Re: U.S. Federal Debt Nearly $12 Trillion

**Morganan** · 02-09-2010, 05:25 PM

Originally Posted by ScratchMonkey

What is China doing, exactly, that's not "playing by the rules"? The last time I checked, dollars aren't edible, so if they give us lots of stuff and we give them lots of worthless dollars, aren't they the fools?

As long as the SDR's of the IMF are denoted in dollars, they wont be worthless so get the thought out of your mind that dollars are worthless. The Chinese artificial manipulation of their currency exchange rates is what forces US companies who want to do business in China produce their wares over there meaning we loose out on real trade and American jobs. The exchange rates essentially offer those businesses a free subsidy to start up operations over there instead of create goods here and ship them over there. We can't effectively trade real US goods with China as long as they keep the exchange rate flat between the yuan and the dollar. Why spend $1000 on something when you can spend $800 and get roughly the same item from elsewhere due solely to currency exchange rates? By keeping the exchange rate flat, China ensures they can continue to reap a huge profit off goods made in China and shipped to the US, while goods made in the US and shipped to China are in their market incredibly overpriced.

All the money going in one direction (to china) means in the system China agreed to abide by to be admitted to the G20 the value of their currency should rise against ours. That would make our goods cheaper to purchase in China, and make their goods more expensive to purchase here. Is that happening? No sir, it is not. That is one of the key elements of the current incarnation of Bretton-Woods that the members of the G20 have all agreed to abide by, and they aren't. The more money they keep loaning us, the lower the value of our currency, and the more profit China makes off their exports and the larger market share they can grab up since they pegged their currency to ours. On top of that it hurts our ability to trade with other countries, as China can vastly undercut us there and still ensure a respectable profit margin. The value of the dollar has dropped against the Euro for example, but we can't increase our trade exports there like we should be able to because China can undercut our prices by a considerable margin and still reap a respectable profit.

Some interesting links...

http://www.huffingtonpost.com/eric-l..._b_355679.html
http://www.epi.org/publications/entry/pm116/

**mp40x** · 07-12-2010, 11:07 AM

U.S. marks 3rd-largest, single-day debt increase

Some interesting excerpts from the article.....

The nation's debt leapt $166 billion in a single day last week, the third-largest increase in U.S. history, and it comes at a time when Congress is balking over higher spending and debt has become a key policy battleground.

The one-day increase for June 30 totaled $165,931,038,264.30 - bigger than the entire annual deficit for fiscal year 2007 and larger than the $140 billion in savings the new health care bill will produce over its first 10 years. The figure works out to nearly $1,500 for every U.S. household, or more than 10 times the median daily household income.

On Wednesday, the Congressional Budget Office said the government has recorded a $1 trillion deficit for the first nine months of fiscal 2010, which began Oct. 1. That's slightly down from 2009's record $1.1 trillion deficit at this point.

The Treasury Department calculates the country's debt position each day, and big rises and falls are not unusual. In fact, since hitting $13.203 trillion on June 30, the figure has since slipped $25 billion to settle at $13.178 trillion as of Tuesday, the latest day for which figures are available.

**snooggums** · 07-12-2010, 11:29 AM

Note: This is irrelevant to the importance of the amount of increase, just interesting to me so I'm sharing.

The one-day increase for June 30 totaled $165,931,038,264.30 - bigger than the entire annual deficit for fiscal year 2007 and larger than the $140 billion in savings the new health care bill will produce over its first 10 years. The figure works out to nearly $1,500 for every U.S. household, or more than 10 times the median daily household income.

They are comparing a single daily increase to the median income household averaged for every day of the year (including weekends and holidays). Assuming a 5 day work week (we can even skip holidays) that is 260 work days with a total of about $62,000. That is $238 per work day and therefore only about 6.3 times what the median household makes on an average workday. While they said it correctly, the additional information will only confuse the majority of people and the $1,500 per household was enough in my opinion.

**KoopaTroopa** · 07-12-2010, 02:18 PM

Was this already shown? When taken in terms of Gross Domestic Product, United States is 20th on a list of 75. Look at all those European Union countries. Ireland, 1,000% of their GDP is debt? Christ.

Throughout the financial crisis, many national economies have looked to their government and foreign lenders for financial support, which translates to increased spending, borrowing and in most cases, growing national debt.

Deficit spending, government debt and private sector borrowing are the norm in most western countries, but due in part to the financial crisis, some nations and economies are in considerably worse debt positions than others.

External debt is a measure of a nation's foreign liabilities, capital plus interest that the government and institutions within a nation's borders must eventually pay. This number not only includes government debt, but also debt owed by corporations and individuals to entities outside their home country.

So, how does the US debt position compare to that of other countries? A useful measure of a country's debt position is by comparing gross external debt to GDP. By comparing a country's debt to what it produces, this ratio can be used to determine the likelihood that a country will be able to repay its debt. This report takes a look at the world's 75 largest economies to see which ones have the highest external debt to GDP ratio, calculated using the most recent numbers from the World Bank. We've listed the top twenty here.

United States 96.5%
Hungary 121.9%
Australia - 124.3%
Italy - 147.4%
Greece - 170.5%
Germany - 182.5%
Spain - 186.1%
Norway - 202.6%
Finland - 220.2%
Hong Kong - 223.1%
Portugal - 235.9%
France - 248%
Austria - 256.2%
Sweden - 264.3%
Denmark - 316%
Belgium - 328.7%
Netherlands - 376.6%
Switzerland - 382.2%
United Kingdom - 425.9%
Ireland - 1,312%

http://www.cnbc.com/id/30308959/The_...ations?slide=1

**snooggums** · 07-12-2010, 02:48 PM

Subprime governments, the new Stock Market bubble.

