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Thread: How? I don't get it.

  1. #1
    God/dess Lysondra's Avatar
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    Default How? I don't get it.

    Honestly, I'm not being sarcastic, I'm not being rude - I just -really- don't understand.

    I keep reading people saying America is so financially well off and that the economy is great. I don't see it! America is HUGELY in debt to all these countries (a ton moreso than other countries are in debt to America)... the AVERAGE American is $16,000 in debt.

    4,800,000,000,000 <--- the total debt of all Americans

    8,500,000,000,000 <--- America's worldwide debt

    http://en.wikipedia.org/wiki/United_States_public_debt
    http://www.brillig.com/debt_clock/

    ----

    If America is SO well off like 'every'one is saying... why is there so much goddamn debt? What makes America so 'well off'?

    No, really... again, not bein sarcastic. Can someone answer me honestly?


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  2. #2
    Sitri
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    Default Re: How? I don't get it.

    Because, we will get to enjoy this standard of living and NEVER have to pay it off. It is called "screwing the future".

    Honestly...

  3. #3
    DJ Maimed
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    Default Re: How? I don't get it.

    When America fails, the new corporate logo will read "United States of Mexico" or "United States of Mexicanadiamerica". I'm just glad I can still move to Africa where Sally Struthers can buy me a cup of coffee and if I'm really lucky maybe Bill Gates will pop in to breast feed me! A future so bright I gotta wear china-white colored shades!

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    God/dess Lysondra's Avatar
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    Default Re: How? I don't get it.

    ..allllright..

    Are you guys being sarcastic towards the question or sarcastic towards the answer?


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    God/dess Deogol's Avatar
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    Default Re: How? I don't get it.

    Seriously, the theory is that our economy can handle that amount of debt.

    For example, some dude is in hock for $10,000,000.00 - that is until you find out it is Warren Buffet's house loan. Then all of a sudden there is a bit of a ratio there.

    So - that's the theory.

    Whether reality matches that - I don't know. For example - we are leaking money like a fountain in foreign trade deficit. What that means is that no one wants to buy our shit but we sure do like to buy theres!

    So if it isn't actual products we can sell to generate money to send back out into the world - we start selling our assets. For example - the company Warren's loan is with sells it to China International Bank. Wha la - a little bit of America owned by communist china until the holder can front the cash to pay it off. If he can't - China can do anything they want with that asset - whether knocking it down for building a communist indoctrination center or what have you.

    Another example is the rumor all of america's gold has been sold off to foreign countries.

    Anyhow - hopefully you get the idea. There are a lot more abstract things going on.

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    Default Re: How? I don't get it.

    if the per person GDP is $42,000, $16,000 debt is manageable.

    government debt only:
    http://en.wikipedia.org/wiki/List_of...by_public_debt

    US is at 65% of GNP.
    Japan which is also rich, has a bigger debt problem at 158% of GDP.

    and I believe the majority of the US debt is owed to other Americans. so can you still be rich if you owe yourself?

  7. #7
    DJ Maimed
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    Default Re: How? I don't get it.

    The only thing I'm sarcastic about is needing a new proctologist because Doogie Hauser turned out to be a nutchugger and Bush is in Iraq. Were fine over here, I couldn't afford a doctor even if I needed one, I speak 6 languages which allows me to order my porno and slushie in most American quickie stores and if I play my cards right could get me my dream $6.oo hr job!! No not being sarcastic cause precious metals are at their highest price in a good number of decades which certainly means the American dollar is in fine shape (especially the newly printed ones)! On a non-sarcastic promissary note Lilith, I love your new avatar, its way cool!!

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    God/dess Paris's Avatar
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    Default Re: How? I don't get it.

    US debt is sort of like taking out a student loan. After the student graduates college chances are his earning power is going to be higher than if he never attended college, hence the loan becomes worth it based on future earning potential.

    I think maybe american debt is like that. We are now a service based economy which means that economic fluctuations will be less dramatic than in a comodity based or manufacturing based economy. Services are not based on the whim of the consumer such as medical care, retail services and hospitality industries like restaurants. This creates a stable base that is growing, thereby our ability to cover those debts is not compromised and is actually getting better.

    Did that make sense?


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    God/dess Lysondra's Avatar
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    Default Re: How? I don't get it.

    So you're saying the US owes other countries because other countries have loaned money because they believe it'll be a stronger power when it 'grows up'?

    Wow, they must be regretting that one now. O.o;


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    God/dess PookaShell's Avatar
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    Default Re: How? I don't get it.

