An economic question.

[nookiemonster]

With the amount of money that our government has spend on the Iraq fiasco, does anyone worry about our solvency in dealing with this disaster?

I'm afraid that Hurricane Katrina could break us. Any insight?

[blondeatlast]

1. We're already broken--devastated, in fact. The Debt Clock:

http://www.brillig.com/debt_clock/

W put us into the red about a year after he was installed in office, IIRC.

The estimated population of the United States is 297,078,586 so each citizen's share of this debt is $26,757.00.

[nookiemonster]

3. OMG! That is just unreal.

Katrina will cost hundreds of billions of dollars. Where the fuck are we going to get that?

:mad:

[blondeatlast]

5. Well, I know I don't have 30k at my disposal right now.

I don't know very many who might.

But the ones who DO have that much are all getting nifty tax breaks.

[TheFriar]

2. reagan broke us, clinton saved us

and bush has broke us again.

[Tace]

4. This Is The True Horror Of Our Situation, In My View

We've lost a big chunk of our domestic oil production, a lot of it probably forever. That, and China and other countries are holding all our debt.

The Leave It To Beaver, Ozzie And Harriet, America I grew up in is gone. There are very darks years ahead.

[eallen]

6. So far, the world is confident that US bonds are the safest investment.

If you want to know how the world views US debt, just track its major instrument, the US 10-year bond. These past few days, while Katrina shook up commodity markets, US bonds rose in value, driving the yield down to 4.04%.

The high-flying bond market, by the way, is a large part of the current rosy economic scenario. It keeps mortgage rates and business costs low, making everyone feel flush. If ever world investors start to have doubts about funding US government debt, bonds will fall, driving their interest rates up, with negative ramifications to business and real estate.

[applegrove]

7. When you go into debt, normally your dollar would take a hit, the

recession would start, consumer spending would go down and after a bit exports would improve. Also, debt spending increases inflation which Feds nowadays handle by putting the economy into recession with higher interest rates. Also foreigners would be less interested in the dollar so that interest rates would be forced to rise to attract loans and bond sales.

Because the USA dollar is the lingua fran-ca of dollars, because Chinese, Japanese hold large piles of them (not trusting all their assets in their own currency) and because the oil industry is based on the US dollar, it acts like a subsidy.

So the things that would happen to put the economy into recession when the government is in debt do not crash the economy. The economy can keep up some pretty bad habits and addictions for a long while it seems.

Sad thing is that the US could have gone into debt spending on kick ass public schools & health care and such. And then - when the shit does hit the fan, and the economy does go into recession, you have actually invested in better lives and more wealth for your people.

The Bushes take this opportunity to "get loans at cut rate prices" to go to war and fill the coffers of the rich with extended markets and all.And a few people will be richer in the end. Americans will not have had to re-adjust priorities (like you do during a recession) and spend on things like alternative energy sources or conserving gas.

So - this subsidy of outside people wanting some of their growing wealth in American dollars is helping the rich, allowing more debt, subsidizing the market and big oil. And the underemployment of the middle class and the poor subsidizes the markets & the rich & the oil by fighting inflation.

So unlike in past times when everyone would suffer from recession and then the economy would purge itself of bad habits, now only the middle class has to pull up its boots. The rich can have more bad habits. And this debt, which is not being paid for by the rich in any way, will be passed on to the children of the middle class. They will pay for this war and this debt as financial markets balance out and the U.S. dollar looses its status in the next 50 years.

That is when the debt for the war and the tax cuts will have to be paid.

The rich get everything and pull every benefit for themselves out of the bugaboo (U.S. dollar so popular abroad regardless of how the accounts are in order). And America will fight even more wars like Iraq to make sure U.S. dollar is the currency of petrol for as long as possible.

So to recap - popularity of U.S. dollar due to bugaboo allows for more debt without penalization to markets. U.S goes to war to protect this dollar hegemony and the "cheap loans" it results in. The benefit of this bugaboo is seen by the rich only. It is for them only to benefit from. Because everyone else is too stupid to understand. They get tax cuts till this excessive debt U.S. economy can handle is all filled up. The markets roar. The middle class helps by fighting inflation on their own with lower wages & function-not governance and hold the bag while learning to hate the poor who suffer from bad schools.

The point is to try and move some middle class to the rich. Indeed slice the middle class in 2/3 1/3 ratio where the 1/3 benefit from not paying taxes. Then you have the have & the have nots. Class mobility is futile. The poor (blacks especially) will get frustrated at the hatred and move to other countries. And some of the poor who are left are fed stories of patriotism so that they live happily watching news "invented especial just for them" that tells them how great they are all day long & will thus continue to vote for the system that builds these two classes out of a once classless democracy.

If you want to think or feel, you will have to move. Unless you are rich. And then you can do whatever you want all day long because you will be so rich and never paying taxes so you and your family will not have to work a day in your lives. And this richness will go on forever. And that is what the rich want. Once the world is totally marketized in 50 years, there will not be other social revolutions. Whoever is at the top in 50 years, will be at the top for eternity.

But as they destroy the environment and science and intellectuals who try to improve the world, to make money and are fed as much crap by corporations as the poor watching T.V. are...they will have fooled themselves. Because.... and please...shhhh....be quiet about this....they breath the same air we do. What they don't know is the managers of all this are corporations are taught to take on the survival instincts of corporations. And corporations don't take things like breathing into consideration. They don't have to - they don't get sick & they never die.

[nookiemonster]

8. Thanks, you.

I'm extremely impressed with this synopsis, oh fuck that, how about a brilliant description, in great detail.

Applegrove, that was great. Really.

:yourock: