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# United States Debt Default

Author Topic:   United States Debt Default
Bailey
Member (Idle past 3690 days)
Posts: 574
From: Earth
Joined: 08-24-2003

 Message 16 of 211 (624087) 07-15-2011 8:14 PM Reply to: Message 15 by Taq07-15-2011 7:13 PM

Re: In Regards to the Flickering Flame of Optimism
 So is defeatism.

Touche lol

 Using this figure, there have been instances where the national debt has gone down in recent times ..

Minor detail - the debt expressed as a percentage of the GDP has experienced temporary decrease.

Dam smoke ..

In this scenario, it seems temporary increases in GDP attempt to give way to the illusion of a decrease in debt.

Dam mirrors ..

However, the actual debt itself remains steadily increasing, in fact never experiencing any actual decrease whatsoever.

As an aside, we may do well to review numbers. When we allow a dollar to represent a second, 1 million dollars is roughly equivalent to 12 days. Proportionately, 1 billion dollars/seconds is equivalent to roughly 32 years.

Now many people when you explain this to them, will then guess that 1 trillion seconds is equivalent to roughly 64 years or so, which effectively demonstrates how we can - at times, perceive numbers from an arbitrary view point.

The fact is 1 trillion dollars is roughly equivalent to 31.7 thousand years - rather then a meager 64 years, when we allow a dollar to represent each second. 1 trillion seconds ago civilization did not exist, and we still have to multiply that by 14.3.

We are considering a huge number - more stars than are in the milky way I hear.

I'm not sure I'm ready to say it's insurmountable though

One Love

Edited by Bailey, : grammar ..

I'm not here to mock or condemn what you believe, tho my intentions are no less than to tickle your thinker.
If those in first century CE had known what these words mean ... 'I want and desire mercy, not sacrifice'
They surely would not have murdered the innocent; why trust what I say, when you can learn for yourself?
Think for yourself.

Mercy Trumps Judgement,
Love Weary

 This message is a reply to: Message 15 by Taq, posted 07-15-2011 7:13 PM Taq has replied

 Replies to this message: Message 17 by Taq, posted 07-15-2011 8:30 PM Bailey has replied

Taq
Member
Posts: 8525
Joined: 03-06-2009
Member Rating: 5.0

 Message 17 of 211 (624090) 07-15-2011 8:30 PM Reply to: Message 16 by Bailey07-15-2011 8:14 PM

Re: In Regards to the Flickering Flame of Optimism
 Minor detail - the debt expressed as a percentage of the GDP has experienced temporary decrease.Dam smoke ..In this scenario, it seems temporary increases in GDP attempt to give way to the illusion of a decrease in debt.Dam mirrors ..

No smoke and mirrors. A 1 million dollar debt for Bill Gates is a lot different than the same debt for Joe the Plumber. If we keep the current debt for 30 years and GDP catches up to it, then the debt has been effectively lowered. This is a very, very bad way to lower the debt, but it is a way to do it nonetheless.

 As an aside, we may do well to review numbers. When we allow a dollar to represent a second, 1 million dollars is roughly equivalent to 12 days. Proportionately, 1 billion dollars/seconds is equivalent to roughly 32 years.

I am a microbiologist so I have a firm grasp on what large numbers of something look like.

 Now many people when you explain this to them, will then guess that 1 trillion seconds is equivalent to roughly 64 years or so, which effectively demonstrates how we can - at times, perceive numbers from an arbitrary view point.

Strangely enough, 1 trillion bacteria is the number of bacteria in about 1 ml of culture media.

 This message is a reply to: Message 16 by Bailey, posted 07-15-2011 8:14 PM Bailey has replied

 Replies to this message: Message 22 by Bailey, posted 07-16-2011 11:06 AM Taq has not replied

Jon
Inactive Member

 Message 18 of 211 (624096) 07-15-2011 10:57 PM Reply to: Message 12 by frako07-15-2011 6:47 PM

Straggler's not an American.
 Not necessarily only the ones that lent you the money The rest of the world would feel the collapse but not as badly as most think.

Straggler's not an American.

 You have been borrowing more then you should now your screwed it could be managed but it will get worse if you just raise the sealing and go on like nothing is happening.

Straggler's not an American.

 Your money in the bank forget about it its gone, the same thing happened in Iceland people wanted to get some cash from their accounts banks said no.

