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At least once a week I read an article about how much money the US owes China. What do other countries owe the United States? Is there a chart somewhere that details how much each country on Earth owes each other country? If two countries owe each other money, can that amount just be erased from the debt amounts?
At least once a week I read an article about how much money the US owes China. What do other countries owe the United States? Is there a chart somewhere that details how much each country on Earth owes each other country? If two countries owe each other money, can that amount just be erased from the debt amounts?
'What countries owe US?'
The US gov't owns very little foreign debt. Mainly because we deal in USD's.
Countries own various foreign debts for various reasons, and there may not be a reason to cancel out debt judged as 'equal'. As the various currencies continually change in value, that might not be so easy to do.
Because too many people wanna keep their social security checks, va disability and comp checks, and social programs… but primarily because of CORPORATE welfare, and tax evasion… which of course passes down to the middle class.
With the debt higher than the money in circulation the US government can never pay off the debt.
Also Let's pretend the government debt is $33 trillion and the money in circulation is $1 trillion.
This isn't entirely accurate; the government can pay off their debt tomorrow if they issue a shiny new 1 trillion dollar bill; just need to print 34 of those suckers. Now, it would have consequences, like making the U.S. dollar worth less than an Iranian Rial with hyperinflation it would cause, but technically, they could do it.
This isn't entirely accurate; the government can pay off their debt tomorrow if they issue a shiny new 1 trillion dollar bill; just need to print 34 of those suckers. Now, it would have consequences, like making the U.S. dollar worth less than an Iranian Rial with hyperinflation it would cause, but technically, they could do it.
Nope, that won't do it because it's tail chasing. A trillion dollar bill is another trillion dollar of US debt.
The federal gov't needs to mint Trillion Dollar Platinum Proof Coins to do the trick. Then deposit them into the Treasury's account at the Fed into perpetuity. We don't need 34 since the Fed owns a bunch of debt, our gov'ts own debt, and you and I and our businesses might want to own some as well.
What that does to our inflation and the global value of the USD is of course not known.
Shows some high level breakdown on who holds the US debt.
And I'd say that the gold-standard-cynics are not exactly wrong. It all runs on faith and it has for a long time. I'm not convinced that this is truly a bad thing...better to say, so long as everybody is willing to have a certain level of faith, or in some ways has no choice but to operate as though they did...the "on faith" system can continue to work.
As I think you may be starting to be aware, because you are here trying to get your head around the whole concept, the national debt is not like an individual having a credit card necessarily. This whole, "our grandkids will be saddled with this problem"...as though they are gonna one day get a bill in the mail or whatever... Ehm, kinda but not really, and certainly not like that. Sure, it's expected that the US will continue to have a lot of resources that include all of its people doing economic activities and being generally productive. But did we expect that our grandkids would be able to just sit on their butts, or that one day nobody will have to pay taxes, or what? It's not that one day the bill will come due, it's more like generations of Americans have been "paying it" (sort of) all along. But still, my life ain't bad. I can't complain. Works well enough for me.
Put it this way... Debt is an investment to the entity holding it. If I have a loan or card or whatever, so long as it's never a risk of default and I am consistently able to pay what is due on it, the company holding it has no reason to want me to pay it off early because they get more interest from me, if I don't. In fact what they really want, is for me to keep paying but please borrow more. No sooner do I pay off a loan, then the lender is like, "wouldn't you like another?" Because they know I have a good score and steady income and it isn't very likely that I will default. I am a good risk, likely to be profitable to them. The only way in which holders of the US National debt start to get twitchy about the bill getting paid, is if the faith in the US gov's ability to pay gets shaky. A default would be disastrous...but the only reason it would happen is if Congresscritters get up to political games. Fortunately we've had enough serious ones there to just barely mitigate the shenanigans.
My credit is good enough to take unsecured loans...not backed by their ability to take away a house or a car to make themselves whole if I fail to pay, but only to wreck my reputation (credit score) if I burn them.
Likewise, so long as the faith in the US government is good enough, our "credit" is good enough, that it doesn't matter if we have the assets on hand to just pay off the debt, we can borrow on faith in our future income (economic activity.) And the holders of the debt are perfectly happy if we're just paying interest, after all...that's what they are in it for, income. So long as they aren't worried that the US will stop paying that interest, we're all good. So reducing the national debt becomes then, somewhat more like a big company buying back stock. Stock, as maybe you already know, is also a form of debt, but it's backed by a stake in a company.
This is even before getting all into the nature of currency...I mean, if we're pondering that... I suspect that now that so much of our commerce is done digitally, there likely isn't enough physical cash currency out there to cover all of the entirely digital balances that exist. So we got rid of the gold standard, we could move towards getting away from even the physical standard. Does that mean that the dollar becomes a form of cryptocurrency in a sense? A digital asset? I don't interact much with the funds in my bank and investment accounts, I can just log in and look at the numbers...pay with plastic, order stuff online, etc. Millions of dollars have "moved through my hands" over the years without me ever laying eyes on cash or coin. Quite a leap of faith there, too, since modern commerce relies on the internet and the electrical grid!
Is operating on faith a bad thing? Not at the moment...
Voltaire in 1729 “PAPER MONEY EVENTUALLY RETURNS TO ITS INTRINSIC VALUE – ZERO”
It's only a matter of time before the US dollars collapses and gets replaced with a new currency with a different name.
Voltaire in 1729 “PAPER MONEY EVENTUALLY RETURNS TO ITS INTRINSIC VALUE – ZERO”
It's only a matter of time before the US dollars collapses and gets replaced with a new currency with a different name.
Then the cycle starts anew...
The USD doesn't have to collapse for the world to have another reserve currency in the future.
The only potential candidate is the Yuan which has barely moved in a generation. But if it does continue to rise, there should be plenty of room for the USD in a larger future global economy.
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What countries owe US?
