National Debt

[slug]

I am just wondering if anyone has seen these charts and is as concerned about the financial future of this country as I am.

I find it interesting that the only two presidents to balance the budget in the past 30 years are both democrats. And all three republicans (fiscal conservatives) increased the national debt.

I also find it interesting that the current president bush's tax cuts while going to war were not, in fact, good for the economy or fiscally responsible. Note the increase in debt of $3 trillion since the year 2000.

Ask any accountant how difficult it will be to pay off this debt. We are approaching the brink of national bankruptcy. My opinion--we have a government as irresponsible as those individuals who only pay the minimums on their credit cards, or these sub-prime mortgage losers who can't pay for a huge house with their high school education supported minimum wage jobs.

I don't want my newborn daughter to have to pay for our incompetence and reckless actions. I think we need to tell the presidential candidates that this out-of-control spending must stop, including (inevitably) this war.

What are your thoughts?

(the red national debt chart was created by Ed Hall, edhall@brillig.com)

http://www.brillig.com/debt_clock/faq.html

[9mmRifle]

McCain or Hillary will fix it

[slug]

H. Clinton wants to institute a national health care program (federal govt. paying for everyone's health insurance).

No candidate has stated they will increase taxes to pay down the debt. (understand this is very unpopular to say during a popularity contest)

Correct me if I am wrong.

[9mmRifle]

I don't think there's one single answer, I might even answer all of the above in this poll vote. Work needs to be created and I think NAFTA must be ended quick, and people in gov jobs like Congress must take a symbolic pay cut. We have now seen the greatest expansion of government size and national debt in history. What might fix it is increased value of the dollar, a drop in oil prices and improvement in gross domestic product, this could help bring the debt back down to normal levels

[vinny_121_ND]

H. Clinton wants to institute a national health care program (federal govt. paying for everyone's health insurance).

No candidate has stated they will increase taxes to pay down the debt. (understand this is very unpopular to say during a popularity contest)

Correct me if I am wrong.

300 million people for national health care? In canada, we have 32 million people, and even that is strained. We have a shortage of doctors, and more and more people are turning to naturopathic medical doctors (ND) as a result.


I am afraid your debt will take a long time to pay off.

[delio]

We are approaching the brink of national bankruptcyFirst of all, you shouldn't focus on the size of the debt, but the amount per GDP.

Also, don't swallow all the hype, and take a look at the following chart, ..

An $800 billion freebie, hidden in the national debt (http://www.optimist123.com/optimist/2007/08/an-800-billion-.html)


http://www.optimist123.com/photos/uncategorized/2007/08/23/piechart200706.png

Not so menacing now, huh?

[slug]

Delio,

Also don't believe the hype that the US dollar has now devalued to a point below the Canadian dollar (no offense, Canada, but that sucks).

Don't believe the hype that in some areas 2/3 new homes purchased with sub-prime mortgage rates are now in foreclosure.

Don't believe the hype that the US national debt/GDP percentage is now at the highest point since we were paying off World War II. (And don't tell me GWOT is as significant or massive as WWII).

Don't believe the hype that any accountant I see on C-Span says we will soon not be able to pay off this debt, let alone our children we are screwing over.

$800 billion, my high school math tells me that is less than %10 of the problem.

What about the other %90.

But don't believe the hype.

[vinny_121_ND]

Canadian economists said we (canadians) weren't doing anything to bring the looney from 70 cents to 1 USD, to 1.02 looney to 1 USD. It was all american that did it. As a result, canadians started shopping in the US. Mass flooding over the border.

[Satellite Weapon]

Here's a youtube clip of a debate on one of the recent GAO reports

http://www.youtube.com/watch?v=q2QE137fRvs

[nagant_m44]

is there any way you can let us vote for multiple options?

[slug]

is there any way you can let us vote for multiple options?


You can vote for multiple options, just click on all the boxes that apply.

[slug]

Satellite Weapon, Glenn Beck is usually a little out there, but I completely agree with him on this issue. Thanks for the video clip.

I think Americans need to think about this issue and act on it NOW. Obesity, debt, irresponsibility, murder. Forget about the terrorists--We are our own worst enemy.

[Laworkerbee]

Satellite Weapon, Glenn Beck is usually a little out there, but I completely agree with him on this issue. Thanks for the video clip.

I think Americans need to think about this issue and act on it NOW. Obesity, debt, irresponsibility, murder. Forget about the terrorists--We are our own worst enemy.

I choose not to forget those who have murdered thousands of our fellow citizens and could care less about all the fat asses out there.

[slug]

Laworkerbee, "forget about the terrorists" was probably not the best phrase to use. I fought against "terrorists" in the GWOT, as I'm sure you did also.

But this is a fact: 16,000 Americans are killed every year... by other Americans.

As for those "fat asses" I assume you couldn't care less about, 3000 Americans die of obesity (the same number of people killed on 9/11) every 3 and a half days.

Look up the stats if you don't believe me.

Here's a call for a leader who will bring the focus back on national responsibility.

[vinny_121_ND]

But this is a fact: 16,000 Americans are killed every year... by other Americans.

As for those "fat asses" I assume you couldn't care less about, 3000 Americans die of obesity (the same number of people killed on 9/11) every 3 and a half days.

It's not that simple, not that black and white anymore. You're walking a fine line now. You can't just cut and run out of oef, oif. What about ISAF? The Canadians are working their butts off to bring stability to the region.

[seraosha]

Re-instate the draft, get those fat asses in shape and invade a country that has something we can turn into cash almost immediately.

win/win

next?

[Laworkerbee]

Obesity

I'll try and give you a take on this one, because it bothers the hell out of me.

For years I have wondered how someone can attain weights above 500 pounds; considering once you have reached that point work is near impossible, so how can they continue to eat so much if they don't work to support their eating habit?

Welfare, food stamps, and disability payments. The government enables these people to do such things in the name of being humane and it sickens me.

Myself, I'm just as bad. I'm a Jackass who can't quite smoking try as I might.

[vinny_121_ND]

obesity is killing our health care system. obesity -> diabetes, cancer, heart disease, artery clogged.

[m.i.t]

devaluation will be secret move end of the way...

after ww1 germany devalued the mark...so debts gone to wchole

For example now

now us econmy has around 8 trillion bucks debts...

ons of the gold 1000 usd..

and after hard devaluation program (it means demolotion of US econmy)

1 ons gold 1 million usd...

national debts would be just 8 B. usd ( according values
before devauluation program)

BUt all debts would have gone to the hell...

so problem is which one is better in progrees...

demolotion of economy or debts...

dont forget Gents...USD bucks are only printed papers...

[Firetxmi]

Myself, I'm just as bad. I'm a Jackass who can't quite smoking try as I might.

Chantix dude, thats all I gotta say. Works like a frickin' charm!

[Laworkerbee]

Chantix dude, thats all I gotta say. Works like a frickin' charm!

I'm worried about the side effects, nothing like messing with the receptors in your brain. :|

Then again I'm getting pretty desperate.

