US Government Owes 11 Trillion Dollars

[demvesalius]

The US Government owes 11 trillion dollars, yet no one seems to care. Everyone is focused on the "stimulus package", education, abortion, religion, etc... Issues that are meaningless compared to the debt the US government owes. Historically speaking, nations who don't pay off their debt fail rather quickly or become the "property" of other nations (China?); so why are we, the American people, letting the government get away with destroying our country?

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[rara avis]

What do you recommend?

[Rudy]

What do you recommend?
I've ordered Chinese language tapes.

No, seriously, I have.

[qwerty123]

Don't worry about it, the government is representing the American people.

11 trillion!! Hmm that's a lot of money, I wish I had that much money! Hey Mr. pessimistic economist.. what's the national debt again?

[Anumidium]

What can we do? I didn't vote for those idiots. The idiots around me voted for those idiots.

[demvesalius]

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[Valiyn]

Popularity voting and money do not go hand in hand.

Why can't we make politicians pass a financial competency test before they can handle the nation's spending?

[Mozzes]

I'm sure one of the keys will be the roughly trillion dollars per year that we've been spending on defense for the last eight years. Cut our spending and by gosh maybe even increase taxes temporarily and maybe we'll own our own country again before we have to trade our wallets in for wheelbarrows.

[rara avis]

I have no debt. I operate pretty essentially on a cash basis. I live within my means, such as they are.

I vote, and I don't see much effective difference between my choices.

I don't necessarily want to be a passive Citizen, it seems creepy and ignorant to hang around complaining while taking a throw-up-your-hands, I'm-not-responsible-for-it stance - but I'm up to my eyeballs in managing my own cozy little proletariat life - remembering to do laundry and get groceries, go to bed on time.

So what is your point - what does one do?

[demvesalius]

I have no debt. I operate pretty essentially on a cash basis. I live within my means, such as they are.

I vote, and I don't see much effective difference between my choices.

I don't necessarily want to be a passive Citizen, it seems creepy and ignorant to hang around complaining while taking a throw-up-your-hands, I'm-not-responsible-for-it stance - but I'm up to my eyeballs in managing my own cozy little proletariat life - remembering to do laundry and get groceries, go to bed on time.

So what is your point - what does one do?

I'm working on that. That's why I'm proposing this topic. It is first important to understand why we, the American people, are ignoring the problem to then fix the problem. I'm going to do my own research then I'll post it in this thread. I would think that creating or supporting an interest/lobbying group to focus on the problem would be the first step. I'm just a recent college graduate and am somewhat naive on the practical ways of the real world, but I hope to find a realistic means by which to solve this crisis, or to at least contribute to a solution.

[Mozzes]

I have no debt. I operate pretty essentially on a cash basis. I live within my means, such as they are.
...
So what is your point - what does one do?

Probably not a whole lot to do on an individual basis. I mean, we're talking about a 10 trillion dollar debt, what can an individual do? I suppose you take steps to protect yourself. Cash and cash equivalencies tend to wither when faced with inflation. Mutual funds, bonds, and CDs not quite as much. If you have spare income it's not a bad idea to consider investing it.

[rara avis]

Probably not a whole lot to do on an individual basis. I mean, we're talking about a 10 trillion dollar debt, what can an individual do? I suppose you take steps to protect yourself. Cash and cash equivalencies tend to wither when faced with inflation. Mutual funds, bonds, and CDs not quite as much. If you have spare income it's not a bad idea to consider investing it.

Pfft, I have no spare income, outside of my token long-term savings.
Living on a cash basis is expensive. :laugh:

[dragonsscout]

I care. I get pessimistic. I somehow convince myself in a futile way that studying economics will let me fix it... and that my vote will too...

[SirJac]

I got it! Print money insane amounts of money stimulating inflation until the dollar hits parity with the peso! Everyone wins, except all the debt holders and every american with any sort of savings...

So where is that stimulus/bailout money coming from again?

[Storm]

Don't worry, it'll be forgiven. Right? Besides the GDP is like $14 trillion, so we can pay it off in a year if we want. That's how it works, right guys?

Seriously, though, vote for politicians who are willing to put this on the forefront.

[demvesalius]

Here is a useful website: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

There is also a section which describes the positives and negatives of Obama's financial plan: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

[Perf]

It's just money.

