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Politics "Under democracy, one party always devotes its chief energies to trying to prove that the other party is unfit to rule -and both commonly succeed, and are right."
-H.L. Menken |
05-25-2011, 05:53 PM
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#1
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Join Date: May 2008
Location: Sugar Hill
Posts: 3,887
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US deficit: Actually not that Bad
So my friend who runs a liberal think tank here in NYC published a recent article in USA today, basically about how the US's current budget deficit isn't as bad as we've been told especially when our debt ratio is compared to many successful national corporations. Check it out.
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Originally Posted by USA Today
The way politicians from both parties are shouting from the rooftops about the dangers of the federal debt, you'd think such high rates of borrowing are always cause for alarm. But some of our nation's largest and most successful businesses not only run even higher levels of debt — they actually consider carrying significant debt to be good business practice. In fact, the private sector teaches us why increasing government debt right now is a good idea.
The United States generates approximately $14.5 trillion in GDP each year and carries, currently, $14.3 trillion in debt. That represents a debt-to-income ratio of roughly 1-to-1.
By comparison, here are the debt-to-income ratios of some of the leading corporations in America:
•IBM— 2-1
•Dupont — 3-1
•United Technologies — 3-1
•Boeing — 4-1
•Caterpillar — 14-1
•JP Morgan Chase — 50-1
In other words, IBM borrows twice as much money as it earns annually. Boeing borrows four times more than it earns. And JP Morgan Chase, clearly not too big to borrow, borrows 50 times more than it earns — getting $50 from lenders for every $1 it makes...
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Originally Posted by KontanKarite
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Originally Posted by Ben Lahnger
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05-25-2011, 09:30 PM
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#2
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Join Date: Aug 2006
Location: the concrete and steel beehive of Southern California
Posts: 7,449
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Which is exactly why the Republican's balking at raising the debt ceiling is bullshit. Raise the ceiling, help American's health care, education, homeland security etc. Block raising it and you hurt all of the above plus veterans, the elderly and more. Sons o bitches.
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08-15-2011, 03:36 AM
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#4
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Join Date: Aug 2011
Posts: 1
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The problem isn't just the federal debt but total debt, and that's total debt in an economy where around 70 pct is based on consumer spending.
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08-15-2011, 03:37 AM
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#5
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Join Date: Mar 2008
Posts: 2,629
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It's still going to lead to bigger problems on down the line.
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08-16-2011, 04:39 AM
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#6
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Join Date: Dec 2005
Location: Um, lower, oh yeah, uh, uh ... YES THERE!
Posts: 6,738
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DMW, that is not a fact or even a probability.
Despanan, the Economist posted an article recently that said much the same thing. I posted a link to it in another thread here, but I can't find it at the moment.
It also called the Republicans out for playing a cynical game of brinksmanship with the debt ceiling and for refusing to even consider raising taxes on the wealthiest Americans ... as the article stated, even Ronald Reagan raised taxes when he had to.
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08-16-2011, 05:04 AM
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#7
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Join Date: Aug 2011
Location: "Historic" River City
Posts: 327
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Okay, math is in no way my strong suit.
This debt ceiling thing and deficit is like paying for everything with credit cards but only paying minimum payments, right? I've always heard that's a bad thing because of fees if you miss a payment, then you have to make up payments you already can't and so on, then you end up living in a cardboard box in an alley someplace.
Or am I oversimplifying all this?
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08-16-2011, 07:23 AM
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#8
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Join Date: May 2011
Location: Texas
Posts: 2,271
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Quote:
Originally Posted by Spooky Spencer
Okay, math is in no way my strong suit.
This debt ceiling thing and deficit is like paying for everything with credit cards but only paying minimum payments, right? I've always heard that's a bad thing because of fees if you miss a payment, then you have to make up payments you already can't and so on, then you end up living in a cardboard box in an alley someplace.
Or am I oversimplifying all this?
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We learned in one of my math classes that because of the interest on most cards, if you pay just the minimum amount each month on a credit card you'll end up paying about 15 times the original amount that you paid. I don't know if that's the same type of thing they are doing with this deficit, though. I don't know anything about credit card fees because we only use debit cards. If we don't have money in the bank(or wallet), we don't buy anything.
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08-17-2011, 12:47 AM
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#9
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Join Date: Oct 2003
Posts: 4,587
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That is part of it, and it works in a somewhat similar fashion.
Another aspect which many people miss is that the stuff they are paying for isn't stuff being bought now.
For example new war ships and fighter jets. They costs trillions, literally. So the government funds them for like 20-30 years like a home loan. When congress approves the funding, it is the same as a loan and for the next 30 years the government pays whatever company as it develops and supplies the item in question.
This accounts for like what? Somthing like two thirds of the budget? Stuff that has been bought a decade ago and already delivered that America is still paying on. Like rent-to-own, but there is no option to give it back and stop the payments.
An example of this on a local level is the Palin bridge to nowhere. They spent millions and five years paying on a bridge that was to be built, but canceled construction and were still out millions because they had to continue to pay for it years after thanks to the contracts.
Even if the government decided to cancel all of these owed payments there are clauses which allow the company to still collect the monies owed to them. Thank the congressmen who get these deals for the companies in their home districts - they make it so even if nothing is ever delivered the tax payers are still on the hook for years with payments for stuff they never even get.
It's like a gym membership, mobile phone contract, or cable TV - if you try and cancel your contract early they will let you, but you will pay the amount you 'owed' even if you do not get the service.
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01-23-2012, 12:26 AM
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#10
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Join Date: Oct 2011
Location: California
Posts: 12
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One of the reason why many of us are going through debt problems is because we don't understand the nature of debt, it is important to understand the debt cycle. The debt cycle starts when you begin to outspend your income for one of many different reasons—ignorance, carelessness, compulsiveness, pride, or necessity. You know it's wrong, but you do it anyway, telling yourself “It's just this once.” Just as people are beginning to get even more irritated about the supposed “cycle of debt” that payday cash advances create, a brand new study was released by Arkansas Tech University Professor Marc Anthony Fusaro. In his research, he learned that the “cycle of debt” is not produced with high interest rates. This is just a little bit of proof that payday cash advances are a reputable product for people in crisis situations. Find out more at: Payday Loan. This debt cycle can continue for only so long. Soon, you can't get any more credit, and just the interest becomes more than you can pay each month. You have lost your money, your sense of self-worth, and your good credit history.
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01-23-2012, 07:06 AM
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#11
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Join Date: Aug 2009
Posts: 2,932
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What an elaborate bot, but still gets it wrong by comparing personal debt with national debt.
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Quote:
Originally Posted by KissMeDeadly
You fucking people [war veterans] are only a step below entitled rich kids, the only difference being you had to do and witness horrible things, instead of being given everything.
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real classy
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