The federal debt is only 57.9% if GDP

[JDPriestly]

(A DUer asked me to post this as a separate thread. I think I'm on so many ignore lists nobody will read it, but here goes anyway.)

See this list:

http://en.wikipedia.org/wiki/List_of_sovereign_states_b...

The IMF arrives at 92.7% by including state debts.

Cutting Social Security and Medicare will shift the cost for caring for very elderly people and very sick seniors to the states. Very few seniors have the money to pay for the kind of medical care that they need in their final years.

The only answer is to raise taxes on the people who earn enough money to permit them to pay higher taxes -- the very rich.

This is a question of patriotism.

My grandmother told me that Social Security was created because up until it was, the very elderly had to go to the "Poor House," which was usually a horrible place maintained at the expense of local authorities, for example, counties.

The debt ceiling did not have to be raised as often during the Clinton administration as it has in some other administrations. That is because, as a Democrat, he handled the economy much more carefully than Bush did.

In fact, Bush was dishonest about the state of the economy, and that is why the burden of "fixing" the economy has fallen to the Obama administration.

Obama is failing in "fixing" it. He should be out here talking to citizens, not sitting in the White House talking to foolish Republicans.

Prior to the 1930s a much higher percentage of Americans lived on farms than live on farms now. When the owners of a farm, the parents, became too old to work on the farm, they either continued to live on the farm with their children or moved to "town" and lived on the income from the transference of the farm to their children or someone else.

In the 1930s, there were a lot of foreclosures of farms. The system in which parents retired based on farm income or gifts from their children was impossible in a time in which there was so much need and so much poverty. That is why Roosevelt set up Social Security -- to prevent a recurrence of the terrible crisis that caring for the aging presented in the 1930s.

And now, the Republicans and especially, Timothy Geithner's protector, Pete Peterson, want to dismantle Social Security and give Wall Street control over all of the nation's retirement funds. That is a horrible idea as all seniors who lost money in the 2008 crisis know. Obviously, Obama is a key supporter of the efforts to privatize Social Security. Were he not, he would not have appointed Tim Geithner as his Secretary of the Treasury.

Obama's role in this is scandalous. He is no Democrat. I strongly support real Democrats, but I will not support Obama. He should have dealt with this issue when he had a Democratic majority in both houses of Congress. The fault for this falls completely and totally on Obama. It is a betrayal of his Democratic supporters.

[Egalitariat]

1. You've got some bad facts there. US GDP is ~ $14.7 trillion. 57.9% of that is $8.55 trillion

The current US debt ceiling is $14.294 trillion.

If your facts were right, we'd be able to spend about $5.7 trillion of our grandchildrens' money before we'd need to have the debt debate we're having right now.

The IMF number is, in fact, correct. And it only includes Federal Debt.

[JDPriestly]

4. Look at my chart.

These are numbers from 2010. My list gives percentages not total amounts.

The 58.9% (sorry about the typo in the heading) is federal debt. When you add the debts of the individual states, you get 92.7%. Look at the chart.

According to the chart, the IMF number includes the debts of the states.

It says CIA debt number: 58.9 Then under "a" it says: ^a Does not include the state debt issued by individual US states and intra-government debt<4>. The intra-government debt is the Social Security for one thing. It does not have to be paid off immediately.

The size of the debts of industrialized, infrastructure-rich countries is the result of the "free trade" policies, the international trade policies that are systematically and nearly every case impoverishing countries that have massive infrastructure to maintain and support but no longer have industrial capacity.

The ultimate problem behind all this is that we "richer" countries are relying more and more on imports from "poorer" countries. Thus, our GDP, our production, cannot keep pace with our expenses.

It's like a person who never cooks at home, always eats in a fancy restaurant, but isn't working to make enough money to cover the accumulating tabs.

The focus has to be on establishing reciprocal trade agreements, not "free" trade agreements and putting Americans back to work in basic industrial jobs. We can't continue to eat out so much. We have to learn to cook at home.

Chinese stir fry is great, but let's make it here.

The world has been here before. After WWI, the US had the positive trade balance, and Europe was in the red. Remember that. No, I wasn't alive then either. But I have read about it.

I also read a great deal about the huge German and Austrian inflation. I read a lot of court decisions that showed that landlords took their long-term leases (which used to be quite normal there) to court and the courts revised the leases so that the tenants had to pay higher rent. The courts invoked a theory called "good faith."

If you read our original Commercial Code, you will see that Llewellyn included the concept of "good faith" in our Commercial Code. Llewellyn knew the German system. I think he even served in the German army in WWI. (I might be mistaken about that.) As we saw in the foreclosure crisis, our courts are unable or reluctant to simply write the terms of contracts based on a theory of "good faith." It may work sometimes, but not generally.

Anyway, our real problems are trade and jobs. Republicans are trying to distract Americans from the unavoidable truth that unlimited free trade and other utterly free market principles when unbalanced by common sense just do not work.

All this talk about debt is a red herring. If you get rid of the debt, you damage the infrastructure and you impoverish the country.

Balance trade relationships and create better jobs, not just more jobs, in the US, and things will regain equilibrium.

I also want to remind you about what happened when the balance of trade between the US and European countries like Germany became so lopsided in the early part of the 20th century.

We insisted that other countries repay us the money they owed -- threw a real hissy fit about it, and then -- of course the failure of our stock market (due to much trading on margin among other things) the failure Credit Anstalt in Austria then the depression and
WWII.

After WWII, we helped rebuild Western Europe because we were powerful, realized the mistakes we had made in insisting on repayment of the debts for money we had loaned to other countries and did not want either Communism or a repeat of WWII.

And now, here we are. China is in the situation that we were in about 80-90 years ago. We shall see what happens.

But we need to stop eating out so much.

We do not need to cut Social Security and Medicare. That will not build our production capacities. It will shrink our GDP and cause states' debts to swell as they pay the end-of-life costs for keeping elderly people in nursing homes.

If we had jobs galore, healthy people would wait until they were 70 to retire. But there are not enough jobs, and employers hire younger people first. Cutting Medicare and Social Security will increase the malaise and insecurity in our country.

I will not be voting for Obama. Geithner is a fool and a Pete Peterson pawn.

[provis99]

2. your link is phony.

[JDPriestly]

3. Here is the link

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt