What Happens if America Can't Pay Debt?

[JP226]

I know you are grossly undertaxing because you are. USA keeps lowering taxes because people will have "more money to spend to save the economy" or "companies can hire more people with saved money".

Of course, problem is that even if company hires more people it does not change a damn thing if there is nobody to buy the crap they produce. And if people buy crap they do not need and then crap they do not need from abroad, you guys are racking ever increasing deficit.

As for capital account, US capital account is not going to save you. Yeah, you guys receive lots of investments and your bonds are purchased. But unless USA switches to more healthy economical structure you guys are not going to live off it.

You only get money as long as people believe you can pay it back with sufficient profit margin to make it worth their time. Problem is, you guys do not grasp that more you loan and take money, more you have to pay back.

Well, actually you grasp it but you just prefer to ignore. Pretending that some miracle will save USA from bad financial handling.

It won't. Sooner or later investors start considering risks involved with US excessive spending and lack of measures to correct it a bigger risk than it is worth. And then you either stop receiving money or have to pay bigger interest. If you offer bigger interest, you just dig your hole way deeper. If you stop receiving money, your economy grinds to a halt and you guys default.

End of American dream.

Uggh, believing a politician. I bet you also think strippers like you.

Don't tell me some Finn can determine whether or not the US has taxes either too low or too high. What are you even basing this stuff on?

[karo]

Uggh, believing a politician. I bet you also think strippers like you.

Don't tell me some Finn can determine whether or not the US has taxes either too low or too high. What are you even basing this stuff on?

Well there is a small thing like the Laffer curve and the fact that you guys pay around 20% at most and the rest of the west pays a lot more so I would say you are under taxed.

[JP226]

The laffer curve is a generic theory that is only taken seriously in the song and dance that is the PR of world wide governments. You can't use it in practice, it's a nice thought, nothing more in terms of application. I actually think I paid over 20% to the Feds alone. Chalk in another 5% or so for state and local.

[karo]

The laffer curve is a generic theory that is only taken seriously in the song and dance that is the PR of world wide governments. You can't use it in practice, it's a nice thought, nothing more in terms of application. I actually think I paid over 20% to the Feds alone. Chalk in another 5% or so for state and local.

how much money did you earn last year? And how much of the taxes are you going to get back because you have paid yo much. And that 25 is nothing compared to the 48 we have to pay here in Belgium.

[Thorn777]

The laffer curve is a generic theory that is only taken seriously in the song and dance that is the PR of world wide governments.

Isn't most economic theory just standing on a shaky foundation?

You cant just go around and cherrypick them, and then go, hey these are the real McCoy, forget about the ones I didnt pick.

Anyway, I think Obama should extend the cuts for as long as this crisis still shows symptoms. After that its really better to have a normal tax-rate going.

In the very long run I believe in very high taxes for the capital-accumulators up there.

[JP226]

This is retarded. I don't care how much belgium taxes or doesn't tax, it's irrelevent in the context of what's "too much" or "not enough." If you guys are happy paying so much in taxes, more power to you. You're fools, but none the less, you don't effect me. It still doesn't answer "what's too much."

Isn't most economic theory just standing on a shaky foundation?

You cant just go around and cherrypick them, and then go, hey these are the real McCoy, forget about the ones I didnt pick.

Shaky? Well, that's hard to say. You can have a hundred theories and everyone will have a great story with a line of assumptions set up and will say my theory is the real deal. For the last three quarters I've changed my theory on what drives corporate taxes three times, and for the next quarter I'm going to have an additional three theories/ stories. That being said, there are guidelines as to what goes and what doesn't. You can't predict say corporate profits by measuring the amount of rainfall. You can predict them overall by looking prior corporate profits, current S&P changes, housing markets and industry measurements and so on. You can predict them by looking at the overall amount of sales and price levels less the costs of investment and labor. You can measure them by looking at employment levels across the largest sectors, looking at construction expenditures and mortgage rates. No theory is air tight, but they have to make sense. And most do in the real world. I won't throw game theory into the mix because it's kind of an exception to the rule, but all in all if the logic is sound, if the math works out and reasonable results can be found, theory isn't overall all that shakey. And later on we do get results, we can forecast and see how close to targt we were when the forecasted periods come around, and if we have to through trial and error we adjust and fine tune our theories. Like any science.

[CarbEast]

The debt is nominated in US dollars. US have complete control over how many dollars they have. It doesn't necessarily means that printing as many dollars as needed is a proper way of dealing with the problem, but as far as original question goes, America can't (technically) ever get in situation when it *can't* pay the debt as long as it's still nominated in USD.

