Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is there even any hope in this debt mess?
Old 07-29-2011, 06:03 PM   #1
gone traveling
 
Join Date: May 2011
Location: Portland
Posts: 133
Is there even any hope in this debt mess?

I am really having a hard time convincing myself there is any long term chance of solving our US debt situation. I think our best hope is to kick the can down the road a few more years and hope for some technological breakthrough like warp drive to open up new frontiers. (only half kidding)

SS and medicare are unsustainable, even for the current beneficiaries much less those of us not reaching 62 for 20+ years. Everyone knows they are unsustainable in the current form but they can't be touched.

So now I think they pass something silly, like a 2 trillion dollar spending cut package, and in 10 years or so we come back to this problem only with a 30 trillion dollar deficit.


Feeling a little down. Nobody is willing to make any sacrifice. The poor, the middle class, the rich, the young, and the old. Everyone has perverted the saying into "Ask not what you can do for your country but what your country can do for you."


I don't have a solution...just depressed.
__________________

__________________
DoraM is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-29-2011, 06:06 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
Of course there is hope. It is spelled I-N-F-L-A-T-I-O-N. If I owe someone $14 trillion, but only have $1 trillion, then I can just revalue my $1 trillion so that it equals $14 trillion and pay off the loan instantly. Easy.
__________________

__________________
LOL! is offline   Reply With Quote
Old 07-29-2011, 06:11 PM   #3
Thinks s/he gets paid by the post
grumpy's Avatar
 
Join Date: Jul 2004
Posts: 1,321
It seems like Congress is unable to act because it is structurally designed to operate in a strict two party system. Now with the "Tea Party" impact we essentially have a third party that is preventing the House from arriving at a compromise.
__________________
...you can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Old 07-29-2011, 06:15 PM   #4
gone traveling
 
Join Date: May 2011
Location: Portland
Posts: 133
Quote:
Originally Posted by LOL! View Post
Of course there is hope. It is spelled I-N-F-L-A-T-I-O-N. If I owe someone $14 trillion, but only have $1 trillion, then I can just revalue my $1 trillion so that it equals $14 trillion and pay off the loan instantly. Easy.
I don't get how inflation will help when we have SS, medicare and even TIPs as part of the debt.

So you devalue the dollar such that it is worth $0.10. Now instead of sending out a $1800 SS check, you have to send out a $18,000 SS check because a loaf of bread now costs $20.

I could see that it shafts foreign bond holders and maybe the mortgage industry, but does it really fix our problems?
__________________
DoraM is offline   Reply With Quote
Old 07-29-2011, 06:21 PM   #5
Recycles dryer sheets
winger's Avatar
 
Join Date: Jan 2007
Posts: 251
It is depressing to see how divided this country has become.
__________________
winger is offline   Reply With Quote
Old 07-29-2011, 07:08 PM   #6
gone traveling
 
Join Date: May 2011
Location: Portland
Posts: 133
I just saw this commercial while watching the evening news. This sums up the problems faced trying to do anything to fix our mess:

‪What Were You Thinking - B v01small.7.8.mov‬‏ - YouTube
__________________
DoraM is offline   Reply With Quote
Old 07-29-2011, 07:30 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by DoraM View Post
I could see that it shafts foreign bond holders and maybe the mortgage industry, but does it really fix our problems?
It depends what you mean by "our." Inflation hurts the economy a lot and it can be especially tough on retirees. Yes, as you note it will also hurt holders of fixed-interest debt. But, it allows the huge US debt to be paid off with cheaper dollars, and the printed money allows the government to cover the debt without raising taxes. Better still, the government can do it under the guise of "stimulating the economy." Of course, the inflation drives up the cost of future borrowing (buyers of new bonds want a much higher fixed rate when inflation roars), but that's primarily a problem for future politicians.

So, inflation helps present politicians avoid unpopular actions (raising taxes) while making the future problem worse and increasing the pain for most people. That's why I think we'll be getting a big dose of it.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 07-30-2011, 12:42 AM   #8
Confused about dryer sheets
 
Join Date: Jul 2011
Posts: 9
Quote:
Originally Posted by DoraM View Post
Nobody is willing to make any sacrifice. The poor, the middle class, the rich, the young, and the old. Everyone has perverted the saying into "Ask not what you can do for your country but what your country can do for you."
I don't think that's true, many people are willing to make sacrifices.
Unfortunately, that doesn't include many of our representatives in Congress, who have chosen to blackmail the American people for political gain, instead of doing their job all along. They should be ashamed.
__________________
madbrain is offline   Reply With Quote
Old 07-30-2011, 03:32 AM   #9
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,146
Quote:
Originally Posted by DoraM View Post
I am really having a hard time convincing myself there is any long term chance of solving our US debt situation. I think our best hope is to kick the can down the road a few more years and hope for some technological breakthrough like warp drive to open up new frontiers. (only half kidding)
You have the same idea as The Telegraph cartoonist Matt.
Attached Images
File Type: jpg Matt.JPG (24.7 KB, 168 views)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 07-30-2011, 03:36 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,293
No hope at all. The next ten years will be very difficult. Then it will get worse.

