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Thread: U.S. Has No Way Out of Debt Trap

  1. #1
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    Exclamation U.S. Has No Way Out of Debt Trap

    I don't know if this is the right place for something like this, or even if there IS a forum for this here. But, considering how many here talk about "bugging out" or TEOTWAWKI, they might find this interesting and informative. It might even give them a timescale for planning and preparation.
    Pimco’s Bill Gross: U.S. Has No Way Out of Debt Trap
    By Greg Brown

    Americans should brace for big changes in their lives in the coming years, warns Pimco founder and co-CIO Bill Gross. There is simply no exit from the significant decline in U.S. living standards to come.

    Borrowing to finance huge deficits will eventually come home to roost on the U.S. taxpayer, either in the form of higher interest rates or a radical reduction in entitlement spending, Gross tells Yahoo Finance in an interview.

    U.S. debt is now at $14.195 trillion, just $99 billion below the current limit. The Treasury Department has been taking money from an emergency reserve to avoid hitting the limit as Congress debates raising the debt ceiling, Reuters reports.

    The White House projects the deficit – or how much we borrow each year to pay for just the federal government, not counting state and local borrowing — will hit $1.6 trillion this fiscal year, or 10.9 percent of GDP.
    Here's the website for the rest of the story:
    http://www.moneynews.com/Headline/us...mo_code=BD34-1
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    The Government is going to keep spending until it can't and until we can't see the daylight from the bottom of the hole it dug. The best course of action for everyone and anyone for the situation we find ourselves in and for any kind of disaster type scenario is to have 6 months or more of non-perishable food and water. That and guns and ammo for them. No one likes to think about it but when the .gov is away the criminals play. In a world where paper money is but kindling all that will be currency is food, water, guns, ammo, and valuable minerals such as gold and silver.

    As we say with carrying a firearm - Better to have it and not need it than need it and not have it. There is no excuse for being unprepared for anything life throws at you.

  3. #3
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    The actual situation is actually worse.

    If you look at federal debt, state debt, corporate debt and personal debt, the number is about $55~60 Trillion dollars.
    Jamie

    Greatness lies not in being strong, but in the right use of strength - Henry Ward Beecher

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    We can get out of debt. It just means that people like me who are nearing the age of retirement or who are already retired will either not get any Social Security, get much less than anticipated, or have to wait until we are almost dead before applying for it. Also, we will either not get any Medicaid, and or Medicare or very little.

    Better that than have the country go bust. I will put up with it as long as you will too.
    I don't live in fear, I live in Alabama!!!

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    actually gold and silver will be worthless when there are no goods/services to purchase w/it.
    the Native Americans had no use for it.
    the S. American civilizations realized the 'nobility' of it for decorative purposes but their economy was not based on it. rather it was carved/engraved stone discs. who is going to hold a stone disc with Obama's likeness cut on it valuable?

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    Hey, JT, read Winston Churchill's 'Age of Revolution' and pay particular attention to the time around 1700, the end of Queen Anne's reign and the beginning of George I. Walpole stopped sending England's armies around the world, lowered taxes and fought smugglers who were trying to evade port duties. We have troops station in 135 countries and give favored nation trading status to countries like China who use cheap labor to undercut our market. We get goods cheaper at the cost of quality and a huge trade deficit. Then we send foreign aid, military aid and troops all around the world to protect 'our' interests.

    Can anybody see why this might be a cause for concern. It is another good reason we have the 2nd and are fighting so hard for it because more people are catching on and those in power are fearful of armed citizens who do not go quietly into the night.

    Armed citizens of Egypt and Libya armed with old weapons dating back to WWI and WWII are giving the modern armed troops of dictators fits. Especially when a lot of the troops are sympathetic with the rebels and against the establishment. No wonder the power brokers want us unarmed or at least our teeth filed down with small calibers, limited magazines and restricted actions.

