Marc Faber: All Western Governments Will Default

[JMapleton]

Comment at 1:40:
http://www.youtube.com/watch?v=pnR2OA3A7Cc&feature=player_embedded#!

If you do the math, this famous economist (Marc Faber) has a point. SS, Medicare, Government debt, this cannot be paid back without a severe reduction in benefits or the severe printing of money.

We have a population of citizens that are very anti-tax and very pro benefits. It will be nearly impossible to take away the promises of SS and Medicare we promised our citizens or raise their taxes. The average voter wants their cake and eat it too. It's going to impossible to fix this problem without a default forcing the US citizen to give up benefits.

Someone please explain to me how we can possible solve this. The math is very obvious, we have more debts than we can pay and we're living off our good credit, which may not always exist.

Faber takes it to an extreme and says all Western governments will default. Opinions?

 

[heyheybooboo]

Wasn't Marc Faber named after the college in Animal House ??

Over the next 75 years the cumulative GDP of the United States will total in excess of $2,750 trillion. Reasonable people can find the proper balance of revenues/expenditures at the Federal level to secure our future.

Whatever Faber is, he ain't an economist (my guess would be an attention whore with self-esteem issues).

Faber @ Work ?




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[boomerang]

It's not too late to turn things around IMO and I'm the eternal pessimist.

It's going to take a leader with the leadership skills, charisma, common sense and the ability to connect with the people to pull it off. Pathological liars aren't going to be able to fill that position. Unfortunately, I don't see that leader out there. If he or she exists, they'd better get cracking.

I think the majority out there are reasonable people that respond to common sense solutions. If that means cutting benefits and raising taxes, with sound reasoning, grounded in truth and common sense, they can be won over.

But realistically, the welfare state is too far along. We have close to a majority living off of government cheese. Politicians that are corrupt to their core. Politicians that seek power over what's best for the people. Great civilizations have fallen before. I predict ours will too. What's key is what will rise from the ashes. After the bloodshed.

The whole world is going to collapse from a financial perspective which may be a saving grace of sorts. Indigenous tribes will of course feel no affects, but a highly industrialized, high population country such as ours, highly dependant on technology to feed and sustain the masses will be turned upside down.

History will be made.

 

[sandorski]

meh, he's probably pushing Gold.

 

[heyheybooboo]

meh, he's probably pushing shorting Gold.

Fixed ?

The solution to SS is less than 2% of GDP, probably much less if our fearless leaders get serious about indexing benefits, raising the retirement age, and of course, do something other than raiding the trust funds to pay for Wars, Tax Cuts, et al ...




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[Tsavo]

Fixed ?

The solution to SS is less than 2% of GDP, probably much less if our fearless leaders get serious about indexing benefits, raising the retirement age, and of course, do something other than raiding the trust funds to pay for Wars, Tax Cuts, et al ...




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The luminaries in Washington will raise the retirement age to something like 112.

Just watch!

 

[Hacp]

See you're getting it wrong. People who get benefits want to raise taxes. People who are actually making stuff I.E. being productive want lower taxes and less benefits.

 

[bamacre]

Fixed ?

The solution to SS is less than 2% of GDP, probably much less if our fearless leaders get serious about indexing benefits, raising the retirement age, and of course, do something other than raiding the trust funds to pay for Wars, Tax Cuts, et al ...


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What about Medicare?

http://www.youtube.com/watch?v=D6Q14HOBThM

We needed to drastically cut the costs of health care, and it didn't get done.

 

[bamacre]

See you're getting it wrong. People who get benefits want to raise taxes. People who are actually making stuff I.E. being productive want lower taxes and less benefits.

But they aren't electing a government that does it. Republicans lowered taxes (for some) yet spent like drunken sailors.

 

[zsdersw]

See you're getting it wrong. People who get benefits want to raise taxes. People who are actually making stuff I.E. being productive want lower taxes and less benefits.

Nope.. it's not that black-and-white.

There's a large portion of Americans (probably the majority) who fall somewhere in between; they want benefits, but don't want to pay for them.

 

[StageLeft]

Over the next 75 years the cumulative GDP of the United States will total in excess of $2,750 trillion. Reasonable people can find the proper balance of revenues/expenditures at the Federal level to secure our future.

Reasonable people, where do we find these mythical creatures? The US is almost certainly going to go through the pains Greece and others will. I don't know what the end point is but there will be much strife on the way there.

The solution to SS is less than 2% of GDP, probably much less if our fearless leaders get serious about indexing benefits, raising the retirement age, and of course, do something other than raiding the trust funds to pay for Wars, Tax Cuts, et al ...

Gov is currently spending something like 40-50% more than it brings in and hasn't been balanced in years, this is a big problem.

 

[JS80]

Why default when you can monetize!

 

[her209]

The government death panels will take of the problem.

 

[nick1985]

But they aren't electing a government that does it. Republicans lowered taxes (for some) yet spent like drunken sailors.

And Democrats are raising taxes and spending like even more drunk sailors?

 

[zsdersw]

And Democrats are raising taxes and spending like even more drunk sailors?

While true, that wasn't the point of his post. He was responding to Hacp's assertion that some people want lower taxes and less benefits by saying that those people aren't electing the people who get it done.

