Comments on: America… bankrupt?

By: kevinma

kevinma — Tue, 18 Mar 2008 13:13:42 +0000

I think politicians will do anything in order to get the peoples votes. So they’ll say things such as lowering taxes to make the people want them as their leader. This causes the economy to destabilize. I am not worried about the US being in debt because a lot of countries are in debt to the public. Also a high percentage of the people they’re indebt to are the citizens of America. Also people are always that a country might go bankrupt.

By: judychen

judychen — Sun, 16 Mar 2008 13:42:45 +0000

Should we worry about the US debt? Why or why not? Who’s to say we can’t just keep refinancing the debt indefinitely?
I don’t think we need to worry about the US debt now since US has the strongest economy in the world. It won’t really go bankrupt.

By: kevinchiu

kevinchiu — Sun, 16 Mar 2008 07:46:00 +0000

You know, if they just made Economics a mandatory course like Math or English, politicians really wouldn’t have such a big problem with raising taxes… I disagree with the fact the US has to stop spending whats “not there”. Sure, the debt is piling up, but at least it makes it so the US has a chance to enter the expansion phase of the business cycle. While the fiscal stimulus package hasn’t yet to be employed, I don’t think it’ll succeed as well for the reasons people have mentioned above. If the US chose to stimulate Aggregate Demand directly through… say Investments in technology (you know.. the same thing that propelled the US economy in the 90s with Clinton), it may be more effective.

By: Chan Min Park

Chan Min Park — Sat, 15 Mar 2008 14:30:51 +0000

Whitehead does not seem to approve the fiscal stimulus package. The fiscal stimulus package will certainly increase spending, but the US has to stop spending what is not there. The debt is piling up and what is scary about this is that a lot of this debt is going to foreigners which will result in transfer of wealth to foreigners.

Politicians, they want to look good to citizens. By looking good means increasing government spending and tax rebates, but this piles up debt. To balance the budget, they will have to decrease government spending and increase taxes. Nobody is going to like that.

US should be worried about that. If an individual has debt, they are always worried about it. The US government just sells more securities. Individuals its just like paying off one credit card with another and debt piles up. For now it may seem as if it’s okay but eventually there is going to be debt you have to face.

By: Richard T.

Richard T. — Sat, 15 Mar 2008 06:39:16 +0000

Certainly, Whitehead isn’t very pleased with the stimulus package. Whitehead sure as represented above is very concerned with the United State’s debt. As mentioned, if the 9.6trillion debt is hold by Americans then when it is payed back, it does not represent a loss of wealth from America, rather a transfer of wealth from Americans to Americans, neither diminishing nor enhancing our overall spending power.However, the problem underlying is that nearly 3 trillion debt is hold by the foreigners and essentially, the US are gradually becoming pooer and the foreigners are becoming richer. and if this issue continues to grow, the the confidence within America sure doesn’t seem bright.

By: kxc.024

kxc.024 — Sat, 08 Mar 2008 04:05:26 +0000

The problem with politicians today is that they do things that would help win them reputatio and legitimacy, instead of impelementing measures that could really help the country in the long run. Americans don’t like to hear that there will be a tax increase in order to help their country get out of debt; they prefer to hear that there will be a tax cut and they can spend more, even if it means only helping alleviate the debt by a small amount. From what I read above, I think that Whitehead would be against the fiscal policy that Bush and his administration recently passed. He’s probably advocating for an increase in taxes so that the people would stop exceeding their incomes.

While I recognize that this US debt is a serious problem, I also agree with Elaine that by stating the States is losing its democratic ways due to the debt is stretching it a bit too far. However, this problem shouldn’t be taken lightly because Whitehead is correct in stating that we can’t keep refinancing the debt indefinitely. There will be some point where the money supply will just run out (probably because a foreign country will start owning nearly all of the debt) and we’ll be screwed.

By: Stacy Dwyer

Stacy Dwyer — Fri, 07 Mar 2008 03:28:26 +0000

Going back to the meat of this issue. The description given is a lot like our government having a trade deficit. The author says, “However, in the case that the government ever finds it hard to issue new securities, either due to a loss of faith among investors in its ability to repay its debt, . . . using taxpayers’ money to meet its debt obligations.” The whole idea being debated is no so much if the U.S. is going bankrupt, because we are not. The question is how to pay off the debt. This brings me back to having a trade deficit. The problem is that the majority of people are spending more than they have. This forces them into debt. The problem is, when everyone is in debt, who do we borrow from? The answer is other countries. We borrow money from China as an example. We do not necessarily depend on China, but on the relation ship we have with it. We send the Chinese market money by buying Chinese goods: the “made in China” exports, just so in return we can borrow that same money to pay off out debts. Because we over spend, we under save. If we really want to “rescue” the U.S. economy, we don’t need to buy “made in USA” goods instead of the other guys, we need to not spend at all and save. In the long run, saving allows us to have money for those future “big” projects. The one’s our economy really needs. At first the US economy might look bad, but it is a short term pain, for a long term gain. Save more!

