Four Ways Out

Posted by $ Abaco 10 years, 4 months ago to Economics
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I recently was listening to a smart economist. He said there are three ways for the United States (or any country) to get out from a massive pile of debt like ours:
1). Grow the economy.
2). Inflate our way out of it.
3). Assign losses.
4). Default

The fourth is the one I added. What are your thoughts on this? Assigning losses is called "austerity" in the news lately. Nice-sounding word. I expect inflation. I don't expect any growth in real GDP above the growth in population. Default is a last resort...a massive resignation.

I think we'll see further real restrictions, probably in the form of means tests, for Social Security. Sure, you paid into it. Here's a quarter - go call somebody who cares. We'll see inflation. So, I'm predicting mainly 2 and 3.

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  • Posted by Enyway 10 years, 4 months ago in reply to this comment.
    It is beyond me why anyone cannot see that THEY are paying the taxes which are levied against the manufacturers. Anyone who thinks they are not paying the taxes levied against business is an idiot.
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  • Posted by Enyway 10 years, 4 months ago in reply to this comment.
    It should, at the very least, eliminate some of the idiots running the show. Expect the worst, hope for the best.
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  • Posted by Enyway 10 years, 4 months ago in reply to this comment.
    If it comes to pass and Hillary is elected, it is probable that she will not be using cigars in the oval office. Then again, I am not sure of her proclivities.
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  • Posted by Donald-Brian-Lehoux 10 years, 4 months ago in reply to this comment.
    I am doing this so we don't need the dry power. If it gets to that level then it will will be not good. What do you suggest other than keeping your powder dry?
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  • Posted by DrZarkov99 10 years, 4 months ago in reply to this comment.
    According to the World Bank, http://data.worldbank.org/indicator/N... the U.S. NDP is just shy of $15T, compared to a GDP of $17.5T. The formula is a bit complicated, involving GDP + investment in assets + export income - import costs - depreciation of assets. How investment and depreciation are measured is a bit subjective when it comes to a nation-state, but the export/import picture represents nearly $400M of the negative $2.5T between GDP and NDP. Fun enough for you?
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Wouldn't take that much 30% cut in spending and in government employees civilian and military would do the trick. If you get rid of the dregs , dross,weak, lame, and lazy.
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Then you are playing in the wrong game. You have only to remember your oath of office and keep your powder dry.
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Why pick on the military? Because they can't fight back? Why not the real money wasting trash heap of the country such as the welfare system? Why is it always the soldiers fault? How about the ass hole civilians that sent them to war? Why not cut that expenditure?
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  • Posted by Donald-Brian-Lehoux 10 years, 4 months ago in reply to this comment.
    you sound like you are really aware. Here is something to think about. In case Trump changes his mind or he is screwed out of the nomination. Vote veteran someone that puts America B4 any party, we come from all backgrounds. Divide and conquer is what they do. End double standard,DC politician on Obamacare,SS mrpresident2016.com
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Ho hum nothing new there. It's time to make the payoffs on Great Recession I or as we call it in oldspeak. Great Bankruptcy I. Thee goes anothere 30% of your retirement buying power. Now go vote for them again. Fools!
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Not to worry it's all part of the cycle of economic repression. What's coming up ? Round Three? Where is the next war to be? Let's see we have desert and jungle cammies Latino Cammies for Venezuela? Eastern Euro cammies with lots of tanks for Ukraine assistance? Winter cammies for North Korea? The choices are endless or Syria in the mountains? Education ? All those new languages to teach instead of
    English?

    Need an excuse Genocide in Syria?

    Cold War II with Russia again. Deja f'n vous

    It's a great time to be a socialist politician!!!!
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  • Posted by $ MichaelAarethun 10 years, 4 months ago in reply to this comment.
    Theiy don't get the most return benefit by defaulting on loans for such things as 'T Bills. They get it from debt repudiation where the old folks and retirees take it in the shortz
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  • Posted by $ winterwind 10 years, 4 months ago in reply to this comment.
    I'd add the word "government" to #1. Not that we don't know it, but just because there's gonna be someone out there who doesn't know it and I sometimes get bored starting the discussion from the beginning. /edited for clarity
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  • Posted by CircuitGuy 10 years, 4 months ago in reply to this comment.
    " will never be privatized"
    You're probably right. I hear about so many people not believing in the program that maybe there's a chance people will say, "just keep what I gave you, if I can not put any more in." I agree, though, it probably won't happen.
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  • Posted by mspalding 10 years, 4 months ago
    Grow the economy would work if grow the government would just slow down a bit. Default is the best option. Maybe then no one will lend the government money and it will be a much smaller government.
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  • Posted by $ sjatkins 10 years, 4 months ago
    I will not take one bit of austerity because I did not create this debt in the first place and I am not receiving my living from the government whose coffers may soon be dry.
    (1) is my first choice and we cannot do it bound so tightly by chains of government.
    (2) kills us as it kills wealth by destroying its measure.
    (3) We need to accept the real losses such huge debt signifies and inevitably leads to. It has been made so huge and works than it would have been by denying reality too long. A large part of it was from not allowing the 2008 mess to unravel.

    (4) At the rate things are going this is nearly inevitable outcome.
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  • Posted by $ blarman 10 years, 4 months ago in reply to this comment.
    I would argue that they wouldn't need to borrow it if they weren't spending it. They need to stop creating outlays for moneys they do not expect to bring in.

    I have long been in favor of eliminating the future-based budgeting we do now and go to a past-based budget. In other words, you can't spend more money - including debt service - than was actually brought in in taxes the last year. You could even go back two years to give full time for analysis, etc. That way the only way government budgets would grow is if the economy itself was growing.
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