What happened to all of the doom and gloom economic threads?

[Byron In Exile]

You're correct, it's bigger than 12, it's around $13.5 Trillion as of today.

The deficit for the year 2010 is around $1.3 Trillion, the total, cumulative deficit is around $13.5 and growing very quickly.

"Deficit" and "Debt" are two different things.

There are many online dictionaries which can assist you in your search for knowledge.

 

[RightField]

"Deficit" and "Debt" are two different things.

There are many online dictionaries which can assist you in your search for knowledge.

Whatever.

 

[Byron In Exile]

Whatever.

Seriously.

Learn what the difference is.

It will aid you in life, and help you to not seem stupid.

 

[mercury14]

As long as they run the printing presses, there will be plenty of wallpaper for everyone...




Hey, U_D, give us a few more months and we'll SHOW YOU the inflation.

You'll find that funny as hell too...

So wait... In a few months we're going to have inflation AND deflation? You've said both.

 

[mercury14]

Maybe you don't know the difference between debt and deficit. It's a common mistake amongst the dumbasses.

Lol at Reichfield.

 

[koalabear]

So wait... In a few months we're going to have inflation AND deflation? You've said both.

Look! UD's dingleberry is back, rolleyes and all.

 

[mercury14]

Look! UD's dingleberry is back, rolleyes and all.

Great post.

 

[koalabear]

Great post.

Thanks.

 

[IrezumiKiss]

Thanks.

http://cache.gawker.com/assets/images/comment/7/2010/09/6d3ccd39fec8fa047381f6c74e4ea56a/340x.jpg

 

[Frisco_Slug_Esq]

Good morning Mr. Mirth...

September 30, 2010
Ireland's Doleful Lesson for The US
By Steve McCann

This past spring much of the world's attention was focused on the financial dilemma in Greece.* While the news managed to slightly penetrate the attention span of the average citizen of the United States, it was largely ignored.* After all it was Greece, a country that seems to revel in its laid back psyche and history of economic and government upheavals.

Today however, lost in the coverage of the mid-term elections, the tea party and Christine O'Donnell's high school hi-jinks, is the news that Ireland, a country to which nearly 40 million Americans can trace their ancestry, is on the brink of insolvency.* This is not a nation with a recent history of financial and political turmoil but one that can serve an object lesson as to where the United States is headed.

This is not a story with the same sex-appeal as analyzing what makes Obama tick or what is happening in the tea party movement or the chronicling of the loony acts of some on the Left but it is one that is much closer to home than we care to admit, and one happening to a country with whom this nation has so many emotional ties.

In the 1990's and early part of this decade, Ireland's growth rate had earned it the nickname of "the Celtic Tiger."* But much of the boom was financed with borrowed cash.* From 2003 to 2007, the Irish banking system imported funds equivalent to over 50% of the nation's Gross Domestic Product thus triggering a runaway real estate and construction bubble.

Cheap loans, with a tacit nudge by the government, were virtually forced upon the Irish people.* Mortgages amounting to 120% of the cost overpriced apartments were taken out, with the cash left over used to purchase new cars or other consumer items.* New hotels, offices and shopping centers (which were not needed) sprang up throughout much of the country.* There appeared no end in sight as the government and banking system worked hand in hand promoting policies that created a massive financial bubble.

The world financial crisis put an end to these excesses and the boom came to a halt practically overnight.* Today the unemployment rate is nearly 14% and defaults on mortgages have hit epidemic levels.* The banks have countless loans on their books that are no longer being serviced and the underlying collateral is virtually worthless.* The Irish government has had to bailout or nationalize numerous banks, the final cost of which is yet to be determined.

Tax revenues to the government between 2008 and 2009 dropped by 19% and the annual budget deficit as a percent of the GDP hit 15.4% vs. an average of 1.1% from 2003-2008. **In 2010 the deficit may well exceed 18-20% of GDP (worse than Greece).* In only two years 2008 to 2010 (est.) the general government debt will have gone from 44% of the GDP to nearly 80%. (A phenomenal 82% increase).

