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The United States is Insolvent

financialsense.com — "The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP." "The future will be defined by lowered standards of living." Thanks, government. Thanks a whole bunch.

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  • zadadka, on 10/12/2007, -68/+7lol....
    Politics....the Stock Market Game for Voters !!
    • Rodzirra, on 10/12/2007, -59/+14Yeah, and the stock market is nothing more than a giant casino these days. (The house always wins, remember?)
    • PatrickFisher, on 10/12/2007, -20/+132If this is the stock market, then I'd be really concerned, because something doesn't add up...
      US GDP: $ 12,490,000,000,000 (in 2005)
      Source: https://www.cia.gov/cia/publications/factbook/geos/us.html#Econ
      So that would make the federal deficit:
      $57,960,000,000,000 (4*GDP)
      And yet the US National Debt clock says the coutry is in
      $ 8,617,000,000,000
      Source: http://www.brillig.com/debt_clock/
      And that's total debt, rather than deficit...

      I'm telling you, either math is different when you get into the trillions, or something is fishy... The article doesn't explain itself very well...
    • TubaTechno, on 10/12/2007, -10/+69"Yeah, and the stock market is nothing more than a giant casino these days."

      Probably coming from someone who doesn't own a 401K or a mutual fund....which gains roughly 7% growth a year on average during long term investments. Meaning, if you invest in the stock market in a time span of 14-40 years, you'll get an average return of atleast 7% a year....

      that doesn't sound like gambling to me...
    • RetroRufio, on 10/12/2007, -6/+32Just for those who aren't quite sure what insolvency is...

      http://en.wikipedia.org/wiki/Insolvent
    • zttrx, on 10/12/2007, -20/+78FUD. We spent the whole of the 70s and 80s in a much, MUCH worse hole than this one. Is no one here old enough to remember that?
    • Azurensis, on 10/12/2007, -27/+52@PatrickFisher

      The National Debt clock doesn't include things like social security that are future liabilities. The government doesn't include those in the 'official' figures simply because they don't want us to know exactly how ***** we are.
    • TheKidd, on 10/12/2007, -24/+6@PatrickFisher: It is because the current administration does not consider the cost of the war into the deficit?
    • trulymadly, on 10/12/2007, -4/+87The reason it "doesn't add up" is because the report isn't talking about $58 trillion (4*GDP) in national debt, it is $58 trillion in *obligations*. Social security, medicare, veterans and government workers retirements are some of the biggest.

      It's sort of like the difference between your mortgage, and the knowledge you have to pay for your kids college tuition.

    • david76, on 10/12/2007, -0/+19This is the difference between cash accrual accounting and GAAP (Generally Accepted Accounting Principles). GAAP takes into account future liabilities among other things. Cash Accrual looks at cash in vs. cash out over a given period. This (cash accrual) is the method the governments use when determining annual deficits and debt.
    • lordthor, on 10/12/2007, -8/+31yeah but when we get tired of oweing money, we can always just take over the countries we owe money too, then we owe ourselves.
    • PatrickFisher, on 10/12/2007, -8/+24@trulymadly "It's sort of like the difference between your mortgage, and the knowledge you have to pay for your kids college tuition."


      I'm going to quote falstaff here (from below), because he makes a good point, which I am going to expand on:
      "[This] is kind of like adding up your bills for the next 10 years, then comparing that to your income for one year. It's going to look bad, but it's utterly meaningless."

      So, using your analogy, this is kind of like:
      Oh my god! My kid's tuition is going to cost $75000 over four years, ten years from now, and I'm only making $60000 a year! I'm basically bankrupt!
    • SmoothCorn, on 10/12/2007, -12/+6It says that the national debt is only 8.5 trillion on wikipedia

      http://en.wikipedia.org/wiki/Us_national_debt
    • fasdfa, on 10/12/2007, -3/+4You can check the numbers here:

      http://mwhodges.home.att.net/debt-summary-table.htm
    • MaddDog, on 10/12/2007, -3/+47With a GDP of $12.47 trillion and a federal debt of $8.617 trillion, the US has a GDP-to-debt ratio of 68%. This is certainly very high, and is where Canada was about 12 years ago. It took 6 years of painful cuts, and now we are sitting at a ratio fo around 25% GDP-to-debt. This has allowed us the freedom to invest more in those programs listed above, like social security/pension funds, and Canada is sitting very well in those regards.

      It's not too late, but the US needs to cut its spending and quick, because it will take 12-15 years for the problems to solve themselves out.

      The US is not insolvent - counting $48 trillion in "future debts" is neglecting the future GDP that will be paying for it.
    • littlebylittle, on 10/12/2007, -2/+44I don't care about all the above debate in the end. Something is VERY, VERY wrong with our Government spending, and we all know it.
    • dchu, on 10/12/2007, -3/+30>So, using your analogy, this is kind of like:
      >Oh my god! My kid's tuition is going to cost $75000 over four years, ten years from now, and I'm only making $60000 a year! I'm basically bankrupt!

      Well if you put aside some money from 60k anually to pay for the tuition 10 years down the road then its ok. But if it is 60k in and 60k out yearly then its a problem. Even worse if it is 60k in and 120k out per year, which is what the gov is doing.
    • hansonc, on 10/12/2007, -10/+1@david76

      wow.... go read something about accounting sometime. Just because you've heard a bunch of accounting terms doesn't mean you know how to use them
    • h00paj00, on 10/12/2007, -10/+14@MaddDog: We could run our country on 1/3rd the budget and make money... if we just cut out all the pork and redundant social programs. The problem is, we're so deep in socialism and pork (BOTH parties) that no one who has the power, will find anything to cut.

      And then they'll do something stupid like cut transportation funding, and destroy our infrastructure, which in turn destroys intrastate trade and movement of people and goods.

      Best bet is to start with a clean slate of a budget.
    • inajeep, on 10/12/2007, -2/+2Thank you Retrorufio, I was going to suggest some seltzer water to get it out. That would have been foolish.
    • JewishPower, on 10/12/2007, -5/+10The national debt is NOT the same as the federal deficit.

      In 2006, according to Wikipedia, the national deficit was $390 billion, 15% of the national budget, which itself was $2.2 trillion dollars, which itself was 16% of the GDP in 2006 (estimated at 13.514 trillion).

      Ergo, .15X.16 = national deficit = 2.4% of the US 2006 GDP.
    • Heiios, on 10/12/2007, -4/+8[quote=Rodzirra]
      Yeah, and the stock market is nothing more than a giant casino these days. (The house always wins, remember?)[/quote]

      Good thing they banned online gambling for us right?
    • mousky, on 10/12/2007, -3/+16h00paj00:

      I would be happy if governments began to use their tax revenues wisely. Alaska, a state with no taxes, received $6.60 for every dollar paid in federal gas taxes. Meanwhile, New Jersey, which has roads in bridges in desperate need of repair and/or replacement receives only $0.87 for every dollar paid in federal gas taxes. So, while Alaska comes up with Bridges to Nowhere, drivers in New Jersey get to drive over crumbling roads and bridges.

      But you are correct, cut the pork and you could see a big difference in paying down that debt.
    • quetranza, on 10/12/2007, -17/+5When, oh when will idiotic articles stop showing up on Digg? Come on, people, use your ***** heads and don't digg crap like this.
    • csbabe, on 10/12/2007, -3/+2@ zadadka
      I hope you realize how this effects you, and even more if you have children / will have children.
      Our Government is more concerned with knowing how to pull of the trick of distracting it's own nation, there are serious things wrong with this state of mind.
      We need to build back up from the core of this country
    • david76, on 10/12/2007, -1/+2@hansonc

      Strange, I don't seem to see anywhere in your reply examples of how I was wrong.

