Comments on: John Bogle on the Future of U.S. http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/ Moving beyond the basics Wed, 19 Nov 2008 16:58:09 +0000 http://wordpress.org/?v=2.2.2 By: KMC http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10743 KMC Wed, 26 Dec 2007 10:48:02 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10743 @ Festivus - You're absolutely right in your analysis. Furthermore, on your point about banks and foreign investors, I think that situation is just a microcosm of the U.S. in general. I think U.S. families, banks, and federal government all suffer from the same affliction - they borrow and spend more than they make and use financial engineering and aggressive investments to try to make up the difference. @ Festivus - You’re absolutely right in your analysis. Furthermore, on your point about banks and foreign investors, I think that situation is just a microcosm of the U.S. in general. I think U.S. families, banks, and federal government all suffer from the same affliction - they borrow and spend more than they make and use financial engineering and aggressive investments to try to make up the difference.

]]> By: Festivus http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10695 Festivus Tue, 25 Dec 2007 20:58:20 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10695 The reason our national debt has been manageable is because there was never any loss of faith in the US economy, and it was largely driven by domestic lending. Now its changed, its driven by foreign lending and faith in the US economy is weakening, particularly with the strong economies in Europe and the weak dollar. For the deficit to become unsustainable foreign lenders don't have to stop lending to us, they just have to start lending LESS. And in the treasury auctions over the last year and a half this is exactly what has been happening for the first time in history. Will it change? Maybe, fundamentally we're still strong but we have some big structural problems we need to fix (as well as huge over spending issues that need to be resolved). Now virtually every major American bank has a foreign government as their largest investor (e.g. Abu Dhabi, Saudi Arabia, China, Singapore). Most of this has happened over the last couple of months since bank balance sheets began to implode. A lot of people fear the fact that foreign governments now have such large ownership stakes in our banking system but ultimately I think its a good thing. They'll be more inclined to provide liquidity going forward when we need it. The fact of the matter is that the sovereign wealth funds of countries in the Middle East and Asia now control the largest pools of cash and we need their help to sustain our markets. The reason our national debt has been manageable is because there was never any loss of faith in the US economy, and it was largely driven by domestic lending. Now its changed, its driven by foreign lending and faith in the US economy is weakening, particularly with the strong economies in Europe and the weak dollar. For the deficit to become unsustainable foreign lenders don’t have to stop lending to us, they just have to start lending LESS. And in the treasury auctions over the last year and a half this is exactly what has been happening for the first time in history. Will it change? Maybe, fundamentally we’re still strong but we have some big structural problems we need to fix (as well as huge over spending issues that need to be resolved).

Now virtually every major American bank has a foreign government as their largest investor (e.g. Abu Dhabi, Saudi Arabia, China, Singapore). Most of this has happened over the last couple of months since bank balance sheets began to implode. A lot of people fear the fact that foreign governments now have such large ownership stakes in our banking system but ultimately I think its a good thing. They’ll be more inclined to provide liquidity going forward when we need it. The fact of the matter is that the sovereign wealth funds of countries in the Middle East and Asia now control the largest pools of cash and we need their help to sustain our markets.

]]> By: Tim http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10321 Tim Fri, 21 Dec 2007 07:21:12 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10321 KMC, you have to temper the national debt figure in terms of GDP. standing alone, the national debt seems huge, but in terms of percentage of GDP it is not such a scary number. i remember all the scaremonger about how large our national debt was during the 80s, and nothing came of it. the national remains manageable and necessary. it isn't grown burdensome in terms of our GDP. it's an election year, so there will be much more focus on the national debt, how much each person owes, etc, etc. it will all be scaremongering, because there are many more factors that account for our country's economic viability than just its national debt. KMC, you have to temper the national debt figure in terms of GDP. standing alone, the national debt seems huge, but in terms of percentage of GDP it is not such a scary number. i remember all the scaremonger about how large our national debt was during the 80s, and nothing came of it. the national remains manageable and necessary. it isn’t grown burdensome in terms of our GDP.

it’s an election year, so there will be much more focus on the national debt, how much each person owes, etc, etc. it will all be scaremongering, because there are many more factors that account for our country’s economic viability than just its national debt.

]]> By: KMC http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10224 KMC Thu, 20 Dec 2007 16:47:46 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10224 @ Tim - Dude, the national debt is so large ($9 Trillion) that each and every person in the country owes $30,000. I hardly think saying 'that's a problem,' is scaremongering. People who don't want to acknowledge the country's long-term fiscal challenges inevitably call it 'scaremongering' when someone raises the alarm. @ Tim - Dude, the national debt is so large ($9 Trillion) that each and every person in the country owes $30,000. I hardly think saying ‘that’s a problem,’ is scaremongering.

