But you have a system of insurance for health and stuff right?? like i got a friend and they can't get their health stuff sorted cause they don't have insurance.. is that how it works there... we don't have that here... like i can go to the doctor with my we community service card for $35.00 and i can get most of my prescriptions for $3 each... most are subsidised by the governnment... but you guys don't have that right?

From what I can tell out of the $3.6 Trillion dollars we will spend this year:

23% will go to Medicare/Medicaid ($825 Billion)

20% will go to Social Security ($715 Billion)

19% will go to Defense Spending ($700 Billion)

12% will go to Tax Credits and deductions ($420 Billion)

6% will go to Interest on our current debt :0 ($215 Billion)

6% will go to Federal Pensions ($215 Billion)

IMO much can be cut out of all of these (except for interest of course)

Last edited by pimpinwalstreet 14 years ago

how much you all pay in taxes? like how many cents in the dollar?

I get roughly 30% taken out of my paychecks, that includes federal, state, local, social security, and medicare tax

hmmm okay

America's currency is fiat currency which means it's not backed by anything, it instead gets it's value based on the reliability of the United State's government, when we were on the gold standard worst case scenario, the dollar was also valued the same as gold, meaning if the US economy went down, the dollar would still be worth something. The dollar use to be a kind of certificate, you could go to the bank, and get it's worth in gold. If gold went up the dollars value went up world wide, etc.

The US dollar is a world currency world banks use dollars in their reserves, so if the US dollar becomes valueless the whole global market suffers, any institution that deals with US dollars suffer, which is why big governments like China are invested in gold, becaues gold has a value on the market which is very high. China also has huge reserves of dollars because they (use to be) reliable to hold on to, not the case anymore.

The US has a debt ceiling, the US spends more than it makes, and there's a cap on this. If it ever reaches the cap by law the US can't borrow anymore money and will have to start making MORE money than it spends (novel idea right) if it can't it will default and the economic crisis can ensue (similar to what happened in greece only on a world scale because again the dollar is a world currency)

All confidence will be lost in the dollar making it worth as much as the shit stains in your toilet.

That's my basic understanding of the economy anyway.

Last edited by JayMeal 14 years ago

thanks jay... so can i ask... how did it end up being like this... and is it like this for other countries or is the states a special case?

Damn Jay...you hit it dead on

Because we have the federal reserve, in the early 1900s there were financial hiccups, people were worried about where the economy was going, so the federal reserve act was enacted to allow the feds notes (i.e., the dollar) be used as currency. Then the gold standard went, then we kept getting into wars, and we needed to borrow money, when shit hit the fan, the federal reserve would lower interest rates and print money, all of this caused bubbles, and the watering down of the US currency.

Why the US has debt though isn't so much the feds fault (the fed I attribute the devaluing of the dollar more to) but because of our foreign policy which costs trillions (two wars (2.5 if you count libya) huge amoutns invested on the TSA and saftey that doesn't work, etc) so we borrow money.

I don't know other countries currency systems but chances are smaller governments invested in dollars for SECURITY.

Think of it this way. You get a lot of bags of coal back in the day because they were cheap and thought to yourself, this will be a nice security I'm only spending 1k EDs each, I'll get 10 bags of coal.

Now, lets say coals flooded the market, n they were worth 500 eds, now you're screwed you lost all of your money, you're best possessions are worthless!

Now imagine a government making a hiccup like this, they have employees to pay, they have a lot at stake, they would go into a crisis because their assets (the dollar) is worth as much as paper. So that's why it affects the world.

i think i am getting it... i never understood economics... it is so whack to see a country owing trillions of dollars talking about owing more... then when it said on the news that they were gonna look at cutting back on spending... i was trying to figure out where would they cut back... and then it said military and care for the elderly... and i was all like.. oh noes.. not the elderly...