National debt, get out your checkbook

I just finished doing an online search for the Natinoal Debt. After checking averages and sources for several of the hits, I got an average (as of yesterday) of about $8,559,042,877,497.29. Eight and a half trillion dollars. Several of the pages also mentioned how much each American "owed", deriving that number from the current population divided into the debt. One thing I noticed, though, was that some of them didn't take into account that not every person accounted for in the census was actually a wage earner. So, I took the approximate population, age 14 - 64, and did my own calculations. Get out your checkbook, it's time for us to pay off those debts.

Each working-age American owes $42,697.07. Pocket change, right?

That's about $2,000 a year in interest each.

Don't you just print more of the green stuff to pay?

Nah, I have a better idea. The feds can just get a "payday loan" to cover the current debt, then pay it back at 32% interest next April 15. That would work, wouldn't it?

I don't have enough time or energy to keep up with the financial workings of other nations, but the current state of things on this side of the pond is just staggering. Apparently, our current congress (they hold the purse strings here) know something they are not telling me about how we can continue like this. I sure wish they would allow me to handle my finances the way they do. Spend freely and unencumbered by consequence, and let someone else worry about it when everything collapses.

I have one, too. I think every federal politician who gets an automatic raise should have the sum total of their raises pay off the national debt. Fuck that noise. They made this mess, not us.

A more important consideration is what percentage of GDP the national debt is.

Running a deficit on an indefinite basis is more of a problem (usually) than having an accumulated debt. Accumulated debt tends to shrink in real dollars as time goes on, due to normal inflation. Moreover, if you can grow the GDP at a greater-than-normal rate, that's just as good as paying off debt (in the same way that a $200,000 mortgage is less daunting to someone making $100,000/yr than it is to someone making $50,000/yr).

If GDP isn't growing faster than the debt is, you can always just inflate the debt out of existence. That's hard on the debt holders, but those who are indebted can actually benefit from high inflation, as it makes the value of their debts shrink.

Sorry about my ignorance but we owned it to banks? Most international banks or banks are really all 'internationals'?

And is it true that US own lots to China?

Wich nations that are really rich and have little or no debt? The Scandinavians???

China and Japan have been buying a lot of US government debt. At one point it was a billion dollars a day.

I recall reading recently that Norway is awash in cash due to their offshore oilfields.

More importantly, how many USAans know that their Federal Reserve is not owned by their government. It is owned by a group of private banks!

I'm afraid to say that your country is morally and financially in decline, and has been since the second world war -- but what do you do about it -- NOTHING!

Thanks Rob...

But when we say one nation is buying another nations governemnt debt...how does it work? Than is just like having shares? And at some point we are in the 'mercy' of 'their' hands???

I do understand that for a long time the 1 dollar lost its value and it maybe value 0,50 cents??? Than eveything is just an ilusion and things are what they said they are but its not true or real...

Well...is it very bad administration than...but how come US is considered the richest nation in the world..or is not? Sooo confuse..and looks like a game that different people in power play and the generations of workers have to carry the heavy load for politicians and gov decisions, bunch of burocrats...and most of us dont get even good health care benefits or can afford health care and we have to pay this debt of more than 40,000...merda...excuse me my language...

I protest!

Dirty..if you can..expplain me about those private banks...in reallity most banks are owned by few big international banks??? Do you know their names???

I do hate banks..and do not own anything to them...many do dirty work and dont think we regulate their deals to our interestes not theirs..crap! I'm talking about we simple workers and common people..nations many times make messes and more messes...pure irresponsability..next generations have to pay for their gov mistakes....

America's government and America's citizens do love their credit cards. The amount of debt carried by the average credit card user is in itself staggering.

Some history of the National Debt:

• During the final two years of World War I, the national debt increased by over 400%, but a government determined to pay it off decreased the national debt every year between 1919 and 1929, the year of the stock market crash.
• Again, the national debt skyrocketed during World War II -- from $48 billion in 1941 to $269 billion in 1946. Then again, during every year from 1946 to 1951 (except one) the national debt decreased.
• The national debt has increased every year since Eisenhower left office, although by the end of Clinton's administration, he had almost stopped it dead in its tracks, containing the growth to less than 0.3% during his final year.
• During the GWBush administration, the national debt has increased by at least 7.2% every year (more in some years).

Large private banks were required to join the federal reserve system by law and the Federal Reserve itself is managed by a presidentially appointed (and largely independent) Board of Governors.

Debt is an investment that pays interest. Government bonds are a category of debt. The U.S. finances its deficit with government bonds that individuals, investment companies, or national banks can purchase.

Japan and China buy U.S. bonds because (on the surface, anyway) they consider them a decent investment. Japan's interest rates are so low that, presumably, U.S. debt is a better investment. Also, given that the U.S. is in a huge trade deficit with China, all the goods that the U.S. buys from China are paid for in U.S. dollars which China (or Chinese vendors) now holds.

The U.S. dollar declined quite a bit over the last couple of years, which means the value of the U.S. dollars Japan and China hold has declined. Not a good thing for them. However, Japan and China are both big oil importers, and oil is traded in U.S. dollars for the moment. So they need the US bucks to buy their oil.

(One big reason the U.S. is pursuing a policy of confrontation with Iran is that Iran is considering selling oil in Euros. If enough oil-producing countries start selling oil in Euros, oil-purchasing countries won't need U.S. dollars anymore and the value of the U.S. dollar will drop like a brick. That's another discussion, though).

Japan and China do have a pretty big club to wave at the U.S.A. - if they suddenly decide to sell all their U.S. dollar investments, the value of the dollar would drop dramatically. Moreover, if they stop buying U.S. dollars, the U.S. wouldn't be able to finance its deficit. Either option is very bad for the USA.

Pretty much. I visit relatives in the USA yearly. 5 years ago, one USDollar was equal to about 1.5 Canadian dollars. Everything in the USA looked pretty pricey to me. Now, the U.S. dollar is equal to about 1.1 Canadian dollars, and everything in the states looks dirt cheap. It's all relative.


No argument here.

Yeh..is very strange I think..banks offering credit cards to young people...why???How come??? They just want to tempt to consume and get into debt the already tempted to have 'stuff'...gasoline with fire situations...

My father-in-law in Brasil is almost 70 and the bank never offered him any credit cards..he is retired from paper making company...worked for more than 40 years, but even poor he himself constructed 3 little homes for him and his family...the bank account he has was just to receive his small salary...not more than U$ 400,00 montly...and he still have an savings account because worked in renovations his off days...sure, I'm talking about exemple of 'poor' nation..but if a working mature man can not be offered a credit card how come teenagers get some???