Why is National Debt Bad?

[JettaKnight]

According to the Politicians, debt isn't a real thing because the government can simply print as much money as it wants. My question for them has always been: if you can print as much money as you want why do we have to pay taxes?

FIFY. It's way too easy easy to make this an us versus them issue, but in reality all Americans are complicit.

 

[Ingomike]

Ever try and negotiate a business contact with gold? Or buy a car? Our make a house payment? Our it travelling instead of getting local currency?

This is a normalcy bias…

 

[Ingomike]

FIFY. It's way too easy easy to make this an us versus them issue, but in reality all Americans are complicit.

Nearly all, anyway…

 

[blain]

oh, never mind. Can I give you a hand with the deck chairs?

I think you've got the chairs covered.
You might check with the band to make sure they have everything they need to play on.

 

[JettaKnight]

I completely agree, bet most of INGO does. But you don’t say anything about doing it the legal and constitutional way, not illegally…

I've said it before, and I'll say it again, "immigration reform benefits Republicans." Catholics from South America align with us when it comes to social issues. But instead of working towers that, we've demonized the mass of humans looking for a better life.

I don't want illegal immigration, I wasn't the immigration process reformed. I don't want to see smart kids with STEM degrees worried that they have to take those skills elsewhere just because of their parents ' sins.

 

[jedi]

OP you do understand that the majority of the US debt we owe to OURSELVES.

Who Owns the US National Debt?

The majority of the U.S. national debt is owned by Social Security, the Federal Reserve, and foreign investors. Learn how that impacts the economy and you.

www.thebalancemoney.com

Basically within the next decade we won't be able to cut social security checks at 100 face value.

So think of what occured to Greece all national pensions got cut or just went bye bye.

 

[AndreusMaximus]

OP you do understand that the majority of the US debt we owe to OURSELVES.

View attachment 257521

Who Owns the US National Debt?

The majority of the U.S. national debt is owned by Social Security, the Federal Reserve, and foreign investors. Learn how that impacts the economy and you.

www.thebalancemoney.com

Basically within the next decade we won't be able to cut social security checks at 100 face value.

So think of what occured to Greece all national pensions got cut or just went bye bye.

Short answer: No, I wasn't aware.

I always thought that "debt", correctly speaking, only referred to money we owe to other nations, and other stuff like social security checks would be referred to as "unfunded liabilities" (IIRC, not sure if that's the right term.) I guess most of the numbers I have seen for US debt actually do include those things, though.

To screw this up even further, we're owed a load of money by a bunch of other countries, too. Supposedly there's some countries that we both owe money to, and they owe us money. I have no clue how that's supposed to work.

Yeah, I've got some learning to do.

 

[BugI02]

You can't make art or jewelry from a paper fiat currency

 

[2tonic]

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Well.....kiss my tenders...!

Although origami isn't so much an art, as it is a snooty method of recycling.

 

[jamil]

General musings from a guy that likes economics podcasts:


I have heard the arguments from neo-Keynesians, and I'm not sold, but it's something worth pondering.


I know there's a lot of complaints about fiat currency and how we should get back to gold, but isn't gold and other precious metals simply a physical fiat currency? What makes gold intrinsically valuable? Because it's shiny? Because it's needed for electronics? You can't say it's because it's a fixed supply because we're stilling mining more for thousands and thousands of years. If you make it a currency again, then you inhibit its use in practical applications.

I wouldn't say gold is valuable because it's a fixed supply. It's valuable at least in part because it is rare. It's certainly not as available as dirt. So we should expect gold be be more valuable than dirt. But it's also valuable because of perception. Everything is worth what someone is willing to pay for it.

I have mixed feelings about being on the gold standard. But I'm not an economist and I'm not gonna pit my experts against yours.

When is your debt too much? In my limited knowledge that'd be when you can no longer borrow more. And that may be because lenders lose faith in your ability to repay. That could because you've lost your ability to produce income (for us that's losing a job, for a govt it's more complicated but loosely based on GDP) or you've got a bad credit history. On the latter, that's why this stupid game of chicken that Congress plays with the debt ceiling is so dangerous; time to get Congress out of it. Reps seem to only care about what can make them look good in the next election cycle.

I disagree that your debt is too much when you can't borrow more. It's one sign you have too much debt. But, even if you can still get credit, you have to pay it back. Your debt is definitely too high when you can't afford to do anything else but pay off your debts.

But even too much debt isn't the right standard. It's the consequences of debt. Any debt has consequences. It's a trade-off. Benefits of debt vs consequences. Benefits are, you get it now. Consequenes are, you have to pay it back and that's usually not free. And at the nation level, consequences are also that it tends to cause inflation. It tends affect creditworthness. It tends to affect interest rates. Higher debt destabilizes economies. There are plenty of downsides to national debt.