      The annual deficit calculated by the CBO (Congressional Budget Office) and OMB (Office of Management & Budget) is not calculated according to GAAP. The accumulation of annual deficits results in the national debt, again not calculated using GAAP.

      My point was simple, this number sounds extreme, and it is, because it's determined using GAAP. When discussing government solvency nobody ever uses GAAP figures.
    • borderinsanity, on 10/12/2007, -6/+5Marked inaccurate. The article has too many errors to enumerate them.

      About future liabilities. The US Government ought to start accounting for obligations it has to employees of the US Government (and veterans of the Armed Forces). The US Government should not be required to record future liabilities to private citizens for Social Security or Medicare because those liabilities can be changed by law by an Act of Congress and acceptance by the President. E.g., the US Congress could stop paying for all Social Security and Medicare and reduce the budget by about USD 1 Trillion (current spending), like, tomorrow.

      @MaddDog

      Though, I will quibble about the Canadian debt-to-GDP ratio: The GC's (Government of Canada's) Fiscal Monitor September 2006 has the net debt at CAD530*10^9; and Statistics Canada has the GDP in September 2006 as CAD1,192*10^9; or 44%. From the same Fiscal Monitor, accounting for "non-financial assets" (like land and buildings) the total aggregate deficit is CAD476*10^9, or 40% debt-to-GDP.

      True, the GC has done a good job on all fronts: it limited increases in government spending over the last 12 years, it avoided increasing taxes on private citizens and corporations, it stopped debt financing its spending, it got out of the debt market to allow private capital to be allocated to private business (which increases revenues from taxes at a faster rate), and it controlled inflation. The GC though, did this out of self-preservation. From the point of view of 1994, if the GC hadn't changed its spending habits it would have seen a debt-to-GDP ratio approaching 85% by 2001. A snap-the whip approach was needed.

      With this surpluses, though, I would like to see taxes reduced at a rate of 2:1 to new spending, and in this order: employment, personal, corporate, consumption, duties and excise. Reducing taxes and limiting new obligations (spending) would increase government revenues faster, and to the point where Canada would be able to start accounting for future liabilities.

    • crgnetworks, on 10/12/2007, -8/+2"Thanks, government. Thanks a whole bunch."

      No it's: Thanks, Bush. Thanks a whole bunch.


      ***** inbred steer queer.
    • Kiganshee, on 10/12/2007, -2/+0@mousky:

      "Alaska, a state with no taxes, received $6.60 for every dollar paid in federal gas taxes."

      I don't know where you got your figures, so I can't comment specifically, but "gas taxes" can mean a lot of things. If "gas taxes" there means taxes on gasoline at the point of sale, that is messed up. If "gas taxes" means taxes paid by oil companies on oil and natural gas production, that figure makes a lot more sense, as a large percentage of US-produced oil comes from Alaska.

      On-topic though, WHEN is a politician going to stand up and say things like "the national debt is a national security issue. education is a national security issue. energy is a national security issue." They make me take off my shoes at the airport all the time, but I never hear ***** about the national debt or education, both of which will have a huge effect on what the US of the future looks like.
    • omaryak, on 10/12/2007, -3/+1TubaTechno: "that doesn't sound like gambling to me"
      Famous last words. Tell that to the employees of Enron.
    • VeganG, on 10/12/2007, -0/+4Who are these parents who pay for their kids' college tuition, and where can I go back in time and sign up?

      (never been to college)
    • llbbl, on 10/12/2007, -1/+4@PatrickFisher

      If you will ___READ___ the article he doesn't just say it is based the debt (which is still freaking high... thanks to GWB), which is different than the total deficit.

      "Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000."
    • ernkush, on 10/12/2007, -2/+1The key lies in confidence in the dollar. How do you think Roosevelt's government was able to so much during the Great Depression?
    • krz9000, on 10/12/2007, -1/+2the dollar is not important anymore globaly spoken. the interest to keep it high/stable is slowing as well. focus is in asia now and will stay there for some years
  • Andrej73, on 10/12/2007, -9/+29US debt financed by chinese government. realy.
    they saved our standard of living. thanks.

    • Rodzirra, on 10/12/2007, -7/+41But how long can that crutch last? China already holds well over $700 Billion in USD-denominated assets, and they're looking to unload a good deal of it. Ben Bernanke and Henry Paulson are over in China right now, most likely groveling and begging them not to dump it too quickly. If they do, we're toast.
    • stonebear, on 10/12/2007, -1/+3Rumour has it they are warehousing bales of American paper currency to keep the dollar strong and the yuan weak. I hope those warehouses are on Bernanke and Paulson's tour.
    • ptsd, on 10/12/2007, -9/+3there was a story on digg about china dumping a trillion u.s. currency for gold it made it to the front page with like 50 diggs then disappeared. i didnt get a chance to read the article.
    • ahawks, on 10/12/2007, -16/+5I'm kind of confused by how you have +5, since your lack of complete sentences leaves me wondering wtf you're talking about.
    • thcobbs, on 10/12/2007, -0/+7@ahawks

      That never stopped anyone from commenting on digg before.
    • Ramtech, on 10/12/2007, -10/+1I wanna move to another planet.. this is just rediculous...
      stupid government...
      ***** bush...
  • dagonweb, on 10/12/2007, -13/+26The chinese are being THREATENED by the US and OPEC - If the chinese banks start selling their dollar reserves, no more oil for China and no more exports for China.

    So basicly if this house of cards collapses, both China and the US are in a state of super-crisis, with gettos, starving people, riots and civil unrest everywhere.

    This little nightmare won't end well.
    • SparQy, on 10/12/2007, -12/+27Michael Moore is a bit of a tool, but is he really the one selling the fear? He's more about saying that the administration is controling the masses through fear. Remeber THREAT LEVEL ORANGE? RED? Sheeeesh...
    • gallagherFTW, on 10/12/2007, -16/+6yeah capncash i agree. i don't think there's anything more sickening than Michael Moore scaring people half to death with spliced footage and rigged interviews. well, just looking at him might be more sickening. www.moorewatch.com

      in other news, don't pay your income taxes. it just goes to pay the interest on our deficit. think of us as all pitching in for the ***** credit card payment once a year. and if you don't, it's like a red letter on your chest.
    • stoikiometry, on 10/12/2007, -2/+3Looks like Joss Whedon was completely wrong.
    • Xeth, on 10/12/2007, -16/+11Why should standards of living not decline? We all know the American lifestyle is not sustainable on a global level. It's about time our standard of living came down to match global norms.
    • CiXeL, on 10/12/2007, -3/+8@ xeth
      im not sure you actually know what that means. it means extreme poverty. while you may be amused by it in a theoretical sense, you will regret that statement if it comes to pass.
    • dracostimpy, on 10/12/2007, -2/+12@dagonweb

      The key difference is that China never had it so good as we do here. It's a much farther plummet for us than them, and they're the ones with all the industry now. That means China can work themselves out of the upcoming "Great Global Depression" a lot easier than we can. And it's not like they'll have trouble finding someone to sell their junk to, considering they're about 1/5 of the population of the planet. Sure, they'd be shooting themselves in the foot by destroying the dollar, but they'd be shooting America in the heart.

