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Old 08-22-2019, 06:16 AM
 
Location: Pennsylvania
13,341 posts, read 4,567,526 times
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Maybe that Ross Perot fellow was correct back in 1992 when he said we need a balanced budget amendment.


What a concept -- spend only what you take in. Wow.
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Old 08-22-2019, 06:20 AM
 
Location: USA
20,178 posts, read 9,637,314 times
Reputation: 15225
Quote:
Originally Posted by BeerGeek40 View Post
Maybe that Ross Perot fellow was correct back in 1992 when he said we need a balanced budget amendment.

What a concept -- spend only what you take in. Wow.
Agreed, but you know the Feds like many State governments who do have Balanced Budget requirements carry huge debt "off balance sheet" like California's huge unfunded Public Pension DEBT. Many states are facing this problem. This type of accounting is a form of CORRUPTION.
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Old 08-22-2019, 06:23 AM
 
17,533 posts, read 4,656,062 times
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Quote:
Originally Posted by middle-aged mom View Post
The US was debt free one year in 1835.

Every POTUS inherits debt, adds to it and kicks the can.

In 2016, Trump told Hannity and his viewers he was going to ďbalance the budget fairly quicklyĒ.

That some future budget might be balanced is meaningless. Itís all about appropriations.
Modern times are different enough (the cost to run an advanced society) that it may be best to look 50-70 years back.

There is no problem running a deficit or even debt but it is the size of the debt against GDP which can be troubling...and potential interest rates. As it stands now we pay 500 BILLION a year in interest. Putting that in perspective would be 100 million taxpaying households would each pay $5,000 in Fed. Interest per year.

That's not to be ignored - the numbers are too big.

The debt, since it already exists, does not concern me as much as the deficit - which we were getting close to zero (relatively)....because, left alone, the debt would at least shrink compared to GDP and Population. But Trump and the GOP decided to ADD A trillion or more a year to it, after claiming to be "conservative" is off the charts hypocritical.

They also claimed the tax cut would easily pay for itself...of course, anyone with 1/2 a brain knows the score there. So now there is really no hope in getting these number stable or down for a decade.

That's not good. Basically it means the very wealthy will stay that way and others will be missing some vast sums they could have used for living.
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Old 08-22-2019, 06:26 AM
 
17,533 posts, read 4,656,062 times
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Quote:
Originally Posted by Pilot1 View Post
Agreed, but you know the Feds like many State governments who do have Balanced Budget requirements carry huge debt "off balance sheet" like California's huge unfunded Public Pension DEBT. Many states are facing this problem. This type of accounting is a form of CORRUPTION.
It's a form of buy-now and pay later...however, it is usually fixable by screwing the pooch. That's what it comes down to. In RI they have a similar problem but they finally are addressing it by cutting the pensions later on. I'm not sure of the mechanisms, but they do it.

Surely you know that the last 20 years 4.5% gain in the DOW killed a lot of these pensions..being as they had calculated on historic averages of 7-8%. That was considered conservative.

So they adjust it, even if it for the future, and it works out one way or another. Some of this involves tying it to the actual returns of the portfolio.

Yeah, it somewhat screws some of the workers, but what else is new? We have to protect the 1%. That's the modus operandi of the USA>
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Old 08-22-2019, 06:28 AM
 
17,533 posts, read 4,656,062 times
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Quote:
Originally Posted by BeerGeek40 View Post
Maybe that Ross Perot fellow was correct back in 1992 when he said we need a balanced budget amendment.


What a concept -- spend only what you take in. Wow.
I voted for the guy....I'm a fiscal conservative. Sure, such an amendment would have to come with a time frame to pay it down.....and/or emergency measures for times of war and depression, but if it used caps it would be OK
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Old 08-22-2019, 06:51 AM
 
1,219 posts, read 239,194 times
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I would love to see the federal govt default
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Old 08-22-2019, 07:24 AM
 
10,577 posts, read 7,104,924 times
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Quote:
Originally Posted by rebeldor View Post
Cons only care about fiscal responsibility when a Dem is in office.

Libs only care about war when a Pub is in office.

Hence the reason why both sides suck.

This is so TRUE! I wish I could give you triple the rep points for that. Democrats and Republicans are hypocrites...at best. All these left right back and forth is simply the sport of fools. I have to admit....however.....that I am sometimes foolish.



That having been said......interest rates are near historical lows.......much lower than what they should be for a healthy economy. The discount rate (which sets the interest rates) for a healthy economy, based upon historical norms/averages, since 1960 is around 5.75%. It's currently 2.75%. Inflation is not currently a problem, seemingly, as we have exported much of our inflation born from increasing the money supply....because that money ends up in China and other countries due to our enormous trade deficit.



Here is the thing. The interest rate on the national debt is tied to the discount rate. As the national debt grows, the payment of the interest on the debt is growing faster than nearly all other government expenditures. At the rate the debt is increasing.....it already threatens our future because much of government tax revenues will simply go to serving the interest rate of the debt....leaving less money for other things. This is where the interest rates come in. If interest rates double....to fight inflation.....well....you do the math. Its going to have a dramatic impact on the budget....which would require raising taxes and or increasing debt....and or making massive cuts to other government programs....all of which will have a negative impact on the economy.


I don't think the average person really realizes how bad the economy really is in term of sustainability. When we fall....its going to be a really, really hard fall and the longer the correction is postponed via increasing debt....the harder the fall is going to be.
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Old 08-22-2019, 10:08 AM
 
5,813 posts, read 3,781,593 times
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Quote:
Originally Posted by Ralph_N_1962 View Post
I would love to see the federal govt default
When you print your own currency you canít default (unless due to human error).
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Old 08-22-2019, 02:35 PM
 
6,963 posts, read 6,717,107 times
Reputation: 5172
Quote:
Originally Posted by middle-aged mom View Post
But what the heck, letís buy Greenland, then whine when Denmark calls it absurd.
Why would they call it that if they were to theoretically sell it for the right price?
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Old 08-22-2019, 02:40 PM
 
6,963 posts, read 6,717,107 times
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Quote:
Originally Posted by LordSquidworth View Post
When you print your own currency you canít default (unless due to human error).
No, but a country can print itself into a worthless, hyper-inflated currency that nobody will accept as payment. That has happened plenty of times in other countries. You would think negative-yielding sovereign bonds would be a tacit admission of this, but that appears to not be so. It's uncharted waters we are in.
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