It's an insidious tax on the public.
Everyone who is rejoicing about the new stimulus check or whatnot have to understand that it's coming out of their pockets. The taxpayers, as a collective, will have to pay for this debt as a matter of time.
Such amounts of debt also furthers the inflation problem, which is certainly not ideal given the lack of action by the central bank to try to tighten monetary policy.
Topic: US national debt exceeds $30 trillion (Read 289 times)
American politicians promise americans free stuff. Free student loans, free healthcare, free UBI. Our $30 trillion in national debt is the price we pay for it.
Not many make a connection between free social programs and national debt. People believe they can enjoy free things without incurring penalty or price. Greed and ambition blind us to the long term consequences of our short term choices.
If the road to hell is paved with good intentions. Might it be fair to say, the road to high inflation and a bankrupt state might be paved with free things.
Unfortunately, many are desperate and willing to sell their souls to get ahead. If any choose to sell their souls in exchange for free things from the government, I hope they read the fine print.
Not many make a connection between free social programs and national debt. People believe they can enjoy free things without incurring penalty or price. Greed and ambition blind us to the long term consequences of our short term choices.
If the road to hell is paved with good intentions. Might it be fair to say, the road to high inflation and a bankrupt state might be paved with free things.
Unfortunately, many are desperate and willing to sell their souls to get ahead. If any choose to sell their souls in exchange for free things from the government, I hope they read the fine print.
America is in a very privileged position at the moment and for the foreseeable future - they have control of the worlds reserve currency. This allows them to raise debt and have their currency used by many other countries, it gives their financial regulators immense powers in combination with all their global companies, to influence all sorts of policies in their favor. It lets them live a more comfy life than many others because they can borrow with one hand and run a printing press with the other - which deflates the amount of future debt they'll end up paying back. There will be a limit to the US debt - it might be $31 trillion, it might be $100 trillion or it might never come.
I tend to disagree with the Healthcare and student loans being the dragging force of our debt in the US. Other countries across the world offer more free schooling and cheaper Healthcare and don't have the same debt issue. The problem we have is the insane amount of fat in every bill. It's the "$5million to study the effects of snakes in our wilderness" type "initiatives that get us in trouble. The politicians buy their votes with these things on the backs of the US citizens.
There is a bigger reason why healthcare is the biggest cost, not because it is not free, but because it is expensive. The insulin that Americans pay 300 dollars for is 3 dollars literally across the border, when you have stuff like that, it becomes a problem. So, let's assume Americans spend 1 trillion dollars per year on healthcare (probably more) the very same exact healthcare would cost 100 billion dollars for some European nation.So, naturally those European nations could subsidize that and end up paying it from the taxes without a problem. Which means that USA doesn't have a problem with paid or free healthcare, they have with expensive healthcare. Visiting a doctor in USA starts to become a trouble, because it may cost 4k just to get flu shot and some vitamins and an appointment, whereas same would be 40 bucks without insurance in Europe. Get that healthcare products, drugs, services all a cap, and you will end up with much cheaper healthcare. After that, you could make it free or paid, wouldn't matter.
Quote
The United States’s national debt exceeded $30 trillion for the first time, according to Treasury Department figures released on Tuesday.
The national debt is now about double China’s entire gross domestic product.
The sobering milestone comes after the federal government spent trillions of dollars to stimulate the economy and lessen the economic blow that came with the pandemic.
The country’s debt has increased by a whopping $7 billion since the end of 2019, just before the pandemic took hold.
“The milestone of $30 trillion in debt should be a giant red flag for all of us about America’s future economic health, generational equity, and role in the world,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, a group that works to raise awareness about the debt.
“Our high and rising debt makes us less prepared for the next pandemic, less secure against future adversaries, less resilient to the changing climate, and less able to build the strong and inclusive economy that we all want for the next generation,” he added.
Most of the trillions of dollars that Congress spent sending out three stimulus checks to people, propping up businesses, and providing jobless benefits during the worst of the pandemic was financed through borrowing rather than being offset through revenues — a fact that raised the national debt to the $30 trillion mark much sooner than expected.