    From where I stand this is very much an arms issue if we want to continue as a free nation.
    1934 – National Firearms Act, 1968 – The Gun Control Act, 1986 – Firearms Owners Protection Act, 1993 – Brady Handguns Violence Act, 1994 – Assault Weapons Ban, 1995 – Gun Free School Zones Act, NO MORE COMPROMISING

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    U.S. Has No Way Out of Debt Trap ?
    Sure it does.

    All the dot-gov has to do is declare a national financial emergency and then these Executive Orders are activated (EO 11051):

    http://www.thepowerhour.com/news2/eo_dangerous.htm

    So then the dot-gov will be able to assign work tasks to everybody (EO 11000) and we will then be on a competitive footing with China and India and who-not.

    Of course, this is after all private property is confiscated (several EOs, which see) and sold to somebody else in order to forestall collapse.

    Poof! No more debt!

    Second Amendment? Feh. Guns are private property, and if you think you'll be able to keep your guns and stash of ammo during a government-directed move, forget it.

    All part of the plan. They're already creating the requisite national financial emergency.

    No?

    I must be crazy, then.

    Either that, or "the power hour" is crazy.

    Or maybe just the folks who wrote and signed all those Executive Orders.

    I recall that one of Clinton's aides supposedly said (according to an unremembered source) something like, "Hey, EOs are great. You write one up and get it published in the Federal Register and if nobody objects, it's law. What could be better?"

    The thing that really bothers me is that there are now apparently over 11,000 of them. Who knows what's buried in 'em. You? Me?

    Certainly not me.

    Terry, 230RN
    "Gun control is not about public safety, crime reduction, or 'the children.' Gun control is about power. The people have it, and the government would rather they didn't." (An internet poster, not myself.)

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    Some of the worst of those have been rescinded:

    http://www.archives.gov/federal-regi...xon.html#11490

    Did Nixon actually do something right? Whoa.

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    U.S. Has No Way Out of Debt Trap
    Sure they do. And rest assured all of the options are being promoted.
    1. Dump the dollar. Replace it with a new currency, perhaps a world currency. (remember the Amero? You laughed?) Then just re-define our debt.
    2. Massive inflation. So we repay our loans with dollars worth pennies. So what if a loaf of bread is $50? The New World Order has lots of funding sources.
    3. Global governance. Let the UN run the world, forgive all debt.
    4. Massive tax increases. The only problem is that we all know this doesn't work, ever. The really rich simply move their money elsewhere. (George Soros, Kennedys, all offshore)
    5. Drastic cuts to entitlements. Here's what I don't understand.
    The first thing suggested is eliminate SS. But SS is the only entitlement where the benefactors actually paid something in. Where is: Stop welfare? Medicaid? Thousands of government programs that are dismal failures. (Yes, thousands)
    How about this as a patch on SS. Eliminate the cap on SS tax. Right now you pay no more after you reach $108K. Just tax 100% of wages. That puts the burden on those making the most, yet need the least. (not that it's fair, but cutting benefits to those who paid in all their lives isn't fair either.)
    6. Default. Do we ever get paid back by countries whom we've loaned money? No.
    7. War. Nothing gets the economy moving like a nice war. Let's nuke someone.
    8. Fair tax. Double the income of the IRS simply by making taxes fair. Everyone pays his "fair share". Rest assured, this will never happen, because it doesn't buy votes. Congress would see the country collapse before they gave up their power.
    9. Cut the budget. Cut every department in the federal government by 50%. Think you'd notice? I don't. Why do we even have a Federal Department of Education? Energy? Agriculture? Commerce? Labor? Let the states do their job.

    If I were you, I'd be buying gold and silver.
    Think you were smart by saving all your life and now you have a nice nest egg? Those dollars may be worthless. Precious metals have a worldwide value not tied to the dollar.

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    7. You are wrong about war. You are welcome to think what you want, but economic history does not back up your claim.

