

America's debt

Shame on them


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Bah. You are absolutely incorrect. It seems 'The Economist' has a huge investment in dreamland fantasy, as do the many politicians who seem to use the Treasury as a vote-getting instrument, attracting moochers, for to keep their Party in power.

This 'spend now, pay later' crap has got to end. I'm totally in agreement with Rick Santelli, who sees this 'addiction' to deficit spending as inevitably ruinous to this little Republic. It's best to honor the spending limit. Absolutely no compromise; live within your means.

Best would be the inclusion of a Balanced Budget amendment to our Constitution, to stop these silly debates once and for all.

Rudy Haugeneder

America is not creating jobs, according to statistics released today.
There is little or no recovery, therefore almost no chance of the United States repaying its massive debt, never mind the interest once rates climb to their traditional levels.
In view of that, the Congressional debt ceiling stalemate is appropriate, since it is a reflection of the current -- and future -- economic reality and any decision made will probably be wrong.
As such, doing nothing is the best alternative and provides the flexibility to handle whatever is, or isn't, about the happen.


Republicans should raise the debt limit $50 billion at a time and keep fighting the Dems all the way to November 2012. Let voters decide then if they want Obama, Reid and Pelosi to plunder 25% of GDP, tax, borrow and spend. Voters might choose smaller government, lower taxes, more jobs and send Obama home.

High interest rates will eventually prove the folly of government out of control.


the tax issue enbodies the republic perfectly, they got the tax break by lying that there would be "a ten trillion surplus" in ten years time, bush came forward to ask "a refund" for his rich friends, ten years and ten trillion deficit later, obama extended the tax break for two more years due to the recession, even that is not enough for the republicans, they want it permanent.


For those of you in the UK, good luck, because the Tories have been emulating the Republicans as of late with deep budget cuts. Worse yet, you also have Rupert Murdoch owning a good chunk of your news media and taking it further to the political right.

In America, the political right will reduce this country to one of cheap-labor manufacturing and the production of commodities: food, lumber, and minerals. The UK will starve if you go this route.

Jim Cap

Congratulations, Economist!

And it's about time.

Today's Republican Party is NOT the "conservative, fiscally responsible" GOP that it was back in the days of Eisenhower, Goldwater, Nixon and Ford. In fact, even Ronald Reagan would be shocked to see what has happened to this party and it's once proud tradition.

These new Republicans---led around by the nose by bomb throwers like Grover Nordquist and Rush Limbaugh---are so ideologically fixated that they can no longer understand basic economics, or government, or...reality itself.

Some of them---like the wacky fringe that was elected in 2010---are obviously delusional, or willfully ignorant, or so filled with hatred for "government" and "taxes" that they can't see straight. But the other Republicans who know better are so filled with fear of these extremists that they cower in silence or just recite the obligatory claptrap about "no taxes, just cuts and all of our problems will disappear."

These bizarros have the mantle of respectability but they're as extremist and right-wing as any elected officials on the entire planet.

I don't trust the Republican Party any longer. And this is coming from a small business owner and (traditional) conservative who enthusiastically voted for every Republican nominee since Nixon.

These guys scare me. And a lot of the people I know---who work with me, or live in my nice community, and share my views---now agree with me.

We see what the modern Republicans are doing with power. I don't want to give them more of it. I want stability, not perfection. And not some crazy idealistic notion of a "Perfect Free Market". Ayn Rand novels, as much as I loved them, should never be the basis for a real, working government that has to function in a complex world.

I expect some of my fellow conservatives will spew some hatred at me for this. So be it. Somebody has to be an adult here. The Republicans are playing with fire. If you have a home, or a job, or a business, or a kid, these people are not ones you should trust any longer.


As the Economist has already highlighted, the US budget deficit could be sensibly reduced by reviewing the spending on a topic often considered taboo, especially in Republican circles. I, of course, refer to defence spending where, as this publication states, the US spends more than the next 17 largest spenders combined.

And yet the Republicans line up to refute any need to reduce this spending & if anything, praise requests to increase it. Am I the only one aghast? There is no Soviet Union or Warsaw Pact any longer; China is way behind the US in military might & most Western countries show themselves to be more than adequately protected against terrorism whilst spending a fraction of the US total.

The defence industry has also been shown to be inefficient and wasteful (another source of potential cost cutting) but very little is heard on this front either. This is the one area where the Republicans seem reluctant to consider addressing inefficiency.

The defence industry is worth billions to private enterprise & the Republican Party values its standing as the party of free enterprise. You may wish to make a connection. I couldn't possibly comment.


