Reuters
Joergen Oerstroem Moeller, National Interest: America's Greatest Enemy Is Neither China nor Russia (It's Debt)
What happens if the United States can't pay down its debt?
What looked possible some years ago have with recent economic policy decisions turned into a realistic scenario: the United States face a technical default.
The figures and forecasts published by the Congressional Budget Office (CBO) leave little doubt. Currently, net interest burden accounts for 1.6 percent of Gross Domestic Product (GDP) equal to 9.4 percent of federal revenue absorbing about one out of every ten U.S. dollars of federal revenue. In 2022—four years from now—it will be 2.7 percent of GDP equal to 16 percent of federal revenue absorbing one out of every six U.S dollars of federal revenue. Measured in share of total outlays, net interest will jump from 7.6 percent in 2018 to 12.2 percent in 2022 and 13 percent in 2028. This forecast though is based on very optimistic assumptions for the U.S. economy. Taking changes over the preceding couple of weeks into account, a net interest burden of 20 percent of total federal revenue looks realistic—a staggering figure with every American seeing one of every five U.S. dollars paid to the government used to finance debt.
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WNU Editor: The U.S. is an incredibly rich country .... with more than enough resources that can quickly reverse this trajectory of accumulating more debt to fund government programs. The problem is that there is no political will to do it .... because there is no desire among the U.S. population to vote for politicians who will reverse this trend. When will that point arrive when the will to do something will be there arrives is an answer that I do not know. But if I was to hazard a guess .... I give it another 10 to 15 years.
Why so much debt? how to cut it way back?
ReplyDeletethat said, let the left and the right have at it
I’m still more concerned with corrupt politicians being exposed through email hacks.
ReplyDeletePaul Ryan is a disappointment or more.
ReplyDeletePaul does not want to play. The game is too rough for little Paulie. So he is taking his marbles and going into consultancy so he can get even richer. He could go back to Wisconsin and the family business, but I doubt it.
Paul Ryan could go for reducing the budget and suffer the consequences. After all he could fall back on the family business.
One way of helping to solve the debt is to buy illegals bus tickets to Canada.
Maybe major tax cuts will help?
ReplyDelete#MAGA
"The US is an incredibly rich country..." Actually we can stop right there. Most Americans don't have anything close to the lifestyle that Canadians, Aussies, or Western Europe take for granted and have no hope of ever coming close to this. Americans dream of one day achieving the lifestyle and level of wealth and opportunity the citizens of the above named countries take for granted.
ReplyDeleteAs such, most of us find it extremely insulting when statements like this are made by foreigners. Either you know better and you say such things to insult or to "rub salt in our wounds" so to speak or your American contacts are the wealthy few and you along with them are simply in a "bubble" not knowing any better. Very respectfully, the best description of America, as I have stated here before, is "Potemkin Village."
"....that there is no political will to do it..." Of course we lack political will to sacrifice our environment, much needed infrastructure projects, a social safety net for those in need and no other options, decent health care, and funding for economic projects that are needed among other things. An excellent place to start, would be to look at military spending. America spends about 700 billion or so on the military. Russia and China each spend only about 10 to 20% of this amount. What are we getting for this? We certainly aren't getting a top notch military. The Russians and Chinese are equal to us and in some ways stronger. Steep cuts here would save enormous amounts of money. Also, a change in foreign policy would be a good step in the right direction. How much are we spending in terms of security to try and mitigate the blowback from all of these fruitless foreign interventions that aren't advancing our interests and in many cases undermine them? Changes here would result in enormous savings and would make Americans much less poor and perhaps even rich!!
I would suggest studying the foreign policies of countries like Canada, Australia, and New Zealand and trying to implement them as much as possible.
As for the national debt, the unfunded liabilities have to be accounted for as well. The federal government has enormous land holdings. These could be sold off annually at a rate needed to pay off the debt and unfunded liabilities as well.
When we add in the unfunded liabilities such as future Social Security liabilities the debt is closer to 100 trillion instead of the smaller number that is typically presented. As such, it can be paid off but it is a much more serious problem than is typically let on or understood.
Please understand this post is not to offend anyone, merely to set the record straight. If anyone is offended, I apologize.
Anon,
ReplyDeleteSome disciplines, fields of study, are fusions of other disciplines.
A case in point is economics, which is a combination of psychology, statistics and more.
The economy grows faster with a light hand instead of one wielding a lash.
The cost of 'lost' revenue has been revised downward in the months after the tax cuts took effect.
A static model of of tax cuts purports than you simple extend the tax cut and the current GDP to figure the 'lost revenue'.
The current crop of politicians right to rule is more Byzantine than the concept of 'Divine Right', but it is no less unscrupulousness, crooked, and dishonest.
Certainly with the current set up you fight less battles with sword and shield only to be replaced with government giveaways to select voting blocs and ballot stuffing.
Aizino,
ReplyDeleteI couldn't have put this any better myself!!
Anon,
Why do you ridicule MAGA? We want our country to be great. Everyone dreams of doing something great. Every American patriot wants our country to be great. Make our dountry great, what an awesome and inspiring message!! As to make America great "again," this imagines our country was ever great. While a dubious assumption, it is designed to inspire and I can understand the useage of this. After all, if our country ever was great, then this means our country can be again!!
Making our country great is an awesome goal!! Why are you opposed to it. Perhaps Trump's policies are flawed and won't work. Hint: OFFER CONSTRUCTIVE CRITIQUE ON HOW WE CAN MAKE AMERICA A GREAT COUNTRY!! Snarky criticisms are NOT helpful.
"Maybe tax cuts will help." Any time we can allow people to keep more of their hard earned money this is a good thing. Anything we can do to starve the beast of the government is generally a good thing. Corporations are the people who own them, manage them, and work for them. While there are basic functions for the government to perform that probably only they can, anytime we can limit them is generally for the best. Make them live within their means like the rest of us.
As for making our country great, this is an awesome thing to work towards. It is a message of hope. No wonder POTUS won. He presented a message of hope to the American people. His opponents offered nothing except the status quo that was failing and continuing may have even been suicidal.