    You are right, we have to reduce teh entittlement claims to what we can pay for.
    Cogito, ergo armatum sum

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    7. War. Nothing gets the economy moving like a nice war. Let's nuke someone.
    Are you volunteering your home town with your family home as ground zero or somebody else's home town and family. That isn't a bit funny.
    1934 – National Firearms Act, 1968 – The Gun Control Act, 1986 – Firearms Owners Protection Act, 1993 – Brady Handguns Violence Act, 1994 – Assault Weapons Ban, 1995 – Gun Free School Zones Act, NO MORE COMPROMISING

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    Are you volunteering your home town with your family home as ground zero or somebody else's home town and family. That isn't a bit funny.
    Not to mention that a war (#7) is mutually exclusive with cutting taxes (#4) and cutting the budget (#9)

    Also, war as an economic boon is at best short lived. If my Grandfather is to be believed the few years after WWII saw quite a bit of unemployment until about 1948. If my father is to be believed the economy during the Vietnam war was a joke. Bad enough that one of the presidents had to declare wage and price freezes to forestall something called stagflation.

    Item last: We have already had war become a function of politics which has weakened our military enough. Having it also a function of economics may well be the death of our military.

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    I must be crazy, then.

    Either that, or "the power hour" is crazy.
    230RN, I don't know you that well. I do listen to The Power Hour almost every morning. Joyce Riley is a sweet passionate lady, but she's a little bit crazy.

    What's up with her obsession with orange and blue?

    I don't think we have to worry about Presidential press gangs dragging us off to slave in factories and farms...

    ...or burning our paper money to stay warm...

    ...or using our last rounds of .22LR to defend our last can of "Beans, Pork and."

    Sure, the nation has a good bit of debt right now. But as a percentage of GDP, it's less than we had in the late 40s and early 50s.

    I don't doubt American's lifestyles will change in the coming decades. We've been using WAY more than our share of the world's resources for many decades. Now much of the rest of the world is getting rich and powerful enough to bid for their fair share.

    "The American Century" is over. In the next century instead of being incredibly insanely richer than the rest of the world, we're just going to be a little richer than the rest of the world.
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    I don't doubt American's lifestyles will change in the coming decades. We've been using WAY more than our share of the world's resources for many decades. Now much of the rest of the world is getting rich and powerful enough to bid for their fair share.
    There is no need to be ashamed of America's success. The guilt-ridden concept that there is some "fair share" to which everyone is entitled - and we are exceeding - is nothing more than an impossible socialist fantasy. People and countries use the resources that they can afford to obtain and can put to use.

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    There is no need to be ashamed of America's success.
    I'm not ashamed of America's success. "Fair share" is shorthand for "the amount of resources proportionate to our population."

    It is a fact that the world produces a finite supply of resources and we use more of them per capita than any other nation. It's also a fact that the rest of the world is going to be demanding more of those resources than ever before. The increased demand will make supplies more costly. That's going to impact our lifestyles in the future. That's nothing to be ashamed of... but it is a fact.
    Last edited by LibShooter; April 2nd, 2011 at 08:14 AM.
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    Eliminate the cap on SS tax. Right now you pay no more after you reach $108K. Just tax 100% of wages. That puts the burden on those making the most, yet need the least. (not that it's fair, but cutting benefits to those who paid in all their lives isn't fair either.)
    This is an underappreciated option.
    Paul
    People have some respect for the complexity of technology. But almost every ignorant fool thinks he understands money and economics.

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    the U.S. is being run like a family.

    dad works, brings home pay.
    mom works p/t, brings home pay.

    both go out and buy items with cash, then with credit cards.

    when bills come do they go to their bosses and ask for O/T.
    when its turned down, they do a balance transfer to a new credit card but keep the old one open and still use it.

    then when bills come due again, they go to Jr.'s piggy bank and take a little change hes made from cutting lawns and delivering papers.

    when mom and dad find out that the change in Jr.'s piggy bank isnt really helping, they raid his college fund.

    when mom and dad see that they cant just drain the college fund they threaten granny with the we cant come see you or let you see Jr. because we have to work more and cut back.

    mom and dad know that granny will open up her purse and give some money...


    this just continues each generation/congress/president/senate...

