U S National debt

[OldWiseGuy]

As long as we have politicians spending our hard earned money like drunken sailors on liberty, it matters not if we cut or increase taxes.

The government spends it's revenues meeting our needs and entitlements. The biggest reason for deficit spending/debt is that taxes are too low. In the meantime consumers continue to buy imports sending $600Billion out of the economy each year, a deficit that must be made up by.....borrowing dollars back from those nations we trade negatively with. Everyone is spending like drunken sailors, not just the government.

 

[OldWiseGuy]

Now you know you aren't suppose to mention that, makes you wonder who all got rich because of him? (He's worth over 40M and was only worth about 1M when he went into office, hmmm).

The main reason people run for these offices is to get close to the treasury. They are very efficient at lining their pockets with our money. No so efficient in doing "the people's business".

 

[mark46]

What will happen if the interest on debt becomes so high the USA defaults. Is that even a possibility?

not even a possibility for the strongest economy is world history

 

[jayem]

What will happen if the interest on debt becomes so high the USA defaults. Is that even a possibility?

For the record, it's unconstitutional for the federal government to default. That's stipulated by the little-known Section 4 of the 14th Amendment:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

This was adopted after the Civil War. It requires that the federal government pay interest and principal on all Treasury bonds, notes, and bills it issued to fund the war. It must also pay soldiers pensions, and other costs. But it will not pay the owners of emancipated slaves for their losses, and will not pay any Confederate debt. Obviously, the language specific to the war isn't applicable anymore, but the no-default requirement still stands.

 

[OldWiseGuy]

Even on a mortgage you have to pay the monthly interest rate as a minimum. If you dont you may lose your house. I think maybe thats the OPs issue - if the USA allows the rate of increase to continue, and if that rate of rise is above your GDP growth, then......... well what - what actually happens - does this become a Greece Austerity Measures scenario?

If we can get our trade policy right we can pay off our debts pretty fast. Money leaves our shores faster than we can print (borrow) it.

 

[OldWiseGuy]

Public debt is public ownership. So the $63,000 that each citizen 'owes' translates to ownership (and stewardship) of the nations assets. I personally own a couple hundred feet of highway in the Arizona desert. Fortunately it doesn't need to be plowed in the winter.

 

[wing2000]

Estimated. It depends on what happens overall when the government takes in more revenue due to the tax cuts.

I fully understand there are hypotheticals. Reagan's tax cuts did take in more revenue in year 4 of the first cut. However spending increased.

As long as we have politicians spending our hard earned money like drunken sailors on liberty, it matters not if we cut or increase taxes.

...and by all indications, the same thing will happen this time around.

 

[cow451]

I figured Trump would try to bankrupted it. To make it go away.

He used that apply many times in business.

 

[jayem]

Another thing to keep in mind is that current interest rates are vanishingly low. True, they probably won't stay that way forever, but for now, our debt service is pretty cheap. For 2018, net interest is projected at $332B or about 9% of federal spending. Which is within 1% of the average over the years. And as was noted, 2/3 of our debt is internal. Most of that interest is paid to the American people and institutions. So that money ultimately goes back into our own economy.

http://federal-budget.insidegov.com/l/121/2018-Estimate#Spending&s=47xnQz

 

[redleghunter]

Wow you really believe the USA can get away with not paying its debt? For a start your credit rating wont be worth a dam and any money borrowed from then on will be very expensive

And if they do that, there biggest market, the US, would not be able to purchase in large quantities their cheap products.

 

[redleghunter]

...and by all indications, the same thing will happen this time around.

Trumps main deal is the wall. Which if fully funded might cost what one month of combat operations cost in Iraq and Afghanistan in 2007.

He has a very cheap fixation compared to his previous peer presidents.

 

[Zoii]

Trumps main deal is the wall. Which if fully funded might cost what one month of combat operations cost in Iraq and Afghanistan in 2007.

He has a very cheap fixation compared to his previous peer presidents.

What do people really think of all that in the USA. It's a wall important to people in the USA?

 

[redleghunter]

What do people really think of all that in the USA. It's a wall important to people in the USA?

I think it is important to border states. It is their economies most hit. Not to mention cartel narco terrorists.

 

[Galaxy Hunter]

For the record, it's unconstitutional for the federal government to default. .

The government would simply add it to the long list of things they do that are unconstitutional.

 

[Galaxy Hunter]

The government spends it's revenues meeting our needs and entitlements. The biggest reason for deficit spending/debt is that taxes are too low. In the meantime consumers continue to buy imports sending $600Billion out of the economy each year, a deficit that must be made up by.....borrowing dollars back from those nations we trade negatively with. Everyone is spending like drunken sailors, not just the government.

The government does not have a problem with taxes being too low. It's problem is that spending is too high.

 

[Galaxy Hunter]

In any event, I think debt to GDP is the true metric to worry about and the US seems to be within the acceptable bounds.

?

It's acceptable for now but what happens when GDP goes down? I suppose the only good news is that the government can always change the way they calculate GDP. They do those little numbers shell games to make inflation and unemployment anything they want them to be. The problem is that you can only tweak numbers so much before someone yells that the king is naked. If GDP numbers are the only thing keeping us from an economic collapse from our debt we'd better have some creative folks faking those numbers in the future.

 

[mark kennedy]

Put the lock box back on social security and we will be running a surplus. We had that until George W. Bush decided to spend it on tax cuts and an unnecessary invasion of Iraq.

 

[rambot]

It's a global ponzie scam. China holds our debt and we buy a lot of stuff from them. Europe is dependent on our economy and monetary policy.

If China calls our debt Europe becomes like Pakistan and China starves to death.

That is why we are constantly policing the open seas and involved in every hell hole failed state. It's the order of things the Globalists all agree to. That is why they hate Trump.

China holds about 1/4 of your debt and japan holds ALMOST as much

 

[redleghunter]

China holds about 1/4 of your debt and japan holds ALMOST as much

But we have nukes and Japan does not. Plus, the last time Japan tried to to take over our economy we ended up making most of their top companies bankrupt. I think Trump had a lot to do with that in the late 80s by selling them overpriced real estate.

 

[OldWiseGuy]

Put the lock box back on social security and we will be running a surplus. We had that until George W. Bush decided to spend it on tax cuts and an unnecessary invasion of Iraq.

Not quite.
https://www.cbsnews.com/news/lets-debunk-this-social-security-myth/