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jackjjackson · 61-69, M
You think? I think it’s a made up number that will never mean anything. It would only matter if it would ever be paid which I strongly suspect it will not. @swirlie
swirlie · 31-35, F
@jackjjackson
That number is very real Jack. 20+ Trillion and counting to be very realistic here. It is actually impossible for the U.S. government to ever pay back the principle amount of 20 trillion, but that does not relieve the U.S. Fed of the legal obligation to 'service' that principle debt on a monthly basis. That means, paying interest-only at the VERY least on that 20T debt obligation.
Paying down any amount of 'principle' owing is simply no longer possible for the American government, because the taxation is not there from which to draw those financial resources. Please keep in mind that it takes 61% of every dollar of annual tax revenue the Fed brings in each year, just to pay the interest-ONLY on the country's national debt. That is why lowering taxation in all sectors represents a huge misunderstanding of how America actually functions from a financial perspective.
Having low taxation sounds good on paper, but that land of milk and honey mentality that American citizens became duped into believing about themselves since the days of Eisenhower, is like a flock of chickens that are suddenly coming home to roost. The absolute lie about the so-called "American Dream" is about to blow up in the face of those who still pretend that Santa Clause will take care of the financial details to keep the illusion happening for Americans. Lowering taxation however, will merely accelerate that fowl homecoming.
Keep in mind as well, that when Greece began to default on it's own identical fiscal situation, the country had no choice but to start selling assets. Part of those assets was also a partial sell-off of certain components of the country itself, like the islands forming the Greek Isles for example. Yes, the Greek Isles are for sale. The reason the USA never went in to buy it up, is because they had no money. But China, Germany and Canada are purchasing huge stakes in Greece and they are paying cash for their purchases. This is no different than Canada owning almost 90% of the island of Barbados since the 1960's and almost 100% of the island of Turks and Caicos since the 1990's.
But the problem for the U.S. Fed, is finding the resources to pay the interest on the national debt. As of December 8th when the debt ceiling was not raised as planned, the Fed turned to Social Security as a resource to service the debt. In other words, the monthly payout to Social Security will be reduced starting January 2018 and the amount robbed from SS will be used to partially service the country's national debt crisis.
That number is very real Jack. 20+ Trillion and counting to be very realistic here. It is actually impossible for the U.S. government to ever pay back the principle amount of 20 trillion, but that does not relieve the U.S. Fed of the legal obligation to 'service' that principle debt on a monthly basis. That means, paying interest-only at the VERY least on that 20T debt obligation.
Paying down any amount of 'principle' owing is simply no longer possible for the American government, because the taxation is not there from which to draw those financial resources. Please keep in mind that it takes 61% of every dollar of annual tax revenue the Fed brings in each year, just to pay the interest-ONLY on the country's national debt. That is why lowering taxation in all sectors represents a huge misunderstanding of how America actually functions from a financial perspective.
Having low taxation sounds good on paper, but that land of milk and honey mentality that American citizens became duped into believing about themselves since the days of Eisenhower, is like a flock of chickens that are suddenly coming home to roost. The absolute lie about the so-called "American Dream" is about to blow up in the face of those who still pretend that Santa Clause will take care of the financial details to keep the illusion happening for Americans. Lowering taxation however, will merely accelerate that fowl homecoming.
Keep in mind as well, that when Greece began to default on it's own identical fiscal situation, the country had no choice but to start selling assets. Part of those assets was also a partial sell-off of certain components of the country itself, like the islands forming the Greek Isles for example. Yes, the Greek Isles are for sale. The reason the USA never went in to buy it up, is because they had no money. But China, Germany and Canada are purchasing huge stakes in Greece and they are paying cash for their purchases. This is no different than Canada owning almost 90% of the island of Barbados since the 1960's and almost 100% of the island of Turks and Caicos since the 1990's.
But the problem for the U.S. Fed, is finding the resources to pay the interest on the national debt. As of December 8th when the debt ceiling was not raised as planned, the Fed turned to Social Security as a resource to service the debt. In other words, the monthly payout to Social Security will be reduced starting January 2018 and the amount robbed from SS will be used to partially service the country's national debt crisis.
