US Bond Default, a good thing?

[slapass]

Of course our rates would go up and the world would panic a bit but in the long run the US and most of the first world would have to deal with this huge debt we are building up.

I did counter argue this in my head. We could just keep piling it on and living the good life, and some where in the distant future, we would screw some group of Americans. Not the worst plan as it is versus screwing us now.

Social Security has a 25% cut coming to benefits. It was enacted a long time ago based on the fact that the system was busted based on simple math. It hits about the time I retire. So that is taken care of but what about the huge 100% of GDP debt that we currently have?

[Panty Snatcher]

It will NEVER happen

[Struggle4Bucks]

Originally Posted by slapass

Of course our rates would go up and the world would panic a bit but in the long run the US and most of the first world would have to deal with this huge debt we are building up.

I did counter argue this in my head. We could just keep piling it on and living the good life, and some where in the distant future, we would screw some group of Americans. Not the worst plan as it is versus screwing us now.

Social Security has a 25% cut coming to benefits. It was enacted a long time ago based on the fact that the system was busted based on simple math. It hits about the time I retire. So that is taken care of but what about the huge 100% of GDP debt that we currently have?

There is no solution for the US debt... and The Great Default is inevitable... sorry.

The Great Default: Why Taxpayers Cannot Grow Their Way Out of the Government's Problem
Gary North - August 17, 2013

In assessing whether or not the United States government will be able to maintain Medicare, Social Security, and Medicaid payments to all of the people who have been promised such payments, we must assess the ability of the federal government to collect sufficient revenues to make these payments.A standard suggestion by liberals, who deeply believe in these programs, is to say that what needs to be estimated is the Gross Domestic Product of the entire nation. Then, once this is estimated, it becomes possible to determine whether or not the federal government will be able to make the payments. Here is a recent example.

A fundamental problem with this approach is this: it assumes that the United States government has a legal claim on 100% of the productivity of the residents of the United States. This is politically naïve. We know from experience that the limit of the federal government's ability to collect revenues is somewhere in the range of 20% of GDP. It never exceeds this by much. It has not exceeded it since World War II, and it has never reached 21%. So, while it is instructive to look at what GDP is likely to be, there has to be a limit on the possibility of the federal government's extracting sufficient revenues to maintain its payments.

The next step is to assess what percentage of the federal budget can be allocated to maintaining these payments. One thing is certain: it is not 100%. The federal government has other responsibilities, and any attempt to cut back on any expenditures will be fought tooth and nail by organized groups that have a stake in the subsidies. Furthermore, there will be infighting within the federal bureaucracy as a matter of turf protection. Any attempt by the Social Security Administration to extract wealth, meaning budgetary allocations, from any of these rival federal bureaucracies will lead to a political standoff.

So, from the beginning, we must assume the following. First, it is unlikely that the federal government will be able to collect more than 20% of GDP from the public. Second, it is unlikely that Social Security, Medicare, and Medicaid will ever exceed 60% of the federal budget. It is around 50% today. There is too much political power lodged in other special-interest groups, which are represented by the bureaucracies within the federal government. These people will not give up without a series of political fights.

It is now highly unlikely that the economy of the United States in real terms will exceed an annual increase as high as 3% per annum. The GDP of the United States is around $17 trillion today. Multiply this by about 20%, or .2. That is about $3.5 trillion. At present, the government pulls in only about $2.5 trillion. It borrows the rest. Multiply this by .6: 60% of the budget. That is about $1.5 trillion. That is about the maximum that the government can expect to spend on the major items of the unfunded liabilities.

There is no way that an increase of 3% per annum to this figure of $1.5 trillion will enable the United States government to pay its obligations for Social Security, Medicare, and Medicaid. Kotlikoff estimated the present value of the unfunded liabilities in 2012 as $222 trillion. I know of no estimate that places this lower than about $70 trillion. Note: these are unfunded liabilities, not total expenditures on the programs.

There is no way statistically that this can be paid off. Liberals can dance around the figures, and pretend that "we" are going to grow our way out of this. We are not going to grow our way out of this. The government is going to default its way out of this.

It is indicative of the complete bankruptcy of the present political order that no national leader will face up publicly to these facts. This is true throughout the Western world. Back in 1999, Peter G. Peterson wrote in his book, Gray Dawn, that he had discussed this matter with political leaders around the world. He said that not one of them was unfamiliar with it, and he also said that not one of them had spoken publicly about it. Peterson was the chairman of the Council on Foreign Relations. He had access to these leaders. He was in a position to know what they believed. He was also in a position to know what they had done. What they believed had nothing to do with what they had done.

There is going to be a Great Default. There is no escape from this. People can prepare for it, or they can ignore it, but statistical games will not enable the United States government to do anything except default.

[suesheboy]

Social security is paying back what you put into it and we keep borrowing from it.

Let Obama care start the shift and then switch to a single payer system. Some who leech off of the medical industry will be hurt, but the society as a whole will gain.

To default is just plain stupid. It will kill the market, destroy businesses, raise prices on individuals and effect everyone for more than what the debt is worth.

[pimpmaster9000]

but I thought US democracy and economy were the shit?

I mean you guys give yourself the right to teach and preach to others and you even occupy more countries with your military presence than hitler did and dropped more bombs than hitler did

are't you "the greatest country in the world" and shit?

please please USA tell us all how to live! its not like the only thing good about your country is the nukes and the rest is all phoney crap LOL

its such a crying shame you guys get to influence the world so much....teaches us right for investing money in stupid shit like free healthcare and education instead of nukes