Well, the national debt of the US has finally reached ten trillion dollars. http://www.brillig.com/debt_clock/ :mowsad
This is why I favor imperialism!
If yer in debt to somebody, take over their country! Then the debt just goes away! >:3
That's impressively awful.
and almost every penny of it was under the jurisdiction of ronald regan (reganomics, wheeeee), george bush 1, and george bush 2 (blowing stuff up is expensive? nah, lets just throw some more stealth bombers full of caviar at it. that fixes everything)
Stealth caviar sounds awful. Disappointment in your mouth without you knowing anything about it.
That number is too big. I don't understand it.
part of the reason its too big is beaurocracy- for a long time when the government had to buy something for government purposes, like a chair for a DMV and suchlike, there would be an insane ammount of papers being sent back and fourth, signed in triplicate, saved on someones desk for aging, and then eventually arriving at the correct persons desk with the correct signitures. this process just cost enough man hours of salary to inflate the cost dramatically, resulting in the study that found the US government (particularly the military, which has epic paperwork) would pay upwards of thirty dollars for a box of screws or sixty dollars for a toilet seat. now think of how much that costs to buy a few thousand guns, a couple tons of uranium, and a few gunboats
but moreso then that look at the most recent bushes spending habbits- the american government is STILL sinking millions into stealth bombers and planes that are ten times as advanced but we are not allowed to use for fear of others seeing what secret tech we have.... do the terrorists and insurgents have easily bombed factories or military bases? no. we spend millions on black hawk helicopters, the finest anti-tank weapon the world has ever seen.... to the terrorists and insurgents have tanks? maybe one or two, which are probably so full of sand and rust they serve as little more then statues. but at least we can afford to send troops in with full combat armor and armored humvees, right? oddly enough no, that's where they skimped out on, and is shown to be the thing that would actually save lives....
yes, tax cuts to the rich, reward american business for slashing jobs and sending them oversees so that the american worker only works at walmart, flush the taxpayers money down on wars when social security and medicare die..........yeah, great job ruling what USED to be the most powerful country in the world
Actually, Social Security spending already costs over $600 billion annually. It's one of the biggest single government expenses. Very likely it has already passed the point of feasibility. The only way to keep it going will either be to push the retirement age to the low 70's or drastically increase taxes.
Frankly, as a scientists, I'll never retire and die in my lab, forever preserved by the decades of inhaling formaldehyde.
So if Social Security completely fails I could care less. :P
I'm reminded of an adage I heard.
"If you owe a man a hundred dollars, he has power over you. If you owe him a million dollars, you have power over him."
Perhaps not applicable in this circumstance, but the talk of ridiculous amounts of debt brought it to mind.
I think much of the recent rise in debt can be attributed to the Emergency Economic Stabilization Act, which I think comes out to a rough cost of 850 billion, 150 billion of which will go to useless pork barrel spending in it's 450 pages of dense legal bile. Anyways, I suppose the worst that can happen is that it's simply 850 billion down the drain, and at best... it will actually breathe life into the credit market again. Of course, I'm pretty sure that the nation is juggling between two unacceptable extremes and examples of the past, on one hand, there is the great depression mistake of helping the economy too little too late, but there is also the fact that the banks that are being backed up will continue to exhibit policies that would reflect an utter failure of concepts in investment 1.01, much as they did in Japan, (and Switzerland too I think). Fortunately, there are some strings attached to hopefully prevent that from happening, but whether or not they will actually help anything is something I cannot predict.
But who am I kidding? At this point, I'm quite sure that us Americans are going to be in trouble no matter what we do. Personally, I'm certain that continuation of bad foreign policy will harm us more than bad domestic policy, though our recent administration has done an admirable job of epically failing in both regards. One of the government's biggest expenses has been the war, and it would at least START to set things right if it were ended. Throw down another 850 billion, I guess that is minor compared to the rest of the unjustifiable debt that we have, useless wars, bad economic policies, and runaway inflation. I suppose 10 trillion isn't so bad compared to 9.4 trillion, right? :rolleyes
Quote from: Alondro on October 07, 2008, 10:22:10 AM
This is why I favor imperialism!
If yer in debt to somebody, take over their country! Then the debt just goes away! >:3
What do you do when you
are the country you owe money to?
