US National Debt hits 7 trillion
- Thread starter John Reynolds
- Start date
In yearly 11 trillion $ economy its pretty hig then again in Cnada we have it pretty high still. We'll know how bad it is once interest rates creep up to some insane levels if they ever do. I dont think we can afford high rates right now whether help borrow for debt or fight inflation.
I guess bush is the only one we can blame for all this debt, right? I mean the constitution gave him the power to spend as he will's, right? He needs no approval from, say another body of govermnent, right? Yeah he must be guilty, he is pro-life, conservative, yeah he must be guilty.
later,
epic
later,
epic
epicstruggle said:
Blame? No one in this thread was blaming anyone. But since you brought it up, it's fair game, right?
A few questions for you.
Whose budget did we get? Who proposed it? Who was in control of the house/senate when it was ratified?
Now obviously no one can control the economy and thus the tax coffers so that too will play some part in this.
Babel-17
Veteran
I've been reading that the Japanese gov't will very soon be unable to prop up the dollar and that the price of oil might soon get pegged to the euro.
My admittedly limited understanding is that either of these things could in the end push a trend towards inflation.
As a side note, I've read that the price of oil when measured in euros hasn't really gone up that much. Is this true?
It seems that our gov't has gambled heavily with their running up of the national debt and that we are as a result at an increased risk from events beyond our control. The fact that the republican party is showing a widespread and significant internal dissent over the debt causes me additional concern.
I still however remain optomistic regarding the economic future of the USA. Imo we have made huge gains in efficiency and productivity over the last decade and when ably led and united in purpose our best years are still ahead of us
My admittedly limited understanding is that either of these things could in the end push a trend towards inflation.
As a side note, I've read that the price of oil when measured in euros hasn't really gone up that much. Is this true?
It seems that our gov't has gambled heavily with their running up of the national debt and that we are as a result at an increased risk from events beyond our control. The fact that the republican party is showing a widespread and significant internal dissent over the debt causes me additional concern.
I still however remain optomistic regarding the economic future of the USA. Imo we have made huge gains in efficiency and productivity over the last decade and when ably led and united in purpose our best years are still ahead of us
I blame most politians. Do you see democrats clamouring to have pork taken out of the budget that targets their state? Republicans and democrats are both complicite(sp?) in this. Bush can only propose what should be in the budget. Its congress that actually drafts and votes on it. Both parties have done a piss poor job of controlling spending.Ty said:Blame? No one in this thread was blaming anyone. But since you brought it up, it's fair game, right?
A few questions for you.
Whose budget did we get? Who proposed it? Who was in control of the house/senate when it was ratified?
Now obviously no one can control the economy and thus the tax coffers so that too will play some part in this.
I have been advocating a balanced budget ammendment for many years. This is the only way of putting some control on how much can possibly be spent. I would also like to see the creation of an independent body to oversee what is in the budget and cut all pork spending. The tricky part would be how to define pork. Congress could override any cut by voting on each item individualy, meaning they couldnt hide behind thousands of valid spending items.
later,
epic
Well, the US Dollar is extremely weak against the Pound and Euro now (it's actually forecast to go as far as £ 1.00 = $ 2.10). My company does a fair bit of business with US customers - sorry, that should read did a fair bit of business with American customers. Sales from the US have obviously dropped somewhat due to the weaker dollar-pound exchange rate. (Not to worry, however, as the stronger Euro means that we now do more business with our European friends ).
For any other currency, the alarming fall in value would have been a crisis point. Luckily, since the USD is counted as the benchmark currency, this is considered just a 'problem' rather than a crisis.
Now, I'm no economist, but a National Debt of 7 Trillion Dollars (I can just hear Dr. Evil saying that) seems somewhat... excessive?
).For any other currency, the alarming fall in value would have been a crisis point. Luckily, since the USD is counted as the benchmark currency, this is considered just a 'problem' rather than a crisis.
Now, I'm no economist, but a National Debt of 7 Trillion Dollars (I can just hear Dr. Evil saying that
) seems somewhat... excessive?
digitalwanderer
Legend
But on a happy note, it makes my credit card bill look trivial and that makes me feel better in an odd way.
