Nation's Debt: It's Not Being Rescued, It's Being Moved Around 70 comments
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So, have you heard that the U.S., as a whole, is overextended? Have you heard that the federal government is “rescuing” the bad debt in the private sector by taking it on as their own, really all our children’s own, hopefully not-quite-as-bad debt?
We’re just moving the debt around in our economy, not getting rid of any of it. For proof one need only look up at the National Debt Clock in NYC, which in the past week had to give up its dollar-sign digit for a “1″. The owner of the sign is working on getting a couple more digits added to the clock. Why do I worry that folks might interpret that as an increase in the debt/credit limit of the country?
(The debt clock shows gross debt, which as of yesterday was at $10.2 trillion, which includes the debt the federal government “owes” to itself through the Social Security trust fund.)
The “debt held by the public,” what the government owes to others, both in this country and abroad, is just under $6 trillion, but it’s gone up just as fast as the gross debt in the past week, because all of this new debt we’re issuing to finance the rescue is real debt, really owed to others–not just to the trust fund. Want to learn more about the different measures of debt? See this page on Concord’s website.
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This article has 70 comments:
People around the world are saying: "I thought Americans were the wealthiest, most money-smart people on earth. What happened?"
the problem is with loafers like yourself being given bad loans that you have no intention of paying off. Get off your ass and be productive instead of complaining about it to noone in particular.
The govt has done more than enough to try and help out... In the end this is just capitalism at its worst. Blame it on greed.
The reason that the founding fathers didn't allow for regulation at the federal level is that they knew, as we are seeing now, that this would lead to the government being run by business and that business would eventually strip the population of its wealth. In a free market, every single penny comes from the population. If the population has no money, the market fails.
The government is now trying to replace the population as the source by giving money directly to business, but business will still have no one to sell their products to no matter how much you give them. The only fix for this is to put money in the hands of the population, but our government no longer thinks in terms of the Citizens.
Now that Congress has spent, given away, and wasted $11 trillion of the population's money, we have a problem.
If you want to stop this madness, go here.
ewebsmith.com/self/Sta...
Buy some farmland in a temperate climate near freshwater, purchase lots of seeds and jars, pull the family back together, cook meals at home, learn to get by with less and save your money :)
This is not a problem with capitalism; this is a problem with corrupt politicians not doing their jobs, and us, as their bosses, not doing ours.
That's IRRESPONSIBLE growth, not SUSTAINABLE growth. So what we have now is the inevitable result.
The stock market has taught us that slow growth is not enough. Now it'll have to adjust.
The S&%t has already hit the fan, government please don't toss more money in the toilet, instead let's set up some long-term solutions, BUT START TODAY !
Oh yeah, and also, maybe the government could stop chucking my f#cking money out the window.
Reaganomics are dead. We should name this economic failure after him.
Don't take your eye off the ball. This economic meltdown we are experiencing is one, just ONE, of the things we are gonna get to have fun with thanks to peak oil.
There have been many people over the years that told us that this was going to happen if we didn't change our ways.
Probably the best thing that you can do for yourself and your family is SHUT THE TV OFF, and start doing your own critical thinking and the next time someone says something to you that you find disturbing and threatening. Find out for yourself if the disturbing things you hear are true, before saying. Oh, that's crazy talk, and I don't believe it. With some things, it really doesn't matter if you believe them or not, they are still true. The era of political correctness is done. Time to pull the head out of the sand, clean the bugs out of your ears, roll up the sleeves, you are gonna get dirty on this one.
How do we get out of it? In the short term, we should never bail out the losers who played this game. Instead, we should wage war on our crumbling infrastructure, spending hundreds of billions on projects that will create jobs and leave us with capital improvements instead of stupid, mindless, ego driven wars. Rather than "tighten our belts" as McCain idioticaly proclaims -- the intellectual equal to bleeding a sick patiet -- we should address the scariest part of today's news, the dramatic cut back in state and local infrastructure projects. We should reestablish all of the post Depression walls, reinstateme the prohibitions on banks owning insurance companies and investment houses, and other businesses and require anyone taking deposits and making loans to be a bank insured by the FDIC.
