Does anyone else see a correlation behind Debt / GDP

Maybe, just maybe, the national debt is not what you think it is!! You don't find it at all coincidental that the GDP grows consistently with the National Debt? And yet, for some reason you now think reducing the National Debt will lead to economic growth. Can you explain how that would work?

 

no, but I do notice the correlation between gazelle deaths and moon astroid strikes. I bet there is a causation too!

 

Have a graph of the ratio of debt to GDP? Also, what does this chart look like adjusted for inflation?
/that might give you a clearer picture

 

Uh, probably because government spending is part of GDP. Do I win a cookie? Imagine if Obama decided to spend 100 trillion paying each American millions to watch an episode of Mork and Mindy once a day. GDP would shoot through the roof! Unfortunately, we'd all probably end up starving to death as no one would be doing anything that actually produces real wealth.

A more helpful way of thinking about the private sector/public sector is thinking of the government as a parasite on the economy. The larger the share of government in the economy the less healthy the economy.

 

So right you are.

 

Well, duhhhh... there is NO economic growth... the unemployment rate is realistically around 20% ...as for the debt, the Chinese and other former communist countries are obviously loaning us the money to buy their goods....

HOWEVER, when communist finally understand how capitalism actually works they will stop buying up our debt because it's impossible to make a PROFIT when you are loaning someone the money to buy your merchandise.

Actually the party is over. China is not buying our debt and actually trying to sell it off slowly in order to prevent high inflation of the dollar and losing value. ...that's why the federal reserve is the only source left to buy our bonds/debt and they are just printing money out of thin air.

When you as an individual decide to raise your debt ceiling you have to find someone to extend you more credit... that's why the vote to raise the national debt limit was so insane... there is no one left to loan the US money so the fed will just print more causing a weaker dollar and higher inflation.

It's clearly a formula for doom and epic failure.

We had better figure out quickly what it was that got us to the top of the economic food chain and as the old saying goes... "dance with the one who brung you."

Why do you think America became so great, wealthy and powerful?

 

And this is shocking to you? Government is nationalizing the private sector!

DUH.

And all those people who are hired by the Government? Some are private sector - certainly - and some are critical to the functioning of proper Government (like roads and other infrastructure, etc).

But what of the rest?

Are the increasing employee roles in the public sector robbing the private sector of its economic productivity?

Where would these people otherwise be working? Why doesn't unemployment in the private sector mirror unemployment in the public sector?

What happens when we hit recessions when the public sector employs such a monstrous number of people - who don't lose their jobs?

DEBT. Why? Because these are not productive positions - not like the private sector is. By definition, the public sector employee costs the Government X dollars, and can only return Y dollars in income taxes. Do they provide some economic benefit? Probably; on a case-by-case basis, it will vary.

But it is my belief that a Government employee cannot possibly be productive enough to replace the productivity of that same people in the private sector, and that assertion explains extremely well why we get in more financial trouble as the Government grows in size.

Government is co-opting our economy. It is now nearly 40% of our overall GDP. Keynes himself explained that if Government spending comprised more than 25% of GDP, we'd be in trouble.

And now, these supposed Keynesians are not even obeying the man who created their belief system, and it will be to the detriment - or worse - of us all.

How could this end well?

Kick these people out.

 

The question is, why is Government spending part of GDP. You answer that, then I might give you a cookie!

 

It's amazing that people can look at this graph, and because their ideologies are so set in stone, continue to think that the National Debt is the problem. Absolutely mind boggling amazing!!!!

 

Only to those whose ideologies are so set in stone that they can imagine causality where it doesn't actually exist.
/people see what they want to see

 

So what do you see? I see things through mathematics. I understand what the National Debt is. It's just really hard to talk to people about the complexities of the system when their knowledge is so amateur. So I try to just show people little pieces just to get them thinking.

The National Debt is nothing like you think it is.

 

No, what's mind boggling is that if you as an individual were in the same financial shape the interest on your debt WOULD be the problem. The fastest growing part of the budget is INTEREST on the debt. If interest rates went up only 4% the interest on the debt would approach a trillion dollars per year.

Read up on "compound interest" if you don't understand this.

Oh... here's the kicker... a huge chunk of that debt was bought by the fed with counterfeit money they printed out of thin air. Would you take money I printed in my basement last night in exchange for your goods and services? Neither will the countries who sell us oil and other products. Counterfeiting only leads to inflation... lowering the value of the money or the product that is counterfeited. In the end consumers/citizens will pay dearly at the gas pumps, grocery stores, everywhere we shop.... for this nonsense.

If printing money made us wealthy we would have all arrived at the promise land long ago ...so just stop for a moment and think about WHERE these loans are coming from.

 

Got any more lies you'd like to tell the rest of us?



Interest rates are at 0% and Govt can borrow at a cheaper rate than any time in recent history. Maybe you should read up on econ 101 and then come back to me in two years to have an educated debate.

 

Ah. So you're operating on the absurd premise that you know more about this than anybody else. Gotcha.
What's your hypothesis for causation?

 

No, I know more about it than any one on this forum. People like Ben Bernanke, Warren Buffett, and other economists know much more about it. If you think about the system logically and apply accounting and mathematics to it, it starts to make sense.

Ask yourself why a country that has it's own made up currency would have to "borrow" it's own made up currency? The trick is to figure out who they are actually borrowing from and what money they are actually using. I'll give you a hint, you or I are never asked to lend money to the Govt.

 

http://theeconomiccollapseblog.com/...y-impossible-to-pay-off-the-u-s-national-debt

It is mathmatically impossible to pay off national debt

 

Riight...

They legally have to borrow it because they're not allowed to print it out of thin air. A large chunk of us are compelled (not asked) to loan it through the SS trust fund. A lot of it also comes from the Fed (borrowing non-existent money from people who didn't have it in the first place) and fun governments like the Chinese (who are using our interest payments to fund their entire military).
I repeat: where's your hypothesis for causality?
/You just kicked over the wrong hornet's nest, buddy.

 

Lol, you post some kook blog in expectation that you can beat me in knowledge of economics??? Come on son, you are out of your league.

 

Aren't we so lucky. Riddle me this, if deficits do not matter and government spending only increases the size of the economy why stop at trillion dollar stimulus packages why not 100 trillion deficit spending packages?

At what point do you think government spending would do more harm than good? Do you think there is a point? At what ratio of public/private share of GDP do you think is best or is 100% public optimal? You have a very limited view of things and your attempts at showering us hoi polloi with wisdom is pathetic.

There is a cost to spending, that you cannot see this is laughable.

 

Hahahaha, get real my friend. Tread lightly, I will destroy you in an economics debate over the national debt and the accounting of America.

You already have no clue what you are talking about. First off the SS trust fund never had any money in it in the first place, and the Govt is legally obligated to invest any surplus SS money in to Treasuries. Now ask yourself this, where do Treasuries come from? Now think about it logically, don't get a brain freeze, and try to figure out what really is happening?

And the Fed under law can not lend money directly to the Govt.

We do not need the Chinese to fund our spending.

Next?

 

This is the common cop out of the uneducated. The economy is a balancing act. The target is a healthy inflation rate to keep up with economic growth. You can't just spend $100 trillion if it exceeds our productive capacity. So to take $1 trillion to $100 trillion just shows your lack of intelligence in this subject. Intragovernmental debt should never be included in the debt to GDP ratio since intragovernmental debt is an allowance, not real debt. Our real debt to gdp right now, should be in the range of 70%.

Like I said, you are out of your league.

 

I thought spending was itself economy growth. You just said that deficits directly increase GDP.

Is there something more to the story here?

 

I said there is a correlation. And yes spending directly increases the GDP as it is apart of the GDP. I don't get your problem here.

 

Aren't we fortunate!

Here is another hint... IT DOESN"T MATTER.... the government has ABSOLUTELY NO INTENTION of paying it back.

The government is in effect writing a check and proclaiming that they now have more money.

They raided the social security fund (and the Federal Pension funds) of the real money people had paid into and left bits of paper with IOU written on them... now that its broke they turned to counterfeiting.

Note: in the second quarter of 2009, the Federal Reserve was the effective buyer of some 48 percent of the new Treasury debt issued that period, as part of its "quantitative easing." It's true, the Fed doesn't show up at the Treasury auctions and directly buy the new T-bills and so forth, but private dealers pay higher prices for the Treasuries knowing that the Fed is waiting in the wings to pick them up.

 

They didn't raid the social security fund, that is a complete lie. The Social Security Fund has always been the same. The Government can't invest in itself, that is illogical. The SS Fund is simply an allowance of how much the Govt can spend in the future.

And the Govt will pay every dime it is allowed to pay in Social Security and then that will be rolled over in to public debt. The Govt has no intention of paying the public debt because it can't based off current legislation and accounting.