Why isn't government debt more of a problem in people's minds?

[Moraj]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

 

[joG]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

Are you talking about popping the treasury bubble?

But never fear. Per capita you'll love it:

https://www.statista.com/statistics/203064/national-debt-of-the-united-states-per-capita/

 

[PeteEU]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

False

Biggest owner of US debt.. Social Security, with almost 2.8 trillion.

Biggest foreign owner of US debt... Japan with about 1.11 trillion, followed by China with 1.1 trillion.

Federal reserve is owed 2.5 trillion and various Mutual funds are owed 1.4 trillion.

Fact is, out of the almost 20 billion, only 6.3 billion is owed to foreign countries.

This is why the "debt problem" debate by the US right is so false and meaningless.

 

[Jetboogieman]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

First of all, the majority of US debt is owned within America.

Number 2, that's not how things work.

 

[Crispy]

False

Biggest owner of US debt.. Social Security, with almost 2.8 trillion.

Biggest foreign owner of US debt... Japan with about 1.11 trillion, followed by China with 1.1 trillion.

Federal reserve is owed 2.5 trillion and various Mutual funds are owed 1.4 trillion.

Fact is, out of the almost 20 billion, only 6.3 billion is owed to foreign countries.

This is why the "debt problem" debate by the US right is so false and meaningless.

Does who the debt is owed to determine whether the number is ok? I'd also say 1.1 trillion to China is nothing to sneeze at no? I don't think this is a right / left problem it's a fiscal feasibility and responsibility problem wouldn't you agree?

 

[Simon W. Moon]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

It'd be like your bank suddenly asking for the entirety of your note.

We make payments on our debt.

There's not a looming possibility of us having to go through our couch cushions to suddenly come up with trillions.

 

[DaveFagan]

False

Biggest owner of US debt.. Social Security, with almost 2.8 trillion.

Biggest foreign owner of US debt... Japan with about 1.11 trillion, followed by China with 1.1 trillion.

Federal reserve is owed 2.5 trillion and various Mutual funds are owed 1.4 trillion.

Fact is, out of the almost 20 billion, only 6.3 billion is owed to foreign countries.

This is why the "debt problem" debate by the US right is so false and meaningless.

"Fact is, out of the almost 20 billion, only 6.3 billion is owed to foreign countries."
Fact is, out of the almost 20 TRILLION, only 6.3 TRILLION is owed to foreign countries. Chump change? Not in my World.

 

[Nuber]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

NOTE - My numbers are rounded and some numbers may be 2017 comparisons to 2016 numbers. Just discussing the topic, not interested in hyper-technicality.

$20T in debt caused $241B in interest payments in 2016 according to the CBO http://https://www.cbo.gov/publication/52408. That means that we spent 7% of our 2016 revenue on interest payments for the debt.

As interest rates rise, the payment levels will increase. As our overspending continues, both our debt level and interest payments will rise. Interest payments will become an ever-increasing percentage of our revenue.

To compound the situation, our aging and ever-increasing retirement class owns a very large portion of the debt, and they will want their money. When SS can no longer directly pay their benefits (SS payments exceed SS revenue), one of our largest sources for loans will have expired.

My two main points -

I can think of quite a few things that I would rather spend 7% of our federal revenue on than interest payments.

The main question is when does the house of cards come down, not if.

 

[PeteEU]

Does who the debt is owed to determine whether the number is ok? I'd also say 1.1 trillion to China is nothing to sneeze at no? I don't think this is a right / left problem it's a fiscal feasibility and responsibility problem wouldn't you agree?

Actually it does matter. The narrative is that the US owes 20 billion to other countries.. false, it is only 6.5 billion. The rest is owed to .. itself, which frankly is meh in the grand scale of things.

 

[PeteEU]

"Fact is, out of the almost 20 billion, only 6.3 billion is owed to foreign countries."
Fact is, out of the almost 20 TRILLION, only 6.3 TRILLION is owed to foreign countries. Chump change? Not in my World.

Chump change? naw, but in the grand scale of things it is not a problem. The foreign debt is not even 50% of GDP. The other debt is to mr and mrs America, and can be paid back by printing more money.

Think it of this.. you owe 100 dollars away. 10 dollars to the bank, and 90 dollars to Mon and Dad.. guess which is a problem and which is not that big of a deal?

 

[Critter7r]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

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[DA60]

Paying it back is not such a big deal.

Servicing it is.

For every 1%, the price goes up, the debt servicing costs for the U.S. government apparently rises by about $200 billion.

