"Mathematically Impossible to Pay Off US Debt"

I'm going to post the concluding paragraphs to this article and open up the floor to discussion;

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...if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this....

#1) If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.

#2) The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back.
That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

Of course if we had listened to our very wise founding father Thomas Jefferson, we could have avoided this colossal mess in the first place....

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

But we didn't listen, did we?

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.

http://theeconomiccollapseblog.com/a...-national-debt

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I dunno about all of that...but I do know you keep borrowing from the Chinese to service a debt caused by the massive increase of social entitlements and the Iraq war, nothing good will come of it....

Best would to replace the USD to some other currency, to use when trade world wide.

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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Originally Posted by Steve Boyd

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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You might want to look up who bought the most Bonds last year then.

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Originally Posted by Steve Boyd

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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The reason the greedy banks lent money to people who wouldn't pay it back was because they were told to by the US Gov't in the 90's.....

Fannie May and Freddy Mac were the two lending institutions that created the marjority of those loans. They then sold these loans to other banks as part of other transactions and basically poisoned the whole banking industry in the US, and some of these bad loans were sold to bank's outside the US. Now ...you want to draw the lines and connections here to why all this was done or do we need to spell it out? Heck..I might as well, Steve, the government of the time was interferering in a process that has run well for decades to solve a problem that the government wanted to solve, that is put more minorities and lower class workers in their own homes, which conveniently is BS because people who cannot afford the home and have no equity IN the home would have no problem walking away from the home.

So...in conclusion, before one blames this on bankers, ask why Senator Dodd and Barney Frank were so defensive when questioned on all of this stuff emmm? They were head of the committees in the Senate and House over seeing all of this and took record numbers of donations from Wall St. firms over the years.

Government should regulate and NOT participate in the economy and politicians on financial matters should NOT be taking millions in campaign donations from the same institutions they are overseeing......

A question.

Does it even matter? I mean virtually all money is fiat money, which means a Dollar or an Euro is worth a Dollar or an Euro only because the government says it is.

I can see where deficits would lead to inflation so debts today are paid off in the future with cheaper money in the future, but really, the only thing that gives money value is our faith that government and rule of law (property rights) won't collapse.

As an aside, I don't think the gold standard is any better. What is gold? It's just a shiny metal with some industrial uses that is also used for ornamentation and jewelry. If it has to be based in a commodity, why not lumber? If push came to shove, I could at least build stuff with it.

When I think about it sometimes, all economics is really a house of cards, so I really try not to think about it too much. ;)

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Originally Posted by Mark in Oshawa

The reason the greedy banks lent money to people who wouldn't pay it back was because they were told to by the US Gov't in the 90's.....

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As the entire world has just seen, but the implications escaped you, is that banks and financial institutions do whatever they want to and what they want to do, regardless of anything else, is MAKE MONEY.
THEY with their embedded former CEOs etc in Government positions, tell the Government what to do, not the other way.
We just saw it nakedly with the Trillion dollars of Government--taxpayer---money forked over to them....

Only a silly person would suggest otherwise.



They lent, even on risky ventures like ME! because just writing a loan, flilling in my name at the top of a mortage contract and hitting PRINT could make them 6%.
6% of a couple of hundred thousand dollars for the time to type john vanlandingham and an address.
Their cost for the clerk doing the typing, a couple of bucks, the paper, about 130 sheets, the minimum they make was several thousand dollars for a couple of minutes "work" if i defaulted in 1 month;
the most is over $400,000 profit when the loan is repaid....

that's called a "good risk".

Try coming down to earth occasionally......

Yes but:
http://www.nytimes.com/2010/02/05/op...05krugman.html
[SNIP]

Fiscal Scare Tactics
By PAUL KRUGMAN

Published: February 4, 2010

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts. Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates. The long-run budget outlook is problematic, but short-term deficits aren’t — and even the long-term outlook is much less frightening than the public is being led to believe.

