United States National Debt concern

[socraticmethod]

If you're going to look at GDP as a measure of the ability of an economy to sustain government spending then why are you adding government spending to the GDP figure? [...] Do both GDP numbers reflect the same capability of the economy to support a certain level of government debt?

Obviously, yes. Unless you actually reduced the amount of money spent on acquiring taxed goods and services, of course it's the same. Why does it matter who acquires them? Whether a business gets its income from contracts with other businesses, or from contracts with the government, it pays the same tax on that income. Why wouldn't it? Why would there be a difference?

There is a difference because not all spending is created equal. As a working stiff in order for you to buy something you first have to produce something. You produce a good or service that others want which adds to the pool of what everyone is spending money on and in exchange you consume something that someone else produced. Government spending isn't the same. If it taxes it takes the money you would have spent leaving you worse off and it takes the good or service out of the economy that otherwise would have gone to you. If it uses the printing press rather than a direct tax it has the same economic impact as a counterfeiter spending money into the economy. More currency units chasing the same pool of goods and services. If you think that there is no economic difference between spending with money that was either stolen or counterfeited and spending with money that required actual production then why not make counterfeiting legal? Should increase spending significantly and be a real boost to GDP right?

[socraticmethod]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

Ah, the Ron Paul lunacy emerges into the light, all those legs scuttling around like crazy.  Ick!

I can tell you that the people who work at the Federal Reserve Board are to a man/woman/whatzit Federal Gubmint employees who bow to the Treasury Department in a whipped-doglike fashion, to my very great frustration on a daily basis for 5 freaking years.  The actual currency comes to the Fed from the Bureau of Engraving & Printing, a gubmint agency.

Ah so it's actually the Bureau of Engraving and Printing that are in control of monetary policy and not the Fed! Thanks for setting us straight!

[socraticmethod]

Last I checked, all those currency units say on them "Federal Reserve Note".

[dragoncar]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

The US can issue debt.  Primary dealers are obligated to participate in the debt auctions.  The Fed buys this debt from the primary dealers in exchange for dollars (zeros and sometimes ones).  This process is also known as "printing money."

[fixer-upper]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

The US can issue debt.  Primary dealers are obligated to participate in the debt auctions.  The Fed buys this debt from the primary dealers in exchange for dollars (zeros and sometimes ones).  This process is also known as "printing money."

True enough, but why does it need to be debt?  Wouldn't simply printing the money accomplish the same goal without committing your children to a life of high taxes to pay for the interest?

[socraticmethod]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

The US can issue debt.  Primary dealers are obligated to participate in the debt auctions.  The Fed buys this debt from the primary dealers in exchange for dollars (zeros and sometimes ones).  This process is also known as "printing money."

True enough, but why does it need to be debt?  Wouldn't simply printing the money accomplish the same goal without committing your children to a life of high taxes to pay for the interest?

It's always been interesting to me that the very same democrats who decry wall street and claim to be for the common man defend the federal reserve.

[dragoncar]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

The US can issue debt.  Primary dealers are obligated to participate in the debt auctions.  The Fed buys this debt from the primary dealers in exchange for dollars (zeros and sometimes ones).  This process is also known as "printing money."

True enough, but why does it need to be debt?  Wouldn't simply printing the money accomplish the same goal without committing your children to a life of high taxes to pay for the interest?

It's always been interesting to me that the very same democrats who decry wall street and claim to be for the common man defend the federal reserve.

Because the constitution.  It would be easier to print the money, but the alternative is not a life o high taxes.

[fixer-upper]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

The US can issue debt.  Primary dealers are obligated to participate in the debt auctions.  The Fed buys this debt from the primary dealers in exchange for dollars (zeros and sometimes ones).  This process is also known as "printing money."

True enough, but why does it need to be debt?  Wouldn't simply printing the money accomplish the same goal without committing your children to a life of high taxes to pay for the interest?

It's always been interesting to me that the very same democrats who decry wall street and claim to be for the common man defend the federal reserve.

Because the constitution.  It would be easier to print the money, but the alternative is not a life o high taxes.

The constitution DOES NOT define the dollar as debt.  The dollar was intended to be a fixed measure, which would make wars hard to fight, rather than necessary to propagate inflation for the benefit of the banks.

Care to try again?  Are you really happy slaughtering civilians as a means to stimulate the economy?  Are you really happy being taxed on capital "gains" which only keep up with inflation rather than just saving the money without all the drama?  I'm not.

