1979 we defaulted a bit, cost Govt 6/10 %

[Driftr]

Jul 12, 2011 13:36:17 GMT -5 djAdvocate said:

Jul 12, 2011 12:07:05 GMT -5 Driftr said:

No, but I worked in banking (as an accountant) for 10 years prior to moving to Texas.

so, does your experience in banking say that a customer that borrows money should not be lent to?

No. My experience does say that lending more and more money to a customer that has never shown an interest in paying anything except the interest is a bad idea though.

[Driftr]

My experience also says that those customers who pay their loans back in full are the ones you want to lend to time and again. The bank will even want to lend to them so badly that they'll reduce the rates to entice them into taking out that new loan. Wouldn't it be great if the U.S.A. was back in a position where people wanted to lend to us rather than us having to buy our own paper just to try and keep the rates suppressed?

[djAdvocate]

Jul 12, 2011 13:38:34 GMT -5 Driftr said:

Jul 12, 2011 13:36:17 GMT -5 djAdvocate said:

so, does your experience in banking say that a customer that borrows money should not be lent to?

No. My experience does say that lending more and more money to a customer that has never shown an interest in paying anything except the interest is a bad idea though.

well, we agree on that. let's pick this up again when the government can no longer afford anything other than the interest on the debt, shall we?

[djAdvocate]

Jul 12, 2011 13:42:40 GMT -5 Driftr said:

My experience also says that those customers who pay their loans back in full are the ones you want to lend to time and again. The bank will even want to lend to them so badly that they'll reduce the rates to entice them into taking out that new loan. Wouldn't it be great if the U.S.A. was back in a position where people wanted to lend to us rather than us having to buy our own paper just to try and keep the rates suppressed?

it wasn't that long ago we were in this position. and yes, it would be great to get back there.

cutting $4T over (10) years would be a terrific downpayment on that idea.

[Driftr]

Jul 12, 2011 13:44:59 GMT -5 djAdvocate said:

Jul 12, 2011 13:38:34 GMT -5 Driftr said:

No. My experience does say that lending more and more money to a customer that has never shown an interest in paying anything except the interest is a bad idea though.

well, we agree on that. let's pick this up again when the government can no longer afford anything other than the interest on the debt, shall we?

No thanks. I'd prefer we stop borrowing more and more before it results in the end of the United States.

[Driftr]

Jul 12, 2011 13:46:06 GMT -5 djAdvocate said:

Jul 12, 2011 13:42:40 GMT -5 Driftr said:

My experience also says that those customers who pay their loans back in full are the ones you want to lend to time and again. The bank will even want to lend to them so badly that they'll reduce the rates to entice them into taking out that new loan. Wouldn't it be great if the U.S.A. was back in a position where people wanted to lend to us rather than us having to buy our own paper just to try and keep the rates suppressed?

it wasn't that long ago we were in this position. and yes, it would be great to get back there.

cutting $4T over (10) years would be a terrific downpayment on that idea.

I do not think that cutting 4 trillion over 10 years comes anywhere close to getting us back to that ideal. I'd prefer we pay down 4 trillion of the existing debt over that 10 years.

[djAdvocate]

Jul 12, 2011 13:53:07 GMT -5 Driftr said:

Jul 12, 2011 13:46:06 GMT -5 djAdvocate said:

it wasn't that long ago we were in this position. and yes, it would be great to get back there.

cutting $4T over (10) years would be a terrific downpayment on that idea.

I do not think that cutting 4 trillion over 10 years comes anywhere close to getting us back to that ideal. I'd prefer we pay down 4 trillion of the existing debt over that 10 years.

well, you can forget that idea, i am sorry to say. getting us back to even is about the best you can expect- and i think it is a reasonable expectation. it is the kind of thing a person like Obama should be talking about.

[Deleted]

i think you are underestimating the seriousness of not raising the debt ceiling, tex. if it is as consequential as i believe it is, the ends absolutely do not justify the means.

