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We're borrowing 43% of our budget? Talk about unsustainable. I would seriously make plans for when the US is forced to stop this destructive pattern. Its goi

We're borrowing 43% of our budget? Talk about unsustainable. I would seriously make plans for when the US is forced to stop this destructive pattern. Its going to be ugly.

icarus_drowning 16y ago
I can't see how it won't end up looking like a massive cut in entitlement spending, probably along the lines of Paul Ryan's most recent doomed proposal: http://www.roadmap.republicans.budget.house.gov/ http://www.roadmap.republicans.budget.house.gov/ This isn't to cheerlead Republican strategies (after all, I think the heart of Ryan's proposal is decidedly anti-Republican, since Republicans and Democrats alike seem to have based their party orthodoxy on not cutting spending, be that in the form of tax cuts or increased entitlements, respectively), merely to offer an example of the kind of cutting that will, but necessity, have to happen. Of course, there's always the "collapse of the US" scenario. Optimists, therefore, will prepare for the painful years of budget-cutting by refusing to rely on entitlements in their later years. Pessimists? Well, I suppose joining a survivalist encampment doesn't sound that bad...
jpcx01 16y ago
Don't worry about it. Krugman says deficits are ok.
- jbooth 16y ago
  Krugman says that we're in a depression and that the one economic climate where you should run a temporary deficit is in severe recession or depression. Now, you can say that after 8 years of castigating Bush for deficits, he's all of a sudden ok with them under Obama. And you'd be right. But it's also true that Bush took inherited a surplus and doubled the national debt in a "boom" economy, while Obama inherited an already-massive deficit while in the most severe economic crisis we've seen in decades.
  - roc 16y ago
    > "he's all of a sudden ok with them under Obama. And you'd be right." No, you wouldn't. For eight years he castigated Bush for not paying down the debt. Krugman's advice is: borrow your way out of the bad days, pay it back on the good ones. There's plenty of policy there to disagree about. There's no reason or benefit to misrepresenting people's positions.
    - jbooth 16y ago
      Finish reading :) I said exactly that.
      - roc 16y ago
        My mistake. I swear I read that twice; apparently I should have gone for a third pass.
  - anamax 16y ago
    > But it's also true that Bush took inherited a surplus and doubled the national debt in a "boom" economy The deficit under the last Repub congress was $100B/year and the trend was downwards. That changed when the Dems took congress for Bush's last two years. The current deficit is $100B/month. Note that Congress didn't pass a budget in 2008 - they held back until after Obama became president.
    - jbooth 16y ago
      Ok, so based on fiscal-year technicalities and on the GIANT ECONOMIC DISASTER that Bush and supply-side economics presided over, Obama's increased the deficit a lot. True. He still didn't inherit a surplus and double the national debt.
      - anamax 16y ago
        Bush had 9/11. Bush also did a prescription drug plan that was a financial disaster. However, the Dems wanted something even more expensive so .... In fact, that's generally true; Repubs overspent, but Dems wanted more. The Repubs weren't fiscally conservative in absolute terms, but they were significantly more so than Dems. Since the alternative to Repubs isn't perfection, but Dems, that's relevant. As to the financial disaster, it's due to Dems pushing "affordable" housing. The Repub's contribution is that they didn't try very hard to oppose it. (When McCain suggested looking at Fannie and Freddie in 2005/6, he got his teeth kicked in.) Tax revenues increased under Bush. And fewer paid income taxes. (The poor get a decent return on SS while the rest of us are hosed. The rich don't care because both "contributions" and payouts are capped.)
caf 16y ago
The US is in a somewhat unique position - as the de facto reserve currency, it can inflate its debts away. Like Monopoly's "Get Out Of Jail Free" it's a card you can only play once, though.
- Ardit20 16y ago
  Am sure Japan can do that also since they have their own currency and can print plenty of money. One person mentioned some numbers however, such as 2500 Yuan per hour. I am sure that figure one day was 25 Youan, but inflate and inflate, some zeros have been added. I guess however having prices go up also, such that say bread is 1000 Yuan you do not get real inflation if you print slowly. But, I doubt anyone want to take a chance. I would think also that it is not so easy and it is not really a get out of jail card. Money have value as long as they have power. They can print as much as they like, as it seems to be the case with Japan, but if prices go up accordingly, they would need to print more, and prices go up and print more and Germany 1930s or Zimbabwe 2007. Paying off debt is a good policy, whether be it a country or individual. Saving is a good policy too.
  - gaius 16y ago
    The US can inflate ultimately because the USD is what oil and other major commodities is traded in. Anyone who needs to convert their currency into another to trade doesn't have that luxury. Not even the CHF, the EUR or the GBP.
    - Ardit20 16y ago
      What they can't just start trading in Euro? Do they have some sort of contract or is there some sort of law which says you can trade oil only in dollars? I think if the dollar became a fonny currency people would switch quickly. It would for example not make any sense for a British man to trade in dollars if he gets say one pence for every dollar. Especially if by the next day it is worth 0.5 pence.
      - gaius 16y ago