Quote from: The1Kobra on October 07, 2008, 02:51:31 PMAnyways, I suppose the worst that can happen is that it's simply 850 billion down the drain, <snip>
The worst that can happen is that this brushes the problem under the rug, props up an economy that's missed it's recessionary period, and we do this dance again in a few years. :B
For the love of god that's terrible...I'm moving back to the old world stat *gets on viking warship to Denmark*
I'll just stay up north and pray that the vortex from the sinking ship that is the US economy right now doesn't take mine with it. Idle hope, I know, but let me have that much.
Quote from: Reese Tora on October 07, 2008, 03:28:32 PM
The worst that can happen is that this brushes the problem under the rug, props up an economy that's missed it's recessionary period, and we do this dance again in a few years. :B
I would actually say that is a better case scenario than the one I was projecting, because it's entirely possible that the 850 billion dollars spent on trying to revive the economy will fail entirely, banks continue to invest poorly, the toxic securities that the government buys don't turn profitable, the credit market doesn't get revived, and the economic slump continues. The only thing that changes in such a scenario is that the government wasted 700 billion, and 150 went into pork, the debt interest gets higher still, and.... umm... then I bring out my Mayan apocalypse calendar...
Quote from: Redwing X on October 07, 2008, 03:38:57 PM
For the love of god that's terrible...I'm moving back to the old world stat *gets on viking warship to Denmark*
ive got friends in sweden who say i would love it there, wife and i have decent plans to pack up
For those who have swallowed McCain's ``shrink government'' tripe,
(http://i158.photobucket.com/albums/t102/superluser/budget.jpg)
we added $459.5B to the debt in FY 2007 (that's what the graph is for, as well). Given that we're not going to touch Social Security, Medicare or Defense, and that interest is what we're already paying on the debt, what portion of the remaining $802B can be cut to balance the budget?
perhaps the united states government could figure out how to MAKE money?
Sadly that's probably impossible. :januscat
Quote from: Brunhidden on October 07, 2008, 04:12:18 PM
Quote from: Redwing X on October 07, 2008, 03:38:57 PM
For the love of god that's terrible...I'm moving back to the old world stat *gets on viking warship to Denmark*
ive got friends in sweden who say i would love it there, wife and i have decent plans to pack up
My boyfriend lives in Denmark, homghomg we'd so be neighbors! Kinda xD by boat/chunnel/plane.
I woudn't be hoping too much to see the taxes stay the same. other countries with similar quality public services usually have higher taxes than those of USA. A similar crisis to that of 1930 calls for measures about as drastic. higher taxes are likely to happen.
Quote from: Rakala on October 07, 2008, 10:09:16 AM
Well, the national debt of the US has finally reached ten trillion dollars.
That is too much damn money.
Quote from: Dagardo on October 07, 2008, 06:59:00 PM
Quote from: Rakala on October 07, 2008, 10:09:16 AM
Well, the national debt of the US has finally reached ten trillion dollars.
That is too much damn money.
how much money is ten trillion? its so much money bill gates will say "damn, thats a lot of money"
http://news.bbc.co.uk/1/hi/business/7660409.stm
Eek, that is worse than I thought! I certainly do not enjoy the idea of a possible 11 trillion dollar debt. I honestly have to wonder who the government keeps borrowing from... I would think investors would stop doing so after the first 5 trillion. Unfortunately, I don't think the number is going to drop without some drastic changes in the government's administrative tendencies.
Quote from: The1Kobra on October 09, 2008, 10:17:38 AM
I honestly have to wonder who the government keeps borrowing from.
China, as I understand it.
Quote from: Tapewolf on October 09, 2008, 10:19:31 AM
Quote from: The1Kobra on October 09, 2008, 10:17:38 AM
I honestly have to wonder who the government keeps borrowing from.
China, as I understand it.
and what happens to china when the debt owed to america cant be paid? i think we JUST saw what happens with subprime lending....
Quote from: Brunhidden on October 09, 2008, 10:31:05 AM
and what happens to china when the debt owed to america cant be paid? i think we JUST saw what happens with subprime lending....
If I were you, I'd be more worried about what happens to the US when China owns it lock, stock and barrel.
There actually are a few possibilities:
1: China keeps getting a steady flux of income from the debt interest. Actually, this may be a valid reason for investing more now that I think about it. If they assume that America won't default on their debt (and it is a BAD BAD thing for governments to collapse like that), they have an easy source of steady income in this fashion, and the more that is invested, the merrier. And yes, it is far more likely for some average person to declare bankruptcy than it is for a government to do the same, though the thought has been going through my head with alarming frequency.
