Hope You're Feeling Rich: The Trillion Dollar War

Discussion in 'Politics, Religion, Social Issues' started by skunk, Aug 20, 2005.

  1. skunk macrumors G4

    skunk

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    #1

    http://www.nytimes.com/2005/08/20/opinion/20bilmes.html?pagewanted=print
    Looks like you'll have to defer that next Mac purchase, guys.
     
  2. highres macrumors 6502a

    highres

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    #2
    What really depresses me when I see these types of figures and the cost of the conflict in Iraq is when I think of how much the US could be doing to improve worldwide conditions like poverty, disease and education with this kind of money. Instead of leading the world forward and truly building a global community this administration would rather drag us back into the Dark Ages, environmentally, educationally, militarily and otherwise. It really is a tragedy and is criminal in my opinion. When will people wake up and demand change?
     
  3. skunk thread starter macrumors G4

    skunk

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    #3
    That is indeed the true tragedy. A trillion dollars spent more wisely could probably wipe out terrorism, too. And of course the real irony is that most of that money is being provided by China, and other bastions of democracy.
     
  4. miloblithe macrumors 68020

    miloblithe

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    #4
    There doesn't seem to be all that much doubt, to me, that the US only has a few years left before the big bill we've been acumulating catches up with us.

    Peter Peterson wrote about this in “Riding for a Fall” in Foreign Affairs, Sept/Oct. 2004

    Peterson recognizes that three trends are threatening to bankrupt America: (1) increasing domestic and international costs of waging the war on terrorism, (2) the United States’ unprecedented current account deficit and negative net investment position, and (3) aging populations throughout the developed world and their attendant rising welfare costs mean that many of the United States’ current creditors will no longer be able to finance US debt in the future. Peterson estimates that current US levels of spending and borrowing are not sustainable for more than five years, and that in the long run the United States cannot fulfill its global leadership role without realistically facing these problems.

    My contention (which Peterson probably agrees with but doesn't state) is that there's no way in hell this administration is going to face these problems. We continue to run a massive current account deficit and federal budget deficit. There is no plan to reduce the costs of our wars. And the other issues in the world are a matter of fact. Japan has only one possible method of funding its current standard of living with their aging population and stagnant economy: stop funding US debt.
     
  5. highres macrumors 6502a

    highres

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    #5
    If it could be believed, didn't we have a "balanced budget" under the Clinton Administration and a budget surplus?

    Maybe I should have taken it as a sign when the Bush Administration looted Social Security right after taking office that things were headed in the wrong direction.
     
  6. skunk thread starter macrumors G4

    skunk

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    #6
    Just you wait till oil starts being priced in Euros.
     
  7. miloblithe macrumors 68020

    miloblithe

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    #7
    It amazes me how consistently most Americans dismiss the EU as innefectual nonsense doomed to failure. It seems directly proportional to how deathly afraid they are of it, exactly on that point (among others).
     
  8. xsedrinam macrumors 601

    xsedrinam

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    #8
    $7,782,816,546,352 In Debt

    NewsLink This is U.S. Debt total as of April. A current figure is available at U.S. Debt Clock
    I'm neither an economist nor the son of an economist but, as the manager of a household of 4, I know if we continue to spend more than what comes in over an extended and prolonged period of time, sooner or later we'll have to "pay the piper". Remember the mantra of Elections several years' past? "It's the Economy, Stupid"? How a "debt economy" functions and thrives without regard to the expanding balloon's limit, is a question I'll leave with the economists; but with current U.S. indebtedness totals, that would place an approximate per capita debt in excess of $26,000 on the head of each citizen. If the bank(s) call loan on that next week, we'd be hard pressed to deliver. Over the past decade, I've seen the economic collapse of two South American countries (Argentina and Ecuador). We were there when the Sucre went belly up. The IMF and other Monetary Funds cannot continue to bail out defaulting countries. Not surprisingly, there are still European countries who do not want to come on board the present Euro plan. Where it all is headed and will end up, is a question for greater minds than mine, but I do know that, eventually, "trickle down" means that "Joe sixpack" will feel the trickle, sooner or later.
    X
     
