the deficit is now out of control, only a fool can't see the obvious and that is that the deficit is fast approaching crisis levels. The only hope in hell is if china and japan keep buying your treasuries, if you can guarantee that then this can drag on a little longer but why should they keep bailing out an irresponsible nation?
Honey badger don't give a (*)(*)(*)(*) is the correct answer. You haven't factored in the retirement of the baby boom generation. Seventy seven million people. Doing nothing means that they will swamp Social Security and Medicare. There isn't enough money on earth to pay for their needs because the money needed for their care was stolen from the trust funds and deposited in the general fund. Do you have an answer for that? I don't think so. Baby boomers don't give a shxt.
Tariffs destroy economic activity. They are only rational in developing country, given infant industries and the 'cheap' financing of public goods
well then there is always uncle ben, he will keep buying treasuries forever......100 dollar happy meals anybody?
The terrible shame is that under every conceivable scenario the result is the same. A plummeting standard of living for most Americans. Americans are so unaware of this that it's heartbreaking. It's like trying to explain the second law of thermodynamics to a terrier.
I even see on your media people saying that the fed buying up the treasuries was a good thing...."WE OWE IT TO OURSELVES NOW" they say.....it shows how clueless people are to the consequences of monetizing debt!
They will realize soon enough. Sad that people can not see the obvious. It is a snowball that started rolling downhill when nixon closed the gold window. It is now gaining momentum thus the rapid boom/busts. Notice the gap closing between each boom and bust. Hard to say when the dollar collapses but it is inevitable as with any purely fiat currency. Either right before or right after there will be major world war. That is the only card left to play.
Of course they take it seriously. Unfortunately they take their "careers" more seriously and they view spending money as the basis of their power and hence the future of their careers.
This is a class in its own in terms of doom and glooming on here. It isn't based on much. You'd have to integrate economic decoupling (where the US becomes less important to the global economy) with a subsequent need for more aggressive foreign policy.
Nature abhors a vacuum. American withdrawal leaves a vacuum. Competing polities are like the wind. They will rush in to fill the vacuum. In so doing there will be conflict. It will be armed conflict.
I haven't referred to 'economic hardships'. I've referred to decoupling as the influence of the US economy, due to growth elsewhere, naturally wanes. Its on a par with the psychological problems created by the decline in an imperial power
You're talking about "waning" implying a much slower process than the collapse which is almost surely coming. With a gradual erosion of U.S. dominance, those next in line can slowly move into place. With a collapse though, it leaves a wide open field and there are many who would see it as an opportunity to "jump to the front." That will cause conflict - deep conflict - that con really only be resolved by armed conflict.
Almost surely? Golly, aren't you pessimists confident! Note you forget to actually provide any actual economic content
It would be pretty hard to provide content predicting the coming collapse that you wouldn't have some sort of problem with. Everything mainstream would call it "whacky," and I'm pretty sure you would too. But it's how our system is set up. The Federal Reserve and the FDIC are set up to stop minor failures and collapses of small banks . . . by transferring the burden to the dollar and the system as a whole. Everything looks just fine, (it's working exactly as planned, after all) right up until the moment when the system collapses under the weight of the debt incurred saving all the failures.
I have no problem with the consideration of heterodox approaches in economics. However, the 'doom and gloom' merchants typically use less supporting evidence than the 'the royal family are lizard people' comedians. The problems weren't created by debt. They were created by neo-liberalism (with then side issues such as an EU that forgot to evolve according to economic criteria, rather than the desires of an Old Europe that looks teary eyed at its imperialist past)
Lets just start with the US debt. Current debt is 15 trillion with over a trillion deficit each year, means its going to grow for the unforeseeable future. You can't tell me this isn't a problem. The only way out is inflation. Now lets look at the major debt holders. Top three holders of US debt are the Social security trust fund 19%, fed reserve 11.3%, China 8 %. After that you have US households. We all know the social security fund is a liability and is now paying out more than it takes in. The fed reserve can continue buying as much treasuries as they want because they can print as much money as they want. And then there is China, who won't buy inevitably. They will stop, its just a matter of when. All of this tells me our debt is not in good hands and is out of control. The only real solution is inflating our way out. Otherwise, its unpayable. Your basic economic principle, supply and demand. There will be a large supply of treasuries and very little demand at some point. This will most definitely be true when the US dollar no longer remains the world reserve currency, and you can't tell me that it's not in danger. The fed reserve has flooded the market with money. It's very easy to put that money out there, much harder to take it out. There is no indication that they are going to stop putting money out there. They are fully invested in money printing for the European crisis as well. The deficit spending is a stimulus of its own, and only furthers the problems. At some point you have to say how much stimulus would be enough? I'd love to see some answers to that question. We have a very globalized world economy now. We all take China's numbers for fact for some reason. They are a Communist country, they will bend their numbers how they see fit. China is facing inflation, real estate bubble, worker revolt, etc. They have put a massive amount of money into their economy as well. They are a huge importer of natural resources and helped many countries out during the 2008/09 financial crisis. At some point these purchases will go way down. Countries like Australia and Germany will suffer, as they are huge exporting countries, and have already been hit some. China will quit buying US treasuries at this point. This will also bring upon the currency crisis. As the US continues to print money to pay for deficit spending, China and other countries stop buying treasuries or decrease their amount significantly, all that's left to buy these is the fed. The fed will print money and major inflation hits. The US dollar tanks and then other currency will devalue theirs as too strong a currency kills their exports. It will be a race to the bottom on the currency side. The boom days of our "globalized economy" are over. The glory days of fiat currency are over. The time to pay the piper are coming. The question is when. To sit here and say that our deficit spending is not an issue is vast underestimation of the entire situation. To sit here and think that increasing deficit spending will solve any problems is absurd. You can't fix a problem of this magnitude without having huge consequences, and we just have to accept the realization that these consequences are coming. How bad and how long they will be is up in the air, but they can't be avoided, merely prolonged and made worse.
What economic analysis are you basing this on? I have to ask as there wasn't any resemblance of economic thought in your comment, but that may have been a simple oversight! Could you refer me to a specific economic school of thought and the modeling they use to demonstrate the rationale involved?
So you can't actually support your stance with sound economic analysis? I of course already suspected that
Another scintillating Post --- patronising Interesting that Future Guessing ( Economics) excludes Common Sense .
You forgot content (again). Why don't you try and help the fellow by providing economic analysis in support?
Now what exactly is Future Guessing Analysis ? Is it anything like the continued string of misjudgements we have seen for , say , the last fifty years ? Guess Common Sense wins the day over sticking Labels on everything and still getting it wrong !!!