[demvesalius]

It's just money.

And your blood only feeds oxygen to your brain and vital organs.





demvesalius added to this post, 4 minutes and 33 seconds later...

A PDF which explains the crisis in full: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

[Perf]

And your blood only feeds oxygen to your brain and vital organs.





demvesalius added to this post, 4 minutes and 33 seconds later...

A PDF which explains the crisis in full: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
If you're actually equating blood to money, then things are really out of whack.

Every country in the world, including China and other emerging economies, and most of the major corporations are being affected, it's not just Americans. If everyone is suffering, who's not suffering? My point is that it helps to take a look at things from a different plane of thinking. Right now, I have the following situation in my family:

- I work and collect income
- My wife has been out of work for 3 months and collects unemployment insurance
- My father-in-law almost lost his job, but has been re-assigned and has at least two more months at his firm.
- His wife got laid off. They have a 4-year-old daughter to take care of, same as us.
- My sister hasn't worked for 4 1/2 years as she's been raising her kids.
- Her husband quit his job six months ago as the firm was relocating; he got severance, but that is running out.

So what are we to do? The country is in debt, more and more people are out of work, and this is happening the world over. We'll do what we do best when times are tough - work together and find ways to survive. We'll start businesses together, take care of each others' kids to enable some to work part-time, cook together to save money if needed, etc...

There must be a bright side.

[demvesalius]

If you're actually equating blood to money, then things are really out of whack.

Every country in the world, including China and other emerging economies, and most of the major corporations are being affected, it's not just Americans. If everyone is suffering, who's not suffering? My point is that it helps to take a look at things from a different plane of thinking. Right now, I have the following situation in my family:

- I work and collect income
- My wife has been out of work for 3 months and collects unemployment insurance
- My father-in-law almost lost his job, but has been re-assigned and has at least two more months at his firm.
- His wife got laid off. They have a 4-year-old daughter to take care of, same as us.
- My sister hasn't worked for 4 1/2 years as she's been raising her kids.
- Her husband quit his job six months ago as the firm was relocating; he got severance, but that is running out.

So what are we to do? The country is in debt, more and more people are out of work, and this is happening the world over. We'll do what we do best when times are tough - work together and find ways to survive. We'll start businesses together, take care of each others' kids to enable some to work part-time, cook together to save money if needed, etc...

There must be a bright side.

I assume Canada is the same as the US in that the point of lobbying/interest groups is to work for the people who don't have time to deal with politics. You elect representatives to, well, represent you in government as well. I'll tell you what you do: You support an interest group which supports reducing national debt. Then hopefully this interest group can raise enough public awareness of the problem that people vote in representatives to solve the problem or current representatives adapt to stay in office. Did you not read anything posted above? This is creditable material. It's no conspiracy. It's not that complicated.

The US Government has the largest national debt, it has so during economic ups and downs.

[blueback]

The debt is a problem, but it's only one.

It doesn't make any sense to focus on it exclusively. I would say if you want to focus on a problem exclusively you should focus on unemployment first, and then maybe inflation second. Both of those are more important beacuse controlling them is how we'll pay off the debt. So, if you want to fix the debt you'll have to sift to those things anyway.

[demvesalius]

The debt is a problem, but it's only one.

It doesn't make any sense to focus on it exclusively. I would say if you want to focus on a problem exclusively you should focus on unemployment first, and then maybe inflation second. Both of those are more important beacuse controlling them is how we'll pay off the debt. So, if you want to fix the debt you'll have to sift to those things anyway.

Your philosophy of economics is wishful thinking. Please watch this clip before posting in this thread again: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. (Pay special attention to the very end).

And you might want to view the other sources.

EDIT: David Walker is a very creditable source.





demvesalius added to this post, 21 minutes and 0 seconds later...

I'm just a recent college graduate and am somewhat naive on the practical ways of the real world, but I hope to find a realistic means by which to solve this crisis, or to at least contribute to a solution.

I should probably point out that when I say this I'm referring to the realistic ways of politics. Not about making it on your own in the "real world".

[Solus]

I think the American public debt has been steadily increasing since the early 1970s so the previous administration is as innocent/guilty as those before. What's new is that the American dollar is decreasing in importance as the world's reserve currency and it is going to be more and more difficult for the US to finance its huge trade deficit.

