[Roy Fokker]

Hi Space,

This debt will directly affect me and indirectly affect my children and their children.

I see no one else talking about it. No one else seems bothered. I can't imagine why - a currency devaluation because of insurmountable debt will make the hardships of the Weimar Republic seem like a comic tale.

Do you want to pay for a loaf of bread with $5 million or more?
Neither do I.

But that is what is going to happen because public knowledge and awareness of our train-wreck deficit is abysmally low.

The official national debt figure, now approaching $9 trillion, reflects only what the federal government owes in current debts on money already borrowed. It does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at roughly fifty trillion dollars – a staggering sum that is about as large as the total household net worth of the entire United States. Your share of this fifty trillion amounts to about $175,000.

Don’t believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare alone. The only options for balancing the budget would be cutting total federal spending by about 60%, or doubling federal taxes. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.

Ron Paul nails it again

[sanctuary]

I weep for our children, their children unto the end of time. This is indeed the end of the USA economic powerhouse. And we don't even have the great ruins that the Romans had.. Unless we count the freeways. Someday, people will wonder why there needed to be 4, 6, and 8 lanes for traffic. I'm grieved to the marrow of my soul. The nation we grew up in is dying, if not already dead.

[Roy Fokker]

This segment was originally broadcast on March 4, 2007. It was updated on July 8, 2007.

When the stock market soars or plunges, everyone pays attention. But short term results aren't that important to the man you're about to meet. David Walker thinks the biggest economic peril facing the nation is being ignored, and for nearly two years now he has been traveling the country like an Old Testament prophet, urging people to wake up before its too late. Who is David Walker and why should we care?

As correspondent Steve Kroft first reported earlier this year, he is the nation's top accountant, the comptroller general of the United States. He's totaled up our government's income, liabilities, and future obligations and concluded that our current standard of living is unsustainable unless some drastic action is taken. And he's not alone. It's been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.


"I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility," Walker tells Kroft.

David Walker is a prudent man and a highly respected public official. As comptroller general of the United States he runs he Government Accountability Office, the GAO, which audits the government's books and serves as the investigative arm of the U.S. Congress. He has more than 3,000 employees, a budget of a half a billion dollars, and a message he considers urgent.

"I'm going to show you some numbers…they’re all big and they’re all bad," he says.

So bad, that Walker has given up on elected officials and taken his message directly to taxpayers and opinion makers, hoping to shape the debate in the next presidential election.

"You know the American people, I tell you, they are absolutely starved for two things: the truth, and leadership," Walker says.

He calls it a fiscal wake up tour, and he is telling civic groups, university forums and newspaper editorial boards that the U.S. has spent, promised, and borrowed itself into such a deep hole it will be unable to climb out if it doesn’t act now. As Walker sees it, the survival of the republic is at stake.

"What’s going on right now is we’re spending more money than we make…we’re charging it to credit card…and expecting our grandchildren to pay for it. And that’s absolutely outrageous," he told the editorial board of the Seattle Post Intelligencer.

You have heard this before, from Ross Perot 15 years ago. You might have even thought the problem had been solved, when President Clinton announced, "Tonight, I come before you to announce that the federal deficit … will be simply zero."

"Well, those days are gone. We've gone from surpluses to huge deficits and our long range situation is much worse," Walker says.

"President Bush would argue that the economy is in pretty good shape, unemployment is down, the deficit is actually less than expected," Kroft remarks.

"The fact is, is that we don't face an immediate crisis. And, so people say, 'What's the problem?' The answer is, we suffer from a fiscal cancer. It is growing within us. And if we do not treat it, it could have catastrophic consequences for our country," Walker replies.

Full article

How many people are talking about the deficit? How many folks in "leadership" positions have done anything about it? How many have plans to do anything about it?

The train-wreck is getting bigger by the second.
Not by the month. Not by the day.

By the second....

cheers,

[multicollinearity]

Originally Posted by Roy Fokker

How many people are talking about the deficit? How many folks in "leadership" positions have done anything about it? How many have plans to do anything about it?

I have plans. I'm working on my immigration to Canada. At least the Canadians are reducing their debt. The future looks bright in Canada. Can't say that about the US.

[CHATSDALE]

what would univrsal health care add to this mix
john edwards wants to double income tax but how many of fixed income taypayers could survive this
could we call in the debts that we have spread accross the globe...fat chance
question is which way do we jump..it there going to inflation or a depression, do we invest enough for a rainy day or do we buy gold and stick it in our mattress
is the market going to make another surge in the 1400 and beyond..should we sell before the bottom falls out
will we work all our lives and then find out when we are old and sick that we will hve to live on raimen noodles
i think i will invest all my money in the raimen noodle market

[pickledpepperRN]

I can't find where John Edwards wants to double the tax rate: http://johnedwards.com/issues/tax-reform/

Responding to criticism from Republican presidential candidate Rudy Giuliani, John Edwards answers a question about his capital gains tax proposal in Dover, N.H. on July 28, 2007. : http://johnedwards.com/media/video/d...capital-gains/

[Roy Fokker]

Originally Posted by CHATSDALE

could we call in the debts that we have spread accross the globe...fat chance

What debts "spread across the globe" ? The US is the largest debtor nation in the world - we owe far, far, far more than we give out in credit!

Originally Posted by CHATSDALE

question is which way do we jump..it there going to inflation or a depression

What makes you think we have a choice?

You guys know what a 'Promisary note' is, right?

