What does a communist do In the midst of the disastrous obamacare rollout?

Quote from Ricter:

Why would they (being mostly us, until another Reagan comes along) stop lending to us in a future where IRs are 5%+, when they're lending to us today where the real rate of return is low to negative?

Definitely agree with you on the latter. It's important to not let debt/GDP rise too high. Acknowledging that where "too high" begins is not known with certainty.

Edit: btw, my "the debt will never come due" was not intended to be taken literally, but was intended to be a "gross oversimplification" response to jem's gross oversimplification. :D
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They stop lending to us when interest becomes to large a portion of our tax revenues and they know the dollars they get back are going to be worthless.

You never addressed the other problem with 20 trillion debt how is it fair that future generations will have to pay out half of the tax revenue we take in just to service the debt, then what?
 
completely irresponsible from a guy who thinks in systems like you.

1. we have seen the Banks and the Insurance and Drug companies... (same owners) make our Dems and establishment republicans sell out core voters... both left and right.

2. We see the IMF (probably owned by FED private bankers) say countries should pay down their debt by selling off assets.

So you can see the bankers are already starting to act like we will have to pay the piper with a pound of flesh... and we know they can make our politicians jumped through hopes and tap dance and bend over.

So all they need is the crisis... to screw our kids into the ground.

that is the end game... or too big a risk to keep spending like greedy pigs.

Quote from Ricter:

The debt will never come due.
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Quote from Max E. Pad:

They stop lending to us when interest becomes to large a portion of our tax revenues and they know the dollars they get back are going to be worthless.

You never addressed the other problem with 20 trillion debt how is it fair that future generations will have to pay out half of the tax revenue we take in just to service the debt, then what?
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In such a scenario competition for dollars is elevated, and that's likely because the economy is booming, ie. inflating. So revenues will be up and social safety net spending will be down--less borrowing will be required. (I think stagflation could return.)

As for the $20 trillion in debt, which cannot come due all at once anyway, the US has many, many times that much value on the asset side of the books. Worst case scenario, where spending could not be sufficiently cut (and printing is impractical), assets could be sold. Not ideal, but also not likely.
 
Quote from Ricter:

In such a scenario competition for dollars is elevated, and that's likely because the economy is booming, ie. inflating. So revenues will be up and social safety net spending will be down--less borrowing will be required. (I think stagflation could return.)
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And what happens in the scenario where interest rates go to 5% in a sluggish economy because no one wants to lend to the government at 1% because we have taken on too much debt?

over the past 20 years we have had to drop interest rates lower and lower, to the point where they now have to be zero just for the economy to grow at 1-2%, we cant keep growing the debt more than GDP so what do you propose? If you agree that it is unsustainable at some point to keep growing our debt more than our GDP, then at some point even in your mind we have to hit a wall. Where is that wall in your opinion, what debt to GDP ratio is the tipping point?
 
Quote from Ricter:

Why would they (being mostly us, until another Reagan comes along) stop lending to us in a future where IRs are 5%+, when they're lending to us today where the real rate of return is low to negative?

Definitely agree with you on the latter. It's important to not let debt/GDP rise too high. Acknowledging that where "too high" begins is not known with certainty.

Edit: btw, my "the debt will never come due" was not intended to be taken literally, but was intended to be a "gross oversimplification" response to jem's gross oversimplification. :D
More...

They are propping the US up. When they get tired of it they won't do that anymore, they will let it collapse like it deserves and then they can get on with their lives.
 
Quote from Max E. Pad:

Call for more government of course, krugman has lost his mind.

Expanding Social Security
By PAUL KRUGMAN

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For many years there has been one overwhelming rule for people who wanted to be considered serious inside the Beltway. It was this: You must declare your willingness to cut Social Security in the name of “entitlement reform.” It wasn’t really about the numbers, which never supported the notion that Social Security faced an acute crisis. It was instead a sort of declaration of identity, a way to show that you were an establishment guy, willing to impose pain (on other people, as usual) in the name of fiscal responsibility.

But a funny thing has happened in the past year or so. Suddenly, we’re hearing open discussion of the idea that Social Security should be expanded, not cut. Talk of Social Security expansion has even reached the Senate, with Tom Harkin introducing legislation that would increase benefits. A few days ago Senator Elizabeth Warren gave a stirring floor speech making the case for expanded benefits.
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A superb idea! But of course the first thing that must be done is Congress must act on the actuaries recommendation of a 2 cent on the dollar increase in the contribution rate. If benefits are increased, this amount will have to be bumped up a little. Another change that should be considered is permitting the Trustees to invest some of the Trusts assets in sovereign bonds of other nations, and perhaps a small part of the trust in equities. This would reduce credit risk.

For low wage workers the advantages of a shared risk, defined benefit plan, like Social Security, are tremendous, but it is not a bad deal even for the Wealthy.
 
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