What a biased left wing article! Pure garbage indeed! Why not quote a Senator Obama when he voted against an increase in the debt limits proposed by the Bush administration? "Raising the debt limit is just confirmation of the incompetence of the President and he should resign".

The USA has a spending problem, not a taxation problem. Why not quote Obama when he insisted don his trillion $ quantitative easing? He said without it unemployment would rise to over 9% in two years (2011) while by passing his program unemployment would drop to 6.5% by 2011. And where is unemployment today? 9.2%. In other words, Obama spends $1 trillion and all that happens is his banker friends make more money but unemployment is the same.

The author of this garbage article is truly clueless about politics and economics. Have he/she do obits?


The writer of this article makes some insane assertions. First he claims that "America’s net indebtedness is a perfectly affordable 65% of GDP." This sounds like the talking heads during the real estate bubble stating that it was perfectly acceptable to lend to people at 12 times income and give those people an "interest only" loan. The writer also asserts that "investors have been more than happy to go on lending to the federal government." Investors were also happy to invest in derivatives, CDOs, credit default swaps, etc. during the real estate bubble and we all know how that turned out. Common sense is lacking in this article.


I am appalled at The Economist's shoddy analysis in this article. Its conclusion is completely wrong and appears to be precisely the same talking points as Obama's Democratic Party.

First of all, The Economist's facts are not even right. The article states that "America's net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government."

Well, I don't know where they are getting the 65% figure, because the actual figure is roughly 100% of GDP (the federal government's total debt right now is $14.3 trillion and US GDP is about that same amount).

Secondly, the Economist is implying that a national debt of 65% of GDP is acceptable, which it is not. History has shown that nation's that incur national debt in excess of 50% of their GDP are usually headed for prolonged periods of stagnation and decline.

Thirdly, the article's statement that "investors have been more than happy to go on lending to the federal government" is simply not true. The Chinese government, which is the biggest investor in US Treasury debt by far, has already stated that they are getting very nervous about their US debt holdings and have been methodically reducing its holdings of US Treasury debt over the past two years. In fact, China's holdings of short-term US Treasury debt declined by 97% from May 2009 to March 2011. Not too mention the warning that Standard & Poor's issued about US Government's credit rating.

Also, the article's following statment is plain absurdity: "America's tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so." America's problem has absolutely nothing to do with collecting too little revenue; it has everything to do with spending. Spending is completely out of control and US corporate tax rates are about the highest in the developed world and some individual taxpayers in states such as California and New York now pay well over 50% of their income in taxes. As for Ronald Reagan, he increased taxes only one time, which he did very reluctantly as part of a budget deal with the Democtratic House in 1982 to lessen the degree of the tax cuts that he enacted in 1981. Reagan later said that he made a mistake in agreeing to the relatiely small tax increases in 1982, because the US Congress did not honor its commitment to reduce spending. So, the Economist is taking things out of context and playing very loose with the facts.

Yes, America's independent voters should take note: The blame for the current budget crisis falls squarely on the radical socialist policies of the Obama Administration and the party of irreponsible big government, the Democratic Party.


Shame on Them? Shame on You!
When the President's own economist quits to the safety of the classroom because HE won't support Hussain Obama, there is a definite problem. It is only exacerbated by such incredibly biased viewpoints like The Economist to lead the public into a false sense of security. The point isn't to service our debt but to eliminate it.
The huge economic stakes game was already started almost 3 years ago. Now you don't like it when the Republicans slap your hands because you are totally, fiscally irresponsible?! Now you don't like it because you are finally being held accountable?! Suck it up and put on your Big Boy pants. Even Vladamir Putin called O'Bama and his Socialist Democrats a bunch of idiots for going down the same path that ruined so many other countries. Again, it's pretty bad when a Communist tells you that your actions toward communism are idiotic.


So, the US Government was able to run just dandy at 1.7 trillion in 1999, not so much at 2.9 trillion in 2008, and just can't seem to make ends meet at 3.5 trillion in 2010? Sorry, as a member of the "wilder eyed" crowd, the thought of our politicians racking up debts and deficits like money grows on trees, then trying to get us struggling folks to pay for it, is totally unacceptable. Mine and other small businesses are holding on by our fingernails, and the answer is to jack up our taxes? Do you have an economic deathwish??

Trond Johannessen

"Perfectly acceptable net debt of 65% of GDP"?
When you write about the Euro-zone you would ooh and aaah. But the skyrocketing net debt of the US is just going to be accelerating and reach over 80% of GDP by 2012, according to OECD forecasts, while the Eurozone will be at 61% and the UK at 68%. In 2007, the UK was at 30% of GDP and the US and the Eurozone at 43% of GDP. Do the math on the derivative of this curves and you can see that the US and the UK have wrecked their balance sheet in the downturn. There is NOTHING acceptable about the US balance sheet. They are not creditworthy and your eagerness to hand out blame seems to blind you to the cold fact that America is in trouble regardless of how the domestic litigation between parties will be resolved.


