What is going to happen when the US Treasury's debt burden becomes unsustainable?

We'll all be dead for a long time before that happens. Unless there is a GOP coup and they run the country under a right wing dictatorship, and make it happen.

 

I disagree, pal.

http://www.bloomberg.com/news/2011-...fails-to-beat-inflation-chart-of-the-day.html

 

I'd opt for spending increases on infrastructure and education. It would mean more jobs, and ending the low demand we are experiencing.

 

As Federal spending on education increased, the quality of education decreased. Maybe I should be happy the gas tax wasn't spent to maintain the roads.

 

Link?

I'd like to know how education "decreased".

 

the U.S. government has enslaved its citizens by using them as collateral for foreign debts

 

You think our education has improved due to increased Federal spending?

http://www.thedailybeast.com/newswe...dents-compete-with-the-rest-of-the-world.html

http://www.studentsfirst.org/pages/the-stats

http://blogs.edweek.org/edweek/curriculum/2011/08/us_math_reading_achievement_fa.html

 

It has more to do with the schools being overwhelmed by low-income ethnic minorities. Family values, culture, and race apparently make more of a difference than spending or structural reform.

 

2013, because next year is exactly 100 years since 'they' started the FED in 1913.

 

Much of this can be owed to top heavy bureacracy at the local and state levels.

Look, opinion pieces are fine, but you made a statement that the spending brought scores down. I'd counter that partisan politics, not offering teachers the kind of money that will draw the best into the field, and other factors, particularly growing poverty in the past thirty years (with the exception of the Clinton years) and lack of opportunities after high school are other factors.

 

The US will annex Canada for their resources and begin a new homesteader movement to occupy the land. It would fracture our relationship with the Commonwealth, giving us an excuse not to pay our debts to them, open up the Russians and Chinese to use the Canadian resisters as proxies, thus keeping them off our backs, as we'd call it an internal struggle akin to Tibet or Georgia. At the same time we would open a second front in Mexico using the Cartels as our excuse and move in and occupy all their resources as well. We'd be fine after that. Aside from that, the liberals will bury us in more debt and pray the 'revolution' finally comes, but when its not the revolution they dreamed of they will flee to Europe and finally see exactly what a failure their belief system has wrought.

 

You mean a debt larger than the size of our economy is sustainable?

 

Many of the Japanese people are suffering more than the rest of the world realises:
http://www.politicalforum.com/political-opinions-beliefs/209487-usa-heading-way-japan.html

 

This would only be possible if Obama gets elected and Congress remains Republican and the Senate Democratic.
The grid-lock will be an excuse for "emergency" acts by the president as happened in 1933 Weimark Republic of Germany.

Backed by the greed and muscle of the Unions everywhere, and the Black majorities of armed angry criminal intercity Black bias pro-Obama Black Shirts, the nation will become a dictatorship.
The "Emergencies" will necessarily be continued on various grounds.
War with Iran will require a draft into the civilian services Obama has already been setting up, and will drain off unemployment creating a seemingly strong full employment economy.


If the Republicans win, a revolt will follow as soon as their austerity measures presents the Unions, the 20% real Unemployment, and the Black Intercity with the "bullet to bite" as things adjust to the economic Reality of a slow recovery through pain and suffering.

In the end, Obama must become dictator.
War will become a necessary "emergency" to keep Obama reigning.
The war may be internal, communistic economics employed against the Big Businesses as they are "nationalized," and Sendicatism economics against medium to smaller businesses which will allow the employees to unionize by open hand raising non-secret ballots.

 

Hope and Change is still alive though.


America can Hope that the Independents begin discussions between themselves and come to realize a simple solution to the present Depression, worldwide, is available.

They can Change.

These independent thinkers can begin to voice and articulate the Truth which will save not just America but Japan and Europe.
Even Chuina will actually benefit since their growth depends upon selling to the world throughtheir exports of mnufacture goods.

All that must be done is to increase Consumer Spending in America, immediately.

How?
Simple.

Legislate a four step programmed and controlled rise in the Minimum Wage.

The 99% of the population will immediately start spending the money which the 1% of the population thirsts for.
The increased demand is what will create Jobs, not Obama nor Romney, nor tax breks for the rich.


Spending creates jobs through increases in Demand.

 

Unfortunately, in the last two decades the politicians seem to have focused more on trying to lower consumer prices, even when that meant lowering wages also. What I mean by this is the importation of cheap immigrant labor, and all those "free-trade" agreements. But all this did not decrease the price of the single most expensive consumer cost: housing. Indeed, free trade and immigration have actually resulted in an increase in the cost of housing, despite the fact that cheaper immigrant construction workers have been used, and cheap prefabricated Chinese parts are reducing the need for domestic construction labor. It is really more about the price of land.

