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anonadminJan 9, 2012
Smoke and mirrors!
I just realized that the comparison of debt to GDP is smoke and mirrors. It is the equivalent of me trying to get a $9,000,000 loan because I work for a company that makes $10,000,000 a year. Ignoring the fact that I only make $60,000 a year.
The GDP is The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
So the US GDP is 15.23 Trillion dollars.
However, the GDP is not the governments income, it is the total made by the people.
The government only makes 5.2 Trillion dollars from taxes and other revenue sources.
So, if the national debt is the size of the GDP then the government is in hock up to 300% of it's income and pushing towards 500% based on the 2012 budget.
vitriolandangstJan 10, 2012
True. But this would make it the size of a reasonable home mortgage.
Most of the debt is owed to US citizens and institutions.
It's not GREAT that we have this large debt -- but the worst thing we could do is to cut spending on the wages of government employees and programs. Businesses are NOT investing and will wait on the sidelines until there is real growth -- that's why government policy has to fill the gap.
>> The VAST MAJORITY of the debt can easily be spoken for;
$3 Trillion to Iraq and Afghan wars (includes medical care for vets)
$2 Trillion for 2008 Bailout; $780 Billion in TARP funds and the rest was just printed by the Fed with no government oversight.
$2.4 Trillion in an IOU from George W. Bush for what he took out of the SS trust fund.
$1 Billion for Bush's reform of Medicaid and making it impossible for the government to negotiate down drug prices.
~$750 Billion in tax breaks for the top 1%. Foreign investment by this bracket increased, so that for every dollar they got back, they spent 2 overseas -- so it did produce jobs, just not in the USA.
>> If George Bush had done NOTHING at all but kept Clinton's economic policies (and perhaps not allowed for increased leveraging on Wall Street), then we'd be nearly at the point where our debt was paid down.
Even with the economic downturn the DEFICIT is slightly reducing, even though the DEBT has some momentum.
The Banksters and their friends on financial news shows would like you to freak out about the debt and not pay attention to what causes our deficit (low tariffs, lot's of spare income for the powerful).
peppermintpigJan 11, 2012
To say that it's comparable to an individual's debt on a mortgage doesn't do the situation justice. The harm and risk of such a debt when multiplied grows exponentially. It would be comparable to more than a million people deciding to collectively mortgage their homes and then being stuck in a long malaise as individual responsibility to the debt fades and drags down the ability to pay it off.
NeosopheusJan 9, 2012
And to make things even better, as of 2011, consumer debt in the U.S. was over $14 trillion.
http://www.creditscore.net/u-s-consumer-debt-in-2011/
America: once the land of the free and the home of the brave, now a nation of debt.
NeosopheusJan 9, 2012
That should read $11 trillion, not $14 trillion. My mistake.
NeosopheusJan 9, 2012
Dugg down with no rebuttal. Classic.
njdoo7Jan 9, 2012
Reality is not popular.
devinemoneymanJan 9, 2012
A new world order push for a one world order government. .. As long as people are ignorant and keep killing each other and working for the elite thugs it might happen .And after the smoke clears you will be the victim of your own ignorance.http://educate-yourself.org/nwo/
njdoo7Jan 9, 2012
You should really clarify the "one world government" part.
Even though dozens of leaders have publicly called for a new world order, people attempt to refute the concept of NWO by using this straw-man. This is the main component of wikipedia's article on this subject:
http://en.wikipedia.org/wiki/New_World_Order_%28conspiracy_theory%29
How is the concept new world order is a "conspiracy theory" when we can watch a video of george bush calling for it:
http://www.youtube.com/watch?v=7a9Syi12RJo
or Soros calling for it:
http://www.zerohedge.com/article/george-soros-united-states-must-stop-resisting-orderly-decline-dollar-coming-global-currency
Why does Wikipedia not source these videos of prominent men and politicians calling for it?
Here is another prominent man calling for it:
""For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as internationalists and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that's the charge, I stand guilty, and I am proud of it."
http://en.wikipedia.org/wiki/David_Rockefeller#Policy_groups
This does not mean a world government, but an integrated governance system. The claim that it means "one world government" is a straw-man.
njdoo7Jan 9, 2012
I should mention that a lot of the wikipedia article on new world order is a straw-man. It goes far beyond what this concept actually is.
Some more radical people may add elements to it, but the concept is really simply and not a conspiracy theory.
njdoo7Jan 9, 2012
I now notice there are two wiki sources for New World Order. The other is:
http://en.wikipedia.org/wiki/New_world_order_%28politics%29
This is what most are referring to when using the phrase. The current push towards political re-balancing of power is one towards central governance.
This is what most people are calling attention to, but the "conspiracy theory" version is often used as a straw-man.
liscombcJan 10, 2012
“Apathy is the glove in which evil slips it’s hand.”
“Our lives begin to end the day we become silent about things that matter.”
“All that is required for evil to flourish in the world is for good men to do nothing.”
“The price good men pay for indifference to public affairs is to be ruled by evil men.”
-Plato
Well said, never be silent.
desmodenJan 9, 2012
Based on IMF numbers
US 94%
Germany 84%
Canada 84%
France 82%
EU 80%
Isreal 77%
UK 75%
Very very few "major first world nations" are below 50%
yurmutha412Jan 9, 2012
Like they showed in the article, the countries that are worse than the US like Ireland, Spain, Portugal, are causing the crisis in Europe.
jhw539Jan 9, 2012
"the countries that are worse than the US like Ireland, Spain, Portugal, are causing the crisis in Europe."
Spain is at 61%.
http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt
If you prefer the cia's measure, the same holds true. Spain is doing well by the arbitrary GDP vs debt yardstick.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
But I MUCH prefer the US's economic standing over Spain, debt and all, thanks.
yurmutha412Jan 9, 2012
I mentioned Spain, even though it was not mentioned in the article here is an exact quote:
"Greece, Iceland, Ireland, Italy, Japan and Portugal"
Spain has it's own problems with the debt it holds, even though it is relatively low. The point I was making is that the amount of debt when it hits near 100 percent becomes very dangerous, even more so for the US because it is so huge no one can bail it out. Our economy dwarfs the others. For us, it's sink or swim.
desmodenJan 9, 2012
As the "smarter than the average bear" jhw539 said well.
It's not just about debt. It's also about growth, potential, etc.
Iran for example is quite low... Is that a good healthy economy?
Most Americans with homes carry 200%,600%,900% or more of debt vs "GDP"
But when the economy is finally moving in the right direction, we don't need panic over things like this.
Keep in mind in
1997-2001 it was in the 55-65% range
2001-2009 it jumped to 84.2%
2009-2011 up again to 99.6%
1941-1945 it was 117%
And these wars were much much longer
The sky is not falling.
anonadminJan 9, 2012
"Most Americans with homes carry 200%,600%,900% or more of debt vs "GDP"
I feel sorry for them.
They carry that much debt and think that it is the top 1% that is screwing them?
They are screwing them selves, paying interest on every dollar they make so that they can have now what they could buy outright if they just saved there money for a few years.
yurmutha412Jan 9, 2012
We're obviously following a skyward trajectory. The time during world war 2 was nothing like this because it's sustained and reaching a no return point. They are all expenses that aren't going to end suddenly like they did after world war 2. The interest on the debt coupled with the expenses that people have come to see as a necessity make it nearly impossible to turn around. The WW2 years were an anomaly. They have nothing to do with what we are facing.
desmodenJan 10, 2012
And I would argue that the tech crash of 2000, Sept 11, Bank Crash, Housing Crash, Size of Baby Boomer group retiring, and fighting in one and then 2 wars for 10yrs is also (hopefully) an anomaly.