  9. Sun Baked macrumors G5

    Sun Baked

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    #9
    I think we are getting a good return on our money, we probably secured enough extra oil in the coming years to fill all the toilets at the Pentagon (once). ;)
     
  10. skunk thread starter macrumors G4

    skunk

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    #10
    Sounds like Doodoo Economics to me...
    :D
     
  11. miloblithe macrumors 68020

    miloblithe

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    #11
    It's really not appropriate to compare a national economy to a household economy as an analogy. They are not analogous. The most important reason is that a household is led by an individual who lives a certain amount of time. Nations can run perpetual debt because they are not mortal. In many ways, running a deficit is a good idea. It allows for greater consumption and investment now. This is especially good if the deficit is used to finance investment, because that will facilitate greater growth for the future. Businesses do the same thing, on a much smaller scale. Ross Perot was kind of an idiot for squalking about "if I ran my business like the Federal Government" when complaining about government debt. Businesses run deficits all the time, and for good reason. If a business has a new venture, it borrows money from investors or banks to finance that venture, in anticipation that the returns on that investment will be greater than the principle and interest. Businesses do this perpetually, constantly in debt. That is how they grow. An economy can be similar. If a country realizes it can invest in something that will improve productivity in the long run (say education, roads, scientific research, etc), the country can make a return on that investment by taxing the resultant higher future GDP. If a country were to cut back on this kind of investment just because current taxes don't cover all expenses, that country is limiting its future growth, potentially to the point of no or negative economic growth.

    Of course, running a massive deficit to fund a war-of-choice is an entirely different matter.
     
  12. skunk thread starter macrumors G4

    skunk

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    #12
    I think George must have been out trying to score some coke during that section of his MBA course.
     
  13. blackfox macrumors 65816

    blackfox

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    #13
    It is interesting to ponder the degree of inevitability of US economic collapse.

    For this country to remain financially solvent in the face of declining tax revenues and with an aging population drawing more resources (among others) seems to demand a level of sacrifice that I fear few politicians, or voters, will be able to muster.

    There was a very interesting article in the Atlantic the other month, written as a fictional brief to the incoming president circa 2017. It outlined the reasons for the US's fall.

    Among them were unprecendented borrowing and debt, both by the consumer and by the government. There was also the lower tax revenues, as done by Bush before leaving office. There was the skyrocketing cost of Medicare, even as many more were left uninsured. There was the collapse of the housing market bubble, due to the volatility of the dollar.

    In this article, there was an interesting proposition as to how the US managed to stay afloat without the unpopular raising of taxes to cover the shortfall - a deal with China.

    China would provide the US with currency in exchange for a segment of our manufacturing base. This aided us by providing us with the monies to continue operation, and it allowed China to continue to fuel it's economic growth as laborers streamed to the factories in the industrial cities, as well as keeping the yuan low, by releasing all that currency from it's banks.

    In addition, China (among others) stepped in to fund our universities, whose state governments, boung by balanced-budget rules, could not afford to run.

    There was also the proposition that with Castro's death, Chavez used this as an excuse to blame the US in meddling in Cuba's future and prohibited all oil exports to US ports. This, along with a secret oil deal with China, contingent on the latter pulling out of the deal it had been running with the US.

    The resultant oil shock, coupled with the inevitable economic ripples, devalued the dollar by 50% in only a few days. Investment fled. The US was left with little to no manufacturing base, or higher-learning infrastructure (which had gone back to China), and was crippled with debt. Millions were forclosed on, and the government was unable to fund any meaningful assistance (vast RV parks for the displaced were mentioned).

    Pretty scary stuff.

    On a positive note, this hypothetical President was the first Independent elected. This after the 2008 president, a Democrat, proved too spineless to forstall the disaster his predecessor had helped create, and the 2012 president, a war-hero Republican (who had famously parachuted in in the night and captured UBL asleep on video), proved that Republicans just are unable to govern, despite their gift for rhetoric.

    sorry, I've misplaced the issue, so I cannot give credit to the author and/or provide a link...
     
