Discussion: The Economy, Fiscal Cliff, National Debt, And Other Financial Issues IV

[wiegeabo]

The Treasury can only raise money by selling debt or by cutting spending.

The government could also raise taxes, A LOT, but that would take an act of Congress, so...

raise the Debt Ceiling it is.

 

[Kelly]

Actually raising the debt ceiling doesn't help us "pay off our debt", it essentially, helps us keep paying the interest on our debt.


And those of you with 401K's and 403B's like myself, watch this very closely....because we have lots of money wrapped up in bonds...not a cool thing to be watching at the moment.

 

[Destructus86]

 

[The Question]

We've already explained, in a fair amount of detail, with source citation even, that that isn't how the debt ceiling works.

In this case, there's no way to "remove the ****" without raising the debt ceiling.

 

[The Question]

Like, look at the image that you posted and notice for a second that our debt is over four times the size of our national budget and about seven times the size of our tax revenue. Trying to pay off our debt with the money we already have instead of raising the debt ceiling would result in every single publically funded program, including the military and all private sector government contracts, being defunded and **** down. This would result in unemployment skyrocketing to levels that would make the great depression look good while simultaneously chucking every social program designed to help the poor. And it still wouldn't be enough to pay off our debt.

Raising the debt ceiling is necessary to generate the revenue and fund programs that we've already commissioned so that we can, eventually, eliminate our debt. It's how we did it in the Great Depression. That's how paying off debt on this scale works.

And, as weig said, not raising the debt ceiling doesn't even stop us from incurring more debt, because expenditures are set by separate legislation. It just makes the treasury unable to pay for those expenditures. Which actually increases our debt, except this time without the ability to eventually pay it off.

 

[dnno1]

The thing is that scenario presumes that all the debt has to be paid in a short period of time. The truth of the matter is that a lot of that debt may not have to be paid until 30 years from now and some may not have to be paid at all. The scenario of the family with $146,710 of debt is realistic if they have a 30 year mortgage on a home that represents most of the debt. They don't have to pay it all back at once (they have 30 years to do that) and the cuts that they made ($38.50) may be sufficient to meet their short term budget.

 

[hippie_hunter]

And I counter your picture with the Cracked.com article: "5 Scary Myths You Probably Believe About the Economy"

Spoiler

Pundits love to tell us that the American economy is circling the drain due to the recession and politicians throwing money out the window like it's made of bees. To hear them say it, America is always just on the cusp of a Mad Max-style blasted hellscape.

But in the midst of all that doom and gloom, there are a whole bunch of very smart people saying that things aren't nearly as bad as the inflammatory headlines make it look. We aren't saying they're right (spoiler alert: nobody can actually predict the economy), but there's no reason why we should always assume the pessimists are right, either. So if nothing else, it will improve your mood a bit to hear ...

5. No, China Isn't on the Verge of Owning America

What You've Heard:

As hysterical ads like this tell us, American spending is so off the charts that President Obama has to fly to China every year and beg on his hands and knees for the Chinese president to lend America money. With the Chinese owning most of America's debt, it's only a matter of time before China asks for their money back and we all become slaves to the dastardly communists, because that's totally how it works.

But Actually ...
First of all, China only owns 8 percent of the total U.S. debt. That's probably not enough to repossess Rhode Island, let alone the whole United States. And Washington isn't begging China for money, either. The debt that we owe to China comes from treasury bonds, which are kind of like IOUs, which they buy because it helps to keep China's currency low, which is better for trade. And because they sell so much **** to America, China basically has to buy our debt as a way to unload the trillions of American dollars we're giving them.

Also, for those worried about China swinging their economic dick around, China can't just recall their debt. First of all, you can't do that with treasury bonds, and even in a fictitious world where you could, it would be economic suicide for China. What, you thought the "debt" was money they lent because they felt sorry for the U.S. and wanted to bail them out, like lending your buddy 30 bucks until payday? No, they buy debt because it's a good deal for them.

And while it's easy to panic about the amount of debt that America owes to other countries, people forget that the U.S. buys other countries' debt too, so much that it almost cancels out the issue. For every dollar the U.S. owes a foreign country, it is owed 89 cents in foreign debt. America actually makes more money off of buying other people's debt than other people make buying theirs. And rest assured, those countries are probably also running terrifying ads about cackling American students making fun of their economy.

