Collpse of the American Dream

• believer

  

  Economics for dummies:
  
  [video=youtube;mII9NZ8MMVM][/video]
  
  Funny, true, and scary.
• BRF

  

  I have only watched half of it but took a time out to say:
  
  That is awesome.
• Footwedge

  Watched it. Very good. Looked like a Ron Paul speech. But Ron is a whack job.
  
  I see no reason not to default on the National Debt.
  
  Bankers pretty much always bankroll both sides of wars. They watch the gladiators die for their financial pleasure...kinda like Mike Vick's buds partying at the cockfights.
• believer

  

  Footwedge;1240326 wrote:I see no reason not to default on the National Debt.

  Agreed...and then abolish the Fed. But speaking of "too big to fail" you can bet the Illuminati ranch that'll never happen.
• gut

  Defaulting on the national debt is WAYYYY UP there on the dumbest things I've ever heard on this board.
  
  Setting aside the issues of borrowing rates, capacity to borrow, and the damage that would be done to the USD in terms of its global premium, you have to take a really hard look at who owns treasuries - you'd be slamming mom & pop not only thru pensions and mutual funds but in many cases directly. Corporations, and banks (which hold our savings), would be hit hard. Anyway, approx. 20% of the debt is held by US individuals and institutions. You're talking wiping out $3T+ in wealth, a little less than the Internet bubble (@1/2 a housing bubbles), which would be really fucking stupid. Obama would piss that away in 2-3 years, anyway.
  
  We're not going to not pay our foreign creditors. It's dumb. Forget it. Not even up for debate.
  
  So what's on the table are all the intergovt holders (i.e. SS Trust Fund, Fed, state/local govts). This is @ $4T. It's basically all deferred printed money - one govt agency holds a liability and another holds the asset. Cancelling that debt would mostly just dress-up the balance (accounting). Assuming you will honor the obligations to pay SS and other govt retirement funds, the real liability doesn't change. Anyway, the only thing canceling this debt really accomplishes is to hurt your credit rating. So forget that.
  
  Now the interesting point raised with this idea is the debt held by the Fed. This is maybe 20%, or about $3T. But the last several years I want to say this has been somewhere between 40-60% of buying. Basically, the huge deficits we've been running the Fed just prints money and takes an IOU, thus far with no disastrous inflation impact (although, what's happening is there is core inflation in commodities and raw materials, but it's been offset by downward pressure on wages and productivity - read: lower employment - gains).
  
  So the bottom line is $3T of debt is completely "funny" debt that the govt just owes itself. The $4T held mostly by the SSTF is technically owed future recipients, but it really just becomes a fungible liability as part of broader entitlement reform. Ultimately there's about $8T in debt currently, and counting, that needs to be repaid. The rest basically rolls over into perpetuity. We actually can recover from this, but not if we're going to pile on another $10T over the next decade.
• believer

  

  gut;1240373 wrote:Defaulting on the national debt is WAYYYY UP there on the dumbest things I've ever heard on this board.
  
  Setting aside the issues of borrowing rates, capacity to borrow, and the damage that would be done to the USD in terms of its global premium, you have to take a really hard look at who owns treasuries - you'd be slamming mom & pop not only thru pensions and mutual funds but in many cases directly. Corporations, and banks (which hold our savings), would be hit hard. Anyway, approx. 20% of the debt is held by US individuals and institutions. You're talking wiping out $3T+ in wealth, a little less than the Internet bubble (@1/2 a housing bubbles), which would be really fucking stupid. Obama would piss that away in 2-3 years, anyway.
  
  We're not going to not pay our foreign creditors. It's dumb. Forget it. Not even up for debate.
  
  So what's on the table are all the intergovt holders (i.e. SS Trust Fund, Fed, state/local govts). This is @ $4T. It's basically all deferred printed money - one govt agency holds a liability and another holds the asset. Cancelling that debt would mostly just dress-up the balance (accounting). Assuming you will honor the obligations to pay SS and other govt retirement funds, the real liability doesn't change. Anyway, the only thing canceling this debt really accomplishes is to hurt your credit rating. So forget that.
  
  Now the interesting point raised with this idea is the debt held by the Fed. This is maybe 20%, or about $3T. But the last several years I want to say this has been somewhere between 40-60% of buying. Basically, the huge deficits we've been running the Fed just prints money and takes an IOU, thus far with no disastrous inflation impact (although, what's happening is there is core inflation in commodities and raw materials, but it's been offset by downward pressure on wages and productivity - read: lower employment - gains).
  
