Economy The US National debt is 28 Trillion, the value of US stock market is 43 Trillion=never gonna pay

Loiosh said:
Does anyone on Sherdog know how it actually works?

I sure as hell don't.
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You mean why we seem to have infinite debt? Its not super complicated.

The government borrows at intrest rates less than the rate of inflation. Their debt "shrinks" over time just by waiting. Since the government can't die, it just waits.

As long as they can make the interest payments, the "principal" goes away on its own.

For example, ww2 put the government 260 billion in debt. At the time, paying all that off wasn't an option. Paying any significant amount wasn't an option. The government bonds were at 1.5% though. Paying that rate of 3.9 billion per year is absolutely on the table. After that, keep paying and wait.

Today, 260 billion really isn't that big of a deal. The government can wait until debt isn't a big deal through inflation.
 
Day Drinking said:
You mean why we seem to have infinite debt? Its not super complicated.

The government borrows at intrest rates less than the rate of inflation. Their debt "shrinks" over time just by waiting. Since the government can't die, it just waits.

As long as they can make the interest payments, the "principal" goes away on its own.

For example, ww2 put the government 260 billion in debt. At the time, paying all that off wasn't an option. Paying any significant amount wasn't an option. The government bonds were at 1.5% though. Paying that rate of 3.9 billion per year is absolutely on the table. After that, keep paying and wait.

Today, 260 billion really isn't that big of a deal. The government can wait until debt isn't a big deal through inflation.
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Thanks.
 
degoj99 said:
This is what trashed Yugoslavia financially. Tito, unlike most dictators, understood he was mortal. So he borrowed like crazy and life was nicer than economic fundamentals would have otherwise allowed, then he died, and the bills came due. Maybe the difference is we can just tell China LOL we just nationalized all the companies & real estate you bought and aren't paying shit on the debt.
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May it be so. Just like that.

And any other debt day we aren’t paying.
 
It’s not “real” money. The more you look into it the crazier it is.

It’s like the stock market or Bezos and Musk being worth billions.
It’s not like they have a billion dollars in their bank account.

It’s based on speculation. Countries don’t actually pass dollar bills back and forth (unless you’re Obama and need to appease Iran).
The only thing behind the American dollar is a conglomerate of banks speculating how much your money is worth.
 
The net worth of the US is roughly 200 trillion, even after we subtract our debts.
 
You don't need a global currentcy to have a global economy. Who do you guys think holds all this debt? The #1 holder is...US citizens and companies. Pensions, 401k's, etc etc all hold US bonds. Those target date retirement funds that are popular and people put a bit of each paycheck in? As people approach retirement, it's less equities and more bonds in those accounts. Uncle Sam owes you a bit of $ because you hold some 10 year notes in your 401k...are you seriously worried you won't get paid? Or are you worried about hyperinflation, because we aren't really seeing any evidence of that either.

Another large holder as has been mentioned is China. Worried they'll stop buying US debt anytime soon? That they'll what, call in our debts? Not anytime soon. There's not enough buying power globally without the US to support China's exports (which keeps their economy viable). If they stop buying US treasuries, what do you think that would do the dollar relative to the Chinese Yuan? If the dollar gets devalued that way, the "cheap Chinese crap" that us Americans love to buy wouldn't be so cheap. US products would be as cheap or cheaper, and that would crush China's economy. It likely won't stay that way forever, but it will for quite some time.

Also, Japan actually holds more of our debt than China.
 
djacobox372 said:
The net worth of the US is roughly 200 trillion, even after we subtract our debts.
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So we have to sell the west coast and our children? What does our net worth mean? We can get more credit to go further in debt?

end the FED, put congress back in its constitutional role of the printers of money.

How did the FED even get that power? It’s right there in the constitution
 
4daLuLZ said:
Republicans lost so of course the National Debt is now a major issue.
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Well or it’s not. And money doesn’t mean anything. In that case, give us all 10k stimulus checks. Print that shit out.
 
national debt is never meant to be paid off, just eternally rolled forward.
 
