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[Piecake]

No offence but this is the kind of answer I was trying to avoid. These aren't solutions (which is what I was after), these are logical conclusions and one could argue that these are also logical conclusions to an America which has defaulted on its loans and can no longer borrow money from any other countries.

Can you name me a country that has no debt ceiling that is also in good economic standing? Again, the same questions I have above apply... how much debt is too much debt? How does the USA ween itself off debt?

I know the hate for Republicans/their ideology is strong but I'm looking for answers which answer the systemic issues America now faces (aka please go beyond "fuck the Republicans!")

http://www.washingtonpost.com/blogs...-dont-have-debt-ceilings-and-are-not-on-fire/

Why do you assume that sovereign debt is a bad thing? And why do you think our debt is out of control? Just because it looks big? Well, we have a big damn economy. Our yearly deficit has decreased by half since the financial crisis. Surprisingly, a financial crisis creates a lot of debt because there is less tax revenue and people need a lot of help. That is what is supposed to happen. I really don't understand why you think spending is out of control either. Its not. Hell, Obama is spending far less than anyone since the 80s.

The main reason why we have long term fiscal issues is health care. No, not medicare or social security, health care. We spend twice as much as any other nation on health care and get worse results. Why? Well, we don't control prices and our health care is not a free market. We have no idea what that surgery actually costs or what this exam will cost. You can imagine that that causes an expensive system. Not to mention that because we have so many players in the game, all sorts of different hospitals and insurance companies that it creates a huge bureaucratic mess. Yes, medicare and medicaid is FAR more efficient and cost effective than private insurance, and they insure the most unhealthy segments of our population!

 

[ridethepiggy]

Whoever buys bonds.

Except the U.S. produces it's own currency. If the U.S. Wanted to it could print whatever coin/bill to pay back it's 'debt' with a push of a few keys. I borrow money from the bank but I don't have the ability to produce more money to pay the bank back. The U.S. Does. To argue we 'borrow' money is a bit incorrect.

 

[Riki]

Except the U.S. produces it's own currency. If the U.S. Wanted to it could print whatever coin/bill to pay back it's 'debt' with a push of a few keys. I borrow money from the bank but I don't have the ability to produce more money to pay the bank back. The U.S. Does. To argue we 'borrow' money is a bit incorrect.

Creating money lowers its value. Both Russia and Germany tried exactly this. If you print too much, it becomes worthless.

 

[RDreamer]

Who does the U.S. Borrow money from?

Philosophically, no one. The term "borrow" bothers me in this instance. The US can't borrow it's own fiat currency from anyone, really. We have the printing press. We take some money out of circulation from someone with the promise to print some more for them at a later date.

Creating money lowers its value. Both Russia and Germany tried exactly this. If you print too much, it becomes worthless.

The US is already creating money. It's far from worthless.

 

[akira28]

This idea that permeates conservative mentality that the government needs to be run like household is something I will never understand when the comparison makes no sense.

the monied conservatives understand the difference. That's just how they parse it to the general masses who don't really need to understand the process. If they can break it down to "Just let daddy balance the country's checkbook", it makes their jobs easier.

 

[ridethepiggy]

Creating money lowers its value. Both Russia and Germany tried exactly this. If you print too much, it becomes worthless.

Except that's not what we have been doing. The GOP has been preaching hyperinflation for years and it hasnt happened. And to compare our situation to Russia or Germany after WW1 is missing the bigger context behind their situations which played a bigger part than just 'printing money'.

 

[Zaraki_Kenpachi]

Creating money lowers its value. Both Russia and Germany tried exactly this. If you print too much, it becomes worthless.

Too bad the money hasn't been losing value. What now?

 

[Liberty4all]

You would think, right? Domestic Terrorism should definitely be applied in this case.

Do you really think that? They are elected representing the wishes of their constituents.

I pray that this whole thing doesn't irrevocably damage American democracy and put the country on the road to facism.

