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8 Dec 2004, 01:37
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#1
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Registered User
Join Date: Mar 2003
Posts: 329
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Is the US economy collapsing???
The trade deficit is exploding. this year the US trade deficit will be more than 600 billion dollars,
thats more than 5% of the GDP.
In addition to that, the national debt is increasing rapidly. It stands at 7.5 trillion dollars. Thats 66% of the US GDP. and its growing rapidly. The US is making 700 billion dollars of new debts every year(tendency rising).(more than 6% of the GDP)
In november, the US made an unbelievable 95 billion dollars of new debts.
The Bush administration isnt doing anything avbout it. in fact, they want to make new tax cuts.
By the end of the decade, the us will have more debts than it has a gdp, what happens then????
whats the effect on the world economy???
sources: http://www.csmonitor.com/2004/0729/p17s01-stgn.html
http://www.publicdebt.treas.gov/opd/opdpdodt.htm
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"Security is the essential roadblock to achieving the road map to peace."
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Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 01:46
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#2
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Godfather
Join Date: May 2000
Location: England
Posts: 5,185
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Re: Is the US economy collapsing???
its argued that by making tax cuts people tend to spend more because they have more money in their pocket. however as was shown in japan...most of the time people keep the money because theyre scared of what might happen.....
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8 Dec 2004, 02:44
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#3
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Registered User
Join Date: Jan 2003
Posts: 4,290
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Re: Is the US economy collapsing???
first of all THANK YOU for allowing me to reply to actually sane people. i have gone here and it is quite bizzare (although the spell check and the html are nice)
ok, now on the topic: the 60-70% of the GDP are not such a big problem. most european countries have about the same levels and i think japan is well above 100%. the current budget deficit also isnt that bad, comparable to Germany and France. what makes me worry a little is that the us goverment doesnt borrow money from its own people but from foreign central banks, and so do the people in the US. there has to be *something* going wrong if the money for american mortgages comes from the chinese central bank.
the american people do not safe enough money to even pay for their own consumption and bush adds even more to that by running that budget. deficit spending may make sence (under some circumstances) if people dont spend their money, but americans already spend too much rather than too little.
then look at the trade ballance, basicly it says the the us is borrowing money from other countries to buy their imports. that simply can't work out forever.
of course the us has the great advatage of beeing the country with the worlds primary reserve currency, so that it could theoratically 'inflation' its way out of the debt, but how long will other countries accept the dollar if it becomes practically worth- and useless?
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im not tolerant, i just dont care.
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8 Dec 2004, 03:03
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#4
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Evil inside
Join Date: Nov 2001
Posts: 3,631
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Re: Is the US economy collapsing???
It works as long as those who buys the US Federal Bonds a) think its paying off for then (in therms of what they get back in their own currency) b) thinks the US Fed can pay when the bond is up c) the USA still has the power to force people to buy their bonds d) The U.S Dollar is still the most used currency for trading.
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8 Dec 2004, 03:34
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#5
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Banned
Join Date: Sep 2004
Posts: 433
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Re: Is the US economy collapsing???
The Economist says it is, and I believe The Economist
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8 Dec 2004, 03:39
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#6
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Evil inside
Join Date: Nov 2001
Posts: 3,631
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Re: Is the US economy collapsing???
What exactly is the Economist saying?
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8 Dec 2004, 03:43
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#7
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Banned
Join Date: Sep 2004
Posts: 433
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Re: Is the US economy collapsing???
http://www.economist.com/opinion/dis...ory_id=3446249
Quote:
Originally Posted by The Economist
The dollar's loss of reserve-currency status would lead America's creditors to start cashing those cheques—and what an awful lot of cheques there are to cash. As that process gathered pace, the dollar could tumble further and further. American bond yields (long-term interest rates) would soar, quite likely causing a deep recession.
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8 Dec 2004, 04:41
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#8
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Klaatu barada nikto
Join Date: Mar 2000
Location: St. Paul, Minnesota
Posts: 3,237
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Re: Is the US economy collapsing???
The deficit, relative to GDP, is not sustainable in the longer term; but neither is likely to remain constant (I hope).
