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Want to see impressive numbers?

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Shades:
It's like George Carlin said, we live in a country where the rich have most of the money, pay none of the taxes; the middle class pays most of the taxes and has a little of the money; the poor are there ... just to scare the shit out of the middle class!
-kyrathaba (July 25, 2011, 09:18 PM)
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Hahahah~! I LOVE George Carlin! His comedy was simply brilliant. The world lost something precious when he died.


But I think I'm missing something... Looking at the World Debt Clock:
 (see attachment in previous post)
Check the US numbers, then look at France, the UK, Germany, Spain, Portugal, Italy... THEY'RE WORSE!

Europe seems to be in far worse condition than the US, and the US is pretty close to bankrupt. They're discussing defaulting on their debt!!!

Is that right? Is Europe in far worse a position than the US? If so, how? How could anyone be so grossly irresponsible to get debt soar to such insane levels?

Australia and Canada are the only 2 "western" countries that seem to have debt levels that could just possibly on a crazy day... warrant letting them out of their straight-jackets. Still bad, but nothing near the levels in Europe.

Am I missing something? If so, what?


-Renegade (July 26, 2011, 07:15 PM)
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As China is changing their US dollars for Euros, other Asian markets do the same...so I think that the Eurozone is in a better state, because there are positive signals which the emerging markets appear to like. Or they want to keep their money safe because of the ineptitude of the US government which cannot make up their minds.

I understand that the credit rating agencies like Moody's, Standard and Poor's etc. lower their rating for the US, making it more expensive for the US to borrow money from the international market. I also understand that if the lending percentage increases with 1%, it will cost the US as much as all the wars (WW-I, WW-II, Vietnam, Balkan, Golf war I, Golf war II, Irak/Afghanistan) combined.

That frightens a lot of foreign investors...and it should frighten the Republicans as well. The minister of Finance from Great Britain is already cursing the Republicans to hell, because he expects that their stubbornness will nullify all the rescue attempts for the Euro. So the misery that will become a part of life for the US people will spread out on the European tax payers as well.

The US needs to realize that Europe was very grateful after the second WW-II and their Marshall-plan, but from that gratefulness is nothing left because the later generations in the US governments completely mismanaged it...actually destroyed it in the process.

Now I say Republicans all the time, but I mean only the extreme ones, because I know that most of them are actually in favor of solving this whole situation and getting more and more fed up with this. After all, most of the US voters out there are thinking like Republicans for some things in life while for other things they think like a Democrat.

As the poor don't have money to spend but want to, the rich have money but don't want to...it's the middle class that will have to save the US economy. Live and let live...that benefits everybody (in the short and long run).

 

Shades:
Two documentaries about the financial state of the US:
http://documentarystorm.com/i-o-u-s-a/
http://documentaryheaven.com/california-dreaming/

Those two sites are anyway good places to get (properly) informed about whatever tickles your fancy.

wraith808:
Two documentaries about the financial state of the US:
http://documentarystorm.com/i-o-u-s-a/
http://documentaryheaven.com/california-dreaming/

Those two sites are anyway good places to get (properly) informed about whatever tickles your fancy.
-Shades (July 28, 2011, 08:27 AM)
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I'd recommend that if you want to get properly informed, the first thing is to get informed on who's informing you if it's not yourself.  Documentaries are biased, just like anything written by a human is.  The amount of bias might be different, but that difference is only revealed by knowing the perspective the documentary is written from...

xtabber:
One person’s debt is another person’s asset. These are merely the two sides of the same coin. When you borrow money from the bank, the bank shows your loan on their books as an asset. When you pay the bank back, the bank’s assets are reduced by that amount, which is why the bank is always eager to make loans.

The bank needs to make a profit to stay in business, so it charges interest. If the risk of default is low, that interest will be low, because you are a good investment. If the risk of default is high, the bank needs to charge a higher interest rate to protect itself against the expected number of loans that will default.  That’s what credit ratings are (or at least should be) all about.

