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Humm

So, when I graduated from high school in 1968, the national debt (USA) was just north of half a billion dollars, with a “b.”
Yes, I was allowed to graduate, and I assume all my fellow Cougars assumed my graduation was for the better of the school. Today, before passing BoneSpur’s “Tax Incentive for failure” the (USA) has a debt of well north of twenty trillion, with a “t.” Upon passing the current tax law, the (USA) debt will guarantee another Trillion dollars exceeding north. Simply because nothing is being done to pay off the debt.

Further, the Religious requirement to eat fish had tartar sauce poured on the sinful requirement to eat fish every Friday somewhere while I was in junior high or early high school. Religious/Economy 103.

Last week driving home from date night with our grandchildren I had to drive through a major gauntlet of homeless people (Reagan’s Children) in downtown Olympia, WA. There were no homeless people around Hawthorn (CA) High School where I ran track and cross country. There were no homeless under the overpasses I ran under to the ocean from the school campus along the railroad tracks. Hell there weren’t any malls either. One of the beech boys graduated a year or two before I was a freshman. But I digress.

Until we address the major players of sex, power, and money it will always be the wrong time for discussion as we must be sensitive to the victims. Adding to the mix are politics, religion and the village idiots. Sadly, we are all village idiots.

History is ugly when repeated, over, over and over. Economic failure brought the USA to its knees with the grate depression. Recently we were on the brink of failure agenda due to the elimination of I believe thirteen economic laws resulting in the grate recession. What version of grate depression/recession will 2.3 bring us?

I beleave the bigger you are the harder you fall. The bigger the debt, the harder the crash ~ Economy 410 “Economy of Hard Knocks.”

If I were China, I would pump North Korea up to egg the US on so that the USA goes broke. China, along with other adversaries own the US debt. Brake the camels back and all that money comes home to roost. We did the same thing to Russia; pay back time? Or karma? No nuc’s need to be fired and the fallout is the same. Are we playing into our adversaries hands? Economy 810 ~ “Economy of decline”

You are correct, none of us here will solve the worlds problems, let alone the US economy. But preparing ourselves might be prudent. At what point is prudent? I missed the big San Fernando, CA earthquake, back in the early seventies, by enlisting in the army and being overseas at the time. I do not have food supplies to sustain me if there is another quake like it now.

Just saying:)
 
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"So, when I graduated from high school in 1968, the national debt (USA) was just north of half a billion dollars, with a “b.” "

NO, national debt was much much higher !

National dept in 1968 was 348 Billion and 37% of GDP.
The 20 Trillion of today is 104% of GDP.

While that's bad its not nearly as bad as people think.

Interest rates now are much lower also.

If we had the tax rates of 1968 (indexed for inflation) now, we would have a budget surplus and pay off the debt in 11 years. ALL 20 TRILLION of it.
 
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If I were China, I would pump North Korea up to egg the US on so that the USA goes broke. China, along with other adversaries own the US debt.

Firstly, if China owns the US debt, why would they want us broke? We wouldn't be able to pay back the debt!

Secondly, Korea is tiny. Remember we already had a Korean War. Another in Vietnam. Horrible wars, but they didn't break the economy.
 
25% (or whatever it was), indexed for inflation, ... is still 25% I hope. :)

You would index the brackets.
200K becomes 1.4 Million adjusted for inflation.

TAX rates in 1968

Top Rate on Regular Income.
75.25%

Highest Income Tax Tier $200,000



That means a federal rate of 75% on every dollar above 200K.
So now it should be 75% on every dollar above 1.4 million.
 
Personally, I don't like debt, but there's something to be said or repeated about U.S. debt. It is mostly in dollars which means as it depreciates, our balance of payments is effected positively (imports more expensive, exports less so). As pointed out above, foreign creditors, especially China, are caught as much as any by the old saw: borrow a million, and the bank owns you. Borrow a billion, and you own the bank, cf. government bailout of the banks in 2008+. (By the way, the banks own the government anyway.)

The old rule was we always owed more to the UK and Canada, with Japan or China third. Also, the old rule by far the majority was debt was owed to our own citizens. As of 2016 Wikipedia notes:

"On November 7, 2016, debt held by the public was $14.3 trillion or about 76% of the previous 12 months of GDP.[5][6][7][8]Intragovernmental holdings stood at $5.4 trillion, giving a combined total gross national debt of $19.8 trillion or about 106% of the previous 12 months of GDP;[7] $6.2 trillion or approximately 45% of the debt held by the public was owned by foreign investors, the largest of which were Japan and China at about $1.09 trillion for Japan and $1.06 trillion for China as of December 2016.[9]"

Source: National debt of the United States - Wikipedia

Further, as noted above, both Japan and China have to invest here so we have their currencies to buy their products.

We are way better fixed than many countries. Greece we are not, but....
 
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Headlines for December 20, 2017 | Democracy Now!


