Posted on 04/21/2011 10:33:41 AM PDT by SeekAndFind
It’s nice to see some mainstream economists making logical arguments with regards to America’s financial position. In a recent research piece Credit Suisse shows that America is far from being broke. Of course, anyone who understands MMT and the actual workings of a modern fiat monetary system knows this is a preposterous notion to begin with, but CS is using a traditional framework and their evidence counters much of what we so often hear from fear mongerers and politicians:
“Some of our senior politicians and market pundits say it every day: America is broke.
We wonder if this is meant to be a joke. America is not even close to being broke. Household net worth is $57T. Public government debt including the state and local sector is about $12T. If we consolidate balance sheets to reflect the fact that the household sector is ultimately responsible for repaying this debt we arrive at a household net worth of $45T or 303% of GDP. This is at the high-end of the historical norm of 250- to 300% since the data began in 1952. The current level was surpassed only in the recent tech stock and housing bubbles.
No doubt policymakers have a lot of work to do in terms of agreeing on a politically palatable way to adjust current laws to reduce the unprecedented intergenerational transfer of wealth associated with old entitlement programs and a wave of new retirees. But, ultimately, the resources are there and as we are increasingly finding out, so too is the political will.”
Source: Credit Suisse
It’s just a flesh wound.
Their static analysis is worthless. Unless major changes are made to entitlements spending will mushroom. We have promised much much more than we can afford.
We aren’t broke now but we are running, not walking into a catastrophe.
And these are NOT the droids you are looking for...
That is too funny. I have been saying this for months now. It is amazing to see the sheep in this country. ROTFLMAO
It ain't MY debt, and I'm not going to pay it. They touch my junk and people will die - that is my line in the sand.
RE: We are broke, so we should declare bankruptcy, and the govt will bail us out!!
And how will the government, who is broke, be able to bail you out other than to TAKE or BORROW from those who aren’t broke?
It can also print money to bail you out, and you’ll be bringing a sack of $100 bills to the grocer the next time.
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