    I love my America. But I am counting the days until George W. Bush is out of his chair. I dont blame the debt on him or anything but I dont think he's helped it and I'm ready for some things to change. Our national debt is getting crazy but other large countries have similar situations right now. But 16,000 in debt isn't too huge a number if you consider financing cars, mortgages, student loans, etc. Its all investments somehow or other. If its credit card debt I guess that's different, I'm not sure what specifically you were referencing.

    I do agree we need to fix it, but I dont think its worse off than alot of other countries and that "we are just so richer and better than everyone else" Crap is just shit George W. Bush spews all over the place to try to make his presidency look successful.

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    God/dess Lysondra's Avatar
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    Default Re: How? I don't get it.

    Yeah... that BEST/RICHEST/FREE-EST country in the world is the shit that really gets me.

    Like.. what?!

    Way to be egotistical there, Bushy.


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    God/dess Lena's Avatar
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    Default Re: How? I don't get it.

    Reality is a social construct. It has nothing to do with... reality.



  13. #13
    God/dess PookaShell's Avatar
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    Default Re: How? I don't get it.

    Yeah - Americans don't think like that. George W.Bush thinks like that and unfortunately his face is what represents our country right now. We all hate him. We kick him in the balls every time we see him.

  14. #14
    Banned Melonie's Avatar
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    Default Re: How? I don't get it.

    Reality is a social construct. It has nothing to do with... reality.
    Which is a concept that arguably applies to international finance as well. In my own mind at least, the key to understanding how the USA can be so far in debt to the rest of the world with the rest of the world still being eager to loan Americans yet more of THEIR money requires forgetting all about the typical borrower / lender relationships that happen on a personal level or even on a national level, and realizing that internationally the US has managed to set up a 'rigged game'.

    First question is ... gain or lose, what happens if foreigners STOP loaning us money ? Well, if you're an export country with a very weak market for domestic consumption of the products you produce like China or Japan, not lending the USA more money effectively means not selling as many export products ... thus shutting down your industries and laying off your own workers ... which would only cause an equal amount of gov't money to be paid out to support your own unemployed citizens. At least if you loan that same amount to the USA instead, in theory you will eventually get paid back something.

    Second issue is that the US dollar, while no longer backed by 'real money', is still a pretty safe spot to park foreign assets. Keep in mind that while most of he rest of the world has seen their own currencies / economies self-destruct at some point in the last 100 years, this hasn't happened in America (so far). This 'safe harbor' currency factor allows the USA to screw foreign investors a la the 'slowly boiling a frog' scenario, usually meaning that for every 1.1 million euros = US$ 1 million the US borrowed 5 years ago, we get to pay back $ 1 million = 800,000 euros today !!! To the US gov't and big US financial institutions as well as US consumers, these exchange rate slides (= US dollar inflation / devaluation) appears to be 'free money' even after interest payments are tacked on. By this perverse international currency theory, the more Euros we borrow, the more dollars we 'make', and the more 'stuff' we get to buy with those borrowed Euros that we never have to pay full price for !

    Then you've got the issue of the US dollar being the '800 pound gorilla' reserve currency to the world since the end of WW2. This forces every country to exchange their own currency for US dollars when buying / selling oil and other global commodities. This arrangement basically forces commodity sellers (with the largest being Arab oil shieks) to reinvest their (petro) dollar proceeds into US dollar denominated financial instruments, businesses, assets, loans etc. in order to stabilize the world price of their commodity in terms of other currencies. If this wasn't the case, then the exchange rate of the US dollar vs the Euro or Yen would fall off a cliff, meaning that the Euro or Yen price they (Arab oil shieks) could charge for their commodity (oil) sold to european and japanese customers would also fall off a cliff (or alternately that the US dollar price for imported oil would rise so high that the US economy would come to an immediate halt, meaning vastly reduced oil purchases thus vastly reduced incomes for those Arab oil shieks).

    The big worry for the USA is that the international dominance of the US dollar as a reserve currency is slowly but steadily being eroded. If and when that happens, i.e. if the US dollar becomes no different than the Brazilian Real or the Thai Baht or the Mexican Peso, then run, don't walk, for the exits ! The 'tin foil hat' crowd would tell you that this very point is the true reason that the US has been so persistent in its Iraq / middle east involvement - to stop the Arab oil shieks from deciding to price oil in terms of gold or Euros or something besides the US dollar. Were this to occur, the US dollar would indeed fall off a cliff, the assets of US citizens and businesses would be hugely devalued, and the US economy would quickly fall into a depression so deep it would make the 1930's look like a 'soft landing'.

