Login/Sign up

World Association of International Studies

PAX, LUX ET VERITAS SINCE 1965
Post US Debt Hits $20 Trillion
Created by John Eipper on 09/16/17 7:02 AM

Previous posts in this discussion:

Post

US Debt Hits $20 Trillion (Bienvenido Macario, USA, 09/16/17 7:02 am)

I have this question for WAISers:

According to former US Senator Alan Simpson, when the US national debt was $14.8 trillion on June 14, 2011, for every $1 the US government spent, 41 cents was borrowed.

Now that the national debt is over $20 trillion, for every $1 the US government spends, how much is borrowed?

On October 8, 2008, the US national debt was $10.2 trillion.

The 115th US Congress aims to keep piling up more debts. Americans today are born into indebtedness they never agreed to nor benefited from. This is slavery pure and simple. Who would call for the audit of the World Bank? When? Could we at least ask the US Congress to pass a law requiring the president to give a status report on the National Debt in his State of the Union address?

From Alan Simpson:

"When Erskine and I go around the country, give us 50 minutes with people from the left or the right and we'll get a standing ovation. Not for our ego--that's out. But here's what you do: you don't use graphs, we don't have PowerPoint and all that crap.

"You just say if you spend more than you earn, you lose your butt. If you spend a buck and borrow 41 cents of it--which is happening today; it was 40 cents a few weeks ago, it's 41 cents now--if you spend a buck and borrow 41 cents, you're stupid.

"Therefore, you have a Congress that's being stupid, and an administration that's being stupid. They think we're all jerks--Republicans and Democrats. How goofy is it to borrow 41 cents (for every $1 the US government spends)? They think we're all jerks--Republicans and Democrats."

--Alan Simpson, speaking before Ripon Society - "They think we're all jerks - Republicans and Democrats" - June 14, 2011

https://www.youtube.com/watch?v=urbUN0dpkS0

See: US national debt tops $20T for first time in history

Published September 11, 2017

http://www.foxbusiness.com/politics/2017/09/11/us-national-debt-tops-20t-for-first-time-in-history.html

JE comments:  The debt hit one trillion only in the 1980s.  I'll plead a Humanist's ignorance on Bienvenido's question, but the cost of borrowing is not connected to how much is owed.  One interesting number from Wikipedia's article on the US national debt:  thanks to low interest rates, the annual service on the debt has increased from $300 billion/year in the 1990s to "only" $430 billion today.


SHARE:
Rate this post
Informational value 
Insight 
Fairness 
Reader Ratings (0)
0%
Informational value0%
Insight0%
Fairness0%

Visits: 122

Comments/Replies

Please login/register to reply or comment: Login/Sign up

  • $20 Trillion in Debt; from Ric Mauricio (John Eipper, USA 09/16/17 1:50 PM)
    Ric Mauricio responds to Bienvenido Macario (16 September):

    Ah, very interesting questions indeed. But let's dissect former Senator Simpson's statements for a moment. If one borrows 41 cents and spends $1, would not one have 59 cents of something that they didn't have before? The issue here is whether that 59 cents of something is of an economic benefit. If the 59 cents generates current and future income, then borrowing that 41 cents would have been a good thing. And that is in theory what the US Government hopes to provide in their borrowing strategy.


    Aha, you say, then running up the government debt is a good thing. But, and there's always a "but," if the 59 cents is wasted on frivolous spending (like buying Elvis satin paintings), then no, that is not a good thing. So let's look at what the US government is spending on. The biggest spending category is social security, unemployment and government pensions. Hopefully, those who receive these benefits will spend the money and boost the retail and agricultural (food) economy in doing so. Second comes Medicare. The spending here accretes to the medical and pharmaceutical industries. One could argue that there is a lot of waste and fraud in this area, but the bottom line is that someone benefits. Next is the military. Again, those in the military will support the retail and agricultural industries, but more so, the military industrial complex benefits from this, and this benefits other industries as well. So if one subscribes to the Keynesian theory of economics (which most universities in the world teach), then the US Government borrowing strategy is a good thing.


    But now the dark side. I told you there's a "but." Where does the $US 20 trillion come from? Obviously, several years ago, that $US 20 trillion did not exist. So you say, we just keep printing money. But printing money is an outdated concept. You see, most money now exists only in digital form. If one collected all the US paper money and coins, it would not add up to even a fraction of US $20 trillion. I'm sorry, Bitcoin (or other cryptocurrency), but the Federal Reserve has you beat. The US dollar (as well as other fiat currencies such as the Euro, Renminbi, or Yen) are all cryptocurrencies. The dark side to this is if you are holding these fiat currencies, you are losing money because they are depreciating. It's called inflation, since the other side of the coin are that goods and assets are being adjusted upwards to account for this depreciation.


