Posted on 12/28/2003 12:00:01 PM PST by Willie Green
Edited on 04/13/2004 2:03:18 AM PDT by Jim Robinson. [history]
Enough people worry about the federal budget deficit that it probably won't get insanely out of hand.
The trade deficit, our addiction to buying more from abroad than we sell abroad, is sneakier.
At $500 billion a year now and counting, it is steadily turning over America's "net worth" to foreigners. Mainly the Chinese, who now sell us $115 billion more a year than they buy from us. They pocket our dollars, acquire our assets.
(Excerpt) Read more at pittsburghlive.com ...
Someone had better come up with a plan soon or we are toast.
I would like to see how well China could compete with EPA, OSHA, our state regulation boards, unions, lawyers, labor laws, etc. Also, they've never spent a dime on R&D so maybe they should pay us something for that.
Hey they don't wipe their @ss with those little pieces of paper. Some foreign companies buy out American companies or Government bonds, and some build up weaponry. "Capitalists will sell us the rope to hang them."
5% and it will disappear in 5 years.
Same thing happened in the late 1990s.
The US economy will double in less than 15 years and salaries will triple.
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Right. Until you wake up to find they own the entire monetary system.
Those little rectangles are, in reality, a claim against our factory and farm produced outputs in the future, or our assets in lieu of produced goods. They're called IOU's if you want to think in terms of trading with you neighbor by takng something from him today with a promise to deliver something of yours to him tomorrow to settle the deal.
A man worked for a buck a day a hundred years ago. Now he works for a hundred bucks a day. In both cases, it takes that days work to pay for that days living expenses, with very little (if any) left over. Except that now he has to have his wife work as well to make it, and with fewer kids to boot.
So, what does trippling salaries actually mean except that you have to make 300% gain on your savings over the next 15 years for them to remain the same in purchasing power?
Through the years I've scraped and saved and invested wisely so now my investments earn the equivalent of 5 times my salary each day.
It takes self discipline and hard work but the reward justifies the sacrifice.
All on $100 to $200 each month for 25 years.
The power of compounding and the rule of 72 should be required knowledge for every junior high graduate!
The result will be a trillion dollar deficit going to foreign lenders or money creation by Greenspan. They both amount to ten percent or more of GDP. The government figures keep quoting that 5% of GDP is similar to the amount owed immediately after WW II. At that time we had a trade surplus plus were receiving monies from allies that owed us for equipment bought for the war.
Now to get to the worrisome part of the equation. With a raw figure of 8.5 trillion which is our national GDP, what is the percentage of that GDP required to service our debt? A low ball figure is 11%. Forecasts of four to five percent is a pretty good figure of growth in our economy a year. This means that a deficit of five to six percent will be short of meeting our obligations each year.
This also means that adding a trillion dollar debt each year we have a time frame of two to three years when our debt equals more than our GDP. This is the breaking point. Argentina, here we come! Japan was fortunate in having a trade surplus and a saving population so we will not be so fortunate as they.
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They are IOU's we can not possibly pay off.
My plan is the following:
Stay the course. Consume and consume and consume. Keep trading those little rectangular pieces of paper for cars and computers.
Then, just when it gets really, really, really bad; and foreigners own like 20 trillion worth of America, we tell them to go screw themselves. It can't possibly cost us more than 1 trillion to kick all their asses if they complain. Call it the Rodney King 2020 plan.
Same thing happened in the late 1990s.
The US economy will double in less than 15 years and salaries will triple.
Sorry, I just don't believe this. Most people would not say that salaries have tripled in the last 15 years. They would tell you that they are having to work a lot more but not really making much more.
The only way salaries will triple will be if the pump so many dollars into the money supply.
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