US National Debt

Discussion in 'Economics' started by fbbi0, Jan 22, 2004.

  1. fbbi0


  2. ig0r


  3. fbbi0


    I hear you. It's really worst than 30 trillion if you consider the following,

    The $44 trillion hole?
    Recent study says Social Security, Medicare shortfalls could be far bigger than previously thought.

    May 29, 2003: 3:46 PM EDT

    Who's gonna pay for it? Soon if not already, the total GDP won't be enough to even service the debt. House o cards?
  4. noddyboy


    This isn't like a credit card debt that has to be paid off you know. Why is there an obsession with paying it off anyway? If creditors think that the debt is really a big concern, interest rates won't be so low. And while interest rates are so long, isn't it good that America is borrowing cheap money and investing it in America? Also, a large percentage of the debt is internal. If your dad borrowed from your mom who then spends it on your mom, what is the big concern?

    Okay. Things are quite so simple. There is probably lots of things wrong about what I just said. But precisely, things aren't so simple. So let's look into it more before crying wolf. Are there successful countries with no debt that we want to follow?
  5. fbbi0


    borrowing from mom (with her consent) is one thing... borrowing from the unborn children and grand children is another.

    who are the creditors?
  6. So when do the goldbugs reveal themselves and then tell us we hold worthless paper in our pockets?
  7. pspr


    Send me the bill. I'll print some money and pay it off. :D
  8. noddyboy


    Some of the creditors are other government agencies.
  9. noddyboy


    Certainly possible. And Japan would not let the US currency depreciate, so at least Japan will burden part of the cost! Ah, so free money. Why are we complaining?
  10. noddyboy


    I am not sure if I got this right, but I am pretty sure (read on Bloomberg) that the bond market grew much faster than the federal debt in the recent years, so as a percentage, the US govt is borrowing less of the total debt market. And it is important for the US govt to be present in the debt market because it serves as a benchmark and aids price discovery.

    An argument for less federal borrow is the crowding out effect. If the goverment borrows too much, other people find it harder to borrow, since there is more competition for lenders. This percentage of total debt arguement shows this is not so.
    #10     Jan 23, 2004