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Thread: US National Debt / Deficit - How does it end?

  1. #1
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    US National Debt / Deficit - How does it end?

    I have a lot of my own thoughts and fears about where the US national debt is leading our nation and the world. I feel like I’ve done enough of my own studying to have a good understanding of what the likely outcome(s) are but want to get some perspective from other well informed individuals here on 4Forums.

    My conclusion is that the US debt is already so out of control that it will just keep rising until we either default on our loans or we enter a period of rapid inflation as we try to pull a Weimar Republic and print our way out of debt. Maybe someone will contradict this conclusion but I think that the majority will agree that the US financial collapse is beyond preventing at this point even if it is for different reasons than my own.

    The real area of interest to me is how does this end? I’ve been reading the book “Patriots” which I believe is the darkest possible scenario for a post economic collapse US. The collapse I am more inclined to believe in is that we’ll face hyperinflation for a short period until the deficit is effectively paid off and during this time our economy will become a basket case. Critical services (electricity, police, firemen, most businesses), communication (Internet, TV, newspapers), and our government will continue to function throughout. The chaos will be at its worst for a matter of months. The worst hit will be the poor who depend on services that may fail such as welfare, food stamps, and other entitlements. There will be regional violence but nothing large scale or long lasting. The loss of life due to things relating to the collapse will number in the thousands or maybe tens of thousands but certainly not millions.

    What is everyone else’s view on just how this could play out? Or perhaps are there any who believe this sort of collapse will just never happen?
    Hail to the ones who came before us

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    Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

    So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

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    Think we'll actually make it another 20 years like this? I'd be all too happy if we somehow could manage that. I expect changes in our level of technology to bail us out if we can manage to make it that far. I just suspect the problem is much more imminent.
    Hail to the ones who came before us

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    Quote Originally Posted by AMD4EVER View Post
    Think we'll actually make it another 20 years like this? I'd be all too happy if we somehow could manage that. I expect changes in our level of technology to bail us out if we can manage to make it that far. I just suspect the problem is much more imminent.
    We'll easily make it another 20 years. They won't be great years, but the United States will exist. Besides, we gotta wait for a few other countries to fully collapse before we go down that road. Believe it or not, others are ahead of us.

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    Prophet John Paul Jackson on the next Ten Years in America

    John Paul Jackson - Sid Roth - It's Supernatural
    “For the scientist who has lived by his faith in the power of reason, the story ends like a bad dream. He has scaled the mountains of ignorance; he is about to conquer the highest peak; as he pulls himself over the final rock, he is greeted by a band of theologians who have been sitting there for centuries.” - Robert Jastrow

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    Interesting link Easyrider. I'm not one to put much faith in faith. But that's a debate for another thread

    I guess there aren't as many people here concern with the possibility of our nation going bankrupt as I thought there would be. Or maybe there are and they just aren't sure what to believe about how soon we could see such a collapse or what a collapse would entail.
    Hail to the ones who came before us

  7. #7
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    Debt is fixable

    Though I fully realize how tempting it is to exaggerate the US debt issue, our debt is certainly not unresolveable. The range of solutions is simply sufficiently politically unpalatable, especially in the current political climate, that major fixes would not be put into place until the problem becomes acute. Some of the solutions include:

    - Letting all Bush tax cuts expire. We did just fine with those tax rates in the past, we can again, while significantly helping the budget

    - Pinning Social Security and government pension payment increases to cost of living increase, while gradually increasing the age of full benefits to 70.

    - Reducing Medicare costs by having people take up some part of the burden or placing some limits on care, as private insurers do. This is contraversial since it means that some might be deprived of lifesaving procedures at the end of their lives. However, with medical developments and up to millions of dollars in medical expenses, one can often extend a persons life by, say, another year. The question we have to ask ourselves is how much public money we are willing to spend as a society to keep someone alive for another year - an average of $100,000? $1 million? I say this with full understanding that my care could be rationed someday as well.

    - Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

    - Other tax or spending reforms

    Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

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    Quote Originally Posted by Another opinion View Post
    Though I fully realize how tempting it is to exaggerate the US debt issue, our debt is certainly not unresolveable. The range of solutions is simply sufficiently politically unpalatable, especially in the current political climate, that major fixes would not be put into place until the problem becomes acute. Some of the solutions include:
    Let's take a look...

    - Letting all Bush tax cuts expire. We did just fine with those tax rates in the past, we can again, while significantly helping the budget
    $300 billion a year in savings first year

    - Pinning Social Security and government pension payment increases to cost of living increase, while gradually increasing the age of full benefits to 70.
    Savings of $0 first year to $67 billion by 2022 assuming you also increase the age for Medicare. I'll assume $33 billion in savings for my calculation.

    - Reducing Medicare costs by having people take up some part of the burden or placing some limits on care, as private insurers do. This is contraversial since it means that some might be deprived of lifesaving procedures at the end of their lives. However, with medical developments and up to millions of dollars in medical expenses, one can often extend a persons life by, say, another year. The question we have to ask ourselves is how much public money we are willing to spend as a society to keep someone alive for another year - an average of $100,000? $1 million? I say this with full understanding that my care could be rationed someday as well.
    This is impossible to measure and not possible to implement anyway. People already take up some of the burden of medicare. Limits on benefits are now illegal under the health care act and even before that it never reduced costs overall (but did for the insurer). More importantly, no one knows what the "last year of life" is until they are dead; and then it is too late to go back. Multiple studies show a large portion of expenditures go towards last year of life for those in their 60s. Often times, the thought is they will survive, and many do, since they are not that old yet. So if you have a 60 year old with prostate cancer do you treat them knowing that it is expensive but they have a good chance to live another 20+ years?