Straggler's not an American.

 Yourself for not stepping on your governments feet when the time was right.

Straggler's not an American.

 This message is a reply to: Message 12 by frako, posted 07-15-2011 6:47 PM frako has not replied

 Replies to this message: Message 24 by Straggler, posted 07-16-2011 1:44 PM Jon has not replied

Jon
Inactive Member

 Message 19 of 211 (624101) 07-15-2011 11:42 PM Reply to: Message 14 by jar07-15-2011 7:05 PM

Re: A first step.
 Taxes would be based on multiples of the poverty line. At or near the poverty line you would pay no income taxes, but as income rises you would move into named brackets like "10 X Poverty level" and "100 X Poverty level" and "1000 X Poverty level".

But right now, aren't the brackets just numbered with \$\$ amounts?

I think it is a great idea to base taxes on poverty levels, but I don't see how changing the wording of the tax forms would help eliminate buzzword politics.

Jon

 This message is a reply to: Message 14 by jar, posted 07-15-2011 7:05 PM jar has replied

 Replies to this message: Message 21 by jar, posted 07-16-2011 8:24 AM Jon has seen this message but not replied

Rrhain
Member (Idle past 1192 days)
Posts: 6349
From: San Diego, CA, USA
Joined: 05-03-2003

 Message 20 of 211 (624117) 07-16-2011 4:42 AM Reply to: Message 11 by Jon07-15-2011 6:46 PM

Jon writes:

quote:
What would that do to the poor people who currently pay no taxes?

Huh? Did the sales tax suddenly not become a tax? Payroll taxes suddenly stopped being taxes?

The poor pay taxes. What they don't pay is income tax. This is why a "national sales tax" in lieu of an income tax is so stupid: Poor people will wind up paying more in taxes because their money is all spent on consumption (food, utilities, gasoline, etc.) which will now all be taxed at a higher rate.

Let us not forget, we were running surpluses at the end of the millennium. The vast majority of our current debt can be contributed to two things: Bush's tax cuts and the wars in Afghanistan and Iraq. This is why there was that talk not too long ago about "doing nothing" with regard to the budget. Simply letting all that expire, going back to Clinton-era tax rates and military spending, we'd make huge dents in our debt.

Personally? I say go back even further...repeal the Reagan tax cuts.

 This message is a reply to: Message 11 by Jon, posted 07-15-2011 6:46 PM Jon has replied

 Replies to this message: Message 23 by Jon, posted 07-16-2011 1:27 PM Rrhain has replied

jar
Member
Posts: 33957
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0

 Message 21 of 211 (624150) 07-16-2011 8:24 AM Reply to: Message 19 by Jon07-15-2011 11:42 PM

Re: A first step.
No one can eliminate buzz words, but it changes the perspective when \$110,000 is expressed as 10 times the individual poverty level.

Anyone so limited that they can only spell a word one way is severely handicapped!

 This message is a reply to: Message 19 by Jon, posted 07-15-2011 11:42 PM Jon has seen this message but not replied

Bailey
Member (Idle past 3690 days)
Posts: 574
From: Earth
Joined: 08-24-2003

 Message 22 of 211 (624165) 07-16-2011 11:06 AM Reply to: Message 17 by Taq07-15-2011 8:30 PM

Re: In Regards to the Flickering Flame of Optimism
Tag writes:

 weary writes:Minor detail - the debt expressed as a percentage of the GDP has experienced temporary decrease. Dam smoke .. In this scenario, it seems temporary increases in GDP attempt to give way to the illusion of a decrease in debt. Dam mirrors ..

No smoke and mirrors. A 1 million dollar debt for Bill Gates is a lot different than the same debt for Joe the Plumber. If we keep the current debt for 30 years and GDP catches up to it, then the debt has been effectively lowered. This is a very, very bad way to lower the debt, but it is a way to do it nonetheless.

I’m gonna split hairs a bit here, but after all we’re in a debate forum. In this scenario, the actual debt is not decreasing at all – it’s representation, as a percentage, is simply being modified in proportion with its surroundings. This is like when we get a hair cut and refer to it as ‘getting our ears lowered’. At first it can be a useful expression, until someone believes people’s ears are actually being lowered .. then its just confusing.

