If im not mistaken, the American debt reached 15 trillion dollars yesterday, and is now 100% of your GDP.
What do you Americans think of this?
(Im not setting out to bash other countries for their politics and economy, just want to hear what the average joe has to say.)
I'm in NZ, our exchange rate is fairly high, and while that is good for ME personally (Cheaper HoN coins.. XD) it's putting our country in a worse off state.
Granted we're not TOOO dependant on America, moreso China/Australia etc as they make up a significantly larger share of our exports, it still impacts us.
All I know of is that Greece is screwing up some things in here D:
Well, the PIGS (Portugal, Ireland, Greece, Spain) are in deep ****.. As well as Italy, which is the fourth largest economy in Europe. A sticky situation indeed.
And on the other side of the Atlantic, America - the worlds only superpower, borrows 30 billion dollars every day so they can let the wheels spin.. Any Americans that got any insight on what the different presidential candidates are proposing towards the economy question? As an outsider, I kinda like Ron Paul :P
Pls dont look at debt alone, you always have to look at it in a perspective. Greece for example always had a much lower debt per capita, but was much worse off. Similair Japan always had enourmes debts but still pretty good ratings.
What is important is how a country tries to improve and how you would predict future development. When people look to close at just debt numbers this superficial thinking often just leads to bad decisions in the long run.
You also have to look at how much a country is investing and what services are private or state owned. (A reaction to high debt numbers you often see on a local level is to privatice watersupply, electricity, waste,... while this immidiatly lowers the debt it often hurts in the long run. )
This means that a lower credit rating or economic growth are way more important then the actual debt. Dont get me wrong the debt is important and a major problem, but there are also alot of other factors that are even more important. You could even argue that it could be wise to increase the debt even more in order to boost the economy. (Germany did this during the crisis, by investing alot in saving jobs by subsidising part-time labour and car purchase)
This means that you cant always say it became worse when the debt is increasing. (In this case it became worse)
True that. Japan for example have a debt which is 220% of GDP... BUT they have production to back it up.. Electronics, auto industry etc..
The US problem is they really dont have the production base anymore.. Most of the industry was moved or outsourced abroad. Sure they got a auto industry, but lets get real - the cars are not that great.. The US economy is mostly based on consumption, and over half of us jobs are in the service industry, which doesnt produce or create anything. And then the financial sector.. Its HUGE, but again, doesnt create anything.
The scary thing about this debt, is that it is in dollars, which is the most common currency for countries to have in reserve.. IF they cant repay the debt, the FED might run their printing presses to the extreme, and further devaluate the dollar.. If countries dump their dollar reserves, the market will be flooded with dollars, devaluating it further, alas inflation..
On top of that, the future liabilities of the US (Social Security, and Healthcare), especially MediCare and MedicAid adds another 40 trillion dollars that the US government has promised their people in the future.. So in the long run, total debt of the US is close to 55 trillion dollars. And that is a SCARY ammount of money! :S
Last edited by AdventureMan; 11-24-2011 at 05:58 AM.
NZ is currently in a bit of debt, not much, but a fair amount.
Our National government, if they get into power, is going to sell off our state owned assers (Air NZ, other stuff like that). I know many people who are against it... me included. I think there could be other ways to reduce our debt levels, while STILL maintaining dominant ownership of these assets. When our debt is gone, these assets will provide much more significant income in the long run, rather than just flogging them to pay off debt, and then receiving a significant cut of the previous income.
I'm scared with how the world is now, like, it could kind of go anywhere :S
More worried about EU than America though, lol.
@ RSS: I guess people in western nations are scared in general.. In my country, Norway (Yeah im not Polish, flag only for "ingame purposes".), the general impression is: we are the best country to live in, we are somehow immune to what happens in the world.. During the crunch in 08, we didnt notice any change at all, BUT; we have debt aswell, although the media has NEVER mentioned it, and just recently, the prime minister stressed that if the situation in the EU deteriorates even further, it will have a great impact on us aswell..
For anyone whos interested, check this out.. Its called "Overdose: The next financial crisis". A swedish documentary (dont worry, its in english) from 2009, explaining what is going to happen IF the governments are going to use stimulus packages. Which they did.
Alot of goodies from Gerald Celente, a quite eccentric, but brilliant trend analysist, and Dr.Doom - Peter Schiff, who has forecasted every single of the current, and previous financial meltdowns..
15 trillion + the costs of MediCare, MediCaid and Social Security. The retirement of the "babyboomers" is on the horizon, and with the benefits the government has promised them, the actual debt in the long run is closer to 55 trillion dollars.
Former Comptroller General David Walker made a video explaining that in 20 or so years, the costs of MediCare and MedicAid alone will demand 40% of the US GDP...
Now that is unsustainable policy..
In 20 years most of the US will speak spanish or portuguese and most of the EU... damm phrase does not work because we speak different anyway.
I guess we are all dependant on immigration.. In Norway, we will require 10 000+ additional nurses/caretakers to take care of the babyboomers.
Hey, im for immigration, as long as they are willing to integrate into the culture and speak the language.
But that is a different discussion :P
That being said, the Republicans are running out of candidates. Cain's sex scandal ruined his chances, Perry trying to actually talk policy and showing that he doesn't have a clue ruined his chances and Romney is their backup candidate, but if he gets the nomination he's going to lose to Obama. The only chance Ron Paul has right now is if Romeny somehow screws up royally.
its going to be some major penny pinching in the future.
interesting to see how this plays out
i feel like debt is an unavoidable fate right now