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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM

Joesolo Indiana Solo Since: Dec, 2010 Relationship Status: watch?v=dQw4w9WgXcQ
Indiana Solo
#40826: Nov 17th 2012 at 5:53:31 PM

we pay interest on the national debt. If theres one thing Europe universialis has taught me, it's that paying interest is the worst possible use for a country's money EVER.

and were paying (according to one site) $12,922,741,407.27 in interest every year and it keeps going up! 13 BILLION DOLLARS. For God's sake, Thats almost the cost of a nuclear air craft carrier!

I'm baaaaaaack
SomeSortOfTroper Since: Jan, 2001
#40827: Nov 17th 2012 at 6:08:18 PM

Er, the debt is of the order of tens of trillions, if that was the yearly interest you'd be paying 0.1% pa.

edit: which is nuts on any longer term bonds which are going to have to be in there; shorter term ones maybe but that's going to be a limit not an average. I bet it's closer to 10x that which is still low. It;s not the interest payments now that you have to be worried about.

edited 17th Nov '12 6:16:33 PM by SomeSortOfTroper

Joesolo Indiana Solo Since: Dec, 2010 Relationship Status: watch?v=dQw4w9WgXcQ
Indiana Solo
#40828: Nov 17th 2012 at 6:15:10 PM

then the website was wrong. I'll check around.

CNN says it's 5 trillion over the next 10 years. so $500 bill a year. Alright, thats a whole fleet of nuclear aircraft carriers.

edited 17th Nov '12 6:16:28 PM by Joesolo

I'm baaaaaaack
NativeJovian Jupiterian Local from Orlando, FL Since: Mar, 2014 Relationship Status: Maxing my social links
Jupiterian Local
#40830: Nov 17th 2012 at 6:24:03 PM

While it's true that paying interest essentially nets the country nothing in the long run, in the short run, there are better things to use that money for than paying off the debit — like keeping the economy from sliding back into a recession. No one likes running a deficit, and everyone would be for paying down our debt if had enough money to do it as well as everything else we want to do. The debate is over whether the debt is more important than other things, like cutting taxes or social programs.

Really from Jupiter, but not an alien.
Joesolo Indiana Solo Since: Dec, 2010 Relationship Status: watch?v=dQw4w9WgXcQ
Indiana Solo
#40831: Nov 17th 2012 at 6:24:09 PM

[up] True. but at the same time, shouldnt we be at least making payments towards it?

edited 17th Nov '12 6:25:40 PM by Joesolo

I'm baaaaaaack
DeviantBraeburn Wandering Jew from Dysfunctional California Since: Aug, 2012
Wandering Jew
#40832: Nov 17th 2012 at 6:34:00 PM

What everyone should remember is Politician =/= Economist.

According to Romney, during the presidential race Bill Clinton told him he would have won had it not been for Sandy.

Everything is Possible. But some things are more Probable than others. JEBAGEDDON 2016
Joesolo Indiana Solo Since: Dec, 2010 Relationship Status: watch?v=dQw4w9WgXcQ
Indiana Solo
#40833: Nov 17th 2012 at 6:35:31 PM

oy vey...were never going to hear the end of this.

I'm baaaaaaack
Fighteer Lost in Space from The Time Vortex (Time Abyss) Relationship Status: TV Tropes ruined my love life
Lost in Space
#40834: Nov 17th 2012 at 6:44:57 PM

Joesolo, if measures to cut the deficit and/or debt would reduce future revenues by more than the amount of deficit reduction, they are counterproductive. This is the kind of math they teach in elementary school.

@Romney: What I see is a man desperately struggling to justify his defeat. It's really kind of pathetic. Obama would almost certainly have won without Sandy, but it helped demonstrate the stark contrast in leadership skills between the two men.

Edit: corrected a very serious typo...

Also, long term real (inflation-adjusted) interest rates on US debt are currently negative. That means that people are paying the government to take their money. There is no sign that this situation will change until we are out of this liquidity trap depression.

edited 17th Nov '12 6:49:44 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
nightwyrm_zero Since: Apr, 2010
#40835: Nov 17th 2012 at 6:52:31 PM

The difference between household debt and national debt is that a country can print money (assuming the debt is in its own currency). It may not be a good idea to do so since it causes massive inflation but it's always an option (and a threat to the country's debtors). Also, a lender can foreclose on a borrower who can't pay, but you basically can't do that to a country. Because of these differences, how you approach personal debt may not be a good approach for national debt.

In a sense, national debt isn't a direct threat to a country. A big debt threatens it indirectly by lowering the confidence of others in your country which causes other bad stuff to happen, but no one is coming to foreclose on the capital or making the country declare bankruptcy.

edited 17th Nov '12 6:53:13 PM by nightwyrm_zero

ohsointocats from The Sand Wastes Since: Oct, 2011 Relationship Status: Showing feelings of an almost human nature
#40836: Nov 17th 2012 at 6:55:11 PM

That means that people are paying the government to take their money.

Ain't that just the saddest thing I ever did hear.

Kostya (Unlucky Thirteen)
#40837: Nov 17th 2012 at 6:55:24 PM

Which is why I want to punch any person that says China somehow owns us. Leaving aside the fact that most of our debt is to ourselves that is not how it works!

Barkey Since: Feb, 2010 Relationship Status: [TOP SECRET]
#40838: Nov 17th 2012 at 6:55:40 PM

What we should be doing is focusing on getting out of this recession, and then figuring out what it is that got us this deep, and stop doing it.