    This is the brilliance of the government debt strategy (any government, even in history, like the Roman Empire and Chinese dynasties) of creating more and more debt and more and more depreciating money. The lenders (those who hold bonds) are being paid in currency (dollars) that are worth less than when they first lent the money. By the way, everyone points at the Chinese (and Japanese second) as the biggest holders of these depreciating bonds, but no one seems to point out that the real biggest holder of treasuries are the American people. The biggest holder of US treasuries is the social security trust fund. Now why do I call this brilliant? Simple, such a system gives the government (or whomever controls the government) power over its people. Utterly brilliant, in a Machiavellian sort of way.


    OK, now that I've pointed out the dark side, the next question is obviously, "how do I avoid having others assert this kind of power over me?" Of course, as long as we live on this earth, it is almost impossible to avoid being powerless, but one can alleviate some of this by mimicking those in power (I believe some of my fellow WAISers have alluded to the elite wealthy being the ones in power). My studies have brought me to the point where mimicking the elite wealthy provided important lessons in my own personal economics. Very little depreciating assets, like bonds or cash. Just enough to get me through the crypto world. And more in business, be it a personal business, real estate holdings, or companies (through the stock markets). Precious metals? I personally like an investment company that streams gold revenue from gold mining companies rather than take the risk of mining itself. It also outperformed gold (the price as we know is manipulated on the exchanges by global elite).


    So establishing rules to rein in spending or borrowing is moot. It will never happen. Resistance is futile. But let's outsmart the Borg, aka the Global Elite.


    JE comments:  Are you listening, Global Elite?  We WAISers have you figured out!  (Great analysis, by the way, Ric.)

    Please login/register to reply or comment:

    • Calculating GDP, Debt: It's a Dismal Science (Timothy Brown, USA 09/19/17 4:40 AM)
      When calculating national debt and GDP, try factoring in the estimated margins of error. We don't know within an estimated +/-15% what our GDP is--crime, drugs, prostitution, larceny, hidden assets, black (off-the-record) employment, off-shore deposited moneys, etc. Nor do we know what our real population is within +/- 10% (some hide from the census, some the census just plain misses, illegals, sex slaves, etc.). At one point, Mexico didn't know its population within +/- 20% or GDP within +/-30%.

      Besides, I always keep in mind what Mark Twain, my favorite economist, said.


      "There are three kinds of liars--liars, damn liars, and statisticians," to which I add politicians.


      In every country where I did macroeconomic analysis, I would look first at the official statistics, then I'd try to find someone active within the "informal" economy (illegal casino and slot machine operators in the Netherlands had great "real" data). In Paraguay--where I developed a Fat Colonel Index--it was the shops openly selling smuggled goods or goods stolen out of US Embassy imports), and then I would just wander around both rich and poor neighborhood, local food and sundries markets and upscale shops and see how people were dressed, how well--or badly--fed they were, how proud they seemed of their homes, etc.


      All this just to say that I agree entirely that our national debt is growing too fast and is now bigger than ever. But I also see that, while there are pockets of real poverty and too many people are in need, by both world and historical standards, we're doing rather well.


      Besides, all it will take is a really good devaluation of the dollar to reduce the nominal value of our debt.


      But I digress.


      JE comments: Weimar Germany "succeeded" in reducing its reparations debt through hyperinflation.  The eventual result:  Hitler.  Maybe this explains Germany's aversion to debt in general.


      From generals to Colonels:  Tim:  please explain your "Fat Colonel Index."  When they're fat, does this mean things are going well economically?  (Coronel is an honorific term in Paraguay for a local strongman or caudillo.  Brazil has its analogous Coroneis.)


      It used to be that girth meant prosperity.  Now, with the "you can never be too thin or too rich" culture, it's the other way around.


      Please login/register to reply or comment:



  • $20 Trillion in Debt (Istvan Simon, USA 09/19/17 4:08 AM)
    I am afraid I do not agree with Bienvenido Macario (16 September), who uses inflammatory language about future generations being born into "slavery" because of our tendency to spend more than what our taxes provide in revenue.

    It is a very bad GOP idea (of the abominable Tea Party variety no less, but mostly insisted on only when the president is a Democrat) that we simply must pay off our debt, and that the US deficit is somehow unsustainable. It is not. We do not need to pay off our debt, at least not in the short term. Debt can be beneficial  The analogy that people make with family finances is simply a false analogy when it comes to countries. No less an authority than Paul Krugman, a Nobel Prize-winning economist, has expounded on this subject in many of his excellent columns in the New York Times. But it is not just Krugman who has talked about this subject.  Many other prominent economic luminaries like Stiglitz, also a Nobel laureate, have been interviewed and explained this in layperon terms to educate our people.


