unoccupied for 9 of the past 12 months, with no more than 2 consecutive months of occupancy, and the difference between the year the house was built and the year of your birth comes out to be an even number not equal to 6, and the house is currently either blue or brown and a second color.....that is a tax expenditure.

Tax expenditures are specific exceptions to general taxation that only apply to a select qualified individuals or entities, typically for the purpose of using government policy to encourage or compensate certain behaviors, or to hand out political favors.

And again, everyone's tax rates have to be higher because of that.

A tax expenditure is a tax expenditure which results in deficit spending (borrowing) and higher tax rates.

 

[Antares]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

Now ^^THIS^^ continues to be bullshit.

Nope. Tax expenditures add up to at least $1.2 trillion every year, and are paid for by heavy borrowing and higher tax rates.

g thinks ALL money is the Governments and anything they let you keep is an "expenditure".

 

[Antares]

Do you take advantage of deductions, exemptions, and credits on your tax bill? If so, you are participating in the biggest part of the problem, by far.

Now ^^THIS^^ continues to be bullshit.

Nope. Tax expenditures add up to at least $1.2 trillion every year, and are paid for by heavy borrowing and higher tax rates.

*shakes head*

This is Franco and Steve McGarrett level thinking. You're using so wide and vague and so ridiculously dumbed down conceptualizations, your position could just as easily support the premise that god gets fucked in the ass by a Persian unicorn on Tuesdays at supper time.

There are specifics, then there are generalities. There are deductions, then there are tax expenditures. Deductions are general rules whereby basic taxation is assessed. For example, the first $10,000 of income is nontaxable. This is a general rule. On the other hand, if you bought three houses in the past year off the profits of the sale of a boat at least 45 feet long but more than seven years old, and use two houses as alternating residences while the third has been unoccupied for 9 of the past 12 months, with no more than 2 consecutive months of occupancy, and the difference between the year the house was built and the year of your birth comes out to be an even number not equal to 6, and the house is currently either blue or brown and a second color.....that is a tax expenditure.

Tax expenditures are specific exceptions to general taxation that only apply to a select qualified individuals or entities, typically for the purpose of using government policy to encourage or compensate certain behaviors, or to hand out political favors.

g is as fucked up as it gets, a true collectivist.