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they’ll have risen to 3.5 percent of G.D.P. How scary is that? It’s about the same as interest costs under the first President Bush.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

The trouble, however, is that it’s apparently hard for many people to tell the difference between cynical posturing and serious economic argument. And that is having tragic consequences."


More of the same tactic from the same exact people that brought you Weapons of Mass Distraction?

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Originally Posted by janvanvurpa

As the entire world has just seen, but the implications escaped you, is that banks and financial institutions do whatever they want to and what they want to do, regardless of anything else, is MAKE MONEY.
THEY with their embedded former CEOs etc in Government positions, tell the Government what to do, not the other way.
We just saw it nakedly with the Trillion dollars of Government--taxpayer---money forked over to them....

Only a silly person would suggest otherwise.



They lent, even on risky ventures like ME! because just writing a loan, flilling in my name at the top of a mortage contract and hitting PRINT could make them 6%.
6% of a couple of hundred thousand dollars for the time to type john vanlandingham and an address.
Their cost for the clerk doing the typing, a couple of bucks, the paper, about 130 sheets, the minimum they make was several thousand dollars for a couple of minutes "work" if i defaulted in 1 month;
the most is over $400,000 profit when the loan is repaid....

that's called a "good risk".

Try coming down to earth occasionally......

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Yep they're supposed to make money. And if the system was allowed to play out without government interference, the ones that were making risky loans would have gone out of business. Going out of business sure isn't making money. That's one hell of a deterent to the next guy to come along and cook up some stupid scheme. But that's not what happened, now is it? The government (yes under Bush) came along and "bailed them out" because they were "too big to fail". What's the lesson there? It sure as hell isn't watch what you're doing closer, it's make yourself "too big to fail". And that is precicely what the banks have done. They used their TARP/bailout money to buy up smaller banks. And now we're all just waiting for the next bubble to burst. And if you don't think that's comming you're a fool.

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Originally Posted by Alexamateo

A question.

Does it even matter? I mean virtually all money is fiat money, which means a Dollar or an Euro is worth a Dollar or an Euro only because the government says it is.

I can see where deficits would lead to inflation so debts today are paid off in the future with cheaper money in the future, but really, the only thing that gives money value is our faith that government and rule of law (property rights) won't collapse.

As an aside, I don't think the gold standard is any better. What is gold? It's just a shiny metal with some industrial uses that is also used for ornamentation and jewelry. If it has to be based in a commodity, why not lumber? If push came to shove, I could at least build stuff with it.

When I think about it sometimes, all economics is really a house of cards, so I really try not to think about it too much. ;)

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Mostly, I agree. Money only has value because we think it does. Although in all fairness, it's easier to carry a bunch of paper instead of a bunch of 2 by 4s.

Look at it this way, a lot of third world countries either don't pay off their debt or get it forgiven. In another 8 months or so Obama will have us below third world status and we can walk away from it. Hell, Somalia and Haiti will be sending us aid.

In a way, I wouldn't mind seeing us hit rock bottom. Those that still embrace the fundamental American values and work ethic will regroup, rebuild, and drive on to rise again. The deadweight seeking nanny will cannibalize themselves and destroy each other.

With some realistic thinking and some voluntary balance, all this could be worked out.

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Originally Posted by janvanvurpa

As the entire world has just seen, but the implications escaped you, is that banks and financial institutions do whatever they want to and what they want to do, regardless of anything else, is MAKE MONEY.
THEY with their embedded former CEOs etc in Government positions, tell the Government what to do, not the other way.
We just saw it nakedly with the Trillion dollars of Government--taxpayer---money forked over to them....

Only a silly person would suggest otherwise.