#2 Deficits Aren't Always Bad

What You've Heard:

It's a simple principle -- if you make $2 and spend $5, then you are $3 in debt and need to tighten your purse strings, Spendy McSpenderson. But Obama and Congress must have been four hours into a rampant coke binge when this very simple concept was explained to the rest of us and they can't seem to get it through their heads. We're in a recession, and yet they still choose to run deficits, because they're big-spending nanny state socialist wackjobs.

But Actually ...

The big problem when trying to understand deficit and budget stuff is that everyone wants to compare it to their own household budget (a favorite tactic of pundits). It's understandable that people want to try to simplify the issue, but this is one of those times when simplifying makes it wrong.

While it seems absurd to think that a country, a business, or anyone else can "spend their way out of hard times" (because it sounds like a drunk spending more money on gin in order to forget the problems caused by yesterday's gin), for every government, running a deficit is just something they have to do when the economy is bad in order to keep it from getting worse.

​

It works like this: When the economy goes into recession, people obviously have less money. That means the government has to cut taxes to give people a break. That means less revenue, and on top of that, the government has to spend more on unemployment benefits, food stamps, and such because a lot more people need them now. So basically the government has less money and higher bills. And you want the government to keep spending that money, not because we're all communists who want to be enslaved by Big Brother, but because that spending helps the government to stabilize the downfall.

The biggest problem with an economic downturn is the potential for a death spiral -- you lose your job, so you don't have money to spend at McDonald's, then McDonald's closes and all those people lose their jobs, then they don't have the money to spend at the grocery store, then it closes, etc. The government, however, can use its borrowing power to break that chain reaction -- you lose your job, but you have food stamps, which you spend at the grocery store, so it doesn't have to close and its employees can keep drawing paychecks. That way you don't get into a situation where everyone is out of work at once -- you keep things afloat until people can find work again.

Then once things have turned around -- and this is key -- you start paying those deficits back. Oh, look at this -- the U.S. deficit has been slashed by a third just over the last few months. How about that.

​

But the point is, this is why the political arguments about the deficit tend to be somewhat full of **** -- it's not a war between the hard-working private sector and the evil oppressive big government. It's about how much money the government should pump into the private sector to keep it afloat, and how much debt it can take on.
Which finally brings us to ...

1. America Doesn't Have a Debt Crisis (Not Yet, Anyway)

What You've Heard:

If there's one thing politicians and pundits like to preach doom and gloom about, it's the oncoming debt Armageddon. The United States is spending money like a lottery winner with terminal cancer and racking up debt much faster than it can repay it. The U.S. now owes $16 trillion, a number so high, we don't even know how many zeroes it has. Politicians frequently use a bunch of fancy graphs to highlight the fact that America is running headlong into financial ruin. Washington, they say, is going to have to curb its spending fast or else we're going to wind up like Greece -- utter collapse, followed by rioting in the streets (as a common talking point goes).

But Actually ...

The raw number is mind-boggling, but that number only matters when compared to the size of the economy. For instance, if you personally wound up $20 million in debt, your only option would be faking your own death and starting a new life in some foreign land. Donald Trump, on the other hand, takes on $20 million in debt on impulse purchases he barely notices. It all comes down to how rich you are, and the U.S. economy is the Donald Trump in that scenario (the total assets of the USA are around $200 trillion).

So for instance, one way to measure how screwed a country is involves measuring public debt against gross domestic product (to compare their debt to their economy). For the U.S., that ratio is 73 percent, which seems high, but it means we're in better shape than Germany, the United Kingdom, Canada, and other countries you don't think of as being on the verge of getting their land repossessed (Japan, for example, is at 214 percent).

​

The other important thing isn't the amount of money that the government owes, but rather the interest on that amount, which is what it actually pays back. That isn't very much, considering that interest rates are at historic lows -- it's very cheap for the U.S. to borrow right now. Also remember that a growing economy can turn the situation around fast -- the government took on a lot of debt during World War II, but the growth of the economy afterward made the debt irrelevant.

