The US may ALREADY be bankrupt !

[_TJ_]

US 'could be going bankrupt'
By Edmund Conway, Economics Editor
(Filed: 14/07/2006)

The United States is heading for bankruptcy, according to
an extraordinary paper published by one of the key members
of the country's central bank.

A ballooning budget deficit and a pensions and welfare
timebomb could send the economic superpower into insolvency,
according to research by Professor Laurence Kotlikoff for the
Federal Reserve Bank of St Louis, a leading constituent of
the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already
bankrupt. "To paraphrase the Oxford English Dictionary, is the
United States at the end of its resources, exhausted, stripped
bare, destitute, bereft, wanting in property, or wrecked in
consequence of failure to pay its creditors," he asked.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cnusa14.xml&menuId=242&sSheet=/money/2006/07/14/ixcity.html

[stellanoir]

1. Dunno whether to say

"D-uh" or "D-oh."

[Yupster]

28. You can't go bankrupt

when you have the ability to print all the money you want.

The worst that can happen is your currency becomes horribly inflated which is bad enough.

[Viva_La_Revolution]

34. beat me too it!

or

[Botany]

2. That was the goal of Grover & company

BTW spending $250 million per day in Iraq doesn't help either.

[_TJ_]

3. That makes me sad

There are so many poor and hungry people in the world
and the US is spending $250 million every day to kill
people in one of the poorest countries in the world. :-(

And yet GWB calls himself a Christian?

[Botany]

4. and all the time letting bin Laden get away, ......

.... letting the Taliban back into power in Afghanistan, turning Iraq into
a Shi ite Theocracy which will be the host for anti western terrorists, and
building permeant bases for a neo con wet dream.

[Lost-in-FL]

5. See the symtoms

The biggest US ARMY post, Fort Hood if currently facing an uncertain future. If they are having problems paying for defense, that's bad news.

I heard about this yesterday in the Randi Rhodes show. Someone called saying that many employees were sent home cause the post could not pay the electricity bill. That's a real shame.

http://www.kdhnews.com/docs/daily/headlines.aspx?ad=0&sid=10741

Behind the politics, memos and number crunching are 800 contract employees at Fort Hood who say they are facing each day with the question: Is today the day the ax falls on me?

"Layoffs have been happening since the first of May – all month long," said one contractor, who spoke on condition of anonymity. Fearing her job could be cut even sooner, she also declined to allow a description of her work to be printed.

[tanyev]

13. Thanks for posting that. I looked for something yesterday and

couldn't find it. I'm sure that area staunchly supports GWB and the Republican party. I'm dying to know what the mood is like there now.

[jwirr]

39. Another dumb question. *ss is trying to destroy all social programs

- is he also trying to destroy the military so that they can privatize it? Mercenaries to protect corporations?

[jwirr]

6. So what happens here? What do we have to hand over to the

people we owe? What court deals with International Bankruptcy? How does this impact the US? Where do we go from here? I know what happens with personal bankruptcy - how does national differ?

[HamdenRice]

9. There is no international bankruptcy -- it's handled through currency

One of the big problems of international economics is that there is no such thing as national bankruptcy. It is handled through the currency markets. What happen is that because we have so much debt and dollars out of the country, eventually people become wary of it and it loses value. That's why everyone is freaking out over the possible collapse of the dollar.

If the value of the dollar collapses, things in the US appear very cheap to people holding yen or euros. So the Japanese go on a shopping spree buying up US assets. That's what happened under Reagan and Poppy Bush I. Although the dollar did not collapse, the Japanese held so much of it that they started buying up Manhattan real estate, hollywood companies and midwestern auto plants.

Also government that are really strapped just welch out on some of their obligations. For example, if worse came to worse, the government could simply abolish medicaid and medicare. Heath care financial time bomb problem solved.

[jwirr]

10. God help us.

[lonestarnot]

12. Yes. China holds the most interest at this point don't they?

[Yupster]

27. No

not even close.

[Recursion]

30. No, we do

US Citizens hold by far the majority of the public debt, then US State governments, then US corporations, then foreign corporations.

Check out The Treasury Bulletin for all the info you could ever want, and much, much more info than you could ever want, on the subject.

[Selatius]

19. Russia suffered the same fate after the collapse of communism

The economy was simply dismembered by foreign groups buying up everything, often through crooked ways.

[bobbolink]

17. What happens here is that you get rid of all the poor folk.

Let 'em die miserable deaths. Without the Dems speaking up, of course.

Then, go after the muddleclass.

"First they came for the Jews, but I wasn't Jewish, so I didn't speak up"

[SensibleAmerican]

36. We're not going to go bankrupt

The FCB will never let it happen.

[serryjw]

7. The question of the century? WHY

do I have to go to a UK website to read this shit?

[_TJ_]

8. Maybe this is too SCARY for the US media

It sure as hell scares me - and I'm not even American ;-)

[serryjw]

11. Actually It has been written

about quit a bit in the last 4 years. You don't have to be a economist to figure the Baby Boomers are going to bankrupt the system, especially Medicare. We can raise the SS to 70, BUT what do we do when all the BB need their triple bypass after a lifetime of McD's?. Have you been to America? Half of the BB eat like Bill Clinton.The wars and *'s tax cut only made the situation dire.

[Lasher]

15. So, it's all the Boomers' fault?

No, you don't have to be an economist to figure the Baby Boomers are going to bankrupt the system. There's lots of people other than economists who are falling for the GOP's arguments that it is a fine idea to gut SS and our other social programs.

