Author Topic: The coming economy and us  (Read 4440 times)

Online hobdayd

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Re: The coming economy and us
« Reply #15 on: November 15, 2016, 02:41:07 pm »
Only time will tell. You do have something that others lack...energy and land. All you need to do now is grow your population by 100M people to pay down your debt!

Offline CentralCal

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Re: The coming economy and us
« Reply #16 on: November 15, 2016, 03:05:14 pm »
Yes we became debt free around 2007. We became prudent savers and have been rewarded with crap interest rates for savings. Meanwhile, the borrowers continue to borrow and drive Range Rovers on lease!

Who has it right?

You have it right. The crap interest rates do suck though. In California the housing prices go up every day and everyone thinks they are rich with their equity.But the housing prices will crash as they always do in cycles and the people that borrowed against the equity to drive the Range Rovers will not have a roof over their head!
Personally I got divorced 2 years ago. She got half my retirement and I pay way too much in alimony. I don't stress about that cause I did take a vow and we raised 2 fine young men.First thing I did was buy a new to me 2013 for a great price of $8900. Since we sold the house in the divorce I rented for 2 years and recently bought a small house cause with interest rates so low I pay half of what I was paying as a renter. It's only 900 sq. ft. but it has a garage so I'm very happy with it.
I save what I can am always on the lookout for bargains. I fitted my bike with great deals mostly from nice people on this forum.
So my motto is be concerned about the economy but don't stress about it. ::021::
I

Offline OldRider

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Re: The coming economy and us
« Reply #17 on: November 15, 2016, 03:36:37 pm »
Two questions for you amateur economist.

1. During the last eight years the Democrats and mostly Obama have stated over and over that they have cut the deficit in half. If you look up the deficit numbers year by year, Obama has had five of the highest years of deficits in history. This is how we got to the $20 Trillion debt.

So, why did they say over and over they have had lower deficits and you never heard anyone correct them?

2. So now we have this $20 Trillion that has to be paid back. The hight government surplus in history was $329 Billion in 2000. Even if we could match the highest surplus in history every year, it would take 61 years to pay off the debt, and that doesn't take interest into account.

So, how can we ever pay this debt?

I just can't see how we can ever dig ourselves out of this hole.

Online hobdayd

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Re: The coming economy and us
« Reply #18 on: November 15, 2016, 04:03:25 pm »
Traditionally inflation reduced the value of the debt over time...along with growth...but we see low growth, low inflation and high youth unemployment. Not a good position. Add in the uncertainty of Brexit, the Euro, the EU, China and it's neighbours then life gets interesting. Then add mass migration and climate change!

I was moving on until your last post!

Playing Monty Python again now...

Offline OldRider

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Re: The coming economy and us
« Reply #19 on: November 15, 2016, 04:16:21 pm »
I agree, but from the 80's through the 90's the debt was in the $2-$5 trillion range. Now at almost $20 trillion we're in a mess. Old solutions won't work this time.

I look at the debt clock almost every day.

http://www.usdebtclock.org/

Online hobdayd

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Re: The coming economy and us
« Reply #20 on: November 15, 2016, 05:09:53 pm »
Wow...depressing

Offline Checkswrecks

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Re: The coming economy and us
« Reply #21 on: November 15, 2016, 09:33:35 pm »
Two questions for you amateur economist.

1. During the last eight years the Democrats and mostly Obama have stated over and over that they have cut the deficit in half. If you look up the deficit numbers year by year, Obama has had five of the highest years of deficits in history. This is how we got to the $20 Trillion debt.

So, why did they say over and over they have had lower deficits and you never heard anyone correct them?

2. So now we have this $20 Trillion that has to be paid back. The hight government surplus in history was $329 Billion in 2000. Even if we could match the highest surplus in history every year, it would take 61 years to pay off the debt, and that doesn't take interest into account.

So, how can we ever pay this debt?

I just can't see how we can ever dig ourselves out of this hole.



With respect to your first question, politicians wouldn't cherry pick numbers to make whichever case they want, now would they?
 ::)
Seriously, the Dems and Republicans are both right, because they are careful to pick how they want to present the facts. The Republicans always bring out this chart to show how big the debt is and how it is growing. We keep hearing "Gee - Look at how high it got under Obama." And at face value the Republicans are right, it's meant to be a scary chart.



But that's pretty misleading in real life, because it doesn't relate whether we can pay that debt or not. It's like you trying to buy a car and telling the bank that you owe somebody $10,000. If you work for minimum wage, you won't get a loan. If you make $500,000/year, that $10,000 debt is nothing and you'll get the new loan with no problem.


And that's why Obama has been correct in saying that his team has cut the debt ratio (he also talks about the debt per person). The economists divide the debt by how much money the country generates and show it in the chart shown below. By those terms, Obama inherited the 2007-2009 meltdown AND war debt from Bush Jr, it took years to get a handle on it, and now the ratio is getting better. The yearly change and trend have been a lot better, too. I may not have agreed with a number of his policies, but he did this right and we individuals have benefited.





The answer to your second question is that because the population naturally grows and accept that a little inflation devaluing the dollar is normal, these divisions of the big debt number can make it go away. It's why Clinton's term looks so good in both of the above charts. An interesting observation to me is that we think of the Republicans as the ones more conservative money-wise and the ones who would reduce the debt and that was historically true. But you can see that the philosophy changed when Ford came into power. Remember the term "voodoo economics" under Reagan? The debt ratio got worse under Ford, Reagan, and then each Bush; while the years of Carter, Clinton, and Obama reversed the trend. I have no idea about why, it's just how thing worked out.


