Comment by maxklein | Hacker News Reader

Comment by maxklein | Hacker News Reader

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National Debt : $9 Trillion. National GDP: $13 Trillion. Science and Research - #1. Innovation - #1. It took 8 years to create this debt. It will take a while to get it off, but it's a freakin powerhorse we're talking about here. It's not South Africa, it's the biggest economy in the world.

All these things you speak about are momentary things. They react to short term events.

The problems right now are due to the gambling nature of many American businesses - but it's that same nature that makes American #1 in so many ways.

This is just a correction. It's not a recession. America has been living above it's means and will drop down a notch or two, but the fundamentals are very strong.

Education - good Science & Research - good Investment & Risk Taking - good Intellectual Capital - good Natural resources - good

America is fine, people are just using this bubble cycle as propaganda for an election, and you guys are panicking. Take it easy - go scoop up some stocks at rock bottom prices like the richest man in the world is doing.

I'm curious- do you know what the economic definition of a recession is?

Do you know any other country with such a debt to GDP ratio? Do you know what the significance of having that much debt is?

Do you realize that's equivalent to someone who makes $100k a year having ~$70k in credit card debt? That's not "normal"- that's the person that has the Dr. Phil intervention on Oprah.

To you, things may look okay. I'll tell you what's actually happened though, as you've looked outside at your normal life. Over a million people this year have lost their homes. Over a million people are projected to lost their homes next year.

Education: More and more of our jobs are being taken up by H-1 foreigners. I'm the son of immigrants- this isn't meant to be xenophobic- we're not producing graduates capable of tomorrow's challenges. Too many college students are too focused on how they're going to get their next handjob and not on their D in calculus.

Research: Bush has cut funding for science and research dramatically. Don't just make assumptions, look it up. Most academics and professors hate Bush. There's a reason why most schools are liberals now.

Intellectual Capital: Our best asset. Slowly being trickled a way by a generation worrying about what happened on Gossip Girls and Lindsay Lohan's lesbian relationship.

Natural resources: what resources? Timber? grass? food? The only one that matters, oil, is in short supply. We only produce 3% of the world's oil supply, and use 25% of it. Meanwhile, rather than eliminate oil entirely, half the population thinks drilling more oil and adding 4% to our supply 15 years from now will fix our energy woes.

This is not a rant, and I'm not some bitter curmudgeon. I'm a young, healthy 24 year-old, and this is reality.

"Do you realize that's equivalent to someone who makes $100k a year having ~$70k in credit card debt? That's not "normal"- that's the person that has the Dr. Phil intervention on Oprah."

The debt of our federal government is different than the 70k credit card debt of a person who makes 100k in two ways that somewhat cancel.

First, the interest rate that the federal government can get is remarkably low. In fact, if we include inflation (which seems to be hard to peg right now), I would almost venture to guess that the interest rate might be negative.

On the other hand, it makes me uncomfortable that people compare the federal debt to the GDP because the GDP is a sort of total income for the nation. What ought to matter is the relevant part of the income of the federal government. I haven't found good data on what this income is (anyone?) but I think it is on the order of about 3 trillion. It was about 2.5 trillion in 2006 according to Wikipedia.

Anyway, if we wanted to compare the national debt to consumer debt in terms of a debt load, this is about like having a person who owes about three times his annual income on a mortgage. There are still two main differences. One the one hand, there is no home that this mortgage has enabled us to enjoy. On the other hand, the interest rates on federal debt are lower than the rates on just about any mortgage.

you are right about the interest rates, but I don't like using mortgages, because they're no underlying asset for our creditors to seize when we default (which is why I used credit cards).

Maybe we can use auto loans and cars.

Um, lots and lots of countries have this Debt to GDP ratio. It's not unusual, look it up.

The biggest economy in the world is European Union, not US (as measured by GDP.)

Except that the European Union is not an integrated economy, it is a federation of inter-dependent economies that share a common currency, as the clusterfuck regarding how it will respond to the current crisis is showing.

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