What worries me more is the huge budget deficit. Am I wrong or is it expected that the budget revenues will be almost 40 percent smaller than the expenditures for 2009 resulting in a massive gap that needs to be closed somehow?

I majored in economics which is a subject I profoundly detest and probably don't understand well. Enlighten me if anything above is incorrect.

[Pandemonium]

The essential problem is not the acquired debt but the financial system itself. A system that is based on the premise that debt acquisition creates money is simply idiotic. There will always be more debt than money in the system because of the fundamental premise. The current crisis was bound to occur sooner or later. A few predictions I have heard stated that the global financial system will be insolvent by 2013. I presume some fun times will be occurring soon.

I have almost finished one of the degrees I am studying so I am content in the fact that I have contributory skills.

[Fermat]

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[demvesalius]

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This is public debt, not debt of the individual governments; please don't confuse these two.

[OneHertz]

There is nothing wrong with debt. It is the government, you can not equate that to a person. A person has to pay their debt off before their life ends. The government never has to pay it off and all is dandy as long as growth rates exceed the costs of that debt. Although right now I think the cost of debt may be higher...

[demvesalius]

There is nothing wrong with debt. It is the government, you can not equate that to a person. A person has to pay their debt off before their life ends. The government never has to pay it off and all is dandy as long as growth rates exceed the costs of that debt. Although right now I think the cost of debt may be higher...

The US Government is headed on a course to where it would only be paying off interest on the money it owes...meaning eventually it would lead to bankruptcy.

I don't like having to explain myself a dozen times, this clip explains why you're wrong: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. (Pay special attention to the end).

I want to believe what you just said and stick my head in the sand of a flawed philosophy too.

[Henry]

The US Government owes 11 trillion dollars, yet no one seems to care. Everyone is focused on the "stimulus package", education, abortion, religion, etc... Issues that are meaningless compared to the debt the US government owes. Historically speaking, nations who don't pay off their debt fail rather quickly or become the "property" of other nations (China?); so why are we, the American people, letting the government get away with destroying our country?

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lol @ histrionic economics.

Its about 70% of GDP, which is in line with other developed countries, and its paying about a 1-2% real rate of interest. And the federal reserve expands the money supply largely by buying tbills. And the trade deficit will probably shrink this year, massive fiscal expansion and all.

[demvesalius]

lol @ histrionic economics.

Its about 70% of GDP, which is in line with other developed countries, and its paying about a 1-2% real rate of interest. And the trade deficit will probably shrink this year, massive fiscal expansion and all.

Would you mind explaining yourself a little more clearly?

[Henry]

Would you mind explaining yourself a little more clearly?

11 trillion dollars is approximately 70% of gross domestic product, which is approximately 15 trillion dollars. This is a mid level for a developed economy.

This debt is carried at very, very low rates of interest. The 30 year treasury is yielding a paltry 3.6%, the 10 year is yielding 2.8%. Inflation in the US has averaged a bit over 2% since the 1980s, so assuming that continues, you're looking at a 1-2% "real" rate of interest on the money, ie barely nothing.

Its problematic, no doubt, but stopping the economy from its significant 4th quarter contraction is more important right now.

[UBERROGO]

Popularity voting and money do not go hand in hand.

Why can't we make politicians pass a financial competency test before they can handle the nation's spending?



We did, the creators, givers, and graders of that test were the american people.

[demvesalius]

11 trillion dollars is approximately 70% of gross domestic product, which is approximately 15 trillion dollars. This is a mid level for a developed economy.

This debt is carried at very, very low rates of interest. The 30 year treasury is yielding a paltry 3.6%, the 10 year is yielding 2.8%. Inflation in the US has averaged a bit over 2% since the 1980s, so assuming that continues, you're looking at a 1-2% "real" rate of interest on the money, ie barely nothing.

Its problematic, no doubt, but stopping the economy from its significant 4th quarter contraction is more important right now.

You see, you're argument is too short term. You're thinking too much about the here and now. You should really watch that video; but, here is a statement by Robert Bixby, which addresses to a degree what you have said:

(From an interview with the Iowa Press: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

Borg: BUT I HEAR MANY PEOPLE EXPLAIN THE DEFICIT AWAY BY SAYING IT'S ONLY A SMALL PERCENTAGE OF OUR GROSS NATIONAL PRODUCT.