[wholagun]

the US has lots of problems, and Americans always get mad at foreigners for saying it, but its true. Like the video clip points out, just b/c you don't like hearing something won't make the problem disappear you're just sweeping it under the rug. Now myself and the rest of Canada have a stake in what happens in the US b/c we're so tied to you guys. There are a lot of issues what always amazes me is how CEOs make so much money millions of dollars while the employees are only making 40 000. The American situation worries me, I'm already seen here in Southern Ontatio, the industrial heartland of Canada, hundred of thousands of jobs being lost in the manufacturing sector. I feel a large part of the problem is the disconnect of our politicians - just the other day Bernecki and Bush were on TV saying US is not going into rececession yet the economy is growing at 0.6% virtually nothing. The foreign reliance on oil, and the power of the oil companies is HUGE. As price goes up the cost of everything goes up, and so little was invested in new energy sources that now the US is playng catch up to the Japanese. Having former oil barons in white house doesn't help either, and the war in Iraq costing the country if I recall correcetly 500million a day really isn't helping, and is Ameican safer having gone into Iraq? As a political science student looking south it appears that your problems all stem from bad politics and bad policies.

[2Sheds_Jackson]

Here's a good site for basic info on different ways of measuring the debt. http://www.marktaw.com/culture_and_media/TheNationalDebt.html

It's a complex issue - I don't find much value in attaching a president's name to the chart. It's congress that approves the budget, and we've had a democrat controlled congress for virtually all of the last 30 years. And under Clinton, when the debt went down, there was a republican majority. So it's not very clear cut. Also, I fail to see the connection between the debt and defense spending. We spend far, far more on social programs. In fact, any analysis of the national debt will show a very close relationship between the start of our debt problem, and spending brought on by Johnson's "Great Society". The national debt is, after all, nothing more than the gap between taxes paid by people who work, and spending, much of which is on people who don't.

[slug]

Here's a good site for basic info on different ways of measuring the debt. http://www.marktaw.com/culture_and_media/TheNationalDebt.html

It's a complex issue - I don't find much value in attaching a president's name to the chart. It's congress that approves the budget, and we've had a democrat controlled congress for virtually all of the last 30 years. And under Clinton, when the debt went down, there was a republican majority. So it's not very clear cut. Also, I fail to see the connection between the debt and defense spending. We spend far, far more on social programs. In fact, any analysis of the national debt will show a very close relationship between the start of our debt problem, and spending brought on by Johnson's "Great Society". The national debt is, after all, nothing more than the gap between taxes paid by people who work, and spending, much of which is on people who don't.


I believe republicans controlled congress from '94 to '06. But anyway, depending on who you ask and whether or not we are fighting a war, defense spending is between 20% and 50% of the federal budget. That is a sizeable chunk, although I agree that we have to limit LBJ's "Great Society" also. OIF spending is approaching $500 billion--that's a lot of money that could go to other programs. Congress is not completely to blame, especially when the president steam-rolls them by vetoing war spending bills twice when they try to limit him.

[2Sheds_Jackson]

I believe republicans controlled congress from '94 to '06. But anyway, depending on who you ask and whether or not we are fighting a war, defense spending is between 20% and 50% of the federal budget. That is a sizeable chunk, although I agree that we have to limit LBJ's "Great Society" also. OIF spending is approaching $500 billion--that's a lot of money that could go to other programs. Congress is not completely to blame, especially when the president steam-rolls them by vetoing war spending bills twice when they try to limit him.

Well that's politics right? The problem is that people lack the guts to take the political heat for doing what they know is right. I take the opposite view on the war and the deficit. Running a deficit during war is pretty common - in fact it's how the deficit got started. I think the problem is that we always have a budget shortfall, even when we're not at war. It's a constant thing that just never goes away. It's interesting to note that it pretty much keeps pace with total tax receipts - it's just that total tax receipts keeps going up and up too. We've got to break them of that habit.

[Power_serj]

There's an easy solution that no politician has the balls to do....for fear of losing votes from buisness owners. Heavily fine all companies that hire illegals so they leave. After that, get all these people off of welfare and unemployement and give them the jobs that the illegals were doing. That will bring back a lot of revenue back to the federal government (because they pay taxes and the gov't won't need to pay for these social welfare programs). Also, that will help money flow back into the US economy, as opposed to the Mexican economy.

Then cut a large number of social welfare programs that promote laziness and sucking off the taxpayers money, and cut a number of pork barrel and earmarking spending projects.

Lowering taxes will help lower the national debt as well. Yes, lowering taxes! Give tax returns for those who buy health insurance, and lower taxes on buisnesses and middle income (don't lower as much for low income) families. This will help keep product prices low, and middle income families spending helping boost the economy. Also, keep the interest rates low still too.

"Do not begin national health care program" and "Limit social programs"

[Yellowbelly]

Satellite Weapon, Glenn Beck is usually a little out there, but I completely agree with him on this issue. Thanks for the video clip.

I think Americans need to think about this issue and act on it NOW. Obesity, debt, irresponsibility, murder. Forget about the terrorists--We are our own worst enemy.

I pretty much agree. Glenn beck is quite harsh at times when he definitely shouldn't be or when he's wrong but everything about this issue was portrayed correctly in that video. Very informative, in fact, it kinda scares me just because I know how real that is. It just reinforces my understanding of our domestic economic disaster, which hasn't happened yet.

I agree that we can't raise taxes to fix the debt. We can only raise so much before inflation takes hold, DI drops and we've gone absolutely no where. It's just not good policy at all so it should be out of the question.

The only way I can see that would fix this is a mass gov't liquidation sale. Sell off all unnecessary parts of the government that aren't needed to run the country to the private sector. Not only would the gov't get billions if not trillions of dollars, it'd stop subsidizing so much, ending the war on terror, poverty, drugs. I believe that with all that stopped and keeping the taxes the way they are temporarily, the US govt would have a massive budget surplus to pay off our debt in probably less than a decade. After paying off the baby boomers, we'd have a chance to get rid of social security or privatize it so that it wouldn't be a problem anymore.

Face it guys, this is the only way that America can sustain itself unless someone else has a better idea (i'm open). Honestly, this plan will hurt us a little because lots of people will lose jobs. But is it better for a few to lose jobs or just get it sold to the private sector, or to send the whole country into a depression. It's the best long-term thing we can do. Big government definitely isn't the answer.

...to anything.

[Hilbert]

Curb the rediculous level of Pork Barrel and in some cases unconstitutional spending of our tax money that our politicians on both sides, right and left, seem to be so damn good at.

[vryhpyammoadded]

Slash government by 2/3, get it out of the suger daddy biz for all. Do not build a federal health care system.
Problem is that for these improvments to happen a Soviet style collapse or a terrible civil war must occur. The people are simply too far gone to demand the state cut off the crack cold turkey.

Also...
So what’s so blazing important the difference between taxing the nation a gazillion dollars to fund welfare programs and using the same funds to employ others in the defense industry to help fight a war?
Sure, I can see loads of the cash being dumped into the overseas occupied economy/government appearing lost but if you fight to win over said nation don’t you usually see multiples of your investment paid back the decades to follow? I really don’t see defense/war dollars as being wasted money unless you intend to lose the conflict.

Personally this war has been great for me. I’ve improved my standard of living near tenfold working various contracts and have passed that money on down the line benefiting others to provide me services and so on… Where’s the issue here?

[slug]

Yes, the war has been good for my savings account too. Probably is for every soldier/contractor who is not wounded or killed. Although I am not sure what "multiples of our investment" we have seen from korea, vietnam, grenada or the former yugoslavia. Possibly some from panama and kuwait.

Also, what is so wrong about cutting the military after the war is over? I think it's important to remember that the president who cut military spending and size more than any other in history was Eisenhower, possibly the best managing general for the American military in the 20th century.

[Hilbert]

Yes, the war has been good for my savings account too. Probably is for every soldier/contractor who is not wounded or killed. Although I am not sure what "multiples of our investment" we have seen from korea, vietnam, grenada or the former yugoslavia. Possibly some from panama and kuwait.

Also, what is so wrong about cutting the military after the war is over? I think it's important to remember that the president who cut military spending and size more than any other in history was Eisenhower, possibly the best managing general for the American military in the 20th century.

Also recall what condition our military entered WW2 in as a result of the defense slashes after the "War to End All Wars."

[Flagg]

Did anyone watch the video posted on page 1?

Did anyone catch the video featuring US Comptroller David Walker?

Guess what...he just quit.

His comments in recent years have scared the living sh!t out of me for two reasons:

1.) He's a calm, cool, collected professional who has been SCREAMING "ICEBURG!" from the crow's nest of USS United States for the last couple of years in a public position that is almost universally reserved for suckups who would play the game and instead make public comment with something along the lines of "a change in course for the USS United States would be approrpriate at this juncture". He's been laying his nutsack on the chopping block for years with his comments.

2.) The public response from what little air time he has had in the mass media to share his incredibly severe warning(for such a high office public figure) has been absolute and total silence. No one cares or can comprehend.

I recently watched on YouTube an ancient interview with a young Mike Wallace(of later 60 Minutes fame) interviewing Ayn Rand while smoking Luckies sometime in the early 60's on US Prime Time TV. Damn good piece. Today.....Prime Time is now mindless reality TV rubbernecking trainwrecks........

People should be writing their elected legislators....instead they're home getting fat watching a plasma TV they bought with no money down(and it's certainly NOT just US citizens guilty of this).

I think the US(and many other nations as well) is likely to experience the biggest collective financial crisis since the Great Depression sometime over the next 10 years.

*Demographics(boomer retirement will see boomers consuming their assets rather than adding to them...resulting in decling real estate prices as they scale down, declining equity prices as they require cash flow, and pressure on national finances as they begin quickly accelerating their expensive social security benefits becoming an 800 pound gorilla on the backs of working aged citizens.)

*Lack of savings(both short-term and retirement if top 10% are excluded)

*Equity valuations(quite high P/E average...as profits decline and boomers sell off their equities for living expenses the lack of US savings will see foreign ownership or a severe decline in share prices due to lack of personal savings.)

*Home values declining(residential property MUST revert to an acceptable multiple of average wages which will destroy a LOT of illusory net worth along the lines of the destruction og dot com paper "net worth".)

*1970's 2.0 off sourcing(old school industries were "offsourced" like steel and automotive manufacturing in the 1970's, now it's ANY/EVERY job that can be performed remotely)

*Competitive Currency Devaluation(People blame "big oil fat cats" for $4 gas.....have a look at the underlying currency. The relationship between gold/oil, silver/oil, copper/oil, lead/oil, milk/oil shows that it's not so much the rise in oil cost, but the decline in the value of currency)

*Complete lack of monetary and fiscal discipline(As above...reserve currency intentionally and knowingly abused and potentially destroyed. NOTHING but tax cuts and massive spending is mentioned.)

*War.......(War is NEVER cheap..in lives or financial cost)

The results could be:

*Age based conflict within societies(retirees fighting to protect their entitlements versus younger generations trying to cut them off at the knees to prevent a declining standard of living.)

*International economic conflict(free trade could be at risk of reactionary trade barriers being erected leading to all out trade wars if nationalist fervor grows out of domestic economic problems)

*Global paradigm economic shift in reserve currency(Extremely poor US fiscal and monetary policy runs the serious risk of destroying it's very special and very lucrative control over global reserve currency status. The unwillingness/inability to display appropriate fiscal and mentary discipline is, in my opinion, the biggest threat currently faced by the United States since WWII. WHo wants to exchange something valuable[energy,food,and other strategic commodities] for a piece of depreciating paper?

*Possibly much higher taxes

* Possibly much lower standard of living

*Increasing possibility of broader conflict.

Outside the United States I've often heard the expression:

"When the United States catches a cold, the world gets the flu."

I think it's quite relevant to this topic and I think it could be extended further to include something along the lines of:

"If the United States gets the flu, a whole lotta people around the world are gonna get the Ebola."

In my opinion, this massive financial cancer has to be cut out..."hot potato" is not the appropriate policy in dealing with the situation.

The sooner it's dealt with the better......the longer it's avoided, the worse it will be with potentially grave ramifications for many, or even most on this forum.

[TheKiwi]

As for those "fat asses" I assume you couldn't care less about, 3000 Americans die of obesity (the same number of people killed on 9/11) every 3 and a half days.



Where did you get that figure from? That's like over 1 million per year. Even when the CDC was at it's worst on obesity, they were quoting "only" 400,000 per year. Then in September 2004 they realised that they'd made serious statistical error with their calculations and quietly reduced their figures to 80,000 per year. That's like a 200% error. Along with that there was an acknowledgement that there had been "human errors" in the compilation of those figures, shorthand for "massaging" results towards a political end.

[2Sheds_Jackson]

Although I am not sure what "multiples of our investment" we have seen from korea, vietnam, grenada or the former yugoslavia.

No matter what Al Gore will tell you, I don't think anybody can dispute that all the advances in science, technology, medicine etc that the DoD has paid for, have been a good investment. For whatever reason, we're unwilling to devote funds for this kind of thing unless we're convinced that we're under threat.



Also, what is so wrong about cutting the military after the war is over? I think it's important to remember that the president who cut military spending and size more than any other in history was Eisenhower, possibly the best managing general for the American military in the 20th century.

In principle I'd agree with you...but I'd have to point out that Ike's war still isn't over. Korea remains as divided as it was the day he took over. The troop draw-down had begun before he took over, and was one reason why when North Korea struck, they damn near managed to capture all of South Korea in the first thrust. It took us years and tens of thousands of American dead to fight them to a draw. Not exactly the picture of military supremacy that I'd hope for. How many US and Korean lives could have been saved by a US military that was up to the task on day 1, and achieved a decisive victory in a matter of months? Drawing down too far only invites the next war when you've got commitments like the US has.

[Sloppy Joe2]

go to the social security building down here at el paso, and you will see almost everyone of the cars parked out front has a mexican license plate. worst off they get SS!!!!

same with the public schools and hospitals! stopping the illegal immigration leaching of american tax-payers dollars MAY help. w/e may be done America MUST NOT turn its back on the GWOT!

[Will938]

Where did you get that figure from? That's like over 1 million per year. Even when the CDC was at it's worst on obesity, they were quoting "only" 400,000 per year. Then in September 2004 they realised that they'd made serious statistical error with their calculations and quietly reduced their figures to 80,000 per year. That's like a 200% error. Along with that there was an acknowledgement that there had been "human errors" in the compilation of those figures, shorthand for "massaging" results towards a political end.

365 / 3 = 121.6

121.6 x 3000 = 365,000; not over a million.

I can't speak of obesity, but our eating habits cause heart disease and strokes, which are the #1 and #3 killers here. And they account for around 600,000 deaths a year IIRC.

[TheKiwi]

365 / 3 = 121.6

121.6 x 3000 = 365,000; not over a million.

I can't speak of obesity, but our eating habits cause heart disease and strokes, which are the #1 and #3 killers here. And they account for around 600,000 deaths a year IIRC.


Sorry, I read the 3000 as per day, not per 3 days. Regardless, the CDC's 300-400,000 figure was debunked back in 2004.

As for the figures on hear disease and strokes, I have bad news. Life is 100% fatal, no matter what you eat or how much you exercise. How many of those 600,000 are aged 75+? To be blunt, if you don't die of heart disease or a stroke, you will die of something else, the only question is what age this takes place.

These figures are largely wild ass guesses, massaged beyond the point of recognition and then used for political purposes.