Now, again, this isn't a "free government jet skis for everybody!" situation. For instance, there is a real problem with the population getting older and the fact that old people are expensive to take care of. But the U.S. is not like Greece -- the danger is less "Road Warrior apocalypse" and more "higher taxes, later retirement, and possible inflation."

​

None of those are good things, but let's not abuse the word "crisis" here. It's OK to step back, take a deep breath, and appreciate that things could be much, much worse.

http://www.cracked.com/article_20454_5-scary-myths-you-probably-believe-about-economy.html​

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[The Question]

http://disinfo.com/2013/02/the-forg...dian-towns-experiment-with-guaranteed-income/

The Forgotten History Of A Canadian Town’s Experiment With Guaranteed Income

by JacobSloan on February 28, 2013 in News

A town in Canada tried the simplest method to end the ills associated with poverty: give everyone a minimum sum of money. Via the Dominion:

Try to imagine a town where the government paid each of the residents a living income, regardless of who they were and what they did. For a four-year period in the ’70s, the poorest families in Dauphin, Manitoba, were granted a guaranteed minimum income by the federal and provincial governments.

Until now little has been known about what unfolded over those years in the small rural town, since the government locked away the data that had been collected and prevented it from being analyzed.

But after a five year struggle, Evelyn Forget, a professor of health sciences at the University of Manitoba, secured access to those boxes in 2009. Forget has begun to piece together the story by using the census, health records, and the testimony of the program’s participants. What is now emerging reveals that the program could have counted many successes.

Unlike welfare, which only certain individuals qualified for, the guaranteed minimum income project—called “Mincome”—was open to everyone. It was the first—and to this day, only—time that Canada has ever experimented with such an open-door social assistance program. The program came to a quick halt in 1978 when an economic recession hit Canada.

Initially, the Mincome program was conceived as a labor market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work. It turns out they did.

Only two segments of Dauphin’s labor force worked less as a result of Mincome—new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren’t under as much pressure to support their families.

In the period that Mincome was administered, hospital visits dropped 8.5 per cent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits. In today’s terms, an 8.5 per cent decrease in hospital visits across Canada would save the government $4 billion annually.

If a guaranteed income program can target more people and is more efficient than other social assistance programs, then why doesn’t Canada have such a program in place already? Perhaps the biggest barrier is the prevalence of negative stereotypes about poor people. “There’s very strong feelings out there that we shouldn’t give people money for nothing.”

http://www.dominionpaper.ca/articles/4100

A Town Without Poverty?
Canada's only experiment in guaranteed income finally gets reckoning
by VIVIAN BELIK

WHITEHORSE, YK—Try to imagine a town where the government paid each of the residents a living income, regardless of who they were and what they did, and a Soviet hamlet in the early 1980s may come to mind.

But this experiment happened much closer to home. For a four-year period in the '70s, the poorest families in Dauphin, Manitoba, were granted a guaranteed minimum income by the federal and provincial governments. Thirty-five years later all that remains of the experiment are 2,000 boxes of documents that have gathered dust in the Canadian archives building in Winnipeg.

Until now little has been known about what unfolded over those four years in the small rural town, since the government locked away the data that had been collected and prevented it from being analyzed.

But after a five year struggle, Evelyn Forget, a professor of health sciences at the University of Manitoba, secured access to those boxes in 2009. Until the data is computerized, any systematic analysis is impossible. Undeterred, Forget has begun to piece together the story by using the census, health records, and the testimony of the program's participants. What is now emerging reveals that the program could have counted many successes.

Beginning in 1974, Pierre Trudeau's Liberals and Manitoba's first elected New Democratic Party government gave money to every person and family in Dauphin who fell below the poverty line. Under the program—called “Mincome”—about 1,000 families received monthly cheques.

Unlike welfare, which only certain individuals qualified for, the guaranteed minimum income project was open to everyone. It was the first—and to this day, only—time that Canada has ever experimented with such an open-door social assistance program.

In today’s conservative political climate, with constant government and media rhetoric about the inefficiency and wastefulness of the welfare state, the Mincome project sounds like nothing short of a fairy tale.

For four years Dauphin was a place where anyone living below the poverty line could receive monthly cheques to boost their income, no questions asked. Single mothers could afford to put their kids through school and low-income families weren't scrambling to pay the rent each month.