The last 10yrs have been very very costly in so many ways. Dollars and Lives.
It was said very well above:
Much of the 15 can be accounted for.
$3 Trillion to Iraq and Afghan wars (includes medical care for vets)
$2 Trillion for 2008 Bailout; $780 Billion in TARP funds and the rest was just printed by the Fed with no government oversight.
$2.4 Trillion in an IOU for what they took out of the SS trust fund.
$1 Billion for Medicaid Rework
~$750 Billion in tax breaks for the top 1%.
so $8-9 Trillion were one time charges for choices (right or wrong)
not a budget or regular spending issue.
The other $7-9 Trillion ARE a budget/spending issue that needs to be addressed.
yurmutha412Jan 10, 2012
30 years of a consistently rising debt/gdp ratio cannot be called an anomaly.
desmodenJan 10, 2012
The Ratio did NOT go up for 30 years.
From 1997-2001 it went DOWN from 65%-55%.
From 1950->1980 it continually went down.
As did the econmony. 79 a good year?
njdoo7Jan 9, 2012
What's your point?
Everyone else does it?
As someone mentioned, those countries that are falling apart in EU have over 100% debt/gdp.
desmodenJan 9, 2012
My point is that people shouldn't over react.
Is it good? No
Is it the end of the world? No
Many (if not most) growing "modern" countries carry debt at 48-90% of GDP
It would be nice if we could get it down to <75%Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
Recognizing it as a problem does not equate to overreacting.
Diminishing it's importance, due to everyone else doing it, is a form of denial.
desmodenJan 10, 2012
I am by no means saying it should be diminished.
However if you read the other comments on this site, it's like people are saying the world is ending and all is lost.
All I'm saying is we should try to keep things in perspective.
This isn't something new. It's been growing for a while. So it will take a while to fix.Comment is buried, click here to see the rest.
jhw539Jan 9, 2012
Not all of them (Spain is doing great by your precious debt/gdp measure). And certainly not all countries with a worse debt/gdp ratio are doing badly (although the tidal wave really didn't help Japan's mediocrity).
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
Even Ireland is under 100%.Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
Ireland's last reported debt/GDP is 96.8%.
3.2% is pretty close.
Regardless, the metric means different things in different countries, as all countries are unique. However, the metric is used by economists all over the world for a reason.
jhw539Jan 9, 2012
Based on the fact that the US is having money thrown at it hand over fist by the bond market, it appears that those who are actually putting their money on the line don't care about debt/GDP. There is just a bit more to it.
Have you see discontinuities in the Treasury bill market? A narrower spread between rates on Treasury bills and other forms of short-term cred... Ah screw it, just start googling terms off the link below (from one of the *many* times in the recent past folks have insisted the bond fairies are about to lay waste to the US treasury). The short answer is there is a HELL of a lot more to macroeconomics than debt/GDP in every nation and the US is in a FAR different position than any Euro nation.
http://www.washingtonpost.com/business/economy/how-to-tell-if-financial-markets-start-to-freak-out-about-us-debt-limit/2011/07/01/AGegkNuH_story.html
How long has Ron Paul been talking about the doom of coming inflation - and been utterly wrong? At some point, most people paying attention just tune out the chicken little crap (hence the market's position on US bonds - partisan positions don't influence portfolio positions for those with real money).Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
Being the lesser of the bad is no achievement.
I have not seen discontinuities in the treasury market (treasury bills mature in less than one year -you might want to google that-; I assume you mean treasuries as a whole).
However, I have seen the fed become the largest treasury holder over the past 2 years. That alone speaks for itself.
I'm sure there wont be a failed auction as long as the fed is there to fill the void.
The treasury bubble will pop one day, but you can continue to say "it hasn't happened yet" until that day.
jhw539Jan 9, 2012
"The treasury bubble will pop one day, but you can continue to say "it hasn't happened yet" until that day."
Cute - and just how long before we can decide you are wrong?Comment is buried, click here to see the rest.
peppermintpigJan 11, 2012
Wrong on what counts? What are the facts in dispute? I don't believe there is a factual dispute that the Federal Reserve buying its own treasuries. More than a few people don't appear to grasp the obvious consequences and ethical challenges of such an action.
GDP is a metric for central planning. It's not nearly as important a figure as would be the figures of any national bank or activities of the banking cartels in general, but we're not all privy to such information.
number1greenJan 9, 2012
Oops, guess all those giveaways do not make things better...
pivenJan 9, 2012
The American UN-funded debt / liabilities is well over $ 117 Trillion [ One hundrend seventeen ]
http://www.usdebtclock.org/
Do Not believe the lame media low ball number
calvinayreJan 10, 2012
The problem is that they never expected this. It would be worthwhile to note that last year China was only 2nd to the world's economy already http://calvinayre.com/2011/02/14/business/chinese-economy-second-place/ .
FrankLuskaJan 9, 2012
Please remember young ones and children, when you need to get even with those that destroyed the country, when your paying 70 - 90 % of your earnings in taxes, and can no longer have a home, family and children, just make sure you take your anger out of the people who caused this and not on those who tried to prevent it.
desmodenJan 10, 2012
I don't see how it's fair to go after the Baby Boomers.
FrankLuskaJan 10, 2012
Didn't, went after the corrupt, not all boomers are corrupt,
But then again, those who voted or keep voting in the people who keep the country going downhill must bear the responsibility along with the corrupt. Every action has consequences, Every person is responsible for their own actions.
desmodenJan 10, 2012
True, and _very_ true.
and I suppose with some of their dietary habits if things get really really bad we could always eat them, though some may not consider that a modest proposal.
Ammar_IftikharJan 9, 2012
More $ printing and more inflation at world economy
ickglueJan 9, 2012
I am guessing the GOP candidates will say: We need to cut taxes for the top 1% in order to reduce the debt to GDP ratio from 100% because wealth always flow downstream, much like poop.
delphium226Jan 9, 2012
I guess that would make Reagan (50% top end tax rate), Nixon (70%), Eisenhower (91%) 'job killers' according to latest republican economic 'theory' that tax increases on the rich results in killing jobs.
Also, if having low taxes created jobs... no one should be out of work right now.
liscombcJan 9, 2012
Taxes are low for the .01%, or those with billions, becuase they can affford the best tax avisors or lawyers. They are able to escape with the majority of their money.
For those who own a small business, or the middle class, taxes aren't low. When you add up your fed and state taxes, those people are paying between 45-60%.
That's not low taxes. The problem is the right wing wants the .01% corporations to pay less taxes, and the left wants the middle to upper middle class to pay more taxes.
Either way, the middle class gets screwed.Comment is buried, click here to see the rest.
jhw539Jan 9, 2012
"For those who own a small business, or the middle class, taxes aren't low. When you add up your fed and state taxes, those people are paying between 45-60%."
That is still a lie, doesn't matter how emphatically you wave your hands and claim it. The only way I've found anyone get up to even 45% is if they live in CA and have no mortgage and no kid tax breaks and earn over $200k and incorrectly calculate their marginal tax rate and incorrectly assume every dollar they earn is subject to sales tax (note no sales tax on rent, tax payments, food, medical bills, etc).
