12 replies to this topic

[youmast]

My post has been cancelled for some reason. I was not quite right saying that Americans held $50trl, or $270,000 in depts per capita. Here is a correct number (quote):

"Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities , a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined." (USA Today)

American depts ain't less, but equal to world GDP.

[snorkels4]

any way out? deflation inflation? how much during bushy??

[pdx5]

It might be more correct to call it taxpayer liabilities than debt. A debt is something you borrow and get to spend. Liability is something you never have the pleasure of spending but you are required by law to pay back! It is more insidious. The taxpayer liability consists mainly of entitlements promised to every American citizen AND legal residents who are not citizens. And the lion's share of this entitlement liability is in the form of Social Security payments. Thank you president FDR!! Even people who never contributed one red cent in FICA tax can get benefits, even non-citizens who are over retirement age. Medicare is another huge component of taxpayer liability. And now we have the prescription drug benefit promised to millions of retirees, thank you president GWB43.

[Jnavin]

I believe we are veering into the realm of the political.

[pdx5]

Unfortunately economy and political situation are like siamese twins. You can't separate one from the other. If you put your head in the sand about political events, I am afraid it is akin to driving blindfolded.

[ogm]

There is a theory that massive inflation will solve the issue. If you borrowed 10 rubles in 1989 and payed them back in 1998 .... Get the idea? As for housing problem , it can always be solved with more immigrants. Just bring in new buyers and they will absorb the inventory As for government debt, I think the next president will pull out of Iraq, and that will close most of the budget gap.

Edited by ogm, 02 August 2007 - 10:22 PM.

[zedor]

It might be more correct to call it taxpayer liabilities than debt.
A debt is something you borrow and get to spend. Liability is
something you never have the pleasure of spending but you are
required by law to pay back! It is more insidious.

The taxpayer liability consists mainly of entitlements promised to every
American citizen AND legal residents who are not citizens. And the
lion's share of this entitlement liability is in the form of Social Security
payments. Thank you president FDR!! Even people who never contributed
one red cent in FICA tax can get benefits, even non-citizens who are over
retirement age.

Medicare is another huge component of taxpayer liability. And now we have
the prescription drug benefit promised to millions of retirees, thank you
president GWB43.

Lets set the record straight. Social Security is NOT an entitlement program -- it is a Federally mandated retirement program that we all MUST pay into some 15 % of our earned salary (cap on the amount) plus 1.6 % as a health insurance premium for Medicare. MEDICARE is the ONLY health insurance available to Americans over 65 years of age. ( it can be suplamented by individuals but not opted out of as the base insurance once we reach 65)

ENTILEMENT is a way to taint them with the brush that we dont really deserve them . But no one can OPT out of this system and thus this in NOT and entilement its is a contract with each and every one of us.

AND Alan Greenspan fixed the boomer bulge problem in the 80s when they raised the % we have to pay (whether we do all of it or just half and the employer the other half is irrelevant -- still all who earn income from work must into this mandated annuity program Social Security and over the 65 healt insurance MEDICARE )


The problem is the surplus engineered by AG is being stolen each year to fund government operations and that surplus is replaced with a piece of IOU -- to the tune of some 250 Billion each year. So when the boommers retire this borrowing of money will come home to roost as

1. the 250 billion cant be borrowed each year as it wont be there

2 the 250 billion will have to paid forked over to fund the system as only toilet paper is in the surplus vault.


That will mean a swing of 500 billion.


So when they say the deficit each year is 250 billion that is FALSE as it is based on this borrowing from the Social Security reserve pool set up to make sure the system is solvent when the boomers retire. This is the pool of money AL Gore said he would put in a lock box ie not allow the government to silently borrow from each year. The only problem with the solvency of SS is how to repay this "borrowed" money.

If the amount "borrowed" from the Social Security trust fund surplus reserve each year was not allowed, the actual Federal Government operating budget deficit each year would be 500 to 600 billion dollars not the smoke and mirrors 250 to 300 they "say".

Borrow and spend is the problem.

Edited by zedor, 03 August 2007 - 01:06 AM.

[arbman]

Where are they spending all of that money?!? The truth of the matter is, yes the retiring baby boomers will be a huge drain on the economy, but there can never be enough funds to prepare a country for the next growth wave in the population. So, they must borrow and establish the companies and create the jobs ahead of time, so that when each and every year there are new graduates coming out of the schools, they can immediately join to the labor force and contribute to the tax system, so they have to always make some deficit and let the next generation pay for them... The problem is what happens when the population does not grow anymore? You will have a huge deficit as well as a huge retiring old generation. It might seem distant, but it will probably happen in about 60 years since the world population is unlikely to double twice or about 24 billion people in the next 2x36 year generational cycle as it did in the past. There are about 6 billion people and about 2 billion of them are already living dead on this planet such as the ones in Africa, some 2 billion of them never see the daylight working in the factories in the sweatshop conditions... There is just not enough resources for the population to even double from here to around 12 billion people. They have to start living on Mars or other planets, I guess, I don't know how this fixes the resource issues though, unfortunate but probably a big war will become unavoidable... - kisa

Edited by kisacik, 03 August 2007 - 01:38 AM.

[Tor]

My post has been cancelled for some reason. I was not quite right saying that Americans held $50trl, or $270,000 in depts per capita. Here is a correct number (quote):

"Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities , a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined." (USA Today)

American depts ain't less, but equal to world GDP.

Thanks Yuri, but so what???

So what if it was $1m per capita???

I dont see it.

[youmast]

There is a theory that massive inflation will solve the issue.
If you borrowed 10 rubles in 1989 and payed them back in 1998 .... Get the idea?

Yeah, I get the idea. The idea that the only way to solve this problem is to do the same things as Russians did between 1989 and 1998, when Russian currency collapsed from roughly 0.60 ruble per dollar in 1988 to 30000 ruble per dollar 10 years later. The whole social system with all that benefits and pensions totally collapsed as well.

I don't know what my parents would do without me... having no pension whatsoever these years? What my wife' family would do without me and without their jobs and pensions? Thanks Got I've been involved in business! What would I do if instead of making money in 1990's, I keep doing science in University for $15 per month?

Oh, yeah... that has happened with one of the richest and super-powerful country in the world. Tell me about this story 25 years ago, I would never believe.