We're borrowing 43% of our budget? Talk about unsustainable. I would seriously make plans for when the US is forced to stop this destructive pattern. Its going to be ugly.

icarus_drowning 16y ago

I can't see how it won't end up looking like a massive cut in entitlement spending, probably along the lines of Paul Ryan's most recent doomed proposal: http://www.roadmap.republicans.budget.house.gov/ http://www.roadmap.republicans.budget.house.gov/ This isn't to cheerlead Republican strategies (after all, I think the heart of Ryan's proposal is decidedly anti-Republican, since Republicans and Democrats alike seem to have based their party orthodoxy on not cutting spending, be that in the form of tax cuts or increased entitlements, respectively), merely to offer an example of the kind of cutting that will, but necessity, have to happen. Of course, there's always the "collapse of the US" scenario. Optimists, therefore, will prepare for the painful years of budget-cutting by refusing to rely on entitlements in their later years. Pessimists? Well, I suppose joining a survivalist encampment doesn't sound that bad...

jpcx01 16y ago

Don't worry about it. Krugman says deficits are ok.

jbooth 16y ago
Krugman says that we're in a depression and that the one economic climate where you should run a temporary deficit is in severe recession or depression. Now, you can say that after 8 years of castigating Bush for deficits, he's all of a sudden ok with them under Obama. And you'd be right. But it's also true that Bush took inherited a surplus and doubled the national debt in a "boom" economy, while Obama inherited an already-massive deficit while in the most severe economic crisis we've seen in decades.
- roc 16y ago
  > "he's all of a sudden ok with them under Obama. And you'd be right." No, you wouldn't. For eight years he castigated Bush for not paying down the debt. Krugman's advice is: borrow your way out of the bad days, pay it back on the good ones. There's plenty of policy there to disagree about. There's no reason or benefit to misrepresenting people's positions.
  - jbooth 16y ago
    Finish reading :) I said exactly that.
    - roc 16y ago
      My mistake. I swear I read that twice; apparently I should have gone for a third pass.
- anamax 16y ago
  > But it's also true that Bush took inherited a surplus and doubled the national debt in a "boom" economy The deficit under the last Repub congress was $100B/year and the trend was downwards. That changed when the Dems took congress for Bush's last two years. The current deficit is $100B/month. Note that Congress didn't pass a budget in 2008 - they held back until after Obama became president.
  - jbooth 16y ago
    Ok, so based on fiscal-year technicalities and on the GIANT ECONOMIC DISASTER that Bush and supply-side economics presided over, Obama's increased the deficit a lot. True. He still didn't inherit a surplus and double the national debt.
    - anamax 16y ago
      Bush had 9/11. Bush also did a prescription drug plan that was a financial disaster. However, the Dems wanted something even more expensive so .... In fact, that's generally true; Repubs overspent, but Dems wanted more. The Repubs weren't fiscally conservative in absolute terms, but they were significantly more so than Dems. Since the alternative to Repubs isn't perfection, but Dems, that's relevant. As to the financial disaster, it's due to Dems pushing "affordable" housing. The Repub's contribution is that they didn't try very hard to oppose it. (When McCain suggested looking at Fannie and Freddie in 2005/6, he got his teeth kicked in.) Tax revenues increased under Bush. And fewer paid income taxes. (The poor get a decent return on SS while the rest of us are hosed. The rich don't care because both "contributions" and payouts are capped.)

caf 16y ago

The US is in a somewhat unique position - as the de facto reserve currency, it can inflate its debts away. Like Monopoly's "Get Out Of Jail Free" it's a card you can only play once, though.

Ardit20 16y ago
Am sure Japan can do that also since they have their own currency and can print plenty of money. One person mentioned some numbers however, such as 2500 Yuan per hour. I am sure that figure one day was 25 Youan, but inflate and inflate, some zeros have been added. I guess however having prices go up also, such that say bread is 1000 Yuan you do not get real inflation if you print slowly. But, I doubt anyone want to take a chance. I would think also that it is not so easy and it is not really a get out of jail card. Money have value as long as they have power. They can print as much as they like, as it seems to be the case with Japan, but if prices go up accordingly, they would need to print more, and prices go up and print more and Germany 1930s or Zimbabwe 2007. Paying off debt is a good policy, whether be it a country or individual. Saving is a good policy too.
- gaius 16y ago
  The US can inflate ultimately because the USD is what oil and other major commodities is traded in. Anyone who needs to convert their currency into another to trade doesn't have that luxury. Not even the CHF, the EUR or the GBP.
  - Ardit20 16y ago
    What they can't just start trading in Euro? Do they have some sort of contract or is there some sort of law which says you can trade oil only in dollars? I think if the dollar became a fonny currency people would switch quickly. It would for example not make any sense for a British man to trade in dollars if he gets say one pence for every dollar. Especially if by the next day it is worth 0.5 pence.
    - gaius 16y ago