2: The debt (hopefully after Bush's term, because I can't imagine it dropping before then), starts to drop, America spends about... possibly 12 years paying off the debt, possibly more, possibly less(I'm not a psychic so I can't predict the future). In which case, China, and other investors get their money back, while having made a substantial amount from interest.
3: Bad quirk: the value of the dollar plummets, there is massive inflation, and investors who invested in such a manner would get completely hosed, of course, hyperinflation still leaves the US economy in shambles.
I guess it's that really, weighing the possibility of collapse against the possibility of a steady income. Obviously, the situation doesn't look like it's going to be corrected any time soon, which makes investment all the more risky.
Quote from: The1Kobra on October 09, 2008, 10:39:25 AM
1: China keeps getting a steady flux of income from the debt interest. Actually, this may be a valid reason for investing more now that I think about it. If they assume that America won't default on their debt (and it is a BAD BAD thing for governments to collapse like that), they have an easy source of steady income in this fashion, and the more that is invested, the merrier. And yes, it is far more likely for some average person to declare bankruptcy than it is for a government to do the same, though the thought has been going through my head with alarming frequency.
To put it in context, Iceland looks like it already
may be insolvent (*). When Ireland announced it was guaranteeing all savings about a week ago, its credit rating dropped to a 1-in-4 chance that it may default, which astonished me.
When the UK government's rescue plan was announced yesterday, our rating was listed as 1-in-20. I'd be very,
very interested to know what the US' rating is.
**EDIT**
(*) Fun fact - UK local councils appear to have collectively invested in excess of
£500m £600m £700m £842m (1.4 billion dollars) in Icelandic banks which have now failed. Whoops.
http://news.bbc.co.uk/1/hi/uk_politics/7660438.stm
Quote from: The1Kobra on October 09, 2008, 10:17:38 AMI honestly have to wonder who the government keeps borrowing from...
Mainly from itself, strangely.
The majority of Treasury Securities are owned by the US Government, I believe as a method of preparing to fund Social Security.
The majority of the rest is owned by foreign governments.
Quote from: Brunhidden on October 09, 2008, 10:31:05 AMand what happens to china when the debt owed to america cant be paid? i think we JUST saw what happens with subprime lending....
That's actually a very easy question to answer: The US repudiates the debt. There will be howling when it happens, but ultimately, no one can force the US to pay, and the rest of the world will just have to suck it.
This is why China (as well as any other country) will not suddenly turn and demand all of the US's debts to be repaid. They know they'll lose the gambit.
Quote from: Tapewolf on October 09, 2008, 10:44:28 AM
I'd be very, very interested to know what the US' rating is.
Well, according to a wiki (http://en.wikipedia.org/wiki/Credit_rating) article, the US credit rating is 91.27, and is, as of March 2008 the 10th safest country to invest in in the world. Of course, I am quite skeptical of it's accuracy, since if the US is the 10th SAFEST to invest in, I would love to see how unstable investing in another country would be. Actually, maybe looking at such a thing might make my eyes explode, so maybe not.
Quote from: superluser on October 09, 2008, 12:28:49 PMThis is why China (as well as any other country) will not suddenly turn and demand all of the US's debts to be repaid. They know they'll lose the gambit.
But if that is the case, why do they continue to invest in the US deficit? If it's continually rising, and it is as of this post, 10.23 trillion, why would they continue their bad investment instead of just cutting their losses? I suppose an extremely unrealistic gauge of the situation could lead to continued bad investment, or a possibly realistic hope that the U.S. will shape up, or perhaps for some other reason which could have to do with the United States handling on foreign policy. (maybe China wants us to continue the war in Iraq, but I have no idea if that's true or not.) There has to be some reason they continue investing, even if it's not a logical reason.
Quote from: superluser on October 09, 2008, 12:28:49 PMThat's actually a very easy question to answer: The US repudiates the debt. There will be howling when it happens, but ultimately, no one can force the US to pay, and the rest of the world will just have to suck it.
That very well might happen, and I'm afraid of the repercussions of such a stunt to be honest. Bush has already gotten many countries angry with continued violations of international law. This (http://www.newyorker.com/archive/2005/02/14/050214fa_fact6) is a very good example of such a stunt that got Canada very upset with the US, and I'm sure I can dig up plenty more examples of horrid misconduct by the US government. Repudiating the debt might just trigger an explosion of the worst kind.