Burnley123 · 41-45, M
@swirlie Its a very thorough post on debt and you have read this well, however, Jackson does indeed have a point about Greece not being comparable.
Greece does not own its own currency and was essentially destroyed as the weakest link in a hugely unbalanced Euro-zone economy. What happened to them could never happen to America because the US has more fiscal autonomy, political power and is also so huge that the rest of the world economy would be in trouble if an American crisis happened.
That is not to say that America does not have huge problems or that you are wrong to say the Trump tax cut is a really bad move. You are completely right on that. Like my native UK, America has spent decades with a huge trade deficit owing to prioritising the financial and service sectors over manufacturing. A trade deficit can only be sustained by some kind of debt; whether that be private debt or Government debt. Also, the continued post-Reagan/Thatcher belief that trickle-down economics will stimulate an economy into prosperity is proven as a fallacy to the point of exhaustion.
Basically, the economic priorities have locked Britain and America into a system which is unsustainable and we will continue to see low-growth and crisis until that changes. Both our nations have large Government debt and even larger private debt. Both have a large trade deficit and neither has the political will for painful re-adjustment; not least because that would go against Wall Street and the City of London.
A lot of Trump supporters are pointing to the growth figures as a sign that his economics are a success but this is flawed reasoning for a number of reasons. Leaving aside for a minute that he inherited a growing economy from Obama and that your Fed also makes key decisions, the Trump tax cut will still end up as a disaster. Running a deficit in 'good' times accelerates the fall-out of any crash. This is what happened under George W Bush and no lessons have been learned.
Greece does not own its own currency and was essentially destroyed as the weakest link in a hugely unbalanced Euro-zone economy. What happened to them could never happen to America because the US has more fiscal autonomy, political power and is also so huge that the rest of the world economy would be in trouble if an American crisis happened.
That is not to say that America does not have huge problems or that you are wrong to say the Trump tax cut is a really bad move. You are completely right on that. Like my native UK, America has spent decades with a huge trade deficit owing to prioritising the financial and service sectors over manufacturing. A trade deficit can only be sustained by some kind of debt; whether that be private debt or Government debt. Also, the continued post-Reagan/Thatcher belief that trickle-down economics will stimulate an economy into prosperity is proven as a fallacy to the point of exhaustion.
Basically, the economic priorities have locked Britain and America into a system which is unsustainable and we will continue to see low-growth and crisis until that changes. Both our nations have large Government debt and even larger private debt. Both have a large trade deficit and neither has the political will for painful re-adjustment; not least because that would go against Wall Street and the City of London.
A lot of Trump supporters are pointing to the growth figures as a sign that his economics are a success but this is flawed reasoning for a number of reasons. Leaving aside for a minute that he inherited a growing economy from Obama and that your Fed also makes key decisions, the Trump tax cut will still end up as a disaster. Running a deficit in 'good' times accelerates the fall-out of any crash. This is what happened under George W Bush and no lessons have been learned.
jackjjackson · 61-69, M
You pointed out the key component, the trade deficit which has been at the center of thr President’s sights since prior to the election. In fact action is already under way
https://www.bloomberg.com/view/articles/2017-12-22/suddenly-america-s-trade-deficit-isn-t-so-awful
@Burnley123
https://www.bloomberg.com/view/articles/2017-12-22/suddenly-america-s-trade-deficit-isn-t-so-awful
@Burnley123
Burnley123 · 41-45, M
I hope that is right but it's a very optimistic reading. Not sure the tax bill will cut down too much tax avoidance
swirlie · 31-35, F
@jackjjackson
A flea? Then why is Greece considered such a threat to the entire EU each time Greece defaults on it's financial obligation?
Why is the UK so steadfast in distancing itself from the EU and the likes of Greece whom the UK would continually pay a hefty price to prop up financially, each time Greece defaulted on it's own debt obligation?
The USA is in the same financial position as Greece is today. The only difference between the two countries is the geographical size of each country and the financial numbers of economic collapse resulting from the potential implosion of either's economy. In this regard, the USA and Greece are one in the same.
The USA will be relegated to a flea on the world stage if and when the USA goes into Receivership like Greece has technically lapsed into and the benchmark world currency will no longer be considered the US Dollar.
