Bankruptcy for the United States?

Discussion in 'Political Discussions' started by Randell1234, Mar 23, 2009.

  1. Randell1234

    Randell1234 Moderator Staff Member

    Here is an interesting article.

    ...Republicans say Obama's budget is no laughing matter.

    Senate Republicans warned of deficits that could climb to $20 trillion in coming years and a weakened dollar if Obama and his Democratic allies get their proposed $3.6 trillion budget plan passed.

    "The practical implications of this is bankruptcy for the United States," said Sen. Judd Gregg, R-N.H. "There's no other way around it. If we maintain the proposals which are in this budget over the 10-year period that this budget covers, this country will go bankrupt. People will not buy our debt; our dollar will become devalued."

    Sen. Susan Collins, a Maine Republican who sided with Obama on his $787 billion economic stimulus plan, said she couldn't support the White House plan this time.

    This is the time for change...right? :eek:
  2. airtorn

    airtorn Moderator Staff Member

    Yep - Hope for it.
  3. Ian Anderson

    Ian Anderson Active Member

    For comparison the last pre-Obama presidential budget request was for $3.1 trillion not including the Iraq/Afganistan war costs.
  4. Go_Fishy

    Go_Fishy New Member

    Incidentally, the last budget plan was not battling a major recession...;)
  5. BillDayson

    BillDayson New Member

    Can countries go bankrupt? Unlike corporations, they can just print more money if they want to.

    So the analogous situation in a nation might be currency collapse, I guess. That's my worry, that in a few years the United States (and perhaps the world) will be experiencing hyper-inflation.

    I guess that the counter-argument is that the tremendous declines in the securities and real-estate markets have already caused huge amounts of wealth to simply evaporate. So money is essentially being un-printed at a tremendous rate which raises the danger of deflation and requires governments to re-inflate with cash injections.

    If the economy fails to robustly respond, then we might be in for the mother of all stag-flation. (Hello, Zimbabwe.) We might be seeing bread-lines and tens of millions of more homeless before too long. Coming at the same time that the huge baby-boomer cohort is hitting retirement age, things could turn very ugly as the US starts rapidly spiraling towards third-world living standards.

    If the economy does respond to the monetary reflation and does recover, we still might find ourselves at a huge competitive disadvantage if that recovery was funded by selling vast amounts of bonds whose debt service becomes the biggest part of our yearly national budget. Our federal budget will join our obscene trade deficits in funding the rise of China.

    I'm not really sure that I would condemn the Obama administration's plan. (Do they have a plan?) They are doing what any politicians in their situation would do, I guess, trying to reflate the economy while spreading spoils to their supporters and pet causes.

    But I sense that we are all in very dangerous territory right now that could change the entire course of world history. I feel like an ancient Roman in the first decade of the 400s CE might have felt, sitting in his comfortable peristyle on a warm autumn day, and worrying about disquieting reports of wholesale collapse along the distant Rhine and Danube frontiers.

    I'm not an economist, in act I'm probably the only DI participant who isn't a business administration student. So I'm just a layman talkin'. But I worry sometimes...
  6. bmills072200

    bmills072200 New Member

    I would say that your assessment is almost dead on. The credit rating of the United States will likely be downgraded pretty significantly in the next 2-3 years, if not sooner, and the funding that we need will no longer available. Let's just hope that WHEN that does happen, level-heads do prevail and our leaders do not choose to go on a money-printing spree. Tough choices will have to be made, programs will have to be cut and people will be hurt, but it will have to be done. I just wish that they would do the cutting now and not wait until it is forced.

    I equate it to a young college student that maxes out the credit limit and then calls the credit card company and asks that they increase the limit, and they do because he has been making the payments and he seems to be a pretty good risk. But then he keeps on spending and the next limit is reached and it looks like his grades are faltering and he may not even graduate. So the credit card company decides that the risk is not worth it anymore shuts him off. It would have been wise that the first time that the college student reached the limit for him to learn from that and decided to curb his spending and start paying off the debt, but instead he just kept spending, assuming that the credit would always be there.
  7. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member Staff Member

    The last budget plan was battling a major recession; it's just that those who were the powers that be at the time chose not to acknowledge such.
  8. me again

    me again Well-Known Member

    This has been coming for many years, but now people are seeing it and feeling it. Dorothy, we're not in Kansas anymore! :eek:

