The US National Debt is Over $35 trillion

[+OverSword]

If you are an American tax payer your portion of our current national debt is $268,258.00

https://www.usdebtclock.org/

Edited August 6 by OverSword

[+and-then]

I wonder what the individual cost will be for each citizen when DC decides it must "reset" and wipe the slate clean.  Obviously, only a fool would imagine that level of debt could ever be repaid.  Will all savings and assets be seized and some new currency be put in place, or will they simply allow a collapse and every man for himself?

[Tatetopa]

7 minutes ago, and-then said:

I wonder what the individual cost will be for each citizen when DC decides it must "reset" and wipe the slate clean.  Obviously, only a fool would imagine that level of debt could ever be repaid.  Will all savings and assets be seized and some new currency be put in place, or will they simply allow a collapse and every man for himself?

I don't see how a nation could do either one and survive.  Sounds like a suicide plan.

[Hawken]

Citizens get judged by their credit score. And yet the government is that much in debt. 

[preacherman76]

45 minutes ago, and-then said:

I wonder what the individual cost will be for each citizen when DC decides it must "reset" and wipe the slate clean.  Obviously, only a fool would imagine that level of debt could ever be repaid.  Will all savings and assets be seized and some new currency be put in place, or will they simply allow a collapse and every man for himself?

Probably both. 

[preacherman76]

35 minutes ago, Tatetopa said:

I don't see how a nation could do either one and survive.  Sounds like a suicide plan.

We are already on a suicide plan. 

[acidhead]

56 minutes ago, OverSword said:

If you are an American tax payer your portion of our current national debt is $268,258.00

https://www.usdebtclock.org/

It's approximately 100k if you count every man, woman and child in America. 

Imagine for a second every child born today, in America, it's not "you're lucky! You were born into the American Dream"!  It's "hey kiddo, Buck Up! You owe 100k! Best of Luck!"

Edited August 6 by acidhead

[+OverSword]

I see someone said yes to the question.  I assume that that means they would fork over their portion of the debt right now if instructed. 

[Hawken]

8 minutes ago, OverSword said:

I see someone said yes to the question.  I assume that that means they would fork over their portion of the debt right now if instructed. 

Maybe that person is a multimillionaire or billionaire and try to use it as a tax write off. 😁

[DarkHunter]

The debt can not be paid off and no one is going to try.

American GDP is approximately $25.44 trillion, the American debt is a bit over $35 trillion.  The total world's GDP is approximately $100 trillion and the total word's debt is approximately $315 trillion.

Economics get extremely complicated at this level but essentially everything is built off of debt and the system does work as long as an over whelming majority of people believe it works.  Getting rid of the debt would probably create far more problems then having it but America and the whole earth are getting close to a situation that has never occured before at this scale of no longer being able to pay the fee for servicing the debt which when that occurs who knows what might happen.  Everything possible will probably be tried to avoid hitting that though.

Overall America is approximately 25% of the world's gdp and approximately 10% of the world's debt so not horrible.

[Alchopwn]

The mistake the collective dumbasses of the world make is thinking that national debt is the same as personal debt.  It isn't.

For a start, national debt is covered by an issue of bonds.  The bond market is a long term part of our financial system, and it soaks up most of the USA's problems very nicely, because people can buy bonds and invest in the debt, getting money back at a later stage when they cash the bond in.

It should be pointed out that Inflation is a good thing to have high when paying off your debts, as then the money is worth less than when you borrowed it.  Remember this for later...

Next, having a bit of national debt and inflation is actually very stimulating for the US economy.  Why?  Because it pushes down the value of the $US, which makes our export goods and services more competitive on the international market, which brings home serious money to the USA.

Next, the USA controls the $US which is the global currency, ever since the 1944 Bretton Woods Agreement.  That means that the FRB and the US Treasury control the levers of international interest rates.  While this remains true, the USA's economy remains very sheltered from the effects of debt, as everyone needs $US to perform international transactions.

