The Looming Issue
 

Nothing I need to say that this graph will not. We can take a lot of pain now, or unbearable pain later.

To Ponder:

Or, the owners of U.S. debt are in for a very close buzz cut.

Makes you wonder how the Middle Kingdom will accept that.

Inscrutable.

Turns my stomach how its seen as acceptable....

Imagine if they used their brains and offered up.some.kind of corp or individual tax break per million donated to reduce the deficit what could happen... just another case of the rich getting richer and the man keeping my peoples down.


Posted from my iPhone/Mobile device

we should be paid for our military services
i've always thought, by country's benefiting
by our military might. Take Kuwait for example
they should be sending us free oil.
then maybe other countries would step up to the plate
instead of us always footing the bill.

DING DING DING!! Give that man a cigar!

We could have implemented a fix long ago that would have only involved minimal pain. But we kicked the can down the road. So now, at a minimum, the pain will be bad. The longer we wait, the worse it will be.

Historically, both parties were responsible for dodging their duty and faiing to lead in this area. I have no idea how this plays out, I'm no economist. Almost too scary to contemplate...

Since we cannot be sure of what the masterminds who regulate American money truly have in mind, predictions of where this trend will lead may not be possible. Sure, common sense would predict that if the trend continues, there will be economic collapse.

But not all economists subscribe to common sense. There are all these different "theories" which have important areas of disagreement. Maybe there is no one theory that covers all economic parameters and contingencies.

Not that this covers enough economic ground to solve the our debt problem, but there is this list of policies or actions on which there is substantial agreement across the field. From Wikipedia:

Agreements:

According to various polls cited in Principles of Economics by Harvard Chairman and Economics Professor Gregory Mankiw, economists have the following agreements by percentage.[154][155]
1.A ceiling on rents reduces the quantity and quality of housing available. (93% agree)
2.Tariffs and import quotas usually reduce general economic welfare. (93% agree)
3.Flexible and floating exchange rates offer an effective international monetary arrangement. (90% agree)
4.Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90% agree)
5.The United States should not restrict employers from outsourcing work to foreign countries. (90% agree)
6.The United States should eliminate agricultural subsidies. (85% agree)
7.Local and state governments should eliminate subsidies to professional sports franchises. (85% agree)
8.If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85% agree)
9.The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85% agree)
10.Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84% agree)
11.A large federal budget deficit has an adverse effect on the economy. (83% agree)
12.A minimum wage increases unemployment among young and unskilled workers. (79% agree)
13.The government should restructure the welfare system along the lines of a “negative income tax.” (79% agree)
14.Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78% agree

Obviously, there will not only be disagreement about these 14 points, but even outright rejection of some points as governmental overreach such as, for example, point 14 which has the smallest percentage of agreement.

So, theoretically, if it were possible to achieve political agreement (since all 14 points involve government control of some kind) to institute them all as policy and acted upon as such . . . maybe the trend could be reversed?

Big IF.

We are 14-20 years too late on this, started with the Bush era and accelerated under Obama. Though Obama says we are starting to decelerate the acceleration :smash:

In terms of Social Security and Medicare, we are more than 20 years too late. Actuaries have been saying, for at least 40 years, that the structure of those entitlement programs could never withstand the demographic tsunami called the "Baby Boomers". This has been a slow moving train bearing down on us for 40+ years, and we didn't have the political will to step off the tracks.

Simple way to put it, when your interest payment on your credit card is more than the principal it's over. No more credit cards for you.

True. But if you can print your own money, you don't need a credit card. You just need fools who'll keep loaning you their value earned dollars so they can be perpetually repaid by a greater amount of inflated, unearned, fiat funny money. Of course, if the loaner and the loanee are, by conspiracy, in cahoots, in effect one and the same, inflated numbers are of no consequence. The giant monopoly game is simply played over and over. When the main player goes bankrupt, the board is closed, re-opened and the money is again distributed among the participating players, in nominally greater amounts though not really worth more in buying power since the previous debt represented by all the properties, houses, hotels, etc. have merely gone up in price accordingly to represent that greater debt. Of course, the hidden small folks who are never visible in the game between the big players--the financial midgets who live in those houses, or travel on those railroads, or pay the utility bills and mortgages or go directly to jail if they don't--those folks don't constantly get to go past go and get their $200 like the big players do. But they have to actually manage to pay for the higher prices on less flexible incomes that the big players, who print and redistribute money, have. Inflation actually hurts their pockets, their little fixed stash which is not automatically renewed in greater amounts with every new round of the game.

