(01-11-2026, 05:35 PM)Creaky Wrote: Can’t point me in the direction where debt is a good thing could you please. I don’t know why a trade deficit is automatically a bad thing.
Sure responsible debt is ok, I get that but, is the US debt a responsible debt?
Especially to your enemies
While the USA's trade deficit may have improved, that improvement was purchased, essentially, on debt.
Banks and other lenders profit from the debt of their customers. This has worsened significantly as the $US is no longer tied to a fixed standard in reserve, so they can generate debt on debt, recursively, as much as they can get away with (and sometimes more, as the sub-prime mortgage crisis showed). They love debt - it is their bread and butter. Far more profitable than mere savings.
During the first Trump administration, there was no real effort to deal with rising national and private debt in any way (like Obama did with quantitative easing and the Fed did by raising interest rates). Consequently, debt continued to rise with accelerating rapidity. And despite Trump's claims that the economic figures were good (they were fairly average), bankruptcies of long established businesses skyrocketed under good 'ol 45.
... and then came COVID, during which bankruptcies reduced (probably because they were funded by government handouts of public money, instead of needing to be profitable).
You see, Trump dealt with the pandemic by handing out public money. To the people, to businesses, to drug companies, and even to government special emergency projects, who were authorised and funded to hand out public money (as well as taking a fair slice of 'their' cake in the process). Well, it was an emergency! - and he found out that he could do it with just an Executive Order, and bypass all that annoying Congressional bookkeeping - and they let him do it.
Although Biden reduced the slope of the rise of debt, he was hampered by the fact that the economy he inherited was screwed. He had to re-stabilize things first, the process of which, of course, was not without pain for the average Joe (LOL), but by the end of his term, things were
starting to look like they were getting on track. It wasn't totally fixed.
Then, for some strange reason, the American people re-elected Trump, who was now a convicted felon - for fiscal fraud, as well.
And his 50% tariffs on general imports (which doesn't seem to have increased manufacturing, but did get retaliatory tariffs, like all the economists said they would) caused stock market instability that wiped further trillions from the economy - and that's just on the stock market! You ain't gettin' that back, bud. Oh, and the government shutdown, that cost too!
Taken along with him saying that he had secured 1,500% savings on medicine costs, doesn't give any confidence in the numbers he says, they clearly haven't been rigorously calculated and re-checked.
So now, today, the ratio of US debt to GDP is 118.78171%. That's unserviceable.
So, imagine a hypothetical where you, Mr USA, want to buy a $30,000 Tesla, on finance, but you are only earning $25,256.41
a year (that would be a debt to equity ratio of 118.78171%). Of course that isn't a living wage these days and would be totally consumed by living costs. So, you just couldn't afford the car.
That's the situation of the US economy right now. The country is broke.
Which explains the resource theft that Trump is doing and/or attempting, on several fronts, right now.
