So, at what point will the national debt become a major problem?

[D.Pham4GLTE (>60GB)]

Well, as we all know, the national debt is over $10 trillion now, and it's increasing at a substantial pace, considering the deficit is over $400 billion this year. So, my question is, will the national debt become a problem at some point?

What i mean is, when the average Joe borrows and borrows, at a certain point, banks are gonna see that his debt is so high, that they'll probably stop lending to him...could something like that happen to the US?

[Birrman54]

Well from a certain point of view, the national debt as a percentage of GDP isn't relatively alarming. That said, I don't think it will be treated as a major issue for at least another decade.

[wabio]

When foreign investors/countries start pegging/demanding other forms of currency maybe....?

[Superboy]

When our economy becomes unable to pay off our debts, just as any business that no longer has the profitability to make good on its debts.

[VinVega]

Originally Posted by wabio

When foreign investors/countries start pegging/demanding other forms of currency maybe....?

What this guy said. If countries start investing in the Euro, we're in bad shape.

[DarkestPhoenix]

I would say our national debt was a major problem twenty years ago.

When will people care? Possibly never.

[Dr Mabuse]

It's the largest problem we have.

So large a problem it is being 'gamed' by the politicians, the media, and financial 'experts' much like the sinking island in 'Erik The Viking'.

"We can SEE the island is sinking". "No it's not! don't be ridiculous! th island is NOT sinking". Starts at around 6:00.

[mbs]

Maybe we'll hyperinflate to the point where $10 trillion isn't a problem. Maybe that is the "plan" behind everything that is going on today.

More realistically, it was a problem 10+ years ago. The average person won't be concerned because the average person is a dolt and cannot fathom the problem. Well, until countries decide we'll no longer be able to make good on the debt+interest. Don't we currently spend something like 1/2 our tax dollars on the interest alone? At the rate we are going, we'll be up to all taxes going to interest alone a decade or so. Then no country will let us borrow anything.

[VinVega]

Originally Posted by mbs

Don't we currently spend something like 1/2 our tax dollars on the interest alone?

It's more like 10%. In comparison, we spend over 20% on Social Security. That's going to be fun once the baby boomers start retiring in droves.

[Dr Mabuse]

If you include the domestic 'debt' of the entitlements of Social Security and Medicaid/Medicare we are 50+ trillion in debt. 10+ trillion only covers foreign debt.

Currently no one at to 'the people' gives a damn, so neither do their representatives I guess. Though I am still amazed that almost no one except people like Lou Dobbs are even trying to get this info out, giving it any media coverage at all.

This is best revealed by the fact that most of America is going to vote for the fella(Obama) who intends to REALLY ramp up spending, which will greatly accelerate the growth of the national debt. I fell sure Obama is going to win, and this will guarantee a huge increase in the 'credit card' spending problem.

We may well hit an international loss of confidence in our currency in the next 4 years, it's entirely possible. Which would result in hyperinflation.

[classicman2]

Originally Posted by VinVega

It's more like 10%. In comparison, we spend over 20% on Social Security. That's going to be fun once the baby boomers start retiring in droves.

Social Security has a surplus.

Money (in huge chunks) is taken from the Social Security Trust Fund to pay for things - like the War in Iraq for example.

Stop 'raiding' the trust fund(s) and you stop increasing some unfunded liabilities.

btw: You're starting to sound kind of Republicanish on Social Security. I thought you were an Obamaton.

[Dr Mabuse]

There isn't any money in the Social Security Trust fund. There never has been. It was an empty and meaningless pandering game to make the public 'feel better' about Social Security.

It is a myth that is perpetuated to this day by politicians basically lying, and playing ridiculous word games to try and back up the lies about the fictitious 'fund' that doesn't exist. They pander to people with and about it, but it doesn't have a dime in it.

Those treasury bonds are already spent.

Here's one article that covers it topically, I'm sure there are better ones.