The REALITY is taxes are at a historic low and Internet Experts are wrong when they claim otherwise, no matter how arrogantly certain they state it.
The conservative Tax Foundation puts 'tax freedom day' on April 12th since their calculation of "this year's tax obligations at the federal, state and local levels" puts it at 28%.
http://www.taxfoundation.org/taxfreedomday/
Retirees are intensely interested in total tax burden, you can google up many indepth studies on this issue. Nowhere has a tax burden of "45-60%" on the middle class.
It's tough to have a debate on this important issue when people keep making up lies.Comment is buried, click here to see the rest.
anonadminJan 9, 2012
Ill have to disagree with you on this one. I just ran my numbers and they show me at 45% of my wage going to taxes.
We Have
Federal Income tax 25% (Based on my income)
Federal Social Security tax 6.2%
Medicare 1.5%
State Sales tax 8.25% of every $ spent
Property tax 1.5% for every $100 valuation
Licensing of my car
Licence plate (State Mandated) $50
State Inspection (State Mandated) $37
Insurance (State Mandated $600
I feel that there are some missing from this list but that is the basics.
njdoo7Jan 9, 2012
A few more:
- inflation tax
- gas tax
- tolls (bridges, roads, et)
- indirect tax (taxes companies pay that you do business with)
- capital gains tax
liscombcJan 10, 2012
That's how they make the numbers appear low, you pay a small amount of tax, multiple times that add up to a lot.
ganjadude4391Jan 9, 2012
I made over 50K in NY, after state local and federal taxed my bring home was only around 27500, or just shy of 50%, and im not in the city either
njdoo7Jan 9, 2012
And that doesn't even count: gas tax, property tax, indirect corporate tax, sales tax, etc.
Most people pay 50% of their income in tax when all these are counted. It's unfortunate you pay even more.
liscombcJan 10, 2012
Yes, I live outside the city as well. The property taxes and school taxes are huge!
kwanijmlJan 9, 2012
Direct taxes may be low (relatively), but the total tax burden is still high; i.e. it's been estimated that when you buy a car, for example, as much as 50% of the cost of purchase can be attributed to taxation along all levels of production. Yes, your 1040 may read more pretty, but our wise overlords have found plenty of ways to extract wealth from us, where we don't notice it as readily.
But beyond that, real taxation (or real government burden) is higher, primarily due to the inflation tax. Governments (with their central banks) use inflation as a means to provide new money first for their project and those of their corporate cronies. . . but by the time this infusion of cash gets down the line to the middle class and poor, the inflated monetary base has now rendered those dollars worth less, by inflating prices. The rich (and politically connected) get richer, the poor get poorer. It is a regressive tax.
Our government would have/could have never embarked on all these wars and all it's imperialism for so long, if it had to tax directly for the funds needed to do this. The American people would have long ago fought back against the more direct taxation.
sheopleherderJan 9, 2012
So please add the real taxes that are Inflation, Capital Gains, Gas tax and the other double taxes that you conveniently forgot. The Hubris just drips off of you...
liscombcJan 10, 2012
Sorry, but at least in NY state you are 100% wrong on this. I can't say much for other parts of the country, as to what their total taxes are, but for those of us in many of the NE states, it is very high.
spatula7Jan 9, 2012
"The problem is the right wing wants the .01% corporations to pay less taxes, and the left wants the middle to upper middle class to pay more taxes."
How can you keep repeating the same lies over and over with a straight face?
The middle class are paying less taxes under Obama than before he took office.
But we are experiencing the results of an economic crisis. And if deficits are so important and the "be all end all" of our problems, then don't you think we should all take our lumps, pitch in and fix it by paying more taxes?
And yes, I think Obama was wrong to extend the Bush tax cuts even in this economy.
The big hypocrisy is the right saying we should all pay less taxes while at the same time say that the deficit is our number one problem...it just doesn't don't add up...
Further...we know from the performance records of every single Republican president since Eisenhower that debt increases greater than GDP when taxes are cut without careful consideration of the impact on GDP.
When Clinton was in office (and every Democrat by the way since Eisenhower outside of Obama) they all had a positive GDP to deb ratio...imagine that, more millionaires getting created under Clinton and greater GDP, all with higher taxes (but not by much mind you, just apparently enough)....And the reason the deficit wasn't paid down then? It wasn't seen as a problem.
So what does that tell you? That taxes don't matter nearly as much as the right say they do. What matters in business are sales.
Sales get created when there is growth. As long as growth is greater than cost we get something called revenue....this obsession on taxes and deficits are important but more often than not, simply a distraction used to push a political agenda from the right to protect the mega rich that run the party....which is why so much wealth has been transferred to the already rich over the last 30 years...all the followers of the cut taxes and cut spending crowd are being misled by focusing on only one side of the economic equation...in business sales, growth and revenues are always more important than minor fluctuations in costs...there has to be a balance and not a single Republican primary candidate is talking about a balance....not one.
liscombcJan 10, 2012
"And if deficits are so important and the "be all end all" of our problems, then don't you think we should all take our lumps, pitch in and fix it by paying more taxes?"
No, the people who are already losing ~50% of their income do not need any more taxes to fix the debt. Kick the fed reserve on the street, end the wars, and fix the loop holes that the corporations are running through.
I don't think this president who's cabinant is filled with Goldman brothers, is about to end the loop holes for their buddies.
And this is not only obama, but every main line president we have had for a long time.
If you want a real change then really invest some time at looking at the facts on Ron Paul. Look at him without any preconcieved notions and then decide. If you get your facts from hit pieces or CNN you will never see the truth.
scamper22Jan 9, 2012
people will digg you down, but it will always be the case that the 'middle class' pays the tax appropriate for the services.
Exceptions being countries rich in natural resources or something.
People who argue that we can 'tax the rich' or 'tax corporations' just need to look at the world... like Europe. 40% income taxes on the middle class. 15-20% VAT that even includes things like food...
Not saying we shouldn't have those kinds of tax rates to pay for the kind of services people want... just that it's pretty much impossible to run a country just by taxing the rich or corporations.
casf1bJan 9, 2012
And yet most Americans just sit quietly and watch like bystanders as America bleeds to death.
The_SovereignJan 9, 2012
There is no alternative other than police brutality and jail time.
njdoo7Jan 9, 2012
In two words, comfortably numb.
spatula7Jan 9, 2012
And that's why unemployment is improving? And why everyone still has cars and TVs and all the food they could possibly eat at next to nothing. And why the US can still borrow for next to nothing and lending percentages are down and inflation is in check...bleeding? No, unemployment is still high and things can be improved. But bleeding? Let's not get hysterical.
theunlearnJan 9, 2012
Unemployment numbers are improving because it only takes into account those looking for jobs. The workforce is shrinking and that makes the percentages look better. "Everyone" has cars and TVs because the government will just hand you a check twice a month if you aren't working.
njdoo7Jan 9, 2012
"Employment-to-population ratio
United States
1994 - 72.0
2001 - 73.1
2002 - 71.9
2003 - 71.2
2004 - 71.2
2005 - 71.5
2010 - 66.7"
http://en.wikipedia.org/wiki/Employment-to-population_ratio
This is a much more telling metric than "unemployment."
The bottom line is, how many people are working?
