Bankruptcy could be good for America

[katty]

more: http://www.ft.com/cms/s/0/a8486284-fee9-11de-a677-00144feab49a.html

In Winnie-the-Pooh, there is a significant moment when the bear is asked whether he wants honey or condensed milk with his bread. He replies “both”. You can get away with this sort of thing if you are a much loved character in children’s literature. But it is more problematic when great nations start behaving in a childish fashion. When Americans are asked what they want – lower taxes, more lavish social spending or the world’s best-funded military machine – their collective answer tends to be “all of the above”.

The result is that the US is piling up debt. A budget deficit of about 12 per cent of gross domestic product is understandable as a short-term reaction to a huge financial crisis. What should worry Americans is that, with entitlement spending set to surge, there is no credible plan to bring the budget deficit under control over the medium term.

The US has formidable strengths that will allow its government to be profligate for far longer than other nations could get away with. But if the US keeps running huge deficits, sooner or later the country will start flirting with bankruptcy. Oddly, it might be best if the crisis came sooner rather than later. For a surprising number of countries, running out of money has been the prelude to national renewal.

[gateley]

1. I'm actually somewhat in agreement with this. We are so soiled in every area

of who and what we've become, that I think maybe the only solution is to pull the rug out from under us. Otherwise we're just scurrying around stomping out little fires, the ones we're aware of, while the fire keeps spreading.

What do you think?

[yodoobo]

2. The catch is, it would also wipe out our currency

Along with everyones savings, pensions and other retirement.


Essentially a complete reboot of the economy.

In any event. It will not be necessary. On Obama's agenda before he leaves office is to cut the deficit in half. The deficit is high right now because we are in cleanup mode, but that won't last forever.

Once the healthcare bill is passed and he can move on to other things, I think deficit reduction will be high on the list.

[PDJane]

3. Which won't happen without increased taxes........

and if he increases taxes on the poor and middle class while cutting services, instead of doing what he should do, which is a fully graduated income tax, there will be hell to pay. The propaganda needs to change.

[AdHocSolver]

5. Deficits are NOT a problem. The problems are too many imports and not enough family supporting jobs.

Families and businesses run deficits all the time and it is no problem so long as you have enough income to pay your bills.

The problem occurs when one borrows even more money to pay ones bills.

Massive trade deficits, and reduced tax revenue due to tax breaks for the corporations and the wealthy, coupled with reduced income taxes due to high unemployment numbers are the cause of our economic problems.

The U.S. needs to eliminate corporate control of trade in order to bring the manufacturing of everyday goods such as clothing, shoes, electronics, appliances, toys, and books back to America in order to reduce the TRADE deficit and provide good jobs for Americans.

Merely cutting government deficits will not save the economy unless it is achieved by reducing military spending, reducing imports, returning corporate taxes and taxes on the wealthy to previous higher levels, investing in infrastructure such as mass transit, rehabilitating education, and stop throwing billions at crooked banks that run Ponzi schemes.

[digidigido]

6. Unfortunately the healthcare bill sucks, and there is no way he can reduce

the deficit without raising taxes on the wealthy, which he has been loathe to do.

[natrat]

7. cut the deficit in half? one of his campaign promises? we know what thats worth

at some point,maybe now past, there is a tipping point where the debt is just too large and it swamps the boat. They show no signs of slowing the dollar printing press so good luck with that cut the deficit in half bs.

[girl gone mad]

4. It would be wonderful for the younger generations.

I have told my son and his friends many times that their generation really should not feel obligated to pay the debts of their parents and grandparents.