    So many aspects of the economies of other parts of the world are now totally entangled with the US consumer market and the US dollar that basically they have no choice but to continue lending America money regardless of her actual creditworthiness. A 3 piece suit banker once explained this to me in a VIP room in the following terms. Imagine that there is a bank that has loaned 50% of it's assets to a single customer. That customer is in danger of going bankrupt. If the bank decides to cut off further lending to that customer, they WILL go bankrupt for sure ... and force the bank into bankruptcy right along with the customer since that customer's 'bad' loans constitute half of the bank's total assets which the bank simply cannot afford to 'write off'. So the bank really has no choice other than to keep lending more money to that customer in the hopes that getting paid back 'something, someday' will be better than getting paid back nothing at all plus having the remaining 50% of their banking business collapse as well. This is basically the position that Europe, Japan, China etc. are now in re America.
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    Last edited by Melonie; 11-07-2006 at 03:28 AM.

  15. #15
    God/dess Deogol's Avatar
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    Default Re: How? I don't get it.

    Quote Originally Posted by PookaShell
    I love my America. But I am counting the days until George W. Bush is out of his chair. I dont blame the debt on him or anything but I dont think he's helped it and I'm ready for some things to change. Our national debt is getting crazy but other large countries have similar situations right now. But 16,000 in debt isn't too huge a number if you consider financing cars, mortgages, student loans, etc. Its all investments somehow or other. If its credit card debt I guess that's different, I'm not sure what specifically you were referencing.

    I do agree we need to fix it, but I dont think its worse off than alot of other countries and that "we are just so richer and better than everyone else" Crap is just shit George W. Bush spews all over the place to try to make his presidency look successful.
    You're so funny!

    If you want to know who put us in the spot we are in - go to the local mall and take a good look around at the people around you.

    This has been building long before Bush came to power.

  16. #16
    Banned Melonie's Avatar
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    Default Re: How? I don't get it.

    ^^^ not to be overtly political on election day, but the NAFTA treaty and 'normalization' of US trade relations with China, which are arguably the root causes of today's stagnant hourly pay rates for US workers, loss of US jobs, outsourcing, relocation of US manufacturing operations overseas etc., were clearly the initiative of Bill Clinton and were set in motion long before GWB came into office. As a memory refresher, you might want to read this 6 year old news story ...



    (snip)"The issue has split both parties over the past year. Democrats, led by the president [Bill Clinton - sic], strained their ties with key allies in the labor movement when they supported the measure; conservative Republicans broke with the party's allies in the business community to oppose the bill.

    Unions warn that the pact could cost hundreds of thousands of American workers their jobs as Chinese goods flood the U.S. market and companies move their factories to China to take advantage of lower wages."(snip)


    It's unfortunate (for all Americans except politicians, anyhow) that it often takes several years between the time that a change in gov't economic policy is made and the time when the effects, repurcussions and unintended consequences of that new policy become obvious. Most Americans don't ever 'connect the dots', and merely blame or praise whatever politicians are in office at the moment if things turn bad or improve - even though in the vast majority of cases the bad or good results actually stem from changes which were set in motion long before the current crop of politicians were voted into office.
    ~
    Last edited by Melonie; 11-07-2006 at 05:48 PM.

  17. #17
    God/dess Deogol's Avatar
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    Default Re: How? I don't get it.

    Quote Originally Posted by Melonie
    ^^^ not to be overtly political on election day, but the NAFTA treaty and 'normalization' of US trade relations with China, which are arguably the root causes of today's stagnant hourly pay rates for US workers, loss of US jobs, outsourcing, relocation of US manufacturing operations overseas etc., were clearly the initiative of Bill Clinton and were set in motion long before GWB came into office. As a memory refresher, you might want to read this 6 year old news story ...



    (snip)"The issue has split both parties over the past year. Democrats, led by the president [Bill Clinton - sic], strained their ties with key allies in the labor movement when they supported the measure; conservative Republicans broke with the party's allies in the business community to oppose the bill.

