What will happen to US about the national debt?

I'm not too worried about the US being 16 trillion dollars in debt and heard at 8 trillion, its unpayable but it doubled within a few years?

http://www.brillig.com/debt_clock/

Why are we so much in debt and who do we OWE? It says that we'll be in debt of 3 billion dollars a day and what are we spending, how are we going to pay back.

I feel like the US currency will somewhat decrease, not be valuable anymore.

 

We could balance the budget very easily if we just let the Bush tax cuts expire. It's not an unbeatable cliff we are facing. The politicians just refuse to do anything.

 

We'll inflate off the debt; that's irrelevant.
We need to balance the budget, and we need to do that by striking a balance between raising taxes and cutting spending: spread the wealth while maintaining an superpower economy that creates jobs.

 

Great depression was caused internally when the (Federal Reserve) decided to cash out and call on the loans they have been providing to the government. That was done at the expense of many American livelihoods. Now try to imagine once China and foreign countries(who as you may have noticed are not to fond of American ideals) decide to do the same. I think a little more than livelihood is going to be at stake this time.

We are going to be in for a serious hurt, should the day come we don't spend on defense like we do now. Americans criticize their own government for so much "pointless" defense and military spending, little do they realize, even if the government wanted to, they couldn't stop without an essentially fatal blow to the "SUPERPOWER" status America currently holds.

The problem now is, it's too late, now even if we wanted to fix the economy and all that, there is no way without suffering a massive loss and risking an unparalleled humanitarian crisis. We are living on borrowed time. All it takes is one extreme politician to band a few countries on the same page and spell the end of the America we now know.

 

I have little to add to the topic, but I find it interesting to put numbers into perspective. The debt of USA amounts to roughly 103% of the GDP. However, right after WW2, the debt was 120% of your GDP and americans didn't go bankrupt.

Now, let's look at some other countries. First, Japan, the fourth most powerful economy in the world. Its debt represents 226% of its GDP and the country has relatively no problem with it. That being said, as we all know, Greece is having huge issues with its debt while it has "only" 144% of its GDP as debt. What I'm trying to get to is that a huge debt, by itself, isn't a threat to a country. There are plenty of other factors in.

Let's not forget all the assets that a country own before saying it's in trouble. The net national debt of USA, for example, was only 65% in 2010 (http://www.economywatch.com/economi.../General_Government_Net_Debt_Percentage_GDP/). I can't tell whether this studies factor in all the debts of the states though. Sorry, too lazy to verify.

Personally, I'd be more worried about personnal debt than national one. I doubt know the statistic for USA, but here in Quebec, for each $ a person owns, he owes 1,50$ to a bank. Of course, this doesn't consider our belongings so the situation isn't as dire as I make it sound to be, but this should be a worrisome situation too.

 

The situations is more dire than our debt issue after WW2 because their are far more socioeconomic/ecological/political issues than there were after WW2.

The way we conduct business is an ever changing factor to which many sorts of reactions and outcomes can vary. It's unfortunate that at this time, we have probably the worst sorts of factors in effect(from all sides). And in case it isn't played of FOX News as often as it should be. The whole world is part of a shake up: From the Eurozone crisis, to the utter failure of the banking system(everywhere), to the massive humanitarian crisis in many parts of the world, to the revolutions and outings of people who were thought to be untouchable in the Middle Eastern region.

This is one of those moments in history where like in the Titanic, the ship is sinking, some are laughing it off saying it's impossible, some are wondering and panicking or trying to find out whats going one, while some are trying to survive (or not, and dying). Except, the beauty with the Titanic, was it was quick and swift, if only we get so lucky, and some things like infrastructure survive, we may be able to rebuild with more ease, but if we are unlucky and this thing drags on due to either nature, or due to the few still high in society sacrificing everything so they can afford some more leisure, then we are in for serious hurt.

