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  #61  
Old 01.07.2011, 01:30
hoppy
 
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Re: Is the US in denial over its $14tn debt ?

Paul Ryan says that the Republican proposed budget cuts will not impact those over 55 years of age. Also that a government shutdown is not that serious.

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Ryan said he is not willing to raise taxes -- or allow the Bush tax cuts to expire in 2012 -- to protect Social Security and other entitlements.

"Class warfare ... is contrary to growth," he said. "It might advance equality, but it doesn't advance prosperity."
http://www.huffingtonpost.com/2011/0..._n_837031.html

I am so hoping that he will announce his bid to run for presidency, him and Michele Bachman ( Ms. fire in her heart and arid air in her head)

I haven't given up on the US, those of who who criticize ( however knowledge you are), are just rats fleeing a ship before its sinks. Where is you indomitable spirit, where is you sense of loyalty and patriotism?

OK. seriously, the US has to start taxing the rich, it's the only way out.
What worried me is that a growing number are defaulting or just refusing to pay loans- such as mortgage, next it will be that they will refuse to repay student loans.

Last edited by hoppy; 01.07.2011 at 03:09.
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  #62  
Old 01.07.2011, 10:45
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Re: Is the US in denial over its $14tn debt ?

The list of things the US continues to be in denial over is a lonnnnng one
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  #63  
Old 01.07.2011, 23:56
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Re: Is the US in denial over its $14tn debt ?

Guys, I don't get how Republicans & Democrats argue over 300 billion dollar cuts over the next 10 yrs, I mean why should it matter? the debt is at 14 trillion $ & growing...
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  #64  
Old 02.07.2011, 02:31
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Re: Is the US in denial over its $14tn debt ?

remembers me about this

http://en.wikipedia.org/wiki/Weimar_Hyperinflation
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  #65  
Old 02.07.2011, 09:41
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Re: Is the US in denial over its $14tn debt ?

The definition of Hyperinflation is 50% CPI YoY..... In order for that to happen they would have to print $30Trillion, atleast, for one year. Thats why QE was a piss in the ocean. Weimar was actually the fault of the English who forced the German government (who was pushing Von Havenstein to stop printing money at a 16% inflation rate) to not tell Von Havenstein what to do.

When the Germans were late delivering 300 telephone poles to France Rudolf Von Havenstein took his new English 'central bank act of 1923' and decided to start printing.

At the time there was no government in Germany, just a bunch of politicians who were against inflation.

Hyperinflation is more difficult than people think. I speak regularly with the "Ben Bernankes of Africa"..... These guys always have told me some of the logistical and timing issues with just printing.

But as stated before, the Germans were 12x leveraged when Von Havenstein went nuts. The US today is 6x leveraged. Thats a very large difference.

Von Havenstein tried QE back in 1921 and 1922. It did not work, although the yield curve did go massively negative. But loan growth (the ultimate goal of QE) never picked up.

In the end Von Havenstein died of a heart attack in 1925, the day they picked his replacement, the amazing Hjelmar Schacht.... Had the Nazis won the war we wouldnt have Keynesian economics, we would have Schachtian economics.


But in order for us to have another Weimar the government is the US would have to dissolve. Dont forget that Greece has tried on 7 instances to have hyperinflation and only succeeded 3 times.
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  #66  
Old 02.07.2011, 10:03
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Re: Is the US in denial over its $14tn debt ?

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OK. seriously, the US has to start taxing the rich, it's the only way out.
Many international companies have left America because it's one it has one of the highest corporate tax systems in the world. The US needs to rethink this tax in order to draw companies back and add more jobs on the job market.
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  #67  
Old 04.07.2011, 16:29
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Re: Is the US in denial over its $14tn debt ?

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Many international companies have left America because it's one it has one of the highest corporate tax systems in the world. The US needs to rethink this tax in order to draw companies back and add more jobs on the job market.
Cut taxes & jobs start to flock towards the US...would be ideal in a Republican world??
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Old 04.07.2011, 16:59
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Re: Is the US in denial over its $14tn debt ?

