Debt/GDP

Can anyone explain why The Economist and Uncle Ben quote in the mid-70% range yet BBRG is showing in the 90% range? Why are there discrepancies? Is it projected vs. current?

Not sure, but one might be using potential GDP vs actual GDP. The other possibility I can think of is how they are accounting for the Social Security Trust Fund, whether that is accounted for as an asset or a liability.

If memory serves, I believe the 70% number is the amount of debt held by the public. It’s goes up to 100% once you account for the debt held by the government. Which, unless they plan to forgive themselves the debt repayments, you have to count. So go with 100%.

Off topic, but I thought was a good summary of fed holdings. http://blogs.wsj.com/economics/2011/08/09/a-look-inside-the-feds-balance-sheet-12/

I think Millenials like myself will need to push the babyboomers onto the ice flow if America is going to survive. I told my parents as much.

Most likely, 90% is the debt held by the public and non-Fed government entities (everyone but the Fed). The Fed holds about $1.4 trilion of the total $14 trillion. The 70% figure might refer to privately held debt, that is, debt held by everyone except government programs (Medicare, Social Security, etc.). Otherwise, it might refer to domestically held debt. Here is a good summary of the debt decomposition: http://static.seekingalpha.com/uploads/2011/7/26/saupload_11_07_26_who_holds_the_debt_small.png

I think the 70% refers to the current debt/gdp ratio and the 90% refers to the amount once all borrowing authorized under the recently increased debt ceiling is utilized. I can’t confirm though.

Sweep the Leg Wrote: ------------------------------------------------------- > If memory serves, I believe the60% number is the > amount of debt held by the public. It’s goes up > to 100% once you account for the debt held by the > government. Which, unless they plan to forgive > themselves the debt repayments, you have to count. > So go with 100%. You can look at it several ways. As of 2010 US net debt held by the public is about 70% while gross debt including debt owed to itself is near 90%. The CIA Factbook breaks it down correctly I believe. https://www.cia.gov/library/publications/the-world-factbook/geos/us.html Where people are off-base is when they say: “the US has spent all my social security money!” and at the same time “the US has 90% debt/GDP!”. Only one of these statements can be true in the same context. If the US has 90% debt/GDP then they have set aside cash specifically for Social Security. If they have spent all of the Social Security money then it has 70% debt/GDP. You can’t have it both ways. That’s a simplified explanation but accurate I believe.

Yeah, that’s what I was getting at with the SS Fund being an asset or a liability.

ChickenTikka Wrote: ------------------------------------------------------- > I think Millenials like myself will need to push > the babyboomers onto the ice flow if America is > going to survive. I told my parents as much. I have a better idea…send all the boomers to developing countries in Asia, South America and Africa with lower cost of labor, healthcare etc. That way they can retire in comfort while generating employment for millions of poor people in developing nations while we get to remove a huge liability of our books.

I thought the same thing. This will happen only though if you let market forces take care of it. As long as the government is paying for their healthcare and treatment why would they leave?

You just gave him a business idea.

ChickenTikka Wrote: ------------------------------------------------------- > I think Millenials like myself will need to push > the babyboomers onto the ice flow if America is > going to survive. I told my parents as much. I think there is a significant probability of a intergenerational conflict occurring in the next 20 years.

ChickenTikka Wrote: ------------------------------------------------------- > I thought the same thing. This will happen only > though if you let market forces take care of it. > As long as the government is paying for their > healthcare and treatment why would they leave? Push for legislation to include foreign healthcare/ assisted living entities among the medicare/ medicaid providers. I don’t know if you can currently be reimbursed if you are a provider based overseas.

marcus phoenix Wrote: ------------------------------------------------------- > > I have a better idea…send all the boomers to > developing countries in Asia, South America and > Africa with lower cost of labor, healthcare etc. > That way they can retire in comfort while > generating employment for millions of poor people > in developing nations while we get to remove a > huge liability of our books. You have to consider the unintended consequences too. Boomers currently control over 80% of personal financial assets and more than 50% of discretionary spending power. They are responsible for more than half of all consumer spending, buy 77% of all prescription drugs, 61% of OTC medication, and 80% of all leisure travel. So, while healthcare costs would go down, their loss would be a huge hit to the US economy. Of course we could always just go Logan’s Run on them and take their money for ourselves.

I’m not sure if that will work. First of all, the amount of fraud would be absurd. The only way for it really to happen is to basically cut all benefits. Then Americans will find that they can easily afford medical treatment if they go abroad and this stupid debate will go away. If they want to pay the premium to be local than by all means they will. It will be a simple NPV with an inital outlay for a plane ticket. I actually think this is a great solution. But sadly, I’m not God and I know cranky old people and libs will definitely not like being told they have to get a passport and go to a place where nobody speaks English. I think, we should allow temporary labor to move to America, much the way Dubai does, and take care of the elderly and the needy that way. We could easily fly over a couple million Thai and Phillipino nurses/physicians assistants to take care of the elderly. We might want to make sure though that they are over the age of 40 to prevent them from making anchor babies. Employment would be temporary with absolutely no rights or path to citizenship or benefits. We could pay them US minimum wage and they would be very happy with that. Sure, it doesn’t sound very American, but it would save a ton of cash. When times are tough, you have to do some “not so nice” things.

