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@aksfjh
I disagree, even if the bill was amended heavily. As it should have been, if it came out of the senate fair, with some sort of Balanced Budget Amendment attached I think the Reps would bite. They want some sort of game changer and that amendment could do it. It was really bad in the form it came it, but it should be there in some form. You say that they can not compromise with them because the bill was so bad. I say they should, step it up Senate come up with something bi-partisan and let it speak on its own merit. If the House rejects it, then that's on them. And we can pressure them to yield. Two wrongs don't make a right. That kind of thinking is what got us into this damn mess in the first place. The dems should do everything possible to put together something on paper that's bi-partisan and show this country that they can put on the big boy pants. They all need to go. Further, one needs only look that it been 800 days since the senate has passed a budget. Obama's budget did not get a single vote-rep or dem. Not a single vote. What does that say? If i vote for Obama it will be because the Rep candidate is so poor that it would be even more foolish to elect them.
p.s @perkypenguin I am glad that I did. You can not have a country that is ignorant and free. We need to stress that the average citizen needs to become educated and start performing their civic responsibility. We need to demand more of our leaders, we need to stress compromise. Politicians should be the best of us, it doesn't have to be this way. The average person needs to learn how to properly form opinions. That you should get news from multiple sources, and that when you do learn new information be flexible to change your opinion based on new information.
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99%+ of the people on TL aren't going to be able to form a decent opinion on the issue.. They just don't have enough information in their brain. There's actively researching academic economists on both sides of the debate who know much more than anyone on these forums I'm sure..
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the problem is the recession, mainly, because in order to get out the government has to increase spending, however, we have no money, and congress recently voted to keep the bush era tax cuts in place for a bit. so we're kinda screwed
we need a balanced budget plan, however with the massive spending that the government does, and the unlikelyhood of any of it being cut from places like welfare, medicare, social security, defense (half the budget btw), education, and of course, congressional salaries, the only way to do it is to raise taxes.....which will go over about as well as if you brought a mistress to your wife's funeral.
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On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back?
The biggest fail post I have ever seen
How do you think that the government funds its debt?
Through selling guits, mostly to the chinese
So the Chinese are the ones funding the US debt
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On July 24 2011 04:25 jmack wrote:It's pretty clear at this point large INTERNATIONAL banks / financial sectors are guilty of fraudulent banking, or at least swindling millions of people out of TRILLIONS and disregarding any respect for their customers interests. Deregulation is retarded. Retarded. Do you know what the word greed means? What did people think would happen if they allowed the greedy to run free? Tax the rich; hard. There should be large government SPENDING not CUTS ( cuts is moronic ). And before anyone claims I don't know what is it I'm talking about let me paint you a picture: You are currently allowing the government to tell you that if the rich get tax CUTS they will create jobs; what jobs? What jobs and where are they? Deregulation and wealthy tax cuts have been around for a decade and now that the bubble has burst it's clear the attempt was a complete failure. With that in mind, you're allowing your ELECTED officials to present more ideas following the same broken logic. No corporation can create jobs if there's no demand for their product ( regardless of how much the company pays it's CEO's ) IF THE PEOPLE WHO BUY THE PRODUCTS HAVE NO MONEY. A serious move towards a socialist ( don't be ignorant and overreact to the word; go do some research and tell me it isn't a more ideal system we should be striving to move toward ) nation is a great way to actually recover the economy. This is not just information I am posting on TL forums; it is being screamed at you by those stuck behind the main stream cable media. No matter what your beliefs, no matter what they are; I have a hard time believing ANYONE supports the notion that millions should go hungry/poor while working 60hrs a week for minimum wage while CEO's of THE BANKS collect half billion dollar bonuses for doing nothing. The banks and their CEO's are the modern day version of medieval lords of land, seemingly immune to the law and collecting absurd wages based on the misuse and exploitation of their slaves. Yes we're slaves; we're slaves living on the illusion that we're free and that one day we can be the "wealthy". I look forward to your views, discussing them and reflecting on my own. + Show Spoiler +Yes I am angry and disgusted. The more I learn about our system the sweeter the word "revolution" sounds.
This is pretty much exactly how I feel. Feels like living in a pseudodemocracy that in reality is nothing but an instrument for the rich to get even richer. Who get away with all sorts of shady and downright unethical things because they're soooo important.
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On July 24 2011 23:43 Gracksaurusrex wrote:Show nested quote +On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt
Actually China owns 1.1 trillion of US debt, not that much in comparison to all of the debt.(14 tril) It is enough to give them significant leverage over US policy but it is not reasonable to say China "owns" the US or any of the other hyperbolic shit people say. Also what are guits? Are they some UK word for bonds?
@Equity 213 that video is retarded, we will default on something, just not on our debt payments. That does not make creditors or ratings agencies happy, since we have to roll over the debt, it will hurt us very quickly with increased borrowing costs.
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On July 25 2011 00:24 TheFrankOne wrote:Show nested quote +On July 24 2011 23:43 Gracksaurusrex wrote:On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt Actually China owns 1.1 trillion of US debt, not that much in comparison to all of the debt.(14 tril) It is enough to give them significant leverage over US policy but it is not reasonable to say China "owns" the US or any of the other hyperbolic shit people say. Also what are guits? Are they some UK word for bonds? @Equity 213 that video is retarded, we will default on something, just not on our debt payments. That does not make creditors or ratings agencies happy, since we have to roll over the debt, it will hurt us very quickly with increased borrowing costs.
Well, first of all, the poster that you responded to is being sort of a jerk to a guy asking honest questions.
Second, I think that it kind of is a danger that China owns so much of our debt. They don't own say...50%, but I believe they hold the most debt in comparison to everything else America owns.
There's also the fact that China buys our debt like no other, and is trying to trade our US dollars for euros to ensure that when America sinks, they don't experience too big a fallout. That's also bad because if China manages to balance out its portfolio without too many American reserves, there's less incentive for China to keep buying our debt.
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On July 24 2011 23:43 Gracksaurusrex wrote:Show nested quote +On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt
Why is it a fail post? I was asking questions. Sorry I am not a genius and don't already know everything like you.
Even still, mr genius, you didn't even answer my post - and I don't know wtf a "guit" is, even after trying to look it up.
For knowing very little about this topic I have a feeling that you actually know even less than me still.
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They peak 14trillion yet? Lol, I think you hit a point where interest is to high to surpass, they are bridging that point.
Wonder what they'll do, feel likes their on there last cylinders, imagine if they hadn't done everything for the "quick buck".
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On July 24 2011 13:56 arbitrageur wrote:
99%+ of the people on TL aren't going to be able to form a decent opinion on the issue.. They just don't have enough information in their brain. There's actively researching academic economists on both sides of the debate who know much more than anyone on these forums I'm sure..
i agree with this, the future can only be predicted by theory. economists in the field have the most knowledge of the theory to make informed decisions.
you can't cite examples and statistics to prove your point as there hasn't been a large enough sample of events to make any meaningful prediction. most TLers lack the basis to make predictions since their theory is non-existent, but it's pretty fun to hear opinions.
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The debt ceiling makes me laugh because the govt just raises it when they reach it. Totally pointless to have a debt ceiling if they just raise it when they need money...
Also, china holds alot of our debt. Not sure if its in their best interest for the US govt to go bankrupt.
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On July 24 2011 13:56 arbitrageur wrote:
99%+ of the people on TL aren't going to be able to form a decent opinion on the issue.. They just don't have enough information in their brain. There's actively researching academic economists on both sides of the debate who know much more than anyone on these forums I'm sure..
This isn't rocket science, it's not even science.
There is no "right answer" There are a plethora of options to reduce the defecit. The problem is doing it while keeping your constituents happy. It's political bullshit basically.
One party is scared they will lose votes if they let taxes go up. One party is scared they will lose votes if they cut social spending. All parties are scared of being labelled terrorist loving commies if they dare touch military spending. All 3 of these options or combinations thereof are perfectly viable options to slash the defecit. It's taking the egos and grandstanding out of the equation and getting decision makers to do whats best for the country rather than whats best for re-election that makes this a thorny issue.
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On July 25 2011 03:00 travis wrote:Show nested quote +On July 24 2011 23:43 Gracksaurusrex wrote:On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt Why is it a fail post? I was asking questions. Sorry I am not a genius and don't already know everything like you. Even still, mr genius, you didn't even answer my post - and I don't know wtf a "guit" is, even after trying to look it up. For knowing very little about this topic I have a feeling that you actually know even less than me still.
I don't know what the fuck a "guit" is either but here is my answer to your question:
The US Dollar is backed by the full faith and credit of the United States. It is "made up" but that doesn't mean it has no value, an important distinction. If the US just said "fuck it" the dollar would stop being the primary reserve currency as most countries holdings dropped in value drastically and the US government's cost of borrowing more would skyrocket. Additionally the value of the dollar compared to other currencies would drop drastically, essentially destroying the global foreign trade that is the current norm. (Not saying it would stop, just become radically different) Essentially there would be a massive restructuring of the global economy and it would be painful.
@zergneedsfood: Gov bonds are the primary source of US dollar currency reserves, hard currency reserves are significantly smaller because they are automatically reduced in value each year by inflation. This is at least offset by interest payments on bonds and so bonds make up the major source of reserves. US Government bonds are considered to have a "risk-premium" of 0%, they are assumed to be guaranteed payouts.
To say China is selling the dollar while buying debt is a contradiction because the dollar is traded in bonds to a significant extent. There is a global trend of diversification away from the US dollar but it is still the primary reserve currency.
" but I believe they hold the most debt in comparison to everything else America owns. "
I'm not sure what that means but if you were trying to say they own more debt than anyone else you are kind of right. The actual owner of the most US debt is the US government itself. (Our gov owes itself somewhere around 4 trillion dollars) Second is China which is why I said they own enough to have significant leverage over our policy.
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To the question who is the lender of all the debt ?
Everyone who has some savings on the bank is lending someone this money. i think the biggest part in us debt is social security savings, there was a graph in this thread .... Additionally a lot of it is just created in trade for the promise to pay back by central banks.
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On July 25 2011 05:00 TheFrankOne wrote:Show nested quote +On July 25 2011 03:00 travis wrote:On July 24 2011 23:43 Gracksaurusrex wrote:On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt Why is it a fail post? I was asking questions. Sorry I am not a genius and don't already know everything like you. Even still, mr genius, you didn't even answer my post - and I don't know wtf a "guit" is, even after trying to look it up. For knowing very little about this topic I have a feeling that you actually know even less than me still. I don't know what the fuck a "guit" is either but here is my answer to your question: The US Dollar is backed by the full faith and credit of the United States. It is "made up" but that doesn't mean it has no value, an important distinction. If the US just said "fuck it" the dollar would stop being the primary reserve currency as most countries holdings dropped in value drastically and the US government's cost of borrowing more would skyrocket. Additionally the value of the dollar compared to other currencies would drop drastically, essentially destroying the global foreign trade that is the current norm. (Not saying it would stop, just become radically different) Essentially there would be a massive restructuring of the global economy and it would be painful. @zergneedsfood: Gov bonds are the primary source of US dollar currency reserves, hard currency reserves are significantly smaller because they are automatically reduced in value each year by inflation. This is at least offset by interest payments on bonds and so bonds make up the major source of reserves. US Government bonds are considered to have a "risk-premium" of 0%, they are assumed to be guaranteed payouts. To say China is selling the dollar while buying debt is a contradiction because the dollar is traded in bonds to a significant extent. There is a global trend of diversification away from the US dollar but it is still the primary reserve currency. " but I believe they hold the most debt in comparison to everything else America owns. " I'm not sure what that means but if you were trying to say they own more debt than anyone else you are kind of right. The actual owner of the most US debt is the US government itself. (Our gov owes itself somewhere around 4 trillion dollars) Second is China which is why I said they own enough to have significant leverage over our policy.
Aaahh.
I didn't mean they were "selling" the dollar. I meant they were diversifying their portfolios by trying to trade in dollars for other currencies.
There are no problems now, I agree with that, since the greenback is the one and only go-to currency. But that's why we argue the debt problem: because it could have an egregious effect in some (unforeseeable future at least) way later on.
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On July 25 2011 03:10 iansanew wrote:Show nested quote +On July 24 2011 13:56 arbitrageur wrote:
99%+ of the people on TL aren't going to be able to form a decent opinion on the issue.. They just don't have enough information in their brain. There's actively researching academic economists on both sides of the debate who know much more than anyone on these forums I'm sure.. i agree with this, the future can only be predicted by theory. economists in the field have the most knowledge of the theory to make informed decisions. you can't cite examples and statistics to prove your point as there hasn't been a large enough sample of events to make any meaningful prediction. most TLers lack the basis to make predictions since their theory is non-existent, but it's pretty fun to hear opinions.
to be totally honest, those "economists" put us here... I don't know much, but after watching inside job "documentary by a political science major, with matt damon narrating, you see how the bubble was caused through deregulation."
And if you dont like the 99% of ppls opinions, then why come to this post to begin with?...
