Ron Paul: "The U.S. Government Must Admit It Is Bankrupt"

Is USA bankrupt?

  • Yes

    Votes: 93 66.9%

  • No

    Votes: 46 33.1%
  • Total voters
    139
Quote from bearice:

Laurence Kotlikoff: United States is Bankrupt Right Now

Bloomberg, February 26, 2011

Our country is bankrupt. It’s not bankrupt in 30 years or five years. It’s bankrupt today.

Want proof? Look at President Barack Obama’s 2010 budget. It showed a massive fiscal gap over the next 75 years, the closure of which requires immediate tax increases, spending cuts, or some combination totaling 8 percent of gross domestic product. To put 8 percent of GDP in perspective, this year’s employee and employer payroll taxes for Social Security and Medicare will amount to just 5 percent of GDP.

Actually, the picture is much worse. Nothing in economics says we should look out just 75 years when considering the present-value difference between future spending and future taxes. Over the full long-term, we need an extra 12 percent, not 8 percent, of GDP annually.

Seventy-five years seems like a long enough time to plan. It’s not. Had the Greenspan Commission, which “fixed” Social Security back in 1983, focused on the true long term we wouldn’t be sitting here now with Social Security 26 percent underfunded. The Social Security trustees, at least, have learned a lesson. The 26 percent figure is based on their infinite horizon fiscal- gap calculation.

But the real reason we can’t look out just 75 years is that the government’s cash flows (the difference between its annual taxes and non-interest spending) over any period of time, including the next 75 years, aren’t well defined. This reflects economics’ labeling problem. If you use different words to describe the receipts taken in and paid out each year by the government, you produce entirely different cash flows and an entirely different fiscal gap measured over any finite horizon.

Complete article:

http://www.midasletter.com/index.php/united-states-is-bankrupt-right-now/
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The United States is bankrupt for years. Yet, the world and exporting countries like China, Japan, Germany, UK, Italy, Canada, Mexiko, Brazil, Russia etc. cannot allow that the US is being sent into the woods. Why? Take a look at foreign Treasury Bond holdings.

Crisis in the US = worldwide crisis.

That´s why the ponzi scheme is still working. New markets need to be developped. Tunesia, Egypt, Lybia = all new markets for export hungry countries. While Lybia still has a possible "hard currency" = i.e. oil, it might become a different story if Collonell Ghadaffi goes apesh1t and descides to destroy production facilities.
 
Quote from ASusilovic:

The United States is bankrupt for years. Yet, the world and exporting countries like China, Japan, Germany, UK, Italy, Canada, Mexiko, Brazil, Russia etc. cannot allow that the US is being sent into the woods. Why? Take a look at foreign Treasury Bond holdings.

Crisis in the US = worldwide crisis.

That´s why the ponzi scheme is still working. New markets need to be developped. Tunesia, Egypt, Lybia = all new markets for export hungry countries. While Lybia still has a possible "hard currency" = i.e. oil, it might become a different story if Collonell Ghadaffi goes apesh1t and descides to destroy production facilities.
More...

every ponzi scheme has an end point.
predicting the end is an easy way to go broke.
 
You people don't get it. The US isn't bankrupt. The Banks are.

On a side note, this recent bailout in Greece is not a bailout of Greece. It is a bailout of European banks.

Quote from bearice:

2 years back millions of people knew USA is bankrupt.
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It started in 1980, when taxes for the rich were lowered, lowring taxtation, while not lowering spending. At the helm of... drumroll.... a re-thug-lican!
 
The Bush tax cut was enacted to spend down the surplus that Clinton had accumulated - it should not have been extended. Now no new taxes has become theological dogma among Republicans who zombie like take their orders and perform an oath to Grover Norquist. The deficit could be elimated if everyone paid their fair share. Please don't tell me that the rich and Corp's "create jobs" with the marginal income. The tax trate was over 50% under Eisenhower.
 
What we look back on now as the Golden Age of the US economy occurred with extremely high marginal income tax and corporate tax rates.

That should be a rather obvious clue that economic growth and tax rates have a relationship considerably more complex than what ideologues allow for.
 
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