jdwalke

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The significance of the United States' deficit is grossly exaggerated. According to a good friend as well as a reputable professor on campus, the following can be easily shown (i'm too lazy/busy to try it myself). The United States could pay off its entire deficit in one year with the amount of money it gives away to other countries.

Now, why is this significant? One must understand the nature of our countries deficit. Other countries own their respective portions of our debt by means of bonds. Paying off our debt implies other governments "cashing in" on their bonds. Accordingly, it seems as though we may not have complete control over this matter, although my knowledge is insufficient to reinforce this idea.

Regardless, we could easily afford for countries to "cash in" their bonds, and could "pay off" our debt with the money we already give to other countries if it was of any great significance.

Let me know what you think of this argument. I have not yet heard any claims disproving this theory, so I would appreciate your input.

auntybush xi

You're into the Chinese for alot of money.
When the shit hits the fan, and make no mistake it will, you'll be worried then!

Jimi

Yes.... but it doesn't. You can't simply just say, "Don't give money to other countries! Use it to pay of the defecit! The country uses a lot of money in a lot of places that could be used to pay of the defecit. Just out of curiosity... you said a few times that you don't have the knowledge, and that you're too lazy to give valid proof or not.... why bring up the argument?

Justin

You forget, we are the biggest buyer of their goods. If shit hit the fan, there would be a trade embargo and there economy would tank.

CD

Tax the Catholic Church for 1 month... that should do the trick.

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kgilly

It goes both ways though. If there was a trade embargo and we were no longer buying there products we would be buying products from another country at higher prices. It would not impact our economy as much as theirs, but nonetheless it goes both ways.

jdwalke

LOL... Because, like most people, I would rather talk about it than invest the necessary effort into producing factual observations that no one would give a shit about.

Seriously though, I've often wondered about this, but I do not have enough interest in the matter to invest the time necessary to get further proof. I just thought that this idea may have crossed someone else's mind.

jdwalke

What you have pointed out is true. We could have paid off our debts, if given permission by the owners of the bonds. Perhaps countries simply prefer that we give them money _every_ year instead of one .

I do not believe you caught the point of my post though. I meant to suggest that our debt is trivial. It simply means that other countries have invested in our economy. In order to promote global trade, this would seem to be a good starting point.

volfro

I don't think it's entirely signifigant.

As was mentioned, although the US is in debt, it gives quite a bit of monetary support to others--not to mention the enormous amounts of EVERYTHING that we import.

But if worse comes to worse, nobody really messes too much with the US. We've got the biggest guns. It's almost like asking the school bully for the lunch money he stole yesterday. You'll walk away with a black eye and empty pockets.

Insaniteus

What makes the deficit, and the national debt, scary is the interest. Interest ammounts shoot up the higher numbers we're dealing with, and money to pay off high interest amounts is utterly wasted government cash that could've gone to so many other things.

If the deficit and national debt were fully paid off, we could keep our current standard of living on about 1/3 of the tax revenues. However, if things keep degrading, soon it'll take as much as half just to cover the interest alone.... Once the interest surpasses the GDP, and it will, we're fucked. We'll be asking our greatest warning, Russia, for loans.

-Insaniteus-