    The money spent on people whom we KNOW are going to die any day now is actually not that much in comparison; it is mostly hospice care expenditures (for Medicare that is). I'm not sure what the alternative proposed is...put them on the street? Force the next closest relative to take them?

    This is why government should stay out of these kinds of things...or at least federal...OR suck it up and do it like they do is Switzerland.

    Savings = $0

    - Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.
    Unfortunately scaling back the military kills huge numbers of jobs. This is what happens when you make a country dependent on government...all the eggs are in one basket. I'll give you the benefit of the doubt and assume we can cut the military by 40% no questions asked (a very generous assumption). $280 billion in savings.

    - Other tax or spending reforms
    Not specific enough to judge.

    Totals Savings: $613 billion/year

    You did better than most. You are coming up about $1.4 trillion short though. Maybe $1 trillion assuming the economy gets better.

    Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.
    No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode.

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    Quote Originally Posted by Steeeeve View Post
    Let's take a look...

    $300 billion a year in savings first year

    Savings of $0 first year to $67 billion by 2022 assuming you also increase the age for Medicare. I'll assume $33 billion in savings for my calculation.

    This is impossible to measure and not possible to implement anyway. People already take up some of the burden of medicare. Limits on benefits are now illegal under the health care act and even before that it never reduced costs overall (but did for the insurer). More importantly, no one knows what the "last year of life" is until they are dead; and then it is too late to go back. Multiple studies show a large portion of expenditures go towards last year of life for those in their 60s. Often times, the thought is they will survive, and many do, since they are not that old yet. So if you have a 60 year old with prostate cancer do you treat them knowing that it is expensive but they have a good chance to live another 20+ years?

    The money spent on people whom we KNOW are going to die any day now is actually not that much in comparison; it is mostly hospice care expenditures (for Medicare that is). I'm not sure what the alternative proposed is...put them on the street? Force the next closest relative to take them?

    This is why government should stay out of these kinds of things...or at least federal...OR suck it up and do it like they do is Switzerland.

    Savings = $0

    Unfortunately scaling back the military kills huge numbers of jobs. This is what happens when you make a country dependent on government...all the eggs are in one basket. I'll give you the benefit of the doubt and assume we can cut the military by 40% no questions asked (a very generous assumption). $280 billion in savings.

    Not specific enough to judge.

    Totals Savings: $613 billion/year

    You did better than most. You are coming up about $1.4 trillion short though. Maybe $1 trillion assuming the economy gets better.

    No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode.
    Though I don't have the time to go through all the numbers and, as I mentioned, this was only a partial list of fixes, I will say that, though Congress does wait with major fixes until the problem becomes acute, it does act once it is acute enough. Meanwhile, it does seem willing to often make smaller improvements. For example, as a generation Xer, I cannot retire with full benefits until I am 67.

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    Quote Originally Posted by Another opinion View Post
    Though I don't have the time to go through all the numbers and, as I mentioned, this was only a partial list of fixes, I will say that, though Congress does wait with major fixes until the problem becomes acute, it does act once it is acute enough. Meanwhile, it does seem willing to often make smaller improvements. For example, as a generation Xer, I cannot retire with full benefits until I am 67.
    Which is fine for most problems but things like debt are easily fixed when the problem becomes "acute". Debt is one of those things that when the problem HAS to be addressed, you can't. It's how almost all major empires have collapsed. The Roman Empire being a classic example.

    Lucky for us, we are years away a "sacking of DC".

  11. #11
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    Budget Simulator | Committee for a Responsible Federal Budget

    Give it a shot and see if you can balance the budget.
    Hail to the ones who came before us

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    Would that book be Patriots: Survival in the Coming Collapse by survivalist James Wesley Rawles, featuring a frightened man in fatiques on the cover, carrying what may very well be an assault weapon?
    Brother, you can believe in stones as long as you do not hurl them at me. Wafa Sultan

    “War is an American way to teach geography,” British soldier

    War is sweet to those who have not tasted it, but the experienced man trembles exceedingly at heart on its approach. – Pindar

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    Another opinion?

    Why are you utterly blind to the costs of our never ending war machine?
    Brother, you can believe in stones as long as you do not hurl them at me. Wafa Sultan

    “War is an American way to teach geography,” British soldier

    War is sweet to those who have not tasted it, but the experienced man trembles exceedingly at heart on its approach. – Pindar

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    Quote Originally Posted by simone View Post
    Why are you utterly blind to the costs of our never ending war machine?
    Back to the topic...

    Obama promised to cut the deficit and instead he doubled it. He's a lying sack of manure.

    See my tag line below.
    “For the scientist who has lived by his faith in the power of reason, the story ends like a bad dream. He has scaled the mountains of ignorance; he is about to conquer the highest peak; as he pulls himself over the final rock, he is greeted by a band of theologians who have been sitting there for centuries.” - Robert Jastrow

  15. #15
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    Quote Originally Posted by Easyrider View Post
    Back to the topic...

    Obama promised to cut the deficit and instead he doubled it. He's a lying sack of manure.

    See my tag line below.
    What would you like Obama to do to cut the deficit? Can you give me specifics?

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