For Amy Richardson, it meant she could afford to buy her children books for school. Richardson joined the program in 1977, just after her husband had gone on disability leave from his job. At the time, she was struggling to raise her three youngest children on $1.50 haircuts she gave in her living room beauty parlour.

The $1,200 per year she received in monthly increments was a welcome supplement, in a time when the poverty line was $2,100 a year.

“The extra money meant that I was also able to give my kids something I wouldn't ordinarily be able to, like taking them to a show or some small luxury like that,” said Richardson, now 84, who spoke to The Dominion by phone from Dauphin.

As part of the experiment, an army of researchers were sent to Dauphin to interview the Mincome families. Residents in nearby rural towns who didn't receive Mincome were also surveyed so their statistics could be compared against those from Dauphin. But after the government cut the program in 1978, they simply warehoused the data and never bothered to analyze it.

“When the government introduced the program they really thought it would be a pilot project and that by the end of the decade they would roll this out and everybody would participate,” said Forget. “They thought it would become a universal program. But of course, the idea eventually just died off.”

During the Mincome program, the federal and provincial governments collectively spent $17 million, though it was initially supposed to have cost only a few million.

Meant to last several more years, the program came to a quick halt in 1978 when an economic recession hit Canada. The recession had caused prices to increase 10 per cent each year, so payouts to families under Mincome had increased accordingly.

Trudeau's Liberals, already on the defensive for an overhaul of Canada's employment insurance system, killed the program and withheld any additional money to analyze the data that had been amassed.

“It's hugely unfortunate and typical of the strange ways in which government works that the data was never analyzed,” says Ron Hikel who coordinated the Mincome program. Hikel now works in the United States to promote universal healthcare reform.

“Government officials opposed [to Mincome] didn't want to spend more money to analyze the data and show what they already thought: that it didn't work,” says Hikel, who remains a strong proponent of guaranteed income programs.

“And the people who were in favour of Mincome were worried because if the analysis was done and the data wasn't favourable then they would have just spent another million dollars on analysis and be even more embarrassed.”

But Forget has culled some useful info from Manitoba labour data. Her research confirms numerous positive consequences of the program.

Initially, the Mincome program was conceived as a labour market experiment. The government wanted to know what would happen if everybody in town received a guaranteed income, and specifically, they wanted to know whether people would still work.

It turns out they did.

Only two segments of Dauphin's labour force worked less as a result of Mincome—new mothers and teenagers. Mothers with newborns stopped working because they wanted to stay at home longer with their babies. And teenagers worked less because they weren't under as much pressure to support their families.

The end result was that they spent more time at school and more teenagers graduated. Those who continued to work were given more opportunities to choose what type of work they did.

“People didn't have to take the first job that came along,” says Hikel. “They could wait for something better that suited them.”

For some, it meant the opportunity to land a job to help them get by.

When Doreen and Hugh Henderson arrived in Dauphin in 1970 with their two young children they were broke. Doreen suggested moving from Vancouver to her hometown because she thought her husband would have an easier time finding work there. But when they arrived, things weren't any better.

“My husband didn't have a very good job and I couldn't find work,” she told The Dominion by phone from Dauphin.

It wasn't until 1978, after receiving Mincome payments for two years, that her husband finally landed janitorial work at the local school, a job he kept for 28 years.

“I don't know how we would have lived without [Mincome],” said Doreen.“I don't know if we would have stayed in Dauphin.”

Although the Mincome experiment was intended to provide a body of information to study labour market trends, Forget discovered that Mincome had a significant effect on people's well being. Two years ago, the professor started studying the health records of Dauphin residents to assess the impacts of the program.

In the period that Mincome was administered, hospital visits dropped 8.5 per cent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits.

It's not hard to see why, says Forget.

“When you walk around a hospital, it's pretty clear that a lot of the time what we're treating are the consequences of poverty,” she says.

Give people financial independence and control over their lives and these accidents and illnesses tend to dissipate, says Forget. In today's terms, an 8.5 per cent decrease in hospital visits across Canada would save the government $4 billion annually, by her calculations. And $4 billion is the amount that the federal government is currently trying to save by slashing social programming and arts funding.

Having analyzed the health data, Forget is now working on a cost-benefit analysis to see what a guaranteed income program might save the federal government if it were implemented today. She’s already worked with a Senate committee investigating a guaranteed income program for all low-income Canadians.