Example: Remember the figures used years ago that said that 1 in 6 (US?) women had been raped? It turned out to me more like 1 in 15 to 20 (still a horrible figure). But the 1 in 6 is still used because it sounds better.

You get research based on bollox, which is then quoted by other related research and you end up with a sequence of reach-arounds, all based on the same original crap, quoting each other as back-up.

[9mmRifle]

I believe republicans controlled congress from '94 to '06. But anyway, depending on who you ask and whether or not we are fighting a war, defense spending is between 20% and 50% of the federal budget. That is a sizeable chunk, although I agree that we have to limit LBJ's "Great Society" also. OIF spending is approaching $500 billion--that's a lot of money that could go to other programs. Congress is not completely to blame, especially when the president steam-rolls them by vetoing war spending bills twice when they try to limit him.

remember when we were all freaked out when the debt was at 900 billion or something, well here's that debt clock

http://img206.imageshack.us/img206/9721/opyofbua4.jpg

it's even higher today - around 9 trillion - that's Trillion with a T
and by the end of the year the debt clock will be broken (it will have run out of numbers to count how much we owe)

[shocker1]

When my pension and 401K tanked in 99 I started buying US gold and silver coinage. I could not tell you how many people said i was nuts. I said it is safe. I never expected 300% gains. Just remember people put their silver dollars and Franklins in the bank pre 1962, they went back to withdraw their retirement and got nickel clad or pot metal brass back. Nice

I got an idea though, when the debt based dollar is falling let's lower Fed rates so we can see how low it will go. Oh wait, somebody already thought of that.

[slug]

I think we can all agree that sooner or later someone is going to have to pay the piper. Here's an allegory for you--this is the path that America is heading down:

http://www.youtube.com/watch?v=5ydqjqZ_3oc

"F you! Pay me!" $9.3 trillion and growing, and we're about to bust the joint out. Or are we just going to tell our kids and the rest of the world "F you! You pay ungodly socialist taxes to pay off our idiocy."

[seraosha]

I think "**** you, try to collect!" is going to be a more accurate response.

[vinny_121_ND]

Did anyone watch the video posted on page 1?

Did anyone catch the video featuring US Comptroller David Walker?

Guess what...he just quit.



I don't blame him. No one's paying attention until it's too late. Everybody is tuned in to american idol. Can anyone predict what the future of america will look like in 10 years?

[annihilation]

Maybe after we deal with Iraq and Afghanistan we can speed some time focusing on our issues and trying to clean up our home before going out and worrying about other nations. We need to focus less on the world outside of economic interest. Outside of that we shouldn't bother interfering.

[ren0312]

300 million people for national health care? In canada, we have 32 million people, and even that is strained. We have a shortage of doctors, and more and more people are turning to naturopathic medical doctors (ND) as a result.


I am afraid your debt will take a long time to pay off.

300 million people can actually be insured by the government, just ask the Nordic countries, but in return you will have to accept 60+ per cent income tax if you are in the highest tax bracket, and minimal (1+ per cent of GDP) defense spending, there is no such thing as a free lunch, in short, it is a trade off, have a universal health care system and have the Navy cut by 60-70 per cent, or maintain your armed forces and not have a Nordic style welfare state, you just can not have both, Nordic countries have an excellent social safety net, but they pay for it through the nose.

[Violet Fashion by Mindy]

So you limit social spending and hurting the people most at risk of falling into poverty because the fat cats (rich ****s) don't have a freaking clue on how to run an economy?

Again why should the poor suffer in fixing the national debt when by and large they are the ones that do not contribute to the current mess.

IE they don't go into billions of debt to fund corporate take overs, they are not the ones who want to go to war but are the ones that suffer the most by it.

how about taxing the **** out of the CEO's of these companies that are causing all this freaking debt.

[ren0312]

Well that's politics right? The problem is that people lack the guts to take the political heat for doing what they know is right. I take the opposite view on the war and the deficit. Running a deficit during war is pretty common - in fact it's how the deficit got started. I think the problem is that we always have a budget shortfall, even when we're not at war. It's a constant thing that just never goes away. It's interesting to note that it pretty much keeps pace with total tax receipts - it's just that total tax receipts keeps going up and up too. We've got to break them of that habit.

Running a deficit is a good idea during a total war situation like World War 2, when defense spending approached 40 per cent of GDP and the entire resources of the economy was mobilized towards war production, in this situation it is just a better idea to use debt to finance the war rather than through the normal means of raising taxes, however, in a situation where the country is in a limited war, like the situation now or during Viet Nam, raising taxes and depressing non military spending temporarily is the best way to go.

[ren0312]

Yes, the war has been good for my savings account too. Probably is for every soldier/contractor who is not wounded or killed. Although I am not sure what "multiples of our investment" we have seen from korea, vietnam, grenada or the former yugoslavia. Possibly some from panama and kuwait.

Also, what is so wrong about cutting the military after the war is over? I think it's important to remember that the president who cut military spending and size more than any other in history was Eisenhower, possibly the best managing general for the American military in the 20th century.

Defense spending made up half of the federal budget in 1960, not much cutting that I can see there.p-)

[dedbunniez]

Defense spending made up half of the federal budget in 1960, not much cutting that I can see there.p-)

It accounts for 52% of the budget last time I checked. That's 2 trillion dollars.

[Firetxmi]

I think "**** you, try to collect!" is going to be a more accurate response.

Which is the attitude that gets us into such wonderful things as subprime mortgages, soaring credit card debt, etc...

[annihilation]

remember when we were all freaked out when the debt was at 900 billion or something, well here's that debt clock

http://img206.imageshack.us/img206/9721/opyofbua4.jpg

it's even higher today - around 9 trillion - that's Trillion with a T
and by the end of the year the debt clock will be broken (it will have run out of numbers to count how much we owe)


I think the BUSHs should have a larger amount to pay then 66k. As if it wasn't for our brilliant leader we wouldn't be in this big of a mess.

[deagle]

well, most (or at least a HUGE portion of the budget is supporting military operations...i think prez Bush submitted increased DOD budget recently), so there's less money to spread out elsewhere. costs of goods going up too. gas prices are over $100 a barrel, and most of that is going to run land/sea/air vehicles. then the SUV's/hummer's drink it, then we try to get by with our regular cars. we're a global economic power, and they're trying to bankrupt us (our US dollar isn't as mighty as it once was), making our national debt even worse.

[Shellshock1918]

McCain or Hillary will fix it

BAHAHA

Wow.

I hope that was sarcastic.

[Lokos]

I think "**** you, try to collect!" is going to be a more accurate response.

Umm, that would not be in the interests of the United States.

Lokos

[Satellite Weapon]

Increasing taxes while the economy is so fragile could really kill any chance of growth/recovery.

[vryhpyammoadded]

Did anyone catch the video featuring US Comptroller David Walker? Guess what...he just quit.I’ve agreed with a lot of what Walker has said and yes, I’ve noticed.


I recently watched on YouTube an ancient interview with a young Mike Wallace(of later 60 Minutes fame) interviewing Ayn Rand while smoking Luckies sometime in the early 60's on US Prime Time TV. Damn good piece. Today.....Prime Time is now mindless reality TV rubbernecking trainwrecks........Ayn is great! It should be mandatory that all people read her works and demonstrate comprehension of her points. Thanks for the Youtube info. I didn’t know they existed and just finished watching them all. I especially liked these two comments she made while speaking with Tom Snyder.
“America will be destroyed by the Republican Party because they do not understand their own philosophy nor do they know how to preach it.” And “Not only is the idea of separation of church and state a great idea but separation of economy and state”. Also, Mike Wallace and Phil Donahue just didn’t seem to really comprehend her philosophy.



