Is Earning $50 LESS per month a Big deal to YOU?

[dbroncos78087]

The bond rate being low does not mean the debt rate is low.

We are and we aren't like Greece though. We do have a similar amount of debt like those countries. We do have most of our government revenue going towards mandatory domestic spending like those countries. We are experiencing a sluggish economy like those other countries.

BUT...

We have a reputation that is built on private investment and using economic prosperity as a catalyst for innovation unlike those other countries. We do owe most of our money to ourselves unlike those other countries. We are being allowed to borrow money at very low rates unlike those other countries.

So we share some similarities between ourselves and Greece but the notion that we are them is just wrong.

[GoCrew5]

Gonna be 20 T in debt soon yet spending and being in debt is not a problem. Really?

[FOBolous]

it's a big deal for those that's making only 30k. people making that amount of money are already living paycheck to paycheck...any changes to their financial situation even if it's "only" $50/mo...hits them hard.

[dbroncos78087]

it's a big deal for those that's making only 30k. people making that amount of money are already living paycheck to paycheck...any changes to their financial situation even if it's "only" $50/mo...hits them hard.

I think what you're hitting on is the "marginal" dollar. Meaning that it only matters if anywhere in that $50 is your next dollar that you rely on. If you have expenses that keep pace with your income then it will affect you much more than if your income outpaces your expenses.

[FOBolous]

Gonna be 20 T in debt soon yet spending and being in debt is not a problem. Really?

so...in your opinion....at what dollar amount will our debt hit the tipping point?

[FOBolous]

I think what you're hitting on is the "marginal" dollar. Meaning that it only matters if anywhere in that $50 is your next dollar that you rely on. If you have expenses that keep pace with your income then it will affect you much more than if your income outpaces your expenses.

lol...yea that. you said it more elegantly than i did

[dbroncos78087]

lol...yea that. you said it more elegantly than i did

Its one of the reasons why I chose to keep taking economics classes beyond what my degree required. I think it is a very interesting subject and applicable in "real life".

[GoCrew5]

so...in your opinion....at what dollar amount will our debt hit the tipping point?

I don't have an answer for that but if we keep spending like we do it isn't going to be good in the future

[FOBolous]

I don't have an answer for that but if we keep spending like we do it isn't going to be good in the future

you dont have an answer for that. and you won't find an answer for that no matter how much time you spend on Google because the answer is this...as long as America remain one of the main driver for the world's economy and people continue to see our government as a safe investment by buying our bonds (which they will as long as we remain one of the main driver of the world's economy)...we can rack up $100 trillion dollars of debt and it wouldn't be an issue. it'll just LOOK bad but will have no real world ramifications.

all this talk about the "debt crisis" is premature and fear mongering at its absolute finest. notice how our debt became an issue literally overnight as soon as Obama got elected for his first term...notice how all these "fiscal conservatives" literally came out of nowhere as soon as he was elected. All this talk about the debt literally did not exist before Obama got elected. as if our debt wasn't already $7 trillion and our annual spending wasn't already at historical high already BEFORE Obama was elected. before Obama, raising the debt limit was a routine thing congress does every year under every modern President...but then as soon as Obama got elected, it became an issue. again...fear mongering and political theatrics at its finest.

[waveycrockett]

you dont have an answer for that. and you won't find an answer for that no matter how much time you spend on Google because the answer is this...as long as America remain one of the main driver for the world's economy and people continue to see our government as a safe investment by buying our bonds (which they will as long as we remain one of the main driver of the world's economy)...we can rack up $100 trillion dollars of debt and it wouldn't be an issue. it'll just LOOK bad but will have no real world ramifications.

all this talk about the "debt crisis" is premature and fear mongering at its absolute finest. notice how our debt became an issue literally overnight as soon as Obama got elected for his first term...notice how all these "fiscal conservatives" literally came out of nowhere as soon as he was elected. All this talk about the debt literally did not exist before Obama got elected. as if our debt wasn't already $7 trillion and our annual spending wasn't already at historical high already BEFORE Obama was elected. before Obama, raising the debt limit was a routine thing congress does every year under every modern President...but then as soon as Obama got elected, it became an issue. again...fear mongering and political theatrics at its finest.

