US Debt... Chance of recovery?

The debt we have gotten ourselves into is insane, and I'm just curious if there is really any way for us to get out of this (you can see what the debt is here Debt Clock) and if there is a way how?

I'm not to up on economics or anything and I'm just wondering how we're gona get ourselves out of this one or if it's even possible, because I think it's safe to say this is the biggest debt ever racked up by anyone or any nation in history...

The US was growing fast enough that we did have a surplus for a little while and projections for an end to the US national debt. I believe the US even had some type of law or pseudo law that congress was going by to limit spending except in the event of war or some other emergency. Then the year 2001 came and the war on terror started. The budget went bye bye. Instead of focusing on the budget, our elected leaders are trying to give tax breaks to the wealthiest of Americans and spending money like there's no tomorrow. I think we just need to elect people who care about sticking to a budget without giving the farm away to every single little pork barrel project.

[edit on 7-8-2006 by cpdaman]

they say america could pay of its debt really quickly if it wanted, but we all get the feeling the economy is being kept afloat for what ever reason.

all americas wealth is like many believe in europe now, leaving the american people just to be like they always are 100% consumers for all european corporations, bet you americans feel great making europeans rich. lol

Could the lot of you be any more clueless?

The debt and deficit are SHRINKING and as a percentage of GDP and are historically quite low. While America's per capita debt is about $29K, her per capita GDP is almost $43K! Additionally, extensive debt reduction has been historically correlated with recessions.

The EU has a larger debt burden with half the growth, twice the unemployment of America and is in the midst of a demographic death spiral. Maybe we should be writing the EU's obit?

Go here to get some informed and factual analysis of America's debt.






[edit on 7-8-2006 by Number23]

Originally posted by Number23
Could the lot of you be any more clueless?

The debt and deficit are SHRINKING and as a percentage of GDP and are historically quite low. While America's per capita debt is about $29K, her per capita GDP is almost $43K! Additionally, extensive debt reduction has been historically correlated with recessions.

The EU has a larger debt burden with half the growth, twice the unemployment of America and is in the midst of a demographic death spiral. Maybe we should be writing the EU's obit?

Go here to get some informed and factual analysis of America's debt.






[edit on 7-8-2006 by Number23]

Number23, please don't contribute facts cause we all know that once someone with common sense comes in we have to jump on our toes /sarcasm

I agree with you 100%

I declare Japan and Europe the clear winners when it comes to racking up the biggest percentage of debt per GDP. The US doesn't even come that close. Will Europe go bankrupt in the next few years? Hopefully they can hang in there. We might secretly want a few countries to convert their currency before something like that happens.

I feel so sorry for the European companies that can no longer compete with American companies because the value of the Euro has increased so much. sarcasm

Serious now, maybe the US is in dire straits. Perhaps the value of the Euro should go up some more to help the US compete around the world.
Ok, I'm really joking.

While the price of oil may seem to be hurting the US economy at the moment, the high prices are only going to speed development of alternative energy here so we stop using so much oil for transportation. That would be a major win for the US economy. Hopefully the middle eastern countries will have enough investments to get by at that point.

Why save money? There's a reason why the government is spending like there is no tomorrow. Because there is no tomorrow. Wars, lack of ressources, destruction of forests, climate change, diseases, the future isn't bright and they know that. Next year, 2007, the amazonia forest will die. After this, all hell will break loose. Oil is gonna diseapear in the next 10 years too. Water gonna be rare in the next 10 years. Life will take a severe drop, american way of life will go to hell.

That's why they are spending like there is no tomorrow. Because they don't care, because they are rich. They continue to do pollution, to make wars, to pump oil, they do nothing for the health of the planet, they just got richer and richer.

So we must change government and do something for the planet before it's too late, if it's isn't already. Our childrens will be mad at us for what we have done to the planet.

