Is the US national "debt" an illusion?

[Febo]

Debts sucks.
If you take debt, then always take so much that you cant repay back. so you bankrupt and not worry with the rest.

[OROBTC]

...

Febo (and everyone)

Yes, debt is dangerous!  Way too many people go into debt irresponsible way, to support consumption now rather than building a base for more productivity.  Perhaps the only exception would be for a mortgage that you are sure you can afford.

Shakespeare was right, better not to get into debt (nor loan).  Unless you have thought it through.

It is too easy to become a slave when in debt.

[Amph]

it seems that despite the huge debt, usa are still on track, and can recover from it anyway, they can probably liquidate the first debt by rising another one and keeps the circle active

so yes, you could consider it an illusion

[JackRipper]

it seems that despite the huge debt, usa are still on track, and can recover from it anyway, they can probably liquidate the first debt by rising another one and keeps the circle active

so yes, you could consider it an illusion

You can only float debt for so long before you are buried in interest payments. Decades ago, the national debt didn't matter because it was all owed to domestic sources. It was like taking money out of one pocket and putting it in the other. In today's world however, the majority of the debt is foreign held and all interest that is paid leaves the U.S. economy.

The national debt (what the OP was talking about is National Net Worth. Very different animal) is a serious problem that, unless addressed, will have widespread financial consequences in the near future.

[ThEmporium]

U.S went to collapse this year, after this stronger dollars .

No, actually it didn't collapse this year as it were before. now the more job opportunities emerges and people are getting job normally. Actually the military spent on Iraq and Afghanistan reduce drastically compared to previous years, it is one of the big reason that U.S going correct on the line, regards to the inflation crisis, any wrong step on foreign affairs will have bad impact.

[AtheistAKASaneBrain]

...

Febo (and everyone)

Yes, debt is dangerous!  Way too many people go into debt irresponsible way, to support consumption now rather than building a base for more productivity.  Perhaps the only exception would be for a mortgage that you are sure you can afford.

Shakespeare was right, better not to get into debt (nor loan).  Unless you have thought it through.

It is too easy to become a slave when in debt.

Debt allows for things to happen. If you are not in debt, you are usually a slave too, a 9-5 one.
Debt can allow someone without many resources to start his own business. Of course things can go wrong and you are screwed. It's a gamble.
The problem is not debt, the problem is the debt has a fraudulent origin.

[BitRod]

Paper money is just debt slave money. How do you pay off the debt if every cent you borrow you have to payback in interest? I borrow a $1 now i owe you $1.10 so I borrow $2 to pay you back but now I owe you $1.30... If the government printed its own money it would be a different story but any president that had that idea has been killed. Abe Lincoln and John Kennedy.

[NUFCrichard]

I tend to agree with many of the forward-thinking viewpoints that are shared on forums like this. However, I feel there is misinformation being circulated regarding the US national debt. The core question that must be answered: What is the national wealth?

Private wealth in the US is almost $70 trillion. But dig deeper: What is the mineral wealth in our national parkland? What are the Rocky Mountains, Mendocino County, and ANWR worth? What is the aggregate oil wealth in public lands? What is the value of the US military in the jungle of international relations?

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.

When you take a look at the massive swaths of valuable land held by the federal government, it becomes clear that the total federally-owned real estate, oil, minerals, etc. within the borders of the USA could be valued in the quadrillions of dollars.

One thing has become increasingly clear to me: the United States HAS debt, but it is really not IN debt.

The purpose of the Federal Reserve is to govern the people through the money supply. The threat of hyperinflation or deflationary depression is exaggerated. The resource wealth of the United States - as well as the large, rich, taxable population - provides a backstop that keeps our currency strong, even in expansionary environments.

I believe this backstop is far more valuable than prior generations' use of precious metal reserves. I concede gold and silver are more tangible, but defining the national wealth by reserves of scarce metals is nothing more than a form of social brainwashing intended to keep resource-rich Americans feeling poor.

Conspiracy theorists and John Birchers who measure the national debt against gold reserves are engaging in monetary child's play. However, the Federal Reserve's ability to spend the past decade in crisis while hiding the money supply (M3) from the American public is brilliant. A brilliant scam that must come to an end in the United States, as it has in central banks throughout Europe and across the globe.

The strength of the dollar in FOREX markets in the wake of QE3 invalidates many conspiracy theories. As a market student and participant, I believe the dollar is legitimately strong and would remain strong through QE4, QE5, and QE6.

Is it time to end the myth of false scarcity? Is the easy answer - a dramatic increase in the debt ceiling to fund the Small Business Administration, Farm Service Agency, and regional banks - the best path for the US economy?

Recently an interesting statistic was released. The USA has fewer corporations today than 40 years ago, despite having three times as many citizens. If "corporations are people," do we just need more "people?"