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The Ottawa Citizen and Southam News wish to apologize for our apology to Mark Steyn, published Oct. 22. In correcting the incorrect statements about Mr. Steyn published Oct. 15, we incorrectly published the incorrect correction. We accept and regret that our original regrets were unacceptable and we apologize to Mr. Steyn for any distress caused by our previous apology.
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8 Dec 2004, 11:00
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#9
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
Quote:
Originally Posted by wu_trax
first of all THANK YOU for allowing me to reply to actually sane people. i have gone here and it is quite bizzare (although the spell check and the html are nice)
ok, now on the topic: the 60-70% of the GDP are not such a big problem. most european countries have about the same levels and i think japan is well above 100%. the current budget deficit also isnt that bad, comparable to Germany and France.
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I disagree, first of all japan has 150%; secondly european countries do not have such high debts and deficits at the same time. the highest is germany with 59%.
The current deficit is catastrophic.
I think I know what your mistake is.
you are looking at the US federa deficit which is at 4 %
and your looking at the german and french maatricht criteria deficit which is about the same number. But the maastricht criteria measures all the debts and not not just the federal deficit.
The US has made 700 billiob dollars of new debts from october 2003 to the october of 2004.
Thats almost 7% of the gdp. thats a catastrophic number. What worries me more is that that number is rising. They made 95 billion dollars of new debts in november. And despite the dollar falling, the trade deficit is rising and rising.
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"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 12:19
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#10
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Registered User
Join Date: Jan 2003
Posts: 4,290
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Re: Is the US economy collapsing???
maybe, but the figures for germany are not entirely accurate either. for example we have liabilities of a few 100 billion € in pensions for state employees. those will have to be paid in the next 10-20 years. they are not counted yet, although it is certain we will have to pay them. then we have a minister of finances who probably would even scare those guys at enron with the way he makes his budget. example: we have these two large companies the state more or less still controlls, Deutsche Telekom and Deutsch Post. We also have a state controlled bank called 'Kreditanstalt für Wiederaufbau' (KfW). now what Eichel (thats his name) does is he sells the stocks of those companies to that bank and uses the money to reduce his deficit. the bank has to borrow money to pay for these stocks, but im pretty certain that that doesnt count for maastrich. if now the stock market recovers and that bank sells the stocks on the open market he will still get the money, if it doesnt he looses nothing.
thanks for the info about the us budget deficit, that certainly will help me at the mad place. got any links?
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im not tolerant, i just dont care.
Last edited by wu_trax; 8 Dec 2004 at 12:33.
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8 Dec 2004, 14:47
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#11
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
http://www.publicdebt.treas.gov/opd/opdpdodt.htmä
as you can see the USA has made 96 billion dollars of new debts in november and 10 billion from december 2nd to december 6th
this is really getting scary. the trade deficit was at 54 billion in august and 53.4 in september
shattering
if they continue like, the US economy is going to implode
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"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 14:50
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#12
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
Quote:
Originally Posted by wu_trax
maybe, but the figures for germany are not entirely accurate either. for example we have liabilities of a few 100 billion € in pensions for state employees. those will have to be paid in the next 10-20 years. they are not counted yet, although it is certain we will have to pay them. then we have a minister of finances who probably would even scare those guys at enron with the way he makes his budget. example: we have these two large companies the state more or less still controlls, Deutsche Telekom and Deutsch Post. We also have a state controlled bank called 'Kreditanstalt für Wiederaufbau' (KfW). now what Eichel (thats his name) does is he sells the stocks of those companies to that bank and uses the money to reduce his deficit. the bank has to borrow money to pay for these stocks, but im pretty certain that that doesnt count for maastrich. if now the stock market recovers and that bank sells the stocks on the open market he will still get the money, if it doesnt he looses nothing.
thanks for the info about the us budget deficit, that certainly will help me at the mad place. got any links?
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you dont get my point. The german federal government had mad a 2% of gdp debt and the entire german state(Bund+ Länder+Gemeinden) has made about 1.7 which makes it 3.7%
In america the federal state had made about 430 billion and the states and cities have made about 270 billion. thats almost 7% of the gdp
Californias deficit alone was as big as the one from the german federal state.