Originally posted by Vitchilo
Why save money? There's a reason why the government is spending like there is no tomorrow. Because there is no tomorrow. Wars, lack of ressources, destruction of forests, climate change, diseases, the future isn't bright and they know that. Next year, 2007, the amazonia forest will die. After this, all hell will break loose. Oil is gonna diseapear in the next 10 years too. Water gonna be rare in the next 10 years. Life will take a severe drop, american way of life will go to hell.

That's why they are spending like there is no tomorrow. Because they don't care, because they are rich. They continue to do pollution, to make wars, to pump oil, they do nothing for the health of the planet, they just got richer and richer.

So we must change government and do something for the planet before it's too late, if it's isn't already. Our childrens will be mad at us for what we have done to the planet.

Being young is great, but it doesn't afford you much in the way of perspective. History is just lousy with dopes who ran around predicting the end of the world. Do you know who Malthus is? You might want to read about him over at Wikipedia.

Have you ever heard of a book titled “The Population Bomb”? Written in 1968 by Paul R. Ehrlich, it predicted we'd all be dead of starvation my the end of the 70's (this was an ancient time, long before your birth). Now much of Europe faces a population crash!

In 1980, biologist Paul R. Ehrlich bet economist Julian Lincoln Simon that the price of a portfolio of $200 of each of five mineral commodities (copper, chromium, nickel, tin, and tungsten) would rise over the next 10 years. He lost: by 1990, the prices had fallen to $576. See also: Wager between Julian Simon and Paul Ehrlich.
en.wikipedia.org...

Doom sayers have always been wrong and always will be.

Originally posted by CrabEyes
The debt we have gotten ourselves into is insane, and I'm just curious if there is really any way for us to get out of this (you can see what the debt is here Debt Clock) and if there is a way how?

I'm not to up on economics or anything and I'm just wondering how we're gona get ourselves out of this one or if it's even possible, because I think it's safe to say this is the biggest debt ever racked up by anyone or any nation in history...

"I'm not to up on economics" No kidding?

Why don't you post a GDP clock? It will show you that America's GDP is growing FASTER than her debt.

It may well be that US GDP is growing faster than the deficit, but you ignore several basic trends.

1 -- Demographically, the US is move in the same direction as Europe. In fact, the giant bubble of baby boomers will hit retirement age within the next five to ten years. And most of them have not saved for old age.

2 -- Demand for commmodities is growing outside of the US, and it takes a long time to bring new sources on line. So during the same period, you might expect sharp increases in materials costs.

3 -- GDP will only grow if there is continued increase in capacity to produce. Not only will many older workers opt out, but a double digit portion of American youth can not add, subtract, or read, much less do anything more involved. And much of the remainder can not do those very well. And poor work ethic is the rule among younger people. Who in the US will do the producing that will make the GDP rise? The people with no skills and crappy attitudes or the old people who are not working any more, but who are consuming resources?

4 -- And do not forget the ever-growing consumer debt. I suspect it is climbing much faster than the growth in GDP.

For those reasons alone, it would be good to reduce the national debt. If we do not, we will have a crisis that will likely result in one of two outcomes. One is a default on debt. The other is fiat inflation. Neither would be much fun.

"doomsayars have and will always be wrong"

there was a stock market crash in 1929 and the economy collapsed i.e great depression um i must be wrong

because tons of people have predicted problems with economy in years past and been wrong or trying to "sell subscriptons, than there fore everytime someone gives indicators the economy is set up to collapse and head for a depression they will all be wrong and will always continue to because our country is depression proof. always will and always has. r i g h t

faulty logic and unawareness of abstractions of thought that dictate ignorance and arrogance



[edit on 8-8-2006 by cpdaman]

There will come a time when America's lenders will say NO. How much more money can the U.S. borrow?
Do you really think it is right to pass this debt with insane interest/usury to your exisiting & unborn children?
If you think this is the way to do it then you've already proven my point.
Somebody is going to be left holding the bag.
Option 1: worldwide economic collapse and start over
option 2: economic collapse>chaos>world war> mass death
option 3: slavery
it doesn't look good.