The gross national debt burden, which represents the debt the government owes its creditors, is greater than the U.S. economy. The national debt differs from the federal debt held by the public, which represents only the amount of government bonds held by the public and not the money the government owes itself. That number is lower, at $23.5 trillion.
News that the U.S. has crossed the $30 trillion threshold comes as the Federal Reserve unwinds its ultraloose monetary policies and prepares to raise the federal funds rate for the first time in years to combat soaring inflation.
Increased borrowing costs would make it even more difficult to finance the debt.
“It doesn't mean a short-term crisis, but it does mean we are going to be poorer in the long term,” David Kelly, chief global strategist at JPMorgan Asset Management, told CNN. The U.S. owes a lot of its debt to foreign investors, particularly China and Japan.
“That means American taxpayers will be paying for the retirement of the people in China and Japan, who are our creditors,” Kelly said.
During a meeting last week, top central bank officials indicated that the first in a series of interest rate hikes will likely come in March. Investors are pricing in several rate hikes this year, which could bring the federal funds rate to a range of 1-1.25%.
https://www.washingtonexaminer.com/policy/economy/us-debt-exceeds-30-trillion-for-first-time
The national debt is now about double China’s entire gross domestic product.
The sobering milestone comes after the federal government spent trillions of dollars to stimulate the economy and lessen the economic blow that came with the pandemic.
The country’s debt has increased by a whopping $7 billion since the end of 2019, just before the pandemic took hold.
“The milestone of $30 trillion in debt should be a giant red flag for all of us about America’s future economic health, generational equity, and role in the world,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, a group that works to raise awareness about the debt.
“Our high and rising debt makes us less prepared for the next pandemic, less secure against future adversaries, less resilient to the changing climate, and less able to build the strong and inclusive economy that we all want for the next generation,” he added.
Most of the trillions of dollars that Congress spent sending out three stimulus checks to people, propping up businesses, and providing jobless benefits during the worst of the pandemic was financed through borrowing rather than being offset through revenues — a fact that raised the national debt to the $30 trillion mark much sooner than expected.
The gross national debt burden, which represents the debt the government owes its creditors, is greater than the U.S. economy. The national debt differs from the federal debt held by the public, which represents only the amount of government bonds held by the public and not the money the government owes itself. That number is lower, at $23.5 trillion.
News that the U.S. has crossed the $30 trillion threshold comes as the Federal Reserve unwinds its ultraloose monetary policies and prepares to raise the federal funds rate for the first time in years to combat soaring inflation.
Increased borrowing costs would make it even more difficult to finance the debt.
“It doesn't mean a short-term crisis, but it does mean we are going to be poorer in the long term,” David Kelly, chief global strategist at JPMorgan Asset Management, told CNN. The U.S. owes a lot of its debt to foreign investors, particularly China and Japan.
“That means American taxpayers will be paying for the retirement of the people in China and Japan, who are our creditors,” Kelly said.
During a meeting last week, top central bank officials indicated that the first in a series of interest rate hikes will likely come in March. Investors are pricing in several rate hikes this year, which could bring the federal funds rate to a range of 1-1.25%.
https://www.washingtonexaminer.com/policy/economy/us-debt-exceeds-30-trillion-for-first-time
....
American politicians promise americans free stuff. Free student loans, free healthcare, free UBI. Our $30 trillion in national debt is the price we pay for it.
Not many make a connection between free social programs and national debt. People believe they can enjoy free things without incurring penalty or price. Greed and ambition blind us to the long term consequences of our short term choices.
If the road to hell is paved with good intentions. Might it be fair to say, the road to high inflation and a bankrupt state might be paved with free things.
Unfortunately, many are desperate and willing to sell their souls to get ahead. If any choose to sell their souls in exchange for free things from the government, I hope they read the fine print.
I tend to disagree with the Healthcare and student loans being the dragging force of our debt in the US. Other countries across the world offer more free schooling and cheaper Healthcare and don't have the same debt issue. The problem we have is the insane amount of fat in every bill. It's the "$5million to study the effects of snakes in our wilderness" type "initiatives that get us in trouble. The politicians buy their votes with these things on the backs of the US citizens.