The right wing hates Roosevelt which is ironic. Roosevelt saved capitalism by putting referees on the field of play. We need them back.
If you give your favorite political party a get-out-of-jail-free card this November you essentially teach them that is OK to screw you over and that you really don't mind all that much.
Billions were made through this bubble, there is plenty of blame to be spread around, however, where will the magic come from?
pacificgatepost.blogsp...
It is no coincident that under President Clinton saw the large job creation in US history where 25 jobs was created by under 8 years of President Bush only less than 2 million jobs created BUT trillions of dollars of debt as assumed by the people.
This debt burden couple with social security & other obligation, US debt will only increase in the near future.
Thank God the idoit will be out of the office before he could bankrupt the US.
1) Reinstate Glass-Steigel. Wally, you and Roosevelt are/were absolutely right. I blame both Clinton and the Republican congress at the time.
2) Break up Fannie, Freddie, and AIG and auction off the parts to private parties over the next few years. Use the DOJ to ensure that they never become monopolies again.
3) Tax investments at the same level as actual work (at what level and flat vs. progressive are other topics). What we need is more production and less speculative frenzy (3 destructive bubbles in 1 decade!). Why does our tax code encourage the flipping of houses and investments and discourage wage earning?
4) Reconsider the balanced budget amendment - you remember, that idea from the 90's that was our only chance of avoiding the crushing national debt we now face? Also, ban earmark expenses. Only structural change will end deficit spending. Public pressure has failed. The future will be bleak otherwise.
5) Wrap it up in Iraq and Afghanistan and accept that these will be unstable countries for our lifetimes because the people there have crazy values and the military can't change that. Put the vets to work on #6.
6) Make energy independence a priority. Build light rail in all cities. Tax gasoline to discourage overconsumption. Fix the crime and school problems in inner cities to halt the spread of exurbs. Make developing new sources of energy a top scientific and engineering priority. The alternative is economic failure and an even more expensive war at some point in the future when the oil is cut off.
7) Quit accepting disadvantageous trade deals from communist and fascist countries such as China and Russia just for the sake of free trade. We're going broke thanks to China's currency manipulations. Russia is threatening worldwide democracy with our oil money. Saudi Arabia still pays for jihadist mosques with our oil money. So much for the theory of trade expanding freedom. Time to learn and move on.
8) Start thinking and investing long term for the first time in decades. Invest in schools, infrastructures, and inner-cities. Fair or unfair, the next generation will have to shoulder the burdens that the baby-boomers took on. If we don't prepare them, we're preparing for a national decline and poverty.
9) Ban monetary lobbying. It's bribery. Why do we accept this? Where do you think most of the corruption and budget looting comes from? This one reform would do more to attract the right kind of people to government than any other idea. As it is now, public service is a good place to get filthy rich, which attracts the greedy self-interested conmen we have now.
Nice to have company in the "unpatriotic" poor and middle class.
"Off budget" accounting ring any bells?
War will cost 50 billion and will be repaid from Iraqi oil funds sound familiar?
Not putting the war in the budget--thats ok!
well charge it and not include it in our budget.
Guess who the cheerleaders were selling us this mendacity?
Bush and the necon cabal.
Yes, blame congress, lots of blame to go around, but Bush spent his political capital on bankrupting our country, lying to us the entire way about the need to war, and the need to deregulate, the need to lower taxes.
War on terror was really the "war on truth".
Freemarkets are the solution to all the worlds problems (that and a huge military budget) ---and can only thrive unfettered by sissy regulations.
We loved it while credit flowed.
Never have so many have been fooled for so long.
Smart brief article.
Marty
It's nice to know that there are a lot of smart people out there... differences may exist on the fringes, but the meat and potatoes of your arguments are rather consistent.
Sorry Diane, I think your commentary has run away on it's own!
Excuse me , China can't sell those US's IOU , because there is no buyer in this world, US is good in export - junk food and toxic bad debts.
selling those US debt - will be declaring war with US.
no nations dare to do that.
look at iraq, - framed with possesion of weapon of mass destruction and follow by invasion.
there is nothin we ordinary citizens can do.
let Bush buy his time and leave the office with all the wealth he had made. he just only have 2 months to wait.
The biggest problem I have right now is these commercials and websites offering to buy up your unused/scrap gold, simply because when the dollar tanks (soon) you will have to buy/sell with whatever replacement (fiat) currency these greedy SOB's come up with.
So in addition to Gold, you're going to need to stock up on food, water Ammo, Guns to make it through the tough times to come. If you want more info about how these cash for gold scams work and more importantly how they'll affect you...see www.CashforGoldScams.c...
It's going to get alot worse before all's said and done, I expect that we may not even have an election this year and good o'l "W" can be the 'dictator' he always wanted to be!
Ohh as for early troop withdrawls....don't clap too loudly, they're commin home to show of their urban pacification skills they learned in Iraq/Afghanistan....do... that make ya prouder than sh*t!
After many boom/bust cycles caused by this practice (fractional reserve banking) and many wars financed by it, we find ourselves in the Year of Our Lord 2008 having another financial bust.
Just thought you might like to know.
George W. Bush managed to bankrupt another company. United States of America. But he's excused. It was all God's work he was doing.
Let's appoint him Secretary General of the UN once he leaves office, shall we?
I guess Bush has to think so or else he might have to face the facts of the damage he has done. Lincoln pulled the same stunt, I reckon.
May Bush live long and serve as a reminder: "A man has got to know his limitations."
Yes, and everyone is behaving as if it is possible to print capital. Maybe it's wishful thinking.
It's not just mind boggling, it's patently impossibe! Except for the narrowly defined war powers, and some very arcane executive order privileges, the president, any president, has no power to effect the economy or enter into debt. The bully pulpit affirded by the presidency allows the president, any president, a platform from which to advocate for and make recommendations for polices they would like to see addressed, but thats it. Remember your "root words" from early grade school? The Executive is empowered to "execute", and not "legislate policies. Congres, and only Congress, has control over the budget, financial services, banking, and all the regulatory and oversight committee's that pertain thereto. Congress has been controlled by the Democrats for better than two years now, and they've done nothing save for obstruct reasonable efforts to rein in the nonsense that was occurring on Wall Street, in our Banks, and in the Credit Markets. Indeed, the only substantial legislation that our Democrat Congress managed to pass was the egregious revamp of our bankruptcy laws making it even more difficult for those in bankruptcy to discharge high interest credit card debt. Doubtless both party's carry some responsibility for what's happening, but; like it or not, Democrats have been in charge of all the financial services, banking, regulatory and oversight committee's and caucuses since our financial sector started it's decline. Indeed, Democrats taking control of Congress, and the slide in our economy seem interconnected. Senator Joe Biden is singularly responsible for helping out his cronies in banking and financial services by working to pass this bankruptcy monstrosity. Indeed, it's as though he and party leaders were prescient regarding the present financial fiasco, and were planning ahead to insure that their buds in banking and Wall street managed a "clean get away".
The entire premise of "cutting taxes" was based on "starving the beast". Essentially, limiting the size of government by limiting their ability to raise revenue at will. Decades have shown that good times or bad, government, if left to it's own devices, will spend all it takes in, and borrow against future intakes. The vast majority of the time that Congress spends in session (at one time, being elected to Congress was a part time job, and members received only a stipend while Congress was in session. Those elected to Congress were constrained to remain gainfully employed, and there were no pensions or perks), is spent on legislation or re-jigging taxes, tarriffs, and fees, increasing revenue streams.
The way our economy is structured, and how our tax base operates (citizens have no say at all in whether our taxes go up), the only pragmatic solution to the cancerous expansion of a self serving government bureaucracy, is to "starve the beast". Indded, it's axiomatic that the first step to socialism is to convince citizens that government is "entitled" to any portion of their earnings. This was established by legislation that funded our nations civil war. The taxation this established was to have ended when the war debt had been repaid. Government found that confiscatory tax policy was more suitable for "government expansion and control" than relying on tarriffs, tolls and fees, and the rest is history. In no other enterprise or endeavor is it acceptable to charge consumers for goods and services that they never receive or benefit from! Arguably, no amount of taxation will ever be enough. Government is already our nations largest employer, with many government employees able to opt out of social security (citizens can't but gov workers can), and with government being one of the few employers offering "fixed return" pensions (rather to the 401K's that are being slaughtered by the current financial mess), expanded government only adds to this economic fiasco. There are no good arguments in favor of increased taxation for anyone, reach or poor. A flat tax might be arguably a better way of funding government, but, unless all, including the poor, are taxed at this rate, a reverse incentive will be created, and only encourage marginal earners to stay where they are, while the costs of goods and services, and government spending will continue to escalate. It's been speculated that by the middle of this century, better than 1 in 4 working age citizens will be employed by government. No economy can stand that level of taxation!
That's what they set out to do, and guess what? That's exactly what they did.
Congress and the courts are supposed to be the presidential limitations. Anyone who aspires to be president should be challenged by their nature and temperment, and passion to shoot for the stars. Our founders gave this a lot of though, hence the system of checks and balances that an independent Executive, Legislative, and Judicial branch would provide. No one saw the "debilitating" effect that a two party political system, partisanship, would have on the implementation of this vision. A Democrat controlled Congress, and a court that legislates from the bench are the result of decades of corruption on behalf of both party's.
Government 101, the President can use his bully pulpit to suggest, recommend, and advocate, or oppose legislation. The president cannot appropriate funds, nor can the president incur debt (save for the war powers act, but Congress still authorizes even that).
Is G.W. a dimbulb on the tree? Demonstrably yes. Is he solely or even majority responsible for this financial fiasco? No.
Voting out Congressional Elites, the self serving power brokers, and long-serving pariahs in the House and Senate, is the solution to what ails this country. Until and unless voters set aside their partisan "team spirit", and vote out incumbents, nothing will improve, regardless of who's living at 1600. We need to make "voter enforced" term limits our mantra, our grail, our committment to democracy and our fellow citizens. Two terms is plenty for any focused individual to achieve success in either the House of the Senate. If, we the people, establish a patter or regularly voting out incumbents, we can solve corruption, and special interest control of Washington. If can only force ourselves to "flush" Congress periodically, we can end the corruption, money influenced, special interest serving, earmarking culture that usurps the will of America's Citizens. If voters routinely "take out the trash" every two terms, lobbyists and special interests will find no value in pandering to politicians. There would always be new blood and fresh ideas on the committee's and caucuses that control our daily lives. New politicians who, rather than worrying about their next campaign, will pay attention to doing the best job they can, in the shortest amount of time, in order to serve their communities, families, and friends back home in the district. By ending the "fiefdoms" that long-serving politicians create, we can end the self interested bureaucratic impass that has created the "us against the government" mentality that denies our democracy and our liberty. Who knows, if we change Congressional diapers more often, perhaps good, honest, intelligent, community service motivated citizens will again find value in running for office. Serioualy, do we really need to see any more Lawyers elected of office? If the past 40 years of government abuse and corruption have taught us anything, it's the danger of allowing either party to control both Congress and the White House. Giving either party a veto proof margin would be anathema to our economy, our democracy and a danger to our social and cultural interests. Before you enter the polls this fall, stop and think. Think not just about your partisan interests. Forget about :getting even" for what the "other side" has done to you (hell, they've done it to us all), and remember that regardless of which party, these people, particularly those serving the longest, are corrupt and have it in their nature to protect their own self interests at any cost. Before you vote the straight party ticket, think about your friends and family, your neighbors, the people you don't know, and even the people you don't like. This election may be our last opportunity to send a message that we, the people are "mad as hell, and we're not going to take it anymore". This may be our last chance to demand that our will, and only our will, serve as guidance for our governance. This may be our last chance to tell Congressional elites and power brokers "thanks, you've done enough", and send them back to the private sector. Think of it as voting in self defense! By turning out Congressional Elites, the party annointed, the Power Brokers, the long-serving pariahs and incumbents in Congress, we can begin to take back control of our government, change the balance of power and tenure in Congress, and marginalize the damage that either an Obama or a McCain presidency will cause! What a surprise that would be for the media, pundits, the talking heads, and in particular, the self serving politicians and bureaucrats who put self interests before those of America's Citizens!