People who don’t want to acknowledge the country’s long-term fiscal challenges inevitably call it ’scaremongering’ when someone raises the alarm.

]]> By: Tim http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10133 Tim Wed, 19 Dec 2007 19:14:19 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-10133 stop the scaremongering over the national debt too. nothing that bogle mentioned is shockingly revealing. he addresses things that any reasonably informed individual could say in an interview. it is the easy way out and that's what i hate. how you solve the problems, more than "taking action on social security," etc. is more enlightening. $1.5 trillion on the wars? give me a break, whenever people like adding up numbers, they forget to deduct that the cost of the military operations if there is not a war. soldiers still get paid, etc, etc. cut spending or raise taxes? what a cop out and an glaring DUH. low cost production from China and India? yeah, completely forgets that u.s. manufacturing has continued to expand, and the fact that the standard of living in those countries will inevitably create inflation as a result of supply and demand. the same scary thoughts were brought about when korea and japan were on the rise too. stop the scaremongering over the national debt too.

nothing that bogle mentioned is shockingly revealing. he addresses things that any reasonably informed individual could say in an interview. it is the easy way out and that’s what i hate. how you solve the problems, more than “taking action on social security,” etc. is more enlightening.

$1.5 trillion on the wars? give me a break, whenever people like adding up numbers, they forget to deduct that the cost of the military operations if there is not a war. soldiers still get paid, etc, etc.

cut spending or raise taxes? what a cop out and an glaring DUH.

low cost production from China and India? yeah, completely forgets that u.s. manufacturing has continued to expand, and the fact that the standard of living in those countries will inevitably create inflation as a result of supply and demand. the same scary thoughts were brought about when korea and japan were on the rise too.

]]> By: KMC http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9981 KMC Tue, 18 Dec 2007 11:03:42 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9981 @ brian - I don't consider my comments "scaremongering," but if you do that's your opinion. I could do a whole lot more scaremongering on those topics. You are absolutely correct, though, that recent tax and spending (e.g. Medicare part D) bills have certainly made the situation worse. It's a weird world indeed when the Democrats are pitching themselves as the party of fiscal responsibility. @ brian - I don’t consider my comments “scaremongering,” but if you do that’s your opinion. I could do a whole lot more scaremongering on those topics. You are absolutely correct, though, that recent tax and spending (e.g. Medicare part D) bills have certainly made the situation worse. It’s a weird world indeed when the Democrats are pitching themselves as the party of fiscal responsibility.

]]> By: brian http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9892 brian Mon, 17 Dec 2007 20:17:51 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9892 I think Bogle is on to something, but your interpretation is way off. Even Bogle qualifies his comment about Social Security, and puts more emphasis on out-of-control spending (Iraq War, anyone?) and our nonsensical trade policies with India and China. Stop with the scaremongering over Social Security and Medicare. If those are the 800 pound gorilla, then the tax cuts for the wealthiest Americans are the 3200-pound elephant. See: http://www.epi.org/content.cfm/webfeatures_snapshots_20070829 It worries me that all of the Republican candidates have favored making these tax cuts permanent. What happened to fiscal responsibility? I think Bogle is on to something, but your interpretation is way off. Even Bogle qualifies his comment about Social Security, and puts more emphasis on out-of-control spending (Iraq War, anyone?) and our nonsensical trade policies with India and China.

Stop with the scaremongering over Social Security and Medicare. If those are the 800 pound gorilla, then the tax cuts for the wealthiest Americans are the 3200-pound elephant.

See: http://www.epi.org/content.cfm/webfeatures_snapshots_20070829

It worries me that all of the Republican candidates have favored making these tax cuts permanent. What happened to fiscal responsibility?

]]> By: ryan http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9881 ryan Mon, 17 Dec 2007 18:39:26 +0000 http://advancedpersonalfinance.com/john-bogle-on-the-future-of-us/#comment-9881 it is unfortunate that Ron Paul has to break records in order to get any press in this election at all. most people i ask do not even know who the candidates are, except the main ones presented by the media. we are in a sorry state, our economy, our policies, our tax system, the amount of free money we give away to people who dont work, the war, etc. i echo Bogle on all this. it is unfortunate that Ron Paul has to break records in order to get any press in this election at all.

most people i ask do not even know who the candidates are, except the main ones presented by the media.

we are in a sorry state, our economy, our policies, our tax system, the amount of free money we give away to people who dont work, the war, etc.

i echo Bogle on all this.

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