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Who'd a thunk that Russians, after experimenting with communism for so long, were far more intelligent than the Swiss by selling their US treasury positions?
First of all, a Trillion dollars has so many zeros that I do not know if I typed the number correctly 14.46 TRILLION in debt (+ Interest). That is 98 percent of the U.S. Gross domestic product.
14.46 Trillion divided by 50 states = 289,200,000,000 dollars
14.46 Trillion divided by 311 million citizens = 46,495 dollars
Each US citizen has a debt of 46,495 dollars (regardless of age).
You were correct up to that point.
[quote=Venezuelan;19880055]
Major foreign holders of U.S. Treasury securities:
China
Japan
United Kingdom
Brasil
Taiwan
Russia
Hong Kong
Switzerland
Canada
As of 06/30/2011 your public debt is $9,742,223,364,846.58
You have an additional debt of $4,600,864,275,161.82 in "intergovernmental holdings." That is money government agencies owe to other government agencies for services rendered, plus trust funds and other types of funds.
Not all $14 TRILLION of your National Debt is for sale as securities.
For example, as of December 2010 you had $14.025 Trillion in total public debt with:
$5.656 TRILLION in intergovernmental holdings (not for sale)
$8.368 TRILLION privately held
$0.315 TRILLION held by banks in the US
$0.187 TRILLION in US savings bonds
$0.615 TRILLION in private pension funds
$0.185 TRILLION in government employee pension funds (city/state)
$0.253 TRILLION held by US insurance companies
$0.636 TRILLION in Mutual Funds
$0.519 TRILLION held by State and local governments (non-pension) $4.437 TRILLION held by foreign and international banks
$1.216 TRILLION held by other investors
As you can clearly see, not all $14 TRILLION is owned by "foreigners."
At most, only 1/3 of your $14 TRILLION is held by foreigners, so it would be greatly appreciated not to continue to spread misinformation.
In fact, failing to understand who owns your debt is the reason most of you can't grasp the complexities of your debt ceiling, Budget Deficit, and National Debt.
I'll try to make sense of this so you can understand it, and it's implications.
You have a Budget Deficit of $1.5 TRILLION from fiscal 2011. To make up for the short-fall, you'll have to sell US treasury securities (bills, notes and bonds). The sale of those securities will cause the National Debt to increase above the current "debt ceiling." In order to sell those securities, the debt ceiling must be increased.
If the debt ceiling is not increased, the US will not default on its debt, however it will default on $1.5 TRILLION in payments to private contractors who provide goods and services to the US, and on promised payments to States, counties and cities, who in turn use that money to contract goods and services.
Yes, these contractors include Haliburton, Hughes and Martin, but they also include small local businesses who are remodeling, repairing, refurbishing your federal court houses, federal office buildings and the offices of federal agencies, by doing things like installing plumbing, carpet, dry wall, electrical work, ceilings, painting, moving furniture from one office or one floor or one building to another etc, and contractors who provide MREs, ammunition, IT support, office supplies etc.
At the State/local level, those contractors are building roads, sewers, etc etc.
If the debt ceiling isn't raised, you'd be in a recession in about 90 days, and I suspect a lot of the 2012 budget will have to be used to pay off contractors from 2011 contractors, which is effectively a budget cut, and right now, the government spending $1.5 TRILLION it doesn't have to spend every year is what has kept you out of a recession.
So, raising the debt ceiling prevents that?
No. Not even close.
Your troubles do not end just because the debt ceiling is raised. Raising the debt ceiling only allows the government to sell the 2011 Budget Deficit as securities, but that doesn't solve the problem that you're still $1.5 TRILLION short of cash.
You have to sell the treasury bills, bonds and notes, and if you don't sell all $1.5 TRILLION, then you'll default on payments to contractors and be in a recession within 90 days.
Which now brings us to who really owns the debt and why it is important to clearly understand who owns it.
