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US Debt now > GDP

by Oltz
Tags: debt
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FlexGunship
#91
Nov7-11, 02:16 PM
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Quote Quote by mheslep View Post
Agreed.
Thirded.
John Creighto
#92
Nov12-11, 09:49 PM
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I read something interesting today:

" New rules taking effect in the course of the decade will force banks to set aside at least minimal sums to cover the risk of government bonds. The so-called Basel III banking rules approved by the G-20 last year would require banks to hold capital reserves equal to at least 3 percent of all their holdings, regardless of the perceived risk. That rule, intended to prevent banks from taking on too much leverage or gaming banking regulations, would also apply to government bonds. But the rule, known as a leverage ratio, would not take effect until 2018 and could still change."
http://www.americanfuture.net/tag/eu...-central-bank/

I wonder what implications this will have on future interest rates on government debt.
MarcoD
#93
Dec9-11, 06:07 PM
P: 98
I finally figured it out. It's all political humbug, the 40 cts on the dollar borrowing being bad.

http://economix.blogs.nytimes.com/20...-last-quarter/

The US didn't get any poorer, the debt is shifting from households to the government. They are just keeping the equilibrium in place at a lower interest rate.
Greg Bernhardt
#94
Dec9-11, 06:15 PM
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I like the idea of capping debt to 1% under GDP.
MarcoD
#95
Dec9-11, 06:21 PM
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Quote Quote by Greg Bernhardt View Post
I like the idea of capping debt to 1% under GDP.
Yeah well, I don't understand economics, it's just a theory.
mheslep
#96
Dec10-11, 04:35 PM
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Quote Quote by Greg Bernhardt View Post
I like the idea of capping debt to 1% under GDP.
The Republicans just tried something like that by blocking the debt limit increase for awhile. The Democrat's heads almost exploded.

edpell
#97
Dec16-11, 04:10 PM
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I still think wowwees point about towns that can not afford to maintain infrastructure is important.
Office_Shredder
#98
Dec16-11, 07:08 PM
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How did these places originally afford to build this expensive infrastructure that they're no longer capable of maintaining?
AlephZero
#99
Dec16-11, 07:24 PM
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Quote Quote by Office_Shredder View Post
How did these places originally afford to build this expensive infrastructure that they're no longer capable of maintaining?
Probably "One settler, one pick, one shovel." Life was simpler back then.

Sewer repair and construction in London, 1845:
http://i.dailymail.co.uk/i/pix/2011/...x440_popup.jpg
http://i.dailymail.co.uk/i/pix/2011/...x440_popup.jpg
feathermoon
#100
Dec20-11, 09:42 PM
P: 60
Given the huge chunk of our budget health care takes every year, perhaps instead of concerning ourselves with cutting this program or that, and frankly whining, people should get off their lazy boys, exercise, and stop having preventable illnesses?

If anyone's to blame, its everyone.
Gokul43201
#101
Jan31-12, 10:00 AM
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Latest report from the CBO:http://www.cbo.gov/doc.cfm?index=12699

A new budget report released Tuesday predicts the government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year but still very high by any measure.

The Congressional Budget Office report also says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed.

The CBO study also predicts modest economic growth of 2 percent this year and forecasts that the unemployment rate will remain above 8 percent this year. That is based on an assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month.
...
The CBO report shows that the deficit dilemma would largely be solved if the tax cuts enacted in 2001 and 2003 and renewed in 2010 through the end of this year were allowed to lapse. Under that scenario, the deficit would drop to $585 billion in 2013 and to $220 billion in 2017.
http://www.cbsnews.com/8301-505245_1...1.1t-cbo-says/

Congressional Budget Office reports another $1 trillion deficit
http://www.politico.com/news/stories/0112/72205.html
MarcoD
#102
Jan31-12, 10:25 AM
P: 98
The odd thing is that despite the growing public debt, the interest on public debt remains really low -probably that low that value is being destroyed,- for which I have no explanation except for that the money doesn't have anywhere else to go.

Is there anyone who really understands that phenomenon? I have an hypothesis that with the housing bubble that much money was created that, after it deflated, all that money has to move from private to public debt or otherwise the financial system blows up. But that hypothesis may well be horsedung.

And I am still not sure whether federal public debt is 70% or 100% of US GDP since different numbers are sometimes reported. What are the real numbers?
WhoWee
#103
Jan31-12, 11:20 AM
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I have to wonder how the CBO can make projections?
http://news.yahoo.com/blogs/ticket/c...174736897.html

"The last time the Senate passed a traditional year-long budget was April 29, 2009. While this is considered a vital role for congress, the promotions arguably overstate the gravity of this failure to act. The congressional budget is just an outline for recommended spending levels, and does not direct appropriators to divvy out funds in any exact manner. As the Peter G. Peterson Foundation explains, "While budget resolutions are not laws, and the Congress can act on funding and revenue legislation without first adopting budget resolution, they can enforce good fiscal discipline."

In the days leading up to Obama's address, Republicans appeared to delight in being able to point out all that has happened in the world within 1,000 days. "912 days elapsed b/t Pearl Harbor & D-Day," read a post Tuesday morning on the Republican Study Committee's Twitter feed. "It's been #1000days since Senate Dems passed a budget."

"The last time they passed a budget, you had never heard of the iPad," a post on the group's website read, complete with a video hammering the point home. "Tiger Woods was only known for his golfing abilities. General Motors had never declared bankruptcy. You had never heard of Swine Flu. And the national debt was $4 trillion smaller than it is today."
"
my bold
MarcoD
#104
Feb7-12, 05:25 PM
P: 98
I reasoned the US debt is 70% GDP, so I think everybody can stop worrying.

The US position is -I think- completely comparable to someone who has $70 debt, and knows that he will spend $30 in the future. Since he knows that, he writes an IOU of $30, and gives himself $30. His total debt now is $100, but he owns $30. All interest on the debt of $30, he just pays to himself.

For the rest I think the US is just borrowing against the $2T Europe probably lost on the housing bubble, so the US can buy for another twenty years of trade deficit against Europe.

Looks to me the US is super healthy, and I am starting to believe Europeans are complete idiots.
MarcoD
#105
Feb7-12, 06:43 PM
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God, now I am confused, or I was? The question is of course, did you spend the $30?
russ_watters
#106
Feb7-12, 10:13 PM
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Quote Quote by MarcoD View Post
I reasoned the US debt is 70% GDP, so I think everybody can stop worrying.

The US position is -I think- completely comparable to someone who has $70 debt, and knows that he will spend $30 in the future. Since he knows that, he writes an IOU of $30, and gives himself $30. His total debt now is $100, but he owns $30. All interest on the debt of $30, he just pays to himself.
Oh, ok - so we could just decide to simplify the balance sheet by taking that $70+$30-$30=$70. I'm sure all the bondholders won't have a problem with that.
MarcoD
#107
Feb7-12, 10:51 PM
P: 98
Nah, I am an idiot, it seems. Miscalculation.
jduster
#108
Feb8-12, 02:37 PM
P: 46
Lets put this into perspective.

U.S. debt is 100%~ its GDP.

Japan's is 200% of its GDP.


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