Is the US in denial over its $14tn debt?

Jeanwah

By Justin Webb BBC News

Is America in denial about the extent of its financial problems, and therefore incapable of dealing with the gravest crisis the country has ever faced?

This is a story of debt, delusion and - potentially - disaster. For America and, if you happen to think that American influence is broadly a good thing, for the world.

The debt and the delusion are both all-American: $14 trillion (£8.75tn) of debt has been amassed and there is no cogent plan to reduce it.

More at: http://www.bbc.co.uk/news/world-13906274

Jokertt14

they must be

they only thing i wonder is :

do dept collectors call them all day ??

usamamasan1

Obama set to bankrupt America

pjhawks

usamamasan1 wrote:

Obama set to bankrupt America

you forgot AND republican controlled congress set to bankrupt America. republicans rather bankrupt the country than take some money away from the corporations and richest of the rich. it really is a combination of the two, not just Obama and not just the republicans.

blackredyellow

pjhawks wrote:

usamamasan1 wrote:

Obama set to bankrupt America

you forgot AND republican controlled congress set to bankrupt America. republicans rather bankrupt the country than take some money away from the corporations and richest of the rich. it really is a combination of the two, not just Obama and not just the republicans.

But it's so much easier to just blame the other side


As far as politics go, it's a no win situation for either side.

If Obama and the Dems cut federal spending like the Republicans want, then the economy goes back on a downturn and he/they take the blame for that. "Hey, we cut federal spending by 10%, but now hundereds of thousands of more people are out of work, and a countless of companies that supply our federal government just went under..."

Come to think of it, that's like a win-win for Republicans... spending would go down, a bunch of dems would get voted out because of the economic aftermath, then the Republicans can get back in power and run things into the ground again, all he while taking care of their buddies.


If the Republicans raise the debt ceiling and we keep spending money like the Dems seem to want to do, then we get further and further in debt, and the hole gets deeper.

Electric_Delta

We're in for another Depression at this point, so it really doesn't matter. Stock up on the essentials now.

know1

I'm not in denial about it, but our politicians seem to refuse to do anything about it.

usamamasan1

Electric_Delta wrote:

We're in for another Depression at this point, so it really doesn't matter. Stock up on the essentials now.

I did that before the last Presidential election.

Moonpig

usamamasan1 wrote:

Electric_Delta wrote:

We're in for another Depression at this point, so it really doesn't matter. Stock up on the essentials now.

I did that before the last Presidential election.

funny that, you strike me as the type and all.

Jeanwah

Rest of article; a graph and classic picture of Tea Partiers found on website.

Mr Haass, a former senior US diplomat, is leading an academic push for America's debt to be taken seriously by Americans and noticed as well by the rest of the world.

He uses the analogy of Suez and the pressure that was put on the UK by the US to withdraw from that adventure. The pressure was not, of course, military. It was economic.

Britain needed US economic help. In the future, if China chooses to flex its muscles abroad, it may not be Chinese admirals who pose the real threat, Mr Haass tells us. "Chinese bankers could do the job."

Because of course Chinese bankers, if they withdrew their support for the US economy and their willingness to finance America's spending, could have an almost overnight impact on every American life, forcing interest rates to sky high levels and torpedoing the world's largest economy.

Not everyone accepts the debt-as-disaster thesis.

David Frum is a Republican intellectual and a former speech writer to President George W Bush.

He told me the problem, and the solution, were actually rather simple: "If I tell you you have a disease that will absolutely prostrate you and it could be prevented by taking a couple of aspirin and going for a walk, well I guess the situation isn't apocalyptic is it?

"The things that America has to do to put its fiscal house in order are not anywhere near as extreme as what Europe has to do. The debt is not a financial problem, it is a political problem."

Mr Frum believes that a future agreement to cut spending - he thinks America spends much too big a proportion of its GDP on health - and raise taxes, could very quickly bring the debt problem down to the level of quotidian normality.
'Organised hypocrisy'

I am not so sure. What is the root cause of America's failure to get to grips with its debt? It can be argued that the problem is not really economic or even political; it is a cultural inability to face up to hard choices, even to acknowledge that the choices are there.

I should make it clear that my reporting of the United States, in the years I was based there for the BBC, was governed by a sense that too much foreign media coverage of America is negative and jaundiced.

The nation is staggeringly successful and gloriously attractive. But it is also deeply dysfunctional in some respects.

Take Alaska. The author and serious student of America, Anne Applebaum makes the point that, as she puts it, "Alaska is a myth!"

People who live in Alaska - and people who aspire to live in Alaska - imagine it is the last frontier, she says, "the place where rugged individuals go out and dig for oil and shoot caribou, and make money the way people did 100 years ago".

