Debt=Bad

[Swagger Monster]

The United States is over sixteen trillion dollars in debt. This equates to about $50,000 per United States citizen.

It's apparent that the debt is a lofty issue that needs to be tackled sooner rather than later.

With that being said, I pose three questions.

First of all, what consequences will occur if the US just doesn't pay the debt?

Second of all, assuming that it is in our best interest to pay off the debt, how do we go about doing so? What cuts need to be made and what programs need to be implemented?

Also, what efforts are we as a country currently making to pay off this massive debt?

 

[Fisher]

Since our Social Security System is theoretically one of the big borrowers, there is the insolvency issue; no body will loan us money in the future; the value of the dollar would drop drastically and lose its position in the exchange markets; all those funds that have US bonds in them would drastically drop; and all those little old ladies who bought savings bonds for their kids would hit you with an umbrella just off the top of my head.

I think we need to budget to payoff the debt instead of borrowing more money whenever the principle comes due As for cuts, not even gonna try in this post.

Lastly, the only effort we are making is to keep kicking the can down the road with hope that one day we will either figure it out. The best thing perhaps that could help us with the debt might be a temporary world wide depression that hit the countries that hold lots of our debt and we could gain added value in our payment on the exchange rates, but not likely to happen.

 

[Neomalthusian]

The United States is over sixteen trillion dollars in debt. This equates to about $50,000 per United States citizen.

It's apparent that the debt is a lofty issue that needs to be tackled sooner rather than later.

With that being said, I pose three questions.

First of all, what consequences will occur if the US just doesn't pay the debt?

Second of all, assuming that it is in our best interest to pay off the debt, how do we go about doing so? What cuts need to be made and what programs need to be implemented?

Also, what efforts are we as a country currently making to pay off this massive debt?

There is no intention to pay it off.

I would say for a dose of reassurance about the debt, read up on chartalism/MMT, try some Paul Krugman, Bill Mitchell, Warren Mosler. If you're less optimistic, try Kyle Bass, or find others who are thinking we're not too far from a default vs. hyperinflation scenario.

 

[Swagger Monster]

So, we're basically procrastinating?

I know that China holds a good chunk of our debt. Will a (very) slow payoff motivate them to kick our collective asses through war or ruining our economy?

By the by, we could always cut NPR. Surely we'll be in better shape after getting that load off of our shoulders :roll:

 

[Neomalthusian]

So, we're basically procrastinating?

If you believe debt matters and has the potential to destroy us from within, then yes. If you believe debt does not matter to our government the way it matters in other respects, then not necessarily.

I know that China holds a good chunk of our debt. Will a (very) slow payoff motivate them to kick our collective asses through war or ruining our economy?

China and Japan hold about a sixteenth of our total debt each. I'm sure if we did something dramatic enough, it would strain our relationships, but our foreign policy with Asia is not my area of expertise, so I would defer to someone else on that topic.

 

[MaggieD]

The United States is over sixteen trillion dollars in debt. This equates to about $50,000 per United States citizen.

It's apparent that the debt is a lofty issue that needs to be tackled sooner rather than later.

With that being said, I pose three questions.

First of all, what consequences will occur if the US just doesn't pay the debt?

Second of all, assuming that it is in our best interest to pay off the debt, how do we go about doing so? What cuts need to be made and what programs need to be implemented?

Also, what efforts are we as a country currently making to pay off this massive debt?

#1 -- As long as we continue to pay interest on our national debt and other countries don't lose faith in our ability to do so, probably nothing will happen. If other countries get nervous and stop lending us money, we'd have to shut down government as we know it.
#2 -- Unless and until Congress is willing to stop deficit spending, there's no way we can lower our national debt. When/if they ever did that, then anything is possible.
#3 -- What are we doing now? Absolutely nothing.

 

[civilwolf]

The United States is over sixteen trillion dollars in debt. This equates to about $50,000 per United States citizen.

It's apparent that the debt is a lofty issue that needs to be tackled sooner rather than later.

With that being said, I pose three questions.

First of all, what consequences will occur if the US just doesn't pay the debt?

