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Is the United States on the road to bankruptcy?

By maxwell edison ·
For the past twenty years (ten, here at TR), I've been warning about the possibility - no, make that the inevitability - that the United States government will face the ultimate financial disgrace - financial bankruptcy.

I've been extremely critical of the Democratic Party for advancing policy positions - especially social policy positions - that will ultimately lead to such an outcome; and I've been even more critical of the Republican Party for capitulating to said Democrats and for failing to advance a more fiscally responsible and libertarian principled philosophy for the sake of bipartisanship and/or compromise.

Political party preference aside (if that's even possible), what's on the horizon for the financial stability of, what was once the most financially stable nation on the planet, the United States of America?

P.S. I expect most replies to be nothing but typical political rhetoric. Please prove me wrong.

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Thing is

by santeewelding In reply to We can fix it

I don't think we have until 2020. Business as usual is headed straight for a brick wall -- not a yellow-brick road.

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Nick: A question for you

by maxwell edison In reply to We can fix it

Speaking for yourself, if you add up (estimated, of course) all the taxes you currently pay per year: federal, social security, medicare, state, local, sales, gasoline, property, various fees, various surcharges, etc., and estimate those to be a certain percentage of your total income, how much are you willing to have your taxes increased? Would you be willing to pay ten percent more? Twenty? Twenty-five?

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About 35-40%

by NickNielsen In reply to Nick: A question for you

I could live with not more than a 10% increase in that, but only if rational budget cuts also take place.

Now, Max, a question for you: South Carolina is living the nightmare right now.
- An electorate that virulently hates taxes,
- a Republican legislature that refuses to raise taxes, and
- an increasing budget deficit due both to irresponsible tax policies and the current economy.

How much do you cut before you raise taxes? http://www.thestate.com/2010/10/31/1537808/fraud-danger-and-dirt-state-letting.html

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Would you also be willing . . . . . . .

by maxwell edison In reply to About 35-40%

...... to be sent to a work camp for 5 months, each and every year, to toil and work - without pay - for the benefit of others? The only difference between that and what you said is the location and possibly the type of work.

P.S. Don't forget the required reading from your little red book. (I actually have a copy on my book shelf.)

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Does it also benefit me?

by NickNielsen In reply to Would you also be willing ...

To a large extent, as I see it, it does. Does all of it benefit me, even indirectly? Of course not.

You seem to think that because I can accept some, I will accept all. There are federal departments that need to be greatly reduced or eliminated. The Department of Education is one; it should be a coordinating committee under the Commerce Department, with the sole function of promulgating national education standards. There are federal programs that need to be greatly reduced or eliminated. Any and all subsidy programs come immediately to mind: you don't promise people a minimum price for their product, nor do you pay them to NOT do something. It distorts the market. On the other hand banking regulation, medicine, transportation safety, product and food safety, and other public safety issues are the province of government. This is not a black or white issue.

The laissez-faire government of the 19th century allowed (and sometimes actively participated in) the rise of the robber barons, the slaughter of native Americans, and the repression of free men. I don't want a return to that kind of government, and I really don't think you do either.

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It's close to 50% now

by unhappyuser In reply to Nick: A question for you

Depending upon your income level, if you drink or smoke, etc.

EMD

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WAY TO GO NICK!

by Oz_Media In reply to We can fix it

You mean, what's that word...HOPE?

LOL, the way I look at ANY situation is;

Q)
Will I actually die from this and not wake up tomorrow morning?

A)
If NO, I'm not going to die tonight, no problem then, tomorrow's another day.
If YES, may as well make the most of it and not worry about it then there's nothing I can do about it.

In most cases I realize that, no matter what happens, I will still wake up tomorrow and live another day, when I don't I wouldn't know it anyway.

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With the current US Defect

by HAL 9000 Moderator In reply to Is the United States on t ...

Being so much of the US's GDP that is coming very quickly and has been building for quite a few years now.

It's taken at least 20 years to get to this stage so it's going to take a lot longer and a lot of Pain on the part of the Citizens to get over it, if that ever happens.

From past Political Experience if it takes 1 year to get into a mess it takes 3 or more to get out of it. Being that it's now at least 20 years of successive Poor Economic Administration on the behalf of successive US Governments I really don't think that there is any Political Will to do anything about the way that the US Government works.

Also I remember the US Authorities deriding Japan for what they called Quantitative Easing and it now appears that while it was Bad for Japan and going to cause much trouble for Japan it's acceptable for the US.

