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US Economy & Especially Federal Spending NOT sustainable.

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  • Ronald Greek
    Opinion about the US economy... Baby boomers are increasingly ready, or required by rules or health, to retire. As with the blip in 2007 / 2008, as the
    Message 1 of 2 , Jun 29, 2011
      "Opinion" about the US economy...

      Baby boomers are increasingly ready, or required by rules or health, to retire. As with the blip in 2007 / 2008, as the boomers want to cash-out of their "investments", the dollar price of those "investments" falls, because it has become a declining market

      If they raise the debt limit, will anyone still be willing to "loan" money to the US? If not, or if they refuse to raise the debt limit, what will the politicians do?

      100% taxation of the income of every taxpayer in the US would NOT cover annual federal spending.

      Does anyone believe the $14 trillion of treasury note debt is ever going to actually be paid off? If it is not going to be paid off, then it should be clear that this $14 trillion is extra currency in circulation, which is inflationary to the same extent as though they had just printed the money.
      If Uncle pays off the treasury debts with printing press money, the net inflationary results to the economy should be zero.

      That would leave the non-treasury debt, examples being the IOU's in the Social Security "Trust Fund", pension and retirement benefit funding, which adds up to a lot, I see numbers somewhere between $60 trillion and $110 trillion, depending on how the estimates are calculated (who lives how long), even without the benefit payments being adjusted for inflation.

      100% confiscation of all property in the US, real estate, cars, clothes, bank accounts, stock, everything, tossing everyone out of the country naked, and somehow selling everything at present "market value" to someone outside the US (since no one FROM the US would have anything) would not cover the above federal debts.

      And what sense would it rob everybody to sell off and make one final round of payments, and in the process turn the entire nation over to foreign interests?

      What course to you think they are going to chart?

      I opine that the most likely course of action, and that probably makes the most sense, would be to also just print the money for these promised benefit payments. Pay people what the contracted for... but only what they contracted for, no inflation adjustments. Provide the option of cashing out now, or taking the string of payments.

      Remember, whether the money is just printed, or created by permanent debt, it is still inflationary to circulating currency to the same amount.

      IF "they" wanted to back the US currency with the gold that is supposed to be in Fort Knox, gold would need to be around $1,000,000 per ounce. This number assumes the US actually pays all present promised debts, but DOES NOT adjust any for inflation, while simply paying all debts with printed dollars, and that afterward the US eliminates all federal spending other than perhaps some low budget military.

      In whatever US economy returns after the coming crash, a "minimum wage"
      earner, If such exists, can at best expect to have buying power from earnings equal to a "minimum wage" earner in the cheapest global economy nation, in today's terms, earnings of between 60 cents and 72 cents per hour. I globalized economic terms, one car argue that all of us in the US are overpaid by a factor of ten.

      The illusion of US wealth is already crashing, and it may be prudent to think of where you will stand after the crash, I opine that the above is a best-case scenario, hoping for a peaceful transition to a reduced economy reflecting our true status. Expect your purchasing power of foreign items to at best be 1/10 of what it is now.

      The US has been a net importer of energy since the early 70's. Today in terms of oil, we internally pump less than 20% of the amount used, which is NOT even enough to operate the farming industry.

      Even with the "green revolution" crops, genetically modified crops, high fertilizer use, pesticides, pumped water (from nearly depleted wells), tractors, etc, the US has been a net importer of food since the late 90's.

      As we sit here today, it is difficult to find anything actually made within the US borders.

      Much will need to change, in particular communities will need to be able to provide "life support", and more, from solely local assets.

      Ronald Frederick Greek
      Yuma, Arizona, USA
      Attorney at Law
    • Robert Juliano
      Okay, doom-sayer, what is your solution to this problem? 1.) states have already reported that their revenues are up from last year. This trend should continue
      Message 2 of 2 , Jun 30, 2011

        Okay, doom-sayer, what is your solution to this problem?

        1.) states have already reported that their revenues are up from last year. This trend should continue until the states have (roughly) balanced budgets within 3 - 10 years from now. Just adding even a marginal electrical switch to non-stockholder electrical power means state's budget gap closure within a year.

        2.) To pay off the national debt of 14 trillion dollars, without raising taxes or cutting services, all we need to do is to stop buying oil from over seas. he USA uses some 20 million barrels of oil PER DAY. at a modest 70 dollars a barrel, the USA uses some 1.4 billion a day of oil. 1.4 * 365 = 511 billion a year. assuming we need some 20% of the money saved to keep the process going, we have some 450 or so left over. 1.4 trillion / 450 billion per year = 32 years. If you want to speed up the process, bring back the reagan era taxes on the top 5 percent of the population. (this gathers another 225 to 500 billion, depending on how you gather the cash, and how you frame the "wealth.") that bumps it up to minimum of 625 billion. That means we are down to 23 years. That means we can get to zero debt in 23 years with no spending cuts or onerous tax hikes. (I didn't hear any complaints during the reagan years.)