Second of all, assuming that it is in our best interest to pay off the debt, how do we go about doing so? What cuts need to be made and what programs need to be implemented?

Also, what efforts are we as a country currently making to pay off this massive debt?

I like what Fisher said

"Lastly, the only effort we are making is to keep kicking the can down the road with hope that one day we will either figure it out."

and what MaggieD said

"#1 -- As long as we continue to pay interest on our national debt and other countries don't lose faith in our ability to do so, probably nothing will happen. If other countries get nervous and stop lending us money, we'd have to shut down government as we know it.
#2 -- Unless and until Congress is willing to stop deficit spending, there's no way we can lower our national debt. When/if they ever did that, then anything is possible.
#3 -- What are we doing now? Absolutely nothing."

I agree with that and I would like to add:

on #2 To pay your debt, you need a budget surplus, to achieve this, you either need to reduce your spending or increase your income

... austerity measures are failing... even IMF has stated this clearly. Recent experience in Europe has proven that austerity measure are really not the way to go. It is like a person is only earning 100$ per month, no matter how hard he is trying to save, he still needs to eat and find a place to sleep... sure he can go homeless and eat less to stay within the 100$ budget, but this would probably lead to him falling sick, loosing his jobs... etc ... etc...

What the US government is hoping for is to encourage entrepreneurship, help small and medium businesses succeed... because this would reduce unemployment, increase TAX returns and eventually reduce the budget deficit and turn it in into a surplus.

Also US is trying to encourage companies who are not outsourcing their work to oversees ... India, China...

I honestly think this is the way to go, and these measures have started to pay off by the decrease of unemployment






If all this done and it will take some time, you will see the charts above go above zero... and that is when the problem will be solved

 

[samsmart]

Since our Social Security System is theoretically one of the big borrowers, there is the insolvency issue; no body will loan us money in the future; the value of the dollar would drop drastically and lose its position in the exchange markets; all those funds that have US bonds in them would drastically drop; and all those little old ladies who bought savings bonds for their kids would hit you with an umbrella just off the top of my head.

I think we need to budget to payoff the debt instead of borrowing more money whenever the principle comes due As for cuts, not even gonna try in this post.

Lastly, the only effort we are making is to keep kicking the can down the road with hope that one day we will either figure it out. The best thing perhaps that could help us with the debt might be a temporary world wide depression that hit the countries that hold lots of our debt and we could gain added value in our payment on the exchange rates, but not likely to happen.

There is, by far, more waste, fraud, and abuse in our military-industrial-congressional complex than there is in our Social Security program.

 

[Fisher]

There is, by far, more waste, fraud, and abuse in our military-industrial-congressional complex than there is in our Social Security program.

Never said there wasn't. We are going to have to bite the bullet and just start means-testing social security and medicare at some point. Going after only waste, fraud, and abuse isn't going to get us there if we are unwilling to say that people getting public benefits they do not have to have does not constitute waste, fraud, or abuse.

 

[samsmart]

Never said there wasn't. We are going to have to bite the bullet and just start means-testing social security and medicare at some point. Going after only waste, fraud, and abuse isn't going to get us there if we are unwilling to say that people getting public benefits they do not have to have does not constitute waste, fraud, or abuse.

Which doesn't address our War on Everything and the immense amount of money we spend on the Pentagon for being a jobs program to defense contractors so Representatives, Senators, and Defense Department officials have someone who will hire them as lobbyists after their political careers are over.

 

[Fisher]

Which doesn't address our War on Everything and the immense amount of money we spend on the Pentagon for being a jobs program to defense contractors so Representatives, Senators, and Defense Department officials have someone who will hire them as lobbyists after their political careers are over.

It isn't an either/or position. There are tons of things I would like to be reformed/abolished but we need to get over the stigma of welfare that prevents people from calling SS/Medicare public assistance and get on with it. SSI needs to be limited to only people with physical or profound disabilities, not drug addicts and kids with ADHD; Earned Income credit needs to go; government contracting be it with the DoD or any other agency needs to be cut to the bare bones essentials; States need to do more to address their own state problems instead of depending on the federal government to pay for it for them. Revenue needs to be raised; spending needs to be cut.