OT: So the debt grows…

[GH]

It seems to me that while our federal debt is a really big deal. $13 trillion it is the personal, corporate and municipal debt ($50 trillion) that is causing all of our current problems. How do we increase tax and not cause MORE personal and business defaults and then have to pay yet more trillions to bail them out, and worse have a higher percentage of zero in tax to collect? Are you aware that while your home loan may be around 5% the loan you took out so you could have a city worker and a policeman and a fireman and a teacher with a nice plump pension is at 8% (more if the fund lost money). Yes 8% is the amount we are legally on the hook for, since the numbers are based on an 8% rate of return. Seems like a lot more interest than one would usually agree to in this economy eh?

Face it, it really does not matter how the debt is distributed, if to individuals or companies or the federal govt. Current bailouts simply redistributed existing debt rather than increasing it. What matters is that very little of it will ever be repaid unless the FED prints money day and night. If you are a retiree or have ANY kind of pension then a considerable amount of this money lost will be yours

The other big issue is this business of leverage, where a single $1 debt default seems to cascade into tens of dollars in losses. Clearly in this world we need to see the first dollar not default rather than a whole cascading chain of credit swaps and derivatives going bad.

[briansd1]

Good post GH. short to medium term, It’s all about preventing the cascading effects of default.

[briansd1]

Good post GH. short to medium term, It’s all about preventing the cascading effects of default.

[briansd1]

Good post GH. short to medium term, It’s all about preventing the cascading effects of default.

[briansd1]

Good post GH. short to medium term, It’s all about preventing the cascading effects of default.

[briansd1]

Good post GH. short to medium term, It’s all about preventing the cascading effects of default.

[Eugene]

[quote=ocrenter]unfortunately it appears neither side of the aisle want to get serious abut the debt.

I’m feeling more and more hopeless about the future of this country with each passing day.[/quote]

Please provide any rationale for why we should get serious about the debt now, as opposed to when the economy is at full employment. Especially since the government can borrow at 2.5% for 10 years.

Ireland is very serious about the debt. Does not seem to be working well for them.

[Eugene]

[quote=ocrenter]unfortunately it appears neither side of the aisle want to get serious abut the debt.

I’m feeling more and more hopeless about the future of this country with each passing day.[/quote]

Please provide any rationale for why we should get serious about the debt now, as opposed to when the economy is at full employment. Especially since the government can borrow at 2.5% for 10 years.

Ireland is very serious about the debt. Does not seem to be working well for them.

[Eugene]

[quote=ocrenter]unfortunately it appears neither side of the aisle want to get serious abut the debt.

I’m feeling more and more hopeless about the future of this country with each passing day.[/quote]

Please provide any rationale for why we should get serious about the debt now, as opposed to when the economy is at full employment. Especially since the government can borrow at 2.5% for 10 years.

Ireland is very serious about the debt. Does not seem to be working well for them.

[Eugene]

[quote=ocrenter]unfortunately it appears neither side of the aisle want to get serious abut the debt.

I’m feeling more and more hopeless about the future of this country with each passing day.[/quote]

Please provide any rationale for why we should get serious about the debt now, as opposed to when the economy is at full employment. Especially since the government can borrow at 2.5% for 10 years.

Ireland is very serious about the debt. Does not seem to be working well for them.

[Eugene]

[quote=ocrenter]unfortunately it appears neither side of the aisle want to get serious abut the debt.

I’m feeling more and more hopeless about the future of this country with each passing day.[/quote]

Please provide any rationale for why we should get serious about the debt now, as opposed to when the economy is at full employment. Especially since the government can borrow at 2.5% for 10 years.

Ireland is very serious about the debt. Does not seem to be working well for them.

[ocrenter]

you do realize we may never reach “full employment.”

over the last couple of decades, we appeared to be in “full employment” mostly due to bubble driven economies. the tech bubble gave a bunch of folks jobs that otherwise would not be there. the housing bubble of course allowed for a lot of extra Realtors, construction workers, loan processors as well as a bunch of folks in retail and interior design that frankly would not have jobs if not for the bubble environment.

this recession will last for a long time, and when it is over, we WILL not get back to that “full employment” status. Unless of course we create another bubble.

So while we think up of a new bubble so we can get back to that magical “full employment,” what should we do? pile on the debt?

The truth about the over 250k class is this: If their income over 250k is tax’d heavily, it would be their incentive to spend that > 250k income as much as possible in the form of business related deductions. If their over 250k income is not taxed as heavily, they just end up saving it or investing in financial holdings.

[ocrenter]

you do realize we may never reach “full employment.”

over the last couple of decades, we appeared to be in “full employment” mostly due to bubble driven economies. the tech bubble gave a bunch of folks jobs that otherwise would not be there. the housing bubble of course allowed for a lot of extra Realtors, construction workers, loan processors as well as a bunch of folks in retail and interior design that frankly would not have jobs if not for the bubble environment.

this recession will last for a long time, and when it is over, we WILL not get back to that “full employment” status. Unless of course we create another bubble.

So while we think up of a new bubble so we can get back to that magical “full employment,” what should we do? pile on the debt?

The truth about the over 250k class is this: If their income over 250k is tax’d heavily, it would be their incentive to spend that > 250k income as much as possible in the form of business related deductions. If their over 250k income is not taxed as heavily, they just end up saving it or investing in financial holdings.

[ocrenter]

you do realize we may never reach “full employment.”

over the last couple of decades, we appeared to be in “full employment” mostly due to bubble driven economies. the tech bubble gave a bunch of folks jobs that otherwise would not be there. the housing bubble of course allowed for a lot of extra Realtors, construction workers, loan processors as well as a bunch of folks in retail and interior design that frankly would not have jobs if not for the bubble environment.

this recession will last for a long time, and when it is over, we WILL not get back to that “full employment” status. Unless of course we create another bubble.

So while we think up of a new bubble so we can get back to that magical “full employment,” what should we do? pile on the debt?

The truth about the over 250k class is this: If their income over 250k is tax’d heavily, it would be their incentive to spend that > 250k income as much as possible in the form of business related deductions. If their over 250k income is not taxed as heavily, they just end up saving it or investing in financial holdings.

[ocrenter]

you do realize we may never reach “full employment.”

over the last couple of decades, we appeared to be in “full employment” mostly due to bubble driven economies. the tech bubble gave a bunch of folks jobs that otherwise would not be there. the housing bubble of course allowed for a lot of extra Realtors, construction workers, loan processors as well as a bunch of folks in retail and interior design that frankly would not have jobs if not for the bubble environment.

this recession will last for a long time, and when it is over, we WILL not get back to that “full employment” status. Unless of course we create another bubble.

So while we think up of a new bubble so we can get back to that magical “full employment,” what should we do? pile on the debt?

The truth about the over 250k class is this: If their income over 250k is tax’d heavily, it would be their incentive to spend that > 250k income as much as possible in the form of business related deductions. If their over 250k income is not taxed as heavily, they just end up saving it or investing in financial holdings.

[Author]

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