[brewer12345]

The Fed has its own currency.  The US (aside from coins), does not.  Realizing that the Fed is not a part of the government is a very important distinction.

Ah, the Ron Paul lunacy emerges into the light, all those legs scuttling around like crazy.  Ick!

I can tell you that the people who work at the Federal Reserve Board are to a man/woman/whatzit Federal Gubmint employees who bow to the Treasury Department in a whipped-doglike fashion, to my very great frustration on a daily basis for 5 freaking years.  The actual currency comes to the Fed from the Bureau of Engraving & Printing, a gubmint agency.

Ah so it's actually the Bureau of Engraving and Printing that are in control of monetary policy and not the Fed! Thanks for setting us straight!

I am positive that anything I say that does not jibe with your firmly held "views" will be ignored.  However, for anyone else that might be reading and cares I will say that from everything I saw over 5 years working for two Federal Reserve banks and having far more contact than I would ever care to have again with FOMC voting members and FRB staffers of all levels in DC, there is no conspiracy. First, there is an enormous amount of political leverage that the administration can wield if it wishes to do so.  Second, Congress can make life very difficult for FRB governors if they chose to do so.  Third, the career Fed staffers, officers, governors, etc. are among the most risk averse people I have ever met.  They have no interest in doing anything that could get them in trouble/jeopardize their pension.  Finally, anyone believing that the Fed is an all-powerful Elders of Zion/Gnomes of Zurich type puppeteer has about as much experience with the actual people as a Martian.  Individually or as a group, they are no more capable of doing the many ridiculous things ascribed to them than I would be at flying to the moon by flapping my arms.  If they were ever to become that competent (and there are a lot of things that militate against that happening), would almost certainly spend their time and efforts arguing and sabotaging each other.

[dragoncar]

The constitution DOES NOT define the dollar as debt.  The dollar was intended to be a fixed measure, which would make wars hard to fight, rather than necessary to propagate inflation for the benefit of the banks.

Care to try again?  Are you really happy slaughtering civilians as a means to stimulate the economy?  Are you really happy being taxed on capital "gains" which only keep up with inflation rather than just saving the money without all the drama?  I'm not.

... the heck did I just read?

[warfreak2]

... the heck did I just read?

Let's just say that fixer-upper's political theories are... fictitious, and any resemblence to real political theories, living or dead, is purely coincidental.

[socraticmethod]

The only one to mention zionist conspiracy theories Brewer is you. Of course it isn't a conspiracy that the federal reserve controls the money supply. Straw man much?

[brewer12345]

The only one to mention zionist conspiracy theories Brewer is you. Of course it isn't a conspiracy that the federal reserve controls the money supply. Straw man much?

Like I said, you won't even really read anything that does not fit your rather eccentric worldview.  Mazel tov!

[fixer-upper]

The constitution DOES NOT define the dollar as debt.  The dollar was intended to be a fixed measure, which would make wars hard to fight, rather than necessary to propagate inflation for the benefit of the banks.

Care to try again?  Are you really happy slaughtering civilians as a means to stimulate the economy?  Are you really happy being taxed on capital "gains" which only keep up with inflation rather than just saving the money without all the drama?  I'm not.

... the heck did I just read?

The Nobel peace prize winning president just asked for half a billion dollars to arm al-Qaida while fighting al-Qaida.  That's just one example of many. 

War is often used as a means to increase monetary velocity, and is a great way to waste money into circulation in the absence of personal debt creation.  Hence the war on drugs, the endless war on terror, etc, ad nauseum.  These wars will never be won, because the economy depends on their waste.

[brewer12345]

The constitution DOES NOT define the dollar as debt.  The dollar was intended to be a fixed measure, which would make wars hard to fight, rather than necessary to propagate inflation for the benefit of the banks.

Care to try again?  Are you really happy slaughtering civilians as a means to stimulate the economy?  Are you really happy being taxed on capital "gains" which only keep up with inflation rather than just saving the money without all the drama?  I'm not.

... the heck did I just read?

The Nobel peace prize winning president just asked for half a billion dollars to arm al-Qaida while fighting al-Qaida.  That's just one example of many. 

War is often used as a means to increase monetary velocity, and is a great way to waste money into circulation in the absence of personal debt creation.  Hence the war on drugs, the endless war on terror, etc, ad nauseum.  These wars will never be won, because the economy depends on their waste.

