Dhondy Posted August 8, 2011 Posted August 8, 2011 Here's a quiz question for the economics/finance guys among you. when was the last time the US budget was in the black? No googling. This will have implications. Don't have to read the press. Downgrade- higher interest rates-higher mortgages-higher borrowing costs for the government-higher deficits-more cutbacks-eventually higher taxes despite the best efforts of the Tea Party. Sounds familiar here in Europe. Who was it that said- "Most people on earth can't afford to live like the Americans. Problem is, the Americans can't either." How apt.
Ram Posted August 8, 2011 Posted August 8, 2011 Answer to the question; When they were following the Gold standard?
Guest Gunner Posted August 8, 2011 Posted August 8, 2011 1988. I think the Reagan Presidency was the last one.
Ram Posted August 8, 2011 Posted August 8, 2011 1988. I think the Reagan Presidency was the last one. No way.. they have been in debt for many decades now. Its just the debt had ballooned to unimaginable proportions in the last 2 decades.
anotherhawkeye Posted August 8, 2011 Posted August 8, 2011 2000? When Clinton was the president, they used to have surplus..then bush happened.
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 Keep trying, folks. You guys are not in finance, I hope?:--D Anotherhawkeye, well done. Move on to paragraph two.
Guest Gunner Posted August 8, 2011 Posted August 8, 2011 No way.. they have been in debt for many decades now. Its just the debt had ballooned to unimaginable proportions in the last 2 decades. I actually googled it out of curiosity now. It was 1957 (Dwight Eisenhower). That is truly incredible.
Ram Posted August 8, 2011 Posted August 8, 2011 I know the US had a MASSIVE spending binge post world War 2 and there was the depression in the late 30s. How about 1920? (+/-) 10 years?
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 Sriram, Anotherhawkeye got the answer. Clinton it was, in the later half of his presidency. Then came Bush Jr, tax cuts and two wars, Gunner...Reagan, a fierce tax cutter, followed Carter, a tax hiker and ran up a massive deficit. Dow down 5.5%. Hold on tight folks. Don't sell. Time to buy.
Ram Posted August 8, 2011 Posted August 8, 2011 ^ Doc, I am sure you know this already, but there's a difference between having a budget surplus versus being not in debt. You can have a $10 bn budget surplus for this year and yet be in $10 tn dollar debt.
punjabi_khota Posted August 8, 2011 Posted August 8, 2011 Ummmerica will be back folks. Please excuse the appearance during renovation.
Guest Gunner Posted August 8, 2011 Posted August 8, 2011 Sriram, Anotherhawkeye got the answer. Clinton it was, in the later half of his presidency. Then came Bush Jr, tax cuts and two wars, Gunner...Reagan, a fierce tax cutter, followed Carter, a tax hiker and ran up a massive deficit. Dow down 5.5%. Hold on tight folks. Don't sell. Time to buy. http://www.geldpress.com/2008/07/us-budget-reporting-deception/ Interestingly this guy says 1957. He claims that the Clinton surpluses were hogwash. The most obvious and interesting trading call at the moment is a short CHF, however I would like to warn you that you need courage for this. I called the Long dollar in early 2008 and long gold in mid 2009. :--D
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 ^ Doc, I am sure you know this already, but there's a difference between having a budget surplus versus being not in debt. You can have a $10 bn budget surplus for this year and yet be in $10 tn dollar debt. Yup, the two are completely different. Clinton was the last guy to run a budget surplus.
Ram Posted August 8, 2011 Posted August 8, 2011 Check this out Doc; These guys had a half a trillion dollar deficit (adjusted to today's inflation obviously) back in the 40s.
yoda Posted August 8, 2011 Posted August 8, 2011 S&P made a 2 trillion dollar mistake in their calculations, yet announced that it made no difference in their final analysis to even warrant an extra day or two to reevaluate. The damage is done however and all of us have to pay the price for this irresponsible downgrade by the S&P. Look at Moody's analysis for a more accurate description of what the situation is: Moody's Investors Service, which on August 2 confirmed the U.S. Aaa rating with a negative outlook, explained it did so because it is not "necessarily impossible" that U.S. lawmakers come up with additional deficit-reduction measures next year. Failure to do so by the end of 2013 would probably lead to a downgrade of U.S. ratings, Steven Hess, Moody's top analyst for the United States, told Reuters in an interview. A downgrade could also happen before that if the current plan to reduce the budget deficit turns out not to be "credible," he said. Doc, contrary to what you may be implying in your OP, the Tea Party is one of the biggest reasons for this S&P downgrade. With them refusing to let moderate Republicans to work with Obama, the 4 trillion dollar deficit reduction plan which is what the S&P wanted, was never going to happen. The way to make money in this market in the near term is to find pullbacks to short, if you know what that means.
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 The worrying thing for those of us in the west, Sriram is that, we have been flattering ourselves that we are better off than we actually are. How does it feel to wake up one week and realise that your money, your house, your pension is worth a lot less than you thought they were worth? More worryingly for the middle aged among us, will our children be poorer than we were? It's a terrifying thought.
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 Yoda, yes I am well aware of the brinkmanship engaged in by the Tea Party. My reference was to their "best efforts" in minimising tax rises as opposed to cutbacks. Next time, they won't be so lucky.
Ram Posted August 8, 2011 Posted August 8, 2011 The worrying thing for those of us in the west' date=' Sriram is that, we have been flattering ourselves that we are better off than we actually are. How does it feel to wake up one week and realise that your money, your house, your pension is worth a lot less than you thought they were worth? More worryingly for the middle aged among us, will our children be poorer than we were? It's a terrifying thought.[/quote'] I hear ya Doc, but if this makes you feel any better, you can draw solace from the fact that you (or your family) at least have assets in India. If all hell breaks loose in the West and the dollar/pound becomes worthless, you can at least move to another country and not have to drag along wheel-barrows worth of money to buy bread and milk. :--D. Can you imagine the plight of the folks who have ALL their assets in one country? They must be petrified by now. Having said that, I think this is just another temporary phase in the economic cycle. The brand that is called the United States is still very compelling. I sort of like to compare the economies to corporations. Microsoft may have gone through some tough quarters in the last few years from a profit perspective and their share may have slid down considerably, but as a brand, they still have HUGE value, which will ensure their long-term survival. I think its going to be the same for these Western Economies as well
Dhondy Posted August 8, 2011 Author Posted August 8, 2011 ^Oh, business is doing very well. In fact, they are flush with cash both in US & here in UK. It's the governments who are bankrupt, and as a result so are the large public sectors, including NHS, Medicare, etc. And India's no refuge, believe me. There isn't one.
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