  14. xsedrinam macrumors 601

    xsedrinam

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    #14
    Really? I guess I'll try rendering unto Caesar come, next April. I obviously must not have been clear on my point. It was not to draw attention to analogies. It was to point out that fiscal irresponsibility demonstrated in overspending, defaulting on loans, depletion of reserves, co-mingling, fraud, announcing US$87 billion for a military campaign and spending over 250 billion cannot be propped up and sustained with a simple printing up of more currency or rollovers. It has to come to roost, sometime, somewhere. What would happen if there were a global run on banks next week? It almost recurred in the U.S. some time around '87 in Michigan, if I recall.
    X
     
  15. miloblithe macrumors 68020

    miloblithe

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    #15
    It's sad that there's no real capacity for plain dealing in US politics. I agree that neither party is fully facing up to reality, although Democrats are doing a good deal better on the idea that massive deficits aren't helping us. Our political system is too based around combating for entrenched interests rather than figuring out the best collective path.
     
  16. xsedrinam macrumors 601

    xsedrinam

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    #16
    Lobbyists and special interest groups are just part (IMO) of a skewed lens which taints U.S. world view and reality perception. In a global economic market, what happens in Japan or Europe has been of obvious import. Add to that China and the Far East, the Middle East, all of the Americas, and "getting it right" gets complicated particularly so when the margin for error seems to be narrowing. I shudder to think of 4 more years' U.S. occupation in Iraq while other neighboring countries (the Saudis, Iran among them) are fixed on a distorted radar of thinking war will resolve the problem.
    X
     
  17. solvs macrumors 603

    solvs

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    #17
    The way things seem to be headed, I don't think we have to worry too much about future debt. At this rate, there won't be a future. :p :eek: :(
     
  18. mactastic macrumors 68040

    mactastic

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    #18
    Ah but if you **** up the country you can blame the next Democrat elected for the mess you hand off to him.

    I mean, we hear all the time around here how the GSAVE (formerly WoT) is all Clinton's fault. I'm sure the problems of this president will be hung around the neck of the next Democrat in office.
     
  19. ham_man macrumors 68020

    ham_man

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    #19
    Is it impossible for anybody too not use common sense anymore? Unless you absolutely must borrow money, then don't. Plain and simple. Unless it is for my home (which I feel is understandable), I will make it a goal of mine to never, ever go into debt...
     
  20. kalisphoenix macrumors 65816

    kalisphoenix

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    #20
    I'm not sure that economists have proven that anyone should listen to them.

    It seems to me that Capitalism is a lot like Windows. They started out with a basic concept that seems adequate at first glance but is irreparably flawed (that there is no distinction in priority between one's luxury and another's necessity). I think the basic concept of Capitalism is much like MS-DOS.

    Then, once problems emerged (as they definitely did), a stop-gap solution was employed in order to make the system less offensive. It was not a revision, mind you, but a bad "patch" job, and it suffered from all of the problems of the underlying system. Basically good things became damn near impossible to manage. I'm talking here about the public offerings available in society -- public schools, state-assisted universities, state hospitals, welfare programs, et cetera. It's often taken as an argument supporting Libertarianism or at least privatized schooling/healthcare/whatever that the public institutions are in such a mess, but I think that the failure of Capitalism is most evident in the public institutions' sorry state... the "richest" country in the world should have no problem providing the best schools in the world, and yet we find this is not the case. Windows 3.

    The next stage of Capitalism is where the problems themselves are used to justify further alterations of the deeply flawed system. These alterations don't actually help anything, they merely exacerbate the situation. For instance, is your local economy bad? Well, we need to revitalize it! We're taking over your neighborhood -- move out. (not that anything like this has happened in the US ;) ). Capitalism is used to justify many of the same excesses that were perpetuated under "State-Socialist" regimes, in which "one dollar equals one vote." Less and less progress is made, while the bureaucracy(system requirements?) become progressively more bloated. The inconsistencies build up (tobacco legal while pot is punishable by imprisonment). Basic requirements are not fulfilled, while new "features" are added to the system. And then everyone wakes up one day in the country version of Windows ME! :eek:

    </;)>
     

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