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.