 

[mikelb7]

Ok, too many posts to respond to here. Some informative stuff and some spewing of hate (which is to be expected)

People have been ignoring my underlying questions though, and if the general theme here is, "debt isn't inherently a bad thing" (which I agree with and understand), again, at what point is there too much debt? Is there such thing as too much debt? If there is no such thing as too much debt, why would any country ever actually pay off its debt?

Why shouldn't the USA go into $50T of debt then?

 

[ridethepiggy]

Philosophically, no one. The term "borrow" bothers me in this instance. The US can't borrow it's own fiat currency from anyone, really. We have the printing press. We take some money out of circulation from someone with the promise to print some more for them at a later date.

Exactly.

 

[Riki]

Too bad the money hasn't been losing value. What now?

Philosophically, no one. The term "borrow" bothers me in this instance. The US can't borrow it's own fiat currency from anyone, really. We have the printing press. We take some money out of circulation from someone with the promise to print some more for them at a later date.




The US is already creating money. It's far from worthless.

Except that's not what we have been doing. The GOP has been preaching hyperinflation for years and it hasnt happened. And to compare our situation to Russia or Germany after WW1 is missing the bigger context behind their situations which played a bigger part than just 'printing money'.

I meant in a larger sense, but yes, I get what you're saying.

Do you really think that? They are elected representing the wishes of their constituents.

I pray that this whole thing doesn't irrevocably damage American democracy and put the country on the road to facism.

They are already damaging American Democracy by halting the entire democratic process for no reason at all.

 

[OminoMichelin]

Creating money lowers its value. Both Russia and Germany tried exactly this. If you print too much, it becomes worthless.

They are already creating money, and lots of it. It's not creating massive inflation because the majority of that cash doesn't actually circulate in the economy. It actually help more businesses than employees.

 

[Jackpot]

Custer finally made a stand too.

Obama has to negotiate at some point. That's the weakness in his hardass position.

Still claiming to be "non-partisan"?

 

[TacticalFox88]

Also, China owns only a fraction of our debt. Most of the US's debt is to itself. And even in the off-chance that China DID own most of our debt, they couldn't do jackshit about it. If we told them "lol we're not paying." they couldn't do a goddamn thing, because if they tried to start a war over imaginary debt, they'd be crushed economically and militarily.

 

[Piecake]

Ok, too many posts to respond to here. Some informative stuff and some spewing of hate (which is to be expected)

People have been ignoring my underlying questions though, and if the general theme here is, "debt isn't inherently a bad thing" (which I agree with and understand), again, at what point is there too much debt? Is there such thing as too much debt? If there is no such thing as too much debt, why would any country ever actually pay off its debt?

Why shouldn't the USA go into $50T of debt then?

debt really doesnt matter. The interest on that debt matters. Thats why Japan can borrow with 200% debt to GDP. As long as people have faith in your currency and faith that you will pay off your obligations we will be fine. Republicans will destroy that. Interests rates will likely rise because people will no longer have implicit faith that we will pay back our obligations. Is there a point where too much debt is too much? Probably, but we are definitely not there yet. Is Japan there yet? Well, it doesnt look like it

 

[OminoMichelin]

Ok, too many posts to respond to here. Some informative stuff and some spewing of hate (which is to be expected)

People have been ignoring my underlying questions though, and if the general theme here is, "debt isn't inherently a bad thing" (which I agree with and understand), again, at what point is there too much debt? Is there such thing as too much debt? If there is no such thing as too much debt, why would any country ever actually pay off its debt?

Why shouldn't the USA go into $50T of debt then?

Bonds have an interest rate, default occurs when you can't even pay the interests on borrowed money. So there is a limit, but cutting state spending actually has negative effects on sustaining national debt. Of course, sensible and job-creating spending>spending that benefits a chosen few.
The debt can be $50T or even $1000T, as long as you can pay back your interests, it doesn't matter

 

[Trouble]

Except the U.S. produces it's own currency. If the U.S. Wanted to it could print whatever coin/bill to pay back it's 'debt' with a push of a few keys. I borrow money from the bank but I don't have the ability to produce more money to pay the bank back. The U.S. Does. To argue we 'borrow' money is a bit incorrect.

y helo thar hyperinflation

 

[Bulbo Urethral Baggins]

Still claiming to be "non-partisan"?

