what a massive pile of CORPULENT SLUGS our Congress is
3 LCS’s when the Navy only asked for one! Even the Navy knows they are garbage now and don’t want them anymore but Austal and Lockheed/Marinette feed enough campaign cash to their congressional land mollusks to make damned well sure the Navy’s going to get plenty of them now that they have created that hideous monster!
and
and why on earth doesn’t the Navy just buy a number of out of work AHTS’s? The total contract if exercised is more than half a billion dollars for Christ’s sake.
and don’t fall for the BULLSHIT line that only Republicans are financially responsible! They are just as prolific spending the money the people borrow from foreign lenders as Democrats only instead of spending on education or healthcare for people, they are only interested in lining the pockets of big business. There should at least be a Constitutional prohibition against borrowing money from anyone other than a US citizen because when we crash and burn in the future it will be non Americans holding an axe over our necks. China will OWN us someday.
But that’s not sustainable forever. At some point the people buying all this debt are either not going to continue buying it or will want exorbitant rates of return to offset this risky investment. When that happens, the party will be over in spectacular fashion because we won’t be able to afford to service the debt at that those (much) higher rates.
But that’s not sustainable forever. At some point the people buying all this debt are either not going to continue buying it or will want exorbitant rates of return to offset this risky investment. When that happens, the party will be over in spectacular fashion because we won’t be able to afford to service the debt at that those (much) higher rates.
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They are not buying debt. They are buying dollars with a small yield on their investment. They cannot demand anything really. So long is the US dollar is the sovereign currency. No one is asking them to invest money in US bonds, they do so of their own free will.
We operate on a (large) budget deficit every year. Because of this, we are dependent upon inflow of capital just to pay our bills. (A large bill being servicing the debt we already have). So this:
Is what I’m talking about. At some point the entities buying our treasuries won’t be willing to do so with “a small yield on their investment”.
It’s like any of us. If the bank begins to worry about their ability to get paid, they’ll want 10% for that car loan instead of the 3% you can get right now, or, they won’t give you a loan at all. When that happens, it’ll be 1929 all over again.
The twin US deficits: overspending and trade are funded through printing money, and a decreasing standard of living, infrastructure, etc.
But no problem, the US is too big to fail. Just as the failure of one Wall Street investment bank caused a world wide recession due to the follow on effects of counterparty risk and defaults. When the US catches a bad cold, the rest of the world catches pneumonia.
Similarly, when the US can no longer afford to provide the free world’s defense at US expense, Russia, China, Iran and whoever else will do as they damn please. The fee World cannot afford to let the US fail.
In one of the articles Bugge posted, it talked about China’s long term plan to divorce itself from the US economy by things such as setting up their own oil exchange not based on the USD and transitioning from from selling our middle class their goods to selling those goods to their own (huge) burgeoning middle class. And of course their one belt one road project.
Once all that’s in place, they not only won’t care about our colds, they’ll be in position to bring on and worsen our economic sickness.
This idea that we’ll be back on top in 10 to 20 years isn’t going to happen without a MASSIVE shift in how we do things here. We need to get equally aggressive in divorcing ourselves from China and becoming at least self sufficient again.
The elections of 2018 and 2020 will determine our ultimate fate I think. Time is running out before we reach a point of no return (if we haven’t reached it already).
I cannot agree more but the needed MASSIVE shift you say is needed to avoid collapse likely cannot happen without it triggering a collapse
here is what I envision such a shift would look:
a military 1/2 the size it is now with 1/3 the budget it eats annually…cut weapons system spending to only 20% it is today…make all new weapons bought not replace any less than 30 years old and only on a 1 new for every 2 old ratio
all other Federal spending 1/2 it is now including making social security and medicare needs based instead of a guaranteed benefit and increasing FICA taxes collected to a level guaranteeing an annual 5% surplus on expenditures which goes into the bank for future growth in benefits
income taxes at least 35% higher than they are now at ALL levels of income and capital gains taxation at a minimal 25% going up to 50% for excess gains
a Federal VAT of 10% on all goods except food and an excess VAT on luxury items such as yachts, planes, etc… perhaps a higher VAT on foreign made products to make US made one’s more competitive in the market
absolutely no capital leaving the US without a 15% tax on the transfer
tax benefits on investments made in increasing US production of manufactured goods and resources and tax penalties for investments made into foreign production and resources
a Constitutional prohibition on the Treasury borrowing money from foreign sources and a balanced budget amendment (except for when Congress declares war on a foreign nation state or when there is a recession in the economy more than 15%)
a Constitutional amendment that no less than 5% of outstanding Federal debts be paid off each and every year (except during wartime or huge recession)
a Constitutional amendment prohibiting campaign contributions to Senators and Representatives cannot come from any person who cannot vote for those they contribute to (or better still, publicly financed campaigns) and Constitutional term limits on any member of Congress to not more than 5 total terms in the House and 2 total terms in the Senate
any others to add?
if I am not mistaken, this shift would bring the US very close to the European nations in taxation and spending and those nations have not collapsed under the strain however the US would need to make the shift so that the cure did not kill the patient. how would be get there from here is the biggest question?
On the other hand the US could adopt some of the policies of other countries that have a higher rating on the world happiness index. The US is currently at 18. Outranks the UK
and thus suddenly all this recent loud talk of tariffs is going down to a quiet whisper
if China says no to further lending, the US would be in VERY DEEP SHIT because no one else would take their place without demanding very high interest on the bonds they buy. Everything could suddenly spiral down very fast here if there is no money the US Treasury can borrow on the cheap!
as we now see, China already has significant leverage to use to keep the US giving them all they demand. We are their whores now and will become more and more so as the decades march on. They will own us in the end!
Well, go see a doctor before you transmit your sickness to the rest of the world
Why would Russia, China, Iran or whoever else start bombing everybody just because US withdraw from the world scene?? What would they gain in terms of trade, or wellbeing of their people?
BTW; Who determine what is considered “the free world”??
I was just about to hit “like”, but then I got to your point 5 and the rest of the protectionist rant.
I think US should revive their leadership in promoting free trade, free & fair competition and human rights, for which it has been the champion for the last 70 years. It has brought prosperity to all, so far.
You only have to adjust to the new reality that no one nation can be calling all the scores any more.
This seems to be a bet you’re willing to go all in on… Your fellow “citizens of the world” in Ukraine, Isreal, and various countries in the South China Sea may not be so confident. Time will tell if the regimes of those countries you mention are as benevolent and all caring for the benefit of all nations as you seem to believe.
