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Are you concerned about the $70 Trillion US debt?

I have another take

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1. Patricia Pomerleau CEOExpressSelect Member
     Forum Moderator
     (7/17/2019 2:37:09 PM)
     Message ID #336829

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America's debt load is about to hit a record. The combination of cheap money and soaring debt helped fuel the decade-long economic expansion and bull market, but America's gluttony of loans could work against it if its fragile economic balance shifts.

In the first quarter of 2019, the United States' total public- and private-sector debt amounted to nearly $70 trillion, according to research by the Institute of International Finance. Federal government debt and liabilities of private corporations excluding banks both hit new highs.

Debt in itself isn't bad. Borrowing can help governments and businesses grow by funding important projects and services that make the economy stronger. And right now, the United States can still deal with its debt burden. The economy, about $21 trillion in size, remains healthy, and the Federal Reserve is preparing to cut interest rates and make debt even cheaper. But America's near-record liabilities could be dangerous down the road.

America has a lot of debt to pay back. The Treasury Department reported that the budget deficit jumped more than 23% between October and the end of June, widening some $750 billion. That is in part due to President Donald Trump's 2017 tax cuts. US debt is at a new all-time high because of increases in government borrowings, which now amount to 101% of GDP, the IIF says.

In the long run, however, easier financial conditions from central banks, including the Federal Reserve, "will support further debt buildup, exacerbating concerns about debt service burdens and sovereign debt sustainability," wrote IIF analysts led by Emre Tiftik, deputy director of global policy initiatives.

Interestingly, During the 2016 presidential campaign, Republican candidate Donald Trump promised he would eliminate the nation’s debt in eight years. Instead, his budgets would add $9.1 trillion during that time. It would increase the U.S. debt to $29 trillion according to Trump's budget estimates.

To lower the debt, military spending must also be cut. The most Obama spent was $855 billion in FY 2011. The most Bush spent was $666 billion in FY 2008. Instead of cutting, Trump is breaking all those records. Military spending rose to $989 billion in FY 2020.

So, the Trump campaign promises are not exactly being executed.

So....How Debt Affects You:

The national debt doesn't affect you directly until it reaches a tipping point. A study by the World Bank found that if the debt-to-GDP ratio exceeds 77 percent for an extended period of time, it slows economic growth. Every percentage point of debt above this level costs the country 1.7 percent in economic growth.

The first sign of trouble is when interest rates start to rise significantly. Investors need a higher return to offset the greater perceived risk. They start to doubt that the debt can be paid off.

The second sign is that the U.S. dollar loses value. You will notice that as inflation. Imported goods will cost more. Gas and grocery prices will rise. Travel to other countries will also become much more expensive.

As interest rates and inflation rise, the cost of providing benefits and paying the interest on the debt will skyrocket. That leaves less money for other services. At that point, the government will be forced to cut services or raise taxes. That will further slow economic growth. At that point, continued deficit spending will no longer work.

I'm seriously concerned about debt Are you? .

  • If so, how do you think record debt numbers will affect the US and its citizens.
  • If not, why do you think unlimited debt is not a problem.
  • Why do you think that Republicans don't care about debt any more and just keep raising the debt limit?

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2. T Cavanagh CEOExpressSelect Member
     (7/20/2019 8:10:57 AM)
     Message ID #337204

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That $70 trillion is on the low side of all recorded and unrealized US debt, I have seen a number closer to $100 trillion

The number far exceeds the value of all US companies, real estate, and public property. But we are not alone, the rest of the world far exceeds our debt.

Government spending has been a Keynesian dream since 9/11, and has once again proven Adam Smith to be correct, Government spending is a false economy.

Government spending did not move the US economy to growth, in fact it hindered growth. Private business cannot compete with the US Government that is sucking up all the capital.

