$15,000,000,000,000

[MTAtech]

Originally Posted by RottenChester

U.S. National Debt Clock : Real Time

Way to stick it to the future America!

The only thing I see coming are austerity measures, currency devaluation, the Social Security trust fund IOU's not being paid back, and further U.S. credit downgrades.

Not a good time to have a balanced budget amendment fall through:

Balanced budget amendment falls 23 votes short in House - CSMonitor.com

Best time to have a balanced budget amendment fall through. When we're in an severe economic downturn, cutting government spending and instituting austerity doesn't put people back to work. It makes the economic downturn worse. Slashing spending while the economy is depressed destroys jobs, and it’s probably even counterproductive in terms of deficit reduction, since it leads to lower revenue both now and in the future.

[newonecoming2]

Originally Posted by RottenChester

Way to stick it to the future America!

It may be the not to distant future that gets the bill. Structurally we are in the same boat as Greece. Not as far down the road but on the same path. Inflation is the only way out of this one.

[MTAtech]

Originally Posted by newonecoming2

It may be the not to distant future that gets the bill. Structurally we are in the same boat as Greece. Not as far down the road but on the same path. Inflation is the only way out of this one.

Just like Greece, except the U.S. has its own currency; and, except Greece's interest rates are record high and the U.S. rates are record low. Greece is stuck with the euro and stuck with a severe competitiveness problem that can only be resolved with grinding deflation, making their debt problems worse. The U.S. has no such problem.

Countries without their own currency are subject to self-fulfilling crises in a way that nations that still have a currency of their own are not. The point is that fears of default, by driving up interest costs, can themselves trigger default — and that because there’s a crossing-the-Rubicon aspect to default, once a country crosses that line it will probably impose fairly severe losses on creditors. A country with its own currency isn’t in the same position: even if it is pushed into some inflation, there’s no red line that need be crossed.

The bottom line, the comparison between the U.S. and Greece is faulty.

Instead of turning into Greece, we’ve turned into Japan, except much worse. And policy is replaying 1937. Here we are, with markets now deeply worried not by deficits but by stalling growth, fearing not fiscal profligacy but fiscal austerity, and, as I said earlier, with interest rates at historic lows.

And what do we hear from the right? Calls for austerity.

[newonecoming2]

Originally Posted by MTAtech

Just like Greece, except the U.S. has its own currency; and, except Greece's interest rates are record high and the U.S. rates are record low.

What was Greece’s rate a year ago? Two years ago? It was only when everyone figured out that they couldn't ever pay their debts that the rates went up to record levels.

Originally Posted by MTAtech

Greece is stuck with the euro and stuck with a severe competitiveness problem that can only be resolved with grinding deflation, making their debt problems worse. The U.S. has no such problem.

Is the falling price of houses not deflation? Yes Greece is stuck with the euro but we are stuck with the world's reserve currency.

Originally Posted by MTAtech

Countries without their own currency are subject to self-fulfilling crises in a way that nations that still have a currency of their own are not. The point is that fears of default, by driving up interest costs, can themselves trigger default — and that because there’s a crossing-the-Rubicon aspect to default, once a country crosses that line it will probably impose fairly severe losses on creditors. A country with its own currency isn’t in the same position: even if it is pushed into some inflation, there’s no red line that need be crossed.

How hard is the fed trying to get inflation? Where is the fed getting inflation? How long has Japan been at 0% interest rates? What is their growth rate like? They have had a high enough savings rate to buy their own debt. We don't have the same thing. We need to sell our debt to others.

Originally Posted by MTAtech

The bottom line, the comparison between the U.S. and Greece is faulty.

They have a high deficit. We do. they have a low savings rate, we do. Until the price of houses starts going up our economy will not improve much. Yes we can simply print the money we need to spend to meet our obligation. Just like Germany did after WWI. What would happen if our T-bills were being traded like Italy's Would the plunge protection team buy up bonds to support the prices like they do stocks?

Originally Posted by MTAtech

Instead of turning into Greece, we’ve turned into Japan,

Japan is structured very differently than we are. They have a strong manufacturing base ours has been eroded. They have had a high enough domestic savings rate to buy their own debt. Not us. They are net exporters we are net importers.

Originally Posted by MTAtech

except much worse. And policy is replaying 1937. Here we are, with markets now deeply worried not by deficits but by stalling growth, fearing not fiscal profligacy but fiscal austerity, and, as I said earlier, with interest rates at historic lows.

Money flows from the US to other areas that offer better return on the money than here. Glad you mentioned 1937. http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg Take a look at the shape of the graph in the 1930's vs today. Greece is triggering a debt collapse in Europe. That is going to very likely trigger a debt collapse in the US as well.

Originally Posted by MTAtech

And what do we hear from the right? Calls for austerity.

What you here from me is a call for very high inflation for a very short amount of time.


Freeze government spending and then do a 2x on the economy by having a 4x on the minimum wage. That will get you a balanced budget and a whole lot less debt in the US. I'm talking total debt not just government debt.




Our economy has more in common with Greece than it does with Japan. We have high imports they had high imports. We have a low savings rate they have a low savings rate. Our zirp is causing inflation in other countries besides the US. They don't make their own money. We have a very high deficit they have had one that will never go positive. Our deficit will not go down any time soon. Not with austerity not with tax increases not any time soon. Just like Greece.


Japan owns their own debt. We have external creditors. They have a high savings rate we have a low and formerly negative savings rate. They have high exports we have high imports.

[Kings Ranger]

What's this I hear about these automatic cuts kicking in in 14 months?

Conveniently AFTER the next Presidential election....

[Rggr]

Originally Posted by Kings Ranger

What's this I hear about these automatic cuts kicking in in 14 months?

Conveniently AFTER the next Presidential election....

Yep and these aren't even cuts. They are just reductions in the amount of the planned increase - that's Washington accounting.