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On July 25 2011 03:00 travis wrote:Show nested quote +On July 24 2011 23:43 Gracksaurusrex wrote:On July 24 2011 05:09 travis wrote:
Isn't money made up anyways? What exactly is it that keeps the government from perpetually saying "there isn't a financial crisis, and the debt doesn't matter" ? What if it was just never paid back? The biggest fail post I have ever seen How do you think that the government funds its debt? Through selling guits, mostly to the chinese So the Chinese are the ones funding the US debt Why is it a fail post? I was asking questions. Sorry I am not a genius and don't already know everything like you. Even still, mr genius, you didn't even answer my post - and I don't know wtf a "guit" is, even after trying to look it up. For knowing very little about this topic I have a feeling that you actually know even less than me still.
Even though it (well, obviously) can't be explained in simple words in a thread like this, it goes kinda like this way. (following one poster above)
Yes, governments could - in theory - say, screw it, we just don't pay you back. But this would mean that people would completely lose confidence in money itself, because "the government" (used in a very wide sense) is, obviously, inherently involved in monetary government.
Meaning, if the government just started ignoring its own debt, then soon the money won't be worth more than the paper its printed on. Or in most cases nowadays - the dataframes were the account-numbers are saved.
Economy would go back to barter transactions, which would be...well...bad 
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How exactly do Americans look at their own debt, and compare it to the current crisis in Europe?
From what I've read and seen in interviews, the news,etc. I always get the feeling that the general US spokesperson shrugs at the US debt, and then redirects attention to the EU (eg Greece). An example that comes to my mind is Timothy Geitner that urged the EU to take firm actions in order to dam the financial crisis, because otherwise it would have a detrimental effect on the world economy. I don't mean to talk crap, but this to me looked very arrogant for a person that's the financial supervisor for a country that has an insane amount of debt and will basicly stop functioning by august 2nd.
Okay well I will try to explain the situation as best I can.
America has no true "debt" crisis, it has a political crisis over a fund to raise the debt ceiling. The government has two main ways of borrowing money: taxation, and borrowing. The Congress has control over how taxes are regulated and how high the total debt ceiling is. The government cannot legally borrow above that limit.
This is not a debt crisis because the US will not default even if the ceiling is not raised. The government will have more than enough money to pay the interest on its debt. It just won't be able to take on new debt. It also won't be able to pay for everything it currently does. Taxes and other revenue will still be coming in, just no new borrowed money.
Right now the US borrows about 43 cents of every dollar it spends.
http://mercatus.org/publication/how-much-federal-spending-borrowed-every-dollar
Europe is in much worse shape because there are countries that are in real danger of real default on their debt. What would a country usually do? Devalue their currency, hike up interest rates, restructure their debt.
They can't. You have to devalue your currency. They have the Euro. They can't devalue it because that will screw over every other country in the Union. They can't raise their interest rates; it will hurt banks across Europe that are already on shaky ground.
The US is in a political crisis because one party (Republicans) wants to restructure spending in order to agree to raise the debt limit. The Democrats want to raise the debt limit now and restructure spending later. Both parties agree that spending needs lowered in order to face a debt crisis like the one Greece is facing later, but Republicans suspect that Democrats don't really want to lower spending and Democrats suspect Republicans want to gut Social Security and Medicare and Obamacare. Both are right of course.
Regardless of that we have to lower spending; it isn't so much that we are increasing the debt but that we have greatly increased the amount recently and the increase seems destined to grow larger every year if we continue as we have. Two pieces of cake for dessert is okay, every two days it is not.
However even the threat of the US not being able to borrow money is enough to scare the markets across the globe; it implies instability in the money machine that is the US Treasury and Federal Reserve, which the globe is quite frankly depending on right now to pump out liquidity by keeping interest rates down and printing money either in reality or on computers. We just gave out billions of billions of dollars to foreign banks and companies (and American ones) during the crisis so they wouldn't go under. Just gave it away, put it on our tab. We still are.
This crisis has shown how important the US still is to the world economy, we are the ones holding it up right now. The debt debate raises the threat that maybe we won't be able to hold it up as well for an unknown amount of time, so people are scared.
Europe is in worse shape but really if either one went down the other would be following.
The US debt limit needs to be raised but not without significant cuts in spending, Obama is being a straight mook right now imo. Now is not the time to soak "the rich" when what the economy needs is money in people's hands that they are willing to spend. You can raise tax revenue without pointlessly broad diatribes and policies inspired by class ideology, this is the 21st century we can come up with new ideas I hope. And now is not the time to say that you're serious about spending and then declare that cutting Obamacare and most of Social Security and Medicare spending is "off-limits."
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Hold all 40-60 year olds at gun point and demand that they cough up.
But seriously and realistically, the debt can only be paid off with a substantial drop in the quality of life of our generation in NA sometime in the future.
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EPT