The reason for the current high levels of national debt is due to the spending we did to shore up the US economy during the Pandemic.  Under Trump and then under Biden we in the USA and every other country in the entire world turned on the money presses to pay for what was needed.  The effect of this is inflation.  Now remember how I told you that inflation is good for paying off debt?  The situation is far from bad.  Don't listen to scaremongers who don't understand how national debt and international finance actually work.

[Gromdor]

I was going to say.  If you own $268,258.00 in government bonds, then you would owe nothing and would be collecting interest on it.  

Edit to add: Considering that everyone's Social Security is figured into the National Debt, that is almost exactly the case.

Edited August 7 by Gromdor

[DayoOlabisi]

8 hours ago, Alchopwn said:

The mistake the collective dumbasses of the world make is thinking that national debt is the same as personal debt.  It isn't.

For a start, national debt is covered by an issue of bonds.  The bond market is a long term part of our financial system, and it soaks up most of the USA's problems very nicely, because people can buy bonds and invest in the debt, getting money back at a later stage when they cash the bond in.

It should be pointed out that Inflation is a good thing to have high when paying off your debts, as then the money is worth less than when you borrowed it.  Remember this for later...

Next, having a bit of national debt and inflation is actually very stimulating for the US economy.  Why?  Because it pushes down the value of the $US, which makes our export goods and services more competitive on the international market, which brings home serious money to the USA.

Next, the USA controls the $US which is the global currency, ever since the 1944 Bretton Woods Agreement.  That means that the FRB and the US Treasury control the levers of international interest rates.  While this remains true, the USA's economy remains very sheltered from the effects of debt, as everyone needs $US to perform international transactions.

The reason for the current high levels of national debt is due to the spending we did to shore up the US economy during the Pandemic.  Under Trump and then under Biden we in the USA and every other country in the entire world turned on the money presses to pay for what was needed.  The effect of this is inflation.  Now remember how I told you that inflation is good for paying off debt?  The situation is far from bad.  Don't listen to scaremongers who don't understand how national debt and international finance actually work.

that certainly is what the brochure says. the problem is that a debt based society rewards the richest and punishes the poorest. this is the reason we see such wealth inequality. it is likely only to grow.

it is also important to mention that there is a threshold beyond which this system no longer works. at some point, bonds become more difficult to sell and permanently more expensive to fulfill. the answer, of course, is inflation. but it isn't the permanent, expected 2% inflation target (which is already a constant, regressive tax). in fact, the Fed has already suggested that the 2% target might not be something we can sustain for long periods any more. the risk at the far end (and inevitable end unless the trajectory changes) is hyperinflation.

a few important things to keep in perspective:

US tax-to-gdp ratio ~27%

US debt-to-gdp ratio ~123%

US government spending as percentage of gdp ~36%

US unfunded liabilities ~$43 trillion

US total combined wealth of billionaires ~$5 trillion

these numbers are bad. but what's really bad is that there is no political incentive to fix it. unless the US electorate suddenly starts to vote in hundreds of little Thomas Massies across the country, we will continue to elect the same big spenders. there's no fiscal conservative option on the horizon. the people don't really want to stop spending and the politicians and their lobbyists simply won't stop spending. meanwhile our bondholders are beginning to show their unease with the US credibility. that's why i maintain that we are on a trajectory for hyperinflation, though i cannot predict a timeline.

the only other option would be insane productivity/efficiency increases. some propose that AI will get us there. i think perhaps nuclear energy can help. but i don't think we should count on these as inevitable within the requisite time frame. and even if they are, we run into the same human problem. the more we make, the more we will spend. if our gdp increases to $500 trillion in a span of 10 years, i have no doubt that we could easily justify borrowing $900 trillion per year from the future if we haven't learned our lesson yet. so i maintain that the single most likely outcome is that we must learn our harsh lesson and we won't bring it on ourselves (by defaulting on our debt). we will push it until hyperinflation forces itself upon us.

