For RogueJSK:

Bingo, bullseye.

quote:

Originally posted by BBMW:
You do realize that if everyone has to pay it, all the businesses are going to simultaneously raise their prices to cover it. it's just going to drive inflation, which will eat up any gains from the raises. But in the end it won't effect the companies bottom lines much.

I will think it will drive increased automation and job elimination. The way to beat the increases is to do the work without the workers.

quote:

Originally posted by Ackks:
No, it's not sustainable. The $15 minimum wage they are going to pass through budget reconciliation is going to finish the small business off COVID didn't sink. Not only will they not be able to afford to pay entry level people $15, but all the people who work there are going to want raises as well. A store manager making $16 an hour isn't going to want to be paid a dollar more than a kid walking in off the street. Debt will soar even higher, and the progressives will get what they want, the end of the middle class, and a reset.

There certain businesses whose products & services will not support the price inflation because people will NOT be willing to pay the increased price. Automation/job elimination cost cutting measures not withstanding, many small businesses will fail as a result!

The various burger chains near me have signs saying they are hiring for 16-18$ an hour. Good scratch for a 16 year old kid. Never mind the official minimum wage. You can’t get out of there for less than $10 for a burger, fries and soda, per person

quote:

Originally posted by ElToro:
The various burger chains near me have signs saying they are hiring for 16-18$ an hour. Good scratch for a 16 year old kid. Never mind the official minimum wage. You can’t get out of there for less than $10 for a burger, fries and soda, per person

I would say ~$13 for such an order (as I see you are in the Bay Area). We recently moved from the Bay Area to Utah. Our standard order at a national burger chain was double the $$ in the Bay area as it is down the street from us here.

But a thought re gov't spending, either direct $$ or mandating others pay $$.

The more the gov't "gives" you, the more they own you. In the name of serving the people, they subjugate the people, which is a fundamental goal of socialism.

quote:

Originally posted by Scoutmaster:

quote:

Originally posted by Flash-LB:. . . My parents couldn't afford to send me to college, so I joined the Army to get the G.I. bill after I got out.

Then I went to school on the G.I. bill which wasn't much back then plus I worked an almost full time job all the while carrying around 18 credit hours every quarter.

I want my money paid back to me with interest if they're going to forgive student debt.

I have a similar background, and a similar demand to repay me, even though it was 45 years ago.

Borrowed to cover part of my BS, paid for my own Masters with savings and a bit more borrowing. Paid off my student loans. Paid for two BSes, one for each kid, no borrowing allowed.

So if this crop of fools buys slackers' votes pays off student loans, then they owe me hard currency for three degrees, plus interest. Thinking how to collect. Maybe repossessing a couple of National Parks, selling them for condos and splitting the proceeds? Class-action suit? Or?

RE: debt-is it sustainable. It is, right up to the second it is felt not to be by creditors, that is, owners/prospective owners of US Treasury debt. As long as the US debt behind the accumulated deficit is felt to be 'risk-free', then the musical chairs preliminaries continue: the music plays on and nobody sits. But as soon as default is seen as possible/probable/likely, the music stops and there will be a lot fewer chairs than players.

The current national debt (shown in the link below)

https://www.bing.com/search?q=...883637&wsso=Moderate

There is no way I can imagine how the nation can repay that debt. And the idiots is DC (not to mention other places) just keep creating more and more and more debt. At some point it has to collapse, and I see that happening in the not distant future.

I can see, in a few years, a house and senate full of millennials and younger, deciding to solve the debt. They will conclude that the debt is the fault of the evil boomers and that there is no obligation to pay it off.

They will simply wipe the slate clean. So what if it impoverishes the remaining elderly boomers and bankrupts “evil businesses” and the middle class? The drastic reduction of the dollar’s value will eliminate nest eggs that retirees depend upon.

The larger corporations will mostly survive as most of them will have moved their money out of the dollar into something else.

This is in line with their belief that we are an evil empire that must be taken down a notch or two.

The elimination of a financially secure middle class is important for leftist goals. An impoverished population that is hungry is easier to manipulate once they are dependent upon government for essentials.

I’m old enough that I probably won’t be around.

quote:

Originally posted by sigcrazy7:

quote:

Originally posted by hudr:
...I am near debt free. I am still invested in “the game”, but we will just have to see how that shakes out.

The following is not a criticism. I quote your post only as a basis for discussion. In fact, I admire anybody's desire to be debt free, in particular for the psychological benefits it provides. Having said that...