    Unions warn that the pact could cost hundreds of thousands of American workers their jobs as Chinese goods flood the U.S. market and companies move their factories to China to take advantage of lower wages."(snip)


    It's unfortunate (for all Americans except politicians, anyhow) that it often takes several years between the time that a change in gov't economic policy is made and the time when the effects, repurcussions and unintended consequences of that new policy become obvious. Most Americans don't ever 'connect the dots', and merely blame or praise whatever politicians are in office at the moment if things turn bad or improve - even though in the vast majority of cases the bad or good results actually stem from changes which were set in motion long before the current crop of politicians were voted into office.
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    Default Re: How? I don't get it.

    Quote Originally Posted by Melonie
    It's unfortunate (for all Americans except politicians, anyhow) that it often takes several years between the time that a change in gov't economic policy is made and the time when the effects, repurcussions and unintended consequences of that new policy become obvious. Most Americans don't ever 'connect the dots', and merely blame or praise whatever politicians are in office at the moment if things turn bad or improve - even though in the vast majority of cases the bad or good results actually stem from changes which were set in motion long before the current crop of politicians were voted into office.
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    Default Re: How? I don't get it.

    staging an unwinnable war for 3 years is freakin' expensive too. i would love to see a real-time counter of how much public money is being thrown down the defence gurgler after a cause that doesn't want the help.

    to be overly simplistic, i think the US was great once. truly the land of whatever it is, like all the books say... that said, Rome was also great.. and so too Britain. it's the rise and fall, wax and wane of power.

    the US is waning and that's ok. you are an incredibly patriotic lot and even when you are no longer the 'super power' per se, you will still be a ballsy bunch.

    imagine how the Romans felt... it is nature.

    the times they are a-changing.

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    Banned Melonie's Avatar
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    Default Re: How? I don't get it.

    ^^^ agreed that times are a-changing. America has had her 'century', policitally and economically.

    As to money spent on middle east wars, yes this amounts to a few hundred billion dollars. But in the grand scheme of things, this amount is a tiny percentage of US gov't spending on social programs, gov't subsidies etc. Arguably, the 9/11 attack cost US businesses and the US economy somewhere around 2 trillion dollars in losses - therefore the 'tin foil hat' crowd would tell you that the cost of putting troops on the ground in the middle east at a cost of $100 billiion a year was 'cheap insurance' against another domestic attack by islamic terrorists and another 2 trillion dollar loss to US businesses and the US economy ... which has been true for the past 5 years at least.

  21. #21
    Jay Zeno
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    Default Re: How? I don't get it.

    Yeah, I've heard the "it's not the current politicians' fault" thing any number of times, and while it certainly has a large element of truth to it, it's also a ready tool for apologists.

    Economy going good? It's the Bush tax cut.
    Or the economic crop from Clinton.

    Don't like the economy? It's Iraq. Bad Bush.
    Or the fallout from the Clinton years.

    Economy good in the Clinton years? It's the fruit from the Reagan tree. (Unless you're in the tech field - then it's Clinton's fault.)
    Or the leadership of Clinton.

    I see a lot more scapegoats then true cause-and-effect structures. I honestly think nobody has a good handle on the millions of moving parts that constitute this economic machine. People see their ideological corner and think that's it. Well, I've heard people argue that one guy had a handle on it, but he's retired.

  22. #22
    Banned Melonie's Avatar
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    Default Re: How? I don't get it.

    ^^^ I assume that you're referring to Alan Greenspan ? While 'Sir Alan' did extremely well at making 'correct calls' re financial policy while he held the Fed's chairmanship, he certainly wasn't correct 100% of the time. Also, with today's globalized central bank leverage (i.e. with the US comprising a smaller and smaller percentage of global finance), and with each central bank setting policies and taking actions in their own self-interest, the point is arguably upon us that no one country, or no single central bank, can actually control the direction of the global economy anymore.

  23. #23
    Jay Zeno
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    Default Re: How? I don't get it.

    As I said, I've heard people argue it. I have no opinion on it - just cynical observation, based on years of listening to empty threats and pointless posturing. (I'm not talking about you, Mel, but things in general.)

    But if someone truly is right 100% of the time, we should put him or her in charge. Until then, "extremely well" is about as good as we can hope for.

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    Banned Melonie's Avatar
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    Default Re: How? I don't get it.

    again, there is a serious question as to who is really 'in charge' of currencies and capital flows in todays global economy. It is arguable that today the Chinese central bank has just as much ability to affect US interest rates and international capital flows into/out of the US as Alan Greenspan did / Ben Bernaake does, if not actually more so. Thus having someone who does 'extremely well' running the US Fed today doesn't necessarily translate into good things happening for the US economy (because much of that translation is now in Chinese !)

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