  So the bottom line is $3T of debt is completely "funny" debt that the govt just owes itself. The $4T held mostly by the SSTF is technically owed future recipients, but it really just becomes a fungible liability as part of broader entitlement reform. Ultimately there's about $8T in debt currently, and counting, that needs to be repaid. The rest basically rolls over into perpetuity. We actually can recover from this, but not if we're going to pile on another $10T over the next decade.

  In a sense, everything you've said is simply a "deferred" government default anyway (IE: not repaying foreign creditors, one government body holding the asset & one holding the liability, the private Fed printing fiat money & taking IOU's, etc.)
  
  You can bet the ranch that $10 trillion in funny debt will occur. The bottom-line is it's all a matter of everyone accepting the worthless funny money and turning a blind eye to the mounting debt...and then hoping the artificial bubble doesn't burst. If it does, it will be the banking system that causes it (IE: the Fed, the "Red Shield", whatever).
  
  It's ALL fiat money no matter how we slice and dice it. So why not simply declare wipe the slate clean and start the process all over again?
• Footwedge

  Thinking that the US is "good for it" is one of the funniest things I've ever read on here. People say, "well, we are in over our heads, but we can still right the ship, as long as we start addressing the debt". Bwahahaha.
  
  The yearly deficit exceeds the GDP now and we are chasing WWII levels. Yes, the whole thing is fiat...means very little.
• gut

  Over half the debt is owed to someone who is not the US govt. We can't and won't default on that. The US enjoys low interest rates and the markets get a premium boost, as well, because of the strength and security of the US dollar (ever hear of a "flight to quality"?). So you are arguing for destroying trillions in wealth for no real reason.
  
  Second, if you think this is some trivial will-nilly thing (bahhhh, it's just fiat money) then you need to do some research on countries that have defaulted.
  
  Or maybe just lop a zero off the 'ol tihng. I'm sure it will feel fantastic to see your bank account go from $10k to $1000 overnight.
• believer

  

  I'm not naive enough nor dumb enough to actually expect our government to simply "default" on its obligations. And I don't claim to be an economic expert by any stretch of the imagination.
  
  However, I am aware enough to understand that the value of our money is somewhat arbitrary and depends greatly on what the world power brokers agree it should be.
  
  The reason the United States "enjoys" its unique position in the world economically (despite the recent credit downgrade to AA+) is because of our relatively stable political, social, and economic climate vis-à-vis most of the world including our socialist cousins in Europe. This is why countries like Japan and more recently China have no qualms dropping billions into our economy. It makes the world economic machine hum.
  
  But as we have witnessed the past half decade things can change in a hurry. What happens if China calls in the debt? Not likely to happen - but what if? We could easily find ourselves in national default simply because the "bankers" have decided to tell the Fed to stop issuing the credit and printing worthless dollars and there won't much we peasants can do about it.
  
  The economic and political complexities are certainly mind blowing.
  
  Suffice it to say that the same power brokers who have created this mess need to find a viable and equitable solution to balance the books or the Great Depression II may be imminent.
  
  And we all know what brought us out of that mess.
• Footwedge

  gut;1240524 wrote:Over half the debt is owed to someone who is not the US govt. We can't and won't default on that. The US enjoys low interest rates and the markets get a premium boost, as well, because of the strength and security of the US dollar (ever hear of a "flight to quality"?). So you are arguing for destroying trillions in wealth for no real reason.

  For no real reason? Since 2008, we have lost a few trillion in overall wealth...and that is doing it your way. When people cannot pay their debts, they default...unless of course they have a printing machine.
  

  Second, if you think this is some trivial will-nilly thing (bahhhh, it's just fiat money) then you need to do some research on countries that have defaulted.

  I've done a little research, thank you very much. The IMF pretty much calls the shots on who goes belly up and who doesn't. And they are a pile of idiots too. And...thanks for the breakdown on what the 16 trillion debt entails. But interestingly enough, a man of such financial astuteness that you are, you failed to mention the unfunded liabilities tabbing another 61 trillion...to 80 trillion.... depending on which source you want to believe. Yes..61 trillion..over and above the piddly 16 tril already accumulated.
  

  Or maybe just lop a zero off the 'ol tihng. I'm sure it will feel fantastic to see your bank account go from $10k to $1000 overnight.

  It wouldn't bother me a bit. The system that we have in place today is already stealing me blind. I understand exactly how they are doing it. Apparently, you don't.
• Footwedge

  believer;1240533 wrote:Suffice it to say that the same power brokers who have created this mess need to find a viable and equitable solution to balance the books or the Great Depression II may be imminent.
  

  This..
  
  Accept they have no interest in fixing it. It is not in their interests to do so. From the Federal Reserve to the Investment banks...to the mortgage banks and beyond, the huge sucking sound are these collective power brokers with their vaccuums cleaning out your bank accounts.
  