How far is the USA or anyone else from monetizing debt?
 
Rocco Siffredi said:
thanks Obama!!!! <-- yes the debt doubled under obama and at some point the debt is so high that the interest is so high and it is hard to pay it off. So remember that Trump was carrying all this interest from obama and also remember that the government grew under obama which makes debt go up.

Now add covid relief to that


But President Bidet will fix it all up.
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Trying to defend Trump on that issue is a good way to sound clueless. Trump was really lucky in that a global economic boom started late in the year before he took office. It was a perfect time to start taking care of the budget deficit and look great by just riding the global wave, especially since he had promised to cut the debt during his campaign. However he instead actually increased the deficit significantly, during an economic boom, and used it to do things like lower the taxes for the rich which certainly didn't stimulate the economy enough to compensate, let alone to increase revenue, since they of course weren't at high enough levels to have that effect, which was pretty obvious. That's incredibly irresponsible, and self-serving in his case since he's gained so much from his own policies. This was also a systematic effect of his policies and most certainly not something that only occurred once the pandemic started.

But of course we'll always see posts like yours since so many Americans treat politics like sports.
 
Soon the US needs to print money, just to pay the interest on the loan
 
Squarechoke said:
Trying to defend Trump on that issue is a good way to sound clueless. Trump was really lucky in that a global economic boom started late in the year before he took office. It was a perfect time to start taking care of the budget deficit and look great by just riding the global wave, especially since he had promised to cut the debt during his campaign. However he instead actually increased the deficit significantly, during an economic boom, and used it to do things like lower the taxes for the rich which certainly didn't stimulate the economy enough to compensate, let alone to increase revenue, since they of course weren't at high enough levels to have that effect, which was pretty obvious. That's incredibly irresponsible, and self-serving in his case since he's gained so much from his own policies. This was also a systematic effect of his policies and most certainly not something that only occurred once the pandemic started.

But of course we'll always see posts like yours since so many Americans treat politics like sports.
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The tax rate really doesn't matter if the government can just print however much money they want. In 2020, they printed something like 40x the difference in revenue from his tax cuts.
 
Squarechoke said:
Trying to defend Trump on that issue is a good way to sound clueless. Trump was really lucky in that a global economic boom started late in the year before he took office. It was a perfect time to start taking care of the budget deficit and look great by just riding the global wave, especially since he had promised to cut the debt during his campaign. However he instead actually increased the deficit significantly, during an economic boom, and used it to do things like lower the taxes for the rich which certainly didn't stimulate the economy enough to compensate, let alone to increase revenue, since they of course weren't at high enough levels to have that effect, which was pretty obvious. That's incredibly irresponsible, and self-serving in his case since he's gained so much from his own policies. This was also a systematic effect of his policies and most certainly not something that only occurred once the pandemic started.

But of course we'll always see posts like yours since so many Americans treat politics like sports.
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I agree but lowering taxes also involved taxing overseas profits. The net result was a 4% increase in tax revenue. Problem is Congress and he signed budgets that outpaced that revenue increase
 
Day Drinking said:
You mean why we seem to have infinite debt? Its not super complicated.

The government borrows at intrest rates less than the rate of inflation. Their debt "shrinks" over time just by waiting. Since the government can't die, it just waits.

As long as they can make the interest payments, the "principal" goes away on its own.

For example, ww2 put the government 260 billion in debt. At the time, paying all that off wasn't an option. Paying any significant amount wasn't an option. The government bonds were at 1.5% though. Paying that rate of 3.9 billion per year is absolutely on the table. After that, keep paying and wait.

Today, 260 billion really isn't that big of a deal. The government can wait until debt isn't a big deal through inflation.
Click to expand...
The interest payments on the debt are like two thirds of the military budget these days. That is a huge figure. Social security is also the biggest spending done by government. I think at this point about half of the US spending is spent on debt.

Also, with US bonds so low why would anyone purchase them?
 
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