New York Gov. Cuomo Moves to Divest Pension Funds from Fossil Fuels


And in a major victory for environmentalists fighting climate change, New York Governor Andrew Cuomo said Tuesday he’ll work with the state comptroller to divest New York’s massive public pension fund from fossil fuel companies. The so-called de-carbonization roadmap seeks to phase out investments in companies that trade in coal, oil and gas, while investing in green technologies like solar and wind. New York’s Common Fund manages over $200 billion in retirement savings for more than a million New Yorkers. It currently holds shares of more than 50 oil and gas companies, with over a billion dollars invested in ExxonMobil alone.
 
Headlines for December 20, 2017 | Democracy Now!


New York Gov. Cuomo Moves to Divest Pension Funds from Fossil Fuels


And in a major victory for environmentalists fighting climate change, New York Governor Andrew Cuomo said Tuesday he’ll work with the state comptroller to divest New York’s massive public pension fund from fossil fuel companies. The so-called de-carbonization roadmap seeks to phase out investments in companies that trade in coal, oil and gas, while investing in green technologies like solar and wind. New York’s Common Fund manages over $200 billion in retirement savings for more than a million New Yorkers. It currently holds shares of more than 50 oil and gas companies, with over a billion dollars invested in ExxonMobil alone.

Wonder if they will move some of that to TSLA?
 
Firstly, if China owns the US debt, why would they want us broke? We wouldn't be able to pay back the debt!

Secondly, Korea is tiny. Remember we already had a Korean War. Another in Vietnam. Horrible wars, but they didn't break the economy.

Re: China ~ There is just something about a trophy on the mantle. When they own you, they make the decisions; not that we cannot make our own corrupt decisions. Maybe we would become like Puerto Rico.

The whole build up of our Cold War force was to be prepared to withstand the brunt force of the Russian Hords. A side line benefit of our build up was that we kicked their a$$ economic wise. As their economy collapsed our country’s chest got bigger. That is how you do it without firing a bullet. Except now; do we learn to speak Russian?

Yes, they were horrible wars, and we lost them both. While they did not break the bank (close), the human carnage question should be asked. The boundary line between the North and South Korea is not exactly an economic free trade zone. While Korea is tiny, so was Afghanistan to the Russians. We burned the candle at both ends (funding the rebel cause against Russia) and Osama Bin Laden came back to bite us. Now look at the sixteen years we have been bogged down it Afghanistan, including a slew of other conflicts. Russia is not sitting back just watching us either.

FYI ~ while traveling in England back in roughly 1969/70 at a tube station, the graffiti read "US out of Vietnam." Today, some friends of ours are about to travel to England, and they will be wearing clothing that indicates they are from Canada hoping to avoid ridicule. They think they have the Canadian speak down:)

You can consider the US strong, but it is only as strong as its weakest link. Again the more you pound your chest, the harder you fall. I am short so I have gotten away with that trick:)

Inflation is my favorite MajorBS, my father said that about inflation roughly twenty years ago. When handed his ninetieth birthday card, he looked up and said, "I have never been that old before." He passed away about two weeks later. He had put himself through Chafee Community College (CA) following the war, and then Northrop put him through USC school of business. Starting with the busting of the damn by reducing tax rates from roughly 75% down to again roughly 35% there has been a major sucking noise as vacuums began hording the money flowing out of the Treasury. To fill that vacuum space devoid of cash, the Treasury prints an ungodly amount of money/cash. Reminds me of a story about a salt spinning wheel at the bottom of the ocean; the cause of the ocean being salty. I apologize I do not know the full story.

We dumped the gold standard thanks to Nixon. So, are we not just printing money like BitCoin?

Is our nation's debt serious or have I been lied to about that problem too?
 
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Is our nation's debt serious or have I been lied to about that problem too?

A bit of both.

The best way to look at our national debt is as a percentage of GDP.

When you go to the bank for a home mortgage, they look at your income to determine what's the maximum mortgage you can have. It's the same way as looking at the national debt as a percentage of GDP.

Right now were sitting at about 104% of GDP. That's not the highest it's ever been. Just after World War II it was at 118.9%. So we are close to an all-time high but not quite there yet.

We do need to get the debt down. It's never good to have this high a percentage. But it's not a killer number yet.

Dropping the tax rate on corporations is not the way to get the economy to expand. Let's say that you have an income of $100,000. Let's look at it as if you have a high tax rate or low tax rate. If you have a low tax rate you're going to enjoy that hundred thousand dollars. If you have a high tax rate you'r going to look at what you can do to cut your taxes.

I've been in business for myself for over 20 years. Every year in June I would look at my projected taxes. If it was a great year I would look for ways to spend my money that would reduce my taxes. I would look at buying extra equipment that could reduce my taxes. Even if I did not need the equipment. Depending on how much profit I expected to make I would do things like, buy a new vehicle, buy 10 new laptops, buying another property for rentals. Put a new roof on one of my existing rentals. There were lots of ways to cut my taxes.

When it looked like I was going to cross from one tax rate to another, it really encouraged me to go out and spend money. If I had a low tax rate I didn't want to spend any money.

That's the problem with these new tax rates. Why would a company want to make investments. If I was a corporation with the new tax rates I would just buy shares of my company. I wouldn't build new plants, buy new equipment, or hire any new employees. I would just pocket the profits.
 