So if/when rates go back to historical norms, that means there will be about $600-$800 billion more in debt servicing costs.

Now Keynesians/Kruigmanites who are actually ignorant enough to think that debt is fine so long as you can print your own money - don't mind this.

But those of us who actually have a clue how the real world works do worry about it.

If you think the sole reason the Fed does not raise rates faster is that the economy is not strong enough yet to do so (which it isn't)...you are dreaming. They know what raising rates back to historical norms would do to the fiscal situation...as Yellen somewhat alluded to recently.

https://www.c-span.org/video/?c4676406/janet-yellen-national-debt&start=3224

And if inflation ever jumps again significantly and the Fed has to raise rates accordingly...yikes.

 

[MrWonka]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

1.) No, they can't just ask for it any day.

2.) most of that money is actually owed to American citizens not other countries.

3.) 20 trillion dollars isn't not actually that much money when your GDP is also about 20 trillion dollars. Most people who buy houses have debt that is more than double what their yearly salary is, and there is no reason to be freaking out about it.

4.) The interest on that debt is incredibly low.


What people like yourself need to understand is that government debt is not the same as your own personal debt. Some entities, like banks actually want debt. Every time you put money in your checking account or your savings account your bank is voluntarily taking on debt from you, and they're happy to take as much of it as you want to give them. Why? Because they turn around and loan your money out to other people at a higher interest rate than what they're paying you. They're actually making a profit off of that debt.

America is the essentially the world's bank. The American people are basically the world's most diversified portfolio. Countries borrow us money because they know we're a safe investment. So long as our GDP grows at a rate that is equal to or higher than the interest rate we're being charged(which it usually is), we're actually making a profit off that debt.

 

[MrWonka]

Now Keynesians/Kruigmanites who are actually ignorant enough to think that debt is fine so long as you can print your own money - don't mind this.

I think you're thinking of Reagonites. They were the ones who preached that deficits don't matter.

The point about printing our own money is simply to help people understand that at any moment we could instantaneously whip out our debt. Our national debt could literally be gone tomorrow with the blink of any eye if we wanted it to be. We don't do that because keeping the debt is actually better overall.

 

[blackjack50]

NOTE - My numbers are rounded and some numbers may be 2017 comparisons to 2016 numbers. Just discussing the topic, not interested in hyper-technicality.

$20T in debt caused $241B in interest payments in 2016 according to the CBO http://https://www.cbo.gov/publication/52408. That means that we spent 7% of our 2016 revenue on interest payments for the debt.

As interest rates rise, the payment levels will increase. As our overspending continues, both our debt level and interest payments will rise. Interest payments will become an ever-increasing percentage of our revenue.

To compound the situation, our aging and ever-increasing retirement class owns a very large portion of the debt, and they will want their money. When SS can no longer directly pay their benefits (SS payments exceed SS revenue), one of our largest sources for loans will have expired.

My two main points -

I can think of quite a few things that I would rather spend 7% of our federal revenue on than interest payments.

The main question is when does the house of cards come down, not if.

This


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[VanceMack]

Its only a 'problem' when the guy sitting at the desk in the oval office is someone from an opposing party. Obama and democrats all shat themselves over the defeict during the Bush administration, with Obama himself calling the 9 trillion dollar debt run up by the Bush administration "unpatriotic". However when Obama more than doubled the entire combined debt of all past administrations combined, it became no big deal. Right now Trump is still dealing with the Obama debt. Wait til the 2018 State of the Union address (regardless of whether or not it is delivered by Trump or Pence). If the debt is 23 trillion, leftists will once again go back to ****ting themselves daily over the debt and reckless and irresponsible spending (all the while clamoring for more debt and irresponsible spending).

 

[Kushinator]

Obama and democrats all shat themselves over the defeict during the Bush administration, with Obama himself calling the 9 trillion dollar debt run up by the Bush administration "unpatriotic".

It most certainly was unpatriotic! Between 2001 and 2003, federal receipts fell by nearly $400 billion while expenditures increased by nearly $300 billion. This means from QII 2003 onward... the federal government was operating out of a $700 billion ($681 billion) fiscal crater.

Can you defend such a budget policy reversal?

However when Obama more than doubled the entire combined debt of all past administrations combined, it became no big deal.

The federal government bridged both the output and investment gap left by the private sector. Between the time Obama won the election and the first stimulus expenditure was paid through the Treasury, the United States economy had witnessed more than $10 trillion in wealth evaporate.

I can defend the budget policy continuation of the Obama administration. That's the difference between our positions.

Right now Trump is still dealing with the Obama debt.

A meaningless statement.

Wait til the 2018 State of the Union address (regardless of whether or not it is delivered by Trump or Pence). If the debt is 23 trillion, leftists will once again go back to ****ting themselves daily over the debt and reckless and irresponsible spending (all the while clamoring for more debt and irresponsible spending).

The meaningless partisan nonsense continues!

 

[fredmertzz]

The US owes almost 20 trillion dollars to so many countries. They could easily ask for it back any day. :shock:

I'm not trying to downplay the debt problem, but it does have laddered maturities. It's not like they can just demand payment prior to maturity. They can trade it on the secondary market if they want it off their books though.

 

[Exquisitor]

Its only a 'problem' when the guy sitting at the desk in the oval office is someone from an opposing party. Obama and democrats all shat themselves over the defeict during the Bush administration, with Obama himself calling the 9 trillion dollar debt run up by the Bush administration "unpatriotic". However when Obama more than doubled the entire combined debt of all past administrations combined, it became no big deal. Right now Trump is still dealing with the Obama debt. Wait til the 2018 State of the Union address (regardless of whether or not it is delivered by Trump or Pence). If the debt is 23 trillion, leftists will once again go back to ****ting themselves daily over the debt and reckless and irresponsible spending (all the while clamoring for more debt and irresponsible spending).

I think the Republicans were the most hypocritical when they started crying about the Debt only when they have Democrat President.

Do they think I do not see them doing this?

After they handed over a crisis.

Instead of running around crying, "Failed Stimulus," they could have given a little more and the growth would have a balanced budget by now.

 

[blackjack50]

Its only a 'problem' when the guy sitting at the desk in the oval office is someone from an opposing party. Obama and democrats all shat themselves over the defeict during the Bush administration, with Obama himself calling the 9 trillion dollar debt run up by the Bush administration "unpatriotic". However when Obama more than doubled the entire combined debt of all past administrations combined, it became no big deal. Right now Trump is still dealing with the Obama debt. Wait til the 2018 State of the Union address (regardless of whether or not it is delivered by Trump or Pence). If the debt is 23 trillion, leftists will once again go back to ****ting themselves daily over the debt and reckless and irresponsible spending (all the while clamoring for more debt and irresponsible spending).

Once power is given to the government...it is not returned. I for one am not happy with this. There is no such thing as good debt. But seriously...I was reading an article this morning and it seems Trump is wanting the debt ceiling to go up and the left is already saying no. Which is opposite of what they said for the past 8 years.

The crowd is not the sum of its parts.

I am a republican who did not vote for Trump (Or Hillary).

 

[VanceMack]

I think the Republicans were the most hypocritical when they started crying about the Debt only when they have Democrat President.

Do they think I do not see them doing this?

After they handed over a crisis.

Instead of running around crying, "Failed Stimulus," they could have given a little more and the growth would have a balanced budget by now.

Of course you think that...and perfectly exemplify the point. Its always 'the other guys'.

 

[VanceMack]

Once power is given to the government...it is not returned. I for one am not happy with this. There is no such thing as good debt.

There is no good debt but there is responsible debt.

 

[Exquisitor]

Of course you think that...and perfectly exemplify the point. Its always 'the other guys'.

No, It's not the other guy, it's me, I elected Bush, I let 9-11 and economic crisis, I turned my nose up to Obamacare and I told the Republicans what this Obama would do to them if they didn't stop him.

Now you guys are lucky you didn't get Hillary because everything would grow and everyone would know that you can't just throw at it tax break (slam your foot on the gas on an icy road).

 

[Exquisitor]

There is no good debt but there is responsible debt.

Well, our debt is irresponsible.

Who told us we could run up 150 Trillion dollar Debt?

No, It's not the other guy, it's me, I elected Bush, I let 9-11 and economic crisis, I turned my nose up to Obamacare and I told the Republicans what this Obama would do to them if they didn't stop him.

Now you guys are lucky you didn't get Hillary because everything would grow and everyone would know that you can't just throw at it tax break (slam your foot on the gas on an icy road).

Hey, after the crash, I'm going to go running around crying, "Failed Tax Break."

 

[VanceMack]

Well, our debt is irresponsible.

Who told us we could run up 150 Trillion dollar Debt?



Hey, after the crash, I'm going to go running around crying, "Failed Tax Break."

Have you really taken to quoting yourself???