      That should have us all very worried, but if some of these people want to dismiss articles like this as FUD, go right ahead. That just makes it easier for those of us who aren't clueless to prepare for the pending collapse without having to wrestle someone for the last pack of batteries on the shelf. Just remember, naysayers, don't come bangin on dagonweb's or my door when you're up ***** creek, cuz we tried to warn ya. A few hundred bucks today could have saved you a world of pain tomorrow, but if you wanna keep living in Happyland, do so at your own risk.
    • ardenr, on 10/12/2007, -8/+5EUROPE FTW
    • Xeth, on 10/12/2007, -5/+7@CiXeL
      You show the typical American worldview that everyone outside has an abysmal standard of living, which is simply not true. People can be quite
      comfortable at much lower consumption rates, and we better get used to it, it will happen.
    • SelfAbortion, on 10/12/2007, -4/+8@CapnCash
      That's right, Michael Moore is the biggest problem with our country right now. The country would be a much better place if nobody knew about anything at all. That way, nobody can get pissed off and it'll all be smooth sailing. Sounds like a great idea to me. I hate being pissed off. Where's that pile of sand to dunk my head into?
    • aukxsona, on 10/12/2007, -0/+2I don't want to say it, but right now we should NOT be threatening China at all. They should be our ally. I mean they are keeping are asses a float right? Iran is moving to Euros, many more Middle Eastern countries will soon follow. If China moves to Euros after dumping it's dollars, we'll be in a bad spot. I think the FED should raise interest rates to make keeping those dollars attractive. (and I have school loans ya'll) I know a lot of people are losing their homes through foreclosure due to the FED raising rates, but what choice do we have? Let the dollar flounder?

      If the dollar flounders, the only safe ways to invest will be in gold or foreign markets.
  • billizm, on 10/12/2007, -1/+17I love this quote:

    In accounting parlance, that’s the same as telling your spouse “Our checkbook is such an out of control mess I can’t tell if we’re broke or rich!”
  • twosox, on 10/12/2007, -7/+10If you read a financial statement like the accompanying comments by the Comptroller of the US (http://fms.treas.gov/fr/06frusg/06gao2.pdf) from a public company, you would see that stock price hit $0.01 on the pink sheets.

    It's deplorable.
    • scorchedearth, on 10/12/2007, -1/+10When the GAO says due to manipulation and inconsistency of data, it is unable to give an opinion on the finances of the country, you know there is a problem.

      A huge problem.

      Here is the quote:

      • Certain material weaknesses in financial reporting and other limitations on the scope of our work resulted in conditions that continued to prevent us from expressing an opinion on the accompanying consolidated financial statements for the fiscal years ended September 30, 2006 and 2005.6

      To add to above, this is the 10th year in a row that the GAO has been unable to do this.

      We're screwed.

      Buy some gold, get some guns...its going to be a hell of a ride.
    • heffae, on 10/12/2007, -1/+3I would like to see what would happen if in IBM's annual financial report they just put
      "Certain material weaknesses in financial reporting and other limitations on the scope of our work resulted in conditions that continued to prevent us from expressing an opinion on the accompanying consolidated financial statements for the fiscal years ended September 30, 2006 and 2005.6" I don't think the SEC or wallstreet would stand for that.
  • sfacets, on 10/12/2007, -29/+17The US is many things beginning with "in". Intolerant, insolent, internationally challenged...
  • SteelChicken, on 10/12/2007, -16/+3the collapse is coming. at least our ride into hell will be financed by other people.
    WOOT

  • brickbat, on 10/12/2007, -10/+5But the corporations are making trillions.
  • BigSlacker, on 10/12/2007, -11/+12Buried for just being silly nonsense. Private financials are not the same as public.
    • ievolver, on 10/12/2007, -7/+23True, but if the US is insolvent it actually affects all other economics in the world, which makes this issue a major one. Dugg.
  • ricepudd, on 10/12/2007, -11/+4I understand that many countries are selling US dollars for Euro's... perhaps now is the time for the United States to join Europe!
    • venicerocco, on 10/12/2007, -10/+12The United States cannot qualify for entry into the EU based on their human rights record. Namely, the continued execution of prisoners.
    • thcobbs, on 10/12/2007, -6/+8Cause Europe really has a wonderful Human Rights record itself.
    • youpidou, on 10/12/2007, -0/+5Like many Europeans I can't see how the death penalty is much better than allowing slavery. The right to live is the most fundamental human rights of them all. Luckily, most countries without totalitarian regimes have abolished both.
    • thcobbs, on 10/12/2007, -2/+1So, the person found guilty of capital murder(in the US that means pre-meditated... and in some cases even requires more than just pre-meditation) has a greater right to life than the person(s) he/she killed?
    • aukxsona, on 10/12/2007, -0/+1 Nope. We fought to get free and now we are. Now we have to deal with it. It's our bed we must lie in it. This is our fleas we must rid. These are our chains that we forged and we must carry or break...if they don't break us first. We the people will have to deal with what may come...good or ill. Joining Europe is shirking our collective karma. Thanks for the offer...just take pitty on us when our government lights that gas chambers, starves the babes, and gives the death march orders to us because we were to short sighted to see our own misgivings. Please intervene on our behalf in the future should that occur..as we have or would have for you.
  • gregharmon, on 10/12/2007, -12/+15The sky is falling! Everyone run for cover!
    • rjani57, on 10/12/2007, -0/+1can i wait till after xmas? santa's promised me a toy train!
  • xGORDOx, on 10/12/2007, -9/+30I say we stop sending trillions overseas to support countries that do nothing for us. Why spend money on lost causes?
    $1,000,000,000 for Palestine? Why?
    • drpeppper, on 10/12/2007, -3/+24I totally agree with you. Why the hell are we giving aid to countries we have nothing invested in. The whole world already labels us as greedy bastards, why not actually take the greedy road and save some coin for us.
    • ahawks, on 10/12/2007, -2/+7If you're worried about pinching a few hundred billion pennies here and there, may I direct your interest to this little spat we're involved in out east?
    • skinnydog, on 10/12/2007, -10/+11Palestine I say give them money. Stop giving money to Israel to buy tanks, Apache, helicopters, guns and see what happens...
    • thcobbs, on 10/12/2007, -8/+3Israel gets over-run and every Jew slaughtered.
    • jollyllama, on 10/12/2007, -0/+6Don't take my bs word for it, let's ask Susan Rice, Senior Fellow for Foreign Policy Studies at the Brookings Institute. She might know a thing or two:

      "The world's weakest states are poor states that lack the capacity to fulfill essential government functions, chiefly: 1) to secure their population from violent conflict; 2) to competently meet the basic human needs of their population (i.e. food, health, education), and; 3) to govern legitimately with the acceptance of a majority of their population...These states are high-risk zones that in a rapidly globalizing world may eventually, often indirectly, pose significant risks to far-away countries. Transnational "spillover" from these states includes conflict, terrorism, disease, and environmental degradation. Efforts to illuminate the complex relationship between poverty and insecurity may be unwelcome to those who want assurance that global poverty and U.S. national security are unrelated. However, we ignore or obscure the implications of global poverty for global security at our peril."
    • Tweekster, on 10/12/2007, -1/+6Actually we give way too much money to first world nations, let alone second or third.

      The US seriously needs to cut back on "aid" to countries that dont even need it. (we only recently stopped giving money to Britain for post WW2 rebuilding)

      We shouldnt stop giving all aid, but a billion here, 10 billion there, pretty soon you are talking some real money.
    • balkanboy, on 10/12/2007, -3/+2How do you know that the US is not getting any return on investment from throwing money at foreign countries? Are you on some congressional committee or have some special knowledge that the rest of the population doesn't have?

