US deficit is 'real and growing' threat: Ben Bernanke

[Lankan Ranger]

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US deficit is 'real and growing' threat: Ben Bernanke

Federal Reserve chairman Ben Bernanke on Monday called for quick and decisive steps to rein in the exploding US budget deficit, warning failure to act could result in a serious crisis.

Warning that surging annual deficits presented a "real and growing threat" to the US economy, Bernanke told an audience in Rhode Island that a day of reckoning would come if action is not taken.

"The only real question is whether these adjustments will take place through a careful and deliberative process... or whether the needed fiscal adjustments will be a rapid and painful response to a looming or actual fiscal crisis."

The US saw a record 1.47 trillion dollar budget shortfall in the financial year that ended in September, as tax revenues dried up and the government splurged on economic bailouts and stimulus spending.

Bernanke suggested new fiscal rules from Congress could help put the US budget back into order, but only with sustained political support.

"Both current and future congresses and presidents will have to make some very tough decisions to put the budget back on a sustainable trajectory," he said.

Bernanke said a reform of the fiendishly complex US tax code could also help.

"Most people agree that the US tax code is less efficient and less equitable than it might be; moreover, the code is excessively complex and imposes heavy administrative and compliance costs," said Bernanke.

"Collecting revenues through a more efficient, better-designed tax system could improve economic growth and make achieving sustainable fiscal policies at least somewhat easier."

US deficit is 'real and growing' threat: Ben Bernanke - The Times of India

[lcloo]

Time to cut down economically unproductive budget expenditure, any Ameircan members care to contribute their ideas?

I think USA have to have new start-ups in their small to medium businesses that produce real goods which can sell their products to Walmart. By real goods I mean thing that are physical, not services like banking, insurance, warehousing etc. Also American people must be willing to buy more expensive made in USA goods and reducing their credit spendings. And the rich who have billions in cash must put these money to work instead of keeping in their bank accounts.

[Chinese-Dragon]

Having a double-dip recession in the USA, will cause catastrophic problems for the world economy... AGAIN.

It is time for us to reduce our investments in the US, so we don't get burned by another one of their global recessions. Or if Obama's worst fears come true, and the US experiences a "lost decade" like Japan did, as a consequence of the asset bubble collapse they experienced during the credit crunch.

Either way, it's time to look somewhere else. We need some "risk diversification".

[xdrive]

I think USA have to have new start-ups in their small to medium businesses that produce real goods which can sell their products to Walmart

In other words, you have no idea what your talking about, right? LOL.

And the rich who have billions in cash must put these money to work instead of keeping in their bank accounts.

You obviously don't know how banks work (most likely because you live in a communist state)
Money put into bank accounts, don't just sit in bank accounts idle. The bank invests the money in projects, hence why you get interest paid on money in your bank account.

[Chinese-Dragon]

In other words, you have no idea what your talking about, right? LOL.

Why not try to be constructive instead of trolling.

"Lcloo" is clearly talking about trying to revive the industrial capacity of the US, an idea which Obama himself advocated, as a way of reducing their enormous budget deficit.

The problem is that it will take a LONG time to make such a change to the structure of the US economy, and even then there is no guarantee it would be price-competitive.

[Chinese-Dragon]

You obviously don't know how banks work (most likely because you live in a communist state)

Yes, a Communist state that has the second largest market economy on Earth, and also possesses the biggest banks on Earth by market capitalisation.

Chinese Banks Rule in New World Order - Bloomberg

Maybe try doing some reading, instead of throwing out personal attacks that don't make any sense.

[xdrive]

Yes, a Communist state that has the second largest market economy on Earth, and also possesses the biggest banks on Earth by market capitalisation.

Chinese Banks Rule in New World Order - Bloomberg

Maybe try doing some reading, instead of throwing out personal attacks that don't make any sense.

Why would you reply to something not directed at you and then go on some little rant about how big banks are in china (no one was talking about how big Chinese banks are) lol.

The guy my post was directed at has clearly no idea how banks work, as he clearly had shown from his post. (He believes money in banks just sit there.) My post and his post had nothing to do with "how big Chinese banks are" so i don't know why you would go on some rant about it, i don't even care.