So those little folks are the real fools who loan their earned money to the government and its big boy cronies, by voting to keep them in power and collectively paying the higher tax burden, by foolishly surrendering the power the birthright some distant Founders gave them, giving that power to government which repays the loan with worth less dependent strings attached. When you pledge your lives, your fortunes, and your sacred honor, not to secure liberty, but to secure promises of comfort based on a corrupt Ponzi scheme, your lives have less meaning and are less in your own hands, your fortunes dwindle in buying power and over-regulated personal ownership, and your honor no longer exists.

But generation to generation, change is not so noticeable. Humans, having a greater propensity and ability to adapt, find ways to be happy, to enjoy life in the circumstance to which they are born. Unfathomable things like trillions of dollars have no relation, no substance, seemingly, to their immediate, very flesh and blood real lives. They elect those other guys to take care of those complex things that no-one but "experts" can understand--government, business regulation, taxes, infrastructure, foreign relations, borders, and they seem to always do a good job. There's always some folks who complain about something, but none of it seems to make much sense, since things always wind up going along OK. Always doomsayers but no doom. Life is good.

What, me worry?

Sometimes a pilot friend of mine's saying comes to mind...."It's always darkest right before you hit the trees."

Maybe Hillary can fix it just like Bubba did.

RAVEN FOR PRESIDENT
I could not agree more that foriegn gov't should repay U.S. otherwise it never ends. They continue to ask for our help then throw us out on our nose.

Your proposal might have some effect on that debt chart that John posted for this thread. But it would require a change in thinking regarding our aid to foreign governments.

If we aid them on strictly charitable or philosophical grounds, we could hardly ask them to pay us back. That would not be charitable.

If we aid them because it is in our interest, security or otherwise, we should not expect to be paid back for that which benefits us in the first place.

But, if we were to give aid neither on charitable/philosophical, nor on general self-interest grounds, but strictly on financial mercenary grounds, we could negotiate up front for payment for our services. If some country was desperate for our military assistance, we could set a fee schedule based on a cost/price analysis, with enough profit to help with our debt payments. Sort of a U.S. Guns For Hire program.

Might go against founding principles, and "higher ground" stuff, but those "principles" are old news and that "higher ground" nonsense is all blowhard crap. Show me the money. That's what it's about now, isn't it? Hell, this could even almost maybe or possibly pay off the debt. I mean, we could sell to the highest bidder. What's it worth to a rich kingdom rolling in oil dollars like Saudi Arabia to knock off, say, Shia threats, or ISIS threats. Or, say, Iran and their buddies, to wipe out Israel, saving them from having to waste billions or trillions on nuclear programs and such. We could wipe out Russia for a huge fee which Europe and the Ukrainians could surely afford. Or, maybe, if Russia saw that writing on the wall, Russia could up the ante. The bidding could be astronomical. And then there's those perpetual conflicts in Africa. What could be the price for wiping out Boko Haram? Asian conflicts? North and South Korea. e.g.? India, Pakistan? Unlimited possibilities. Forget the debt--the whole military/industrial complex economy would be booming with full employment in creating and replenishing weapons and military equipment. An economy sustainable by the never-ending world conflicts.

Think about it.

The way Bubba fixed the budget was actually quite ingenious and I doubt his Worst Lady can do the same.

Through a shrewd sleight of hand, when the Roth IRA was created, it included the option to "roll over" your traditional IRA and pay the taxes. Right a the peak of the tech bubble, Billion$ in previously untaxed money was rolled over and taxed at 30% of its market value (which happened to be close to the peak), the governments coffers were flooded with unplanned revenue, the budget appeared to be balanced and the sheeple were happy.

Yeah that option, which did not have an effect on the debt interest payment, was a one time thing which is no longer available. And the tech bubble burst anyway, so the illusory budget surplus was immediately cut in half and continued to dwindle into the Bush administration's budget problems which were exacerbated by 9/11. And the response to 9/11 required re-establishing a stronger military which had been diminished under Clinton, so needed more "spending" and stretching of the budget, etc., etc.

So, yeah, Clinton didn't "fix" anything, certainly not the rising national debt. The Clinton's were no less in bed with the big boys and big money than other politicians.

Great sum up of the sheep who believe that "it will never happen." As long as they get what the government "gives" them they don't care.
What me worry? As long as our leader Alfred E Newman plays golf during every crisis, including the one in Denmark, everything must be fine.