Debt is just a number by itself and not something to be afraid of. To me, the reason is in a chart which shows the debt per capita, as below. If you compare now to the start of the Great Depression or the World-wide post WW1 depression, we aren't quite as debt-ridden now. So, yes, the number of dollars in the first chart was really bad, but the growing population and each of us being more productive means we are treading water for today. As for tomorrow, it's why I started this thread. We REALLY don't want the ratio (above) or per capita situation (below) to go up by the little amount which would bring us to the level of 1929.





To me, our collective national goal should be to reduce the load before proverbially some straw breaks the camel's back, and our individual goal is to recognize what we can each do.
We need to use up more tires, so you can sell more of them!
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Offline arjayes

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Re: The coming economy and us
« Reply #22 on: November 15, 2016, 10:17:09 pm »
And that's why Obama has been correct in saying that his team has cut the debt ratio (he also talks about the debt per person). The economists divide the debt by how much money the country generates and show it in the chart shown below. By those terms, Obama inherited the 2007-2009 meltdown AND war debt from Bush Jr, it took years to get a handle on it, and now the ratio is getting better. The yearly change and trend have been a lot better, too. I may not have agreed with a number of his policies, but he did this right and we individuals have benefited.

I have a really hard time giving Obama any credit whatsoever for reducing spending. If he spent less it was only under duress from the Republican Congress. And it's easy to judge where he ended up favorably against his first year (2009) where the deficit was a whopping 9.8% of GDP. Also, much of the reduction came from the sequester at the expense of our military, which is now dilapidated, as well as national parks, research, etc. Reducing spending under duress while running the country into the ground is nothing to crow about.

Just as Reagan  ran up a ton of debt rebuilding the military in the 1980s, I expect we'll see the same from Trump. What choice do we have? We can't even keep our airplanes in the air any more. It's embarrassing.

Offline shrekonwheels

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Re: The coming economy and us
« Reply #23 on: November 15, 2016, 10:17:23 pm »
Two questions for you amateur economist.

1. During the last eight years the Democrats and mostly Obama have stated over and over that they have cut the deficit in half. If you look up the deficit numbers year by year, Obama has had five of the highest years of deficits in history. This is how we got to the $20 Trillion debt.

So, why did they say over and over they have had lower deficits and you never heard anyone correct them?

2. So now we have this $20 Trillion that has to be paid back. The hight government surplus in history was $329 Billion in 2000. Even if we could match the highest surplus in history every year, it would take 61 years to pay off the debt, and that doesn't take interest into account.

So, how can we ever pay this debt?

I just can't see how we can ever dig ourselves out of this hole.

Taxes are profits for the government. When they have too big of a blow out sale, they lose profits and the ability to maintain and or pay bills.

In other words, we have lost much of our tax base thus why the negatives. Spending is down however, way way down. It is still a nightmare, but it is downgraded form Freddie is going to pull your through your bed type of nightmare.

Offline OldRider

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Re: The coming economy and us
« Reply #24 on: November 15, 2016, 10:35:01 pm »
 The Iraq war cost $1.04 Trillion with most of that being paid before Obama took office. No matter how you slice up the numbers $20 Trillion is $20 Trillion. We've never been this far in the hole before.

Offline shrekonwheels

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Re: The coming economy and us
« Reply #25 on: November 15, 2016, 10:42:52 pm »
The Iraq war cost $1.04 Trillion with most of that being paid before Obama took office. No matter how you slice up the numbers $20 Trillion is $20 Trillion. We've never been this far in the hole before.


You can safely say that with every single administration save Jacksons.

There are many, many factors at play but referring to what I posted above is a big start.

http://duanegraham.files.wordpress.com/2012/03/net-changing-in-govt-spending.jpg


Offline fredz43

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Re: The coming economy and us
« Reply #26 on: November 16, 2016, 12:17:58 am »
The Iraq war cost $1.04 Trillion with most of that being paid before Obama took office. No matter how you slice up the numbers $20 Trillion is $20 Trillion. We've never been this far in the hole before.

Really? From all that I have read, the problem was that the Iraq war was fought without it being paid for, never was put into the regular budget. That is how we went from a surplus in 2000 to the debt we had in 2008. How was the Iraq war paid for by 2008 when we didn't have any tax increase to pay for it after that surplus was spent? Maybe I missed something.
You're only young once.
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Offline OldRider

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Re: The coming economy and us
« Reply #27 on: November 16, 2016, 12:51:37 am »
Really? From all that I have read, the problem was that the Iraq war was fought without it being paid for, never was put into the regular budget. That is how we went from a surplus in 2000 to the debt we had in 2008. How was the Iraq war paid for by 2008 when we didn't have any tax increase to pay for it after that surplus was spent? Maybe I missed something.

In 08 the debt was already $5.7Trillion and while there was a surplus of $329 billion, it didn't help much. I said that wrong, what I meant to say was the cost of the war was already included in the national debt before Obama took over, not paid for.

Offline groundhog

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Re: The coming economy and us
« Reply #28 on: November 16, 2016, 01:42:28 am »
I rode my bike today

Online hobdayd

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Re: The coming economy and us
« Reply #29 on: November 16, 2016, 03:50:53 am »
You also have to consider when the debts become payable and the ability to pay...and who holds the debt and wether they or anyone else will be in a position to continue.

 

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