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Started By
Message
Regarding the National Debt, Where is the Point of No Return?
Posted on 2/12/14 at 6:35 pm
Posted on 2/12/14 at 6:35 pm
Obviously, Congress doesn't consider $17 Trillion (and rising) to be that big of a deal, since the GOP basically surrendered regarding the latest hike in the debt ceiling.
So, here's my question. I'm assuming that nobody here wants to see OUR COUNTRY eventually collapse underneath a mountain of debt. So, forgetting liberal, conservative, Democrat, Republican, black or white, Bush this or Obama that....
At what point do ALL OF US need to be extremely worried about our rising national debt? If no corrective action is taken, at what point does the bubble burst?
So, here's my question. I'm assuming that nobody here wants to see OUR COUNTRY eventually collapse underneath a mountain of debt. So, forgetting liberal, conservative, Democrat, Republican, black or white, Bush this or Obama that....
At what point do ALL OF US need to be extremely worried about our rising national debt? If no corrective action is taken, at what point does the bubble burst?
14
Posted on 2/12/14 at 6:38 pm to KCT
quote:Now. But it could also be too late. May be time to sit back and watch the whole thing crumble.
At what point do ALL OF US need to be extremely worried about our rising national debt?
Posted on 2/12/14 at 6:39 pm to KCT
we have passed it and it will be a huge deal for this country. Running up trillions of dollars of debt has ruined the value of the dollar. The next big crisis will be started by a significant fall of some worthless currency it very well could be the Dollar or something else. Our policies of just pilling in money to debt is running this country into disaster.
Think of it this way. If your daughter ran up a 10000 dollar debt on a credit card and couldn't pay it off would you give her 50000 dollars to spend on more things? No you would take the card away from her make sure her life isn't ruined by it, get her to talk to a finical advisor and help her get into control of her money.
Think of it this way. If your daughter ran up a 10000 dollar debt on a credit card and couldn't pay it off would you give her 50000 dollars to spend on more things? No you would take the card away from her make sure her life isn't ruined by it, get her to talk to a finical advisor and help her get into control of her money.
This post was edited on 2/12/14 at 6:40 pm
Posted on 2/12/14 at 6:44 pm to KCT
quote:
Regarding the National Debt, Where is the Point of No Return?
When the Federal Reserve loses control of interest rates.
Posted on 2/12/14 at 6:49 pm to catholictigerfan
quote:
Think of it this way. If your daughter ran up a 10000 dollar debt on a credit card and couldn't pay it off would you give her 50000 dollars to spend on more things? No you would take the card away from her make sure her life isn't ruined by it, get her to talk to a finical advisor and help her get into control of her money.
The flaw in your analogy is assuming that federal government finances are a zero sum game. They are not. The Federal Reserve will always be there to prop up their deficit spending and keep the cost of money low.
Posted on 2/12/14 at 6:54 pm to GumboPot
quote:
The flaw in your analogy is assuming that federal government finances are a zero sum game. They are not. The Federal Reserve will always be there to prop up their deficit spending and keep the cost of money low.
This is quite relevant.
Honestly we passed the point of no return either in the teens with the establishment of the federal reserve, or when nixon trashed the gold standard, or maybe when Reagan showed that "deficits don't matter." Not too sure which is the killer, probably reagan.
With that said, as long as our debt is denominated in the dollar, we don't have to worry **that** much. We can always print to pay it off. Yes it will cause inflation but we are not talking argentina or weimer republic. Their debts were denominated in other currencies.
Posted on 2/12/14 at 6:55 pm to KCT
Son, that ship sailed a loooonnnnnggggg time ago. Think about it this way: if we began paying $500B every year in addition to what we're already paying in interest, it would still take around 40 years to pay it off.
Now, consider this: the Democrats and their buddies in the media went absolutely bananas when the sequester 'cut' $90B out of the budget.
This debt will NEVER be paid off. It would be nice if we could just stop it in its tracks, though.
Now, consider this: the Democrats and their buddies in the media went absolutely bananas when the sequester 'cut' $90B out of the budget.
This debt will NEVER be paid off. It would be nice if we could just stop it in its tracks, though.
Posted on 2/12/14 at 6:58 pm to Hawkeye95
You're blaming a man who left office in 1989?
There's absolutely nothing we can do now?
I don't get the logic there.
There's absolutely nothing we can do now?