Bixby: WELL, HERE'S THE IMPORTANT THING THAT I THINK DAVE AND I ARE REALLY TRYING TO STRESS ON THIS FISCAL WAKE-UP TOUR IS THAT WE'RE NOT TALKING ABOUT TODAY'S BUDGET DEFICIT BECAUSE THAT IS RELATIVELY SMALL AS A PERCENTAGE OF THE ECONOMY. WHAT WE'RE TALKING ABOUT IS THIS UNPRECEDENTED PRESSURE THAT THE DEMOGRAPHICS IN HEALTH CARE COSTS ARE GOING TO BRING IN THE COMING DECADES. YOU DON'T HAVE TO LOOK TOO FAR OUT, TEN, TWENTY YEARS OR SO, TO GET THIS UNSUSTAINABLE THING. AND THAT'S REALLY THE PROBLEM. IT'S NOT TODAY'S DEFICIT. IT'S THE TRAJECTORY OF DEFICITS THAT WE'RE ON BY THESE ENTITLEMENT PROGRAMS.



Here is a link to the interview's transcripts with David Walker and Robert Bixby: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

David Walker is the Comptroller General of the United States, so if he is alarmed it be best to listen.

[Henry]

You see, you're argument is too short term. You're thinking too much about the here and now. You should really watch that video; but, here is a statement by Robert Bixby, which addresses to a degree what you have said:

(From an interview with the Iowa Press: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

Borg: BUT I HEAR MANY PEOPLE EXPLAIN THE DEFICIT AWAY BY SAYING IT'S ONLY A SMALL PERCENTAGE OF OUR GROSS NATIONAL PRODUCT.

Bixby: WELL, HERE'S THE IMPORTANT THING THAT I THINK DAVE AND I ARE REALLY TRYING TO STRESS ON THIS FISCAL WAKE-UP TOUR IS THAT WE'RE NOT TALKING ABOUT TODAY'S BUDGET DEFICIT BECAUSE THAT IS RELATIVELY SMALL AS A PERCENTAGE OF THE ECONOMY. WHAT WE'RE TALKING ABOUT IS THIS UNPRECEDENTED PRESSURE THAT THE DEMOGRAPHICS IN HEALTH CARE COSTS ARE GOING TO BRING IN THE COMING DECADES. YOU DON'T HAVE TO LOOK TOO FAR OUT, TEN, TWENTY YEARS OR SO, TO GET THIS UNSUSTAINABLE THING. AND THAT'S REALLY THE PROBLEM. IT'S NOT TODAY'S DEFICIT. IT'S THE TRAJECTORY OF DEFICITS THAT WE'RE ON BY THESE ENTITLEMENT PROGRAMS.



Here is a link to the interview's transcripts with David Walker and Robert Bixby: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

David Walker is the Comptroller General of the United States, so if he is alarmed it be best to listen.

There are always deficit paranoics, some of them credible, many not. A lot of them thought Regan's tax cuts would have bankrupted the country and they didn't.

The economy is in trouble. No, its not the Great Depression 2.0, but the damage is very serious, deflationary, and will spiral out of control if strong measures are not taken. You have to get the economy back on track and then focus on deficit reduction a la the Clinton years, because you're not going to improve the economy or the budget with a fiscal contraction during a steep recession.

[demvesalius]

There are always deficit paranoics, some of them credible, many not. A lot of them thought Regan's tax cuts would have bankrupted the country and they didn't.

The economy is in trouble. No, its not the Great Depression 2.0, but the damage is very serious, deflationary, and will spiral out of control if strong measures are not taken. You have to get the economy back on track and then focus on deficit reduction a la the Clinton years, because you're not going to improve the economy or the budget with a fiscal contraction during a steep recession.

Glover: MR. BIXBY, LET'S GO TO YOU ON THESE CONSEQUENCES. TALK A LITTLE BIT ABOUT WHAT HAPPENS IF YOU START DOING THINGS LIKE RESTRAINING THE HEALTH SYSTEM, IF YOU START CUTTING SPENDING, IF YOU START RAISING TAXES. WHAT EFFECT DOES THAT HAVE ON THE NATION'S ECONOMY AND ON THE NATION'S ELECTORATE?

