Long-term economic outlook of USA and beyond
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Location: carl sagan's universe
Posted on: 16-10-08 15:25:04
Looks like both pratickm and newton are all geared up to write tomes on the current financial situation and maybe we'll have a CD has the winner of the nobel economics prize sometime in the future.
Zaz!
But nice to see some analysis going on here.
http://economictimes.indiatimes.com/Credit_crisis_IMF_maintains_1_trillion_loss/articleshow/3299318.cms
Here is where the 1 trillion figure comes from.
Quote:
Originally posted by pratickm
Who is buying all this cheap stock?
Any guess?
I wouldn't be surprised if after few months of this whole drama, all of a sudden the world comes to know that Sheikhs from Saudi and other Middle Eastern countries hold majority stakes in all those BIG corporations......Bush, after his political retirement, goes to Dubai to settle permanently.....Dick Cheney accompanies him there.....they start couple of BIG oil companies there.....USA economy is getting back to normal....
Rich becomes richer and poor becomes poorer.....Toronto Star reports that before recession, India had 800 million people living on less than 50 US cents a day, now it has 850 million people..............and somewhere on the rooftop patio of a seven star hotel, few Americans and Britons take 'chuski' of beer and discuss: Saale, bahut samjhte the apne aap ko sher, Asian Sher, ek hi jhatke mein saari pahalwaani nikaal di humne. Saamp bhi mar gaya aur laathi bhi nahin tooti. Humara paisa humaare paas hi bank accounts mein raha aur maje bhi le liye.
Canada will have another elections.....canadians still slogg their a**es to make both ends meet....vent out their frustrations on local ethnic radio channels and forums like CD and the life goes on and on and on.........
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A couple of videos of interest...
Part 1:
http://video.google.ca/videosearch?hl=en&q=Richard%20Daughty%20%22The%20Mogambo%20Guru%22&um=1&ie=UTF-8&sa=N&tab=wv#
Part 2:
Click on the second video in the same link.
Quote:If there has to be a solution to this mess, the solution simply cannot depend on or assume that US national debt will be reduce or vanish.
Originally posted by newton
What has to happen is a major pullback of discretionary spending by the US on futile wars. If the US does not succeed in reducing its public debt, correcting the trade imbalance we could be looking at Scenario 3.
Conservative estimates of the national debt are $10 Trillion.
That does not take into account the underfunded Social Security and Medicare.
If we were to add in the full funding for those two programs, we are probably looking at upwards of $50 Trillion (approximate, and prolly conservative).
The $700B bailout pales in comparison to this - it adds barely 1% to the debt.
Even if the US were to completely suspend and eliminate the Social Security and Medicare programs tomorrow, it will still leave $10 Trillion of national debt.
We all know they cannot get rid of those programs overnight.
Even if the US were to pull out of their wars in Iraq and Afghanistan tomorrow (again, we know it can't) and were to scale down their military spending to barebones, they will barely make a dent in the debt.
In other words, there is no reasonable action that will make all that debt simply disappear.
Therefore, the US has got to live with the debt and it's policy makers (as well as those in Europe and other countries) have to take it as given and design their solutions around it.
Hopefully, this is not a tome
I am mostly thinking aloud.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Then the govt has to do what any average family does to pay off debt. Increase revenue (raise taxes) and decrease costs (cut subsidies). There is going to be pain either way but Canada successfully achieved it.
Quote:Yep, I agree with that.
Originally posted by newton
Then the govt has to do what any average family does to pay off debt. Increase revenue (raise taxes) and decrease costs (cut subsidies). There is going to be pain either way but Canada successfully achieved it.
There is no reason why a Govt's budget should be handled any differently than a household budget.
Just like a household, the Govt has to take on debt.
However, at some point it needs to be repaid.
So far, the US has avoided repaying the debt because other countries have been gobbling up US securities and have been using the USD as a safe haven during turbulent times.
Even now, the value of the USD has not fallen in any way.
This is similar to how lenders will not hesitate to lend moeny to some person with very good credit rating.
They will continue lending until the point the person becomes insolvent.
In uncertain times, banks will lend money to the person with good rating even if he/she is piling on more debt.
Eventually it will catch up.
That's been the position of the US in the world.
They have stayed afloat on debt for many years now.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
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