Warning

 

Close

Confirm Action

Are you sure you wish to do this?

Confirm Cancel
Member Login

Site Notices
12/6/2019 7:27:02 PM
Posted: 3/13/2011 6:12:26 PM EST
I just saw an estimate that the earthquake is going to cost about 100 billion dollars, so even if that doubles it still won't be what our Gov't. overspent in February alone. Think about it.
Link Posted: 3/13/2011 6:32:12 PM EST


That does put a whole new light on the situation.
Link Posted: 3/13/2011 6:46:14 PM EST
FBHO
Link Posted: 3/13/2011 8:07:47 PM EST
[Last Edit: 3/13/2011 8:11:10 PM EST by Spook410]
While we are probably screwed (the theory is you run big deficits until the economy improves then you pay it off with taxes and the revenue growth generates but doubt this will happen), you do have to remember that our economy is almost 3 times the size of Japan's and that things are even tougher for Japan. For over a decade now they have tried to stimulate their economy but have only had deflation and stagnation. So now that they have this huge disaster they can't borrow the huge sums they need even though they have put another $186 Billion into the banking system. That and the Japanese stock markets are down by 6 percent as I write this. We are probably screwed, the Japanese are going to see changes in their way of life and part of it was their big deficits.

Off topic: I watch the dignity and behavior of the Japanese people. There hasn't been looting (remember Katrina?), all the civil service have stayed at their jobs, and the people stand in orderly line to get water. It's a great tragedy and I can only watch in amazement at the strength of their society.
Link Posted: 3/14/2011 5:01:01 AM EST
Japan was two yrs away from a total economic meltdown. They were having trouble paying for the normal budget items. Now they have all this to pay for. Its not good. We are right behind them.
Link Posted: 3/14/2011 6:51:05 AM EST
Originally Posted By sanman28:

Japan was two yrs away from a total economic meltdown. They were having trouble paying for the normal budget items. Now they have all this to pay for. Its not good. We are right behind them.


I'm not an economist and my understanding may be totally flawed, screwed up, and wrong. However this is what I think I understand and it is a little complicated. While Japan has one of the highest debt to GDP ratios in the world (something like 190%), they were running big trade surpluses and this was financing their debt internally. They were paying like 2% on Japanese treasury bonds. Compare this to over 12% Greece is paying or nearly 9.5% Ireland pays. US is about 3.3% because we're considered something of a safe haven. Given that this disaster will have a big impact on exports for awhile, they may not be able to fund so much of their debt through exports and will have to actually borrow from others as we do. That will drive their rates up but probably still not to the levels everyone else pays. They spent all this money trying to get their economy out of deflation. It didn't work. Not sure what happens next.

US is currently over 90% for a debt to GDP ratio. Last time it was this bad was WWII. Our debt is financed by China and Saudi Arabia rather than by our own exports. We're not the worst in this regard.. we're something like 12th in world rankings and we do have a huge GDP that can pay down debt quickly. However, it does have to be fixed or we'll pay bigger interest rates and experience inflation. I think we're in for fewer services and higher taxes in any case. Saving the economy from disaster in 2008/2009 may have been the right thing to do, but we haven't paid the bill yet.
Link Posted: 3/14/2011 7:37:24 AM EST
You're corect on what you post, but on stimulus I'm not so sure. Bailouts and such are only a delaying tactic. Debts are future taxes and I think going through disaster might have been good. Perhaps ugly and hard, but much of the stimulus was to prevent things that happened anyway. Like those who foreclosed, perhaps were over extended anyway, and now are living where they should have to begin with without running up the national debt. I know there is this corporate 10% annual increase in everything under the sun, but perhaps steady plodding and even going backwards sometimes gets you much further down the road as opposed to a major meltdown by the end of the decade.
Link Posted: 3/14/2011 12:13:04 PM EST
[Last Edit: 3/14/2011 3:29:27 PM EST by Spook410]
Originally Posted By marko16:
You're corect on what you post, but on stimulus I'm not so sure. Bailouts and such are only a delaying tactic. Debts are future taxes and I think going through disaster might have been good. Perhaps ugly and hard, but much of the stimulus was to prevent things that happened anyway. Like those who foreclosed, perhaps were over extended anyway, and now are living where they should have to begin with without running up the national debt. I know there is this corporate 10% annual increase in everything under the sun, but perhaps steady plodding and even going backwards sometimes gets you much further down the road as opposed to a major meltdown by the end of the decade.


Agreed. Numbers are one thing, but the jury is out on what the right thing to do for the country as a whole was. I'm grateful that my 401K has done so well on a government funded bailout given that I'm close to retiring, so for me, it was good. However, I don't know what happens next and when. If they can engineer a soft landing for all of this it will be a great accomplishment. If they do what they usually do, a few will benefit and the rest of us will suffer. Easy to be cynical given history. That and, liberal Democrats are not likely to assail entitlements like medicare or social security.
Link Posted: 3/14/2011 6:42:31 PM EST
Originally Posted By Spook410:
That and, liberal Democrats are not likely to assail entitlements like medicare or social security.


We can only wish. Unfortunately, those are voters

Link Posted: 3/15/2011 1:10:32 PM EST
Top Top