The answer: a historic low percentage of the population. It's actually below 65% now.
kellyJan 9, 2012
By the end of his first term, President Obama will have added as much debt as all the prior 43 presidents combined.
http://www.politifact.com/truth-o-meter/statements/2011/jul/10/mitt-romney/mitt-romney-says-barack-obama-will-add-more-debt-4/
spectecjrJan 9, 2012
... unless you take inflation into account, of course.
helgersJan 10, 2012
Well if you look at the article, it depends on how you examine the statement since he won't actually accrue that much debt, and those are projections which could easily be off. Additionally if you take into account inflation, both Regan and Bush played a huge part in the current debt, especially since the Obama didn't have any say of the 2009 budget as it was already passed when he took office. Also, most of the money had to be spent regardless of how anyone wanted (wages and materials for the wars we were involved in, etc.). I'm not saying that we shouldn't be reducing debt, but you need to be careful of what you claim, especially when your own source points out the faults in your statement but you don't acknowledge them while making your case.
sheopleherderJan 9, 2012
Well now everyone just needs to quit there job and all of their wages will go to pay off China. And then we are out of debt, that's how it works right? lol
itpricevarJan 9, 2012
will this affect the world economy ?????????
chassupJan 9, 2012
Obamanomics!
amaoicanJan 9, 2012
IMO, debt:GDP is far less important than debt service payments:GDP. We have sold a lot of debt over the years, but there's so much demand for our debt that the rates we pay on the debt are almost as low as they could go. And despite the GOP talk radio lunes, inflation hasn't set in.
We still need to address the debt problem, make no mistake. But we are not in a situation of having to decide whether to, metaphorically speaking, amputate a leg or lose a patient.Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
What happens if there is less demand for US debt?
There are very significant indicators pointing to decreased demand for US debt:
- US not doing anything significant to address the debt problem
- Countries abandoning the dollar in bilateral trade (Russia & China, Japan & China, Iran, etc)
- Fed is now the largest holder of US debt (the us central bank is the biggest buyer of us debt)
- Asian countries setting up framework for alternative and competing reserve currencies
We cant assume rates are always going to be low, unless money creation by the fed is going to replace the demand, in which case we WILL see inflation.
I shouldn't have to mention that everyone's grocery and gas bills are much higher than they were 3 years ago, meaning there has been some inflation.
amaoicanJan 9, 2012
"everyone's grocery and gas bills are much higher than they were 3 years ago, meaning there has been some inflation."
You can't say 'inflation' just because a few isolated industries saw price increase. That could just indicate changes in those industries. And of course, 3-4 years ago food and energy prices were dropping like a rock because of the recession. It's really not a good point of reference. But back to the main point, if there was inflation there would be price increases across the board, not just in a few industries.
"What happens if there is less demand for US debt?"
When (not if, when) the demand for US debt slows, it will become necessary and urgent for us to balance our books. At the moment, rates _are_ low which means we can borrow very cheaply. When rates increase we'll still be locked in at the low rates unless/until we float new bonds to pay off the old ones.
njdoo7Jan 9, 2012
MIT project and CPI confirm inflation:
http://bpp.mit.edu/usa/
As for refinancing and balancing books in the future, it is too late for that. Just remember in the future that I told you so.
A 1% increase in rates is a 150 billion increase in interest payments or 10% of the deficit. Congress cant even cut the deficit by 10% with their entire attention on it. They would have to perform drastic cuts which would create riots and strikes.
amaoicanJan 9, 2012
So you're saying if rates increased from 2% to 2.02%, we would see an increase of $150B/yr in interest payments? I call bull.
And how would the interest rates on the debt we've sold increase in the first place? We already sold the debt and locked in the interest rate.Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
No 1% meaning from 2% to 3%, something you could have inferred from the calculation: 150 billion is 1% of the 15 trillion debt.
It's locked in until the next auction. Auctions happen more than once a week. The average maturity of bonds is also less than 10 years (the length of budget decrease plans politicians can agree on).
amaoicanJan 9, 2012
"It's locked in until the next auction."
Uh, no. If you bought a bond a year ago with a 2% rate, and the bonds yesterday sold for 15%, you're still going to get 2%.
njdoo7Jan 9, 2012
The next auction to roll-over the previous one.
When one matures, they issue a new one.
amaoicanJan 9, 2012
ah, fair enough. Still, for a 10 year note that takes 10 years ;)
njdoo7Jan 9, 2012
Yes, but 10 year notes mature all the time. When they mature, the treasury issues another note to pay the principle at current rates.
Most of the treasuries notes are actually less than 10 years, meaning they need to be rolled over more than once per decade...that is unless they can come up with the funds to pay them without new debt..which would require riot creating budget cuts.
njdoo7Jan 9, 2012
*Most treasuries are actually less than 10 years (notes are a specific treasury).*
ncmusicJan 9, 2012
I wished the MIT data went back further. So we could at least compare numbers, above/below historical averages etc.
njdoo7Jan 9, 2012
Me too. shadowstats.org does cpi calculations using historical calculations to show what CPI would be if calculated as it was years ago.
njdoo7Jan 9, 2012
whoops...
http://www.shadowstats.com/
ncmusicJan 10, 2012
The shadowstats seem to trend pretty closely to the numbers from more standard sources. My point is even though the rate might be higher now than is reported with the different methodology it's in no way an outlier from historical norms.
auditortuxJan 9, 2012
Ah yes, because a few isolated industries saw price increases... its a good thing that everyone doesn't have to eat and use energy... oh wait...
amaoicanJan 9, 2012
Yes, everyone uses food and energy. No, that doesn't mean it's especially important for inflation calculations. Inflation is a measure of the change in the value of the dollar, not a measure of the cost of living.
auditortuxJan 9, 2012
Technically, yes, you are right. We exclude food and energy prices from the calculation of inflation.
But if food and energy prices go up 20% year-over-year, most Americans will say we're suffering from inflation.
njdoo7Jan 9, 2012
Are you suggesting the value of the dollar does not impact the cost of living?
If the dollar loses value, the cost of living goes up (assuming no changes to efficiency etc).
This is what we are seeing. The adjusted monetary base has skyrocketed:
http://research.stlouisfed.org/fred2/series/BASE
We don't see across the board inflation because many assets are in deflation, since their prices were too high. One example is housing. While a house value may be declining, it's price can remain stable due to currency debasement.
We see the fed combating deflation in such sectors, with a side-effect of COL increases in assets that aren't in deflation.
It's all relative, but the average Joe is most affected by inflation in food and energy prices.
amaoicanJan 9, 2012
@njdoo - I'm not suggesting that inflation and COL are unrelated, but their correlation is not 1 either. They sometimes move together, sometimes they move apart. But you can't blame monetary policy on changes in the cost of living - decreased supply or increased demand for things (e.g. food and energy) can and does put upward pressure on the prices of those things.
njdoo7Jan 9, 2012
"you can't blame monetary policy on changes in the cost of living - decreased supply or increased demand for things (e.g. food and energy) can and does put upward pressure on the prices of those things."
So you are saying that monetary policy does not affect supply or demand?
Why then is monetary policy often used to target aggregate supply and demand?
Oh, because it does affect supply and demand.
Monetary policy can cause increased demand for food and energy, especially when that policy creates more money to buy the food and energy with. I never said it was the total cause, just one factor.
amaoicanJan 9, 2012
I feel like you're being intentionally dense. See my comment below:
"If oil doubles in price overnight, blame OPEC; if EVERYTHING doubles in price overnight, blame the Fed."Comment is buried, click here to see the rest.
njdoo7Jan 9, 2012
No, I quoted your self-contradicting statement. That's not being dense.
Your quote there is apples to oranges. The fed has been intervening in markets for years, causing multi-year price dislocations. Their actions HAVE lead to increased prices across the board, although assets in deflation (like housing) keep the overall inflation metric lower.
amaoicanJan 9, 2012
Yes, I apologize that I'm a little too busy to spell every damn thing out for you. This discussion is over.
njdoo7Jan 9, 2012
You don't have to spell everything out for me, you are just wrong and trying to exempt the fed from any liability through misleading statements and conclusions.
amaoicanJan 9, 2012
I said the discussion is over.
njdoo7Jan 9, 2012
You wasted your precious time spelling that out for me!?
Just admit it. The fed is one of the biggest factors in price increases.
Most everyone else knows that by now, but you continue to deny it. You're intellectually smarter than that, but not emotionally smarter.. Your emotions are getting in the way.
amaoicanJan 9, 2012
Esta discusión ha terminado.
njdoo7Jan 9, 2012
"I'm a little too busy to spell every damn thing out for you."
There you go contradicting yourself again. Not only did you have time to spell it out in english, but also espanol.
me habla hipocrita
amaoicanJan 9, 2012
这个讨论已经结束。
njdoo7Jan 9, 2012
"The fed is one of the biggest factors in price increases." -Most intelligent person in thread
</thread>
amaoicanJan 9, 2012
Right - the Fed can and does contribute to inflation. But food prices and/or energy prices rising is not inflation (furthermore, energy prices haven't even returned to their previous highs, let alone risen above them).
And the thread was over several comments ago.
njdoo7Jan 9, 2012
There you go contradicting again:
You: "Inflation is a measure of the change in the value of the dollar"
The dollar buys less food and energy. There are multiple reasons for this, primarily
- inflation (decreased value of dollar)
- increased demand (partially caused by inflation - ie people seeking to protect their wealth-, partially caused by population growth)
- reduced supply (not so much in most food/energy markets)
Rising food and energy prices are not always due to inflation, but in this case they largely are.
amaoicanJan 9, 2012
If most Americans were jumping off a bridge, would you jump too? ;)
Americans misunderstand what 'inflation' means and why it's a problem. COL going up is also a problem, don't get me wrong, but COL can and does go up and down without relation to inflation. If oil doubles in price overnight, blame OPEC; if EVERYTHING doubles in price overnight, blame the Fed.
kaelyiestaJan 9, 2012
Inflation(and deflation) are misunderstood on several levels. The most obvious distortion is one of language manipulation by government economists, that have changed what is typically meant of inflation from 'change in money supply' to instead 'change in purchasing power'. It changes the framing from the source to instead one possible effect, which can occur even without changes in money supply. That narrative has become slightly unraveled with all the awareness about money printing and such. It has become slowly understood that purchasing power is merely a symptom of inflation, and not even a sufficient one since all economic goods can slowly decrease in cost as productivity increases without any manipulation of the currency whatsoever. Only those who wish to hide the true nature of this phenomenon would intend to manipulate the meaning of these terms in such a way.
There is another error that even those aware of the fed and such tend to miss(I was guilty of this myself until I read Human Action). The error is in misunderstanding the demand for money, in cash and fiduciary holdings, or put another way, in savings(beyond any increase in the stock of specie). A money supply that grows or shrinks in response to the demands of people to have or not have money vs goods is not actually an instance of inflation or deflation. This distinction isn't just pedantic adherence to definition, because only in considering this requirement, can one speak of inflation and deflation meaningfully and not conflate these with other incidental issues.
njdoo7Jan 9, 2012
amaoican: "Inflation is a measure of the change in the value of the dollar"
Good that you admit this. Now, let's look at the historical value of the dollar:
http://3.bp.blogspot.com/_KQih9PUiAAQ/TMceSLjkqWI/AAAAAAAAAGk/JIUT7foorlY/s1600/Value+of+US+Dollar.jpg
Looks like inflation to me.
MIT and CPI confirm that this is ongoing:
http://bpp.mit.edu/usa/
njdoo7Jan 9, 2012
amaoican: "Inflation is a measure of the change in the value of the dollar"
Good that you admit this. Now, let's look at the historical value of the dollar:
http://3.bp.blogspot.com/_KQih9PUiAAQ/TMceSLjkqWI/AAAAAAAAAGk/JIUT7foorlY/s1600/Value+of+US+Dollar.jpg
Looks like inflation to me. Why do you claim otherwise when real data contradicts you?
MIT and CPI confirm that prices across the board are increasing:
http://bpp.mit.edu/usa/
amaoicanJan 9, 2012
I didn't realize we were talking about inflation over the last 100 years; I thought we were talking about the here and now. My apologies.
njdoo7Jan 9, 2012
There has been inflation in the past year, as MIT's index confirms:
http://bpp.mit.edu/usa/
As of 11/31/2011 inflation was over 3% on a yearly basis, as measured by MIT.
amaoicanJan 9, 2012
You're bitching about 3% inflation? It was negative a few years ago, so yes, it's going to be a bit higher than usual now. Are you wanting 0% inflation? 'cuz that is not the current inflation target.
njdoo7Jan 9, 2012
No, you said there isn't inflation. I am refuting that.
The fact that you are still formulating propaganda to misdirect from this point tells me you are trying to mislead people.
Someone who makes a mistake admits it when proved wrong, they don't create straw mans or use red herrings.
amaoicanJan 9, 2012
I apologize if I said or implied there was NO inflation. What I meant slash felt like I was saying was that the change in price of one or a few goods (ie oil and food) does not equate to inflation, and perhaps (though I don't actually recall saying this) that inflation was not particularly high right now.
I don't think you could actually say there is NO inflation - our measuring methods aren't good enough to say that*. We could say it is negligible (it's not) in which case it might even be negative (which is what we want to avoid - which is why we target 2% rather than 0%).
* That's not to say that we COULD do any better.
njdoo7Jan 9, 2012
amaoican: "inflation hasn't set in"
I agree that the rise in the price of a good does not equate to inflation.
However, the recent and current rise in the price of goods is mostly due to inflation. Not only from Fed policy, but european policy, asian policy, etc...
amaoicanJan 9, 2012
I disagree entirely. Oil, for example, has risen over 10% in the last year, while inflation has been around 3% (even by your own admission). Oil has risen since the recession (from a low, mind you) quickly because the demand for oil is related to the health of the economy - an economy in good health demands more oil than the same economy in bad health.
So the change in price of oil can not "mostly" be attributed to inflation, and I suspect we would find the same thing if we looked at food prices - they have risen faster than inflation because there are real supply/demand issues in play.
njdoo7Jan 9, 2012
As you mentioned:
"You can't say 'inflation' just because a few isolated industries saw price increase."
'if there was inflation there would be price increases across the board"
I am talking about the price increases across the board, as measured by MIT, not solely oil.
It's interesting how you flip-flop on focusing on one industry to prove your point, and use another strawman of "oil price being mostly due to inflation." (something i didn't claim)
amaoicanJan 9, 2012
What do you mean, then, when you say that the increase in the price of goods is mostly due to inflation? If you mean the price of all goods in the aggregate, then aren't you just saying that inflation is caused by inflation? (Which, while true, sounds a bit silly).
njdoo7Jan 9, 2012
What is silly is you posting 20+ times attempting to contest this self-supporting statement.
Some sectors see more inflation than others. Food and energy are leading the way. This is also mostly due to inflation. People seeking to protect themselves from a devalued dollar, store their wealth in hard assets necessary for survival (food and energy).
amaoicanJan 9, 2012
"Some sectors see more inflation than others."
No, no, no! This is exactly the thought I've been trying to drive out of your head. Inflation doesn't mean "increasing prices". Increasing prices is a *symptom* of inflation!
(Incidentally, there is some evidence that my claim -that isolated increases in prices can not indicate inflation- is wrong. Look at in China. They had been aggressively inflating the supply of RMB to hold the value of the RMB constant against the dollar, and those extra RMB were disproportionately invested into housing, leading to overbuilding, and a future real estate bust, if/when they run out of farmers to move into the cities...
That said, in China's case there ARE increasing prices in numerous sectors, but you don't REALLY see the BIG problem unless you consider real estate.)
njdoo7Jan 9, 2012
Another strawman, sigh...let me spell it out for you with your definition of inflation:
"Inflation is a measure of the change in the value of the dollar"
Some sectors see more "change in the value of the dollar" than others.
This is a true self-evident statement.
That is because people take steps to protect their wealth. Instead of storing it in dollars, they store it in other assets. Food and energy have been favorites.
amaoicanJan 9, 2012
No!
amaoicanJan 9, 2012
The value of the dollar is not sector-dependent. If we accept that premise, economics would fall apart. At any given moment, the value of a dollar is constant throughout the economy. If a dollar buys 2 cans of soda at the same time that it buys a small box of nails, then 2 cans of soda have the same value as the small box of nails. That is to say that the dollar is a yardstick that varies in time only.
If we accept your premise that the value of the dollar varies depending on which sector of the economy you're in, then that analysis falls apart and we can no longer say how much anything is worth relative to anything else.
njdoo7Jan 9, 2012
I suggest you spend more time on your psychological intellect.
Your emotional attachment is circumventing the rest of your intellect.
Maybe this exchange will prompt cognitive dissonance strong enough to overcome the denial. However, the latter defense mechanism is obviously pretty strong for you. Good luck.
njdoo7Jan 9, 2012
You're missing the point:
The value of the dollar affects demand differently in certain sectors.
amaoicanJan 9, 2012
Look, we need to have some constant unit before we can say how much anything is worth - but we don't have anything like that. Dollars is the closet thing to a constant unit of value that we have, and it's not constant across time, but it is useful to accept as an axiom that at any given moment, "1 dollar" is a constant unit of value everywhere, and it is the value of the things you get back for your dollars that vary.
So values of things vary depending on quality, convenience, and so on, but the value of 1 dollar is 1 dollar. To claim that a dollar's value varies depending on the sector seems to precede giving up and throwing the dollar away completely.
Assuming that a dollar has constant value everywhere (at one time) allows you to compare the values of other things.
njdoo7Jan 9, 2012
And the value of things also depends on demand, which the value of the dollar influences.
A decrease in the value of the dollar will reduce demand in some sectors, and increase it in others.
amaoicanJan 9, 2012
I'm going to think about this comment. I think it's probably true in practice because of the way new money enters the economy. That is to say, when new money is created, certain industries will respond immediately, and other industries will respond more gradually as the money flows into them.
amaoicanJan 9, 2012
At stasis, the impact on prices should be similar everywhere, if you could factor out the impact on prices caused by changes in individuals' preferences that is...
Well, economics is hard, lol. That's kinda what Hayek said - we just can't know enough to predict what will happen. That's why we have a market - it's a machine that determines the best way to distribute the goods and services we produce.
njdoo7Jan 9, 2012
Economics is very complex.
It is very complex, and maybe even impossible, to account for individual preferences and "factor them out" as human action is not always predictable or rational.
What have my personal responses to a devalued dollar been?
- I buy less material unnecessary goods
- I buy more life-dependent goods
Why? Two-fold.
1. I have less disposable income relative to increased prices, and life-dependent goods make up a larger percent of my earnings.
2. The money I do save, I want to maintain it's value.
My purchases of electronics, cars, restaurant dinners, etc have gone down.
My purchases of food, gardening materials, energy sources, etc has gone up.
This is a microcosm of how the value of the dollar affects demand (and thus prices) differently in each sector.
Is everyone going to react like me? No, but enough will to significantly impact demand.
amaoicanJan 9, 2012
Well, we really need to bring this to an end. I'm tired, I'm sick, every muscle in my body aches, I can barely keep my eyes open, I'm dizzy, I'm hungry, I'm nauseas, I'm not sure I spelled nauseas correctly, and I'm slightly horny. Long story short I'm really not in the mood to argue.
amaoicanJan 9, 2012
You could produce a theory in which something else is the fundamental unit of value (for example, an hour of human labor or an ounce of gold) but it's really hard to control the value of things (holding constant the value of an hour of human labor sounds like socialism; holding constant the value of an ounce of gold is the Gold standard and comes with its own problems - see history).
njdoo7Jan 9, 2012
Actually history has shown gold is best at maintaining value, as proven by its use as currency for 5000+ years.
What other currency has survived, nonetheless maintain value, for 5000 years? No fiat currency has.
A physical asset based standard (like a gold standard) does create limitations and problems, but there are ways to work around those.
I have analyzed Ben Bernanke's doctoral thesis on this subject as it relates to the Great Depression, and am likely more familiar with the arguments for and against than you are.
He blames the gold standard for it's limits on intervention while overlooking the fact that the fed didn't intervene to the fullest extent. They had the option to intervene under the standard, but they didn't.
Does this mean no changes or policy tools are needed? No, but it doesn't disprove or negate the merits of a commodity standard.
amaoicanJan 9, 2012
That doesn't seem fair. You seem to be lumping together all gold-backed currencies and comparing them to individual fiat currencies. Is there any individual gold-backed currency that survived a "remarkably long time"?
njdoo7Jan 10, 2012
I have a better question.
Is there any individual gold-back currency that remained gold-backed for a "remarkably long time?"
No, the backing was gradually reduced over time. The same goes for any commodity-backed currency, like the silver-backed coinage of Rome.
However, gold itself has been used as international (note international, not just national) currency since at least the 6th century bc in Lydia (modern Turkey).
I recommend Jim Rickard's book Currency Wars for more information on what serious economists and financial experts present as a modern asset-backed currency system.
peppermintpigJan 11, 2012
"You can't say 'inflation' just because a few isolated industries saw price increase. That could just indicate changes in those industries."
Correct, but the effects of inflation do not isolate themselves to a single industry, and changes in industry should account for innovation led decreases in costs if they truly are isolated and not triggered by government meddling.
"But back to the main point, if there was inflation there would be price increases across the board, not just in a few industries."
Inflation is the act of inflating the supply of money. Inflation is happening. The issue is at what rate the effects of inflation are being felt. Inflation and its effects are both occurring and it IS causing across-the-board increases. Depending on the specifics of any given industry, there may be more ability to absorb cost increases, or a delay the effect of inflation.
peppermintpigJan 11, 2012
Actually, to be more technically accurate, inflation is an increase in the supply of currency, not money. Inflation, insomuch that it occurs transparent to the appraisal of a currency in its ability to retain value, is harmful to the creation of capital and not a suitable definition of money.
amaoicanJan 11, 2012
"Inflation is the act of inflating the supply of money."