The biggest owners of the US debt are China, UK and Japan. US cannot repay it's debt and so will run its currency into the ground leaving China, Japan and UK to shut up and suffer or declare war on the US. Which won't happen as the US are the biggest fire power in the world and still spending crazy on defence. US have nothing to worry about other than their reputation.

Cannot understand why my stupid country has tripled it's stock of US treasury bonds over the last four years...Anyone explain that?
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  #69  
Old 04.07.2011, 17:03
hoppy
 
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Re: Is the US in denial over its $14tn debt ?

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Cut taxes & jobs start to flock towards the US...would be ideal in a Republican world??
Trickle-Down economics is a smokescreen.

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How the rich soaked the rest of us
The astonishing story of the last few decades is a massive redistribution of wealth, as the rich have shifted the tax burden
http://www.guardian.co.uk/commentisf...public-finance
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  #70  
Old 04.07.2011, 17:09
hoppy
 
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Re: Is the US in denial over its $14tn debt ?

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Many international companies have left America because it's one it has one of the highest corporate tax systems in the world. The US needs to rethink this tax in order to draw companies back and add more jobs on the job market.
I don't now if they have really left, they just off-shore/outsource certain operations for example:

General Electric, the nation’s largest corporation, had a very good year in 2010.


Drew Angerer/The New York Times
A PRESIDENT’S BUSINESS LIAISON
In January, President Obama named Jeffrey R. Immelt, General Electric’s chief executive, to head the President’s Council on Jobs and Competitiveness. “He understands what it takes for America to compete in the global economy,” Mr. Obama said.
But Nobody Pays That

A Wealth of Exceptions
General Electric: Where Taxes Are a Source of Profits
Add to Portfolio

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.


http://www.nytimes.com/2011/03/25/bu...omy/25tax.html
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  #71  
Old 04.07.2011, 17:31
hoppy
 
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Re: Is the US in denial over its $14tn debt ?

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The biggest owners of the US debt are China, UK and Japan. US cannot repay it's debt and so will run its currency into the ground leaving China, Japan and UK to shut up and suffer or declare war on the US. Which won't happen as the US are the biggest fire power in the world and still spending crazy on defence. US have nothing to worry about other than their reputation.

Cannot understand why my stupid country has tripled it's stock of US treasury bonds over the last four years...Anyone explain that?
Because the UK is the US mini-me? I think that the US paid the UK enough in taxes and so did most Americans which is why today is....

4th of July!

Feliz Día de la Independencia.

We hold these truths to be self-evident, that all men are created equal,
that they are endowed by their Creator with certain unalienable Rights,
that among these are Life, Liberty and the pursuit of Happiness.


“Liberty is the possibility of doubting, the possibility of making a mistake, the possibility of searching and experimenting, the possibility of saying No to any authority--literary, artistic, philosophic, religious, social and even political”-Ignazio Silone
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  #72  
Old 04.07.2011, 19:52
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Re: Is the US in denial over its $14tn debt ?

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The biggest owners of the US debt are China, UK and Japan. US cannot repay it's debt and so will run its currency into the ground leaving China, Japan and UK to shut up and suffer or declare war on the US. Which won't happen as the US are the biggest fire power in the world and still spending crazy on defence. US have nothing to worry about other than their reputation.

Cannot understand why my stupid country has tripled it's stock of US treasury bonds over the last four years...Anyone explain that?
UK isn't really a creditor nation Lou...it's running huge deficits coupled with big debts.
ps i'm not worried about the US going bust because it is inevitable, i'm rather worried about it repeating the same mistakes once robust post-bankruptcy growth returns.
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  #73  
Old 04.07.2011, 23:57
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Re: Is the US in denial over its $14tn debt ?