If you look at my post history, I'm equally critical of the Green Party.

 

[CoffeeJanitor]

How about you tell us how much debt is too much since you seem to think it's a problem. Instead of asking how the USA should cut back on debt we should ask why it should. DO you even know?

Not raising the debt ceiling is a bad financial habit. Hands down. End of story. End of question.




From a very objective standpoint not raising the debt ceiling is the worst course of action given the fragile state of the world's economy. It would send ripples of chaos throughout the entire world's economy and could start another recession.

Seriously, there's so much wrong with your post I'm sure more people will pick it apart later and probably a bunch have before I even hit submit reply on this. You should do yourself a favor and research this sort of stuff before talking about it. I don't think you could have posted something more completely wrong if you had tried.

Woooow. Why all of the hostility? The guy was asking some honest questions. You could have just answered them instead of insulting him.

EDIT: Upon reading his replies, never mind.

 

[Liberty4all]

I meant in a larger sense, but yes, I get what you're saying.


They are already damaging American Democracy by halting the entire democratic process for no reason at all.

I get the impression they think they are saving the country as crazy as that may seem to us.

One thing for sure, forcibly removing them from office and branding them traitors puts the US on a dark road.

I do think Obama ignoring the debt limit, with litigation following going to the Supreme Court is more likely ... But that in and of itself would still have disastrous economic consequences ...

 

[Zaraki_Kenpachi]

Japan does not have a debt ceiling, as was previously mentioned, and is in good economic standing. To answer your questions:

1) So long as you can service your debt payments, grow the economy faster than the debt does, and invest the money in a manner that generates a greater return than the interest rate, the debt is not a problem.

2) Accordingly, there is no need to ween the U.S. off of debt. Debt itself is not a bad thing.

I don't know if I'd use Japan who's had really bad deflation for ages now as a model for "good economic standing".

y helo thar hyperinflation

Do you know what hyperinflation is? Because it doesn't seem like you do.

 

[Riki]

I get the impression they think they are saving the country as crazy as that may seem to us.

One thing for sure, forcibly removing them from office and branding them traitors puts the US on a dark road.

I do think Obama ignoring the debt limit, with litigation following going to the Supreme Court is more likely ... But that in and of itself would still have disastrous economic consequences ...

How are they saving the country, exactly? How is driving us to economic ruin and putting out millions helping anyone?
They are using nearly illegal tactics and fear mongering to try and get there way. That is terrorism. Plain and simple.

 

[makingmusic476]

Or they have less control over the monkeys they put in charge than they think.

Government shutdown: Wall Street angry at tea party it has no influence over

 

[ZombiePlatypus]

It's like the GOP wasn't satisfied with just causing us to get a credit-downgrade as country, now they throw this lovely stunt. It seems like people like Boehner and McCain didn't really want this to happen, but that's what they get as a party for trying to harness the batshit-crazy by catering to tea-baggers. Watching them trying to pin this mess on Dems is pathetic. ACA is here and it's a thing. Fucking deal with it and go back to doing your jobs.

 

[Epsilon-delta]

Japan does not have a debt ceiling, as was previously mentioned, and is in good economic standing. To answer your questions:

1) So long as you can service your debt payments, grow the economy faster than the debt does, and invest the money in a manner that generates a greater return than the interest rate, the debt is not a problem.

2) Accordingly, there is no need to ween the U.S. off of debt. Debt itself is not a bad thing.

And to drive the point further about Japan, their unemployment rate right now is 4.1%. Their highest ever was just 5.6%.

 

[Piecake]

I get the impression they think they are saving the country as crazy as that may seem to us.

One thing for sure, forcibly removing them from office and branding them traitors puts the US on a dark road.

I do think Obama ignoring the debt limit, with litigation following going to the Supreme Court is more likely ... But that in and of itself would still have disastrous economic consequences ...

