XZeroII
if the deficit means nothing, why is the US (and other govt.) spending BILLIONS on interest payments every year
after all it's only a number, I'm sure they can use that money to spend somewhere else
what do you think what happened in Argentina the last couple of years
if the deficit means nothing, why is the US (and other govt.) spending BILLIONS on interest payments every year
after all it's only a number, I'm sure they can use that money to spend somewhere else
what do you think what happened in Argentina the last couple of years
Wow, given that you don't even know what the Fed is, you sure yap about economics like you're Milton Friedman.
http://www.federalreserve.gov/default.htm
U.S. government debt is held by the Federal Reserve, our central bank, which engages in open market operations to regulate the money supply (buy debt to increase the money supply, sell debt to decrease the money supply). The debt is also held by private citizens, domestic and foreign, as well as foreign central banks.
From the FAQ:
Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.
As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by the Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."
EDIT: And it certainly isn't partially "owned by foreigners".
Just out of curiousity, to whom do we owe this money? What happens to all the money that other country owe us?
So what if we don't pay off the debt, who's gonna collect from the US?
So what if we don't pay off the debt, who's gonna collect from the US?
You guys crack me up. Let me go put up a webpage that says I own the Federal Reserve. Must be true then right?
In other news, I gotta a bridge I like to sell you guys...
Vic
Elite Member
- Jun 12, 2001
- 50,422
- 14,337
- 136
The US federal government owes the money to everyone who owns a United States Treasury Bond.
The debt is not owned nor issued by the Federal Reserve. The purpose of the Federal Reserve is to issue currency and control and oversee banks that do business in the US.
The debt is issued by the Dept. of the Treasury and is owned by the individual bondholders. Due to the large trade deficit that the US has had with its foreign trade partners over the past few decades, it is true that a large percentage of those bondholders happen to be foreign nationals.
The US cannot simply default on the debt without consequence. As individuals and corporations have credit ratings, so do national governments. If the US were to default on its debt, its credit rating would be destroyed. As US currency is backed solely by the "faith and credit of the United States government", the value of our money would plummet, causing inflation and lower quality of life. In addition, our ability to trade with our foreign partners would be drastically reduced, and as many of them will have lost large sums of money, there would be the real possibility of World Bank intervention or even war.
I am very concerned about the debt. Money may be abstract, but it is not imaginary. The worst immediate likelihood of the rising budget deficits is higher interest rates and inflation. As for defaulting, I do not believe that the US could default on its debt and remain a sovereign nation.
The debt is not owned nor issued by the Federal Reserve. The purpose of the Federal Reserve is to issue currency and control and oversee banks that do business in the US.
The debt is issued by the Dept. of the Treasury and is owned by the individual bondholders. Due to the large trade deficit that the US has had with its foreign trade partners over the past few decades, it is true that a large percentage of those bondholders happen to be foreign nationals.
The US cannot simply default on the debt without consequence. As individuals and corporations have credit ratings, so do national governments. If the US were to default on its debt, its credit rating would be destroyed. As US currency is backed solely by the "faith and credit of the United States government", the value of our money would plummet, causing inflation and lower quality of life. In addition, our ability to trade with our foreign partners would be drastically reduced, and as many of them will have lost large sums of money, there would be the real possibility of World Bank intervention or even war.
I am very concerned about the debt. Money may be abstract, but it is not imaginary. The worst immediate likelihood of the rising budget deficits is higher interest rates and inflation. As for defaulting, I do not believe that the US could default on its debt and remain a sovereign nation.
How can I argue facts if you insist on linking websites that were constructed by conspiracy theorists that have no basis in reality?
BTW, I'm so impressed by your use of Latin.
Anyways, enough of this. Better things to do on a Friday night than attempt to teach economics to the arrograntly uninformed.
DT4K
Diamond Member
- Jan 21, 2002
- 6,944
- 3
- 81
Listen to Vic.
He's the only one who's commented so far that actually appears to have the background in this area.
I am concerned about the deficit, but only slightly.
I remember the doom and gloom, sky is falling, predictions of the Reagan era when we built up a huge debt in a short time.
So far, I've seen no evidence that any of these scary predictions have come true.
