FACT: The U.S. is bankrupt! Yes, bankrupt!

[jem]

Quote from StarDust9182:

Hey Jem, since it is not owned by anyone and pays 6% per year, why not divy up that reserve stock to each taxpayer by giving them their share of shares so they can get that 6% dividend while not owning it? Is it also correct that if they don't own it, then they don't have to pay taxes?

Consider TARP, the injections of capital so far to save the member banks from failure from their own actions as the down payment by the people who are represented by the congress. Since congress mandates it and controls it, then the people must be the ultimate proper owners. Or is my reasoning flawed somewhere?

A kind of debtor in possession financing idea.

right the problem is we have no list of which private banks own the shares and who owns those banks.
so how do the taxpayers get the shares back.

The shares could be owned by a very small group. We do not know. Its probably why they say it is not for profit. There is no need for someones tax return to say owner... Federal Reserve bank.

 

[jficquette]

Depends on the meaning of "bankrupt".

 

[a1elitetrader]

Quote from Eight:

Does he mention that it all works only as long as somebody will buy the T-bills? What if nobody wants T-bills and the Fed can't buy any more?

That's why the US MUST maintain the strongest military in the world. As long as we are the the world's cop, everyone will want our t-bills.

 

[oldtime]

typical elite trader

they must be number 1

they have no self worth unless it is compared to somebody else

they can't conceive of being happy if they are just small

 

[Humpy]

The prices of everyday food just goes up and up.
For instance I bought a sliced white loaf yesterday, it cost me £1.75 that is about $2.60. About 2 years ago it was about £0.80. Just for interest what does the same sort of loaf cost in the US ?

 

[StarDust9182]

Quote from jficquette:

Depends on the meaning of "bankrupt".

The US government report I mentioned earlier released around 2003 actually asked and answered the question of what it means for a country to be bankrupt.

As I recall they said that when the amount of entitlement money promised to be legally paid to citizens exceeds the amount they can collect from those same citizens over each citizen's lifetime, then a country can be said to be bankrupt. I don't think debt costs were included though in the calculation. (Answer to question 1)

Is the US bankrupt by definition given in the report - Yes by those terms, it is. (Answer to question 2).

Question 3 is what needs to be done to prevent bankrupcy was very interesting as they attempted to grapple with the problem. Printing money was not the answer. However, now the problem is grappling with them I think and it seems to have the upper hand.

Perhaps things have gotten much better since that report though.

 

[peilthetraveler]

Quote from Humpy:

The prices of everyday food just goes up and up.
For instance I bought a sliced white loaf yesterday, it cost me £1.75 that is about $2.60. About 2 years ago it was about £0.80. Just for interest what does the same sort of loaf cost in the US ?

Varies greatly. If you go to the discount supermarket, you can sometimes find deals for 99 cents. If you go to a regular supermarket, you can pay as much as $4.29 if you get the good named brand stuff. Generally speaking though, if you don't care about saving money or name brands and you just grab the first one off the shelf, you will pay between $2.29 to $3.29.

 

[Lucrum]

Quote from vicirek:

it is a problem for creditors not the US

For whatever reason, this doesn't make me feel any better about our dire situation.

 

[MrN]

I am not sure if anyone mentioned this, but when you evaluate the financial condition of an entity, you don't just tally up debts, you also look at assets.

What are the US Government's assets?

-Direct assets: Immense amounts of land, etc.
-Most powerful military in the world
-ability to print the worlds reserve currency
-claim on all private wealth in the USA via taxation
-many more things I am not considering at the moment

The fiscal situation is not ideal, but I admit I do grow weary of the 100% negative story that only looks at the downside and debts.

 

[StarDust9182]

Quote from MrN:

I am not sure if anyone mentioned this, but when you evaluate the financial condition of an entity, you don't just tally up debts, you also look at assets.

What are the US Government's assets?

-Direct assets: Immense amounts of land, etc.
-Most powerful military in the world
-ability to print the worlds reserve currency
-claim on all private wealth in the USA via taxation
-many more things I am not considering at the moment

The fiscal situation is not ideal, but I admit I do grow weary of the 100% negative story that only looks at the downside and debts.

It's my understanding that the Federal Reserve (a privately owned institution) and not the government has "the ability to print the worlds reserve currency" so that should not be included as an asset of the government.