Ugh... yes, that is the traditional definition. That is not the contemporary usage though, and I am of the opinion that what we understand a word to mean is what a word means.
As for whether or not inflation, to mean an increase in the money supply, is happening, I have no idea. There is an increase in the supply of base money, but most of that base money isn't getting loaned into the real economy; meanwhile, the money in the real economy is decreasing due to deleveraging. But it's all very complicated stuff that I only scarcely understand - what I do know is that the real economics to whom I listen are saying that there will be no actual inflation (decrease in the value of the dollar) unless/until banks start lending their reserves.
The source of my economics knowledge: NPR Planet money & Russ Roberts' Econ Talk podcasts - that would be a leftish and a rightish source, so I feel like I'm getting an overall politically neutral education ;)
kaelyiestaJan 9, 2012
We are seeing not quite 2% real inflation per year for the last several years. That is far lower than expected(and requires some explaining), but it is still not nothing.
But you are right, debt to gdp isn't what really should be concerning us. Not too long from now, we expect to owe much more, regardless of further government spending: http://en.wikipedia.org/wiki/United_States_public_debt#Unfunded_obligations_excluded
Defaulting on foreign creditors will indirectly come back and hurt american citizens, but once the money to fund our existing social system fails, the poorest and weakest among us will be utterly f**ked, at least in the short run. All the dependence our government has nurtured in this society for the last 75 years or so will be a hard drug to quit in such a cold turkey fashion.
amaoicanJan 9, 2012
"it is still not nothing"
We don't want nothing - we want about 2%; it's a safe distance from deflation.
"The present value of these deficits or unfunded obligations is an estimated $45.8 trillion. This is the amount that would have to be set aside during 2009 so that the principal and interest would pay for the unfunded obligations through 2084."
That's not a useful metric. Do you have any idea how much money I'd have to set aside right now so that the principal and interest would last me through 2084? A s**tton. A s**tton.
It's also over the course of 75 years; that's $611 billion per year. But that doesn't sound nearly as impressive, does it?Comment is buried, click here to see the rest.
kaelyiestaJan 9, 2012
Don't tell others what they want. You cannot know it. The deflation bogey man won't change that. Inflation(that is increase in the supply of fiduciary media outside of increased demand for savings) is not a buffer from harm. It is however unequal to what society would choose so long as we know that society is not the one making the choice in setting interest rates and money supply.
The expected debt to arise from promised payments coming due is a useful metric. Identifying the amount of money needed to equal the principal and interest of an undefined amount as a 's**tton' is not relevant. Instead, identify the amount of money needed to equal the principal and interest on the specific debt which has/will come due. That would properly describe the situation we find ourselves in.
You are right that is is over time, but it is not a linear function. The function starts off small and grows. So while you don't find it very impressive(and no one has since the bulk of the cost will be put off to future tax payers), it will be worse soon enough.
amaoicanJan 9, 2012
I am using we to mean the collective of the constituency of the United States. If the government does something, that means 'we', the United States, wanted it. So to speak.
I admit it is clumsy language and I apologize.
kaelyiestaJan 9, 2012
Ah, I understand. I do that often too and have to constantly remind myself not to ascribe actions or behaviors to sets of people based on geographical region when I actually mean some organization instead. It is a tough habit to avoid.
kwanijmlJan 9, 2012
He's not getting you on semantics of 'we'; he is taking issue with the very real difference between the desires of the United States Government (which is *not* we) and the indivuals which make up society in these united states of america (who are also *not* we).
There is no 'WE'. There is no collective thought process. There is no *one* best policy or solution for 'us'. . . there is only the subjective valuations of the 350 or so million individuals in our society, and the decision making bureaucratic elites who look out for the interests of the U.S. government (they do not and cannot look out for my interests, or your interests, or the collectives' interests).
Even a direct, democratic, majority vote on something would still not even come close to representing the mythical 'WE' collective. It would be two wolves and a lamb deciding what's for dinner, but the cook first skims a large portion off the top of that rack of lamb for himself, and throws the remaining scraps to the two wolves who were promised a nice dinner, and now find themselves fighting over the best pieces that are left.
The fear of deflation is irrational and based on poor understanding of monetary principles. And the desire for a sustained 2% inflation is arbitrary and ignores the damage done to the market processes by artificially manipulating the currency.
http://mises.org/journals/scholar/salerno.pdf
amaoicanJan 9, 2012
Of course there's a 'we'. Don't be absurd.
peppermintpigJan 11, 2012
Discussing collectives always carries with it the error of generalizing. Collective action has no unique moral authority.
"If the government does something, that means 'we', the United States, wanted it. So to speak."
Apples are oranges, so to speak... I do not see the merit in this approach.
amaoicanJan 11, 2012
I see the government as a way of figuring out what it is that 'we' as a society want. Economics is another way to determine what 'we' want. An economy is basically a big computer that calculates who should get what.
amaoicanJan 11, 2012
I should probably clarify that by "government" I am meaning a democratically-elected government. Though even a non-democratically-elected government tells you something. They hold power SOMEHOW, right? They can't beat the guys with guns... they somehow have to get those people on their side. ANd so on.
kmccrawFeb 11, 2012
no big deal there isn't enough money to pay it off anyway
stugodJan 10, 2012
Tick Tock
vitriolandangstJan 9, 2012
The debate about the debt fails to look at all the "struggling economies" that are chock full of former executives from US financial services companies like Goldman Sacks.
The Banksters want you to think this all came about by fair housing, unions, and social services like universal medicine.
You can't go bankrupt making people more productive and healthy in your country -- you go BANKRUPT when someone is siphoning off the money.
Nobody noticed the $1.4 Quadrillion in funny money that our Derivatives markets created in our media -- I suppose it wasn't newsworthy. But when you have a huge de-leveraging of a near total financial collapse -- a few eggs get broken.
Greenland followed the pied piper of "nuvo banking" and they are paying for it. The best thing that Spain and Greece can do is to default on these debts, and tell the bankers that "we are sorry for your loss, but we don't have a policy of paying off cases of fraud."
The problem is that the un-checked financial manipulations of very large, very wealthy organizations, means that they can rake off profits as they send whole countries teetering on default, and then have their cronies in the WTO recommend austerity programs and high interest rates that are designed to NEVER be paid off.
devinemoneymanJan 9, 2012
Its done by design so we will accept a one currency for north american.
http://www.google.ca/search?q=amero&hl=en&client=firefox-a&hs=C2f&rls=org.mozilla:en-US:official&channel=np&prmd=imvns&tbm=isch&tbo=u&source=univ&sa=X&ei=0DYLT43ACMTe0QHY8YiZAg&ved=0CEMQsAQ&biw=1360&bih=664
zbeastJan 9, 2012
A lot of US debt is not real... that's right it's created debt.
The US gave money to the banks then are borrowing it back at interest.
http://www.whiteoutpress.com/articles/q42011/700-billion-dollar-bank-bailout-was-secretly-7-trillion571/
All of this was done to keep the financial system from stalling.
The USA is fine.. it can meet it's debts and keep it's populous happy.
