I really don't think the US will ever go bankrupt. I think if/when the crap starts to hit the fan they'll just start printing money. It's the only way out. The rest of the world depends on US treasuries just as much as the US government does, if not more. If that party ends the whole world goes down with it. And I completely agree with Obama. Five years ago was when we should have been worrying about the deficit. Now there are worse things at stake.
well i wouldn't mind if he said we need to increase taxes and cut spending. i haven't said that on the board but i have when i talk to my friends.
So you didn't vote for the guy who said he would raise taxes on those who could afford it and end the red ink gusher in Iraq? Deficit spending on infrastructure can actually aid future prosperity, deficit spending on consumables, like occupations don't. Unless, anyone wants to argue that having the Iraqi's pump all the oil they can on to the world market has lowered prices ... That's valid but no Bushie would ever say it out loud.
Are you serious? If we go into a depression, we won't have enough tax revenue to reduce the deficit in the long term. The deficit was under control until Bush had to give his stupid tax cut and increase spending by record levels. The point of fiscal economics is for the government to increase spending during bad time and increase during good times. Unfortunately our current president must have that class at HBS and ran this country just like his previous businesses into the ground.
What is sort of funny is that the Bush Administration deliberately created the huge deficit even though, unlike the naive faithful, they don't believe in supply side economics or "vooddoo economics as his father called it. They thought this would force the next Democratic administration to have to raise taxes and cut spending. However their anti-government regulation ideology led to the sub-prime mess and the current recession, despite near bottom interest rates, which is now forcing Keynsian government spending, with many mainstream conservative economists on board.
i didn't vote for obama or mccain. yes deficit spending on infrastructure is good but there is also an out of control debt that needs to be taken into consideration as well.
CNN:Candidates Slam Bush The Obama campaign said the White House announcement is "an urgent reminder that our fiscal policies must change." "These have been years of unprecedented fiscal irresponsibility. That's an important issue in this election because Sen. McCain is proposing to continue the same Bush economic policies that put our economy on this dangerous path and that will drive America even deeper into debt," said Jason Furman, Obama's economic policy director. <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/qwupV_02UOY&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/qwupV_02UOY&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object> My point is not to argue whether we need more spending now. It is that Obama is not in office and already projecting 2 years of increased spending. And it's not so much that we spend but where we spend. A union card in every pot and High speed internet in every wall is not a good thing IMO. I also don't believe we can afford or should even consider Universal healthcare. I am not convinced that the auto industry shouldn't be expected to make it on it's on. Yes there is a real possibility it will fail but that's capitalism. Detroit automakers are defective and reports are that all of this bailout money is just to payoff Union deficits and almost none will actually go to development. Why bailout an industry that should fail. Someone will come in to takes it place. It's the law of supply and demand. Tax the hell out of the imports and give that bailout money as incentives to new American players who want to come in the market. Sure it will take a few years but it is a far cry better option than the road detroit is taking us. If you don't believe it can be done you only need look at the non union auto plants in the south. IMO GM should be allowed to shut down wait 30 days then restart Union free! Look at all the union free auto makers down south. Toyota is the top dog opening in San Antonio with it's tundra building plant and increasing sales almost 80% paying it's workers well, maintaining much lower overhead and more economical vehicles and giving more for the dollar. all the while GM gets weaker trying to get the Union fleas off it's tail. GM spends much more on medical insurance than steel. Allowing GM to fail will never happen under Obama's watch. In stead it is very likely he will pass this card check bill designed to eliminate secret ballots and then every automaker in the south will become union shops along with eventually most other American industry. We can't compete in a global economy with those chains. The only next solution would be to close the doors on free trade. Leaving us stuck with inferior products and the death of America.
never heard that idea before...just read up on it and i'm not sure how it's applicable. my scenario is harmful to both in the medium term because i feel we are just too far overextended and we have to pull back. edit for clarification...i think if we continue on this pace we run the risk of losing our AAA rating and the risk of out of control inflation. i think those longer term problems are worse than the pain of the paradox of thrift you are referencing. help me out here because i am an economic dimwit.