What point are you trying to make? The adminstration can't compromise because that would undermine our democracy. We can't arrest them because that definitely would (who the hell is advocating this?).

What will happen is that either that the republicans will end this farce (best option) Obama raise the debt limit on his own and possibly gets impeached by the house (second best) or we default (worse)

Those are the only options that ensure the future of our democracy as we know it

 

[smokeandmirrors]

And to drive the point further about Japan, their unemployment rate right now is 4.1%. Their highest ever was just 5.6%.

Also their Debt-to-GDP ratio is the highest in the world, and their economy is pretty much stagnant, no?

 

[Sibylus]

Let's take a moment for to let that sink in:

The GOP and Tea Party might be so crazy and delusional at this point that, potentially, even the 1% can't control and reign them in

Holy. Shit.

Slow the hell down here, you're seriously Diablosing if you think the 1% (let alone the other arms of the government) can't or won't reign in crazy. Even if Boehner is so completely broken in his head as to think default is a good idea, that can radically change in the next two weeks. He has far bigger and heavier interests sitting on his shoulders than the Tea Party nutters goading him into this circus.

 

[makingmusic476]

Also their Debt-to-GDP ratio is the highest in the world, and their economy is pretty much stagnant, no?

They've been battling deflation for almost two decades.

Deflation encourages saving (and the Japanese save buttloads of money), which decreases the amount of active money in the economy, which causes more deflation, which encourages more saving. It's a horrible loop that puts a stranglehold on an economy.

The Japanese government's crazy spending has helped prevent the problem from getting too bad, and I believe they very recently managed to slip back into inflation.

Kinda highlights the absurdity of the idea that significant deficit spending invariably leads to hyperinflation. The Japanese racked up all that debt just to end deflation.

 

[Liberty4all]

How are they saving the country, exactly? How is driving us to economic ruin and putting out millions helping anyone?
They are using nearly illegal tactics and fear mongering to try and get there way. That is terrorism. Plain and simple.

I'm not a Republican. With that said I know plenty of Conservatives across the US support their actions and certainly their Constituents who they represent.

You can't label a part of the Government acting within rule of law and in the interests/wishes of their constituents terrorists unless you want a country that stops following its own laws.

The scary thing is many would cheer the illegal removal of these elected representatives if these threads are any indication.

 

[FtsH]

Who does the U.S. Borrow money from?

You must be wondering who the f**k on this planet has so much money to lend to US, right?

I think is answer is no one. Majority of our money is borrowed from ourselves, we are just spending what we expect to get in the next 100 years. So default hurts no one but our own life, today's life. The true way out is to rescue this sucking economy ASAP so we are confident to borrow from our own future again.

Those money from China is a different thing. I think for every 1$ they lend us, China central bank prints like 6 or 7 Chinese Yuan according to exchange rate and deposit in their bank system, which eventually gets consumed by the fast growing economy and inflation there. What can they do if we default? Nothing, or World War III.

 

[makingmusic476]

Slow the hell down here, you're seriously Diablosing if you think the 1% (let alone the other arms of the government) can't or won't reign in crazy. Even if Boehner is so completely broken in his head as to think default is a good idea, that can radically change in the next two weeks. He has far bigger and heavier interests sitting on his shoulders than the Tea Party nutters goading him into this circus.

Government shutdown: Wall Street angry at tea party it has no influence over

.

 

[Riki]

I'm not a Republican. With that said I know plenty of Conservatives across the US support their actions and certainly their Constituents who they represent.

You can't label a part of the Government acting within rule of law and in the interests/wishes of their constituents terrorists unless you want a country that stops following its own laws.

The scary thing is many would cheer the illegal removal of these elected representatives if these threads are any indication.

They're following an imaginary law though. One that dismantles the entire democratic process.

 

[Anticitizen One]

I blame Obama for being such a pussy his first few years in office that Republicans think he's a big pushover that will cave in eventually.

