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On April 09 2011 22:53 Sqalevon wrote:Show nested quote +On April 09 2011 22:44 Robinsa wrote:The US is fine. Japans got like GDP x2 in debt.  But Japan is recovering from a depression ( right? ) And not steaming in one, head first. Japan already made the culture/mentality switch to recover. Or am I completely off here ?
I would say its mainly because of years of spending and a tradition to never raise taxes. Few politicians have been willing to propose tax raises for the last 20 years. The consumer tax for example has since 1989 been raised from 3 to 5%.
Some people belive there will be a tax raise because of the recent earthquake/tsunami. This is just speculations and Im sure theyll find something else to dismantle before they need to raise the taxes. ^^
Sorry for going a bit off-topic guys.
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On April 09 2011 21:58 Rabiator wrote:Show nested quote +On April 09 2011 21:20 Fruscainte wrote:
Well I for one believe that we are pretty secure from conventional threats and we can stop spending more than the entire world combined on our military programs. We have the largest navy, largest air force, and most technologically advanced ground army in the world. Yet, for some reason, we keep pressing on with this. We spend $120 BILLION dollars a year (Yes, 10 BILLION a month) on the war on Afghanistan -- just Afganistan. It cost even more years ago when the fighting first started. We are trillions of dollars in debt from pointless wars that had nothing to even do with the Terrorist Attacks other than what is now considered bad information and we continue to spend on it, and we continue to spend ridiculous amounts on our military. Yeah, we're the best military in the world. We get it, but we don't need to economically screw ourselves to keep that title. The Soviet Union fell apart because they couldnt afford the arms race anymore which Ronald Reagan starts ... Star Wars and so on. Maybe it is time the US realizes that they themselves have to stop spending ridiculous amounts on their military and that "a few millions for some super smart bombs" is just too much. Super expensive technology isnt needed to fight terrorists who are hiding among a population in any case ... the military doesnt work like the industry and more technology doesnt produce more / better results. P.S.: War SHOULD BE bloody so it isnt started lightly ...
If they're hiding amongst population then we need better technology and intelligence to make sure we reduce collateral damage. We don't want to kill civilians. That's why we developed all this "smart" technology.
Though I agree in general. The fact is that so much of what the US government cut was small programs that don't contribute much. The Defense budget is still as massive as ever, and there really is no cut in sight. On the other hand, Defense easily employs the most people, and develops the most technology (both useful for civilians and military), so I can see how they justify Defense costs by the consequences of cutting it.
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On April 09 2011 23:20 Garbels wrote:Show nested quote +On April 09 2011 22:44 Robinsa wrote:The US is fine. Japans got like GDP x2 in debt. Is the dept mentioned in the OP not more than 12 times the GDP ?
According to wiki the US natinal debt is 96,3% of gdp. (http://en.wikipedia.org/wiki/United_States_public_debt)
Should be mentioned that the US debt to foreign investors/nations while the Japanese debt is mainly borrowed from within the country.
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On April 09 2011 12:10 Zergneedsfood wrote:
To be honest, I never saw the national debt as a problem. Sure it ends up cutting social services, but America will never cut it to the point of hacking it to pieces.
And sure it decreases America's dollar value, but that raises our manufacturing industry that's been struggling. Inflation has the side effect of artificially lowering interest rates, thus making saving unprofitable, which means that there will be no capital accumulation necessary for industries to develop.
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On April 10 2011 00:19 xarthaz wrote:Show nested quote +On April 09 2011 12:10 Zergneedsfood wrote:
To be honest, I never saw the national debt as a problem. Sure it ends up cutting social services, but America will never cut it to the point of hacking it to pieces.
And sure it decreases America's dollar value, but that raises our manufacturing industry that's been struggling. Inflation has the side effect of artificially lowering interest rates, thus making saving unprofitable, which means that there will be no capital accumulation necessary for industries to develop.
Wait...what? I have never heard of inflation artificially lowering interest rates. I always thought it was interest rate setting that artificially raises or decreases inflation and not the other way around.
Besides, if interest rates lower, just raise them again to decrease inflation. That's what the Fed and monetary policy is for, to balance out inflation with interest rates.
