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Author Topic: National debt/defecit: what does it REALLY mean??  (Read 2002 times)

superboyac

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National debt/defecit: what does it REALLY mean??
« on: September 18, 2013, 11:26:17 PM »
I have been wondering about this for a while, and I guess I was too embarrassed to ask.  What do these enormous negative numbers really mean for people individually and/or a nation?

Some stupid questions:
When do we have to pay it back?
Do we have to pay it back?
When is it too much?  If $1.6 trillion dollars equals life as it is today...what is life like with $10 trillion debt?
Who is it owed to?
Can they ask for it back?
If they can't, why not?
Is it because the US has bigger guns?  If so, when are bigger guns not enough?
If there's such a huge debt, why do the rich get richer?
If the poor who are getting poorer are the ones paying the debt, is it going to the people it's owed to, or the rich, or both?

Am I missing something here?  It feels like I'm missing something really quite fundamental because none of this really makes any sense to me.  And I'm not that bad with math, economics, numbers, logic, etc.

eleman

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Re: National debt/defecit: what does it REALLY mean??
« Reply #1 on: September 18, 2013, 11:36:27 PM »
1. Probably never, the debt circulates.
2. Theoretically yes. But no one in his/her sane mind would demand wholesale repayment. It would hit the global economy incomparably harder than 2008.
3. As long as it is in a currency you can print freely (in Dollars for US, in Drachmas, not in Euros in Greece) sky is the limit. Don't worry.
4. Mostly to 401(k) people. Some to Chinese government, some to Japanese and European banks.
5. See answer 2.
6. If they did ask it back, US government would put a Benjamin Franklin pictures on blank sheets of paper, and sell it to the creditors $100 a piece. When you do that on a 1.6 trillion dollar scale, hyperinflation ensues. No one on this planet (well perhaps except north korea's latest great fantastic leader) wants dollar hyperinflation because it is the de facto global currency. Everyone has some receivable in it. You don't want your receivables to lose value.
7. Not necessarily. But bigger guns wouldn't hurt (you).
8. The debt is not directly related with the income equality. It has mostly to do with your taxation system and tax breaks, as well as legal system (legal costs are astronomical, so poor can't defend their rights against the incursions by the rich). Anyway, the interest rates on US government bonds is so low that it does not make the creditors richer.
9. Who said the debt is getting paid?

These are my personal views, though some like Paul Krugman would concur with most of them.

Renegade

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Re: National debt/defecit: what does it REALLY mean??
« Reply #2 on: September 18, 2013, 11:50:20 PM »
I have been wondering about this for a while, and I guess I was too embarrassed to ask.  What do these enormous negative numbers really mean for people individually and/or a nation?

Destruction and destruction.

Some stupid questions:

There are no stupid questions - only unasked questions.

When do we have to pay it back?

Never. It can never be paid back. That's the point to it. Perpetual debt slavery.

Do we have to pay it back?

Yes. You will never be let off the hook.

When is it too much?  If $1.6 trillion dollars equals life as it is today...what is life like with $10 trillion debt?

It was too much a very long time ago. Compare the debt and deficit to GDP, then compare your personal debt to your income, then ask if you could get away with the same kind of shennanigans as the government does if you tried to get a bank loan/debt/deficit like they do.

Welcome to the insanity of Keynsian economics.

Who is it owed to?

Central banks mostly, but a large amount is held by bond holders, etc. etc.

However, trying to track down the specific individuals generally ends in frustration. These people have their money wrapped up in shell corporations, trusts, and all manner of different ways of misdirection. They're rich enough to afford the best lawyers and accountants in the world, and they can hide things better than anyone. People have tried to track down the specific owners of some of these organisations, but have largely failed.

For example, when shares of a bank are owned by some fund... good luck tracking down who the specific investors are. Funds within trusts withing shell corporations within corporations within funds within trusts within...

Can they ask for it back?

Yes.

Is it because the US has bigger guns?  

No. Guns are irrelevant from a national perspective. The debt is globalised and owned by globalist interests, i.e. banksters. Many of the debt holders are American.

If so, when are bigger guns not enough?

They're already not enough. Ever heard the saying, "Welcome to Washington D.C., home of the best government money can buy?" Same thing goes elsewhere as well - D.C. is not unique like that.

i.e. Who are you going to shoot? There are no countries to attack. There are only the super rich, which include Americans as well. (Not all the super rich own parts of that debt.)

If there's such a huge debt, why do the rich get richer?

Who do you think owns the debt?

If the poor who are getting poorer are the ones paying the debt, is it going to the people it's owed to, or the rich, or both?

The people who own the debt are the super rich - banksters. They're getting their pound of flesh no matter what.

Am I missing something here?

Quite a bit, but this is the Living Room, so that's probably more than enough.

It feels like I'm missing something really quite fundamental because none of this really makes any sense to me.  And I'm not that bad with math, economics, numbers, logic, etc.

I've written a bit about some of the questions you've asked (probably best to start at the bottom):

http://cynic.me/tag/...nal-reserve-banking/

The mathematics of FRB collapse at some point. I've written extensively on exactly how and why.

For the economics questions, basically, Keynesian economics are just, well, people are going to get mad at me if I say much more. Do a search for "keynes vs. austrian economics". Then search for "quantitative easing". Have a visit to some site like http://www.zerohedge.com/.

Welcome to the rabbit hole...

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J-Mac

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Re: National debt/defecit: what does it REALLY mean??
« Reply #3 on: September 20, 2013, 12:43:36 AM »
There are no stupid questions - only unasked questions.

Ha!!  You don’t have kids, do you?!   :D   8)

Jim

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Re: National debt/defecit: what does it REALLY mean??
« Reply #4 on: September 20, 2013, 06:05:26 AM »
There are no stupid questions - only unasked questions.

Ha!!  You don’t have kids, do you?!   :D   8)

Jim

So far we still have babbles and whatnot. Guess I have something else to look forward towards! ;D
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Freedom is the right to be wrong, not the right to do wrong. - John Diefenbaker

Stoic Joker

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Re: National debt/defecit: what does it REALLY mean??
« Reply #5 on: September 20, 2013, 06:34:16 AM »
Guess I have something else to look forward towards!

Ah, yes... Like the why phase. It's a lot like a police interrogation...but much, much worse... ;)

TaoPhoenix

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Re: National debt/defecit: what does it REALLY mean??
« Reply #6 on: September 20, 2013, 07:44:27 AM »

I don't know what the percentages are, but some of it will have to be paid back. A small percentage is "revolving", aka it will never be zero and that's fine, but someone being a jerk can play a "leverage" game and "call it in".

And apparently even the states have to follow rules that the feds don't. You can't believe the number of times I've seen "X program being dropped because the state was short by $100,000 in the budget".


eleman

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Re: National debt/defecit: what does it REALLY mean??
« Reply #7 on: September 20, 2013, 07:56:31 AM »
States don't have banknote printing presses.

It is a small detail, but a very crucial one.

xtabber

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Re: National debt/defecit: what does it REALLY mean??
« Reply #8 on: September 20, 2013, 01:02:00 PM »
These are my personal views, though some like Paul Krugman would concur with most of them.

Actually, anyone who understands anything about economics would concur with most of them.

Unfortunately, not many people know much about economics, and thus are easy prey for hucksters who peddle political dogma as alternative economic theory.