The Irish government has had to turn to the international market to sell bonds to finance this debt.* Last week, for example, the Irish state sold 1.5 billion euros of bonds on the market; however the interest rate was extremely high and the default insurance premiums on these same instruments hit a record high. *Total interest costs were 8% of all government revenue in 2009 (as compared to an average of 4.3% during 2003 to 2008).* It is estimated that interest costs will exceed12% of all revenue in 2010.

In an effort to continue receiving support from the European Union and to have the European Central Bank and the IMF buy their bonds, the Irish government has been forced to make severe cut backs in expenditures, particularly wages and salaries in the public sector and reductions in some social spending.* However these savings will not be enough, and in December 2010, when the government prepares the budget for next year, the steps that will have to be taken will have to be much more draconian if it expects to receive additional loans on the international capital markets.

The world financial markets have been forced to calculate the very real possibility of what would happen if Ireland went bankrupt.* There is a deep mistrust of the ability of Ireland to avoid a default (thus the high interest and premium rates).* If the austerity measures are not sufficient and the markets lose all confidence, then the only option will be the euro-zone bailout fund which will result in the tacit loss of Irish sovereignty and the further decline of property prices, wages and a near permanent high unemployment rate which may take decades to repair.

How does this sad tale compare to what is happening in the United States?* First on a comparative statistical basis:

National Debt as a Percent of GDP:* Ireland in 2010: 75%** USA est. in 2012:** 74%

Deficit as a Percent of GDP: *Ireland in 2010: 18%*** USA 2009: 10%

Interest Cost as a Percent of Govt. Revenue:* Ireland 2010: 12%* *USA 2010: 19%

Current Unemployment Rate (comparative basis)*** Ireland:* 13%*** USA:* 10.6%*

As matters stand today, two factors are different between the two countries: first, while Ireland has begun, albeit through coercion, a major cost cutting program, the United States is continuing its profligate ways, and second, unlike Ireland, the United States has nowhere to turn for a bailout.

The consequences of what the current administration in Washington is doing are inevitable: a head on collision with national bankruptcy; but many still live in a dream state willing to accept the mellow toned assurances of those in the governing class, particularly Barack Obama, that they have everything under control. *It would behoove all of us, particularly the media, to look across the ocean to a country we all know so well and come face to face with reality.

*Calculated on the same basis as Ireland, with labor force drop-outs considered unemployed

Page Printed from: http://www.americanthinker.com/2010/09/irelands_doleful_lesson_for_th.html at September 30, 2010 - 06:02:06 AM CDT

 

[Frisco_Slug_Esq]

So wait... In a few months we're going to have inflation AND deflation? You've said both.

We've already had a deflation, take your house, for example...

Now, we have to begin paying back creditors with dollars we don't have. The Summer of Recovery was supposed to produce cash, it did not, so now the Fed will have to default on our creditors with inflated dollars.

 

[RightField]

I wish Obama would stop with his "social engineering experiments" with the economy (he's trying to show that he's "in control") and just step out of the way, lighten his byzantine rules and reduce business taxes so we can bring our morebund economy back to life (and create jobs).

 

[Frisco_Slug_Esq]

I wish Obama would stop with his "social engineering experiments" with the economy (he's trying to show that he's "in control") and just step out of the way, lighten his byzantine rules and reduce business taxes so we can bring our morebund economy back to life (and create jobs).

That ain't going to happen. Unlike Bill Clinton, I don't think he's at all troubled by the idea of serving only one term.

There's money to be made and a permanent podium from which to criticize and complain, the natural place for a community organizer...

 

[Ulaven_Demorte]

We've already had a deflation, take your house, for example...

Now, we have to begin paying back creditors with dollars we don't have. The Summer of Recovery was supposed to produce cash, it did not, so now the Fed will have to default on our creditors with inflated dollars.

My house? Still worth quite a bit more than I paid for it, almost double in fact. True it's not worth what it was when real estate values were hyper-inflated. But then I wasn't one of the stupid fucks who rolled my car payment into my mortgage or took out an equity loan to buy a new speed boat and maxed out on a teaser rate ARM.

I'm not sure you know what deflation and inflation actually mean.. Or you're using your own definitions of the words, which you have been more than willing to do in the past.

 

[Frisco_Slug_Esq]

You could not sell it right now for what you think it's worth, no matter how you try to couch its value...




