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261 Comments
- 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... - trulymadly, on 10/12/2007, -4/+88The 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. - 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... - 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?
- 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.
- Rodzirra, on 10/12/2007, -7/+43But 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.
- 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 - 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. - RetroRufio, on 10/12/2007, -6/+32Just for those who aren't quite sure what insolvency is...
http://en.wikipedia.org/wiki/Insolvent - 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. - 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.
- xGORDOx, on 10/12/2007, -9/+31I 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? - NoTiG, on 10/12/2007, -6/+28I 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.
- 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.
- 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. - Andrej73, on 10/12/2007, -9/+30US debt financed by chinese government. realy.
they saved our standard of living. thanks. - 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.
- 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!” - 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! - SparQy, on 10/12/2007, -12/+28Michael 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...
- inactive, 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.
- MadOgre, on 10/12/2007, -5/+20This 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.
- dagonweb, on 10/12/2007, -13/+27The 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. - SniperSlap, on 10/12/2007, -1/+14Standards 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. - 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. - 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. - 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. - falstaff, on 10/12/2007, -4/+15Which 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.
- wild, on 10/12/2007, -13/+24Incredible, Inclusive, Involved, Independent...
- 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. - 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. - inactive, on 10/12/2007, -18/+27Silly 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 - 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.
- thcobbs, on 10/12/2007, -0/+7@ahawks
That never stopped anyone from commenting on digg before. - inactive, 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. - inactive, 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. - profOblivion, on 10/12/2007, -0/+6*the sounds of crickets chirping*
- And0, on 10/12/2007, -0/+6It's clear now that people aren't crazy when they become Libertarian; it just happens slowly over time.
- 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." - 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.
- 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?
- 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. - bloodguard, on 10/12/2007, -3/+8"Thanks, government. Thanks a whole bunch."
Errr, No. Thanks asshat voters. Thanks a whole bunch. - 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. - 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. - 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. - 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!" - BESTenemy, on 10/12/2007, -0/+4Rememebr the quote from the tax documentary? "Federal Reserve's no more Federal than the Federal Express".
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