They lent, even on risky ventures like ME! because just writing a loan, flilling in my name at the top of a mortage contract and hitting PRINT could make them 6%.
6% of a couple of hundred thousand dollars for the time to type john vanlandingham and an address.
Their cost for the clerk doing the typing, a couple of bucks, the paper, about 130 sheets, the minimum they make was several thousand dollars for a couple of minutes "work" if i defaulted in 1 month;
the most is over $400,000 profit when the loan is repaid....

that's called a "good risk".

Try coming down to earth occasionally......

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They have corrupted government, That was part of my point, and they lent you money, which was a good risk. AS for your assertion of the "work" they didn't do...they are the bank. Who else would lend you the money. You want me to condemn bankers? You obviously harbor some hostility towards them.

I think the US banking community is too corrupted by the government's meddling, and I am of the opinion they should have let a few of them go broke if not all of them. None of them were too big to fail....but both parties down there had it into their head the world was coming to an end if the banks were not bailed out.

Funny enough, as I said (and you haven't disputed) the banks were into much of this mess because of pressure from government to lend more money more freely for mortgages to targeted renters..

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So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.

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US Public Debt Stands at circa $12,372,898,000,000 or $40,089 per person (est at 22:07pm 05/02/2010 - GMT)
All that would need to be done is collect that amount in revenue though the instrument of taxation sufficient to cover the interest bill. The only method of doing this would be to raise taxes and cut spending.

Seeing as the three biggest expenses in the US Budget are Defense, Social Security and Medicare and Medicaid, coupled with an aging population as a result of the post war baby boom and a future shrinking of the tax base as those people leave the workforce...
... and the fact that the US Dept of Defense is practically a holy grail and can not be touched.
... and people object to paying taxes in the first place...

...then probably yes.

Cost will continue to rise whilst revenues will fall relative to them.

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Originally Posted by Rollo

US Public Debt Stands at circa $12,372,898,000,000 or $40,089 per person (est at 22:07pm 05/02/2010 - GMT)
All that would need to be done is collect that amount in revenue though the instrument of taxation sufficient to cover the interest bill. The only method of doing this would be to raise taxes and cut spending.

Seeing as the three biggest expenses in the US Budget are Defense, Social Security and Medicare and Medicaid, coupled with an aging population as a result of the post war baby boom and a future shrinking of the tax base as those people leave the workforce...
... and the fact that the US Dept of Defense is practically a holy grail and can not be touched.
... and people object to paying taxes in the first place...

...then probably yes.

Cost will continue to rise whilst revenues will fall relative to them.

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The Defense dept. has had one cut, the F-22 Raptor but I bet there are some things that will follow.

Growing the economy over time should help erase the debt, but with an aging population and a reluctance to pay higher taxes, it will bring a lot of pressure on a lot more parts of the budget. Obama planned to really add more taxes on the richer part of the Income Tax bracket and kill the estate tax, but I suspect that isn't really doing to do much but drive capital offshore.

Sticky issue for sure, but The USA isn't the only nation in a coffin corner fiscally. The UK I know is in the Red, and Canada after being in the black for 9 straight years is now back in the red with many of the same demographic traps of an aging population the USA has.

There are no easy solutions, although Jan figures it will all be hunky dory, and of course...he is always right...just ask him.

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Originally Posted by Mark in Oshawa

Funny enough, as I said (and you haven't disputed) the banks were into much of this mess because of pressure from government to lend more money more freely for mortgages to targeted renters..

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Let me put it clearer since your reading comprehension is so clouded by your own voice which never ceases repeating platitudes:

You are full of crap.
Only an idiot would believe and suggest that banks were forced to do ANYTHING that they didn't want to.


I though saying that a little bit more polite would suffice, but you drone on so relentlessly repeating the same childish crap taken unfiltered from Limgbaugh, Hennity, Beck and their imitators that I guess i need to speak clearer for you to hear.

" but you drone on so relentlessly repeating the same childish crap..."

You think you're any different? Or is it ok if you take crap unfiltered from Lenin, Marx, and Mao?