As I have proven, no more than 1/3 of your debt is owned by foreigners. You should have known that, because that should be common sense. There are more than 100 countries who have GDP less than the State of Mississippi which is the poorest State in the US. Some countries' GDP isn't even as much as the city of Kenosha, Wisconsin.
Only about 15-20 countries have the ability to buy US debt. I guess due to the mind-set of Americans, I should point out that the purchase of US debt is a CASH TRANSACTION.
That's right, no credit there. You don't buy US t-bills on credit. It's cold hard cash or bust.
Of these countries, who would be buying US debt?
China? China has already dumped nearly all of its holdings and is now buying EURO securities. That is clear and convincing statement by the Chinese that they do not intend to buy future US debt.
So when your $1.5 TRILLION in securities from the 2011 Budget Deficit go on sale, China will not be buying them.
Brasil and Russia (and India) work in tandem, generally as BRIC, and they are doing a wonderful job. They are doing everything the US has failed to do. As good Christian Nations, BRIC is bringing water, sewage, electricity and roads to people who have been denied those things by the US. Those countries touched by BRIC are developing rapidly (and consuming a lot of resources, especially oil -- much to the chagrin of Americans). Russia and Brasil will not be buying any US debt either.
Japan? Japan recently suffered a devastating earthquake and is still reeling from that and losing money hand-over-fist trying to provide social services, support and rebuild. They don't have any money, and won't be buying US debt.
Taiwan and Hong Kong will not be buying US debt either. Hong Kong has US debt mostly because it purchased 30-year bonds before the British lease expired in 1999. Taiwan moves with China (and will eventually peaceably re-united with China because that's what Taiwanese want).
That leaves only the United Kingdom, Switzerland and Canada to fork over $1.5 TRILLION in cold hard cash to purchase the t-bills the US is going to sell here shortly, in October.
What about other purchasers?
Private pension funds aren't going to be buying US debt. They are all underfunded, because they don't have cash to buy more US debt. In fact, the S&P 500 pension funds are underfunded by more than $600 Billion.
Government pension plans? Nope. Cities, counties and States are already in pension trouble because they are underfunded and they have all lost tremendous revenues due to job losses, and devaluation of property (which reduces the amount of property taxes collected).
Mutual Funds? Well, that would be you and people like you who invest in Mutual Funds directly or through your 401(k) plan.
If you could cough up $1.5 TRILLION in cold hard cash, I doubt your foreclosure rate would be as high as it is.
Insurance companies? Not likely.
US banks? If they buy debt then they don't have cash to loan, right? I suppose they could always borrow more from the central bank.
Cities and States? Why do cities and States by US treasury notes anyway? Those are your "rainy day funds." Some cities and States actually have a small surplus of cash set aside for a "rainy day" and they often purchase 5-7 year notes with that or purchase the shorter t-bills that they can roll over every 3-6-9 months or so. Right now, with many States bankrupt, on the verge of bankruptcy or short cash, I don't think they'll pony up $1.5 TRILLION.
That means you're going to have to rely very heavily, on, um, you know, er, the, uh, the "wealthy" to rescue you, but they aren't going to rescue you to the tune of $1.5 TRILLION because they don't have that kind of cash either.
So raising the debt ceiling will not solve the problem. You have to raise the debt ceiling and sell all $1.5 TRILLION of the 2011 Budget Deficit. And that won't solve the problem either, because in March there's $1.7 TRILLION from the 2010 Budget Deficit that will have to be re-sold.
And even if you manage to do that, it still doesn't solve the problem.
If you don't have a budget deficit of ~$1.5 TRILLION in 2012, you'll go into a recession.
And if you don't have a budget deficit of ~$1.5 TRILLION in 2013 you'll go into a recession.
And in 2014 you'll be in a recession and they you'll have $1.5+ TRILLION budget deficit even if you cut the budget.
And what you can conclude from that is the rest of the world cannot keep buying your debt.
Sooner or later, the gravy train comes to a crashing halt.
