Discussion: The Economy, National Debt, And Other Financial Issues II

[Franklin Richards]

The dollar is just fine.

 

[Comics N' Toons]

The dollar is just fine.

really? evidence please? What about the trade deal that happened between Japan and China on the last day of 2011? That was the one that will eventually phase them out of supporting the dollar and you say the $$$ is doing fine?

They are the 2nd and 3rd largest economies.

 

[Paradoxium]

The decoupling theory is bunk. China and Japan are two countries who are great for shorts, and they need to continue to trade with the United States to keep up their currency sham. You are also ignoring credit destruction and money velocity. 2008 was actually a deflationary event, should another credit crunch occur again it too will be deflationary.

 

[Comics N' Toons]

Deflation is followed by inflation. The dollar is fiat money. When inflation happens it is because the dollar is weak. If hyperinflation happens, it's over.

What about credit destruction. Credit doesn't mean much and hasn't since the housing bubble burst. Some Banks go so far as to not even lend money anymore as a precautionary measure

Money velocity is one of the only things holding the dollar in place. The $ is dependent upon trade and the use and flow of the $ according to other nations. RESERVE CURRENCY and all that jazz. If we lose the $ as the world's reserve currency, the dollar will die!

 

[wiegeabo]

The banks will start lending again because we're not letting them do anything else.

They stopped lending, they're primary source of income...then wondered why their revenues dried up. And they've been trying to do everything but lend to get their revenues back up, but the people aren't letting them get away with it. That's why BofA keeps getting slapped so hard every time they try one of their silly schemes to avoid lending money.

So if they want to stay in business, they'll start lending again. And after this meltdown, hopefully they got burned enough to start lending smartly rather than just to anybody who could breath.

 

[Paradoxium]

Dude 55 trillion credit market. That dwarfs a lot.

 

[Paradoxium]

Printing one trillion or two, with reduced money velocity is like a fart in the tornado.

I am not denying the final chapter is hyper inflation, but in coming years or decades its probably going to be a shorter revolving doors of boom and busts.

 

[Comics N' Toons]

The truth is that the United States financial system is starting to come apart at the seams. America simply cannot run a half trillion dollar trade deficit and a trillion dollar federal government budget deficit each year indefinitely. There is no way in the world that those twin deficits are sustainable.

If the Federal Reserve thinks that it can solve these problems by printing up a bunch of money and throwing it on to the table they are sadly mistaken. The main thing that is going to do is cause a dramatic drop in the faith that other nations have in the U.S. dollar and in U.S. government debt.

But without faith in the U.S. dollar and in U.S. government debt, the world financial system is headed for a world of hurt. If the rest of the world starts rejecting U.S. dollars and U.S. Treasuries, the fallout will be horrifying.

 

[8wid]

The United States is bankrupt. By the November election or not soon after, the US debt ratio will top its own GDP. Hyperinflation is instilled and a global depression is likely to happen too. America will essentially go the way of the Soviet Union.

 

[enterthemadness]

Doom and gloom. Its what future is. >_< .

If by some miracle, Gary Johnson polls 15% in PPP--he is at 7%--he will be invited to the national debates. Let's say he wins the Election! Can GJ fix America or is it too late?

 

[Comics N' Toons]

The United States is bankrupt. By the November election or not soon after, the US debt ratio will top its own GDP. Hyperinflation is instilled and a global depression is likely to happen too. America will essentially go the way of the Soviet Union.

so you are saying America will end in about a year? What are we to do for money then? Food? Our entire ways of life would be gone... It can't happen so soon!

 

[enterthemadness]

America caving in on it's debt. Sometime before 2050. Probably. 2012/2013?

 

[Destructus86]

The truth is that the United States financial system is starting to come apart at the seams. America simply cannot run a half trillion dollar trade deficit and a trillion dollar federal government budget deficit each year indefinitely. There is no way in the world that those twin deficits are sustainable.

If the Federal Reserve thinks that it can solve these problems by printing up a bunch of money and throwing it on to the table they are sadly mistaken. The main thing that is going to do is cause a dramatic drop in the faith that other nations have in the U.S. dollar and in U.S. government debt.

But without faith in the U.S. dollar and in U.S. government debt, the world financial system is headed for a world of hurt. If the rest of the world starts rejecting U.S. dollars and U.S. Treasuries, the fallout will be horrifying.

This is true.

The sad thing is most people think things are getting better....sticking our heads in the sand won't save us.

 

[enterthemadness]

This is true.

The sad thing is most people think things are getting better....sticking our heads in the sand won't save us.

Even if unemployment is going down, thus improving, it doesn't fix the national debt or weak dollar. We spend and borrow too much. It's scary...it's depressing.

 

[Pagan]

Even if unemployment is going down, thus improving, it doesn't fix the national debt or weak dollar. We spend and borrow too much. It's scary...it's depressing.

it's our military and our tax code. fix them and you're good.