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Originally Posted by janvanvurpa

Let me put it clearer since your reading comprehension is so clouded by your own voice which never ceases repeating platitudes:

You are full of crap.
Only an idiot would believe and suggest that banks were forced to do ANYTHING that they didn't want to.


I though saying that a little bit more polite would suffice, but you drone on so relentlessly repeating the same childish crap taken unfiltered from Limgbaugh, Hennity, Beck and their imitators that I guess i need to speak clearer for you to hear.

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John, If you continue to not have a point, I am just going to tune you out. I didn't get this from right wing cranks. Any serious look at a lot of my post on a few subjects would tell you that contrary to your wee mind, I am open minded. Quite frankly, if I said what I thought of your debating skills, I would get my tail banned and you aint worth it.

Your posts are insulting and never seem to acknowledge anyone who doesn't share your left wing view of the world, and quite frankly it would be insulting if I had respect for your points, but at some point, I tuned them out.


PS...the banks were Freddy Mac and Fannie May, which last I heard, were semi gov't controlled. The intereference in the banking system by governments of both stripes is out there if you are not sitting there under you socialist umbrella telling everyone how smart you are....

Oh one last point John. After a night's sleep, I will put you on ignore....there are many leftwing cranks I can debate. Some of them I actually respect. I know you find THAT hard to believe but civilized people don't take politics as a blood sport, but you do and I don't need to validate your mindless assertions and insults any more...

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Originally Posted by janvanvurpa

Let me put it clearer since your reading comprehension is so clouded by your own voice which never ceases repeating platitudes:

You are full of crap.
Only an idiot would believe and suggest that banks were forced to do ANYTHING that they didn't want to.


I though saying that a little bit more polite would suffice, but you drone on so relentlessly repeating the same childish crap taken unfiltered from Limgbaugh, Hennity, Beck and their imitators that I guess i need to speak clearer for you to hear.

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So Janet Reno threatening procecution under Civil Rights Laws had no effect what so ever?

Don't know why I even ask these questions, I already know the answer. But I guess I'm just not to the same point as Mark, yet, but I'm getting there quickly.

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Originally Posted by chuck34

So Janet Reno threatening procecution under Civil Rights Laws had no effect what so ever?

Don't know why I even ask these questions, I already know the answer. But I guess I'm just not to the same point as Mark, yet, but I'm getting there quickly.

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Don't interrupt him...he is on a roll......

Quite Frankly Chuck, this debate is pretty much dead. John has spoken, and how dare we contradict him? He is SO smart and we got our brains out the same Cracker Jack Box that Glenn Beck did.

I think if we all just ignore the white noise, he would get the message...but I do see how some might find him mildly amusing....

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Originally Posted by Alexamateo

A question.

Does it even matter? I mean virtually all money is fiat money, which means a Dollar or an Euro is worth a Dollar or an Euro only because the government says it is.

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http://thelongestlistofthelongeststu.../currency4.jpg

This is 1,000,000,000,000,000 Pengo - at the time it was worth about 4 US Cents.

There is a responsibility of the Government to make sure that the money is a) worth something useful and b) acceptable to trade with.

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Originally Posted by Rollo

http://thelongestlistofthelongeststu.../currency4.jpg

This is 1,000,000,000,000,000 Pengo - at the time it was worth about 4 US Cents.

There is a responsibility of the Government to make sure that the money is a) worth something useful and b) acceptable to trade with.

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Something that Mugabe has forgotten, and if the US gov't isn't careful, they may find out as well...

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Originally Posted by Rollo

http://thelongestlistofthelongeststu.../currency4.jpg

This is 1,000,000,000,000,000 Pengo - at the time it was worth about 4 US Cents.

There is a responsibility of the Government to make sure that the money is a) worth something useful and b) acceptable to trade with.

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So back to the original question. Does it even matter, as long as you have faith that the US and European governments will not fall, and you and I and Mark all go to work tomorrow and keep producing goods and services for our fellow man?

