"The debt level of the U.S. is disastrous," says Eurogroup chief Juncker, scratching his head...


"The debt level of the U.S. is disastrous," says Eurogroup chief Juncker, scratching his head over why the EU is the "epicenter" of sovereign debt worries. Is he not aware of the U.S. privilege of being able to create the money to service its debt with just a few keystrokes?

Comments (21)
  • Rob Viglione
    , contributor
    Comments (331) | Send Message
     
    EUR and USD solvency are both questionable, but my bet is on EUR collapsing first. Our consumers are the envy of the world, so the big producers want to keep us afloat for as long as possible...
    11 Jun 2011, 05:05 PM Reply Like
  • Tack
    , contributor
    Comments (16276) | Send Message
     
    The U.S. can print dollars, Europe print Euros, and Japan print Yen until the cows come home, so default is impossible unless they all just decide to pull the plug on the printing presses. The real issue with monetary expansions is what will be the real inflation effects, once monetary velocities return to something approximating normalcy.

     

    Right now, monetary expansion has had little effect in increasing monetary velocity, so inflation has been rather less than the quantities of new money would suggest, as most of the money has been piling up on bank balance sheets, commodity speculation, and bonds, rather than adding to demand for goods and services.
    11 Jun 2011, 05:07 PM Reply Like
  • Machiavelli999
    , contributor
    Comments (831) | Send Message
     
    The problem is that Trichet and the Europeans are deciding to stop printing Euros because of perceived inflationary pressures in Germany. And so they are literally destroying Greece and Portugal who can't afford to pay back their debt already and definitely not with an APPRECIATING Euro. They have decided to throw Greece and Portugal overboard because of a little bit of inflation in Germany.

     

    The funny thing is that a default in Greece and Portugal will ultimately destroy the Euro and hurt Germany much more than a little inflation would. And the fact that there are CLUELESS people in Europe in power, like this Juncker guy, who don't understand why US will never default, is the reason why I am so worried about Europe.
    12 Jun 2011, 12:27 AM Reply Like
  • realornot
    , contributor
    Comments (1263) | Send Message
     
    Europe, US and Japan are feeding the inflation fire with more fuel. The rest of Asia is trying to put out the fire by raising rates.
    Something got to give.... The stock market and another recession is what we are looking at.
    11 Jun 2011, 06:00 PM Reply Like
  • PVizzle
    , contributor
    Comments (743) | Send Message
     
    "EUR and USD solvency are both questionable"

     

    What are you talking about? The U.S. is completely different than the U.S. because it is a monopoly supplier of its own currency. The debt to GDP levels in the U.S. are well below what they were at the end of world war two. There can only be a solvency problem in the U.S. if congress decides to stop paying bondholders for some reason. Europe is a completely different story and is a disaster.
    11 Jun 2011, 07:43 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    This is an ugly contest and it is hard to declare a winner when one peels back the layers of the onion. The US has no political will to really manage its debt and Europe has certain member countries with the same problem.

     

    I am starting to come to the belief that if the US collapses so will Eruope and vice versa. The connections between our economies is too great.
    11 Jun 2011, 08:30 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2229) | Send Message
     
    This is another piece of evidence suggesting that perception can become reality. If enough central bankers perceive the US as financially insolvent or financially incapable of dealing with its debt load then the problem in the US will become reality. Playing games, as we are, is fuelling these comments.
    11 Jun 2011, 08:38 PM Reply Like
  • Morocco Bama
    , contributor
    Comments (131) | Send Message
     
    Our debt load is manageable if we act. Ours is more of a political problem than a financial one.
    11 Jun 2011, 08:49 PM Reply Like
  • PVizzle
    , contributor
    Comments (743) | Send Message
     
    " If enough central bankers perceive the US as financially insolvent or financially incapable of dealing with its debt load then the problem in the US will become reality. Playing games, as we are, is fuelling these comments."

     

    How is the U.S. insolvent? It produces its own currency to pay off its debts and its debt-to-gdp is nowhere near historic highs.
    11 Jun 2011, 09:00 PM Reply Like
  • Joe Morgan
    , contributor
    Comments (1608) | Send Message
     
    If politicians really cared for the well being of our Nation, they would have put long-term reforms on Social Security in the 1990s....and they would have not agreed on Medicare with it's exponential and relentless growth in the 2000s...

     

    If politicians really cared, they would have cut spending during the good times, so we could have add debt and boost growth in the bad times without reaching
    such levels in the debt to GDP ratio.....

     

    Now, because of the reckless spending for decades, the freeloading and the incentivizing of parasites, we cannot afford tax cuts to small businesses and
    infrastructure spending....

     

    Our hope, is that innovation and investment takes hold and can buffer the below output potential growth in our economy....

     

    We are still one of the most productive nations in the world, and we can surely climb this wall of worry, but politicians are still searching for scapegoats and they are bashing publicly profitable industries, and this pertains to a real danger for the future....
    11 Jun 2011, 09:05 PM Reply Like
  • PVizzle
    , contributor
    Comments (743) | Send Message
     
    " we cannot afford tax cuts to small businesses and
    infrastructure spending...."