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"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 15:10
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#13
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Registered User
Join Date: Jan 2003
Posts: 4,290
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Re: Is the US economy collapsing???
are you german? didnt know that
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im not tolerant, i just dont care.
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8 Dec 2004, 15:16
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#14
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
Quote:
Originally Posted by wu_trax
are you german? didnt know that
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you dont have to be german to know 3 german words
__________________
"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 15:29
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#15
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Registered User
Join Date: Jan 2003
Posts: 4,290
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Re: Is the US economy collapsing???
Quote:
Originally Posted by Perle
you dont have to be german to know 3 german words
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but you need a german keyboard for öüä
PS that link doesnt work, i searched the site, but couldnt find anything :/
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im not tolerant, i just dont care.
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8 Dec 2004, 15:35
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#16
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Shai Halud
Join Date: Aug 2001
Location: Sunny Leeds \o/
Posts: 2,127
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Re: Is the US economy collapsing???
Nö yöü dön't.
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8 Dec 2004, 15:39
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#17
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Registered User
Join Date: Jan 2003
Posts: 4,290
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Re: Is the US economy collapsing???
ok ok, there always is ascii-code or copy and paste, but seriously, who does that for a simple posting?
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im not tolerant, i just dont care.
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8 Dec 2004, 15:51
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#18
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Shai Halud
Join Date: Aug 2001
Location: Sunny Leeds \o/
Posts: 2,127
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Re: Is the US economy collapsing???
Don't forget onscreen keyboard, character map and Alt/Alt Gr
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8 Dec 2004, 16:00
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#19
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
Quote:
Originally Posted by wu_trax
but you need a german keyboard for öüä
PS that link doesnt work, i searched the site, but couldnt find anything :/
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http://www.publicdebt.treas.gov/opd/opdpdodt.htm#years
try this one
__________________
"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 17:57
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#20
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Vermin Supreme
Join Date: Jul 2000
Location: Pittsburgh
Posts: 3,280
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Re: Is the US economy collapsing???
Quote:
Originally Posted by Tactitus
The deficit, relative to GDP, is not sustainable in the longer term; but neither is likely to remain constant (I hope).
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'faith-based economic plan'
i assume bush is doing exactly the right thing. because if he isn't, then we're all completely screwed.
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8 Dec 2004, 20:26
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#21
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Klaatu barada nikto
Join Date: Mar 2000
Location: St. Paul, Minnesota
Posts: 3,237
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Re: Is the US economy collapsing???
Quote:
Originally Posted by acropolis
'faith-based economic plan'
i assume bush is doing exactly the right thing. because if he isn't, then we're all completely screwed.
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Bush (actually Congress) is probably doing the wrong thing, but I'm unsure how it will all play out. One of the problems with being old is that I can remember hearing the same (or very similar) dire predictions during the Reagan deficits. Of course, this time they say it's different--but they said that then too.
At some point, if you bother keeping track, you start to notice that economists generally have a pretty poor record of predicting the future.
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The Ottawa Citizen and Southam News wish to apologize for our apology to Mark Steyn, published Oct. 22. In correcting the incorrect statements about Mr. Steyn published Oct. 15, we incorrectly published the incorrect correction. We accept and regret that our original regrets were unacceptable and we apologize to Mr. Steyn for any distress caused by our previous apology.
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8 Dec 2004, 21:34
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#22
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Registered User
Join Date: Dec 2001
Location: Confœderatio Helvetica
Posts: 323
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Re: Is the US economy collapsing???
With a little bit of optimism, one could say that sooner or later, the weak dollar will lead to higher us-exports, leading to a increased growth, decreasing trade & budget deficits and a stonger dollar.
Blame the EU that they're currently not growing fast enough...
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8 Dec 2004, 22:27
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#23
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Registered User
Join Date: Mar 2003
Posts: 329
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Re: Is the US economy collapsing???
Quote:
Originally Posted by Tactitus
Bush (actually Congress) is probably doing the wrong thing, but I'm unsure how it will all play out. One of the problems with being old is that I can remember hearing the same (or very similar) dire predictions during the Reagan deficits. Of course, this time they say it's different--but they said that then too.