The Canadian government's sudden interest in guaranteed income programs doesn't surprise Forget.

Every 10 or 15 years there seems to be a renewed interest in getting Guaranteed Income (GI) programs off the ground, according to Saskatchewan social work professor James Mulvale. He's researched and written extensively about guaranteed income programs and is also part the Canadian chapter of the Basic Income Earth Network, a worldwide organization that advocates for guaranteed income.

GI programs exist in countries like Brazil, Mexico, France and even the state of Alaska.

Although people may not recognize it, subtle forms of guaranteed income already exist in Canada, says Mulvale, pointing to the child benefit tax, guaranteed income for seniors and the modest GST/HST rebate program for low-income earners.

However, a wider-reaching guaranteed income program would go a long way in decreasing poverty, he says.

Mulvale is in favour of a “demo-grant” model of GI that would give automatic cash transfers to everybody in Canada. This kind of plan would also provide the option of taxing higher-income earners at the end of the year so poorer people receive benefits.

A model such as this has a higher chance of broad support because it goes out to everybody, according to Mulvale. GI can also be administered as a negative income tax to the poor, meaning they'd receive an amount of money back directly in proportion to what they make each year.

“GI by itself wouldn't eliminate poverty but it would go a heck of a long way to decrease the extent of poverty in this country,” says Mulvale.

Conservative senator Hugh Segal has been the biggest supporter of this kind of GI, claiming it would eliminate the social assistance programs now administered by the provinces and territories. Rather than having a separate office to administer child tax benefits, welfare, unemployment insurance and income supplement for seniors, they could all be rolled into one GI scheme.

It would also mean that anybody could apply for support. Many people fall through the cracks under the current welfare system, says Forget. Not everybody can access welfare and those who can are penalized for going to school or for working a job since the money they receive from welfare is then clawed back.

If a guaranteed income program can target more people and is more efficient than other social assistance programs, then why doesn't Canada have such a program in place already? Perhaps the biggest barrier is the prevalence of negative stereotypes about poor people.

“There's very strong feelings out there that we shouldn't give people money for nothing,” Mulvale says.

Guaranteed income proponents aren't holding their breaths that they'll see such a program here anytime soon, but they are hopeful that one day Canada will consider the merits of guaranteed income.

The cost would be "not nearly as prohibitive to do as people imagine it is," says Forget. “A guaranteed minimum income program is a superior way of delivering social assistance. The only thing is that it's of course politically difficult to implement.”

And Switzerland's trying to do it nationwide right now:

http://mobile.reuters.com/article/idUSBRE9930O620131004?irpc=932

Honestly, I can't think of a reason why the United States shouldn't do it. Thoughts?

 

[Hobgoblin]

And I counter your picture with the Cracked.com article: "5 Scary Myths You Probably Believe About the Economy"

Spoiler

Pundits love to tell us that the American economy is circling the drain due to the recession and politicians throwing money out the window like it's made of bees. To hear them say it, America is always just on the cusp of a Mad Max-style blasted hellscape.

But in the midst of all that doom and gloom, there are a whole bunch of very smart people saying that things aren't nearly as bad as the inflammatory headlines make it look. We aren't saying they're right (spoiler alert: nobody can actually predict the economy), but there's no reason why we should always assume the pessimists are right, either. So if nothing else, it will improve your mood a bit to hear ...

5. No, China Isn't on the Verge of Owning America

What You've Heard:

As hysterical ads like this tell us, American spending is so off the charts that President Obama has to fly to China every year and beg on his hands and knees for the Chinese president to lend America money. With the Chinese owning most of America's debt, it's only a matter of time before China asks for their money back and we all become slaves to the dastardly communists, because that's totally how it works.

But Actually ...
First of all, China only owns 8 percent of the total U.S. debt. That's probably not enough to repossess Rhode Island, let alone the whole United States. And Washington isn't begging China for money, either. The debt that we owe to China comes from treasury bonds, which are kind of like IOUs, which they buy because it helps to keep China's currency low, which is better for trade. And because they sell so much **** to America, China basically has to buy our debt as a way to unload the trillions of American dollars we're giving them.

Also, for those worried about China swinging their economic dick around, China can't just recall their debt. First of all, you can't do that with treasury bonds, and even in a fictitious world where you could, it would be economic suicide for China. What, you thought the "debt" was money they lent because they felt sorry for the U.S. and wanted to bail them out, like lending your buddy 30 bucks until payday? No, they buy debt because it's a good deal for them.

And while it's easy to panic about the amount of debt that America owes to other countries, people forget that the U.S. buys other countries' debt too, so much that it almost cancels out the issue. For every dollar the U.S. owes a foreign country, it is owed 89 cents in foreign debt. America actually makes more money off of buying other people's debt than other people make buying theirs. And rest assured, those countries are probably also running terrifying ads about cackling American students making fun of their economy.

#2 Deficits Aren't Always Bad

What You've Heard:

It's a simple principle -- if you make $2 and spend $5, then you are $3 in debt and need to tighten your purse strings, Spendy McSpenderson. But Obama and Congress must have been four hours into a rampant coke binge when this very simple concept was explained to the rest of us and they can't seem to get it through their heads. We're in a recession, and yet they still choose to run deficits, because they're big-spending nanny state socialist wackjobs.

But Actually ...

The big problem when trying to understand deficit and budget stuff is that everyone wants to compare it to their own household budget (a favorite tactic of pundits). It's understandable that people want to try to simplify the issue, but this is one of those times when simplifying makes it wrong.

While it seems absurd to think that a country, a business, or anyone else can "spend their way out of hard times" (because it sounds like a drunk spending more money on gin in order to forget the problems caused by yesterday's gin), for every government, running a deficit is just something they have to do when the economy is bad in order to keep it from getting worse.

​

It works like this: When the economy goes into recession, people obviously have less money. That means the government has to cut taxes to give people a break. That means less revenue, and on top of that, the government has to spend more on unemployment benefits, food stamps, and such because a lot more people need them now. So basically the government has less money and higher bills. And you want the government to keep spending that money, not because we're all communists who want to be enslaved by Big Brother, but because that spending helps the government to stabilize the downfall.

The biggest problem with an economic downturn is the potential for a death spiral -- you lose your job, so you don't have money to spend at McDonald's, then McDonald's closes and all those people lose their jobs, then they don't have the money to spend at the grocery store, then it closes, etc. The government, however, can use its borrowing power to break that chain reaction -- you lose your job, but you have food stamps, which you spend at the grocery store, so it doesn't have to close and its employees can keep drawing paychecks. That way you don't get into a situation where everyone is out of work at once -- you keep things afloat until people can find work again.

Then once things have turned around -- and this is key -- you start paying those deficits back. Oh, look at this -- the U.S. deficit has been slashed by a third just over the last few months. How about that.

​

But the point is, this is why the political arguments about the deficit tend to be somewhat full of **** -- it's not a war between the hard-working private sector and the evil oppressive big government. It's about how much money the government should pump into the private sector to keep it afloat, and how much debt it can take on.
Which finally brings us to ...

1. America Doesn't Have a Debt Crisis (Not Yet, Anyway)

What You've Heard:

If there's one thing politicians and pundits like to preach doom and gloom about, it's the oncoming debt Armageddon. The United States is spending money like a lottery winner with terminal cancer and racking up debt much faster than it can repay it. The U.S. now owes $16 trillion, a number so high, we don't even know how many zeroes it has. Politicians frequently use a bunch of fancy graphs to highlight the fact that America is running headlong into financial ruin. Washington, they say, is going to have to curb its spending fast or else we're going to wind up like Greece -- utter collapse, followed by rioting in the streets (as a common talking point goes).

But Actually ...

The raw number is mind-boggling, but that number only matters when compared to the size of the economy. For instance, if you personally wound up $20 million in debt, your only option would be faking your own death and starting a new life in some foreign land. Donald Trump, on the other hand, takes on $20 million in debt on impulse purchases he barely notices. It all comes down to how rich you are, and the U.S. economy is the Donald Trump in that scenario (the total assets of the USA are around $200 trillion).

So for instance, one way to measure how screwed a country is involves measuring public debt against gross domestic product (to compare their debt to their economy). For the U.S., that ratio is 73 percent, which seems high, but it means we're in better shape than Germany, the United Kingdom, Canada, and other countries you don't think of as being on the verge of getting their land repossessed (Japan, for example, is at 214 percent).

