How much debt do you think is okay for the U.S to handle, what is the breaking point?

[sooner78wakeboard.]

So how far is debt and how long will it be until the U.S. gets to that point. If they get to that point.

So right now we are at $15.3 trillion. How much can the U.S. handle? How much more debt can the United States occur until it blows out our economy. $20 trillion, $25 trillion? Say we grow $3 trillion in a hole a year, in 3 years are we looking at $24 tillion, will the economy still hold?

Remember when the Politicians were working hard to figure out a way to cut a trillion out of debt for the next ten years. A trillion, it takes about three or four months to spend that much and they are striving to figure out how to reduce that amount over ten years.....shame on both parties.

[mysfit]

It isn't as simple as pegging a number and saying that's it.

Gotta balance that with improving the economy and the overall health.

Is it better to have a 6% unemployment rate and a good GDP with a 1 trillion dollar debt or 12% unemployment, shrinking GDP and 500b debt?

[PIBuckeye]

demorats couldn't care less about the debt........

Just wait until inflation rears its ugly head....... it ain't gonna be pretty....

[potzer25]

Originally Posted by PIBuckeye

demorats couldn't care less about the debt........

Just wait until inflation rears its ugly head....... it ain't gonna be pretty....

that is an incredibly ignorant, partisan statement to make...

Deficits don’t matter.

[chucksker]

'Murica for the cot damn win!!! Free market capitalism fuck yeah!!!!!!!

FUCK THA COMMIES!!!!!!!!

[potzer25]

This would probably need it's own topic but enjoy the reading:

UNDERSTANDING THE MODERN MONETARY SYSTEM | PRAGMATIC CAPITALISM

What you can essentially see here is that the USA has run budget deficits for the majority of the last 60 years (in fact well over 200 years). More importantly, however, the domestic private sector balance has remained in surplus until the late 90′s. This was in large part due to the government’s desire to run budget surpluses as we believed the government sector needed to “save” in order to spend. As voters cheered the “fiscal prudence” of Bill Clinton they had no idea that he was helping to contribute to the bankruptcy of the private sector and ultimately lead us towards one of the greatest economic calamities of the last 75 years. In essence, the surplus years of the Clinton Presidency removed net financial assets from the private sector and forced the private sector to sustain their standard of living by acquiring money in the only other way possible – by going into debt. George Bush further exacerbated the problem as current accounts remained a substantial demand leakage that was not offset by high enough budget deficits. What would ensue over the course of the next 10 years would be the largest debt bubbles in the history of modern economies.

Another important conclusion from the above analysis is that you’ll see that all three sectors cannot be in deficit or surplus at the same time. This is impossible as one sector’s deficit is another’s surplus. You will often hear politicians say “we all need to tighten our belts”. When it comes to political rhetoric that sounds great, but when it comes to reality it is simply not rational. If the private sector desires to net save then the public sector must spend. Both cannot save without causing adverse effects to the economy. If, as we saw in 1999, the private sector and public sector both attempt to save then there is an increasing likelihood that the private sector will attempt to sustain its standard of living by taking on excessive levels of indebtedness or by forcing the economy into severe recession. In a world with global trade we are certain to have trade deficit and trade surplus nations. This means that once you input the foreign sector into the above equation you are, by definition, going to have countries that MUST run government budget deficits or ultimately suffer shrinking economies. Without some rebalancing mechanism these misunderstandings continue to cause substantial and unnecessary economic turmoil throughout the world.

What level of debt is acceptable is not really the right question. The real question, as always, is what level of growth can be achieved to continue servicing and/or reducing that debt. Our debt reached >120% GDP and we recovered just fine.

[sooner78wakeboard.]

Originally Posted by potzer25

This would probably need it's own topic but enjoy the reading:

UNDERSTANDING THE MODERN MONETARY SYSTEM | PRAGMATIC CAPITALISM



What level of debt is acceptable is not really the right question. The real question, as always, is what level of growth can be achieved to continue servicing and/or reducing that debt. Our debt reached >120% GDP and we recovered just fine.

I am not asking about a wonderful scenario where both political parties came together and agreed control spending or at least keep in line with current revenues. I am must talking about if politicians keep up their current status quo...how much longer will it last?