Of course you don't mention the link is from July, before the bottom fell out. The most ludicrous claim in the whole campaign was John McCain's continued pledge (into October) to balance the budget by the end of his first term. He eventually backed off later in the month.
It will continue to be throwing money at a problem that is in need of contraction. Populations are expanding, but blue collar jobs are being replaced by machinery. I actually think a World War would be beneficial towards the economy by offering jobs across the world as well as lowering world population. This is being very extreme. I think the deficit contributes to the recession. I know I don't need more refundable credits on my tax return, but Obama is promising them to me, and I don't plan on spending the extra cash. Individuals need to quit deficit spending as well.
I didn't vote for Bush. I never thought he had much common sense which I thought for a President was much more important. But that being said with 911 two wars Katrina and an out of control Fannie Mae and Freddie mac I don't see how the deficit could have gone any other way. After 911 Bush became focused on protecting this nation from attack above all else. To make matters worse Bush ruled more like a slightly centric Democrat. Not that that is bad, but he wasn't opposed to helping out the needy even at the cost of the deficit.
Somehow I get the feeling China won't just let the US off the hook for trillions, at least not without a lot of pain. The other problem is that if we default on our debt the dollar would be basically worthless...there was a great article about that posted here a while back, but I don't have time to search now. I voted for Obama, but if he doesn't develop a plan to get us out of deficits I hope the Republicans get back to real conservatism and come up with a viable alternative. One that doesn't involve all of Bush's crap. This is my #1b concern for the future, even more than Iran/Russia/China militarism or even non-nuclear terrorism. Terrorists w/ nukes would be #1a.
right now we are getting insanely cheap money just because we are viewed as safe. so i think the first step will be our cost of borrowing to finance our deficit spending will increase significantly. that WILL happen because the credit default swaps on u.s. govt are slowly rising (that means people are buying these to try to insure themselves on the u.s. debt they hold). when money costs more for us to borrow then some problems will start to happen. i don't think the u.s. would ever stop paying the interest unless they simply didn't have the ability to do so. hopefully, we can survive this game of chicken and avoid that outcome.
If Obama does to the budget deficit what George Bush has done or what Ronald Reagan did, I will be very upset.
I did not vote for Obama. I am not in some kind of crisis mode now that he will be President. I have hope that he can help our country, doubt, but hope. The man ran on "Change" and it worked, there is nobody in this country that wouldn't agree that we needed to "change". The first thing he does is say that he is not going to change our spending habits. The following statements just crack me up... Above: I find this blind belief that this man is "the hand you want on the tiller" funny and disturbing. If you can provide me with one instance where Obama has handled any military or economic situation equal to the one he is about to undertake then I might share your optimism. The fact is that nobody knows what he can do other than give charismatic speaches. I will withhold my feelings about how our new "captain" will steer the ship until he has actually done something, legislated something of value, proved something. Anything. Until then, I don't know and neither do you. Are you freakin kidding me. This statement is the primary reason why our countries economy is in a shambles. This is how people think. AAAh what the heck spend spend spend and if they ask for me to pay.... screw em. Disgusting.
It is not a republican and democrat thing... this board is suffering from economic insanity... It doesn't matter if it is Bush or Obama you can't keep borrowing and expect anything other than total bankruptcy you forgive a nation's debt when they go bankrupt simple as that bankers and the most wealthy don't buy up US debt expecting to lose bigger than the citizens of this country Obama should do the exact opposite face the hard recession now while we have the best chance to survive, spending which is borrowing is the exact worst thing to do. Slash spending/borrowing and restrict services and let the economy contract to a manageable level and American determination, industry and sweat will bring the nation back stronger this is insanity on the lines of Bush, I think both parties have lost their minds. I knew for sure McCain was clueless, President Obama do the right thing.
I agree, I just don't want to lose my job either. if obama's going to spend our way out of this, which honestly i don't know if its possible, i would like to see him focus efforts on renewable energy.
Another thing politicians are so scared of a recession/depression that what they are doing is total short term thinking it is not a matter of 'if' but how big is the hit going to be... we need to get the debt down now,,, the economy is the issue. government debt can create the last credit bubble prior to a collapse or at least a severe recession or a depression- I think this is a very good time to go to work for the federal government, I would really consider it for a younger person.
