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Debt
Nov 22, 2014 8:28:57 GMT -5
Post by brucemacneill on Nov 22, 2014 8:28:57 GMT -5
I'm still really interested in better understanding this "...world can't get enough of U.S. treasury bills. It's still considered the safest debt in the world." If that's really the reason our debt doesn't matter, I'd like to understand what it means and why it is. If I remember correctly, if you substituted "U.S. real estate" for "U.S. treasury bills", you'd be describing the world in 2007, wouldn't you? I think Jeff covered it pretty well.
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Debt
Nov 22, 2014 8:36:22 GMT -5
Post by millring on Nov 22, 2014 8:36:22 GMT -5
Googling around under the search "Why the federal debt doesn't matter" I came up with this article: www.governmentisgood.com/articles.php?aid=30I can only speak for myself -- and I could find examples of the kind of arguments he's making -- but those 4 things do NOT represent the central question of the debate over whether or not the debt matters. At least, I don't think they do.
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Debt
Nov 22, 2014 8:37:03 GMT -5
Post by millring on Nov 22, 2014 8:37:03 GMT -5
I think Jeff covered it pretty well. Where?
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Debt
Nov 22, 2014 8:49:25 GMT -5
Post by fauxmaha on Nov 22, 2014 8:49:25 GMT -5
I was wondering that myself.
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Debt
Nov 22, 2014 8:50:49 GMT -5
Post by fauxmaha on Nov 22, 2014 8:50:49 GMT -5
But I'll accept Bruce's conclusion, in any case.
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Post by brucemacneill on Nov 22, 2014 9:28:33 GMT -5
I think Jeff covered it pretty well. Where? "Least syphilitic hooker in the whorehouse."
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Debt
Nov 22, 2014 9:44:23 GMT -5
Post by Doug on Nov 22, 2014 9:44:23 GMT -5
Let's face it the country is bankrupt. And we are so far down that recovering is impossible. Sell off the assets to pay debtors and close the government and start over.
I bid $212.38 for the Grand Canyon. I bet they could get 100 million for the White House. Hey that's an idea for the Reps, sell the White House out from under Obama, I can't see how that would not be legal.
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Debt
Nov 22, 2014 10:51:51 GMT -5
Post by patrick on Nov 22, 2014 10:51:51 GMT -5
Those who actually read Paul Krugman on a regular basis know that Krugman DOES consider the debt to be a problem, but a long term problem, whereas the recession required an immediate response.
America's economy is doing well compared to Europe, but not because of our exploiting our energy resources, oil is a worldwide market and those low prices also benefit other countries. The difference between the US and Europe that explains our better economy is that the Europeans wholeheartedly accepted an austerity program, which has been a disaster for them, whereas the US used a more Keynesian approach, though not as stimulatory as Krugman would have liked. (By the way, one reason oil prices are so low is because our close friends the Saudis have ramped THEIR production way up in order to bankrupt the fracking industry.)
It is NOT widely accepted that a 100% debt toGDP ratio is linked to economic decline. That was based on one draft study that was not peer reviewed, but was taken up by politicians because it suited their purposes. Then a grad student asked to see their original data and showed it was all hokum.
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Debt
Nov 22, 2014 10:55:18 GMT -5
Post by patrick on Nov 22, 2014 10:55:18 GMT -5
I bid $212.38 for the Grand Canyon. I bet they could get 100 million for the White House. ; R's are willing to spend 10X that much just to rent the place for 4 years!
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Debt
Nov 22, 2014 11:36:11 GMT -5
Post by fauxmaha on Nov 22, 2014 11:36:11 GMT -5
Free motorcycles for everyone!
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Debt
Nov 22, 2014 11:47:23 GMT -5
Post by Russell Letson on Nov 22, 2014 11:47:23 GMT -5
Goody! I'm selling mine to buy another guitar.
Of course, since everybody already has a free one, I'll only get enough for a used Baby Taylor, and I already have one of those.
Drat.
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Debt
Nov 22, 2014 23:53:39 GMT -5
Post by epaul on Nov 22, 2014 23:53:39 GMT -5
....u America's economy is doing well compared to Europe, but not because of our exploiting our energy resources, oil is a worldwide market and those low prices also benefit other countries...[ Nope. America is doing better, much better, than Europe because of fracking and cheaper energy (and leaders in Europe know this, but they are hamstrung by green politics). Focusing just on oil prices is myopic. Energy is a spectrum. Oil is just one part (and the very current low prices are an even smaller part of what has been a 15-year turnaround). Electricity and natural gas dwarf oil in importance to industry, and natural gas and electricity are much cheaper here because of fracking. (and oil fungiblity be fracked, gasoline is much cheaper here as well, but that is a tax issue). Germany has started building some industrial plants in America, not because they want to but because they have to. Germany's energy costs are cutting its industrial throat. It can't compete. Even China is starting to move some industry over here to take advantage of our brighter energy future. And bright it is. It is an inconvenient truth, but this country's ass was saved by fracking and cheap energy.
