The national debt is 19.3 trillion dollars. How do we fix it?

[g5000]

We fix the debt very easily. We ban all tax expenditures, thus creating about $800 billion in surplus revenues every year.

Then the hard part. How do we spend all that extra cash?

I suggest using some to lower EVERYONE's tax rates, and the rest to pay down the debt. Then, once the debt is paid off, we lower EVERYONE's tax rates even more.

See how easy that is?

No. You implement my $23.50/hr plan raising wages and placing billions per week back into the economy.

And where are those billions hiding right now?

 

[TyroneSlothrop]

 

[C_Clayton_Jones]

"The national debt is 19.3 trillion dollars. How do we fix it?"

The better question is what shouldn't we do – things we shouldn't do such as cutting taxes, eliminating vital programs and regulatory measures, or proposing a balanced budget 'amendment.'

 

[Toddsterpatriot]

We fix the debt very easily. We ban all tax expenditures, thus creating about $800 billion in surplus revenues every year.

Then the hard part. How do we spend all that extra cash?

I suggest using some to lower EVERYONE's tax rates, and the rest to pay down the debt. Then, once the debt is paid off, we lower EVERYONE's tax rates even more.

See how easy that is?

No. You implement my $23.50/hr plan raising wages and placing billions per week back into the economy.

And where are those billions hiding right now?

He has a brilliant plan to give businesses a tax credit for all employee expenses.

He doesn't know what a tax credit is, but is sure his plan will work.

 

[Fishlore]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

 

[Toddsterpatriot]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

What are the buyers hedging? Be specific. How does their Treasury purchase hedge their other position?

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself.

Yes, I want you to prove that "foreign countries and Federal Reserve Banks ... buy almost all of that debt"

 

[M14 Shooter]

"The national debt is 19.3 trillion dollars. How do we fix it?"
The better question is what shouldn't we do...

Good to see you fully recognize you have no effective answer to the question.
As usual.

 

[Fishlore]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

What are the buyers hedging? Be specific. How does their Treasury purchase hedge their other position?

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself.

Yes, I want you to prove that "foreign countries and Federal Reserve Banks ... buy almost all of that debt"

As I said, I'm not here to teach you econ. 101. Here's a link to a conservative, Republican site that summarizes public domain info on the debt that anyone, including you, should master before joining a polite discussion on the topic. Good luck.
Who Owns The Most U.S. Debt?

 

[sealybobo]

We don't it will never be delt with because neither party or more important the American people will not accept that there is no easy simple quick painless answer to the problem.

I think it's like a Ponzi scheme. The bankers in charge love us being in debt like this and we love making the minimum payment.

What is it now $30,000 per American? That was during bush. What is it now?

There is now way to pay off the debt. The only way is to go bankrupt, pay our creditors pennies on the dollar, having a crazy bad depression and then in the future we won't be the world's superpower/police.

We haven't had this crash yet because the international corporations aren't done using us yet.

If you play out the debt scenario it's inevitable. The debt will double in the next 8, then again, and again. The rich are gobbling up everything. When the shit hits the fan, they'll be on their islands safe. Then they'll come in and save us and we'll start the process all over again.

 

[sealybobo]

"The national debt is 19.3 trillion dollars. How do we fix it?"
The better question is what shouldn't we do...

Good to see you fully recognize you have no effective answer to the question.
As usual.

No one does

 

[Toddsterpatriot]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

What are the buyers hedging? Be specific. How does their Treasury purchase hedge their other position?

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself.

Yes, I want you to prove that "foreign countries and Federal Reserve Banks ... buy almost all of that debt"

As I said, I'm not here to teach you econ. 101. Here's a link to a conservative, Republican site that summarizes public domain info on the debt that anyone, including you, should master before joining a polite discussion on the topic. Good luck.
Who Owns The Most U.S. Debt?

As I said, I'm not here to teach you econ. 101

Based on your errors, that would be funny.

Thanks for the link.
More recent data shows foreign governments plus the Fed own less than half of debt held by the public.

That's much less than "almost all of that debt". Maybe you should search for a basic math website to help you?

 

[bendog]

Bring manufacturing back to the U.S. Offer tax incentives, scale back the nazi epa, get the government out of the way, they will come back. In other words, vote the Democrats OUT. This debt has weakened us as a country, and must be fixed.

Elect Donald. I hear he's got a really big plan.

 

[Never3ndr]

Bring manufacturing back to the U.S. Offer tax incentives, scale back the nazi epa, get the government out of the way, they will come back. In other words, vote the Democrats OUT. This debt has weakened us as a country, and must be fixed.

Spoken by somebody who doesn't even have a basic understand of economics.

Now, I agree that debt has weakened us as a country. However, the LAST thing you want to do is go manufacturing heavy in a technological age. Fortunately, the US is actually a tech leader. You want to expand on that advantage? Revamp the educational system and increase incentives to get out of industries that aren't profitable (like manufacturing in the US), and get into industries with high growth potential (green energy, tech, etc.). While we can all argue budget cuts (personally, I'd weaken DoD spending as a start...and that is coming from a vet, trust me, we waste a ton of cash) but lets leave cuts aside. You really want to decrease the debt immediately, you start with increasing the taxes or finding new ways to tax individuals. Whether or not cuts come, doesn't matter so much in the short run, because the cuts will generally take time to implement. An income increase for the government (by increasing taxes) on the other hand will show some immediate results.

 

[Never3ndr]

Bring manufacturing back to the U.S. Offer tax incentives, scale back the nazi epa, get the government out of the way, they will come back. In other words, vote the Democrats OUT. This debt has weakened us as a country, and must be fixed.

Elect Donald. I hear he's got a really big plan.

Its "huuuuuugggggeeeee"

 

[bendog]

"The national debt is 19.3 trillion dollars. How do we fix it?"
The better question is what shouldn't we do...

Good to see you fully recognize you have no effective answer to the question.
As usual.

No one does

Well there is. It's called raise taxes and cut spending, and don't increase spending till it balances. Hillary's got a tax increase on the wealthy, but no spending cuts. The Donald .... nothing beyond "postage stamp." Cruz and Rubio have plans that seem a bit more credible than Hillary's.

 

[sealybobo]

"The national debt is 19.3 trillion dollars. How do we fix it?"
The better question is what shouldn't we do...

Good to see you fully recognize you have no effective answer to the question.
As usual.

No one does

Well there is. It's called raise taxes and cut spending, and don't increase spending till it balances. Hillary's got a tax increase on the wealthy, but no spending cuts. The Donald .... nothing beyond "postage stamp." Cruz and Rubio have plans that seem a bit more credible than Hillary's.

Lots of cuts. Painful. And I'm sure the bankers won't mind us trying to pay it off.

Show me a link to anyone's specific plan and the numbers crunched showing me anyone has ever laid out a plan to pay off the debt.

I'd be curious what Ron or Rand Paul would say.

One thing I'd do is undo the federal reserve act of 1913

 

[sealybobo]

I'd stop paying interest on the debt. I'd pay China back first too. Here's your ******* money.

Anyone who doesn't have kids or a will their $ goes to the debt. We could use that Oprah $

 

[Fishlore]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

What are the buyers hedging? Be specific. How does their Treasury purchase hedge their other position?

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself.

Yes, I want you to prove that "foreign countries and Federal Reserve Banks ... buy almost all of that debt"

As I said, I'm not here to teach you econ. 101. Here's a link to a conservative, Republican site that summarizes public domain info on the debt that anyone, including you, should master before joining a polite discussion on the topic. Good luck.
Who Owns The Most U.S. Debt?

As I said, I'm not here to teach you econ. 101

Based on your errors, that would be funny.

Thanks for the link.
More recent data shows foreign governments plus the Fed own less than half of debt held by the public.

That's much less than "almost all of that debt". Maybe you should search for a basic math website to help you?

You provide no evidence, merely the assertion, that less than half etc. You wnat an argument, not a discussion. Bye-bye

 

[Toddsterpatriot]

Before trying to "fix" the national debt, we have to understand what is broken. How is the average American today hurt by our national debt ? Please be specific.

National debt is not like personal financial debt. Governments print money, debtors can't. Every advanced economy has a national debt, most are a bigger portion of GDP than ours is. Are they all wrong? Please explain.

Our national debt allows the government to borrow against future productivity to increase present productivity, without which future productivity is unlikely. It's like a college loan or a home mortgage. Are these bad things too? Help us understand.
The people who hold the paper on our debt expect to be repaid, with interest.

Eventually, we will not be able to repay our debt.

And you need it explained to you why this is a bad thing?

Really?
I'm afraid I still need an explanation. You continue to treat sovereign debt as consumer debt. This is false reasoning. You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

Treasury bonds (the "paper" to which refer) are sold at auction, often at a price above or below the face value depending on several factors. This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions. For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

So, you see, thinking of sovereign debt as consumer debt is a fundamental fallacy. Most of sovereign debt is never repaid, the can is merely kicked down the road. It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt, happy to do so

Now that you have had it eplained to you why the national debt is a good thing, it may help you understand why all those folks who think it is a bad think can never explain their belief with anything more than a misleading analogy to private debt.

