Why can't the US live within their means?

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Instead of passively accepting the plots to roll back a century of progress and reign oneself to austerity, perhaps resisting these plans is better, specifically by mentioning that firstly "deficits do not matter" as Dick Cheney said, and also, to inform people that the bankers and the financial racket are the problem, it's not up to everyone else to clean their mess. Moreover, the United States will not go bankrupt! It's impossible.

I also think of another idea:

To lower US debts, US has to force Japan and China to swallow the debts, or risk a war on Taiwan.

US can consolidate debts.

And the US can transfer its debts to the Middle Eastern countries.

http://credit.about.com/od/reducingdebt ... e-debt.htm

Just asking you, is there any reason why you accept a Canadian's answer rather than a Singaporean? I am just curious.

I like the United States as a country but I just want to know Americans better. Thank you.

Personally I've found that checking accounts are a false sense of security. We've been much more responsible with our spending ever since we kept all the money we COULD spend in our pockets. It's like, ok, I can either have cable/internet or electricity... Hmmmm... OK, well, if I don't have electricity, the internet/cable is pointless... Hmmmm.... I'll just check my email at work this month! Or if for fun we take our kids to our favorite Mexican place but I can't afford a big meal for myself, I just order the tortilla soup.

And that's the problem with economics in the USA. We teach our kids to dream big dreams and go to college and make those dreams come true, follow their dreams, and live a good life. But what kids never see is just how much work their parents did to have that kind of lifestyle. So we get out of colleges and buy big houses we can't afford and then lose EVERYTHING at foreclosure when the bottom falls out of the economy and can't pay our mortgages. Personally, I think all post-college kids ought to buy an acre lot in the country and a RV, preferably a used one. If you manage to eke out a good living with ONE child and the job is secure, buy a 3 bedroom double-wide and sell the RV if it will help and try things with a second child. Then, with some good experience behind you, get a better job elsewhere, better benefits, and then buy the 2-story, 5-bedroom McMansion, have another kid, and start spending more time on your hobbies. Don't sell your other property, rent it out to pay for the McMansion!

Build on your assets. Inherit a piano? Get it tuned, learn how to play it, and give piano lessons to all the neighborhood kids (I do teach piano lessons, and honestly piano isn't really my primary instrument--I just happen to be good at it).

Diversify. Like I said, I teach piano lessons throughout the workweek, but I also accompany church choir rehearsals and play worship service and prayer meeting/Bible study, along with weddings and funerals. I also play in a rock band, sing a little, and even took up playing guitar. I write music and know a lot about computer audio recording and sound design--there's no reason I couldn't write songs, radio images and jingles, or even music for film and video games.

You don't even have to be that smart, just willing to do the work. I know a preacher who lives modestly and supplements his income by doing yard work. He even has contracts with most families in the manufactured housing park where I live. His wife has a sign in their front yard advertising for Avon. That's a good idea. I might do the same for teaching piano at home! If only those guys working in the banks, wearing the fancy suits could be that resourceful.

And grow some veggies instead of buying. I teach myself to cook one new thing per week. At least.

I should have said that you dont want cheques with that chequing account. Its simply for holding cash for expenditures. I think that was what you were getting at?



Right. That tactile experience with physical cash is important. You need to see it, feel it, know it as a finite resource rather than a vague number.




Right. Good financial sense and fiscal prudence do not take genius. Its something that even slow people can master. Its more about stick-to-it-ness than sophistication.

Last edited by Fuzzy on 15 May 2010, 5:34 am, edited 1 time in total.

Thats a good idea, but we need to boot anti-democratic states out of the UN, or at least make them shut the f-up. I dont like to point fingers but -> China.



Saying stuff like "foreign countries can make it cheaper" usually go into one ear and out the other on conservatives. They only want to hear things they want to hear.



Are you surprised? You said the wrong thing - you didnt say the thing that the conservative right wing OP wanted to hear. Political and religious extremists have their ears barricaded.