You guys should have listened to me and voted Clinton with Obama as Vice so he can get experience then Obama should have become president in 2016 when he was hardened.

 

[Protein]

Fox News has created a monster.

 

[Liberty4all]

What point are you trying to make? The adminstration can't compromise because that would undermine our democracy. We can't arrest them because that definitely would (who the hell is advocating this?).

What will happen is that either that the republicans will end this farce (best option) Obama raise the debt limit on his own and possibly gets impeached by the house (second best) or we default (worse)

Those are the only options that ensure the future of our democracy as we know it

I think the Republicans will fold. If not, option 2, Obama unilaterally raising the debt ceiling.

who the hell is advocating this?)

.

I've seen multiple posts calling them traitors, domestic terrorists, etc ...

 

[Zaraki_Kenpachi]

They've been battling deflation for almost two decades.

Deflation encourages saving (and the Japanese save buttloads of money), which decreases the amount of active money in the economy, which causes more deflation, which encourages more saving. It's a horrible loop that puts a stranglehold on an economy.

The Japanese government's crazy spending has helped prevent the problem from getting too bad, and I believe they very recently managed to slip back into inflation.

Kinda highlights the absurdity of the idea that significant deficit spending invariably leads to hyperinflation. The Japanese racked up all that debt just to end deflation.

The debt was racked up because they half assed a jump out of deflation which is why people have been worried about abenomics because they don't know if sentiment can be changed. And they're finally seeing "some" inflation but is still under 1% and with the Nikkei dropping and Yen strengthening due to the problems in washington, it's not looking very optimistic for them. There's still not as much optimism for Japan as Abe and others in Japan were hoping for.

 

[makingmusic476]

You must be wondering who the f**k on this planet has so much money to lend to US, right?

I think is answer is no one. Majority of our money is borrowed from ourselves, we are just spending what we expect to get in the next 100 years. So default hurts no one but our own life, today's life. The true way out is to rescue this sucking economy ASAP so we are confident to borrow from our own future again.

Those money from China is a different thing. I think for every 1$ they lend us, China central bank prints like 6 or 7 Chinese Yuan according to exchange rate and deposit in their bank system, which eventually gets consumed by the fast growing economy and inflation there. What can they do if we default? Nothing, or World War III.

And you should see how much debt various parts of the Chinese government have racked up:

http://online.wsj.com/article/SB10001424052702303796404579101411189745756.html

All the governments have borrowed crazy amounts of their own money from their own people, other countries, and so on. Seriously, every major country has done this, and the mere issuance of such debt only obfuscates how that money even came into existence for them to borrow.

 

[ZombiePlatypus]

You must be wondering who the f**k on this planet has so much money to lend to US, right?

I think is answer is no one. Majority of our money is borrowed from ourselves, we are just spending what we expect to get in the next 100 years. So default hurts no one but our own life, today's life. The true way out is to rescue this sucking economy ASAP so we are confident to borrow from our own future again.

Those money from China is a different thing. I think for every 1$ they lend us, China central bank prints like 6 or 7 Chinese Yuan according to exchange rate and deposit in their bank system, which eventually gets consumed by the fast growing economy and inflation there. What can they do if we default? Nothing, or World War III.

So everyone's basically kicking the can down the road?

 

[Sibylus]

.

Said article doesn't actually refute anything I said, being that it focuses on the problem of Tea Party nutters and not on the Speaker himself. You're kidding yourself if you think moneyed interests can't make his life far more hellish than Tea Party backlash. Contrariwise, you're kidding yourself if you think moneyed interests can't outcompensate a Tea Party blowjob.

 

[JesseEwiak]

So everyone's basically kicking the can down the road?

In the sense we've "kicked the can" down the road since the nation became independent. We've always had debt. After WWII, we had a 4.5 to 1 ration of debt to yearly GNP. Now, it's barely 1 to 1.

 

[Sathsquatch]

Also their Debt-to-GDP ratio is the highest in the world, and their economy is pretty much stagnant, no?