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Originally Posted by Alexamateo

So back to the original question. Does it even matter, as long as you have faith that the US and European governments will not fall, and you and I and Mark all go to work tomorrow and keep producing goods and services for our fellow man?

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Of course it does. If the money you worked for, by the time your next pay packet rolls around is worthless, then what is the point of producing goods and services for our fellow man? Or to bring it closer to home, why work for money that does not buy bread?
Money is supposed to be a counter for the value of goods and services. Things still have inherent value even if the currency does not.

The really weird thing is that although fiat money itself is an intrinsically useless good, it still operates according to the laws of the market.

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.......When coercion is the standard, the murderer wins over the pickpocket. And then society vanishes in a spread of ruin and slaughter.


Do you want to know whether that day is coming? Watch money. Money is the barometer of society's virtue. When you see that trading is done not by consent but by compulsion - when you see that in order to produce you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal not in goods but in favors - when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - then you will know that your society is doomed.

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Francisco D'Anconia in Atlas Shrugged

But if figures are accurate, I fail to see where these dire predictions of deficits have come true.

Hey, I am a fiscal conservative, but I have yet to see where Keynesian deficit spending has done us great harm, even on inflation. In fact the only thing I truly see that causes great inflation are rises in transportation costs (i. e. oil)

Mentioning hyperinflation like the Hungarian pengo only reinforces my views that faith in your currency has as much to do with economics as anything.

on edit:
but understanding opportunity costs, Would we be that much better off if we had not run up debt, and is there any way of knowing?

Also before anyone mentions the Clinton surpluses, They are an anomaly caused by the truly game changing of tax rates from 70% down to 28% in the 80's coupled with the technological boom that was occuring in society as a whole. Once politicians saw all that revenue, spending was once again ramped up.

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Originally Posted by Alexamateo

But if figures are accurate, I fail to see where these dire predictions of deficits have come true.

Hey, I am a fiscal conservative, but I have yet to see where Keynesian deficit spending has done us great harm, even on inflation. In fact the only thing I truly see that causes great inflation are rises in transportation costs (i. e. oil)

Mentioning hyperinflation like the Hungarian pengo only reinforces my views that faith in your currency has as much to do with economics as anything.

on edit:
but understanding opportunity costs, Would we be that much better off if we had not run up debt, and is there any way of knowing?

Also before anyone mentions the Clinton surpluses, They are an anomaly caused by the truly game changing of tax rates from 70% down to 28% in the 80's coupled with the technological boom that was occuring in society as a whole. Once politicians saw all that revenue, spending was once again ramped up.

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Well there are people than smarter than both of us that are saying spending needs to be reigned in. Confindence in a currency is not only from within the nation, but from other nations. The US dollar was the staple currencey for years, but now with the Euro out there, I suspect the faith in the US dollar has to be justified by the strength in the US economy, which last I looked was sputtering....

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Originally Posted by Alexamateo

but understanding opportunity costs, Would we be that much better off if we had not run up debt, and is there any way of knowing?

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It all depends what what you consider the benefit from those costs in ringing up the debt actually were.

Treasury Notes, Bills and Bonds and TIPS are issued as sales of government debt. The question is how much of those debt securities are used to fund the capital and interest of previous debt securities? The answer to that is something I can't easily find the answer to.

If the US National Debt is roughly commutative, then the debt would be mostly be comprised of the historical biggest expenses of the US Government. Surely that would include, the Revolutionary War, the War of 1812, the Barbary Wars, war with Mexico, the Civil War, scuffles in Europe and the Pacific (WWs), Korea, Vietnam, Iraq, Afghanistan et al. etc.

Admittedly there may have been a period some time in the period from 1833 to 1860 when the debt actually was zero, but I can't find proof of that.

