IS THE USA BANKRUPT?

[MODU]

Again, this all goes back to the failed concept that the government has to pay for everything.  It should be in Congresses best interest that large funded projects have a return of investment on them, and if/when these projects fail to be of value any more, the must be dismantled, restructured, or turned over to the private sector for management.  An easy example is Amtrak.  Of all the routes the rail serves, only one is profitable.  At $1+ Bill a year in just operational spending, this drain on the nation needs to be plugged before it gets worse.  It is time to sell Amtrak to the private sector for operation and management, end constant underperforming routes, or sack the upper and middle management of the organization and fill it with corporate rail professionals to improve the revenue stream of the system.  This would not only save the government money annually, but it would aslo infused the government with proceeds which should go towards covering debt and not be used as additional funding to be spent.

[opebo]

Haha!  MODU's solution is to sell Amtrack!

[MODU]

Haha!  MODU's solution is to sell Amtrack!

Fixes Opies glasses so he can read the word "Example" in his post.

[Swing low, sweet chariot. Comin' for to carry me home.]

$4.8 Trillion is the current Public Debt, that is the amount we are obligated to repay, U.S's 2005 GDP was $12.49 Trillion, so the public debt represents around 40% of our annual GDP.

In contrast, Japan's public debt, as of 2001, was $6.3 trillion representing 136% of the Japan's 2001 GDP.

http://www.publicdebt.treas.gov/

Your ignoring the amount stolen, er, borrowed from the SS trust fund. The total debt is $8.4 trillion. Your also ignoring the unfunded future liabilities, $65 trillion.

Money borrowed from a saving account is NOT "debt".   If I borrow money from my savings and spend it, that money does NOT become debt; rather it is simply money I failed to save.  The IOUs written to the SS trust fund are simply a transfer of money from one account to another; it is no different than me transferring money from my savings account to my checking account and using it to pay cash for a new car.  The alternative would be to leave the money in the savings account and publicly finance (a.k.a. take out a loan, a.k.a. borrow money, a.k.a. incur REAL debt) the car.

In addition, a plan to spend money in the future is NOT "debt".  It is simply a plan to spend money, but, obviously, the money has not yet been spent and the plan to spend it can simply be changed.

[opebo]

$4.8 Trillion is the current Public Debt, that is the amount we are obligated to repay, U.S's 2005 GDP was $12.49 Trillion, so the public debt represents around 40% of our annual GDP.

In contrast, Japan's public debt, as of 2001, was $6.3 trillion representing 136% of the Japan's 2001 GDP.

http://www.publicdebt.treas.gov/

Your ignoring the amount stolen, er, borrowed from the SS trust fund. The total debt is $8.4 trillion. Your also ignoring the unfunded future liabilities, $65 trillion.

Money borrowed from a saving account is NOT "debt".   If I borrow money from my savings and spend it, that money does NOT become debt; rather it is simply money I failed to save.  The IOUs written to the SS trust fund are simply a transfer of money from one account to another; it is no different than me transferring money from my savings account to my checking account and using it to pay cash for a new car.  The alternative would be to leave the money in the savings account and publicly finance (a.k.a. take out a loan, a.k.a. borrow money, a.k.a. incur REAL debt) the car.

In addition, a plan to spend money in the future is NOT "debt".  It is simply a plan to spend money, but, obviously, the money has not yet been spent and the plan to spend it can simply be changed.

Correct, jmfcst.  The importance of the 'raiding' of the Social Security trust fund is, in my opinion, that it utilizes funds derived through a highly regressive tax to fund deficits created by Bush's cuts to the relatively more progressive income tax system.

[minionofmidas]

Hyperinflation as in, thousands of percent? Yes, true.
But then again, look at the inflation levels Britain had in the 70s and 80s. They weren't exactly hyperinflation, but they weren't exactly desirable either.

I think the flow of capital is much more efficient now; suppliers simply can't raise prices without creating a competitor to quickly undercut them.  Also, the risk of spikes in labor costs has basically been removed from the equation. The threat of inflation is now largely limited to commodities (oil, copper, land for development, etc) and lawyers driving up insurance costs. 

Actually, I mentioned America's rising inflation rate in passing to a Bundesbank economist mate of mine (we play boardgames on thursdays together), and he said it's partly an accounting quirk of US inflation reckoning. Apparently, your guys can't bother to keep track of house prices, and therefore model housing costs (which of course form a large part of inflation) after rent prices. Now, for years, there was a rise in the price of owned houses without attendant rises in rent prices (so inflation figures were artificially low) ... and now rents are rising as well, and fast (so inflation figures are now artificially high).