Will the US end up like Greece in a few years? (unemployment, minimum wage)

[slackjaw]

Greece's economy isn't anywhere near as productive as the United States, that makes a big difference in your options for managing/reducing debt.

[pvande55]

They got the Olympics back in '04. Maybe it's just as well the US lost the 2016 to Brasil.

[Retroit]

Yes it will happen. It's already starting. Look at what happened in Wisconsin with the governor and teachers. We also had some mild "uprisings" here in Michigan. Oh yeah, it's going to get worse. There isn't enough money to go around anymore - it's all going to China. American Socialism will die a painfull death.

[CDusr]

Yeh, can't see how Greece won't default. Too much debt. All that is being done is a fire sale. Others are bound to follow.

However, the US has the reserve currency now, but that doesn't mean it always will. That one thing alone would be a huge change to the US.

Too much debt is too much debt. History doesn't show you can "print" your way out or carry it around forever. There is a big push for a global currency, like SDRs. Altho ironically, all the centralizing seems to cause more issues there are those who claim it is the answer.

[texdav]

Originally Posted by slackjaw

Greece's economy isn't anywhere near as productive as the United States, that makes a big difference in your options for managing/reducing debt.

But their debt pales in comparison to ours. We remmeebr are borrowing 40 cents of every dolar spent. That is not far off the grece model really.Porugal and spain followig;which is why their euroepan partners have gone since started the cuts to save themselves.Frances president introduced his chnages of even what its spent on;not consumers but thing that return wealth. The mobvement is set and we are not the leaders but those who liberals still want to follow their past policies to where they are now. Even states are far ahead of the federal government in cutting spending and balancing their budget while making a enviroment for business growth thru being competitive.

[saganista]

Originally Posted by Retroit

Yes it will happen. It's already starting. Look at what happened in Wisconsin with the governor and teachers. We also had some mild "uprisings" here in Michigan. Oh yeah, it's going to get worse. There isn't enough money to go around anymore - it's all going to China.

There isn't any shortage of money. Bank liquidity is high. GDP is over $15 trillion per year, the highest it's ever been. The Chinese meanwhile do one of three things with the dollars they receive from us in trade. First, they buy things from us. Second, they buy things from other countries who then buy stuff from us. And third, they invest the dollars in US Treasury securities and a few other dollar-denominated assets. The dollars all end up right back where they came from.

Originally Posted by Retroit

American Socialism will die a painfull death.

There is no such thing as American Socialism. We are a market-based, capitalist economy. The pure form of laissez-faire capitalism that some on the right seem to favor has already died a thousands deaths, including here just recently. Despite its uninterupted history of utter failure, some still misguidedly advocate for it.

[GregW]

Will US wind up like Greece?
Pure Capitalism based on free and open markets with no taxes or social regulations is worshiped by theoretical economists with religious fervor. It is hated by businessmen that realize the key to profits is some form of monopoly. Economists do not run the world. Businessmen do. That is why economies that provide subsidies for business and protection for wealth are so popular. The people that run the show love making money but hate losing it even more. They do not let the religion of Capitalism get in their way. Most of the populations are the losers in this rigged casino. The "housing crisis" is a great example of financial manipulation of the highest order. Look who won and look who lost in that manufactured debacle.

If the big players have their way the US will wind up much poorer than Greece because we have more to steal.

[saganista]

Originally Posted by CDusr

Yeh, can't see how Greece won't default. Too much debt. All that is being done is a fire sale. Others are bound to follow.

The normal response in a situation such as Greece's would be to devalue the national currency. But Greece does not have a national currency. Because it uses the Euro, it is dependent upon the EU for the sort of financial rebalancing that a devaluation would typically accomplish. What is bound to happen is what already has. The EU will finally get around to setting up a central facility to assist Euro-users who run into economic imbalances, and the people paying the up-front costs of that facility will whine about it.

