Elon says we are headed for bankruptcy

10,394 Views | 125 Replies | Last: 2 mo ago by BusterAg
Logos Stick
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7:47a, 7/26/24
Is he correct?

Almost 80% of tax revenue last month was spent on debt. LOL

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P.U.T.U
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7:50a, 7/26/24
AG
Doesn't take someone of Musk's IQ to figure this one out
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Kyle Field Shade Chaser
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In reply to Logos Stick • 7:51a, 7/26/24
AG
So what happens when America goes bankrupt?


They just get told bad boy, and keep running just like normal the same as all the big business that go bankrupt and stay in business?
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ttu_85
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In reply to P.U.T.U • 7:52a, 7/26/24
P.U.T.U said:
Doesn't take someone of Musk's IQ to figure this one out
Yep. We have known for a long time but that can got kicked down the road so many times that its as flat is a pancake. That issue is the elephant in the room.
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jpb1999
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In reply to Kyle Field Shade Chaser • 7:53a, 7/26/24
AG
My question as well. What do normal people do with their money to help hedge this?
_________________________________________

Spane Bohem


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Martin Q. Blank
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7:55a, 7/26/24
I'm not even sure what it means for a country to go bankrupt since they can just print more money to service the debt. Is there a worldwide bankruptcy court?
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HollywoodBQ
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In reply to Logos Stick • 7:55a, 7/26/24
AG
I get FDR for Social Security and Nixon for the Gold Standard.

But shouldn't LBJ get the blame for Welfare?

Bush 43 for endless war in Iraq, Afghanistan and of course the subprime bailout during the GFC.

Obama for Healthcare.

And in this election year, Trump for shutting down the world and printing money during Covid?
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Ag87H2O
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In reply to P.U.T.U • 7:56a, 7/26/24
AG
P.U.T.U said:
Doesn't take someone of Musk's IQ to figure this one out
It's too late anyway, but it might take someone like him saying it for people to start paying attention and at least getting it back out in the discussion.
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HollywoodBQ
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In reply to jpb1999 • 7:57a, 7/26/24
AG
jpb1999 said:
My question as well. What do normal people do with their money to help hedge this?
Listen to Ben Shapiro's and Steve Bannon's sponsors and buy Gold.
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Phatbob
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In reply to HollywoodBQ • 7:58a, 7/26/24
AG
HollywoodBQ said:
I get FDR for Social Security and Nixon for the Gold Standard.

But shouldn't LBJ get the blame for Welfare?

Bush 43 for endless war in Iraq, Afghanistan and of course the subprime bailout during the GFC.

Obama for Healthcare.

And in this election year, Trump for shutting down the world and printing money during Covid?
Anyone who grew the federal government gets the blame. Anyone who votes for them gets the blame.
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Mostly Foggy Recollection
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7:59a, 7/26/24
Wilson was the OG that got this started. He created the Fed and income tax. Two of the worst ideas ever.

That was the start of our downfall. FDR, LBJ and Nixon accelerated it with idiotic administrative expansion and **** fiscal moves. Since then, it really hasn't mattered. We were going to fail as a nation, it was just how much time do we have.

Wilson and FDR were communist snatches.
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BQ78
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In reply to Phatbob • 8:01a, 7/26/24
AG
Print money and inflate it away. You think gas prices are high now, wait for California prices in Oklahoma and Texas before the tax is applied
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Logos Stick
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In reply to HollywoodBQ • 8:02a, 7/26/24
FDR ended the gold standard for domestic transactions.

"84 years ago, on April 20, 1933, the United States abandoned the gold standard, delinking the value of the dollar to gold. The person responsible for that was President Franklin D. Roosevelt, who had urged Congress to take up reform of the currency system in January that year."
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TexAgs91
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In reply to Martin Q. Blank • 8:04a, 7/26/24
AG
Martin Q. Blank said:
I'm not even sure what it means for a country to go bankrupt since they can just print more money to service the debt. Is there a worldwide bankruptcy court?