And if saving is unprofitable, that increases consumer spending because people will take their money to the streets to invest in assets and property.
I don't see any correlation with our current inflation rate and stymied industrial development. If anything, the resurgence of the auto industry, the rust belt (same thing? forgot), and even companies like Caterpillar empirically deny the claim.
Like I said, a dollar value that's decreases enhances our ability to export, which is the biggest money maker for manufacturers. Furthermore, a modest inflation rate is good for employment too.
Why are we worrying about current inflation levels when it's nowhere near hyper inflation?
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On April 10 2011 00:25 Zergneedsfood wrote:Show nested quote +On April 10 2011 00:19 xarthaz wrote:On April 09 2011 12:10 Zergneedsfood wrote:
To be honest, I never saw the national debt as a problem. Sure it ends up cutting social services, but America will never cut it to the point of hacking it to pieces.
And sure it decreases America's dollar value, but that raises our manufacturing industry that's been struggling. Inflation has the side effect of artificially lowering interest rates, thus making saving unprofitable, which means that there will be no capital accumulation necessary for industries to develop. Wait...what? I have never heard of inflation artificially lowering interest rates. I always thought it was interest rate setting that artificially raises or decreases inflation and not the other way around. Besides, if interest rates lower, just raise them again to decrease inflation. That's what the Fed and monetary policy is for, to balance out inflation with interest rates. And if saving is unprofitable, that increases consumer spending because people will take their money to the streets to invest in assets and property. I don't see any correlation with our current inflation rate and stymied industrial development. If anything, the resurgence of the auto industry, the rust belt (same thing? forgot), and even companies like Caterpillar empirically deny the claim. Like I said, a dollar value that's decreases enhances our ability to export, which is the biggest money maker for manufacturers. Furthermore, a modest inflation rate is good for employment too. Why are we worrying about current inflation levels when it's nowhere near hyper inflation?
Thats how interest rates are lowered. by the central bank buying assets by creating money out of thin air.
The investments are made, are based on the signal of interest rates.
Low interest rates -> investments to high order capital goods.
High interest rates -> investments to low order capital goods.
Artificially low interest rates give the impression of market demand for investment in the high order capital goods, when the ACTUAL time-pereference determined interest rate would demand more investments to low order capital goods. This becomes evident when interest rates are no longer artificially lowered below the pure(time preference) rate of interest, which makes the low return of high order capital good investmens unprofitable and they become evident as malinvestments which leads to market liquidation in those areas, unemployment, recession. Examples: tulip bubble, dotcom bubble, latest real estate bubbles around the world. THIS is why central bank activity is (quite ironically) PRO-cyclical, not counter cyclical as they like to believe due to primitive(that is, none) understanding of capital theory
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On April 10 2011 00:29 xarthaz wrote:
Thats how interest rates are lowered. by the central bank buying assets by creating money out of thin air
I'm pretty sure that there are more ways to lower interest rates than printing money. >.>
But what I was talking about specifically was fighting inflation to keep it controlled so that it doesn't get out of hand. In that case, the Fed raises the interest rate rather than lowers it.
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Yeah, by saving. That is not what the artificial lowering of interest rates encourages though. And fighting inflation(aka raising interest rates) is by selling assets, thus bringing the money from the economy into central bank.
There of course is the simpler solution. Not alter the money supply at all, thus avoiding the problems of inflation and of economic bubbles. Alas, it is rarely practiced.
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On April 09 2011 16:48 Billyssjssfj wrote:Show nested quote +On April 09 2011 13:04 Sajimo wrote:Money is DebtThe federal reserve was created in 1913 by Woodrow Wilson. A very very short synopsis of how money has worked since goes like this.... The government needs 10 millions dollars to be put into the money supply. They call up the Fed and ask for 10 million. The Fed prints it (or makes it electronic for modern purposes), and gives it to the government and asks for 10 million in some sort of bond. However, the newly created money has interest assessed to it. The government, and the US people, now owe more money to the Fed then is actually in circulation. Multiply this by billlllions of dollars and other tricks the banks use (90% of the money a bank takes in can be used to create to currency) and we end up in a deep deep hole. The economy is meant to collapse. I started buying gold about 5 years ago, after I finished college and could afford to, knowing that the price was going to continue to sky rocket. The rich of the rich are way ahead of this 'new' knowledge. They have been sitting back making money off this disgusting tapeworm while hard working Americans keep finding themselves trapped in this cycle. It didn't start here in the US but it may just end... Sup my awake brother. I find it interesting that whenever the toPic of the national debt arises, the people who are the self-proclaimed experts never address the issue of why or how we got into so much debt. They talk about the sPending and they talk about budget cuts, but they never address the parasite that is the federal reserve.