[JP226]

That and, since the debt is in dollars, if everyone dumps it, they are out of a lot of cash themselves.

[Last Roman]

better yet
tax the out of churches
make those greedy basterds cough up the dough

this isn't the middle ages. most churches aren't wealthy beyond belief.

[Exarch]

That and, since the debt is in dollars, if everyone dumps it, they are out of a lot of cash themselves.

it'll be different in about 5-10 yrs' time when msot countries stock up on assets to cushion themselves against exposure to the USD.

i hate to say it, but the Great Recession of 08-09-10 has shaken the confidence of the USD (along with massive budget deficits and debt spending) that a lot of countries have felt it necessary to pursue other alternatives to the USd as a reserve currency

[Tiwaz]

Uggh, believing a politician. I bet you also think strippers like you.

Don't tell me some Finn can determine whether or not the US has taxes either too low or too high. What are you even basing this stuff on?

Which politician you speak of?

Oh yes, the "Tax cuts are good for economy"-Bush. But he is in your corner, not mine.

Apparently in your mind republican politicians are honest and right.
Did you bother read the article mentioned in this very thread before?

Your beloved mathematics have proven that all those tax cuts set up by Bush have failed to produce increase in income but decrease.
Neither have they in practice resulted in huge boost to growth.

And all this compared to 90s when taxes were raised. Income went up AND growth did as well.

Clearly you guys, americans in general that is, have lost the ball somewhere on the road.

[JP226]

My god, what does this even mean Tiwaz? I thought you were going to produce a thought out response where you could point to x y and z as being reasons we are under taxed.

it'll be different in about 5-10 yrs' time when msot countries stock up on assets to cushion themselves against exposure to the USD.

i hate to say it, but the Great Recession of 08-09-10 has shaken the confidence of the USD (along with massive budget deficits and debt spending) that a lot of countries have felt it necessary to pursue other alternatives to the USd as a reserve currency

How? It's still bar none the closest asset in the world to riskless. It may not be as it once was however, what's better exactly? By buying dollars you are essentially wagering that the US economy will grow.

[karo]

My god, what does this even mean Tiwaz? I thought you were going to produce a thought out response where you could point to x y and z as being reasons we are under taxed.



How? It's still bar none the closest asset in the world to riskless. It may not be as it once was however, what's better exactly? By buying dollars you are essentially wagering that the US economy will grow.

Follow my logic here, you guys pay around 20% taxes. When we compare you guys to the rest of the West you guys are not paying much taxes. Isn't that true? And when looking at the cost of living it's much cheaper in the US than it's in Europe. And the wages you guys get is also more. So you get payed more and pay less taxes and on top of that the life there is cheaper than here in Europe. What does this mean to you guys?

And the problem of the debt is not paying it but paying the interest on those loans. That money can be used on the citizens of the Us instead of paying it to foreign powers. That's why I was talking about raising the taxes with 2%, cutting the spending and starting to pay of the debt before it will become a problem for the next generation.

[JP226]

It's irrelevent in comparing countries as to how much tax is not enough or too much. I don't care how much more you lose in taxes. Not one iota.

It's as if you are strangling yourself and saying "see how hard we're strangling ourselves, you need to try harder." Eeeeh no...

[karo]

It's irrelevent in comparing countries as to how much tax is not enough or too much. I don't care how much more you lose in taxes. Not one iota.

It's as if you are strangling yourself and saying "see how hard we're strangling ourselves, you need to try harder." Eeeeh no...

So you compare paying taxes to strangling yourself?

And how will you find out if the people and companies in the US are under taxed or not?

[JP226]

And how will you find out if the people and companies in the US are under taxed or not?

Now you turn the question on me? I never set about doing so, merely asking the question of Tiwaz who declared it.

[karo]

Now you turn the question on me? I never set about doing so, merely asking the question of Tiwaz who declared it.

I tried to explain you why the US is under taxed by giving examples of other Western countries and the only you said was "I don't care...'

[JP226]

I tried to explain you why the US is under taxed by giving examples of other Western countries and the only you said was "I don't care...'

No you hardly tried to explain anything. You said, belgium taxes themselves more than the US, therefore the US doesn't tax itself enough. That's not an explanation, that's flawed logic.

[Banana Jelly]

Imagine how poor America will be left with when America pay's all it's debt and china stops lending money to America.

[Exarch]

if the obama admin aggravates the Chinese any more, i think they just might do that.
then, who's going to fund obama's 2nd stimulus?