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    the U.S. is being run like a family.
    No offense Jerry, but I personally know of very few families that do this. My brother's truck is 16 years old, my sister in law's car 9. My own is newer, but I'll drive it until the wheels fall off. My older child started kindergarten in new clothes but not high fashion.

    Many of the families with outstanding debt generally use a credit card to buy luxuries that quite frankly they could live without. Far too many look at an item and say 'it's within our credit limit' rather than asking 'could we make the payments.'

    The family you describe uses credit like a kid in a candy shop, the government uses the public treasury like an adolescent in a brothel. My Dad claimed he never once borrowed money for an item that wouldn't return a profit of at least 115%. Dad raised four children, put all four through college, paid off a mortgage on over 2000 acres and still has enough savings and investments to live comfortably in retirement. Please don't insult him by putting the gentleman in the class of those in Congress.
    Last edited by Selena; April 2nd, 2011 at 12:10 PM.

  19. #19
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    I know some irresponsible idiots. I know a lot more responsible people.

    Of course, I only know a few congressfolk.
    Paul
    People have some respect for the complexity of technology. But almost every ignorant fool thinks he understands money and economics.

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    "Fair share" is shorthand for "the amount of resources proportionate to our population."
    Wrong again, Lib. That is a collectivist concept, and we all know how well collectivism works, now don't we?

    "Fair share" means you get what you earn.

    It is a fact that the world produces a finite supply of resources
    And we have no earthly idea what that amount is, because we have not even begun to scratch the surface.

    The increased demand will make supplies more costly.
    Not necessarily. Necessity is the mother of invention. We have increased demand in America, but in terms of constant dollars, real costs have not gone up in terms of what constant dollars actually buy.

    Here is a good book for you to read. It will give you some better insight as to how economies work.
    "There is no lie too grotesque, too stupid, or too base for leftist extremists to retell." -- Standing Wolf

    Posted from my Ubuntu machine.

  21. #21
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    "
    Fair share" means you get what you earn.
    What I should have said was "I am using the term 'Fair Share' to mean the 'amount of resources proportionate to our population.'"

    That is a collectivist concept, and we all know how well collectivism works, now don't we?
    Throughout history collectivism has worked pretty well. In fact, without it we would have all been eaten by the lions half a million years ago. A team of hunters working together to kill and share a mastodon is collectivist... and a foundation of human society. We need the right amount of collectivism balanced with the right amount of individualism.

    And we have no earthly idea what that amount [of resources on earth] is, because we have not even begun to scratch the surface.
    We've made pretty deep scratches in the surface of the earth searching for resources. And it's obvious we can't generate enough stuff for 7 billion people to live in the manner to which Americans have become accustomed.

    And sure, innovation will help... but there are certain laws of nature that can't be ignored. There is a certain amount of oil in the ground and we are pumping it out a lot faster than it's being made. We will run out. The same goes for iron ore, the fancy minerals we need to make computer chips and even water.

    Billions of new consumers with disposable incomes will bid up prices. Even Mr. Murray N. Rothbard says so. That's going to make us effectively poorer.
    Do what you can, with what you have, where you are.
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    And it's obvious we can't generate enough stuff for 7 billion people to live in the manner to which Americans have become accustomed.
    I don't know if that's true. The reasons why other countries are poorer have more to do with politics than anything else.

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    There is a certain amount of oil in the ground and we are pumping it out a lot faster than it's being made.
    LOL, all it takes to synthesize oil is a carbon source, water vapor and a source of power.* The earth is covered with water and if the doomsayers are correct we have more than enough carbon dioxide floating around. The power is all around us if we had the intestinal fortitude to use it. Aluminum and ceramics have done much to replace reliance on steel, though not nearly enough in my opinion. As for the fancy minerals needed for computers, I'm not sure which one you are talking about, copper, silicon and beryillium are both relatively common occurring. High tech batteries are another story but computers are pretty safe.