What you are incorrectly evaluating about the USA Jack, is that as a financial entity, the USA is NOT infallible AND that the USA controls the world and all the world's economies. Nothing could be construed as a more wildly departure from the present day truth than the perception of the American economy as being superior in terms of financial stability to that of Greece.
A flea? Then why is Greece considered such a threat to the entire EU each time Greece defaults on it's financial obligation?
Why is the UK so steadfast in distancing itself from the EU and the likes of Greece whom the UK would continually pay a hefty price to prop up financially, each time Greece defaulted on it's own debt obligation?
The USA is in the same financial position as Greece is today. The only difference between the two countries is the geographical size of each country and the financial numbers of economic collapse resulting from the potential implosion of either's economy. In this regard, the USA and Greece are one in the same.
The USA will be relegated to a flea on the world stage if and when the USA goes into Receivership like Greece has technically lapsed into and the benchmark world currency will no longer be considered the US Dollar.
What you are incorrectly evaluating about the USA Jack, is that as a financial entity, the USA is NOT infallible AND that the USA controls the world and all the world's economies. Nothing could be construed as a more wildly departure from the present day truth than the perception of the American economy as being superior in terms of financial stability to that of Greece.
swirlie · 31-35, F
@Burnley123
"..Jackson does indeed have a point about Greece not being comparable".
No, Jack does not have a point. When a country is bankrupt, size does not matter. Bankrupt is bankrupt. The USA (like Greece) is teetering on the edge of financial bankruptcy as we speak.
Do you think for one minute that the world benchmark currency will continue to be the USD if and when the United States tanks, like it almost did in 2008?
Those two countries are indeed comparable!
"..Jackson does indeed have a point about Greece not being comparable".
No, Jack does not have a point. When a country is bankrupt, size does not matter. Bankrupt is bankrupt. The USA (like Greece) is teetering on the edge of financial bankruptcy as we speak.
Do you think for one minute that the world benchmark currency will continue to be the USD if and when the United States tanks, like it almost did in 2008?
Those two countries are indeed comparable!
Burnley123 · 41-45, M
@swirlie I think you misunderstood that part of my point because you are not familiar with what makes eurozone economics distinct.
America has huge and unique sustainabile debt as do many places. The whole financial system of the world is imbalanced and will have more crisis.
Which economist says that the USA is like Greece? I'm interested.
America has huge and unique sustainabile debt as do many places. The whole financial system of the world is imbalanced and will have more crisis.
Which economist says that the USA is like Greece? I'm interested.
jackjjackson · 61-69, M
[ picturing Swirlie’s frantic internet search yielding no results to prove a flawed hypothesis 😉 ] @Burnley123 @swirlie
Burnley123 · 41-45, M
@jackjjackson She might find something but the hypothesis is flawed.
[quote]Keep in mind as well, that when Greece began to default on its own identical fiscal situation, the country had no choice but to start selling assets.[/quote]
Especially that part.
Greece bailed out its banking sector and needed Euros to do it. They had to get these from the troika on condition that they had to impose austerity policies, which were barbaric and also failed economically.
Greece then tried to negotiate a compromise on the loan and was not allowed to do it by its creditors. In such a situation, America would just default on its loans to China or whoever because it has a huge economy, its own currency and huge political clout.
[quote]Keep in mind as well, that when Greece began to default on its own identical fiscal situation, the country had no choice but to start selling assets.[/quote]
Especially that part.
Greece bailed out its banking sector and needed Euros to do it. They had to get these from the troika on condition that they had to impose austerity policies, which were barbaric and also failed economically.
Greece then tried to negotiate a compromise on the loan and was not allowed to do it by its creditors. In such a situation, America would just default on its loans to China or whoever because it has a huge economy, its own currency and huge political clout.
jackjjackson · 61-69, M
If anyone is able to find it it’s Swirlie 😉 @Burnley123
swirlie · 31-35, F
@jackjjackson
Picturing Jack standing in line to buy food stamps with a wheelbarrow full of worthless US Dollars. 😉
Picturing Jack standing in line to buy food stamps with a wheelbarrow full of worthless US Dollars. 😉
jackjjackson · 61-69, M
Harvesting the back 40 @swirlie