    The important thing about debt is not how much it is (e.g. oh My God, we reached 20 trillion, it was only 11 trillion a few years back, blah blah blah, the sky is falling, disaster is sure to follow, look at Greece, etc.), but how much it is against our income, and our growth of income, and our ability to repay it in the future, and whether it is being used wisely to increase our ability to repay it in the future or wasted on unproductive things.


    Take the extreme example of the financial meltdown of 2008. This increased our National Debt tremendously, which brought as one consequence the Tea Party to government for a number of political and economic reasons. Now suppose that the deficit hawks had won the argument, and we would not have increased our debt by an enormous amount. What would have happened? Massive unemployment, instead of tolerable if very unpleasant one, a massive depression for probably over a decade, instead of a severe recession of the economy for about two quarters, and then modest low growth for several years, and gradual decrease of unemployment with no or very low inflation, which is what occurred. Contrast this with Europe, which because of Germany's distaste for debt followed austerity programs everywhere, and because of that had no growth and a much more severe recession than the US, together with the meltdown of Greece, with several other countries with serious threats to follow Greece into bankruptcy. It is pretty clear that the US did a lot better than Europe, and incomparably better than we would have done if we did not borrow heavily to get out of the crisis. It is obvious that our ability to repay the debt increased tremendously because we took on massive additional debt--versus having much less debt, but with also much decreased ability to pay it back, even if we would have owed much less.


    JE comments:  What economist claimed "We're all Keynesians now"?  (I just checked--it was coined by Milton Friedman and said by Nixon in 1971.)


    It's been a long time since we visited the topic of Europe's austerity regimen.  How are things looking economically in Greece?  Italy?  Portugal?  Spain?  We have WAISers in all four of these nations.


    Please login/register to reply or comment:


Trending Now



All Forums with Published Content (41972 posts)

- Unassigned

Culture & Language

American Indians Art Awards Bestiary of Insults Books Conspiracy Theories Culture Ethics Film Food Futurology Gender Issues Humor Intellectuals Jews Language Literature Media Coverage Movies Music Newspapers Numismatics Philosophy Plagiarism Prisons Racial Issues Sports Tattoos Western Civilization World Communications

Economics

Capitalism Economics International Finance World Bank World Economy

Education

Education Hoover Institution Journal Publications Libraries Universities World Bibliography Series

History

Biographies Conspiracies Crime Decline of West German Holocaust Historical Figures History Holocausts Individuals Japanese Holocaust Leaders Learning Biographies Learning History Russian Holocaust Turkish Holocaust

Nations

Afghanistan Africa Albania Algeria Argentina Asia Australia Austria Bangladesh Belgium Belize Bolivia Brazil Canada Central America Chechnya Chile China Colombia Costa Rica Croatia Cuba Cyprus Czech Republic Denmark East Europe East Timor Ecuador Egypt El Salvador England Estonia Ethiopia Europe European Union Finland France French Guiana Germany Greece Guatemala Haiti Hungary Iceland India Indonesia Iran (Persia) Iraq Ireland Israel/Palestine Italy Japan Jordan Kenya Korea Kosovo Kuwait Kyrgyzstan Latin America Liberia Libya Mali Mexico Middle East Mongolia Morocco Namibia Nations Compared Netherlands New Zealand Nicaragua Niger Nigeria North America Norway Pacific Islands Pakistan Palestine Paraguay Peru Philippines Poland Polombia Portugal Romania Saudi Arabia Scandinavia Scotland Serbia Singapore Slovakia South Africa South America Southeast Asia Spain Sudan Sweden Switzerland Syria Thailand The Pacific Tunisia Turkey Turkmenistan UK (United Kingdom) Ukraine USA (America) USSR/Russia Uzbekistan Venezuela Vietnam West Europe Yemen Yugoslavia Zaire

Politics

Balkanization Communism Constitutions Democracy Dictators Diplomacy Floism Global Issues Hegemony Homeland Security Human Rights Immigration International Events Law Nationalism NATO Organizations Peace Politics Terrorism United Nations US Elections 2008 US Elections 2012 US Elections 2016 Violence War War Crimes Within the US

Religion

Christianity Hinduism Islam Judaism Liberation Theology Religion

Science & Technology

Alcohol Anthropology Automotives Biological Weapons Design and Architecture Drugs Energy Environment Internet Landmines Mathematics Medicine Natural Disasters Psychology Recycling Research Science and Humanities Sexuality Space Technology World Wide Web (Internet)

Travel

Geography Maps Tourism Transportation

WAIS

1-TRIBUTES TO PROFESSOR HILTON 2001 Conference on Globalizations Academic WAR Forums Ask WAIS Experts Benefactors Chairman General News Member Information Member Nomination PAIS Research News Ronald Hilton Quotes Seasonal Messages Tributes to Prof. Hilton Varia Various Topics WAIS WAIS 2006 Conference WAIS Board Members WAIS History WAIS Interviews WAIS NEWS waisworld.org launch WAR Forums on Media & Research Who's Who