    • youpidou, on 10/12/2007, -2/+0Because dollar for dollar it does more to protect US security than the war in Iraq. And it saves lives instead of taking them. Oh, and most industrialized countries give more aid to developing countries than the US compared to their GDP.
    • thcobbs, on 10/12/2007, -0/+1@youpidou

      So, it's OK to buy our security, but not fight for it? Isn't that bribery??? Oh and in the process, we give more money to the people who would do us harm?
  • MadOgre, on 10/12/2007, -5/+19This is one of the reasons the Republicans lost in so many races in the last election. The .gov is on a spending spree like drunk frat boys with their first credit cards.
  • gotamd, on 10/12/2007, -18/+18The deficit is not 400% of our GDP. I'm not even going to bother reading the article if it says that...
    • Xarou, on 10/12/2007, -7/+11400% = 4x, not 400x

      for example:

      400% 40 = 160, not 16000.

      So, with it being 50tril, and the GDP is 12.5 tril, then it is 400%
    • gotamd, on 10/12/2007, -4/+2I'm aware of what 400% means. What I'm saying is that the deficit is in the billions, not trillions. The numbers you're using are wrong.
    • unloud, on 10/12/2007, -1/+2deficit != debt
    • gotamd, on 10/12/2007, -1/+2unloud: Yeah, perhaps they're thinking about debt... The deficit is definitely not that large.
  • teeljuice, on 10/12/2007, -4/+11@PatrickFisher

    The debt clock is current debt (in the form of purchased bonds held by the Chinese and whatnot). The 57 trillion is the unfunded liability and will become debt when the baby boomers cash in- or try to at least.
    • falstaff, on 10/12/2007, -4/+14Which is kind of like adding up your bills for the next 10 years, then comparing that to your income for one year. It's going to look bad, but it's utterly meaningless.
    • teeljuice, on 10/12/2007, -1/+8I don't think your analogy is correct. An unfunded liability, is not the same thing as a bill coming due.

      Social Security benefits are supposed to be set aside to pay those "bills for the next ten years" but instead, our government basically counts it as cash and pisses it away. Later when the bill comes due, there is nothing left to pay for it.
    • falstaff, on 10/12/2007, -4/+4There's nothing left to pay for it....except for the revenues from the year in which that bill comes due. I'm not saying that the US government is a model of financial excellence, and unless changes are made, the national debt will grow a lot, but you're taking into account future obligations without taking into account future revenues, and then calling it all a problem of today.

      If we stopped collecting SS taxes, that would be one thing, but that's not...you know...reality.
    • darkstar949, on 10/12/2007, -0/+8I've been reading the same thing about Social Security - and the bottom line for everything I have read is that the government is either going to start raising the taxes for it to pay the retiring Baby Boomers, or they are going to have to find another solution. The real problem is that the number of people that are approaching retirement age exceeds the number of people that are entering the work force since this means that the number of people that will be earning a fully taxable income is also going down the Social Security system is in a state of crises.
    • snowwrestler, on 10/12/2007, -1/+2@teeljuice
      Social Security benefits cannot truly be set aside, because there is nowhere to put them. The government cannot simply invest in the stock market or open a savings account like you can. The numbers are way too big, and the government is not (and should not be) in the business of buying and running private companies. The "set aside" is that the SS surplus funds are invested in the only investment they can be: U.S. Treasury bonds. This means they are loaned to the U.S. government to spend, and will have to be paid back eventually from general revenues (taxes). Ironically if the Congress had not set it up this way on purpose, we could talk about actual solutions with less hand-wringing about the (nonexistant) "nest egg" or "lock box."

      People are living longer and birth rates are declining. That's the way it is and there is nothing the government could have done differently to make SS work better. The problem is demographics not policy.

      @darkstar949

      That is basically correct but I think the crisis aspect has been oversold IMO. The problem could be solved by increased means testing and raising the eligible age, but the Repubs wanted to take the thing private so they hammered on that. But it's not the only solution.
    • SelfAbortion, on 10/12/2007, -1/+2Re: Social Security

      There's not even a need to "raise taxes" per se'. All that needs to be done is get rid of or bump up the $90,000 s.s. tax limit. I.e. if some fat cat makes 400,000 per year, they are only paying social security taxes on 90k. If that limit was pushed upward even to like, 120k, it would take care of a significant portion of the problem. I've read several analyses that suggest this as a means of taking care of the social security problem. I don't have any at my fingertips but I'm sure google can help if you don't believe me. The problem with that is, rich people in power generally aren't good at taking other rich people's money for fear of losing said power that is derived largely from said rich people.
  • brizzad, on 10/12/2007, -20/+0amerikkka bu$$$h am i rite guys? .. guys?
    • profOblivion, on 10/12/2007, -0/+6*the sounds of crickets chirping*
  • NoTiG, on 10/12/2007, -6/+27I think standards have been getting lower but people just don't realize it. In the earlier part of the 20th century families could mostly get by with just the husband working. Now the wife and husband works and their situation as a whole hasn't improved. Not to mention that barely any american's own their own homes now... as in they are not paid off and still mortgage renting. Taxes can only increase because the interest on the federal debt will always increase since the principal is never paid. Don't thank the government, although they are partially to blame. Thank the federal reserve which is not federal and is not a reserve. If the system were at all honest, the government would issue their own currency, then tax the same amount back to finance themselves rather than borrow it from the fed who creates it from nothing and charges interest. In other words they would not unconstitutionally delegate the power given them by the constitution to some private entity. It is well known the fed is private... You don't even need to refer to previous court rulings which show this to prove it. If the federal reserve was federal then they would be printing their own money and wouldn't be in debt to themselves.
    • ScottMitchell, on 10/12/2007, -2/+14People say that things are worse b/c most families need two incomes. But look what that extra income buys today that a generation ago most folks didn't have. A second car. A 54" TV. Satellite. Cell phones for the family. A TV in every major room in the house. A computer or two. And so on.

      People can make it on one salary, even today, if they just forgo what has become the "standards" in materialism.
    • BESTenemy, on 10/12/2007, -0/+4Rememebr the quote from the tax documentary? "Federal Reserve's no more Federal than the Federal Express".
    • Web_Weasel, on 10/12/2007, -0/+4@ScottMitchell

      That's a widely believed myth. Those extras you're talking about are not the reason the middle class is falling apart. It's fixed costs increasing faster then incomes.
      Check out this article out from the Harvard Magazine: http://www.harvard-magazine.com/on-line/010682.html
    • Mu99ins, on 10/12/2007, -1/+4Women, 100 years ago, worked their asses off at home, beginning
      the day with starting a fire in the stove for cooking and hot water.
      They had to iron clothes (heating the iron on the stove), cook their
      own bread, pluck the chickens if they couldn't get the kids to do it,
      and if they could afford chickens, walk to the store, wash the clothes
      in a wash tub (heating the water on the cook stove), hanging the
      wash on a line, beat the rug, churn the butter, knit for hours on end,
      darn socks, sew clothing, and the family was rich if they had indoor
      plumbing. Life expectancy was much lower then, partly due to the
      high death rate of infants. People don't appreciate what they have
      today, compared to anytime in the distant past.

    • PhantomZmoove, on 10/12/2007, -0/+3A lot of those things didn't exist to own back then. Besides, we shouldn't look at items on a list that people own or don't own. We should look at the amount of disposable income people have now with two people working vs one person working during the WW2 era. Toss debt per person into the mix and the picture gets worse.

      We, as a country are worse off right now fiscally than we were 50+ years ago.

