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  1. #21
    Pandaren Monk gypsybob's Avatar
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    Honestly, I believe countries shouldn't be borrowing money at all and just live within their means. Only spend the money the nation gains from taxes and all that so they don't get done in by piles of debt. Sure there would be far less money to spend but there would never be any more debt problems.

    It's the same reason I don't own a credit card, I don't want the hassle of debt.

  2. #22
    Quote Originally Posted by Roose View Post
    Does the US have any intentions of ever paying off the debt, or are they too big to fail just like their banks?
    Parts of it are paid off all the time to different people. People/governments cash in their bonds after theyve gained interest and then buy new ones or dont. IDK if the US debt will ever be fully paid off but it could.

    Quote Originally Posted by Roose View Post
    What would happen if the US told their debtors to piss off? Does anyone have any recourse?
    They wouldnt buy US government bonds anymore which would mean the government would be severely handicapped financially. If someone wanted they could go to war with us to get their money back.

    Quote Originally Posted by Roose View Post
    Are we ignoring the deficit because we know that nobody can ever make us pay it back?
    We ignore it because it really doesnt matter(needs to be much larger to begin to matter). Our national strength means that we will be able to pay it back if we had to.

  3. #23
    Apparently there is over 1 trillion dollars in off shore bank accounts owned by rich American business people. Imagine what America could do if they could even tax 50% of that kind of money. The 7 trillion dollar deficit would be gone in a matter of several years.

  4. #24
    The Insane Reeve's Avatar
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    Quote Originally Posted by Rennadrel View Post
    Apparently there is over 1 trillion dollars in off shore bank accounts owned by rich American business people. Imagine what America could do if they could even tax 50% of that kind of money. The 7 trillion dollar deficit would be gone in a matter of several years.
    What? Taxing 50% of 1 trillion will pay off what? God, I hope we don't have a 7 trillion dollar deficit. We do have a 16 trillion dollar debt, but again taxing 1 trillion dollars in offshore money wouldn't make a huge dent in that.
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  5. #25
    Quote Originally Posted by mvallas View Post
    Unfortunately the only way to do it is to do what any person who has a ton of debt can do without going bankrupt... learn to live without big expensive things for a while and just be happy with what you have until the debt is paid off.

    ...but you try telling the warmongers and fearmongers in congress today we should just relax and focus on ourselves for a change. =/
    The debt has gone up a lot lately due to decreases in tax revenue because of the recession. Added to that are the stimulus packages, unemployment spending, more welfare that help limit the impact of the recession and it goes up. When the economy improves and people start making more money, the government will have more money. Then as long as we dont spend more on stuff we dont already do or give it away to rich people in tax cuts(looking at you Bush Tax Cuts), the deficits will go down and possibly the debt.

    Thee are 2 ways to reduce debt, spend less and make more money. A combination of the 2 works best.

  6. #26
    Quote Originally Posted by Sealed View Post
    As long as the dollar is sought after as a global currency and widely used for international contracts, depreciation is still a safe strategy for the US though.
    Granted, that's changing, but slowly, and it's not in China's interest to cause any kind of crisis with a sudden dick move.
    Well to your first point, your'e right, because the only other option is to default and not be able to take loans anymore. Granted, this would be a great way to cut the deficit to zero in a few hours time.

    On the second part, China is already slowly doing it, along with other foreign investors, not re-buying their treasuries and buying commodities anyways. The big breaking point is when they realize that they've been making things for other countries in exchange for paper while their people live in poverty, and that actually consuming the goods they make instead of stockpiling rediculous amounts of cash might benefit them.

  7. #27
    Quote Originally Posted by Reeve View Post
    What? Taxing 50% of 1 trillion will pay off what? God, I hope we don't have a 7 trillion dollar deficit. We do have a 16 trillion dollar debt, but again taxing 1 trillion dollars in offshore money wouldn't make a huge dent in that.
    It would probably make a bigger dent than axing a $100 million government program that actually employs American people. Depends on if the money is making interest or just sitting there, most likely the former just matters how much.

  8. #28
    We just counterfeit, I mean print more money.
    The real question is when will the bigger countries like China etc stop accepting the american dollar.
    Smaller countries have tried to do this but somehow their leaders were killed or we went to war with them.
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  9. #29
    Scarab Lord shise's Avatar
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    Of course not, and be happy.

    In the current system a country MUST run into debt to grow as one of the top group. Lame but that's how it goes.

  10. #30
    When's the last time any developed state has paid off it's entire debt? Big difference between having manageable debt levels, and not having any debt.

  11. #31
    Scarab Lord Roose's Avatar
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    I guess we are not too bad off when California and Texas combined have a higher GDP than all but 3 nations: China, Germany, and Japan.

    Can you even measure the US' debt-to-equity ratio? How leveraged are we?

  12. #32
    Quote Originally Posted by Warpaladin View Post
    I have my doubts, I think it's unlikely that the U.S will pay off the $16 trillion (and growing) debt. I suppose it's possible strange things have happened before.
    Did you know that Her Majesty's Government is still paying for Napoleonic era war bonds?

    Paying off debt is kind of overrated.

  13. #33
    The debt is constantly being repaid and reissued. It's not meant to ever be entirely paid off, nor should it be. The goal is to maintain a manageable level of debt, which we are dangerously veering away from.

    Debt holders can't just come to collect whenever they wish, the debt is in the form of bonds which have defined maturity dates. If we told bond holders to "piss off" (aka defaulted and didn't pay them) the US credit rating would be lowered, which would likely require interest rates on newly issued government debt (treasury bills, notes, bonds) to go up. Why? People would view lending the US money as more of a risk. Currently, lending the US money through the purchase of debt is nearly riskless in financial terms because we have never defaulted. If we did default it would mean a higher cost of servicing future debt. That would not be good.

    It's disturbing how little people know about how government debt works.

  14. #34
    Quote Originally Posted by Roose View Post
    I guess we are not too bad off when California and Texas combined have a higher GDP than all but 3 nations: China, Germany, and Japan.

    Can you even measure the US' debt-to-equity ratio? How leveraged are we?
    United States Household Wealth is something on the order of $65 trillion.

  15. #35
    Dreadlord larrakeyah's Avatar
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    Greece, Portugal and Spain. Italy will follow, France next in line. Not to mention the UK time bomb. It makes sense to have a manageable level of debt, honest.

    0 debt? Not likely, 16 trillion and rising? Dangerous.

  16. #36
    Quote Originally Posted by Hiricine View Post
    On the second part, China is already slowly doing it, along with other foreign investors, not re-buying their treasuries and buying commodities anyways. The big breaking point is when they realize that they've been making things for other countries in exchange for paper while their people live in poverty, and that actually consuming the goods they make instead of stockpiling rediculous amounts of cash might benefit them.
    Foreign countries own only a fraction of the US debt. About 25-30% depending on the day of the week. Half of the outstanding treasuries are either owned by the fed (QE) or by other governmental departments (the SSA being the biggest single owner of treasuries by far).

    Quote Originally Posted by semaphore View Post
    When's the last time any developed state has paid off it's entire debt? Big difference between having manageable debt levels, and not having any debt.
    Australia - April 21st 2006.

    Quote Originally Posted by Roose View Post
    I guess we are not too bad off when California and Texas combined have a higher GDP than all but 3 nations: China, Germany, and Japan.

    Can you even measure the US' debt-to-equity ratio? How leveraged are we?
    We're up to 101.6% as a percentage of GDP. Which is only natural during a borderline depression.

    The reason people don't pay much attention to the defecit is because the 10 year rate on treasuries is effectively zero right now. 3 months is negative. People are paying the United States Government a premium to borrow their money.

    In most liberal democracies debt is never really paid off. The money borrowed is effectively leverage on the productive capacity of a country's people and you merely outgrow and eat away at debt as a percentage of GDP through steady and moderate (1-3%) inflation.

  17. #37
    Quote Originally Posted by Veliladon View Post
    Australia - April 21st 2006.
    No. They didn't pay it all off. They just owed less than they were owed.

    United States net debt is trillions less than the gross debt but I don't see anyone using that figure.

  18. #38
    I hope so. China I think is getting angrier and angrier...


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  19. #39
    Quote Originally Posted by Hiricine View Post
    On the second part, China is already slowly doing it, along with other foreign investors, not re-buying their treasuries and buying commodities anyways. The big breaking point is when they realize that they've been making things for other countries in exchange for paper while their people live in poverty, and that actually consuming the goods they make instead of stockpiling rediculous amounts of cash might benefit them.
    Yep, we agree that it's happening.
    Also, China's prosperity is starting to seriously cascade down on its citizens. I heard just a few hours ago that Chinese wages had increased by around 15% this year. And it's been clear for some time now that with the developed world still bogged down in the crisis' aftermaths and a degrading price competitiveness, the country is going to operate a u-turn from export-based growth to focus on its increasingly affluent internal market. I think Chinese authorities are well aware of how things are, but they still have little reason to go out of their way to undermine the confidence the world still places in that "paper".

  20. #40
    The Insane DeltrusDisc's Avatar
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    Quote Originally Posted by Shop Ebay View Post
    Or we could print a few trillion dollar coins with Obamas head on it.
    lol that is just funny. I do still want to see what would happen though, and Obama coins... ahhh. hehe
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