  Nice to see that you are turning into a Ron Paulbot afterall.
• Footwedge

  For those who care, the United States aggregate household wealth dropped 25%, or 17.5 trillion dollars from 2007 to 2009. That of course corresponded with Bush's last 2 years and Obama's first year as president. Although, contrary to people's belief, the president had very little to do with it.
  
  Interestingly enough, the banking cartel had no problem in paying back Uncle Sam's bailout of 800 billion. Why is that? The banks' primary source of revenue is the interest rate spread between what they dole out to the savers, versus what they charge the borrowers.
  
  Anyone making more than .7% on their savings account? Anyone? Or how about their money markets and CD's? Anyone making more than 1%$? Anyone? LOL.
  
  Here's a link from Wiki with footnotes referencing the loss of 17 trillion dollars.
  
  "Household net worth fell from 2007 to 2009 by a total of $17.5 trillion or 25.5%. This was the equivalent loss of one year of GDP.[SUP][7][/SUP] By the fourth quarter of 2010, the household net worth had recovered by a growth of 1.3 percent to a total of $56.8 trillion. An additional growth of 15.7 percent is needed just to bring the value to where it was before the recession started in December 2007.[SUP][2]"
  
  http://en.wikipedia.org/wiki/Wealth_in_the_United_States[/SUP]
• gut

  Footwedge;1240574 wrote: you failed to mention the unfunded liabilities tabbing another 61 trillion...to 80 trillion.... depending on which source you want to believe. Yes..61 trillion..over and above the piddly 16 tril already accumulated.

  Do you understand what an unfunded liability is? I suspect you don't. When those liabilities come due, one of three things happen:
  1) you pay it from your pot of tax revenues
  2) you cut the entitlement
  3) you borrow money to pay it
  
  Now assuming you oppose cutting the entitlements, you want to knee-cap and curb-stomp the ability to borrow, which leaves us with cutting something somewhere.
  
  The problem remains spending. Defaulting on the debt is pissing into the wind when we are running $1T+ deficits annually. Attempting to parse the debt and unfunded liabilities is a difference without a distinction, really. And guess who's going to be paid first?
  
  But how exactly is the system in place today stealing you blind? I always get a good laugh when you display your ignorance attempting to explain something you claim to understand.
• believer

  

  Footwedge;1240576 wrote:Nice to see that you are turning into a Ron Paulbot afterall.

  lol Unfortunately Paul is a loser politician with good economic principles.
• gut

  believer;1240646 wrote:lol Unfortunately Paul is a loser politician with good economic principles.

  SOME good principles....I still think his idea to return to the gold standard is a real hoot. Take my little bag of gold to the local Outpost to buy some feed for my horse and buggy. Good times.
• believer

  

  gut;1240649 wrote:SOME good principles....I still think his idea to return to the gold standard is a real hoot. Take my little bag of gold to the local Outpost to buy some feed for my horse and buggy. Good times.

  lol True. Even the value of gold is arbritrary. Hell, we might as well go all the way back to the barter system if we're true purists. But I digress.
• Footwedge

  gut;1240630 wrote:Do you understand what an unfunded liability is? I suspect you don't.

  Would it be a ...drumroll....."unfunded...liability"? Or, how about...a liability that has no funding for. 61 trillion worth of prorated debt covering a few decades. But you don't want to talk about them...do you?
  
  Your boy Mitt has mentioned them. But of course, he has absolutely no plan in addressing the issue.
• Footwedge

  believer;1240646 wrote:lol Unfortunately Paul is a loser politician with good economic principles.

  A opposed to the "winner politicians" that have horrible economic principles, yes? Is that your preference?
• believer

  

  Footwedge;1240852 wrote:A opposed to the "winner politicians" that have horrible economic principles, yes? Is that your preference?

  You have mastered the art of spin.
  
  Paul IS a loser politician. That doesn't mean he doesn't have good ideas.
  
  I have said this ad nauseam...I have no particular pleasure in casting my vote for Romney. But I certainly refuse to waste my vote and assist in the re-election of BHO.
  
  Paul is a political loser. He ran on the Republican ticket and lost. He's a a Loser.
  
  Yeah, yeah, yeah I'm part of the problem. :rolleyes:
• WebFire

  believer;1240855 wrote:You have mastered the art of spin.
  
  Paul IS a loser politician. That doesn't mean he doesn't have good ideas.
  
  I have said this ad nauseam...I have no particular pleasure in casting my vote for Romney. But I certainly refuse to waste my vote and assist in the re-election of BHO.
  
  Paul is a political loser. He ran on the Republican ticket and lost. He's a a Loser.
  