By: ElaineLung

ElaineLung — Wed, 05 Mar 2008 15:00:17 +0000

I’d guess that Whitehead et alia would disapprove of the stimulus package; the package is trying to cajole Americans into spending more, in order to combat the recession we’re in. The problem with this, as already mentioned, is that it puts money into the hands of consumers who, still thinking they can overspend without any real ramifications, are just going to spend more. Well, that’s fantastic — why not drive the nail in deeper? And the reason why politicians aren’t taking any real action against the deficit is for PR reasons, really. Who wants to be remembered as the guy who raised taxes? In reality though, it’s like a mother feeding her sick and stubborn child cough medicine; [most] people find that it tastes disgusting, but that it helps in the end. It’s a serious problem; confidence in the government isn’t an endless well we can keep on drawing from.

I do have a question though: isn’t saying that America is “losing democracy” over this a bit excessive? Stability is at risk, yes…but democracy? It seems like that word’s being used a bit too loosely. I mean, c’mon.

By: Angel Liu

Angel Liu — Wed, 05 Mar 2008 12:03:07 +0000

I guess that Whitehead and other economists who share his views are unhappy about the recent fiscal stimulus package because it is encouraging spending when the US is losing democracy to over-expenditure. But they must agree that it is necessary. First of all, without any economic growth, the US cannot pay back its debt. Although 70% is owed to Americans, no household can forgo a majority of their income to pay for debt. However, if aggregate demand shift out and there’s an increase in real GDP, employment, and tax revenues, the government can use the additional revenue to buy securities off American hands. Furthermore, there is really no reason to anger the American public by increasing tax or cutting government spending because war in Iraq is coming to an end due to loss of American confidence, world criticism, etc.

By: Erin

Erin — Wed, 05 Mar 2008 04:09:00 +0000

In my opinion, I don’t think Whitehead agrees with the economic stimulus plan. It’s just giving Americans the idea that they are wealthier, which most of them won’t be when they spend their $1,000 from the government on a vacation, new clothes, etc. After they buy whatever it is they buy, they will be right back at square one, gaining no wealth, just maybe some materials. The people who put their money into savings will benefit though, but that is really not what the government wants us to do with that money. Most people become so blind sighted when they are given “free” money that they spend it willy-nilly wherever they want…which is really not benefitting them or our economy in the LONG run.
I think the reason politicians don’t take serious measures to reduce our debts is because it is such a bold move to make. It would requre possibly raising taxes, and probably a lot of short term dislike from American citizens..but I believe in the long run, we would benefit from trying to pay off our debts. People may complain about higher taxes to pay off our debts, but I think it would be better to have people mad about taxes for a short time than living in a country that has gone bankrupt. Short term pain for long term gain (I attribute that quote to my econ teacher, mr lauridsen)
Politicians have become a lot more neutral than they used to be in order to appeal to the most amount of people.
Finally, I think personal debt is a huge thing to be worried about. If the majority of the people in our country are in debt, I’m sure our nation’s debt situation would reflect that. With less Americans in debt, we are able to invest in more things to help our own economy. It is impossible for one person to reduce the US’s large debt, but if everyone just contributes a little bit, and keeps themselves debt-free, maybe it could help.

By: Mollie

Mollie — Mon, 03 Mar 2008 21:23:59 +0000

Debt makes the world go ’round, but where do we draw the line for what constitutes too much debt for any given nation? Having national debt is part of the economy, but in the US, it has grown to a sizable and unacceptable proportion in recent times; it’s time for Americans to step up to their patriotic duty and do something about it. Just like the fact that alot of personal debt will do you harm, the increased national debt will hurt the US’s economy – and ‘in the long run’ is coming sooner than we’d like.

Spending the money handed out by the stimulous package will only encourage people to spend money that they don’t have, or that they think will continually be given to them. It is time to save your money, get yourself out of debt and, in turn, get the US out of the ridiculous amount of debt in which we now find ourselves. Start small, finish big. And not in the Red.