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Old 01-16-2013, 10:47 PM #106
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Originally Posted by benji25 View Post
However if I only make 30k per year I shouldn't take out 140k in loans.
Depends what your expenses are and what you are taking out the loan for. If it is secured with assets and you have low expenses, then there's nothing much wrong with that much debt. 140k unsecured on a 30k salary is a pipe dream though.

You seem to be really poorly versed in family or personal finance, seems like you are very young and maybe live at home or rent a room or small apartment.
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Old 01-16-2013, 10:54 PM #107
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And if you happen to lose your job?
case in point
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Old 01-16-2013, 11:36 PM #108
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Quote:
Originally Posted by drgonzo View Post

Depends what your expenses are and what you are taking out the loan for. If it is secured with assets and you have low expenses, then there's nothing much wrong with that much debt. 140k unsecured on a 30k salary is a pipe dream though.

You seem to be really poorly versed in family or personal finance, seems like you are very young and maybe live at home or rent a room or small apartment.
I agree mortgages are different. I was more talking a short term investment where you are looking to get a decent return, not committing to a long term loan such as a mortgage.

Obviously a mortgage is going to be a huge amount of debt and if you think you have a relatively secure job and you can commit to 30 (or 15) years of payments then a house May be a good investment for someone.
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Old 01-17-2013, 12:04 AM #109
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Obviously a mortgage is going to be a huge amount of debt and if you think you have a relatively secure job and you can commit to 30 (or 15) years of payments then a house May be a good investment for someone.
Just think of America as the largest and most valuable house in the world. As of right now our mortgage on it is slightly larger than a single year of income. So about a $32k house for a person on a $30k salary.
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Old 01-17-2013, 02:00 AM #110
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I didn't know I could print money as a home owner.
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Old 01-17-2013, 06:18 AM #111
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Just think of America as the largest and most valuable house in the world. As of right now our mortgage on it is slightly larger than a single year of income. So about a $32k house for a person on a $30k salary.
am i missing something here? isnt our debt around 16 trillion and our yearly tax revenue around 2 trillion?
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Old 01-17-2013, 08:41 AM #112
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Quote:
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Just think of America as the largest and most valuable house in the world. As of right now our mortgage on it is slightly larger than a single year of income. So about a $32k house for a person on a $30k salary.
And the crux of my point is we aren't making money to pay that back. Spending as % of GDP is increasing faster than internal revenue as % of GDP.

So we are spending more, and bring in a relatively flat amount (as in the 2 graphs above).

It would be like saying yeah we are making the $30k and theoretically that should be enough to pay back our loans, but we are spending all $30k and then some on things like Obamacare, medicare, social security. Oh and next year we will get a 5% raise, but we are going to spend 10% more.

What to cut and how to cut is a different discussion. The main point I am trying to make is that we need to figure out a plan to do so, and it seems like many politicians and bright individuals agree with me that our current model is not sustainable long term.
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Old 01-17-2013, 01:59 PM #113
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holy **** did I not already explain the cyclicality of the deficit to you?
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Old 01-17-2013, 04:25 PM #114
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am i missing something here? isnt our debt around 16 trillion and our yearly tax revenue around 2 trillion?
2 trillion is only a portion of the nation's "income" (GDP). in this analogy, it's the portion of your income that is used to pay the mortgage. so the problem is not our mortgage or our income, it's that we're not putting enough money into paying it (i.e. tax revenue is too low).

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I didn't know I could print money as a home owner.
If you could, would you be able to afford a smaller or larger mortgage?
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Old 01-17-2013, 04:27 PM #115
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Fun fact: no large sovereign nation with its own currency has ever hit the upper bound on debt. Japan, with well over 200% of GDP in debt, borrows at < 1% long term.
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Old 01-17-2013, 04:29 PM #116
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gdp =/= nations income.......
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Old 01-17-2013, 04:30 PM #117
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yes it is.
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Old 01-17-2013, 04:32 PM #118
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no, its not. you need to take a class on macroeconomics. gdp is the market value of all goods and services produced in a country
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Old 01-17-2013, 04:33 PM #119
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yup...thats the wealth we tax...national income...
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Old 01-17-2013, 04:36 PM #120
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2 trillion is only a portion of the nation's "income" (GDP).
i was refering to this. tax money does not go towards gdp and gdp is not the nations "income"
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Old 01-17-2013, 04:40 PM #121
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GDP is just the total dollar amount spent in the U.S.

Since your spending = my income, and vice versa, we also refer to this as national income.
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Old 01-17-2013, 04:44 PM #122
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the market value of a product is what it sells for dummy
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Old 01-17-2013, 04:45 PM #123
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gpd has nothing to do with money spent. its presumed market value of all goods/services produced in country.



yes it is what it sells for.... im just saying that tax money does not contribute to gdp. it was a very simple point
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Old 01-17-2013, 04:52 PM #124
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gpd has nothing to do with money spent. its presumed market value of all goods/services produced in country.
Ok, so theres NGDP and RGDP.

NGDP is the total dollar amount spent in the U.S. It's also measured by the equation MV = PY (PY is also NGDP). With M being the money stock, V being the amount M changes hands (velocity), P being the price level, and Y being real output.

RGDP is measured by subtracting an inflation estimate, PCE deflator, from NGDP.]
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Old 01-17-2013, 05:10 PM #125
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no, its not. you need to take a class on macroeconomics. gdp is the market value of all goods and services produced in a country
lol. He takes one macro class and thinks he's an expert while at the same time displaying he is clearly not. Priceless.
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Old 01-17-2013, 05:17 PM #126
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another professional, well thought out argument......................

btw that is the definition of gdp. the money does not go to the federal government government and is not income.

and i never claimed to be an expert
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