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(Some Guy)   Some dude no one ever heard of says the US is going bankrupt, proves it by reading definition of "bankrupt" from the dictionary to reporters. No, really   (in2perspective.com) divider line
    More: Dumbass  
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17348 clicks; posted to Main » on 16 Jul 2006 at 11:30 AM (16 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2006-07-16 4:43:17 AM  
1. He works for the Federal Reserve Bank
2. He paraphrased the OED in order to help make his point; not in order to prove it.
3. The proof of his claims is in the research done by Profs Gokhale and Smetters, which place the United States' long-term fiscal gap at US$65 trillion.

Submitter needs to learn to read
 
2006-07-16 4:43:27 AM  
President says the US is going great. Proves it by avoiding the definition of "bankrupt" from the dictionary. Ever... really.


/I love doing this
 
2006-07-16 4:50:04 AM  
Once the US is actually bankrupt - how will that affect the individual citizens?
 
2006-07-16 4:51:43 AM  
bluescalequail: how will that affect the individual citizens

the dollar will collapse.

/or so i've been told.
//probably tax hikes and severe spending cuts, too.
 
2006-07-16 4:54:14 AM  
Last One Left: 1. He works for the Federal Reserve Bank

Uh, no. He doesn't.
 
2006-07-16 4:59:39 AM  
Churchill2004: the dollar will collapse.

eh - but what does that mean to each person living here. Runaway inflation? (in which case, does that mean everyone makes bigger numbers, but pay bigger numbers too?) or something else altogether?

you are working with a frumpy housewife here... I know that there are people who know enough about our economy to know what the dollar collapsing means to the people here.
 
2006-07-16 5:03:25 AM  
bluescalequail: how will that affect the individual citizens?

I'm not clear on all the details, but I hear dogs and cats will start living together.
 
2006-07-16 5:06:24 AM  
I'm convinced!

/DNRTFA
 
2006-07-16 5:11:08 AM  
Seriously. I have no doubt that this country is going bankrupt. But I would like to have an idea what that actually entails.

Is it going to be the type of scenario where there just is no money, and people will be out of work? Or will it mean runaway inflation? Is it one of those things that is going to mess up things like powergrid, or only things like government spending(military, municipalities and social programs).

In many countries, people tend to not trust banks. So they do their best to hold on to gold and stuff like that. Because gold always holds it value, and currencies go up and down.

But I do wonder how it will affect us personally.
 
2006-07-16 5:17:56 AM  
Bankruptcy is no big deal nowadays. shiat, half my friends and family have been bankrupt, they're okay now. Donald Trump has been bankrupt twice.

/just kidding, kinda
 
2006-07-16 5:20:07 AM  
bluescalequail: Seriously. I have no doubt that this country is going bankrupt. But I would like to have an idea what that actually entails.

The US is not going bankrupt, although it has the largest debt load in the world. The UK has a similar debt. If the US were to go "bankrupt" it would mean that its debt would be paid out equally among the world's banks. No bank in the world wants that to happen.
 
2006-07-16 5:27:59 AM  
Sun God: No bank in the world wants that to happen.

I can believe that. But at the same time, I can't help but wonder. How far are they willing to let things go before they start cutting their losses.
 
2006-07-16 5:47:23 AM  
bluescalequail: How far are they willing to let things go before they start cutting their losses.

Their "losses" would be in US currency. Who would they sell the money to? Who would buy it? There are only about two countries in the world who could afford such a loss: Japan and China.
 
2006-07-16 5:51:21 AM  
Couple that with the fact that the US practically prints money in the form of food, products, and services (especially food) that many other countries rely on, and that makes the idea of a complete collapse even more unlikely.
 
2006-07-16 6:04:50 AM  
Think of it like this:

People who are irresponsible or really, really down on their luck go bankrupt. With the USA, its irresponsible.
So, we pay back a fraction of our debts and then China and Saudi Arabia don't lend us as much money next time.

Its like a college student with their first credit card. We are going to go through another depression to learn our lesson. We haven't had a deep depression in a while.

My view is that ultimately depressions are *good*. They seperate the men from the boys so to speak, and in the end make aour counrty stronger.
 
2006-07-16 6:34:01 AM  
Sun God: Uh, no. He doesn't.

He works for the US Federal Reserve. I thought it was called the Federal Reserve Bank, but apparently it's just the Federal Reserve, even though it is the central bank of the US.

My mistake on adding 'bank.'
 
2006-07-16 6:45:38 AM  
2006-07-16 06:34:01 AM Last One Left

My quote seems to have disappeared: by Professor Laurence Kotlikoff, a key member of the country's central bank.
 
2006-07-16 7:27:49 AM  
someone I know that talks too much, and also has a tendency to be of the foil hat gang said something... it sounded logical enough at the time, but then when you considered the source...

