SUBSIM Radio Room Forums - Admirable, Desirable -- Not Payable

SUBSIM Radio Room Forums (https://www.subsim.com/radioroom/index.php)

- General Topics (https://www.subsim.com/radioroom/forumdisplay.php?f=175)

- - Admirable, Desirable -- Not Payable (https://www.subsim.com/radioroom/showthread.php?t=144661)

Admirable, Desirable -- Not Payable

Obama and the balloning US debt:
http://www.spiegel.de/international/...591459,00.html

Quote:

The Obama team has been dealt probably the most complicated cards in recent US history. According to estimates by independent experts, the promises Obama made to his voters during the two-year campaign will cost more than $2 trillion (€1.58 trillion) to fulfill. That includes $1.5 trillion (€1.2 trillion) for a new health care policy in the coming 10 years, $150 billion (€120 billion) for an infrastructure program and $360 billion (€284 billion) for a major tax reform to be implemented by 2013. Obama also gave taxpayers the magnanimous promise that 95 percent of them would see their taxes lowered.
But then, in the final spurt of the campaign, the underlying economic situation changed. The financial market collapsed, growth fizzled and the labor market began to falter. Both parties were forced to give President George W. Bush the power to spend $700 billion (€553 billion) to save the banks, a bailout plan that will weigh heavily on the national budget for years to come. And no one knows whether this sum will be sufficient in the end.
Despite the government's cash injection, the financial crisis has now reached the so-called real economy. Insurance companies in the United States are ailing, many credit card companies are on shaky ground and the entire American automobile industry, after losing money for years, now has serious liquidity problems. The country's largest carmaker, General Motors, cannot survive without government help. Chrysler has announced plans to lay off 25 percent of its salaried workforce.
But in the run up to the election, Obama was both unwilling and unable to scale back his lavish promises. He remained generous, even adding more promises that would cost additional billions.

Current US debt already is at 10.x trillions, and skyrocketing.

It seems reality finally brings his feet back to contact with Earth again, either by stepping back from many of his promises, or by boosting america's debts even more, which will kill even more of america's financial credibility in the world. That is no Obama-bashing by me - a president MacCain would have been faced with the same miserable realities.

Mabe McCain already feels happy not to have won, while Obama maybe already is cursing.

Quote:

Originally Posted by Skybird

Current US debt already is at 10.x trillions, and skyrocketing.

What will it be in january? :o

Yes we can, :yep: But what? :hmm:

strange for that country which has so much natural ressources

If 1 apple costs 1 thaler and you get 2 thalers every week, but every week you buy not 2 but 4 apples since you think you can pay them later, the outcome of the calculation suddenly does not appear as strange anymore.

The yearly GDP of the US is 14.3 trillion
+
the current debt is 10.x trillion, rising
=
the US effectively is bankrupt.

It can only live on by living on tick. and there you are at the thing with the thalers and apples again. If one apples costs 1 thaler, and you only have 2 thalers but always buy 3 apples and say you want to pay for 1 more apple of the past you took but have not payed for, then... Bed-story's over, good night, my children...

The situation does not leave much space to any president for creative reforming of the US, no matter his name and party. you must stop buying 4 apples and buy just 2, and of these 2 you buy just 1, and spend the other thaler for one of the unpayed apples of the past. suddenly, you do not have 4 apples per week, but just 1.

Quote:

Originally Posted by jpm1

strange for that country which has so much natural ressources

You'd be surprised at how little natural resources can affect a country's wealth sometimes. Case-in-point, the Soviet Union, Russia, India, and to a lesser extent, pre-reform China. And of course, there are the various nations of Africa sitting on diamonds and other mineral resources that rank among the poorest countries on earth.
Economic freedom is the most important factor:yep:

I had been watching some interviews with economics experts on various news channels leading up to the election. They pretty much all said the same thing (paraphrasing); "It's all well and good to make promises and want to make changes but there simply won't be enough money available to do it. The Bush Administration has pretty much emptied the coffers with uncontrolled spending over the last 8 years. What had started as a "surplus" back in 2000 is now a huge, multi-trillion dollar deficit."

(BTW, I'm not Bush-bashing here. This is what others had said.)

So, add to that the current economic woes and the eroding of the middle class and it's not hard to see what the reality will be IMO...:shifty:

Quote:

Originally Posted by jpm1

strange for that country which has so much natural ressources

Well also consider that a great deal of those natural resources cannot be accessed or used at least not profitably due to 'enviromental' restrictions.

Quote:

Originally Posted by DeepIron

The Bush Administration has pretty much emptied the coffers with uncontrolled spending over the last 8 years. What had started as a "surplus" back in 2000 is now a huge, multi-trillion dollar deficit."

A couple of points:

1. Bush hasn't spent a dime that Congress didn't appropriate for him to spend, and the last two annual budgets were created by the Democrats.

2. That Y2K "surplus" was based on completely unrealistic tax revenue PROJECTIONS that were never going to be realized. This was done by the Clinton administration in order to make their party look good in the coming elections. As soon as the Repubs took over and reality set in that surplus vanished into the thin air it came from.