Keep in mind, we no longer have the petrodollar. So here's what it could mean...

[ol]
  • Hyperinflation: Printing more money without backing could lead to hyperinflation, making the dollar worthless.
  • Loss of Reserve Currency Status: The US dollar losing its status as the world's reserve currency would diminish global demand for it, further devaluing the dollar.
  • Debt Default: The US could default on its debt, causing massive financial turmoil globally since many countries and institutions hold US debt.
  • Economic Collapse: Domestic economic collapse could occur, with high unemployment, business failures, and severe recessions.
  • Social Unrest: Economic hardship could lead to significant social unrest and instability within the country.
  • Geopolitical Shifts: Global power dynamics could shift, with other countries (like China) stepping in to fill the void left by a weakened US.
    • [/ol]
    Printing money might offer a short-term fix, but without the petrodollar system, the long-term consequences could be severe and far-reaching.
    "Freedom is never more than one election away from extinction"
    Fight! Fight! Fight!
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    ttu_85
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    In reply to Martin Q. Blank • 8:04a, 7/26/24
    Martin Q. Blank said:
    I'm not even sure what it means for a country to go bankrupt since they can just print more money to service the debt. Is there a worldwide bankruptcy court?
    It destroys your currency and is highly inflationary and will destroy national wealth. Britain is a great example. Their debt as a percentage of GDP went to 140% during WW2. They never recovered. The Pound lost to the dollar as the world reserve currency. Japan in the late 80's is another example.

    Now BRICS is trying to replace the Dollar as the global exchange standard. The dollar weakens as more are floating around. And more are created to service the debt. The only reason we are still in the game is the rest of the world is as debt ridden as we are.
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    FIDO95
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    In reply to Kyle Field Shade Chaser • 8:05a, 7/26/24
    AG
    Kyle Field Shade Chaser said:
    So what happens when America goes bankrupt?


    They just get told bad boy, and keep running just like normal the same as all the big business that go bankrupt and stay in business?


    It means the dollar becomes worthless overnight. The resulting hyperinflation will give your $100,000 savings the buying power of $100. The middle class dissolves into poverty. Civic utilities degrade as power and water systems collapse. Criminal organizations can pay cops and government officials more than the salaries government provides. There will not be enough zoo animals to keep us fed. It's happened all up and Central and South America and we are naive to think we are immune somehow to reality.
    No material on this site is intended to be a substitute for professional medical advice, diagnosis or treatment. See full Medical Disclaimer.
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    BboroAg
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    8:06a, 7/26/24
    AG
    USA going broke is not a bug…it is a feature of the Federal Reserve System
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    Not Coach Jimbo
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    8:06a, 7/26/24
    OP It's not "spent on debt"

    It's debt servicing ... It's the INTEREST ON OUR DEBT. The debt is so high that the INTEREST on the debt is more than they collect in a year.

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    MaxPower
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    In reply to Martin Q. Blank • 8:07a, 7/26/24
    Martin Q. Blank said:
    I'm not even sure what it means for a country to go bankrupt since they can just print more money to service the debt. Is there a worldwide bankruptcy court?
    You can either print money to pay it down (inflation which is basically a tax increase on your citizens) or you can offer higher interest rates on n your debt issuances because no one trusts you will pay it anymore (similar to high risk bonds). That will impair economic growth drastically and is effectively a tax on your citizens in the future.

    Regardless, it isn't quite as bad as Musk implies. The percent of government spend servicing debt has gone from roughly 7% to 17% over the last 8 years and is trending to increase further. Thats still really bad but not bankruptcy levels.
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    Aggie95
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    In reply to MaxPower • 8:27a, 7/26/24
    AG
    why does it say 75% in the tweet? What statistics are they/you using that are causing such a big difference?
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    Ag with kids
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    In reply to HollywoodBQ • 8:28a, 7/26/24
    AG
    HollywoodBQ said:
    I get FDR for Social Security and Nixon for the Gold Standard.