But in reality, Alaska is the most heavily subsidised state in the union. There is more social spending in Alaska than anywhere else.

To make it a place where decent lives can be lived, there is a huge transfer of money to Alaska from the US federal government which means of course from taxpayers in New York and Los Angeles and other places where less rugged folk live. Alaska is an organised hypocrisy.

Too many Americans behave like the Alaskans: they think of themselves as rugged individualists in no need of state help, but they take the money anyway in health care and pensions and all the other areas of American life where the federal government spends its cash.

The Tea Party movement talks of cuts in spending but when it comes to it, Americans always seem to be talking about cuts in spending that affect someone else, not them - and taxes that are levied on others too.

And nobody talks about raising taxes. Jeffrey Sachs has a theory about why this is.

America's two main political parties are so desperate to raise money for the nation's constant elections - remember the House of Representatives is elected every two years - that they can do nothing that upsets wealthy people and wealthy companies.

So they cannot touch taxes.

In all honesty, I am torn about the conclusions to be drawn. I find it difficult to believe that a nation historically so nimble and clever and open could succumb to disaster in this way.

But America, as well as being a place of hard work and ingenuity, is also no stranger to eating competitions in which gluttony is celebrated, and willful ignorance, for instance regarding (as many Americans do) evolution as controversial.

The debt crisis is a fascinating crisis because it is about so much more than money. It is a test of a culture.

It is about waking up, as the Americans say, and smelling the coffee. And - I am thinking Texas here - saddling up too, and riding out with purpose.

blackredyellow

Jeanwah wrote:

Rest of article; a graph and classic picture of Tea Partiers found on website.

What is the root cause of America's failure to get to grips with its debt? It can be argued that the problem is not really economic or even political; it is a cultural inability to face up to hard choices, even to acknowledge that the choices are there.

While there you go right there... and that goes to the politicians too. To fix this mess, we need long-term change in how our gov't works. And not one elected official that I can remember in my life cared about long-term fixes for anything. The longest they look ahead is to the next elections cycle.

Long-term fixes usually involve short-term pain... and as long as our elected officials know that short-term pain will probably get them kicked out of office, they really don't have any interest in it.

LikeAnOcean

At what point does the shit hit the fan?

$15tn? $16tn?...$20tn?????


And who is going to be throwing the shit?


We owe the money, but at what point is who ever we owe it to going to say, hand it all over now? And why didn't they do it a long time ago, I mean, we've come this far. What's the breaking point?

Go Beavers

blackredyellow wrote:

pjhawks wrote:

usamamasan1 wrote:

Obama set to bankrupt America

you forgot AND republican controlled congress set to bankrupt America. republicans rather bankrupt the country than take some money away from the corporations and richest of the rich. it really is a combination of the two, not just Obama and not just the republicans.

But it's so much easier to just blame the other side


As far as politics go, it's a no win situation for either side.

If Obama and the Dems cut federal spending like the Republicans want, then the economy goes back on a downturn and he/they take the blame for that. "Hey, we cut federal spending by 10%, but now hundereds of thousands of more people are out of work, and a countless of companies that supply our federal government just went under..."

Come to think of it, that's like a win-win for Republicans... spending would go down, a bunch of dems would get voted out because of the economic aftermath, then the Republicans can get back in power and run things into the ground again, all he while taking care of their buddies.


If the Republicans raise the debt ceiling and we keep spending money like the Dems seem to want to do, then we get further and further in debt, and the hole gets deeper.

This column by Brooks talks about how if the Republicans don't flex, it'll be a win for Dems. It seems like the consensus is that Dems are coming across as flexible on the budget. Brooks also gets some good zingers in on the Republican party:

http://www.nytimes.com/2011/07/05/opinion/05brooks.html?partner=rss&emc=rss

Jeanwah

blackredyellow wrote:

Jeanwah wrote:

Rest of article; a graph and classic picture of Tea Partiers found on website.

What is the root cause of America's failure to get to grips with its debt? It can be argued that the problem is not really economic or even political; it is a cultural inability to face up to hard choices, even to acknowledge that the choices are there.

While there you go right there... and that goes to the politicians too. To fix this mess, we need long-term change in how our gov't works. And not one elected official that I can remember in my life cared about long-term fixes for anything. The longest they look ahead is to the next elections cycle.

Long-term fixes usually involve short-term pain... and as long as our elected officials know that short-term pain will probably get them kicked out of office, they really don't have any interest in it.

You're right and it's sad that the people who are supposed to lead the country are too focused on their careers than the outcome of the country.

However, state governors (at least NYS) are doing what's necessary to save bankrupt states. Major cuts, huge layoffs, all which focus on long term. At least it's starting somewhere, regardless of whether the people hate them or not.

unsung

You guys worry too much, they just need to print more money. :roll: