Record budget and trade deficits, Iraq $10 billion a month paid with borrowed money.?

Question

Most consumers get near to nothing from war spending. The dollar is at an all time low. Many of our international lenders and those that sell to us things we need (like oil), are asking to be paid in currencies other than our dollar. That is real inflation, but our salaries and our savings from CD interest are not going up. I am afraid a real economic catastrophe may occur, are you ?

Answer 1

I am afraid a real economic catastrophe may occur, are you ? Yes and here is why:

First, what is insolvency. Insolvency is when an entity (a business, individual, city government, or federal government, etc.) can not pay their bills. How an insolvent entity pays their bills is by borrowing the money.

What is bankruptcy? When an insolvent entity can no longer borrow money to pay their bills, they go into bankruptcy.

Many, many times an individual, a corporation, a city, a country will become insolvent, and eventually, will no longer be able to borrow any money, and will go into bankruptcy. Who bails them out? Tax payers, consumers, states, other countries.

For example, when a country like Mexico and Argentina went bankrupt, who bailed them out: their bond holders by not collecting all that was owed to them, and the US government, when Mexico had financial problems in the early 90s and could not pay their bills, the US gave them $50 billion.

What about when New York city went bankrupt? Taxpayers and bondholders bailed them out.

What about an individual? Consumers, and taxpayers, and whoever loaned them money (meaning they won't get paid the money they loaned out).

So far, the last 50 years, no problem. Why, because everyone who was insolvent and who eventually went bankrupt, there was always a bigger entity there to bail them out.

Is the US government insolvent? Yes, they can not pay their monthly bills without borrowing money, They come up short each month by about $60 billion.

Is the US government bankrupt? No, because numerous other countries are willing to loan them money so they can still pay their bills. Also, the Social Security trust fund, loans the government about $200 billion every single year. This is money that is suppose to be there to take care of the Baby Boomers in their retirement, but the boomers are letting the government loot the Social Security trust fund every year, putting the cost on future generations.

Will the US government ever go bankrupt? Yes, eventually.

Well When?

You can actually estimate this to a degree.

Between now and 2015, only 8 years away, if those who loan us money decide not to loan us anymore, we will be bankrupt within 30 days, that is, we will no longer be able to pay our bills. Ever month the US government has billions of bills to pay, and if in any given month they cannot borrow the money necessary to pay their bills, they will go bankrupt very quickly.

Who loans us the most: China, Japan, Russia, and OPEC contries, are on the top of the list.

For example, let's say the price of oil DROPS, and it drops for a couple of years, the OPEC countries will be forced not only to quit loaning us money, but will be forced to sell the US government bonds they do have.

This would mean that not only will the US lose one of their biggest entities that loans us money, but will have to start paying them back for what we have borrowed from them. And if no other country wanted to make up the difference, the US would go bankrupt.

Another thing that will eventually cause us to go bankrupt. Japan, the Japanese loan us billions of dollar every year. Why, because eventually, they will retire, starting in 2010, the boomer generation in Japan will not be loaning us anymore money, but will be wanting the money back that they loaned us to fund their retirement.

What will happen, again, we will lose one of the biggest entities that loans us money, and if no one wants to make up the difference, we will not be able to borrow enough money to pay our bills, and will be forced into bankruptcy.

Finally, granted between now and 2015, there are some things that could cause us to go bankrupt, but we don't know for sure. But, in 2015, it is a for sure thing, that is, we will go bankrupt.

In 2015 the Social Security surpluses will stop, that is, Social Security will no longer be able to loan the government anymore money. Social security will actually have to start cashing in all the bonds they bought from the US government between 1983 and 2015.

The government can not pay their bills now without borrowing money from other countries and the Social Security trust fund, and in 2015 when Social Security is no longer able to loan money, and will start to demand that the government pay money back, will cause the country to go into bankrupcy.

The baby boomers have borrowed and borrowed to make their lives better, only to put the burden of paying all the money back onto future generations.

And, unlike all the other entities that have gone bankrupt, with always a larger entity there to bail them out. Who is going to be big enough to bail out the US government?

The turth? No one will be big enough. The dollar will collapse and future generations will be forced to pay all the money back, which means a huge decrease in their standard of living.

We have been insolvent for over 50 years, and yes, our ability to borrow money to pay our bills can not, and will not be able to go on much longer.

Below is the link to a report put out by one of the US government's cental banks. The title is "Is the United States Bankrupt?" Remember this in not a report done by someone on the internet, it is a report done by a US central banker.

If you do decide to check out the report, the report does offer some solutions that may keep us from going bankrupt. But, after you read it, ask yourself, is the government even beginning to do anything the report suggests? The answer is no, the US government is doing nothing to prevent a future bankrupcy.

Answer 2

Well, young George couldn't feature as hero in his own cowboy movie, even briefly, without spending money, could he! And anyway, it wasn't his, so hang the expense. And the carpet baggers, mostly American corporations with Administration connections, got most of it anyway. And any idiot pollie knows a war is just the thing to baffle the voters (even those that bother voting), get 'em stirred up, and voting for yer, pardner! As long as yer wear a white hat and cowboy boots, talk with a drawl and mention God frequently. Of course if an (un)critical mass of Americans weren't so ignorant of the world at large, and into the "American Dream" of consumerism etc (in which most won't share anyway), they might have demanded decent health services, social services, etc which wouldn't leave so much deficit spending available to George and his mates. But you can't have everything, can you, especially when they've got it already. Good luck and sympathy.

Answer 3

an entire and entire loss of sensible management. enjoying the opportunities and playing with the way forward for america as a substitute of life like, sensible management has resulted in our modern mess. additionally, way too plenty deregulation and cuts to necessary courses. The Bush administration's theory of smaller government is to enable each and everything pass with the aid of itself. If people have been ordinary, that would artwork. people are not ordinary, they're grasping thieves if left unchecked and deregulated interior the employer sector.

Answer 4

Some people have their heads in the sand. I am worried about big, big problems ahead for some of the reasons alluded in your question and other reasons as well.

Answer 5

I would say, not "may," but has already begun. What more can I add to the excellent, well informed & comprehensive answer from marketinsider?

Answer 6

Who's running record budget deficits? Not the U.S., not even close.

Is this a question about Japan?