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What is the national debt, and why do we care?

O

Orsorum

Lifer
(I already know the answers, folks, I want non-economists to answer this)

Just trying to get a feel for what people think it is, and why it is important.
 
we owe people money. paying what you owe is simple honesty. if we were to renig on our debts we'd lose a lot of face in the world. I forget what the debt was, but I remember it had a LOT of 0's
 
it's 6.3 trillion and rising...don't you love the way our gov't's spending the money it doesn't have?!!
 
i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
 
Originally posted by: tokamak
i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
Click to expand...

Why do you not care?
 
Originally posted by: Orsorum
Originally posted by: tokamak i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
Click to expand...
Why do you not care?
Click to expand...

it's sad isn't it? he probably doesn't even vote...yet think he has a right to bitch and whine about public policy and elected officials. sad really.
 
Originally posted by: m2kewl
Originally posted by: Orsorum
Originally posted by: tokamak i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
Click to expand...
Why do you not care?
Click to expand...

it's sad isn't it? he probably doesn't even vote...yet think he has a right to bitch and whine about public policy and elected officials. sad really.
Click to expand...

i don't see where he whined or bitched about anything.
 
The National Debt is money owed because we couldn't pay for all of our services with current tax revenues. So, to get the added money, the government borrows money. Of course, to intice investors, the government has to offer interest on each amount of money borrowed. We have to pay back this cash with money out of current tax revenue, and as this grows, this limits the amount of money that the government can use for, well, government services. In addition, while right now we have very low interest rates, enough borrowing can, in theory at least, cause the interest rate to rise, "crowding out" private investment. So, based on my knowledge of AP Macroeconomics, you have my answer.
 
Originally posted by: Dudd
The National Debt is money owed because we couldn't pay for all of our services with current tax revenues. So, to get the added money, the government borrows money. Of course, to intice investors, the government has to offer interest on each amount of money borrowed. We have to pay back this cash with money out of current tax revenue, and as this grows, this limits the amount of money that the government can use for, well, government services. In addition, while right now we have very low interest rates, enough borrowing can, in theory at least, cause the interest rate to rise, "crowding out" private investment. So, based on my knowledge of AP Macroeconomics, you have my answer.
Click to expand...

I would add to this that the credit the American gov't has is dependent on the public perception of our ability to pay it off. If the credit goes down, then the Ameircan currency essentially becomes worthless.

-Ed
 
Originally posted by: m2kewl
Originally posted by: Orsorum
Originally posted by: tokamak
i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
Click to expand...
Why do you not care?
Click to expand...

it's sad isn't it? he probably doesn't even vote...yet think he has a right to bitch and whine about public policy and elected officials. sad really.
Click to expand...

😕
 
Originally posted by: Orsorum
Originally posted by: tokamak
i thought it was just like money that we had borrowed from ourselves. like government bonds and stuff. i dunno.

and personally, i don't care.
Click to expand...

Why do you not care?
Click to expand...

i dunno i guess i just think there are more pressing issues. in my limited knowledge, it seems to me that the "national debt" is just kinda an economic anomaly, a side-effect of the way that our government does business. i mean, if it gets paid off, whats gonna change in my everyday life? or in anyones everyday life? i mean sure, in all honestly, i suppose that i should care, but at this point in time i just really kinda don't. i mean, orsorum did say that he wanted non-economists' opinion on this. i think he's just looking for a general array of different opinions, and i gave mine.
 
The National Debt is the taking more of what our congress already knows they don't have any of and spending it...
 
Originally posted by: charrison
It consumes too much tax money to make the interest payments.
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Just increase the income tax rate on the debt instruments to 100% and it will bring in more revenue to offset this burden.

 
Originally posted by: LunarRay
Originally posted by: charrison
It consumes too much tax money to make the interest payments.
Click to expand...

Just increase the income tax rate on the debt instruments to 100% and it will bring in more revenue to offset this burden.
Click to expand...

Actually people will not buy debt if it is going to be taxed 100%.
 
Originally posted by: charrison
Originally posted by: LunarRay
Originally posted by: charrison
It consumes too much tax money to make the interest payments.
Click to expand...

Just increase the income tax rate on the debt instruments to 100% and it will bring in more revenue to offset this burden.
Click to expand...

Actually people will not buy debt if it is going to be taxed 100%.
Click to expand...

Lets just default ... go bankrupt when it gets to 10 thrillion... start all over... we'll be much more credit worthy.. and we can use the current debt service funds to pay for my social security.. and medicare..

 
There's something to be said for Hamilton's theory that if we owe everyone a ton of money (including citizens), then no one will want the US government to die, cause, you know, harder to collect. Of course, we're a bit bigger and more powerful than Hamilton's time, but it still has a little bitty bit of legitimacy.
 
I think as Americans we enjoy being in debt so this is why the national debt does not bother Americans as much as it should sometimes. To be considered a proper American it is good to borrow money to buy a house. For yonger americans it is ok to take large student loans (and avoid paying them off) AS WELL as taking multiple credit cards and maxing them out. In the US as opposed to Europe we cannot be thrown in jail for most unpaid debts. People have developed scams by abusing bankrupcy laws. Im not saying that all of these things are bad, but they do influence our placidity towards debt. Even though i believe that I have a remote understanding of economics...the National Debt is still a remote thing to understand. FICA money, good and bad debt, intrest rates, the "credit" of the US...These are remote things to the people who have to sign their life away just to buy a house

 
The reason nobody cares about the national debt is because it could be paid off if we really wanted to. If forget the exact amount but we spend 600 Billion on military and i would have to say at least more than 50million in foreign aid (this is either really low or really high). Plus i am sure that other countries owe the US money that we could get or we could charge for peace keeping missions. plenty of ways to reduce the debt. when clinton was in office he slashed the military budget and we had a profit.
 
Originally posted by: Nocturnal
Will we ever be able to pay our debt down?
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Yes, after Bush is gone someone is going to have to raise taxes to play for this deficit. Do you remember
the budget surpluses of three or four years ago?

 
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