        3.) I don't know where you are getting your numbers, but very few folks get their pension in a lump sum.

        4.) If a societal collapse does happen, the states with largely rural population are in real trouble. (The small towns lack generation capacity. They lack engineers. They lack food. They lack Doctors. There is a reason people left and continue to leave the rural areas.)

        I've heard arguments similar to yours, but with the crisis being the coming Oil Crash. I think there are some folks who want a "simpler" life, and they are looking for a justification for same. Personally, I have no problem with someone wanting to move to a small town/community/etc. I don't count myself as one of them. When the Oil runs out, some of us will be working diligently to switch over to electric drive trains, hydrogen, ethanol, etc.

        Just my thoughts before I toddle off for morning caffeine.

        Bob


        --- On Wed, 6/29/11, Ronald Greek <unno_2002@...> wrote:

        From: Ronald Greek <unno_2002@...>
        Subject: [arcology] US Economy & Especially Federal Spending NOT sustainable.
        To: arcology@yahoogroups.com
        Date: Wednesday, June 29, 2011, 7:00 PM

         


        "Opinion" about the US economy...

        Baby boomers are increasingly ready, or required by rules or health, to retire. As with the blip in 2007 / 2008, as the boomers want to cash-out of their "investments", the dollar price of those "investments" falls, because it has become a declining market

        If they raise the debt limit, will anyone still be willing to "loan" money to the US? If not, or if they refuse to raise the debt limit, what will the politicians do?

        100% taxation of the income of every taxpayer in the US would NOT cover annual federal spending.

        Does anyone believe the $14 trillion of treasury note debt is ever going to actually be paid off? If it is not going to be paid off, then it should be clear that this $14 trillion is extra currency in circulation, which is inflationary to the same extent as though they had just printed the money.
        If Uncle pays off the treasury debts with printing press money, the net inflationary results to the economy should be zero.

        That would leave the non-treasury debt, examples being the IOU's in the Social Security "Trust Fund", pension and retirement benefit funding, which adds up to a lot, I see numbers somewhere between $60 trillion and $110 trillion, depending on how the estimates are calculated (who lives how long), even without the benefit payments being adjusted for inflation.

        100% confiscation of all property in the US, real estate, cars, clothes, bank accounts, stock, everything, tossing everyone out of the country naked, and somehow selling everything at present "market value" to someone outside the US (since no one FROM the US would have anything) would not cover the above federal debts.

        And what sense would it rob everybody to sell off and make one final round of payments, and in the process turn the entire nation over to foreign interests?

        What course to you think they are going to chart?

        I opine that the most likely course of action, and that probably makes the most sense, would be to also just print the money for these promised benefit payments. Pay people what the contracted for... but only what they contracted for, no inflation adjustments. Provide the option of cashing out now, or taking the string of payments.

        Remember, whether the money is just printed, or created by permanent debt, it is still inflationary to circulating currency to the same amount.

        IF "they" wanted to back the US currency with the gold that is supposed to be in Fort Knox, gold would need to be around $1,000,000 per ounce. This number assumes the US actually pays all present promised debts, but DOES NOT adjust any for inflation, while simply paying all debts with printed dollars, and that afterward the US eliminates all federal spending other than perhaps some low budget military.

        In whatever US economy returns after the coming crash, a "minimum wage"
        earner, If such exists, can at best expect to have buying power from earnings equal to a "minimum wage" earner in the cheapest global economy nation, in today's terms, earnings of between 60 cents and 72 cents per hour. I globalized economic terms, one car argue that all of us in the US are overpaid by a factor of ten.

        The illusion of US wealth is already crashing, and it may be prudent to think of where you will stand after the crash, I opine that the above is a best-case scenario, hoping for a peaceful transition to a reduced economy reflecting our true status. Expect your purchasing power of foreign items to at best be 1/10 of what it is now.

        The US has been a net importer of energy since the early 70's. Today in terms of oil, we internally pump less than 20% of the amount used, which is NOT even enough to operate the farming industry.

        Even with the "green revolution" crops, genetically modified crops, high fertilizer use, pesticides, pumped water (from nearly depleted wells), tractors, etc, the US has been a net importer of food since the late 90's.

        As we sit here today, it is difficult to find anything actually made within the US borders.

        Much will need to change, in particular communities will need to be able to provide "life support", and more, from solely local assets.

        Ronald Frederick Greek
        Yuma, Arizona, USA
        Attorney at Law

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