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After seeing the "do you love glorious USA debt" thread, and seeing that it's complete troll bait, I decided to go ahead and post a proper thread on the issue. This question has been bugging me for a long time.
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.
p.s. I would really like it if this didn't turn into a republican vs democratic government debate 
If I need to do things in order to make this a proper thread, please say so, it's the first time I posted anything (I'd link newspapers, but I doubt lots of people here can read dutch ^^ )
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Well you can't tax the "job creators" (lol) and you have to keep spending to stimulate the economy. That war that came along didn't help either I guess. I don't see any other option but to keep loaning and spending... Who's idea is this dumb debt sealing anyway?
Edit: On a more serious note, where did that money actually go? I know America isn't known for it's social security, healthcare or infrastructure. Is it just a combination of war and low taxes or is there something else going on?
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I don't think it's being shrugged off anymore by your average educated citizen. Most people I interact with recognize that it's a serious problem. Personally, I have no idea how we're ever going to get it under control without taking really drastic measures that either totally hinders governmental function or corporate profitability.
Basically, at some point, SOME GENERATION will have to take the hit for the irresponsibility of our government's actions for the past 20-30 years.
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On July 24 2011 04:06 Marsupian wrote:
Well you can't tax the job creators and you have to keep spending to stimulate the economy. That war that came along didn't help either I guess. I don't see any other option but to keep loaning and spending... Who's idea is this dumb debt sealing anyway?
Edit: On a more serious note, where did that money actually go? I know America isn't known for it's social security, healthcare or infrastructure. Is it just a combination of war and low taxes or is there something else going on?
We have very low taxes compared to other developed countries, especially at the top brackets, and our social security (due to an aging population) is not fiscally sustainable at the moment. War made it all worse, but the U.S. was in trouble before the Iraq War.
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I think the national debt has finally reached the point where people are aware of it and that it will eventually need to be addressed, but hasn't yet gotten to the point where large enough portions are actually willing to support the changes that would be necessary to begin reducing it.
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On July 24 2011 03:59 horste wrote:After seeing the "do you love glorious USA debt" thread, and seeing that it's complete troll bait, I decided to go ahead and post a proper thread on the issue. This question has been bugging me for a long time. 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. p.s. I would really like it if this didn't turn into a republican vs democratic government debate If I need to do things in order to make this a proper thread, please say so, it's the first time I posted anything (I'd link newspapers, but I doubt lots of people here can read dutch ^^ )
Most of the americans on TL are actually the people in the process of inheriting the debt, as such we're a little cranky about being stuck with the bill.
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I'm of the firm belief that an EMP attack will happen resetting all the debt before anything bad comes of it. If not EMP, then peak oil. Either way, as long as the system allows an absurd amount of debt take advantage of it... and then just wait for the computers to collapse and all the electronic currency figures are lost.
In all honesty, far scarier than the debt or approaching the debt ceiling is the system and structures that allowed all this debt to accumulate off of any tangible standard (say gold for instance) so currencies and wealth are all entirely subjective and intangible. It seems like it's just a system waiting to collapse regardless if we hit a debt ceiling or not.
The answer to the debt crisis in my mind: smarter military spending (in things like tech, not troops), not fearing things like taxation of "job creators" (they were fine when they were taxed in pre-Bush era) because the purpose of the government is to provide for the people... requiring money (ie taxes) to do so, and the recognition that wealth trickles up not down. Benefits like unemployment = guaranteed spending which = guaranteed profits, versus putting money at the top which doesn't guarantee spending trickles down since the wealthy bank-it far more often than they spend it.
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On July 24 2011 04:12 Dranak wrote:
I think the national debt has finally reached the point where people are aware of it and that it will eventually need to be addressed, but hasn't yet gotten to the point where large enough portions are actually willing to support the changes that would be necessary to begin reducing it.
Eh, personally I feel that it's become such an astronomically large number that it's more of an abstract figure now than any reasonable sum of money to be paid back. I have no idea how we're going to handle it in the future.