Bixby: IT WOULD HAVE A POSITIVE EFFECT OVERALL BECAUSE WHAT WE'VE GOT IS AN UNSUSTAINABLE SYSTEM NOW, SO YOU'RE GOING TO HAVE TO DO SOME OF THESE THINGS TO MAKE A SUSTAINABLE SYSTEM. WHAT WE'RE TALKING ABOUT IS SOME SHORT-TERM SACRIFICE FOR A LONG-TERM GAIN. AND WE'VE GOTTEN OUT OF THAT IN THIS COUNTRY. WE HAVEN'T ASKED -- POLITICIANS DON'T TALK ABOUT SACRIFICES ANYMORE. IT'S FREE LUNCH ALL THE TIME.





demvesalius added to this post, 4 minutes and 9 seconds later...

Glover: OKAY, LET'S GO TO CATACLYSMIC. LET'S MAKE THE CYNICAL ASSUMPTION THAT NOTHING HAPPENS, THAT POLITICIANS FIND IT EASIER JUST TO CONTINUE DOING WHAT THEY'RE DOING. WHERE DOES THE NATION HEAD? WHAT ARE THE CONSEQUENCES OF NOT DOING SOMETHING?

Bixby: WELL, EVENTUALLY THE ECONOMY GOES OVER THE CLIFF. HERE'S ONE OF THE THINGS -- AND YOU GET LOWER STANDARDS OF LIVING, BASICALLY. YOU MAY HAVE NO CRISIS AT ALL. WHAT YOU MAY HAVE IS A SLOW, LONG EROSION OF STANDARDS OF LIVING SO THAT OUR KIDS AND GRANDKIDS JUST HAVE A MUCH WORSE ECONOMY AND STANDARD OF LIVING THAN WE DO TODAY.

Walker: LOOK, WE DON'T FACE AN IMMEDIATE HEART ATTACK, BUT WE HAVE BEEN DIAGNOSED WITH FISCAL CANCER. WE NEED TO MEND OUR WAYS. WE NEED SOME TOUGH TREATMENT IN ORDER TO MAKE SURE THAT WE CAN PROSPER IN THE FUTURE. WHAT'S MOST LIKELY TO HAPPEN IS FOREIGN LENDERS WILL NOT WANT TO BUY OUR DEBT AT THE LEVELS THEY HAVE. WHAT DOES THAT MEAN? INTEREST RATES WILL GO UP. WHEN INTEREST RATES GO UP, THAT HAS A COMPOUNDING EFFECT ON THE DEFICIT, ON THE ECONOMY, ON AMERICAN FAMILIES. AND BY THE WAY, OUR LONG-RANGE SIMULATIONS DON'T ASSUME INTEREST RATES ARE GOING UP.

Bixby: CAN I MENTION ONE OTHER CONSEQUENCE OF NOT DOING ANYTHING THAT PEOPLE REALLY NEED TO FOCUS ON IS INTEREST COSTS, NOT INTEREST RATES BUT INTEREST COSTS. THE FEDERAL GOVERNMENT SPENT $227 BILLION LAST YEAR IN INTEREST ON ITS DEBT. THAT WAS 9 PERCENT OF THE FEDERAL BUDGET. IT'S MORE THAN WE SPENT ON THE WAR ON IRAQ AND AFGHANISTAN. MORE THAN WE SPENT ON THE MEDICAID PROGRAM. THAT'S WITH A MODEST BUDGET DEFICIT. NOW, IF WE START RUNNING BIGGER BUDGET DEFICITS, AS WE'RE PROJECTED TO DO, NET INTEREST SKYROCKETS AND BECOMES ONE OF THE MOST DIFFICULT PARTS OF THE BUDGET.

[Storm]

I'm sorry, I don't read all caps.

[demvesalius]

I'm sorry, I don't read all caps.

I just copied it off of the transcripts. You can always watch the SECOND video I posted which says the same stuff.

[Visum]

Looks like this vid is no longer available. To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.
Please don't misunderstand my post as I am alarmed by our current situation.