Neither the weak Dollar nor the debt is much of a problem for the USA.
The USA has significantly more leeway in terms of debt than other countries do and I am not talking about absolut numbers here but relative to its GDP.
As long as the International Dollar Standard exists, the Dollar will always be in demand no matter how weak because it is because it's the currency of international trade. And as long there is demand there will be constant flow of foreign money into the US economy fueling the US trade and spending deficits. The USA has a virtually unlimited credit line.
Unless several things come together, e.g. an unprecedented economic boom in Europe combined with a huge US budgetary deficit, long term economic stagnation of the US economy, the move of least one major player on the oil market to the Euro and a massive devaluation of the Dollar, the IDS isn't threatened and the US isn't in trouble.
Should that ever happen (unlikely in the forseeable furutre) the USA would be fucked gloriously.
The USA has significantly more leeway in terms of debt than other countries do and I am not talking about absolut numbers here but relative to its GDP.
As long as the International Dollar Standard exists, the Dollar will always be in demand no matter how weak because it is because it's the currency of international trade. And as long there is demand there will be constant flow of foreign money into the US economy fueling the US trade and spending deficits. The USA has a virtually unlimited credit line.
Unless several things come together, e.g. an unprecedented economic boom in Europe combined with a huge US budgetary deficit, long term economic stagnation of the US economy, the move of least one major player on the oil market to the Euro and a massive devaluation of the Dollar, the IDS isn't threatened and the US isn't in trouble.
Should that ever happen (unlikely in the forseeable furutre) the USA would be fucked gloriously.
And everyone else too.L233 said:
One reason why foreign banks are propeing up the dollar is because we are one of the biggest markets there is. A weak dollar is good for our exports. Something that the bush admin is willing to live with in the hopes that it sparks new life into our economy.later,
epic
epicstruggle said:And everyone else too.
The effects on the rest of the world would be rather short term. The USA isn't that big a fish in global trade as the huge GNP might suggest. Sure, it would make a dent in most economies connected to the US economy but they'd recorver. It's a common misconception that every single national economy would go down in flames if the US ever faltered. I mean... up until the early 90s the USA was an utterly insignificant export market for Germany and many other European countries.
The USA on the other hand would face much more severe problems than losing <10% in potential exports. A decade after that hypothetical crash, the rest of the world would have pretty much recovered but the US would be a different country for good.
It's all fun to talk about hypothetical scenarios but I don't see it happen anyway within my lifetime. Ah well, maybe if Bush gets re-elected
Humus said:
Well actually some countries already sell their oil in euros (Venezuela, Russia).
On gasoline prices: The have been stable for quite a while now, even sometimes going down slightly. However, at the launch of the euro we saw the opposite (dollor going up, oil prices increasing sharply). So all in all consumers neither gained nor lost money over the last few years in regard to oil prices...
StealthHawk
Regular
Ok, with all the talk about the national debt that comes up every so often, I was wondering if anyone could please explain to me what the actual ramifications are of having a national debt?
From reading comments here in this thread, it seems that one drawback is the weakening of the dollar. Is this just a weakening at the international level? Or is it also domestic?
To whom is the bulk of the national debt owed?
I remember while I was in high school that one of my history teachers said that while we had a huge national debt, a lot of other countries also had debts to us, so that would offset the "real" debt quite a bit. True?
From reading comments here in this thread, it seems that one drawback is the weakening of the dollar. Is this just a weakening at the international level? Or is it also domestic?
To whom is the bulk of the national debt owed?
I remember while I was in high school that one of my history teachers said that while we had a huge national debt, a lot of other countries also had debts to us, so that would offset the "real" debt quite a bit. True?
http://www.brillig.com/debt_clock/faq.html
I wouldn't count on a lot of foreign debts being repaid. Korea, Mexico, Brazil have all been forgiven huge amounts as it became impossible for them to even service their debts.
Much of the stock market is "held/owned" by trading groups(such as knight trading grouphttp://finance.yahoo.com/q/pr?s=NITE, et al), mutual funds, and big institutional companies. Alot is also help by the original founders.pax said:
later,
epic