It does seem that we cannot continue deficit spending forever. But on the other hand, if the economy grows fast enough that the debt payment as a percentage of total spending remains constant, then we could theoretically have deficit spending indefinitely
EDIT: WRONG FORUM, KEEP THIS CRAP IN P&N WHERE CONSERVATIVE VS LIBERAL FLAMEFESTS ARE THE NORM.
He's the only one who's commented so far that actually appears to have the background in this area.
I am concerned about the deficit, but only slightly.
I remember the doom and gloom, sky is falling, predictions of the Reagan era when we built up a huge debt in a short time.
So far, I've seen no evidence that any of these scary predictions have come true.
It does seem that we cannot continue deficit spending forever. But on the other hand, if the economy grows fast enough that the debt payment as a percentage of total spending remains constant, then we could theoretically have deficit spending indefinitely
EDIT: WRONG FORUM, KEEP THIS CRAP IN P&N WHERE CONSERVATIVE VS LIBERAL FLAMEFESTS ARE THE NORM.
Don Vito Corleone
Elite
- Feb 10, 2000
- 30,029
- 67
- 91
When you take out Social Security and Medicare (which presently take in more than they pay out, something that will not be true for long because of the large number of Baby Boomers moving into retirement), the current administration spends $1.50 for each dollar it takes in. So much for fiscal responsibility . . .
Our fiscal policy is simple.
The value of the dollar against other major currencies of the world has fell 30% during the past six months.
This has several meanings: OFFICIAL GOVERNMENT STATEMENTS
Our exports are a better value for foreign consumers compared to products produced by other nations
Our domestic labor becomes less expensive so encourage foreign investment in plants in USA
Imports become much more expensive due to lower value of dollar so we buy made in USA
Foreigners vacation in USA because its such a good value (sorry, strike that one PATRIOT ACT forbids anyone except cheap labor from Mexico to enter country..too big security risk)
Probably others, just can not think of them right now
To a certain degree it is a good thing having weak dollar.
Reasons for US currency value continues to fall:
Trade deficits.. corrected somewhat by weak dollar
Confidence of markets..Preception we have no control of our fiscal affairs
Results of a continuing falling value of dollar:
Eventually when value of dollar falls to point where it is virtually comparable to the ruble or pesos we will see prices skyrocket on products produced by petroleum products...LITERALLY EVERYTHING...since the oil producing countries will demand payment in euros, pounds or yen..anything more stable than the dollar, then we will have to trade our worthless dollars for a currency they will accept
This story explains a lot
The value of the dollar against other major currencies of the world has fell 30% during the past six months.
This has several meanings: OFFICIAL GOVERNMENT STATEMENTS
Our exports are a better value for foreign consumers compared to products produced by other nations
Our domestic labor becomes less expensive so encourage foreign investment in plants in USA
Imports become much more expensive due to lower value of dollar so we buy made in USA
Foreigners vacation in USA because its such a good value (sorry, strike that one PATRIOT ACT forbids anyone except cheap labor from Mexico to enter country..too big security risk)
Probably others, just can not think of them right now
To a certain degree it is a good thing having weak dollar.
Reasons for US currency value continues to fall:
Trade deficits.. corrected somewhat by weak dollar
Confidence of markets..Preception we have no control of our fiscal affairs
Results of a continuing falling value of dollar:
Eventually when value of dollar falls to point where it is virtually comparable to the ruble or pesos we will see prices skyrocket on products produced by petroleum products...LITERALLY EVERYTHING...since the oil producing countries will demand payment in euros, pounds or yen..anything more stable than the dollar, then we will have to trade our worthless dollars for a currency they will accept
This story explains a lot
this is NOT a problem at all.
just add a ZERO to every bill the fed prints. budget deficit will be no more, but we have to deal with inflation.
just add a ZERO to every bill the fed prints. budget deficit will be no more, but we have to deal with inflation.
Yes and no...yes, because if the debt gets too big, the economy will go in the crapper. Amazing how the "fiscally conservative" Republicans are responsible for the greatest single year debt, eh?
Anyway, I'm also not concerned because we've almost always had a debt. The only President to pay it off? A Democrat by the name of Andrew Jackson.
/flamebait
Anyway, I'm also not concerned because we've almost always had a debt. The only President to pay it off? A Democrat by the name of Andrew Jackson.
/flamebait
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