We are in a global economy based on fiat currencies so in many regards are all in the same boat. China must buy dollars to keep the Yuan in check as well as expand their own money supply if they are to export to us. This will only increase if they choose to keep up with our own presses. If the dollar fails, we will have pulled off the largest scheme in world history. We will have exchanged worthless paper for the world's wealth. The aftermath is what I would be concerned with as we revalue or create a new fiat and try to use it in a global market with pissed off countries on the verge or in war with us. But, you see, for that to happen the whole world must make the move together. They will all have to sell at the same time so as to not be the last country holding a worthless dollar. The problem, who will buy a dollar if everyone is selling? I do not say this in a pious way, but the world does not have too many options if they are to choose a fiat for wealth retention. As for a sovereign default, it is possible, but what then? War perhaps, but I hope for neither.
The dollar index is currently at 89. Click for the current chart. (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.$USD&p=W&yr=3&mn=0&dy=0&id=p75322511259)

A few links myself.
Nouriel Roubini (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)
His most recent talk on Bloomberg News. (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts. 0Faces%20Growing%20Risks&clipSRC=mms://media2.bloomberg.com/cache/vcQ6.Dc03xzM.asf) It is a good global overview of both the US and European Union regarding debt to GDP.

Here are a couple of links regarding China and its relation to US Bonds.
CBRC Official Says U.S. Bonds Not Only Option, China (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)
China to stick with US bonds (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)
Why China Can’t Sell U.S. Treasuries (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)





Visum added to this post, 3 minutes and 16 seconds later...

Sound Money at the State Level (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

"Here is a list of 6 states (4 in the last month) and (2 states today) that have pending legislation to authorize the use of gold and silver to settle debts with its citizens and to provide them the legal means to avoid the devaluing of the dollar by having a parallel currency in light of massive bailouts and to protect them in the event of the dollars failure."





Visum added to this post, 4 minutes and 38 seconds later...

State Sovereignty Issues (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

"So far, eight states have introduced resolutions declaring state sovereignty under the Ninth and Tenth Amendment to the Constitution, including Arizona, Hawaii, Montana, Michigan, Missouri, New Hampshire, Oklahoma and Washington.

Analysts expect that in addition, another 20 states may see similar measures introduced this year, including Alaska, Alabama, Arkansas, California, Colorado, Georgia, Idaho, Indiana, Kansas, Nevada, Maine and Pennsylvania."

[Storm]

So I watched the video. Haven't had time to look at the links. No idea where the state sovereignity article is about, sounds like a political statement more than anything. The United States are already sovereign, they don't have to declare it. Perhaps I'll try rereading it later.

The video was a lot of doom of gloom without any real solutions given. Everyone knows it's a problem, but I have yet to hear a real answer. The video said Medicare is the biggest spender, largely due to the high prices of prescription drugs.

Here's a question, if Medicare stopped paying for prescription drugs, would drug companies lower their prices? Theoretically, they should.

[Rudy]

Here's a question, if Medicare stopped paying for prescription drugs, would drug companies lower their prices? Theoretically, they should.

Yes, though the degree of price change is difficult to say. When the government is paying for prescriptions, people will often get drugs they would not be willing to pay for on their own. This drives up demand, and therefore price. You probably know that already; just clarifying for anyone else reading.

[demvesalius]

So I watched the video. Haven't had time to look at the links. No idea where the state sovereignity article is about, sounds like a political statement more than anything. The United States are already sovereign, they don't have to declare it. Perhaps I'll try rereading it later.

The video was a lot of doom of gloom without any real solutions given. Everyone knows it's a problem, but I have yet to hear a real answer. The video said Medicare is the biggest spender, largely due to the high prices of prescription drugs.

Here's a question, if Medicare stopped paying for prescription drugs, would drug companies lower their prices? Theoretically, they should.

Yep, the first video I posted is somewhat "doom and gloomish". Watch the second video I posted which is almost 30 minutes long, which interviews David Walker and Bixby: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Here is a transcript of the video if you want to read instead: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Here is a citizens guide from the Peter G. Peterson Foundation (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.), which is about 28 pages: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

Visum seems to have posted some good links I think, but I still need to look at them closer.

[Storm]

It's also probable that the research would tapper off a bit.

However, it seems a lot of money is poured into superfluous drugs nowadays. Perhaps, we'd see a shift towards more "needed" drugs since the superfluous drug demand would go down? I admit though, I don't know what kind of drugs Medicare pays for.

