[Cowboy1600]

Now I'll try and cut off the calls of being anti-US before they happen. Im playing devils advocate. The US economy may be growing at record levels etc but the debt hole that Bush has dug, and is continuing to dig, is going to create massive problems for the future. Will these problems see the break up of the USA?

I know some of you will state that the USSR failed due to the inherent problems with communisim. Maybe thats true, but mainly the USSR was deconstructed as "mother Russia" was flat, stinking broke.

The US lives on credit from other nations. How long until these other nations stop lending? What will this mean? What happens when the creditors come knocking?

http://www.onlineopinion.com.au/view.asp?article=2328

Once again I am NOT pushing some left wing hippy crap blah blah blah. This is a major issues that has been somewhat neglected due to the "war on terror".

My opinion: Bush has been economically irresponsible. Clearly his economic abilities are seriously lacking. His policies of tax cuts and war have created an economic void that may never be filled.

As JB would say: Discuss.

[Johnny Diablo]

Just trying to figure out where you get these ideas from.

I am starting to understand now that I am not the only one that thinks you aussie youngsters seem to have gotten involved just a bit much.

Secret plan to curb student politics

Also seems that the media has run amok with its reporting. Bruce Hawker, managing director of Hawker Britton, blamed the media for the public's fear of crime.

[Cowboy1600]

So ill take that as you dont have any idea. Im not trolling, nor am I just hanging ****. Why are you concentrating on me? Im not the issue. The issue is the US economy, and more importantly US foreign debt.

Is the US economy not in tremendous debt? This is once again an issue that will have an affect on me.

Im not involved in any student unions, nor any student political movement.

Also seems that the media has run amok with its reporting. Bruce Hawker, managing director of Hawker Britton, blamed the media for the public's fear of crime.

What in the hell has this got to do with the topic? You are just trying to get off the topic by trying to soil me. Dont try and make me look like some extremist.

Where do I get these ideas? I think of them. Oh my god!! I think for myself!! I dont need to regurgitate some esoteric rigmarole in order to stimulate discussion. You may not agree, and I may be incorrect but it makes for interesting debate.

Tell me, does the US not have record foreign debt? What would happen if you borrow $1000000 from a bank and then didnt pay a cent back for 5 years. You then went back and asked for more money? Would the bank lend you more money? Hell no. How much longer do you think other countries and organizations are going to keep send cash and commodities to the states?

[Baketech]

[Cowboy1600]

Ok, modified the title. Previous heading was a little inflammatory. Im not meaning to express some wacky opinion. I do wonder what is the future of the US economy and what impacts this may have on the US.

[Baketech]

Originally Posted by Cowboy1600

Ok, modified the title. Previous heading was a little inflammatory. Im not meaning to express some wacky opinion. I do wonder what is the future of the US economy and what impacts this may have on the US.

Keep trollin....

[oldfogey]

Trout breaks surface

Generally, people (banks, pension funds, insurance companies, individuals) lend to people (countries, companies, individuals) when they think they're going to get their money back. The wealthier (assets, income, prospects) the borrower, the easier it is to borrow.

The US is a wealthy, historically and prospectively economically successful country. So people are happy to lend to it.

All borrowing is a time switch of income from tomorrow to today. More income now, less in future. If you think you're going to be wealthier in the future, you're happy to borrow today. Indeed, if the borrowing finances something productive (education, business investment) then you could be wealthier tomorrow because you've borrowed today.

The US government is borrowing a lot in absolute terms and relative to the size of its economy compared with any historic average. But not huge, not like a 3rd world country, or Italy or Japan. So its citizens will be a bit poorer in the future as they will have to pay the debt cost, but nothing drastic.

The USSR didn't borrow much at all. It didn't have to, the government had control of taxation and prices and so simply reduced its citizens' income instead. It was a communist economy, and therefore inefficient. It spent lots on unproductive armaments (much bigger % of economy than the US). It did have a brief period when it produced large and fast growing quantities of oil at a time of rising real oil prices when it spent fast, too. Then the oil fields came to capacity, the real oil price fell, and the country's income fell sharply. So people had to become poorer, over a short period. Result: fall of communism.