At some point, if you bother keeping track, you start to notice that economists generally have a pretty poor record of predicting the future.
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yes we had the same 6% deficits in the 80s too.
But might I remember you that the debt was only 1 trillion dollars back then??
now after 8 years of bush and 8 years of reagan its at 7.5 trillion+ a huge trade deficit.
The numbers are getting worse and worse
__________________
"Security is the essential roadblock to achieving the road map to peace."
--George W. Bush, July 25, 2003
Mankind is ready to enter the solar system
George W. Bush, in his speech about his space program
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8 Dec 2004, 22:33
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#24
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Vermin Supreme
Join Date: Jul 2000
Location: Pittsburgh
Posts: 3,280
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Re: Is the US economy collapsing???
Quote:
Originally Posted by Tactitus
Bush (actually Congress) is probably doing the wrong thing, but I'm unsure how it will all play out. One of the problems with being old is that I can remember hearing the same (or very similar) dire predictions during the Reagan deficits. Of course, this time they say it's different--but they said that then too.
At some point, if you bother keeping track, you start to notice that economists generally have a pretty poor record of predicting the future.
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it was different in the '80s. and its different today.
in 1980ish, the largest demographic bulge in the history of the planet was about to hit prime earning years.
in 2005ish, the largest demographic bulge in the history of the planet is about to...ummm...anyway.
And you are completely right about economists. To get an economic outlook, take whatever the economic growth of the past year has been, and move it slightly toward the 50 year average.
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8 Dec 2004, 23:13
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#25
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7H4 B4R73ND3R
Join Date: Mar 2001
Location: University of South Florida
Posts: 206
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Re: Is the US economy collapsing???
Is the US economy collapsing? No. Is it the best it ever has been? No.
The US economy will keep rolling along over hills and through bad and good times. It is also important to note that if the US economy did collapse it would probably send most of the world's countries into a depression.
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The Last Ride of Stephen Whatley and His Immortals
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8 Dec 2004, 23:43
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#26
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Aardvark is a funny word
Join Date: Sep 2002
Location: I'm No Nino Rota
Posts: 5,923
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Re: Is the US economy collapsing???
Quote:
Originally Posted by Event_Horizon
Is the US economy collapsing? No. Is it the best it ever has been? No.
The US economy will keep rolling along over hills and through bad and good times. It is also important to note that if the US economy did collapse it would probably send most of the world's countries into a depression.
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Clinton for Roosevelt 2008
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9 Dec 2004, 04:22
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#27
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edited for readability
Join Date: Feb 2003
Location: for something...
Posts: 1,207
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Re: Is the US economy collapsing???
I doubt it wil implode seriously.. though im not sure what the trade deficit has to do with an implodeing economy other than it will discourage foriegn demand for the dollar... which might cause a recession, but certainly nothing catastrophic..
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9 Dec 2004, 05:01
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#28
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Jolt's best friend
Join Date: Feb 2003
Posts: 2,101
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Re: Is the US economy collapsing???
would a recession not result in even higher public borrowing?
-mist
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9 Dec 2004, 07:24
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#29
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edited for readability
Join Date: Feb 2003
Location: for something...
Posts: 1,207
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Re: Is the US economy collapsing???
no. It would lead to less investment, less consumption, and more saving.
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9 Dec 2004, 12:27
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#30
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I dunno...
Join Date: Jun 2003
Location: manchester
Posts: 1,502
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Re: Is the US economy collapsing???
Heh. Frankly, my essays are more important to me than the stability of the global economy.
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9 Dec 2004, 13:32
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#31
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Jolt's best friend
Join Date: Feb 2003
Posts: 2,101
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Re: Is the US economy collapsing???
if people are saving more, what're they doing with the savings, burying them in the back yard?
-mist
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<Karmulian> subtle as a kick in the nuts as always
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9 Dec 2004, 14:24
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#32
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edited for readability
Join Date: Feb 2003
Location: for something...
Posts: 1,207
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Re: Is the US economy collapsing???
THEY ARE SAVING IT. Meaning they arnt spending it.
Public Debt would decline because there wouldnt be as much demand, shifting AD to the left, holding prices steady -- without inflation.
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