Originally posted by BattleofBatoche
There will come a time when America's lenders will say NO. How much more money can the U.S. borrow?
Do you really think it is right to pass this debt with insane interest/usury to your exisiting & unborn children?
If you think this is the way to do it then you've already proven my point.
Somebody is going to be left holding the bag.
Option 1: worldwide economic collapse and start over
option 2: economic collapse>chaos>world war> mass death
option 3: slavery
it doesn't look good.

I do not think that the leaders will say no. The people lending the money -- buying our debt -- will say no.
Also, options 1 - 3 are looking good.

Slavery? Who thinks up this stuff? How did so many ignorant people find each other?

Look, interest rates correlate with risk. The greater the risk of default the higher interest rate you'll pay. Right now the world is only asking for 5% interest, that means the rest of the world thinks loaning money to America is a pretty safe bet.

In addition, (how many times do I have to say this?) America has a lower debt burden then EU and most of the Industrial world AND AMERICA HAS THE BEST PERFORMING INDUSTRIAL ECONOMY ON EARTH.

So let's review America loan application:
World's largest GDP
World's per capita GDP
Word's highest worker productivity
Historically low debt burden
Robust growing economy
Virtually full employment

Sure, maybe investor money will go to the countries with less growth, lower GDP, more unemployment and higher debt burden.

Good luck with that.

Originally posted by Number23
Slavery? Who thinks up this stuff? How did so many ignorant people find each other?

In addition, (how many times do I have to say this?) America has a lower debt burden then EU and most of the Industrial world AND AMERICA HAS THE BEST PERFORMING INDUSTRIAL ECONOMY ON EARTH.

So let's review America loan application:
World's largest GDP
World's per capita GDP
Word's highest worker productivity
Historically low debt burden
Robust growing economy
Virtually full employment

Sure, maybe investor money will go to the countries with less growth, lower GDP, more unemployment and higher debt burden.

Good luck with that.

Angry are we?

First of all, calling someone with a different opinion ignorant is not likely to change their minds.

Second, we did look at your data and argument -- and brought up some other points worth considering. If you refuse to consider some very interesting evidence, what does that tell us? I loved my econonmics professors, too, but that does not mean I completely bought their arguments. You can bang your shoe on the table and tell us you will bury us all you want. That does not make for a good discussion. Maybe a better explanation of why your points are stronger or a refutation of someone else's would work better.

Third, in the middle of the 1800s, Britain had all the advantages you point out, yet a few expensive decades of squashing the slave trade all over the world. By 1914, it was a not-so-Great Britain anymore.

Fourth, do you realize that investor money is going to countries with some combination of "less growth, lower GDP, more unemployment and higher debt burden" already. American producers, distributors, and retailers are hitting Latin America and Asia in a huge way. I would wager that investors are most interested in political stability and less saturated markets than in per capita GDP.

So companies are going to try to sell their products to the people with LESS money...?

I guess you really didn't pay attention in economics class.

Oh and I love when people bring up the manufacturing crap. It's sure sign you don't read beyond the headlines, if you bother to read about economics at all. Since you clearly have now idea what you're talking about, allow me to educate you.

Manufacturing outpaced the overall economy in 2005, though it experienced slower growth last year along with most sectors. Today, the Commerce Department released its annual report on GDP by Industry for 2005 which showed that manufacturing GDP increased a solid 4 percent last year in inflation-adjusted terms, or half a percentage point faster than the 3.5 percent pace of the overall economy.
...
As in every year since 1987, manufacturing's share of GDP was larger than every other private sector except FIRE (Finance, Insurance and Real Estate) in 2005.
blog.nam.org...

And

Manufacturing’s share of U.S. Gross Domestic Product is bigger than the entire GDP of France or the United Kingdom, as well as bigger than the combined economies of Canada and Mexico. America is the world’s manufacturing power house and bigger than the entire economies of Spain or Canada. It would be the eighth largest economy in the world if manufacturing were a country and roughly equal to the entire economy of China.
...
Manufacturing is the top U.S. exporter, responsible for 64 percent of U.S. exports. Without the foreign exchange earned by manufactured exports, the United States could not pay for its imports.
www.nam.org/s_nam/bin.asp?CID=201979&DID=232026&DOC=FILE.DOC

continuing...