[abtech]

"Tell me, does the US not have record foreign debt? What would happen if you borrow $1000000 from a bank and then didnt pay a cent back for 5 years. You then went back and asked for more money? Would the bank lend you more money? Hell no. How much longer do you think other countries and organizations are going to keep send cash and commodities to the states?"

hmmmm probably about as long as the US has given billions to half the known world in foreign aid, defaulted loans (Nigeria, Columbia, Mexico, France and about 40 others come to mind) . . . Foreign debt has historically been counted in US dollars and I believe what you are currently speaking of is not actually foreign debt, it's the trade deficit and is driven by protective laws enacted in several countries to discourage the purchase or reliance upon non "home made" product. Ever try to by a Cadillac in OZ? How about a Harley in Japan? Take a look at your countries Australian content rules (or Canada's for that matter).

[BDA116]

I have ~$650K in mortgage debt alone. That number is quite a bit higher than 8 years ago.
I guess that makes me fiscally irresponsible for my own family's economic picture, right? My economic abilities are seriously lacking, right?

Cracks me up when economic idiots bring knives to gun fights.

[bwhip]

Originally Posted by Cowboy1600

...Dont try and make me look like some extremist.

[oldfogey]

Originally Posted by abtech

hmmmm probably about as long as the US has given billions to half the known world in foreign aid, defaulted loans (Nigeria, Columbia, Mexico, France and about 40 others come to mind) . . . Foreign debt has historically been counted in US dollars and I believe what you are currently speaking of is not actually foreign debt, it's the trade deficit and is driven by protective laws enacted in several countries to discourage the purchase or reliance upon non "home made" product. Ever try to by a Cadillac in OZ? How about a Harley in Japan? Take a look at your countries Australian content rules (or Canada's for that matter).

US foreign aid has never been that big as % of the economy: including debt forgiveness it's seldom exceeded 1% of gdp. Current account deficit (as you say, not foreign debt but domestic debt held by foreigners) is between 5% and 6% of gdp. All nations have barriers to trade, including Australia and Canada. The US gets taken to task in the the World Trade Organisation for breaking the rules at least as often as any other major trade bloc.

[QuikMike]

Originally Posted by Cowboy1600

Now I'll try and cut off the calls of being anti-US before they happen. Im playing devils advocate. The US economy may be growing at record levels etc but the debt hole that Bush has dug, and is continuing to dig, is going to create massive problems for the future. Will these problems see the break up of the USA?

I know some of you will state that the USSR failed due to the inherent problems with communisim. Maybe thats true, but mainly the USSR was deconstructed as "mother Russia" was flat, stinking broke.

The US lives on credit from other nations. How long until these other nations stop lending? What will this mean? What happens when the creditors come knocking?

http://www.onlineopinion.com.au/view.asp?article=2328

Once again I am NOT pushing some left wing hippy crap blah blah blah. This is a major issues that has been somewhat neglected due to the "war on terror".

My opinion: Bush has been economically irresponsible. Clearly his economic abilities are seriously lacking. His policies of tax cuts and war have created an economic void that may never be filled.

As JB would say: Discuss.

ooooh, cowboy...you're asking for it....

[abtech]

Originally Posted by oldfogey

US foreign aid has never been that big as % of the economy: including debt forgiveness it's seldom exceeded 1% of gdp. Current account deficit (as you say, not foreign debt but domestic debt held by foreigners) is between 5% and 6% of gdp. All nations have barriers to trade, including Australia and Canada. The US gets taken to task in the the World Trade Organisation for breaking the rules at least as often as any other major trade bloc.

and the mean percentage of domestic debt held by foreigners in Japan, France, England and Germany is what? How about Canada and Australia? Based on GDP, I think it's probably pretty close . . .

[BDA116]

Originally Posted by abtech

and the mean percentage of domestic debt held by foreigners in Japan, France, England and Germany is what? How about Canada and Australia? Based on GDP, I think it's probably pretty close . . .