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Don't really know how other guys are keeping track of it, but in my opinion, the EU debt crisis is a lot worse than our debt crisis here.
A lot of people get the false assumption (it's sorta the fault of Republicans who exaggerated) that a default on US debt on August 2nd would cause some type of death bringing financial fall out that we've never experienced before.
It's not necessarily like that. If America fails to bring about some type of balanced budget or whatever by August 2nd, it only means that certain payments, like SS checks and payments to soldiers would start to dry up and stop. Now, of course, that's bad, but it's nowhere near as bad as countries in the Eurozone who can't pay back bond investors and have already had their credit ratings (like Italy) downgraded to junk status.
Is the debt a serious issue? To me, not really. What's more of an issue is what's causing the debt. Actual debt really doesn't do much since China will continue to buy it for the forseeable future. What is dangerous then is the possibility that America can't garner enough capital to pay back on interest payments or bond holders when the time comes.
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On July 24 2011 04:07 ploy wrote:
I don't think it's being shrugged off anymore by your average educated citizen. Most people I interact with recognize that it's a serious problem. Personally, I have no idea how we're ever going to get it under control without taking really drastic measures that either totally hinders governmental function or corporate profitability.
Basically, at some point, SOME GENERATION will have to take the hit for the irresponsibility of our government's actions for the past 20-30 years.
I think due to the recent crisis there are more countries out there that started realizing this. In Holland the government has started making drastic cuts in the budget for the same reason. I guess I'm part of the generation that is going to take this hit. The major issue is the minimum age to which you have to work before you get your pension. It has to go up but the party who will take action will take a huge popularity hit (people actually think we can just go on like this -.-) so instead of taking immediate action (which is necessary imo) they decided to slowly up the minimum age over time. This helps with popularity (less voters who are effected in the short term) but I feel screwed over as I will be among the ones who will pay for this.
Due to the influx in population and longer average lifetime it's probably a necessary measure in other countries as well. You can't just have half the population working and the other half being supported by the working half.
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On July 24 2011 04:12 No_Roo wrote:Show nested quote +On July 24 2011 03:59 horste wrote:After seeing the "do you love glorious USA debt" thread, and seeing that it's complete troll bait, I decided to go ahead and post a proper thread on the issue. This question has been bugging me for a long time. 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. p.s. I would really like it if this didn't turn into a republican vs democratic government debate If I need to do things in order to make this a proper thread, please say so, it's the first time I posted anything (I'd link newspapers, but I doubt lots of people here can read dutch ^^ ) Most of the americans on TL are actually the people in the process of inheriting the debt, as such we're a little cranky about being stuck with the bill.
I understand that the general person on TL has nothing to do with the debt, but it's still easier for people like you to give an opinion on how "average joe" as they like to say it, feels about it. On the news here we only get Obama, Geitner, and reports from the actual situation, not how the public feels about it. I understand that people will prolly feel annoyed, and kinda let down that it's an inheritance of previous generations, but does the majority now support higher taxes for richer people and a budget cut on things like military? (most obvious example), or do you think that the government should stay away from raising taxes and needs to try and find other ways to solve it?
Looking at the debate now, both parties understand that something needs to change, but don't quite agree on how. From a belgian point of view, where taxes are well over 50%, I don't understand how the liberal party can be opposed to raising taxes when things are this dire, as well as why there aren't more people on the streets protesting. I don't know if street protesting is an EU thing, but I really think that it would happen here if the situation was the same as it is over there
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On July 24 2011 04:15 Zergneedsfood wrote:
Don't really know how other guys are keeping track of it, but in my opinion, the EU debt crisis is a lot worse than our debt crisis here.
A lot of people get the false assumption (it's sorta the fault of Republicans who exaggerated) that a default on US debt on August 2nd would cause some type of death bringing financial fall out that we've never experienced before.
