$145,000 owed by every American

[question everything]

Sunday, August 28, 2005

$145,000 owed by every American

The country is ill-prepared to cover $43 trillion in obligations.

By ROBERT TANNER
The Associated Press

You owe $145,000. And the bill is rising every day.

That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor. And it's not even taking into account credit card bills, mortgages - all the debt we've racked up personally. Savings? The average American puts away barely $1 of every $100 earned.

Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society we spend $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services. A chorus of economists, government officials and elected leaders are warning that nonstop borrowing could bring fiscal disaster - one that could unleash plummeting home values, rocketing interest rates, lost jobs and threats to government services.

(snip)

An Associated Press/Ipsos poll of 1,000 adults taken July 5-7 found that a sweeping majority - 70 percent - worried about the size of the federal deficit either "some" or "a lot." But only 35 percent were willing to cut government spending and deal with a drop in services to balance the budget. Even fewer - 18 percent - were willing to raise taxes to keep current services. Just 1 percent wanted to both raise taxes and cut spending. The poll has a margin of error of 3 percentage points.

A few years ago, government finances were the strongest they had been in a generation. But it didn't last. The budget surplus of $236 billion in 2000 turned into a deficit of $412 billion last year. The government had to borrow that much to cover the hole between what it took in and what it had to spend; a difference that's called the federal deficit. Blame the bust of the dot-com boom, the ensuing recession, President George W. Bush's federal tax cuts, the 9/11 terrorist attacks and the subsequent wars in Afghanistan and Iraq.

(snip)

Some people, however - including economists - think the picture isn't so gloomy. Ben Bernanke, who recently left the Federal Reserve Board to serve as Bush's top economic adviser, has argued that the problem is not with the United States. The trouble lies overseas, where people want to save rather than invest or spend their money. While the federal budget needs to be balanced, the key is to encourage other countries to create more economic activity, he says... As a society, Americans are on track this year to spend $680 billion more on foreign goods like Chinese-made clothes and Scandinavian cell phones than overseas buyers do on American products.

(snip)

Here's how economists, from former Federal Reserve Chairman Paul Volcker to analysts at the International Monetary Fund, explain the danger that creates: Americans go into debt to live a life beyond their means, spending borrowed money to buy goods, many from overseas. Government provides more services than it can afford to, and goes into debt to cover the gap. Foreign banks increasingly cover that debt by buying it, in the form of U.S. Treasuries, which helps keep interest rates low and keeps American consumers buying. Experts say the relationship is unsustainable. It could all come crashing down if foreign banks reduced their investment in the dollar, says Nouriel Roubini, an economics professor at New York University.

(snip)

http://www.ocregister.com/ocr/2005/08/28/sections/news/focus/article_652246.php

[gizmo1979]

1. Will you take a check?

Alittle short of cash right now.

[getmeouttahere]

2. Is this the same article that I saw on CBC's website?

http://www.cbc.ca/cp/business/050827/b082710.html


Canelon sees echoes in the rise of obesity: a pervasive I-want-it-now attitude no matter what the consequences. The American people seem to want the best of both worlds - tax cuts and government services - while they hope the dollars sort themselves out.
An Associated Press/Ipsos poll of 1,000 adults taken July 5-7 found that a sweeping majority - 70 per cent - worried about the size of the federal deficit either "some" or "a lot."
But only about a third, 35 per cent, were willing to cut government spending and deal with a drop in services to balance the budget. Even fewer - 18 per cent - were willing to raise taxes to keep current services. Just 1 per cent wanted to both raise taxes and cut spending. The poll has a margin of error of 3 percentage points.

THIS IS THE MOST AMAZING PART OF THE ARTICLE FOR ME...NOT THAT I'M AT ALL SURPRISED BY IT, COMING FROM THE BUSH ADMIN...

- Ben Bernanke, who recently left the Federal Reserve Board to serve as Bush's top economic adviser, has argued that the problem is not with the United States. The trouble lies overseas, where people want to save rather than invest or spend their money. While the federal budget needs to be balanced, the key is to encourage other countries to create more economic activity, he says.

The overseas equation gives many other economists the biggest scare.
The trade deficit - the difference between what America imports and what it exports - is the highest it's ever been, both in absolute numbers and in comparison to the size the economy.

This article tells me two things – the obvious being that BushCo continues to blame others for their/our problems. I’m sure the rest of the world would love to know that it is their fault that our economy is failing, because they are not spending enough. Un-fucking-believable doesn’t begin to describe this. If the rest of the world is smart, they will continue to save, so that when the great US economy collapse does come, they might have a better chance to ride out the storm. I read somewhere recently that Canada’s trade surplus increased again last quarter, primarily because their trade with Europe grew. Now it doesn’t take an economist to figure out that this is a good course for Canada to follow. Strengthen their economic ties with the rest of the world. It also shows that Canada must be doing a better job of keeping manufacturing jobs in the country, and I wonder why that might be! Could it be that they actually pay the employees a living wage? Sure, I’m oversimplifying, but that must be part of it.

[question everything]

3. Another interesting fact - not in the article, but implied

is that we are dependent on foreign investors to buy our stocks and bonds yet, the Bush government has been showing so much disdain to foreign countries - mostly Germany and France - because of their stand on the Iraqi war.

I doubt that companies are now fighting to get a chance to rebuild Iraq - not with that chaos. But last year many did, and the Bush government was clear in who was going to get a contract and who was not.

[getmeouttahere]

4. Excellent points, question everything!

implied is the key

I predict that the other countries will band together as BushCo continues to isolate us with their warmongering and bullying

[calimary]

5. Ah, "our way of life" - that must NOT be compromised. That, according

to bush's own father, is NOT negotiable. THIS is the way of life that we have to go to war for - so we can keep living beyond our means, consuming like ravenous hyenas with no thought about the future. Well, the bushies are filthy rich. Let THEM foot the bill. They can afford it better than the rest of us can. And they're responsible for the cause of this.

[Mairead]

6. Note that no mention is made of cutting the war budget, only social bits

Talk about limiting the spectrum of discourse!

The war budget eats 50c of every tax dollar. Just think how well off we'd be if it only ate 10c.

[getmeouttahere]

7. Very good point, mairead....

you think like Kucinich. If we only had our priorities straight, we could do everything better than anyone, with our resources, or at least the ones we had before BushCo