U.S. Debt
 

With all of this talk about the deficit, it is important to remember that the 'deficit' is merely each years shortfall, which includes interest payments on the 'debt'.

The national debt is America's mortgage. It is now at an all-time high, and thanks to our current administration libertine fiscal policy, will probably grow to new heights.

Currently 6.5 trillion :eek:

Current US Public Debt 'To the Penny' from the Bureau of Public Debt

I want a social moderate and a fiscal conservative in the White House now!

The Concord Coalition is a bi-partisan group petitioning for fiscal sanity in the government.

Concord Coalition

I was listening to the words of the Treasury Secretary today...and he just sounded so confident that passing the House's version of the tax bill would be an immediate benefit to us. I've heard some tall tales in my time on this earth, but this one is a true gollywhopper.

Since rumor has it that the President is quick to punish those who do not toe the line, this probably comes under the heading of professional cowardice.

Glad you brought this up. I've been thinking about starting a thread on the debt myself.
Back when they were wondering what to do with the huge surpluses, I said pay the debt. People looked at me as if I'd said nuke the whales.
Ok, the debt is a mere (cough, choke, blanch) 6.5 Trillion bucks.
To whom do WE owe this money?
Who is collecting all this interest we're paying?
I would assume to lend us all that money "they" would have to be pretty rich. And my savings bonds don't mean diddly.
So "they" are probably banks, insurance companies, TIAA/CREFT, Warren Buffet and so on.
So, since "they" are also the big campaign contributors and lobbyers. "They" would have the debt paid down if it was to their advantage.
"They" don't, so it ain't. End of story.
OK, tell me what I'm missing here.

I didn't get much of the story. However, my government teacher (who is not necessarily trustworthy) says that most of the American debt is in the form of bonds. He also says that for most of the government's loans, if they paid the debt off early there would be a fine that usually would amount to MORE than the interest. Less than a quarter or a fifth of the debt (I can't remember which) is owed to foreigners (I'm assuming this means foreign governments).

So, if we pay all of the debt right now, it would cost the government more than paying it off at the proper times.

I still believe that the government ought to pay off it's debt. 6.5 trillion is ludicrous.

I think a lot of our debt is held by foreign nationals, and foreign financial institutions. Sorry, I'm shooting from the hip on this one, by I seem to remember that vast amounts of the bond and T-Bill issues are held by international banks as a means of stabilizing their financial holdings.

Again, this is conjecture, but it seems like there are positive effects to this type of debt. One would be a stabilizing function on the world economy at large. American backed notes are just about the most secure financial holding you can have. This allows smaller economies to purchase a foothold in a secured market, and not stand and fall solely on the strength of their local markets.

-sm

Well from what I learned in my economics class there are two ways the government can borrow money to finance the budget deficit.

1. Selling bonds to the public

2. Selling bonds to the Fed

We never discussed who holds the public bonds.

     Okay, so paying off the debt now would cost more in fines than paying it out with interest... So why not hold onto the money? I mean put it into an account designed to payoff a particular debt in a particular timeframe? Would it be wrong to have our debts covered in advance?

The Debt Clock

includes what each of us owes...:mad:

Because if we held onto the money, the Republicans would sally forth with another tax cut.

damn straight.

-sm

He's half right. The debt consists of various instruments with varying timeframes. Since there is no way the goverment could pay off 6.5 trillion at once, the debt would be paid off gradually.

I have heard that the US has a 10 trillion dollar economy. Owing 6.5 trillion is the equivalent of a person who earns 100K a year having a 65k credit card bill.

     Not that I'm disagreeing that the tax cut would happen, but I'm actually suggesting the same thing Bruce was. Paying down the debt. The whole 'holding onto the money' thing was just a way to respond to the added expense of paying off certain debts outright.
     I guess I'm just being archaic, suggesting that the US actually have the money it spends each year. What the hell am I thinking?

Err, no, because the 6.5 trillion dollar debt is debt owed by the Federal government. If you want to compare it to income you have to use Federal tax revenue, not GDP.

     I think the point stands that that's a hell of a lot of debt. 'Specially for a country that's talking about big tax breaks and gives money to other countries the way the US does. Let's face it, if an individual citizen spent money like that he'd be bankrupt, and never again allowed to own so much as a credit card and god help him if he tries to get a loan to buy a house.

One point is that a country has a much greater life span than an individual. Also the majority of people who have debt don't usually own trillions of dollars in military equipment, building, and land. I think the government could cover it's debt if absolutly necessary. But it doesn't have to.

Not that I'm disagreeing that we have to much debt. Just that it isn't the giant problem some people make it out to be.

But all the interest we're paying could be used to support me in a manner to which I'd like to become accustomed.:D

I agree with Cam, but given the absolutely retarded amount of money the government has spent over the past 2 years, someone needs their credit card taken away.

it's not really fair to compare government debt to consumer debt. It's more in line with corporate debt, where it would not be at all unusual for a corporation, even a large and well established corporation, to owe as much as 80 or 90% of it operating capital in debt.

-sm

Except they can't get a pork barrel bailout. Can the gumint declare chapter 11? 13?
As for having enough military, buildings and land to cover the debt, oh come now.
Do you really think they'd give them up?
If I've got a gun...no, I got the biggest gun in the world and you say, hey you owe me 50 bucks, Give me the gun.
Which end of the gun do you think you'll get?:rattat:

Well, the budget for 2003 is 2 trillion dollars, so that would make 6.5 trillion over %300. How would that make the average shareholder feel?