Of course I understand what happens when you don't raise the debt ceiling djlungrot! A while back I even explained here what would happen. This is pretty simple stuff.

I also what happens when you spend more than you take in every year & never address the problem. Believe it or not that leads a country into amassing 14 TRILLION dollars in debt. That's just about everything the country takes in for a whole year (that's US by the way). I also understand that it will get much worse the longer the spending & borrowing keeps going (much like a snowball going down hill gets bigger, faster). And lastly I understand that the party that's in power has not only keep on doing spending but has increased the rate of spending the whole time they have been in power.

Now as I said before I don't expect anyone to assume that the Republicans are doing this because they care about the country or because they are good guys or for any other motive than they want to get a political gain out of it. But the fact remains that their aim (for whatever reason) is best for the country right now & is needed right now. I stand behind the Republicans or any other party that will force this issue to be address & I really don't care how they force it to be addressed.

The truth is that if both parties don't work together & deal with this it will cost us a lot more money in the long run. But on the other hand if spending cuts aren't put in place it will cost even more as we continue to spend & borrow. The lesser of the 2 evils is in my mind to shut this country down until this is worked out.

I'll also say again that this "emergency" was caused by the Democrats (although both parties got us to where we were when President Obama took office) & to blame the Republicans (as some here are) is just plane dumb. The Democrats got the upper hand & rammed their agenda down the throats of the Republicans, they rammed their spending packages & social programs down the throats of the Republicans & the American people (even those that didn't want them) & then they lost in the last election. Now they have no majority & are crying fowl because the Republicans are able to stop them cold. Well to bad. I just hope that the next election is the same landslide that we saw in the last election & Republicans are able to erase every single thing that the Democrats did in this 4 years & turn this country around.

[djAdvocate]

Jul 12, 2011 13:51:49 GMT -5 Driftr said:

Jul 12, 2011 13:44:59 GMT -5 djAdvocate said:

well, we agree on that. let's pick this up again when the government can no longer afford anything other than the interest on the debt, shall we?

No thanks. I'd prefer we stop borrowing more and more before it results in the end of the United States.

and i would prefer to speak to someone who doesn't engage in hyperbole.

i like my chances better.

[djAdvocate]

Jul 12, 2011 14:05:13 GMT -5 @oldtex said:

i think you are underestimating the seriousness of not raising the debt ceiling, tex. if it is as consequential as i believe it is, the ends absolutely do not justify the means.

Of course I understand what happens when you don't raise the debt ceiling djlungrot! A while back I even explained here what would happen. This is pretty simple stuff.

I also what happens when you spend more than you take in every year & never address the problem.

i think we are at the beginning of addressing this problem. but you don't cut off your foot when you have a hangnail, tex.

i have a lunch appt, so i have to go. i will address the rest of your post when i get back, if time allows.

[djAdvocate]

for the record, i blame BOTH parties for this situation. but the problem is a lot deeper than "we spend too much". it is an institutional problem, and i believe it will requires something of an institutional change to fix it.

[Driftr]

Jul 12, 2011 14:05:56 GMT -5 djAdvocate said:

Jul 12, 2011 13:51:49 GMT -5 Driftr said:

No thanks. I'd prefer we stop borrowing more and more before it results in the end of the United States.

and i would prefer to speak to someone who doesn't engage in hyperbole.

i like my chances better.

So you don't think the United States would end if we got to a point where we couldn't afford anything other than interest on the debt? You're the one who brought that up slick, not me.

[Deleted]

i think we are at the beginning of addressing this problem. but you don't cut off your foot when you have a hangnail, tex.

Using your analogy you "Do" cut off a foot when it has gangrene in it before it spreads & you have a much bigger problem. Well we didn't "cut" at 1 trillion, 2 trillion, 3 trillion, 4 trillion, 5 trillion, 6 trillion, 7 trillion, 8 trillion, 9 trillion, 10 trillion, 11 trillion, 12 trillion, or 13 trillion so I say Let's cut at 14 trillion.