[Chinese-Dragon]

He believes money in banks just sit there.

And you believe we have a Communist economy and don't know how banks work...

... despite the fact we have had a "market economy" since 1978, the second largest economy in the world, and the biggest banks in the world. We are also the largest creditors in the world, and loan money to almost every nation on the planet.

Tell me how that works?

You obviously don't know how banks work (most likely because you live in a communist state)

[xdrive]

And you believe we have a Communist economy

I didn't say anything about the Chinese economy in my posts. Learn to read.

and don't know how banks work...

I said that guy didn't know how banks worked, not the whole of the country (which your claiming i said) You're pretty silly if you thought i said the whole country. Learn to read.

... despite the fact we have had a "market economy" since 1978, the second largest economy in the world, and the biggest banks in the world. We are also the largest creditors in the world, and loan money to almost every nation on the planet.

Here you go again with off topic crap. I don't care about any of this and never said anything about any of this in my post and as you can see from my above quote i didn't say "The Chinese don't know anything about banks" as you claim i said.

Stop going on off topic rants and responding to things that weren't actually said and things that you have made up in your head.

Learn to read.

[below_freezing]

Yes, a Communist state that has the second largest market economy on Earth, and also possesses the biggest banks on Earth by market capitalisation.

Chinese Banks Rule in New World Order - Bloomberg

Maybe try doing some reading, instead of throwing out personal attacks that don't make any sense.

he's an idiot, even the Soviet Union beat the US in finance when they bought 25% of the US harvest for dirt cheap and caused a crisis in the food commodities market... in 1970's. The US was beaten at its own game by a hardcore communist power, now it's happening again, but this time they're going to stay down.

[Brotherhood]

And you believe we have a Communist economy and don't know how banks work...

... despite the fact we have had a "market economy" since 1978, the second largest economy in the world, and the biggest banks in the world. We are also the largest creditors in the world, and loan money to almost every nation on the planet.

Tell me how that works?

Ignore him, he is just another false flag who is a typical China hater still suffering "identity crisis", he lost his credibility a long way back when he raise a Pakistan flag and telling everyone he is located in Pakistan and got busted by webmaster.

[Chinese-Dragon]

You obviously don't know how banks work (most likely because you live in a communist state)

Here is your quote xdrive.

You said he didn't know how banks worked... "BECAUSE" he lived in a Communist state.

Explain that to me?

[Chinese-Dragon]

Ignore him, he is just another false flag who is a typical China hater still suffering "identity crisis", he lost his credibility a long way back when he raise a Pakistan flag and telling everyone he is located in Pakistan and got busted by webmaster.

he's an idiot, even the Soviet Union beat the US in finance when they bought 25% of the US harvest for dirt cheap and caused a crisis in the food commodities market... in 1970's. The US was beaten at its own game by a hardcore communist power, now it's happening again, but this time they're going to stay down.

You're both right, I'll just ignore him.

He doesn't even know what he's talking about anyway.

[xdrive]

Ignore him, he is just another false flag

My glad is the correct flag.

who is a typical China hater still suffering "identity crisis"

I don't hate China, nor have i ever hated China, nor have i conveyed that in my post.

he lost his credibility a long way back when he raise a Pakistan flag and telling everyone he is located in Pakistan and got busted by webmaster.

False and a lie. I have never claimed to be from Pakistan or risen the Pakistani flag and the webmaster never busted me for such thing as you claim.

People like Chinese-Dragon have a problem with taking things out of context and assuming things. Read what is written and take it word for word, don't take it out of context and claim it says something else when it does.

[Chinese-Dragon]

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^^^ OK ignoring the troll, let's get back on topic.

Obama Warns of 'Lost Decade' - WSJ.com

Obama warned around a year ago that the US may face the prospect of a "lost decade" like Japan did. This is due to the fact that the US had a major asset bubble collapse (same with Japan) during the Credit crunch, and the American economy is having a very hard time trying to get back on the path of recovery. Many people still predict a double-dip recession.

So, what would be the geopolitical consequences of a "lost decade" in the USA?