 

Two little problems with that. First, the empirical evidence linking minimum wages and economic growth is rather weak. Second, of the evidence that does find that link isn't focused on standard demand criteria. Instead its usually focused on endogeneous issues such as human capital investment

 

This country is in for some VERY VERY hard times. That is why I am glad I never had any children.

 

Again, you avoid the overall debt burden and fiat money printing crisis in your comment. Though I do agree with the above statements, I'm pretty sure this post is focused on more than minimum wage.

 

A random reply designed (if that isn't being too optimistic) only to hide from the economic content. The fellow simply exaggerated the role that the minimum wage can play. There is a positive though. Unlike the ranting right, there is a correct reference to the need to focus on growth to reduce debt problems. Austerity, coercing a non-economic dogma that harms economic activity, has- for some countries- increased debt concerns

 

What needs to be understood is that it was the excessive spending and debt itself that is at the heart of the problem. Now the deeply indebted countries are stuck between difficult options.

Setting aside the issue of whether austerity is a good policy or not, the one thing that is imparative is for a country not to get into any more debt. Debt was and is the problem. Getting into more debt is not going to help. More stimulus, at the cost of taking on even more debt, does not make any sense either. All that excessive spending was stimulus already. So by that sort of logic, the economy should have already grown enough so that the collected taxes could easily pay off the debt. But we see that that simply is not true.

Is "stimulating" the economy really worth the compounded interest payments it will take to service a national debt? And is it not possible that the taxation to pay off the debt will cause more of a disincentive to economic activity than the government spending did to encourage it to begin with?

 

The only way for these nations to get out of their debt is to grow their economies. Excess stimulus created the debt but austerity will only exacerbate it. The excesses of borrowing have been rung out of the economy so what is needed now is to revive the economies for longer term sustainable grow. Drastic cuts to government spending now does nothing to reduce long term debt but exacerbates the existing spiral into catastrophic economic failure which endangers future economic growth and any chance to reduce indebtedness.

The only sane way to do this is to get the economy growing and then adopt a long term debt reduction plan.

 

First, it is to be questioned whether a particular government really has an absolute need to grow their economy to pay down their debt. This may be true in some situations, but not others. And standard of living may also be a factor; although austerity may be possible, it might not always be desirable. (But I want to make particular mention to the fact that I do not believe increased homelessness and unemployment are necessarily the direct inevitable result of austerity. What I mean by this is that an increase in homelessness is no more to blame on a government policy of austerity than the potato blight was to blame on the widespread starvation in Ireland. If austerity leads homelessness, it is probably more because of structural problems in the economy to begin with. People's livelihoods should not be so desperately dependant on moderate recessions of economic growth.)

In many instances, it might not be the best policy for the government to try to pay down its debt too rapidly, if the economy can only endure so much taxation. The point I was making is that governments should not get into any more debt. More stimulus, at the cost of more debt, will only hurt the economy more than it helps.

If the situation is really such that the economy absolutely needs to grow before the government can pay down its debt, the best course of policy by the government may simply be inaction, letting the economy grow by itself. If the debt is compounding out of control because of high interest rates, and it is clear the economy is unable to grow at a rate that the tax base can sustain the growing debt, I would argue that it is simply impossible for the government to ever repay its debt, and that a default (in some form or another) is inevitable. Pushing the problem into the future will only make it even worse.

If by "austerity" you merely mean ending the budget deficit, than I would have to reject the idea that austerity is a bad thing. The whole Keynesian idea was originally that governments save during the good times to spend during the bad. Getting into debt to spend during the bad times is a completely different thing. There are some real doubts to be raised about whether the interest payments and risk is worth it.

 

You are right to an extent.

The error of dropping tariffs was unavoidable because the manufacturers in America used them to stifle fair competition.
They raised the tariffs so high that foreign nations could not compete, and they could avoid the effort to become more efficient.

The ideal situation would be to adjust Tariffs to compensate ONLY for differientials in wages between American workers and foreign workers.

In other words, a sneaker made in Asia where the worker receives $1/hr would cost more only to compensate from the $10/hr wage of American sneaker manufacturers.

This parity based of average wage between these countries and America would keep jobs here, raise taxes on imports, and create a level working field around the world.

 

This is nonsensical. One of the main sources for the gains from trade is difference in factor proportions. Differences in labour abundance, for example, will derive comparative advantage in labour intensive product. Those differences will also ensure differences in wages. You're therefore simply asking to destroy economic activity by harming specialisation according to comparative advantage. That is economic irrationality