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Thread: Your share of the national debt is now $1.1 million

  1. #11
    The Dude
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    Re: Your share of the national debt is now $1.1 million

    Quote Originally Posted by joG View Post
    True. And they will go on buying it till they don't.

    When to expect that is impossible to say. Only days before Lehman went down people were buying their debt. Then you couldn't give it away.

    The US is still not at that point. But an awful lot of the debt is landing at the fed. That implies not a run but a devaluation and following that inflation. But again it is too early to say. What must be kept in mind is the time dimension. It will take time to work the debt off and the process cannot be controlled once a collapse starts. Do we really want to take that punt?
    Well true, because a. what Lehman was selling was junk; how nobody went to jail over that is beyond me, and b. Lehman can't print its own money. The U.S. goverment's situation is far different than Lehman Bros. was.

    As long as we keep paying our bills, there's no reason for the time dimension to enter into it, barring an unforeseen crash which, as we know, could happen at any moment, but if that happens no amount of debt reduction will save us. We're YEARS from reducing the debt. It's a punt we have no choice but to take, since hamhandedly slashing spending like Leatherface is just going to slow growth.

    I hate to say it, but the only way out of this mess is to spend until we grow ourselves out of it, then worry about the debt.
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  2. #12
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    Re: Your share of the national debt is now $1.1 million

    Quote Originally Posted by Kobie View Post
    Well true, because a. what Lehman was selling was junk; how nobody went to jail over that is beyond me, and b. Lehman can't print its own money. The U.S. goverment's situation is far different than Lehman Bros. was.

    As long as we keep paying our bills, there's no reason for the time dimension to enter into it, barring an unforeseen crash which, as we know, could happen at any moment, but if that happens no amount of debt reduction will save us. We're YEARS from reducing the debt. It's a punt we have no choice but to take, since hamhandedly slashing spending like Leatherface is just going to slow growth.

    I hate to say it, but the only way out of this mess is to spend until we grow ourselves out of it, then worry about the debt.
    After Greenspan's dot.com bubble we spent our way out and were overtaken by the impact of that spending, when the Clinton bubble bust after which we spent our way out less fruitfully. Spending after reaching a certain level of debt begins to become less and less effective. That is why you have to save between bouts. In essence we have built a new bubble in government debt. So, by the way, have the Europeans.

  3. #13
    The Dude
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    Re: Your share of the national debt is now $1.1 million

    Quote Originally Posted by joG View Post
    After Greenspan's dot.com bubble we spent our way out and were overtaken by the impact of that spending, when the Clinton bubble bust after which we spent our way out less fruitfully. Spending after reaching a certain level of debt begins to become less and less effective. That is why you have to save between bouts. In essence we have built a new bubble in government debt. So, by the way, have the Europeans.
    Absolutely true, but we have advantages the Europeans do not.

    The Greenspan dot-com bubble WAS the Clinton bubble.

    I just feel that sucking money out of the economy during a recovery is a terrible idea. Deal with the debt when times are good, not when they're bad. Of course, with that comes making more good times, not creating more poor people while those with wealth sit on it. We need to give them something to invest in.
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  4. #14
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    Re: Your share of the national debt is now $1.1 million

    Quote Originally Posted by Kobie View Post
    In the long term, of course we will have to curtail some spending and increase taxes. However, the best way to combat the national debt is GROWTH. Every burst in economic growth in this country has come through technological breakthroughs. The Internet. The assembly line. Nuclear power. The automobile. The steam engine. Hell, the cotton gin.

    Become a technological leader again, we solve the debt.

    And we're not that far off from that. The U.S. is still a huge producer of much of the world's tech. Most of the production of said tech gets outsourced to places like China, so we're losing on that revenue stream, but the U.S. still produces more viable technology than any country on the planet.
    But will that provide the *jobs* necessary for this growth? Or will they just get shipped off to foreign countries?

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    Re: Your share of the national debt is now $1.1 million

    Quote Originally Posted by WCH View Post
    But will that provide the *jobs* necessary for this growth? Or will they just get shipped off to foreign countries?
    Fair question and, again, one I can't answer without taking a few more econ courses. Which of course raises the question, how do we keep those jobs in this country? I don't think simply "lowering taxes" is the answer.
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