I don't get the logic there.
Posted on 2/12/14 at 7:02 pm to KCT
quote:
You're blaming a man who left office in 1989?
Yes. Before reagan, debt was reserved for use during war or other calamity. Reagan just spent, spent, spent. He set the stage that deficits didn't matter to the overall health of the economy. Everyone after reagan just copied his lead. Granted obama took it up a notch, but so did Bush.
There is literally nothing we can do. Both parties are completely addicted to the stimulus effects of debt spending.
Posted on 2/12/14 at 7:08 pm to Hawkeye95
This thread needs a definition of what the "point" of no return means.
To me that point is where the current economy cannot support current spending. We are past that point now. The Federal Reserve spends (prints) 30 billion on treasuries a month (was 40 billion a couple of months ago). Can we get behind the point as I defined? That has yet to be determined. The Federal Reserve is trying in what they currently call tapering.
To me that point is where the current economy cannot support current spending. We are past that point now. The Federal Reserve spends (prints) 30 billion on treasuries a month (was 40 billion a couple of months ago). Can we get behind the point as I defined? That has yet to be determined. The Federal Reserve is trying in what they currently call tapering.
This post was edited on 2/12/14 at 7:10 pm
Posted on 2/12/14 at 7:11 pm to KCT
The point of no return was around 15 Trillion.
too late now.
too late now.
Posted on 2/12/14 at 7:11 pm to Hawkeye95
quote:
the stimulus effects of debt spending.
If this were true, then why hasn't our economy rebounded?
I think it's gotten to a point where stimulus spending has gone too far and has actually hurt the economy rather than help it.
Keynesian economics work well short term to give a boost, but you have to scale it back once there are improvements. We aren't scaling anything back. It's like having a credit card..it's good to use in crucial situations where you are short on money at the moment.
But if you run it up to the point you can't pay it back then eventually you have to file bankruptcy.
Posted on 2/12/14 at 7:18 pm to deltaland
quote:
If this were true, then why hasn't our economy rebounded?
I think it's gotten to a point where stimulus spending has gone too far and has actually hurt the economy rather than help it.
Keynesian economics work well short term to give a boost, but you have to scale it back once there are improvements. We aren't scaling anything back. It's like having a credit card..it's good to use in crucial situations where you are short on money at the moment.
But if you run it up to the point you can't pay it back then eventually you have to file bankruptcy.
Oh, we definitely got growth from the spending, but it was a probably low multiplier factor since much of it was just spent on stupid shite. Some stimulus spending, such as infrastructure, gives you a good multiplier since it helps business. Others such as art shows gives a shitty multiplier since it generates no additional economic activity. The stimulus bill had a lot of art shows and very little infrastructure.
But I don't think any economist would argue that we got a short term bump, although they may argue over how much.
I do agree its not sustainable, and the problem is not keynsian policies but instead how they are implemented. We are seeing the effect of non stop use, i.e. bridge to nowhere, generating very little growth.
Posted on 2/12/14 at 7:24 pm to KCT
It's long passed.
This post was edited on 2/12/14 at 7:25 pm
Posted on 2/12/14 at 7:38 pm to KCT
quote:
Regarding the National Debt, Where is the Point of No Return?
All ready there.
Forward!
Posted on 2/12/14 at 7:44 pm to Hawkeye95
quote:
Hawkeye95
agree on the stimulus being spent in large part on things that are just not valuable. there are some public investments that can get us good returns- like infrastructure to a point, as you mentioned. i actually see that type of investment as supply-side, as it can boost our productive capacity.
that doesn't mean that spending infinite dollars on infinite infrastructure is infinitely valuable though. there is only so much worthwhile investment to be had. and i absolutely do not believe that enough was available for a sufficient stimulus.
but from what i can see you should post more
Posted on 2/12/14 at 7:46 pm to KCT
About $5 trillion ago.
Posted on 2/12/14 at 7:49 pm to GumboPot
quote:
When the Federal Reserve loses control of interest rates
this
Posted on 2/12/14 at 7:49 pm to GumboPot
quote:
When the Federal Reserve loses control of interest rates.
this, probably. depends on what we're trying to "return" from and to
Posted on 2/12/14 at 8:27 pm to deltaland
quote:1933 says hi.
But if you run it up to the point you can't pay it back then eventually you have to file bankruptcy.
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