Puckhead

He does surround himself with some pretty smart guys. I mean how many of them don’t pay taxes? Yet they still have their job. Ok that's a cheap shot I’m sorry not meaning to offend. On to the real debate!

You can’t justify going into the trillions of dollars of debt. Let’s look at a normal person, the average "Joe". If he goes into debt, what must he do? He can’t print his own money or go deeper into debt. Well he can go deeper into debt but eventually he will ruin his credit rating and loose a good bit of his stuff. The way out of debt is to save and cut spending. You can’t spend what you don’t have; it’s simple money management 101. The real crime here is that the media won't cover this story. Instead their busy covering the Obama’s day to day life. I am sorry but people need to see this for what it is, a one sided political agenda that finally can be passed. He has no one to stop him and he can pretty much do what he wants. Also please stop saying he "inherited" this debt. He wanted the job! Bush wanted the job. Clinton wanted the job. If you take the job, you take the bad with the good. The last thing I will say is, this money printing and pork projects will come back to bite us...it’s just a matter of time.


Note: This isnt meant to offend anyone just trying to join the debate.

Winged Wheeler

The ship analogy wasn't just a broad generalization, it was wishful thinking. Maybe all those smart people can just wish this away:

III Corps

I would be careful using that term, 'best and brightest'. It does carry with it some heavy baggage. And 'best and brightest' brings with it a certain hubris and blindness as well as some disdain when mere folks have the audacity to challenge the self annointed. Witness Obama's response sometimes when actually given a real question rather than some wussy fluff toss such as questions about his difficulties with smoking. Waaa-waahhhhhhhh.

http://www.nytimes.com/2008/12/07/opinion/07rich.html

RXS676

Even these numbers understate the magnitude of the deficit problem. Since 2002, the United States Treasury has published the true budget deficit, based on the same "generally accepted accounting principles" that a private corporation is required to use. According to these reports, the actualy budget deficit for 2008 was $1 trillion, more than twice the $450 billion based on the way the White House and CBO cook the books.

If you then include the change in SS and Medicare liabilities, the number jumps to $5 trillion.

Considering the fact that the recent "stimulus" spending has increased the deficit four-fold, the annual budget deficit for 2009 likely exceeds the GDP of the United States. If the federal government nationalized all companies, and imposed a 100% tax rate, it still would not have enough to cover its true annual deficit. Let alone pay down the debt, which when you include the unfunded SS and medicare liabilities exceeds $60 trillion.

This is uncontainable. No amount of spending cuts or tax increases will fix the problem. Neither will smart presidents and their advisors. The only possible outcome is inflation, or a default by the federal government on its debt (which will likewise lead to inflation because no one will lend us money anymore).

We won't need to wait until foreign creditors stop buying our debt to see this happen. Suppose by some miracle we had a balanced budget today. We would still have our existing level of debt which would need to be maintained. No debt securities are for an indefinite term. As the existing bonds mature and have to be re-issued, our foreign creditors will demand higher interest rates, requiring more federal expenditure for interest. If economic growth hasn't provided more tax revenue to pay for it, it will be "paid" with more debt. And this is just to MAINTAIN the existing level of debt, never mind the fact we are adding to it at and accelerating pace. It's the world's biggest ponzi scheme. As Peter Schiff says, Bernie Madoff shouldn't be sent to jail, we should make him Secretary of the Treasury!

As I said in my first post in this thread, it's happening already. It's completely expected that things go from good to bad to worse to disaster. Just because they don't go straight to disaster doesn't mean they're never going to.

jungle

Since the days of FDR and the great depression the US has steered toward more government intervention in the hopes of taming the "unregulated" markets. What this has done is to put the drivers of disaster in the positions of control.
Rather than allow competition in free markets there has been a continual movement toward government monopolies in education, health care, retirement, banking and postal delivery. The result is that many of us are forced to purchase products we would never buy unless forced to, because we are not allowed alternatives.
Where does it all end? Take a look at California's recent history. Eventually the burden cannot be sustained and further credit is denied. The system collapses to provide only those services it can actually afford. This can be a very good thing in the long run and a very painful thing in the short run.

In the end, allowing the supposedly "best and brightest" to dictate exactly how a very large portion of our income is spent always ends in disaster when no specific limits are placed on that spending. There have been a great many highly intelligent people who have run countries and business' right into the ground. Free markets tend to shy away from such antics.

At any given point in time, available capital is finite, dollars pumped into government deny an equal amount to the private sector
and lower GDP output. Sometimes government will seem to support the private sector with funding, but it is almost invariable that they choose to support the losers and punish the winners leading to a more unbalanced economy.

ryan1234

To further expound on this ill-conceived notion that the top education institutions produce the most experienced and clairvoyant thinkers, I'll present an article by Mr. Paul Krugman.

http://www.nytimes.com/2009/06/15/op...15krugman.html

The basic gist of his article is that it would be foolish to worry about the government borrowing too much, or the Fed monetizing too much of that debt. His reasoning is that there can never be too much inflation in a "liquidity trap" - which he believes is happening right now. The only problem is that most of what he speaks of, in context of a liquidity trap, doesn't make much sense in comparison to recent events. His evidence from the historical examples he gives (Great Depression and more recent Japan) is flawed and skewed to say the least.

There is an interesting article that unpacks what Krugman claims:

Krugman's Liquidity Claptrap | Alan Reynolds | Cato Institute: Commentary

DYNASTY HVY

Call me crazy but why would anyone vote on something they have not read ?
What the hell is wrong with people ?
I think I,m going to change my avatar back to Howard Beale !!



Fred

HSLD

LOL, the Patriot Act comes to mind, along with many union contracts

I know the sky is falling, but approval for banks to get the government warrants off the books is approved. It looks like the initial repayments represent about 1/5th of the TARP

U.S. Said to Plan Approval Today for 10 Banks to Repay TARP - Bloomberg.com

Winged Wheeler

And will the government take that money and retire debt with it? Or will they spend it on something else?

WW

DYNASTY HVY

Spend

Fred