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Sag - Thank you for your continuing efforts to teach economic reality.
Well, so many are not apparently familiar with even the basics, and then they often compound the problem by relying on "facts" that wouldn't pass muster as being so much as a decent rumor.
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Originally Posted by GregW
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.
I'm usually not much for drastic measures, but this could be a step in the right direction after all these years of induced windfalls for the mega-rich.
Location: Currently I physically reside on the 3rd planet from the sun
2,220 posts, read 1,877,888 times
Reputation: 886
Quote:
Originally Posted by saganista
LOL. You can only tax the money. If rich people are tired of paying so much in taxes, they should try hogging a smaller share of the money.
Sure. Because what we need in this country is first-rate amenities, low taxes, and no deficits. People who are able to balance their checkbooks two times out of three ought to be bright enough to realize that you can't have all three of those things at the same time.
Boy, oh boy. Those who invest in US securities don't have any say at all in what we do, much less any ability to dictate. A lot of people really do need to go back to Square-1 and re-educate themselves about how all this works.
Sag, I initially thought you were intelligent and well informed.
The more I read your comments, the more I feel I over-estimated you.
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.
So much debt? Greece's debt-to-GDP ratio has been floating around 145%. That's too high by maybe a third at this point. But as Greece's total public debt is less than $500 billion, you're talking about an excess debt of perhaps $150 billion. That's peanuts in an EU with an annual GDP of a hundred times that.
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Originally Posted by CDusr
The statement was about future possibilities and trends.
What possibilies and trends suggest that the US share of world GDP is about to plummet? The US share of world GDP is 23%. There isn't another country that reaches 10%.
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Originally Posted by CDusr
Also helps to have the most military might on the planet.
How?
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Originally Posted by CDusr
At the rate China has been growing and is projected to grow they are looking to outpace US.
When? And you might want to recall that between about 1988 and 1993, the people you for some reason pay attention to were warning us that within 20 years or so, all of the USA would be owned by Japan.
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Originally Posted by CDusr
Even the FED appears to be showing declining US GDP on charts for future trends.
LOL. The Fed cut its estimate for 2011 GDP growth in April after raising it in January. The graph you link to is of IMF data and simplistic projections of recent trends.
Quote:
Originally Posted by CDusr
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.
They went from 5% to 9% during a global recession. Between 1995 and 2001, the US went from 25% to 32% during a global expansion. Then George Bush came along. It's been all downhill ever since.
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Originally Posted by CDusr
Got no idea what Olympics and Country Music have to do w/ anything... lol.
Status as a reserve currency is a reflection of economic reality. Not Chinese or Russian jibber-jabber, certainly not the notions of some panel of experts somewhere, and most definitely not the garbled gobbledy-goook of whackjob internet wannabes.
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Originally Posted by CDusr
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.
We are not in debt up to our eyeballs. That "Greatest Generation" bunch ran the debt-to-gdp ratio up to 120% or so. Did they pay it off? Nope. They just dumped it onto future generations (that would be us) while they lived it up off all those GI Bill benefits that taxpayers were handing to them. And what sort of burden do you find yourself under today as the result of their selfish ways? Any?
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Originally Posted by CDusr
Nobody said SDRs haven't been around. Just been a larger push for them and including gold...
The number of SDR's in existence is periodically expanded as the global economy expands. There is no gold involved.
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Originally Posted by CDusr
There appear to be trends away from the US having the bulk of the leverage.
What trends are those? Are you trying to talk about IMF Governance changes under which the quotas and voting shares of members will soon be changing? I suppose you realize that the US supported that plan. US "leverage" will meanwhile not be changing at all.
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Originally Posted by CDusr
China's economy looks to be very likely surpassing US based on trends and certainly they want more say so.
You're living in a dream world. China and the EU both need to take greater responsibility in bearing the burdens of global economic administration. They have depended on the US carrying all the water for them. Those days are coming to an end. More say so comes at a price of more do so. We'll see who's up to it.
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Originally Posted by CDusr
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.
China has investments in various dollar-denominated assets because they have bundles of trade-surplus dollars that they have nothing else to do with. As China knows full well, the value of those investments will be best protected by helping to assure that the US economy remains as strong and stable as possible. As for the never-ending stories of China pulling away from US debt, at the end of April of this year, they held $1,153 billion worth of US Treasury securities. At the end of April 2010, it was $900 billion. That's an increase of 28%.
No, the US Dollar is used as currency reserve for the world. We also determine our own monetary and fiscal policy without exogenous constraints. People have much more faith in the entrepreneurship, flexibility and dynamism of the US economy. The same cannot be said for Greece.
Greece has almost full retirement at 56, healthcare for each and every person, and no one goes hungry or without a roof over their head.
Yet, their national debt is the equivalent to 4,400 per person. Ours is 4,500 per person.
Now the United States isn't going to be Greece. We simply have to many natural resources, to much money, and we consume to much of the worlds goods and services for other countries not to extend us credit.
But one has to ask, if Greece is getting all of those goodies, for less debt then we carry, why can't we retire at 70, have full healthcare, and give the bare minimum of survival food and housing for every citizen, without going bankrupt?
One answer
A military that costs 4 times what the rest of the world combined spends.
Our military budget should be cut dramatically. Europe and our NATO allies have, year over year, cut their military spending. Thats because we supply them with military protection. People complain about our foreign aid, the biggest foreign aid problem the United States has is our military.
Here's a very good article with some good comparisons between the US and Greece.
If it's from MSN it can't possibly be good.
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Originally Posted by mysticaltyger
I think the US has some competitive advantages that Greece doesn't.
Comparing the US as a whole, that is quite true. Regardless of what people might think, geography plays a tremendous role in shaping a country and determining its economic power or the limits of its economy.
Now if you compare individual States to Greece, some States are on a par with Greece. Mississippi is one such State. In fact, the per capita income in Mississippi is just a few dollars high than the per capita income in Greece.
The natural resources a State has, the education level of its people, it's transportation system and such all play a role. Greece is hampered by limited natural resources and being a coastal State situated south of the Balkan Mountains.
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Originally Posted by mysticaltyger
..but I also think Americans are complacent and have an "it can't happen to us" kind of attitude.
That's quite true as well. Americans have a very poor attitude and that attitude is worsening by the day.
Americans want free housing, free health care, free day care, free education, free food, free retirement benefits, free unemployment benefits, free disability insurance, free cable, free cell-phone, free internet, free movie and music downloads, free roads, free bridges, free parks, free water service and cheap gasoline, and on top of all that, they want a minimum wage of $75/hour and no taxes for them.
Who is going to pay for all the "free" stuff? The rich of course. Well, the rich only have so much money and was they are taxed to death, they'll be making minimum wage of $75/hour like everyone else.
The government should pay for it. But the government doesn't pay for it, other countries are currently buying US debt finance the spending spree demanded by Americans.
And what happens when other countries either run out of money or get tired of financing the US spending spree? What then?
All this arguing over the debt ceiling becomes moot if no one buys your debt, because the end result is the same. A major recession that will lead to a depression.
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Originally Posted by mysticaltyger
I fear we will end up like Greece in the next decade, although I sincerely hope we don't.
You'll end up much worse than Greece.
You have to decide if you want a federal system of government or unitary system with a national government like France or Romania or Belarus or Poland, because you can't have both.
If you choose to follow the US Constitution and stick with the federal system of government, then you need to do away with the Department of Education, because you already have duplication at the school district level with school boards, and the State level with State school boards, and some States have a third level of bureaucracy at the county level with county school boards. If you did away with the Department of Education, you couldn't possibly be any worse off than you are now, since things have actually gotten worse in education.
If you don't want to continue the federal system, then do away with the local, county and State school boards, because that is redundancy and duplication that is not needed.
If you choose to stay with the federal system, then do away with the Food Stamp program and unemployment benefits. What about the poor? What about them? What person is so friggin' stupid as to not consider the possibility that a State can set up and run its own Food Stamp program, a better program than any moronic bureaucrat in Washington could ever come up with. And who thinks it cool that Democrats and Republicans argue over whether or not to extend unemployment benefits? Well, if the federal government stopped collecting Federal Unemployment Tax then the States could collect that tax instead and offer the same or better unemployment benefits, but gosh, why would anyone want something better?
You need an EPA, but you don't need federal and State EPAs. Either do away with the federal EPA (the best option) or get rid of the State EPAs, because they are redundant and a duplication of "services" already provided. Same with OSHA. Why do you need State OSHA offices and a federal OSHA office? Choose one or the other and reap the savings.
You need an FAA and an NTSB, but you don't need a federal Department of Transportation and 50 State Departments of Transportation. Choose one or the other and eliminate the redundancy and reap the savings.
You don't need HUD either. What about the poor? What about them? I hate to burst anyone's bubble but there are cities that run their own Section 8 programs and there are counties and there are States who run their own Section 8 programs. You don't need a federal program. And what exactly has HUD done, other than stare at Detroit and other hell-hole cities for 50 years? Nothing. Get rid of it.
Anyway the point is there is a tremendous amount of budget cutting that can be done and none of has any effect on programs or services. Those programs and services will still be there, they'll just be better.
You people have a lot of hard choices to make. Personally, I don't think you're up to the task because you're selfish and weak and you can't get beyond thinking in any terms other than Democrat/Republican.
So, I guess you'll end up like a ritzy Poland where no one works, no one has money, no one has anything, but they all have cell-phones.
So much debt? Greece's debt-to-GDP ratio has been floating around 145%. That's too high by maybe a third at this point. But as Greece's total public debt is less than $500 billion, you're talking about an excess debt of perhaps $150 billion. That's peanuts in an EU with an annual GDP of a hundred times that.
What possibilies and trends suggest that the US share of world GDP is about to plummet? The US share of world GDP is 23%. There isn't another country that reaches 10%.
They went from 5% to 9% during a global recession. Between 1995 and 2001, the US went from 25% to 32% during a global expansion. Then George Bush came along. It's been all downhill ever since.
