The United States of Debt

[moa]

On Sunday on the John McLaughin's One on One program, the Comptroller General of the United States, David Walker, was being interviewed along with budget expert Stan Collender.

Walker said that the true financial debt of the United States is not the $6.4 TRILLION that is often mentioned, but is actually $30 TRILLION! That total debt is equivalent to about three years of US Gross Domestic Product (GDP). Or, it is equivalent to a public debt of $100,000 each for every citizen of the United States.

The obvious conclusion these experts have is that the United State government cannot afford to fund the many promises and obligations it made to very many people. I assume it is doubtful that even enormous tax increases would make much difference, other than hobble the economy and crush the middle class.

Between the public debt and private debt, it would appear America is way over its head in debt. I wonder what this means for the future tranquilty of America when all those Federal IOUs come due?

 

[4v50 Gary]

Start saving $ now. Fire Mineta and privatize TSA security screeners.

 

[ojibweindian]

Easy. Print up tons of money to pay off the debt, then watch as the price of a loaf of bread and a gallon of milk climb to $100K +.

I'm just waiting for the fun to start. I know it will, I just don't know when.

 

[TallPine]

Invest now in precious metals ...




... such as brass and lead.

 

[bountyhunter]

Between the public debt and private debt, it would appear America is way over its head in debt. I wonder what this means for the future tranquilty of America when all those Federal IOUs come due?

That's the problem, they never "come due" if you are the government of the most powerful country in the world because nobody is big enough to force payment, at least not directly. The government will simply borrow more money to pay off any "debts" that it must, and/or print more money. To answer your question about what the long-term effects are, some are:

1) Higher interest rates, since Uncle sam will force the money into short supply if they have to keep borrowing more and more.

2) inflation, if Uncle sam prints more money.

3) Sustained recession, because higher interest rates mean compaies can't afford to invest in their businesses and people can't afford to build homes.

4) gneral economic decline for the simple reason other countries lose confidence in governments who are not conducting themselves responsibly, the same way you won't lend money to a dufus who isn't paying back the other people he already owes.

 

[bountyhunter]

I'm just waiting for the fun to start. I know it will, I just don't know when.

It already has. King george the II is running the Fed charge card over a trillion which will fall onto whatever poor schmuck is in office after him. That will require massive spending cuts and tax hikes, which will make the republicans giddy because they will get to blame it all on the democratic administration who inherited their mess. Politics are such fun.

 

[Master Blaster]

And the reason that Bush has to spend so much now is because someone in Washington (this includes congress) woke up and realized that 8 years of reaping the peace dividend and pandering to public opinion polls left us ill equiped to defend our country and our vital national interests(CHEAP OIL). Under Clinton the effective force of our military was cut but 50% accross the board and more in some areas. We are now spending money to fix these problems.

But certainly the perscription drug benefit, and other actions and pending steps taken have made the situation worse as well. Some of the defense spending is just pork barreling for certain key congressmen and senators home districts.

 

[moa]

bountyhunter, how about a number 5.

Flight of foreign capital investments to safer havens.

And, maybe, a number six. A Depression ala the 1930's, maybe even worldwide.

 

[ThreadKiller]

Vote buying

Wouldn't it be nice if we could get a leader, a real leader, who wouldn't stoop to pandering to the masses. I'm tired of seeing my tax dollars used to buy votes. 15% hike in funding for the NEA!!!! What's wrong with this picture? The NEA shouldn't receive Federal tax monies ever, let alone during a time of economic downturn. But Bush seems to think that will help get him elected and I 'spose it will. A great many of us believe the Federal Government exists for the benefit of them and their bank account.

Of course the big picture is what Bush is spending on domestic issues is nothing compared to what his more liberal Democratic comtemporaries would attempt.

However, the differences between the GOP and the DNC are increasingly difficult to distinguish.

Too many people want something for nothing in this country.

 

[Poodleshooter]

I think George Will got it right in his article this week:

By 2000 conservatives knew that even Americans rhetorically opposed to "big government" are, when voting, defenders of the welfare state. Social Security and Medicare are the two most popular and biggest components of government (together, a third of federal outlays and rising as the population ages)."

Most people WANT big government, which is why George is spending like mad. It isn't a good time to be pro-small government.
Ugh

 

[El Tejon]

30 Tril?

Hmmm, how about a THResque Bake Sale for the government: start selling surplus firearms and ammunition. Just think what THR members would pay for M14s alone!

 

[Waitone]

Actually $30 trillion sounds a little low. When talking heads and other members of the ruling class talk about debt, they refered to Funded debt. The other category is un-funded debt.