"What is a promisary note?", you ask? Well, every Federal Government Dollar Bill is a promisary note - it is a promise to the person who buys the dollar bill that s/he owns a part of the US (literally) in return for purchasing that note.

Yes, ladies and gents - for every single dollar bill in circulation... be it a $1 or a $100 --- it is akin to a "loan". Every dollar bill (and assets in dollars that you carry) essentially say the same thing: "I promise to pay the bearer (of this note) the sum of X dollars" (where X = amount listed on the dollar bill).

Used to be that back in the day, back when the currency was backed by gold/silver (as listed by the Constitution of the US), you could take your "dollar bill stash" to the bank and have them convert it to real gold/silver.

That was the simplest, essential "demonstration" of the "Gold Standard". Granted the old "Gold Standard" has many faults - but the principle it was based on was very sound... and given a scenario today of "hard assests" - it WILL work!

The principle being? "Paper money is just a substitute for REAL FIXED assets (read: "money").

Please allow me to quote an old post from this very thread:

One doesn't have to be an economist to understand this.

A promisory note must have something of value to back it up - simply stamping $100 on a piece of paper does NOT make that piece of paper worth a hundred dollars! Without something of value to back it up, it is nothing more than expensive toilet paper!

Our current system rests on the assumption that the value of the dollar will not depreciate - and this in turn requires that there be a constant consumption/buying of dollars in the market. In other words, there must be constant demand.

What happens when the demand dries up? For example, what if the Chinese decide to sell dollars and stock on Euros because of more profitable exchange rates for them? This will cause the value of the dollar to plummet - because now there are too many dolalrs and not enough buyers.

What does this mean for you and I? If you had a wad of $100 bills, 100 notes thick... that entire wad is now not worth $100,000 but say it's worth half that much.... Now if that wern't bad enough (that your net worth just halved), factor in inflation and debt and you're in a nightmare!

One way to avoid this, is to keep printing more money. Kinda like this for example - you want to buy something worth $100, but you only have 5 $10 notes. So you go home and print another 5 $10 notes. End of problem, right?

Not really. See, money can't come out of nothing. Currency is essential a medium of transfer of value - a very highly streamlined "barter" system. Currency by itself has no value! In other words - currency only represents something of value.

So just printing more money only devalues it and consequently your own worth - because you don't have anything of value/worth if someone were to come in and cash those notes that you just printed! Remember, you don't produce or make anything, you simply printed currency!

How long do you think this is going to last? Less than 2 years ago, our deficit was a "mere" 7 trillion dollars. As of today, that number has gone over 8 trillion! Each citizen has $27,000+ to share as poart of this debt!

Do you have 30 grand to spare? Or do you want to tell your kids and grandkids that they will have to pay this 30 grand that you spent out of their pocket?

Link

Remember - your "paper dollars" by themselves have no values... like the article said .... "simply stamping $100 on a piece of paper doesn't make that piece of paper worth $100".

"Currency" is a "mode of exchange".

Ancient man, found a better way to "barter" things.
Instead of saying "2 chickens = 1/2 lbs of bread"; ancient man began deciding on a medium of "exchange".

"You give me 2 pieces of "precious stone" for 2 ducks"
"Deal!"

Slowly, that system evolved. Rather than carry his 50 pieces of "precious stone" around with him, an ancient men came up with the idea of a "Bank". He said:
"Give me your precious stone and I'll issue 'certificates' in their name". In other words? Give me your precious metal and I shall issue a "Promisary note" in your name saying "The Bearer has X amount stored with me".

Thus was born - "currency". In the old days, it worked on the principle of "coins".... today it works with paper and electronic credit.

But the principle is still the age old: "Currency = means of bartering".

Now, that post that I quoted? I made that post back in 2005 - two years ago. Our financial conditions have worsened far beyond what I expected back then. That "Do you have 30 grand to spare? Or do you want to tell your kids and grandkids that they will have to pay this 30 grand that you spent out of their pocket?" statement I made then ... is a joke today. Your kids and grandkids owe far more than that today. Far, far, far more than that.

Originally Posted by CHATSDALE

do we invest enough for a rainy day or do we buy gold and stick it in our mattress. is the market going to make another surge in the 1400 and beyond..should we sell before the bottom falls out
will we work all our lives and then find out when we are old and sick that we will hve to live on raimen noodles
i think i will invest all my money in the raimen noodle market

I would advise a shift towards "Hard currency" at the earliest possible. Keeping a good sum of your assets in non-negotiable and soft negotiable properties is good advice.

PERSONALLY:
If I were you, I would invest in "hard assets".
The dollar is going to flounder---- and then it is going to crash.
In the next 20 years, we are going to see cataclysmic change in the US financial markets that is going to make the "Great Depression" seem like a tea party.....


....... unless we can get some kind of 'sensible' government in Congress and the White House - governence that seem to understand the markets and financial stability.


cheer,
Roy

[CHATSDALE]

when i said that we should call in our markers i meant the billions we gave to rebuilding europe and asia after ww2, every time one of those countries wanted something uncle sap as represented by any of the pol parties would coming with the money and when we needed someone to watch our back we would get a mob of jeering nuts
if we had gone the isolationists route we would not have the money problems we have now
and john edwards definitely did say that the amount of taxes to support the health programs that he has envisioned would run about 40% which is roughly half of the working class average tax

[pickledpepperRN]

40% of what?

I didn't hear it and can't find it written.

[CHATSDALE]

it was in a debate, the average income tax rate at this time is 17% of income, some less some more
but he is estimating that to provide monies for universal health coverage the rate would have to rise to 40%