The national debt is the largest national security threat!

[Armistead]

The problem is the debt ceiling, we're gonna have to raise it. If we don't our economy will crumble in time. Congress will fight and threaten each other, but they only have a few months to increase it and in the end they will.

Course this is like putting another finger to plug another hole in the Hoover dam. The world economy will be totally different in the future.

[Skybird]

Originally Posted by kraznyi_oktjabr

It's true that China benefits greatly from U.S. as export market and therefore have incentive to keep it going which means buying U.S. bonds. However China as everybody else (at my knowledge) do not have endless cash reserves. Before or later it just simply do not have money to buy bonds.

I believe that China can't accept situation where it's unable to pay to it's soldiers and buy enough 7.62mm rounds for "national security" purposes.

I don't know what will happen when China stops buying. Will American economy simply collapse? Will someone else fund American spending parties?

China has started to lower its dependency on the US market, and has started to jump off the dollar, it also has started to reduce it'S US bonds. More and more European economists also start to warn again st investing into US debts any longer. The Swedish Riksbank, the leading bank in Scandinavia, has stopped trading US bonds alltogether. Other big European banks, so I was told on weekend, prepare to follow the example, it is kept hidden to minimise negative shortterm conseqeunces for these banks and to avoid political pressure.

US thinks it is untouchable. But it no longer is. The longer it hesitates to learn that lesson and tries to bully and intimidate others into buying worthless US boinds, the harder the crash on learning day. The US has a fundamental structural problem, and its financial resources have started to break away. For Americnas, this is unimaginable , since America is believed to be what Rome was for Romans: the shining centre of civilisation in a dark universe of barbarism.

And if anyone thinks that China with rising marks would ever accept to endlessly depend on the US while America is in freee fall, then he has not understood whom he is dealing with. It would be incompatible with Chinese self-understanding to be the most superior community on Earth, to accept this injust "coexistence" endlessly, and at their own cost. The dragon has awakened once again, and in the long run he will not accept any poor, bigmouthed debtor as an equal to talk to.

If you read the signs in the news, you can see that it already has started. It is the small nuances that are important.

The US, in all this historic change, will either accept to relaunch, and then on a much smaller scale accept a place in the second row of seats only, by becoming bancrupt. Or it will reject the simple facts and try to turn the wheel of time bvackwards - and by that become most likely a rogue nation itself and a totalitarian dictatorship fighting against all odds, and all others. That are the two most likely scenarios I can imagine, currently, ignoring unpredictable events like global pandemics, meteor impacts and such things.

[krashkart]

Well said, Skybird. I think the past ten years alone should have taught us a thing or two. We are about to get our teeth kicked in, and unfortunately we've been ignoring the warnings for years.

Not to knock or insult my own country, but our culture has (or at least "had") a nasty habit of thinking that we're the best thing since buttered toast. Pride often goeth before a fall, right? I have sincere doubts that we will remain as a major power for much longer. While sad in a way, it is also not entirely surprising that this would come to pass. Eventually, all empires must collapse under their own enormity.

Interesting times ahead, yes?

[Skybird]

Well, America expects others to behave in a self-damaging and stupid way - and that is a sign of a certain kind of stupdity - at least blindness - on its own side. It is not clever to depend on a "strategy" that bases on the other's cooperation by acting stupid.

All these are developements for which the mighty and powerful and expensive American military is no suitable tool. Instead, due to its costs, it serves as a catalyst for these developements and causes costs to the internal structure of the country: the money it takes to run this military is not available for education, modernising the economic structure, the powergrid, the traffic network...

Ironic, from a historian's point of view.

It'S sad, in a way, since there is so much potential still left. But it gets wasted by not making necessary, dramatic changes to the country'S general course and setup. It seems it wants to stay like it has been, forever, and tramples with the feet like a stubborn child that does not get what it wants.

But every box of Monopoly gets delivered with only so many toy notes of money, and not more. Sorry, kid.

[Armistead]

It's already obvious politicains are preparing us for a two class soceity. It seems politicians are more interested on how to keep and create wealth globally for a few. I have no doubt somewhere in our future economics will be run by some world council. All leading economist say were headed for collapse, you just won't hear it from the government. Slowly as possible government will move more and more into poverty, a lil at a time so chaos doesn't ensue. All studies show 50% of the next generation won't have medical insurance, medicare and caid can't be funded. They've ignored the fixes for 20 years, now it's too late, millions will suffer. Fuel will be an issue, food, wages lowered. Anyone under 50 knows they can forget seeing all the money they paid into SS and medicare, etc..

We've had 11 years in which the Social Security program did not take enough in FICA taxes to pay the current year's benefits, so they use Trust Bonds to make up the difference.

We're nearing a 100 trillion in total debt across the board, money spent or money currently owed, 60 trillion in medicare alone to those paid in...but it's all gone. Add SS and the national debt, state debt, etc...all that money went somewhere.

I think we all know we've longed crossed the point of it can be fixed.

It's really no different than any past history of great nations. Again, the middle class will be a thing of the past.

[gimpy117]

yes, thats true, the upper class wield far too much power in this country, soon it will be either you are rich or poverty. I am scared for my future

[Skybird]

From: Der Tagesspiegel

[TorpX]

The situation is not good, that's for sure.

I think we all know we've longed crossed the point of it can be fixed.

I believe the nation's problems can still be fixed, but people have to make an effort. I'm mainly talking about our leadership here. Borrowing, spending and printing dollars won't fix anything though. Incredibly, Most Democrats and many Republicans don't seem to grasp the situation. They appear to be in complete denial.

