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The EU and the Euro was born in 2000 and I was 20 at that time. And I knew rightaway after studying the Euro financial model that this whole set up was a farce and was headed for ruin. It couldn't even hold itself together for a decade.
This sovereign crisis is only proof to that. Greece will eventually default. They will keep buying more time. It's more like the inevitable can only be put off for a certain amount of time. We'll see how far they are able to stretch it. Other members of PIIGS aren't far
And here comes Italy Let's see how far the rest of the PIIGS hold themselves together.
GLOBAL MARKETS: Europe Banks Slide, Euro Slips On Italy Worries - WSJ.com (http://online.wsj.com/article/BT-CO-20110708-704345.html - broken link)
I would be happy to pay an extra $4,237 per year in Federal taxes if I could be assured that it would go for debt reduction and not for extra spending.
But that's not what you said in your original post...you said "their (the Greek) national debt is the equivalent to 4,400 per person. Ours is 4,500 per person."
Debt per person and new debt per person are completely different things.
And of course, if we all paid and extra $4237 per year in tax, it would tank our economy. Same would be true if spending was cut by that much...although I tend to think cutting spending would hurt the economy less than increased taxes.
As I mentioned, the biggest part of the problem is exploding medical & Social Security costs. We spend nearly 20% of GDP on health care (about half of which is funded by taxation), yet we're far from the healthiest population. Interestingly, that's one of the things the Greeks seem to do better than us. They live longer than we do but spend a lot less on health care. IMO, I think it's their Mediterranean diet.
Well, if we cannot make some sort of meaningful agreement on how to solve the horrific financial problems facing this country, we will be in for a world of hurt. The 3rd rail of politics.........the failing entitlement programs..........that is what must be reformed. Also.......the huge welfare-type programs need to be trimmed back severely.
The "Greatest Generation" did not run up the debt in World War 2.
Right.
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Originally Posted by mysticaltyger
They got to deal with the burden of the war debt, though.
What burden? How much did they pay off?
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Originally Posted by mysticaltyger
A fast growing economy made the debt manageable and shrunk it as a % of GDP.
The economy shrank after the war. Real GDP in 1950 was still below the level of 1945. The decade of the 1950's then brought three recessions.
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Originally Posted by mysticaltyger
Our debt is now approaching 100% of GDP. That might be a manageable percentage if we didn't have a huge wave of Baby Boomers about to collect Social Security & Medicare.
Social Security is not a problem. Even if we do nothing at all, it will be just fine well into the second half of the century. Medicare is a problem. It is a problem because of the out-of-control profit-centered fee-for-service health care system that it is connected to. Simply passing HCR added better than a decade to the time we have to deal with Medicare, but the clock is still ticking, and there is a great deal of work yet to be done.
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Originally Posted by mysticaltyger
Even if we ended all the wars now, Social Security & Medicare are going to eat up nearly all government revenue if we don't do soemthing. Economists across the political spectrum agree on that much.
LOL. I don't think you're familiar with very many actual economists, and you certainly aren't aware of what they agree and don't agree on. .
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Originally Posted by mysticaltyger
Our future economic prospects are not that good, as countries with aging populations collecting Social Security benefits tend to have slow growing economies....so growing out way out of the problem is not a likely option as it was after World War 2.
Tell it to the Chinese. They and Europe both have rather ominous demographic issues to confront along those lines. There is one place that does not -- the US.
I would be happy to pay an extra $4,237 per year in Federal taxes if I could be assured that it would go for debt reduction and not for extra spending.
Keep in mind that there is no direct link between revenue and spending at the federal level in the sense that there is at the household level. In essence, the Congress spends what it believes it needs to spend in order to meet the legitimate needs of the nation and its people. The income side is more or less expected to take care of itself with little more than a bump this way or that every few years or so.
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