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

[socraticmethod]

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

Another straw man. You're on a roll. ;)

[brewer12345]

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

Another straw man. You're on a roll. ;)

You have a nice life, now.

[arebelspy]

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

Another straw man. You're on a roll. ;)

It seems to me brewer is addressing the comment with a legitimate question, and you're dismissing it.

As someone said earlier, the MMM forums tend to trend towards optimism and rationality.

If you want conspiracy theories, go to ZeroHedge.

[socraticmethod]

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

Another straw man. You're on a roll. ;)

It seems to me brewer is addressing the comment with a legitimate question, and you're dismissing it.

As someone said earlier, the MMM forums tend to trend towards optimism and rationality.

If you want conspiracy theories, go to ZeroHedge.

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

[fixer-upper]

Isn't that the infowars or some other such conspiracy theory?  The Fed provokes wars to increase gubmint spending so the Fed can control everything?  Pretty far fetched, to put it mildly.  In any case, the world is generally a shitstorm with everyone hating everyone else, so its not like you have to go out and bother provoking wars.

Another straw man. You're on a roll. ;)

It seems to me brewer is addressing the comment with a legitimate question, and you're dismissing it.

As someone said earlier, the MMM forums tend to trend towards optimism and rationality.

If you want conspiracy theories, go to ZeroHedge.

I'd correct you in saying both sites tend toward irrational exuberance toward their own viewpoint.  Encouraging extremism in either direction tends to be a bad thing, as it alienates the independent thinkers who see shades of gray between the black and white.

[warfreak2]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

Even if you can't read your own posts in a disinterested way and identify them as espousing a conspiracy theory, do you really also think that FU's posts are totally level-headed and not even remotely tin-foil-hat material? He literally claimed that the US economy relies on the intentional wasting of money on wars... are you seriously giving that your stamp of approval as a sober, reasonable hypothesis?

[arebelspy]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

He's calling a spade a spade, yes.  He's not the one bringing up the conspiracy theories or arguing them as fact. 

[fixer-upper]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

Even if you can't read your own posts in a disinterested way and identify them as espousing a conspiracy theory, do you really also think that FU's posts are totally level-headed and not even remotely tin-foil-hat material? He literally claimed that the US economy relies on the intentional wasting of money on wars... are you seriously giving that your stamp of approval as a sober, reasonable hypothesis?

Has the war on drugs made any progress, or have we simply replaced potheads with crackheads?  Has the war on terror remade the world safer, or is violence escalating?  IMHO, both are worse today than before the government got involved.

How many trillions have been spent?

[socraticmethod]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

Even if you can't read your own posts in a disinterested way and identify them as espousing a conspiracy theory, do you really also think that FU's posts are totally level-headed and not even remotely tin-foil-hat material? He literally claimed that the US economy relies on the intentional wasting of money on wars... are you seriously giving that your stamp of approval as a sober, reasonable hypothesis?

Please tell me which post exactly that I made which espoused a conspiracy theory. I said the federal reserve controls monetary policy. That's not a conspiracy or a controversial statement in any way. It doesn't matter that a government office prints the slips of paper in circulation and brewer is well aware of that.

I also don't consider it much of a conspiracy theory to say that central banks help to fund government spending. That's why Hamilton wanted one. It's why Lincoln wanted one. They provide a mechanism to monetize spending that would otherwise have to come from direct taxation. Last I checked the wars in Afghanistan and Iraq got a lot of people killed on both sides and cost trillions of dollars. Not to mention the costs of previous wars. These are simple statements of fact. Now since this is the place for rationality and civility I'd like to challenge you and others to stop with the insulting "tin foil", unfounded accusations of conspiracy theories, etc that serve no purpose in the discussion but to provoke.

[socraticmethod]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

He's calling a spade a spade, yes.  He's not the one bringing up the conspiracy theories or arguing them as fact.

He's the only one who has brought up conspiracy theories. Nobody except for him mentioned zionists. Nobody else mentioned Ron Paul or Infowars, etc... He did. He's just trying to make it appear things were said that in fact were not.

[Mr Mark]

As far as the economics goes, I'm with Krugman and the neo-keynesians. You can't analyze the us government like it was a household, or county.  What counts is maintained real economic growth and improved productivity.  The US is in fine shape, imho.

