quote:

Originally posted by wcb6092:
I would like to know how much debt we can take on before it all collapses.

Washington is never going to show any restraint.

We have long since passed that point. The "debt" as advertised is around $20T. Note I said "as advertised!"

Reality is about 120 trillion when the unfunded debt is considered.
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https://www.usnews.com/opinion...-the-us-federal-debt

Myth: The government owes $20 trillion.

Fact: The federal government actually owes around $120 trillion. The $20 trillion debt is the portion of the government's financial obligation that is legally binding. The other portion, the government's unfunded liabilities, is money the government has promised to people but will not be able and isn't legally required to pay. The lion's share is in Social Security, Medicare and veterans benefits. Estimating unfunded liabilities is difficult, requiring estimating future interest, inflation, population growth and mortality rates. Consequently, figures range from the astronomical (around $80 trillion) to the truly unbelievable (over $200 trillion). But even the lowest estimates exceed the annual economic output of the entire planet.
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quote:

Originally posted by wcb6092:
I would like to know how much debt we can take on before it all collapses.

Not sure if this answers your concern, but somebody on Fox News said a couple days ago that the deficit is now the same as the GNP. In other words, it would take every dollar generated by the entire US economy in a year to pay off the debt. Obviously, current taxes alone can never pay off the debt, and at the increased borrowing rate, it won't be long before the interest on the debt will eat up the entire GNP.

Rand Paul is right. We either cut spending now, and brutally, or we default in a few years. I know Trump understands this, and the Dow Jones Average understands this, but until the Democrats (especially their voters) understand, there's no chance of addressing the problem.

If I was wealthy, I'd move everything offshore until Trump starts accomplishing his most serious goals, starting with draining the swamp.

quote:

Originally posted by cparktd:
Bad as it is I'm convinced the debt would be headed even higher if the Dems were in charge. I far from an economist but If the economy gets and stays hot for a sustained period of time that will make it better will it not?

The downside to that is, the .gov will see the tax revenues rolling in from a booming economy and say to themselves "look at all this money coming in!...we've got to spend it!"

quote:

the deficit is now the same as the GNP.

The Debt continues to climb, not just as a "big number", but as a percentage of the economy.

Debt/GDP ratio:

quote:

Originally posted by newtoSig765:
If I was wealthy, I'd move everything offshore until Trump starts accomplishing his most serious goals, starting with draining the swamp.

I think you’re being overly optimistic. Nine months from now the big spending republicans are going to lose their grip on the senate and their healthy majority in the house. Trump will have two or six years where all legislation will be held up by gridlock. His agenda is effectively stall out.

quote:

Originally posted by Surefire:
Government debt isn’t real, or at least it doesn’t have the same consequence as it does to individuals.

Or some nonsense like that.

Serious point though - the massive debt increase under obama has had what negative impact? To you or I, doubling our debt would be crippling, so when does it become a problem for government?

Two things ar least will cause it to matter.

Rising interest rates and downgrade of US treasury bond ratings which further causes rising interest rates of US Treasuries.

Interest rates have been extremely low for over a decade and that is starting to change recently and is causing stock market drops right now.

At some point interest rates on US Treasuries could be so overwhelming, such as most tax receipts going to borrowing to pay the interest on debt, that something very bad will happen.

When will that happen? Who knows but IMO not as far off as many believe with the track we are on.

Some politicians have already shown a lot of interest in ways to tap the trillions of dollars in 401Ks and IRAs in ways similar to what they did with social security.

quote:

Originally posted by chellim1:
Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other.

\
Pretty much this.

IMO, while unpopular, SS disbursements need to be rolled back until no less than age 70 (perhaps even 72 would be a good place to start). Several reasons for this -

First, when SS was enacted, the average lifespan was mid-60s. Now it's mid to upper 70s, yet most start collecting in their mid 60s.

Second, many people (millions) draw far more from SS than they ever put into it and they are doing this for 10, 20, sometimes 30 years. There simply is not enough money for this welfare program, and that is exactly what it has become.

