DCWoody
Posts: 1401
Joined: 10/27/2006 Status: offline
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The US govt isn't bankrupt or near so, because it could raise taxes. It can get into as much debt as it likes, as long as people are willing to lend....with China staking its economy partially on sales to the us, and being the largest economy....usa could pile on a LOT more yet. That's the thing with national debts for rich nations, it's always going to get paid.....those who're still lending to Greece now, are going to get their money back....and the massive interest on top. The problems with overwhelming debts isn't that a nation can go bankrupt....it isn't realistically going to happen to any G20 nation.....it's merely that the citizenry end up with mass taxes going to pay the interest on the debt. That's one of the reasons I'm not so worried about the UK as many, the interest on our borrowing remains extremely low.....unlike greece.....and I imagine it's the same for the usa. The difference between usa and UK, is that UKs burgeoning govt debt levels are a result of the credit crisis, previously UK national debt was stable, actually falling slightly as % GDP, with interest payments being trimmed down to very equitable levels indeed.....and there's all party consensus on cutting the deficit, and getting national debt back falling again by 201X....where X varies slightly depending who you ask. USA national debt was shooting up under reagan, and again under bush, and the problems with your welfare system have been predicted for a long long time....and (maybe I'm just not aware of it but) the 2 parties don't seem to be particularly committed to doing much about it, IIRC both presidential candidates ran on 'no tax rises'...which seems very odd in the circumstances. If this continues, it will lead to usaicans paying hefty taxes for big interest&profits for bankers (you might blame the bankers&investors, I blame the politicians choosing to borrow money)...but NOT, the us going bankrupt. There are very few scenarios (mass natural disaster eg yellowstone, civil war, losing WW3 with china) that could result in usa failing it's debt obligations....there isn't any chance of it simply collapsing under the weight of its debt. The US isn't bankrupt, and it isn't going to go bankrupt.
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