The question is what impact would it have on your decisions going forward?

[warfreak2]

Please tell me which post exactly that I made which espoused a conspiracy theory.

Your entire position in this thread is that the US is in some sort of economic danger because the deficit is growing, despite that growth only being projected, and despite that claimed projected growth not actually being projected at all. You cited CBO projections but then dismissed them as unreliable when it turned out they didn't support your position. You also claimed that the government spends more to make the deficit-to-GDP ratio look better, despite this being mathematically impossible.

Also, despite these claims sequentially being shown to be false, you haven't once stopped to reconsider your position. This suggests that your arguments here do not represent a rational basis for your beliefs, but rather post-hoc rationalisations for beliefs which are not conclusions that you have reached by considering actual evidence.

Plus, you just completely ignored my post which you quoted to reply to.

Yes, this is a place for rational, civil people, which is why I am answering your arguments and civilly telling you that you appear to be in the wrong place, rather than just laughing in your face. (Next, I might start just laughing in your face, though. I don't have infinite patience.)

[fixer-upper]

As far as the economics goes, I'm with Krugman and the neo-keynesians. You can't analyze the us government like it was a household, or county.  What counts is maintained real economic growth and improved productivity.  The US is in fine shape, imho.

The question is what impact would it have on your decisions going forward?

The problem with your viewpoint is that real economic growth and improved productivity cannot be maintained indefinitely in a world of finite resources.  We're teetering on the edge of debt saturation, and there will eventually come a time (if we aren't already there) when no more debt should be issued.  What happens then?

Should we build ghost cities like the Chinese?  Should we have a debt jubilee to wipe out the bond holders?  Another war to end all wars?

[Mr Mark]

+1

And, what he said.

Please tell me which post exactly that I made which espoused a conspiracy theory.

Your entire position in this thread is that the US is in some sort of economic danger because the deficit is growing, despite that growth only being projected, and despite that claimed projected growth not actually being projected at all. You cited CBO projections but then dismissed them as unreliable when it turned out they didn't support your position. You also claimed that the government spends more to make the deficit-to-GDP ratio look better, despite this being mathematically impossible.

Also, despite these claims sequentially being shown to be false, you haven't once stopped to reconsider your position. This suggests that your arguments here do not represent a rational basis for your beliefs, but rather post-hoc rationalisations for beliefs which are not conclusions that you have reached by considering actual evidence.

Plus, you just completely ignored my post which you quoted to reply to.

Yes, this is a place for rational, civil people, which is why I am answering your arguments and civilly telling you that you appear to be in the wrong place, rather than just laughing in your face. (Next, I might start just laughing in your face, though. I don't have infinite patience.)

[brewer12345]

As far as the economics goes, I'm with Krugman and the neo-keynesians. You can't analyze the us government like it was a household, or county.  What counts is maintained real economic growth and improved productivity.  The US is in fine shape, imho.

The question is what impact would it have on your decisions going forward?

The problem with your viewpoint is that real economic growth and improved productivity cannot be maintained indefinitely in a world of finite resources.  We're teetering on the edge of debt saturation, and there will eventually come a time (if we aren't already there) when no more debt should be issued.  What happens then?

Soylent green time, right?  I have firearms, experience as a hunter and a big smoker ready to go.  Long pig time!

[socraticmethod]

Please tell me which post exactly that I made which espoused a conspiracy theory.

Your entire position in this thread is that the US is in some sort of economic danger because the deficit is growing, despite that growth only being projected, and despite that claimed projected growth not actually being projected at all. You cited CBO projections but then dismissed them as unreliable when it turned out they didn't support your position. You also claimed that the government spends more to make the deficit-to-GDP ratio look better, despite this being mathematically impossible.

Also, despite these claims sequentially being shown to be false, you haven't once stopped to reconsider your position. This suggests that your arguments here do not represent a rational basis for your beliefs, but rather post-hoc rationalisations for beliefs which are not conclusions that you have reached by considering actual evidence.

Plus, you just completely ignored my post which you quoted to reply to.

Yes, this is a place for rational, civil people, which is why I am answering your arguments and civilly telling you that you appear to be in the wrong place, rather than just laughing in your face. (Next, I might start just laughing in your face, though. I don't have infinite patience.)

