Idiot Education Time: What Effect Does Our National Debt Have In The Long Run?

[NATO AIR]

perform community service please. educate an idiot. what effect does our high national debt have on our future? what are the ways we can beat it down? thank you :baby4:

 

[Hobbit]

perform community service please. educate an idiot. what effect does our high national debt have on our future? what are the ways we can beat it down? thank you :baby4:

Eventually, someone will want to collect on those debts. Either we'll have to pay them or politely tell them to shove it. Now, there's several ways to fix this, but no politician will try them because it'll cost him votes and he'll be dead by the time we have to pay the debt.

That's the theory, anyway. Personally, I think it's become an arbitrary number that the other side uses to show how much the president sucks.

 

[Isaac Brock]

Actually that's a very good question.

Canada has a large debt too. Borrowing money isn't inherintly bad, especially with low interest rates, but there has to be some optimum ratio between debt load, interest rates and economic performance? Anyone know? RWA this seems like your territory.

 

[rtwngAvngr]

Actually that's a very good question.

Canada has a large debt too. Borrowing money isn't inherintly bad, especially with low interest rates, but there has to be some optimum ratio between debt load, interest rates and economic performance? Anyone know? RWA this seems like your territory.

I don't know when anyone would call this debt in. I guess if america was about to fail, the banks would call this loan in. But if america was about to fall, there were be a lot bigger problems than the debt. The whole concept of money is wild anyway. It's an abstraction of value.

 

[Isaac Brock]

I don't know when anyone would call this debt in. I guess if america was about to fail, the banks would call this loan in. But if america was about to fall, there were be a lot bigger problems than the debt. The whole concept of money is wild anyway. It's an abstraction of value.

While true, debt definitely leverages how much money the government has to spend, or how much the government needs to receive from the population. So it has to have if not an inherint values, certainly a perceived practical value.

So it just begs the question how much debt is acceptable?

 

[rtwngAvngr]

While true, debt definitely leverages how much money the government has to spend, or how much the government needs to receive from the population. So it has to have if not an inherint values, certainly a perceived practical value.

So it just begs the question how much debt is acceptable?

Man. mark your calendar, but I don't know. I guess it depends on how the debt issue is spun to the people. I guess ultimately it would be up to the banks and bond holders, and the electorate to decide. This is a tough one. Of course, less is better.

 

[onedomino]

perform community service please. educate an idiot. what effect does our high national debt have on our future? what are the ways we can beat it down? thank you :baby4:

By the end of 2004, the US National debt will be about $7.5 trillion dollars. The 2005 interest payment on this debt will be more than $320 billion. Behind social welfare and defense, paying the interest on the national debt is the third largest item in the US annual budget. During WW2, national debt was 125 percent of GDP. Today, it is about 65 percent of GDP.

The relationship between national debt and economic growth: when it borrows to cover national debt influenced budget deficits, the US competes in capital markets and thus drives up interest rates. High interest rates reduce the business investment needed for increased productivity and innovation. Economic growth is thereby curtailed. This suppresses tax income which has an adverse affect on budget deficits.

 

[rtwngAvngr]

By the end of 2004, the US National debt will be about $7.5 trillion dollars. The 2005 interest payment on this debt will be more than $320 billion. Behind social welfare and defense, paying the interest on the national debt is the third largest item in the US annual budget. During WW2, national debt was 125 percent of GDP. Today, it is about 65 percent of GDP.

The relationship between national debt and economic growth: when it borrows to cover national debt influenced budget deficits, the US competes in capital markets and thus drives up interest rates. High interest rates reduce the business investment needed for increased productivity and innovation. Economic growth is thereby curtailed. This suppresses tax income which has an adverse affect on budget deficits.

yeah. That sounds about right. Thanks one.

 

[White knight]

I think it ultimately benefits the lenders, then the question would be well who are the lenders?

Someone mentioned that in the previous administration we had a huge surplus, the administration prior to that we had a big deficit and a War, coincidence or pattern?

 

[NATO AIR]

thank you everybody

 

[Wry Catcher]

A little more message board history, not much interest in the national debt during W's term. Now the conservtives cry and moan, where were they when Ronnie and 'W' had the check book?
Hypocrisy, a conservative traditional value.

 

[edthecynic]

perform community service please. educate an idiot. what effect does our high national debt have on our future? what are the ways we can beat it down? thank you :baby4:

Debts don't matter when Republican presidents run up trillions in debt, but if Democratic presidents don't pay down the GOP debt it's generational theft by Dems.

 

[Samson]

A little more message board history, not much interest in the national debt during W's term. Now the conservtives cry and moan, where were they when Ronnie and 'W' had the check book?
Hypocrisy, a conservative traditional value.

I don't suppose it would make any difference if I mentioned that it is the Congress, not the President, that controlls the Government's Purse-strings and spending, and that a balanced budget amendment has never passed congress.

At any rate.

There's absolutely nothing wrong with Debt, as long as there is a reasonable expectation that it will be repaid With REAL MONEY.

It is this last issue that causes concern. If I lend you a dollar today, I expect to get $1.05 tomorrow that is WORTH MORE than the dollar I loaned....but what if its worth LESS? I.E., what if the value of the dollar declines overnight, and whatever I could have bought yesterday, I now cannot buy?

People are lending the US Government Money (buying Bonds), but the US Government is undermining the value of the dollar (simply printing more) so that whatever the bond rate is won't comphensate for the decline in value. the larger the Debt, the greater compunding magnetude of the decline. Eventually, people stop buying bonds (US Government Debt), and the entire Ponzi Scheme collapses.

 

[Procrustes Stretched]

Personally, I think it's become an arbitrary number that the other side uses to show how much the president sucks.

GREAT ANSWER AND AS CLOSE TO TRUTH AS IT EVER GETS AROUND HERE.

clap, clap, clap...

 

[Wry Catcher]

A little more message board history, not much interest in the national debt during W's term. Now the conservtives cry and moan, where were they when Ronnie and 'W' had the check book?
Hypocrisy, a conservative traditional value.

I don't suppose it would make any difference if I mentioned that it is the Congress, not the President, that controlls the Government's Purse-strings and spending, and that a balanced budget amendment has never passed congress.

At any rate.

There's absolutely nothing wrong with Debt, as long as there is a reasonable expectation that it will be repaid With REAL MONEY.

It is this last issue that causes concern. If I lend you a dollar today, I expect to get $1.05 tomorrow that is WORTH MORE than the dollar I loaned....but what if its worth LESS? I.E., what if the value of the dollar declines overnight, and whatever I could have bought yesterday, I now cannot buy?

People are lending the US Government Money (buying Bonds), but the US Government is undermining the value of the dollar (simply printing more) so that whatever the bond rate is won't comphensate for the decline in value. the larger the Debt, the greater compunding magnetude of the decline. Eventually, people stop buying bonds (US Government Debt), and the entire Ponzi Scheme collapses.

I disagree with your first point. A president has the power of the veto. It is he who is ultimately responsible for the debt.
As to your second point, we are 100% in agreement. Though, desperate times call for desperate measures and January 2009 was a desperate time.

 

[Procrustes Stretched]

I don't know when anyone would call this debt in. I guess if america was about to fail, the banks would call this loan in. But if america was about to fall, there were be a lot bigger problems than the debt. The whole concept of money is wild anyway. It's an abstraction of value.

great post. Two in a row in one thread? What is happening @ USMB today?

Maybe the wingnuts haven't gotten their talking points emails yet?

 

[Samson]

A little more message board history, not much interest in the national debt during W's term. Now the conservtives cry and moan, where were they when Ronnie and 'W' had the check book?
Hypocrisy, a conservative traditional value.

