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United States22883 Posts
On May 16 2010 17:19 Romantic wrote:Show nested quote +On May 16 2010 17:01 XinRan wrote:On May 16 2010 16:53 Nightmarjoo wrote:
Wow, Russia's pretty good at balancing their checkbook, only in debt $150 billion!
I didn't know Japan was almost as in-debt as us though, what's going on there? I think it's years of stimulus spending to lift Japan out of the economic stagnation that started with the Asian financial crisis. Personally, I blame democracy for the world's debt woes. Cutting social entitlement programs that bankrupt countries will always be politically unpopular. Cutting your 700,000,000,000$+ dollar military budget, halting wars of aggression, and investing in education (Kids can't vote anyway! Psh) not tax cuts are also pretty unpopular. Not to mention ending state sponsored terrorism, torture, that sort of thing.
Well, it's both. Defense comes in at #1, Social Security/Medicare (NOT Medicaid) are #2. Those two combined make up something like 80-85%.
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United States22883 Posts
On May 16 2010 17:19 Nightmarjoo wrote:Show nested quote +On May 16 2010 17:13 blue_arrow wrote:these are government/public debts obviously  , private investors and corporations are the ones doing most of the loaning =p That's a good point, and potentially a scary one. Not sure if I like the idea of private companies owning the gigantic debts of the entire world, that's a little too much bureaucratic power in the hands of people with virtually no accountability. Hard to regulate your lender, the guy who has you on his debt-leash.
I think it sounds scarier than it actually is. It's usually things like banks that are regulated and the statements are open, and there's multiple sources for loans. Furthermore, no one wants to see their money disappear, which means the country has to progress and avoid inflation. When people talk about China "owning" the US, they're completely mistaken because both countries are tied up with eachother. The US is still by far the best investment opportunity for China and to see us fail would totally fuck them over as well.
The bigger issue is regulating yourself. Greece is in their current situation because a bunch of private firms offered them loans when they joined the EU and they took a ton of them because the interest rate was so great at the time and growth would eventually allow them to pay it back (or so the thinking goes.) Fast forward to today and the interest rates have gone from a cute little sex kitten to a beastly dominatrix who's fucking Greece in the ass with a strap on.
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Private debt.
Consider World War 2. The US needed money, it sells war bonds to the public. Now even if we ignore all foreign debt, the US is in debt in an isolated system.
So the assumption that national debts have to equal out has an easy counterexample.
Other countries buy bonds, but not all of them. Do they even count bonds you've purchased against your debt in that picture?
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There's not that much physical money in the system. All money means these days is if you want it, you can get it. But if everyone wanted their physical money at the same time, there wouldn't be enough to even satisfy like 1/8th of the demand.
The world is basically gambling.
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On May 16 2010 17:38 Caller wrote:
i was expecting something a lot more mathematically based
i was severely disappointed.
You mean a couple of additions, a multiplication and maybe a derivative ?
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On May 16 2010 18:52 Jibba wrote:Show nested quote +On May 16 2010 17:19 Romantic wrote:On May 16 2010 17:01 XinRan wrote:On May 16 2010 16:53 Nightmarjoo wrote:
Wow, Russia's pretty good at balancing their checkbook, only in debt $150 billion!
I didn't know Japan was almost as in-debt as us though, what's going on there? I think it's years of stimulus spending to lift Japan out of the economic stagnation that started with the Asian financial crisis. Personally, I blame democracy for the world's debt woes. Cutting social entitlement programs that bankrupt countries will always be politically unpopular. Cutting your 700,000,000,000$+ dollar military budget, halting wars of aggression, and investing in education (Kids can't vote anyway! Psh) not tax cuts are also pretty unpopular. Not to mention ending state sponsored terrorism, torture, that sort of thing. Well, it's both. Defense comes in at #1, Social Security/Medicare (NOT Medicaid) are #2. Those two combined make up something like 80-85%. Of course, but many of the problems of SS\Medicare aren't inherently fuck ups of the system. Only covering the old and the poor is obviously bad insurance practice (so why not include all of us pweeese) and SS is shitty because of the baby boom and the fact trillions were taken out of SS by people who barely put anything in. Not to mention we only ever cut taxes we never raise them. Hilariously I'm pretty sure that even if we had a 100% public all inclusive single-payer healthcare system people would bitch about the tax increase, even if it was less than the 5,000$\year premiums they wouldn't be paying anymore.