Are we entitled to get back what we put in? You betcha. But that's it, IMO.

quote:

Interest rates have been extremely low for over a decade and that is starting to change recently and is causing stock market drops right now.

Interest-rates going up "for the right reason" is bullish, right?

Each time interest rates have surged up to their long-term trendline, a 'crisis' has occurred...



But this time is different right? Because rates are "going up for the right reason."

Hhmm, the reaction in markets each time the yield on the 10-Year Treasury yield reaches its trendline is ominous...

https://www.zerohedge.com/site...42.jpg?itok=EgNrGntN

How much debt can we withstand ?
What negative impact did Obama's debt increase really have ?

There is no definite answer to those questions. Exactly when a collapse would come is probably dependent on a lot of other random factors in the culture.

But the fact that the negative impacts are obscured in magnitude and time is exactly what fuels the Socialist Narrative. WHY NOT just have the government print and give away enough money that everyone has everything they need ?

It would work for a few people...a few hundred...a few thousand...certainly for ME and MY FAMILY ....might as well get what we can now!

quote:

Originally posted by Gustofer:

quote:

Originally posted by chellim1:
Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other.

\
Pretty much this.

IMO, while unpopular, SS disbursements need to be rolled back until no less than age 70 (perhaps even 72 would be a good place to start). Several reasons for this -

First, when SS was enacted, the average lifespan was mid-60s. Now it's mid to upper 70s, yet most start collecting in their mid 60s.

Second, many people (millions) draw far more from SS than they ever put into it and they are doing this for 10, 20, sometimes 30 years. There simply is not enough money for this welfare program, and that is exactly what it has become.

Are we entitled to get back what we put in? You betcha. But that's it, IMO.

What do we do with those obviously disabled persons who cannot work? I ask because my bro is crippled-he has several jobs during his lifetime yet cannot do a lot of jobs. He has put into SSI but has received well over what he actually put into it when he was able to work.

quote:

Originally posted by chellim1:

quote:

Interest rates have been extremely low for over a decade and that is starting to change recently and is causing stock market drops right now.

Interest-rates going up "for the right reason" is bullish, right?

Each time interest rates have surged up to their long-term trendline, a 'crisis' has occurred...



But this time is different right? Because rates are "going up for the right reason."

Hhmm, the reaction in markets each time the yield on the 10-Year Treasury yield reaches its trendline is ominous...

https://www.zerohedge.com/site...42.jpg?itok=EgNrGntN

Ominous chart! IMO there is a good chance that the interest surge can go substantially above the long-term trend line. Rates have been trending downward since the Jimmy Carter presidency. Anyone else remember getting 13 percent on a mid term CD?

quote:

Originally posted by BamaJeepster:
It's not an entitlement if you have paid more in than you get out of it.

Hate to burst your bubble, but SS and Medicare/Medicaid are spending more than they are "making". Therefore, methinks, your math (or whomever's you are using) is a tad off.

But, since you used CNN, here is a counter to your assumption.

http://www.politifact.com/trut...at-you-paid-what-yo/

quote:

Ominous chart! IMO there is a good chance that the interest surge can go substantially above the long-term trend line.

Yep.
There's a good chance that the long-term trend line in interest rates has reversed. We just don't fully realize it yet.

quote:

Originally posted by Southflorida-law:

quote:

Originally posted by BamaJeepster:
It's not an entitlement if you have paid more in than you get out of it.

Hate to burst your bubble, but SS and Medicare/Medicaid are spending more than they are "making". Therefore, methinks, your math (or whomever's you are using) is a tad off.

I never said otherwise. I said that for the people who work their whole lives and pay that tax, they do not re-coup what they put in to it. People who either never put into it or get disabled at a young age obviously get way more out of it than they put into it. What began as a 'retirement program' has morphed into a massive, bloated social welfare program.

Your original assertion implied that a 'fiscal conservative' should somehow feel guilty for accepting social security payments that they have contributed to for their entire working career.

