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In theory, it is possible to pay off every cent of the national debt. We could go back to United States Notes rather than Federal Reserve Notes (Google it!). We would need to actually "print" rather than "borrow" the money into existence, but yes, it could be done.
In practice...well this isn't a country full of Dave Ramsey's and I doubt those in control will see a pressing need to be totally debt free and "live within our means". This means it won't happen.
Much of our debt in Treasuries serves our people, businesses and the world with safe and secure holdings and investments. The vast amount of that debt along with the very deep and liquid markets helps to ensure that commerce and economic growth continues throughout the world.
We will never pay off all our debt. We will never have the need to do so.
I would bet all I own that our National Debt will be higher in 10 and then in 100 years...
Much of our debt in Treasuries serves our people, businesses and the world with safe and secure holdings and investments. The vast amount of that debt along with the very deep and liquid markets helps to ensure that commerce and economic growth continues throughout the world.
We will never pay off all our debt. We will never have the need to do so.
I would bet all I own that our National Debt will be higher in 10 and then in 100 years...
All it really has even been is insurance and a liquid asset. A coin was in reality a way to keep track of a debt. I do something for you and then you give me a coin for something I will buy later. You could also owe me the coin as a personal IOU. However most people were more willing to take the government's IOU over a personal one. I was as good as the coin. Its really pretty simple but unfortunately it will go over people's head anyway.
The problem isn't the ability to pay. The problem is in the power that could be corrupted. However not understanding how it works seems to make it more ripe for corruption. People will use government debt as savings and they will use to to chase goods and services. That makes it money no matter what people want to call it.
No, there is always a bid-ask spread. The last I checked the bid price for a 3 month T-bill at a date 1 month prior to maturity was actually 99.999 cents on the dollar and the ask price was 100.000 cents on the dollar. This means that if I had a T-bill to sell 1 month before it matured, I could not get the "full" value for it, because no one would have paid quite that much.
As interest rates rise, the discount to par rises as well.
Over simplified. Lacks accuracy as a result, but largely qualitatively not quantitatively informative.
So all you have to do is up the debt limit and issue more T-bills to cover the spread. In some applications T-Bills and cash are used interchangeably.
Over simplified. Lacks accuracy as a result, but largely qualitatively not quantitatively informative.
So all you have to do is up the debt limit and issue more T-bills to cover the spread. In some applications T-Bills and cash are used interchangeably.
There is still a spread, you're simply going to reach the point where the auction doesn't turn enough buyers for the T-bills.
And they are still not the same if they are used interchangeably "in some applications". Because there are still other applications where they are not used this way. Heck, if I had a paper T-bill and tried to go to the grocery store with it, I doubt I'd get very far.
And US Dollars are tied to something of value: GDP, both internal and external.
US Dollars/Debt are balance sheet items. You can look in your wallet and count how many dollars you have.
GDP is a measure of output over a period of time. You cannot look in your wallet and find GDP. GDP can also be influenced depending on the currency being looked through. Many countries appeared to have a significant decline in their shipping amounts....based in dollars, even if volumes overall grew.
However, at the end of the day, a growing economy will not produce more dollars. Compound interest does. If an economy has been stalled out and without interest as we are here, then the printing machine does. When not fast enough to keep up with the current deficit, things get prickly.
I'm afraid the term "economy of confidence" is fairly apt here. It's not terrible, so long as we don't do anything stupid like blow this confidence over political bickering, or try to take on the banks.
Much of our debt in Treasuries serves our people, businesses and the world with safe and secure holdings and investments. The vast amount of that debt along with the very deep and liquid markets helps to ensure that commerce and economic growth continues throughout the world.
We will never pay off all our debt. We will never have the need to do so.
I would bet all I own that our National Debt will be higher in 10 and then in 100 years...
It is not our duty to borrow money simply so that others can lend. That is one of the strangest economic arguments I have ever heard. Make 'em keep it in a safe, all in $20 bills.
US Dollars/Debt are balance sheet items. You can look in your wallet and count how many dollars you have.
GDP is a measure of output over a period of time. You cannot look in your wallet and find GDP. GDP can also be influenced depending on the currency being looked through. Many countries appeared to have a significant decline in their shipping amounts....based in dollars, even if volumes overall grew.
However, at the end of the day, a growing economy will not produce more dollars. Compound interest does. If an economy has been stalled out and without interest as we are here, then the printing machine does. When not fast enough to keep up with the current deficit, things get prickly.
I'm afraid the term "economy of confidence" is fairly apt here. It's not terrible, so long as we don't do anything stupid like blow this confidence over political bickering, or try to take on the banks.
Dollars can be created via the normal bank lending process, through Congress/Federal deficit spending, or via the Fed via QE out of thin air.
Compounding interest moves money around, does not produce it.
It is not our duty to borrow money simply so that others can lend. That is one of the strangest economic arguments I have ever heard. Make 'em keep it in a safe, all in $20 bills.
If you don't appreciate the fact the USD and its related investments and paper are far and away the largest, deepest and most liquid container of money, savings, security, and worldly business transactions, then I can't help you!
It may not be our duty, but it sure makes us money and the world go round!
If you don't appreciate the fact the USD and its related investments and paper are far and away the largest, deepest and most liquid container of money, savings, security, and worldly business transactions, then I can't help you!
It may not be our duty, but it sure makes us money and the world go round!
It does not make us money, it costs us money (interest payments). The lender earns money, the borrower spends it.
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