 

[wiegeabo]

it would be a start. but only a start

 

[hippie_hunter]

it's our military and our tax code. fix them and you're good.

It's not at all as simple as you make it out to be. Fixing our military budget and tax code still wouldn't be enough to make things good. An excessive defense budget and an outdated entitlement system combined is what is causing the real problems.

 

[Pagan]

It's not at all as simple as you make it out to be. Fixing our military budget and tax code still wouldn't be enough to make things good. An excessive defense budget and an outdated entitlement system combined is what is causing the real problems.

I disagree. fix the tax code and cut the military 66% and you're good.

you could do a couple of other things to help shore up medicare and SS.
take the cap off of ss deductions. why do people making over the cap be allowed to keep that when the rest of us have to pay that on all our income?

tax capital gains like normal income. stop all oil company subsidies. nationalize health care and you've solved most of our economic problems.
if you really wanted to solve them all you'd need to rework a lot of trade agreements.

 

[hippie_hunter]

I disagree. fix the tax code and cut the military 66% and you're good.

you could do a couple of other things to help shore up medicare and SS.
take the cap off of ss deductions. why do people making over the cap be allowed to keep that when the rest of us have to pay that on all our income?

tax capital gains like normal income. stop all oil company subsidies. nationalize health care and you've solved most of our economic problems.
if you really wanted to solve them all you'd need to rework a lot of trade agreements.

What kind of reality do you live in? Most of the stuff you want will never, ever happen. Nationalizing health care is not going to do anything in fixing our fiscal state, cutting 66% of the military budget is unrealistic politically, stopping all oil subsidies is unrealistic and will never happen except for being used as talking points for political gain. We need realistic proposals that can happen, not idealism that will go nowhere.

 

[Pagan]

What kind of reality do you live in? Most of the stuff you want will never, ever happen. Nationalizing health care is not going to do anything in fixing our fiscal state, cutting 66% of the military budget is unrealistic politically, stopping all oil subsidies is unrealistic and will never happen except for being used as talking points for political gain. We need realistic proposals that can happen, not idealism that will go nowhere.

the only thing stopping them from being reality is people like you who don't believe that they could ever happen. it's a self fulfilling prophecy. as long as people have a defeatist attitude nothing ever will get changed.

we have no excuse for our defense spending. other than the paranoia instilled by the media and politicians. we don't need to be the world police.
We don't need to hang our children's future from a cross of iron.
Oh we can't give you an education or healthcare. We have to blow some more stuff up halfway across the globe because these defense contractors must be kept in business.

 

[8wid]

so you are saying America will end in about a year? What are we to do for money then? Food? Our entire ways of life would be gone... It can't happen so soon!

America as a nation isn't going anywhere, but it's economic and military domination of the world is over plain and simple. The greed of these last wars and the financial crisis put an end to that. There won't be US bases sitting around the Middle East or Europe anymore, a smaller US Navy not designed for policing anymore, a reduced military size in general, fuel prices remain at the current prices permanently, the US economy is the third largest in the world behind China and India etc. It's just a matter of time.

 

[Pagan]

another thing the US needs to address. The very expensive war on drugs

Incarceration nation

 

[hippie_hunter]

the only thing stopping them from being reality is people like you who don't believe that they could ever happen. it's a self fulfilling prophecy. as long as people have a defeatist attitude nothing ever will get changed.

we have no excuse for our defense spending. other than the paranoia instilled by the media and politicians. we don't need to be the world police.
We don't need to hang our children's future from a cross of iron.
Oh we can't give you an education or healthcare. We have to blow some more stuff up halfway across the globe because these defense contractors must be kept in business.

Sorry dude, sure I believe that the military budget should be much smaller, but we need to look at such issue's realistically. Cutting the military budget by 60% is never going to happen. Cutting all oil subsidies is never going to happen.

Instead of focusing on solutions that have no chance of passing, we need to look at solutions that can happen.

 

[wiegeabo]

They can happen. I think they'll need to happen.

But it's going to take a couple of decades, at a minimum.


The system got where it is today by years upon years of incremental increases. It'll take years upon years of incremental decreases to reverse it.

Even if all the politicians were willing to do massive cuts and restructuring, there's no way they can do it in massive sweeps. Because the systems in place would collapse from the sudden lack of funding and resources. For example, if you slash the military by 60%, what happens to all of those suddenly unemployed service personnel. What happens to all of the civilians employed by military contracts? And those working for the suppliers? It's a big chain reaction.

So thinking it's just that simple is rather naive because it's not. If the economy was in good shape, it might be able to withstand it. Sort of like ripping off a bandaid quickly, a little pain, then the markets realign and it's all better. Problem is, in this case, the little pain would probably last 5-10 years and effect millions. And this isn't a good economy.

 

[Destructus86]

The dollar is just fine.

And that thinking is exactly why we keep digging the hole we are stuck in.