Tilted Forum Project Discussion Community - View Single Post - Main US Threat Not Terrorists, But Fiscal Irresponsibility.

Infinite_Loser · 03-11-2007, 07:46 PM

Well... I'm not really sure what you're asking but here's my $.02 on the subject.

1.) No, current US operations aren't sustainable. Currently, the US has a savings rate of somewhere around -1% and, as a result, relies heavily on overseas investors to finance it's operations. This can only continue for as long as the savings rate in other countries remains high. Of course, trends show that the savings rate in foreign countries are gradually decreasing per year (Especially in Japan, one of the biggest investors into the US), meaning that sooner or later they'll no longer be able to finance the US' operations. If the US is no longer seen as a profitable investment, then other countries will begin to call in their debts and that'll not only screw over the US market, but every country who relies on the dollar to remain strong in comparison to their currency (As an interesting side note, I believe China has about $10 billion worth of US government issued bonds). There's little to nothing the government can do about it (They can do like Australia and force households to save a part of their yearly income, but that's not likely to happen). US consumer savings have to increase for there to be any type of hope for the future.

Edit: Also, on the issue of medicare... Just socialize it (Like Canada). The problem is that most big businesses won't like that >_<

2.) Save more and spend less.

3.) I'm not really sure... If I had to guess I'd say that the US would switch from being a major importer to being an exporter specializing in cheap, domestic labor (Something like China currently). Though, that's probably a bit drastic.

4.) No, because the stock market is unpredictable.

03-11-2007, 07:46 PM	#2 (permalink)
Infinite_Loser Junkie Location: Lake Mary, FL	Well... I'm not really sure what you're asking but here's my $.02 on the subject. 1.) No, current US operations aren't sustainable. Currently, the US has a savings rate of somewhere around -1% and, as a result, relies heavily on overseas investors to finance it's operations. This can only continue for as long as the savings rate in other countries remains high. Of course, trends show that the savings rate in foreign countries are gradually decreasing per year (Especially in Japan, one of the biggest investors into the US), meaning that sooner or later they'll no longer be able to finance the US' operations. If the US is no longer seen as a profitable investment, then other countries will begin to call in their debts and that'll not only screw over the US market, but every country who relies on the dollar to remain strong in comparison to their currency (As an interesting side note, I believe China has about $10 billion worth of US government issued bonds). There's little to nothing the government can do about it (They can do like Australia and force households to save a part of their yearly income, but that's not likely to happen). US consumer savings have to increase for there to be any type of hope for the future. Edit: Also, on the issue of medicare... Just socialize it (Like Canada). The problem is that most big businesses won't like that >_< 2.) Save more and spend less. 3.) I'm not really sure... If I had to guess I'd say that the US would switch from being a major importer to being an exporter specializing in cheap, domestic labor (Something like China currently). Though, that's probably a bit drastic. 4.) No, because the stock market is unpredictable. __________________ I believe in equality; Everyone is equally inferior to me. Last edited by Infinite_Loser; 03-11-2007 at 07:51 PM..