Politics US Debt woes and the problems for the rest of us

[Helme]

Labour creates the products/services, gets paid, then consumes products/services. I don't see this is as a Soviet propaganda, but rather a fairly obvious truth. If everyone stops consuming, nobody will make any money any more, this is pretty much what is happening now - yes, corporations currently enjoy record profits but that's from cutting out labour costs, this won't last forever. Similarly, if everyone stops producing there will be nothing to consume

 

[mr.Blacky]

But again, the right-wing has convinced people that the government doesn't actually create jobs - only small business owners and corporations does that, ignoring that the Federal government is the biggest employer in the country. I guess in this fantasy cops buy their iPhones with monopoly money I dunno.

the question is how productive are those government jobs?
while another paper pusher job is still a job it is not a productive job.
You point out the US investment programs in one of your posts. Those did good because they were productive jobs, investing in the devellopment of the country. Nowadays corporations build the same things and not governments (they just order it)

 

[Helme]

The US infrastructure is falling apart because nobody has done any real investments in it for decades. Public transportation is a totally alien concept to anybody living outside places like New York. There is plenty to do, the problem is that there is no will to do it.

As for how productive these things are, historically governments have been really, really good at building these kinds of things which is why you really don't see private corporations doing projects at this scale - they can't compete. But in a country like the US that worships the private market even when it makes no sense... well you can still contract them to do it if you must, it'll cost way more but they would still have to hire massive amounts of people to get these jobs done.

The problem now is finding someone, ANYONE in Washington who is even willing to consider spending money. That is going to be hard because they've pretty much swallowed the austerity thing whole, which might be sensible when coupled with revenue increases but without is pointless and cruel.

Another point to take into consideration with these programs is that, they practically pay for themselves because you'll recoup what you pay the workers/contractors in taxes - not to mention the fact that having good infrastructure is kind of nice, think for example about the amount of money the US could save in the long run by electrifying their rail roads so they wouldn't have to rely on diesel trains any more. Not to mention that you'll have a couple of hundred thousand people who can afford to consume again which is the major problem corporations face currently.

 

[Tom]

"historically governments have been really, really good at building these kinds of things which is why you really don't see private corporations doing projects at this scale - they can't compete"

Oh really?

UK railway network - designed and built by private companies, subsumed by the government, guess when the rot set in?
UK trunk road network (excluding motorways) - designed and built by private companies (almost all A-roads around towns and cities are former turnpikes), now festering and falling apart because councils don't do their jobs?

I'm presuming you didn't live in the UK in the 1970s, when our government controlled just about every service? Energy supply - crap. Water supply - crap. Telephone system - crap.

Government does one thing, and one thing well - spend other people's money. Trouble is, it spends that money in ways so wasteful you wouldn't believe.

 

[caLLous]

They surely aren't going to let it get to the point where they are on the brink of (potentially) defaulting... are they?

The worldwide ramifications of the US defaulting are frightening. Toht will be alright though, apparently.

 

[Embattle]

Over runs, over budget and massively delayed every time the government gets involved in a big ticket item or project, hell it even over pays for small ticket stuff.

 

[Wij]

I see wealth coming from labour, be it private or public. But then again I'm a dirty leftist, and obviously I can't have any grasp on reality because I'm from socialist Sweden. Never mind that what saved the US the last time from total economic disaster was huge government work programs that got the economy rolling again. But since this doesn't seem to count... I guess the magical free market fairy did it.

Do you actually mean wealth ? Or value ? Or what ? People can have a very lavish lifestyle and yet have next to no wealth. Earn lots and spend lots == no wealth.

If you mean value then I'm presuming you're referring to Marx' Labour Theory Of Value. I can see your point when it's opposed to pure capital speculation bullshit but the theory, on it's own, is bollox.

 

[Helme]

Oh really?

You've got plenty of other examples in favour of it as well, NHS being the best I believe - the most cost effective medical care in the world. But I was speaking mostly of the US here, and their telephone lines, massive highways etc. all originate from government programs that were very cost-effective, not to mention useful because they brought services to places where private businesses would never invest.

They surely aren't going to let it get to the point where they are on the brink of (potentially) defaulting... are they?