In any case federal spending is completely out of control and there will be a price to be paid at some unpredicted point in the future. Lots of Europeans and George Soros would love to see the dollar fall as the world's reserve currency and have the Euro rise to the status. I read an article late last year which said Russia has expressed interest in using another currency for world oil trading.

At some point various economies and governments will feel its time to find another currency. Then the chaos will commence and no politican will be able to stand in the face of the political firestorm.

 

[armoredman]

I wish I could afford to invest in steel and lead, but my other half doesn't believe this is serious......don't forget the Russian Nuke exercises this month.....got BOB?

 

[tyme]

waitone, I'm still not clear on all that and I haven't had a chance yet to investigate. Isn't unfunded debt merely that amount promised but not guaranteed by contract to others? I.E. much of that $23T is future SS payouts, which are of course not guaranteed.

I don't consider that debt. It's stuff that can be fixed by policymakers without defaulting on any payments. The fact that they don't fix it is their problem, not the result of some necessity to pay.

 

[HankB]

rant mode ON

Bush "the Conservative" is spending money at a rate that would even give pause to a drunken sailor in a bordello after four years at sea. And his social programs are a wish list - an EXPENSIVE wish list - for every lefty in Hollywood. He started off with a tax cut, and then did a credible job in Afghanistan. Then things went South as Bush made a hard left turn.

* He signed Campaign Finance Reform, aka the McCain 1st Amendment Repeal Act.

* He has not vetoed any spending bills. Not one. $kaching$

* He greatly expanded Medicare benefits - and this week's latest budget numbers show the cost to be at least 1/3 higher than was predicted when he signed the legislation, less than a year ago. Some are starting to call this horrendously expensive plan "Hillary Care Light." $kaching$

* His administration proposed extending social security payments to Mexicans, including illegal aliens, and proposed building a SS office in Mexico City so illegals would find it easier to apply. And some of the requirements for benefits are LESS stringent for foreigners than they are for American citizens. $kaching$

* Bush wants to reward criminal activity by "regularizing" illegal aliens (don't call it amnesty, though that's what it is.) Illegal immigration is ALREADY up, with illegals getting free health care and illegal's kids in our schools. $kaching$ $kaching$

* And now that he's STARTING to get some criticism from his conservative base, he proposes increasing - rather than abolishing - funding for the NEA. (Anyone else think this is just his way of giving the finger to his conservative critics?) $KACHING$

Maybe he doesn't WANT a second term, and is deliberately throwing the election? Or he's really a closet liberal like his daddy, who just gave the George H. Bush government award to . . . Teddy "Chappaquiddick" Kennedy?

:banghead:

 

[critter]

Currency of the future? AMMO!!

 

[Russ]

This has been true for at least 25 years and perhaps longer. The world keeps on turning. Most of this debt is owed to US citizens (bondholders). The US will not default on this easily and if it does, I hope I am not around to see it.

 

[CZ-100]

Invest now in precious metals ...




... such as brass and lead. ...

I like that

 

[greyhound]

Wouldn't it be nice if we could get a leader, a real leader, who wouldn't stoop to pandering to the masses.

And I thought we had one after 9/11. In my opinion, he did EVERYTHING just right in the immediate aftermaths of the attack except his stupid "go shopping" remarks when Americans were ready to sacrifice for the cause.

The sad thing is, even with the blatant pandering, I'll still vote for him. The Democratic alternative is much worse.:banghead:

 

[Standing Wolf]

I can't tell the Republicrats from the Democans even with a score card.

 

[Omega_7]

hankB

You figured it out. Bush has created the police state and set the course, and now Kerry or another Demo will pick up where Klinton left off. I actually do believe this is the plan.

As far as what to store up on: Freeze dried food. You cannot eat bullets or gold although you better get some of this too, AFTER stocking up on at least 3 years food storage. Beans/rice/sugar/vitamins are good too, but you need MREs and freeze dried (FD will store 20 years in a cool dry place) Store the bulk stuff in 5 gallon buckets or plastic barrels with oxy absorbers. And some concealable handguns. And hi-cap magazines and survival clothing/boots/military packs/tools. And I highly recommend at the least that you get some food grade potassium iodide.. a tyroid radiation blocker mineral.

 

[Bill Hook]

We're not talking nuclear war here, just the breakdown of civil authority. If you've got brass and lead, sad as it is to say, you won't be starving, when you consider all those who don't. Law of the Jungle.

 

[Art Eatman]

I'd have to go looking for the source(s), but I've several times seen it stated that the total--direct debt, unfunded obligations like military and federal employee retirement, plus SS and whatever--comes to around $43 or $44 trillion.

Art