Yes, eliminate the fed... And be ready to say goodbye to fractional reserve banking, and single digit interest rates, while you're at it. That's not going to put the economy, and private debt in the ditch, or anything.
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tax the wealthy or kill medicare, social security, and medicaid.
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The US government has no interest whatsoever in reducing the national debt. The people who are behind this whole scheme want the government to maintain a debt level that is as high as humanly possible for two reasons: because it weakens the government, and because the same people directly profit from a huge national debt: they are the ones who collect the interest that the government has to pay each year.
This is modern slavery: the vast majority has to work hard everyday and gets taxed to the max so the government can pay interest to a small clique of people whose only job consists in collecting interest. 200 years ago, when the constitution was created, something like this was UNTHINKABLE, in fact, in Europe at least, this kind of usury was outlawed.
Bush ran the country into debt thanks to the two wars he started, Obama sealed the deal by "saving" the banking system from collapsing (in reality, he was simply helping to socialize the losses of privately held entities). And to pay for said debt, they dont cut the military expenses or tax the banks, they cut down social security and government jobs.
The entire political system in the USA today is corrupt to the core. Your constitution has been figured out by the same kind of people it was supposed to hold in check, and now it doesnt hold up to the 21st century anymore.
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On April 10 2011 01:00 Sprouter wrote:
tax the wealthy or kill medicare, social security, and medicaid.
Simple models like this do not work when trying to adjust messy real-world systems.
1. Tax the wealthy- How? They already are being taxed, theoretically. Tax them more? By how much? Enforce the existing rules? The people responsible for enforcement would be doing that already, if (necessary but insufficient):
i)they were competent AND
ii)they knew how to enforce the rules AND
iii)they knew where the violation was AND
iiii)they will act to enforce the rules rather than getting paid off for personal benefit
And so on. Clearly there are issues at each step of even this short list; getting the entire system to work is not trivial.
(Wealthy people are not stupid either, they probably aren't going to stand around docilely waiting for you to persecute them without constructing comprehensive defense systems around their wealth.)
2. Kill entitlement programs- just be like, "yo, medicare is too expensive, the entire program ends tomorrow"? There will be a shitload of angry people who will be angry at you for breaking the promise. They had already earned the money when they were younger and working to put it into the system, now they are older and want their fucking money back that was promised to them. You want to be the one responsible for ending this promise? (not an enviable job, but someone will be left holding it in the end) Good luck with that.
Obviously there are problems, but something like just 'tax the wealthy' is not a validly formatted answer.
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On April 10 2011 02:47 where wrote:Show nested quote +On April 10 2011 01:00 Sprouter wrote:
tax the wealthy or kill medicare, social security, and medicaid. 2. Kill entitlement programs- just be like, "yo, medicare is too expensive, the entire program ends tomorrow"? There will be a shitload of angry people who will be angry at you for breaking the promise. They had already earned the money when they were younger and working to put it into the system, now they are older and want their fucking money back that was promised to them. You want to be the one responsible for ending this promise? (not an enviable job, but someone will be left holding it in the end) Good luck with that.
Well, we've pretty much all accepted in America that at some point we will have no choice but to cut benefits significantly. In other words, we will be forced to choose a generation that has to be a scapegoat, who will pay significant amounts of money into the program and yet not draw even close to the amount they put in or the amount their predecessors received. I have a feeling it will be my generation. At least, I certainly won't expect much money to be there when I retire. Of course, anyone who is depending on the government for their retirement is in a world of trouble.
As I quoted in the OP, this is how ponzi schemes work, and let's not kid ourselves that SS is such a scheme. The first ones in will walk away rich but eventually you will have a large group of people holding an empty bag and a generation that is unwilling or unable to fill it.
