Hey Phantom II, to paraphrase Dilbert's pirate iPhone app, don't let the door bash your khyber on the way out, people like you would be best off helping some far right regime in Central America.

"On the other hand, the Adams Theory of Slow Motion Disasters states the following: Any looming disaster that is generally recognized years in advance is eventually solved."

The saying in economics is: Anything that is not sustainable will not be sustained.

Note however, it does not say the "solving", the end of the sustaining, will not be *painful*.

"So what are the odds that human ingenuity will find a way to pay off the national debt...?"

The odds are high because the solution is simplicity itself == raise taxes and cut entitlement benefits. But alas ... A LOT. starting seriously in the next 15 years or so. And judging by the Tea Partiers and the Hands Off My Medicarers, doing this A LOT, while simple, will not be easy.

How much is "A LOT"? Fortunately, the Congressional Budget Office has given us the real numbers. For starters, by 2030, an income tax increase of 50% across-the-board on everybody, individuals and businesses. (Else the credit rating of the US is projected to be "junk" by then.) And 2030 isn't so far away. Obviously the tax increases (or cuts) will have to start well before then.

Then it is ever more tax increases from there, since spending only goes up, up, up, ever after.

The CBO numbers and size of the needed tax increase, or alternative spending cuts, and comparisons to past fiscal events (such as World War II), since you request links, is here:

http://www.scrivener.net/2008/05/how-much-will-income-taxes-have-to-go.html

The gist is that by 2030 the cost of Medicare, Social Security and Medicaid rise by *6 points of GDP*. Since the entire government for decades has been 20 points of GDP, taxes must rise by 6 points of GDP for the deficit and debt to be "stable".

What about Krugman's column saying "be happy, don't worry"?

He played a neat trick in it -- he *didn't count* the cost of Medicare, Social Security, Medicaid and unfunded federal-military pensions. They are "off-budget" so he hand-waved them away and ingored their cost in the "official" budget numbers he discussed. .

Oh, but a little while back he wrote a very different column where he *did* count them!: Quote:

"I'm terrified ... we're looking at a fiscal crisis that will drive interest rates sky-high ... looming threat to the federal government's solvency ... because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest ... the conclusion is inescapable ... the task is simply impossible. The accident, the fiscal train wreck, is already under way..."

Yiles!! The two columns compared in more detail:

http://www.scrivener.net/2009/08/krugman-versus-krugman-on-deficits-and.html

Why the huge difference?

In the first column Krugman was using *debt fear* to try to block Bush's tax policies.

In the second he is using *debt is fine, it didn't hurt Ozzie and Harriet!* to support Obama's spending plans.

You may have noticed, Krugman is partisan.

But his much-the-most-honest column was the first one.

It was in a misrepresented context. I'm not even arguing that RM's point was incorrect. Evidence suggests that the Canadians have done a better job of reigning in their debt. I didn't argue against that. You seem to be awfully defensive against somebody just trying to clarify data.

Mr. welge, the point is IT WAS IN CONTEXT. He had posted the difference in size. "Almost lying"? what are you studing, to become a politician.

The US economy is not going to collapse for a number of reasons. I could write a book on it. Since the industrial revolution, life expectancy and quality of life has improved for all people in all countries under all governments and all healthcare systems. Seriously, it's true. I'm young and between me and my friends, we think that things are moving in the right direction. Economics isn't a game that anybody "wins" anyway. I like how people believe that recessions are a "mistake" as if somebody f'ed up or something. People were behaving in an unsustainable manner, now resources are being reallocated to actually productive parts of the economy. The economy here in Texas is almost unscathed. Doesn't seem like a bad thing to me. Once we go a few years without wasting economic resources, the momentum will return to the economy, and everybody will calm the f down. I think that the national debt could become relatively high, especially if the US actually develops a higher savings rate, but Obama's policies are still dumb. He's not spending money in anywhere near the best way possible, and his transparency promises completely fell through. My generation is baffled by the sheer inefficiency and lack of transparency in government today.

Your post about the difference in sizes was unnecessary, since RM already pointed it out, and it had no context; it didn't add anything. Just like when people inadvertantly double-post and people thumb them down, I assume you got thumbed for lack of contribution.

Canada is (approx) 1/10 the size of the US, with (approx) 1/10 the GDP, but *only* 1/20 the debt, despite one payer healthcare. This was (part of) the point RM was trying to make. (If I may be so bold as to speak on their behalf.)
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I think that my post was perfectly necessary. Saying that Canada has one twentieth the debt of the US is almost lying. Plain and simple. Not putting information in context is bad.

Reducing and preventing a deficit are the same thing. To reduce the deficit, you can't have on in the first place. I didn't realize that I had to specify Dilgal.