[classicman2]

Do you agree that there are more FICA taxes now paid than there is benefits going out?

Yes or no?

[mbs]

Originally Posted by Dr Mabuse

I
This is best revealed by the fact that most of America is going to vote for the fella(Obama) who intends to REALLY ramp up spending, which will greatly accelerate the growth of the national debt.

According to all the non-partisan "fact checkers" both Obama and McCain have roughly pledged to spend the same amounts.

[DVD Polizei]

Originally Posted by Dr Mabuse

There isn't any money in the Social Security Trust fund. There never has been. It was an empty and meaningless pandering game to make the public 'feel better' about Social Security.

It is a myth that is perpetuated to this day by politicians basically lying, and playing ridiculous word games to try and back up the lies about the fictitious 'fund' that doesn't exist. They pander to people with and about it, but it doesn't have a dime in it.

If we can manage to go to war, we can manage to create a fund which would keep SS in great shape. Problem is, most politicians don't care about it anymore. Why should they. They don't have to worry about it.

We have the money. And if we don't...we can find the money. Problem is, nobody cares anymore.

Which brings me to the next point. When you have a lack of caring for those around you--which is the epitome of Capitalism--your economic system will crumble, and no one will want to do business with you because of a lack of trust and respect.

Unfortunately, many don't want to realize the economic system we have...doesn't work. The basis on which it is founded...is flawed.

Two major reasons why.

It wasn't an overnight flaw, but economists knew the system was based on trust. As a society, we've embraced selfish desire to the point where we'd sell our own grandmother on eBay to make a few bucks. It's this sort of mentality which is bringing our economic system to a hault.

Second, the type of growth which is demanded, is unrealistic. And therefore, we've had credit fill in the gaps. The fact is, most people can't afford to live at a lifestyle which is "American". Most Americans shouldn't have a home. Most Americans shouldn't be owning their own homes or even living on one. Most Americans shouldn't be owning new cars. Most Americans shouldn't have money to spend after bills. This is the reality, folks.

You have such a whitewash from your government and from corporations selling you products, that you amazingly have a notion with a certain "credit score", you can afford all these luxuries associated with being an American. And once the credit score wasn't even enought to keep the economy going...banks and lending firms didn't even abide by it.

Several decades ago, you really could own your own home, a new car, and so forth. But not today. The type of economy can't support it anymore. More jobs are paying less while manufacturers and corporations are wanting more for their products. They only way for them to get their selfish profits is to issue credit to you. They know damn well the prices are so high no one could pay upfront for them--only the elite rich could. And once you're locked into a payment schedule, you'll be owned for life.

Finally, jobs used to be a career. Now they barely last 5 years. If you're with a company for more than 3 years, chances are, you're in a seniority position, and have probably been with the company longer than most. That's wrong. That's insane. However, corporations don't give a shit about longevity anymore.

You are disposable.

And when you are disposable, owning large-dollar items like homes and cars, become less viable.

The only way for this economy to make a comeback is for companies to change the way they do business. They MUST start caring about their employees, and practice retention of their employees above all else.

Those who live by the dollar...will die by the dolllar. This is why we need to start investing in other factors of our economy other than profits. Profits are great, but it cannot be the only factor as it is today. You must invest in your employees, in your quality of product, and you might have to make sacrifices in profits in order to server the higher good which is keeping the economy stable.

[Superboy]

Originally Posted by Dr Mabuse

If you include the domestic 'debt' of the entitlements of Social Security and Medicaid/Medicare we are 50+ trillion in debt. 10+ trillion only covers foreign debt.

How about instead of giving everyone these astoundingly generous tax cuts that only inflate the budget deficit, the trade deficit, contributes to the loss of American jobs, and the resulting increasing in spending only increases entitlement payments. All of which are paid with money that is borrowed because our society is one that doesn't want to have to pay for something.