I don't suppose it would make any difference if I mentioned that it is the Congress, not the President, that controlls the Government's Purse-strings and spending, and that a balanced budget amendment has never passed congress.

At any rate.

There's absolutely nothing wrong with Debt, as long as there is a reasonable expectation that it will be repaid With REAL MONEY.

It is this last issue that causes concern. If I lend you a dollar today, I expect to get $1.05 tomorrow that is WORTH MORE than the dollar I loaned....but what if its worth LESS? I.E., what if the value of the dollar declines overnight, and whatever I could have bought yesterday, I now cannot buy?

People are lending the US Government Money (buying Bonds), but the US Government is undermining the value of the dollar (simply printing more) so that whatever the bond rate is won't comphensate for the decline in value. the larger the Debt, the greater compunding magnetude of the decline. Eventually, people stop buying bonds (US Government Debt), and the entire Ponzi Scheme collapses.

I disagree with your first point. A president has the power of the veto. It is he who is ultimately responsible for the debt.
As to your second point, we are 100% in agreement. Though, desperate times call for desperate measures and January 2009 was a desperate time.

I'll meet you halfway: The Congress can over-ride a Presidential Veto, and a President can offer a bill supporting a balanced budget. Neither seem very anxious to control US Debt, or enhance the value of the dollar, regardless of whicheve party controls whatever branch of government.

 

[mascale]

Stranger than "Fantasize-Along-With-FoxTvNews," is the actual accounting at the U.S. Federal Reserve. The Total U. S. Credit Market is about $55.0 tril. The New Federal Ceiling is only about 25% of that. U. S. Personal Income is about 23% of that.

Economies supportive of the concept, "The Rich Get Richer, and The Poor Get Poorer," throughout history all fail. Recently, the poor were unable to repay the mortgages, and the rich houses all came tumbling down. Personal Income itself did not crash, but the federal government propped up the financial, credit markets. The Preservative federal stimulus went to prop up the personal income accounts. Even China could buy the crap!

For credit to make any sense, there has to be accounting that keeps it valueable. Federal procurements, and personal income, provide the accounting that keeps the paper looking viable. Even China can create a credit market with it.

Undeveloped nations, with no credit markets, don't have the flexibility of failure: That the United States most recently experienced. The United States harbors a failed people, with critter-level, aborigine, faith and values. The United States credit market bailed them out.

The people in East Africa have no such flexibility. They Die. China is creating the infrastructure: Useful in the floods, and the famines, and the earthquakes--to keep people alive. The economy can function. China is set to flourish, and nations of the planet clearly Know that.

The U. S. federal deficit actually goes a lot further than analysts usually realize. The universities, such as the Political Science Department at Bloomington Campus, Indiana University, where Nobel Laureate Ostrom is supportive of them all--won't allow a presentation of said analysis, even in a graduate degree review committee. That was 35 years ago, and they all know it.

There had to be a basis formation model, and no presentation was permitted even then. Clearly: Teaching, or any such presentation, is clearly not possible--without the doctoral degree--unless it is believed that some kids are better than other kids, and that all the other kids are not worth the extra effort.

So the law is on their side. You cannot know, or make use of, the underlying basis arithmetic. All of the 7.0 mil. U. S. teachers are supportive of the law, and clearly of Indiana University, and clearly of the Nobel Committee.

My own people were friends with the President, Gerald Ford, and even the orginal Catholic President, John Kennedy. Other people have been able to find out about arithmetic, even though you can't do that in the schools! Our people settled in Penn's Colony, in 1683. We came to know some people, over the years, who also were not indigenous peoples. It's that hard to find anyone, even: Who do want to know arithmetic in America!

"Crow, James Crow: Shaken, Not Stirred!"
(Her Majesty's PM, actually, would himself find this all a bit advanced--unless he knows someone!)

 

[Neubarth]

Since we do not have to ever pay the national debt back, there is nothing to worry about. Just borrow from The FED at zero interest.