 

[Anarchist420]

If they were to:

1. cut SS benefits by 1/2;
2. reduce medicare by 10%, by cutting out waste ;
3. cut all other mandatory spending by 1/2 (e.g., unemployment);
4. reduce the military budget to 85B by closing all of the bases not on U.S. soil as well as pulling out of Iraq and Afghanistan;
5. plus reduced other discretionary spending by 67-75% (dept of education, energy, health and human services, state, treasury, doj, housing and urban development);
6. cut individual income tax by 20% across the board;
7. cut corporate tax by 20%;
8. sell 10% of Federal assets,
then they could pay off about 1/2 of the national debt in 8 years.

It's as simple as that.

 

[CycloWizard]

Where there's a will, there's a way. Unfortunately, there is no will to make it happen, so there's no way it will happen. At least not until we've circled the drain for a while longer and are closer to the event horizon.

 

[shadow9d9]

And Democrats are raising taxes and spending like even more drunk sailors?

Well, when you are handed the shit that was 2008, you can't blame them for passing a stimulus similar to what Bush passed in a fine economy.

As for healthcare, 1 trillion over 10 years to actually help people vs 1 trillion for 2 endless occupations that continue to kill our people and innocent civilians...

About equal, except Republicans campaign on smaller government while cutting taxes only for the rich, spending like crazy, and expanding government like crazy. At least the democrats are willing to pay for what they spend by "raising taxes." Kinda better to pay for your spending, no?

 

[shadow9d9]

If they were to:

1. cut SS benefits by 1/2;
2. reduce medicare by 10%, by cutting out waste ;
3. cut all other mandatory spending by 1/2 (e.g., unemployment);
4. reduce the military budget to 85B by closing all of the bases not on U.S. soil as well as pulling out of Iraq and Afghanistan;
5. plus reduced other discretionary spending by 67-75% (dept of education, energy, health and human services, state, treasury, doj, housing and urban development);
6. cut individual income tax by 20% across the board;
7. cut corporate tax by 20%;
8. sell 10% of Federal assets,
then they could pay off about 1/2 of the national debt in 8 years.

It's as simple as that.

We already have the lowest actual corporate tax rate of the first world countries... as it is , the top 100 money makers pay less than 2% in taxes, and 60 billion in profit is offshored and paid 0% on...

 

[Trianon]

Wasn't Marc Faber named after the college in Animal House ??

Over the next 75 years the cumulative GDP of the United States will total in excess of $2,750 trillion. Reasonable people can find the proper balance of revenues/expenditures at the Federal level to secure our future.

Whatever Faber is, he ain't an economist (my guess would be an attention whore with self-esteem issues).

Faber @ Work ?




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He is not alone in his estimates, similar views held by Nassim Taleb, James Grant, and many more. I consider him an intellegent and logically thinking professional. on the contrary, the argument you made above defies logic.

 

[JMapleton]

See you're getting it wrong. People who get benefits want to raise taxes. People who are actually making stuff I.E. being productive want lower taxes and less benefits.

If you believe that, you're naive. Everyone wants lower taxes, Republican or Democrat, and particularly older people want their benefits preserved or increase.

It's the older population that will hurt us the most and that population learn towards the lower tax voter base as well. Americans want, but cannot have, both.

Nope.. it's not that black-and-white.

There's a large portion of Americans (probably the majority) who fall somewhere in between; they want benefits, but don't want to pay for them.

Exactly.

 

[JMapleton]

If they were to:

1. cut SS benefits by 1/2;
2. reduce medicare by 10%, by cutting out waste ;
3. cut all other mandatory spending by 1/2 (e.g., unemployment);
4. reduce the military budget to 85B by closing all of the bases not on U.S. soil as well as pulling out of Iraq and Afghanistan;
5. plus reduced other discretionary spending by 67-75% (dept of education, energy, health and human services, state, treasury, doj, housing and urban development);
6. cut individual income tax by 20% across the board;
7. cut corporate tax by 20%;
8. sell 10% of Federal assets,
then they could pay off about 1/2 of the national debt in 8 years.

It's as simple as that.

If you read my post, you'd know that my point was, the voters will not do any of those things.

The reason we cannot fix this problem is the American voter. They want both more benefits and lower taxes. This problem can in theory be fixed, but I am certain the US voter will not vote anyone in office willing to enact such a plan. The problem is not lack of solutions, but lack of will on the voter.

 

[JMapleton]

It's going to take a leader with the leadership skills, charisma, common sense and the ability to connect with the people to pull it off. Pathological liars aren't going to be able to fill that position. Unfortunately, I don't see that leader out there. If he or she exists, they'd better get cracking.

This is one annoyance I have with most people when they discuss politics.

They blame the politicians. It's the citizens that voted these individuals in office and it's the citizens you should blame. If such a person as you describe does come along, they will not vote for them. "Oh blame Washington." No. Blame Main Street. They voted Washington in office.

Most people don't have a clue as to how big of a mess the US Government is in financially and they do not care. They just want as much as they want get and they want it now, thinking the US government is just a bottomless pit of money and it can "never go broke."

 

[IceBergSLiM]

I think my generation is pretty much accepting of the fact we won't be getting a dime from the SS system.

 

[Thump553]

Marc Faber aka Doctor Doom almost certainly has a new book to peddle. I don't deny there is a long term problem, but he is definately Johnny One Note.