you don't understand spending more than you earn is not not a winning deal? ...i know your a very smart woman, and if i can see that, you should have already solved it... not being a smartazz here, but i know you know this, but are you like the other libs that cannot see any wrong in obama? are you going to try to defend this too? we can even do this, lets take obama out of the picture and just say the government... is this still aceptable to you?

I'm smart enough to know that Obama does not take out a checkbook and pay the bills of the nation. He does not have the authority to look at a bill from one the many bureaucracuies and say "Oh yes we need to pay you this amount of money this month".

That has all been decided through the budget, unless there is not a budget. So what it is Moe - I'm not understanding why people thing that Obama has this almighty power to spend money "unchecked".

Maybe I don't understand something - please explain and don't expect that I'm just closed minded about it.

i see... i'm a little disappoited that your just a typical lib. obama is in charge, he will get the blame or credit where it's due, just like every other president in the past has. so you think "he is in his budget" makes everything ok. did you ever think there may be a problem with "his" budget?

http://www.theamericancause.org/index.php?page=barack-obama-s-spending-spree

yes, but the nominal figures are prtty much meaningless until they're put in context with the GDP. Here is what the Debt as a % of GDP looks lie since 1950"


And here is what Government spending as a % of GDP looks like since 1900'



I'll agree that it's higher than it was before. Beyond that, So what?

I assume that $1 trillion+ figure you're referring to is servicing of the national debt, yes? The money for this comes from foreign bond holders. The current largest holder of US debt is China. Other debt holders include Japan, The UK, and Korea. The incentive for bond holders to hold these bonds in reserve is that since the breakdown of Bretton-Woods, the dollar is the primary reserve currency of the world. Plus, when these foreign entities own US debt, they have influence over US spending and monetary policy. If the dollar tanked, these creditors would be out of billions and billions of dollars. In this way, the US regime is effectively a "corporation", and foreign debt holders are "stock holders". The reason that owners of debt don't pay tax is because they are making dividends, not income. As you can imagine, the debt holders (China, etc) are not at all pleased with American monetary and fiscal policy. They are watching the value of their investments go down daily. You can bet that foreigners are putting as much pressure on the US regime as possible behind the scenes to get their act together. The big question now (among others) is "how to orchestrate an orderly collapse?". IMHO, some Federal assets will be sold off, the FED will adjust interest rates (especially inter-bank rates) downward and increase reserve requirements. Most of the burden (as usual) will be born by future generations in the form of debased currency, higher prices on goods/food/commodities, more difficulty in getting loans (especially small business loans and mortgages), and a lower standard of living.

Does this sufficiently answer your question? Ciao!

i've also heard that india has bought alot of these bonds too... which is(imo)better than china

Great information everyone. The charts were helpful in
understanding the long term picture and made heavenlyboy's
explanation easier to understand. (not that I totally in
the know)

Anyway,another question for heavenlyboy or whoever can answer.

Let me set this up first. We are heading toward a decline in
population due to the aging baby boomers. Loss of income,
loss ofretirment funds, inability to find work as a senior,
higher cost of necessities, and likely less options in the near
future for healthcare benefits - are all situations that will
speed the process of population decline along. Not to mention
that may women had already extended their single/childless
status as they advance their careers. I think this will
continue even more with the lack of secure and good paying jobs.

NOW THE QUESTION - if the per person debt is currently 35,600
and it can only grow (due to the interest the gov must pay)
how high can that figure go before we become like Germany
after the war - when the greatest value of their money was
as a paper product to burn or flush away?

Consider how much the six year olds of today will have to
pay in taxes - if we're still here when they're 50.

this dang thing

That's because it's a pretty meaningless factoid. We can all see how impressed you are with big numbers.

THIS is what is meaningful to me:



And THIS

meaningless factoid? i am coming to the realization that the libs and conservatives will never be able to get along, because the libs are too much like 3 year olds. when the country does go down, libs will still try to blame everyone else instead of trying to solve anything.
but the good thing is, Obama will be gone in 2012, and then you libs can do what your best at, cry and whine, then blame someone else...

How so? Or is this just the most insulting thing you could think of to say?

don't blame me if the truth bothers you... do something to fix it

The problem is our debt, and our ability to pay it off,
just like the recent commission found. They did NOT find
that the debt was meaningless and announced everything was
rosy with a GNP chart.

According to historian Franz Senholz, in 1923-approximately the height of Weimar hyperinflation-only .8% of government expenditures were covered by taxation. I don't have the figures for this in the current US, but since per-person share of the national debt is growing exponentially (you can observe this on usdebtclock.com), and there is no significant growth in production or savings, the current trajectory we are on could well put us into hyperinflation within a generation. Hope this helps. :)

It all depends on GDP and productivity. When things are roaring, the economy can support a huge amount of debt. We've done it before. Inflation is defined as too many dollars chasing too few goods and services. Rising prices alone do not cause inflation. Too little productivity almost certainly will. Unemployment has dropped some under Obama. It will certainly spike back up if wages continue to drop and and aggregate demand drops with them and more companies are forced to close their doors for lack of business.The debt, unfortunatly is on an upward trajectory and will continue to do so as long as the Government refuses to tax the people who have all the money. So, rising debt -lower GDP, rising inflation, a sure formula for disaster. The process is only exacerbated by current Fed policy of quantitative easing which is literally just printing money. Japan invented QE in 2000, and they still haven't recovered.

The debt commission, headed by long-time Conservative Alan Simson and Corporatist Democrat Erskin Bowles has a credibility somewhere on a par with the Warren Commission and its magic bullet theory.

WOW - I was hoping my analagy of the 6 year old wouldn't be close,
but they are the next generation and the one after them may
be fewer in number still.

Thanks HB for the inforamtin and the link.

Above someone said the Government payed 48 or 49 Billion out to recipients.

I pay my FICA out of every paycheck, then the government borrows it. When I retire they will pay it back with interest. It's a trillion dollars they use as a slush fund.

So when they quit the Social Security insurance program, where will they get the money to pay the bills.

You know I thought about that too. If they privitize
social security and the medi's

1. how much money do they give the private corp to invest?

2. ditto on the question already posed, what will the gov
budget look like without all those money to be 'absorbed'?

But their credibility is much higher than yours, and their understanding of the problem is far greater.