People should be writing their elected legislators....instead they're home getting fat watching a plasma TV they bought with no money down(and it's certainly NOT justUS citizens guilty of this)
Agreed and have made the attempt to communicate this but to no avail. In my opinion the politicians have the mentality my last corporate employers had, “I’ve got to get what’s mine while the getting is still good”. They then fattened the cow, dolled it up real good and sold it to the slaughterhouse, who got ripped off by the way. They then took the money, running to their tax shelters and off shore accounts while the employees who helped raise the cow didn’t even get paid for their last month of work or even a thank you very much. Nine individuals made close to fifty million while 1400 others were run down like rabbits in the headlights of the departing executives Beamers. There is some justice though. Those closest to retirement, who were forced to quit or fired a few months before the fall somehow got a hold of incriminating evidence and the lawsuits resulting have been glorious.
Too bad Americans won’t get that chance if the government defaults on them.

I think the US and many other nations as well is likely to experience the biggest collective financial crisis since the Great Depression sometime over the next 10 years.

Agreed and for most all the reasons you specify. I suspect the usual historical suspects will return to plague the nation. Those being higher taxes to support social programs that replace corrupted, bureaucratic, inefficient institutions with more of the same but at least they’re fresh and new. Look for a shiny happy new marketed and spun Social Security, Hillary Care, National Power Grid, Water and Carbon controls to make everyone’s carefully managed life better so as to appease the angry public beast feeling sorely ripped off. All of this will be done to avert civil unrest as people demand a better sugar daddy.
The resultant decline in national power and leveling down of standard of living will bring about an external power vacuum causing destabilization and increasing the probability of a serious war somewhere that, chances are, America will be the scapegoat for.
Still, something about all this rings all too familiar and the US red vs blue may end up the White vs Red of a hundred years past. I’m hoping we dodge that bullet.

[Mastermind]

First, there is not one gdmnd thing anyone is ever going to do about an 8 trillion dollar debt. That amount is simply not payable under any circumstance.

Second, the budget deficits are now a fantasy game...no one really knows what is going on with the amount coming in and the amount going out.

Third, the US now has a trade deficit with just about every major industrialized nation...and that figure even included Mexico.

The bottom line is, this is just not sustainable. The world economy is enveloped in a massive artifical gimic game that is going to collapse eventually. when that happens, this is not just going to be a depression...this is going to be chaos beyond anything modern people have ever experienced.

When will it happen?

Soon...

[dedbunniez]

First, there is not one gdmnd thing anyone is ever going to do about an 8 trillion dollar debt. That amount is simply not payable under any circumstance.

Second, the budget deficits are now a fantasy game...no one really knows what is going on with the amount coming in and the amount going out.

Third, the US now has a trade deficit with just about every major industrialized nation...and that figure even included Mexico.

The bottom line is, this is just not sustainable. The world economy is enveloped in a massive artifical gimic game that is going to collapse eventually. when that happens, this is not just going to be a depression...this is going to be chaos beyond anything modern people have ever experienced.

When will it happen?

Soon...

And that is why I will build a base in Antartica.

[wholagun]

damn Bush has been one huge disaster for the US, I can't belive so many ppl worshiped the guy at one point when it was HUGE taboo to criticise Bush and the government. That what happens when you stray from American values that made the country. Being Canadian and our two countries being each others largest trading partners it is hurting us in Canada as well and what gets me really rattled up is when both George W and Harper go on TV and say the exact same thing like they were reading off the same page "our economy has strong fundementals". While the growth is Canada isn't based more on commodities and is on a more solid foundation none the less there are problems too. Both leaders are delusional - economists are saying **** is hitting the fan - but for some reason Bush thinks that its still strong. Someone needs to give Bush a wake up call and tell him he's going to going to go down as one of the worst American presidents. That's what happens when you surround yourself with YES people. Some Americans I go to school with say their families keep telling them how many manufacturing jobs are being lost. Its the same in Ontario, while economic growth b/c of commodities is good it is also not sustainable and bad for the environment.

America being the superpower that it is makes it a leader in trend setting and until they stop oil dependence we'll all be paying high oil prices and it will be hurting the economy b/c when oil goes up so does inflation of everything b/c everything needs to get from point A to point B.

[vryhpyammoadded]

And that is why I will build a base in Antartica.Sorry, won’t work unless you pay Calanen and his people in Australia. He and I have already cornered the Antarctic market. My American prisoners are shipping there now to develop his resources and we both share the kickbacks. Get in line… p-)

[annihilation]

First, there is not one gdmnd thing anyone is ever going to do about an 8 trillion dollar debt. That amount is simply not payable under any circumstance.

Second, the budget deficits are now a fantasy game...no one really knows what is going on with the amount coming in and the amount going out.

Third, the US now has a trade deficit with just about every major industrialized nation...and that figure even included Mexico.

The bottom line is, this is just not sustainable. The world economy is enveloped in a massive artifical gimic game that is going to collapse eventually. when that happens, this is not just going to be a depression...this is going to be chaos beyond anything modern people have ever experienced.

When will it happen?

Soon...


But the guys on CNN said that the trade deficit is ok and the debt is just a small percentage compared to the GDP.

[9mmRifle]

But the guys on CNN said that the trade deficit is ok and the debt is just a small percentage compared to the GDP.

United States GDP is something like 12.9 Trillion -13 Trillion, 1,300 Billion that's the amount of wealth the U.S economy produces in one entire year. Now the problem is the debt hitting figures like 9 Trillion, which means if we want to pay off the debt then every American would have to work their butts off for about 9 months without paying for clothes, gas, food etc and just pay off the debt.

[ren0312]

When you look at it as a per centage of GDP it is not too bad, the US debt is still lower as a per centage of GDP than Italy for example, so in the short to medium term, the US is not in danger of defaulting on its debt.

[Wolfmanjack]

It is interesting that a lot of people are basicaly calling those people on Welfare Lazy etc.. And these people should just man up and get a job.

Reality check people, While there is a small SMALL portion of this group who would be ABLE to actually get a job and do the job in question there is a damn good reason why the MAJORITY are on Welfare.

Be it for Reasons of physical /mental /etc disability's those reasons are still valid. While the system is not perfect you can not arbitrarily just kick thousands of people off welfare and expect anything good to happen.

Granted there are those who do take advantage of the system. But i think that number is a lot lower then the majority of people actually think.

If you were to do so let me ask you this.. How would Grandma down the street pay for her food ? How would she get her medication ? How would she be able to live? All these things take money. Money that we pay in tax's. The system is broken to a extent but the reality's of not supporting those who can not support themselves is a very harsh prospect.

You would have a a large portion of these people out on the streets, Hungry and desperate. A sizable portion of these people are mentally ill. They are not on their medications. Do i need to spell this out for you?

The answer..... I don't have one.. But i do know that just cutting people off hardcore is a recipe for disaster.

Personally i liked Ron pauls take on this situation. Shame he or someone like him wont become president.

[superbuzzmetal]

Slightly off topic but what can a person do in the dawn of a depression or social instability ? Would the savings you have in the bank still be safe or should you invest in gold for example ?

[annihilation]

When you look at it as a per centage of GDP it is not too bad, the US debt is still lower as a per centage of GDP than Italy for example, so in the short to medium term, the US is not in danger of defaulting on its debt.