Quote:
Originally Posted by Venezuelan
Why is the US borrowing so much from other countries (through bonds, securities)?
Because the US spends far more money than it earns, just like the average American.
It doesn't really matter. It will all come to an end soon enough.
Quote:
Originally Posted by Venezuelan
Is the U.S. really independent? (Oil dependency + Biggest debtor nation)
Not really. It is interdependent to be sure, but not dependent. The US has delusions of grandeur that it will rule the world and that costs a lot of money.
Quote:
Originally Posted by Venezuelan
By 2021 the U.S. debt is going to reach 19.46 Trillion (proyected).
2021?
No, you need to read the CBO reports. The US debt will be greater than $20 TRILLION in 4 years.
Quote:
Originally Posted by Venezuelan
Why the U.S. media does not promote a change in consumption/credit borrowing habits?
That can't happen.
First, the US media is not independent. It is owned by major corporations who are involved in consumer consumption.
Second, the US has a consumer economy. They US economy works if and only if Americans spend every penny they earn, and then borrow money and spend that as well.
Third, if Americans start saving money like Japanese, Germans and others, their economy would collapse and unemployment would soar even higher.
Lastly, an attempt by the media to change the American mindset would take 2 generations. A major recession/depression will accomplish that in 10 years.
Quote:
Originally Posted by Venezuelan
Other thing... Why city planners do not add a subway system/trams to each major city so that people have alternative/low cost transportation?
At one time, the US has an excellent system of private mass transit. Private mass transit gets in the way of selling cars, so the GM Corporation bought up all the private mass transit in the US and destroyed it in an attempt to force Americans to buy cars.
That is not a conspiracy theory, it is a fact, as GM executives confessed on screen in front of God, their mothers and apple pie. It's a well documented fact, and there are at least two very good documentaries that go into great detail, with interviews from the GM executives who ran the project.
Quote:
Originally Posted by Venezuelan
The oil dependency will be reduced and the borrowing habits (purchase/leasing of new cars every 3 years) will be reduced too.
There are 49 operating refineries in the US, but only 17 refineries produce gasoline. The other 32 refineries produce ZERO gasoline. What they produce is the American life-style, which is pharmaceutical drugs, liquid laundry detergent, body washes, prepared foods, ready-to-eat foods, frozen foods and various and sundry other items that are disposable, like Chlorox Brand Orange Scented Kitchen Wipes.
Quote:
Originally Posted by Venezuelan
The U.S. Consumes 25 percent of the worlds oil that is pumped every day.
Japan consumes 5% and has a life-style that is superior to the US.
Quote:
Originally Posted by Venezuelan
Scientist have said that if the world looses that many thousands of tons of mass (oil is below the surface) the results are Tsunamies, earthquakes, etc...
The US is the only nation of the world that refuses to sign the Kyoto Protocol.
en.m.wikipedia.org/wiki/Kyoto_Protocol
Are you for real? Pukipedia? Pukipedia is not an authoritative source on anything and there's a dead bird out on the sidewalk that is more intelligent that than the global warming scientists.
For your information, when you are drilling, like a test well, like Deep Horizon that blew up in the Gulf of Mexico, after you strike oil and pump a few 1,000 barrels, you shut down.
It takes about 5 years to due the oil assays and the geological studies.
Once that gets the okay, it'll take about 9-12 years to build the infrastructure and the get the wells pumping to capacity and for an open sea platform that includes building shuttle tankers (since you can't run pipelines across the bottom of the ocean).
It takes about 5-7 years for a well to become profitable, which means it has pumped enough oil to pay for the well, and the infrastructure to support it and the labor and such.
As you pump oil out, you pump in water/sea-water for several reasons, one is to maintain static pressure so the pumps operate smoothly, another is to force natural gas to the top of the geologic structure so they can be pumped, and another is to keep the geologic structure from collapsing.
So your scientists are stupid, because the mass that is pumped out is replaced.
