Obama said the "B" word

[FUEGO]

What’s the definition of bankrupt?

Maybe we start auctioning off hard assets that aren't being used very efficiently. The Capitol, the Whitehouse, etc.

 

[ziggy29]

What’s the definition of bankrupt?

Good question. Maybe when the federal government's debts exceed all of its assets (land, buildings, property, et cetera)? Until then, the government could theoretically remain solvent by selling off assets to retire debts. Not that it would happen, but that might be one way to define it.

 

[REWahoo]

Until then, the government could theoretically remain solvent by selling off assets to retire debts. Not that it would happen, but that might be one way to define it.

How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...

 

[FUEGO]

How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...

Maybe next time the UN meets in NYC, hold an auction on the courthouse steps outside? Highest bidder?

Who will be snapping up US properties a la Japan circa 1989?

 

[REWahoo]

Who will be snapping up US properties a la Japan circa 1989?

Whaddya bet the Sultan of Dubai has his eye on White Sands National Monument...

 

[Westernskies]

My thoughts are that this thread will have posts deleted due to political content and will quickly be porky pigged.

..say it ain't true, REWahoo!

 

[FUEGO]

Whaddya bet the Sultan of Dubai has his eye on White Sands National Monument...

Speaking of bankrupt governments... Dubai is apparently not doing so well these days.

 

[ERD50]

How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...

Put it on ebay?

-ERD50

 

[Hamlet]

Owing money does not make you bankrupt.

Owing money beyond your ability to pay does.

The Federal government has revenues that are above $2.5 trillion. Interest on the debt is currently about $450 billion.

We are reaching dangerous levels, but wise action can still avert disaster.

What’s the definition of bankrupt?

At 12-18-09 04:14:51 PM GMT we were at $12,135,856,734,588.51 according to U.S. National Debt Clock

To me were all ready there.

 

[ls99]

Heck, the US is already bankrupt, there are just arguments over how bad.

The real question, when will the currency be officially devalued? Amero anyone?

 

[samclem]

The real question, when will the currency be officially devalued? Amero anyone?

I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.

 

[ls99]

I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.

 

[ziggy29]

I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.

 

[LARS]

Bankruptcy is a technical term that I don't think applies to the US. As I have said in previous posts, the US government will not default on its debt. It will print the monies necessary to retire its debts.

The real concern is the value of the $ relative to other currencies or commodities (oil).

You will know in no uncertain terms the jig is up on our profligate spending the day that Congress institutes capital controls. It is the final acknowledgement that the US $ is on its way to being worthless. Stopping the flow of $ into other non-US denominated assets is the final step to try to protect the currency.

 

[ziggy29]

Bankruptcy is a technical term that I don't think applies to the US. As I have said in previous posts, the US government will not default on its debt. It will print the monies necessary to retire its debts.

Right. As long as there is a printing press cranking out fiat money, bankruptcy isn't the likely outcome -- high inflation would be.

Still, as an aside I question why the president would use a term like this when not all that long ago, he was chiding his opponents for using scare tactics about health care reform. Is it any more likely that we'd go bankrupt than, say, Grandma not getting a hip replacement because she's over 70 and we're rationing care?

 

[ls99]

It will print the monies necessary to retire its debts.

The real concern is the value of the $ relative to other currencies or commodities (oil).

Not sure creditors will accept Monopoly Money as payment.

How much gold does the US own? How would it's value be set? I guess gold would be accepted as payment, maybe if start drilling for oil and export enuf for someone to care. What else can we sell/trade for debt? Mt Rushmore, rent space for whomever's likeness for a small fee?

 

[LARS]

Still, as an aside I question why the president would use a term like this when not all that long ago, he was chiding his opponents for using scare tactics about health care reform. Is it any more likely that we'd go bankrupt than, say, Grandma not getting a hip replacement because she's over 70 and we're rationing care?

While there is a level of "scare tactics" in Obama’s comment, I think his real point was that we, as a nation, have to get the cost of health care under control. If we don't, it will cause tremendous economic dislocations in the future. Whether the current Congressional approach will achieve that is clearly an open question.

Where I find fault in Obama is that I see zero leadership on his part on the health care debate. He does not appear to be in the trenches leading the discussion. His approach is one of platitudes (i.e. “we’ll go bankrupt”). The President (and his staff) should be guiding this process; instead, we have Pelosi and Reid calling the shots with the obvious results (or lack thereof).

 

[ziggy29]

While there is a level of "scare tactics" in Obama’s comment, I think his real point was that we, as a nation, have to get the cost of health care under control. If we don't, it will cause tremendous economic dislocations in the future. Whether the current Congressional approach will achieve that is clearly an open question.

I've long been saying that any health care reform is futile until the issue of cost containment is addressed. No amount of single payer or universal coverage or elimination of medical underwriting willt stop an eventual train wreck if we keep getting 10-20% cost increases every year. It's pretty bad when I'm ecstatic that my portion of the Megacorp premium is "only" up about 5% for 2010. (Of course, that was for the HSA/HDHP option. The other traditional PPOs were up 12-15% or so.)

And that's where I fault Congress the most: very little of the energy is even being spent on the cost containment issue, which I feel is absolutely central to the problem.

 

[ziggy29]

Not sure creditors will accept Monopoly Money as payment.

Which has to be offset with the realization that if foreign creditor nations stop taking the U.S. dollar and start selling Treasuries, they are in effect likely to trigger a global depression. China is making a lot of noise about the U.S. debt and the dollar, but in reality they are smart enough to know they would be slitting their own throat if they as a nation dependent on exports started massively dumping Treasuries and destroying their largest export market.

At some point, though, you do have to wonder when enough is enough.

 

[LARS]

Not sure creditors will accept Monopoly Money as payment.

Existing creditors have no choice but to accept the “worthless paper”.

The real question is new creditors, or more importantly the sellers of oil, etc., as they will not accept dollars as a form of payment and therein is the problem with printing our way out of the problem.

We will destroy the value of the currency, which is a problem given we are not self-sufficient. So one can only hope idiots like Bernanke (and Congress) understand this and when push comes to shove, he (they) will defend the dollar (i.e. increase interest rates/cut spending).