3 ms·

>accepting that pain now is better than letting the US become a failed state. If you look throughout history, there has never been any nation or empire that ha

>accepting that pain now is better than letting the US become a failed state. If you look throughout history, there has never been any nation or empire that has ever done this. The US will fail just as Rome and others before it.

tribune 10y ago
Doesn't mean we should embrace to keep the financial party going...
dragontamer 10y ago
Last time I checked, if you're $1 million in debt... its your problem. If you're $18 Trillion in debt, its the bank's problem. Just saying. True, $5 Trillion of the debt is held by the US Government in some form (around $2 Trillion is held by the Fed, another $3 is held by Social Security). So it'd be bad for them if the US Government defaulted. And that's why we need to pay back the debt, so that Social Security and the Fed can continue to function. Social Security has lent trillions of dollars to the US Government. They deserve to get their money back.
- maxerickson 10y ago
  The primary banker of the US government is the organized society living in North America.
  - dragontamer 10y ago
    I recognize that, and yes, this is a very important note to consider. The true reason we want to pay off our debt, is because we citizens of the US Government rely upon the debt to be repaid. (Pension funds, Social Security, Investors, and the Federal Reserve are the top lenders to the US Government. NOT China as some people have noted). Indeed, if China became the chief banker, we'd just default and stick our middle finger across the Pacific Ocean. Station a few Aircraft carriers in the Pacific and tell them "Come get your money back, if you dare". But since the debt plays a critical role in our economy (an investor wishes for 7% returns may yearn for 5%+ interest rates of the past), its important to consider the debt from both sides. Yes, the US Government arguably wishes to be debt free. But similarly, the US Public wishes for a safe location to store cash for years-and-years. Long story short: the debt is only a problem if we the public decides its a problem. If that happens, we'd expect interest rates to go up. However, interest rates have only dropped, so that suggests that the market wishes for more debt to be created.
    - pm90 10y ago
      Deliberately defaulting on debts is probably the worst thing for a sovereign nation to do. The governments of other countries may still be do that risking higher interest rates as you mention. However, if the USG ever does that, there will be consequences far more dire than China or SSA or the Fed losing money. And there are many reason for the low rate of interest, but historically, USG securities have been the safest investments, so you have a lot of dollars chasing them. So the USG can set the interest rate low and yet it will be bought up.
      - dragontamer 10y ago
        It just means people will stop trusting the US Dollar. Pretty bad for the US, but I don't think it'd be a catastrophic worldwide event. Interest rates will go up, and it will become even harder for the US to pay back the debts, and it will become much more difficult for the US to borrow money in the future. Bad all around of course, not something to be trifled with. But its a relatively simple prediction to make.
        paavokoya 10y ago
        >It just means people will stop trusting the US Dollar. This means the USG stops exerting political power. and even with all our military, money is more important. Look at Nazi Germany. They failed after exhausting their military because they couldn't keep influencing nations with money.
fapjacks 10y ago
Right. Those history books are a fucking crystal ball. It's all right there for anybody to see.

tribune 10y ago

Doesn't mean we should embrace to keep the financial party going...

dragontamer 10y ago

Last time I checked, if you're $1 million in debt... its your problem. If you're $18 Trillion in debt, its the bank's problem. Just saying. True, $5 Trillion of the debt is held by the US Government in some form (around $2 Trillion is held by the Fed, another $3 is held by Social Security). So it'd be bad for them if the US Government defaulted. And that's why we need to pay back the debt, so that Social Security and the Fed can continue to function. Social Security has lent trillions of dollars to the US Government. They deserve to get their money back.

maxerickson 10y ago
The primary banker of the US government is the organized society living in North America.
- dragontamer 10y ago
  I recognize that, and yes, this is a very important note to consider. The true reason we want to pay off our debt, is because we citizens of the US Government rely upon the debt to be repaid. (Pension funds, Social Security, Investors, and the Federal Reserve are the top lenders to the US Government. NOT China as some people have noted). Indeed, if China became the chief banker, we'd just default and stick our middle finger across the Pacific Ocean. Station a few Aircraft carriers in the Pacific and tell them "Come get your money back, if you dare". But since the debt plays a critical role in our economy (an investor wishes for 7% returns may yearn for 5%+ interest rates of the past), its important to consider the debt from both sides. Yes, the US Government arguably wishes to be debt free. But similarly, the US Public wishes for a safe location to store cash for years-and-years. Long story short: the debt is only a problem if we the public decides its a problem. If that happens, we'd expect interest rates to go up. However, interest rates have only dropped, so that suggests that the market wishes for more debt to be created.
  - pm90 10y ago
    Deliberately defaulting on debts is probably the worst thing for a sovereign nation to do. The governments of other countries may still be do that risking higher interest rates as you mention. However, if the USG ever does that, there will be consequences far more dire than China or SSA or the Fed losing money. And there are many reason for the low rate of interest, but historically, USG securities have been the safest investments, so you have a lot of dollars chasing them. So the USG can set the interest rate low and yet it will be bought up.
    - dragontamer 10y ago
      It just means people will stop trusting the US Dollar. Pretty bad for the US, but I don't think it'd be a catastrophic worldwide event. Interest rates will go up, and it will become even harder for the US to pay back the debts, and it will become much more difficult for the US to borrow money in the future. Bad all around of course, not something to be trifled with. But its a relatively simple prediction to make.
      - paavokoya 10y ago
        >It just means people will stop trusting the US Dollar. This means the USG stops exerting political power. and even with all our military, money is more important. Look at Nazi Germany. They failed after exhausting their military because they couldn't keep influencing nations with money.

fapjacks 10y ago

Right. Those history books are a fucking crystal ball. It's all right there for anybody to see.