What I said was that the projections were bad if taken at face value which even the CBO itself says and which I quoted from your source. I also said that their projections historically have been overly optimistic which I followed up with a specific example. Which part of that do you think has been shown to be false?

On top of that, my position is not simply that the debt will become problematic for the economy depending on future projections. My position is that it is already problematic and could become even more so at current debt to GDP ratio regardless of the future projections. I have raised multiple supporting points such as the trillions in unfunded liabilities and a trend of reduced GDP growth due to baby boomers leaving the work force that haven't been answered at all.

You pointed out the error in my mathematical example. I not only acknowledged my error I thanked you for pointing it out. Then we discussed the different components of GDP and I explained why they are not all equal in terms of being useful for indicating what debt load a country can sustain.

None of this is conspiratorial in any way. So I'll ask you one more time. What exactly did I say that was a conspiracy theory?


Now in contrast let's review some of the posts that have been made in response.

Whatever you say, sport.


Aside from stocking up on tinfoil and moving into a bunker, what exactly are you doing to prepare for your chosen doom scenario?

Yup.

I don't care what you do.  I was asking what the hypothetical tinfoil-newbie might do.  Well, enjoy your MREs.  Perhaps I should revisit that Alcoa stock purchase idea given the many uses for the foil...

Ah, the Ron Paul lunacy emerges into the light, all those legs scuttling around like crazy.  Ick!

Finally, anyone believing that the Fed is an all-powerful Elders of Zion/Gnomes of Zurich type puppeteer has about as much experience with the actual people as a Martian.

These comments are not rational nor is the repeated posting of tin foil hat pictures. They don't address the content of the discussion nor do they add anything constructive. They commit the fallacy of guilt by association and are meant to insult and attack the people they are directed toward which is in violation of forum rules.

[arebelspy]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

He's calling a spade a spade, yes.  He's not the one bringing up the conspiracy theories or arguing them as fact.

He's the only one who has brought up conspiracy theories.

He's the only one that called them out as such, yes.  You and FU have espoused multiple "theories" that most would label conspiracy theories, even if they don't have a fancy name that brewer was giving them.

The most frustrating part for me though is that you seem to completely ignore arguments and not address actual facts.  WF2 has posted multiple good posts that you've just flat out ignored, or given a response like "nice straw man".

It seems to be a waste of time, if you're not going to actually address any of the counter arguments to your "theories" - which again, makes them seem tin foil hat-esque.

[arebelspy]

Whatever you say, sport.


Aside from stocking up on tinfoil and moving into a bunker, what exactly are you doing to prepare for your chosen doom scenario?

Yup.

I don't care what you do.  I was asking what the hypothetical tinfoil-newbie might do.  Well, enjoy your MREs.  Perhaps I should revisit that Alcoa stock purchase idea given the many uses for the foil...

Ah, the Ron Paul lunacy emerges into the light, all those legs scuttling around like crazy.  Ick!

Finally, anyone believing that the Fed is an all-powerful Elders of Zion/Gnomes of Zurich type puppeteer has about as much experience with the actual people as a Martian.

These comments are not rational nor is the repeated posting of tin foil hat pictures. They don't address the content of the discussion nor do they add anything constructive. They commit the fallacy of guilt by association and are meant to insult and attack the people they are directed toward which is in violation of forum rules.

You are right, those posts don't help advance the conversation.  But neither does raising certain stats ("Look into the CBO stats and get back to me"), then when they're brought in, questioning the validity of them ("Oh yeah, but they're always too optimistic.." -- then why did you bring them up?).

How about this?  We stop naming other random conspiracy theories that seem to fall in line with your ideas, and you actually address WF2's points?  He can even re-cut and paste the stuff not addressed yet.

[fixer-upper]

The only one talking about conspiracy theories is Brewer. I didn't bring up conspiracy theories and neither did fixer-upper. Brewer has in multiple posts.

He's calling a spade a spade, yes.  He's not the one bringing up the conspiracy theories or arguing them as fact.

He's the only one who has brought up conspiracy theories.

He's the only one that called them out as such, yes.  You and FU have espoused multiple "theories" that most would label conspiracy theories, even if they don't have a fancy name that brewer was giving them.

The most frustrating part for me though is that you seem to completely ignore arguments and not address actual facts.  WF2 has posted multiple good posts that you've just flat out ignored, or given a response like "nice straw man".