  Yeah, yeah, yeah I'm part of the problem. :rolleyes:

  With the state of our political system, I'm not sure being a political "winner" really means anything. I mean, look where it has gotten us so far.
• pmoney25

  

  believer;1240855 wrote:You have mastered the art of spin.
  
  Paul IS a loser politician. That doesn't mean he doesn't have good ideas.
  
  I have said this ad nauseam...I have no particular pleasure in casting my vote for Romney. But I certainly refuse to waste my vote and assist in the re-election of BHO.
  
  Paul is a political loser. He ran on the Republican ticket and lost. He's a a Loser.
  
  Yeah, yeah, yeah I'm part of the problem. :rolleyes:

  Romney will lose regardless of what the Pauliban
  does. Romney is the worst possible candidate the Republicans could have nominated. He won because he has money and it was his turn. The fact that the polls are even close in this terrible economy shows you how bad Romney is as a candidate.
• BoatShoes

  believer;1240279 wrote:Economics for dummies:
  
  [video=youtube;mII9NZ8MMVM][/video]
  
  Funny, true, and scary.

  Funny, not true at all and what is scary is how many Americans believe such drivel. For instance, President Kennedy wanted to eliminate the use of silver certificates and executive order 11110 gave the treasury secretary authority to issue them during the transition period to their elimination. If anything, the executive order ended up enhancing the Federal Reserve's power. He was not assassinated by the Federal Reserve as is implied in this video.
  
  Nonsense.
  
  I did laff at the end when the fed monster with Bernanke and Greenspan heads appeared and when Hank Paulson was kicked into the abyss.
• BGFalcons82

  

  Regarding the video, I found it well made and informative. A crash course on the Federal Reserve is hard to do in 29 minutes, but they hit the high points. Turns out the founders had an idea of what would end the country long before the Progressives got wind of it.
• WebFire

  BoatShoes;1240945 wrote:Funny, not true at all

  So you are saying nothing in the video is true?
• isadore

  The ‘American Dream’ Is a Myth: Joseph Stiglitz on ‘The Price of Inequality’
  Income inequality has become the subject of much debate in this country, in large part because of the Occupy Wall Street movement.
  In his latest book,
  The Price of Inequality, Columbia Professor and Nobel laureate Joseph Stiglitz examines the causes of income inequality and offers some remedies. In between, he reaches some startling conclusions, including that America is "no longer the land of opportunity" and "the 'American dream' is a myth."
  While we all know stories of people who've moved up the social stratosphere, Stiglitz says the statistics tell a very different story. In the last 30 years the share of national income held by the top 1% of Americans has doubled; for to the top 0.1%, their share has tripled, he reports. Meanwhile, median incomes for American workers have stagnated.
  Even more than income inequality, "America has the least equality of opportunity of any of the advanced industrial economies," Stiglitz says. In short, the status you're born into — whether rich or poor — is more likely to be the status of your adult life in America vs. any other advanced economy, including 'Old Europe'.
  For example, just 8% of students at America's elite universities come from households in the bottom 50% of income, Stiglitz says, even as those universities are "needs blind" — meaning admission isn't predicated on your ability to pay.
  "There's not much mobility up and down," he says. "The chances of someone from the top [income bracket] who doesn't do very well in school are better than someone from the bottom who does well in school."
  Because the children of those at the top of society tend to do better than those at the bottom — thanks, in part, to better education, health care and nutrition — the income inequality that's slowly emerged over the past 30 years will only widen in the next 10 to 20 years.
  If the root causes of income inequality go unaddressed, America will truly become a two-class society and look much more like a third world economy, Stiglitz warns. "People will live in gated communities with armed guards. It's a ugly picture. There will be political, social and economic turmoil." (Hence the book's subtitle: 'How Today's Divided Society Endangers Our Future')
  The good news is Stiglitz believes this "nightmare we're slowly marching toward" can be avoided, citing Brazil's experience since the early 1990s as an example of a country that has reduced income inequality. Among other things, he recommends improving education and nutrition for those at the bottom of society, and eliminating "corporate welfare" and other policies which "create wealth but not economic growth."
  For example, he cites the provision in Medicare Part D which forbids the federal government from negotiating prices with the drug companies. Over 10 years, that rule will generate approximately $500 billion for the industry, he estimates, but no tangible benefit for taxpayers or the economy as a whole.
  Importantly, Stiglitz believes inequality of wealth and opportunity are hurting the overall economy, by limiting competition, promoting cronyism and keeping those at the bottom from reaching their potential.
  "What I want is a more dynamic economy and a fairer society," he says, suggesting income inequality is ultimately detrimental to those at the top, too. "My point is we've created an economy that is not in accord with the principles of the free market."
  http://finance.yahoo.com/blogs/daily-ticker/american-dream-myth-joseph-stiglitz-price-inequality-124338674.html