It's not necessarily like that. If America fails to bring about some type of balanced budget or whatever by August 2nd, it only means that certain payments, like SS checks and payments to soldiers would start to dry up and stop. Now, of course, that's bad, but it's nowhere near as bad as countries in the Eurozone who can't pay back bond investors and have already had their credit ratings (like Italy) downgraded to junk status.
Is the debt a serious issue? To me, not really. What's more of an issue is what's causing the debt. Actual debt really doesn't do much since China will continue to buy it for the forseeable future. What is dangerous then is the possibility that America can't garner enough capital to pay back on interest payments or bond holders when the time comes.
The only reason US credit ratings were not downgraded so far is that the major rating agencies are in the US. The chinese rating agency Dagong puts Italy at A- and US at A+, far from AAA.
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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.
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Having people recognize the burgeoning debt as a problem is not the issue, not here in the US anyway. From what I gather, a huge number of people consider debt in general to be a horrible, terrible thing, when in fact the role that it plays in a healthy economy is vastly misunderstood. Unfortunately, partisan politics here in the United States revolves around buzzwords and "hot topic" issues, and for conservatives, the national debt is an easy jumping off point, as it allows them to attack taxes and government infrastructure all at once. Furthermore, instead of actually attempting to educate the masses in regards to the nature and function of debt in a healthy economy, they boil these issues down to mere "yes/no" or "good/bad" questions, further hurting any actual understanding,
The worst part of all this, far and away, is how a huge number of Americans blame the lower and middle classes for the debt problem. Republican fear-mongering in regards to government programs has created a horrible socio-political environment, one in which those who are on desperate times are somehow most responsible for the nation's debt. Take this scenario for instance:
A lot of republicans like to cite the recent data that suggests that 47% of Americans avoided federal income tax entirely, be it through entitlements or deductions that are part of the social safety-net. (additionally, a great many people think that all recipients of welfare or medicare are drug addicted pariahs, when in fact are usually simply disadvantaged minorities.) Anyways, back to the point. That 47% that avoided federal income tax? They make up a combined 2.99% of the economy in monetary terms, meaning that even if that entire 47% were properly taxed it would be a mere drop in the bucket. So, one may ask, where is the debt coming from, who isn't paying up?
The answer is obvious and simple, big business. Corporations are singlehandedly killing this country through their tax evasion and savvy tactics, and if you doubt me, here is a small sampling of companies and their avoided government dues.
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
The list goes on and on, some analysts suggest that if businesses in the US were held accountable for moving taxable infrastructure overseas and avoiding proper taxation, literally EVERY SINGLE monetary problem would be solved, and the national debt could be totally annihilated in a few years.
In the end, the problem is political in nature. The people of the United States have the means necessary to solve these financial problems, only the maneuvering of political parties (mostly Republicans but Democrats are just as guilty for not bringing these issues to the forefront) occludes the visibility of those in power taking advantage of those who are not, and instead we are endlessly embroiled in class and racial conflict, all in the name of partisan politics. inb4 TL;DR lol
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On July 24 2011 04:15 Zergneedsfood wrote:
Don't really know how other guys are keeping track of it, but in my opinion, the EU debt crisis is a lot worse than our debt crisis here.
A lot of people get the false assumption (it's sorta the fault of Republicans who exaggerated) that a default on US debt on August 2nd would cause some type of death bringing financial fall out that we've never experienced before.
It's not necessarily like that. If America fails to bring about some type of balanced budget or whatever by August 2nd, it only means that certain payments, like SS checks and payments to soldiers would start to dry up and stop. Now, of course, that's bad, but it's nowhere near as bad as countries in the Eurozone who can't pay back bond investors and have already had their credit ratings (like Italy) downgraded to junk status.
Is the debt a serious issue? To me, not really. What's more of an issue is what's causing the debt. Actual debt really doesn't do much since China will continue to buy it for the forseeable future. What is dangerous then is the possibility that America can't garner enough capital to pay back on interest payments or bond holders when the time comes.
I don't mean to trash you or anything, before I go further with this.
With both of my parents working in the financial sector, and in an area which keeps close track of government debts, I feel obliged to answer here.
