US debt problem visualized: Debt stacked in 100 dollar bills
Interesting....
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US debt problem visualized: Debt stacked in 100 dollar bills
Interesting....
Sure puts it in perspective in a hurry, doesn't it. Seems insurmountable, doesn't it.
The comparison that gets it for me is the fact that Apple Computers has more cash than the US government.
It seems like an enormous debt, and it is enormous, but not when compared to the size of our economy, and NOT when one considers that there is effectively an infinite life-time on which to amortize it.
Most folks with conventional mortgages start out with a debt that is 2 to 2.5 times their annual income; they have additional debt burdens for cars, and additional monthly expenses for utilities, taxes and insurance. In any given month only a small portion of their income goes to paying down the mortgage; but it gets paid over time.
Our present debt is huge, but there is an infinite time period on which to pay it back.
Those who think we should or can run a nation as a household are, besides using meaningless slogans, not even considering that in a certain sense, that is precisely how we handle our long term debt. The only difference is we can pay it off over eternity, a household gets 30 years.
I think that we'll probably get our national debt crisis solved long before Hopyard ever actually agrees with a DC forum thread topic. :rofl:
Actually, that is not the only difference. Does your mortgage significantly increase every day? Does it triple in 3 years? This would only be logical reasoning if in fact our deficit stayed the same or only slightly increased.Quote:
Originally Posted by Hopyard
eternity? really?
When the interest payments encroach on your ability to fund your purpose for existing it becomes a huge problem.
Things need to be fixed. That doesn't mean we need to extend our credit limit, it means fixing the spending problem.
We are not addressing the cause of our debt and until we do, our ability to borrow when it becomes necessary becomes more costly and difficult.
This thread can easily get out of hand quick. I reccomend a mod interject before I really start to rant:wink:
Ah, but our country grows in size and GDP increases even during a recession. Therefore debt can be added.Quote:
Originally Posted by exdee40
And, a nation isn't a household, so that household model so many are fond of is a simplistic analogy that doesn't really hold up to scrutiny. The same for all those out there who proclaim they would run government like a business.
A business doesn't have a lot of control over what its customers decide to do. If they decide to go elsewhere, or nowhere, a business has no options. A government has a variety of options to raise revenue.
Ours only chooses not to do so.
There is also the matter of owned assets or net worth v the amount of debt. Uncle owns huge amounts of assets and has a huge net worth. So it isn't just a matter of income (gdp) to debt ratios. In the business world your brand name and reputations are assets. Uncle has a brand name and a reputation as well.
We need to be very careful about further eroding the brand name and reputation with foolish moves.
I think the last guy that managed our budget like the current administration was Hoover... This time it will not be Hoovervilles, it will be Bama-towns...
But our deficit grows exponentially compared to actual GDP Growth. Our interest payments are a huge percentage ofQuote:
Originally Posted by Hopyard
our actual spending. They are quickly reaching being unsustainable.
A buisness responds to the desires of it customers in order to generate more business. They don't want nor need "control" over their customers.Quote:
Originally Posted by Hopyard
If the buisnesses of the USA decide to go elsewhere, the Government has no options. They can no longer take revenue from the businesses nor their customers.
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Nice visualization. Though I noticed this in part of the narrative:
Note: On the above 114.5T image the size of the base of the money pile is half a trillion, not 1T as on 15T image.
The height is double. This was done to reflect the base of Empire State and WTC more closely.
Nothing like obscuring facts with a little false reasoning for doing so...
As a percent of the Gross Domestic Product needed for payment on the debt - it's not really out of line with past periods of debt - which doesn't mean it's good - but it means some of the hysteria is over the pure dollar amount, but that means nothing unless the dollar amount is related to the percentage of the yearly out-put of the country tied up in servicing that debt.Quote:
Originally Posted by Hopyard
Figure it this way. if I'm $500,000 in debt and last year it was only $300,000, a big debt already sounds like it's getting catastrophic. But if I made $30,000,000 during the year I owed $300,000 that doesn't seem so bad - especially since you're talking interest payments, not the debt itself. If this year I'm $500,000 in debt I make $50,000,000 - well it's better.
The struggle and crazy delay in Washington is political and not economic. Which is too bad. Months have been wasted that could have been spent addressing built-in economic problems - and they sit as the never ending bad economy grows worse.
A good President would have stopped this nutsiness months ago - called a spade a spade - and gotten on with the real work of the government.