US is economically very stable, so the high debt level is not an issue.
As long as the US dollar keeps being the number one reserve currency,the US debt can keep growing without any issues.The Federal Reserve will keep printing money and buying US government bonds and other countries will keep buying US dollars for their foreign transactions and national currency reserves.
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
That won't go on forever if the value of dollar keeps going down. Debt does cause this, when you have so much debt that you keep on printing money and everyone has trillions of debt from you, then it will not make sense to keep getting more and more of it. This is why some nations may try to switch to euro instead of dollar, even yuan as well. That way they would know there is at least a chance that they could get paid, so why keep it in dollars?The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
I am not saying that this will happen tomorrow, but as long as USA keeps getting their money more and more worthless, some nations will definitely start looking at other currencies or at least there is a risk of that happening.
Let's assume you're right. Question - let's simulate the situation? Well, for example, your country, businessmen from your country, have decided that it's time to abandon the dollar and switch to -.... Oh, what are we going to switch to? First you need to find a really high-quality alternative. Euro? Well, so-so - internal tensions, a "trend" to leave the EU, debts, problems with the Russian Federation, ... The Euro does not fit!
ABOUT! China and its yuan! Well, why not an option - a powerful economy, hates, at least indicatively, the United States and the dollar, wants world domination. Next steps? Your country sells goods, services to China.. You get a bunch of yuan, you want to buy, for example, ore in Australia, and
Australia says - no, give us dollars, we don't accept yuan 
You are rushing about, you need ore - South Africa also says "why do I need yuan? Where can I buy something for them, except for China ... No, let's pay in dollars" . As a result, you are sitting with a bunch of yuan, and you understand that now you either switch to monopoly imports from China, or throw these pieces of paper out of your head, and continue to trade on the world market for DOLLAR As long as the US dollar keeps being the number one reserve currency,the US debt can keep growing without any issues.The Federal Reserve will keep printing money and buying US government bonds and other countries will keep buying US dollars for their foreign transactions and national currency reserves.
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
That won't go on forever if the value of dollar keeps going down. Debt does cause this, when you have so much debt that you keep on printing money and everyone has trillions of debt from you, then it will not make sense to keep getting more and more of it. This is why some nations may try to switch to euro instead of dollar, even yuan as well. That way they would know there is at least a chance that they could get paid, so why keep it in dollars?The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
I am not saying that this will happen tomorrow, but as long as USA keeps getting their money more and more worthless, some nations will definitely start looking at other currencies or at least there is a risk of that happening.
As long as the US dollar keeps being the number one reserve currency,the US debt can keep growing without any issues.The Federal Reserve will keep printing money and buying US government bonds and other countries will keep buying US dollars for their foreign transactions and national currency reserves.
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
Well, Russia, there is a fixed idea to "destroy the USA"
They have been "destroying the USA" for the last 200 years, though later, after each new round of "destroying the USA", they, the USA, beg for food and beg for help so that they do not starve die, after "another victory" But China - why should they destroy the market, which is critical for them. Just simulate - the US economy is collapsing, total inflation, purchasing power tends to 0. And the question is - who will buy everything they produce from China ?? Russia ?
)) Iran? Venezuela? Maybe the EU? Try to simulate the situation before voicing such ideas... Basically, this debt is not the problem of the USA but of the lenders who are mainly foreign countries and which invest their export surpluses in dollars, first and foremost China and Japan. With the USD as the world currency, there are hardly any alternatives that have enormous export-strong countries. As long as this is the case and the US does not overdo it with debt, then they can continue the debt game forever.
It's not a problem for them too I think, pretty sure that the lenders have some sort of favor attached to the loaned money so as to prevent a one sided deal with the US government, and the way I see it, I think that the lenders are happy that the loan isn't paid yet because they enjoy the benefits of having some sort favor with one of the superpower nations in the world. 
As long as the US dollar keeps being the number one reserve currency,the US debt can keep growing without any issues.The Federal Reserve will keep printing money and buying US government bonds and other countries will keep buying US dollars for their foreign transactions and national currency reserves.