Do you not pay attention to the real news?

 

[firespin]

My house? Still worth quite a bit more than I paid for it, almost double in fact. True it's not worth what it was when real estate values were hyper-inflated. But then I wasn't one of the stupid fucks who rolled my car payment into my mortgage or took out an equity loan to buy a new speed boat and maxed out on a teaser rate ARM.

I'm not sure you know what deflation and inflation actually mean.. Or you're using your own definitions of the words, which you have been more than willing to do in the past.

What you paid for it is irrelevant. What it's worth to you has gone down in the past two years. That affects your ability to finance against the equity, or sell it for other purposes.

 

[Ulaven_Demorte]

You could not sell it right now for what you think it's worth, no matter how you try to couch its value...

Do you not pay attention to the real news?

I'm sure that appraiser just pulled a number out of his ass that he thought I would like.

Funny, you asking if someone else pays attention to real news..

 

[Frisco_Slug_Esq]

What you paid for it is irrelevant. What it's worth to you has gone down in the past two years. That affects your ability to finance against the equity, or sell it for other purposes.

I'm sure that appraiser just pulled a number out of his ass that he thought I would like.

Funny, you asking if someone else pays attention to real news..

An appraiser is not the market.

You would have us believe that you are in a market not hit by foreclosures of any sort creating the fire-sale conditions that bring down the value of all homes. Now, you local government is sure as hell going to tax you on the value you think it holds, but if you were a smart investor, you would sell it for that appraised value and go find yourself a fire-sale to upgrade to...

BTW - We live in a relatively untouched pocket of prosperity and our home was just appraised and that price indicated deflationary pressures even in this housing market.

 

[Ulaven_Demorte]

What you paid for it is irrelevant. What it's worth to you has gone down in the past two years. That affects your ability to finance against the equity, or sell it for other purposes.

You're playing checkers..

The property is worth nearly double what I paid for it, much more than what I owe on it even with the drop in hyperinflated value.

Only morons and bankers (I wonder how much of an overlap there is in those two groups) thought that the hyper inflated real estate prices would last forever / continue to climb and mortgaged their property to the hilt during the "good times".

 

[Frisco_Slug_Esq]

Now we KNOW U_D is laughing and having fun...

 

[Ulaven_Demorte]

Now we KNOW U_D is laughing and having fun...

Always, usually at your expense though.

Loved the "Kill Igor's Goat" reference you made in the Survivor thread Cap'n OneNote. I laughed pretty hard at that one. Damned commies voted off Jimmy J.

 

[Frisco_Slug_Esq]

Yeah, we're laughing too.




We watch you post that your 401K has grown, your house has added value, and your evil greedy employers orders are up 85% and your job is secure because you're the best hand on second shift and we know for a fact that you're pulling our legs...

 

[Ulaven_Demorte]

Yeah, we're laughing too.

We watch you post that your 401K has grown, your house has added value, and your evil greedy employers orders are up 85% and your job is secure because you're the best hand on second shift and we know for a fact that you're pulling our legs...

You know Jack and shit.. And Jack left town.

The fact is my 401k recovered from the precipitous drop quite some time ago and is growing steadily. You're mis-characterizing what I said about my property value (surprised?). It's still worth nearly twice what I paid for it despite the loss of hyper inflated value of a couple of years ago. It was nealry triple what I paid for it. Not only am I the best hand, but I make it possible for my Director to sleep easy knowing that anything that happens will be handled properly.

I know, it's as unbelievable to you that someone could be competent at their job as it is that they could also be happily married and getting healthy and fit for their own personal edification.

One day you're going to actually stumble across some measure of truth about me, likely by accident. But I won't hold my breath waiting for that to happen.

 

[Frisco_Slug_Esq]

We're still pointing and laughing...





Now tell us how to run an insurance company without profit.

 

[Ulaven_Demorte]

We're still pointing and laughing...

Now tell us how to run an insurance company without profit.

Who said you could or should?

I made it pretty clear that I wouldn't give two shits if health insurance were obliterated as we know it to be replaced with a single payer system. One of the problems with insurance companies is because they have to profit, and do so above all other concerns.

It's time for me to get out in the yard and do something productive.