11 Replies to “Tony Robbins | The National Debt and Federal Budget Deficit Deconstructed”

  1. While this discussion puts the deficit into some sort of perspective, it gets in the weeds right off the bat. How about explaining in real terms what cuts we would have to make and what tax levels we would have to get to to make a meaningful dent over time. All the stupid talk of retroactively taking sports salaries, movie money, and super bowl advertising is just an exercise is silliness. Tell people what we have to cut and by how much, or is that the hard part? After all, if you tell people they will be living in a cardboard box under a bridge it’s a no go, isn’t it? Anyone with a sense of history knows some of the debt will be repaid and some will slowly be defaulted on through inflation/devaluation and if you aren’t allocated to hard commodities you are done like dinner.

    1. He does have a point but I would prefer some handy rule of thumb like:
      “The US government costs taxpayers $7.5 million dollars a minute” or
      “Increasing the tax rate to 50 percent on incomes over $1million would reduce the annual deficit by x.0%.”

      1. Exactly. We know we have a huge problem, the hard part is determining what needs to be done. How much cutting? What tax rates? There is no doubt we will need to ‘chew gum and walk at the same time’ so some ideas of how much gum and how much walking is required would be useful.

      2. no question they are huge numbers! If our fathers and their fathers wanted to own something they worked and saved and bought it. Now we buy it today and pay for it later or never. Our governments lead by example in all the wrong ways and parents may rightly fear for their children’s future. Unlikely we shall vote for a dictatorship and no hard, unpopular choices will be made by our politicians. Debasing the dollar surely has a limited effect before being a problem in itself. The path of least resistance is to continue as we do until an inevitable default by the US of A. Beyond that is the unknown perhaps its painful and short ,perhaps its “Escape from New York”?

      3. The Fed has dual mandates and is trying to achieve both: protect the currency while stimulating employment. Their strategy is to expand their balance sheet to offset the contraction of private credit. That way inflation is not a huge problem because of the deflationary effects of deleveraging. When the contraction stops, so will they (I hope and pray).

  3. If you are of a certain age you surely remember savings programs they had in school encouraging savings and preaching the benefits of compound interest. For me that was in the early stages of Vietnam. The war dragged on and as the costs mounted Nixon figured he could rig the deck by eliminating the last vestiges of the gold standard and paying debt with wooden nickels. We have been playing that game ever since. Once our currency floated and was no longer a store of value and compound interest was destroyed replaced by constant inflation/devaluation, what was the point in saving? In essence it really destroyed capitalism in favor of debtism. I suppose it’s fair to suggest the government lead the way into this trap, it surely wasn’t our fathers and father’s fathers. But you know, there is only so far you can go borrowing dollars at the present value and paying the debt back with wooden nickels before the lenders get wise and the bond vigilantes get theirs. I suppose that is what all the political noise is about, no doubt many of those making the most noise are holders of LT treasuries. Everything was peachy when they were making yields higher than inflation but they can see the horizon from here and it looks a little dark.

  4. Don’t worry, Mit Romney and his pals will soon sort out the poverty ridden people. Take away their food stamps. Foreclosure on the mortgage. And cut the dole money. His friends caused it all in the first place. Dont belly ache to me, luckily in Australia we have a great economy, AAA rated today. World class. And, a socialist government. I prefer to call them a caring government. We never went into recession in 2008 and they gave cash bonuses to help the people and have gone from strength to strength. Therese.

    1. “luckily in Australia we have a great economy…..”

      Fortunate. Yes. But I prefer Houses and Holes view: “I am talking about the end of the mining boom, which is nothing more than the march of the GFC to those that have escaped until now, and the persistence of policy settings that assume that the private sector is immune to deleveraging, as well as the failure to plan beyond the next hole in the ground.”

    2. Therese, before you thumb your nose at the USA, let’s be clear on some facts. Two reasons Australia has survived the GFC – (1) the financial banking prudence, government credit (savings) and a strong economy which Labor inherited from the Howard government just prior to the GFC, and (2) the mining industry has boomed off Asian demand (China, Japan, India, Korea, etc.) for our raw resources. In an attempt to take all the credit for themselves Labor and it’s disciples will argue falsely that the mining boom was only 2% of the national GDP (Bob Carr and Wayne Swan), but they purposefully omit to mention the spinoffs to other industries. The revenue from the mining industry has filtered through our economy through all other industries a few times annually. Labor, through the psuedo-leadership of Kevin Rudd, Julia Gillard and Wayne Swan have squandered $200 billion in 4 short years on wasteful projects and bureaucracy and psuedo-social spending. Their mismanagement has given us a return value of probably 20c for every dollar spent. We have gone from +$50billion to -150billion in government debt in 4 years flat. The ANNUAL INTEREST PAYMENTS on these debts would pay for new hospitals, new schools, new highways, new universities, and other major infrastructure. And we still have to face the capital debt repayment. The annual interest payments could have been used to boost pension funds, disability funding and education advancement. Instead, $billions of Australian taxpayers money is spent on servicing debt thanks to Labor wasting our money. It’s as if the Australian Labor party is trying to compete with Europe and the USA in a race to the bottom of a huge debt hole. In the process they fudge the figures and try and bamboozle the population with economic jargon and spin. Keynes would be spinning in his grave right now.

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