[Henry]

So I watched the video. Haven't had time to look at the links. No idea where the state sovereignity article is about, sounds like a political statement more than anything. The United States are already sovereign, they don't have to declare it. Perhaps I'll try rereading it later.

The video was a lot of doom of gloom without any real solutions given. Everyone knows it's a problem, but I have yet to hear a real answer. The video said Medicare is the biggest spender, largely due to the high prices of prescription drugs.

Here's a question, if Medicare stopped paying for prescription drugs, would drug companies lower their prices? Theoretically, they should.

The US government is a wholly owned subsidiary of the health care industry. We pay a HUGE multiplier on drugs produced in a free market, free trade environment as seen in many other developed countries.

For some reason, free trade on automobiles is good. Free trade in computers is good. Free trade in anything produced by working class people is good. But free trade for niche products with tiny production costs and often perfectly inelastic demand? Um...its unsafe and would discourage innovation.

Fixing, along with the totally-unnecessary bureaucracies of insurance companies and PI attorneys, woudl go a long, long way to fixing the health care system in America.

[maxpot46]

We are in a global economy based on fiat currencies so in many regards are all in the same boat. China must buy dollars to keep the Yuan in check as well as expand their own money supply if they are to export to us. This will only increase if they choose to keep up with our own presses. If the dollar fails, we will have pulled off the largest scheme in world history. We will have exchanged worthless paper for the world's wealth. The aftermath is what I would be concerned with as we revalue or create a new fiat and try to use it in a global market with pissed off countries on the verge or in war with us. But, you see, for that to happen the whole world must make the move together. They will all have to sell at the same time so as to not be the last country holding a worthless dollar. The problem, who will buy a dollar if everyone is selling? I do not say this in a pious way, but the world does not have too many options if they are to choose a fiat for wealth retention. As for a sovereign default, it is possible, but what then? War perhaps, but I hope for neither.

"Here is a list of 6 states (4 in the last month) and (2 states today) that have pending legislation to authorize the use of gold and silver to settle debts with its citizens and to provide them the legal means to avoid the devaluing of the dollar by having a parallel currency in light of massive bailouts and to protect them in the event of the dollars failure."

"So far, eight states have introduced resolutions declaring state sovereignty under the Ninth and Tenth Amendment to the Constitution, including Arizona, Hawaii, Montana, Michigan, Missouri, New Hampshire, Oklahoma and Washington.

Analysts expect that in addition, another 20 states may see similar measures introduced this year, including Alaska, Alabama, Arkansas, California, Colorado, Georgia, Idaho, Indiana, Kansas, Nevada, Maine and Pennsylvania."Excellent post. I concur with your analysis of the global monetary system, except to point out that the U.S. has already pulled off the largest robbery in world history as the monetary system has, since Bretton Woods in 1944 (or even the Tri-Partite Agreement of 1936), been designed to funnel the world's wealth to the U.S.

And I am very heartened by your news of the monetary activities of other states. Unfortunately they will run afoul of legal tender laws, as well as probably Art I Sec VIII of the Constitution. But I wish them success nonetheless.


maxpot46 added to this post, 5 minutes and 29 seconds later...

Fixing, along with the totally-unnecessary bureaucracies of insurance companies and PI attorneys, woudl go a long, long way to fixing the health care system in America.I agree, health care won't be fixed until the producers are directly answerable to consumers again. With the middle-man of insurers, neither side has the incentive to economize and control costs.

Another issue is the artificially reduced supply of doctors, thanks to the medical school/government cartel.

[Kaos32d]

The world is coming to an end! What are we to do about it? Yes the country is spiraling into a financial panic. Although it is not the Depression 2.0 it is a global gut check. The bailout sucks and so does huge stimulus that just increases our debt. To the guy that keeps ranting about our federal deficit; to bad. As sick as it is that people that represent us can't stop pulling out that credit card, it is a pretty good reflection of America as a whole. Maybe when realize that the media that we experience (TV, Internet, Print) and is fed to us by the people that want us to but their useless shit, when we realize this we might change. On the upside it means that the entire world is invested in us making a full recovery literally with their money. Really though you should be more worried about the short run and the current situation because otherwise most likely the last thing on your mind will be your kids paying on daddy's interest.