It seems to be a waste of time, if you're not going to actually address any of the counter arguments to your "theories" - which again, makes them seem tin foil hat-esque.

I haven't ignored any counter arguments, and in the original spirit of the thread, perhaps it would be wise to reflect on a warning provided by the Bank of International Settlements:

There is a common element in all this. In no small measure, the causes of the post-crisis malaise are those of the crisis itself – they lie in a collective failure to get to grips with the financial cycle. Addressing this failure calls for adjustments to policy frameworks – fiscal, monetary and prudential – to ensure a more symmetrical response across booms and busts. And it calls for moving away from debt as the main engine of growth. Otherwise, the risk is that instability will entrench itself in the global economy and room for policy manoeuvre will run out.

When the central bank of central banks is warning them to stop using debt as a tool for growth, perhaps it is wise to avoid counting on the opinions of those who say our debt doesn't matter.

[socraticmethod]

You are right, those posts don't help advance the conversation.  But neither does raising certain stats ("Look into the CBO stats and get back to me"), then when they're brought in, questioning the validity of them ("Oh yeah, but they're always too optimistic.." -- then why did you bring them up?).

How about this?  We stop naming other random conspiracy theories that seem to fall in line with your ideas, and you actually address WF2's points?  He can even re-cut and paste the stuff not addressed yet.

I believe I already did address them in post 92 with direct quotes from the CBO.

[socraticmethod]

As far as the economics goes, I'm with Krugman and the neo-keynesians. You can't analyze the us government like it was a household, or county.  What counts is maintained real economic growth and improved productivity.  The US is in fine shape, imho.

The question is what impact would it have on your decisions going forward?

If it is true that you can't draw a valid comparison to a household budget then debt to gdp really doesn't matter at all right? After all, aren't we really just talking about the capacity to carry a certain debt load? That in itself implies a comparison to a family budget being able to make their monthly debt payments and grow their income fast enough to keep up with growing interest payments.

In the case of the US budget what will that require? Since everyone seems to be hung up on debt to gdp ratio what does it indicate? It has risen significantly since the housing bubble popped. Is it expected to increase or decrease from here? If a decrease on what grounds is a decrease expected? Under what conditions? These are questions that have to be answered and answered with realistic expectations if someone thinks debt to gdp is how you can tell whether or not debt is a problem to be concerned about. All I have seen so far here is people pointing out that some countries have a higher ratio and if there is a problem it will be everyone's problem. That hardly makes a strong case that no problem exists.

[fixer-upper]

How about this?  We stop naming other random conspiracy theories that seem to fall in line with your ideas, and you actually address WF2's points?  He can even re-cut and paste the stuff not addressed yet.

That seems rather generous, considering how WF2 and Brewer have mocked my points rather than debated them. 

Putting the burden on SC to respond to all questions without holding others to the same level of accountability seems a bit unbalanced.

[arebelspy]

How about this?  We stop naming other random conspiracy theories that seem to fall in line with your ideas, and you actually address WF2's points?  He can even re-cut and paste the stuff not addressed yet.

That seems rather generous, considering how WF2 and Brewer have mocked my points rather than debated them. 

Putting the burden on SC to respond to all questions without holding others to the same level of accountability seems a bit unbalanced.

I'm not saying the others shouldn't have to respond to questions as well, but it seems to me they are, with charts and data even, whereas SC doesn't seem to be.

What I'm asking for is a genuine discussion.

One side is asking legitimate questions but name calling, the other is refusing to answer any questions.

Neither behavior is helpful.

I'd rather both sides approach with reasonable arguments for a discussion, or at least attempt, so the thread doesn't have to get shut down.

[socraticmethod]

Perhaps because they appear to show the deficit/GDP ratio staying around its long-term average, rather than returning to anywhere near its 2009 peak? I guess that wouldn't really support your argument.