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
The real problem will occur,when the US dollars stops being a global reserve currency.I'm sure that Russia,China and many more countries will decide to stop using US dollars in their transactions at some point.
The question is what happens next?Hyperinflation in the USA or the US government going bankrupt?Or maybe both?
It is looking as if the past administration is always better of with the current one, this I'm thinking and having this thought like back during Clinton, Bush, Obama, Trump and now Biden I think it has been a progressional increase in budget and debt all together. This is becoming a global situation that successive government get worse than the previous. Now US is having high debts which that still causing inflation , yet America is threatening Russia and having trade war with China and still the economy will be affected.
Well I won't go so far as to say that having the successive governments/administrations are getting worse than the previous ones but I get your point. Because mostly, that is the case. Even here in my country this has proven to be both true and not. I said so because last administration was worse than the one before here in my country but the administration right now though, is way better than the last one. Mainly because of the president that has good judgement and does not tolerate any type of corruption even when the ones involved are close friends or part of his political party. I cannot say the same for other countries, maybe you should start a separate thread about this asking this type of question.
People should understand the difference between the federal government's annual budget deficit, and the country's national debt. The Federal government generates a budget deficit whenever it spends more money than it brings in through income-generating activities, such as taxes.
The national debt is the net accumulation of the federal government's annual budget deficits. The proceeds of the selling of Treasury bills, treasury notes, and treasury bonds SHOULD be used to stimulate the growth of the economy and the goal should be to help the country's long-term prosperity. (Not paying Politicians and government employees salaries and arranging kickbacks on corrupt tenders)
In short.... it is how the money is spend and how it is used to grow the economy and not how it inflates individuals or a small percentage of government employees pockets.
The national debt is the net accumulation of the federal government's annual budget deficits. The proceeds of the selling of Treasury bills, treasury notes, and treasury bonds SHOULD be used to stimulate the growth of the economy and the goal should be to help the country's long-term prosperity. (Not paying Politicians and government employees salaries and arranging kickbacks on corrupt tenders)
In short.... it is how the money is spend and how it is used to grow the economy and not how it inflates individuals or a small percentage of government employees pockets.
Basically, this debt is not the problem of the USA but of the lenders who are mainly foreign countries and which invest their export surpluses in dollars, first and foremost China and Japan. With the USD as the world currency, there are hardly any alternatives that have enormous export-strong countries. As long as this is the case and the US does not overdo it with debt, then they can continue the debt game forever.
USD is the trade currency around the world and most of the forex reserves in other countries are made of US Dollar bonds and other derivatives. Even the exchange rate for other fiat currencies are denominated with regards to the USD. But now we are seeing hints that governments around the world are looking for alternatives. El Salvador has already made Bitcoin as legal tender. Many other countries, including Panama, Malta and Tonga are considering awarding legal tender status to Bitcoin.
Basically, this debt is not the problem of the USA but of the lenders who are mainly foreign countries and which invest their export surpluses in dollars, first and foremost China and Japan. With the USD as the world currency, there are hardly any alternatives that have enormous export-strong countries. As long as this is the case and the US does not overdo it with debt, then they can continue the debt game forever.
I stand corrected then. I initially thought that most if not all of the debts they have are being used to improve the lives of the US citizens. Because on some of the speaches I have seen online, they boast about the things they have done and are still planning to do and so I initially assumed that they really are doing something significant and helpful towards the citizens of the country they are governing in. Even on campaigns before elections they boast about these things.
Man, now I even feel more awful for the people of the US. ;<
It is looking as if the past administration is always better of with the current one, this I'm thinking and having this thought like back during Clinton, Bush, Obama, Trump and now Biden I think it has been a progressional increase in budget and debt all together. This is becoming a global situation that successive government get worse than the previous. Now US is having high debts which that still causing inflation , yet America is threatening Russia and having trade war with China and still the economy will be affected.
I stand corrected then. I initially thought that most if not all of the debts they have are being used to improve the lives of the US citizens. Because on some of the speaches I have seen online, they boast about the things they have done and are still planning to do and so I initially assumed that they really are doing something significant and helpful towards the citizens of the country they are governing in. Even on campaigns before elections they boast about these things.
