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Culture & Politics » soc.culture.china » Re: US is bankrupt , the party is over , time to pay the bills
| Re: US is bankrupt , the party is over , time to pay the bills [message #228351] |
So, 23 Juli 2006 00:39 |
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Islam Will Replace Collapsing Amerikan Empire wrote:
US could be going bankrupt
Publication time: 17 July 2006, 20:50
The United States is heading for bankruptcy, according to an
extraordinary paper published by one of the key members of the
country's central bank.
A ballooning budget deficit and a pensions and welfare timebomb could
send the economic superpower into insolvency, according to research by
Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis,
a leading constituent of the US Federal Reserve.
Prof Kotlikoff said that, by some measures, the US is already
bankrupt.
"To paraphrase the Oxford English Dictionary, is the United States at
the end of its resources, exhausted, stripped bare, destitute,
bereft,
wanting in property, or wrecked in consequence of failure to pay its
creditors," he asked.
According to his central analysis, "the US government is, indeed,
bankrupt, insofar as it will be unable to pay its creditors, who, in
this context, are current and future generations to whom it has
explicitly or implicitly promised future net payments of various
kinds''.
The budget deficit in the US is not massive. The Bush administration
this week cut its forecasts for the fiscal shortfall this year by
almost a third, saying it will come in at 2.3pc of gross domestic
product. This is smaller than most European countries - including the
UK - which have deficits north of 3pc of GDP.
Prof Kotlikoff, who teaches at Boston University, says: "The proper
way
to consider a country's solvency is to examine the lifetime fiscal
burdens facing current and future generations. If these burdens exceed
the resources of those generations, get close to doing so, or simply
get so high as to preclude their full collection, the country's policy
will be unsustainable and can constitute or lead to national
bankruptcy.
>
> "Does the United States fit this bill? No one knows for sure, but there
> are strong reasons to believe the United States may be going broke."
>
> Experts have calculated that the country's long-term "fiscal gap"
> between all future government spending and all future receipts will
> widen immensely as the Baby Boomer generation retires, and as the
> amount the state will have to spend on healthcare and pensions soars.
> The total fiscal gap could be an almost incomprehensible .9 trillion,
> according to a study by Professors Gokhale and Smetters.
>
> The figure is massive because President George W Bush has made major
> tax cuts in recent years, and because the bill for Medicare, which
> provides health insurance for the elderly, and Medicaid, which does
> likewise for the poor, will increase greatly due to demographics.
>
> Prof Kotlikoff said: "This figure is more than five times US GDP and
> almost twice the size of national wealth. One way to wrap one's head
> around .9trillion is to ask what fiscal adjustments are needed to
> eliminate this red hole. The answers are terrifying. One solution is an
> immediate and permanent doubling of personal and corporate income
> taxes. Another is an immediate and permanent two-thirds cut in Social
> Security and Medicare benefits. A third alternative, were it feasible,
> would be to immediately and permanently cut all federal discretionary
> spending by 143pc."
>
> The scenario has serious implications for the dollar. If investors lose
> confidence in the US's future, and suspect the country may at some
> point allow inflation to erode away its debts, they may reduce their
> holdings of US Treasury bonds.
>
> Prof Kotlikoff said: "The United States has experienced high rates of
> inflation in the past and appears to be running the same type of fiscal
> policies that engendered hyperinflations in 20 countries over the past
> century."
>
> Paul Ashworth, of Capital Economics, was more sanguine about the coming
> retirement of the Baby Boomer generation. "For a start, the expected
> deterioration in the Federal budget owes more to rising per capita
> spending on health care than to changing demographics," he said.
>
> "This can be contained if the political will is there. Similarly, the
> expected increase in social security spending can be controlled by
> reducing the growth rate of benefits. Expecting a fix now is probably
> asking too much of short-sighted politicians who have no incentives to
> do so. But a fix, or at least a succession of patches, will come when
> the problem becomes more pressing."
>
> Information appearing on telegraph.co.uk is the copyright of Telegraph
> Group Limited and must not be reproduced in any medium without licence.
> For the full copyright statement see Copyright
>
> By Edmund Conway, Economics Editor
>
> Source: Telegraph
>
> http://www.kavkazcenter.com/eng/content/2006/07/17/4993.shtm l
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| Re: US is bankrupt , the party is over , time to pay the bills [message #228368 ] |
So, 23 Juli 2006 03:33 |
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It's too long to read.
My English is poor.
But I think you title maybe alarmism
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| Re: US is bankrupt , the party is over , time to pay the bills /ENRON on steroids [message #228452 ] |
So, 23 Juli 2006 10:33 |
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shipeng713 [at] 163.com wrote:
> It's too long to read.
> My English is poor.
>
> But I think you title maybe alarmism
Actually the title is far to mild, America is completely and
hpoelessly bankrupt and has been for ages
Big bankers are reluctant to pull the plug and admit it as it will
bring the big banke down if they do point out america is bankrupt, so
are they
America has millions of people ready to retire and few young workers
conming on and no hope of funding the extra costs or clearing the
mountains iof debts
The escalating cost of war means its now hopeless america is dead
But like most patients with a terminal illness they prefer not to
accept reality and cling to a fading hope of a miracle , like free
iraqi oil or a nice big war to save them
America is dead but asia is already taking up the opportunities so
america will simply fizzle out rather than go bang
The riots when american workers find out may prove very interesting to
watch as they still think they are going to get pensions
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