The whole system is BASED on debt.

Without debt, the system collapses.

It is sustained by creating more debt. Which is then passed off to other debtors. Who don't pay. Who borrow more. Which creates more money. Which keeps the system working.

It's actually a little frightening.

Read the book my quote below is from. SCARY. :eek:

Yep, Alexander Hamilton would be very pleased. Of course, I'm more of a Jefferson guy.

Eh, our founding fathers are overrated. I think Radar ruined them for me. :)

The IMF said this about AMerica's Debt situation:

Bush lied about the first tax cut and he is lying about the newest tax cut. Most of the media are to stupid to point this out.

This new tax cut and the subsequent tax cuts every year ( this is seriously what Bush said he wants to do ) will effectively bankrupt our nation and force us to eliminate Social Security, medicare, medicaid, hud, and just about every other essential social program. As the debt grows, the middle class payroll taxes - you know the taxes that created the mass of the surplus - will go to pay the interest on the national debt.

The rich will walk away happy - content to know that the rabble are not feeding off of the government teet anymore.

This sounds extreme, but without a real media out there to hold these people to task, this is what will happen. In the long run, it fulfills a lot of Heritage Foundation fantasies. It will destroy the middle class and create a large serf class that will function as a cheap, exploitable working force for the rich.

Basically their goal is to turn back the clock on American society to what it was in the McKinley administration - a hundred years ago.

Don't make the mistake of when you discover your heros have feet of clay, you discard their ideas and accomplishments. They were great men but they were after all just men.(add, not women for those that wish);)

Hell, even Jesus was just a hippy in his time.

Nah, they may have been great people, but I can't say that any of them were my heroes to begin with.

Neil Stepherson - Inferface.

debt....
 

is, like all things monetary, a form of power. The structure of the American economy necessitates people at the bottom and at the top. The current administration is simply excacerbating the abuses inherent within our chosen system of socio-political power (Help! Help! I'm being repressed!). That doesn't mean that the system is wrong. It means that the system is being abused by the people at the top. Therefore as folks not at the top, we have to take that power back into our hands.
By the way, props to all the Cellar because this is one of the methods by which power iwe take that power back.

Re: debt....
 

Shhh! Don't tell anyone that...next thing you know, we'll all be brought up on conspiracy charges.

While we were talking...

05/12/2003 $6,460,371,786,677.29

05/30/2003 $6,558,146,735,285.55

System is based upon liquidity. Debt is simply another way of creating short term liquidity at the expense of long term wealth. When debt is used constructively, liquidity provides cash and therefore resources to new, innnovative ideas and products. The resulting adverse effects are more than compensated by productive jobs, innnovative products, and whole new industries.

When debt is used destructively, it becomes the money game to make short term wealth at the expense of long term inflation, lower standards of living, and no new innovative product development. What results is consolidation, job losses, no new industries and innovative products, and inflation.

It was called stagflation. Theoretically not possible according to economists. But exactly what happened when another Republican president decided to fix the economy by throwing money at it AND running massive military operations all over the world - including VietNam. He did other stupid things such as wage and price freezes - because he refused to acknowledge that his administration was the reason for US economy faltering. His administration made things worse by trying to make America productive. Destruction of the American economy because the naive believed increased debt was not a problem. Government can not make a better economy. Government cannot create innovation. Government can only make things possible to get better OR directly make things worse.

Again referring to the so opaque comments by Warren Buffet. The only tax cut is one that lowers taxes by reducing spending. George Jr's tax cut does none of this; so necessary to long term growth and wealth. His is a classic money game made possible because - and referring back to discussion in the Cellar two years ago - many people foolishly think that throwing money like a grenade will actually solve economic problems. Money is a scapel to build an economy when in the hands of innovators. A scapel that must be used only where it can be most effective. A scapel made ineffective by too much money or government intervention to 'fix' the economy.

Myopia. Solving problems by throwing money at it failed catastrophically 25 years ago. Increased government debt is simply another way of throwing money, wildly, as if it were a solution. Why then would something that failed 25 years ago do any better today? Because too many people actually believe rhetoric by a mental midget president who could not even run a successful company.

How did the US become the world's richest and most economically powerful nation after WWI? European nations ran up great debts in wars and other international boondoogles. US simply got rich and powerful by avoiding all that silly nonsense. How did Europe and Japan grow richer at the expense of the US when George Sr was president? They bought US bonds and other debtors instruments while the US so increased government spending that even George Sr could not meet his promise - no new taxes.

Ironic that only Democratic presidents make governement more efficient - reduce expenses without reducing services - less costs - reduce government debt. Republicans are good at running up debt and making the wealthiest richer at the expense of both middle and lower classes. They are also good at promoting lies that debt is not a problem - even contrary to what David Stockman warned about 20+ years ago.

With military adventure all over the world - including a new slate of military based across the Middle East and up to China's borders, then the US economy will only short term boom followed by the resulting economic downturns. Anyone who thinks government increasing debt is productive is only acting like an ostrich - ignoring the lessons of 1970s and 1980s - and pre WWII Europe - and many third world nations.

Wow, those heroic Democrats sure are something! How did they reduce expenses without reducing services?

It was called welfare reform. It was called deregulation of the trucking industry back in the days of Jimmy Carter.

Explain how the current President can so increase government spending while cutting domestic government services.

Gulags cost money.

War is hell......and expensive.

Silly tw. He might not have been referring to war as a service.

I guess he doesn't work for a defence contractor.;)