 

This topic got me interested in the USA debt so I digged up this beautiful graph showing the composition of the debt:
http://politicalcalculations.blogspot.ca/2011/01/who-owns-us-national-debt.html

It illustrates very well how foreign powers hold a relatively small chunk of the cake. That being said, the situation is obviously not changing for the best. Aka, the debt is being less and less in the hands of americans.

It certainly is true that many factors differ from the past. Before, the main way to get into control of the debt was simply to wait for the GDP to grow. That miracle solution doesn't work as well when the GDP growth is under 2% per year though.

I simply do not know if the situation is as dire as some people make it out to be. I fear that we'll face other issues before that.

 

This is mostly false.
First of all, China has no desire to see us fall. They need us to buy what they produce or they will not develop. Chinese foreign policy culture is much less focused on the superpower image that the americans and soviets struggled over during the cold war. They see their US treasury bonds as a smart investment which finances the US consumer.
Additionally, the US could quite easily maintain its superpower status and cut military spending. We spend more than the next 26 nations defense budgets combined on defense.

 

For anyone who knows even basic economics and such:

If you take all of the debt that every person company, government, etc has in this country and add it all together, you will find that there literally does not exist enough money in our economy to pay it all off. This is because of a very simple concept:

Our source of money creates the money and then distributes it to the government or the banks. They then charge interest on the money they just gave you. Here's the problem with that:

Let's use very small scale examples to make it easier to understand.

Creator of Money makes 100,000$ and now gives that to the distributor, who for example's simplicity sake, has 0 dollars. So now the distributor has 100,000$, however the creator of this money is now charging them, let's say 5% interest over X years. Well that may seem all fine and dandy, but when the people who actually control how much money is in the system, how do you magically come up with the extra money that doesn't exist?

To put it in a math formula:

100,000 = Total amount of money in economy because creators of money made it.

5% = interest rate charged on borrowed money

So now, because of what the creators of the money did, and charged interest on, the borrows now must pay 105,000$, even though only 100,000$ exists in the system. They are asking for 5,000$ that literally does not even exist. How can you pay off a loan with interest if the amount of interest doesn't even exist?

The last time the US government wasn't in some form of debt was the 1800s, and that's not likely to happen again in the future

 

Creditors don't give money to clients if they don't have enough money to pay the interest+money back. That's just bad bussiness. And for what they don't have, there will be a bill. Money takes time to earn. Quickly earning money is not free.

EDIT: Essentially all countries are in debt, it's not impractical.

 

The debts we are in aren't an unbeatable thing, the people in charge on the other hand aren't dealing with it the way it should be dealt with obviously. Tax's should be a raised a little bit and spending should be cut way back, and its not helping any that we are spending countless dollars on the war with iraq witch is ideally pointless. The debts will keep raising unless someone is smart enough to do something about it. If not hope everyone is ready for another depression

 

I don't think he's talking about bad decision making, it's just money being created due to fractional reserve banking: http://www.khanacademy.org/finance-...money/v/banking-3--fractional-reserve-banking

Think about it. What would happen if all banks called in all debts? There wouldn't be enough money to liquidate the debt.

 

It's not about whether there is debt or not, there will almost always be debt. It's about the debt as a percent of GDP, and you need to keep that low to maintain credibility and investor/consumer confidence. The US' is currently slightly high. For the moment, it isn't a huge deal. However, it has prevented us from using certain types of economic tools for getting out of the recession. For example, if the debt was lower, Obama may have started a public works program like FDR did during the Great Depression. A large debt is limiting, but not crippling.

 

Since the Reagan administration we've done nothing but accumulated this overwhelming debt that i personally believe we'll never be able to conquer. As some remember during his administration they made a a notion to cut taxes while increasing spending, i.e the economic stimulus package, the government bailout measures and $800 billion a year military spending which is one of the biggest issues to our problem - $800 billion * 9 = 7.2 × 10^12. Such as these administration issues, lets take a look into the past with the deficit of the 2004 recession due to the reduced income of the middle and lower class.