  • 0siris, on 10/12/2007, -11/+10This article is inaccurate. Im not being political, but just look at the numbers, our debt (not deficit) is 6% of our GDP. Someone ***** this one up big time.
    • Azurensis, on 10/12/2007, -3/+7No, they didn't. As of right now, the US is on the hook for social security payments that add up to $44 TRILLION. The regular debt calculation doesn't include this.
    • NoTiG, on 10/12/2007, -1/+4from the article: "Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000."
    • WhiteWolf666, on 10/12/2007, -3/+7The article is not inaccurate. He's using a different calculation.

      The difference is "Current Debt included Future Commitments under Current Law".

      Oddly enough, he does not include future revenue.
    • Azurensis, on 10/12/2007, -2/+2Imagine that Social Security is a credit card, and instead of making payments towards it, we have been spending that money on new cars and fancy clothes. All the while we're also using the credit card to pay for the mortgage, our hunting trips, and anything else we think we want. Yes, our monthly bill might seem manageable, but when you look at the actual account balance you see how bad it really is.
    • darkstar949, on 10/12/2007, -2/+6@WhiteWolf666 - They generally don't use future income for such calculations due to the fact that is is unpredictable. Case and point - you may be able to figure out what you finical obligations for the next few years will be without too much difficulty (in fact it is good practice to figure out your next years worth of obligations when you do you taxes) but it is unlikely that you will be able to predict your income (i.e. will you be employed with the same employer the entire time, if so will you get a raise, bonus?)
    • gotamd, on 10/12/2007, -0/+1Darkstar: The problem with that is that the government has a pretty steady income compared to any one person since its revenues are based off of the aggregated revenues of the entire country's private sector. They should at least mention that they aren't including future income and that their figures for our debt are based on future numbers (which are just as unpredictable, if not more unpredictable than income, when talking about the government...Iraq War anyone?).
  • Azurensis, on 10/12/2007, -13/+2nothing
    • teeljuice, on 10/12/2007, -12/+1Why are people digging our comments down?
  • SniperSlap, on 10/12/2007, -1/+13Standards of living are lower all around already. Look at your cars, look at your food, look at your prices. Look at the cheap quality of everything. The trend has been to lighten lighten lighten nonstop, while slowly creeping prices upwards. People just fail to recognize a gradual change.

    Worse still in this problem is not just the level of debt of the US government, but also the level of debt of it's citizens. Those two combined are going to make big problems in the future(s) to come.
    • EricAnderton, on 10/12/2007, -3/+14You're right about the quality of manufactured goods: When was the last time you purchased *anything* that was made from wood? Not particle-board, but wood. However, I think that's more an indication of what people are willing to settle for, and an apparent decline in natural resources than a decline in the standard of living.

      But I wouldn't necessarily argue for a decline in standards because there are other things that offset the current standard of living:
      - newer homes keep getting larger and larger, with monster-sized mortgages to match
      - people have flat-out more *stuff* in their apartments and homes
      - automobiles have more *stuff* crammed into them as well (ABS, airbags, emissions equipment, etc) plus the average family has two of 'em.

      This is what people aspire to now. So while people are cramming their huge houses full of garbage, they still have that much more cash to burn on the stuff. But you're right about the dual-income situation: people need the extra cash to fuel this particular lifestyle.

      Now, turn the clock back 50 years, and the "average standard of living" looks like poverty today by comparison.

      - no computer
      - no entertainment center
      - no dryer
      - no AC
      - no color TV
      - *one* car, without seatbelts, airbag, emissions control or built-in navigation
      - no cellphone
      - one wall phone, w/o free long distance plan.
      - one working spouse
      - no wall-to-wall carpet

      There is nothing in the way of somone living like this today, disregarding the availability of housing. One could easily do it and be a dual-income family, but they will likely feel uncomfortable due to the *high* standard of living people aspire to today. However, I agree that this could be viewed as a decline if one takes into account the problems of a debt-based and cosumer-based lifestyle.
    • fasdfa, on 10/12/2007, -0/+2I don't know about the whole standard of living issue, but I have seen a deterioration of quality on nearly every food item I purchase. Which would indicate that manufacturers are unable to raise prices and instead lower quality. Which would indicate a lack of pricing power, which shouldn't happen in a growing economy.

    • aukxsona, on 10/12/2007, -0/+1I too have noticed the lower quality but level prices. For example pasta was 16 oz a pack for 98 cents now it is 12 oz a pack for 98 cetns.

      Or the quality of even plastic toys, where as the plastic is thinner, they have less accessories, and is easily broken by the children. Now it truly is junk, which is why I made my own gifts...figured I could do better myself. Even the clothes are cheaply done, with seams visible, not double seamed, fabric that stains EASILY, dyes that wash out easy and fade quick, no guarentees of workmanship like good old American companies used to do. I remember when SEARS offered a lifetime of owner replacement. That's right they would replace your children's clothes if they wore out before the kid grew out. Tonka trucks has a life time of owner guarentee...the only trucks I buy thank you. Now all the big name brands make you pay for these guarentees and call them "warrentees" like a service warentee for a washer..they used to do that for FREE. Now they charge you 500 bucks for the privelage of a warentee!!!

      As for standard of living. We have one person working in our home. We have no tv. No central heating, 2 bedrooms. No vcr. a computer, dsl, long distance. No cell phone. 1 van. My kids don't usually get expensive toys like play stations or nintendos, no personal dvd's or cable, no satelite, no nothing. BOOKS, Boardgames, computer, internet, skype, (that's the long distance for free), email for letters, open source for new software, Utube for entertainment, and the occasional find....we do have an air conditioner. Many people say oh your so poor. I own my house...no mortgage. I own my car...no payments. I have assets and not liabilties after I balance the books. I am not even 30 and I have 5 kids. I think I'm doing good.

      But people always say we're so poor...ya know what...when my husband lost his job...I didn't have to worry about losing the house or the car. I knew we would be warm this winter because of our woodstove. I knew I could provide food till I could find a job thanks to my garden. I also knew I could pay the bills for a month or twobecause I had a small stash. We make less than most highschoolers do a year. It's all how you use it. Imagine if I had a hgh paying job...I'd be a millionare.

  • ravenofwinter, on 10/12/2007, -7/+7so what? They're the government, they can just print more money.

    Rampant inflatation?? What?

  • firebush, on 10/12/2007, -18/+26Silly sodomites. You just don't get it. The republican's plan is to go into massive debt while we can. See, we (blessed white Christians) have knowledge that lesser races and countries don't have... that Jesus will come before we have to pay it all back.

    Have some ***** faith you godless sinners, and get your debt on!

    Go BUSH!!!!!!1!1
    • billessig, on 10/12/2007, -6/+14Water -> Wine
      Debt -> Fluffy kittens??? o_O
    • venicerocco, on 10/12/2007, -10/+7"The republican's plan is to go into massive debt while we can"

      -- Yeah, so the Democrats HAVE to raise taxes and they can play their little game of pointing fingers at the "HIGH tax Dems" etc.

      Republicans are childish, pure and simple. Why do you think they like guns so much?
    • h00paj00, on 10/12/2007, -9/+4@venicerocco: Please tell the Dems to get rid of their silly notion of spending trillions a year in "Free" health care for anyone and everyone, including illegals and people who go to emergency rooms with the sniffles.


      CUT ALL PORK from the budget. CUT ALL ABUSED SOCIAL PROGRAMS too.
    • joquarky, on 10/12/2007, -0/+3Bankrupt the federal government so that it can no longer support social security, medicare, and public schools? Why would they want to do that? :P
      • NeoConned08, on 12/21/2007, -0/+1The NOrth American Union and the Amero
    • mdmadph, on 10/12/2007, -2/+1in case you didn't notice it, "firebush" was being sarcastic. sigh...
    • venicerocco, on 10/12/2007, -4/+1@ h00paj00

      i think free health care is a pretty solid notion. An admirable, noble goal.