     

    I am confused. How can the U.S. federal government not afford anything when it has spent more money than it has taken almost every year for over 200 years. Clearly the U.S. federal government is not constrained by its revenue as 200 years of data show.
    11 Jun 2011, 09:16 PM Reply Like
  • Joe Morgan
    , contributor
    Comments (1608) | Send Message
     
    Well, if you think we can afford running 1T deficits for the next years.....

     

    Good luck with that reasoning.....
    12 Jun 2011, 08:05 AM Reply Like
  • User 509088
    , contributor
    Comments (1704) | Send Message
     
    "Is he not aware of the U.S. privilege of being able to create the money to service its debt with just a few keystrokes? "

     

    heh heh heh
    11 Jun 2011, 09:08 PM Reply Like
  • Angel Martin
    , contributor
    Comments (1370) | Send Message
     
    As pathetic as DC politicians are, EU politicians are worse, with guys like Juncker as exhibit A.

     

    www.spiegel.de/interna...

     

    I think the best predictor of the future is the past. The US has a 200+ year history of not defaulting on it's debt and not hyperinflating it away - even during the Civil War.

     

    By contrast, Europe has a 200+ year history of repeat defaults, hyperinflations, coups, invasions, revolutions, regime collapses...etc

     

    Constitutional stability? The major anchors of the EU are Germany, France and Italy.

     

    France is on it's 5th Republic since 1789, as well as with three Empires, two monarchical periods, as well as Vichy and the Nazi occupation.

     

    All you have to know about Italy: here is list of their governments since WW2.

     

    www.cosmopolis.ch/engl...

     

    And Germany, the less said the better...

     

    In an economic crisis, I prefer gold, but if i have to choose, I'll take the dollar and US treasuries over the euro and EFSF whatevers any day of the week.
    11 Jun 2011, 09:29 PM Reply Like
  • ctw930
    , contributor
    Comments (14) | Send Message
     
    First off where is the Eurogroup chief getting the idea that he is any position to be talking about any other currency at the moment? Maybe if the Euro was in good shape he could speak up but right now with the Euro pretty much on the verge of collapse and in a lot worse position as the dollar he should just not be talking.

     

    Also the U.S. has been in further debt before and has been bailed out a few times in its history with only minor consequences. (Look up JP Morgan).

     

    People seem to forget that you have to take into account inflation before you talk about how far into debt we actually are. A few billion 70 years ago was worth a whole lot more than a few trillion is worth today.
    11 Jun 2011, 11:46 PM Reply Like
  • HiSpeed
    , contributor
    Comments (1301) | Send Message
     
    The USA wasn't stupid enough to kiss control over its finances completely goodbye by surrendering fiscal sovereignty to an incompetent, Socialist monetary union.
    12 Jun 2011, 01:07 AM Reply Like
  • PVizzle
    , contributor
    Comments (743) | Send Message
     
    Exactly! You simply cannot compare the U.S. to the European Union.
    12 Jun 2011, 03:00 AM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
     
    The US has it's problems, but nowhere near what Europe has. While some countries are not too bad, like Germany, others beside just the PIIGS are getting worse. The main problem is that Italy and Spain may end up pulling the Euro down all by themselves, even without Greece.

     

    France is not doing too well either lately, and appears to be on a downhill slide. PARIS—The Bank of France on Thursday cut its second-quarter growth forecast based on business indicators, providing further evidence of a deceleration of the French economy after the surge in the first quarter. online.wsj.com/article...
    12 Jun 2011, 04:35 AM Reply Like
  • realornot
    , contributor
    Comments (1263) | Send Message
     
    Europe is trying to drag US down into their mud pond. They forgot it is us. Yes, the US taxpayers have saved some of their failing banks during the great bail out. Both Ben and Geitner use our money to bail them out. It is without our consent and knowledge. We will not forget this shameful operation.
    Once again, they are broke and failed again and how dare he is to blame us!!!!
    12 Jun 2011, 03:07 PM Reply Like
  • minecanary
    , contributor
    Comments (1239) | Send Message
     
    The mistake you're all making is discussing the gov't reported debt. Our problems are 10 times worse then the 14 trillion they admit to. You forget the SS money that has already been pilfered, the hapahazard accounting where billions go missing, etc. Kinda like Spain now finding the debts are really a lot higher now the commies have been voted out of power. The U.S. was dead broke before Katrina, Afghanastan, Iraq, etc., etc. The world financial system is going in the crapper and folks will be rioting in the streets. We can't stop the lowlifes here from looting if the lights go out for an hour, let alone if we cut off their food stamps.
    12 Jun 2011, 03:30 PM Reply Like
  • realornot
    , contributor
    Comments (1263) | Send Message
     
    I agree mine. You have to look at all the states are deep in food stamps debts. Government is really scare of riots of the poor.
    It is also wrong that we keep spending on overseas military. Time to heal, it is time to take our military home. Build back a stronger nation.
    12 Jun 2011, 03:40 PM Reply Like
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