The National Debt in the USA

[LouisXIV]

We have been hearing a lot about our national debt here for the last year or more. I thought you might like to be able to visualize just how much money that is:

usdebt.kleptocracy.us/

[Deleted]

I've seen a similar depiction before, but the last imagine makes me wonder about the taboos of the modern age. They could have made twin towers with the money instead of a really big one and a short one. I wonder if the symbol is still too painful.

[LouisXIV]

I am sure to some it is very painful, I think it will be long remembered. Definately not the same, but will be in our memory for a long time like, Remember the Alamo.

[fumobici]

A list of nations and their debt to GDP ratios:

en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

The current American "debt crisis" was manufactured ad hoc for nakedly political aims. I'll spare you for now my take on the underlying motivations except to say that it is unsurprisingly the rich wanting to create a political environment where they could take a greater share of the wealth by the usual means.

The game is pretty much laid bare by the offering up of Social Security, a program fully self-funded and neither part of or contributing to the "debt crisis", and other social programs as sacrificial lambs while the trillion dollar plus per year American "defense" and state "security" apparatus is illogically deemed sacrosanct and tax rates are at or near historic lows or even negative for even the wealthiest and corporations making multi-billion annual profits.

This isn't even a particularly partisan issue, the Democrats are nearly as guilty of fear mongering and willful deceit here as the Republicans.

Cutting public spending while the economy is precariously balanced on the brink of collapse and jobs are hemorrhaging, as any non-ideological macroeconomist can tell you, is exactly what not to do. The highest marginal income tax rates in the US are currently about one third of what they were when the American economic miracle was running free post-WWII. Nobody serious about debt reduction would ignore the revenue side. They aren't serious.

This is class war, and you are on the losing side people.

[bixaorellana]

*kisses hem of Fumobici's highly rational garment*

As I'm in the US right now, I get to hear the unthinking "the sky is falling!" reaction to all the fear mongering. My usual response to it is, "It's so unimaginably high already, why do we care if it's raised somewhat?" This generally gets a "Yeah, that's true." response, proving that unsubstantiated bytes are more effective than reasoned, fact-backed arguments.

[LouisXIV]

Yes I have seen many use this ratio of GDP to debt to justify debt. The only good debt is NO debt. When you enter into debt you are putting yourself in bondage and are assuming that in the future you will be able pay the money back. In the last five years we have learned again that assuming can get you in trouble.

I agree that the "debt crisis" is also being used for political aims. Politicians and people in power have known since the beginning of time that one of the tools of power is keeping the masses in a perpetual state of confusion.

Social Security is fully funded? Tell me another fairy tail. There are all kinds of problems in the horizon with that program and Washington is procrastinating because if they try to solve the problem they may not get reelected. As Benjamin Franklin said, "When the people find that they can vote themselves money, that will herald the end of the republic." We are approaching that point. Then when the whole thing caves in, what will the people do, just like in the past, they will follow the person that blows sweet words in their ear and we will do it all over again. Read your history.

Like bixaorellana says, "It's so unimaginably high already, why do we care if it's raised somewhat?". I agree, I have seen it myself. The Americans have to take responsibility for them selves and not put blind faith in their government.

As to the politicians, maybe one of them will get smart and go to the NRA who have given them a lot of money to run their campaigns, borrow a rife and shoot that shrimp on that treadmill and save us $500,000. But then another politician will fund a million to put a centipede on the treadmill -- Of course, more legs, more money; we must stay within the ratios.

[fumobici]

Any government that preemptively took borrowing off the policy table would as a result lose control over its monetary policy. It would also be unable to moderate the effects of downturns in the business cycle on its citizens. That's perhaps why no government does that. And do you personally walk your own talk? Have you ever used credit to purchase a house, a car? Have you torn up your credit cards so you don't carry a balance, even until the month's end?

There's this irrational conflation between the economics of "household budgets" and that of a state that prints and controls its own currency that runs like a river of jawdropping ignorance through the whole debt ceiling debate and poisons it. Can a household create its own currency? Can a household tax the wealthy to pay off it debt? Can a household lower the value of its outstanding debt or address trade imbalances through currency devaluation? Macroeconomics doesn't operate on the same principles as a household budget. Analogies based on the assumption it does are bald admissions of astonishing ignorance on the part of those advancing them.

[LouisXIV]

My house and car are free and clear. I use a credit card to pay for almost everything and write one cheque at the end of the month to pay it in full and have been doing that for years. I have learned the hard way, if I want something, I save my money until I can afford it. I have a very small net worth, but at least it it is not in the negative numbers like many in this country.

"Any government that preemptively took borrowing off the policy table would as a result lose control over its monetary policy." I really question that. If they had spent the peoples money wisely in the past they would not have the situation they have in the present. Yes, there is a time when govenment has to extend it's self like in the time of war. The government has put themselves in a postition where they have to increase the debt limit, but doing so is not going to solve the long term problem. We will be in the same positon in six months or a year from now. They simply have to stop spending the money like fools. We are spending many hundreds of billions of dollars each year on interest to pay for things we can nor afford and we borrow more money to pay the interest payments. Of the almost 15 trillion debt approximately half of it is short term, that is, under two years. In the present enviroment there is a strong possiblility the people and countries who lend us this money will want a higher interest rate of interest. So then, we even have less money to pay for the what the government has committed to.

Yes governents and household budgets and finances are different, but they both have one thing in common, you can't borrow money and not pay it back with interest with out conquences. Yes the government can turn on the printing press and put more money in curculation, but that just helps fuel inflation and inflation is just another form of taxation.

I understand tha analogies only illustrate a point, it is to bad the people we elect do not understand that.

[brianR]

I've seen also how much our debt to other countries, and its really big.
Our government balance the federal budget and come to an agreement regarding the debt ceiling, the threat of national debt default has many perplexed. Political wrangling over the nationwide debt and the debt ceiling is sending a message many Americans do not want to hear. Conventional wisdom states that China is the solution to the question of “Who owns The United States?”, and that default will place the United States too far behind. Yet as an enlightening report by Business Insider points out, conventional wisdom concerning who owns America is wrong. China has a major stake, but much like in Japan, most of United States debt is nationally held. I found this here: Your financial upside-down cake: China does not own America