Or is a multi-decade Japanese-style depression a better way to break the will of American men, break the daughters of the revolution into prostitution, seize American's weapons, and ultimately rejoin the British Crown and join the New/Old World Order?

I ask that question only half-sarcastically, because that appears to be the the intent of the current world order, and the path the United States is headed. Especially if either Hillary "Forester de Rothschild-RHODam" Clinton, or Jeb "Lehman is now Barclays" Bush are elected president.

This is serious business.

Sure, a new monetary system would be nice. But is a total revolution possible? Perhaps it is time to submit to reality, and finally admit that Reagan was right.

Mine eyes have seen the glory of the coming of a new hashtag.

Matthew Libman
Charleston, SC

I haven't read through the 4 pages of comments, but I wouldn't count possible future income against current debt levels.
If I have $100k debt, I am in debt and have debt.  My future earnings will help me service the debt, and the debt is secured against my capital, usually a house.

In this case America has the debt, but doesn't have the house yet.  They have a plot of land, but are borrowing against a house that could possible be built on that plot of land in the future.  That is just debt plain and simple to me.

The reason why their debt is an illusion is that they don't need to pay it back!  But that's another story.

[johnyj]

As long as you can print money, you can always pay back whatever amount of debt, that's not the problem. Only a country like Greece who can not print money for themselves will run into huge problems

However, those printed money's initial ownership is strange: It should belong to governments, but in reality they all belongs to central banks, which in turn is owned by regional reserve banks. So banks actually pay back the debt using printed money, at the same time those money become the new debt of the government, so that government's debt is ballooning (They borrow money from central bank to pay debt)

Anyway, banks can write off those debt just like they create money, so the debt is really an illusion. It is a way to keep the game running, but the game designer can easily change the rules and still make it work

But foreign investors in US government bonds will not write off those debts, they will require a 100% repayment plus interest, so central banks will print some money to pay them in future

This games runs as long as people accept payment in fiat money, if the trust for fiat money is gone, then the system will collapse

[bitbunnny]

Paper money is just debt slave money. How do you pay off the debt if every cent you borrow you have to payback in interest? I borrow a $1 now i owe you $1.10 so I borrow $2 to pay you back but now I owe you $1.30... If the government printed its own money it would be a different story but any president that had that idea has been killed. Abe Lincoln and John Kennedy.

I agree, specially that paper money is debt slave money.

[knowhow]

well all countries has debit ,,, those allowed people to make them houses and pay in 40 years.... they can buy a computer buy internet buy a car ... the thing is if the loans wouldnt be allowed do you really think we would have a better life?

[johnyj]

well all countries has debit ,,, those allowed people to make them houses and pay in 40 years.... they can buy a computer buy internet buy a car ... the thing is if the loans wouldnt be allowed do you really think we would have a better life?

You can not kick the can down the road forever. Banks usually drive larger and larger bubble to create jobs and increase income, however they have run out of bubbles now. When people consume something from future, but their future income is getting worse year by year (Due to market saturation and technology unemployment), less and less people will be able to pay back the loan, so more and more people will default and banks will eventually acquire majority of the assets many years down the road.  Of course no one cares when they have a better life now, but how about their next generation? The system is unsustainable long term wise, the situation is getting worse for young people quickly

[Amph]

As long as you can print money, you can always pay back whatever amount of debt, that's not the problem. Only a country like Greece who can not print money for themselves will run into huge problems

However, those printed money's initial ownership is strange: It should belong to governments, but in reality they all belongs to central banks, which in turn is owned by regional reserve banks. So banks actually pay back the debt using printed money, at the same time those money become the new debt of the government, so that government's debt is ballooning (They borrow money from central bank to pay debt)

Anyway, banks can write off those debt just like they create money, so the debt is really an illusion. It is a way to keep the game running, but the game designer can easily change the rules and still make it work

But foreign investors in US government bonds will not write off those debts, they will require a 100% repayment plus interest, so central banks will print some money to pay them in future

This games runs as long as people accept payment in fiat money, if the trust for fiat money is gone, then the system will collapse

but they could ask for the central bank to print money for them, are they doing so?

also if normally the previous debt is payed with another next debt, by printing more money, why the value of the fiat isn't collapsing, but it always stays there,are they perhaps, destroying their previously printed money, to keep the activity on this dirty cycle, forever?

[knowhow]

i know it the new youngers is just getting problems already at Portugal they just bought car and house with loan of 40 years.... they lost the job and the back tooked the house the car currently those new generation returned to live with father and mother where they didnt should left to have their own house without a safe job... as Portugal others countries facing the same problem how in their mind earning 1000 euros ,buying a car and a house with bank paying around 300 euros montly would they really thinked without any savings they could pay it for 40 years?if they had some saved before try a house and a car or why not just the house why needed to have more than a thing just to show?

