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Report: US is insolvent, can't pay future bills

Discussion in 'Sports and News' started by EStreetJoe, Dec 20, 2006.

  1. EStreetJoe

    EStreetJoe Well-Known Member

    The article is very long, but here's the second paragraph.


    The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.
  2. wickedwritah

    wickedwritah Guest

    Viva la Toronto/Montreal/Vancouver!
  3. TheSportsPredictor

    TheSportsPredictor Well-Known Member

  4. heyabbott

    heyabbott Well-Known Member

    What percentage is your mortgage balance to your annual income?
  5. EStreetJoe

    EStreetJoe Well-Known Member

    Roughly 120%. But the difference is that I'm not doubling how much I owe every couple of years (like the current administration has done), I'm constantly paying that down.
  6. The Big Ragu

    The Big Ragu Moderator Staff Member

    I've posted about this over and over again on political threads on this board. And no one seems to care. But this is the real legacy of George Bush. He cut taxes and at the same time--in concert with an inept Congress--spent like mad. We are going to be paying for the debt we've racked up for a long time.

    All of that said, the U.S. is not insolvent. Insolvent would be if the U.S. dollar was in the crapper and treasuries had dropped off in rating. As long as we can raise money, we are not insolvent. And the rest of the world has plenty of faith that we can repay our debts and has been eagerly buying U.S. debt.

    But we can't continue on this path and expect that to continue.
  7. wickedwritah

    wickedwritah Guest

    George Bush has made the Chinese rich beyond belief, since they've been buying our debt up like mad. How do you think they've built all these sparkling new cities?
  8. The Big Ragu

    The Big Ragu Moderator Staff Member

    That is true. China continues to be the single largest purchaser of U.S. debt. But there has been plenty to spread around the rest of the world, too.
  9. BTExpress

    BTExpress Well-Known Member

    Of course, a report like this is GOOD news to Bush supporters, who now can simply say, "OK, we'll just do away with Social Security, and that will take care of those nasty future entitlements."

    90% today

    0% in five years
  10. Ben_Hecht

    Ben_Hecht Active Member

    Uh, the US dollar IS in the crapper . . . next?
  11. The Big Ragu

    The Big Ragu Moderator Staff Member

    No, the dollar is not in the crapper.

    It's relative. Foreign governments have slowed down the fall of the dollar by investing heavily in U.S. treasuries. That investment has been very strong, actually. Yes, the dollar has declined and it is relatively weak. But no, it is not in the crapper. Not even close.

    The main reason the crapper is a long way off is that the dollar is the main global currency. It's the currency used to set prices for raw materials, such as oil, copper, etc. And it's the currency used to conduct a large percentage of global trade. For example, Japan exports more than half of its exports in U.S. dollars. Australia, more than two thirds. South Korea, 85 percent. Even countries such as France and Germany, which do almost everything in Euros, use the dollar for a third of their exports.

    Dollars also represent about two-thirds of the official foreign exchange reserves of governments worldwide. This all reflects America's political stability, large economy, low inflation, strongest financial markets, etc. And as long as China and Japan each have $1 trillion in U.S. dollars for the foreign exchange reserves, they will continue to do everything they can to keep the dollar out of the crapper. The dollar is a long way off from being in the crapper.
  12. BTExpress

    BTExpress Well-Known Member

    Ragu is right.

    Much of the world is sort of holding the U.S. hostage.

    But a hostage is of no use if it dies.
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