I identify more with the right wing, personally. But what upsets me more is the negative effect polarization has had on our politics. You can't deny that the liberal left has progressively taken more and more extreme positions with each political victory. The kinds of things that have happened in the last two years would have been unheard of under Clinton. I get the impression that my fellow right-wing conservatives are taking harder stances in an effort to balance out those issues that aren't in favor of majority opinion.

Our form of government can't promise to make everyone happy all of the time. But don't think it necessarily has to be all-or-nothing as it is now. Neither side is willing to give at all.

Thanks Ichinin for being a listening ear to my forums.

I agree that un-democratic states like China should be booted out of the UN, even if this means the exclusion of my very own Singapore as well. UN should be a place where every democracy should be in, not just any commie or autocratic state.

I also sense that some conservatives had not obviously studied orthodox economics in school because they only want to hear things that only benefit them. Did they study game theory? Did they know about trade retaliation (when US raised trade tariffs on steel, China also did the same). But since the OP had only wanted neoconservative opinions, I have nothing to say about that.

If I ever said the things the OP wanted to here, I would be going against my own will and conscience because protectionism has never worked in the place I live. I am not sure about the United States. They can produce most of the things they need, but they could have sacrifised a lot by not doing more in things with lower opportunity costs - like for all the labor in Michigan that are placed in car factories, they might as well build ski resorts or high-end machinery or even gthe newest green technologies in the old car factories... It could bring more money and more skills for the wolverines. But... sigh.

If I really wanted to appease the OP, I'd say:

(1) Ban all unnecessary imports from other countries (esp. Singapore's Creative Zen MP3 players )
(2) Make things that other countries definitely need
(3) Force the other countries to buy American and sell their things cheaply by war, force by the World Bank or a combination of both

And i do not identify with left or right. I am in favour of keeping open (responsible) market economics with a stable society. I've had it with "Up and down" economics just because some psychopatic a-hole want to make a buck and society ends up taking the punishment, and the other side "no change for 5 years" economics if you know what i mean.

I realise that there has been a shift in Us political demographics, but that has something to do with the economy and people not having an income. If you want to be popular, create jobs. Make sure that people have an income to live on. Thats it! Remember that episode of Simpsons where people were whistling and walking in front of the whitehouse with "Everything is fine" signs? That could be you!

Even better is to make sure that a society is stable and you can guarantee a long period of prosperity and peace. Focusing left or right isn't the answer. Stabilisation comes from long term thinking.

So, why do i as a European care and write in this discussion? Well:

1) Because i can and care. Try arguing with Chinese leaders or Iranian religious leaders. At least you are here, arguing your cause - and you can vote.
2) Because i want a stable, free democratic society to live in. Us and Europe are the only big guarantees that the world does not end up a fascist/religious extremist state. Having a US that "owns things" to certain middle eastern states and China isn't really good in the long run.

That is why i want you (the country) to start thinking about what is important: Left and Right is BS - Democracy, Human rights and Freedom of speech isnt!

To claim that the left has won political victories and is becoming more extreme is ludicrous. It's the Right that has rolled back the gains of the past decades and with each new sets of "sacrifices" demanded on the workers on behalf of the parasites a new set of sacrifices are demanded soon after.

I mean take Elena Kagan. She is far more right wing than the outgoing Justice Stevens, appointed by a Republican! You had Bill Clinton announcing that "the era of Big Government is over", the phrase Big Government being a right-wing talking point now successfully inculcated in the political establishment. It's total surrender.

I see. So you're saying there's a right wing majority in the house and senate? What about public opinion that drastically swayed more in favor of the republicans after the health care fiasco? You're saying that the citizenry, by and large, changed their minds for some other reason than that the left wing no longer seemed to represent the will of the people? What happened was the result of an extreme position, and people are starting to realize that the "change" they voted for is not what they're getting.

I would just like to expand upon this. I cannot tell if this is implicit in your post or not, but as I understand it the big problem today is not that money is not backed by gold, but that the vast majority of money in circulation has been created (by banks) as an interest-bearing debt. (Basically the economy relies on people going into debt in order to feed the money supply.) This amount in the UK comes to about 97%. The remaining amount (3%) is the actual notes and coins, which are created by the government without a debt behind them. Since the government creates 3% of the money supply "debt-free", it could very well create more "debt-free" money to fund its public spending, but it does not. Instead it borrows the money from banks (money which the banks create out of thin air for that very purpose), thus making the country indebted to the banks for money the government could have created itself. It's an absurd system, but one that is used almost everywhere. I'm surprised more people don't talk about it in here.

You are pretty much spot on.

"Money" is gold and silver or other durable, quantifiable items of value.

"Currency" is a medium that represents money (e.g., paper notes). Currency IS NOT money. It represent a value of money.

When you go to "fiat currency" you are going to a currency that is backed by nothing. It is not "money," it is only currency.

Before the US went off the gold standard, a note of currency was redeemable for a fixed measure of gold or silver. Now, all a note of currency can be redeemed for is another note of currency, or in other words, NOTHING.

If we destroyed all fiat-based systems and went back to gold in silver, a massive adjustment in wages and prices would be needed to allocate the value of the resource across all good. An example is that your $400 Xbox 360 now costs $0.50 in gold coin (out of my butt guesstimate).

What is criminal about the current system is that bankers use the fiat currency system to steal the wealth of others.

You work and produce a good, you don't get gold or silver for it, you get paper printed with nothing backing it. Who benefits? The man producing the paper. The US government has the authority to print whatever amount of money it needs, but instead it BORROWS every penny of its budget from the Federal Reserve Bank (privately owned) which hands over the "money" with a demand for interest. The government then taxes the people to repay what was borrowed with interest. The problem is that the "money" borrowed never existed until the Federal Reserve Bank wrote it down on a ledger. The same dynamic happens with every credit card, every mortgage, every car loan, etc.

So long as the populace is unaware of the reality of this and trusts the fiat currency to be worth something, the system keeps chugging along. This is what "consumer confidence" is all about. The richest families in the world (who own the global-sized banks) settle their accounts in gold bullion, not currencies. If everyone started doing the same and realized paper currency was less than worthless, the system would come crashing down.

Though we are both questioning the present monetary system, I don't think we are saying the same thing.
I am not arguing for a return to the gold standard. To me, it does not matter whether or not paper money is backed by gold, and I do not really agree with the distinction you make between "money" and "currency". Gold, like paper, is just a medium of exchange: you cannot eat it, for example.
What matters as far as I am concerned is that there is enough money in circulation to facilitate the exchange of goods, and that the people have confidence that their "money" will be accepted in return for goods and services.
The problem with the debt-based money system is that most of the money in circulation has been created as a debt. When someone takes out a mortgage for instance, they are not borrowing someone else's money (as most people think); they are borrowing money that the bank creates out of thin air. The end result (thanks to interest) is that (in the UK at least) the amount of private indebtedness is greater than the amount of money in circulation.
The government could alleviate this by creating debt-free money and spending it into circulation. E.g., say the government has already allocated all its public spending from tax receipts for the year, and then decides it wants to build a road, and say the raw materials and manpower were already there, it could - once the road were built - create the money and pay the workers with it. But the government does not do this; it lets the banks create the money instead, and then borrows it off them, hence national governments become indebted to banks for money they could have created themselves.

Printing money does not create wealth out of thin air; once newly printed money enters into circulation, it becomes inflationary. If the government just starts printing its expenditures, you end up with a situation like that of Zimbabwe.

On the original topic, the biggest expenses of the federal US government are Social Security, Medicare, Medicaid, defence and servicing the debt. Since the last one is essentially fixed, reducing the deficit requires some sort of cuts to the first four and/or substantial tax increases. Anything else is delusional or deliberate lies. Of course, a US politician that told this to the voters would not get elected.

A sure fire recipe for price inflation. Increasing the money supply without increasing the production of goods and services will cause prices to go up.

ruveyn

But in the example I've given, a new service has been created: namely, a road.



Both you and ruveyn are repeating conventional wisdom here.
Banks create money out of thin air, and lend the money into society as an interest-bearing debt. So why not instead have governments creating the money and investing it into society debt-free?

You might like to read the following short article (which briefly mentions Zimbabwe) for more on this: http://www.prosperityuk.com/prosperity/ ... /inf1.html