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Uncle Sam’s debt load amounted to 94% of U.S. gross domestic product in 2012, according to the World Bank. It now amounts to 103% of U.S. GDP. This ratio is sky high compared to its historical average of 61%.
U.S. government debt from 2010 through Sept. 2015. (YCharts.com)
Indeed the Federal Reserve fired up the printing presses, setting new records for U.S. money supply in 2013 and 2014. Forbes Welcome
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While I am not going to weigh in either way, it isn't hard to see the cogs and widgets that are in play. Rather than fixing what broke the world economy back in 2007/8, the power of printed money was used to double down and make the economy appear to be fixed. The same people who crashed the world are still in charge, nobody went to prison as they should have, and the few are still raping the many.
There is only one reason the cost of living has sky rocketed and it has not been supply & demand.
a .50¢ hamburger that now cost $5, is not because a shortage of beef, lettuce, tomatoes, pickles, onions, and mustard, or even cheese.
But who drove the debt, which causes a bankruptcy? By the way you pose words it would be Trump's fault, which is absurd. Under Obama the debt has doubled, but I'll bet you believe it's shrinking because the deficit has come down from the highs... right?
You act like you understand how debt works, yet believe it's completely different for the government than it is for micro-economies. Why is that?
Denial is the only rational answer.
Many many many MANY economists believe that resetting our debt may be the only way out. By the way the world economy is regressing with so many countries doing the same thing you can count on either a world war, a world-wide depression of the highest order, or both. Probably both within a decade or so.
Because the US Government can print it's own money and the whole world is clamoring for it. Private business can't.
Never implied it would be Trumps fault. It's a culmination of 200 years of national deficit spending. My comment is directed at Trump's non existant plan to fix it. Trump is long on talk and short on actual solutions.
IN Texas they call it "Big hat, No cattle" syndrome.
Oh, and by the way, if Obama hadn't spent that money on our financial recovery, the nation and the entire world would have experienced a deep depression rather than a long recession.
I might remind you that Romney in 2012 promised that if he were elected, he would bring down unemployment to 6% by the end of his first term. It's currently at 5% and Obama still has more than a year to go.
It's not the highest in history. The debt was 120% of GDP after World War II. How did we ever survive?
I think those that have debt fetishes need to get a grip.
During the Great Recession the government increased spending and revenue fell. Expanding the money supply and deficit spending is what the government is supposed to do in an economic crisis.
What were the unfunded liabilities on entitlements after WWII?
Deficits do matter.
If the whole world stops clamoring for our money we might have some problems.
It's not the highest in history. The debt was 120% of GDP after World War II. How did we ever survive?
I think those that have debt fetishes need to get a grip.
During the Great Recession the government increased spending and revenue fell. Expanding the money supply and deficit spending is what the government is supposed to do in an economic crisis.
There are countries with over 200%, and they are surviving.
Natures way of culling the herd of humans...... Economic depression. It is sudden, it is harsh, but if let to run its coarse, times of great prosperity always followed with fast recoveries. Until the federal reserve got involved. Only when government was able to get involved, did more time pass in economic depression, that more people were brought down to economic ruin over time.
They confiscated the gold and silver for a reason.
It's not the highest in history. The debt was 120% of GDP after World War II. How did we ever survive?
I think those that have debt fetishes need to get a grip.
During the Great Recession the government increased spending and revenue fell. Expanding the money supply and deficit spending is what the government is supposed to do in an economic crisis.
1. We were growing economically after WWII and could "grow ourselves out" of debt- not today.
2. We are the world reserve currency and can print whatever the hell we want, as long as we retain that status.
3. We cannot "balance the budget" with our Federal Reserve system- we would dry up currency and cause a depression/recession.
4. The money supply did not markedly increase from "the stimulus", as most of it never found its way into circulation- it was used to shore up banks balance sheets. Why did we not have inflation if there was a marked increase in the available currency among the public?
To put the subject of debt into a framework that goes back to the beginning of money, it helps to understand a little more about the why's of the economy that the world shares today.
While most of the foregoing discussion is correct (you can be at opposite sides of a discussion and still be correct)... most of the concerns have to do with debt. Yeah... and you're right... but a good question is 'who owes what to whom?'.
To really get to the core of the problem, it's necessary to understand things like "hockey sticks" and exponential expansion, and how and why we use cash, and how cash is created, and who creates it.
Back to the Original Question ... "Is the US economy going to crash?"... Maybe a better question would be, "When will the world economy crash?"
I would commend to your consideration this primer on the way it all works. It's a multi part study on the basics from Peak Prosperity... Crash Course
This is not a subject that you can skim... at least through chapters 4 and 5... but I'd suggest it's an eye opener, particularly with respect to understanding the actions of the Federal Reserve. What I took from taking the multi chapter course, is that very, very few TV pundits and even fewer members of congress really understand what the inevitable result that their actions will mean to the world's economy.
Lest this be all gloom and doom, there are some things we can do to surf the breaking edge of a large wave. Overall, the "look ahead" time frame is about twenty years, so for most on this forum, possible guidance for the important years. If you are confident that you understand the way money works, you might want to skip to chapter 26... "What should I do?"... but that's mostly generalities. Understanding today by being able to follow the nuances of the current economy, will likely give a leg up on making your own decisions. Methinks time well spent in going through the course. At worst, an hour or so of detail that can't hurt.
At the very least, after going through the study, an understanding of why the Fed action on interest rates will be critical, and a look at the consequences that will attend the decision.
Stay tuned...
Last edited by pushin80; 11-10-2015 at 08:37 AM..
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