__________________________________________________________________________

What I meant to say, is that you can't reduce with debt while you have a deficit anyway, so reducing the debt and the deficit are essentially the same issue. Both have the same solution. Have more money flow in than out.

wow.
What is posted isn't what I typed...

beware the use of the percent sign. The guy would have a 500 percent debt. And the US debt is running at about 80 percent.

And is there some software that wants to censor profanity? I didn't type all those symbols for when our money goes bad. Apparently, it isn't PC to use the colloquialism for breasts. And after all that registration BS.

Scott I can't believe that after making me swear I'm not 13 so that you can comply with the law you won't let me swear a little bit to all the others who swear they aren't 13.

To R.Saunders
european governments too small..... have you say heard of the eurozone? The european central bank issues bonds.
Personally I think the reason the US is not doomed is simple- the united states has borrowed all of the money it owes to people in dollars- which the US government can print- at worst you'll get massive inflation. Far less destructive than economic collapses that we have seen in south america because their debt was in dollars.

The guy who makes $100,000 per year is probably going to have a $500,000 mortgage. So as a percentage of his gross domestic product his debt is P0. The current level of public debt as a percentage of GDP is nearly €. About the same as Germany. The guy with the mortgage, if he got a decent deal, is going to have to pay about 35% of his income every year to the mortgage... the point is that comparing a country's finances to an individual's is comparing apples to oranges.

GDP is a completely mythical number. It is nearly meaningless. If all of us on the block got together and pooled our paychecks, you might think that would be our Gross Domestic Product on the Block (GDPoB). But not quite. Because Bill loaned Fred $8000 to help him put solar cells on his roof we would have to add $8000 to GDPoB for Bill's capital investment, another $8000 would be counted for Fred's capital expenditure and because Joe owns the solar company another $8000 for manufacturing orders and because Joe spent $6000 to buy the raw materials, another $6000 for raw goods, plus $2000 for corporate profits. That "simple" $8000 transaction gets counted multiple times, inflating what's really happening. Or not. That movement of money passed through many hands during the year and got counted each time. Egads, it's enough to confuse anyone.

When money is moving around like mad, the economy is booming. When money isn't moving - it's busted. But trust is an essential and unmeasurable component of money. The barter system is not dependent on trust. And it is not at all an efficient means of buying and selling. Because in our modern times we are not swapping chicken eggs for tomatoes but instead swapping the one thing we produce (like selling real estate) for a product that requires the separate production of literally thousands of other people (like an ipod). That takes a construct like money which is largely based on trust. Take out the trust, and we are back to eggs and tomatoes, and very quickly no one will be able to bring together all it takes to make manufactured goods without the abstraction of money.

And because that concept of money makes the greedy actualize, we get finance for the sake of finance rather than for the intended purpose of capital investment in means of production. But that's another can of tomatoes altogether.

I will give you 50 dozen eggs for a days work. That is a good deal for most people if they could easily convert the eggs into money. But if money isn't trusted, it is going to take an impossible amount of trading to come up with any manufactured good, especially once we have lost our manufacturing base. Possibly the trust of money will be lost after the singularity. That is, after we invent the self-replicating-fabricate-anything device...we are close... Then how well off you are will be determined by what you choose to have your little self-replicating factories produce for yourself...then there will be laws...you can't fabricate Scott's good-looking underwear because he has a copyright on them and wants 50 dozen eggs for the right to make a pair...

Tell me our system of making things happen isn't wacked. But it's all we have right now and it is being controlled and abused by small groups of powerful people...like always.

Look at what happens when governments go broke. We don't really get taught that in school, we'd much rather learn about liberating the slaves. But the collapse of German money after World War I resulted in the democratically elected government of Adolph Hitler (tells me that there are serious problems with majority rule). The Soviet Union fell because it went broke and it's money couldn't buy it anything on the world market. The result was that it downsized, developed and exported a mafia, found oil and is back on the upswing and busily diverting its new wealth back into a military build-up with a neo-nazi at the helm. And so on.

Not much good happens when your government's money is devalued. But, we're in a pretty good spot. We, the U.S. of A., have everything we need to be really well off right here within our borders. We make all the food we need (for much of the rest of the world too). We depend on imported oil, but if we get rid of some environmentalists, we could make all our own energy and the rest of the world would go broke because most of it gets its money from oil sales to us. They might not realize they are broke, but when Saudi Arabia starts buying military hardware from China, they are toast.

It might be good for us to go broke. We can't buy anything on the world market, so we make it here. Full employment comes back again. American made computers, american made televisions, american made childrens toys. Who wudda thought. We could all be busilly providing health-care for one another too. And while we are at it we could elect (by majority) a facist guy who wants to nationalize everything but we are really happy because the planes run on time.

National debt doesn't mean anything - what means something is when our money goes !$%* up. Probably not this year, or next. But if we don't capture bin Laden soon, we will be weenies and don't deserve the trust our money commands.