Their claim was that China has already invested a lot of money buying US currency. They have also for years been saying that Bush is trying to devalue the dollar. They had two reasons for this, and one is that if the dollar was devalued, then paying back China would actually cost less. The other thing is that they believed that Bush was doing was to make the US poor, so that we would have people working cheaply enough to make products made in the US cheap enough for us to export. That this was why Bush is in so tight with Fox and pushing for amnesty for illegals here. So that people here would have to work less for the jobs that are available. This part of the theory runs with him collecting a lot of money from the big corporations, and trying to create a force of low cost laborers in this country.

This probably doesn't make sense - but does anybody think that any of this holds any water? Or are they totally certifiable?
 
2006-07-16 7:34:46 AM  
make that so the people here would have to work for less money, for the jobs that are available...
 
2006-07-16 8:23:39 AM  
bluescalequail: This probably doesn't make sense - but does anybody think that any of this holds any water? Or are they totally certifiable?

Neither. China's holdings in US dollars serve two major purposes: holding the yuan (RMB) down and giving it the means to purchases resources (oil, gas, raw materials, etc.), as the world economy runs on the US dollar.

As for his other claim, it would take a lot of work to get the US down to a level where it could compete with BRIC or other developing countries on cost. However, that doesn't mean he isn't doing it.

The crux of his argument is that Bush is driving down both the US dollar and labor prices. However, the US is currently in a cyclical boom, where real wages aren't growing, but the US dollar is bullish. It could also be argued that the Fed has more power over the state of the US dollar than Bush does. Frankly, while it is hard to disprove your acquaintance's claim, I don't see any real evidence which supports it.

As an aside, I am not an economist. The above is simply my opinion.
 
2006-07-16 10:00:16 AM  
Sun God: Uh, no. He doesn't.


FTFA:

"The United States is heading for bankruptcy - that is, if it is not already bankrupt - claims a paper by Professor Laurence Kotlikoff, a key member of the country's central bank.

The research, for the Federal Reserve Bank of St Louis, argues that..."

Seems to me that the implication is that he does.
 
2006-07-16 10:00:21 AM  
Sun God: Last One Left: 1. He works for the Federal Reserve Bank

Uh, no. He doesn't.


From TFA: he United States is heading for bankruptcy - that is, if it is not already bankrupt - claims a paper by Professor Laurence Kotlikoff, a key member of the country's central bank.
 
2006-07-16 10:01:05 AM  
Goddamnit
 
2006-07-16 10:01:57 AM  
The Federal government could double tax rates and pay off the entire national debt within 3-4 years. It's no big deal and people need to stop running around thinking the barbarians are at the gates of Rome. The United States of America will survive for at least another 10,000 years as a major world power.
 
2006-07-16 10:05:17 AM  
HaywoodJablonski: Goddamnit

Five seconds, BI-ATCH!!

:P
 
2006-07-16 10:05:29 AM  
Gecko Gingrich: Seems to me that the implication is that he does.

Interestingly, however, on his own website, it doesn't mention that he works for the Fed. Make of that what you will.
 
2006-07-16 10:07:41 AM  
capecodcarl: The United States of America will survive for at least another 10,000 years as a major world power.

There has never been - nor will ever be - a major world power that's lasted 10000 years.
 
2006-07-16 10:18:58 AM  
capecodcarl: The United States of America will survive for at least another 10,000 years as a major world power.

Well, I think you just settled the question in my mind of "does this guy just have different political interests than I do, or is he a complete nutter"
 
2006-07-16 11:06:03 AM  
JPJ007: I'm not clear on all the details, but I hear dogs and cats will start living together.

Well, so long as they aren't gay.

Sun God: The US is not going bankrupt, although it has the largest debt load in the world.

We don't. Like your personal obligations, it's measured as a percentage of how well you can service it:

[image from sv1.randomcrap.net too old to be available]

/thanks, randomcrap.net & optimist123.com
//by the way, Canada has done one hell of a job, they were much higher than they are now not two years ago
 
2006-07-16 11:07:42 AM  
Last One Left: Interestingly, however, on his own website, it doesn't mention that he works for the Fed.

Yeah, and neither does the Fed's site. I suspect the article got confused.

BTW, here is the paper he wrote.
 
2006-07-16 11:10:12 AM  
carrot: //by the way, Canada has done one hell of a job, they were much higher than they are now not two years ago

The US was on track to substantially reduce its debt until 2001. Since then, we've been going further down the hole.

Can I get a "but Clinton" from the right here? ;-P
 
2006-07-16 11:16:29 AM  
Fnord: Can I get a "but Clinton" from the right here? ;-P

If Clinton's example had continued to guide us, yes, we'd be out of debt by now, but on the other hand we'd all be getting blowjobs at the office.
 
2006-07-16 11:33:42 AM  
If Bush doesn't manage to bankrupt the country during his stay in office it won't be because he didn't try hard enough.
 