I think you pretty much hit the nail on the head here. I didn't hear jack about a Fiscal Cliff until the day after the election. Not 1 word. In that sense I see a ton of propaganda and media hype.

[GasMan]

The payroll tax holiday is only a minor part of the overall changes in tax code if legislation is enacted.

[bootleg42]

The bond rate being low does not mean the debt rate is low.

I know that. BUT the bond rate in this case tells us that the filthy rich (basically the 1%) are willing to put their money in long term U.S. bonds, which means they believe that there is no long term debt problem.

If there existed a legit long term debt problem, the filthy rich would be taking their money out of treasuries and bonds, especially the 10 and 30 year ones, and the rate would be way higher (kind of like in the 80's when the U.S. faced problems much worse than anything we can imagine today, but was able to fix it easily without a scratch).

This means the filthy rich do not believe that there exists a debt problem, otherwise they wouldn't be putting their money in those long term bonds and treasuries. That's one reason one looks at bond rates.

In other words, the market doesn't believe we have a debt problem.

We are and we aren't like Greece though. We do have a similar amount of debt like those countries. We do have most of our government revenue going towards mandatory domestic spending like those countries. We are experiencing a sluggish economy like those other countries.

BUT...

We have a reputation that is built on private investment and using economic prosperity as a catalyst for innovation unlike those other countries. We do owe most of our money to ourselves unlike those other countries. We are being allowed to borrow money at very low rates unlike those other countries.

Well our debt levels are no where near Greece, and our reputation is not built on private investment, rather it's built on a powerful state that leads any development and innovation. That's how the U.S. developed.

And you're correct to say the debt is basically owed to ourselves, which means we're no where near in any danger of any debt problems like other countries may have.

So we share some similarities between ourselves and Greece but the notion that we are them is just wrong.

The U.S. is no where near Greece or Italy or Spain. Anyone who suggests it is just trying to scare the population into accepting unnecessary and undemocratic social spending cuts, which is the real goal of both parties.

[Pacerlive]

you dont have an answer for that. and you won't find an answer for that no matter how much time you spend on Google because the answer is this...as long as America remain one of the main driver for the world's economy and people continue to see our government as a safe investment by buying our bonds (which they will as long as we remain one of the main driver of the world's economy)...we can rack up $100 trillion dollars of debt and it wouldn't be an issue. it'll just LOOK bad but will have no real world ramifications.

all this talk about the "debt crisis" is premature and fear mongering at its absolute finest. notice how our debt became an issue literally overnight as soon as Obama got elected for his first term...notice how all these "fiscal conservatives" literally came out of nowhere as soon as he was elected. All this talk about the debt literally did not exist before Obama got elected. as if our debt wasn't already $7 trillion and our annual spending wasn't already at historical high already BEFORE Obama was elected. before Obama, raising the debt limit was a routine thing congress does every year under every modern President...but then as soon as Obama got elected, it became an issue. again...fear mongering and political theatrics at its finest.

The ramification is that the US credit rating being downgraded and that is serious.

[bootleg42]

The ramification is that the US credit rating being downgraded and that is serious.

No it's not. There is no were else in the world were one would want to do finance than in the United States. Economically, we're the healthiest country in the world. Maybe Germany can speak of themselves better than we can since they have lower unemployment and better policies, but that whole credit rating from standards and practices is complete B.S. and the markets know it. That's why the bond rates are still low, even a year and a half after the August 2011 downgrade for U.S. credit rating.

Remember, these are the same Credit agencies that rated the banks very well right before the 2008 financial crashes, so understand that those credit ratings don't mean too much when it comes to their rating of huge institutions.

[dbroncos78087]

I'm not sure why everyone is fawning over Germany but thinks our growth is unacceptable. Their growth is pathetic and at least we are north of 2% while they have gotten over it in the last 20 years outside a blip at 2.1%.

http://www.tradingeconomics.com/germany/gdp-growth