Things that could change the current situation and are somewhat likely;

1. A massive virus/plague could be unleashed killing 1/4 to 1/3 of global population. Most of those that die would be small children or people over 60. That would solve your medicare and social security crisis. Alas I'm sure the government would come to the rescue with it's pharmaceutical partners and save the day.

2. A computer virus/plague could be unleashed destroying most computer infrastructures and bring us back to a late 80's level of communication and technology. Everything would have to be built up again but in the meantime it would pull the plug on the stock market and let everything cool down for a few years. I look forward to more music from Pat Benatar and big hair.

3. R&D will have finally paid off and Phizer will find a cure for cancer therefore putting themselves out of work. This could cut our health cost considerably for some time until people start dying of things more related to age.

4. DARPA finally releases the A.I. program they developed and computers begin doing more and making everything we do much more efficient. Computers that can design better versions of itself are a reality within fifty years, maybe now. Maybe they can build me a pair of Nikes cheaper than that kid in Thailand can.

5. DARPA finally releases the know how on how to build a cold fusion reactor. Super cheap energy allows us to spend our countries entire energy bill payments on paying off debt and building a better social infrastructure(ie. schools, healthcare). At the same time all the other countries that rely heavily on petrol dollars take a huge shit as their one exportable good loses all it's value. 9/11 times 1000 ensues as those counties become really poor really fast (Team America: World Police style).

6. Growth becomes stagnant for a few years and the stock market bottoms out around 6000. The world doesn't end but people will learn to respect credit and money for a generation. By the end of of 2011 we start to go on an upswing and things get somewhat back to normal where you're not afraid to sneeze wrong in front of your boss for fear of being the next one to get the axe.

What is not going to happen - Anything you see on the History Channel mega disasters. All of that is as believable as a Jason movie..... what was that noise...............

(Please don't respond to this with Youtube videos unless they're clips of people performing 80's hits)

[metaserve]

As for a sovereign default, it is possible, but what then? War perhaps, but I hope for neither.

I certainly hope not either. But I can't ignore the attitude the past US regime has had regarding debt accumulation. If I remember right it was Cheney who suggested that the only situations in which it was acceptable to run large deficits were during war, or recessions. Well, we have both right now, and unfortunately could, because of some sadistic theo-rhetoric, continue to have both for some time simply because, historically, large capitalist economies tend to excel in times of war.

[Visum]

Excellent post. I concur with your analysis of the global monetary system, except to point out that the U.S. has already pulled off the largest robbery in world history as the monetary system has, since Bretton Woods in 1944 (or even the Tri-Partite Agreement of 1936), been designed to funnel the world's wealth to the U.S. Oh, the wars of money.
And I am very heartened by your news of the monetary activities of other states. Unfortunately they will run afoul of legal tender laws, as well as probably Art I Sec VIII of the Constitution. But I wish them success nonetheless.
I agree. My concern with any state sovereign use of a commodity as payment of debt, would be the Fed attempting or passing a law outlawing the ownership of gold or even silver. It is currently legal to barter (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.), but the IRS does have it's hand out waiting for tax on that transaction. Obviously, this legally negates a completely barter based economy as the IRS doesn't want your gold, and Sovereign entities cannot receive any other coined money but US notes. Food for thought, it seams rational that as M0 or the monetary base decreases, bartering would tend to increase. :thinking:
I certainly hope not either. But I can't ignore the attitude the past US regime has had regarding debt accumulation. If I remember right it was Cheney who suggested that the only situations in which it was acceptable to run large deficits were during war, or recessions. Well, we have both right now, and unfortunately could, because of some sadistic theo-rhetoric, continue to have both for some time simply because, historically, large capitalist economies tend to excel in times of war.
Well, excel as the free money trickles down, increase of the velocity of money, and then slows with the contraction as the debt payment call comes.
An interesting perspective on sovereign debt. Iron Law of the Burden of Debt (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

[mentor]

is 11 trillion that much? the government is smart..

[RBM]

My concern with any state sovereign use of a commodity as payment of debt, would be the Fed attempting or passing a law outlawing the ownership of gold or even silver.

There is a precedent, you know ?

The Gold Confiscation Of April 5, 1933 (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

[Visum]

There is a precedent, you know ?

The Gold Confiscation Of April 5, 1933 (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

Yeah, I was alluding to it..:)