So, how does a massive Bitcoin bubble burst impact the market as a whole? I'm trying to think of what it's going to look like if Bitcoin re-sets to 1,000 next month.


Most institutional investors (the true market movers) think it's going to burst in a near future anyway. So I don't think it would really impact the market as they're basically already expecting it.
 
Thought provoking article by Simon Johnson and Jonathan Ruane in Project Syndicate suggests that China is on track to quickly become the innovation leader in the world:

Given its own policies, and those of the US, China is on track to become the world’s innovation leader. By the end of 2018, it will likely be apparent to all just how quickly and easily this latest chapter in the Chinese success story will be written.​

China, the Innovation Dragon by Simon Johnson & Jonathan Ruane

I think it is worth keeping this in mind when considering the ability of Chinese car companies to improve their EV offerings to make them attractive to consumers outside of China. It wouldn't surprise me to see more of the traditional car companies follow in Volvo's path and become owned or controlled by companies based in China as they feel the strains caused by failing to invest in EV technology and production and being stuck with outmoded technology.
 
A bit of both.

The best way to look at our national debt is as a percentage of GDP.

When you go to the bank for a home mortgage, they look at your income to determine what's the maximum mortgage you can have. It's the same way as looking at the national debt as a percentage of GDP.

Right now were sitting at about 104% of GDP. That's not the highest it's ever been. Just after World War II it was at 118.9%. So we are close to an all-time high but not quite there yet.
It was over 400% of GDP in Victorian Britain. No prob. Turns out this ratio is irrelevant, historically speaking. And the total "national debt"... well, it turns out bigger is better...

It turns out that the national debt is... essentially not debt. If you issue debt denominated in dollars and you can print dollars (which the US certainly can), then it's not debt. It's actually money. T-bills are really just part of the money supply, they're not debt in any meaningful economic sense.

Andrew Jackson triggered a major recession way back in 1828 by, among other things, paying off the national debt. Essentially took money out of circulation.

The problem debt is the debt held by people who *can't* print money. Household debt in the US is very high, and THAT is a problem. Individuals can't print their own money (usually).

(Most banks effectively can, most of the time; when a bank which was printing money stops being able to due to public distrust, it causes a big economic mess. The acute phase of the 2008 crash was caused when "money market funds", which were perceived as money, were suddenly not considered to be money any more, causing a massive shrinkage in the effective money supply. The government stepped in to guarantee them, making them "money" again.)

The federal debt, by contrast, is actually a good thing: more federal debt == more money in other people's pockets. This is good unless it causes inflation, which it hasn't yet.

(Technically every dollar bill in your pocket is a debt the government owes you. And every positive entry in your bank account balance is a debt that the bank owes you. Think about it. These are better thought of as money...)
 
That's the problem with these new tax rates. Why would a company want to make investments. If I was a corporation with the new tax rates I would just buy shares of my company. I wouldn't build new plants, buy new equipment, or hire any new employees. I would just pocket the profits.

They actually removed/worsened a bunch of the better deductions for making investments (expensing, R&D credits) so there's even less incentive to reinvest. :-( I'm sure Musk will, but a lot of CEOs won't.
 
Energy macro trends for those interested in what's going on to get the entirety of the planet with electricity, preferably clean energy.

From the article:

"The number of people without access to electricity fell to below 1.1 billion people for the first time in 2016, with nearly 1.2 billion people having gained access since 2000, 500 million of which were in India. Most progress has been made in developing Asia, where 870 million gained access since 2000, of which India account for 500 million gaining access – one of the largest electrification success stories in history. There is also for the first time a positive trend in sub-Saharan Africa, where electrification efforts have been outpacing population growth since 2014."
 
Thought provoking article by Simon Johnson and Jonathan Ruane in Project Syndicate suggests that China is on track to quickly become the innovation leader in the world:

Given its own policies, and those of the US, China is on track to become the world’s innovation leader. By the end of 2018, it will likely be apparent to all just how quickly and easily this latest chapter in the Chinese success story will be written.​

China, the Innovation Dragon by Simon Johnson & Jonathan Ruane

I think it is worth keeping this in mind when considering the ability of Chinese car companies to improve their EV offerings to make them attractive to consumers outside of China. It wouldn't surprise me to see more of the traditional car companies follow in Volvo's path and become owned or controlled by companies based in China as they feel the strains caused by failing to invest in EV technology and production and being stuck with outmoded technology.


Bringing 2 themes together, will BMW be a Chinese company by 2021? Big ramifications for German industrial policy.
 
MOD INPUT:
If I didn't allow it when I was the sole Moderator here - and I didn't, although there were times when sheer volumes overwhelmed -

I CERTAINLY will not put up with sniveling, uncalled-for, ungrateful posts about Moderators not performing as YOU would like, now that there are more selfless, hard-working members who have stepped up to the task of keeping TMC civil.

If you can't sit on your hands, we'll be happy to send you away. Just makes our lives easier. Offending posts have been placed elsewhere.