But the GDP is not what the government takes in. So how does that comparison works? So I work for a company that makes millions but I only take in 100k a year. So if im in debt by 900k how does the company income help me out.

[TheKiwi]

Slightly off topic but what can a person do in the dawn of a depression or social instability ? Would the savings you have in the bank still be safe or should you invest in gold for example ?

TheKiwi Report

Gold is traditionally one of those commodities that people buy up in times of trouble. However, it is already at quite high prices. If it does go up, it isn't likely to be spectacular, and if it goes down, well it can go a long way down (look at the descent of gold during the 1980s and 1990s for an example).

A balanced portfolio of shares, futures, property, specie etc gives you plenty of back-up should one area underperform.

All advice given on a "no liability should things turn to crap as a result of following my advice" basis.

TheKiwi Report is (c) and (tm) 2008. Just by reading this, you are agreeing to be my towel boy for a period of not less than 12 months or until your death from overwork, whichever comes first. Offer void in California and Quebec. No animals were harmed (much) in producing this report.

[vinny_121_ND]

United States GDP is something like 12.9 Trillion -13 Trillion, 1,300 Billion that's the amount of wealth the U.S economy produces in one entire year. Now the problem is the debt hitting figures like 9 Trillion, which means if we want to pay off the debt then every American would have to work their butts off for about 9 months without paying for clothes, gas, food etc and just pay off the debt.

Does that mean 100% tax to everyone for 9 months?

[TheKiwi]

Does that mean 100% tax to everyone for 9 months?

It means that as the US dollar depreciates on the world market, foreign products will go up in price, decreasing US demand for them. As this happens, the debt will drop (or at least not increase as fast), while US products will become more competitive on world markets due to them costing less. The US economy will grow, the stock market will pick up and the cycle will start all over again.

Economics 101 bought to you by the letter Q and the number 5.

[vinny_121_ND]

It means that as the US dollar depreciates on the world market, foreign products will go up in price, decreasing US demand for them. As this happens, the debt will drop (or at least not increase as fast), while US products will become more competitive on world markets due to them costing less. The US economy will grow, the stock market will pick up and the cycle will start all over again.

Economics 101 bought to you by the letter Q and the number 5.

Thanks Kiwi.

[9mmRifle]

It means that as the US dollar depreciates on the world market, foreign products will go up in price, decreasing US demand for them.

Ain't gonna happen, because the U.S economy still has an enormous appetite for oil, ores, gasoline etc and these imports are vital to keep our economy moving. Unfortunately we have an addiction to oil, and the U.S will pay the pusher whatever price the Saudi pusher asks. That's why I'm a believer in keeping your debts low, your currency stable and not allow it to weaken against global currencies.

[ViktorNavorski]

Oil shale, baby, oil shale!!! That is if, and a big IF, oil prices goes higher and stay there for a long time.

[delio]

Originally Posted by TheKiwi http://www.militaryphotos.net/forums/images/buttons/viewpost.gif (http://www.militaryphotos.net/forums/showthread.php?p=3090592#post3090592)
It means that as the US dollar depreciates on the world market, foreign products will go up in price, decreasing US demand for them.


Let us alternatively rephrase that, ..


It means that as the US dollar depreciates on the world market, American products will go down in price, increasing foreign demand for them.
There!

P.s. Canadian living along the border would tell you its already happening.

[TheKiwi]

Ain't gonna happen, because the U.S economy still has an enormous appetite for oil, ores, gasoline etc and these imports are vital to keep our economy moving. Unfortunately we have an addiction to oil, and the U.S will pay the pusher whatever price the Saudi pusher asks. That's why I'm a believer in keeping your debts low, your currency stable and not allow it to weaken against global currencies.

Not strickly correct.

As the economy slows, so does demand for oil. A drop in oil demand (traditionally) leads to a drop in the price (and an increase in production*).

This time I'm not so sure. So long as China is booming, the oil demand will be there. But much of China's boom is due to sales in the US (and elsewhere) of cheap goods. With the fall of the US dollar, the price of Chinese goods goes up. Couple that with a US recession (if there is one), and China too can go if not into recession, then certainly into a period of much lower growth. Lower Chinese growth means lower demand for oil from them too.

* The OPEC nations have in the past started to produce more oil whenever the price falls as they still need the same income. One of the downfalls of being so heavily dependent upon one source of income.

[TheKiwi]

Originally Posted by TheKiwi
It means that as the US dollar depreciates on the world market, foreign products will go up in price, decreasing US demand for them.



Let us alternatively rephrase that, ..


It means that as the US dollar depreciates on the world market, American products will go down in price, increasing foreign demand for them.

There!

P.s. Canadian living along the border would tell you its already happening.



Actually both of these are true. Demand for foreign products will decrease in the US market while demand for US good by foreign markets will increase.

[delio]

Actually both of these are true. Demand for foreign products will decrease in the US market while demand for US good by foreign markets will increase.

Yup. I was just emphasizing the two sides of the happy coin.

[TheKiwi]

Yep, it's (temporarily) good for you Canadians. However, with the Loonie being so high, what do you think will happen to demand for Canadian products (other than your maple syrup) south of the border? And when your economy starts to have a major trade deficit like the US does, you will be in the same boat. Effectively, its in Canada's best interests to have the Loonie lower than the US$.

What can you do about it? I'd say the best thing would be for the central bank to drop interest rates (to lower than the US one). This will cause folks to drop their Canadian dollar holdings like a hot potatoe and the Loonie will go below the US$ again.

No so good for the Canadian border folks who like to shop south, but better for the country. Of course low interest rates means a housing boom, which puts pressure on inflation which means interest rates go up again.

The circle of life continues (spoken in Jaques Coustou voice).

[Satellite Weapon]

Curb the rediculous level of Pork Barrel and in some cases unconstitutional spending of our tax money that our politicians on both sides, right and left, seem to be so damn good at.

You know politicians will always be corrupt ?


remember when we were all freaked out when the debt was at 900 billion or something, well here's that debt clock

http://img206.imageshack.us/img206/9721/opyofbua4.jpg

it's even higher today - around 9 trillion - that's Trillion with a T
and by the end of the year the debt clock will be broken (it will have run out of numbers to count how much we owe)

see this video, get out of the dollar says Jim Rogers !

http://www.youtube.com/watch?v=iaLBgduVW24

[9mmRifle]

When my pension and 401K tanked in 99 I started buying US gold and silver coinage. I could not tell you how many people said i was nuts. I said it is safe. I never expected 300% gains. Just remember people put their silver dollars and Franklins in the bank pre 1962, they went back to withdraw their retirement and got nickel clad or pot metal brass back. Nice

I got an idea though, when the debt based dollar is falling let's lower Fed rates so we can see how low it will go. Oh wait, somebody already thought of that.