Speaking of, that's a problem, IMHO. Tackling this debt is a not easy. We see it over and over from both parties. Pain - either from cuts in spending or increased taxes doesn't sell in November. Every citizen wants a balanced budget, but when it comes to voting, that's nearly at the bottom of the list of important issues. We're more interested in culture warring, climate change, stopping dictators, etc.

This is a good point. We're distracted with so many other things that no one really gives a **** about the national debt, and often, if you say that in the wrong company, they'll call you a bigot.

Maybe you think the USA is precariously close to losing the ability to borrow, yet in the past few years there was a time that borrowers were throwing money at the Fed to buy securities paying a pittance of interest (or negative?) just in order to get that security that comes with US govt debt. So, I think it's a long ways off, even past our grandchildren's time.

Let the interest rate on the national debt increase significantly for whatever reason and we're ****ed. Maybe that's a long way off.

Could the RMB replace the Dollar? That's a good question as China continues to amass wealth from manufacturing (yes, we created that enemy). But is the world ready to back a communist state especially in light of their provocations with Taiwan and propensity to control the world in there belts and road initiative?


There's talk about GDP - "we have to make things!" And I wonder... I've worked in a lot of industries, and I've designed a lot of crap. Is making stuff all it's cracked up to be? Believe you me, I know that America is falling behind on manufacturing - semiconductors are my life. But... I don't know. I guess the alternative is more damned coffee shops and other services. We're paying people to do our grocery shopping because we're busy doing what? Twenty years ago I listened to a coworker rant about how America doesn't produce anything, but if he could only see it now...

Making stuff created the middle class. Not making stuff has helped destroy it.

And while I'm going, let's talk immigration. Americans are too busy with our careers or becoming influencers to have children (Idiocracy, anyone?). If we're not careful, we'll end up like Japan needing robots because the population is overloaded with the elderly. And here we are, with people risking it all to come with the dream of being able to earn a living without the fear of narcos... You want to make more stuff? Let in people who are willing to work in those factories! If you show up for work and pass a drug test you beat the majority of native born blue collar workers!

Immigration isn't the answer to that. And I'm not opposed to immigration. But let's be sensible about it. Allow immigration for people who have something to offer. Don't allow immigration for people who are burden's on society from the time they get here.

As far as our population goes. We don't need robots. We just need to **** more. In wedlock, obviously. Marry more. **** more. Have more kids.

My Marconi Wireless is running dry, so my rambling must as well.

I hate Marconi. Years ago I was in a job where I had to work with their engineers. They were mostly assholes and idiots. At least the ones I worked with were. It's almost like they had a company policy to hire idiot assholes. How else could they have only hired those?

 

[Ingomike]

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Well played…

 

[jamil]

According to the Progressives, debt isn't a real thing because the government can simply print as much money as it wants. My question for them has always been: if you can print as much money as you want why do we have to pay taxes?

They're right that we can just print more money. But then that has deleterious consequences to our economy too. You make a dollar worth spit by printing away the national debt. They're just listening to idiots who tell them that so people don't start insisting that we do something real to rein in spending.

 

[BigRed]

Time for a national divorce.

 

[jamil]

FIFY. It's way too easy easy to make this an us versus them issue, but in reality all Americans are complicit.

But it IS an us vs them issue. It's us, the sane people who would like to see the debt problem addressed, vs them, the ********ers who just want to spend endlessly to stay in power.

 

[jamil]

Time for a national divorce.

I don't know if that's the right action. I don't think that TPTB want that. I am also fairly sure that it would be a contested divorce.

 

[BigRed]

I don't know if that's the right action. I don't think that TPTB want that. I am also fairly sure that it would be a contested divorce.

The hell with them!

 

[jwamplerusa]

Nothing is wrong with the national debt as long as each US citizen can pay off the $94,390 they owe.

$94,392 now. How long did it take to owe two more dollars? Not long enough.

 

[jamil]

But it IS an us vs them issue. It's us, the sane people who would like to see the debt problem addressed, vs them, the ********ers who just want to spend endlessly to stay in power.

BTW. That was a binary. Sue me.

 

[BigRed]

National debt is not an issue as long as you can kick the can.

Your children and grandchildren will thank you for delivering them into economic slavery.

But hey, it's not that bad right? We are already in slavery. Ain't that bad, right? What's a bit more as long as massa takes care of you?

Your future generations will love it.

 

[JettaKnight]

My Marconi Wireless is running dry, so my rambling must as well.

I hate Marconi. Years ago I was in a job where I had to work with their engineers. They were mostly assholes and idiots. At least the ones I worked with were. It's almost like they had a company policy to hire idiot assholes. How else could they have only hired those?

That's a company? I was talking about my cocktail.

I can't figure out what they do, but they look like patent whores.