America in debt: What will be the result?

[Mark of Zorro]

I have studied about the topic of the American Public Debt. But even with all I know, what I know best is that there are holes in my knowledge. And this topic is so very, very broad in scope and what it affects. All that means I don't even know where to begin.

The debt is something like 16 trillion dollars now. $16,000,000,000,000. I cannot even fit that on my calculator! That is about 50,000 dollars for every man, woman and child in America, and the parents would have to pick up the tab of the children if we paid it now.

United States public debt - Wikipedia, the free encyclopedia

I have heard talk that America could implode because the situation is so bad. I have entertained the idea that it could lead to a war.

What do you think? Is America headed for disaster?

What are the causes of this massive debt? Will the causes have to be dealt with, or can we spend our way out, like many accuse Obama of believing?

Is it even fair to mention Obama, or pin so much blame on him? Or is it others we should really be talking about?

I expect this thread to go a million different directions. But then, I think there are a million things to say about this issue. Have at it. What do you know or think you know? Where do you think its heading?

 

[SevenStarsHK2N]

The debt doesn't actually exist - it's just a way for the European elites to control national governments.

ask yourself this - if every debt in the world was defaulted on - how many factories would close?

The US and most countries in the world can never get out of debt because the system was created and designed to be perpetual.

the dollar is the nations Legal tender - this means that any creditor can demand payment in dollars.

How does the US gov get dollars? the only way the US gov has to get dollars is by borrowing them from the Federal reserve (which is a private owned not federal or government organisation btw - just like federal express is not government either).

The new dollars are only ever lent out at interest.

It's as simple as that.

to get 10 dollars - you must pay back 11.
and this applies for every 10 dollars you borrow - how then can you ever get out of debt?

 

[BrianLewis]

You can't really blame any recent presidents for creating the problem. You can, however, blame them for making it worse, or not addressing it. From what I have heard, Regan was the big borrower, though I can't be certain.

I can't really see the reasoning behind people asserting that China will decide to claim it one day in order to bankrupt the nation. I think it's far more likely that China will use it more excessively for leverage in issues regarding trade, aide, and overlooking environmental issues. I suppose they could likely ask for military assistance as well. We have somewhat of an historical parallel when you think about Korea being a "subject kingdom" around 1600.

 

[alecgraham]

....
I can't really see the reasoning behind people asserting that China will decide to claim it one day in order to bankrupt the nation. I think it's far more likely that China will use it more excessively for leverage in issues regarding trade, aide, and overlooking environmental issues. I suppose they could likely ask for military assistance as well.

I certainly agree with that.* We are more interdependent than we've ever been. A U.S. collapse would be a world collapse.
Are we headed for a collapse? I don't know. I can't figure out why the stock market keeps climbing, but of course the exuberance could end any day now.


*And besides, China seems to be busy hacking into our computers, which is far more fun than calling in debt obligations.

 

[Mark of Zorro]

I cannot say I share anyone's faith that China will remain rational over time. Or America for that matter. History proves that a nut or two can change everything.

You can't really blame any recent presidents for creating the problem. You can, however, blame them for making it worse, or not addressing it.

I am not so sure. Debt is not an automatic problem. But when you have reached the point that interest payments take all your excess wealth after expenses, you are pretty well screwed. I cannot say for sure America has, or by the actions of whom, but it seems we are pretty close at least. We have to tighten our belt, but Congress is not remotely doing it on a meaningful level. They have taken token action at best.

And this is a problem with democracy and representative democracy. Belt tightening and paying back debt is not never a popular move. The whole system rides on popularity.

We need a John Adams, a man who will save our collective @$$es while the country and Congress hates him for it. I don't think we will get one this time.

 

[OoTmaster]

When it comes to debt, even in the case of a country. Usually debt is compared to the borrowers power to repay said loan. This is done through a credit rating or credit score. America still has a very stable credit score. Even though we recently went down a rank in that respect. While our credit is still high. (which it will be as long as gdp stays as high as it is) I think China or an other debtor for that matter would see no problem with lending America even more money. We spend far too much money in China for them to ever want to call in their debts. Plus it does give them nice leverage over one of the world's leading countries.