Man, now I even feel more awful for the people of the US. ;<
The thing I find problematic though is that if this continues (and I think it will and at even larger scales due to increasing problems) the cash back and inflation may not be that much of a help. And as time goes, resources gets scarcer. Just thinking about the future of this world frightens me and makes me pity not only the future generations of the US but also the entire world.
On a side note though, even if the leaders today or on the upcoming administrations want to change how it leads and break this debt cycle, it's probably already too late. And even if we don't cancel out it's possibility, it certainly won't be that easy considering that the people has gotten used to such benefits. I may be wrongly assuming here but the thought of it happening is frightening. Even when I am not from the US itself because if US sinks, the world will change and that is another uncertainty that I'd rather not find out the results.
They are not using the money as you assumed they are, you know that right? If you look at USA, they have citizens increasingly having more debt, they have people getting poorer by purchasing power, they have medical bills that many other nations do not have, and they are also in big financial trouble with national debt mainly taken from them.On a side note though, even if the leaders today or on the upcoming administrations want to change how it leads and break this debt cycle, it's probably already too late. And even if we don't cancel out it's possibility, it certainly won't be that easy considering that the people has gotten used to such benefits. I may be wrongly assuming here but the thought of it happening is frightening. Even when I am not from the US itself because if US sinks, the world will change and that is another uncertainty that I'd rather not find out the results.
I mean, it is clear to me that USA debt is not a good one, sure it is good to increase your debt if you are building something that is beneficial for you, but they were lately talking about infrastructure bill in north of 2+ trillion dollars to fix things, and that tells you how screwed they are if after 30+ trillions they yet to even start that.
I'll ask a simple question - SO WHAT? What will happen to the USA? NOTHING ! Tomorrow the Fed will issue 1 coin worth $40 billion and the matter will be closed. And the whole world will be with an open mouth, and scratching the back of the head - how so? Why can't we do that? But this is an interesting question - why are these just numbers for the USA, but for the rest of the world - trouble and difficulties?
This is example of developed country with poor ecosystem management. It’s ridiculous how they went into $30 trillion in debt. It’s seriously not a joke for Americans. The inflation is on one side and the rising debt on another; this could be damaging in further development of the country. This is the point where healthy relationship between government and peeps start to break apart.
Government will go rogue and impose unimaginable charge backs through taxes, reduced facilities, defaulters with high penalties and much more. When this happens Americans won’t be able to understand what is happening because they would have already been very dependent on government schemes and shoulders.
I hear they spend $3-4 trillion on defence system. Man, 10 years budget right there!!
Government will go rogue and impose unimaginable charge backs through taxes, reduced facilities, defaulters with high penalties and much more. When this happens Americans won’t be able to understand what is happening because they would have already been very dependent on government schemes and shoulders.
I hear they spend $3-4 trillion on defence system. Man, 10 years budget right there!!
My thinking is a follows: There are some situations in which it is great to have debt and to be able to extend your credit. Among these, the first one is dirty cheap money, which is now the case - not to mention if it is European debt, that actually has "cash back" in the form of negative rates. The other one is high inflation, which reduces your debt strongly just by letting time go by.
As long as the debt super-cycle holds at world level, US is just on the right place - at risk of overdoing true.
As long as the debt super-cycle holds at world level, US is just on the right place - at risk of overdoing true.
Also my initial thoughts. The thing I find problematic though is that if this continues (and I think it will and at even larger scales due to increasing problems) the cash back and inflation may not be that much of a help. And as time goes, resources gets scarcer. Just thinking about the future of this world frightens me and makes me pity not only the future generations of the US but also the entire world.
On a side note though, even if the leaders today or on the upcoming administrations want to change how it leads and break this debt cycle, it's probably already too late. And even if we don't cancel out it's possibility, it certainly won't be that easy considering that the people has gotten used to such benefits. I may be wrongly assuming here but the thought of it happening is frightening. Even when I am not from the US itself because if US sinks, the world will change and that is another uncertainty that I'd rather not find out the results.
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