​

The other important thing isn't the amount of money that the government owes, but rather the interest on that amount, which is what it actually pays back. That isn't very much, considering that interest rates are at historic lows -- it's very cheap for the U.S. to borrow right now. Also remember that a growing economy can turn the situation around fast -- the government took on a lot of debt during World War II, but the growth of the economy afterward made the debt irrelevant.

Now, again, this isn't a "free government jet skis for everybody!" situation. For instance, there is a real problem with the population getting older and the fact that old people are expensive to take care of. But the U.S. is not like Greece -- the danger is less "Road Warrior apocalypse" and more "higher taxes, later retirement, and possible inflation."

​

None of those are good things, but let's not abuse the word "crisis" here. It's OK to step back, take a deep breath, and appreciate that things could be much, much worse.

http://www.cracked.com/article_20454_5-scary-myths-you-probably-believe-about-economy.html​

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Bless you, HH. I've been looking for that article. I need to send it to my relatives that only talk about the economy.

 

[Kelly]

I watched the Secretary of Treasury on with Chris Wallace, I have never in all of my years of watching politics ever saw an interview of this length where the interviewee did not actually answer one question that was asked. It was amazing....

 

[wiegeabo]

House GOP offering debt ceiling deal that White House calls encouraging.

http://www.npr.org/blogs/thetwo-way...es-deal-on-debt-ceiling-more-talk-on-shutdown

Doesn't do anything about the shutdown, but avoiding an economic meltdown is rather important too.

 

[wiegeabo]

Aaaand we are now $17 trillion in debt

http://www.washingtontimes.com/news...n-first-t/?utm_source=RSS_Feed&utm_medium=RSS

 

[enterthemadness]

Aaaand we are now $17 trillion in debt

http://www.washingtontimes.com/news...n-first-t/?utm_source=RSS_Feed&utm_medium=RSS

Aaaaand Ron Paul thinks we will go the way of the Soviet Union sooner or later. BTW, it's natural news and they quote him from a recent interview he did at infowars. So, grain of salt, but the man is smart, so probably legit article.

http://www.naturalnews.com/042560_Ron_Paul_US_empire_collapse.html

I think we will collapse. When....I dunno. I think the national debt needs to go up a bit more...for it to happen. I do think in my life time we will collapse though.

 

[The Question]

So, here's a video explaining pretty succinctly why raising the debt ceiling is smart and why being in debt as we are isn't actually a bad thing.

[YT]3ugDU2qNcyg[/YT]

 

[wiegeabo]

There's nothing wrong with debt.

There is something wrong with crippling debt.

 

[chaseter]

Kicking the can down the road solves everything.

Also, increasing debt devalues the currency in your pockets so by all means support making your dollar buy less.

 

[hippie_hunter]

There's nothing wrong with debt.

There is something wrong with crippling debt.

Personally, I would be more concerned with the deficit more than the debt. The debt as it is, is really just a safe haven for investors and allows money to keep flowing in our economy. Even when we're in surplus the national debt is going to go up. The deficit on the other hand is more of a sign that finances are a bit out of control.

 

[SV Fan]

http://seattletimes.com/html/localnews/2022180905_electionspendingxml.html

Washington ballot issues draw money from near, afar

Initiative 522 would only change the law in Washington state, but you wouldn’t know it by looking at the lists of campaign donors.

Of the record-setting $22 million raised to combat the proposal to label genetically engineered food, exactly $550 has come from individuals and companies based in Washington, according to the Public Disclosure Commission.

The initiative’s proponents, although more locally funded, have received $5.8 million of their $8.4 million from outside Washington.

“This is really out-of-state interests fighting over how to influence law in our state,” said Matt Barreto, a political-science professor at the University of Washington.