Originally Posted by CDusr

However, the US has the reserve currency now, but that doesn't mean it always will.

It will for as long as the US economy -- with less than 5% of the world's people -- produces 23% of the world's GDP. Remember that all currencies are simply claims upon the real goods and services produced within the economy that issues it. What currency has more backing it than the US dollar?

Originally Posted by CDusr

That one thing alone would be a huge change to the US.

Keep in mind that this isn't like the Olympics or the Country Music Awards. There isn't some committee that sits around and decides what currencies will win status as a reserve currency this year.

Originally Posted by CDusr

History doesn't show you can "print" your way out or carry it around forever.

Really? The last time the US paid off its debt was 1836, and when they were done, people looked around and asked why they had bothred to do it. We've been carrying around debt for the 175 years since and getting along just fine.

Originally Posted by CDusr

There is a big push for a global currency, like SDRs. Altho ironically, all the centralizing seems to cause more issues there are those who claim it is the answer.

SDR's have been around for decades. They are already a form of global currency. They are not however immediately liquid because they are not legal tender within national economies. You can exchange them for one of four things, however: Euros, Japanese Yen, British Pounds, or US dollars. All of those are immediately liquid and legal tender in their home economies and elsewhere as may be agreed.

[GregW]

Sag - Thank you for your continuing efforts to teach economic reality.

BTW - If the US is going to have to suffer through an austerity program I would like to see it start at the top. I suggest a 10% net worth tax with a 10 million dollar deductable for a start.

[CDusr]

Originally Posted by saganista

The normal response in a situation such as Greece's would be to devalue the national currency. But Greece does not have a national currency. Because it uses the Euro, it is dependent upon the EU for the sort of financial rebalancing that a devaluation would typically accomplish. What is bound to happen is what already has. The EU will finally get around to setting up a central facility to assist Euro-users who run into economic imbalances, and the people paying the up-front costs of that facility will whine about it.

Certainly the EU will try to do something to keep things from unraveling. Something they don't want. However, whether it actually fixes the issue w/ so much debt is a whole other issue.

Originally Posted by saganista

It will for as long as the US economy -- with less than 5% of the world's people -- produces 23% of the world's GDP. Remember that all currencies are simply claims upon the real goods and services produced within the economy that issues it. What currency has more backing it than the US dollar?

The statement was about future possibilities and trends. Also helps to have the most military might on the planet.

At the rate China has been growing and is projected to grow they are looking to outpace US. Even the FED appears to be showing declining US GDP on charts for future trends. I mean look where China went from just 05 to 2010. They were on a whole other playing field til we started sending them jobs and business.
http://en.wikipedia.org/wiki/Histori...untries_by_GDP

Originally Posted by saganista

Keep in mind that this isn't like the Olympics or the Country Music Awards. There isn't some committee that sits around and decides what currencies will win status as a reserve currency this year.

Got no idea what Olympics and Country Music have to do w/ anything... lol.

Originally Posted by saganista

Really? The last time the US paid off its debt was 1836, and when they were done, people looked around and asked why they had bothred to do it. We've been carrying around debt for the 175 years since and getting along just fine.

Paying off a debt and being in debt up to your eyeballs and then some, are 2 different things. Debt is not something I think is a good idea. Obviously, there are whole schools of thought pushing debt. This is passed onto taxpayers for many future generations.

Originally Posted by saganista

SDR's have been around for decades. They are already a form of global currency. They are not however immediately liquid because they are not legal tender within national economies. You can exchange them for one of four things, however: Euros, Japanese Yen, British Pounds, or US dollars. All of those are immediately liquid and legal tender in their home economies and elsewhere as may be agreed.

Nobody said SDRs haven't been around. Just been a larger push for them and including gold, There appear to be trends away from the US having the bulk of the leverage. China's economy looks to be very likely surpassing US based on trends and certainly they want more say so. They have investments in US currency so they don't want to see those become worthless, but they are also pulling away from US debt.