I think the resource market will continue being a strong investment

[9mmRifle]

Dollar tumbles, equities dive, oil and gold soar
http://www.guardian.co.uk/feedarticle?id=7381581

By Jeremy Gaunt, European Investment Correspondent
LONDON, March 13 (*******) - Fears that stresses in credit markets and the world economy as a whole are deteriorating despite central bank help battered financial markets on Thursday, sinking global stocks and sending the dollar tumbling.
The dollar hit another record low against the euro and fell below 100 Japanese yen for the first time in 12 years, underlining concerns among monetary officials about extreme currency moves.
Oil, meanwhile, was at a record high above $110 a barrel and gold was closing in on $1,000 an ounce. Wall Street looked set for a sharply lower opening while European shares were down around 2 percent and Japanese equities lost more than 3 percent.
In the latest credit market fallout, an affiliate of U.S.-based buyout firm Carlyle Group, Carlyle Capital Group defaulted on about $16.6 billion of debt.
"This is going to be a nail-biting day," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in the U.S. state of Vermont. "The dollar seems to be going into a free-fall."
Investors shrugged off any remaining vestiges of the euphoria experienced earlier in the week from U.S. Federal Reserve-led moves to provide liquidity to credit markets.
Much of the focus was on the sinking dollar, which hit a new low against the euro and fell to a 12-year low against the Japanese yen below 100 yen, a sign of both current U.S. economic weakness and an unwinding of risky trades involving yen borrowing.
"We are entering dollar crisis mode," said Derek Halpenny, currency economist at BTM-UFJ in London.
"Looking at the markets there is a complete loss of confidence and that's because the markets are concerned over the U.S. financial sector and ultimately what the (Federal Reserve) will be forced to do to support that sector," he said.
The recent currency moves have aroused concerned comments from European Central Bank President Jean-Claude Trichet and Japanese Finance Minister Fukushiro Nukaga.
Trichet, in an interview with French magazine Le Point, said disorderly swings in currencies were undesirable.
"In the present circumstances, I am concerned by excessive exchange rate movements," he told Le Point.
Nukaga said dollar/yen exchange rate moves were a reflection of dollar weakness rather than yen strength and noted that the Group of Seven industrial nations shared the view that excessive foreign exchange moves are undesirable for economic growth.
The euro hit a new high of $1.5624 before edging back a bit to around $1.5592. The dollar was at 100.25 yen having earlier broken to 99.77 yen.
HIGH OIL, LOW EQUITIES
The tumbling dollar, meanwhile, poses a dilemma for the hawkish ECB, which is holding off cutting interest rates because of concern about inflation pressures.
A rising oil price is one of the reasons for the pressure, but the price is spurred on by a weak dollar as this makes oil cheaper in other currencies. Oil was trading at a record high above $110 as investors weighed the dollar's weakness against bloated U.S. crude stocks.
U.S. crude for April delivery rose 66 cents to $110.58 a barrel, above the all-time peak of $110.20 hit on Wednesday.
"We're looking at the U.S. dollar, we're looking at speculation, we're looking at geopolitical. Those three things tying together are defying fundamentals," said Peter McGuire, managing director of Commodity Warrants Australia.
Global stocks shrugged off the last vestiges of euphoria from Fed-led moves earlier in the week to provide liquidity to credit markets, renewing their downward route on worries about the health of the financial sector.
Financials led European shares sharply lower.
The FTSEurofirst 300 index was down 1.9 percent having rallied for two days.
Japan's Nikkei benchmark sank to a new 2-1/2 year closing low, down 3.3 percent at 12,433.44. The broader TOPIX was down 3.1 percent at 1,215.87, also a 2-1/2 year low.
Euro zone government bonds opened higher as investors sought safety.
June Bund futures were 30 ticks higher at 117.93. Ten-year yields were off 2 basis points at 3.729 percent

[9mmRifle]

Stephen King: Radical measures needed to get us out of this terrifying game of Russian roulette


http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-radical-measures-needed-to-get-us-out-of-this-terrifying-game-of-russian-roulette-796875.html



They never wanted to play, and nor did they ever think they'd have to. Against their will, America's economic policymakers have become engaged in a terrifying game of Russian roulette. The US financial system is in danger of melting down. This may not be the most probable outcome. Equally, though, a bullet through the head is not the most likely ending to a game of Russian roulette. Unless you're mad, though, it's not a game you'd volunteer to play.
Friday's bail-out of Bear Stearns, the US investment bank, brought to a close a remarkably frenetic week in financial markets. Bear Stearns' president and chief executive, Alan Schwartz, said on Thursday "our balance sheet has not weakened at all. We don't see any pressure on our liquidity". A day, it seems, is a long time in financial markets.
The Bear Stearns rescue raises some really big questions. Until now it was possible to argue that, whereas the UK authorities had got things wrong, the US authorities had got things very right.
Northern Rock's collapse apparently stemmed from the Bank of England's failure to inject liquidity and its unwillingness to cut interest rates. It also stemmed from the Financial Services Authority's inability to find a buyer and the Government's failure to provide a bailout in times of distress. In contrast, the Federal Reserve did inject liquidity. It did cut interest rates. And the US does have bail-out options, not least deposit guarantees and the Federal Home Loan Banks (which effectively replaced the mortgage-backed securities market in the second half of last year).
While not all of these factors are directly relevant to the Bear Stearns situation, it seems that monetary easing, liquidity injections and the rest are in no way guarantees of financial stability.
This is a powerful, and worrying, conclusion. A few years ago, investors thought interest rate cuts worked. Back then, the Federal Reserve was typically rewarded for taking decisive action. During the dark days of 2001, for example, when the US equity market was in freefall and the economy was in recession, the dollar rallied, helped along by the sheer aggression of the Fed's monetary easing. The message was simple: the economy might have broken down, but the Federal Reserve knew how to fix it.
That optimism has gone, to be replaced by a growing scepticism. Interest rates have already fallen a long way in the US but there is, as yet, absolutely no sign of any beneficial effect. Indeed, it's as if financial investors have almost given up on America. In the early years of this decade, they gave the US economy the benefit of the doubt, replacing their earlier purchases of equities with investments in new-fangled mortgage-backed securities. These, though, were ultimately no more than loans to a housing market which has now turned to dust.
The Fed's latest rescue efforts have fallen on deaf ears. The dollar's value is plunging against virtually everything. The euro is now worth a remarkable $1.56. Sterling's weakness earlier in the year has partly reversed, rising through $2.02. Oil prices have reached $110 per barrel. Gold has hit $1,000/oz. And the yen temporarily jumped through the ¥100 level against the dollar.
The yen's strength is particularly astonishing. Japan's currency is, after all, controlled by a central bank which, on Wednesday, might find itself without a governor (Toshihiko Fukui is stepping down and Japan's politicians have been unable to agree on his replacement). The markets seem to prefer a rudderless yen to a dollar which is rapidly heading up the creek.
So what is to be done? It's important, first of all, to recognise that there is no quick-fix solution. We're witnessing a breakdown in trust within the financial system on a scale that doesn't lend itself toeasy answers.
Certainly, the policy initiatives announced so far haven't worked terribly well. In some cases, this is hardly surprising. Hank Paulson, the US Treasury Secretary, called last week for banks to raise more capital. But if this means a fire sale of assets, or a rights issue, this is hardly going to provide additional stability. Moreover, if the banks went down this route, their shareholders would presumably not be terribly happy. The best that can be hoped for is an injection of foreign public money, through the activities of sovereign wealth funds, but this approach contains its own controversies.
I think it's now time for some revolutionary initiatives. To my mind, three policy options need to be considered.
First, there has to be an immediate review – and possible suspension – of fair value accounting. This now-ubiquitous technique could be re-described as the tyranny of mark-to-market. If, for example, a bank made a loan yesterday at 5 per cent, yet the loan could be made today at 10 per cent, this is recorded as a loss. Mark-to-market measures the value of assets according to current market conditions, not according to the longer-term aims of borrowers and lenders. If, in the short-term, markets dive, mark-to-market leads to huge losses. These, in turn, contribute to the fire-sale of assets. It is a potential source of huge instability, and we're seeing its effects on almost a daily basis.
Second, central banks (and the governments which back them) need to do more than simply lend cash and liquid assets to the private sector. The Fed's announcement earlier in the week that it was prepared to lend Treasuries to a limited number of primary dealers in exchange for a wider range of collateral, including AAA-rated mortgage-backed securities, was seen by some as a magic bullet. It is no such thing. Ultimately, the authorities need to deal with the ongoing collapse in demand for an ever-widening range of financial assets and the obvious way to do that is to become buyers of last resort. This is, of course, highly controversial because it means that taxpayers will have to clear up the mess left behind by others. Better, though, to clear up a mess than be faced with a meltdown.
Third, it's time to think about so-called "helicopter money". While most people understandably worry primarily about the US housing market, the real threat to our economic security is now coming from the financial system. If this doesn't function, central bank rate cuts won't have much of an impact. Over the last few months, as banks increasingly have been forced to cut back on their lending, the power of the central banks has steadily waned.
Helicopter money bypasses the banking system. The government issues bonds directly to the central bank and the cash that's created can be placed directly in the pockets of households and companies through a series of tax cuts. The recipients, in turn, are then able to spend more easily, freed from the liquidity constraint imposed upon them by the banking system.
This is all controversial stuff. Accounting conventions are called into question. Taxpayers have to cough up. And the independence of central banks is at least temporarily undermined via helicopter money. Better, though, to get out of the Russian roulette game altogether than to end up with a bullet in your skull.