When you buy savings bonds or your retirement fund buys Treasury notes you are, at the same time, increasing the national debt and investing in your future in the least risky way you can. The reason the risk is low is that the government’s expected revenues (e.g., taxes) are expected to be adequate to provide you with a return on your investment when the time comes for you to draw on it.

This whole system of debt/investment is the basis of modern economic development.  Government debt is what puts money into circulation.  Without it, we would return to a feudal subsistence economy, which seems to be the unstated goal of some of those complaining about it.

A deficit, on the other hand, is a short term imbalance between revenues and expenditures.  There is absolutely nothing wrong with governments running deficits to correct for a bad economic climate, so long as they balance these deficits with surpluses when the economy is doing well.

The problem the US faces now is that it ran deficits during the boom years 2000-2007, which was a political choice to reduce taxes, mostly for the benefit of the very wealthy. These are the same people who now want to slash expenditures so that they don’t have to give back any of their gains.  Doing so would make permanent a well documented transfer of wealth from the poor to the rich over that period. That’s a losing political argument, so the tactic of choice has been to try and scare people about the size of the national debt, which is terrifying to the economically ignorant. 

Unfortunately, there are many economically ignorant voters, and lots of money behind the effort to scare them about the size of the national debt.

Debt and assets are basic principles of accounting that have been well known since the Renaissance. Actually, they were known in ancient Babylon, but then forgotten for centuries.  Given the current panic over debt, perhaps we are in for a new Dark Ages.

Renegade:
One person’s debt is another person’s asset.
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Only if they make good on the debt though. It's conditional. It's not like having hard assets, like land or material goods or resources.

A deficit, on the other hand, is a short term imbalance between revenues and expenditures.  There is absolutely nothing wrong with governments running deficits to correct for a bad economic climate, so long as they balance these deficits with surpluses when the economy is doing well.
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But they're not short term, and they don't balance them. They're like heroin. Once they get hooked, they're hooked. If heroin wasn't addictive, it would be amazing. Deficit spending is the same. What government isn't a deficit junkie? Debt must be paid back.

This whole system of debt/investment is the basis of modern economic development.
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That doesn't preclude other systems though, and it doesn't preclude better systems. e.g. The Venus Project is a resource based economic model. Just an example there.

Government debt is what puts money into circulation.
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I don't get that. Governments put currency into circulation. People create wealth then use the currency to trade for wealth. e.g. Farmers grow produce -- new wealth. Manufacturers transform raw materials into new products -- new wealth. Musicians entertain -- new wealth. (The entertainment industry is kind of hard to pin down like all services and IP.)

Financial systems are grease in the machine to transfer wealth. They do not create wealth. Well, some people believe that they do, but that doesn't make it true. The grease has a cost associated with it, and so it has some value, but the way the system works now, it's as though the grease IS the wealth. Give me an apple to eat and a knife to cut it -- you can't eat grease.

Whatever has value after the Zombie Apocalypse is wealth. Whatever does not have value after the Zombie Apocalypse is not wealth. Money won't have any value after December 21st, 2012 when the Zombie Apocalypse hits. Well, except maybe here in Australia because we're so remote and the Zombie Apocalypse may not hit here... But you're all screwed in the US as that's where just about every Zombie Apocalypse hits in the movies. :)

But seriously --- the Zombie Apocalypse test for wealth works. Currency and financial systems are not wealth, except in some deluded fantasy. They are tools to transfer wealth. Grease. They ease/facilitate the conversion of apples to oranges. For example, take some video game where points are dollars. They are worthless except inside of the video game where they have value, i.e. they are worthless outside of the system.

Our current system seems very broken, e.g.:

The problem the US faces now is that it ran deficits during the boom years 2000-2007, which was a political choice to reduce taxes, mostly for the benefit of the very wealthy. These are the same people who now want to slash expenditures so that they don’t have to give back any of their gains.  Doing so would make permanent a well documented transfer of wealth from the poor to the rich over that period.
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