Quote from: The1Kobra on October 09, 2008, 02:33:11 PMBut if that is the case, why do they continue to invest in the US deficit? If it's continually rising, and it is as of this post, 10.23 trillion, why would they continue their bad investment instead of just cutting their losses? I suppose an extremely unrealistic gauge of the situation could lead to continued bad investment, or a possibly realistic hope that the U.S. will shape up, or perhaps for some other reason which could have to do with the United States handling on foreign policy. (maybe China wants us to continue the war in Iraq, but I have no idea if that's true or not.) There has to be some reason they continue investing, even if it's not a logical reason.
Remember--the largest holder of US debt is the US government. 5 trillion dollars of the debt is fictional--it doesn't really exist.
Remember the Simpsons episode where Homer went to find his emergency donut and finds a note ``Dear Homer, I. O. U. one emergency donut. Signed, Homer.''? Most of the governmental debt is like that. It's the government lending money to itself to set aside a trust fund for future obligations. We're stuffed when those obligations come due, and at that point, that $5T willl become very real, and will probably be bought by China (or paid off by printing more money), but for now it's just a debt on paper.
Of the debt that is held by foreigners, the majority is held by the Japanese, who really don't want to see us fail, so they won't call it in.
China holds $502B in US debt. Similar to Japan, China has a huge economic incentive not to see us fail, but I'll grant that that's not enough of an incentive not to call out debts in. What is an incentive is the fact that we will most likely eventually (in decades, not years) pay the debt off, and in the interim, we are paying $237B in interest to various people and countries for that debt. They are making a few billion dollars per year off of the US debt, and they don't want to see it go away.
Finally, as I stated, if they called our debts in and the US looked like it was unable to pay, the US would simply repudiate its debt. Every country in the world knows this, and if they were in the same situation, every country would do the same. This provides the supreme economic reason. If they leave our debts alone, they will make a little money on the interest, and never see the principal for many years. If they call it in, they will lose both the principal and the interest, and the world will suffer a gigantic economic meltdown, ruining economies all over the world.
Which would you choose?
Quote from: The1Kobra on October 09, 2008, 02:33:11 PMThis (http://www.newyorker.com/archive/2005/02/14/050214fa_fact6) is a very good example of such a stunt that got Canada very upset with the US, and I'm sure I can dig up plenty more examples of horrid misconduct by the US government. Repudiating the debt might just trigger an explosion of the worst kind.
That stunt got a lot of Americans angry at the administration (not me--I was already at the maximum anger level before I found out that they were doing this), but I don't see what it has to do with the topic at hand. No explosion will occur, because these countries already know how a situation like this would play out, and there's nothing to be surprised about.
Oh, and also:
Quote from: The1Kobra on October 09, 2008, 02:33:11 PMBut if that is the case, why do they continue to invest in the US deficit?
(emp added)
Not deficit. Debt. The deficit is the difference between what the government spends this year and what the government has collected this year. The debt is sort of like an accumulation of past deficits, plus unpaid interest on the debt and money the government owes to itself.
I'd just like to note that my predictions of the stock market fall and the bailout were spot on! :boogie
Now all that's left is the little bump up in stability this winter and spring, and then the total world economic crash next June/July.
After which the world domination plan goes into effect. :mwaha
my concern now- assume there's two or three countries that manage to survive the economic crash somewhat unscathed. what do they do? they are in a perfect position to buy up everything they care for ha-pennys on the dollar and could supplant pretty much every other first world country in much the same way rome or imperial brittan took control
either that or we all go back to an agrarian society....
Quote from: superluser on October 09, 2008, 12:28:49 PM
Quote from: The1Kobra on October 09, 2008, 10:17:38 AMI honestly have to wonder who the government keeps borrowing from...
Mainly from itself, strangely.
The majority of Treasury Securities are owned by the US Government, I believe as a method of preparing to fund Social Security.
X dollars in Social Security payments come in each year, Y dollars get paid out, X-Y dollars are left over and used to buy bonds from the US government. (in other words, the government borrows everything that's left over each year)
The intrest from those bonds and principle from matured bonds is paid back to social security from the general fund each year, along with the next year's SS taxes. X dollars comes in, Y dollars is paid out, leftovers are used to buy more bonds.
Then enters the continuous problem of X<Y.
The only way to make it work is to either increase X (through essentially taxes), or decrease Y (through lower or more difficult to get payments) to get either X=Y or X>Y.
Otherwise the Social Security System will collapse upon itself, as we're now finding out. When this system was first established, getting to 62 years old was a feat unto itself, but now that it's become a common thing (I think the average life span is 72 years now), more and more people are drawing on it, increasing Y far faster than new workers can generate increases in X at a constant tax rate.