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You're only stuck at the conclusion that you need to cut benefits because you refuse to increase revenue or find more efficient methods of delivering benefits.
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On April 10 2011 06:28 L wrote:
You're only stuck at the conclusion that you need to cut benefits because you refuse to increase revenue or find more efficient methods of delivering benefits.
Except, we HAVE attempted to increase revenue...
"We tried that a couple of times before with this particular Big Government albatross. Jimmy Carter tripled the FICA tax rates in 1977, and promised it would make Social Security solvent until 2030. Wrong. Dead wrong.
According to new projections from the Congressional Budget Office, Social Security will pay out $45 billion more in benefits than it takes in this year.
Social Security is the eternal proof that if you raise taxes to repair a deficit, liberals will just spend the money. That’s what happened to Jimmy Carter’s massive FICA hike. That money didn’t go into some kind of safety-deposit box. The government spent it to finance other programs, and here we are, with Social Security running at a deficit for the first time, in 2010 instead of 2030."
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The United States currently accounts for about 54 percent of the military budget of the entire planet. It seems like a scale back in military spending is the logical step when trying to answer to the debt problem. Also returning corporate taxation to pre-Bush levels might not be such a bad thing either.
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On April 10 2011 02:21 MrBadMan wrote:
The US government has no interest whatsoever in reducing the national debt. The people who are behind this whole scheme want the government to maintain a debt level that is as high as humanly possible for two reasons: because it weakens the government, and because the same people directly profit from a huge national debt: they are the ones who collect the interest that the government has to pay each year.
This is modern slavery: the vast majority has to work hard everyday and gets taxed to the max so the government can pay interest to a small clique of people whose only job consists in collecting interest. 200 years ago, when the constitution was created, something like this was UNTHINKABLE, in fact, in Europe at least, this kind of usury was outlawed.
Bush ran the country into debt thanks to the two wars he started, Obama sealed the deal by "saving" the banking system from collapsing (in reality, he was simply helping to socialize the losses of privately held entities). And to pay for said debt, they dont cut the military expenses or tax the banks, they cut down social security and government jobs.
The entire political system in the USA today is corrupt to the core. Your constitution has been figured out by the same kind of people it was supposed to hold in check, and now it doesnt hold up to the 21st century anymore.
This. And simple solution to the problems the fed has caused is to put the power of printing money back into the hands of the government and not the bankers. Easier said than done however because the bankers have been doing this for quite a long time and already own the government and the military of America and other countries. It is too late to stop them. Thy already own everything because money is debt. SO just go with the flow like all the other sheePle bEcause resistance really is futile.
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On April 10 2011 06:57 Aurocaido wrote:
The United States currently accounts for about 54 percent of the military budget of the entire planet. It seems like a scale back in military spending is the logical step when trying to answer to the debt problem. Also returning corporate taxation to pre-Bush levels might not be such a bad thing either.
America all ready has one of the highest corporate tax rates in the world. Ex-Communist States in Eastern Europe have around ~13-14% Corporate Tax rate compared to the US' 35%. Similarly, there are also State taxes and municipal taxes that are levied. If you raise Federal Taxes to 50 or 60% you are looking at a cumulative tax rate that becomes a disincentive to work. In fact, I'd argue that a tax rate over 50% results in less money for the Government. There will always be two divergent sides on the issue. Those who favor a negligble or limited-Night Watchman State will want to cut spending. Those who benefit from Government will want to raise taxes. A large Government is a conflict magnet. It turns society in on itself. If we let people keep the fruits of their labor we wouldn't be in the situation we are in today.
As for the military budget -- if we cut the entire department we would still be running 500$ Billion yearly deficits. The problem is the MIC & the dependency model of entitlements. People do not realize how poor we are as a nation. I wonder how many people factor in their debt of 45,000$ of the share of the national debt. I wonder what the net worth is of the average American. The fact is that American's do not own -- we rent. There was a point in time when American's understood that debt is slavery. It's a sickening system, but you have State-appointed economists who tell you that your own slavery is good for you -- and the vast majority of the public actually buy it!
