Who Will Start Reducing Their Debt First - Uk Or Us?

[tatty]

Accepting that it may be necessary to suspend disbelief in contemplating the question I'd be interested in some views.

I've been offered a bet that the US will balance their budget and begin paying down their national debt first.

[Police]

Accepting that it may be necessary to suspend disbelief in contemplating the question I'd be interested in some views.

I've been offered a bet that the US will balance their budget and begin paying down their national debt first.

I wouldnt bet against it. The US are more than happy to toss their electorate aside.

Edited December 29, 2011 by Police

[Sour Mash]

Accepting that it may be necessary to suspend disbelief in contemplating the question I'd be interested in some views.

I've been offered a bet that the US will balance their budget and begin paying down their national debt first.

I doubt that balancing budgets and paying down debt figure in the plan for the elite running either country. Borrow until you can borrow no more, then default through printing or outright default depending on whatever is most expedient. Anyone lending US/UK money on anything longer than the near term can kiss it goodbye.

[pepactonius]

Federal spending is totally out of control these days, and there's no political will to cut expenses at all. I think the deficit will generally trend upwards year after year until there's a complete financial/currency collapse in the US. The states, who can't print money, are starting some austerity measures now, but how long will it be before the federal government comes to the rescue and starts bailing out bankrupt states or taking over underfunded state and local government worker pension plans?

What politician would vote to impose an austerity plan that would cause even a minor die-off among the elderly, the disabled, or disadvantaged minorities? Whenever some politician suggests shutting down Social Security, Medicare, or Medicaid, you see attack commercials on TV where the politicians proposing austerity want to "push grandma's wheelchair down the stairs" (or off a cliff) or force the elderly to survive on dog food. If you want to reduce or end food stamps, school lunch subsidies, unemployment compensation, or other welfare programs, you're guilty of racism or genocide ("worse than Hitler", according to one sound byte a few years ago).

In fact, there was even one ad (maybe radio?) where failure to extend the payroll tax holiday for Social Security was going to cause the death of some young child, because the family could no longer afford his diabetes medicine.

The only reasonable way forward in the US is to "kick the can down the road" until external forces (like the market, IMF, foreign governments, financial control board, etc.) demand austerity. They'll become the "bad guys" and the politicians can blame them for all the harsh austerity measures. The elected politicians can say they did the best they could for as long as they could.

[MarkG]

Indeed. Unless Ron Paul wins the election I can't see any chance of deficits being significantly reduced until reality forces it on them by ending the flow of money.

The left won't accept cuts that reduce welfare and the right won't accept cuts that reduce the military budget. America can't afford both of them and probably can't even afford one at current spending levels (e.g. eliminating the entire military budget still wouldn't eliminate the deficit).

[Olebrum]

Balancing the budget would spell disaster. The UK is not a prep school tuck shop.

Edited December 29, 2011 by Olebrum

[Guest unfunded_liability]

Who Will Start Reducing Their Debt First - Uk Or Us?

I was under the impression they've being this a while now through stealth devaluation aka QE.

[57percent]

They'll both monetise some of the debt and pretend that counts.

The journalists and the people are so thick, they'll probably get away with it.

Right now, it's hard to see how they'll ever pay back debt again, but they will. Eventually

[R K]

The bulk of US debt was incurred under Bush on military spend and tax cuts, supported by the burgeoning trade deficits with China.

So a pre-requisite will be either a voluntary or forced reversal of the US/China trade deficit coupled with getting the military budget under control.

This will happen if for not other reason that the alternative is to default anyway.

My money is on the US grasping the nettle first, and the UK piggy backing on US policy. i.e. towards China in particular.

Bush managed to blow it up in half a dozen years or so, so it's completely possible to reverse it.

[Bloo Loo]

It was only under Clinton when they were last paying it down and Major for us - so not exactly impossible where there is a will and a fair wind.

The American economy is so big, it only takes relatively small tweaks to make massive inroads into the numbers.

As others have pointed out, it is not whether there is an ability, but whether there is a will - particularly under democracies that have become used to spending far more than they pay in taxes.

balance the budget?....HA HA HA HA HA:

You didn't think US consumer confidence could be bought for free now did you?

• U.S. TREASURY SAYS DEBT LIMIT TO BE RAISED BY $1.2 TRILLION
• U.S. DEBT TO BE $100 BLN WITHIN LIMIT ON DEC. 30, TREASURY SAYS
• STEPS FOR INCREASING DEBT LIMIT UNDER 2011 BUDGET CONTROL ACT

And the piece de resistance that 100% debt to GDP brings:

• OBAMA ON DEC. 30 LIKELY TO ASK CONGRESS TO RAISE DEBT LIMIT

Just as we thought the circus was over if only for a few weeks. Also, this means that in a few days, the US debt ceiling will be raised from $15.194 trillion to $16.394 trillion. As a reminder, US GDP was just revised down to $15.176 trillion.

[Guest spp]

[mightytharg]

Accepting that it may be necessary to suspend disbelief in contemplating the question I'd be interested in some views.

I've been offered a bet that the US will balance their budget and begin paying down their national debt first.

I don't get it. If they balance their budget then, by definition, there's no money left to pay down the debt.

I don't see Britain ever doing either unless forced. The supposed right-wing government is increasing pay on the public sector troughers and adding hand-outs for the rich every year. Obama is trying to bring down the US, so if he succeeds they might get a balanced budget after the collapse.

[mightytharg]

The UK is not a prep school tuck shop.

Are you sure? Daily Mail link

[Bloo Loo]

I don't get it. If they balance their budget then, by definition, there's no money left to pay down the debt.

I don't see Britain ever doing either unless forced. The supposed right-wing government is increasing pay on the public sector troughers and adding hand-outs for the rich every year. Obama is trying to bring down the US, so if he succeeds they might get a balanced budget after the collapse.

repayment would be scheduled in....I mean, they know to the penny what is due and when.

[MarkG]

It was only under Clinton when they were last paying it down and Major for us - so not exactly impossible where there is a will and a fair wind.

The national debt increased every year that Clinton was president, and the only reason it increased so slowly was because the republicans in congress blocked most of Clinton's crazy schemes. The 'budget surplus' was just another scam.

I believe you'll find the last time the US national debt actually, really, went down was back in the 60s.

[tatty]

Perhaps I'll swerve his bet.

[quibble]

Accepting that it may be necessary to suspend disbelief in contemplating the question I'd be interested in some views.

I've been offered a bet that the US will balance their budget and begin paying down their national debt first.

Bonkers. Neither will [NOMINALLY] in our lifetimes. Is there an end date to this bet? (if so, can I get in on it, please?).

edit: I'm wondering if someone is pulling a fast one, and will win if neither does?

Edited December 29, 2011 by renewable