Sequester Day!

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Oh.... no, I'd say the whole of the western world as we know it is financially running on pure fantasy at this point. I'm really worried about what happens when Europe, USA, and almost every western power hits critical mass. I don't think there's ever been something analogous to the moment we're at in written history. Rome was a smaller scale and the whole globe is financially woven together. Terrifying stuff.

America will go bankrupt before entitlements are slashed.

Has been for yonks, really. It's no big secret just misunderstood and blissfully ignored.

As much as I strongly prefer the Democrats in power - after all, they're the intelligent, progressive, pro-choice, pro-life (saving), pro-liberty, pro-equality, non-invading, non-aggressive party of the two - I do feel that perhaps the entire fleet st and news agencies aren't giving a complete picture of the problems about this issue?

Or am I wrong and it's the Republicans, once again, who will not do anything for the benefit of most the country?

The rich need another tax break in order to stimulate the economy.

There's always been globalism and currency abuse. You should read Cicero's speech on Pompey's command. He basically argues that Rome needs to send a legion to Asia to stabilize things and protect Roman markets.

Also, there was this thing called the crisis of the third century when the Roman currency was so debased it became worthless.

The thing is, Roman money was limited (or should have been) by their gold/silver supply. We don't have to worry about that...

Honestly, I have not heard anybody who actually understands economics argue for austerity. Sure, the debt is a long term problem, but the immediate problem is recession. Sequestration is going to shrink GDP, and that's bad during recession. I don't understand why so many people cannot grasp that.

America's biggest problems right now are toxic politics and irrationality.

Yes. It will

The total public sector debt is something like 90% of GDP. Private debt was over 300% of GDP before the crash of 2008. Why everyone is so much more concerned about the former than the latter beats me. Ultimately though, debt is a social contract, not a physical law. The reason we pay down debt is because someone else is expecting to get paid back. At some point they will have to abandon that expectation.

A lot of what contributes to entitlement costs is our grossly inflated rent-seeking healthcare industry. A lot of government medicare debt goes straight into the pockets of big pharma executives, largely thanks to policy set in place by Dubya. I also imagine the reason we pay twice as much as anyone else on healthcare is because some executives want it that way. They don't want preventative care as that means less business. They want as many people as possible as sick as possible so long as they don't die from their illness (if they die the payments stop). Call me cynical all you want.

Too many rich people expect to be paid back.

Not only that, before the crises a lot of investment banks and derivative trading hedge funds owed each other money in a circular fashion. I.e. Bank A owes Bank B while expecting payment from Bank C which in turn is expecting payment from Bank B which is in turn expecting payment from Bank A. There were not enough rich people lending out their savings to account for all the debt. A lot of it was pure ponzi-scheme style speculative leveraging, mutual debt backed by nothing.

Well, the US deals with debt by selling new bonds to payoff the old... Sure it's a ponzi scheme, but as long as we can get away with it...

And make no mistake, we get away with it because the dollar is the world's currency and the US still has the strongest economy.

This is why we need to promote growth instead of stifling it. As long as GDP grows faster than the debt we will be okay.... for a while anyway.

The debt is a long term problem, not a crisis.

Based on the information I've reviewed, it appears that the (FYE 9/30/2013) Sequester will effectively force long-term hiring freezes across the board in the US Government, reduce operational spending in some discresionary accounts, and have an impact on unemployment benefits that I'm not quite following.

Leaving alone the long-term fiscal and currency issues, the medium-term impact is more of a mess. The US government was not designed to run for years on stop-gap approprations authority. Congress (ie, both parties) needs to pass workable approprations bills so the executive can get spending authority back and deal with these spending decisions. Right now, it's a flat percentage down to the lowest "unit of account" (I think), and that's absurd by anyone's standard. I doubt this month's continueing resolution will do anything on that front, so we need to go to October 1, 2013 before there is any real internal spending reform other than "scrape 10% less (dung) off of bouys".

In short, no one should be proud of this whole mess, and this really has to stop, because it's getting in the way of real spending cuts.

When does slowly rising water change from a problem to a crisis. Answer: when it reaches your nostrils.

ruveyn

^^^ I'd say we're only up to our waist now....

Growing taller is the way to keep our nostrils dry.

We have time.

The USA and Europe are dead. I mean dead. Sure they have a large arsenal of nuclear weapons and massive military might, but use of all that to secure the resources of the globe is really a non-option. Its MAD (Mutually Assured Destruction). Essentially there is a global shift in how we live. The banksters can print money as much as they like, the rebalancing is inevitable; they simply postpone the inevitable. Its a bit like postponing the end of the drinking at a binge party. Eventually the drinker throws up, passes out and wakes up the next morning with an almight headache and wondering what happened. Thats all. No way out.

Now that I have depressed everyone, I think if the world wakes up we can still possibly have a quiet transition to a lifestyle that is less resource hungry and I don't think such a lifestyle is necessarily lesser than our current materialism.

I live in New Zealand by the way. I was born South African. I chose New Zealand because of its proximity to the East Asian economies who will last longer into the future and because New Zealand is a health distance away from any likely conflict zones.

I can't speak for Europe, but I know American declinism runs rampant every so often. In the 1970s, everyone thought we were too backward, too sclerotic and too crime infested to still be around. In the 1980s, everyone thought the U.S. would turn into a vassal of Japan. Neither came to pass.

You may very well be right. But only time will tell if you are. For my money, I think the U.S. will be just fine until at least 2050.