Exactly. It is very telling of the person's intellect when they just throw out the old line of "the US debt is higher than ever before" without any other economic indicator. The majority of US "debt" owed is actually owed to ourselves. The percentage of debt to income - or GDP - is at a rate consistent with the last few years (actually lower than a couple klinton years), and lower than most other nations. If one were to look at the overall economic picture, the US assets are much greater than our debits, and our income is greater than our expenditure. Our "loanability" is not hurt in any way, either.
(very nutshelled, but I tried to put it in words even a communist liberal would understand)
Which is more economically irresponsible:
The individual with $10K overall debt, assets worth $9K and an income of $16K?
The individual with $60K overall debt, assets worth $60K and an income of $30K?
The individual with $200K overall debt, assets worth $250K and an income of $40K?
The individual with $600+K overall debt, assets worth $5+M, and an income of $100+K?

Yeah, the US is in real trouble of going the way of the USSR. Well, it would have been had the communists gotten their way and kerry won the election.

[sheepofblue]

as the sheep surfaces he looks about and sees the hook.... sneers at the bait and submerses again.

Buy and read some economics books.

[oldfogey]

Don't have all the countries stats available, but foreigners own 42% of US publicly held government debt whereas only around 5% of Japanese government debt is held by foreigners. The US has run a big deficit for some years, whereas Japan runs a current account surplus. The UK is lower than the US, around 22%, but has the same issues. The Euro zone typically runs current account surpluses also, so I would think low teens for them.

I'm looking for a sensible global source. The IMF stats would be place to start, but you have to work hard. The St Louis Fed is useful for the US:
http://research.stlouisfed.org/fred2/series/FDHBFIN/1

[oldfogey]

Originally Posted by BDA116

If one were to look at the overall economic picture, the US assets are much greater than our debits, and our income is greater than our expenditure. Our "loanability" is not hurt in any way, either.

The US overseas assets are now worth less than those US assets held by foreigners. So the balance sheet is in the negative. US overseas assets are primarily business assets, whereas foreigners' US assets are mostly US government bonds. Income has been higher on US assets abroad than on foreigners' assets in the US, but that will no longer be true from this year onwards as the foreigners' stock of US debt continues to grow at roughly 5% of the economy per annum.

I agree, this has little to do with "loanability", see my earlier post. But the US now has an income deficit on its balance sheet as well as a trade deficit.

[rocket]

Originally Posted by BDA116

The individual with $600+K overall debt, assets worth $5+M, and an income of $100+K?

That's too random.... hmmm. It's nice to see that Capitalism is kicking the crap out of all the other isms still

Cowboy1600 - I'm surprised you haven't jumped off a bridge or something. Glad to see you haven't ... sort of

[Cowboy1600]

Originally Posted by BDA116

I have ~$650K in mortgage debt alone. That number is quite a bit higher than 8 years ago.
I guess that makes me fiscally irresponsible for my own family's economic picture, right? My economic abilities are seriously lacking, right?

Cracks me up when economic idiots bring knives to gun fights.

If you continue to increase that debt without regard, and then leave it to you kids, and their kids, and their kids then yes. You are very irresponsible. More than liekly tho you have budgeted to have it paid off before you die. Am I right?

KABOOM!!!!

[Cowboy1600]

Okies....I dont have much of knowledge on this issue. Im not pretending to, nor claiming too. Hence why Im asking. I am asking for your thoughts, not trying to start trouble or just argue against anyone.

I understand that all countries at some point are in debt. And all persuasions of government have dug holes. Has the current administration bitten off more than it can chew. The debts are growing at an unprecidented rate. This wont have such an affects on people alive today, but what does it mean for future generations?

From what I can decipher the US is becomming less valuable. Is this true? Is that essentially what your saying oldfogey? You seem to be up to speed on the US economy. Once again, Im not.

[Cowboy1600]

Originally Posted by rocket

That's too random.... hmmm. It's nice to see that Capitalism is kicking the crap out of all the other isms still

Cowboy1600 - I'm surprised you haven't jumped off a bridge or something. Glad to see you haven't ... sort of

Feel free to place me back on your ignore list.

[Cowboy1600]

Originally Posted by abtech

and the mean percentage of domestic debt held by foreigners in Japan, France, England and Germany is what? How about Canada and Australia? Based on GDP, I think it's probably pretty close . . .

The percentge held mioght be similar, but the levels are very different. Lets say country A has a GDP of $10 and a $1 trade deficit that is 50% held overseas and country b has a $200 GPD and a $100 trade deficit with only 30% held overseas whos worse off?