[Satellite Weapon]

President Bush talks about the economy

http://www.youtube.com/v/OFzEPyWa7OA

[Freedom-Fries]

Does that mean 100% tax to everyone for 9 months? Use a daisy-cutter on the debt clock, that's how you get rid of it

[wholagun]

President Bush talks about the economy

http://www.youtube.com/v/OFzEPyWa7OA

I cannot understand how there are some people in the US that still support him. Luckily he's out next year, nonetheless the damage has been done.

[Mastermind]

We are now staring down the double barrel of a global economic disaster shotgun. In the last three weeks the US FED has dumped hundreds of billions of dollars into an unprecedented financial system disaster...artificially propping up financial institutions that were choked to death on the politically correct stage of liberal grandiose schemes. The “borrowed” money for those bail-outs did not come from U.S. Taxpayers...not this time. It came from China and Dubai.

There has not been one word during this latest political fiasco we are calling a "Presidential Campaign Season" about the disaster that is facing Social Security...that was last year's political whipping child....not one word about our total dependence on middle east and third world nations oil. Few words on the NAFTA job suction machine, very little mention of the disaster congress enacted last November with the energy and environment security act that is fully designed to damage the U.S. economy and starve millions to death in needy nations across the globe.

The public has been finessed into a jig saw puzzle of tiny self interest groups that have completely lost their national identity (not only in the U.S) and are now behaving like mewling kittens rather than real citizens with a country to run. Bush & Co seem more content playing tidily winks in the WH rather than getting proactive on any issue of real importance...basically, we are now on a down hill slip-n-slide that has us accelerating to the garden rakes and broken bottles piled at the bottom.

What ever happens...which ever of the three idiot light-weight contenders for president who win....this is not going to be fun for anyone.

It is a perfect storm of social, political and economic disaster that has never been experienced in modern times….at least not since 1939.

The only thing I look forward to in the whole thing is getting to see the faces of the astonished loon masses once the bottom really falls out....it won't do me or my family any good...but, it's still going to be entertaining for a few minutes.

[wholagun]

^^^ hey if you think US is the only one that suffers from NAFTA you're wrong, here in Canada jobs have been lost as well. Until Mexico comes online with their envrionmental standards pays higher wages US and Canada will continue to suffer. As far as Im concerned Mexico should not be in NAFTA, they are far too behind both Canada and US. Reason why EU works well is b/c the countries are more of less on the same level of development and have standards in place that government trade and business standards. NATFTA is only good for big companies and not for the average Joes. Until there is more governenment control like in Europe it will always be ineffective, in Canada that would not be a hard sell, but try and sell that to American conservatives and republicans.

[9mmRifle]

Shell replacing oil reserves faster than depletion



http://afp.google.com/article/ALeqM5hhNl-gk-2NQ-NnFKxylgFv0WDx-Q


Oil giant Royal Dutch Shell said on Monday that it was replacing proved oil and gas reserves faster than they were being depleted despite the sale of a part of a major asset in Russia.Chief executive Jeroen van der Veer said as oil reached another record high price: "This is an unprecedented phase of activity for Shell in a new energy landscape."
In an annual report, the company said net capital investment would amount to 26-27 billion dollars (16.4-17.0 billion euros) this year.
The size of reserves is a central factor in the valuation of an oil company.
In turn, global prospects for their replacement is central to assessments of the future price of oil and therefore the incentives for oil groups to invest in new projects.
Shell said that last year its overall replacement rate was well above 100 percent of the depletion rate and that its net proved reserves of oil and gas amounted to 11.9 billion barrels of oil equivalent, the standard measure.
This was despite the sale of same assets, and most notably of half of the interest of 55 percent in the Sakhalin-2 gas project in Russia, estimated to cost 20 billion dollars.
Excluding the effect of such disposals and of acquisitions, it increased reserves last year by 1.5 billion barrels of oil equivalent, set against production of 1.2 billion barrels, yielding a replacement ratio of 124 percent.
The extra reserves came from projects in Qatar, Norway, Australia and the United States, a Shell spokesman said. If production from oil sands were included, the replacement ratio would rise to 127 percent.
The spokesman declined to comment on the effect of the disruption to Shell's Nigerian oil projects to the estimate of overall reserves.
Some analysts had expected Shell to write off some of its reserve assets in Nigeria because of security and operating problems which has resulted in a suspension of some output.
Shell said its estimate of its resources had risen to 66 billion barrels of oil equivalent and it put the exploitation life of these resources at 55 years owing to the improved performance of exploration activities.

Obamanomics: Target Big Oil, Too


http://blogs.wsj.com/environmentalcapital/2008/03/20/obamanomics-target-big-oil-too/?mod=googlenews_wsj

[Mastermind]

^^^ hey if you think US is the only one that suffers from NAFTA you're wrong, here in Canada jobs have been lost as well. Until Mexico comes online with their envrionmental standards pays higher wages US and Canada will continue to suffer. As far as Im concerned Mexico should not be in NAFTA, they are far too behind both Canada and US. Reason why EU works well is b/c the countries are more of less on the same level of development and have standards in place that government trade and business standards. NATFTA is only good for big companies and not for the average Joes. Until there is more governenment control like in Europe it will always be ineffective, in Canada that would not be a hard sell, but try and sell that to American conservatives and republicans.
So, we at least agree on my only statement about NAFTA...it is a giant job sucking mahichine. I re-read my post and I could not find anything that said the US was the only one suffering under NAFTA.

By the way, just wait until we see the activation of the future globalization trade agreements. The Pacific Rim agreement is going to make us all equal.../s

[annihilation]

I cannot understand how there are some people in the US that still support him. Luckily he's out next year, nonetheless the damage has been done.


Still he had 8 years to ruin this country. And if this guy has his way, we will be in iran before he leaves.

[wholagun]

So, we at least agree on my only statement about NAFTA...it is a giant job sucking mahichine. I re-read my post and I could not find anything that said the US was the only one suffering under NAFTA.

By the way, just wait until we see the activation of the future globalization trade agreements. The Pacific Rim agreement is going to make us all equal.../s


I wasn't implying that you did.
I was stating that American isn't the only one that is losing jobs and not benefiting. Many Americans think they are the only ones that are suffering under NAFTA.

[wholagun]

Still he had 8 years to ruin this country. And if this guy has his way, we will be in iran before he leaves.


who is to say you won't be