Chart of US National debt/Federal receipts

[moneymaker]

In 1920 the ratio was 4.3 just before a big drop in the market, right now it is 5.9! Still looking for a good chart of this.

[svelte]

Well, that’s not far off from asking about the size of the deficit.

[img_assist|nid=20898|title=Deficit by Pres 1946-2013|desc=|link=node|align=left|width=717|height=488]

[svelte]

…maybe this is closer…[img_assist|nid=20899|title=2013 Debt to Revenue|desc=|link=node|align=left|width=755|height=549]

[moneymaker]

Seems everybody wants to compare the National debt to GDP, what good does that do. Think that when comparing it to something that something should be relevant, like the ability to pay it back which would probably be based on federal receipts and not GDP. GDP is a bigger number which makes the National debt seem smaller.

[FlyerInHi]

Money maker, comparing debt to gdp makes perfect sense.

The federal debt will never be paid off because that represents savings to people who own the debt. The federal debt is an investment vehicle.

If you could live forever, you would never pay off your debts either. You would keep on rolling over your debt and increase it as your income increases. You would have unending increases in standard of living.

[Anonymous]

[quote=FlyerInHi]If you could live forever, you would never pay off your debts either. You would keep on rolling over your debt and increase it as your income increases. You would have unending increases in standard of living.[/quote]

Good points.

A common misconception about government debt is that it eventually must be paid off down to zero. This is not true.

The size of the debt is irrelevant. The only parameter that matters is the cost of the debt. And cost is relative to many things.

[livinincali]

[quote=FlyerInHi]Money maker, comparing debt to gdp makes perfect sense.

The federal debt will never be paid off because that represents savings to people who own the debt. The federal debt is an investment vehicle.

If you could live forever, you would never pay off your debts either. You would keep on rolling over your debt and increase it as your income increases. You would have unending increases in standard of living.[/quote]

Yeah right up until the interest rates rise and the cost of rolling the debt exceeds your income. Opps there goes your standard of living and most of what you have gets liquidated. Brilliant plan it’s working out so well for countries like Greece and the rest of the PIIGS. Do you guys think these things through before you say them?

[The-Shoveler]

Because Greece

1) Does not have the resources to be independent economically.

2) Cannot print it’s own money.

[FlyerInHi]

Greece is more like state and local government in USA.

Livin, i do worry about the move up housing maket once interest rates rise. But maybe low rates is the new normal for decades to come

[The-Shoveler]

Well it also does not help that it is very corrupt.

[moneymaker]

It’s kinda like the debt to income ratio the banks use for home loans. What does it matter that I make x dollars, if I only take home .5x dollars then that is what I have to pay the mortgage with. Of course using x instead of .5x works in everyone’s favor so nobody rocks the boat. I guess you could say nobody ever pays off their home either they just move up and buy a bigger one or take out a second but the fact is there are many homes that are paid off.

[livinincali]

[quote=The-Shoveler]Because Greece
1) Does not have the resources to be independent economically.
[/quote]

Of course it does. Not at their current standard of living but at some lower standard of living Greece can certainly support itself by trading tourism for whatever goods it can afford. It’s people won’t like the fact that they can’t retire at 60 anymore, but they’ll survive, just like the rest of countries that have gone bankrupt over the years.

[quote=The-Shoveler]
2) Cannot print it’s own money.
[/quote]
Of course they can. If they leave the Euro they most certainly will be printing up dracmas. Their currency won’t be worth anything close to a Euro and it’s people will take a big haircut to their savings and standard of living, but that’s going to happen one way or another anyways.

[The-Shoveler]

[quote=livinincali][quote=The-Shoveler]Because Greece
1) Does not have the resources to be independent economically.
[/quote]

Of course it does. Not at their current standard of living but at some lower standard of living Greece can certainly support itself by trading tourism for whatever goods it can afford. It’s people won’t like the fact that they can’t retire at 60 anymore, but they’ll survive, just like the rest of countries that have gone bankrupt over the years.

[/quote]

But we can do it without much change in standard of living.

[SD Realtor]

I agree with cali’s point that if the treasury yields rise dramatically we are all pretty much screwed and the standard of living will change.

The shell game with the yields will go on for years maybe decades until someone pulls the plug. It will happen some day/year/decade.

[scaredyclassic]

Was just talking about std. Of living with someone. Life isthe same regardless of what he makes. Basically all the money’s spent, it’s just slightly nicer or more stuff but life itself seems about the same. Not more or less comfortable…not appreciably better stuff…. I don’t see any actual difference in my life making 50k or 125k. It feels the exact same. I have a different adress, newer car…but it doesnt feel better…Std. Of living changes , to matter, needs to involve some pain or appreciable difference in Daily reality. Without that it’s all the same. The same standard of living.

I bet the Greeks will be roasting goats and drinking wine and having sex about the same regardless. Dance and fight and laugh the same.

Maybe none of this crap really matters unless you’re making nothing. In which case you’re s rewed anyway.

[Author]

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