Interesting reading from the same CBO projections that warfreak posted.

https://www.cbo.gov/publication/45229

But if current laws do not change, the period of shrinking deficits will soon come to an end. Between 2015 and 2024, annual budget shortfalls are projected to rise substantially—from a low of $469 billion in 2015 to about $1 trillion from 2022 through 2024—mainly because of the aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt. CBO expects that cumulative deficits during that decade will equal $7.6 trillion if current laws remain unchanged. As a share of GDP, deficits are projected to rise from 2.6 percent in 2015 to about 4 percent near the end of the 10-year period. By comparison, the deficit averaged 3.1 percent of GDP over the past 40 years and 2.3 percent in the 40 years before fiscal year 2008, when the most recent recession began. From 2015 through 2024, both revenues and outlays are projected to be greater than their 40-year averages as a percentage of GDP (see the figure below).

https://www.cbo.gov/sites/default/files/cbofiles/attachments/45229-UpdatedBudgetProjections_2.pdf

In CBO’s baseline projections, federal debt held by the public reaches 78 percent of GDP by 2024, up from 72 percent at the end of 2013 and twice the 39 percent average of the past four decades (see Figure 3 on page 5). As recently as the end of 2007, federal debt equaled just 35 percent of GDP. Such high and rising debt would have serious negative consequences. Federal spending on interest payments would increase considerably when interest rates rose to more typical levels. Moreover, because federal borrowing would eventually raise the cost of investment by businesses and other entities, the capital stock would be smaller, and productivity and wages lower, than if federal borrowing was more limited. In addition, high debt means that lawmakers would have less flexibility than they otherwise would to use tax and spending policies to respond to unexpected challenges. Finally, high debt increases the risk of a fiscal crisis in which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.

No big deal right? After all, "we owe it to ourselves". And keep in mind these projections are assuming inflation stays low for the next 10 years, interest rates don't go up by more than a couple percentage points, GDP growth averages around 3% and no more wars or recessions for the next 10 years.

Cause for concern? Absolutely. Anyone that argues otherwise has their head in the sand or some other place the sun don't shine. Does it mean we should hole up in a bunker expecting the end of the world? Of course not! The world will keep on turning. Just be aware and try to learn from history, prepare as best you can and keep on living life. :)

Most relevant portion of the response is highlighted in red for those who missed it the first time. Contrary to WF2 assertion that these ratios are around historical norms the CBO states they are now above the historic norm, particularly for the 40 years pre 2008 which has since seen the deficit explode and skew the average. The 40 year average prior to 2008 is 2.3%. They project it to grow from 2.6% in 2015 to 4% 10 years later. That is a 74% increase over the long term average.

And that is assuming 3% GDP average growth for those 10 years, no recessions, no more wars or other unexpected high cost expenditures, moderate inflation and interest rates no more than a couple points higher than present levels on treasury bonds. Does anyone seriously believe that is realistic? I hope it is but I certainly wouldn't bet on it.

[socraticmethod]

How about this?  We stop naming other random conspiracy theories that seem to fall in line with your ideas, and you actually address WF2's points?  He can even re-cut and paste the stuff not addressed yet.

That seems rather generous, considering how WF2 and Brewer have mocked my points rather than debated them. 

Putting the burden on SC to respond to all questions without holding others to the same level of accountability seems a bit unbalanced.

I'm not saying the others shouldn't have to respond to questions as well, but it seems to me they are, with charts and data even, whereas SC doesn't seem to be.

What I'm asking for is a genuine discussion.

One side is asking legitimate questions but name calling, the other is refusing to answer any questions.

Neither behavior is helpful.

I'd rather both sides approach with reasonable arguments for a discussion, or at least attempt, so the thread doesn't have to get shut down.

I've asked many legitimate questions that were ignored and have gone out of my way to answer the questions posed to me and I managed to do it without resorting to the smear tactics that were targeted toward me and fixer-upper.

[socraticmethod]

I should also add that the original answers to the OP revolved around debt to GDP not deficit to GDP. Debt to GDP is not around historic norms. In fact the only other time in American history it has been as high as it's current level was WWII.

[warfreak2]

As a share of GDP, deficits are projected to rise from 2.6 percent in 2015 to about 4 percent near the end of the 10-year period. By comparison, the deficit averaged 3.1 percent of GDP over the past 40 years and 2.3 percent in the 40 years before fiscal year 2008, when the most recent recession began. From 2015 through 2024, both revenues and outlays are projected to be greater than their 40-year averages as a percentage of GDP (see the figure below).

2.6%-4% is within very reasonable bounds of the long-term average of 3.1%. It is around the long-term average. It's certainly nowhere near the peak, nor is it particularly unusual historically, and most importantly for your claim that the deficit is growing is projected to grow, it remains below the current level. Something which is projected to remain below its current level, is not projected to grow. That is the opposite of projected growth. Also, I already said all of this, and any sane, numerate person looking at the same graph should reach the same conclusion.