      To hell with Republicans.
  • eexlebots, on 10/12/2007, -3/+6Oh look here : http://financialsense.com/fsu/editorials/2006/0127b.html
    "
    U.S. IN TECHNICAL DEFAULT
    by Dr. M
    (AKA Dr. Chris Martenson)
    January 27, 2006"

    Gee been almost a year now...between this link and the one about the US about to go under financially, I'd say someone else is gaming digg again.
    • groovychk, on 10/12/2007, -5/+2It's the anti-Americans. Looking for anything out there to make us looks bad and pouncing on it when they find it.
    • eexlebots, on 10/12/2007, -2/+3Heehee I thought it was more of the crazy branch of the Libertarians again...
  • thesoze, on 10/12/2007, -10/+3ask the white rich if they care.....come on Dems raise the taxes on the idle rich
    • BonhamsGhost, on 10/12/2007, -0/+2Why would politicians raise taxes on themselves
    • h00paj00, on 10/12/2007, -0/+3Let's see... Idle Rich... Like the Hollywoodites... Who hide their money offshore so they don't have to pay taxes on that $25 mil movie deal they just made. Then they get their panties (or lack there of) in a bunch and demand that taxes be raised. Meanwhile they never pay their share. They hide it all through personal corporations, and buy assets like obscene 500 carat blood-diamond necklaces and solid gold Bentleys... bought through their corporation. In the end, they pay themselves a salary, and pay income tax on that salary.

      *****.
  • WhiteWolf666, on 10/12/2007, -3/+34I don't usually post on digg, but this article is rather large bit of mis-information.

    It's not something new, and it's not something swept under the rug by politicians. It's something that even the President has directly addressed (albeit in an incomplete way), and it's something that congress is well aware of.

    It's a big deal, but it is not the crippling mess the author suggests that it is.

    Here's what he's trying to say:
    1. Spending includes money that we've already allocated for the future.
    2. We've committed to spend $X dollar per capita on Social Security and Medicare over the next 75 years.
    3. Even though Social Security and Medicare are currently revenue earners for the government (i.e. SS/MC receipts > SS/MC expenditures), in 2012 or so that's projected to go negative, and then will go negative as far as the eye can see.
    4. Over the next 75 years, we've projected (and this _is_ a pretty solid projection) that we'll spend $44 trillion on Social Security and Medicare, based on _current_ legislation.
    5. $44 trillion + $9 trillion in current debt = $53 trillion in total debt.

    This is a true statement; but it involves spending we've allocated for the next 75 years. We can fix this, but it will involve difficulties; essentially, we've got to cut the cost of the U.S. entitlement system.

    This does NOT mean we've spent $44 trillion on the Iraq war.

    Everybody in the political system understands the huge unfunded liabilities in Medicare and Social Security. What is means, under the current political climate, is that when these payments come due, we just won't bother to pay them. Period. Medicare and Social Security will be underfunded, benefits will not be paid, and the entire entitlement system will collapse. The issue with this "debt" is not that the Chinese are going to come collecting; the issue is that we've got to figure out a way to cut these costs.

    Mainly, this is a demographic issue. As the average age becomes lower, the "weight" of the entitlement system becomes a greater burden on the economy. One of the major solutions is a demographic one; and if we reopen immigration, this will not be an issue. Keep in mind that one of the things a democratic congress is leaning towards is liberalizing immigration.

    The article is intentionally misleading, and is no different than screaming "FIRE" in a crowded theater. This bozo is possible currency trading or the like. The U.S. government _does_ have serious budgetary issues, but they are by no means crippling. They are a problem to be solved, and will require some curtailment of spending.

    Cheers,
    WhiteWolf 666
    • AllenMcPheeters, on 10/12/2007, -0/+1Well said, WhiteWolf -- right on the mark. Let me just add: this is something people should keep in mind when they are voting. Two years ago, faced with two bad choices for President, I voted for the one who said he wanted to do something about Social Security, instead of the one who said that he was very concerned but would not consider A) raising the retirement age, B) raising the tax rates, or C) reducing benefits. Then again, the chucklehead I did vote for had added to the problem by adding this prescription drug benefit to Medicare. (sigh).
    • darkstar949, on 10/12/2007, -1/+1Kudos on the excellent summary of what is going on.
    • neuroticus, on 10/12/2007, -2/+0@whitewolf,
      on a scale of 1 to 10, how much truth does the original article contain, in your estimate?
    • venicerocco, on 10/12/2007, -2/+2Just... throwing ... it out there but is genocide on the table?
  • GoneSouth, on 10/12/2007, -0/+21"Thanks, government. Thanks a whole bunch".

    On the contrary, you can thank your fellow citizens for this mess. The American voter is easily distracted by shiny objects, such as gay marriage, abortion rights, and interns giving blowjobs. Meanwhile, very important issues of national concern, such as the dismal state of the nation's finances, go unnoticed. Wake up people.

  • MadN, on 10/12/2007, -5/+4Let me be the first to say:
    "But Clinton"

    /But wait, he "balanced" the budget.
    //How much of this was paid to Halliburton?
    ///Bush now welcomes Irainian "students" to flight schools.....
    • member57, on 10/12/2007, -10/+6But wait...
      I was in the military during mr. clinton's reign. Readiness dropped from 90% in 1992 to 35% in 1998. My section had 17 people in 1993 to man 2 12hr shifts 365 days a year, in 1998 that number dropped to 9 I didn't have a day off for 6 months straight, I didn't get even 1 day of leave for over 2 years. Oh did I mention this was Emergency Services in a hospital? We couldn't even get IV needles to hydrate our patients. We had an Ambulance break down en route because SIMPLE maintenance was "extended" to save money. You may think that this is trivial, but not when your children might be the ones we were responding to.. All the while, deployments were at an all time "peace time" high. We were in deployed to something like 35 countries. My good friend, he worked vehicle maintenance in the Army said they were parking vehicle and cannibalizing them to make others function, which is illegal BTW. So when the next President came into office, he had to deal with a run down, demoralized military to rebuild. I won't even go into mr clinton's intel problems... Mr clinton slaughtered the military budget to "balance" the national budget.
    • venicerocco, on 10/12/2007, -3/+8@ member 57

      Peace under Clinton. Ravaging war under Bush.

      The world has seen a monumental upsurge in terrorist activity, murder etc. But yeah, Clinton slashed the military budget.
    • member57, on 10/12/2007, -6/+3@venicerocco
      Peace under Clinton?? WTF, Somalia, Bosnia, Serbia? I guess these were Nintendo wars?? You must have not been in the military, you would have known this... Not only was the military budget cut, the intelligence agencies budgets bled money and person ell. mr clinton's short arm and short sightedness screwed us all. He isn't 100% at fault, but a good deal of it was his. Everybody was warm and comfy in our little world in the 90's while the rest of the world looked on in envy, especially the Middle East. What makes you think that we could saunter up and launch a few cruise missiles at goat farmers and not expect fallout? The freakin idiot had plenty of warning from the 1st Trade Center Attack, and yet he chose to do nothing. Suprise, suprise it costs money to rebuild a military that was in ruin for 6 years. Now President Bush got us into a war that sucks, and more than likely should not have happened, hind sight is 20/20. Now we have to deal with it and hopefully move on. mr clinton needs to own up to his fair share, President Bush admits his, let's get this country back together again.
    • venicerocco, on 10/12/2007, -1/+2@ member57

      Bush admits to nothing.
  • realchemist, on 10/12/2007, -12/+9This article is biased BS
  • fasdfa, on 10/12/2007, -2/+2http://mwhodges.home.att.net/debt-summary-table.htm

    Total Debt (government+private): $87.7 trillion, $295,830 per person
  • biuku, on 10/12/2007, -2/+0the US may be approaching insolvency, and it is interesting, I think, how conservatives have often been terrible financial managers versus people like Bill Clinton, who did a lot of good for the US federal balance sheet; that said, the deficit cannot be four times the GDP. the deficit is government revenue (taxes etc.)minus expenses (tanks & highways and stuff). the government spending is one part of the GDP. Even if no taxes were collected, and a trillian dollars were spent by the government, and no non-government person spent any money, the GDP would = the deficit = 1 trillian. However, taxes are collected and Americans do buy things.

