can someone explain government debt to me?

[jhu]

I just came upon this list. So the usa's debt as a percentage of gdp is about 60%. japan's is 170%! what exactly does that mean for me personally? i don't get it. if i had debts of 170% of my earnings i'd be in big trouble. why isn't japan in big trouble?

fixed link

 

[Saint Nick]

I'm actually interested in this as well.

 

[Newbian]

It helps if you learn how the linking function works first since it adds the first part.

Not to mention the link you gave us is redirected to begin with.

 

[ArJuN]

Deleted

 

[torpid]

Originally posted by: Newbian
It helps if you learn how the linking function works first since it adds the first part.

Not to mention the link you gave us is redirected to begin with.

How does it help, exactly? Are you expecting the answer to be found at the destination of his link?

 

[Newbian]

Originally posted by: ArJuN

Originally posted by: Newbian
It helps if you learn how the linking function works first since it adds the first part.

Not to mention the link you gave us is redirected to begin with.

So basically, you don't know the answer?

I know how to get to the site but op fails at linking x2.

 

[Darthvoy]

your link doesn't work, but from my understanding, Japan is a nation of savers much like China. In fact, a lot of the money that the US borrows comes from Japan. So I am not sure if that's correct.

 

[Red Squirrel]

The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

 

[OCGuy]

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

What the hell are you talking about?

 

[Darthvoy]

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

wow that's one of the most idiotic statements I've ever read. By and large, the US borrows the most from China. I believe China currently holds close to two trillion dollars in US assets. Despite all the rhetoric, the US relationship with China is symbiotic and if that relationship were to be severed, both countries would be hurt severely. Don't forget that countries can also declare bankruptcy and its assets become the pickings of the creditors. Just look at what is happening to Iceland.

 

[TruePaige]

Originally posted by: OCguy

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

What the hell are you talking about?

It's like he is saying they'll just "write it off". That was a good Seinfeld, where Kramer tried to convince Jerry that big companies just write everything off.

 

[xSauronx]

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

like reality?

 

[Red Squirrel]

Originally posted by: Darthvoy

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

wow that's one of the most idiotic statements I've ever read. By and large, the US borrows the most from China. I believe China currently holds close to two trillion dollars in US assets. Despite all the rhetoric, the US relationship with China is symbiotic and if that relationship were to be severed, both countries would be hurt severely. Don't forget that countries can also declare bankruptcy and its assets become the pickings of the creditors. Just look at what is happening to Iceland.

Well I never said I was an expert on this, just, the government basically makes all decisions, so can't see who would have the power to tell them to pay. But an individual not paying their mortgage payments will have the bank go after them.

Though I did not realize the government actually borrowed money from other countries. So I suppose in this case China could tell the US to pay "or else". I thought the money was just borrowed from it's own banks. So it's just the thing of printing more money, at least that's what I always figured. Of course printing more money does also cause inflation so I see how they can't just go ahead and do that.

 

[imported_Champ]

just dont think about it and leave it for the next generation to figure out

 

[nerp]

Originally posted by: Darthvoy
your link doesn't work, but from my understanding, Japan is a nation of savers much like China. In fact, a lot of the money that the US borrows comes from Japan. So I am not sure if that's correct.

We borrow from the chinese and the saudis mostly.

 

[IHateMyJob2004]

I think to you personally, it means nothing.

 

[quakefiend420]

Originally posted by: RedSquirrel

Originally posted by: Darthvoy

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

wow that's one of the most idiotic statements I've ever read. By and large, the US borrows the most from China. I believe China currently holds close to two trillion dollars in US assets. Despite all the rhetoric, the US relationship with China is symbiotic and if that relationship were to be severed, both countries would be hurt severely. Don't forget that countries can also declare bankruptcy and its assets become the pickings of the creditors. Just look at what is happening to Iceland.

Well I never said I was an expert on this, just, the government basically makes all decisions, so can't see who would have the power to tell them to pay. But an individual not paying their mortgage payments will have the bank go after them.

Though I did not realize the government actually borrowed money from other countries. So I suppose in this case China could tell the US to pay "or else". I thought the money was just borrowed from it's own banks. So it's just the thing of printing more money, at least that's what I always figured. Of course printing more money does also cause inflation so I see how they can't just go ahead and do that.

just stay out of threads having anything to do with world finance :laugh:

 

[quakefiend420]

Originally posted by: Champ
just dont think about it and leave it for the next generation to figure out

this is our current solution

 

[Skeeedunt]

Well, from what I understand... for one, GDP is not the government's income, it's how much is actually produced (as opposed to tax receipts, which last year were something like $2.2 trillion? something in that ballpark, compared to GDP of ~$13 trillion). Also the national debt is not a yearly figure, but rather the total debt (the deficit being the yearly debt incurred). The point being that you can't look at the figures you cited and draw the conclusion that the Japanese government is spending 1.7 times what they earn (Edit: re-reading the OP, I don't think you actually claimed this anyway - though the reality is somewhat more extreme, in that our total debt is, what, 5x yearly income at the moment?).

All the same, deficit spending isn't sustainable indefinitely, and is supposed to be offset by budget surpluses in positive economic climates.

Hopefully that's all pretty close, I mostly just made it up.

 

[GTaudiophile]

Originally posted by: Champ
just dont think about it and leave it for the next generation to figure out

We are that next generation...

 

[TruePaige]

Originally posted by: GTaudiophile

Originally posted by: Champ
just dont think about it and leave it for the next generation to figure out

We are that next generation...

So let's leave it for the uh..next generation.

 

[Zeeky Boogy Doog]

Originally posted by: TruePaige

Originally posted by: GTaudiophile

Originally posted by: Champ
just dont think about it and leave it for the next generation to figure out

We are that next generation...

So let's leave it for the uh..next generation.

"But that won't happen for at least another thousand years, let them worry about it."
"Now that's the 20th century spirit!"

 

[TruePaige]

Originally posted by: Zeeky Boogy Doog

Originally posted by: TruePaige

Originally posted by: GTaudiophile

Originally posted by: Champ
just dont think about it and leave it for the next generation to figure out

We are that next generation...

So let's leave it for the uh..next generation.

"But that won't happen for at least another thousand years, let them worry about it."
"Now that's the 20th century spirit!"

Well we won't have to worry about garbage balls. I've already solved it.

When we get too much we can use it as currency, hell with the banks in the tanks our money is already trash.

 

[Engineer]

Originally posted by: jhu
I just came upon this list. So the usa's debt as a percentage of gdp is about 60%. japan's is 170%! what exactly does that mean for me personally? i don't get it. if i had debts of 170% of my earnings i'd be in big trouble. why isn't japan in big trouble?

fixed link

So you're saying that you will always make more money than the house you're going to buy?

Your salary: $100,000
Your house: $170,000

As long as you can make the payments, what's the problem?

 

[Aluvus]

Originally posted by: RedSquirrel
The only reason the government is not really in trouble when in debt, like an individual is in debt is that the government does not really need to pay it. Really, who is going to make them pay? they make all the decisions. They can turn around and say "i own money to who?" and just make it all 0's. This is something the bush administration would have done. There may be aspects I don't understand that would stop them from doing that, I guess.

Countries can indeed default on their debt, and sometimes do, but it causes a massive loss of confidence in that country (not just in things like treasury bills that are issued directly by the government, but also in the entire economy of that country). That can in turn make it harder to recover from whatever other problems they have. It is, in general, a very bad idea. Much like a person or business declaring bankruptcy is usually a very bad idea unless they are in really bad shape.

Originally posted by: jhu
why isn't japan in big trouble?

They are, in some regards.