This doom has already happened in Argentina and someone wrote a book called "Surviving the Economic Collapse". The author lived in Argentina during the collapse. This YouTube video discusses what is in the book.
http://www.youtube.com/watch?v=uW5W8I6Eybw

On Amazon (unavailable now?)
http://www.amazon.com/gp/product/9870563457?ie=UTF8

The author's blog
http://ferfal.blogspot.com/

I read the book. People don't all move into the woods and live in the trees. There is a lot of crime. Shanty towns pop up like mushrooms. You still have most people working. You don't want to live out in the farm area because bad people will come and kill you so they can take your house. The police can't protect those people, they are too isolated.

Moving to another country might not help. If/when the U.S. goes down the rest of the world may go down too.

The way that I see it, There's 2 possible things that can happen:
1. Eventualy, all the contries of the world that we owe money too will get impatient about the debt and start repossessing the US.
2. We will get new loans to pay for the old debt. This scenario will only delay scenario 1.

What's realy going to be interesting is what happens during the repossessing. Cuba will finaly have taken over florida "officialy," Russia might want to take back Alaska "Good bye Palin!," Brittan might want those 13 eastern-seaboard states, France might want the area we got in the Louisiana purchase "but probably not," noone would want Nevada "exept for Las Vegas," Japan could get Washington "the state," China could take California "simply so that they have more land to cram all those people into," Mexico might want some of the sothern-border states, but I have no idea who would want Wyoming and Nebraska. Of coarse, it's possible that the country won't be repossessed along state lines, similar to what happened to Africa with all the European colinization.

I would appreciate it if people would leave comments based upon what country would take what area.

Comparison graph of the national debt versus GDP of the US, Japan and Germany:

http://en.wikipedia.org/wiki/File:PublicDebtTriade.PNG

I propose that all U.S. citizens do all of their investing in US bonds from now on. That way the the money that you lose while the governments spends it on interest, comes back to you.
And as long as you keep on investing, the government will not have to default on its loans. It is a win-win scenario. All you need is trust.

For the person who said the Chinese suggested we issue our debt in Chinese Yuan...are you really that stupid? 1) The Yuan exchange rate is fixed to the US Dollar. Issuing in Chinese Yuan would make no difference. 2) No country can issue debt in currency it does not issue.

And saying any health care bill passed by the Democrats would lead to single payer for all is like saying that any health care bill passed by the Republicans (like Medicate part D) would lead to the privatization of medicare and social security.

Please, stupid person, just leave, as you said you might. America will be much better off without people as stupid as you. Do it now rather than hanging on until the rest of us have saved your butts, and you get the same benefits that the smart ones of us get.

No, I'm not a Democrat, I'm just intelligent. At least just let the rest of us run things so that you can't screw it all up because of your stupidity.

You're also not working. You have every right not to, as long as you can provide for yourself. But you're the proverbial "deadweight employee." We can't fire you, and that would not be the right thing to do. But if you decide to quit...don't let the door hit you on the way out.

If you want your fixed income to go up, you'd want some inflation, wouldn't you? The more the government borrows, the more is has to borrow from you, and the interest rate goes up. Economics 101. I suppose you didn't take that course.

We need less stupid people who don't work. There's the door.

Let’s start with the effects of this year’s deficit. ... Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It’s a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression. Its obvious that some institution may get <a rev="vote for" title="Death Risk Rankings | Are You Dead Yet?" href="http://personalmoneystore.com/personal-loans/quick-loans/fast-cash/ ">fast cash</a>.

I do not understand much about all this but I do not see this as the USA's problem at all. It is the holders of the debt who have the problem.

Assuming an extreme scenario, even if the US declares bankruptcy what happens? The world will have no option but to bail it out. Similar to the large banks which were considered too large to fail and which were bailed out by the government. There may be some temporary recession, layoffs etc, but nothing on any large scale.

Even assuming that nobody bails out the US what will actually happen? The dollar will become worthless in theory, but practically will all American land, American business and American people be sold to its creditors. I doubt. If the US basically tells the world that the dollar is now worth zero, therefore your investment is also worth zero and now we are moving to a brand new currency to start afresh, you can take it or leave it, do you think China, Japan, UK or other will start a nuclear war to reclaim their investment.

A dollar is basically a promise/contract by the US goverment to pay a certain sum of money to somebody. If the US defaults on the contract, there is no way anybody in the world can enforce the contract. Some hue and cry will be made, but then the world will move on.

To all americans, I say forget about all this debt business. Keep on printing dollars and spending like crazy. When the whole ponzi scheme collapses, there is nothing anybody in the world can do to you. If people are foolish enough to accumulate contracts which have no hope of being enforced that is their problem, not your's.

Silly question:

http://www.rense.com/general66/dollardevaluationordoomed.htm

For further reading refer to Ezekiel chapter 22.