higgmond Wrote: ------------------------------------------------------- > marcus phoenix Wrote: > -------------------------------------------------- > ----- > > > > I have a better idea…send all the boomers to > > developing countries in Asia, South America and > > Africa with lower cost of labor, healthcare etc. > > > That way they can retire in comfort while > > generating employment for millions of poor > people > > in developing nations while we get to remove a > > huge liability of our books. > > > You have to consider the unintended consequences > too. Boomers currently control over 80% of > personal financial assets and more than 50% of > discretionary spending power. They are responsible > for more than half of all consumer spending, buy > 77% of all prescription drugs, 61% of OTC > medication, and 80% of all leisure travel. > > So, while healthcare costs would go down, their > loss would be a huge hit to the US economy. Of > course we could always just go Logan’s Run on them > and take their money for ourselves. Your stats fail to consider the disproportionate spread of wealth among the baby boomers. The wealthy boomers who don’t need to rely on SS/ Medicare do not have a reason to migrate. The ones who are entirely reliant on these services do. So while we may still take out a chunk of the individual spending, we will also take out an equilvalent amount or more of liabilities.

marcus phoenix Wrote: ------------------------------------------------------- > higgmond Wrote: > -------------------------------------------------- > ----- > > marcus phoenix Wrote: > > > -------------------------------------------------- > > > ----- > > > > > > I have a better idea…send all the boomers > to > > > developing countries in Asia, South America > and > > > Africa with lower cost of labor, healthcare > etc. > > > > > That way they can retire in comfort while > > > generating employment for millions of poor > > people > > > in developing nations while we get to remove > a > > > huge liability of our books. > > > > > > You have to consider the unintended > consequences > > too. Boomers currently control over 80% of > > personal financial assets and more than 50% of > > discretionary spending power. They are > responsible > > for more than half of all consumer spending, > buy > > 77% of all prescription drugs, 61% of OTC > > medication, and 80% of all leisure travel. > > > > So, while healthcare costs would go down, their > > loss would be a huge hit to the US economy. Of > > course we could always just go Logan’s Run on > them > > and take their money for ourselves. > > > Your stats fail to consider the disproportionate > spread of wealth among the baby boomers. The > wealthy boomers who don’t need to rely on SS/ > Medicare do not have a reason to migrate. The > ones who are entirely reliant on these services > do. So while we may still take out a chunk of the > individual spending, we will also take out an > equilvalent amount or more of liabilities. This is exactly correct. An example, my brother is a cancer doctor and treats anyone who comes into his clinic. 30 percent of those people cannot pay and do not pay. We take that 30 percent of people and create an outsourced public option for them, either by sending them overseas or through a state run facility staffed by union free workers from overseas. They get free healthcare and as the saying goes beggars, can’t be choosers. Those with money get the private option if they want it. They continue to spend, spend, spend. Everyone gets healthcare. The only loser would be the insurance companies and they can go f’ck themselves.

marcus phoenix Wrote: ------------------------------------------------------- > Your stats fail to consider the disproportionate > spread of wealth among the baby boomers. The > wealthy boomers who don’t need to rely on SS/ > Medicare do not have a reason to migrate. The > ones who are entirely reliant on these services > do. So while we may still take out a chunk of the > individual spending, we will also take out an > equilvalent amount or more of liabilities. So the US population will consist of a bunch of rich old people who will pay whatever it takes for their healthcare, a bunch of unemployed former healthcare workers, and 200+ million other folks who are stuck going to the 3 doctors who still accept medical insurance instead of catering to the rich old people.

higgmond Wrote: ------------------------------------------------------- > marcus phoenix Wrote: > -------------------------------------------------- > ----- > > Your stats fail to consider the > disproportionate > > spread of wealth among the baby boomers. The > > wealthy boomers who don’t need to rely on SS/ > > Medicare do not have a reason to migrate. The > > ones who are entirely reliant on these services > > do. So while we may still take out a chunk of > the > > individual spending, we will also take out an > > equilvalent amount or more of liabilities. > > > So the US population will consist of a bunch of > rich old people who will pay whatever it takes for > their healthcare, a bunch of unemployed former > healthcare workers, and 200+ million other folks > who are stuck going to the 3 doctors who still > accept medical insurance instead of catering to > the rich old people. Not at all, I was advocating for the use of foreign healthcare entities in conjunction with local providers, meant primarily for those who cannot afford the more expensive treatments locally or do not have sufficient health coverage. Add to that foreign (in developing countries) assisted living centers/ retirement communities which will give the elderly more discretionary income since they wont be spending all their ss/ retirement money on prescription medication and food. I really dont see any other viable alternative to bring down the high healthcare costs, its better than making drastic cuts, forcing the doctors to abandon patients and leaving these people on the streets to die. Getting rid of expensive lawsuits is one, but I wonder how far that will go. While the older doctors are willing to treat patients for free, I wonder how willing some of the younger doctors of today will be to do the same, despite the hippocratic oath.