Does anyone remember Harry Dent's long range predictions?
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Old 07-30-2011, 03:51 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,577
Quote:
Originally Posted by Ed_The_Gypsy View Post
No hope at all. The next ten years will be very difficult. Then it will get worse.

Does anyone remember Harry Dent's long range predictions?
Yep. He's made lots of long range predictions and, so far, has a consistently awful track record: http://www.fedderngroup.com/newslett...20REBUFFED.pdf

At the risk of stating the obvious, the rather blunt reality is that (in real terms) many people will have to pay more, many will have to get less and there will be some erosion in real living standards.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 07-30-2011, 05:01 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,293
A wile back, he predicted a depression.

How many recessions make a depression?

Let's look at this again in ten years.
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Old 07-30-2011, 08:31 AM   #13
Thinks s/he gets paid by the post
grumpy's Avatar
 
Join Date: Jul 2004
Posts: 1,321
I am viewing the "impending crisis" as a buying opportunity. I just moved a large slug of cash that I have had sitting in a 1.25% Discover savings account to my brokerage account. I plan to add to my holdings of high dividend blue chip stocks at a discount when the opportunity comes.
__________________
...you can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Old 07-30-2011, 08:33 AM   #14
Thinks s/he gets paid by the post
ls99's Avatar
 
Join Date: May 2008
Posts: 4,792
Hope? Of course there is hope. Just remember, the price of hope is disappointment.
__________________
There must be moderation in everything, including moderation.
ls99 is offline   Reply With Quote
Old 07-30-2011, 08:41 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by grumpy View Post
... Now with the "Tea Party" impact we essentially have a third party that is preventing the House from arriving at a compromise.

I think this is just the makeup of the GOP.. some are more moderate that others. If Boehner did not attach the balanced budget item to that bill, it would not have made it out of the house.


But... the democrats that the same issue with conservative Democrats (on spending)... ever hear of the blue dog democrats?


Each of those parties have moderate (more toward the center) and more extreme members (far to the right or left). Often on certain issues as individual members.... but the parties to to push all the members into a unified group to consolidate the power... It squashes any chance of a collaborative (best consensus) solution.... that is the part that is a little destructive (IMO).

Add to that the political positioning to try to make the other party look bad... and there is almost a complete breakdown of the system.

It seems the senate is a little more willing to compromise on this issue.

Some believe that bill that left the house will be changed and sent back to the house. It will have the balanced budget item taken off, some form of tax concession (probably closing some tax loopholes) and remove any language that requires another vote before the 2012 election cycle. That will provide enough cover for members of both parties in the house to get a bi-partisan vote through.


The hard core people on this issue (whichever side) will appear to have done their job (for their campaign pledge and constituents) and it will look like someone else fault. (whichever side of the political fence they are on or the issue.... either "I did my job and got it done" or "its not my fault"!).

It is completely dysfunctional... but that is likely how it will turn out.
__________________
chinaco is offline   Reply With Quote
Old 07-30-2011, 08:43 AM   #16
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Quote:
Originally Posted by ls99 View Post
Hope? Of course there is hope. Just remember, the price of hope is disappointment.
And I am hoping millions will show up this weekend with pitch forks in hand and surround the capital building to support some compromise to get this settled. Unfortunately, that probably will not happen.
__________________
DFW_M5 is offline   Reply With Quote
Old 07-30-2011, 08:45 AM   #17
Thinks s/he gets paid by the post
ls99's Avatar
 
Join Date: May 2008
Posts: 4,792
+1
__________________
There must be moderation in everything, including moderation.
ls99 is offline   Reply With Quote
Old 07-30-2011, 08:51 AM   #18
Recycles dryer sheets
 
Join Date: Jun 2011
Posts: 76
Good heavens no, that won't happen. The Homeland Security Gestapo would label them all terrorists, and haul them off to a gulag somewhere.

(I wish I was joking)
__________________
GaryInCO is offline   Reply With Quote
Old 07-30-2011, 08:58 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
Our politicians baffle me. On the one hand, the Dems and President say they want the debt ceiling raised. The House delivers. Granted ...it's not all of what the President wants so it gets rejected quickly by the Senate with the President saying all the while , "get it done", "compromise"...etc...etc..
Oh...I know....the Dems don't want to have to address the debt ceiling again before the 2012 elections. The GOP wants to use it as a "sticking point" in the 2012 elections. All politics. Nothing more.
At the end of the day....How can anyone....in any party..NOT agree with a balanced budget amendment. Secondly.. what does that say about their motivations and intentions? Without this amendment, Washington will just keep spending dollars it does not have. If we don't cut spending, cap the deficit...now....then when? This isn't going to get any less painful.
Depressing....
__________________
sheehs1 is offline   Reply With Quote
Old 07-30-2011, 08:59 AM   #20
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Doesn't it seem this situation has been played like a football game, where nothing gets resolved until after the two-minute warning, or like a basketball game where it doesn't matter what the score was for the first 90 percent of game time, it's those final two or three minutes that count? It all comes down to the wire anymore.
__________________

__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Speaking of Student Debt chinaco FIRE and Money 65 07-01-2011 03:56 PM

 

 
All times are GMT -6. The time now is 03:14 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.