17 Responses to “The Debt”

1. #1 |  Boyd Durkin |  May 27th, 2009 at 9:31 am

   Collapse is a good thing. Seriously. There is no way to stop the Ponzi without a collapse. Even post-collapse, the crisis won’t be wasted and positioned for even bigger government.

   Now the trick is to get your investments on the opposite side of the dollar.

   At SeekingAlpha, we’ve been preparing for a looong time now.
   http://seekingalpha.com/article/139440-as-the-dollar-continues-to-collapse-where-will-you-put-your-money

   You can get all of Peter Schiff’s articles over there. Or, mises.org is still fantastic.

   Neg karma is OK if it saves even a couple people from ruin. But, I hope everyone reading this site has the majority of their investments outside the US$.

2. #2 |  Ben |  May 27th, 2009 at 9:50 am

   The good news is that it is not too late. There is time to wake up, to make a mid-course correction, to get back on track.

   Thanks, but I’ll just take the job herding autistic cats.

   The amount of leadership it would take to make a ‘mid-course correction’ makes this an impossible dream. We just don’t have the leadership to make it happen.

3. #3 |  Damnthatde |  May 27th, 2009 at 9:56 am

   wow, speechless. that is just incredible

4. #4 |  Kieffer |  May 27th, 2009 at 10:07 am

   Do we really need an economist to tell us why this isn’t sustainable? Anyone with more than a first graders concept of money can tell you why it isn’t sustainable!

5. #5 |  Mattocracy |  May 27th, 2009 at 10:15 am

   Ben,

   You’re correct. Democrats obviously don’t care, and the GOP is too concerned with hating gays and domestic spying to actually care about things that really matter. Libertarians always find a piss poor excuse not to vote libertarian. It’s mighty depressing out there.

6. #6 |  Nando |  May 27th, 2009 at 10:35 am

   Have you seen how high household debt is as a percentage of GDP?

   http://www.economagic.com/em-cgi/data.exe/var/togdp-householdsectordebt

   This chart only starts at 1952, but in 1927 the percentage was just around 100% (just like it was in Q4 2007). both right before depressions/recessions hit.

7. #7 |  Zargon |  May 27th, 2009 at 10:41 am

   I wouldn’t go so far as to say collapse is a good thing. I mean, some people will lose everything they own. Some people will die, of starvation & exposure.

   That said, there’s really no other way for the ponzi scheme to end. Wishing for the political process to correct the problem is silly, because the political process only has very short term incentives. The best thing to do at this stage is probably to educate others, because if enough people who are around understand the real causes of the collapse when it happens (and there will no doubt be a lot of BS), less people will die, and there might be a chance of not simply hitting reset on a failed system.

8. #8 |  Tokin42 |  May 27th, 2009 at 11:01 am

   FTA:

   “We inherited this mess.” The debt was 41 per cent of GDP at the end of 1988, President Ronald Reagan’s last year in office, the same as at the end of 2008, President George W. Bush’s last year in office. If one thinks policies from Reagan to Bush were mistakes does it make any sense to double down on those mistakes, as with the 80 per cent debt-to-GDP level projected when Mr Obama leaves office?

   I keep waiting for someone in the press, anyone, to ask that very simple question. If the spending during the last administration was horrific explain how spending 4x that amount will bring us out of debt.

9. #9 |  phil |  May 27th, 2009 at 11:10 am

   He’s a respected economist, but his arguments only makes sense if you don’t understand compounding, and you assume that exchange rates have nothing to do with relative inflation rates. If you assume that inflation here will be 10% and in europe it will be zero, then yeah, the dollar will fall 50% in value against the euro. That doesn’t seem likely.

   Also, it doesn’t take 10 years at 10% to double revenues. It’s 7%. But, otherwise, he is absolutely correct.

10. #10 |  Dave Krueger |  May 27th, 2009 at 11:45 am

    #5 Mattocracy

    …Democrats obviously don’t care, and the GOP is too concerned with hating gays and domestic spying…

    Wait. The GOP is concerned with domestic spying? Oh, you mean since the Democrats took over.

11. #11 |  Mattocracy |  May 27th, 2009 at 11:55 am

    @ Dave,

    I suppose I should have made that a little more clear. Their concern is being able to continue the practice of it, not repealing it.

    And yeah, I’m sure there is going to be a lot talk of “only we can be trusted to spy effectively for terrorists and not the opposition” in the very near future.

12. #12 |  Dave Krueger |  May 27th, 2009 at 12:18 pm

    I think the time for the mid-course correction occurred back during the Roosevelt administration. In any case, something like putting the government back into the realm of fiscal responsibility would require someone with integrity and testicular fortitude which, by definition, excludes Congress and the White House.

13. #13 |  Dave Krueger |  May 27th, 2009 at 12:41 pm

    #11 Mattocracy
    Their concern is being able to continue the practice of it, not repealing it.

    Ah-ha! Sorry for the misinterpretation and thanks for the correction.

14. #14 |  Brandon Bowers |  May 27th, 2009 at 12:42 pm

    I’m curious. Anyone here think Sanford would have the stones to actually try to fix this?

15. #15 |  BamBam |  May 27th, 2009 at 2:29 pm

    simply hitting reset on a failed system

    How about hitting reset on a failed race (human)?

16. #16 |  Ben |  May 27th, 2009 at 3:23 pm

    How about hitting reset on a failed race (human)?

    Sadly, up until about 10k years ago, we knew exactly how to live.

17. #17 |  Boyd Durkin |  May 27th, 2009 at 4:07 pm

    Bring on the VAT! Invisible to consumers so voters won’t see it everyday (except in prices). Congress is falling in love with it as we speak…on their journey to be just like a European country.

    God forbids us to lower spending, Yee Haw!

    Massive increase in the taxes everyone pays. YCMTSU.

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