2006-07-16 11:36:58 AM  
Fnord: Yeah, and neither does the Fed's site. I suspect the article got confused.

Indeed. I figure he was simply contracted to do this research for the Fed, and was thus working for them at this time.

/off to read that paper
 
2006-07-16 11:37:19 AM  
This administration will have our great grandchildren paying off US debt and cursing Bush's name at every turn.
Nice legacy.
 
2006-07-16 11:37:38 AM  
So would this mean that the bankrupcy will stay on the US' credit report for ten years, and I could buy the White House for cheap at auction ? I'd buy it, and install a moat around it, with swift boats patrolling it. Another Purple Heart for Kerry !
 
2006-07-16 11:38:28 AM  
Liberty dollars, anyone? Get 'em while they're hot.
 
2006-07-16 11:40:36 AM  
Sigh...he needs to go back to Economics 101. Governments do not operate and can not be equated financially to a business. It's some guy trying to play politics depending on the ignorance of the public. Exactly like of like John Kerry.
 
2006-07-16 11:41:49 AM  
You can't go bankrupt when you have the ability to print your own money. You CAN, however, royally fsck things up for the near and distant future, and I think the current administration is doing a great job in that respect.
 
2006-07-16 11:42:23 AM  
Cut entitlements.
 
2006-07-16 11:44:13 AM  
Oh, fiscally bankrupt.

We've been morally and intellectually bankrupt for years. Might as well go for the trifecta.
 
2006-07-16 11:44:57 AM  
Vin Diesel: If Clinton's example had continued to guide us, yes, we'd be out of debt by now, but on the other hand we'd all be getting blowjobs at the office.

...and this is a problem how?..

Last One Left: However, the US is currently in a cyclical boom, where real wages aren't growing, but the US dollar is bullish.

...and by bullish you mean it's lost over 25% of its value on the currencies market since 2000. Sounds rather bearish to me.
 
2006-07-16 11:45:00 AM  
Despite of what the article appears to imply, the Kotlikoff does in fact not work for the Federal Reserve and is most certainly not a "key member".

Laurence J. Kotlikoff is Professor of Economics at Boston University, Research Associate of the National Bureau of Economic Research, Fellow of the Econometric Society, a former member of the Executive Committee of the American Economic Association, and President of Economic Security Planning, Inc., a company specializing in financial planning software.

Professor Kotlikoff received his B.A. in Economics from the University of Pennsylvania in 1973 and his Ph.D. in Economics from Harvard University in 1977. From 1977 through 1983 he served on the faculties of economics of the University of California, Los Angeles and Yale University. In 1981-82 Professor Kotlikoff was a Senior Economist with the President's Council of Economic Advisers.

Professor Kotlikoff has served as a consultant to many national and international government groups including the International Monetary Fund, the World Bank, the Organization for Economic Cooperation, the Office of Management and Budget, the U.S. Department of Education, the U.S. Department of Labor and many others. He has also served as a consultant to many business concerns including The American Council of Life Insurance, Merrill Lynch, Fidelity Investments, AT&T, and other major U.S. corporations. Professor Kotlikoff has provided expert testimony on numerous occasions to committees of Congress including the Senate Finance Committee, the House Ways and Means Committee, and the Joint Economic Committee.


Just some loud-mouthed attention whore.
 
2006-07-16 11:45:49 AM  
Here's what I love about the Bush haters. They can simultaneously believe:

a) He's an idiot. C-student. Can't talk good. Alcoholic cokehead.

b) He's masterminding the most complex, devious, evil conspiracies evar. He surreptitiously pulls the strings of the global economy, world governments, corporations, news media, voters, and everyone else in the world.

I'm not a Bush apologist, just noting that this story doesn't hang together.
 
2006-07-16 11:46:52 AM  
Major Thomb: Governments do not operate and can not be equated financially to a business.

Why not?
 
2006-07-16 11:46:53 AM  
Vin Diesel

If Clinton's example had continued to guide us, yes, we'd be out of debt by now, but on the other hand we'd all be getting blowjobs at the office.

Yes, and what a horrible scenario THAT is.
 
2006-07-16 11:47:00 AM  
Cut corporate entitlements.
 
2006-07-16 11:49:27 AM  
Kar98: Just some loud-mouthed attention whore.

So, a list of his credentials means that he's a loud-mouthed attention whore? Please, do go on.
 
2006-07-16 11:50:37 AM  
The dollar has fallen by 35% against the euro and by 24% against the yen- all during the reign of Bush's GOP, ya know the economic conservative party?
 
2006-07-16 11:50:53 AM  
thenateman:

Bushie IS stupid. If his last name wasn't "Bush", he'd be playing with a pile of his own poop behind a 7-11 somewhere. His HANDLERS, on the other hand, are very, very far from being stupid. They're smart, and they pull the strings VERY well.

Big difference.
 
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