UnThreaded | Threaded | Whole Thread (16) | Ignore Thread Prev | Next
Author: B0BERT Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 465397  
Subject: National Debt Date: 12/8/2012 9:34 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 6
What are some opinions out there as to how high the national debt can go, assuming no major improvement in GDP growth rates, without having a crisis?

Let's assume 2.5% GDP growth for ten more years. I don't see how this would be strong enough to stop us from an eventual catastrophe. I don't know when this catastrophe might happen, but I just don't see how we avoid it.

In my opinion, the two major potential drivers for GDP would be a return to 1.5 million housing starts annually and a huge push into natural gas as a transportation fuel. If these were to both happen, I could see GDP growth rates well above 2.5%. Those seem like the only major things that could support GDP enough to support a $20 Trillion or $25 Trillion debt. I can easily see housing returning to normal, I am unsure about the change in transportation fuels however.

I suppose the alternative would be material cuts to Social Security, Medicare, Medicaid, and other entitlements. My mother recently signed up for Social Security. She has already drawn more dollars in half a year than I have paid into Social Security in five years of working. After only two years of being on Social Security, she will have received more dollars than I have paid into Social Security in my entire life, including my employer match.


I don't expect any major changes to her payments, as politicians don't want to go there, and statistics say that 10,000 baby boomers per day retire.

So, back to the original question. How far can we go without a crisis?
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (16) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement