So all this debt (national, international, etc)...

[Lord Sinister]

Right, this is something that's been bothering me somewhat, so I thought I'd post about it here. I am not really knowledgeable on economic matters, but I am aware of the figures that get touted around often quote figures in the billions or trillions of pounds/dollars/euros (eg http://www.bbc.co.uk/news/business-16698293, http://www.bbc.co.uk/news/business-13416475). From my humble citizen's perspective, these are insane figures.

 

But the real question that I want answered (if possible) is....who is owed all this money? Have governments always been in debt since they were created or is this debt system a more recent phenomenon? By recent I mean World War 2 onwards.

 

Is it owed to different nations? And do they in turn owe money back? Is it all cyclic or whatever the correct economic terminology is? Is it owed to thousands or millions of individual people and/or businesses? Where is this money going? Surely debt doesn't just magically appear? Someone must be owed this money. :\

[Pinkie Pie]

I've always wondered this, too. Though my biggest question is, if there's so much debt and the governments have been in debt so long, what's exactly the consequence for such debt? It's not like the government is putting all their money towards said debt, otherwise they're screwed for their other bills, and they've been in debt so long, and are in fact owing more and more money over the course of time, it feels like there's no repercussions for it.

[Chuckthe2nd]

I think the primary concern is that all the countries we owe money to could literally "foreclose" on the US government. Bye bye, America.

 

I actually highly recommend this documentary if you want a more detailed explanation of the US debt issue:

 

http://www.iousathemovie.com/

[Collective Foal]

This is exactly why I hate getting involved in politics (though I'm very good at talking about it.) The only countries that aren't in massive amounts of debt and actually have money, are dictatorship/communist nations (China, for example). But their people have absolutely no rights (I think it was Tiaman Square where all the protestors were shot in broad daylight but the government made the public believe nothing happened). When you run a system on retarded Capitalism that keep making lunges towards socialism (Liberals), you end up with a horribly fucked up system that causes insane debt. Consistency is key in economics. If we were to keep low taxes and high amounts of revenue from trade with other countries, we's have money out the ass AND happy citizens. But our Democratic friends insist that you have to spend money, and not just some money, a shit ton of money, in order to get any money back, that they're completely breaking the system.

 

Everybody remember that Recession back in '08? That ain't shit. Economists are almost unanimously saying that the way liberal asshats like Obama are trying to fix our economy is going to come back and fuck us in the ass, really hard, with no lube. They're talking 50% unemployment, Inflation the likes of which the world hasn't seen since 1920s Germany, where bills were more useful making fire than being spent on bread. So yea, the debt shouldn't even be a concern anymore. It's like herpes or AIDS, it's only getting more and more malignant, and there isn't anything we can do to stop it. No bother worrying about something that is never going away, right?

[Humin]

Monkeys vote for a monkey to rule the monkey country.

The problem is that monkeys are voting for monkeys. I'd say that our best likelihood for voting for the right president would be to build an unbiased AI system with superior intelligence to pick the person that would be best for the job, because, every single human being is biased.

 

As long as they don't name the AI Hal 9000, we should be OK.

[Collective Foal]

Wwell, it's a Democracy. The people have a choice in their leaders. If they want to elect monkeys, they will be equally responsible for the death of this nation. Back in 08, Obama almost indubitably won because of his popularity with minorities, simply because he was a black candidate. McCain really was the better candidate, and now, because we elected a liberal retard, our economy is fucked. But when everything is going to hell, hopefully I'll be Somewhere far away or six feet under.

[Vapymid]

Sovereign debt is a complicated thing. The US is particularly difficult to understand - I stopped trying.

 

But some things are relatively straightforward. When one country (USA) imports stuff from another and it pays with it's own currency (USD), the exporter get's a lot of dollars, which have to be kept somewhere. What it does is it puts the dollars on deposit with the US Government (because it's the lowest risk creditor for Dollars) and receives T-Bills or other notes for that.

 

When it is time for the US Government to repay those notes they can do that by issuing new notes (new debt) and use the cash to redeem the old ones.

 

I think the primary concern is that all the countries we owe money to could literally "foreclose" on the US government. Bye bye, America.

 

The only way to "foreclose" a country is to stop buying its new debt or demand unsustainable interest rate on it. That is more or less the issue with Greece, Spain etc.

 

But that is a double edged sword. If you stop buying new debt, the country may "default", which will sharply devalue its currency, where it can promptly print more money and pay back the old debt. On paper, it has repaid, but in reality you get a few cents on the original value of every dollar which you lent to the government before. So, by not supporting the country's debt program, you will shoot yourself in the foot.