    But shouldn't LBJ get the blame for Welfare?

    Bush 43 for endless war in Iraq, Afghanistan and of course the subprime bailout during the GFC.

    Obama for Healthcare.

    And in this election year, Trump for shutting down the world and printing money during Covid?
    Medicare...

    That is a far larger part of the pie than welfare - AND it's mandatory.

    Although, his War on Poverty has effectively locked generations of minorities INTO poverty since it went into effect, so he's got that going for him, too.
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    Helicopter Ben
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    In reply to Kyle Field Shade Chaser • 8:30a, 7/26/24
    Kyle Field Shade Chaser said:
    So what happens when America goes bankrupt?


    They just get told bad boy, and keep running just like normal the same as all the big business that go bankrupt and stay in business?

    Pretty much. Not enough people understand what's really causing this. It's a self-serving problem for the government. Inflation is the govt's get out of debt free card. But they never use it for that. They just use it to spend even more.

    Another benefit to the govt is that as cost of living increases, demands for the government to "do something" will increase. We're already hearing the grumblings for price controls on certain things. This will, of course, lead to shortages or stark decline in quality like in the case of rent control. As these demands for govt action increase, so will the spending. And the Fed will be there to monetize all of it, leading to more…you guessed it; inflation. This point is where the snowball effect happens and we could very easily hit hyperinflation.

    The bottom line is that the majority of Americans would not support what needs to be done to fix this. It would mean a drastic reduction of government spending across the board. We would have to look at major cuts to everything from social security and Medicare to military spending. Even if people understood what's causing this and that these cuts are what's best for them and the country at large, they would not support it because "they're owed." They want someone else to take the haircut.

    If the above is true, then it's a mathematical certainty that we will see hyperinflation or some sort of transition to cbdc. The only solution for individuals is to spend your dollars now. Buying precious metals should be your first line of defense. If you're willing to speculate with more risk, buy some Bitcoin or other cryptos.
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    MaxPower
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    In reply to Aggie95 • 8:34a, 7/26/24
    Aggie95 said:
    why does it say 75% in the tweet? What statistics are they/you using that are causing such a big difference?
    https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/#:~:text=Maintaining%20the%20National%20Debt&text=How%20much%20the%20government%20pays,spending%20in%20fiscal%20year%202024.

    Dunno where this guy got 76%.
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    Logos Stick
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    In reply to MaxPower • 8:36a, 7/26/24
    MaxPower said:
    Aggie95 said:
    why does it say 75% in the tweet? What statistics are they/you using that are causing such a big difference?
    https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/#:~:text=Maintaining%20the%20National%20Debt&text=How%20much%20the%20government%20pays,spending%20in%20fiscal%20year%202024.

    Dunno where this guy got 76%.


    He is correct.

    76% of tax revenue taken in last month was spent on debt service.
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    Ag87H2O
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    In reply to Logos Stick • 8:38a, 7/26/24
    AG
    Logos Stick said:
    Is he correct?

    Almost 80% of tax revenue last month was spent on debt. LOL



    I don't know when it finally comes crashing down, but there is a reckoning coming and it's going to get ugly.
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    MaxPower
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    In reply to Logos Stick • 8:40a, 7/26/24
    Yes but is that just a matter of timing or does that represent annualized spend? If it just happened to be 76% this month but will be 17% for the year then his "fact" is meaningless.
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    Logos Stick
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    In reply to MaxPower • 8:43a, 7/26/24
    MaxPower said:
    Yes but is that just a matter of timing or does that represent annualized spend? If it just happened to be 76% this month but will be 17% for the year then his "fact" is meaningless.


    Where do you get 17%?