Back in 1995, right in the middle of a nine-year economic boom, Louis Uchitelle co-authored an absurdly downbeat series of New York Times articles on "The Downsizing of America." That series was full of opinion polls, as though popular illusions could substitute for facts. More recently, there has been hope that scandals at the New York Times might have given new editors at least a casual interest in factual accuracy. Apparently not. A couple of weeks ago, the unrepentant Mr. Uchitelle wrote yet another weirdly apocalyptic piece claiming, that "manufacturing is slowly disappearing in the United States."
If you were hoping for some proof this time, be prepared to be disappointed again. Mr. Uchitelle says, "Manufacturing's share of real gross domestic product... has dropped to between 16 and 17 percent, from 18 to 19 percent in the 1950s.... The downward trends are alarming." Similar statistical exercises recently led to an interesting debate between my old friends Bruce Bartlett and Paul Craig Roberts. Yet the National Association of Manufacturers' Web site shows that "manufacturing's share of the U.S. economy, as measured by real GDP, has been stable since the late 1940s.... The overall share remains the same over the business cycle."
It is impressive for any private activity to maintain a stable share of GDP, since government spending has risen from about 20 percent of GDP in the early 1950s to 30 percent since the 1980s. Manufacturing does not need protection from foreign countries; it needs protection from domestic governments.
Mr. Uchitelle claims "the essence of a great world power is its edge in producing not services but manufactured products." By that standard, the two greatest world powers are Turkmenistan (with 39.8 percent of GDP attributed to manufacturing in 2000) and Cuba (at 37.2 percent). In China, services have risen from 21.4 percent in 1980 to 33.7 percent by 2002. In Hong Kong, manufacturing declined from 22.4 percent of the economy in 1980 to 5.2 percent in 2001.
Mr. Uchitelle claims "the shrinking manufacturing sector is again a source of public agitation, this time because so many American manufacturers are decamping to China and India." Don't editors check the facts? Direct U.S. investment in other countries was worth more than $1.5 trillion last year, according to the July Survey of Current Business. Europe accounts for 52.3 percent of American investment abroad, Mexico for 3.8 percent and China for seven-tenths of 1 percent. Any decamping to India is statistically invisible.
www.cato.org...

But never let the facts get in the way of a political agenda.

Let's face it--Uncle Sam is broke. The gap between the U.S. government's future expenses and tax receipts is $63.3 trillion. No surprise. The nation has 77 million retiring baby boomers on track to collect well above $30,000 a year--the average amount we're paying today's elderly--in Social Security, Medicare and Medicaid benefits. If you're planning for a cushy retirement, forget it. Get ready for much higher taxes, lower benefits and inflation

Uncle Sam is broke

Originally posted by Number23
So companies are going to try to sell their products to the people with LESS money...?

I guess you really didn't pay attention in economics class.

Still angry? Okay. Try this one. For the entire history of the United States until the 1980s, the British were by far the greatest investors in US businesses. Until the 1910s, US residents did not make what the British did. So, the British did indeed sell their products to people with less money. After the war, they sold them to people with more money.

Oh and I love when people bring up the manufacturing crap. It's sure sign you don't read beyond the headlines, if you bother to read about economics at all. Since you clearly have now idea what you're talking about, allow me to educate you.

Before you stroke out, understand that I did not speak exclusively about manufacturing crap. And, since you do not know me, how is it that you know I have a polical agenda?

Also, just because the US has a lower per capita debt burden than other countries does not mean that it is on a garden path to greater prosperity. It could easy be that we are just steps behind the western Europeans.

And again, you have ignored other facts to further your points. For example, the babyboomer bubble addressed most recently by Nuupio. You cannot get around it, my brother. Who will pay the bills when the boomers stop producing and simply consume? Surely, their angry grandchildren with attitudes working in the exploding manufacturing sector will.