HI Bill
Thinks s/he gets paid by the post
- Joined
- Dec 26, 2017
- Messages
- 2,556
Just curious...what are #s 1-6?#7 on the worry list.
Just curious...what are #s 1-6?#7 on the worry list.
I don't see this as a controversy, but more of a matter of understanding just what the debt represents, who owns it, how it can changes, and gains or losses value as regards the person, country or entity owning the debt.
Digging in to this could allow a smart investor to see early warnings... not necessarily negative, but how the debt value may change. The Chinese/US relative debt ownership study, goes far beyond the two countries, and can be affected by seemingly distant activity in trade and debt owed to many other countries.
Some of the long term projections by international financial analytics have proven remarkably accurate. More to this than earnings or corporations plans that we look for in stocks.
A good example is the rapid and not well understood changes in population, as well as pending changes in the economic stress actions in countries such as Greece and Ireland.
A lot more than what I could understand after an hour or so reading about US/China Debt. While it all seems far off, once started,there is a chance that everything could move quickly.
#7 on the worry list.
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Here's a good discussion: https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124
And: https://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355
Bottom line is most of the national debt is to American citizens and institutions. That fact doesn't mean the debt is not a problem, interest on the debt is growing and consuming more and more of the Federal budget.
Bottom line is most of the national debt is to American citizens and institutions.
This article on the national debt appeared on CNBC online just today:
"...what matters is the debt to GDP level..."
https://www.cnbc.com/2019/02/13/tha...r-is-huge-but-heres-what-it-really-means.html
Not even on my worry-list radar.
Before everyone piles on to either counter or support this position, let's note that BOTH sides have their own preferred methods of debt reduction that are strongly resisted by the other side. While we all certainly have our own partisan views, they are not germane to this discussion.
A look at current expenditures and total National debt. Federal lending.
https://www.cnsnews.com/news/articl...highest-level-bank-bailout-and-obama-stimulus
So let me get this straight. This article indicates that tax cuts do not, in fact, pay for themselves. Darn it, just when you let yourself believe there’s a free lunch...
I don't think it's enough to put more money back into the pockets of people. To have the desired economic impact, that money needs velocity in the economy -- it needs to exchange hands through commerce, generating income for labor and creating taxable transactions.So let me get this straight. This article indicates that tax cuts do not, in fact, pay for themselves. Darn it, just when you let yourself believe there’s a free lunch...
So I get nervous when no political party seems to want to do the right thing and attempt to address this issue.
While I worry about the national debt, I worry even more about our nations unfunded liabilities. That is the amount of money already owed or promised to American citizens but without the funds to fulfill those obligations.
I searched the article for the letters "GDP". I didn't get any hits. Assuming the "$122 TRILLION" is the present value of some future amounts, do you have any idea of what that is compared to the present value of future GDP?While I worry about the national debt, I worry even more about our nations unfunded liabilities. That is the amount of money already owed or promised to American citizens but without the funds to fulfill those obligations.
Recently, I read that number was up to $122 TRILLION!! Much of those 'future obligations' are social security and Medicare benefits that many of us younger FIRE'd folks included in our FIRE calcs. So I get nervous when no political party seems to want to do the right thing and attempt to address this issue.
https://www.realclearpolitics.com/a...ovt_liabilities_--_our_ticking_time_bomb.html
What is most important is Exactly who told you to worry about that?
Why? Myra Adams? Can't say I know her or much about her other than what is at the end of the article. I've read a lot of similar things on a website by the Peterson Foundation. They seem to be interested in this sort of thing and not obviously biased towards one political party or the other.
I searched the article for the letters "GDP". I didn't get any hits. Assuming the "$122 TRILLION" is the present value of some future amounts, do you have any idea of what that is compared to the present value of future GDP?
I thought so. Just spend about 10 minutes googling their background and you'll have all the answers you need... BTW - Peterson Foundation is Pete Peterson - Who is dead now BTW.
Hmmmmm, maybe you should spend 1 minute googling the "Peterson Foundation"? You will be enlightened to find that it's much more than Pete Peterson. Or maybe you think his ghost is doing all the recent work?
Any thoughts or comments about the national debt and the related unfunded liabilities of your own??
AAA+++The issue isn't that our current debt is "too high", it's that we're adding $1 trillion per year during an economic boom.
Is there some magic debt to GDP ratio that all of the sudden changes everything for you? I'm not sure how to read your comment.
I've got an idea, if that is what you are really asking... if existing debt / GDP is over 100% already and we have about $22T of debt now. Then it appears that we've already made promises for an additional $100T of spending that is not funded. Assuming our economy can grow at 2.5% per year our GDP would take over 27 years to double. So if nothing changes, you can conclude that our debt to GDP ratio will increase rapidly in the future. Actually, according to the CBO in "The Budget and Economic Outlook: 2019 to 2029" from Jan of this year they project Debt to GDP to be 147% in 2049. So there you go..
The whole point of my original comment is was that while the existing national debt is a large number; the combination of changing demographics, increased health care costs, and federal policy that consistently operates in larger deficits will make the current debt look small by comparison.
SS hasn't contributed a single dollar to our current debt - SS has been funded entirely by earmarked taxes. The point of asking for the ratio is to get a feeling for how big theI read that number was up to $122 TRILLION!! Much of those 'future obligations' are social security and Medicare benefits ... no political party seems to want to do the right thing
+1The $122 TRILLION "unfunded liabilities" is future SS and Medicare. SS hasn't contributed a single dollar to our current debt - SS has been funded entirely by earmarked taxes. The point of asking for the ratio is to get a feeling for how big the problem is in terms that make sense - which would be percent of the future economy. The SS part happens to be 1.3% of the pv of future GDP. https://www.ssa.gov/oact/tr/2018/VI_F_infinite.html
It's wrong to say that "neither party" wants to address SS. The chairman of the House subcommittee on SS submitted HR 860, "Social Security 2100". 204 members of the House have already signed on as supporting this bill - they only need 14 more supporters to get over 50% of the House. https://www.congress.gov/bill/116th-congress/house-bill/860
(FTR, I don't think that SS 2100 is the best solution for SS, but it is a serious proposal with numbers that actually add up)
I think the deficit/debt are serious problems. But, the problem is here today. We're spending $1 trillion dollars more in 2019 than we collect. That money goes to the military, and Medicare, and veterans benefits, and Medicaid, and ...
Taxes aren't covering it partially because we just cut tax rates again.
I'll agree that neither party is addressing that problem.
I'd support any candidate that has proposals to cut spending without cutting taxes, or increase taxes without increasing spending, or to both increase taxes and cut spending.