If I took out a credit card for a million dollars, and bought a new house, new car, went travelling, and did all sorts of other stuff I'd look rich -- until the bill came due. The bill is due and our standard of living is going to be drastically reduced thanks to the poor decisions of the majority in this country who only see politicians as a money bag -- asking what are you giving me? Well, the time De Tocqueville wrote of in the 1840s is today finally due. I'm prepared.
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On April 10 2011 07:02 Billyssjssfj wrote:Show nested quote +On April 10 2011 02:21 MrBadMan wrote:
The US government has no interest whatsoever in reducing the national debt. The people who are behind this whole scheme want the government to maintain a debt level that is as high as humanly possible for two reasons: because it weakens the government, and because the same people directly profit from a huge national debt: they are the ones who collect the interest that the government has to pay each year.
This is modern slavery: the vast majority has to work hard everyday and gets taxed to the max so the government can pay interest to a small clique of people whose only job consists in collecting interest. 200 years ago, when the constitution was created, something like this was UNTHINKABLE, in fact, in Europe at least, this kind of usury was outlawed.
Bush ran the country into debt thanks to the two wars he started, Obama sealed the deal by "saving" the banking system from collapsing (in reality, he was simply helping to socialize the losses of privately held entities). And to pay for said debt, they dont cut the military expenses or tax the banks, they cut down social security and government jobs.
The entire political system in the USA today is corrupt to the core. Your constitution has been figured out by the same kind of people it was supposed to hold in check, and now it doesnt hold up to the 21st century anymore. This. And simple solution to the problems the fed has caused is to put the power of printing money back into the hands of the government and not the bankers. Easier said than done however because the bankers have been doing this for quite a long time and already own the government and the military of America and other countries. It is too late to stop them. Thy already own everything because money is debt. SO just go with the flow like all the other sheePle bEcause resistance really is futile.
If we gave Congress the power to print up fiat money our situation would be even worse today. Besides, Congress has no power to print up money. They only have authority to regulate the weight and measurements of gold & silver coinage. Even then, I'm reluctant to give politicians any monetary power whatsoever. Leave the monetary system up to the marketplace. There is a lot of great work on free banking and competing currencies. Lawrence White, George Selgin, and F.A. Hayek are (were in Hayek's case) the best three in that field. For some reason a lot of people who do not like monopolies seem to love Government-monopolies...makes no sense, but yes, you are correct we need to End the Fed. Without the Fed (and any power given to Congress to print money) the fact is that Government would necessarily shrink. As Joseph Schumpeter rightfully pointed out in History of Economic Analysis:
An ‘automatic’ gold currency is part and parcel of a laissez-faire and free-trade economy. It links every nation’s money rates and price levels with the money-rates and price levels of all the other nations that are ‘on gold.’ It is extremely sensitive to government expenditure and even to attitudes or policies that do not involve expenditure directly, for example, to foreign policy, to certain policies of taxation, and, in general, to precisely all those policies that violate the principles of [classical] liberalism. This is the reason why gold is so unpopular now and also why it was so popular in a bourgeois era. It imposes restrictions upon governments or bureaucracies that are much more powerful than is parliamentary criticism. It is both the badge and the guarantee of bourgeois freedom—of freedom not simply of the bourgeois interest, but of freedom in the bourgeois sense. From this standpoint a man may quite rationally fight for it, even if fully convinced of the validity of all that has ever been urged against it on economic grounds. From the standpoint of etatisme and planning, a man may not less rationally condemn it, even if fully convinced of the validity of all that has ever been urged for it on economic grounds.
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On April 09 2011 12:02 NEWater wrote:
The way I see it, America is in a world of shit. My advice is to find a relative who stays in the countryside and get to grow their own food, suck up to them real quick and plan for arrangements to move in with them when shit hits the fan.
Also, buy silver. Lots of it. Gold is much too matured and silver is only starting to pick up.
heh
I posted up an image of my precious metals stash about 3 months ago , 105 ounces silver 1 ounce gold.
Needless to say people thought i was a nutjob , i guess everyone that invests in something at $17.00 then more than doubles their money within a year (silver currently $40.90) is nutjob.
I imagine most people will eventually "get it" (how bad the situation is) but only when it is far too late.
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EPT