[djAdvocate]

Jul 12, 2011 14:16:15 GMT -5 Driftr said:

Jul 12, 2011 14:05:56 GMT -5 djAdvocate said:

and i would prefer to speak to someone who doesn't engage in hyperbole.

i like my chances better.

So you don't think the United States would end if we got to a point where we couldn't afford anything other than interest on the debt? You're the one who brought that up slick, not me.

i suggested that it will not be an emergency until such a time. i am not sure what time that would be, but it would not be at any time in the forseeable future.

you implied that an emergency would happen sooner, and i politely disagree, slack.

that is not to say that borrowing huge amounts of money indefinitely is a nifty idea. it isn't. but sometimes it is the ONLY way you get from point A to B.

[djAdvocate]

Jul 12, 2011 17:02:35 GMT -5 @oldtex said:

i think we are at the beginning of addressing this problem. but you don't cut off your foot when you have a hangnail, tex.

Using your analogy you "Do" cut off a foot when it has gangrene in it before it spreads & you have a much bigger problem. Well we didn't "cut" at 1 trillion, 2 trillion, 3 trillion, 4 trillion, 5 trillion, 6 trillion, 7 trillion, 8 trillion, 9 trillion, 10 trillion, 11 trillion, 12 trillion, or 13 trillion so I say Let's cut at 14 trillion.

that is nice for you to decide. but it is not your decision to make. it is a collective decision.

i think we need more time to adjust, tex. i absolutely think that we need to get our economic expansion up before we cut back. and MOSTLY, i think not fulfilling our obligation which we have already committed to is something bordering on insane. it will not help us at all, either in the short, intermediate or long term.

if you need a fuller explanation, i can certainly provide it.

[Driftr]

Jul 12, 2011 18:15:38 GMT -5 djAdvocate said:

Jul 12, 2011 14:16:15 GMT -5 Driftr said:

So you don't think the United States would end if we got to a point where we couldn't afford anything other than interest on the debt? You're the one who brought that up slick, not me.

i suggested that it will not be an emergency until such a time. i am not sure what time that would be, but it would not be at any time in the foreseeable future.

you implied that an emergency would happen sooner, and i politely disagree, slack.

You don't think there will be an emergency until the point where we can only pay interest on the debt with our receipts? Interesting. Wrong, but interesting.

that is not to say that borrowing huge amounts of money indefinitely is a nifty idea. it isn't. but sometimes it is the ONLY way you get from point A to B.

Point B sucks. We've been there plenty. I would rather go to point C for a change. I have little doubt you and those like you will get their way, but until then it's nice to think that there's a possibility the insanity will end.

[djAdvocate]

Jul 12, 2011 18:32:03 GMT -5 Driftr said:

Jul 12, 2011 18:15:38 GMT -5 djAdvocate said:

i suggested that it will not be an emergency until such a time. i am not sure what time that would be, but it would not be at any time in the foreseeable future.

you implied that an emergency would happen sooner, and i politely disagree, slack.

You don't think there will be an emergency until the point where we can only pay interest on the debt with our receipts?

i didn't say that. and NO. i don't think that at all. i think it will occur long before then.

but let me use my personal situation as an illustration. my total indebtedness is approximately 5x my annual income. i can manage it easily.

if i compare this to the US, that would equal $22T in debt. and let's face facts here, the US Treasury is a better credit risk than i am.

so, i would think that we should start getting worried at about 1.5x our current debt level. that level would, incidentally, be consistent with a lot of governments in the first world, and SIGNIFICANTLY lower than the debt level in Japan.

i know that nobody likes to actually think about what this stuff means in relative terms. they just see $14T and panic. but in terms of global economics, it is not an unmanageable sum.

they would probably shoot Obama for saying something like that. but that is what is great about not being him. i have that luxury.