Perhaps it would be unfair to call this smoke and mirrors. When the GDP rises and the national debt remains fixed, the result is a lesser percentage of debt against the GDP backdrop. However, the actual debt is obviously not lower, as it has remained fixed, which of course goes the same for Bill or Joe. When they take their surplus income and apply it toward their debt – not just on a chart, but in reality, their debt will be lower.

After all, if Tom wins \$13,700, he can’t then say his \$58,000 tuition bill decreased. What he can do is apply money towards it (after taxes of course). Likewise, he could walk around with his winnings and brag to all the people he owes money to that he’s not going to pay them, but rather he’s decided to subsidize his GDP with his winnings (or their principal, depending how ya look at it) in order to better capitalize on his interest penalties

 As an aside, we may do well to review numbers. When we allow a dollar to represent a second, 1 million dollars is roughly equivalent to 12 days. Proportionately, 1 billion dollars/seconds is equivalent to roughly 32 years.

I am a microbiologist so I have a firm grasp on what large numbers of something look like.

You’re one of the lucky ones*

 Now many people when you explain this to them, will then guess that 1 trillion seconds is equivalent to roughly 64 years or so, which effectively demonstrates how we can - at times, perceive numbers from an arbitrary view point.

Strangely enough, 1 trillion bacteria is the number of bacteria in about 1 ml of culture media.

So the US national debt is roughly 7 ml and climbing when expressed as a culture media ..

Ya learn something’ new everyday if ya ain’t careful

One Love

* Person in general, not just microbiologist ..

I'm not here to mock or condemn what you believe, tho my intentions are no less than to tickle your thinker.
If those in first century CE had known what these words mean ... 'I want and desire mercy, not sacrifice'
They surely would not have murdered the innocent; why trust what I say, when you can learn for yourself?
Think for yourself.

Mercy Trumps Judgement,
Love Weary

 This message is a reply to: Message 17 by Taq, posted 07-15-2011 8:30 PM Taq has not replied

Jon
Inactive Member

 Message 23 of 211 (624184) 07-16-2011 1:27 PM Reply to: Message 20 by Rrhain07-16-2011 4:42 AM

 Huh? Did the sales tax suddenly not become a tax? Payroll taxes suddenly stopped being taxes?

I thought jar's mention of brackets made it clear we were talking about income tax.

 Personally? I say go back even further...repeal the Reagan tax cuts.

The graph from Message 15 would certainly seem to support that sentiment.

Jon

 This message is a reply to: Message 20 by Rrhain, posted 07-16-2011 4:42 AM Rrhain has replied

 Replies to this message: Message 33 by Rrhain, posted 07-16-2011 4:48 PM Jon has not replied

Straggler
Member (Idle past 289 days)
Posts: 10332
From: London England
Joined: 09-30-2006

 (2)
 Message 24 of 211 (624188) 07-16-2011 1:44 PM Reply to: Message 18 by Jon07-15-2011 10:57 PM

Re: Straggler's not an American.
 Jon writes:Straggler's not an American.Straggler's not an American.Straggler's not an American.Straggler's not an American.

Never has Straggler agreed so much with Jon.

 This message is a reply to: Message 18 by Jon, posted 07-15-2011 10:57 PM Jon has not replied

Straggler
Member (Idle past 289 days)
Posts: 10332
From: London England
Joined: 09-30-2006

 Message 25 of 211 (624189) 07-16-2011 1:46 PM Reply to: Message 3 by jar07-15-2011 4:15 PM

Re: Possible
There is talk in the news today of a downgrade of the US credit rating from it's AAA status if something significant doesn't happen soon. Is this likely and if so what effect will it have?

 This message is a reply to: Message 3 by jar, posted 07-15-2011 4:15 PM jar has replied

 Replies to this message: Message 26 by jar, posted 07-16-2011 2:00 PM Straggler has replied

jar
Member
Posts: 33957
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0

 Message 26 of 211 (624192) 07-16-2011 2:00 PM Reply to: Message 25 by Straggler07-16-2011 1:46 PM

Re: Possible
IMHO that is very, very unlikely to happen unless Congress decides to really be *** (that is not impossible of course). There are members of the Tea Party (and they all do seem to be that ***) that simply say default is no big deal, screw the bond holders, but I really don't think they have enough votes to do that.