    Just as an aside, there was a research project being conducted at an old oil site that supposedly had been tapped out. They found that seemingly new sources underground had been in play. Unfortunately they lost their funding and had to abandon the project before an answer could be found.


    *Franz Fischer and Hans Tropsch

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    all it takes to synthesize oil is a carbon source, water vapor and a source of power.*
    But we get more than a third of the world's power from oil. We can't use energy produced from oil to make oil.

    As for the fancy minerals needed for computers, I'm not sure which one you are talking about, copper, silicon and beryillium are both relatively common occurring.
    I'm talking about scandium, yttrium, lanthanum and about a dozen other -ums. Elements like these make it possible to keep making chips faster, smaller and more powerful.

    ...there was a research project being conducted at an old oil site that supposedly had been tapped out. They found that seemingly new sources underground had been in play.
    Yep, there's still plenty of petroleum underground. The problem is it often takes more energy to get it than the oil produces. That does us no good.

    Let's do some arithmetic:

    Wikipedia tells us the US used 22.6 barrels of oil per person in 2008.

    If all 7 Billion folks on earth used that much oil, we would need 158.9 billion barrels every year. According to the U.S. Energy Information Administration in 2008 the world produced 73.69 million barrels a day or about 27 billion barrels for the year. To give everybody on the planet as much oil as we use we would have to produce six times as much oil as we do today. That's not going to happen. As the billions in China, India, Brazil and the rest of the world enter the "demand stream" costs are going to go up because the supply really can't.

    The world could overcome this inevitable math by discovering some cheap way to produce lots of energy. That might happen. I'm a "glass half full" kind of guy... but so far these technologies are a few decades in the future and always have been.

    Failing some unforeseen technological leap, our standard of living will decline in the future as that of other nations increase.
    Do what you can, with what you have, where you are.
    Theodore Roosevelt

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    A team of hunters working together to kill and share a mastodon is collectivist.
    No, that is a cooperative. Collectivism is a political or social structure that may or may not include an economic aspect. A cooperative is an economic structure where people join together for their own individual benefit (and by extension, the benefit of all participating).

    It may seem like I'm splitting hairs here but ask some of the old farmers out here about "collective farms" and "cooperative farms" and they know the difference. Some of these guys fought in far away lands against "collectivism", all of them saw fathers, brothers, and/or friends fight against "collectivism". You will find plenty of "co-ops" around here but no "collectives".

    We've made pretty deep scratches in the surface of the earth searching for resources. And it's obvious we can't generate enough stuff for 7 billion people to live in the manner to which Americans have become accustomed.
    Obvious to whom? There is enough uranium and thorium for nuclear fuel on this planet to last us until the sun consumes our atmosphere if we could only get over the political barriers to build modern nuclear reactors. Add in the Fischer-Tropsch synthesis of liquid fuels, some windmills, hydro-electric, and geo-thermal power and we'd have all the power we need.

    Once we have the power we need the extraction of the minerals out of the ground becomes just a matter of going to get it. There may be an issue of having enough land to grow the food we need but given enough motivation I suspect we could turn the Sahara Desert into a huge wheat field.

    The problems of resource limitations are primarily political. There is no easy solution to that.

    (Note: I did not mention solar power above since I feel that it will never be viable so long as some other energy source is available. Solar power is so diffuse and unreliable (nighttime and clouds) that concentrating it and storing it takes a lot of resources in comparison to other energy sources. It believe it would be best to cover that land with plants for food or building material than to cover it in solar collectors for energy. Also solar panels are ugly, I'd rather see fields of grain, forests, or even windmills than a bunch of plastic panels.)
    You can have free speech or you can have income taxes but you cannot have both.

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