Author Topic: Commentary: Republicans and Democrats are in a race to destroy America  (Read 747 times)

Offline Carl

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Commentary: Republicans and Democrats are in a race to destroy America  ( I found this worth reading,Carl)

Time is running out before America’s massive, nuclear-sized debt bomb goes off, and it seems Congress couldn’t care less.

Democrats and Republicans can’t agree on much, but there is one thing that continues to be an important political unifier: spending and printing money to pay for completely unaffordable government programs. Last week, Congress passed a gargantuan 2,232-page spending bill, which President Donald Trump agreed to sign on Friday, just hours after threatening to veto it.

I could spend a significant amount of time here discussing the law’s countless provisions, but plenty of other writers have already provided readers with some of the most absurd and even disturbing aspects of the legislation. Instead, let’s discuss something far more important: the law’s $1.3 trillion price tag and the nation’s potentially catastrophic national debt.

Earlier in March, the federal government’s debt surpassed $21 trillion for the first time in history, and thanks to legislation passed in February, the government is no longer bound to any limits on borrowing until March 2019.

According to the Washington Examiner, “At its current pace, the government is on track to add at least $1 trillion to the national debt by then.” That amounts to more than $63,700 owed for every American man, woman, and child.

The United States’ growing national debt could create numerous problems. For instance, inflation, which will inevitably be caused when the government is forced to print or borrow money to pay its bills, could drive prices higher and reduce families’ purchasing power.

Another critical concern is that interest payments on debt will consume an increasingly larger share of the budget, creating a sort of fiscal death spiral in which the government needs more money to make interest payments on the debt but can’t afford to do so without borrowing additional money. In fiscal year 2017, the national government paid $276 billion in interest payments on debt. During the next decade, that figure could double, making interest payments costlier than all but the most expensive government programs.

Although these and many more debt-related concerns are important, there is one that could, if left unchecked, possibly create an economic collapse unlike anything experienced since the Great Depression: If America continues to spend at this unsustainable rate, the rest of the world might cease using the U.S. dollar as its primary currency for international transactions.

Since the end of World War II, the globe has used the U.S. dollar as its currency of choice when buying and selling overseas. The international economy’s most important products, including oil and natural gas, are typically traded using U.S. dollars. The Balance reports about $580 billion exists outside of the United States, roughly 65 percent of all dollars.

Further, The Balance also noted, “More than one-third of the world’s gross domestic product comes from countries that peg their currencies to the dollar.”

The reason the dollar plays such an important role in the international economy is because it is widely considered to be the most trustworthy currency. There are no laws mandating the U.S. dollar permanently be used as a global currency, and even if there were, there would be no way to enforce them.

If the rest of the world, or even a significant portion of it, were to switch to some other currency for use in the global economy, the value of the dollar, both in the United States and outside of it, would collapse, dragging the entire U.S. economy down with it.


More at link:  https://www.theblaze.com/news/2018/03/29/commentary-republicans-and-democrats-are-in-a-race-to-destroy-america

Offline Smurf Hunter

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There is a lot to unpack here.

First off, if you hold a lot of debt, inflation is your friend.  Think of stories from 50+ years ago when grandpa bought a house for the price of a used car today.
While paying $10K in interest of the life of the mortgage seemed a lot in that day, today that's peanuts.

Petrol dollar is a real thing.  A huge % of the USD money supply is used for international trade of oil and other energy commodities.  If suddenly a large chunk of the world stopped using dollars, they would presumably trade said dollars for something else, thus flooding the supply of money and raising inflation rapidly.

If we stopped there, things might look good to Joe USA consumer who has $50K in consumer debt.  However the relative cost of borrowing will inevitably increase.  Think 10-15% home loans.
That will devastate the economy, as spending will be curtailed.

I was in diapers back then, but reading about the stagflation of the 1970s seems like a gentle version of what could happen if the petrol dollar abruptly ended.

Offline Carl

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  It is an interesting view of why some things are just done THAT WAY...

Offline Chemsoldier

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I guess my comment would be, "yeah, whats new?"  Tell us something we didn't know.

For what its worth, the Dems do want to increase taxes, mostly on the most wealthy Americans (many of which are politically progressive).  This would increase revenue and reduce the speed at which the debt is being run up.  Increasing taxes might be a useful break on the population's desire to increase spending.  It will hurt the economy somewhat, but guess what?  The debt will eventually destroy the economy. 

I hate taxes and consider them destructive and wrong, but if the Republicans allowed it and used granting approval as leverage to ram through some kind of limitation to debt that would force us to live within our means, it would do more to limit the size and scope of government than the current "fight every tax increase, cave on many spending increases" strategy.  So agree to some tax increases, make sure it includes some kind of limit (maybe in percentage) for deficit spending, and include a measure like sales tax that would ensure everyone feels the pain somewhat.

You can't stop people from wanting free shit, but you can make them see the direct costs through taxes.

Offline Carl

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  As you are a military man and veteran arachnid trainer I must point out that we all don't have the level of understanding of the world that this writer or you understand so well.