If interest rates are at an all-time low, and there is a threat of increasing inflation due to deficit spending, what is the strategy to being debt free? During past times of hyper-inflation, such as the German experience in 1922, the real winners were the debtors. In the process of inflating away its debt, the Wiemar Republic also took along all other debtors for the ride. The losers were any who had currency denominated assets, in particular cash holders and debtees, when the currency was re-denominated at 1,000,000,000,000 Papiermarks for one Rentenmark. That's a quick way to payoff your mortgage! (I assume debts were also re-denominated, but they would have long before been devalued due to the inflation that necessitated the re-denomination. Seriously, one trillion Papiermarks for one Rentenmark!!)

I'm not saying the United States will be going the way of interwar Germany, Zaire, or Venezuela anytime soon, but in a setup to increasing inflation, doesn't it seem prudent to carry some debt in exchange for tangible assets, in particular real estate or precious metals? Holding some debt puts you "in the game," as you said, and can act as a hedge against increasing inflation.

This. If you have the projected future income to utilize other peoples money to buy assets right now, it may be your saving grace if / when the chickens come home to roost. Just make sure you hve a firm understaning of what an asset actually is.

My understanding is that if official inflation shows up, the U.S. cannot make the interest payments on the existing debt

In the event of a significant inflationary event, there is absolutely no way the Banks are going to be left holding the bag. Easy mortgage payoffs due to fiscal restructuring seems like a pipe dream.

Inflation makes paying the debt easier not harder. Inflation degrades debt.

All the debt incurred to fight WWII is still there. But all the inflation incurred since then has had the effect of making it insignificant. One of the reasons the government want some level inflation is to slowly inflate the debt into insignificance. The problem is, the keep ladling on more debt.

quote:

Originally posted by oldbill123:
My understanding is that if official inflation shows up, the U.S. cannot make the interest payments on the existing debt

Bipartisan worry grows over national debt, which now totals $85,210 per person

https://justthenews.com/govern..._campaign=newsletter

A bipartisan group of lawmakers is warning that the national debt –– now estimated to total $85,210 per person –– poses an imminent threat, especially if interest rates spike.

The U.S. government has spent around $6 trillion during the coronavirus pandemic, in addition to regular government appropriations. The $6 trillion figure does not count the $1.9 trillion American Rescue Plan that President Biden signed a few weeks ago. The deficit set a record in FY2020 at $3.13 trillion. And the national debt has hit a record $28 trillion.

Maine Independent Sen. Angus King, a member of the Senate Budget Committee who caucuses with the Democrats, said that "we've got a problem" as a country with the rising deficit and national debt, particularly around the interest on the debt.

"I'm concerned about it in terms of generational equity, the long-term implications for your generation and the generation that comes after," King said during a discussion organized by the Millennial Debt Foundation. "And it bothers me from a, sort of, ethical point of view that where my generation is spending the money, spending your money."

According to the Treasury Department, interest payments on the debt totaled $522.7 billion in FY2020 alone.

"It's a cheap time to borrow and some people are using that as a reason to borrow. The problem that comes is our interest rates flow. The U.S. has the ultimate adjustable rate mortgage, which is the rates can change," King said. "And if the rates go back to 4 to 5%, which is where they've been historically, we're in a heap of fiscal trouble. The math is pretty easy. Every 1% is $250 billion a year of interest costs. So 4% is $1 trillion dollars; 5% is $1,250,000,000,000, which happens to be the entire current discretionary federal budget."

Minnesota Democratic Rep. Dean Phillips shared King's concerns about the billions of dollars, per day, that the U.S. is spending on the debt's interest costs alone.

"I read recently that John D. Rockefeller, in his era, could have paid off the entire United States federal debt with his wealth. Turn up the clock now to 2021, America's wealthiest man, Jeff Bezos, with about $180 billion in net worth, he could pay six months of our debt service; think about that," he said. "We will be in a boatload of trouble when we see interest rate spikes."

Phillips warned that "once foreign investors decide the United States of America is no longer the safest place to deploy their capital, all bets are off, no policy, no legislation, no monetary or fiscal endeavor, will correct that."

The Congressional Budget Office estimates that the debt will be 202% the size of the entire economy, known as the Gross Domestic Product (GDP), by 2051.

According to the Peter G. Peterson Foundation, the debt is $85,210 per person.