Probably because it's EASY and the people who do it now will not be around when it's time to clean up the mess. The longer that the current situation continues the worse it's going to be for all US Citizens but Unfortunately with the Political System being the way that it is I think you'll find that the Brick Wall has to be Hit and then who ever comes after that mess will blame the previous Government and say that they are going to fix the mess. Of course it's not going to happen quickly and with the current need from the US for Quick Fixes I very much doubt that there will be enough Political Will to see it out as things should be done and that the Governments who ever they may be will resort to the Easy Fix.

Max see why I consider all Politician's the same?

Col

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Pain.

by CharlieSpencer In reply to With the current US Defec ...

Pain that none of our 'leaders' are willing to ask us to accept. You're dead on about the political will. The opportunities of Sept. 11th are gone, squandered on luggage inspections and wiretaps. The population was in a mood to accept sacrifice; no one in power was willing to ask it.

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Yes

by DelbertPGH In reply to Is the United States on t ...

I should qualify my answer to "Yes, virtually," because we can't technically go bankrupt, so long as we can print more money. If we can't pay our bills, i.e. become bankrupt, we can always inflate.

I think the country has big-scale problems that go beyond politics. The biggest is that we buy vastly more from overseas than we export. The only reason we keep getting away with it is that we are the world's largest economy and the international reserve currency. Central banks are willing to hold our paper. You need to value <i>something</i> to run a banking system, and for now, the USD is it.

A problem that goes hand in hand with the first one is that we don't make stuff here like we used to. Capability, performance for price, and exclusivity of technology marked our world-leading manufacturing base up to 1970. Now we put as much business energy into finding ways to outsource our manufacture as we used to invest in making things we could sell and use. The new economy is based primarily on loaning each other money, serving each other lunch, wiping each others' rear ends, and shopping.

We have a particular failing in our leading service industry, the rear end-wiping business, health care. We spend one dollar in six (2008 statistic) on health. We don't manage it in any competitive way; our means of paying for it is irrational and suppresses efficiency; we don't have, as a population, better outcomes than countries that spend less; and it promises only to grow in cost. I saw today an article on a new vaccine procedure that will fight already in progress prostate cancer: it promises to extend life by four months at a cost of $93,000 per treatment. You're going to hear a lot about this. Is it properly priced? Can we afford to add this to an overburdened insurance system? Can we even get around to discussing whether an extra four months at the end of life is a worthwhile investment, given that the party that has risen to power has run against "death panel" discussions like that?

As a rising country in the 50s and 60s, bearing the burdens of defending the free world and building our own prosperity, we were able to invest huge sums in building interstate highways, sea ports, and airports, and all the other infrastructure that goes with being a first-rank economy looking to grow. Today we can't find the political will to invest money to keep it all in repair. In part that's because everything we do costs more money than it did 50 years ago. Some portion of that is government regulation that requires expensive features, and some due to fears of lawsuits that requires every niggling event in life be insured. I remember in 1960 driving in Iowa and Kansas and seeing the new interstate highways, with signs proudly announcing that it cost $50,000 per mile and was 90% paid for by Federal funds. Who can imagine public works projects for so little these days? Who can imagine a jet fighter aircraft for $220,000, the F-86?

We can't educate people to support the economy we wish we had. In the 50s and 60s we produced all of our own engineers, and they led the world; now we import them from Delhi and Taiwan, while our own kids major in communications and criminal justice. My wife teaches at a state college, and she gets the B students who come out of our high schools. And at the rural area college where she teaches, they pretty much get only the white ones, in case you were wondering. And they're stoooooooopid. They come out unprepared to write or reason, and don't see the importance of picking up facts, and have checked out of difficult nerd subject material like math or chemistry.

We have lost the will to regulate our banks, as the populace has lost its will to save and invest. The financial disaster that we experience now is nothing compared to the nightmare we narrowly avoided, but nobody has caught on to what occurred. It will happen again. We've also lost the will to pay for the government services we demand. Tax cuts have become a cure-all and a religious chant that displaces financial reason in our national accounts, and recipients of entitlement spending rail against any talk of rationalization at the expense of their comfort.

So, I'll agree with you, on a lot of issues. Maybe there are some here you haven't thought much about. All these issues are critically important. Government is dysfunctional and wasteful, and so are the people, in their politics and social imagination.

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