[deMolay]

Unsustainable? http://www.washingtonpost.com/wp-dyn/co ... 03984.html

[timmac]

This is a very big problem for America right now [Debt], it will show its true ugly head around 2011 when we realize it is still growing out of hand and no stopping in site, it is almost equal to our GNP now and will exceed it late next year, to many countries right now are way over debt, this is going to blow someday and when it does it will finally be Doom for those that have been waiting for that day.

[Novus]

People need stop shopping and consuming everything but you will never ever hear that from the media or TPTB because 70% of the economy is the consumer economy. We are in a no possible win situation here. A discontinuity event is coming where much has to reset. The consumer debt bubble economy has to be allowed to collapse so the 30% of the real economy can continue on.

[deMolay]

The Brits have quit trusting banks and have started stuffing their mattress's. http://www.dailymail.co.uk/news/article ... z0Yx3oZIOI

[rangerone314]

$this->bbcode_second_pass_quote('Novus', 'P')eople need stop shopping and consuming everything but you will never ever hear that from the media or TPTB because 70% of the economy is the consumer economy. We are in a no possible win situation here. A discontinuity event is coming where much has to reset. The consumer debt bubble economy has to be allowed to collapse so the 30% of the real economy can continue on.

[pup55]

$this->bbcode_second_pass_quote('', 'P')eople need stop shopping and consuming everything

[gnm]

$this->bbcode_second_pass_quote('pup55', 'C')onsumption must go on or the game comes to a quick close. But consumption at the scale we have been doing it can't continue because the supply of credit, a.k.a debt, is drying up.....

Like I said, therein lies the problem.

[yesplease]

$this->bbcode_second_pass_quote('rangerone314', 'A')t this point anyone who doesn't concede that national debts are a serious problem, and likely a crippling one in the future, is either lying to people or is deluded.

[Tyler_JC]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('rangerone314', 'A')t this point anyone who doesn't concede that national debts are a serious problem, and likely a crippling one in the future, is either lying to people or is deluded.

[yesplease]

$this->bbcode_second_pass_quote('Tyler_JC', 'H')ere's the problem:



1950s/1960s America had a much stronger long run growth potential than the America of today.

[Tyler_JC]

In the 50s/60s we had a series of balanced budgets and sometimes big surpluses.

We didn't really pay down much debt, but we certainly didn't add much to the total amount.

As for long term growth potential. We also have this to think about:



Part of the 1980s/1990s boom included the big expansion of women into the workforce. That trend has largely leveled off. Meaning, we can't expect the same kind of labor market growth. If anything, the aging of the population will cause workforce participation rates to fall, not rise.

Unless we see some major technological breakthroughs to boost productivity (certainly possible), we aren't going to see the kinds of growth rates we saw in the past century.

The long run growth rate of the US is probably closer to 2% than 3%-4%.

It's just a matter of declining returns on investment. We wouldn't expect McDonald's to grow faster in the long run than a company like In-N-Out burger. There just isn't as much growth potential with McDonald's because they were so successful.

(Not to get us too far off topic... )