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When,How will USA payoff his debt?Who is giving them money?

No country needs to pay off debt. You need to maintain it.

The money comes from those economic actors buying their sovereign bonds, among which individuals (both domestic and foreigners), investment funds (both domestic and foreigners), other sovereign entities, international agencies, banks, etc.
 
When I see a question of debt is see a sign that says throw up here. Few of use that don't have the background to begin to think about this rationally, are aware of that fact, it seems to me.
 
Nope we will never pay it off. In fact we use additional debt to pay our debts making it impossible to ever pay it off. And what's amazing is people flock to buy our debt at a measly 2.75% yield.

The goal isn't to pay it off but to increase inflation fast enough to maintain it at around 100% of GDP. If demand falls for US debt and interest rates rise we will be unable to maintain the debt at 100%, causing the fed to print more money and create more inflation. Obama myRA plan is an attempt at making new demand for government debt so inflation does not increase too fast.
 
Yeah but debt had risen much faster than gdp for decades now. It's not going to end well. Default is the only solution ultimately.
 
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Tango said:
No country needs to pay off debt. You need to maintain it.
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That is simply not true.

It is very possible for a government to operate with little or no debt.


As for the opening post, the only solution is to keep printing more money.
 
zephyrprime said:
Yeah but debt had risen much dater than gdp for decades now. It's not going to end well. Default is the only solution ultimately.
Click to expand...

Not really decades...maybe the last decade or so....Fell from the late 40's to 80. Rose from 80 to 95...fell from 95 to the mid 2000's. Rising currently but seems to be slowing its' pace (looking at 2013's new DEBT to GDP ratio - not on graph).

debt-to-gdp.jpg
 
the u.s.g. should cancel all debt held by non-u.s. citizens... then it should decentralize (based upon total congressional representation) all debt (other than any debt that had ever been purchased by the Fed) held by u.s. citizens and limit itself in several other ways i cant articulate right now.
 
Tango said:
No country needs to pay off debt. You need to maintain it.

The money comes from those economic actors buying their sovereign bonds, among which individuals (both domestic and foreigners), investment funds (both domestic and foreigners), other sovereign entities, international agencies, banks, etc.
Click to expand...

This is the correct answer.
 
Engineer said:
Why? Because we're using it to fund the NSA?
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Exactly. Not really though.

Holding a large amount of our debt allows another nation to manipulate our markets.

Can you imagine the panic if china said they were dumping all their US bonds on the market?
 
Texashiker said:
Exactly. Not really though.

Holding a large amount of our debt allows another nation to manipulate our markets.

Can you imagine the panic if china said they were dumping all their US bonds on the market?
Click to expand...

Sure. It would completely wipe out BOTH economies, which is why they won't do it.
 
Texashiker said:
That is simply not true.

It is very possible for a government to operate with little or no debt.


As for the opening post, the only solution is to keep printing more money.
Click to expand...

It might be possible for a government to operate with little or no debt, but it would be undesirable. A government with little or no debt would mean that 1) the taxpayers are overtaxed and 2) the government is improperly leveraged.
Governments don't retire like people do. The debt doesn't need to be paid off, it just needs to be properly managed.

To all those with your end of the world doomsday predictions, consider this: the smartest and the wealthiest people consider US government debt to be anong the safest and most conservative of investments. Are they all wrong?
 
Vic said:
It might be possible for a government to operate with little or no debt, but it would be undesirable. A government with little or no debt would mean that 1) the taxpayers are overtaxed and 2) the government is improperly leveraged.
Governments don't retire like people do. The debt doesn't need to be paid off, it just needs to be properly managed.
Click to expand...

Everything you posted is failed theory.

Texas is required by its constitution to have a balanced budget. The federal government could do the same thing, but refuses to.
 
Texashiker said:
That is simply not true.

It is very possible for a government to operate with little or no debt.


As for the opening post, the only solution is to keep printing more money.
Click to expand...

Heh. The idea that govt needs to borrow to create new money is a holdover from the gold standard, a sop to the Wealthy. When the govt borrows a dollar to spend, they literally create a new dollar, because bonds are fungible, easily exchanged for money.

That's where money comes from in any fiat currency system.

It is entirely possible for govt to create new money w/o borrowing at all, but that would cut out the people at the top who luvs their US govt securities. Oh yes they do. US govt bonds are the safest investment in the world & the backbone of every great investment portfolio.

Borrowing in our own currency, we can't possibly end up screwed like Greece, Spain, Ireland & others for whom the Euro acts like the gold standard.
 
Texashiker said:
Everything you posted is failed theory.

Texas is required by its constitution to have a balanced budget. The federal government could do the same thing, but refuses to.
Click to expand...

Texas doesn't control the money supply and cannot print money. See the difference? Although, in theory, as long as Texas can grow it's economy and generate enough revenue to service debt, I don't see why it wouldn't be possible for Texas to do the same (with a Constitutional change of course).

Not sure what has failed about it. We have always paid our debts*

(*Well, there was this one time that one part held the US hostage and almost caused a default)
 
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Texashiker said:
Everything you posted is failed theory.

Texas is required by its constitution to have a balanced budget. The federal government could do the same thing, but refuses to.
Click to expand...

Texas has no currency of their own, making your point irrelevant. It's not their job to create liquidity, but rather the federal govt.
 
Texashiker said:
Everything you posted is failed theory.

Texas is required by its constitution to have a balanced budget. The federal government could do the same thing, but refuses to.
Click to expand...

And how much in federal funding does Texas accept each year?
I don't think any of the states allow deficits.
 
Jhhnn said:
Borrowing in our own currency, we can't possibly end up screwed like Greece, Spain, Ireland & others for whom the Euro acts like the gold standard.
Click to expand...

We can most certainly end up just as screwed up as them, just not in exactly the same way as them. Monetization is the same thing as default. How is devaluing the currency by 50% any different than a country with a fixed currency paying 50 cents on the dollar for their debt?
 
Texashiker said:
Paid our debts as in how? Printing more money out of thin air?
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So you want to stop printing money (i.e. a fixed money supply)? Would be interesting to see how the people would react as the majority of the money pooled at the top (like it currently does) and there is no additional supply to go to the masses. Talk about 'eating the rich'.
 
Engineer said:
Not really decades...maybe the last decade or so....Fell from the late 40's to 80. Rose from 80 to 95...fell from 95 to the mid 2000's. Rising currently but seems to be slowing its' pace (looking at 2013's new DEBT to GDP ratio - not on graph).
Click to expand...
Rising since 1980 is several decades.
 
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