    An economic collapse of the United States economy will invariably lead to a global economic collapse, which will necessitate a replacement-global-economic-system that electronically integrates all nations, with a concurrent abandoning of all traditional sovereign currencies. Of course, a global economic collapse could also lead to war on various fronts.
  9. bmills072200

    bmills072200 New Member

    Your post made me think of Revelation... I don't know if that was your intent... but it sounds a lot like the biblical prophecy of the end times...
  10. bmills072200

    bmills072200 New Member

    Actually no one officially acknowledged a true recession, meaning negative GDP for 2 concecutive quarters, until late 2008...
  11. me again

    me again Well-Known Member

    There will come a time when everyone will have to be connected to the new global economic system to buy or sell, once it's fully implemented. Prior to that time, events will continue to unfold to eventually lead up to it. Similarly, in the time of Jesus, no one recognized that He was the Messiah; and today, many people still don't believe that He rose from the dead or that He's coming again to judge the living and the dead. When the mark of the beast is implemented, the world (that's most people) won't understand the eternal implications of receiving the mark, whatever it might be. These are strange and historical times that we live in!
  12. Randell1234

    Randell1234 Moderator Staff Member

    Well, maybe it will all be over soon. :rolleyes:
  13. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    When the Rapture happens, can I have your car? ;)

  14. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member Staff Member

    Yes, they can. Spain went bankrupt several times during the sixteenth century even while they had all that looted gold coming in from Latin America.
  15. cumpa

    cumpa New Member

    I've always viewed myself as conservative on most issues. That being said the damage the Bush administration did to our economy is unbelievable. How can you fight two wars and lower taxes. I hate paying taxes as much as the next guy but I just don't buy the arguement that taxes can never go up or the economy will be destroyed. On top of the two wars President Bush and Congress created a new entitlement program through the Medicare drug benefit without paying for it. Bush was no fiscal conservative that's for sure. I don't agree with President Obama's plans either especially cap and trade it's foolish to say you are giving 95 percent a tax cut when the cost of energy is going to go through the roof, which will have a very negative impact on our economy. Cap and trade will kill our economy since our competitors (China and India to name two) won't be under the same rules. The government won't go bankrupt since it has the power to tax but we probably all will have a much lower standard of living due to the foolishness of our elected leaders.
    Last edited by a moderator: Mar 24, 2009
  16. me again

    me again Well-Known Member

    It's ironic that the Mayan Indians ended their calendar in December of 2012. If you're suggesting that the economy will fully collapse at that time, then that's an interesting theory. LOL ;) It sounds about the right time-frame for a total global economic meltdown though. :eek:
    LOL -- That's a good chuckle! In Christian theology, there are three rapture theories:

    1. Christians will be in the world until the return of Christ, whereupon upon His return, all of His believers will be caught up to be with Him forever. The term caught up is referred to as the rapture, which means glorious.

    2. Christians will be in the world until 3.5 years before the return of Christ, whereupon upon He will catch away His people to be with Him forever.

    3. Christians will be in the world until 7 years before the return of Christ, whereupon upon He will catch away His people to be with Him forever.
  17. chasisaac

    chasisaac Member

    you forgot number 4. It has already happened.
  18. chasisaac

    chasisaac Member

    The reality of the Bush admin is this:
    1. He is NOT a conservative in any way. He was more conservative then Gore or Kerry.
    2. Conservatives do not increase fed spending like a drunk monkey.
    3. The Bush tax decreases, lead to an overall increase in federal revenues from tax years 2003-2008 (2002-2007). The 9/11 had a little blip in there at the start. Also the made up recession stating in 08 (this is different then the govt induced housing problems starting in sept) cost a lot of money and problems.
    4. Fighting wars is (and has always been) an expensive proposition.
  19. thomaskolter

    thomaskolter New Member

    I watched FRONTLINE in PBS (united states public broadcasting service for the foreigners here) and they had a great program on the National Debt. Under Obama by the time his terms are over it will likely DOUBLE the debt to over $22 trillion. We can't do that and survive as a nation.

    As for Bush Jr. I'm sorry but he cut taxes and didn't see a spending bill he didn't like, started two wars and didn't give a damned how it all would be paid. They should bring back "Pay Go" it seemed to work and simply demanded any new spending be paid for as you went. Of course we also need to bring in more money than we spend to pay some of the debt off just like I or you or any business would have to at some point.
  20. cumpa

    cumpa New Member

    Federal revenue may have increased due to economic growth but I think connecting that to the Bush tax cuts is debateable. I'm all for tax decreases if they are paid for with cuts in spending. I think the government needs to spend money on things like infrastructure and quit wasting it on entitlements and cold war weapons systems.

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