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Many international companies have left America because it's one it has one of the highest corporate tax systems in the world. The US needs to rethink this tax in order to draw companies back and add more jobs on the job market.
This is not true. Most Corporations in the USA pay very little in corporate taxes. In theory they could pay high taxes but the reality is that they have outsourced the manufacture to save on labor costs and most of them get a deduction for costs incurred which they deduct.

Plus they get the best patent protection system on the planet for their 12 pieces of silver. The threat to leave is a bluff. The companies that leave just don't make it because they don't have anything to sell in the American market. If it was otherwise then why are Boeing, Microsoft and so many other huge corporations still chartered in the USA? The answer is that it is cost effective to do so. Most large corporations have plenty of really good ways to avoid paying their taxes. Why do you think that so much money goes to US politicians? More than any other country in the world and our form of bribery is more or less legal.

As far as the debt, I've said it before and it bears repeating. If the US government keeps keeping different sets of books for taxes, spending, defense and so forth and doesn't care to reconcile them all in one place at least once a year so that everyone can really see what is happening then we will continue to have this problem with the debt and our inability to control it.
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  #74  
Old 05.07.2011, 07:14
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Re: Is the US in denial over its $14tn debt ?

As much as I enjoy the very hot rhetoric here:

- The international bond market continues to offer the most attractive interest rates in the world for US debt. In other words, by and large no one with skin in the game is worried about the US government debt.

- Current inflation rate in the US is teetering from below 0 to 1%. Recall that when Reagan and Volcker "whipped" inflation (Sorry Mr. Ford) they got it down to 4%.

- the biggest change in the American economy from 2007 is that consumers went from spending just over 100% of their income to about 90% of their income.

Not to get needlessly Keynesian, but the correct thing is for the government to spend more in an economic downturn to restart the engine. I would recommend spending it on infrastructure, which is badly needed in the States.

That said - the government has a historic problem with it's spending being a ratchet, and reductions in the rate of growth get fought over as though they were actual reductions. And yes, American miltary spending is in a zone that can only be described as "lunacy." And the current American tax structure is the weakest it's been since they had the income tax, and there is no political will to raise them. If anything, the republican party has reached the point of being suicidally opposed (thank you mr. Norquist).

All this is to say that, yes $14T is a lot of money, even for an economy that is still a quarter of the world's. But comparing the US to the Weimar republic is pretty overheated. It's a long, long, long way from there, if it even can get there.
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  #75  
Old 05.07.2011, 08:48
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Re: Is the US in denial over its $14tn debt ?

Now if we can only remove the dollar as the (oil) reserve currency....the US would be really fecked..

"Fire in the hole"

http://en.wikipedia.org/wiki/Reserve_currency

"Former Federal Reserve Chairman Alan Greenspan said in September 2007 that the euro could replace the U.S. dollar as the world's primary reserve currency. It is "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency."[6] Econometric analysis by Jeffery Frankel and Menzie Chinn in 2006 suggests the euro may replace the U.S. dollar as the major reserve currency by 2020 if: (1) the remaining EU members, including the UK, adopt the euro by 2020 or (2) the recent depreciation trend of the dollar persists into the future.[7][8] In recent years, the euro's increase in the share of the worldwide currency reserve basket has continued to increase - albeit at a slower rate than prior to the beginning of the worldwide credit crunch related recession and sovereign debt crisis"
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  #76  
Old 05.07.2011, 08:55
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Re: Is the US in denial over its $14tn debt ?

Here it is the clock


http://www.usdebtclock.org/
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  #77  
Old 05.07.2011, 10:05
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Re: Is the US in denial over its $14tn debt ?

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Now if we can only remove the dollar as the (oil) reserve currency....the US would be really fecked..

"Fire in the hole"

http://en.wikipedia.org/wiki/Reserve_currency

"Former Federal Reserve Chairman Alan Greenspan said in September 2007 that the euro could replace the U.S. dollar as the world's primary reserve currency. It is "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency."[6] Econometric analysis by Jeffery Frankel and Menzie Chinn in 2006 suggests the euro may replace the U.S. dollar as the major reserve currency by 2020 if: (1) the remaining EU members, including the UK, adopt the euro by 2020 or (2) the recent depreciation trend of the dollar persists into the future.[7][8] In recent years, the euro's increase in the share of the worldwide currency reserve basket has continued to increase - albeit at a slower rate than prior to the beginning of the worldwide credit crunch related recession and sovereign debt crisis"
Greenspan is way off.
Btw, reserve currency status comes at a premium. Countries with trade surpluses would never want it such as China as they expressed before.
For the world to have enough dollars, they have to keep selling the US crap & not buying much so they keep the rest -hence reserve.
Only the Europeans would race to take that spot
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  #78  
Old 05.07.2011, 10:27
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Re: Is the US in denial over its $14tn debt ?

the US will print it's way out of trouble. i would expect the USD to be worth a fraction of what it is currently worth today within the next 10 years. if we don't get USD hyper-inflation, we should see something that closely resembles it.
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  #79  
Old 05.07.2011, 22:59
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Re: Is the US in denial over its $14tn debt ?

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Many international companies have left America because it's one it has one of the highest corporate tax systems in the world. The US needs to rethink this tax in order to draw companies back and add more jobs on the job market.
It is technically correct that the US has one of the highest corp. tax rates in the world. (I think only Japan has a higher rate). On the other hand it is also true that GE paid zero in terms of corp. tax in 2010. How can you reconcile both of these truths? Just take a look at the IRC (US tax code), and to every regulation in the code you will find an exception or qualification. The same holds true for the entire US tax system esp. personal income tax. The way the regs are written creates a disjointed and very complex tax system which in turn creates a lot of loopholes and exceptions that are so big that you can drive a truck through them. It is also a nightmare to administer for the IRS. Hence, a knowledgeable and capable tax attorney and CPA's wet dream.

Its funny that you mention GE, Hoppy, as it is an extreme example of how corps have organized themselves around the tax code. GE has an entire in-house tax planning department dedicated towards minimizing its tax "footprint". During my last year of law school I actually had the pleasure of being taught in state tax law by one of the heads of GE's Corp tax department. One simplified example of one of GE's planning techniques is that GE actually allocates parts of its manufacturing operations paying special attention to the state tax credits available to them. Very few corps go the same lengths as GE when it comes to domestic tax planning. That's GE corporate strategy and in 2010 it obviously paid off. But it is a tell tale sign that things are a little awry with regard to the effectiveness of the US tax code when a household name corp can plan itself out of paying any taxes.

You could paint a similar picture when it comes to UHNW families in the US with regard to the usage of tax planning techniques.

A flipside of the tax system is that ordinary small and medium size businesses and middle income families just file their taxes, sometimes vote their pocket book (go republican for gimmick tax breaks) and end up paying the bulk of the revenues.

As Zuger pointed out tax revenues are crucial to the federal government because they act as security for federal treasuries. One would think, since we are going to be issuing debt for a little longer and all, that having a more effective tax code so we could collect more revenue would be a bi-partisan issue. I reckon that with a proper overhaul (better filing procedures and the extinguishing of tax loopholes) the US could reduce its corp rates and end up with more revenue.

Last edited by Cbass; 06.07.2011 at 00:00.
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Old 05.07.2011, 23:23
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Re: Is the US in denial over its $14tn debt ?

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The biggest owners of the US debt are China, UK and Japan. US cannot repay it's debt and so will run its currency into the ground leaving China, Japan and UK to shut up and suffer or declare war on the US. Which won't happen as the US are the biggest fire power in the world and still spending crazy on defence. US have nothing to worry about other than their reputation.

Cannot understand why my stupid country has tripled it's stock of US treasury bonds over the last four years...Anyone explain that?
Incorrect. The majority of debt is held by the U.S. Federal Reserve itself, U.S money market funds, US private and public pension funds NOT foreign holders of debt.
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