Greece's debt load will be about 160% by the end of this yr. Which given their situation is a real problem. The bigger debt I am really referring to is the derivative blackhole, which has all the economies entangled. Pulling on one thread can start a whole chain of events.
No one said US GDP is about to plummet. The FED trend chart I was referring to showing downward US GDP was not the one I linked. What I was showing was a simple trend of China moving from near the end of the line to right behind the US in a very short amt of time. Many, many experts are showing this trend to continue to a point where they will overtake the US. Obviously, we will have to wait and see.
Status as a reserve currency is a reflection of economic reality. Not Chinese or Russian jibber-jabber, certainly not the notions of some panel of experts somewhere, and most definitely not the garbled gobbledy-goook of whackjob internet wannabes.
Agreed, that it is an economic reality. China is most definitely an economic reality. Not sure to whom the apparent sophmoric labels are referring.
Quote:
Originally Posted by saganista
We are not in debt up to our eyeballs. That "Greatest Generation" bunch ran the debt-to-gdp ratio up to 120% or so. Did they pay it off? Nope. They just dumped it onto future generations (that would be us) while they lived it up off all those GI Bill benefits that taxpayers were handing to them. And what sort of burden do you find yourself under today as the result of their selfish ways? Any?
The number of SDR's in existence is periodically expanded as the global economy expands. There is no gold involved.
As I said, I don't advocate debt as fiscal or financial policy. That money paid on interest will never go anywhere else. Of course, to whom the debt is owed and interest rate are important details.
No one said gold was part of SDRs, rather that there have been talks about including it.
Quote:
Originally Posted by saganista
What trends are those? Are you trying to talk about IMF Governance changes under which the quotas and voting shares of members will soon be changing? I suppose you realize that the US supported that plan. US "leverage" will meanwhile not be changing at all.
You're living in a dream world. China and the EU both need to take greater responsibility in bearing the burdens of global economic administration. They have depended on the US carrying all the water for them. Those days are coming to an end. More say so comes at a price of more do so. We'll see who's up to it.
I was referring to China, Russia's and others interest in adjusting SDRs and reserve currency. Whether US leverage changes in the future is yet to be seen. You indicate US leverage won't be changing, but that China and EU need to take on more. Seems US takes on alot of that so-called burden by it's own choices.
China has investments in various dollar-denominated assets because they have bundles of trade-surplus dollars that they have nothing else to do with. As China knows full well, the value of those investments will be best protected by helping to assure that the US economy remains as strong and stable as possible. As for the never-ending stories of China pulling away from US debt, at the end of April of this year, they held $1,153 billion worth of US Treasury securities. At the end of April 2010, it was $900 billion. That's an increase of 28%.
As for trends. I guess it depends from where you take your sampling.
Location: Currently I physically reside on the 3rd planet from the sun
2,220 posts, read 1,877,888 times
Reputation: 886
Quote:
Originally Posted by saganista
A. "You can only tax the money" is Rule #1 of tax policy. If you have some new and different one to propose, please do put it forward.
Sag, you make no sense. You can only tax the money? What is that, some kind of mantra? Our currency has no intrinsic value to tax, you can tax the idea of value held by the pretty paper but that and well, the idea of value may not buy you a cup of coffee in a few years.
Quote:
Originally Posted by saganista
B. First-rate amenities, low taxes, and no deficits are mutually exclusive as a group. You can have any two you like. You cannot have all three.
This is a non-sequitor; many are arguing to reduce the deficit back to manageable levels by reducing spending and lowering taxes to increase revenues. One way to do this is to stop the "WARS" juggernaut. If this is not done the out of control spiral of devaluing our currency by printing more money as we continue to spend as if we are not broke will eventually have to hit bottom.
What the slick salesman is telling you is that confidence from the world in our government comes from the our governments confidence in fleecing you. The idea that entreneurship, our resources and a work ethic will prevent the rest of the world calling due our bill when we no longer have the ability to pay them back as interests rates begin to snowball at a pace that makes our current situation look cozy is silly. They will own these commodities, not us, not the people of this country - it is called usury people - it is basically economic slavery. We get owned by foreign interests as our economic structure collapses.
Think Russia in the 80's, think of the nation building and government building we do to third world countries. It is not a complex problem - it is rather straight forward and intuitive.
Small business carries the load of producing GDP while Big Banks and International Business get the breaks and bailouts. You are being sold out by slick talking snake oil salesmen. What small business and/or entrepreneurship is going to flourish in this environment?
Quote:
Originally Posted by saganista
C. US Treasury securities come with no say in anything at all. You may as well buy a bank CD and then try to sit in on a board meeting.
When foreign interests own our currency, they will own our government which will own our labor and resources - meaning they will own you. The government creates nothing and has nothing other than what it confiscates from it's citizens. We are well on our way down the road to serfdom.
Yes, arrogant people will dazzle you with their fancy terminology and you can pat yourself on the back as you run to keep up - however in the end, you will still be owned.
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