I doubt everyone in government except Ron Paul.
American society today does not tolerate imperfection. Whether its lackluster short term results in the executive financial world, an 18 year old not doing well on his SATs and being looked down upon (not everyone who changes the world in great ways goes to a top 50 college... there are many paths to the goal!), or a Presidential candidate proposing an economic platform that may not help America in the next 4 years but will eventually lead our economy to a normal, sustainable level. We have come to see non-perfect results as failures.
Many people out there think that the American economy is not "where it should be" in the marketplace. We don't think that it's worth it to try to artificially engineering our economy back to to its supposed pinnacle - worth it in terms of the debt that our children will be assuming, in terms of the short term high's grounded on nothing but air.
To me, $700 billion for a bank bailout sounds like an effort by the government, on behalf of the people, to reestablish Amerca's former role in the world-wide economy. But the people are worried that this is another artificial inflation of our economy's value to cover up for the losses caused by what we now know was an artificial inflation of value in the market.
I love this country but I dont want to be back on top if that means we are going to fall even harder the next time around. Like a lot of Americans out there I want the corporations that made bad choices to pay for those choices and we can wait it out till the results correct themselves. In the meantime all I ask of my government is that they protect those who cannot protect themselves, specifically people who will need to live off their investmetns within the next 5-8 years (retirees and those close to retirement).
Opinions?
Government will do what it always does since Keynes and inflate. I simply note that government cannot print real goods.
An honest monetary system with an unlimited money supply is possible. Competing currencies with 100% reserve requirements is both fair and very flexible.
But if you insist on a monetary policy based on both fraud and theft (via inflation), well, you've been warned.
Dont tell me the president cant affect the economy. Every time he speaks about it the Dow tanks. Government should just stop trying to do anything. They create variables that cannot be accounted for. Whenever this bailout works, if it works, it will only be a short term fix. I'm sure everyone leaving comments is an investor so I hope you guys and myself recoup a satisfactory amount of our investments and then take it out of the economy for good. The country is built on credit not savings which is the equivalent of a house of cards waiting to be blown down. The power is swinging eastwards and 20 years is not that long of a period. Thank you George Bush for making my country a piece of shit. I never thought a Republican would move us so far to the left with all this socialist nonsense...
Yep, the devil has no problem with license, it is liberty he hates.
waf76
It makes me want to go to washington DC and just find a group of our elected officials and begin uncontrolably vomiting and spewing monumentous amounts of chunk all over them. I would hope this impossible feat would I be able to maintain for at least 10 whole minutes. Chasing them and spewing ridiculous amounts of bile and spunge clods upon their heads and persons completely and thoroughly soaking all who have ever written in an earmark or subsidy or a handout to a lobbying group all the way through clothing to the skin with puke. I think that might make alot of us feel better and would get the message across that we as a Nation are fed up with how our lives are being ruined by their innane repetitous inept (but carefully planned to benefit them) policies that do not help anyone in this country without it benefitting them first. Yes they make me sick. They should do the same to you and I hope I see you there vomiting your spew chunks of partially digested cottage cheese and omlettes with bell peppers upon another many shamefull disrespecting politicians. Do it at the local and state level too cause those idiots have been copying Main St. all along. Puke Puke and puke some more. Tell them what you really think and feel. Let them feel it too!
Barf for change. Barf for change. Barf for change. Barf for change.
?:^O> lwolbrrrrgrrggrgaburrg... ?:^O>
Barf for change. Barf for change. Barf for change. Barf for change.
My name is Matt and I approve this message....gluuurrpuhd...
We need leadership in a huge way, and I don't care what 'party' it comes from, we just need it NOW.