No DUplicitous DUpe Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Tue Dec-14-10 10:56 PM
Original message
The Massive Debt Bomb Threatening You And Me
The Massive Debt Bomb Threatening You And Me
posted with permission from http://sane-ramblings.blogspot.com /
You and I are under an enormous threat and practically nothing is said or done about it. The U.S. government runs annual deficits of $1.4 trillion as it hemorrhages red ink. It costs over $200 billion a year just to pay the interest charges on that skyrocketing debt and that's at interest rates near zero.
What happens when interest rates rise beyond the near nothing they are now. Could the annual interest on the debt jump quickly to a half trillion dollars? To a trillion? Of course, if investors get nervous and demand premium rates for their money.
As they watch the President and Congress actually CUT TAXES, not expenses, they are growing nervous. Meanwhile, they see the amount of the debt itself is soaring.
As interest costs skyrocket, where will the money come from to pay for Medicare? Medicaid? Social Security? Education? Military? These will all be slashed severely while taxes will be raised sharply.
As Americans we can sit back and do nothing about our government's gross financial irresponsibility and watch everything we've worked for be jeopardized for if this is allowed to continue our dollar will eventually collapse in spiralling inflation. That is what happens when nations print money to pay their bills.
Or we can raise our voices, confront our problems now and solve them. Politicians consider this approach to be political suicide because it will involve some sacrifice. But it will ensure our nation's financial future and provide a far better tomorrow for you and me and our families and for our brethren throughout the world.
RKP5637 Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Tue Dec-14-10 11:41 PM
Response to Reply #6
9. I'm wondering what the story will be two years from now. I guess
Edited on Tue Dec-14-10 11:42 PM by RKP5637
I don't get it, but I don't see where all of the demand is coming from and where all of the jobs are coming from. The cuts for ten years have not been magical and the effect of the stimulus package has worn out after two years. What then will we be doing two years from now.
This country tries to support all of the things you mentioned without adequate taxation. It gets ridiculous.
Here's what I think will happen. The business community is happy as is ... they have no incentive to hire more people, just take the tax benefit and stay business as usual. Others, take the benefit and invest it, why hire anyone. It's all a fable. Businesses have figured out how to do more with less, employees are a pain to have around. We're moving into a new model for the 21st century of employment creation, but means being used are traditional, now this because all stops have been pulled out with meager results. The old formulas aren't working. Demand is low.
He's doing OK until the bolded section.
It's weird how they can never fathom NOT spending other people's money as a means to cut deficits and debt. They act as if everything the government pays for is so absolutely indispensable and the government is the only/best provider.
Statistical Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Tue Dec-14-10 11:23 PM
Response to Original message
7. Worrying about a debt in a recession is like worrying about price of water as your house burns. n/t
Yes, because leaving people's money in their pocket means there is no way that money would ever find its way into the economy on its own.
That or they assume "The Rich" have some never ending fountain of money. Just cut the goose open and get all the golden eggs at one time.
TexasObserver Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Wed Dec-15-10 01:16 AM
Response to Original message
11. Disagree. Now is NOT the time to worry about the deficit.
This economy needs much more government spending, not less. Talk of deficit reduction right now is not sound.
Based on what?
customerserviceguy Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Wed Dec-15-10 03:18 AM
Response to Reply #11
13. When will it be sound?
When interest rates on Treasury securities are in double digits, or after that?
That's what we're headed for. We have enough debt right now, that even a tripling of the anemic interest rates on government securities (which would still keep them below 10%) would cripple our national economy beyond the wildest tax cut dreams of the most money-hungry Repuke.
heresy
TexasObserver Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Wed Dec-15-10 04:05 AM
Response to Reply #13
14. When employment is full enough that balancing a budget makes sense.
It is folly trying to balance the budget when 10% of the country is unemployed and at least that many are underemployed. Only 5% unemployment can produce the revenues necessary to approach balancing a budget.
How do you spend people into employment and what happens to employment when you stop spending?
What jobs will you provide that some guy investing his own money can't provide?
Maybe there is a reason the market has not invested $800,000 to study the drinking habits of Asian prostitutes.
As soon as the government stop paying for whatever retarded rent-seeking political pay-off you've funded with OPM the job evaporates and the unemployment shoots up again. Why not just leave the money in the economy and let people use it to create jobs for things people actually want and need based on sustained market demand?
And have you ever stopped to think you could be spending so much money that no level of employment would be able to pay it off?
No DUplicitous DUpe Donating Member (1000+ posts) Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Wed Dec-15-10 04:44 AM
Response to Reply #11
15. RE: "This economy needs much more government spending, not less."
Then the government needs more revenue, not less - tax cuts are counter-productive. And what about the military spending? How can you justify that. It is insane, and will bankrupt us all, including all of the social programs we care about. We can't print money to get out of this hole Bush put us in.
The free money supply of the rich is endless for government employee unions but not national defense.
Warren DeMontague Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Wed Dec-15-10 04:52 AM
Response to Original message
17. Cut the military budget in half. Legalize and tax marijuana. Stop incarcerating a million nonviolent
drug offenders.
Then come back and see what the numbers look like.
Methinks he has a vested interest.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x9909Anyway. This thread shows Krugman is losing his hold on liberals.