To easily sum up all of our debt issue, lets take a look at the amount of money we've borrowed from foreign country's.

In June, the U.S. Treasury released a report that allowed U.S citizens to have a first hand look into Americas financials. In this was a document that states the foreign alliance fund which was scrutinized and finally held accountable for almost 65% of our debt. In fact, over $5.52 trillion.


Courtesy of the one thing i learned today

• China - $1.164 trillion
• Japan - $1.119 trillion
• Brazil - $242 billion
• Caribbean - $240 billion
• Luxembourg - $139 billion
• Belgium - $131 billion
• Taiwan - $142 billion
• Switzerland - $131 billion
• Russia $160 billion
• United Kingdom - $128 billion
• Hong Kong - $198 billion

Not to mention the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE (United Arab Emirates)) our oil exporting countries that together hold over $400 billion.

What can we expect from this kind of debt?

Higher taxes
Reduced to no Baby Boomers funds
Reduced to no Social Security / Retirement funds

When you're 70 and unable to retire, this is because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the value of American dollars decline these foreign holders will be compensated in a forum of payment worth less then satisfactory.

As for the summary of all of this "tl;dr" - What will happen to US about the national debt?; Nothing will happen, it will continue to grow as time goes on, the debt that we will never be able to payback.

 

We're in debt because of the way our central bank works.That's who we owe the money to. We accumulate more debt paying interest than we can pay off. It didn't start with the Reagan administration, it started back in 1913 with the Federal Reserve Act. It was destined to fail and end like this, but it didn't start going downhill untill around the 80's. That doesn't make it good ol Reagan's fault.

 

Our country's debt was developed and put on this continuum of negative loss by the actions Regan implemented while apart of the administration.

Although Regan was so aggressive throughout his campaign in 1980, assaulting the free-spending Carter administration at the end of the first quarter federal spending accounted for 28.7% of national income.

Let's take a look at what all Regan did for us.

Due to Regan's requested budgeting there has was a 60% increase in government spending. To break down a tiny sum of his requests:

The budget for the Department of Education, which candidate Reagan promised to abolish along with the Department of Energy, doubled to $22.7 billion, Social Security spending doubled from $179 billion in 1981 to $269 billion in 1986. The price of farm programs went from $21.4 billion in 1981 to $51.4 billion in 1987, a 140% increase. Now let me remind you this doesn't count the signed $4 billion "drought-relief" measure. Medicare spending in 1981 was $43.5 billion; in 1987 it hit $80 billion. Federal entitlements cost $197.1 billion in 1981—and $477 billion in 1987. Foreign aid (which most of us primarily blame today), grew from $10 billion to $22 billion. Every year, Reagan asked for more foreign-aid money than the Congress was willing to spend. He also pushed through Congress an $8.4 billion increase in the U.S. "contribution" to the International Monetary Fund.

Allow me to point out now that this is his idea of "saving projected spending" and i haven't even gotten to the topic of taxes yet.

Regan was so gung'ho about international funding that he either didn't care nor recognize the amout of stress and debt he was developing for our country. His primary goal was to look good for the present while neglecting the future of his actions and the tolls it would place on us today.

 

This is a very interesting movie which talks a bit about the foundation of the problem:

 

I have seen this before. It's based on anecdotal evidence.

If you're going to partake in a discussion don't allow a misleading video to be the representation of your thoughts, present them yourself.

 

Im honestly quite horrified at the debt situation, without some RADICAL events taking place within the government (which is just unrealistic and more than likely not happening) i honestly believe its going to end in bloodshed. You can only fuck off your debts for so long, i genuinely believe people are going to die over this..

 

What this guy said^^^

Our national debt is completely dependent upon tax policy. Our budget is ~16 trillion. There are proposed tax cuts of ~3.7 Trillion over four years (by Paul Ryan). There are proposed tax increases by liberals. That being said, we have very little accountability for our debt. The United States literally cannot default on our debt.