We're never going to get out from under this debt, because we're just going to keep borrowing anyway. Is the long term plan in congress to just try and outlive every country we owe money to or something?

ohsointocats from The Sand Wastes Since: Oct, 2011 Relationship Status: Showing feelings of an almost human nature
#40839: Nov 17th 2012 at 6:57:42 PM

What did cause the recession, anyway?

I know a lot of it was banks lending to people they shouldn't have, but... what else?

nightwyrm_zero Since: Apr, 2010
#40840: Nov 17th 2012 at 6:59:24 PM

Don't most countries owe other countries while holding the debts of other countries anyways. Owing other countries money is the normal state of the world.

[up]I think a big thing was banks selling those debts to other banks.

edited 17th Nov '12 7:01:14 PM by nightwyrm_zero

Kostya (Unlucky Thirteen)
#40841: Nov 17th 2012 at 7:00:21 PM

Deregulation of banks was probably the biggest thing. This is why we need to re-regulate shit like Obama wanted. Low tax rates in a boom also caused the debt to explode but I don't think it caused the recession itself.

Barkey: You do realize the US has been in a perpetual state of debt since Andrew Jackson's time? We've always owed money it just got especially bad in the last few decades.

deathpigeon Since: Jan, 2001 Relationship Status: One True Dodecahedron
#40842: Nov 17th 2012 at 7:00:45 PM

The root cause of it was the deregulation of the banks and housing market, I believe.

ohsointocats from The Sand Wastes Since: Oct, 2011 Relationship Status: Showing feelings of an almost human nature
#40843: Nov 17th 2012 at 7:02:42 PM

Ah, right.

Now, how do we solve a liquidity trap... I would say probably an extremely steep tax on things that holds money. Like 50%+.

Fighteer Lost in Space from The Time Vortex (Time Abyss) Relationship Status: TV Tropes ruined my love life
Lost in Space
#40844: Nov 17th 2012 at 7:03:18 PM

@nightwyrm zero: It doesn't even necessarily cause inflation. The monetary base (total dollars in circulation, physical and electronic) of the U.S. has tripled since 2008 with no effect on inflation. This is because we're in the aforementioned liquidity trap. Until demand picks up, there's nowhere for investment money to go other than back into bonds. This cycle can continue more or less indefinitely — of course, that's a bad sign because it means we're still below our output capacity.

@Barkey: We never paid back our debt from World War Two; we just inflated it into meaninglessness. As long as the amount of debt service as a percentage of federal revenue isn't too high, then the debt is not a problem. In fact, paying it off entirely would be a terribly bad idea because so much of the financial world relies on U.S. bonds as a means of securely storing cash.

@ohsointocats: The proximate cause of the recession was the collapse of the housing bubble in 2006, followed by the collapse of the financial industry in 2008. The underlying reason was (a) the accumulation of excessive private debt and (b) the deregulation of the finance industry, which permitted all that lending to occur.

edited 17th Nov '12 7:04:18 PM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Barkey Since: Feb, 2010 Relationship Status: [TOP SECRET]
#40845: Nov 17th 2012 at 7:03:20 PM

Barkey: You do realize the US has been in a perpetual state of debt since Andrew Jackson's time? We've always owed money it just got especially bad in the last few decades.

What would things be like if we were to fix the debt, and end that trend?

Personally, I think we could put a pretty good dent in all that if we took all of our foreign aid budget, and turned it into "American Aid"

I'm not ok with shelling out billions to shitholes like Pakistan every year when we're in as much trouble as we are. Anyone have any statistics on our total foreign aid budget?

Trivialis Since: Oct, 2011
#40846: Nov 17th 2012 at 7:03:21 PM

@Kostya

Some people say Clinton got a surplus, I'm not sure.

Anyway, isn't it irresponsible if the debt is just perpetually ignored?

edited 17th Nov '12 7:04:10 PM by Trivialis

ohsointocats from The Sand Wastes Since: Oct, 2011 Relationship Status: Showing feelings of an almost human nature
#40847: Nov 17th 2012 at 7:04:48 PM

Deficit is not the same as debt. Clinton may have run a surplus but there was still debt. It simply means that at that time the government was taking in more money than it gave out.

Joesolo Indiana Solo Since: Dec, 2010 Relationship Status: watch?v=dQw4w9WgXcQ
Indiana Solo
#40848: Nov 17th 2012 at 7:05:37 PM

@ fighteer- In case I was unclear I was saying we need to REDUCE THE DEBT.

I'm baaaaaaack
Trivialis Since: Oct, 2011
#40849: Nov 17th 2012 at 7:05:46 PM

Oh I see, it's a rate comparison and not the net.

TheyCallMeTomu Since: Jan, 2001 Relationship Status: Anime is my true love
#40850: Nov 17th 2012 at 7:06:43 PM

What would it be like if we "fixed" the debt "problem?"

Well, if we had never instituted the Bush tax cuts in the first place and hadn't run up two wars on the credit card, we'd still have a surplus-oh wait, there's the Medicare drug program that needs review-so deficit hawks wouldn't be able to use it as a cudgel to attack democrats. But in terms of having a deficit during good times having real effects on the economy ... I can't think of any way it would significantly help us. In a way, having debt is helpful-because then no one wants us to go belly up.


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