Just put it on the credit card!

[olyclimber]

http://eteraz.org/2007/08/14/us-comptroller-slams-us-economic-inequity/ (no, does not rickroll you)

 

Bush borrowed more than all previous 42 Presidents. Combined. Rome, here we come:

 

According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion.

[KaskadskyjKozak]

http://eteraz.org/2007/08/14/us-comptroller-slams-us-economic-inequity/ (no, does not rickroll you)

 

Bush borrowed more than all previous 42 Presidents. Combined. Rome, here we come:

 

According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion.

 

and is that borrowing normalized to account for inflation?

 

and wanna bet that Clinton borrowed more than all previous 41 presidents combined, Bush 41, more than all previous 40, Reagan more than all previous 40... etc...

 

[RuMR]

sure...i'll take that bet...

[sirwoofalot]

The money was barrowed from whom? I don’t really get this. I don’t think we are barrowing anything from foreign principalities as addressed above. So this trillion dollars is coming from where? Bonds and I don’t mean a drugged up Barry.

 

Fine our government runs a deficit. How much as compared to our GDP; past and present?

 

And does it matter?

 

The reality is our economy is based on only one thing. Trust. Trust that it will not all go to hell in a hen basket.

 

That is it.

 

And if that is what our USA economy is based on then so must the world economy be based on the same thing.

 

 

So I ask again, what does it matter?

 

[olyclimber]

China's 'Nuclear Option'

 

US polticians have been calling for trade sanctions with China or pushing for a revaluation of the Yuan. [20] Recently Mr. Xia Bin (a cabinet member of China's Communist Party) described using the possible sale of US Bonds as a bargaining chip against a yuan revaluation. Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels. It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.[21]

[olyclimber]

Consequences of foreign ownership of U.S. debt

 

A traditional defense of the national debt is that we "owe the debt to ourselves", but this is increasingly not true. U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public. [22] About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.[23] Some argue this exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then. [24]

 

Last year, the central banks of Italy, Russia, Sweden, and the United Arab Emirates had announced similar shifts out of the dollar and into other currencies or gold citing the United States' "twin deficits" (i.e. the U.S. trade deficit as well as its budget deficit) as the reason for the expected fall in the dollar's value.[25] [26] On May 20, 2007, Kuwait abandoned pegging its currency to the dollar preferring a basket of currencies. [27] Syria made a similar announcement on June 4th, 2007. [28]

[olyclimber]

Its cool and all though...we can just print some more money to pay off our debts. Its all good.

[KaskadskyjKozak]

 

If you're gonna die, die with your boots on!

[tvashtarkatena]

Yeah, Porter's just another whiny liberal crying wolf about a non-problem. I'd go with KKK's 'everything is beautiful' approach: his track record of being right about everything so far speaks for itself.

 

Nothing to see here. Move on.

Edited August 16, 2007 by tvashtarkatena

[sirwoofalot]

Consequences of foreign ownership of U.S. debt

 

A traditional defense of the national debt is that we "owe the debt to ourselves", but this is increasingly not true. U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public. [22] About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.[23] Some argue this exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then. [24]

 

Last year, the central banks of Italy, Russia, Sweden, and the United Arab Emirates had announced similar shifts out of the dollar and into other currencies or gold citing the United States' "twin deficits" (i.e. the U.S. trade deficit as well as its budget deficit) as the reason for the expected fall in the dollar's value.[25] [26] On May 20, 2007, Kuwait abandoned pegging its currency to the dollar preferring a basket of currencies. [27] Syria made a similar announcement on June 4th, 2007. [28]

 

 

OK, so China calls in our note. Our economy collapses. Who will the Chinese sell all of their manufactured goods to?

As long as the US is China’s major customer, or Japan, or EU, or Kuwait, or any other country for that matter, then it is in that countries best interest to keep the US economy afloat.

When the US economy goes into recession it sends out a ripple effect that grows exponentially as it affects the smaller economies.

 

Again it comes down to trust. Even if China or others call in their notes the entire international trade is based on the US Dollar.

 

People buy and sale goods all over the world in US Dollars, and it is not just between the us and our trading partners. It is between China and Japan, India and Australia, South Africa and Canada.

 

The US Dollar is the international currency, and it is in all the Nation States best interest to keep the dollar afloat.

 

There is no good reason for the dollar to be anything but insolvent today.

 

BUT it is solvent. It remains so and will as long as there is trust.

 

It is not the bonds, it is not gold, it is not our GDP, none of that matters as much as trust.

 

Everything you said it true. You are right. But so am I.

 

[Fairweather]

I'm not an economist, but somewhere between the doom-and-gloom predictors and the don't worry be happy crowd lies the reality I'm sure. I wouldn't go as far as to say we're sitting on a house of cards, but the structure seems a little shaky nowadays. A mandatory-growth economy and housing starts at a 10-year low? Sounds scary to me. 7 million Americans facing foreclosure? Sounds scary to me. Am I going to go buy bullion, canned food, and a crate of .223? Not just yet. This economy still stands on faith, after all. And wheat prices are strong!

[Fairweather]

Apples to Apples, Porter:

 

 

 

[olyclimber]

someone is sure to breakout the pirates vs global warming graph.

 

i'm not an economist either, but these are shakey times. check out the market this week. where can i get a crate of .223 shells?

[Fairweather]

where can i get a crate of .223 shells?

 

Of course you realize that you must own a gun for them to work properly. A rifle totin' liberal? Now that's scaring me.

Edited August 17, 2007 by Fairweather

[olyclimber]

true. and a guy like me wouldn't own a gun, would he?

[olyclimber]

what would a liberal do with a gun? advance social causes?

[Fairweather]

Naw. Revolution seems to come from the countryside into the urban. What are a bunch of disgruntled lib urbanites gonna do? Hop into their Subaru's and go shoot up the town of Republic?

Edited August 17, 2007 by Fairweather

[ClimbingPanther]

Naw. Revolution seems to come from the countryside into the urban. What are a bunch of disgruntled lib urbanites gonna do? Go shoot up the town of Republic?

only if it can be reached by public transit

 

dirty post editor

Edited August 17, 2007 by ClimbingPanther

[cj001f]

Its cool and all though...we can just print some more money to pay off our debts. Its all good.

 

thats what the Chinese, the Russians and everyone else but the US and Europe have been doing lately......

[KaskadskyjKozak]

 

let's all slit our wrists. we're so fucked.

[olyclimber]

but shoot some guns first! 50+ cal.!

[dt_3pin]

let's all slit our wrists. we're so fucked.

 

I agree, but why don't you go first . . .

 

 

[tvashtarkatena]

Apples to Apples, Porter:

 

 

 

Here's a couple of apples for ya.

 

According to this graph, the debt/GDP ratio has exceeded 60% less than 10% of our history: and the only other point where that occurred was WWII, when nearly all of our industries and workforce were unsustainably mobilized. This was followed by an unprecendented period of prosperity, where we were the only effective industrial producer for nearly a decade.

 

I'd be worried.

[Seahawks]

what would a liberal do with a gun? advance social causes?

 

Take over a country like Chavez.

[KaskadskyjKozak]

what would a liberal do with a gun? advance social causes?

 

shoot enemies of the[ir] state in the back of the head and dump then into pits