I suppose it would be convenient if all of us Boomers would be so polite as to die quietly, and the sooner the better, right? Sure has been handy for everybody, though, when we Boomers paid shitloads of taxes our whole lives, including and especially extra payroll taxes to build up the SS trust fund.

How long did it take you to come up with that 'solution' of raising the SS to 70? Not long I suppose, because it's straight from the GOP playbook. Maybe 'we' can do that and maybe 'we' can't, but if 'we' do, I for one will become a one-issue voter who will oppose anyone and everyone who did anything at all to even remotely support such a measure.

There is no SS 'chrisis'. There is a general fund chrisis, intentionally created by The Decider, mainly with his tax cuts for the wealthy elite. And now, according to plan, they argue that we can't afford SS. I'm amazed at how many people continue to fall for this scam.

[serryjw]

16. I don't come on DU

to be attacked, especially when I was not responding to you. You obviously, didn't read the article. Why can't people disagree nicely. Sorry, I'm tired of the attacks that say nothing meaningful, you sound like a republican...another hits my IGNORE, BYE!

[Lasher]

21. OK I guess I'm on your ignore list

But in case I am not, please note I did not attack you personally; I did, however, attack your position. And despite your claim to the contrary, I believe I offered some meaningful points in doing so. I am disappointed that you are not willing to try to defend your position. Valuable communication often ensues in cases like this, if debate is fairly conducted.

[davekriss]

23. Your attribution of cause is wrong

The babyboomers will not be the cause of "bankrupting the system". That is entirely due to decisions by this Republican Presidency, Republican Senate, and Republican House to tax the top tiers of our society trillions of dollars less than under the tax laws in place at the end of the Clinton administration. Republican policy decisions are what is bankrupting America.

If U.S. demographics and economy continue to grow at the historical rates seen over the last 100 years, then EVEN IF NOTHING IS DONE -- and as long as Treasury honors the Treasury Bonds held by the Social Security Trust Fund -- then social security benefits can be paid at current rates through 2052, followed by a reduction to 75% of current benefits thereafter.

Social security and medicare are red herrings of the Right and will be used to hide the class-based transfer of wealth that began under Reagan and accelerated under GWB.

[Name removed]

14. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Jim Warren]

18. Worth a thousand words

[davekriss]

24. Thank you Jim Warren (eom)

[DFLer4edu]

20. The thinking in this article is flawed in many ways

Yes the US governments financial situation is not looking so good, but this article puts it way out of proportion. The real point is that to meet our social obligations we need to pay higher taxes. The article said that we would have to double tax rates to pay for our obligations. This is an exaggeration, in that it looks at the problem as evidence of a need for higher taxes, not a more just tax system. Both are needed, but a just tax system would mean that doubling across the board would by no means be necessary. Nonetheless, doubling across the board would put US tax rates in line with European ones. It's Europe that's bankrupt; their social obligations far outstrip ours, their taxes are already high, and they do not have a high enough birthrate to sustain the workforce which pays the taxes. The real point isn't that the US government is bankrupt, but that republican fiscal policy is.

[Lasher]

22. Very well stated, DFLer4edu (EOM)

[Jim Warren]

26. Great articulation

and you make great points. This is a strong message that needs to get out.

"The real point isn't that the US government is bankrupt, but that republican fiscal policy is."

Combined with runaway military spending/corporate cronyism for an illegal war.

[HamdenRice]

25. Here's the solution to the entire financial "crisis"

Stop the war. Appropriate $30 billion per year for the Pentagon and intelligence agencies and not a penny more.

Financial crisis solved.

[girl gone mad]

29. What do you mean MAY? n/t

[Lorien]

31. Ah yes, the "personal accountability party" has done it's job again

these are the same idiots that squeal "quit your whining and self pity and get to work"! whenever the non wealthy are working three jobs and STILL can't pay the bills. "Learn to live within your means" the "party of responsibility" barks-all the while spending our tax money like drunken delusional oxycontin addicts. Somehow, I'm not surprised that they are utterly destroying the country they claim to "love" so much. :eyes:

[OneBlueSky]

32. let's not forget the companion moral bankruptcy . . . n/t

.

[Justice Is Comin]

33. And republicans head for the hills when you

talk about pay-go. Nope don't want any part of that pay your bills stuff.

[Voltaire99]

35. Should put a crimp in imperialism, eh?

Funny how a depressed dollar just won't buy as many invasions.

[tbyg52]

40. Not necessarily....

They were buying bread with wheelbarrows full of money in Germany just before WWII, were they not?

[Voltaire99]

42. Good point

No, not necessarily at all.

Of course, Czechoslovakia was much closer to Germany than Tehran is to Fort Bragg. But cost will never fully deter U.S. imperialism; our leaders are willing to see Americans live under bridges rather than shortchange the Pentagon.

[progressoid]

37. Freepers response: "It's because of all of those social programs."

and Clinton's Penis.

[Lasher]

38. Yeah, but they like to call them "entitlement programs"

That's supposed to sound dirty, as if you're evil if you think you're entitled to anything. Unless you're a billionaire, then that's a good attitude. The Estate Tax comes quickly to mind here. They also like to refer to New Deal social programs as "big government". They're talking about eliminating social programs when they say they want to reduce the size of the evil "big government". Military spending, kind of like entitlements for billionaires, doesn't count.

[sweetheart]

41. Euphemisms for a revolution

"bankrupt" means a revolution, no holds barred. The people will have to sell out
to the bankers, and they'll take their pound of flesh.

[samsingh]

43. of course this is reorted in the foreign media