The Glade 4.0

It is a bankrupt country with out-of-control spending, digging itself deeper into the hole every minute.


A long string of budgetary surplusses or balances.


It would force the US Government to balance its budget, one way or another.


You cannot spend what you do not have. Not forever, anyway. Building a nation on debt is just one giant ponzi-pyramid scheme. It is not sustainable. Is it the only way? I think it's the only practical way. You're already paying too much tax. Raising it further will just lower GDP and likely lower the income you are trying to raise.

It doesn't matter where the cuts are made, with regard to fixing this. it does matter with regard to your country's operation, but ultimately, whether they're made militarily or through cutting of infrastructure or social spending, or just trimming the fat, it ultimately does the same thing. It needs to be done.

In theory, the Fed could simply print more money. There are dire implications here, but at some point (and that may already be reached), the massive temporary inflation and dollar value crash it would cause would have the lowest negative impact on the country of al possible choices. Of course, that still leaves you needing to balance your budget to prevent it from reoccurring and going into a permanent inflationary death spiral.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

This coming from a canadian should tell you something

The US isn't bankrupt, though. Not even close. We're more than able to pay all our obligations at this point and for the next couple of decades, and the bond markets are quite happy to lend us more money at very, very low interest rates. Besides, the most worrisome line item is Medicare, which could be reformed, cut or even scrapped if we come down to the wire in 20-30 years. There's a medium-term budgeting issue here, not current or imminent bankruptcy.


Fair enough, but we were headed toward balance/surplus in the 90s without messing around with the debt ceiling.


The debt ceiling doesn't stop Congress from approving expenditures that exceed revenues, it just stops the government from borrowing the money needed to make up the difference (assuming we've hit the ceiling at the time). That's part of the problem - the debt ceiling creates a disconnect between the budget Congress approves and the ability of the government to pay for everything in that budget, causing a financial/economic crisis. If you want to force a balanced budget, the way to do that is with a balanced budget amendment or law, not by playing chicken with the debt ceiling. Otherwise, what you get is Congress ordering the food then skipping out on the bill and pretending that's "fiscally responsible."


Taxes are at their lowest point in decades, and only the most dogmatic supply-siders argue (dishonestly, in my opinion) that raising them a bit would actually lower revenues.


Again, fair enough, but it doesn't need to be done completely and immediately. The cuts can be made gradually and mixed with moderate tax increases. How do we know this? Because, again, we were headed in that direction in the 90s (i.e. before two wars and two major tax cuts), because a good chunk of our structural deficit is a population artifact related to the baby-boomers retiring, and because we have no shortage of willing lenders to make up the difference while we transition to greater balance.


Inflation that neither the markets nor most economists think is likely? I agree that just printing money willy-nilly would be a mistake, but when you're at 9% unemployment, with a significant debt load, and near-zero core inflation, sounding the alarm on inflation strikes me as an odd choice of concerns.

Ummmm ...

Am I the only person here who noticed that last month's jobs gains were revised to a net 90,000 loss?

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Nope. Just tired of pointing it out. About 10 years worth of employment growth has been wiped out.

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A man who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. ~ John Stuart Mill

Yup, and we're now in debt to the tune of $14,342,887,364,361.82 and counting, with trillion dollar overspending the last couple of years, oh yeah, with record deficits.


Since Congress hasn't passed a budget in over two years it can't cause a financial/economic crisis right?


I guess The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985, Budget and Emergency Deficit Control Reaffirmation Act of 1987 and the Budget Enforcement Act of 1990 have taken care of the problem then, right? Since Obama is so against a balanced budget amendment, there might be hope on that front, though the Senate failed on that today.



Tax revenue is nearly double that of the early '90's. Taxes are lower revenue is up.



Don't you mean 3-5 wars and record record domestic spending? As for "two major tax cuts", I supposed the fact that tax revenue being nearly double that of the early '90 in spite of a major recession/depression isn't enough to balance the budget, I guess with unemployment over 9%, the answer must be to raise taxes...



Near-zero? Neither markets, nor economists think inflation is likely?