[olympicoscar]

I don't think the debt limit can be determined. I remember in high school, the teacher telling us that about 1 trillion would be the country into a depression. I also remember people saying the 70's, that if gas hits $1.50 no one will buy it.

The level of growth is the key. If we cannot service the debt, then we are in trouble. Therefore there is no real limit. It could have occurred years ago had we not been able to pay the interest. In theory, it could go on forever.

[potzer25]

Originally Posted by sooner78wakeboard.

I am not asking about a wonderful scenario where both political parties came together and agreed control spending or at least keep in line with current revenues. I am must talking about if politicians keep up their current status quo...how much longer will it last?

No, your question was:

How much debt do you think is okay for the U.S to handle, what is the breaking point?

My response is that "how much debt" is not the right question either in terms of $'s or % of GDP.

[tech_iceman]

who cares? we have more important things going on, like birth control and religion

[potzer25]

Originally Posted by tech_iceman

who cares? we have more important things going on, like birth control and religion

atleast look for the silver lining...that likely means both sides agree we are recovering. ^_^

[olympicoscar]

Originally Posted by tech_iceman

who cares? we have more important things going on, like birth control and religion

What's the price of condoms these days?

[JuiceTheGator]

I think the question is backward. It should be "how much GDP growth do we need to stop deepening our debt. The carrot and mule game of macroeconomics must be adjusted to produce at least 6% GDP growth before we even start getting close to break even on the deficit. That won't happen in our overregulated economy where 70% of the taxes taken from producers are just given to the non-producing.

A complete debt collapse, like in Greece, happens on the extreme. In our case, we just get a little poorer each year as our production is sucked-up by taxes going to debt payments. Even worthless gov't projects return about 40 cents on the dollar spent. Interest returns nothing.

Our standard of living has fallen for a sustained period for the first time since the decade of the great depression. We produce more yet take home less. (unless you work for the federal gov't) As long as the Fed buys enough bonds to keep rates low, we won't go bankrupt in a falling credit quality spiral. But we're eating ourselves away.

[Leader O'Cola]

Originally Posted by JuiceTheGator

I think the question is backward. It should be "how much GDP growth do we need to stop deepening our debt. The carrot and mule game of macroeconomics must be adjusted to produce at least 6% GDP growth before we even start getting close to break even on the deficit. That won't happen in our overregulated economy where 70% of the taxes taken from producers are just given to the non-producing.

A complete debt collapse, like in Greece, happens on the extreme. In our case, we just get a little poorer each year as our production is sucked-up by taxes going to debt payments. Even worthless gov't projects return about 40 cents on the dollar spent. Interest returns nothing.

Our standard of living has fallen for a sustained period for the first time since the decade of the great depression. We produce more yet take home less. (unless you work for the federal gov't) As long as the Fed buys enough bonds to keep rates low, we won't go bankrupt in a falling credit quality spiral. But we're eating ourselves away.

you got called on that lie last week. why would you be so stupid as to trot it out AGAIN ?

[johnshadows64]

I thought 90% of GOP was kind of the standard. Least that's what I've heard on Bloomberg.

[PIBuckeye]

Originally Posted by potzer25

that is an incredibly ignorant, partisan statement to make...

thats your opinion. But it has the convenience of being true....... they don't.

[li0lsh]

Originally Posted by PIBuckeye

thats your opinion. But it has the convenience of being true....... they don't.

LMAO

[JuiceTheGator]

Originally Posted by potzer25

that is an incredibly ignorant, partisan statement to make...

Good luck pointing to any significant pieces of legislation that suggest otherwise.

[Bone]

Bob Beckel was on Hannity a few nights ago and he said the debt didn't matter.

I've heard other dems say the same thing.

[MarkOU]

Originally Posted by olympicoscar

I don't think the debt limit can be determined. I remember in high school, the teacher telling us that about 1 trillion would be the country into a depression. I also remember people saying the 70's, that if gas hits $1.50 no one will buy it.

The level of growth is the key. If we cannot service the debt, then we are in trouble. Therefore there is no real limit. It could have occurred years ago had we not been able to pay the interest. In theory, it could go on forever.

solid answer, agree.