We're running a $1.6T deficit THIS year alone. The Democrats offered $2T in cuts over the next 10 years, and they consider that a major concession!? Are they serious? Spending has skyrocketed from a historic 19-20% of GDP to 25% of GDP just in the last 2-3 years. Then we here some talk about "expenditures in the tax code." By all means, scrap the entire tax code and start from scratch with a new, simplified version without all the subsidies, loopholes, etc. But any serious discussion MUST include MASSIVE cuts in spending to include entitlement reform (~53% of the federal budget). $15-$20 Trillion in cuts over the next decade is what's needed, not a relative drop in the bucket of $2T over 10 years.

Patrick Dukemajian

The problem with America is not that the taxes are too low or that the government is not spending enough. The stimulus was a disaster. We have spend our way to misery. We were told the sky would fall if the bailout wasn't passed immediately, a week went by before the bailout finally passed and the sky didn't fall in the meantime. We were told the sky will fall if we exceeded the debt ceiling. We exceeded the debt ceiling and the sky didn't fall. Now we are being told the sky will fall if a deal isn't reached by Aug 3rd. Be very suspicious of politicians who foretell disaster if they don't get their way. This claim that disaster is coming unless we we act immediately is used to shut down debate and opposing points of view.

The way to increase revenue is to increase growth. How will raising taxes increase growth? I canceled my subscription about a year ago because of your Keynesian view of the economy. The elites still love Keynes even though his economic theory has been disproven repeatedly. The Economist should be renamed The Keynesian Economist.

If the Republicans cave and raise taxes now after being elected to prevent such a thing from occurring, it will be the beginning of the end for the Republican party. Shame on them if they cave. America's greatness is not in Washington. The people are where the greatness is. If only they can be allowed to thrive and flourish instead of being constantly taxed and regulated.


Stop paying soldiers????? That would be a good start!!!

The U.S. has done enough damage to the world already. A complete withdrawal from Iraq, Afghanistan, Pakistan, and Yemen would be a first phase toward the goal of redefining America's role in the world.

But active wars account for a tiny 15% of America's military budget. The bulk of the so-called "defense" budget goes to:
1) contractors;
2) military bases around the globe;
3) military aid to foreign countries -most of them brutal dictatorships;
4) a huge espionage apparatus created after 9/11.

So, by pushing Obama into cutting military programs, Republicans are not only helping America balance their accounts, but also helping America regain a little respect around the world.

DC View

In today's NY Times has an article on Goldman Sachs taking the largest single loan amount $15 billion on 12/9/08.


If the US had not bailed out the banks, not just American banks, world economy would be in a very difficult place.

The point is Politicans are paid and worshipped to make difficult decisions for the Greater Good of the their country. Unforunately,
they are often too weak and short sighted to do the right thing.

That is what is happening in the US, EU and other countries around the world.

Good luck!


Strange how the DOW is doing so well this week, even as the apocalyptic rhetoric heats up on all major news outlets. Personally I don't think even the republicans are dumb enough to let the U.S. actually default - but the stock market doesn't seem to be pricing in even the remote possibility of that happening...


The Blaze said: "$2 Trillion in spending 'cuts' seems to be the magic number cited by President Obama and members of Cogress in favor of raising the debt ceiling. The Cato Institute, however, released a video Wednesday explaining why those $2 Trillion might in fact be a series of smaller projected cuts over a ten year period... these 'spending cuts' would only reduce baseline spending, ergo spending would actually increase to the tune of $1.8 Trillion overall."

Blaze article: http://tblz.us/5yK5t
Cato's video: http://www.youtube.com/watch?v=we5FUR1Opc0

You can talk about "bad Republicans" all you desire to. However, a growing group of US citizens have seemingly ever more frustrated with Federal debt escalation that they have believed the middle class has primarily funded (reports in the media have primarily focused on millionaires receiving "fat cat" bonuses at bailed out firms that someone believed "too big to fail"). They have grown tired of strapping this ever-increasing debt onto the backs of their grandchildren. They have also grown tired of politicians of all ilks acting like they know better than the citizens how those citizens should live their lives, through a plethora of social (re)engineering projects. Maybe that doesn't present a problem in the UK. The people there accept a monarch. It does present a problem in the US. Shame on the Economist for not understanding that cultural difference.

Economist, here's some "schoolin' for ya': http://notyourstogive.com/


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