What is the "national debt"?

[Dovahkiin]

Most americans have absolutely no idea, including.. Politicians. I am wondering what you guys believe the "national debt" is.

 

[Dovahkiin]

No one knows?

 

[Timmy]

It's what we owe, nationally.

 

[Dovahkiin]

It's what we owe, nationally.

The national debt is simply the sum of cumulative annual deficits. The national debt represents the savings of the domestic private sector + foreign sector. The federal government simply credits the "savings" account of the holder of maturing securities. It's an accounting matter. Not a real debt in any sense of the word.

 

[Dovahkiin]

It's what we owe, nationally.

"paying off the debt" would simply mean exchanging dollars for bonds, the govt's liability doesn't change.
Oh, and how do you think entities acquire these bonds?

 

[Confounding]

So the debt doesn't matter? Cool, then what's the issue with free college and guaranteed healthcare? By the way, it's strange that somebody so familiar with our debt and the federal reserve could be so ignorant about what the Pauls, Trump and Bernie are actually talking about when they say "audit the fed." It almost seems intentional, as if you're playing goalie for the banks.

 

[Dovahkiin]

So the debt doesn't matter? Cool, then what's the issue with free college and guaranteed healthcare? By the way, it's strange that somebody so familiar with our debt and the federal reserve could be so ignorant about what the Pauls, Trump and Bernie are actually talking about when they say "audit the fed." It almost seems intentional, as if you're playing goalie for the banks.

A nation sovereign in its own currency with no foreign debts can never fail to credit an account. The national debt is simply a representation of cumulative deficits, our savings, and we have a silly policy where we transfer dollars from reserve accounts at the fed to a savings account at the fed. (This is essentially what happens.) This is what people scream about and we call this "going into debt." They are idiots. They want congress, the people that have no idea how banking actually works, the people who believe budget deficits are always bad, to have more influence over the FED. Horrible idea. The banks aren't the enemy.

 

[Confounding]

A nation sovereign in its own currency with no foreign debts can never fail to credit an account. The national debt is simply a representation of cumulative deficits, our savings, and we have a silly policy where we transfer dollars from reserve accounts at the fed to a savings account at the fed. (This is essentially what happens.) This is what people scream about and we call this "going into debt." They are idiots. They want congress, the people that have no idea how banking actually works, the people who believe budget deficits are always bad, to have more influence over the FED. Horrible idea. The banks aren't the enemy.

Why even keep track of that number if it's as meaningless as you suggest? You'd think the FED would make an effort to explain to people why they don't need to be worried about it.

 

[Dovahkiin]

A nation sovereign in its own currency with no foreign debts can never fail to credit an account. The national debt is simply a representation of cumulative deficits, our savings, and we have a silly policy where we transfer dollars from reserve accounts at the fed to a savings account at the fed. (This is essentially what happens.) This is what people scream about and we call this "going into debt." They are idiots. They want congress, the people that have no idea how banking actually works, the people who believe budget deficits are always bad, to have more influence over the FED. Horrible idea. The banks aren't the enemy.

Why even keep track of that number if it's as meaningless as you suggest? You'd think the FED would dedicate effort to explaining to people why they don't need to be worried about it.

What makes you think the debt is meaningless? I never said that.
Refer to this:
It Is Impossible For The US To Default
The fed actually does understand this, much like those who decide to get bonds.
The US can't default. Now, many still subscribe to neoclassical economics, and believe that QE actually does something useful.

 

[Slade3200]

A nation sovereign in its own currency with no foreign debts can never fail to credit an account. The national debt is simply a representation of cumulative deficits, our savings, and we have a silly policy where we transfer dollars from reserve accounts at the fed to a savings account at the fed. (This is essentially what happens.) This is what people scream about and we call this "going into debt." They are idiots. They want congress, the people that have no idea how banking actually works, the people who believe budget deficits are always bad, to have more influence over the FED. Horrible idea. The banks aren't the enemy.

Why even keep track of that number if it's as meaningless as you suggest? You'd think the FED would dedicate effort to explaining to people why they don't need to be worried about it.

What makes you think the debt is meaningless? I never said that.
Refer to this:
It Is Impossible For The US To Default
The fed actually does understand this, much like those who decide to get bonds.
The US can't default. Now, many still subscribe to neoclassical economics, and believe that QE actually does something useful.

It's a great discussion that needs to be had much more often in our media. There are so many false scare tactics getting thrown out there about this "debt" crisis and most people really don't understand the economics of it. This isn't to say that it is not a serious thing. I personally believe we are still in a good time for investment. With low interest rates and the state of our economy we could use some smart stimulus, particularly in our infrastructure. I would then like to see a more conservative agenda implemented with some tax cuts and I would like to see our debt to GDP ratio get down to the 60% range. So many factors in our economy is a balancing act that benefits from BOTH conservative and progressive principles. The key is understanding how it all works. Unfortunately, most of our politicians are only telling one side of the story and taking advantage of the ignorance of most Americans to promote their agenda. Thanks for posting!