This is not a political debate, this is a question,

How can people feel confortable with this number as our national debt? And with no real plan to ever pay it down, only to ever increase.

This is a question I can not wrap my head around. I can't help but entertain the idea that by the time I'm an old man, America will be dead.

Forclosed on. A part of another, or many other countries who have all cashed in on what's theirs. What flag will we be saluting in 30 years? I'll be 58 years old then.

What can be done aside from pointing fingers. I don't know all the history, I don't know all the politics, but I do know that that's an astounding number to comprehend.

How can it work, if I ran my household budget like this, I'd be bankrupt. If I made $100 day and spent $1,000 per day, how long would this last? Why is it that this practice would lead to disaster and bankruptcy for individuals and private businesses, yet our government seems to be immune to the idea that eventually all loans have to be paid back.

So what happens to America when that day comes?

At least it looks as though Obama is at least trying to make jobs, as opposed to just throwing money at people so they can buy more stuff from China.

I'm not the smartest man in the world, I'm just an ordianry High School graduate who maintained a C average, but for the life of me, I can't figure out how this kind of financial policy can work.....

Maybe I'm just an idiot.

Then I look at this: http://news.bbc.co.uk/2/hi/business/411973.stm

Ahh, the good old days.... Looking at that chart makes me roll on the floor now... what a joke!

Skell

I certainly agree with you Andrew. The level of debt the US is in is quote mind boggling and beyond comprehension for me. Im sure others here have a better understanding of it but it sure scares me a little.

My country (Australia) is slightly better off, however our PM is trying to pass a stimulus package at the moment that will see us go from a large budget surplus to a large deficit in the space of a few months.

Its easy to spend someone elses money isnt it??

George_1950

Hello, Andrew; you are no idiot! I've always maintained that, to get the right answer, one must ask the right question, and you have: "So what happens to America when that day comes?"

It's my belief that there is almost nothing new under the sun, which is why we study history. And I cite to you the example of Weimar Germany and its experimentation with hyperinflation. The ultimate 'winner' is anyone's guess. But Obama's efforts to create jobs is worthless because government, even the most well-intentioned, knows nothing about real jobs, much less creating one. For example: we find ourselves, in the U.S., with a president who has never hired anyone in his life, has never 'created' a job. Why should he be able to do so now? I recently visited a shoe distribution center, back in the Fall of 2008 when all the talk was Congress bailing-out the sinking financial mess. I looked around the center at all the conveyer belts and the thought occurred that there is not one member of Congress who could explain how that distribution center worked. How do they understand banking or finance? They don't, or at least most of them don't. The U.S. gov't has been interfering with the economy for a year and the stock market is down about 3,000 points. Doesn't that tell us something? (Let me offer this observation as well: it has nothing to do with tax cuts.)

Inflation in the Weimar Republic - Wikipedia, the free encyclopedia

KeepItSimpleStupid

hey, someone in our local paper said that they should require politicians to have only a high school education and no more.

inthebox

I remeber back in the 80s, when Reagan cut taxes and a democratic congress and the military budget spent and spent. I remember the outcry about soaring defecits then.

Then the cold war ended and Clinton and this country were the beneficiaries of a "surplus" in large part due to the GOP "contract with America".

--------------------------------------------


The scary part is
-- Reagan was an optimist and raised confidence. Obama is telling us the sky is falling.

-- Nuclear annihilation is real and it is constitutionally correct to spend money on defense [ and a good offense contribute to a good defense].

Someone should tell Obama that the economy does cycle. By the time his "shovel ready" jobs have started after all the deliberations and bureacratic delays take 6-12 months, theeconomy would have recovered on its own.


Obama and the congress are using this to spend and spend our taz dollars and our childrens tax dollars on what? bailing out failing banks and uncompetitive industry?

But the bottom line is confidence, as long as we the taxpayors and those that own t bills have confidence that the US gov is and can pay back its debt it does not matter.

A rough measure of this confidence is the stockmarket.

3 mo ago dow was at 9035
1 mo ago dow was at 8375
1 week ago dow was at 8249
2/17/09 7552 *

[per I phone app ]*

oh! oh!







G&P

tomder55

To reinforce the views expressed above ,this op-ed at Financial Times is a good read :
IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- The Price Of Fear

We are betting alot on a neo-Keynes-on- steroids economic theory. But the debt service will consume a large portion of future budgets ;and as George , Excon and others have pointed out ,the level of spending could imperil the monetary system.
And this does not even factor in future entitlement obligations (which I'm sure in issues like SS we will be screwed...that's why some in Congress are seriously contemplating confiscation of private 401-K money and incorporating them into a public pension program) .

Hoover and FDR turned an cyclical economic slump into a depression with the combination of protectionism and Keynesian pump priming . I don't think it will be any more successful this time.

excon

Hello tom:

COULD?

Or, maybe it's an attempt at achieving that very objective. After all, who benefits the most from inflation? That would be DEBTORS, because they get to pay back their loans with cheaper dollars. It's the lenders who get screwed.

Who is the worlds biggest debtor? That would be US. Who stands to gain the most from an imperiled monetary system? That would be our government. In fact, the government could pay the entire $10 Trillion off in a couple of weeks if hyper-inflation gets underway.

I said if. I shoulda said WHEN.

Buy gold.

excon

tomder55

Hyperinflation will occure when or if the Fed "Monetizes the debt" .That will happen when they can't find "suckers " ...oops I mean investors to purchase the debt. The investors until recently have been China ,Japan ,the OPEC nations etc. But their appetite for owing our debt is likely to diminish given the current economic climate.

Andrew understated the debt . Once the bucket list American Recovery and Reinvestment Act of 2009 is calculated into the equation the debt balloons .

Treasury is preparing to borrow up to $2.5 trillion in 2009 to cover the 2009 federal budget deficit, followed by borrowing another $4 trillion in 2010, with the prospect of increasing the current $10 trillion U.S. national debt by 65 percent in the first two years of the Obama administration. The true current obligations of the federal government, as determined by the U.S. Treasury using GAAP, or Generally Accepted Accounting Practice, rules, totaled $65.5 trillion , exceeding the GDP of the world. This is based on future obligations for unfunded liability entitlements including Social Security and Medicare benefits .

These figures don't show up in the budget because entitlements are not for some reason I can't explain are not included in the the liabilities column . When a Corporation like Enron did that the execs got frog marched.
Like Elliot mentioned in a previous posting ;why is this not a Madoff-like ponzi scheme ?

andrewc24301

Scary scary scary....

In laymens terms, it strikes me as a big "cash advance" ring! And we know how long those last on those who use them. A few months at the most?

When the government has to borrow money to pay it's bills, then we are in trouble, just like the family who has to borrow from one cash advance to pay another.

I'm not expert on it, but it just seems like we are teetering on completle collapse, that to me, could spell the end of America as we know it, maybe even America period.

Obama's plan has to work because if it doesn't what is plan B, sorry, plan C, sorry maybe we are up to play Q or R now?

Like I've always been told, you can't grow money by shaking it from one side to another.....

andrewc24301

And then there are those opitimist who say "we have always had the debt"

True

BUT if you look at any chart of the debt, you see the termendous surge right after 2000. It's like it stays on one spot for most of the last century, then suddely, the bar moves right off the chart!