    If we are running $2 trillion deficits with a $6 trillion outlay, debt service is 25% of tax revenue.
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    Sid Farkas
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    In reply to Ag87H2O • 8:46a, 7/26/24
    AG
    Ag87H2O said:
    Logos Stick said:
    Is he correct?

    Almost 80% of tax revenue last month was spent on debt. LOL

    Partially...he left out LBJ
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    Tom Fox
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    In reply to Helicopter Ben • 8:46a, 7/26/24
    Helicopter Ben said:
    Kyle Field Shade Chaser said:
    So what happens when America goes bankrupt?


    They just get told bad boy, and keep running just like normal the same as all the big business that go bankrupt and stay in business?

    Pretty much. Not enough people understand what's really causing this. It's a self-serving problem for the government. Inflation is the govt's get out of debt free card. But they never use it for that. They just use it to spend even more.

    Another benefit to the govt is that as cost of living increases, demands for the government to "do something" will increase. We're already hearing the grumblings for price controls on certain things. This will, of course, lead to shortages or stark decline in quality like in the case of rent control. As these demands for govt action increase, so will the spending. And the Fed will be there to monetize all of it, leading to more…you guessed it; inflation. This point is where the snowball effect happens and we could very easily hit hyperinflation.

    The bottom line is that the majority of Americans would not support what needs to be done to fix this. It would mean a drastic reduction of government spending across the board. We would have to look at major cuts to everything from social security and Medicare to military spending. Even if people understood what's causing this and that these cuts are what's best for them and the country at large, they would not support it because "they're owed." They want someone else to take the haircut.

    If the above is true, then it's a mathematical certainty that we will see hyperinflation or some sort of transition to cbdc. The only solution for individuals is to spend your dollars now. Buying precious metals should be your first line of defense. If you're willing to speculate with more risk, buy some Bitcoin or other cryptos.

    I agree with this. But I am buying property instead of gold or crypto.
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    MaxPower
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    In reply to Logos Stick • 8:46a, 7/26/24
    Logos Stick said:
    MaxPower said:
    Yes but is that just a matter of timing or does that represent annualized spend? If it just happened to be 76% this month but will be 17% for the year then his "fact" is meaningless.


    Where do you get 17%?

    If we are running $2 trillion deficits with a $6 trillion outlay, debt service is 25% of tax revenue.
    Look in the link I already posted
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    BusterAg
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    8:47a, 7/26/24
    AG
    I don't disagree with him.

    But, we get about as much corporate tax per month as personal tax, so things are not as dire as the tweet indicates.

    We are not going bankrupt in my lifetime. Just my kids lifetime.
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    TexAgs91
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    8:48a, 7/26/24
    AG
    Trump needs to eliminate agencies and fire 80% of DC.
    Drastically reduce welfare and entitlements too.

    Yeah, I know, but this is what needs to be done.
    "Freedom is never more than one election away from extinction"
    Fight! Fight! Fight!
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    Logos Stick
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    In reply to MaxPower • 8:51a, 7/26/24
    MaxPower said:
    Logos Stick said:
    MaxPower said:
    Yes but is that just a matter of timing or does that represent annualized spend? If it just happened to be 76% this month but will be 17% for the year then his "fact" is meaningless.


    Where do you get 17%?

    If we are running $2 trillion deficits with a $6 trillion outlay, debt service is 25% of tax revenue.
    Look in the link I already posted


    No, it's 25%

    The denominator is revenue, not outlay. Outlay includes $2 trillion in borrowed money.

    The OP was about debt service as percentage of revenue.
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    Aggiecadet
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    9:01a, 7/26/24



    And we wonder why we are in so much debt
    Gig ‘Em, Aggies!
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    DamnGood86
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    In reply to jpb1999 • 9:07a, 7/26/24
    AG
    jpb1999 said:
    My question as well. What do normal people do with their money to help hedge this?

    Have you seen the pictures of the guys in Zimbabwe carrying their worthless cash around in a wheelbarrow?

    You need to get a wheelbarrow or two.
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