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  #1  
Old 10-16-2007, 09:42 PM
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Federal debt fiasco
Washinton Times Editorial

In its preliminary estimate, the Congressional Budget Office recently reported that the unified budget deficit for fiscal 2007, which ended Sept. 30, totaled $161 billion. That represented an $87 billion reduction from the 2006 deficit of $248 billion. Republicans in the White House and Congress pretended not to notice the inconvenient fact that the national debt increased by about $550 billion during the same 12-month period. How can this be?

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Old 10-16-2007, 10:12 PM
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If the new debt is in the budget, then it does not become a deficit until the new debt exceeds the budgeted new debt.
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Old 10-16-2007, 10:54 PM
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How many spending bills have left Congress for the President's signature for FY 2008 (which began Oct 1, 2007)?

B
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Old 10-16-2007, 11:15 PM
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In accounting 2+2 doesn't equal 4.
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Old 10-16-2007, 11:42 PM
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Deficit and debt are not the same thing. To make up numbers, lets say your budget for the year is 100. You spend 100 and borrow 50 and you spend it too. Your budget is at zero, not in deficit, but your debt went to 50.

If your budget was 100, you spent 75 and borrowed 50 and spent it, you have a 25 budget surplus and a 50 debt.

Now keep running totals every year.

See how easy it is?
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Old 10-17-2007, 01:16 AM
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Quote:
Originally Posted by Botnst View Post
How many spending bills have left Congress for the President's signature for FY 2008 (which began Oct 1, 2007)?

B
in Spanish that would be el gooseggo.

Can you say "continuing resolution"?
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Old 10-17-2007, 07:20 AM
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Quote:
Originally Posted by Hatterasguy View Post
In accounting 2+2 doesn't equal 4.
In politics either, Hattie.
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Old 10-17-2007, 07:22 AM
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Originally Posted by Emmerich View Post
Deficit and debt are not the same thing. To make up numbers, lets say your budget for the year is 100. You spend 100 and borrow 50 and you spend it too. Your budget is at zero, not in deficit, but your debt went to 50.

If your budget was 100, you spent 75 and borrowed 50 and spent it, you have a 25 budget surplus and a 50 debt.

Now keep running totals every year.

See how easy it is?
That's why those guys make the big bucks, eh?
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  #9  
Old 10-17-2007, 08:39 AM
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I firmly believe the strategy for dealing with the national debt is through inflation and dollar devaluation. The USA borrows dollars from the Chinese and then steadily deflates them. The Chinese dance with us because their economy is locked to ours, and they don't want the house of cards to fall down either.

This means personal wealth kept in dollar money, as in CDs, Savings, etc., is steadily eroded away and declines. People who borrow money are rewarded, especially money borrowed for a long term at reasonable interest rates, such as the 30-year 6% mortgage loans that were issued a couple years ago.

So, where should accumulated wealth be kept? Real Estate? The Stock Market? Do precious metals increase in value, or are they just reliable place-markers in value against the dollar? Should we transfer our dollars to Euros?

Personally, I used to lean toward the stock market but now can see the wisdom in good real estate. But you must have some way to compensate for real estate taxes.

I know of a farm in Gaithersburg, Maryland that was owned by the King family:

"The King Farm Park is a remnant of the 122 acre farm known to the King Family as “Irvington Farm.” The Park preserves the original setting of the house and associated farm buildings to the south on approximately seven acres. Irvington Farm was part of the largest dairy operation in the county (500 cows milked daily), and accommodated 100 dairy cows."

(Note: I don't understand how a 100 cow farm milks 500 cows daily. )

I can remember in the late 1980s or early 1990s that the King family was over $5 Million in debt for back taxes. The farm and family could not produce enough income to pay their taxes. They eventually sold (or had to sell) and the area is one big cluster of development.

On the other hand, stocks are not taxed until they are sold. Held for the very, very long term, they are just like a 401(k) in that you can wait until you retire to sell them. A significant difference though is that the tax rate when you do sell (in current law) is only 15%.

So, what's your advice for storing wealth?

Ken300D

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