As Skybird said, the plane is running out of fuel and will go down one way or another. We can either make a rough landing now or pretend nothing is wrong and crash later. Capt. Obama wants to fly towards Socialism, and will pilot us out over the ocean. Democrats say anyone who disagrees is an extremist. The passengers get to vote in November. We'll see what happens then.

[kraznyi_oktjabr]

Originally Posted by TorpX

The situation is not good, that's for sure.



I believe the nation's problems can still be fixed, but people have to make an effort. I'm mainly talking about our leadership here. Borrowing, spending and printing dollars won't fix anything though. Incredibly, Most Democrats and many Republicans don't seem to grasp the situation. They appear to be in complete denial.

As Skybird said, the plane is running out of fuel and will go down one way or another. We can either make a rough landing now or pretend nothing is wrong and crash later. Capt. Obama wants to fly towards Socialism, and will pilot us out over the ocean. Democrats say anyone who disagrees is an extremist. The passengers get to vote in November. We'll see what happens then.

I would like to add that First Officer What-Ever-His-Name-Was? wants to take heading to Capitalism. Cut taxes, not to touch anyones entitlements or benefits and see if fuel tank magically fills...

P.S. No I'm not saying that First Officer is any better than Captain nor otherwise around.

[MH]

Originally Posted by kraznyi_oktjabr

I would like to add that First Officer What-Ever-His-Name-Was? wants to take heading to Capitalism. Cut taxes, not to touch anyones entitlements or benefits and see if fuel tank magically fills...

American Dream.....


Maybe Americans need to accept the fact that taxes need to be uhm....adjasted.

[magic452]

To adjust taxes would only be giving them a bigger shovel to dig an even deeper pit for us to fall into. They would just spend it on pork barrel projects or social engineering (vote getting) programs.

NOTHING at all would be done about the deficit or debt just more spending.
The government needs to get out of most of the businesses it's in.

"He who governs least governs best." Don't remember who said that.

Is it too late, maybe but one thing for sure is we will find out soon enough.
If there isn't some real movement on spending in the up coming battle over the debt ceiling
there may be little hope left.

Magic

[TorpX]

Originally Posted by MH

American Dream.....


Maybe Americans need to accept the fact that taxes need to be uhm....adjasted.

As magic said, this will not work. It has already been tried. When a "compromise" has been reached higher taxes are levied, but the deal soon falls apart, as Congress has little discipline. After the promised spending cuts evaporate, all that is left are the tax increases. Really, the extra tax revenues just encourage Congress to spend more. Furthermore, higher taxes would almost certainly initiate a "double-dip" recession, and likely be counterproductive.

Unfortunately, I think the debt ceiling will be raised again. Very few in Congress seem to have the psychological toughness to do otherwise. I'm not sure they grasp the magnetude of the problem yet. I would not have much hope, were it not for the Tea Party folks. I think it all depends on the next election. If Obama and his counterparts in congress, have another four years to suck the life out of the nation, I think we will be utterly bankrupt.

[mookiemookie]

Originally Posted by TorpX

Unfortunately, I think the debt ceiling will be raised again. Very few in Congress seem to have the psychological toughness to do otherwise.

I'm not sure you fully understand what would happen economically if it were not raised. You would revive the credit crisis of 2008. And you'd make it seem mild in comparison. Treasury yields would skyrocket because of the flood of investors, foreign and domestic, dumping their holdings. In a misguided attempt at austerity, you'd end up bankrupting the country with sky high interest rates. Those higher rates would freeze all borrowing by not only the government, but by business and industry. You'd crash the economy.

Money market funds would break the buck - you'd destroy every pension fund, public fund, retirement fund and investor in the country. You think your city/state/municipality has trouble now? If their cash holdings were wiped out, you'd see trouble for real. Good luck keeping a police force or firefighters when you have no money to pay them.

God help us if the people in charge of things have the same lack of economic understanding as those opposed to raising the debt ceiling do.

[kraznyi_oktjabr]

Originally Posted by TorpX

... I think it all depends on the next election. If Obama and his counterparts in congress, have another four years to suck the life out of the nation, I think we will be utterly bankrupt.

Sorry but in my opinion you are little bit unfair to Mr. Obama. Most of the debt he is dealing with is not here because of his actions but inherited from his predecessors (no only Bush Jr.). I don't say Obama is any better but putting all blame to one man (as I undertand your text to mean, correct me as appropriate) is a bit unfair.

[Armistead]

Originally Posted by mookiemookie

I'm not sure you fully understand what would happen economically if it were not raised. You would revive the credit crisis of 2008. And you'd make it seem mild in comparison. Treasury yields would skyrocket because of the flood of investors, foreign and domestic, dumping their holdings. In a misguided attempt at austerity, you'd end up bankrupting the country with sky high interest rates. Those higher rates would freeze all borrowing by not only the government, but by business and industry. You'd crash the economy.

Money market funds would break the buck - you'd destroy every pension fund, public fund, retirement fund and investor in the country. You think your city/state/municipality has trouble now? If their cash holdings were wiped out, you'd see trouble for real. Good luck keeping a police force or firefighters when you have no money to pay them.

God help us if the people in charge of things have the same lack of economic understanding as those opposed to raising the debt ceiling do.

The Gop knows they must raise the debt ceiling and they will, but they will posture and threaten for political purposes. Obama didn't creat this mess, he inherited it from both parties. Fact is he can do little about it, congress is mostly responsible. Bush with help from both parties started the mad debt. I think both parties lost a time to correct it, everything they do is still politics and special interest. If the GOP were in control, they would've done the same thing Obama did.