jungle

Almost never mentioned, but very real and massive.


A National Debt Of $14 Trillion? Try $211 Trillion : NPR

TonyWilliams

It's already been explained away why the credit rating reduction was a mistake... more business as usual.

Is that the bagpipe section I hear?

DYNASTY HVY

wow !what a mess and it just keeps going on and on .
Is that the energizer bunny playing those bagpipes ?

BackintheLPA

Check out this article on Asia times

A Very Secret Agent by Chris Cook

http://www.atimes.com/atimes/Global_.../MG27Dj02.html

TheFly

Greed & mismanagement from day one. "It is a foolish man who builds his house on sand".

jungle

It is a real shame we have to go overseas for any real news today.

threeighteen

And yet people still laugh at the tea party.

UAL T38 Phlyer

I think I'm a reasonably intelligent and educated person, but those articles left me more confused than ever.

One said we have way more debt than we admit to. The other said that debt is our strongest asset.

todd1200

I don't think many tea-partiers would agree with the author's conclusion --

"President Barack Obama and his government should get busy creating national equity by instructing the Fed to create and issue the necessary finance for the creation of a new generation of US infrastructure; the transition to a low carbon future which the US can, and should, be leading; and in increasing the capacity of the US people to do so. "

todd1200

I'm no financial wiz, but I'll take a shot. When the second article speaks of "the national equity," I understand that to refer to the federal government's claim to tax revenue on the future productivity of the nation. The article is primarily concerned with challenging common misconceptions relating to the national economy, most of which are remnants from the time that the dollar was backed by the gold standard. Now that the dollar is just an abstraction, it is analogous to a frequent flier mile -- An airline can issue as many frequent flier miles as it sees fit, and if that airline has a claim to miles that are held by others, that could be seen as an equity, even though the promise to transport a passenger a certain distance is also a debt. He makes it sound like a free lunch -- but it only lasts as long as there is a perception of value in the dollar (or in our nation's ability to produce goods and services).

I think the first article is a lot more accessible -- Our government is borrowing (perhaps stealing) from future generations at a higher rate than they care to admit. I think of it as our current credit card bills amount to about $14.5 trillion, but if you look ahead, and compare our projected pay with the money that we are planning to spend, we come up over $200 trillion short.

While the two articles seem contradictory, I think their assertions go hand-in-hand -- while the national attention is on balancing the budget and paying off short-term debt, that shouldn't really be our primary concern. It is like selling factory equipment to improve your balance sheet even though you have no cash flow problems. We have to address long-term revenue collection and spending habits. Politicians love deficit spending because tax cuts and entitlement programs help win votes. Deficit spending makes sense when we are at war or in a recession, but the problem is that when times are good, politicians don't set aside a surplus for future rainy days -- they give tax cuts and create spending programs to win votes. The question is how do we get politicians to see past the next election cycle and make the unpopular decisions that will benefit (or at least stop harming) future generations.