Phillips said the lack of term limits for members of Congress has contributed to the dire fiscal situation the U.S. faces right now.

"When you've got $80-some-thousand dollars per capita in federal debt, which is about 50% more than the median income in the country, there's no way we can tax our way out of it. And there's no way we can cut our way out of it. It's going to have to be a combination, and that's not a political statement," Phillips said.

"That's a pragmatic statement. Both parties own this. No party stands for fiscal responsibility right now and I think part of it is we don't have term limits. We have too many people who want to serve careers in Congress, rather than show up, do the hard work, the heavy lifting and then move on. I think until we have that change, it's going to be hard to find the critical mass willing to make the tough decisions. That's what we need."

Phillips called for a "Simpson-Bowles style commission" of some kind to "really not just investigate how we can solve this problem, but to have some teeth and some initiative and a requirement that we actually deploy some of the findings."

South Carolina Republican Sen. Lindsey Graham, ranking member of the Senate Budget Committee, said Congress needs to take on entitlement reform, given that there are trillions of dollars in unfunded promised benefits under Social Security and Medicare. He said the trust funds for those programs "begin to fail" in the next 10-15 years, which will cause Congress to "raise taxes or reduce benefits," absent entitlement reform.

"I'm a Republican, I'm willing to raise revenue, as part of a deal to bend the curve on entitlements. I don't think you're ever going to get a deal on entitlement reform without Republicans being willing to raise revenue. I don't think you're ever going to get a Republican to raise revenue unless my Democratic friends are going to look at bending the curve. So the easy thing to look at is COLAs, cost of living adjustments for Social Security, you can means test those," he said. "I'm willing to increase the revenue side if the money goes to sustaining entitlements and getting us out of debt, not to continue to grow the government."

Graham had a message for his colleagues in Congress.

"We can argue about each year's budget, and we're adding a lot to the deficit every year, I agree with that. But if you're going to fix this, you've got to go where the real money is at, which is entitlement spending over time and interest on the debt itself. If interest rates go up, like they're beginning to go up, the interest on the debt goes up, and it's going to be a pretty large portion of GDP just to service the debt," he said.

"The goal is not to get out of debt. The goal is to have a debt sustainable to GDP to lower the curb because as the baby boomers like myself retire, I'll be getting my Social Security check here in a few months. There's just a tsunami of us coming that's just going to crush, you know, the ability for the federal government to pay the bills," he also said.

Alabama Rep. Mo Brooks, who is running for the Senate, predicted that the debt will exceed $30 trillion by the end of 2021.

"We're going to blow through the $30 trillion debt mark sometime this year. And after a while, citizens' eyes tend to get a little bit glassy. Yeah, but they need to understand that American citizens are responsible individually for paying that entire debt and each citizens share, man, woman and child, even a newborn baby. Their share is $90,000," Brooks told Just the News this week.

"I want the American citizenry to ask themselves, can you write a $90,000 check right now? Okay, can you do it for your family of four? That's $360,000 Oh, wait a second. If you happen to be doing well enough to actually earn enough money to pay income taxes, then you've got to pay for all those who can't. So double it –– that $720,000 is the average debt burden of each family of four in the United States of America," he added.

Brooks said he hopes the $720,000 figure "impresses upon the American people as to how dangerous this is and how deep that debt is" right now.

quote:

Originally posted by BBMW:
Inflation makes paying the debt easier not harder. Inflation degrades debt.

All the debt incurred to fight WWII is still there. But all the inflation incurred since then has had the effect of making it insignificant. One of the reasons the government want some level inflation is to slowly inflate the debt into insignificance. The problem is, the keep ladling on more debt.

quote:

Originally posted by oldbill123:
My understanding is that if official inflation shows up, the U.S. cannot make the interest payments on the existing debt

Yeah... inflation makes paying the debt easier not harder. Inflation degrades debt.
However, higher interest rates may make it harder to keep up with debt.

Which is why the Fed ignores inflation:

We’ve been talking about inflation for months, but now the mainstream is starting to pay attention to rising prices. In corporate board rooms, board members are talking about passing along their increased costs to their customers. Consumers are trying to tighten budgets. But the Federal Reserve keeps telling us there isn’t a problem. Inflation – so we’re told – is transitory. In his podcast, Peter Schiff said the central bankers at the Fed have to tell us that because they can’t be honest about inflation.