The biggest problem with the EU crisis is that rating agencies keep downgrading EU nations credit ratings. With the amount of money that is being pumped into the member states, greece, italy, spain, whatever CAN pay back their debts, I can't stress this enough. America however, cannot.
While I agree that it won't mean a financial fall out, it does mean that there will be things like parks, monuments, etc, that won't be open anymore, and will stop giving money. Same for soldier payments, you can't tax people that you can't afford to pay.
Also, even with China buying your debt, you're only delaying the problem in my opinion, which is a really, really bad way to actually handle it.
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On July 24 2011 04:13 sailorferret wrote:
I'm of the firm belief that an EMP attack will happen resetting all the debt before anything bad comes of it. If not EMP, then peak oil. Either way, as long as the system allows an absurd amount of debt take advantage of it... and then just wait for the computers to collapse and all the electronic currency figures are lost.
In all honesty, far scarier than the debt or approaching the debt ceiling is the system and structures that allowed all this debt to accumulate off of any tangible standard (say gold for instance) so currencies and wealth are all entirely subjective and intangible. It seems like it's just a system waiting to collapse regardless if we hit a debt ceiling or not.
The answer to the debt crisis in my mind: smarter military spending (in things like tech, not troops), not fearing things like taxation of "job creators" (they were fine when they were taxed in pre-Bush era) because the purpose of the government is to provide for the people... requiring money (ie taxes) to do so, and the recognition that wealth trickles up not down. Benefits like unemployment = guaranteed spending which = guaranteed profits, versus putting money at the top which doesn't guarantee spending trickles down since the wealthy bank-it far more often than they spend it.
An EMP attack? Are you serious?
This is hilarious :DDDD
And probably not too bad an idea either! Resetting wealth the 21st C way I guess.
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Austerity is pretty much a bad thing during a recession. Some public spending could be cut, but much of it needs to happen right now. The US is not in a particularly bad shape (in terms of debt/deficit), and right now is not the time to work on it.
I think that many people misunderstand what this debt represents. Really, it's not catastrophic or anything.
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The debt in combination with the federal reserves money printing Keynesian economic policy severely devalue the dollar which is why food and gases are so high. Inflation is a tax we all pay..
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The essential problem is this:
demand for goods and services is falling because of the high unemployment, which in turn limits the amount of people who get hired. Unemployed people don't pay taxes, so this reduces the income to the federal government.
So, when the private sector is contracting, the government (public sector) has to expand to fill in the gap. Not taxing rich people does nothing to stimulate demand. What prudent business manager is going to add capacity (employees, new machines, new buildings) without demand? What the rich do is sit on the money, which makes complete sense.
Take into consideration what the wealthy population has gotten over the past 10 years. The Bush tax cuts, the extension of that tax cut, the inheritance tax being reduced, the bailout of Wall Street, and that historically, taxes are already pretty low.
So, does it make sense to put this burden on the backs of the middle class and under class (Social Security, Medicare and other government welfare programs)? Or, does it make sense to ask the wealthy to give back (reverse the Bush tax cuts, close some tax loop holes, etc.)?
The bulk of the population consists of the middle and under classes, and are being affected the most by the Recession. You also have to consider that their children are being affected negatively as well. This crisis will have long-term effects even after its over.
I think it is very clear that the wealthy need to give back some of their recent tax gains, and the government actually needs to spend more on the US population at large, by updating all of our national infrastructure among other things. Updating our infrastructure would be a source of civic pride, as well as increasing the efficiency of travel for economic and personal use. Everyone would win. But that isn't the only thing that should be done.
One thing though, I don't think this the right time to reduce military spending because it is a valuable source of jobs and post-high school opportunities for a lot of people, which is a good thing.
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well...
resetting the debt is not something thats impossible.
happened in germany twice in the last 100 years.
Sooner or later the dept will get too big and i guess then we will renegotiate the debt. Our money is not designed to last forever.
and get the myth out of your brains that you will pay back any goverment debt... never happened and will not happen.
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EPT