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Debt
Nov 23, 2014 0:19:30 GMT -5
Post by epaul on Nov 23, 2014 0:19:30 GMT -5
... (By the way, one reason oil prices are so low is because our close friends the Saudis have ramped THEIR production way up in order to bankrupt the fracking industry.) The Saudis do seem to be up to something, and it will be interesting to watch. (and what would they be up to without the competition fracking has provided? Jacking the price of oil to the sky). At current prices, $75-80, new drilling in North Dakota will slow down. This isn't necessarily a bad thing, or even unwanted. Most are viewing it as an opportunity to slow down and fill in some of the gaps in their infrastructure and transportation capabilities. And everything has grown so fast, there are gaps that need to be filled in (natural gas capture being a biggie). Even a slow down still leaves the pace at near frenzy. Long term? Most don't think the Saudis will be able to keep this up long term without causing some sort of crisis on the homefront or stressing their own ability to move the stuff. But, while each company and each well has its own bottom line, the word in North Dakota (which is better than any word you will get anywhere else on the matter) is that most Bakken wells will remain profitable down to about $60 a barrel. Lower than that, then it will get to be interesting. No doubt they will continue to pump at lower prices, but then it will be a case of playing chicken with the Saudis (who, by then, will be dealing with a hornets' nest on their end). But, if oil goes to $50 a barrel, then shutting down the Bakken for awhile and stocking up on cheap Saudi oil isn't a bad move.(and, the natural gas will still flow, and,long term, may prove to be most valuable part of the Bakken field.
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Debt
Nov 23, 2014 0:19:53 GMT -5
Post by epaul on Nov 23, 2014 0:19:53 GMT -5
duplicate post.
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Debt
Nov 23, 2014 0:41:13 GMT -5
Post by fauxmaha on Nov 23, 2014 0:41:13 GMT -5
This drop in oil prices hasn't done my Haliburton stock any good (although I got lucky and was short for the big drop a week ago). But that is pleasantly offset by the decline in Texas oil field developers cold calling me with AMAZING INVESTMENT OPPORTUNITIES!!!
Personal positions (ie, as a consumer of energy and an investor in energy) aside, I don't look at declining energy prices as a particularly good thing. That always suggests sagging global demand.
Even though today's prices do seem to be mostly about US production continuing to grow, and Paul is exactly right: More and cheaper energy is a basic good. The economy doesn't run on good intentions or best wishes, it runs on energy. Energy is life. It is everything. We are truly blessed to be the beneficiaries of Providence in this regard...both in terms of natural resources and the amazing ingenuity required to convert those resources into something useful. Without that sector, the US economy would be in the tank right now.
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Debt
Nov 23, 2014 4:37:18 GMT -5
Post by jdd2 on Nov 23, 2014 4:37:18 GMT -5
For the world, cheap oil is like QE IV, everywhere.
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Debt
Nov 23, 2014 11:25:38 GMT -5
Post by patrick on Nov 23, 2014 11:25:38 GMT -5
More and cheaper energy is good to grow an economy, but since energy, especially oil, is a worldwide market, US oil production does not explain the difference between the US and European economies. Cheap oil here is cheap oil everywhere.
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Debt
Nov 23, 2014 11:27:59 GMT -5
Post by millring on Nov 23, 2014 11:27:59 GMT -5
Cheap oil here is cheap oil everywhere.
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Debt
Nov 23, 2014 11:31:09 GMT -5
via mobile
Post by aquaduct on Nov 23, 2014 11:31:09 GMT -5
More and cheaper energy is good to grow an economy, but since energy, especially oil, is a worldwide market, US oil production does not explain the difference between the US and European economies. Cheap oil here is cheap oil everywhere. Have you ever tried to buy a gallon of gas in Europe? Cheap oil may be cheap everywhere but Europeans go out of their way to make sure energy is still very expensive there.
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Debt
Nov 23, 2014 11:32:43 GMT -5
Post by fauxmaha on Nov 23, 2014 11:32:43 GMT -5
More and cheaper energy is good to grow an economy, but since energy, especially oil, is a worldwide market, US oil production does not explain the difference between the US and European economies. Cheap oil here is cheap oil everywhere. Industry runs on electricity, and electricity is produced by coal, natural gas and nuclear (and a few other odds and ends that amount to rounding error).
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