    The debt, which is the accumulation of all deficits and surpluses, may be four times GDP. I don't know; I'm not American
    • rohcky, on 10/12/2007, -0/+2I have 4 trillians. Maybe if I uninstalled them, the debt would be solve?
  • gbv23, on 10/12/2007, -4/+1Bill Clinton - best Republican president EVAR

    Looking fondly back at the good ol' days of the 90's and the centrist policies therein.

    OTOH, at least the trillions being spent in Iraq is funneling back into the economy via our contractors, such as KBR et al
    • billessig, on 10/12/2007, -1/+1Excellent insight.
    • fasdfa, on 10/12/2007, -4/+2No, money spent in Iraq does not help our econmy at all, it does help certain Haliburton shareholders, like Cheney.

      http://money.cnn.com/2003/09/25/news/companies/cheney/
    • fasdfa, on 10/12/2007, -0/+2Wars helping the economy is a common misconception.

      For example, if I buy an apple for a $1, I benefit by eating the apple, and the apple grower gets a $1 in return for producing the apple.
      Now, if I buy a bullet for $1, who benefits? The bullet manufacturer benefits but what is my benefit? My end of the $1 goes to waste. Its like buying the apple above just to throw it at someone.

      Unless you conquer a territory, like in the Roman times, and gain natural resources or collect revenue from it, wars hurt the economy.




    • fasdfa, on 10/12/2007, -1/+1Are Wars Good for the Economy?
      http://economics.about.com/cs/macroeconomics/l/aa032003a.htm
  • shaim2, on 10/12/2007, -0/+4400% of the GDP includes "future liabilities", meaning money the government has promised to pay (in social security, medi*, etc).
    It's not the deficit (which is a cash flow measurement).
    It's not the trade imbalance, or the foreign debt.

    But it's large. Very very very large.
    And what's more important: it's way too large to allow things to go on "as usual" for much longer.

    (but of course don't expect any hard choices to be made or actions to be taken until the ***** has hit the fan and we're all drowning in it)
  • rekleiner, on 10/12/2007, -8/+2Why don't you spend a little more money on your bombs and military. Sharp as marbles you Yankees are.
    • BonhamsGhost, on 10/12/2007, -0/+3Blimey, what a witty remark!

      Freshen' your drink guvna?
    • h00paj00, on 10/12/2007, -2/+3@rek: Enjoy your Sharia law in 10 years! Make sure your Mum covers up all but her eyes, lest the religious police beat her.
    • dknighton, on 10/12/2007, -1/+1And next time someone tries to conquer strategically retarded country, feel free to ***** the hell off.
  • member57, on 10/12/2007, -2/+1Hey if it gets too bad, maybe we could call up our friends we helped 60 years ago. Also remind them of the significant postwar rebuilding we helped finance.
    NOT!
    • somebitches, on 10/12/2007, -0/+3Actually we paid you guys back already.
    • aukxsona, on 10/12/2007, -0/+1O really...we just stopped paying Brittian...like 5 years ago...so you paid it off in 5 years eh? Good for you...50 plus years off money paid off in 5 years including intrest RIGHT
  • Azurensis, on 10/12/2007, -3/+3What is almost as scary as the numbers being thrown about is the absolute head-in-the-sand attitude being displayed by the people on this site (and at large, I suppose). The article spells out exactly why the US is into a debt that it can never get out of without destroying our way of life, and yet most of you won't even RTFA to see what's being talked about.

    Quoting the article:
    "If we perform the same calculations for the US, however, we find that the official debt stands at $8.507 trillion or 65% of (nominal) GDP but when we add in our “off balance sheet” items the national debt stands at $53 trillion or 403% of GDP."
  • BigKoala, on 10/12/2007, -0/+2It's the Federal Reserve that prints the money, not the government. Cheers.
    • Xeth, on 10/12/2007, -1/+1So many countries that export to us (China, OPEC members) have currencies pegged to the dollar, so we in fact CAN print our way out of this without causing much inflation in the US (but a lot in those other countries, since they actually produce crap...) The question is how much money can we print before they unpeg their currencies and the whole house of cards collapses.
    • BigKoala, on 10/12/2007, -4/+1@Xeth: Actually China freed their currency of the USD a while ago.
    • Xeth, on 10/12/2007, -0/+1No, RMB is restricted to float within a very tight percentage of the dollar, something like 0.5%, so its still effectively pegged, though the rate can be changed by the Chinese central bank. The recent visit to China was a push to make RMB truly free floating.
    • bobzibub, on 10/12/2007, -0/+0ahhh. OK. why this then:
      http://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_publish_M3_index
  • olik, on 10/12/2007, -0/+2I wish I went to the Financial Sense University *pffpt*
  • bloodguard, on 10/12/2007, -3/+8"Thanks, government. Thanks a whole bunch."

    Errr, No. Thanks asshat voters. Thanks a whole bunch.
    • somebitches, on 10/12/2007, -1/+3Agreed. I think anyone who voted Bush in the last two elections should hold their head in absolute shame. For ***** sake the man himself even said it: "fool me once, shame on you..." well he almost said it, he was too unsure of himself to say the whole phrase, as he was well aware of his own ***** incompetence - its really great when your president is such a screw up he doesnt even believe in himself.

      Bush supporters why cant you see through him? What exactly did he do after 9/11 that was so 'amazing'? What the ***** did George Bush do after 9/11 that no other president would have done? He stood in front of a ***** flag and told the country he would get the people who did this - just like ANY other president would do, oh except, HE NEVER ACTUALLY ***** CAUGHT BIN ***** LADEN. You bunch of ***** *****, why are you such arrogant, short-sighted ***** eaters? Are you as ***** retarded as him?
  • And0, on 10/12/2007, -0/+4It's clear now that people aren't crazy when they become Libertarian; it just happens slowly over time.
    • h00paj00, on 10/12/2007, -1/+1I would agree... except for that whole "Legalize Meth and Heroin" wing of the Libertarian party...
    • aukxsona, on 10/12/2007, -0/+1It's called "natural selection." they just happen to practice what science teaches.
  • pirotess, on 10/12/2007, -0/+4Haha! Everyone blaming the government for the runaway deficit is just afraid to organize a rally to cut off Medicare and Social Security. This is like the GM fiasco all over again.
  • patientXero, on 10/12/2007, -1/+2Ohhhhh! So THAT's how credit works!

