Not politics, just fact, this is the worst recovery following a recession in our history.... I personally see no recovery, I see our barely economy limping along in danger of falling right back into a recession or worse at any moment.......
Very true Treasure Hunter. What is scary is that it looks like there is no way our country's situation can be fixed economically. Our national debt and underfunded liabilities are both problems that will have to be addressed someday. We are now over $16 Trillion in debt and soon to be $17 Trillion. Let's just assume that when it hits $17 Trillion something magical in the universe happens that causes our country to balance its yearly budget from now on and that said $17 Trillion in debt stops right there (probably less than a 1% chance of that happening but let's be optimistic).
There are 2 things that can happen to that $17 Trillion debt; it can be paid off by us (the country) or we can default and say f' u to the holders of the debt. There is no other way to resolve this other than pay it off or default.
Now, if we decide to pay it off we will have to not only balance the budget but have surpluses each year. Wonder how many years of surpluses it will take to pay off $17 Trillion? Meanwhile, said debt is earning interest to the holders, whether it be the Chinese or the Federal reserve. So that $17 is not a static amount, but will grow by whatever the interest rate is as it is being paid off. Probably not much chance this scenario (debt being paid off) is going to happen unless I am missing something. Keep in mind that I have not even touched on the underfunded liabilities we owe like Social Security, Medicare, etc. While we are paying off that $17 Trillion we also have to meet our payments on these Gov payments to our citizens.
So the other option with the national debt is to default. The gov could say "we ain't paying" if they wanted. Many PM pundits and economists seem to believe this is going to be the inevitable result at some point in the future and that said debt will NOT be paid off. Some say such a default will happen soon and some say it will take much longer and through the use of such things like QE this game can be kept going for a while as long as they can print to pay for things and that said dollar is accepted as something of value.
If a default occurred it would cause major problems that would lead to financial ruin in many places. Some might believe that the gov debt is only held by entities like China, Japan, Brazil, etc, and it wouldn't matter if we told them where to go. But in reality much gov debt is held by institutions right here in the US that would be devastated by such a default. Such groups are pension funds- public and private, private banks and other financial institutions plus many citizens hold US debt. In a default all these holders get nothing or maybe a pennies on the dollar.
Some may say we can just print all we need to pay our debt. But all that will do is cause the dollar to eventually lose its value and we will still be screwed here financially due to high inflation from all the printing (this will happen anyway if we keep up with the QE and such for too long).
If none of the above really matters then I guess maybe things can get better economically in the future. We can hope I guess.
Just my opinion.
Jim
