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Edited on Sun Jul-31-11 07:48 AM by hansberrym
to GDP. We are approaching 90% now, the extension of another $2.8T might, if the US economy doesn't jump start soon, put us very near or over 100%. That alone would be reason to lower the US debt rating.
Unless we get our act together, we will default(in the long run) either by refusing to pay some debts(the usual meaning of the word) or by printing dollars and screwing creditors by paying back debt with much inflated currency. There are many on this board who think the second way of default is nothing to be concerned about, but then maybe they aren't retired on a fixed buget, or maybe they do not give a crap about those who are, or maybe they just do not understand how foolish is would be to ruin faith in our currency. We can dig ourselves out of the hole we are in now, but ruining the faith in our currency is a death spiral.
Facts are neither left wing or right wing. Our GDP is what it is, and our debt is what it is. The parties will spin, spin, spin, but the spin won't change the facts -though it may confuse the hell out of John Q. Public, which is the point.
The President is betting that if we inject enough money into the economy to spur robust growth, the denominator (GPD) will grow faster than the numerator(debt)and thus reduce the debt to GDP ratio. If he is right, problem solved for 5 or 6 years (average economic expansion), and we buy some time to fix the bigger things. This is kicking the can down the road, but the alternative is to take our medicine now while we are on the edge of another recession or possibly a depression.
This seems much more than the usual left v. right political squable, there seems to be real fear and conviction on both sides that the other guy is going to cause great and lasting harm the country.
(edited to add: in the long run)
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