See that clip/transcript I linked earlier, it's all pretty much theatrics for the upcoming election. The only real danger here is for the American people, many who will lose the already dreadful medical coverage they have - to then be forced onto private options next year that'll probably bankrupt them.

Over runs, over budget and massively delayed every time the government gets involved in a big ticket item or project, hell it even over pays for small ticket stuff.

I find most of these programs that run over recently has been mostly because of private contractors, in the US I think the best example would be the F-22, $70 billion and 20 years spent on a plane that can't fly when it rains, can't cross the international dateline without computers crashing, and most importantly - fills no role whatsoever because the Russian's are selling technology to counter it's stealth for fuck all, and have been doing so for years.

Do you actually mean wealth ? Or value ? Or what ? People can have a very lavish lifestyle and yet have next to no wealth. Earn lots and spend lots == no wealth.

If you mean value then I'm presuming you're referring to Marx' Labour Theory Of Value. I can see your point when it's opposed to pure capital speculation bullshit but the theory, on it's own, is bollox.

I think I'm seeing them really as one and the same, it makes sense in my sleep deprived head but as I'm not a native speaker they've probably got vastly different meanings for you. But yes, I guess I'm talking about value here. A wealth producer for you then would then be the classic capitalist, who gets their wealth from being what amounts to parasites really, but I don't really see them as the base for actual wealth creation, since plenty of places have realised they can do fine without them(Argentina's abandoned factories being taken over and run by workers is a decent example).

 

[cHodAX]

Over runs, over budget and massively delayed every time the government gets involved in a big ticket item or project, hell it even over pays for small ticket stuff.

I can't deny any of that and the worst part is that both main parties have a terrible track record when it comes to wasting money on the big projects but even more so on the small ticket stuff as you mentioned.

 

[ilaya]

you all realise that this debt doesnt actually exist yes? almost all countries have a deficit.. but the vast majority of their debt is erm.. actually owed to themselves.. and we are using real cash to try pay that off

its utter fucking madness

and its not a case of IF USA defaults.. its when... and WHEN that happens... cue global economic collapse

buy seeds and dynamos now.

 

[Tuthmes]

you all realise that this debt doesnt actually exist yes?

Alas it does. One example is that national banks used to have a gold reserve as a guarantee to pay of the debt. A country can go bankrupt. A fine example is Germany from 1918 till 1933.

As of May 2011 the largest single holder of U.S. government debt was China, with 26 percent of all foreign-held U.S. Treasury securities. China's holdings of government debt, as a percentage of all foreign-held government debt, have decreased a bit over the last year, but are up significantly since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities)

This exposure to potential financial or political risk should foreign banks stop buying Treasury securities or start selling them heavily was addressed in a June 2008 report issued by the Bank of International Settlements, which stated, "Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely."

 

[cHodAX]

you all realise that this debt doesnt actually exist yes? almost all countries have a deficit.. but the vast majority of their debt is erm.. actually owed to themselves.. and we are using real cash to try pay that off

its utter fucking madness

and its not a case of IF USA defaults.. its when... and WHEN that happens... cue global economic collapse

buy seeds and dynamos now.

Hmm, isn't well over a trillion dollars of America's debt owed directly to China or Chinese owned banks?

 

[russell]

Well it all scares the bejesus out of me.
* sticks head back in the sand*

 

[GimmlyThe3rd]

Fuck the US and Europe, a complete crash might do some good and bring plummet the house prices down. You all don't know how well you have it, Free healthcare, nice roads, the dole and benefits, council housing, free education and student loans .....

*It was partly a joke, calm down*

 

[old.Tohtori]

The worldwide ramifications of the US defaulting are frightening. Toht will be alright though, apparently.

*slow clap*

Thickness level 3 achieved i see

In any case, this si no different from doomsayers screaming about yellowstone, or meteor worshipping nutjobs running about with placards. It's just socially acceptable because it's not sci-fi, but it's still doomsaying, over-exaggaration and pointless panic.

 

[Ctuchik]

Well, this is a tad more realistic then yellowstone erupting or a massive asteroid splitting earth in half...