Higher Interest Rates Will Raise Interest Costs on the National Debt
Feb 1, 2018

After a lengthy period of holding the federal funds rate close to zero in an effort to help the economy recover from the financial crisis, the Federal Reserve began increasing its target for the federal funds rate in December 2015. There have been four subsequent increases since then; the most recent was in December 2017 and set a target rate between 1.25 and 1.5 percent.

The Federal Reserve sets policies to foster conditions that they believe to be consistent with achieving maximum employment, stable prices, and moderate long-term interest rates. Setting the target for the federal funds rate — the interest rate at which commercial banks lend to each other overnight — is therefore an important tool for the bank. That rate is a benchmark for Treasury bills and other short-term interest rates. Expectations about those short-term rates, combined with other factors, affect longer-term rates that are applied to consumer borrowing such as for mortgages or car loans.

The continued tightening of monetary policy should be viewed as a positive sign of economic strength — it demonstrates the bank’s confidence in the progress the country has made toward its economic objectives. However, higher short- and long-term Treasury rates mean that the federal government’s borrowing costs will also rise, thereby generating significant consequences for the budget and the national debt.



Under current law, CBO projects that net interest costs will triple over the next 10 years, soaring from $269 billion in 2017 to $818 billion in 2027 and totaling $5.6 trillion over the period.

The long-term fiscal challenges facing the United States are serious. Deficits are on the upswing again and therefore will be adding significantly to national debt. To be clear, the culprit is failed fiscal policy, not the monetary policy conducted by the Federal Reserve. Over many years, Congresses and Presidents of both parties have avoided making hard choices about our budget and failed to put it on a long-run, sustainable path. In fact, the tax legislation that was just enacted makes it even more difficult to achieve that sustainable path. However, as interest costs rise and with the deficit slated to reach $1 trillion as early as next year, it is vital for lawmakers to take action on the growing debt to ensure a stable economic future.



https://www.pgpf.org/analysis/...on-the-national-debt

quote:

Originally posted by BamaJeepster:...I said that for the people who work their whole lives and pay that tax, they do not re-coup what they put in to it. ...

the article I posted begs to differ. The "average" American will get more then they paid in.

Does anyone have numbers for how much of the budget is currently being spent on interest for the debt?

I thought I read a few years ago the real interest rate the government would be paying would be between 6 and 7% if rates had not been artificially depressed. It was said then the cost for interest could be somewhere between $500 and $800 billion a year at the higher rate.

My numbers may be off somewhat, but the idea was the interest would on the order of half the budget, at minimum, when the game of kick the can down the road ends.

quote:

Originally posted by Southflorida-law:
the article I posted begs to differ. The "average" American will get more then they paid in.

I'm not 'average' and no one I know is 'average'. I will pay way more in than I get out unless something drastic happens. I won't feel the least bit of guilt about drawing the money that I will have paid into the program over 40-50 years.

Politifact is probably the most biased of all the bogus 'fact checkers' out there, by the way.

quote:

Does anyone have numbers for how much of the budget is currently being spent on interest for the debt?

Somewhere around $250 billion. But if interest rates rise over 4% it would be YUUUGE!

quote:

Originally posted by BamaJeepster:

quote:

Originally posted by Southflorida-law:
the article I posted begs to differ. The "average" American will get more then they paid in.

I'm not 'average' and no one I know is 'average'. I will pay way more in than I get out unless something drastic happens. I won't feel the least bit of guilt about drawing the money that I will have paid into the program over 40-50 years.

Politifact is probably the most biased of all the bogus 'fact checkers' out there, by the way.

That is the way I feel plus our employers put in the same amount as we did or if self employed, like I was for 16 years, you could pay about double what an employed person would.

If one could have put the amount they were forced to pay into SS and their employer amount into an S&P500 index fund instead they would probably have an account balance in the millions of dollars assuming they made a decent income, close to maximum income SS taxes, and were working the whole time until their 60s.