As I pointed out in Message 3, the current revenue is more than sufficient to pay any interest and payments due on debt. That should be okay. The US credit rating should remain sound.

The issue is the monies needed for government to actually do anything. If the debt ceiling does not get raised then a lot of the current non debt related commitments, Social Security retirement benefits, military salaries, government workers salaries, the Federal parts of unemployment insurance, the US postal service might not go out after August 3rd.

Anyone so limited that they can only spell a word one way is severely handicapped!

 This message is a reply to: Message 25 by Straggler, posted 07-16-2011 1:46 PM Straggler has replied

 Replies to this message: Message 27 by Straggler, posted 07-16-2011 2:17 PM jar has replied Message 36 by Malvern, posted 07-18-2011 2:06 PM jar has replied

Straggler
Member (Idle past 289 days)
Posts: 10332
From: London England
Joined: 09-30-2006

 Message 27 of 211 (624194) 07-16-2011 2:17 PM Reply to: Message 26 by jar07-16-2011 2:00 PM

Re: Possible
The role of credit rating agencies in all this seems very strange. Who are they and why do they get to decide things that can have disastrous consequences for nations and individuals?

I guess I am thinking as much of Greece and Portugal and Spain and the UK as I am the US with that question. But it does seem they have a bizzarre degree of power over people's lives and their position on this specific US issue could be key couldn't it?

 This message is a reply to: Message 26 by jar, posted 07-16-2011 2:00 PM jar has replied

 Replies to this message: Message 28 by jar, posted 07-16-2011 2:21 PM Straggler has replied

jar
Member
Posts: 33957
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0

 Message 28 of 211 (624195) 07-16-2011 2:21 PM Reply to: Message 27 by Straggler07-16-2011 2:17 PM

Re: Possible
I don't see much of an issue there. Credit rating is simply looking at the past behavior of either a nation, corporation, individual. It looks and asks, "Do they have a history of paying their debts?", and "Do they have the revenue or assets needed to pay current debt commitments?"

Anyone so limited that they can only spell a word one way is severely handicapped!

 This message is a reply to: Message 27 by Straggler, posted 07-16-2011 2:17 PM Straggler has replied

 Replies to this message: Message 29 by Straggler, posted 07-16-2011 2:27 PM jar has replied

Straggler
Member (Idle past 289 days)
Posts: 10332
From: London England
Joined: 09-30-2006

 Message 29 of 211 (624197) 07-16-2011 2:27 PM Reply to: Message 28 by jar07-16-2011 2:21 PM

Credit Ratings Agencies
This is what I am referring to:

 Link writes:The agency indicated that even an agreement on the debt ceiling might not be enough: "If an agreement is reached, but we do not believe that it will stabilise the US's debt dynamics, we, again all other things unchanged, would expect to lower the long-term 'AAA' rating, affirm the 'A-1+' short-term rating, and assign a negative outlook on the long-term rating."In response, Jeffrey Goldstein, the US Treasury's under secretary for domestic finance, said: "Congress must act expeditiously to avoid defaulting on the country's obligations and to enact a credible deficit reduction plan that commands bipartisan support."

Not an issue as far as you are concerned?

 This message is a reply to: Message 28 by jar, posted 07-16-2011 2:21 PM jar has replied

 Replies to this message: Message 30 by jar, posted 07-16-2011 2:56 PM Straggler has replied

jar
Member
Posts: 33957
From: Texas!!
Joined: 04-20-2004
Member Rating: 2.0

 Message 30 of 211 (624206) 07-16-2011 2:56 PM Reply to: Message 29 by Straggler07-16-2011 2:27 PM

Re: Credit Ratings Agencies
Remember, in 2007, 2008, 2009 S&P and Moody also said that they might lower Great Britain's credit rating from AAA, and this rhetoric has been repeated in 2010 as well.

The problem is that no politicians want to address the issue.

The solutions are really pretty simple, but it requires a long term commitment that neither government is set up to make.

Anyone so limited that they can only spell a word one way is severely handicapped!

 This message is a reply to: Message 29 by Straggler, posted 07-16-2011 2:27 PM Straggler has replied

 Replies to this message: Message 31 by Straggler, posted 07-16-2011 3:33 PM jar has replied Message 34 by Nuggin, posted 07-17-2011 2:17 AM jar has seen this message but not replied

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