QE, or increasing the M1 money supply only benefits the wealthy, creating an accelerating income gap. Now the Fed is talking about more QE. A subsidized interest rate, benefits no one, and as the Obama Admin proved doesn’t move the needle

The US money supply has increased 2-1/2 times since 2008, which would cause inflation, too many dollars chasing too few goods. But alas, our trade deficits with China took care of that. Nobody knows what China has for debt, it has been pegged at 5-7 times their GDP, which currently is at a 27 low due to tariffs

The good news is Xi has no choice but to negotiate with the US

3. Michael O'Neill
     (7/20/2019 8:18:18 AM)
     Message ID #337205

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Yes, I'm a Democrat.

4. D Robb
     (7/20/2019 8:20:15 AM)
     Message ID #337206

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We spend as much on Defense as the next 8 nations combined. We need to cut it. We need to begin a massive infrastructure program and institute universal health care to cut medical costs. We need to raise taxes.

5. Tams Bixby CEOExpressSelect Member
     (7/20/2019 8:48:39 AM)
     Message ID #337207

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And that's why I'm for a Balanced Budget Amendment; w/ a Consumption Tax (to pay for the budget); a component of the Budget Amendment REQUIRING Congress to adjust the Consumption Tax EACH time they pass a Budgetary Item; and All the other necessities that go along w/ it.

No, it most likely won't happen but ...

6. T Cavanagh CEOExpressSelect Member
     (7/20/2019 9:26:20 AM)
     Message ID #337208

This message is in response to D Robb ( message id #337206 )  View All Related Messages

So, cut established programs to initiate new ones?

That makes sense.

The fact remains if you confiscate all the income of the top 1% you have about $2 trillion, now you have more people on welfare, and once you bankrupt those folks you lose millions and millions of jobs, and the 1% has no ability to pay you the $2 trillion next year.

Your Medicare for all has a $3.2 trillion price tag, per year. That leaves you with $500 billion for all other spending, and keep in mind, revenue is at a historical high

Yes, you could cut defense to nothing

What impact does that have on the economy?

Yesterday, Buzz Aldrin was at the WH lamenting the last Admin devastating cuts to NASA. One would think that savings would make a difference. Nope. It didn’t

Hell, under the last Admin, Congress stopped submitting an annual budget, and came up with CR’s and you want them to eliminate DOD??? Good luck

Tell you what Robb, make a list, winners and losers, let’s see who you can piss off first. Trump proposed everyone who is “non-essential” take a 10% haircut, they laugh at him.

Go next door and tell your neighbor you need 10% of his income, then come back and tell us what 5hey said

7. T Cavanagh CEOExpressSelect Member
     (7/20/2019 9:28:07 AM)
     Message ID #337209

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Anyone interested in US debt, socializing risk, and how we got here watch “generation zero” , you can find it on You Tube

8. T Cavanagh CEOExpressSelect Member
     (7/20/2019 9:33:56 AM)
     Message ID #337210

This message is in response to Tams Bixby ( message id #337207 )  View All Related Messages

The later is probably more realistic, however all those nations with a well established VAT, still run up huge deficits.

This Congress can’t even agree on $4.6 billion to house, feed, shelter, and protect children on the Border without drawing blood in a street fight.

Your ideas are good, but idealistic. Term limits, and campaign finance are two more, it’s the land of OZ

9. D Robb
     (7/20/2019 9:51:55 AM)
     Message ID #337211

This message is in response to T Cavanagh ( message id #337208 )  View All Related Messages

How is that European countries can provide better healthcare to ALL their residents at one half to one third less cost per patient than the US? Perhaps, instead of generating false figures based on false assumptions we should be studying the European countries that have successfully implemented healthcare for all?

10. D Robb
     (7/20/2019 9:57:11 AM)
     Message ID #337212

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Hypocrisy reigns in Washington, DC, today. When a Democrat held the White House, the debt ceiling was the Republicans’ favorite tool for forcing conversations about spending caps and long-term entitlements. It dominated the national political headlines from 2011-2014.

Now, particularly under a president who won a competitive primary by trashing traditional conservative notions of trimming the welfare state, Republicans are treating the borrowing limit as a momentary irritant, to be waved off as politically necessary.

trump lies continually. That is what he does. He promised to eliminate the annual deficit. It will exceed $1 trillion this year. He has his wonderful tax cut for the rich to blame.
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