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Old 07-15-2008, 07:24 AM
 
Location: St. Joseph Area
6,235 posts, read 8,640,334 times
Reputation: 3108

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Hi! I don't usually start two threads in one day, but I'm in a curious mood...

How bad is the national debt for our economy? I have a sneaking suspicion that owing 9 trillion dollars, is not good for us, but I'm not sure how. What potential havoc could it wreak, if any?

Thanks!

Mackinac
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Old 07-15-2008, 08:25 AM
 
3,553 posts, read 7,062,872 times
Reputation: 2324
Being a debtor is never good, you have to PAY THE PIPER, and we all know that the piper calls the tune. Right now I'm too tired to look up the cost of all that interest to each taxpayer but it's not a small number.

When you owe that much your currency starts to lose value (without getting too deep into economic theory it has a lot to do with how you obtain the money to pay the interest), as your currency loses value it makes it much easier for countries with (companies that are valued in) stronger currencies to purchase your assets. This is why we see foreign companies purchasing such American stalwarts as;

Coors
Anheuser Busch
Chrysler (although Daimler later sold it)
and others.

As these countrie have more money they can buy whatever they like. Imagine what if (for whatever reason-drought, war, SPECULATION) China, the United Arab Emirates, Saudi Arabia decided to buy OUR ENTIRE crop of wheat, soybeans or corn.

When a country reaches a point that their ASSETS (be it manufacturing plants, cropland or crops) are OWNED by another country, that country becomes, by definition a COLONY. Look at how well colonies thrived under the "benevolence" of their masters-13 American colonies under Great Britain, India under the same, most of Africa under France, Germany, Holland and G.B. etc.

You are living through a time where the US is headed toward becoming a colony of our "owners".

golfgod
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Old 07-15-2008, 08:32 AM
 
Location: St. Joseph Area
6,235 posts, read 8,640,334 times
Reputation: 3108
Quote:
Being a debtor is never good, you have to PAY THE PIPER, and we all know that the piper calls the tune. Right now I'm too tired to look up the cost of all that interest to each taxpayer but it's not a small number.

When you owe that much your currency starts to lose value (without getting too deep into economic theory it has a lot to do with how you obtain the money to pay the interest), as your currency loses value it makes it much easier for countries with (companies that are valued in) stronger currencies to purchase your assets. This is why we see foreign companies purchasing such American stalwarts as;

Coors
Anheuser Busch
Chrysler (although Daimler later sold it)
and others.

As these countrie have more money they can buy whatever they like. Imagine what if (for whatever reason-drought, war, SPECULATION) China, the United Arab Emirates, Saudi Arabia decided to buy OUR ENTIRE crop of wheat, soybeans or corn.

When a country reaches a point that their ASSETS (be it manufacturing plants, cropland or crops) are OWNED by another country, that country becomes, by definition a COLONY. Look at how well colonies thrived under the "benevolence" of their masters-13 American colonies under Great Britain, India under the same, most of Africa under France, Germany, Holland and G.B. etc.

You are living through a time where the US is headed toward becoming a colony of our "owners".

golfgod
So what you're saying is that the U.S. is slowly losing their sovereignty because of our inabilitiy to live within our means? That's scary. The sad thing is that nobody seems to notice this.
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Old 07-15-2008, 08:51 AM
 
Location: western East Roman Empire
7,445 posts, read 11,234,793 times
Reputation: 7008
Quote:
Originally Posted by mackinac81 View Post
The sad thing is that nobody seems to notice this.
Rule number one: don't get high on the money supply.

US citizens violate rule number one and they will get exactly what they deserve: slavery, cloaked under the guise of easy credit (republicans) and welfare (democrats).

The monster has two heads, but the body is one.
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Old 07-15-2008, 09:49 AM
 
3,698 posts, read 10,393,050 times
Reputation: 2612
We spend something like 15 or 18 percent of our federal budget on interest payments on our national debt.

We could either spend that money on something more productive than debt service OR we could cut income taxes across the board by that amount.
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Old 07-15-2008, 10:10 AM
 
485 posts, read 1,805,467 times
Reputation: 215
To those who shudder at foreign ownership I offer the words of Kipling:

"You see, of course,
that we have got
the Maxim gun
and they have not."

They can't take farmland home with them.

Are they going to drink all that beer?

And we can produce a lot of commodities-so many that our markets frequently collapsed from too much supply.

I see a lot of farmland coming back into production-instead of being bulldozed to build crackerbox houses.

Production is what makes a country strong.
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Old 07-15-2008, 01:18 PM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,807,967 times
Reputation: 1708
Quote:
Originally Posted by krakenten View Post
To those who shudder at foreign ownership I offer the words of Kipling:

"You see, of course,
that we have got
the Maxim gun
and they have not."

They can't take farmland home with them.

Are they going to drink all that beer?

And we can produce a lot of commodities-so many that our markets frequently collapsed from too much supply.

I see a lot of farmland coming back into production-instead of being bulldozed to build crackerbox houses.

Production is what makes a country strong.
This is the only place we have China and India by the ba!!s. they are in such a rush to industrialize that they are plowing over good farmland to build factories. Also there water supply is suspect at best. Eventually they will need to start buying food from us. Perhaps if/when this happens we can workout some arrangement with them about a buy back of debt for food.
As my father always says when times are good fiat money is good, but when time are bad.......well......you can't eat money.

But let me just say in regards to the poem above. We already extended ourselves military so the maxim gun is out of play for now. Also Nationalization of any/all industries or financial institutions in the country would be in the shortterm a disaster. This is because we would be seen as a Welcher. Go back to when Jefferson was president we owed a lot of money to a couple of different countries. Jefferson had a choice pay it back or default. He decided to pay it back. And we in turn were considered rock solid to loan to. Mexico at one time also had the same issue early in it nationhood. They defaulted. And suffered from the perception of being a bad lendee for a long time afterwords.
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Old 07-15-2008, 01:39 PM
 
3,460 posts, read 5,072,134 times
Reputation: 6677
Have you ever asked yourself why the government borrows the money that it prints?
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Old 07-15-2008, 01:47 PM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,807,967 times
Reputation: 1708
Quote:
Originally Posted by sterlinggirl View Post
Have you ever asked yourself why the government borrows the money that it prints?

Please elaborate. I'd like to hear what your thinking.
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Old 07-15-2008, 02:02 PM
 
3,460 posts, read 5,072,134 times
Reputation: 6677
Why would the government pay interest to borrow dollars that it can just print?
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