Social Security is easy to fix; cut benefits, raise taxes, increase immigration, raise retirement age to reflect life expectancy, encourage private investing to supplement SS, something of that nature. Will probably end up being all of them.
Medicare and Defense will need serious work though. Even Gates is saying the military's budget is way too high and he runs the place. One of his recent interviews he reminded us of the fact the US Navy is larger than the next 11 navies combined. 9 of those navies are US allies. Lol. At least SOME element of government has started saying the budget is unsustainable AND actually targeted a problem other than "Hand-Outs".
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like everyone said
government sells treasury bonds to private investors
its how they fund the debt
us government bonds are really safe because there is an insignificant chance of the us government falling
so investors like to buy them in uncertain times.
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United States22883 Posts
On May 16 2010 22:29 Romantic wrote:Show nested quote +On May 16 2010 18:52 Jibba wrote:On May 16 2010 17:19 Romantic wrote:On May 16 2010 17:01 XinRan wrote:On May 16 2010 16:53 Nightmarjoo wrote:
Wow, Russia's pretty good at balancing their checkbook, only in debt $150 billion!
I didn't know Japan was almost as in-debt as us though, what's going on there? I think it's years of stimulus spending to lift Japan out of the economic stagnation that started with the Asian financial crisis. Personally, I blame democracy for the world's debt woes. Cutting social entitlement programs that bankrupt countries will always be politically unpopular. Cutting your 700,000,000,000$+ dollar military budget, halting wars of aggression, and investing in education (Kids can't vote anyway! Psh) not tax cuts are also pretty unpopular. Not to mention ending state sponsored terrorism, torture, that sort of thing. Well, it's both. Defense comes in at #1, Social Security/Medicare (NOT Medicaid) are #2. Those two combined make up something like 80-85%. Of course, but many of the problems of SS\Medicare aren't inherently fuck ups of the system. Only covering the old and the poor is obviously bad insurance practice (so why not include all of us pweeese) and SS is shitty because of the baby boom and the fact trillions were taken out of SS by people who barely put anything in. Not to mention we only ever cut taxes we never raise them. Hilariously I'm pretty sure that even if we had a 100% public all inclusive single-payer healthcare system people would bitch about the tax increase, even if it was less than the 5,000$\year premiums they wouldn't be paying anymore. Social Security is easy to fix; cut benefits, raise taxes, increase immigration, raise retirement age to reflect life expectancy, encourage private investing to supplement SS, something of that nature. Will probably end up being all of them. Medicare and Defense will need serious work though. Even Gates is saying the military's budget is way too high and he runs the place. One of his recent interviews he reminded us of the fact the US Navy is larger than the next 11 navies combined. 9 of those navies are US allies. Lol. At least SOME element of government has started saying the budget is unsustainable AND actually targeted a problem other than "Hand-Outs".
BUT THEY'RE SO COOL.
![[image loading]](http://www.connectamarillo.com/uploadedImages/kvii/News/Stories/Osprey_V-22.jpg)
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It isn't really important for governments to balance their budgets. Its not like a person being in debt, don't think of it like that.
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Canada7170 Posts
In Grade 8 we had a unit on Brazil and the teacher spoke about how Brazil was $500b+ in debt and made a huge deal out of it. I asked her why it was such a big issue, since the US was $7t in debt at the time and she couldn't give me an answer. lol
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On May 16 2010 21:55 Boblion wrote:Show nested quote +On May 16 2010 17:38 Caller wrote:
i was expecting something a lot more mathematically based
i was severely disappointed. You mean a couple of additions, a multiplication and maybe a derivative ?
what else would i be talking about?
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Isn't something like 75% of the debt owed to Americans though
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On May 16 2010 16:44 Biochemist wrote:
So if say we borrow a billion from China, China borrows a billion from Russia, Russia borrows a billion from Germany, and Germany borrows a billion from the USA, everyone is in debt a billion? That's a ridiculously simple answer, is that all there is to it?
By its nature, the practice of fractional reserve banking expands the money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.
-wikipedia
countries lend to each other because "canceling out the debt" would actually decrease the amount of "money" circulating through the economy. being in debt to another country also means the other country has more invested into your economy, so they will support you financially and politically. also holding foreign treasury bonds + currencies of other countries is a good way to invest your money.
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EPT
