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The loss was added to our National Debt, most of all which will never be paid down. You and I have paid no more tax as a result. And unless someone specifically changes some tax law, our kids won't pay more either.
In CBO’s baseline projections (which incorporate the assumption that current laws will generally remain the same), growth in spending—particularly for Social Security, health care, and interest payments on federal debt—outpaces growth in revenues over the coming 10 years. The budget deficit increases modestly through 2018 but then starts to rise more sharply, reaching $1.4 trillion in 2026. As a percentage of GDP, the deficit remains at roughly 2.9 percent through 2018, starts to rise, and reaches 4.9 percent by the end of the 10-year projection period. The projected cumulative deficit between 2017 and 2026 is $9.4 trillion.
The projected deficits would push debt held by the public up to 86 percent of GDP by the end of the 10-year period, a little more than twice the average over the past five decades. Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits during the baseline period would accelerate and push debt up even more sharply. Three decades from now, for instance, debt held by the public is projected to equal 155 percent of GDP, a higher percentage than any previously recorded in the United States.
Such high and rising debt would have serious negative consequences for the budget and the nation:
* When interest rates increased from their current levels to more typical ones, federal spending on interest payments would rise substantially.
* Because federal borrowing reduces total saving in the economy over time, the nation’s capital stock would ultimately be smaller than it would be if debt was smaller, and productivity and total wages would be lower.
* Lawmakers would have less flexibility to use tax and spending policies to respond to unexpected challenges.
* The likelihood of a fiscal crisis in the United States would increase. There would be a greater risk that investors would become unwilling to finance the government’s borrowing needs unless they were compensated with very high interest rates; if that happened, interest rates on federal debt would rise suddenly and sharply.
So... In 2026, if there's 400 million Americans (assuming you all wake up, open the flood gates and start speaking Spanglish) and you stay on the same path you're on, with the same laws, that will be $23,500 for every human being living in America (including your newfound friends from south of the border). That's on top of the $47,500 they'll already owe.
Does anyone even need a grand total?
On a side note, I think I know how to solve your illegal immigration problem.
Had we not borrowed Trilions from the CHinese and handed it to the Wall Street bankers and Obama supporters, the people who were responsible for creating a financial mess would have borne more of the burden of their risks and out grandchildren would have trillions less debt to pay in the future. Also, the economy would have bounced back sooner and much stronger.
taken steps to encourage lending??? WHY??? That's what got us into trouble in the first place? Yes lets double down on stupid!
Ok, good idea. Let's STOP all lending, during the middle of a liquidity crisis.
Then many businesses cannot continue operating, and many others cannot expand. And so they start laying people off. And those laid-off people stop buying goods and services from other businesses, who in turn need to lay off more people.
And unemployment spikes, consumer spending tanks, and we're faced with an oversupply of goods across the board. The economy goes into a deflationary spiral, because the volume of money in circulation has plummeted, and people begin rushing into treasury bonds to escape the risk of the stock markets, causing panic and widespread economic collapse.
Had we not borrowed Trilions from the CHinese and handed it to the Wall Street bankers and Obama supporters, the people who were responsible for creating a financial mess would have borne more of the burden of their risks and out grandchildren would have trillions less debt to pay in the future. Also, the economy would have bounced back sooner and much stronger.
We buy stuff from China because it is typically cheaper and for the most part good enough quality. We pay in USD. The Chinese might want to exchange those USD for Treasuries for safe keeping and a bit of interest. USD and Treasuries both represent debt.
In CBO’s baseline projections (which incorporate the assumption that current laws will generally remain the same), growth in spending—particularly for Social Security, health care, and interest payments on federal debt—outpaces growth in revenues over the coming 10 years. The budget deficit increases modestly through 2018 but then starts to rise more sharply, reaching $1.4 trillion in 2026. As a percentage of GDP, the deficit remains at roughly 2.9 percent through 2018, starts to rise, and reaches 4.9 percent by the end of the 10-year projection period. The projected cumulative deficit between 2017 and 2026 is $9.4 trillion.
The projected deficits would push debt held by the public up to 86 percent of GDP by the end of the 10-year period, a little more than twice the average over the past five decades. Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits during the baseline period would accelerate and push debt up even more sharply. Three decades from now, for instance, debt held by the public is projected to equal 155 percent of GDP, a higher percentage than any previously recorded in the United States.
Such high and rising debt would have serious negative consequences for the budget and the nation:
* When interest rates increased from their current levels to more typical ones, federal spending on interest payments would rise substantially.
* Because federal borrowing reduces total saving in the economy over time, the nation’s capital stock would ultimately be smaller than it would be if debt was smaller, and productivity and total wages would be lower.
* Lawmakers would have less flexibility to use tax and spending policies to respond to unexpected challenges.
* The likelihood of a fiscal crisis in the United States would increase. There would be a greater risk that investors would become unwilling to finance the government’s borrowing needs unless they were compensated with very high interest rates; if that happened, interest rates on federal debt would rise suddenly and sharply.
So... In 2026, if there's 400 million Americans (assuming you all wake up, open the flood gates and start speaking Spanglish) and you stay on the same path you're on, with the same laws, that will be $23,500 for every human being living in America (including your newfound friends from south of the border). That's on top of the $47,500 they'll already owe.
Does anyone even need a grand total?
On a side note, I think I know how to solve your illegal immigration problem.
Granted, he or she may not be aware of the connection between "not encouraging lending" and "stopping lending", but in a liquidity trap these are the same policy choice.
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I don't really expect an answer as you know this isn't a valid point.
I don't know what your deal is, but the situation is pretty clear.
In a severe liquidity trap, "doing nothing" means that lending stops, leading to the conclusions I just outlined.
Encouraging lending is the only immediate solution, even when the problem was caused by too much lending. Otherwise you end up in a deflationary environment, which is very bad. The time to have your "come to Jesus" moment about America's excessive debt problems is not in the middle of a crisis.
Granted, he or she may not be aware of the connection between "not encouraging lending" and "stopping lending", but in a liquidity trap these are the same policy choice.
There is no correlation. It's not even the job of the government or the Fed to "encourage" lending.
Quote:
I don't know what your deal is, but the situation is pretty clear.
In a severe liquidity trap, "doing nothing" means that lending stops, leading to the conclusions I just outlined.
There was no crises. Anyone that wanted money and had the ability to pay it back could get money.
Quote:
Encouraging lending is the only immediate solution, even when the problem was caused by too much lending. Otherwise you end up in a deflationary environment, which is very bad. The time to have your "come to Jesus" moment about America's excessive debt problems is not in the middle of a crisis.
The only crises was with brokers wetting their pants.
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WHY??? That's what got us into trouble in the first place? Yes lets double down on stupid!