US politics are running a chicken race that is now going on principles and pride.

And never EVER fuck with an american that has both, because they will doom the world for their prides sake out of shear "don't fuck with me" principle...

I'd make such a kickass american if that were true... xD

 

[old.Tohtori]

True, true. More realistic, but the doomsay and end of world mumbo is as silly

Americans are like children(as a nation, not individuals mind you), but it's expected from such a young nation.

 

[Ctuchik]

True, true. More realistic, but the doomsay and end of world mumbo is as silly

No it won't be the end of the world, and no one as far as i have seen have seriously claimed that.

But it will be a financial disaster the likes we might only have seen once or twice before because it's such a major currency that WAY to many countries are dependent on...

We will naturally see it through, we don't have any other choice, but it won't be pretty.

 

[Helme]

This won't be what causes a collapse of the dollar, or the US economy. Their inability to do any meaningful changes to regulation after the recession will do that. Goldman Sachs was talking about a new recession a few days ago, because of the non-existent growth and continued high unemployment. Granted, it's fucking Goldman Sachs so they're obviously playing their own game but I don't think they're that far off.

The problem really is that nobody is even talking about this in Washington, they're all working as hard as they can to shift the focus from the real problems to bullshit for the campaign next year - nobody wants to campaign on fixing the economy because it's utterly unrealistic in the current political climate. The things you would have to do isn't popular with your financial backers, and without them you might as well save yourself some time and give up. It's all really about self-interest, which is nothing new in politics but it's been taken to absurd levels in the US. All the while they're fighting this out they're shifting gradually more and more to the right because of a small and loud group of what can only be described as lunatics. Even if you're a conservative this should scare you because what the Tea Party represent is utterly insane, and pandering to their insanity like the Republicans are doing is going to have terrible consequences for the average citizen, and not only in America.

 

[old.Tohtori]

No it won't be the end of the world, and no one as far as i have seen have seriously claimed that.

Well it's not far from it either.

We've had these scares all the time, be it with oil and whatnot and not once has it actually caused any major issues. I'd rather be naive then panic over this one, especially since there's f*ck all i, or any of us, can do. If you're going to get shot in the head, might as well enjoy it

 

[Embattle]

you all realise that this debt doesnt actually exist yes? almost all countries have a deficit.. but the vast majority of their debt is erm.. actually owed to themselves.. and we are using real cash to try pay that off

its utter fucking madness

and its not a case of IF USA defaults.. its when... and WHEN that happens... cue global economic collapse

buy seeds and dynamos now.

Debt does exist and its original purpose has been somewhat skewed badly, no country can borrow forever no matter how big it is or it thinks it is.

The theory that that interest paid on debt owed to US residents/organisation isn't a problem has one major flaw in it, nearly a third of the debt is owed to parties outside the US.

 

[cHodAX]

Debt does exist and its original purpose has been somewhat skewed badly, no country can borrow forever no matter how big it is or it thinks it is.

The theory that that interest paid on debt owed to US residents/organisation isn't a problem has one major flaw in it, nearly a third of the debt is owed to parties outside the US.

Debt is nothing but a concept, an illusion based on nothing more material than slips of paper or 1's and 0's. How much of America's debt is owed to it's 'own' federal reserve? But of course we all know, the federal reserve is only federal in name, it is actually privately owned. It is a dummy front to trick the masses into believing the people controlling the money flow are part of a democractically accountable government when infact it is private finance being run by unnamed and completely unaccountable sources.

‪The American Dream By The Provocateur Network‬‏ - YouTube

That vid is worth 30 minutes of anyone's time.

 

[dysfunction]

Debt is nothing but a concept, an illusion based on nothing more material than slips of paper or 1's and 0's.

Tell that to your mortgage lender....and then tell them you are not paying.

 

[caLLous]

BBC News - US loses AAA credit rating after S&P downgrade

Not. Good.

 

[Embattle]

Quite frankly the whole deal made earlier on was rather shocking, they up the debt the limit for the next couple of years by more than they plan to reduce it in the next decade.

 

[Helme]

And instead of raising taxes to increase revenue.... they lower them. It's retarded.