[djAdvocate]

Jul 12, 2011 18:32:03 GMT -5 Driftr said:

Point B sucks. We've been there plenty. I would rather go to point C for a change. I have little doubt you and those like you will get their way, but until then it's nice to think that there's a possibility the insanity will end.

point A sucks, my friend. but here we are. pulling the cork out and sinking the lifeboat doesn't really seem like a solution to me. i suggest we keep rowing.

we need to stop reacting and start PLANNING. that would be really cool, instead of just throwing up our arms and saying "too much".

[Driftr]

i didn't say that. and NO. i don't think that at all. i think it will occur long before then.

I think you did. Back in #33.

well, we agree on that. let's pick this up again when the government can no longer afford anything other than the interest on the debt, shall we?

Now you're making some sense.

but let me use my personal situation as an illustration. my total indebtedness is approximately 5x my annual income. i can manage it easily.

if i compare this to the US, that would equal $22T in debt. and let's face facts here, the US Treasury is a better credit risk than i am.

so, i would think that we should start getting worried at about 1.5x our current debt level. that level would, incidentally, be consistent with a lot of governments in the first world, and SIGNIFICANTLY lower than the debt level in Japan.

i know that nobody likes to actually think about what this stuff means in relative terms. they just see $14T and panic. but in terms of global economics, it is not an unmanageable sum.

Worth looking into later after I get the kids to sleep or tomorrow if schedule at work allows the way it did today. But I'm liking this train of thought now that there's some meat on the bones so to speak.

[djAdvocate]

Jul 12, 2011 18:47:25 GMT -5 Driftr said:

i didn't say that. and NO. i don't think that at all. i think it will occur long before then.

I think you did. Back in #33.

i was quoting you from #31.

Now you're making some sense.

but let me use my personal situation as an illustration. my total indebtedness is approximately 5x my annual income. i can manage it easily.

if i compare this to the US, that would equal $22T in debt. and let's face facts here, the US Treasury is a better credit risk than i am.

so, i would think that we should start getting worried at about 1.5x our current debt level.

correction: i don't think we should worry at all. i think we should plan, and execute. worrying is very unbusinesslike.

that level would, incidentally, be consistent with a lot of governments in the first world, and SIGNIFICANTLY lower than the debt level in Japan.

i know that nobody likes to actually think about what this stuff means in relative terms. they just see $14T and panic. but in terms of global economics, it is not an unmanageable sum.

Worth looking into later after I get the kids to sleep or tomorrow if schedule at work allows the way it did today. But I'm liking this train of thought now that there's some meat on the bones so to speak.

let me be clear about this- i just want our leaders to think and plan. i know that they are not very good at it, but i don't think it is expecting too much.

this business of reacting to polls and trying to please everyone is not only impossible, but irresponsible.

[deziloooooo]

One of the problems with our system of government, the Federal part of it, and something I believe i posted some where else, is over the past few decades, our districts for House Representatives has been Gerry rigged so that most Representatives , both parties by the way, represent mostly same sort , politically that is, type of constituents, and politicians are not stupid, even though many claim they are. They are usually well educated, intelligent and politically astute, and they realize to stay in office they have to satisfy their own constituents so to compromise, use their own judgment in deciding how they will vote, what to support, it all comes back to political necessity.

If ones constituents are heavy on the liberal side one will swing that way, no matter what the reality of what to support say it is, and the same from the other political perspective..any one want to dispute this?

This was brought out in a few round tables on politics that I listened to this week, something I hadn't thought of..and something I gave it some thought and had to agree with..it's true in to many political districts.

[rockon]

The more simple explanation is that no individual or business is allowed or would want to handle their own finances the way we have allowed our politicians to conduct business in Washington and for good reason. I really doubt that any truthful poster here would handle their own finances in this manner even if it were legal because they understand the outcome would be personal financial ruin. So anyone here who supports Obama one this one can feel free to experiment on their own before make recommendations on what should be done at the national level. Please let us know how it works out for you.

[Deleted]

but let me use my personal situation as an illustration. my total indebtedness is approximately 5x my annual income. i can manage it easily.