You assert that "people who hold the paper on our debt expect to be repaid, with interest." Actually, this isn't quite how it works.

That's weird, I expect to be repaid, with interest, on all the debt I hold.
You have a list of people who don't expect to be repaid? Could you post it?

With all due respect, your expectations don't form the laws of economics or the fiscal policy of the US government. The sellers of US Treasury Bonds do not keep records of the supposed intent of purchasers. It is a silly idea. The bonds are purchased largely by institutions and foreign governments as a hedge investment. The fact the bonds are usually "rolled over" i.e. used to purchase new issues upon maturity of the old ones shows that cashing out at maturity is not their investment strategy.

This is because such bonds are used not as a way to make money of the interest -- the way your bank does with your credit card -- but as a hedge against future conditions.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

For this reason, the federal debt is not paid down or paid off but "rolled over" as holders of maturing securities use them to purchase new ones.

Some roll over, some don't. So what?

So plenty. The majority of T. Bonds roll over which is why the debt continues to grow. The bonds function in the economy is as a stabilizing force, not a speculation or short-term investmet.

It is having that can down the road that makes the foreign countries and Federal Reserve Banks, who buy almost all of that debt

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself. I'm here to have a discussion, not teach a course or have an argument with someone who doesn't know that he doesn't know the basics.

Apparently, you think your extrapolations from your personal financial experience are a key to understanding the policies of the Federal Reserve System and of the Department of the Treasury. I have no desire to disabuse you of that idea, but I am not going to spend time duscussing it. I thank you for sharing your thoughts and wish you good luck and successful future investing.

That hedge only works if the debt is repaid, with interest.

No, that is not what "hedge" means in financial terms. Hedging is effective throughout the life of the investment, not just at maturity. With all due respect, you don't know what you are talking about.

What are the buyers hedging? Be specific. How does their Treasury purchase hedge their other position?

That's an interesting claim. Can you prove it?

What you are asking me to prove is something which can be found in most college-level economic textbooks and many of the publications of the Federal Reserve itself.

Yes, I want you to prove that "foreign countries and Federal Reserve Banks ... buy almost all of that debt"

As I said, I'm not here to teach you econ. 101. Here's a link to a conservative, Republican site that summarizes public domain info on the debt that anyone, including you, should master before joining a polite discussion on the topic. Good luck.
Who Owns The Most U.S. Debt?

As I said, I'm not here to teach you econ. 101

Based on your errors, that would be funny.

Thanks for the link.
More recent data shows foreign governments plus the Fed own less than half of debt held by the public.

That's much less than "almost all of that debt". Maybe you should search for a basic math website to help you?

You provide no evidence, merely the assertion, that less than half etc. You wnat an argument, not a discussion. Bye-bye

You provide no evidence, merely the assertion, that less than half etc.

After you provided no proof for "almost all that debt" you want me to prove less than half?
If you proved "almost all", you'd show I was wrong.
Okay, just to show your posts are error filled, I'll prove my claim.

http://ticdata.treasury.gov/Publish/mfh.txt

The above link shows that as of December 2015, foreign official government holdings, $4.095 trillion.

FRB: H.4.1 Release--Factors Affecting Reserve Balances--December 31, 2015

The above link shows Dec 31, 2015 Fed holdings of Treasury securities, $2.462 trillion.

Debt to the Penny (Daily History Search Application)

The above link shows Dec 31, 2015 Debt Held by the Public, $13.673 trillion.

(2.462+4.095)/13.673 = 47.96%

I think that's "less than half". It's certainly less than "almost all that debt"

Let me know if you need help with any of the other things you're clearly confused about.
Although I'm not here to teach you Econ 101, I'm always glad to help.

 

[hangover]

The only way to fix it, is to get the money from those that have the money. They are the ones that ran up the debt, and they should pay it off. The rich and corporations have all the money. They are the ones that ran up the debt. The poor don't have the money, and the middle class is barely able to pay their bills as it is.

Cutting Social Security, Medicare, aid to the poor, education and healthcare, WON'T pay off the debt. It will only make things worse, by making the prison population explode....which is far more expensive.

Keeping the cons from starting another war will cut "deficit" spending by trillion$. Invading Iran will add another $10 trillion to the debt.

Ending foreign aid will go a long way to paying off the debt...hundreds of billions every year could go to paying off the debt. It's time to take care of Americans instead of other countries. The United States "uncle sugar" status has got to end.