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US National Debt Closing in on 57 Trillion


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#31 ronthecivil

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Posted 25 July 2012 - 12:35 PM

Speaking of skinny kids while our own federal debt isn't nearly as bad it's increasing while many provincial debts are very bad but best of all Canadians as a whole are on average in debt at 161% of their own gdp. As it turns out our own incomes are also based on consumer spending and should there be a shock to the economy a LOT of people are going to find that their personal debt levels are unservicable which could create quite the negative feedback loop.

As such, instead of obsessing over the US perhaps we should learn from their mistakes and not repeat them. Well, at least stop repeating them, the sooner the better.....

#32 Drybone

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Posted 25 July 2012 - 12:57 PM

Hey Ron.

The numbers I saw were the US has 3 times the debt for its GDP than Canada does.

1/2 a trill for 30 million people.

15 trillion for 310 million people.

to scale canadas debt would be about 6 trillion.

So I think we are in better shape than we think -comparatively.
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#33 nuckin_futz

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Posted 25 July 2012 - 12:57 PM

Speaking of skinny kids while our own federal debt isn't nearly as bad it's increasing while many provincial debts are very bad but best of all Canadians as a whole are on average in debt at 161% of their own gdp. As it turns out our own incomes are also based on consumer spending and should there be a shock to the economy a LOT of people are going to find that their personal debt levels are unservicable which could create quite the negative feedback loop.

As such, instead of obsessing over the US perhaps we should learn from their mistakes and not repeat them. Well, at least stop repeating them, the sooner the better.....


Good post. Household debt levels in Canada are alarming. They're on par with other basket case nations. While our government kind of has it together. Individual Canadians are plenty foolish with their finances.

#34 ronthecivil

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Posted 25 July 2012 - 01:37 PM

Federally we're "meh" so I suppose that's better. We're not good.

Personally we are much, much worse off. As bad as it was for them right before the house of cards went down.

Keep in mind that if there is a housing correction the CMHC (a federal crown corporation) has just under another 600 billion backing many of the highest ratio loans held by our heavily indebted inhabitants. Should there be a shock to the system (in a world full of shocks) the federal government could be in a position to see it's revenues drop and it's liabilities rise substantially. Such is the risk of ruling a nation of debtors!

#35 taxi

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Posted 25 July 2012 - 01:46 PM

None of those other nations have anywhere near the debt in absolute dollars as the US. If their GDP slips it will be a disaster, and when 75% of your economy relies on consumer spending having those consumers unable to secure more credit ain't good.

The United States' situation is like being the skinniest kid at Fat Camp. Nothing to brag about really.


Then look at it per capita then:

USA: 50k
UK: 143k
France: 75k
Sweden: 91K

#36 Mr. Ambien

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Posted 25 July 2012 - 01:56 PM

Only 57 trillion? I thought the US debt was in the quintillions by now..

#37 nuckin_futz

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Posted 25 July 2012 - 02:37 PM

Then look at it per capita then:

USA: 50k
UK: 143k
France: 75k
Sweden: 91K


Not sure what looking at it per capita does. My point is the US is as screwed as those countries because 75% of their economy relies on consumer spending. The amount of household debt in the US is the real problem.

They have largely shipped their manufacturing base over seas and replaced those jobs with lower paying service jobs. So you have lower household income leading to higher household debt. Those other country's economies don't rely as heavily on the consumer.

If France was foolish enough to ship their manufacturing base over seas they'd be in even more doo doo then they are now.

#38 ronthecivil

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Posted 25 July 2012 - 03:50 PM

Not sure what looking at it per capita does. My point is the US is as screwed as those countries because 75% of their economy relies on consumer spending. The amount of household debt in the US is the real problem.

They have largely shipped their manufacturing base over seas and replaced those jobs with lower paying service jobs. So you have lower household income leading to higher household debt. Those other country's economies don't rely as heavily on the consumer.

If France was foolish enough to ship their manufacturing base over seas they'd be in even more doo doo then they are now.


Actually the US consumer at one time was at around our level of 160% of income but they are now closer to 100%. Still not good being a year's wages in the hole but it's a step in the right direction.

If the US devalues it's dollar (which is likely) it will hit savers but it will clobber the foreign investors that have fled to the dollar as a safe haven. When it does the manufacturing base will have a much more solid business case to produce while foreign imports get much more expensive. And when the overwhelming majority of your debt is in a currentcy you control the printing press for it makes for a fairly easy solution to killing two birds with one stone. (I like to refer to it as the "bring a couple trillion dollars in a suitcase next state trip to China" solution.)

#39 taxi

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Posted 25 July 2012 - 04:06 PM

Actually the US consumer at one time was at around our level of 160% of income but they are now closer to 100%. Still not good being a year's wages in the hole but it's a step in the right direction.

If the US devalues it's dollar (which is likely) it will hit savers but it will clobber the foreign investors that have fled to the dollar as a safe haven. When it does the manufacturing base will have a much more solid business case to produce while foreign imports get much more expensive. And when the overwhelming majority of your debt is in a currentcy you control the printing press for it makes for a fairly easy solution to killing two birds with one stone. (I like to refer to it as the "bring a couple trillion dollars in a suitcase next state trip to China" solution.)


Shhh....

This thread isn't for actual economic analysis, it's to gloat about the USA getting what's good for them....which would be so good for Canada...right?

#40 Electro Rock

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Posted 25 July 2012 - 04:18 PM

This massive debt isn't a failing of the U.S. system per se, but the willful intent of the predatory financial oligarchs that have co-opted not only the U.S. but most of the world's economies.
"The American people will never knowingly adopt Socialism. But under the name of 'liberalism' they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened."

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#41 nuckin_futz

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Posted 25 July 2012 - 04:22 PM

Actually the US consumer at one time was at around our level of 160% of income but they are now closer to 100%. Still not good being a year's wages in the hole but it's a step in the right direction.

If the US devalues it's dollar (which is likely) it will hit savers but it will clobber the foreign investors that have fled to the dollar as a safe haven. When it does the manufacturing base will have a much more solid business case to produce while foreign imports get much more expensive. And when the overwhelming majority of your debt is in a currentcy you control the printing press for it makes for a fairly easy solution to killing two birds with one stone. (I like to refer to it as the "bring a couple trillion dollars in a suitcase next state trip to China" solution.)


Good points. They've been actively devaluing their dollar for many years. Makes good sense when you're addicted to credit. All the while continuing on with their bs of having 'a strong dollar policy'. They would have to devalue significantly from current levels to rebuild their manufacturing base to where it once was. I don't see it happening.




#42 nuckin_futz

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Posted 25 July 2012 - 04:23 PM

This massive debt isn't a failing of the U.S. system per se, but the willful intent of the predatory financial oligarchs that have co-opted not only the U.S. but most of the world's economies.


In terms of individuals. Live within your means. Problem solved.

#43 ronthecivil

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Posted 25 July 2012 - 09:17 PM

Good points. They've been actively devaluing their dollar for many years. Makes good sense when you're addicted to credit. All the while continuing on with their bs of having 'a strong dollar policy'. They would have to devalue significantly from current levels to rebuild their manufacturing base to where it once was. I don't see it happening.


http://youtu.be/OEXstsxK8Qo


I will answer the question for her.

They ARE correct.

If you have the same amount of oil being produced, but slightly less consumption due to lowered economic activity, the price of oil should come down.

The thing is that although the amount of oil is the same, the amount of money out there is much much more. So if you have the same amount of oil but more money than clearly it takes more money to buy the oil.

As much as they love to talk about core inflation I would like to hear quartly stats on the non core inflation. As it turns out that's the stuff that actually matters!




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