The ISM Services Index prices paid component reveals just how much prices are going up. The ISM’s price gauge rose to a 13-year peak and came in twice as high as the last month before the pandemic began. But the central bankers at the Federal Reserve continue to insist the price increases are transitory. Peter called their position absurd.

To simply dismiss what is happening as being transitory strains any credibility. It makes no sense for the Fed to be taking this position unless you actually understand why they’re doing it.”

When it comes to inflation, the Fed basically has two options. It can admit it’s a problem and take steps to address it, or it can pretend there isn’t a problem so it doesn’t have to do anything about it. If the central bankers admit inflation is a problem, it puts the onus on them to take action. That would mean tightening monetary policy – hiking rates, ending quantitative easing, and shrinking the balance sheet.

And therein lies the problem.

They can’t simultaneously prop up the economy and then take the props away. The economy is being propped up on pillars of inflation. That’s the only thing that we’ve got going is the inflation. So, the Fed has to continue to provide inflation. It can’t take it away.”

On top of that, we have President Biden promising all kinds of big spending programs, from his massive infrastructure plan to the “American Families Plan.” If the Fed admits we have an inflation problem, we can’t have these spending plans.

The only reason that we can have all the stimulus is if we also pretend that financing it is not inflationary, that we can print all this money to pay for all this government, and we’re not going to have an inflation problem. So, once you understand the box that the Fed is in, now you understand why they have to dismiss inflation as being transitory. Because they have to pretend that there’s no problem to solve. Because the only way they can keep printing all this money and enabling all these deficits is if they also maintain that it’s not going to cause inflation.”

Even the slightest hint by anybody at the Fed or in the administration that inflation might be a problem creates panic in the markets. We saw this earlier in the week when Treasury Secretary Janet Yellen suggested interest rates might have to rise to keep the economy from overheating. The stock market tanked and Yellen quickly walked back her comments, pivoting back to the approved messaging – inflation is “transitory.”

Peter called it an “insipid” inflation problem that has nowhere to go but up.

More and more Americans are going to have to start accepting and dealing with the consequences of living in a highly inflationary environment.”

Warren Buffett recently warned about inflation, but he blamed it on a “red-hot economy.” Peter said the economy is the exact opposite of red-hot.

A hot economy doesn’t cause prices to go up. It’s actually an ice-cold economy that is the cause. Because the economy is so cold, the government is artificially heating it up with stimulus. So, that is what’s causing this substantial inflation. It’s not the strong economy. It’s the fact that we don’t have a strong economy. We have a weak economy. And so the Fed is stimulating the weak economy by printing money to finance massive government spending. And that is responsible for the increase in prices — not the strength of the economy.”

https://www.zerohedge.com/econ...ruth-about-inflation

yes, but for a different reason

I don't think there is any intention of ever paying it back so it doesn't matter how much it is

Biggest Ponzi scheme since the Roman Empire collapse.

This is the highest debt/GDP in our history.

The closest to this was WWII.

There needs to be a jump in productivity to cover it or most likely we are going to try to print money and get inflation to cover it.

We keep kicking the problem down the road to fix it.

The closest I've come to 'understanding' our national fiscal behavior, is comparison to 'economic genital herpes'....

The political class has discovered learning how to not die FROM it while learning how to live with it is as close to a solution as they can invent.

quote:

Originally posted by nhtagmember:
yes, but for a different reason

I don't think there is any intention of ever paying it back so it doesn't matter how much it is

This is the impression I've had for some time.

If a business guy like Trump wasn't all that concerned about it and tossed another 7 trillion or so on the pile, that tells me a lot. Nobody seems to give two shits about it. I would, however, like to know why that is because it does seem to be a giant house of cards.

I've gotten to the mindset though that if everything crashes, I'll worry about it then. Until then I'm not losing any sleep over it as there isn't a damn thing I can do about it.

Inflation makes paying off the debt a lot easier.

I've heard the argument that the gross inflation during the Carter administration was "allowed" in order to pay off the debt incurred during the Vietnam War.

Inflation has been running around 2-3% a year, but the Press has started to mention fears (or maybe its "hopes") of the financial community regarding higher levels of inflation in the future. The rapid rise in house prices may be a leading indicator (symptom) of the coming inflation.

No suggestions from me on how to deal with it when it comes, just a reminder it will be hardest on those with fixed incomes. I'm old enough to remember when the "Misery Index" (Inflation plus Unemployment) hit 20%.