Since you keep referencing the fact that we don't take FU's theories seriously, I'd really like you to go on the record and say that you do take his theories seriously.

[warfreak2]

I should also add that the original answers to the OP revolved around debt to GDP not deficit to GDP. Debt to GDP is not around historic norms. In fact the only other time in American history it has been as high as it's current level was WWII.

And what disaster, in your own words, consequently happened to the US economy? Keep in mind that your answer had better not contradict reality:

[waltworks]

Ok, let's start over. Here's what I think:
-The economy has sucked in the last decade. I like it when the gov't spends money when nobody else will, because I guess I'm a Keynesian at heart. So I'm ok with deficits. If we have to run big deficits to give the boomers a nice retirement, I'm ok with that too. We're rich. If we decide we want to spend less we can cut SS and Medicare benefits a few % and pretty much be done with it.
-The pessimistic folks I speak with are often the same folks who were ridiculously optimistic during good times, OR people who are *always* talking about gloom and doom. This makes me think they're just emotionally not capable of understanding that sometimes the economy sucks, and sometimes it booms.
-Nobody ever wants to talk about *when* the giant collapse/hyperinflation is going to happen. I mean, you can make tons of money in currency markets. If the dollar is going to collapse, it's a profit opportunity. Why aren't you acting on it?
-The pessimism/collapse worldview has a parallel for-profit industry of gold-hawking shills that have a vested interest in making money off of fear.
-We've been more indebted/run deficits this high relative to GDP before and growth/innovation/awesomeness has always ridden to the rescue. In order for me to believe that's not the case this time (or next time there's a downturn), I'd need extraordinary evidence. Not ridiculous comparisons to Weimar/Zimbabwe/Spain/etc, which IMO aren't even vaguely comparable.

-The US (and the broader world) has a very diversified, giant economy full of the smartest, most capable people on the planet. I see no reason for endless pessimism in this context.

-W

[Roland of Gilead]

I just heard on the news there is a new exchange being set up for arebelspy bucks.  Man these new currencies catch on fast!

[warfreak2]

I just heard on the news there is a new exchange being set up for arebelspy bucks.  Man these new currencies catch on fast!

Where do I sign up, and what's the subscription fee for the newsletter with your commentary and forecasts?

[socraticmethod]

As a share of GDP, deficits are projected to rise from 2.6 percent in 2015 to about 4 percent near the end of the 10-year period. By comparison, the deficit averaged 3.1 percent of GDP over the past 40 years and 2.3 percent in the 40 years before fiscal year 2008, when the most recent recession began. From 2015 through 2024, both revenues and outlays are projected to be greater than their 40-year averages as a percentage of GDP (see the figure below).

2.6%-4% is within very reasonable bounds of the long-term average of 3.1%. It is around the long-term average. It's certainly nowhere near the peak, nor is it particularly unusual historically, and most importantly for your claim that the deficit is growing is projected to grow, it remains below the current level. Something which is projected to remain below its current level, is not projected to grow. That is the opposite of projected growth. Also, I already said all of this, and any sane, numerate person looking at the same graph should reach the same conclusion.

Since you keep referencing the fact that we don't take FU's theories seriously, I'd really like you to go on the record and say that you do take his theories seriously.

If you go with the 3.1% figure you have to use the record deficits since the financial crisis in order to skew the average upward by 34.7%. At 4% that represents a 30% increase. If you use the 40 year average prior to 2008 it's a 74% increase. Either way if your annual budget shortfall increased by those percentages I doubt you would claim with a straight face that it was still "around the long term average".

[waltworks]

Will you be selling glod? Will there be diagrams on a chalkboard?

I want in on the ground floor.

-W

I just heard on the news there is a new exchange being set up for arebelspy bucks.  Man these new currencies catch on fast!

Where do I sign up, and what's the subscription fee for the newsletter with your commentary and forecasts?

[Erica/NWEdible]

Will you be selling glod?

Do I have to pick between Colbert and Pratchett's Glod? Don't make me pick, please!

[arebelspy]

I just heard on the news there is a new exchange being set up for arebelspy bucks.  Man these new currencies catch on fast!

The funny part is, setting up a currency nowadays is easier than ever - you just fork/clone bitcoin/one of it's ilk (like litecoin/dogecoin/etc.)

That story could be a reality in a matter of hours.