All of this is just a big show.Comment is buried, click here to see the rest.
kasha34Jan 9, 2012
Helluva job, Barry. HELLUVA job.
amaoicanJan 9, 2012
http://www.alan.com/2011/07/29/obama-vs-bush-on-the-deficit-in-one-simple-graph/
And remember, Bush's number is JUST the deficits created by his policies during his years in office. It doesn't count the continued deficits from his policies after he left office.
jacksons98Jan 9, 2012
That graph is fake. Only $152 billion in health reforms for Obama? I thought you were counting "continued deficits"
Anyone can put up a good looking graph:
http://www.rightpundits.com/?p=3572
amaoicanJan 9, 2012
That chart seems to attribute the 2009 federal budget to Obama. It was Bush's budget and caused a $1.4 trillion deficit. Yes, Obama inherited a trillion+ dollar deficit.
http://en.wikipedia.org/wiki/2009_United_States_federal_budget
Sourced to http://www.gpo.gov/fdsys/search/pagedetails.action?granuleId=BUDGET-2011-BUD-28&amp;packageId=BUDGET-2011-BUD
In any case, why are you using 3 year old data?
kellyJan 9, 2012
By the end of his first term, President Obama will have added as much debt as all the prior 43 presidents combined.
http://www.politifact.com/truth-o-meter/statements/2011/jul/10/mitt-romney/mitt-romney-says-barack-obama-will-add-more-debt-4/Comment is buried, click here to see the rest.
amaoicanJan 9, 2012
Bulls**t. By "Obama" you mean "the government, during Obama's time in office". Obama hasn't changed government policy enough to have that much impact on the government's finances.
What you said is basically equivalent to if you were selling a house, and just as you were walking out the door to sign the paperwork to transfer the house to the new owner, you (accidentally or otherwise) knocked over a candle, that started a fire, that grew to consume the whole house, but not until after you signed the paperwork.
Sure, the house burnt down under the new owner's watch, but it still remains that the actions that caused the house to burn down took place before he took possession.
(And no, I'm not necessarily blaming Bush. The government is a big ship with lots of switches and dials - he didn't set them all. Some of them he left as they were when he took the helm.)
theunlearnJan 9, 2012
No, it was a democrat controlled congress' budget.
amaoicanJan 9, 2012
Excellent point. Government spending is controlled by Congress, not the President, so blaming government finances on the President is suspicious at best.
But it's entirely reasonable to blame on a president initiatives for which the president pushed - e.g. Obama's health care and Bush's tax cuts.
That was my point - we can't just look at the budget surplus/deficit and use that as a judge of the president. It's only the initiatives he pushes through Congress that we can pin to him (or, potentially, to her).
amaoicanJan 9, 2012
The point of my chart is that _most_ of the deficit that gets blamed on Obama is stuff that would have occurred regardless of who was in office. For example, he didn't change the way we calculate welfare benefits, he took over a year after a recession started adding a HUGE number of new welfare recipients.
The chart shows that the things Bush actually did while in office added significant amounts to the deficit, whereas the things that Obama has done have been more modest. That's not necessarily a defense of Obama - there are many who would say he should have spent more.
liscombcJan 9, 2012
If you want to point fingers, point them at our senate and congress. While our last few presidents are just as guilty, they don't have the power to create the bills that have allowed us to get here.
We should blame bush and obama for encouraging the bail outs, and we should never forget who is really in charge of our money - the federal reserve.
kasha34Jan 9, 2012
I was too subtle. I apologize.
Obama said during the campaign that his policies would "necessarily " cause energy prices to "skyrocket." Then he hired a Secretary of Energy a guy who openly said he wanted us to pay $8-$9 a gallon for gas!
He said he would do it. And his campaign promise is coming true. Helluva job, Barry.Comment is buried, click here to see the rest.
amaoicanJan 9, 2012
"Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket," Obama told the Chronicle . "Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."
Notice he said 'electricity rates' not 'energy', and certainly not 'oil'. Oil hasn't even returned to its pre-recession levels.
kasha34Jan 9, 2012
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Steven Chu
This is who Obama picks as Energy Secretary. A f**king ivory tower greenie who wants us to pay $8+ for gasoline.
f**k him and his mother too.
"Somehow" we have to figure out? Uh, maybe we could prevent Americans from exploring and drilling for all their own oil. That would help. Uh, we could refuse to allow a pipeline that would bring in quadrillions of gallons of oil from Canada.
That would help too.
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” Steven Chu
Somehow we have to figure out how to pull the plug on assh**es like you.
amaoicanJan 9, 2012
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,”; maybe by raising our gasoline taxes to match theirs?
ybevar1Jan 9, 2012
"US debt is now equal to economy". Great. Lets just continue throwing money away and hoping everything will get better.
Im done with the Obama/Bush complaints and comparisons. Lets finally get someone that will bridge the partisan divide and fix this economy.
ROMNEY 2012Comment is buried, click here to see the rest.
FrankLuskaJan 10, 2012
Yes, as clearly shown throughout history, the rich are always on our side.
ybevar1Jan 10, 2012
Considering your boss and everyone else's bosses are rich and give us jobs, yes they do help us.
Considering everytime the rich make a purchase, it benefits numerous other organizations, yes they do help us.
Considering they donate oodles of money to charitable functions, yes they help us.
The rich just don't want to pay for people to get handouts that cause them to be dependent on gov't. If you want everything for free go to Europe. My friend in Denmark says you can get $35,000 a year there for doing absolutely nothing.
stopframingusJan 9, 2012
This is another example of evoking right-wing frames. In this case, the frame is "We have a spending problem in Washington" and we need to cut vital programs and force austerity on the people in order to continue giving tax cuts to the top %, which is how we racked up the deficit in the first place, and why we are facing cuts to vital programs (medicare, medicaid, social security) because we are starved of revenue that many corporations and billionaires are not paying in taxes owed. To make matters worse we are also being framed to believe that making these tax cheats pay is "punishing the rich".Comment is buried, click here to see the rest.
FrankLuskaJan 10, 2012
continue giving tax cuts to the top %, which is how we racked up the deficit in the first place, ???????
Yes, it is immoral, but not the cause, you could take every rich persons wealth in this country and not even come close to paying our debt, which leaves you with, "They are Spending Too Much Money"
Where to cut is another debate and should not come onto the back of the non rich.
stopframingusJan 10, 2012
Yes!! Giving tax breaks to the top 0.1% is a primary cause of our current deficit. All the right wing rhetoric in the world cannot change this fact! But then again facts don't matter when we are dealing with frames.
Also, take a look at the historical average tax rate (above 70% and as high as 91% under Eisenhower, a Republican president)
Keep in mind 99.9% of us are not affected by this high tax rate, and NO, THE AVERAGE PERSON WILL NEVER BE IN THIS GROUP!!!
Oh, and "you could take every rich persons wealth in this country and not even come close to paying our debt" is another frame the ultra rich want us to believe. The ultra high net worth individuals own
$25 trillion in wealth, so YES, I would say this is plenty to pay off our debt.
And my point is that we should be asking what we are spending money on to rack up a $15 trillion dollar deficit? The frames are that we are spending it on "entitlement programs", which is complete nonsense.
FrankLuskaJan 10, 2012
Can you please cite where $25 trillion in wealth is, in this country, i have never heard this before. Among rich people anyway. Also depends on your definition of rich.