PDA

View Full Version : US Debt put into perspective



Dr. Love
09-12-2011, 05:12 PM
US Tax Revenue - $2,170,000,000,000
Federal Budget - $3,820,000,000,000
New debt - $1,650,000,000,000
National debt - $14,271,000,000,000
Recent budget cuts - $38,500,000,000

Now, just remove 8 zeros and view it as a household budget.

Annual household income - $21,700
Annual Household spending - $38,200
New credit card debt - $16,500
Outstanding credit card balance - $142,710
Family budget cuts - $385

take it with a grain of salt, I found it on the internet, but it's still interesting (and a bit crazy/scary!)

Seshmeister
09-12-2011, 05:45 PM
Using the same method spending on defence is $8 800. So with an income of $21 700 you are spending $8 800 on security.

FORD
09-12-2011, 05:45 PM
I suppose the best way to continue with this analogy is to come up with household equivalents to the wasteful "credit card spending".

What would be the household equivalent of "useless wars that have nothing to do with the defense of the USA"?

Would "taking huge cash withdrawals from the credit card and handing the money out on the street corner in Beverly Hills" be the equivalent of "tax cuts for the tax dodging rich"?

Dr. Love
09-12-2011, 05:54 PM
Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

WACF
09-12-2011, 09:57 PM
Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

Really...it should scare the shit out of everyone.

You can not spend yourself out of debt...

Seshmeister
09-13-2011, 04:42 PM
Of course you can.

It just depends on what you spend on.

kwame k
09-14-2011, 04:32 PM
....

What would be the household equivalent of "useless wars that have nothing to do with the defense of the USA"?

Would "taking huge cash withdrawals from the credit card and handing the money out on the street corner in Beverly Hills" be the equivalent of "tax cuts for the tax dodging rich"?

Spending it on blow and hookers in Vegas seems a better analogy:)

FORD
09-14-2011, 05:32 PM
Spending it on blow and hookers in Vegas seems a better analogy:)

Yeah, but at least that's fun, and when you gamble, there's always the slight chance that you come out with a profit.

Seshmeister
09-14-2011, 07:36 PM
Almost all businesses when they start need to borrow money in order to make money. that's how capitalism works.

Governments should think the same and invest in stuff that generates wealth like science, infrastructure and education.

knuckleboner
09-15-2011, 12:38 AM
Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

but if it was, that $142,000 in debt would be more analogous to a mortgage. not quite as crazy.

now, running yearly, growing deficits is bad. but otherwise, just like any mortgage, refinancing, home equity loan, the debt's not exactly a killer by itself...

Dr. Love
09-15-2011, 10:21 AM
how many years in a row could you increase the amount of your mortgage before someone told you 'no'? :)

Seshmeister
09-15-2011, 10:49 AM
but if it was, that $142,000 in debt would be more analogous to a mortgage. not quite as crazy.


I guess.

It used to be though that you could only get a mortgage of 3 times your income.

binnie
09-15-2011, 11:07 AM
I guess.

It used to be though that you could only get a mortgage of 3 times your income.

It wouldn't be possible for the average first time buyer to do that now. The average UK wage is 24K. So, you could borrow 72K. That's not even a shed.

Even with two 'average' incomes it's only 144K. In most places, that's just not enough - the mortgage payments on it will also be crippling when interest rates start to go up (which they will).......

Right now, I'm thinking I'm going to need about a 30% deposit to avoid being abused by the bank for the rest of my life.

Seshmeister
09-15-2011, 11:57 AM
It's nuts.

It was 3 to 3.5 times your income with a 10% deposit right up to 5 or 10 years ago.

Part of the reason the prices are so high is because everyone competed to take on more and more debt.

This may not go down too well but it's the same with women working full time when their families are very young. They have to do so they can pay high mortgages on family homes because women have worked full time when their families are very young pushing up the prices.

It's a spiral of misery.

Hey that would be a good name for one of your shouty bands...

knuckleboner
09-16-2011, 01:05 AM
I guess.

It used to be though that you could only get a mortgage of 3 times your income.

with an established credit history like the U.S. (and yes, despite the debt, the credit history for borrowers has been outstanding), banks would be fighting hand over fist to lend them money.

in fact, they ARE. that's why despite everything, bond rates are so unbelievably low. regardless of what S&P says, the vast majority of bond buyers consider the U.S. to be a rock solid credit risk.


mind you, that's not a dick-cheney-debt-don't-mean-shit moment. things ARE far too out of balance for the long run. but the current position, by itself, is clearly not really damaging. it's the future trajectory that's the issue.

Seshmeister
09-16-2011, 07:09 AM
Yeah through the late 90s and early 2000s my trendy city apartment earned as much as I did each year. Some idiot cunts at the banks thought that as properties were going up in price faster than inflation it didn't matter if people had the money to pay their mortgage as either way the bank would win and in any case they would sell the debt to some other mug.

Nitro Express
09-16-2011, 12:19 PM
The question nobody asks is how much of that debt was created out of thin air? Real money is backed by a commodity of some sort. Today we live in a world of fractional reserve banking and central banks can create as much money as they want. That is why these debt numbers are so high. It doesn't cost a central bank a thing to create money but if they can get countries into debt and get real assets like agricultural land, mines, ports, oil fields, ect.. for payment of the debt then talk about one of the greatest scams in world history. They want to get nations and individuals into debt. It costs them nothing and if they can get your real assets then the people behind these banks and politicians are the big winners and everyone else are the big losers. Most of this debt is fictional bullshit and it's time to start auditing these central banks who have created more debt than what the whole gross national product of planet earth is. They have ran the scam too far to where it's no longer in reality.

A bigger problem than the debt is too many people on this planet have no idea what wealth is and the games that can be played by fractional reserve banking. When you have that many dummies on the planet and you have the reputation of the currency established, oh fucking hell the games you can play. I was once told by and investment banker I was doing an internship for he could teach his dog investment banking on the three day weekend. It's all about being connected at that level of banking.

Nitro Express
09-16-2011, 12:29 PM
Yeah through the late 90s and early 2000s my trendy city apartment earned as much as I did each year. Some idiot cunts at the banks thought that as properties were going up in price faster than inflation it didn't matter if people had the money to pay their mortgage as either way the bank would win and in any case they would sell the debt to some other mug.

The banks knew they had their political ducks all in a row. Once you have enough politicians bought off you can do anything. They knew they were going to get bailed out so the central banks dropped the interest rates low and said full steam ahead. They were trading mortgages so fast and furious that some mortgages didn't even have the legal notes attached to them. Some people got free homes when they got foreclosed on and the financial company couldn't produce the note. Then they started forging fake notes. A can do if you have enough politicians bought off. So the number one rule in banking is own the politicians and you can do anything. Banking rules no longer apply in fact, let's change them to favor the banking trusts.

Terry
09-16-2011, 01:04 PM
Really...it should scare the shit out of everyone.

You can not spend yourself out of debt...

Budget cuts won't get us there, though.

The mortgage analogy is a good one. Also, look at the amount of debt taken on by university students in terms of college loans. In theory, the long term outcome will be that having the degree will enable one to earn a significantly larger amount of money than could be made without one.

It's when things like home mortgages became too easy to obtain that the system became skewed. I mean, all throughout the 2000s, people who had paid as little as 3% down on a 15-year adjustible treated their home equity like an ATM. All the inducements developers used to get people to buy homes (in some cases, zero $ down, paying a buyer's homeowners insurance or property taxes for the first year) combined with an artificially inflated boon in home values fed into unrealistic expectations about people's ability to pay for a house over the long haul. Too many people wanted instant gratification and instant results. It's the same mentality now with getting the US debt under control: too many people want a quick fix with instantaneous results that won't result in a lessening of their own pocketbook or the slightest bit of sacrifice on their part. There are tough choices to be made, and a certain degree of risk / "a gamble" that will attend ANY action (even that of doing nothing). Not facing up to the present-day situation, not being willing to undertake a corrective action (harsh as it can be) and looking backward to assign blame (rather than as a learning exercise) is something Americans have proved highly adept at. This nation doesn't have the stomach to get tough and serious over a long, hard slog, so we deserve to flounder.

Seshmeister
09-16-2011, 08:12 PM
The banks knew they had their political ducks all in a row. Once you have enough politicians bought off you can do anything.

It's a real shame because if they weren't owned the answer to all of this would be a global banking treaty that not only controlled them for the future but got most of our money back from them. If they didn't like it they could go see how they like setting up a new exchange in Mogadishu.

Seshmeister
09-16-2011, 08:18 PM
The whole thing is a fucking joke it really is. Better to just let it wash over you.

Our Chancellor, i.e. the politician guy in charge of our treasury, who is second only to the Prime Minister and sets all economic policy and spending is younger than me and this is his first job.

His first salaried proper job. He did some freelance writing in his 20s and then became a politician and now he is in charge of the economic fate of 60 million people and in charge of a trillion dollar budget.

That's what you are dealing with. This fucking bozo v. the smartest greediest cunts on the planet. It's no great surprise when the banker leeches win every time...