 

The "defaulting" country will be in trouble for a while, especially, if it relies on import of anything, which will suddenly become hugely expensive, which will in turn cause high inflation etc. But, usually, it lasts only a few years, after which it digs itself out of the hole. Those few years may result in the deaths of hundreds or thousands, though, through poverty, civil strife, political repressions etc.

 

To add more confusion, those EU countries I mentioned cannot even do that - print more money - because they don't have any. Their currency belongs to the EU and they have no power to issue it nationally. So, they are really screwed. QED.

 

Regards

[Brad]

When you run a system on retarded Capitalism that keep making lunges towards corporatism (Conservatives)

 

https://www.youtube.com/watch?v=ox2QYv0mmqc TF

 

that they're completely breaking the system.

 

It's been broken for a while now. Since the Nixon administration.

 

McCain really was the better candidate, and now, because we elected a liberal retard, our economy is fucked.

 

I don't think it would've mattered who was the better candidate, McCain would've walked into the same fire. When the debt gets this high, it won't stop climbing without serious reform.

 

Economists are almost unanimously saying that the way liberal asshats like Obama are trying to fix our economy is going to come back and fuck us in the ass, really hard, with no lube.

 

Yes, he's tried to fix the economy. He can't though because the Republicans always oppose him and the Democrats always back down. There is too much conflict in congress, nothing is getting done and if they keep fighting it's only going to get worse.

 

They're talking 50% unemployment, Inflation the likes of which the world hasn't seen since 1920s Germany,

 

Source? Who's saying this?

[Collective Foal]

Didn't feel like watching all four Youtube videos, so I don't know what that's about. Firstly, I don't remember my source for the economic predictions; it might've been on CNN or something like that (wasn't FOX news or MSNBC, I don't watch biased bullshit.) Now, I would love for you to try to tell me that Obama hasn't tried and succeeded in some cases, in firing trillions of dollars into wellfare programs that really benefit a far too small percentage of Americans. That kind of wasteful spending doesn't just increase our debt at its usual rate, it skyrockets the debt by unbelievable amounts. That puts strain on every aspect of our economy to the point where we are going to collapse like a toothpick tower in the wind. McCain's ideas would have AT LEAST postponed this if not terminated it entirely. Here's the simple thing: You make more money off of exporting goods than you do taxes, because when you tax, your simply recycling your own money back into the government's hands, rather taking in "new" money from other countries. If you tax, your national value stays the same. If you export, your national value goes up. Also, exporting goods naturally creates more jobs, as you need people to handle and process the goods. Lowering taxes makes people happier, too. I'd rather have a happy public and more money than have dissatisfied people and the same amount of money.

 

The next problem with liberal decisions is their almost deluded concept of helping individual people. People on welfare are a minority. Sure, it's okay to give them some welfare benefits, but burning through money to try to help people (some of them don't even care and waste that money, as there are a lot of people who sell drugs for food stamps) is completely idiotic. America runs on a Capitalist economy. There are ALWAYS going to be poor people. That's a fact of life. And don't go saying it doesn't have to be, otherwise you're talking Communist China, Russia, and North Korea, all three of those places being known to be oppressive shitholes. That's what's wrong wjth liberals. They dream so much of fixing things that, frankly, can't be fixed, that they also make things worse for the people that used to have it pretty well off. And yes, CEO's getting payed shitloads of money is pretty ridiculous. But sadly, they're in such a high position that they can control that money flow. Yeah, they're greedy bastards and they should donate their unbelievable amounts of money to a good cause, but that's usually not the case. And you can't do anything about it, because taking anyone's money, other than through small taxes, is wrong and unconstitutional, as it conflicts with their liberty to own property.

[Ross Scott]

There's a lot to discuss on this thread, I'll keep my stuff to bullet points:

 

-The debt is owed to anyone who loans money. As someone mentioned, we owe a lot to China. Anytime someone buys a government bond, the government owes that bearer money. People owe money to banks every time they give a loan or any organization involving interest.

 

-There are currently

.

 

-This stuff is bigger than Obama, McCain, or Bush. While presidents have influenced how this plays out, I currently think our political system won't allow the kind of radical change needed to fix this. There's a quote before "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist." I think that kind of sums up the root problem.

 

-I think McCain's campaign platforms were very similar to Bush's, so I don't understand why things would have gotten better staying the course on that. At the very least that probably would have meant the same amount of spending in Iraq, probably more.