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Originally Posted by Mark in Oshawa

Well there are people than smarter than both of us that are saying spending needs to be reigned in. Confindence in a currency is not only from within the nation, but from other nations. The US dollar was the staple currencey for years, but now with the Euro out there, I suspect the faith in the US dollar has to be justified by the strength in the US economy, which last I looked was sputtering....

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Trust me, I'm with you on spending needing to be reigned in, but I just know that deficits and debt have been going on my whole life with no seeming ill effect, so that's why I am asking the question. Do deficits even matter? Maybe they don't as long as they are not too much out of line as a percentage of GDP.

Now, you or I or an individual state can't do it, because we can't "just print money", but maybe government can.

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Originally Posted by Alexamateo

Maybe they don't as long as they are not too much out of line as a percentage of GDP.

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What is "out of line"? I hear we're getting close to the 80-90% range. Seems like that's "out of line" to me.

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Originally Posted by chuck34

What is "out of line"? I hear we're getting close to the 80-90% range. Seems like that's "out of line" to me.

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Historically deficits have run between 2-5% on average. The worst non-WWII year was 1985 at 5.88%. Last year was 9.92% and this year is projected to be 10.64%.

Don't get me wrong, I think deficits are wrong, but just like global warming, I am questioning my assumptions because I fail to see where deficit spending has done us long term harm or caused runaway inflation. I have to believe there is some other dynamic at play here that is not being accounted for.

Also, you are right total debt is approaching 100% of a typical year's gdp. So I guess we have a debt to income ratio of 1:1. We might have to go to sub-primes or junk bonds. :p :

Trying to put it in perspective on a personal level, which may or may not be relative; I am trying to become debt free, and am except for my house. I owe more on my house than I made last year, but I'm not upside down nor do I have trouble making payments, so as long as the US "has value" and can make payments, do deficits really matter?

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Originally Posted by Alexamateo

Trust me, I'm with you on spending needing to be reigned in, but I just know that deficits and debt have been going on my whole life with no seeming ill effect, so that's why I am asking the question. Do deficits even matter? Maybe they don't as long as they are not too much out of line as a percentage of GDP.

Now, you or I or an individual state can't do it, because we can't "just print money", but maybe government can.

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This is the problem Alex. The percentage vs GDP is getting out of line and the debt is being held by Chinese banks. How do you run your economy when you are beholden to banks who don't have your best interests at heart? China is the world's largest economy now and they wont be doing anything any time soon to give the US anything but more debt if they want it. The USA has always been able to manage its debt, but the fiscal realities of the spending of Congress have yet to hit home and the experts are saying it will be nasty if someone doesn't get a handle on it. Then one looks at Pelosi, Reid and Obama and realize, that they are not really looking for that handle yet...

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Originally Posted by Alexamateo

Also, you are right total debt is approaching 100% of a typical year's gdp. So I guess we have a debt to income ratio of 1:1. We might have to go to sub-primes or junk bonds. :p :

Trying to put it in perspective on a personal level, which may or may not be relative; I am trying to become debt free, and am except for my house. I owe more on my house than I made last year, but I'm not upside down nor do I have trouble making payments, so as long as the US "has value" and can make payments, do deficits really matter?

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It isn't a problem when you are not trying to add more entitlements that you cannot control or cap. What is the healthcare plan? You think that is saving money or adding debt? What about the bailouts to the banks and GM? You figure the US gov't really had that money to lend to that when you may need more as a nation to cover the cost of a growing social security deficit? Why go into the hole to protect unionized jobs and the grow the civil service when the economy is in recession? Everything that is being done is counterproductive to how you or I would run our finances. When you are not getting as much income, you don't go buying MORE luxuries or giving MORE to a charity. You cut back. Not government. IT never tries to do with less, and instead tries to tax more income out of the "rich". What do the rich do when they decide they have had enough? They invest offshore or in tax shelters that don't help the economy. Or they quit working so hard and make LESS. Making the Rich pay usually makes them and their money LEAVE. That is NEVER good for a country...