 

[DayoOlabisi]

8 minutes ago, Gromdor said:

I was going to say.  If you own $268,258.00 in government bonds, then you would owe nothing and would be collecting interest on it.  

Edit to add: Considering that everyone's Social Security is figured into the National Debt, that is almost exactly the case.

asset vs. liability

[Gromdor]

Just now, DayoOlabisi said:

asset vs. liability

Social Security is indeed underfunded- hence the unfunded liability of $43 trillion you were talking about above.  But that is a different issue from the debt in general.  If we were to miraculously solve our debt and then forbid any future debt, then social security would not have a guaranteed way to generate interest and be able to fund it's obligations.  We could dump it into the stock market, but the last guy that suggested it (Bush) had the 2007-2008 market crash that would have lost almost all of it had it happened.

[DayoOlabisi]

15 hours ago, acidhead said:

It's approximately 100k if you count every man, woman and child in America. 

Imagine for a second every child born today, in America, it's not "you're lucky! You were born into the American Dream"!  It's "hey kiddo, Buck Up! You owe 100k! Best of Luck!"

and that's just the current debt. imagine working and paying taxes for the next 10 years and seeing that you're now only 400k in debt.

[DayoOlabisi]

2 minutes ago, Gromdor said:

Social Security is indeed underfunded- hence the unfunded liability of $43 trillion you were talking about above.  But that is a different issue from the debt in general.  If we were to miraculously solve our debt and then forbid any future debt, then social security would not have a guaranteed way to generate interest and be able to fund it's obligations.  We could dump it into the stock market, but the last guy that suggested it (Bush) had the 2007-2008 market crash that would have lost almost all of it had it happened.

as is typical of ponzi schemes

[Gromdor]

Just now, DayoOlabisi said:

as is typical of ponzi schemes

No disagreement there.  Let's face it, even with the increased age requirements, people take out more than they put in.  The whole reason why social security exists is because the populace as a whole is unable to save money for their future, so the government has to do it for them.

Do we revert to Social Darwinism and say, "Too bad, so sad" to the people that reached their end of life years broke?

 

[DayoOlabisi]

2 minutes ago, Gromdor said:

No disagreement there.  Let's face it, even with the increased age requirements, people take out more than they put in.  The whole reason why social security exists is because the populace as a whole is unable to save money for their future, so the government has to do it for them.

Do we revert to Social Darwinism and say, "Too bad, so sad" to the people that reached their end of life years broke?

 

what i think should happen is we should focus on increasing non-gov gdp as much as possible (even if it requires moderate gov spending to facilitate), allow our productivity to outpace the increase on our overall debt (combined with freezes or cuts) and use the margins to fund our liabilities while creating a long-term restructure so that people can wean themselves of the dependency over a few generations, allowing some safety net to always exist at some level.

what i think will happen is that gov will try to increase gdp particularly in ways that their top lobbyists prefer which will inefficiently pour an incredible amount of gov spending into gdp. the result will be either standard returns on gdp or, in the case of revolutionary advancements, incredible returns. in either case, the gov will use the opportunity to spend even more proportionate to whatever the gdp totals. hyperinflation may occur to the richest society ever imagined.

[Gromdor]

37 minutes ago, DayoOlabisi said:

what i think should happen is we should focus on increasing non-gov gdp as much as possible (even if it requires moderate gov spending to facilitate), allow our productivity to outpace the increase on our overall debt (combined with freezes or cuts) and use the margins to fund our liabilities while creating a long-term restructure so that people can wean themselves of the dependency over a few generations, allowing some safety net to always exist at some level.

what i think will happen is that gov will try to increase gdp particularly in ways that their top lobbyists prefer which will inefficiently pour an incredible amount of gov spending into gdp. the result will be either standard returns on gdp or, in the case of revolutionary advancements, incredible returns. in either case, the gov will use the opportunity to spend even more proportionate to whatever the gdp totals. hyperinflation may occur to the richest society ever imagined.

