The US national debt

Discussion in 'Business & Economics' started by Mrs.Lucysnow, Jan 3, 2011.

  1. Mrs.Lucysnow Valued Senior Member

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    What are the sciforum members answer to this question asked by another member:


    "Where is the proof that the US will never be able to repay it's debt? Bottom line there is no such proof. Because the US will pay every dollar it owes...even if it has to print more money to do so. The bottom line is that of the 13 trillion dollars the US government owes, about half of that amount has already been monetized - meaning the government owes the money to itself."

    How many of you believe it is possible that the US will repay its debts?
     
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  3. cosmictraveler Be kind to yourself always. Valued Senior Member

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    There's different types of debts that it owes. To repay all of them can be done however it will take many years, over 50, to do so and there's always going to be more debt compiled upon the debt it already has which means that it just may never be repaid fully. You can't keep borrowing money or making up money forever and eventually your money will be useless or you'll be bankrupt.
     
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  5. joepistole Deacon Blues Valued Senior Member

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    You are assuming a nation has a finite life span which is not the case. There is no need for a nation to ever pay off its entire debt. However there is a need for a nation to keep its debt managable in order to maintain price stability and forment economic investment.

    I am not a big fan of Cavuto, but he said it well last evening on Fox. I will try to paraphrase. Cavuto said that debt limits a governments options and flexibility. And he is basically correct. It limits choice/options.
     
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  7. USS Athens Very Special Senior Member Valued Senior Member

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    Isn't the majority of the debt the United States owes, to itself?
     
  8. joepistole Deacon Blues Valued Senior Member

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    About half of the US debt is owed to itself.
     
  9. Michael 歌舞伎 Valued Senior Member

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    I think Money as Debt II makes a good case that mathematically it's not possible to pay off the debt - it's not meant to be paid back. "Money" is issued as debt and most is reissued multiple times and so there will always be more debt than there is money. Even "printing" money is debt.
     
  10. cosmictraveler Be kind to yourself always. Valued Senior Member

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    It is very sad that before America was never in any debt problems prior to the Vietnam war. It wasn't until then that America went into debt and has been going deeper and deeper into debt since then.
     
  11. joepistole Deacon Blues Valued Senior Member

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    I think you need to go back a bit further in history Cosmic. US debt was at it's zenith after WWII.
     
  12. Syzygys As a mother, I am telling you Valued Senior Member

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    That is a very incorrect approach. Think about other countries with their own money, but without debt. Can you find a few? Sure. And there goes your theory...

    We simply need money otherwise we have to still use salt, or bones or whatever they used as a measurement of wealth. Although as others noted earlier, the debt needs to be managable. As long as the debtors think that they can get their money back, everything is fine...

    One easy way to get out of debt for a government is to inflate their money. Once a loaf of bread costs 1 trillion bucks, it will be very easy to pay of those quadrillions what the US owns...
     
  13. Carcano Valued Senior Member

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    Its entirely possible...even EASY.

    But extremely unlikely.

    Its unlikely because there are very few politicians who WANT to shut down the global military empire. Most think its still the end of WWII.

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    There are very few politicians who WANT to drastically increase taxes on the weathiest 1% of Americans. Thats where the majority of the money is located.

    There are very few politicians who WANT to impose tariffs on Chinese made goods...goods responsible for the greatest transfer of wealth (to Asia) in the history of the world.

    Most Americans dont even realize their government's wealth amounts to 14 Trillion less than ZERO.
     
  14. Carcano Valued Senior Member

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    Money is not issued multiple times but it is COUNTED multiple times under the fractional reserve multiplier effect. When banks stop lending this process is unwound.

    Money is created AS debt ONLY when the Federal Reserve creates it to buy US treasury bonds. And even then, the interest earned on that debt is almost entirely REMITTED to the Treasury.
     
  15. USS Athens Very Special Senior Member Valued Senior Member

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    Oh, my mistake, didn't see that...
     
  16. nietzschefan Thread Killer Valued Senior Member

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    So the U.S Debt is mostly owed to itself...like what the U.S can just fuck itself and not pay it?

    Get a grip. You right off that debt owed to the American people and you just fucked everyone with a positive balance in their bank account. Nice job guys.

    I Think i'll buy some more gold now, this attitude pervades everywhere...
     
  17. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    The implication would be that paying said debt ends up boosting the financial position of the American public/businesses/etc., and so doesn't stand to harm the financial position of the US economy as a whole. Payment doesn't represent money flowing out of the US economy to somewhere else, but simply movement of money between the US government and the rest of the US economy. This is how Japan has managed to run massive debt-to-GDP ratios for decades now.
     
  18. joepistole Deacon Blues Valued Senior Member

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    This does not make any sense.
    This is not true either. Money is constantly created for many reasons including replacing old worn currency.

    U. S. Money Supply

    http://en.wikipedia.org/wiki/Money_supply#United_States


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    Last edited: Jan 4, 2011
  19. nietzschefan Thread Killer Valued Senior Member

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    And isn't Japan doing sooo well now, they live in economic Feudalism. This shit won't fly in the West. Certainly not North America.
     
  20. Carcano Valued Senior Member

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    Thats because you dont understand the multiplier effect...and probably dont even want to.

    Replacing already existing coins or paper is not creating money.
     
  21. joepistole Deacon Blues Valued Senior Member

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    Actually, Japan is getting better these days.
     
  22. nietzschefan Thread Killer Valued Senior Member

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    For those without 99 year or infinite mortgages. All you see is numbers go up on a stock market - you could give a shit about the overall welfare of the working populace.
     
  23. Michael 歌舞伎 Valued Senior Member

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    Did you watch the video?

    What I mean is our money is issued by debt. It doesn't have to be. But, that's the system we inherited from the English (who developed it to facilitate commerce across their Aristocrat run Empire).

    Think about this. When you "deposit" some "money" into your bank account it seems like you have added some money in there huh? I mean, you balance goes up. While it works out to function as if that is what has happened, would it surprise you to find out that's not exactly what has happened?


    Also, inflating money destroys wealth - - Is paying banksters so important you'd be willing to destroy your own wealth? I promise you it won't be Banksters who lose wealth - it will be us. It's like cutting off your nose to spite your face.
    :shrug:


    We need structural change.
     

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