Posted on 03/27/2020 3:45:32 AM PDT by Kaslin
The COVID-19 pandemic can be used to illustrate two problems that are both more destructive than the virus. The problems relate to how Americans view the role of government in their lives and to the belief that government money can always fix problems.
Let's look at the money issue first. The immediate reaction of our government to the virus threat was to spend massive amounts of money. The latest news is that politicians plan to "boost" the economy with nearly two trillion dollars in spending and loans. "The package is coming in at about 10% of GDP. It's very large," says Larry Kudlow. For a plan of this size to sound like a good idea, you need to ignore some important economic facts.
Our country has unbelievable levels of debt, and our debt is rising rapidly. The numbers are staggering. The debt clock shows U.S. debt at $23 trillion (nearly 110% of the GDP) and unfunded liabilities of $77 trillion. That's a conservative estimate. Boston University economist Laurence Kotlikoff, an expert on the national debt, says, "The true size of our fiscal problem is $222 trillion...20 times bigger than the official debt." He says, "The government has gone out of its way to run up a Ponzi scheme and keep evidence of that off the books by using language to make it appear that we have a small debt."
(Excerpt) Read more at americanthinker.com ...
They’re telling the truth, but no one is listening.
bump ..
Fair argument. We live in an era of extremely low interest rates by historical standards. When interest rates rise the interest on the debt will consume the budget.
“Coronavirus Is Not Even Close to America’s Biggest Problem”
And it’s not racism or climate change either.
Do you see any indication of rising interest rates anywhere in the foreseeable future?
Not for the foreseeable future.
Exactly
One party gleefully adds to the debt, the other party goes along. The bailout bill will do little but add to the debt.
If that really boosted the economy, then the government must send a trillion every month. That will really boost the economy.
Get real. It's inflationary. The numbers all around go up because each dollar has lost spending power, and idiots crow "the economy is improving."
No it isn't. It's an imaginary boost. To give this idea some credit, the folks are fooled and think that everything's OK again, and start spending, investing, and working, leading to a real recovery.
No time soon. But when the rates do rise the politicians will be in a world of hurt.
Bump.
An already unsustainable national debt has become further unsustainable. GG.
You raise good points, but I think you’re overlooking something important here. I’ll post more on it later this morning.
Nobody's grandkids are going to be saddled with any debt. They will kick the same can down the road until money is no longer useful. Life goes on
The pandemic has exposed the flaws and fissures decades of apathy and fraud have made
So its then ok to have 110 percent debt to gdp?!?!?!
I know you don’t believe that.
And if interest rates were allowed to actually go to where they would naturally, without TRILLIONS spent to keep it down, I think it would be quite a bit higher.
And as we’re adding over a trillion in debt a year, there is NO rosy news regarding the debt.
Not even negative interest rates, which may be here soon :)
Then I’ll buy a safe
“The true size of our fiscal problem is $222 trillion...
That’s 1/4 of a quadrillion dollars.
Didn’t even know that number until about a month ago :)
When those people on msnbc, I think it was, said that Bloomberg spent enough to give every American 1 million dollars, I somehow screwed up how much that would actually be in total and came up with 2.5 quadrillion dollars :)
No job in accounting and finance in the fed gov for me anytime soon!
Adding $2 trillion to our money supply does nothing to change the dynamics here unless it moves quickly through our system instead of being stuffed in mattresses.
The bad news is that we have destroyed so much of our productivity just by shutting down viable, productive businesses. The good news is that we still have plenty of demand for products and services, and those industries will continue to generate activity that adds to the bottom line in terms of our GDP.
Speaking of GDP ...
DP raises a good point about debt-to-GDP ratio. He's right to be concerned, but the real story here isn't the debt. It's the GDP. Even with the election of Donald Trump in 2016 we have been mired in a long period of malaise and decline here in the U.S. The evidence for this is that we celebrate 2.5% GDP growth rates that would have been considered pathetic two and three decades ago. We are slowly following other major industrial nations in Asia and Europe down that road of stagnant mediocrity, and this is driven mainly by our political focus on maintaining high living standards for people even as they become less productive over time (retirees, for example).
You won't like the answer if you did the math, 33,000 years just for the first Trillion. Lets face it, the debt will never go down, God save us if interest rates go up.
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