There are 4,000+ wells pumping Illinois Intermediate and they're only getting 25,000 barrels per day. Since a well pumps 8-18 barrels per day (that's right) you can figure they're pumping 50% water. That water has to be removed at the processing facility (and then it's pumped back into the geologic structure) and that increases the cost to operate the well.
If oil dropped below $50/barrel, they would shut those wells down and stop pumping because it wouldn't be profitable.
Do you think the US habits are fair to the rest of the world and also to its own US citizens ?
Almost 14 million people — 9.1 percent of the labor force — were officially counted as unemployed last month. But that’s just the tip of the iceberg. There were almost 9 million part-time workers who wanted, but couldn’t find, full-time jobs; 28 million in jobs they would have quit under normal conditions; and an additional 2.2 million who wanted work but couldn’t find any and dropped out of the labor force.
If the economy could generate jobs at the median wage for even half of these people, national income would grow by more than 10 times the total interest cost of the 2011 deficit (which was less than $40 billion). So anyone who says that reducing the deficit is more urgent than reducing unemployment is saying, in effect, that we should burn hundreds of billions of dollars worth of goods and services in a national bonfire.
First of all, a Trillion dollars has so many zeros that I do not know if I typed the number correctly 14.46 TRILLION in debt (+ Interest). That is 98 percent of the U.S. Gross domestic product.
14.46 Trillion divided by 50 states = 289,200,000,000 dollars
14.46 Trillion divided by 311 million citizens = 46,495 dollars
Each US citizen has a debt of 46,495 dollars (regardless of age).
Major foreign holders of U.S. Treasury securities:
China
Japan
United Kingdom
Brasil
Taiwan
Russia
Hong Kong
Switzerland
Canada
Why is the US borrowing so much from other countries (through bonds, securities)?
Is the U.S. really independent? (Oil dependency + Biggest debtor nation)
The US debt has increased 500 billion each year since 2003.
By 2021 the U.S. debt is going to reach 19.46 Trillion (proyected).
Why the U.S. media does not promote a change in consumption/credit borrowing habits? The media does the opposite. "Buy Buy Buy the new ______ at zero percent interested rate for the first year" and when you read the small letters of the Ad it says 12.99 interest rate after the first year..
Other thing... Why city planners do not add a subway system/trams to each major city so that people have alternative/low cost transportation?
The oil dependency will be reduced and the borrowing habits (purchase/leasing of new cars every 3 years) will be reduced too.
The U.S. Consumes 25 percent of the worlds oil that is pumped every day.
Scientist have said that if the world looses that many thousands of tons of mass (oil is below the surface) the results are Tsunamies, earthquakes, etc...
The US is the only nation of the world that refuses to sign the Kyoto Protocol.
en.m.wikipedia.org/wiki/Kyoto_Protocol
Do you think the US habits are fair to the rest of the world and also to its own US citizens ?
The U.S. provides more foreign aid than the rest of the countries in the world combined. Is this fair to the citizens of the U.S.?
Also....please show me a subway or rail system in the U.S. that isn't subsidized by the government. They add to the debt rahter than helping.
Baby Boomers? Not likely. They're retiring at about a rate of 9%. That's a lot of old people clinging on to any job possible.
Technology boom? Not likely and even if it did occur it would be just like the tech bubble of the 90's and within 10 years would be outsourced as soon as the cost to transport and make the products became higher than it would be to move it overseas and hire 8 people to take your place. You'd be lucky if they kept corporate here and still paid some Americans to work.
The U.S. debt is compiling incredibly fast and whether you like it or not when the debt hits 100% and then 110% and then 120% of GDP investors will get nervous and credit rating agencies will downgrade the U.S.
Now, couple that with 328 million people added to the world's population last year alone (which is more than the entire U.S. population) and you'll never see another $35/hr job that isn't a highly skilled one and apparently your side thinks it'll be kosher to take $17.5, or more, of those dollars. In 4 years there will be another China. In 10 years there will be another India and China. In 35 year, barring nothing crazy happens, there will be 15 billion people on the planet.