The Japanese economy has been stagnant for decades, but that is mostly due to chronic deflation crippling demand in their economy. This problem has been made worse due to a lack of political will to increase inflation and/or sufficiently stimulate demand with government spending.

Many people believe that Japan cannot spend enough to stimulate demand, but that seems unlikely given the fact that interest rates on their debt are very low, suggesting that investors are not worried that they will default on their loans. In fact, it is basically impossible for a sovereign nation that prints its own money to default on its loans unless it has something idiotic like a debt ceiling.

It is worth noting that the current Japanese government won two elections because they proposed bold action to stimulate the Japanese economy, something that Japan has not tried since their financial crisis hit. This strategy, known as Abenomics, has caused Japan's economy to to grow more strongly ever since it was implemented.

 

[Anticitizen One]

Republicans really want this to come true dont they:

http://www.youtube.com/watch?v=Wpt6IHvEa5I

 

[makingmusic476]

Said article doesn't actually refute anything I said, being that it focuses on the problem of Tea Party nutters and not on the Speaker himself. You're kidding yourself if you think moneyed interests can't make his life far more hellish than Tea Party backlash. Contrariwise, you're kidding yourself if you think moneyed interests can't outcompensate a Tea Party blowjob.

I agree with you.

I think the primary problem is in the most heavily gerrymandered Republican districts. The constituents there are so extreme in their libertarian/conservative beliefs that a more moderate Republican heavily funded by Wall Street has little chance of pushing them out. Districts where such moderate Republicans still exist risk getting primaried by more conservative candidates. Depending on how the lines have been drawn, this could lead to yet another candidate Wall Street can't do much about taking the district, or the extremist views of the new candidate handing the district over to a moderate, Wall Street backed Democrat.

It's those hard right districts that Wall Street is struggling with, I think.

 

[Sho_Nuff82]

The USA has undoubtedly become more of a "welfare" state than it's been in a long time. 

Wealth disparity it's at its greatest point in the last 100 years, so I'll have to respectfully disagree.

 

[wildfire]

People claim that the wealthy and powerful control the Republican party. So why are they allowing this? Some CEO or investment banker really doesn't give a shit about Obamacare, if taking a stand on it is going to cause all his investments to collapse when a default tanks the market.

It seems to me that as the deadline looms nearer and the stock market begins a nasty downturn America's rich fatcats will call up all the people who they've contributed millions to and say "What the fuck are you doing? Stop this!" And it will be over very quickly.

Thank you 1%'ers!

This train of thought deserves some exploration. I'm not one to pin this all on the wealthy Republicans supporting this but it is odd something as potentially damaging as a default would be a viable tool to repeal an insurance policy they don't want to pay for.

I hope our economic elite isn't rebelling because the can't do math.

 

[Trouble]

Republicans really want this to come true dont they:

http://www.youtube.com/watch?v=Wpt6IHvEa5I

Awesome, I love it when the factually incorrect assertion about China owning most of the US debt gets tossed around.

 

[LuchaShaq]

And yet, 90+% of people in congress causing this situation will be re-elected. You could literally destroy your country and still get re-elected.

Welcome to the 2 party system.

If the roles were reversed I would still vote in awful incumbent dems solely due to my abortion stance.

 

[Shake Appeal]

When all of this is over and we're toasting rats over flaming barrels and ducking climate change superstorms, can someone please look into legislators not being in charge of fucking redistricting, like in just about every other half-decent democracy in the world.

 

[wildfire]

You must be wondering who the f**k on this planet has so much money to lend to US, right?

I think is answer is no one. Majority of our money is borrowed from ourselves, we are just spending what we expect to get in the next 100 years. So default hurts no one but our own life, today's life. The true way out is to rescue this sucking economy ASAP so we are confident to borrow from our own future again.

Those money from China is a different thing. I think for every 1$ they lend us, China central bank prints like 6 or 7 Chinese Yuan according to exchange rate and deposit in their bank system, which eventually gets consumed by the fast growing economy and inflation there. What can they do if we default? Nothing, or World War III.

This man speaks the truth.