Djlungrot ok, let's use your personal situation. You owe 5x your annual income. Did you use your house in that figure? That (I assume) is prorated for 30 years? Our government doesn't string out it's debt that far. Also look at your bank statements. Add up all your spending. Did you spend your total income & then borrow 40% more to spend? That's what the government is doing.

Since you gave your numbers, I'll give mine. The total amount owed (including my house) is a little less than half my yearly income. My asset value is about 23 times my debt. I don't borrow except for a house & a car & I pay those off early. In general I don't spend more than I make.

[Driftr]

so, i would think that we should start getting worried at about 1.5x our current debt level. that level would, incidentally, be consistent with a lot of governments in the first world, and SIGNIFICANTLY lower than the debt level in Japan.

Where are you finding tax receipts versus debt levels for other 1st world countries?

I was able to find total debt as % of GDP, but I'm pretty sure that's not what you were talking about. Not sure how reliable wiki is, but if it is, we can see that we're in better shape than the likes of UK, France, Germany today. en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

[Deleted]

I really don't know if lenders look at debt the same for a country as they do a person. I do know that according to some of the statements that I've seen on TV on news/investment type shows (not fox by the way) lenders are feeling that out country has to much debt.

[floridayankee]

Jul 13, 2011 8:06:35 GMT -5 Driftr said:

I was able to find total debt as % of GDP, but I'm pretty sure that's not what you were talking about. Not sure how reliable wiki is, but if it is, we can see that we're in better shape than the likes of UK, France, Germany today. en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

Yes, we are a lot better off than some other major countries out there. The questions then becomes...Are we going to keep on with business as usual or do we actually do something about our rapidly increasing debt before we get as bad off as, or worse than, they are?

[maui1]

a debt turn around is a lot easier for a smaller entity than a large one.

america is moving in a greek type direction, but it will take a lot longer than greece will take to fix it's issues, if it can.

we can't wait to get to the dept levels of other countries that are having problems today, as we are at least, 50 times as large as anyone one of them.........you can't compare eating one pound of food to eating 50 pounds of food, unless you give yourself more time, like 50 times as much.

[floridayankee]

Jul 13, 2011 9:45:22 GMT -5 @maui1 said:

a debt turn around is a lot easier for a smaller entity than a large one.

america is moving in a greek type direction, but it will take a lot longer than greece will take to fix it's issues, if it can.

I don't believe anybody suggests that this will be an easy or quick fix.

.........you can't compare eating one pound of food to eating 50 pounds of food, unless you give yourself more time, like 50 times as much.

Bad analogy. There is absolutely no difference if that 50 pounds of food is being eaten by 50 people.

a debt turn around is a lot easier for a smaller entity than a large one.

Not always. IMHO, It is too simplistic to make that assumption on size alone without knowing the rest of the picture. Greece is tied to the euro and cannot print their own money. The US is not and (ignoring the possibility of collapsing our fiat currency) we could essentially "print" our way out of debt....or at least a portion of it.

[Deleted]

we can't wait to get to the dept levels of other countries that are having problems today, as we are at least, 50 times as large as anyone one of them.........you can't compare eating one pound of food to eating 50 pounds of food, unless you give yourself more time, like 50 times as much.

maui1 I don't think that's true. I think the amount charged on interest throws that off. The same way that you invest & gain money works the opposite when paying interest. As your debt grows you are paying less & less on it because more money goes toward the interest that's being tacked on. It's a double whammy when your being charged that interest & also still spending more than you make & paying interest on that too. I can't adequately express how dangerous that sounds to me.

Our national debt should have been "really" addressed long ago. I won't even say that it has ever been address except for a few political times. (Political times would be when long term solutions are adopted that no one ever expects to follow. It's just a projected solution that they can sell to the stupid masses). Both parties are responsible for this.

[maui1]

Greece is tied to the euro and cannot print their own money.

the eu is printing plenty of its own paper, to keep greece afloat.........just like we are to keep calif (and a lot others) afloat