Currently no one at to 'the people' gives a damn, so neither do their representatives I guess. Though I am still amazed that almost no one except people like Lou Dobbs are even trying to get this info out, giving it any media coverage at all.

This is best revealed by the fact that most of America is going to vote for the fella(Obama) who intends to REALLY ramp up spending, which will greatly accelerate the growth of the national debt. I fell sure Obama is going to win, and this will guarantee a huge increase in the 'credit card' spending problem.

Of course no one gives a damn. No one even knows what the national debt IS. They just know that it's some sort of huge number that is casting a shadow over our economy.

We're simply not living up to the other side of the Keynesian equation of government spending. We borrow, spend, and never pay back. This has only increased the sense of entitlement in our nation, which leads to a greater desire for government transfer payments and services, as well as tax cuts that pretty much spell doom for our economy. The past 20 years, even in "lean years" where we had a limited growth of GDP, we were comparatively better off than in "fat years" compared to previous decades.

We may well hit an international loss of confidence in our currency in the next 4 years, it's entirely possible. Which would result in hyperinflation.

That's a little bit too much gloom and doom. Lesser economies have fallen with much more international debt.

Something Warren Buffet said recently was that there's a bit too much gloom and doom. It's not as if all our infrastructure burned down. It's still there, and the absolute worst that can happen to us is that we won't be able to fully utilize it.

[Breakfast with Girls]

Originally Posted by Dr Mabuse

This is best revealed by the fact that most of America is going to vote for the fella(Obama) who intends to REALLY ramp up spending, which will greatly accelerate the growth of the national debt. I fell sure Obama is going to win, and this will guarantee a huge increase in the 'credit card' spending problem.

You might have had some credibility with this argument before GW Bush. There are no fiscal conservatives left.

[Franchot]

DVD Polizei,



Excellent post. So scary because it's so true, especially to old-timers like myself who have been around for at least half a century and have seen this coming like a run-away train...with no clout to try and stop it.

[wabio]

Originally Posted by DVD Polizei

As a society, we've embraced selfish desire to the point where we'd sell our own grandmother on eBay to make a few bucks. It's this sort of mentality which is bringing our economic system to a hault.

IMO, the epitome of this behavior resides in corporate boardrooms. Execs, showing no loyalty or long-term outlook whatsoever, laying off workers at the stroke of a pen to appease greedy shareholders as well as padding the value of their own stock options. I think capitalism would work much better if legislation were passed disallowing anyone with more than 5000(?) shares from redeeming within 8-10 years or so. This cashing in and retiring game is getting old quick. There has to be some semblance of sanity when it comes to high level corporate compensation. Sam Fuld getting $457 million to steer a sinking ship. He shouldn't have even gotten $4.57 million!

[wabio]

Originally Posted by DVD Polizei

Several decades ago, you really could own your own home, a new car, and so forth. But not today.....

The most disturbing part about it IMO is......it's barely feasible with two working adults. Soon gone will be the days of family vacations, overtime, and workplace sponsored retirement and healthcare. I wouldn't be surprised if paid holidays eventually see the axe someday.

[wabio]

Originally Posted by DVD Polizei

And when you are disposable, owning large-dollar items like homes and cars, become less viable.

Not to mention having kids.

[Franchot]

Originally Posted by wabio

The most disturbing part about it IMO is......it's barely feasible with two working adults.

Yes. If this country continues on the road it is going I foresee a small, elite upper class who will own the majority of wealth, will pull the necessary strings to get government to do what it wants it to do to benefit them, and will put into power the politicians it wants through their "donations." They'll be able to buy what they want and live as they like.

The majority of people (both the ever-shrinking middle and the ever-expanding lower classes) will have to work their asses off their whole lives just to afford a place to live, some form of upper education, passable medical care, etc. and somehow keep themselves from going too much into debt with no guarantee that they won't get wiped out.

[Superboy]

Originally Posted by DVD Polizei

If we can manage to go to war, we can manage to create a fund which would keep SS in great shape. Problem is, most politicians don't care about it anymore. Why should they. They don't have to worry about it.

Actually, we can do both, and we did both, and both are going the same way: poorly run, poorly managed hell holes.

Which brings me to the next point. When you have a lack of caring for those around you--which is the epitome of Capitalism--your economic system will crumble, and no one will want to do business with you because of a lack of trust and respect.

You should really look into cooperation economic models if you want a better grasp of capitalism. what you're talking about refers more to socialism.

Unfortunately, many don't want to realize the economic system we have...doesn't work. The basis on which it is founded...is flawed.

You talk about this as if there already hasn't been an enormous amount of discussion on the topic and large-scale policy changes in our government over the past 100 years. The free market could not handle something as large of a "correction" as the Crash of '29 was, the economic slowdowns of the 60s and 70s showed that government is there to supplant an economy, not to get in its way or attempt to replace it entirely, and the 90s showed that when reality actually reflects your economic model, you can do pretty good for yourself. If you're wondering what's been happening in the past 8 years, it's this: externalities have encroached upon our economic system with a thunderous fervor that the world had not seen with such force in peace time.

Two major reasons why.

It wasn't an overnight flaw, but economists knew the system was based on trust. As a society, we've embraced selfish desire to the point where we'd sell our own grandmother on eBay to make a few bucks. It's this sort of mentality which is bringing our economic system to a hault.

Actually, our economic system is successful because it acknowledges that trust is not going to happen between two parties. That's really where the role of the government comes in. The more information people have, real information that is, the better they are at making economic decisions.

Second, the type of growth which is demanded, is unrealistic. And therefore, we've had credit fill in the gaps. The fact is, most people can't afford to live at a lifestyle which is "American". Most Americans shouldn't have a home. Most Americans shouldn't be owning their own homes or even living on one. Most Americans shouldn't be owning new cars. Most Americans shouldn't have money to spend after bills. This is the reality, folks.

Because they saw what came before them in previous generations, they drive by it every day, they see it on TV, and they're brought up thinking that it is entitled to them. They didn't, however, have to work 3 jobs to pay their way through school, go off and fight WWII or the Vietnam War when they were teenagers, and they didn't have to struggle for anything. Struggle builds competency, but it seems like safety only creates complacency and dependency.

You have such a whitewash from your government and from corporations selling you products, that you amazingly have a notion with a certain "credit score", you can afford all these luxuries associated with being an American. And once the credit score wasn't even enought to keep the economy going...banks and lending firms didn't even abide by it.

Depends on where you're going. And to assume that the person borrowing is the victim is probably the worst accusation against corporations i've ever heard. I didn't want to make them out to be that way because I still think that their lack of competency is still their own fault.

Several decades ago, you really could own your own home, a new car, and so forth. But not today. The type of economy can't support it anymore. More jobs are paying less while manufacturers and corporations are wanting more for their products. They only way for them to get their selfish profits is to issue credit to you. They know damn well the prices are so high no one could pay upfront for them--only the elite rich could. And once you're locked into a payment schedule, you'll be owned for life.

So you're saying that a material, real rate of growth is what we should have adhered to instead of a society financed on credit in order to achieve a better standard of living? credit didn't just allow people to buy homes and cars and make payments on a stereo. It created higher-skilled, higher-paying jobs. It drove technological research faster than anyone has seen before in any previous era.

Finally, jobs used to be a career. Now they barely last 5 years. If you're with a company for more than 3 years, chances are, you're in a seniority position, and have probably been with the company longer than most. That's wrong. That's insane. However, corporations don't give a shit about longevity anymore.

That's the nature of the beast, but at the same time, it affords people such greater flexibility. And keep in mind that investment in human capital hasn't failed us. The US has the greatest secondary education in the world. Say what you will about our high schools, but our colleges are tops in the nation, centers of research that eclipse what's being done around the globe. I want to say something positive about America here, just once.

You are disposable.

No, you are simply becoming less competitive.

And when you are disposable, owning large-dollar items like homes and cars, become less viable.

The only way for this economy to make a comeback is for companies to change the way they do business. They MUST start caring about their employees, and practice retention of their employees above all else.

Well it's becoming apparent that the oversimplified cost/benefit and cost/revenue models were flawed in the qualification for globalization for companies. It's ever more apparent that high costs bring with it competency.

Those who live by the dollar...will die by the dolllar. This is why we need to start investing in other factors of our economy other than profits. Profits are great, but it cannot be the only factor as it is today. You must invest in your employees, in your quality of product, and you might have to make sacrifices in profits in order to server the higher good which is keeping the economy stable.

This is really as far as the role of socialism in society can ever reach, and even then to call it socialism is almost heresy. It's better labeled "investment". Keep in mind that our current economic model - the balance between socialism and capitalism is one that acknowledges the need for investment and the natural human impulse to seek instant gratification. Whether employers themselves recognize this is far beyond me.

I always wondered why, when a company is losing profits, it would fire the people it needs to regain those profits. Oh well. I guess a sinking ship did the rats a favor by dumping them overboard.

[kvrdave]

Originally Posted by DVD Polizei

If we can manage to go to war, we can manage to create a fund which would keep SS in great shape. Problem is, most politicians don't care about it anymore. Why should they. They don't have to worry about it.

We have the money. And if we don't...we can find the money. Problem is, nobody cares anymore.

Which brings me to the next point. When you have a lack of caring for those around you--which is the epitome of Capitalism--your economic system will crumble, and no one will want to do business with you because of a lack of trust and respect.

Unfortunately, many don't want to realize the economic system we have...doesn't work. The basis on which it is founded...is flawed.

Two major reasons why.

It wasn't an overnight flaw, but economists knew the system was based on trust. As a society, we've embraced selfish desire to the point where we'd sell our own grandmother on eBay to make a few bucks. It's this sort of mentality which is bringing our economic system to a hault.

Second, the type of growth which is demanded, is unrealistic. And therefore, we've had credit fill in the gaps. The fact is, most people can't afford to live at a lifestyle which is "American". Most Americans shouldn't have a home. Most Americans shouldn't be owning their own homes or even living on one. Most Americans shouldn't be owning new cars. Most Americans shouldn't have money to spend after bills. This is the reality, folks.

You have such a whitewash from your government and from corporations selling you products, that you amazingly have a notion with a certain "credit score", you can afford all these luxuries associated with being an American. And once the credit score wasn't even enought to keep the economy going...banks and lending firms didn't even abide by it.

Several decades ago, you really could own your own home, a new car, and so forth. But not today. The type of economy can't support it anymore. More jobs are paying less while manufacturers and corporations are wanting more for their products. They only way for them to get their selfish profits is to issue credit to you. They know damn well the prices are so high no one could pay upfront for them--only the elite rich could. And once you're locked into a payment schedule, you'll be owned for life.

Finally, jobs used to be a career. Now they barely last 5 years. If you're with a company for more than 3 years, chances are, you're in a seniority position, and have probably been with the company longer than most. That's wrong. That's insane. However, corporations don't give a shit about longevity anymore.

You are disposable.

And when you are disposable, owning large-dollar items like homes and cars, become less viable.

The only way for this economy to make a comeback is for companies to change the way they do business. They MUST start caring about their employees, and practice retention of their employees above all else.

Those who live by the dollar...will die by the dolllar. This is why we need to start investing in other factors of our economy other than profits. Profits are great, but it cannot be the only factor as it is today. You must invest in your employees, in your quality of product, and you might have to make sacrifices in profits in order to server the higher good which is keeping the economy stable.

[Pharoh]

It will be a major problem in 2228, give or take a few years.