The value of the dollar - Page 2

Shabbaman · 15-01-2008, 13:47

Quote:

quote:Originally posted by socralynnek

But I guess there would be a point when countries like China or Russia switch their savings from US-Dollar to Euro, which means the USA probably should take care of their currency, otherwise they might be losing economical power.

They won't, because they have all these US bonds that will get even more worthless if the USD devalues even further. Besides that, the US imports a lot of their products, so it's in their best interest to keep the dollar up by buying more US bonds.

Some NY banker hotshot had the following example (note that this is not my version of the truth in any way):

7 asians and 1 american are stranded on an island. Each are assigned different tasks, like gathering food, fishing, wood et cetera. The american is assigned the task of eating. At the end of each day, the american eats a copious meal, and leaves just enough for the others so that they can perform their tasks again the following day.
So, the americans say (his words, not mine): see, Asia needs us to keep their economy going!

Nice story. The overall message of the show is that there might be some insecurity about how the downfall will affect Europe, but the general thought is that everyone will be better off besides the US. Somehow it makes sense, it's their debt not ours.

Ynnek: sure, there might be higher debts (Zimbabwe), but not from economies of this size. The Euro Zone has to keep it's deficit below 40%.

grahamiam · 15-01-2008, 15:31

Here's an interesting graph showing the historical presidential trends of the debt of the US Goverment as a percentage of GDP:

Normally, it can be stated that the debt increases during a recession and decreases during recovery, regardless of tax policy. Therefore, don't expect a magic bullet from either party.

However, as seen from the chart, recent Republican presidents have increased the debt substantially. With only 1 recent Democratic president, it's hard to predict a trend for that party as both Clinton and Gingrich (Rep House Member) were instrumental in getting the budget under control in the '90's.

Robboo · 16-01-2008, 01:01

I am shocked GWBUSH isn't higher...I guess the GDP increased in proportion to the debt. OF course any drop in GDP while we increase the debt will result in a big jump.

akots · 16-01-2008, 04:36

The US is printing lots and lots of cash (which counts towards GDP

) and that is the reason while it is not that high if plotted as a fraction.

Shabbaman · 16-01-2008, 15:28

Well, it's getting more media attention now. One of our serious newspapers has the following headline today: "US banks begging Asia for help". Yesterday Citigroup published their numbers, that showed a 10 billion deficit over the last year. That hole has to be filled, and apparently the bank is selling bonds with 7 to 11% interest...

And Rudy Giuliani presents his tax plan:

Quote:

quote:In his aggressive tax-cut program announced last week, Giuliani called for a reduction of the U.S. corporate tax from 35 to 25 percent, elimination of the estate tax and a reduction of capital gains tax from 15 to 10 percent.

He is promoting a one-page income tax form that culls tax brackets to just three -- 10, 15 and 30 percent -- which he said will save a typical, middle-income family of four with $80,000 yearly income about $3,000 annually.

Nice average income btw, respect.

Matrix · 16-01-2008, 16:19

That must be the arithmetical average, not the standard income.

Tubby Rower · 16-01-2008, 16:43

also depends on location. $70k here is comfortable living but that same salary in NYC would have you living on the streets.

barbu1977 · 16-01-2008, 17:42

That is a family income, not per person.

Robboo · 17-01-2008, 03:58

80K where I used to live puts you in the top 1% for that region...
Here not so much....

grahamiam · 17-01-2008, 04:17

I'd love to see how he came up with $3000.

A typical middle income family of 4 making 80K probably has a mortgage on a house, contributes to a 401k, has health insurance payments deducted from the paycheck, and already has a $2000 credit for the 2 kids. I can see that thier adjusted income after all that would be easily under $61k, which puts them into the 15% tax bracket right now.

16-01-2008, 04:36	#14
akots Nebuchadnezzar II Join Date: Apr 2004 Location: Glover Park Posts: 4,459	The US is printing lots and lots of cash (which counts towards GDP ) and that is the reason while it is not that high if plotted as a fraction. __________________ Cujusvis hominis est errare; nullius, nisi insipientis in errore perseverare Ciceron (Marcus Tullius)

16-01-2008, 16:19	#16
Matrix Administrator Join Date: Mar 2003 Location: Tampere, Finland Posts: 4,828	That must be the arithmetical average, not the standard income. __________________

16-01-2008, 16:43	#17
Tubby Rower Moderator Join Date: Aug 2005 Location: Middle of VA. Posts: 3,896	also depends on location. $70k here is comfortable living but that same salary in NYC would have you living on the streets. __________________ 3/2006 : Now, surely that must be because some fists might have caused internal damage to certain delicate parts?

16-01-2008, 17:42	#18
barbu1977 Emperor Join Date: Apr 2004 Location: Blame Canada!. Posts: 3,501	That is a family income, not per person. __________________ Postcount = Postcount + 1; //Postcount++

15-01-2008, 15:31	#12
grahamiam Emperor Join Date: May 2004 Location: USA, East Coast. Posts: 2,673	Here's an interesting graph showing the historical presidential trends of the debt of the US Goverment as a percentage of GDP: Normally, it can be stated that the debt increases during a recession and decreases during recovery, regardless of tax policy. Therefore, don't expect a magic bullet from either party. However, as seen from the chart, recent Republican presidents have increased the debt substantially. With only 1 recent Democratic president, it's hard to predict a trend for that party as both Clinton and Gingrich (Rep House Member) were instrumental in getting the budget under control in the '90's.

16-01-2008, 01:01	#13
Robboo King Join Date: May 2006 Location: Cajun Country. Posts: 2,002	I am shocked GWBUSH isn't higher...I guess the GDP increased in proportion to the debt. OF course any drop in GDP while we increase the debt will result in a big jump.

17-01-2008, 03:58	#19
Robboo King Join Date: May 2006 Location: Cajun Country. Posts: 2,002	80K where I used to live puts you in the top 1% for that region... Here not so much....

17-01-2008, 04:17	#20
grahamiam Emperor Join Date: May 2004 Location: USA, East Coast. Posts: 2,673	I'd love to see how he came up with $3000. A typical middle income family of 4 making 80K probably has a mortgage on a house, contributes to a 401k, has health insurance payments deducted from the paycheck, and already has a $2000 credit for the 2 kids. I can see that thier adjusted income after all that would be easily under $61k, which puts them into the 15% tax bracket right now.