    (sarcastic)
  • musntSurfatWork, on 10/12/2007, -3/+0Voters have no say in any matter. When will people who associate voters, and corrupt leadership - ever wake up and smell the oilsands? Enjoy life, then die, and do with the best you have. Some are born in the wrong place in the wrong time , very true (poor), others, can do something about it other than support this corrupt WesternWorld, and go elsewhere.
  • pmccall, on 10/12/2007, -1/+2This is the net result of the [url=http://en.wikipedia.org/wiki/Starve-the-beast]Starve the Beast[/url] philosophy of some segments of the conservative wing in the country. The split within the conservatives that have given up Blue Dog Democrats has to do with people who consider purposefully breaking the economy in order to force ourselves to lower our entitlements an unnecessarily Draconian method of correcting our course.

    Every year we put off solving the problem makes it uglier, and eventually it will get to the point where the only option is to give the happy middle finger to our citizenry in the form of a rollback of entitlements, high taxation and rampant inflation. If you'd prefer to avoid that, it's important that you vote for true fiscal conservatives regardless of official party affiliation.

    Unfortunately, much of the electorate is too apathetic to go past the (inaccurate) belief that a vote for a Republican is a vote for fiscal conservatism.
  • Shivetya, on 10/12/2007, -1/+3https://www.cia.gov/cia/publications/factbook/rankorder/2186rank.html

    Seems some of the other more popular countries have a worse GDP to Debt ratio...


    • mgoldshteyn, on 10/12/2007, -2/+2If you look at the countries above us, quite a few of them are part of the Euro group. So, the Euro, then, is in worse shape than the dollar, potentially.
  • Solkre, on 10/12/2007, -5/+7Correct me if I'm wrong but I remember a budget surplus when Clinton was in office. Somehow I think we picked the wrong guy to impeach. I'd rather have a good president getting intern head than a ***** one ruining the country and hurting the world.
  • m3r0v1ng1an, on 10/12/2007, -0/+1Another scary story for the children.
  • detroitsux, on 10/12/2007, -3/+5Here's the Fix:
    1. Begin annexing Canada by setting the currency exchange ratio to 1:1.
    2. Pillage... no... ummm.... pilfer... no.... Leverage their natural resources
    3. Leverage Mexican human resources to feed the labor demands
    4. Convert the dead into oil
    • profOblivion, on 10/12/2007, -1/+45. ....
      6. Profit!
    • biuku, on 10/12/2007, -1/+1ha ha. there's already economic union ... it's called NAFTA. And Canada's the US's largest trading partner.

      Canada's also been running surpluses since 1995. Just like Clinton ... but we didn't go and elect Bush.
    • member57, on 10/12/2007, -3/+2Yes but you have all of one boat and two soldiers and they are old. You rely on our strong military so you don't have to worry about anything except your own social problems.
  • frostydf2, on 10/12/2007, -9/+3Too bad the United States government will never default. This article is pointless.

    Defeceit spending isn't bad, and never has been. For those who bury this comment, go do some research.
    • dracostimpy, on 10/12/2007, -1/+5"Defeceit spending isn't bad, and never has been."

      Hahaha! Are you ever lost, man! Why don't you take a loan out for $500 trillion dollars and bet it all on black at the roulette table? It won't matter if you lose, since "defeceit spending isn't bad", right? I'm sure nobody will show up to break your legs when you can't pay.

      How the hell can anyone in their right mind say that going into debt is a GOOD thing? Are you by chance the head of a major lending institution? "Defeceit" spending is ALWAYS ALWAYS ALWAYS bad. If you're arguing that it's good because it keeps the dollar competitive by lowering its value and thus making exports more affordable to foreign buyers, that's like saying it's good to bash yourself in the head with a hammer until you're dumb enough to get along with your idiot neighbors. Please, tell me you're the head of a major bank or some sort of CIA mind slave like Oswald, because I just don't wanna believe that there are people out there of sound mind and body that actually believe "defeceit" spending is good.
    • geronimo, on 10/12/2007, -0/+5Actually it has defaulted but they didn't call it a default.

      Up until the 60's foreigners could exchange US treasuries for gold.

      Then Vietnam happened and we cancelled that as it became too costly - we couldn't print our way out of our debt obligations. So we cancelled that agreement and disallowed exchanging treasuries for gold. So then we could get this - print money - and give it back to these guys. Kinda like monopoly money.

      "how many dollars do you want for those treasuries? This stuff grows on trees, I can give you as many dollars as you want!"
    • Rodzirra, on 10/12/2007, -0/+4frostydf2: "Too bad the United States government will never default."

      They already did... a little over 35 years ago. Check out Congressman Ron Paul's commentary on the matter: http://www.house.gov/paul/congrec/congrec2006/cr021506.htm

      This is really important stuff.


  • jdigriz65, on 10/12/2007, -0/+4This article is talking about the recently released Treasury Department's report using GAAP (Generally Accepted Accounting Practice) methods. Basically the standard "debt" and "deficit" numbers that are typically used by politicians do not include "borrowing" of assets from the social security funds, as they are simply "cash flow" numbers. I may have an over-simplified view of accounting, but cash flow only accounts for payments on debt, not the entire debt itself.

    The example that comes to mind is borrowing $200,000 to buy a house (resulting in $1000/month mortgage payment), and only saying that your "deficit" is a year's worth of monthly payments ($12,000 rather than the full $200,000). To make matters worse, let's say that you take out a home equity loan ( like a Social Security Fund perhaps) for $40,000 (300/month), and then use that money to make the payments...so cash flow wise, you would actually have a positive cash position for the year of 40,000 - 12,000 - (300*12)) or $24,400 in the black! In reality your true debt is $240,000! Bank will eventually only let you borrow more money if they think your house value (GDP) is worth more than you owe or relatively close to value depending on the risk the bank is willing to take (105% is typically the maximum limit for most creditors, and this year the government stands at 403%)...however, eventually that money will need to be paid back otherwise you risk bankruptcy or as the article puts it, insolvency.




    • snowwrestler, on 10/12/2007, -0/+0@jdigriz65

      Public (in other words, government) financial management is different from private financial management, and while analogies to mortgages are helpful, they are not true.

      Governments use cash-flow accounting because they cannot save money. A government must spend its tax revenues in full every year, because there is no place to save them--unlike you they cannot just open a savings account or buy some mutual funds. In government spending there is no such thing as a mortgage or home equity loan--they are called deficits and debts. That is why people say that "deficit spending is not necessarily bad"--the reason is that to a government, every loan is a deficit.

      Loans are fine as long as you can afford the monthly payments. To abuse another analogy, it's like owning a home and refinancing every 5 years to pull out equity. Your debt will get bigger and bigger and bigger but as long as you can afford the monthly payment you can keep going forever without ever paying the principle. You just have to keep your revenue growing as fast as your monthly payments grow.

      We've failed to do that recently, but the other funny thing about a government is that in addition to controlling its own spending, to some extent it can set its own revenues by adjusting the tax code.
  • starguy, on 10/12/2007, -3/+3Slash the entire military budget to zero, you could pay off the entire debt in a few years. Look how obscene it is. All 40 cookies of it. Having spend 40 cookies every year for the last 20 years, they should have enough garbage by now to last them the next 20 years. http://www.truemajority.com/oreos/
    • dknighton, on 10/12/2007, -4/+2I somehow doubt your economic theories as you base them on cookies. Two points which you fail to see in your "ingenious" idea...

      1) Slashing the military budget to zero would leave our country in a totally unprotected state. You planning on taking up arms, you hippie *****?
      2) An entire military force suddenly unemployed would mean a tidal wave on the welfare system. How do you think the economy would react to that? It would crumble.

      I'm sure there are more, but I've already wasted enough time pointing out the errors in your dumb-ass suggestion.
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