$16.7 Trillion

The Andy Naylor Fan Club · Oct 16, 2013

Feck me that's a lot of money. This is the amount of debt the USA has, is it realistic that it will ever be repaid or is it a burden that the country will carry forever more? Should the American public be worried by such large sums of debt? Serious question, I have no idea about this situation.

Barrel of Fun · Oct 16, 2013

What does one trillion look like? http://www.pagetutor.com/trillion/index.html

Do the sums add up? How much money is there in the world? If it were split evenly, what would we each have?

The Andy Naylor Fan Club · Oct 16, 2013

Barrel of Fun said:
What does one trillion look like? http://www.pagetutor.com/trillion/index.html

Do the sums add up? How much money is there in the world? If it were split evenly, what would we each have?

OMG. That link certainly puts it into perspective.

Braders · Oct 16, 2013

Barrel of Fun said:
What does one trillion look like? http://www.pagetutor.com/trillion/index.html

Do the sums add up? How much money is there in the world? If it were split evenly, what would we each have?

or quite simply

beorhthelm · Oct 16, 2013

about $2300 each, for a world population of 7.1 billion.

Barrel of Fun · Oct 16, 2013

beorhthelm said:
about $2300 each, for a world population of 7.1 billion.

That's the debt. But what are we worth as a whole? All the money in the world divided by 7bn.

Pevenseagull · Oct 16, 2013

Barrel of Fun said:
That's the debt. But what are we worth as a whole? All the money in the world divided by 7bn.

no point in working it out. There will be more money in the world next month. Who will have it? (rhetorical)

Footsoldier · Oct 17, 2013

The Andy Naylor Fan Club said:
Feck me that's a lot of money. This is the amount of debt the USA has, is it realistic that it will ever be repaid or is it a burden that the country will carry forever more? Should the American public be worried by such large sums of debt? Serious question, I have no idea about this situation.

If Labour was still in power we'd have the same debt.

JamesAndTheGiantHead · Oct 17, 2013

Bomb them until they pay it off I say.

seagullsovergrimsby · Oct 17, 2013

Why doesn't Obama just rename the country as the United States of Portsmouth as part of a pre-pack administration and reduce the deficit to $250 ?

Adders1 · Oct 17, 2013

The republicans must be angry at the idea they won't be able to fund the policing of middle eastern countries through further borrowing, when they are reinstated next time around. Seems to me the Communist Party of China have effectively taken a massive gamble on the future of American capitalism

KZNSeagull · Oct 17, 2013

I know what would happen to an ordinary citizen who kept on spending money they did not have like that.

This is who the US owes the money to (not sure how they can owe money to themselves!):

I dunno, it's all bonkers.

Psychobilly freakout · Oct 17, 2013

If you actually look beyond the tourist destinations in America it is very obvious that it is rapidly becoming a third world country. I am not sure it is a very good idea to be in hock to China.

Stat Brother · Oct 17, 2013

Psychobilly freakout said:
If you actually look beyond the tourist destinations in America it is very obvious that it is rapidly becoming a third world country. I am not sure it is a very good idea to be in hock to China.

Is that not dependent on location, and skin colour.

Not giving health care to those just above the poverty line isn't going to change that, any time soon.
The loud voices in the Republican party seem to be insane.

It's about time the 'moderate' majority stood up and did their jobs.

AZ Gull · Oct 17, 2013

KZNSeagull said:
This is who the US owes the money to (not sure how they can owe money to themselves!):

Actually, it's pretty straightforward. It is simply who holds US Treasuries. Approximately one third is held by foreign states; a little more is held by other governmental departments, and the rest by individuals, businesses, retirement funds etc.

The reason other government departments and agencies would hold the debt is because they take in more revenue than they need currently; the excess cash is used to purchase Treasuries (effectively transferring that cash to the general fund, where it can be spent). Of course, when they eventually redeem those securities, the federal government will need to raise taxes or issue more debt.

Whilst the numbers involved here are almost unimaginable, there won't be a major problem until and unless the market believes the government will be unable or unwilling to service all this debt (as that point approaches, the market will demand increasingly higher interest rates in order to continue purchasing the debt). The share of government revenue that must be used to pay this interest will increase, and eventually the situation becomes unmanageable (did someone say Greece?).

As is often quoted, though, the US has never defaulted on its debt.

Psychobilly freakout · Oct 17, 2013

Stat Brother said:
Is that not dependent on location, and skin colour.

Oh I see white people don't live in poverty in the south, mid west, or any where else in America ? I know many Americans extremely rich and extremely poor, and what strikes me is there is no middle ground, and those in the so called middle ground seem to live hand to mouth with cards and debt and upside down mortgages which have crippled them. Yet most of them still walk round thinking the world revolves around America.

KZNSeagull · Oct 17, 2013

AZ Gull said:
Actually, it's pretty straightforward. It is simply who holds US Treasuries. Approximately one third is held by foreign states; a little more is held by other governmental departments, and the rest by individuals, businesses, retirement funds etc.

The reason other government departments and agencies would hold the debt is because they take in more revenue than they need currently; the excess cash is used to purchase Treasuries (effectively transferring that cash to the general fund, where it can be spent). Of course, when they eventually redeem those securities, the federal government will need to raise taxes or issue more debt.

Whilst the numbers involved here are almost unimaginable, there won't be a major problem until and unless the market believes the government will be unable or unwilling to service all this debt (as that point approaches, the market will demand increasingly higher interest rates in order to continue purchasing the debt). The share of government revenue that must be used to pay this interest will increase, and eventually the situation becomes unmanageable (did someone say Greece?).

As is often quoted, though, the US has never defaulted on its debt.

Thanks for this.

I understand the principle of how government raises money through US Treasuries, and how that is repaid, and that anyone could buy them.

What I am not clear about is that if one branch of government owes money to another branch of the same government, if push came to shove, is it as big of a disaster if they default on that part of the debt, rather than say defaulting on the monies owed to other countries or privately run pension funds etc? Afterall, that part of the debt is effecting the US government as a whole only. Does that make sense or am I being thick?!

Psychobilly freakout · Oct 17, 2013

KZNSeagull said:
What I am not clear about is that if one branch of government owes money to another branch of the same government, if push came to shove, is it as big of a disaster if they default on that part of the debt, rather than say defaulting on the monies owed to other countries or privately run pension funds etc? Afterall, that part of the debt is effecting the US government as a whole only. Does that make sense or am I being thick?!

It all sounds like an elaborate case of Peter pay Paul to me...

Half Time Pies · Oct 17, 2013

Barrel of Fun said:
That's the debt. But what are we worth as a whole? All the money in the world divided by 7bn.

There is exactly as much money in the economy as there is debt and if everyone paid back all of their debt there would actually be no Money at all!

KZNSeagull · Oct 17, 2013

Psychobilly freakout said:
It all sounds like an elaborate case of Peter pay Paul to me...

Well, some of it does. Or at least that some of the debt is not as high priority to honour as others. But then, I guess they would have difficulty differentiating which Treasuries to honour and which not.

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