**CallousDisregard** · 07-12-2010, 04:04 PM

Originally Posted by snooggums

Subprime governments, the new Stock Market bubble.

I wonder who stands to make money when that bubble collapses ?
Goldman Sachs ?

**ScratchMonkey** · 07-25-2010, 07:32 PM

Generally, the lower your debt-to-income ratio, the better is your financial condition. A recommended debt-to-income ratio is under 15 percent. A ratio of 20 percent or higher signals a need to control credit and to begin a plan for regaining financial stability.

Ideally, you will carry little or no debt so your income can be saved, invested, or spent as desired, rather than used on interest.

http://community.gottrouble.com/serv...117289&d=34736

**mp40x** · 07-25-2010, 07:40 PM

Originally Posted by ScratchMonkey

http://community.gottrouble.com/serv...117289&d=34736

Hmmm, you think the US government missed that memo somehow?

**mp40x** · 01-28-2011, 10:26 AM

It's official: The debt is ballooning. Now can we think clearly?

The Congressional Budget Office reports that the budget deficit this year will be the highest ever -- $1.5 trillion -- and that the national debt will equal 77 percent of Gross Domestic Product by 2021. And the Committee for a Responsible Federal Budget reports that the CBO's long-term estimates are, in fact, extremely optimistic.

Buried in the committee's analysis was this figure: Simply servicing the debt resulting from the $858-billion tax cut deal that President Obama signed last December will cost about $50 billion a year through 2021. Just the interest payments.

What strikes me the most is the interest on the current debt - from the Treasury Dept.

Available Historical Data Fiscal Year End

2010 $413,954,825,362.17

It's only over $413 billion a year, that's all.

Take into consideration the US government only brought in roughly $2.381 trillion in tax reciepts for 2010, but spent $3.552 trillion. You can see how just the interest payment is absolutely killing us. This year, the deficit is now $1.5 trillion.

Have you ever really studied the US Debt Clock? The sheer numbers are just mind-numbing. My 2-year-old son's current share of the debt is $45,000.

**El_Gringo_Grande** · 02-05-2011, 01:34 AM

Originally Posted by aeroripper

It's unfortunate that many people don't understand the gravity of the situation we're in and how this will impact their everyday lives. Our two major political parties, the Fed, and the insatiable culture of excess consumption have sold out our future and led us into ruin. The party is over America, time for the hangover.

I don't think anybody understand the situation period.

What would happen if the US went bankrupt? What? Would the world even allow it? Can it even be avoided?

It is like global warming. We know that things are changing. But we don't have any idea of what those changes mean or even if we can stop the process.

Maybe it is just what humans do? Get fat and happy and eat ourselves to death. Possible, no?

Of course we could try and control it. I find it odd and funny that "conservative" will try and control things like runaway budgets but leave the climate "to God". What exactly is the difference?

**El_Gringo_Grande** · 02-05-2011, 01:39 AM

Originally Posted by mp40x

My 2-year-old son's current share of the debt is $45,000.

Which is quite manageable if left at that. That is only about 1k a year if he only works 45 years. And with modern medical advances he could easily work 60 or more years.

The real problem is that we are not having enough kids and don't allow immigration to overcome that fact. Added to it is that we all want to believe the retirement age is around 62 years when it should be 72 years.

Change those to things and things are not nearly as gloomy if we get raise taxes a bit and cut spending a bit in the next decade.

**Sabre_Tooth_Tigger** · 02-05-2011, 11:30 AM

Originally Posted by mp40x

What strikes me the most is the interest on the current debt - from the Treasury Dept.

Available Historical Data Fiscal Year End

2010 $413,954,825,362.17
It's only over $413 billion a year, that's all..

Thats the interest cost with the lowest rates for two hundred years. The black swan type event is what happens when interest starts going up.
It will create a cascade failure in the whole system and worth of american currency. The only thing to stop it is produce exported especially unique goods demanded by the world.

Im not saying it will happen but it could. Its wreckless endangerment by politicians.

What would happen if the US went bankrupt? What? Would the world even allow it? Can it even be avoided?

What would happen is the loss of easy business and finance. So alot of government jobs would be extinct.
All of that is not financed by goods trade its funded by debt and government bond trade

Russia defaulted so you can look to them to some extent. Its not the end of the world, they are even borrowing again now so a very forgiving world but I think do pay a fairly big premium.
They arent trusted and this means they pay high rates on everything

The consequences would be higher taxes probably. The alternative would be very small government, very small military etc
Anything unsupported by ex-usa profit, coke or whoever would survive I think because they are global they cant be bullied much

Some random lumberjack or whoever is bound in his trade cant move, might find his taxes rise far beyond 50%
In the 1970's the UK had 30% annual inflation and taxes rose as high as 98% of income. Right now uk has about 5% and 60% respectively with 20% sales tax.

Sales and duty taxes means UK petrol currently costs $8.54 a gallon So at least USA has alot of leeway right now, I suspect petrol rising alot would be the most cutting change for many
(UK taxes rose Jan 1st and will rise again April, we are your canary in the mine

)

Each block here is a pallet of 100 dollar bills stacked and piled up to fill it to chest height. The entire load of pallets shown is how much money is owed to China, etc

**ScratchMonkey** · 07-21-2011, 07:20 PM

Federal debt, visualized in $100 bills: http://www.wtfnoway.com/

**ScratchMonkey** · 07-21-2011, 07:21 PM

The solution to our problems!

I figure we're doomed anyway, so I'm not even going to worry about leaving any money or environment for our descendants.

**SharinganTH1422** · 07-24-2011, 12:24 PM

http://www.bbc.co.uk/news/business-14267091

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