CBO report: Debt will rise to 90% of GDP

[pghquest]

Originally Posted by hawkeye2009

3. When the debt is 100% GDP for two years, this essentially guarantees insolvency and inability to maintain the payments on the debt

Actually this isnt true. Debts are not bad provided you have income to pay for the debts.. Companies often run 3-400% debt loads. I run about 1200% debt load.. (i.e. it would take me 12 years to get out of debt without selling anything off). Debt is NOT bad by itself, its what you do with that debt. If you create income with it, its good debt, if you create liabilities with it, (like most americans do) than its bad debt..

The government though, usually can not take on "good debt", they dont have the ability to buy accounts receivables, invest in property, businesses, etc. Which is indeed why their debt is "bad debt".. How much debt we can safetly manage is questionable, but as a relationship to GDP its worthless..

[EinsteinsGhost]

Originally Posted by pghquest

but as a relationship to GDP its worthless..

Finally something I could agree with you on. In fact, an argument has been made (http://www.businessinsider.com/whats-more-important-debt-to-gdp-or-supply-2010-4 - broken link) concerning reliance the measure.

[11thHour]

[saganista]

Originally Posted by sanrene

Yeah, we'd be creating real jobs by now, instead of further crippling the economy with massive spending and debt, as far as the eye can see. I suppose all will be well when we're up to that 90% of GDP, our credit rating as junk status - a liberal utopia.

CH_CK_N...L_TTL_

Wanna buy a vowel?

[saganista]

Originally Posted by hawkeye2009

Art-
For the MILLIONTH TIME- The debt was $5trillion when Clinton left office. There was no surplus!
The Myth of the Clinton Surplus

Doctor, for the millionth time, debt and deficit are two different things. Craig Steiner is an incredible nincompoop. FACT: There were unified budget surpluses for four consecutive years beginning in FY1998. FACT: There were on-budget surpluses in both FY1999 and FY2000. FACT: Some $363 billion worth of these surpluses was used to pay down debt held by the public. FACT: The ten-year budget projection when Clinton left office was for a surplus of more than $5 trillion.

Sorry you missed all that...

Originally Posted by hawkeye2009

Here is some news-
1. EVERY president since FDR has ADDED to the national debt
2. That debt was created by Republican and Democratic presidents, senates, and congress

So what???

Originally Posted by hawkeye2009

3. When the debt is 100% GDP for two years, this essentially guarantees insolvency and inability to maintain the payments on the debt

1945:...GDP = 223.0 billion ..... Public Debt = 258.7 billion
1946:...GDP = 222.2 billion ..... Public Debt = 269.4 billion
1947:...GDP = 244.1 billion ..... Public Debt = 258.3 billion

Instances of default on debt: Zero

[Taxing and currency-issuing authorities can never be insolvent by the way.]

Originally Posted by hawkeye2009

4. taxes alone cannot reduce the debt

LOL. What would happen if taxes were increased to the point where receipts exceeded outlays and the surplus was used to pay down debt?

Originally Posted by hawkeye2009

5. Austerity measures will be necessary to avoid collapse

Collapse of what?