That won't happen. 

Let me tell you a story of my uncle and his company.  The uncle was a union lineman and had a defined benefit retirement plan structured similar to Social Security.  They contributed greatly to it and it was actually over funded when the company was bought out by another company.  The liabilty for the pension rested on the company and not the workers so the new company had in effect bought the liabilty.  So what did they do?  They pocketed the difference to the minimal funded level.  Needless to say the union workers were greatly upset, but what could they do?  Fast forward a few years and that fund dipped into the underfunded category because it's performance did not meet actuarial expectencies. (this all happend in the 70's so it's nothing recent, but you get the idea)

But to skip to the moral of my story-  when we generate an excess that could be used to pay off any debt we historically pocket the money or spend it on something else because the debt is someone in the future's problem.

[+OverSword]

16 hours ago, DarkHunter said:

America and the whole earth are getting close to a situation that has never occured before at this scale of no longer being able to pay the fee for servicing the debt which when that occurs who knows what might happen.

Federal Reserve Executive

Edited August 7 by OverSword

[DayoOlabisi]

49 minutes ago, Gromdor said:

That won't happen. 

Let me tell you a story of my uncle and his company.  The uncle was a union lineman and had a defined benefit retirement plan structured similar to Social Security.  They contributed greatly to it and it was actually over funded when the company was bought out by another company.  The liabilty for the pension rested on the company and not the workers so the new company had in effect bought the liabilty.  So what did they do?  They pocketed the difference to the minimal funded level.  Needless to say the union workers were greatly upset, but what could they do?  Fast forward a few years and that fund dipped into the underfunded category because it's performance did not meet actuarial expectencies. (this all happend in the 70's so it's nothing recent, but you get the idea)

But to skip to the moral of my story-  when we generate an excess that could be used to pay off any debt we historically pocket the money or spend it on something else because the debt is someone in the future's problem.

i agree. it's not just a math problem, it's a human behavior problem. many people laugh when i argue that we are on a trajectory toward hyperinflation. that's because they see a solvable (though difficult) math problem. i see hyperinflation because of the human problem.

[Edumakated]

The problem is we have a central bank that can just print money out of thin air.  This allows the politicians to just kick the can down the road instead of controlling spending as there aren't any consequences.  The incentives are out of whack.  Politicians are judged on what they do TODAY, not the consequences in the future.  As such, it is easier to buy votes by continuing to spend and add to the debt instead of making tough decisions and telling voters "no".  Government also suffers from "mission creep" and has gotten way too involved with things not specifically called out in our constitution that would be much better handled at a local level.

 

[Tatetopa]

56 minutes ago, Edumakated said:

As such, it is easier to buy votes by continuing to spend and add to the debt instead of making tough decisions and telling voters "no". 

Good point.  We are buying votes from the elites with tax cuts that add to the debt.  Lets go back the the Eisenhower era when America was Great and corporate and individual taxes maxed out above 50%. Stock buybacks and executive distributions would have been taxed.  Investment in new facilities, equipment, and R&D were deductible.

Somehow, it is usually winds up couched as the problem of the greedy stupid middle class and not the elites who are running the show for their own benefit.

[DayoOlabisi]

9 minutes ago, Tatetopa said:

Good point.  We are buying votes from the elites with tax cuts that add to the debt.  Lets go back the the Eisenhower era when America was Great and corporate and individual taxes maxed out above 50%. Stock buybacks and executive distributions would have been taxed.  Investment in new facilities, equipment, and R&D were deductible.

Somehow, it is usually winds up couched as the problem of the greedy stupid middle class and not the elites who are running the show for their own benefit.

how many elites are there?

let's just pretend it was possible to do this (it's not): you tax all of the US billionaires at 100% you'd get a one time revenue of $5 trillion (actually less, while crashing the value of all stocks and other assets, the economy as a whole etc.). what's your plan for the other $30 trillion?