Nope

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

Uh, no, actually -- we're not able to pay our obligations at this point, let alone decades from now. Otherwise we would not be having this conversation about the debt ceiling. What you really mean to say is:

"We're unable to pay all of our obligations. But at this point, other people are willing to pay them for us."

And I'd love to know in what sense the US federal government is not bankrupt. As of right now, the federal government has roughly $3T in assets, of which only about $800B are actual hard, "bird-in-the-hand" assets (as opposed to receivables). Meanwhile, it has $16.4T in "on-budget" liabilities and another $114.7T in "off-budget" unfunded liabilities. Newsflash: when liabilities > assets, you are bankrupt. End of story.

It gets even worse when you consider that the federal government's assets (such as they are) are shrinking while its liabilities are increasing exponentially. And it gets even worse than that when you realize that the total assets of the entire goddamned country is only estimated to be about $76T.

We are deeply bankrupt now, and we are and have been getting more bankrupt with every passing year. When was the last time that the gap between government assets and government liabilities actually decreased? That's not a rhetorical question -- I'd really like to see someone answer that. To the best of my knowledge, this has never occurred. Or if it has, I'm willing to bet it was well over a century ago. You would truly have to be a complete and utter idiot to believe the federal government when it says, "if you'll just let us go a little further into bankruptcy now, we promise we'll start turning a profit someday! We really mean it this time!"

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Sail forth! steer for the deep waters only!
Reckless, O soul, exploring, I with thee, and thou with me;
For we are bound where mariner has not yet dared to go,
And we will risk the ship, ourselves and all.

Not necessarily. You could just be using the same logic previous generations held. We'll be dead by the time the **** hits the fan, and our descendants can deal with the fallout.

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Buckle your pants or they might fall down.

Nope. I assume that most everyone who posts here regularly was painfully aware, and that those who weren't aware have a vested interest in not believing it to be untrue or unrelated anyway.

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Ezekiel 23:19-20 

By this logic, virtually everyone with a mortgage is bankrupt.

Anyone who's liabilities out-stripe their assets is, in fact, bankrupt. Do you believe that everyone who has a mortgage has fewer assets than liabilities, and can you source it, or are you just spewing out more non-sense about how you misperceive the world without anything to substantiate it?

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Ezekiel 23:19-20 

You're not bankrupt if you have a mortgage. Your home is considered an asset. Usually, the mortgage is less than the appraised value of the home.

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Holy shitsnacks!

Not quite. Your equity is an asset.

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Ezekiel 23:19-20 

CNN polling shows the "cut cap and balance" plan the GOP passed Friday ranks favorable with every demographic

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I prefer to think of them as "Fighting evil in another dimension"

Except Senate majorities.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

I own, don't have a mortgage and I could pay off my car and my one credit card easily from savings. I'm just using them to build some credit back up after ruining it.

This will not make me happy, but I'll survive it.

What about you?

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones

I have no debt. I outright own all of my property. My monthly obligations are met with 3/4 of one of my paychecks. I'm in as good of a position for the impending fecal tornado that I can be. Hopefully it won't be needed.

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A man who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. ~ John Stuart Mill

Guys, that's just not what "bankrupt" means. Bankrupt (in the non-legal sense) is when you can't pay your debts as and when they come due. Whether or not liquidating your assets would yield enough cash to pay off your debts entirely is irrelevant. It's a question of cash flow, plain and simple - if you can pay your scheduled debt service on time, you're not bankrupt.

In the current climate of crashing house prices? Not everyone, but certainly the vast majority of people with mortgages have liabilities exceeding assets, especially if you take the position that house prices will continue to fall while interest rates rise in the future.

I had to lol

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I prefer to think of them as "Fighting evil in another dimension"

A) Show me the **** numbers,

and

B) Yes, that is what it would mean.

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Ezekiel 23:19-20 

It's not. You should be ashamed.

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I thought equity is your assets minus what you owe.

People need to get over this delusion that leverage property or capital of any sort actually constitutes an asset in any way shape or form.

There are a couple of tracts by Cato the Elder and Ramses II that might help.

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How is capital not an asset? What definition of asset are you using?

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Ezekiel 23:19-20