Your labor value gets cheaper by the day and what you pay for everything is going to increase dramatically over that time period.
Imagine how much oil the world will need when there's 15 billion people on the planet...
The room is about to get very crowded with people we've been oppressing relentlessly.
He was in charge for 8 years leading up to this mess. How many times did he veto spending bills in his first 6 years? Look it up. Have fun with that. Lots of time spent dealing with issues that were important to bible thumpers though.
He was in charge for 8 years leading up to this mess. How many times did he veto spending bills in his first 6 years? Look it up. Have fun with that. Lots of time spent dealing with issues that were important to bible thumpers though.
It wasn't just Bush. The national debt increased from $3.1 trillion to $5.87 trillion under Clinton.
And completely irrelevant to the daily lives of its citizens.
Except for the interest costs paid by federal income-tax payers (like my family), , the ongoing loss of wealth for EVERY American due to the devaluation of the dollar (the "Stealth Tax," which is how our government deals with such insane levels of debt); the lost opportunity costs of keeping interest rates near zero for decades (if you've saved for retirement or hard times, you LOSE buying power every year), and the harm to the economy of having a massively overgrown government that strangles economic growth and prosperity with regulations and taxes.
My spouse and I are part of the 1/2 who pays federal income taxes. Since we are professionals in our peak earning years, work 80 hours a week, are allowed NO deductions other than the negligible person ones, we pay the equivalent of a luxury SUV to Washington every year. This is despite the fact that we can only afford 2 vehicles, each over 10 years old, and each over 100,000 miles. All our income goes to cost of living, taxes, and trying to save a little for a retirement that will never come. Interest cost me and other federal taxpayers $413,954,825,362.17 in 2010, and the amount goes up constantly because government continues to spend like the proverbial drunken sailors. That is money stolen directly from our retirement savings.
When the incredible fiscal irresponsibility of our leaders outweighs the powers of The Fed to keep interest rates at near-zero, they WILL skyrocket. I thought this would happen when the other nations stopped financing our ridiculous over-borrowing--only to see The Fed step in and start PAYING OUR DEBT WITH MORE DEBT. In effect, the U.S. is now financing overspending on credit cards by taking out more credit cards. If we think the speculative bubbles and financial mismanagement of recent years hurt the economy, you might want to rent a bomb shelter for when this fiscal malfeasance runs its course.
Ongoing dollar devaluation hurts everyone. Your income (whether wages or retirement income) is worth less and less every year. Your savings are eaten away, even if you get interest on them. At the same time the cost of everything continues to increase. Nobody (other than the Big Businesses that own the nation and play these games) escapes the "stealth tax" of dollar devaluation. And by its continuing and insidious nature, it slowly destroys the wealth of EVERY American.
I won't even address the burden of excessive government on the economy, other than to point out that only Big Businesses have the political power to exempt themselves from the burdens that cripple their smaller competition. A huge government is exactly what Big Business wants, because it can then enforce the "all or nothing" wealth equation that now rules America. No more can a wage-slave start a business and achieve financial success; the burden of government is too large.
It seems to me that the cost of a fiscally irresponsible government has become the ultimate cost: it cost us the prosperity and success of America, and the future of the next generations.
The U.S. provides more foreign aid than the rest of the countries in the world combined. Is this fair to the citizens of the U.S.?
Per capita, the US donations are somewhat less than Ireland and Finland:
If we multiply this up by the total population, the US does squeak out a win, by a very tiny margin. As long as the EU is considered as separate countries, as a block the EU donates almost twice as much as the US.
Barely ahead of Japan. Notice that Norway, with 5 million people still donate more than 1/10 of what the 300 milion people of the US does.
America is not a particularily generous donor, and certainly does not donate "more than everyone else put together"
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