 

[SV Fan]

http://www.ibtimes.com/minimum-wage...our-pay-could-spark-national-dialogue-1458344

But voters in the Garden State also sent another clear message: They want a higher minimum wage, something their newly re-elected governor didn’t want. In January of this year, Gov. Christie vetoed a bill that would have raised the state minimum hourly wage to $8.50 from $7.25, along with incremental increases tied to inflation. Shortly after the veto, Democrats in the state legislature vowed to put the issue before the people in November elections. And they did, with a statewide ballot initiative that was approved by 61 percent of New Jersey voters.

and

And voters in some municipalities aren’t waiting for state lawmakers to play catchup. In the Seattle suburb of SeaTac, voters on Tuesday approved a measure to increase the minimum wage to $15 per hour. That's currently the highest minimum wage in the nation and it will affect workers at SeaTac International Airport, which serves Seattle and Tacoma. It’s a small victory for supporters of such pay hikes, but it’s one that could set the tone for a national conversation on living wages.

If people want minimum wage increased this is the way to do it. If I was the Democrats I would try get min wage increases as ballot initiatives in the 2014 elections.

 

[SV Fan]

More on the minimum wage increase

http://www.bloomberg.com/news/2013-...yond-u-s-minimum-wage-as-congress-stalls.html

About 76 percent of Americans said they would support raising the minimum to $9 an hour in a hypothetical national referendum, according to a Gallup poll conducted Nov. 5-6. The survey’s margin of error is plus or minus 4 percentage points.

It should be pointed out increasing the minimum wage polled in the high 50s with Republicans, so if the GOP House is true to their word fight for what people want(Obamacare polled negatively at 55% and that was enough to get them to fight against Obamacare)

 

[SV Fan]

http://www.forbes.com/sites/rickung...ing-charity-food-drive-for-its-own-employees/

Walmart Store Holding Thanksgiving Charity Food Drive -- For Its Own Employees!

Recently, Yahoo’s 24/7 Wall Street column sought to identify the nation’s 10 worst paying employers, based on the methodology ultizied by the National Employment Law Project in its 2012 report, “Big Business, Corporate Profits, and the Minimum Wage.”

To the surprise of nobody, Walmart came out on top, achieving the distinction of being the worst paying company in America.

Still, when it comes to Walmart, there are certain analysts and observers who can’t seem to remove the blinders. They continue to insist that Walmart pays its workers an average of over $18.00 per hour when even the company acknowledges that the average full time, hourly rate is $12.83—and that number includes the salaries of some of the highest paid employees in the averaging such as the CEO who earned $20.7 million last year.

Maybe, at long last, the blinders will come off when these deniers are forced to come to grips with the fact that Walmart associates are paid so poorly that a store in Canton, Ohio, located in the northeastern part of the state, now holds an annual, Thanksgiving drive to collect canned foods for fellow Walmart employees in need.

 

[enterthemadness]

MSNBC...oh McD's...it's a video btw.

http://www.msnbc.com/the-cycle/watch/tone-deaf-aid-to-employees-from-big-retailers-68636227664?FB




McD's is out of touch with it's employee's...

 

[Hobgoblin]

California $2.2 Billion Surplus

http://www.bloomberg.com/news/2013-11-20/california-analyst-forecasts-surplus-of-2-2-billion.html

California is poised to shake off a legacy of budget deficits with an operating surplus more than doubling to $2.2 billion by the end of June on tax increases and gains in stocks, the state’s nonpartisan Legislative Analyst’s Office said.

The surplus, projected to reach $3.2 billion in the following year, should be used to expand programs and pay down $6.6 billion in recurring borrowing that Democratic Governor Jerry Brown calls a “wall of debt,” the analyst said today in a report.

Income taxes in the most populous U.S. state, fueled largely by capital gains from the performance of the stock market, provide the biggest share of revenue. Voters in 2012 raised rates to 13.3 percent on those making $1 million or more, the most of any state, and boosted sales levies.

“The state’s budgetary condition is stronger than at any point in the past decade,” Legislative Analyst Mac Taylor said in the report. “The state’s structural deficit —- in which ongoing spending commitments were greater than projected revenues -— is no more.”

 

[SV Fan]

California $2.2 Billion Surplus

http://www.bloomberg.com/news/2013-11-20/california-analyst-forecasts-surplus-of-2-2-billion.html

But but but increasing taxes on people will hurt the state......

 

[wiegeabo]

Good to see the capital gains is paying off, even though the high corporate taxes keep forcing businesses out.

I'm not looking forward to seeing what the minimum wage hike will do, especially in small towns and cities like mine.