 

-I think Obama made a gambit to try and recover the economy which probably helped things in the short term, but set things up to collapse even harder in the long term.

 

-The republicans are just as guilty of overspending as the democrats, if not moreso. The major tax cuts happened under Bush. The bailout happened under Bush (though continued by Obama). There are trends of what each party is more likely to spend on however. Republicans traditionally spend more on military spending and tax breaks, and democrats normally spend more on health care, social services, etc.

 

-While I've heard the THEORY of why lowering taxes on upper income people can help the economy / average person, I haven't heard any EVIDENCE of this. I mean Bush brought our taxes down incredibly low and the economy hasn't exactly prospered with him. Also our taxes are lower than ever, but if you compare us to the 80s or 50s, the average wages for upper income earners has gotten MUCH better (someone posted a video to this), whereas the wages for average workers has actually DECLINED when taking inflation into account. When big companies are raking in profits, smart ones invest regardless of the tax rate. Most companies try to maximize profit in any way they can. So if their tax rate is low, but they can still afford to outsource jobs at a much lower cost than domestic ones, they'll often do so. I consider this argument invalid unless someone can provide a historical example with a direct correlation of how things got better economically for the working or middle class by LOWERING taxes on top income earners.

 

-I agree that we're likely headed towards hyper inflation (I've heard estimates by some economists put it by 2020) for a variety of reasons and the 08 recession was nothing compared to what we likely have ahead.

 

Monkeys vote for a monkey to rule the monkey country.

This is probably the simplest and most accurate explanation you'll find on this.

[Collective Foal]

Bush was a rather liberal Republican, I should say. I support Conservatives, not republicans. Bill Clinton, having been a conservative Democrat, was a financial genius and had a plan that, if Bush's idiot administration had followed through on, would have reduced the debt dramatically. I understand what you mean, Ross, in saying that both parties spend a lot, but frankly, Liberals spend money on ridiculously expensive programs, like welfare, where if you want everybody to be able to have a little extra money, you have to multiply that little bit of money by 100,000,000+ people. And then some of that money doesn't even get used. In military spending, you are investing money much more confidently into a trusted organization that will build you a plane, for example. That plane might cost $3 million to make, but you know that you're getting a plane out of the deal. When you just spew money into the public, you don't know what the hell is going to come out of it. The saying goes, a bird in the hand is worth more than two in the bush. Well, conservatives go with the bird in hand, while liberals are rifling through the bush.

[Pinkie Pie]

while liberals are rifling through the 'Bush'.

 

I'm so pathetic.

[Collective Foal]

Come on Weebs. Serious Topic Discussion. Try to say something serious. Even better, say something intelligent.

[Ross Scott]

Bush was a rather liberal Republican, I should say. I support Conservatives, not republicans. Bill Clinton, having been a conservative Democrat, was a financial genius and had a plan that, if Bush's idiot administration had followed through on, would have reduced the debt dramatically. I understand what you mean, Ross, in saying that both parties spend a lot, but frankly, Liberals spend money on ridiculously expensive programs, like welfare, where if you want everybody to be able to have a little extra money, you have to multiply that little bit of money by 100,000,000+ people. And then some of that money doesn't even get used. In military spending, you are investing money much more confidently into a trusted organization that will build you a plane, for example. That plane might cost $3 million to make, but you know that you're getting a plane out of the deal. When you just spew money into the public, you don't know what the hell is going to come out of it. The saying goes, a bird in the hand is worth more than two in the bush. Well, conservatives go with the bird in hand, while liberals are rifling through the bush.

Well here's how I look at it. I think a certain amount of defense is necessary, I think going into Afghanistan after 9-11 was prudent. I think going into Iraq ands just hanging there for years was a big waste of time, money, and lives, whether we're getting tanks out of it or not.

 

When it comes to welfare, I agree that we shouldn't just be handing money to people on welfare. Not everyone, but SOME of the people who are in poverty may have made poor life decisions that got them there in first place. So those are NOT the people who you should just hand money to. I think what would make more sense would be to use the welfare money to provide basic public housing and actual food and supplies to maintain a certain safety net for people. I don't think the services provided should be a desirable way to live, but I think letting the poor simply fend for themselves in the street is even worse. As for what you're getting, if the money is being spent properly, you're getting people who don't have to go homeless or starve, especially children. Simply ignoring that element of society doesn't help society as a whole, it can drag a lot of it down. The argument "well there will always be poor people" I don't think cuts it, because we're always going to have crime too, but that doesn't mean we shouldn't spend money on police.

 

Regardless, I think we're probably both in agreement that tax money shouldn't be spent on bullshit, which is probably where the majority of it currently goes.

[Collective Foal]

I can definitely shake hands to that, Mister Scott.

[Ross Scott]

Also I found this on the tax thing:

 

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/05/03/do-lower-taxes-create-jobs-lets-look-at-the-states

 

I think this is a pretty fair analysis, since they do the breakdown by state, and show a statistical plot of the results. They also look into some explanations for the states that don't follow the pattern necessarily.

[Brian234]

http://www.usdebtclock.org/#

[ProHypster]

Basically when you can't pay debt, the consequence is less/no countries will lend you money. In Geopolitics as far as I know debt doesn't work the way it works in real life, there is no police to enforce you paying debt, but you can get isolated and embargo'd if you are a weaker country that doesn't pay debt.

 

However all Debt gets erased in one or another way and is a fairly useless measure of a country, I have not yet seen a country that suffered too much from having Insane amounts of Debt. However Germany and Japan I believe both had insane amounts of debt before becoming extremely rich.

 

For Superpowers such as USA I really doubt there will be any consequences since USA itself enforces debt consequences.

 

So there will always be debt and the consequences in geopolitics isolation and embargo or in extreme cases hostility, however it only works if you are a weaker country or a Strong country with many hostile countries against you.

 

This is my take in all this.

 

The alternative theory is called "Zionism" and "NWO" feel free to read it

[Collective Foal]

So apparently the world has a debt. Meaning all the national debts combined amount to several trillion dollars. So uhh... where the hell does that money that nobody has go? I say, we print a shitload of worthless currency, blast it off to Mars, and have the whole world declare bankruptcy.

[danielsangeo]

I'd just like to say one thing, Foal, in regards to something you said way back in July. Sorry if I haven't been around this section in, like, forever.

 

When you run a system on retarded Capitalism that keep making lunges towards socialism (Liberals)

 

Ah, well, see, that's where I take issue: Liberals in the United States, by and large, are not advocating socialism.

 

On Topic:

 

The debt is an insanely hugely massive figure. However, let's not lose sight of what's important while attempting to address the debt. We could cut government spending down to zero except for Constitutionally required expenses and the debt will STILL go up. Why? Because we have decided that it's more important to cut taxes than fund the government for what we want out of it. For at least 30 years, maybe more, the mantra has been "Government is evil" or "I've always felt that the nine most terrifying words in the English language are: 'I'm from the government and I'm here to help."

 

We do need to address the debt. In due course. First, we need to address the causes of debt and start "getting real" over what needs to be done while NOT HARMING THE NATION at the same time. We in the United States 'owe' a large amount of money to other countries but then again, we 'owe' even more to ourselves. I use the word "owe" in quotation marks because, for the other countries, they have taken things out on bonds. Those bonds are, as required by the Constitution (Article 4) and US law (28 U.S.C. § 1738), backed up by the full faith and credit of the United States. This means that the government CANNOT default on its "loans" (as it were). This is why the other countries will not "come to collect", as it were.

 

I believe we will always have debt; there will always be people who don't want to pay for what they want (I currently call them NIMBPs, Not In My Back Pocket, a variant on NIMBY -- those who want to have certain things but they don't want them in their back yard). What we need to do is address the root causes and not the symptoms. A broken arm doesn't heal simply by taking massive amounts of morphine (yeah, I'm talking to you, Gordon Freeman!) even if you might not feel any pain. The cause of the pain must be addressed. The broken bone(s) must be set and given a chance to heal or barring that, an artificial construct can be implanted to simulate the bone. Right now, we're simply increasing and increasing the amounts of morphine we're taking when the effects are lessening. Sure, it might be fun for a while but eventually we're going to brass tacks.

 

This means addressing what we have been putting off for decades: Paying for what we used. That means (get your fainting couches ready, right-wingers): Taxes. Ourselves, our children, our grandchildren, and our great-grandchildren (if not more) have been saddled with this debt that WE (yes, WE) caused. They already are saddled with it. We can either ignore the problem and hope it'll go away (it won't) or we can do something about it (so far, we're not).

 

It's time for us to mature as a nation and stop whining about taxes. We've done this to ourselves. Time to lie in the bed we made.

 

Or. We can punt it down the road. But, I think that's entirely selfish.