Posted on 10/18/2016 4:40:48 AM PDT by expat_panama
While everyone fixates on the U.S. election, developments in the world economy threaten to create problems for the next president and, possibly, trigger a major financial crisis. A little-noticed study by the International Monetary Fund (IMF) delivers the bad news. It finds that global debt -- including the debts of governments, households and non-financial businesses -- reached a record $152 trillion in 2015, an amount much higher than before the 2008-09 financial crisis.
What's worrisome about this is that the global economic recovery has assumed widespread "deleveraging" -- the repayment of debt by businesses and households. Initially, the theory went, these repayments would slow the economy. To reduce their debts, households would cut consumption and companies would cut investment. But once debts had receded to manageable levels, consumer and business spending would bounce back. The economy would accelerate.
It hasn't happened...
...just the opposite has occurred. Many countries have become more indebted. On a worldwide basis, the $152 trillion of debt (again: both private and governmental) is up from $112 trillion in 2007, before the financial crisis, and $67 trillion in 2002...
...Whether or how this might become a full-blown crisis is uncertain...
...some economists urge more "infrastructure" spending on roads and ports by countries that can still borrow. This might help, but a little arithmetic suggests that the potential is limited. The world economy is about $75 trillion. Boosting growth by 1 percentage point would require $750 billion in extra annual spending. Does that seem likely?
The next president cannot escape these issues. Compared to many countries, the United States survived the Great Recession in relatively good shape. But we are inevitably affected by the broader global economy. The delay of deleveraging suggests a slowing world economy and a continued political backlash against global trade and investment.
(Excerpt) Read more at investors.com ...
George Washington had no clue about the America of today or of the global trade in which America is a major factor.
To drag out the founding fathers as an excuse for tariffs today is just plain silly
There will be no reversion to the economic reality of the 1780’s struggling excolonies
Dragging out Adam Smith and applying his principles to today's economy is just silly.
So if you could completely replace the income taxes with tariffs and other sales taxes would you?
Our company pays a 32% tariff on many of our imported goods today. What is the government doing with the money?
It is ludicrous to say that the USA puts up any viable trade restrictions. That is just bunk.
Contrary to popular religious belief, we already levy huge tariffs on imports from unpopular countries like China - unless, perhaps, a certain firm is big enough to buy a few pages of exemptions for themselves in the next "Free" Trade Agreement - so the only thing left to accomplish with a general import tariff on everything is to beat up those scammers in Denmark and New Zealand who are flooding us with cheap cheese and wine. :)
A Free Trade myth easily debunked.
For FY 2010 the USA collected $25 Billion in tariff revenues. That sounds like a lot but when you consider the USA imports $2.5Trillion every year that works out to around 1%. LOL.
Ref. Tariffs in the United States.
Trust me - we pay plenty of customs duty. New tariffs just crush smaller businesses like ours, but do you think GE and Nike - who own and operate their own US Senators - will ever be paying them?
If you don't wipe out the nexus of corruption first, new tariffs will just mean more money for the welfare state to misspend.
I think you may be insane.
“Part of that would be cutting government spending in half. At least as a start.
We need some real economic nationalism.”
Agreed, BUT where do the cuts come from? Military? Social Security? Medicare? EBT Cards and Social Services? Infrastructure?
It’s such a bloody mess! Each cut would have substantial blow back. I KNOW it’s needed, but my elderly Dad JUST makes it each month on his SS and (small!) pension. If he didn’t have that cash flow - who pays for the deficit he’d run each month? Me? And his expenses are going up & up the older he gets and the more assistance he needs.
Our @#$%^&*! politicians have both kicked the can down the road AND moved the goalposts at the same time! Grrrr!
We’ve done the same. Liquidated all assets, paid off all debt, bought more land (only 4 years to go and the farm will be paid off; we can pay it off immediately if need be), doing as much as we can for ourselves, spending little, etc.
I have a feeling it will be cold comfort, but at least a FEW of us out here have been reading the tea leaves!
1) Give up and say there is no solution. It's all broken and we can't fix it because so-and-so would suffer.
2) Try to be good surgeons and make really really SMART cuts so that everything balances perfectly and no one suffers.
3) Default
I'm flat out in favor of default. No $20T debt. No interest to be paid on the debt.
Lower taxes, cut regulations, use the saving on debt to limp along and help the needy for <5 years while economic nationalism kicks in and grows the economy. Government bureaucrats should be hit hardest and first.
There is no avoiding this problem. There is no painless solution.
All the stuff that is "too big to fail"? I would nuke that stuff from orbit as fast as possible. Defaulting on our sovereign debt is a big deal. But until someone comes up with a better idea, I think it's the best idea I've heard.
I feel better now. Thanks! ;)
That is a risk to be sure, but not being able to vote at all is worse. With all the RIGGING going on, and you can bet the LSM will pull a early East Coast Biggie state call for the Witch and say she’s won, and depress the Mid-West time zone differences. Many will just go home and not vote thinking the election lost. They won’t remember what they pulled before. WE DO. How are you going to get an absentee ballot if you are in the ER on Election Day or out of state for a unplanned funeral. Each state has it’s laws on absentee voting dead lines. God knows my husband didn’t think he’d be dead with in minutes of a massive heart attack less than 3.5 wks after he voted. I’ve made to many ER trips myself to risk it and they are always sudden onset and I’m there all day and usually am an admit for observation because I’m a cardio patient.
Trump was not my first choice, but he won the primary. And I sure as Heck ain’t voting for the Witch. I’ve a US Rep to elect and don’t want a dem back in that seat, took us 2 decades to get rid of Gore and the last Dem Rep.
Unless they do a debt jubilee and show real efforts at controlling spending this will come crashing down, it can’t be sustained.
Unless they do a debt jubilee and show real efforts at controlling spending this will come crashing down, it can’t be sustained.
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