[Erdogan]

I don't agree to the notion that having national debt is the same as stealing from the future.

Here is the reasoning: A generation from now, the people will have to consume the food that is produced in the future, drive cars that are produced in the future and so on. Everything that is consumed, is consumed in the now, and have to be produced in the now.

But to produce in the moment, you rely on a capital structure that is partly from the past. When you drive over a bridge, that capital was produced in the past. The house you live in was build in the past. The tractor that make the farmer more producive was produced in the past. Therefore it is important that the capital structure is properly maintained and and adjusted to needs, and grown if you want a higher prosperity level. Currently we have gross distortions and capital consumption due to ZIRP  and money printing. That means a smaller, less adapted capital structure, which means the next generation will have lower prosperity.

[rayhan]

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.



Imagine when you compare Russia's little debt with it vast natural resources!! This is why the US fears Russia, because Russia's potential far exceeds what the US has been able to create so far.

So what happens if a war between Russia and US breaks down? Who has an upper hand?

[stallion]

The richest country in the world is in the biggest debt. Hahah, that's why they fear Russia. Russia has maximum resources and minimum debt.

[LiteCoinGuy]

https://en.wikipedia.org/wiki/Trillion_dollar_coin

[BrianM]

I have little doubt that US dollar is going to crash... crash really hard. I don't know when, perhaps not the next 5-10 years... but it will happen, and all the other fiat will follow. The result will either be world war or the build up of a new monetary system. In case we don't all die, then will gold,silver and digital currency play an important role in building up the new system.

[xavi21]

I tend to agree with many of the forward-thinking viewpoints that are shared on forums like this. However, I feel there is misinformation being circulated regarding the US national debt. The core question that must be answered: What is the national wealth?

Private wealth in the US is almost $70 trillion. But dig deeper: What is the mineral wealth in our national parkland? What are the Rocky Mountains, Mendocino County, and ANWR worth? What is the aggregate oil wealth in public lands? What is the value of the US military in the jungle of international relations?

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.

When you take a look at the massive swaths of valuable land held by the federal government, it becomes clear that the total federally-owned real estate, oil, minerals, etc. within the borders of the USA could be valued in the quadrillions of dollars.

One thing has become increasingly clear to me: the United States HAS debt, but it is really not IN debt.

The purpose of the Federal Reserve is to govern the people through the money supply. The threat of hyperinflation or deflationary depression is exaggerated. The resource wealth of the United States - as well as the large, rich, taxable population - provides a backstop that keeps our currency strong, even in expansionary environments.

I believe this backstop is far more valuable than prior generations' use of precious metal reserves. I concede gold and silver are more tangible, but defining the national wealth by reserves of scarce metals is nothing more than a form of social brainwashing intended to keep resource-rich Americans feeling poor.

Conspiracy theorists and John Birchers who measure the national debt against gold reserves are engaging in monetary child's play. However, the Federal Reserve's ability to spend the past decade in crisis while hiding the money supply (M3) from the American public is brilliant. A brilliant scam that must come to an end in the United States, as it has in central banks throughout Europe and across the globe.

The strength of the dollar in FOREX markets in the wake of QE3 invalidates many conspiracy theories. As a market student and participant, I believe the dollar is legitimately strong and would remain strong through QE4, QE5, and QE6.

Is it time to end the myth of false scarcity? Is the easy answer - a dramatic increase in the debt ceiling to fund the Small Business Administration, Farm Service Agency, and regional banks - the best path for the US economy?

Recently an interesting statistic was released. The USA has fewer corporations today than 40 years ago, despite having three times as many citizens. If "corporations are people," do we just need more "people?"

Or is a multi-decade Japanese-style depression a better way to break the will of American men, break the daughters of the revolution into prostitution, seize American's weapons, and ultimately rejoin the British Crown and join the New/Old World Order?

I ask that question only half-sarcastically, because that appears to be the the intent of the current world order, and the path the United States is headed. Especially if either Hillary "Forester de Rothschild-RHODam" Clinton, or Jeb "Lehman is now Barclays" Bush are elected president.

This is serious business.

Sure, a new monetary system would be nice. But is a total revolution possible? Perhaps it is time to submit to reality, and finally admit that Reagan was right.

Mine eyes have seen the glory of the coming of a new hashtag.

Matthew Libman
Charleston, SC

Dosn't really matter how much you inflate worthless paper. 0 times 1000 is still 0.
You can say that it is big trouble, but in reality its just worthless fiat. a few zeros more dont make any change.
The only change is that your work is worth less. For the state a few zeros dosnt make any diffrence what so ever, they can just print more paper