Isnt_It_Just_Money

U.S. Debt May Be Next Economic Crisis

Are you saying the US has to actually produce something of value to someone else to get out of debt? That's such old school no one talks about it. We will get gov parlor tricks instead.


On Jul 06 01:34 AM derryl wrote:

> I was about to ask how a "commitment to fiscal sustainability" could
> possibly be realized in this grotesque deficit environment when Steve
> offered a couple of measures that would begin to trim the spending
> side. But I don't know. I am not convinced that there is any possible
> combination of spending cuts and revenue increases that can restore
> the US budget to a sustainable path starting from where it's at now.
>
>
> Spending cuts mean declining incomes for whoever was receiving the
> spending, which means declining income and other taxes from those
> people, and declining economic participation from those people, which
> further increases economic contraction. Tax increases which, if
> they are to lead to fiscal sustainability, must be used first to
> stop deficits and then to pay down debt, also take money out of the
> pockets of American businesses and consumers which reduces GDP.
> So the government must take an expanding share out of a shrinking
> pie in order to move toward sustainability.
>
> Unless we experience some miracle of productivity I just don't see
> how the conventional weapons of revenue hikes and spending cuts can
> realistically turn this thing around.