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Where is the funding going to come from?! As a non-American, I get worried by all this funding when America is in serious debt. :(

• village-idiot 8y ago
  A few billion is literally nothing compared to our overall balance sheet. If you’re worried about American debt, you need to look at the pentagon and social security, not our research efforts.
• emptybits 8y ago
  I don't disagree with the important question of "Where does the money come from?" (Perhaps, it's also, "What didn't we fund because of this?") But FWIW, America is not unique in its serious debt situation and as a percentage of GDP, it's not unusual. Many EU nations are in the trillions of debt ballpark. Also China, Canada, Australia, etc. In fact, some of those nations exceed America in national debt per capita. [1] I write this as a Canadian. We're also a nation of serious debt and I sometimes wonder where money for my government's big projects comes from... [1] https://en.wikipedia.org/wiki/List_of_countries_by_external_debt https://en.wikipedia.org/wiki/List_of_countries_by_external_...
  • galaxyLogic 8y ago
    From the link it seems that all major economic powers have a large "external debt". Then who are the creditors? If every country paid their debt, where would the money end up? And I see from the article that "... while a country may have a relatively large external debt (either in absolute or per capita terms) it could actually be a "net international creditor" . Wouldn't it be better to focus on this "balance of debts vs. assets?"
    • jchanimal 8y ago
      Accountants and economists will think in terms like cash flow, net present value, opportunity cost, etc. In that way of thinking rationally you want as much debt as you can carry. State actors with control of money supply are even less worried about solvency.
    • konspence 8y ago
      >Then who are the creditors? If every country paid their debt, where would the money end up? At least in the US, most of the funds would end up in private citizens or corporations in the form of treasury bond repayments.
    • gaius 8y ago
      Then who are the creditors? The best analogy I think is that we borrow the money from our future selves. If we invest it well then our future selves will enjoy the wealth in retirement. If we fritter it, we will be destitute in our old age.
    • OscarCunningham 8y ago
      The governments owe money to the public.
    • kortilla 8y ago
      >Then who are the creditors? If every country paid their debt, where would the money end up? Bond holders. The us treasury holds bond auctions all of the time to raise money.
  • y4mi 8y ago
    The debt between European countries started with the second world war. I was taught that this is one of the strategies chosen to discourage further wars, as declaring it would destroy billions of your own money.
    • adrianN 8y ago
      How is destroying billions if virtual currency a bigger discouragement that destroying billions of real, physical assets?
      • adventured 8y ago
        I agree with your point. There should be some skepticism that debt discourages, rather than encourages war. In more militaristic or authoritarian nations, if the debt were great enough, it could be an incentive to invade the neighbor/nearby country you owe it to in order to destroy it (assuming that scenario). One of the several reasons Iraq invaded Kuwait, is that Kuwait refused to forgive $14 billion in loans (to Iraq) accrued during the Iran-Iraq war. Iraq's annual GDP in the 1980s was $40b to $60b depending on the year, to give you some idea of their ability to deal with the $14b in debt held by Kuwait (it was a considerable sum to them in the 1980s; it might be like the US owing Panama or Singapore $5 trillion today). https://en.wikipedia.org/wiki/Invasion_of_Kuwait#Dispute_over_the_financial_debt https://en.wikipedia.org/wiki/Invasion_of_Kuwait#Dispute_ove...
        • srtjstjsj 8y ago
          Another point of context, the US spent $2.4T on the Iraq+Afghanistan wars. Invading Kuwait over $14B debt is a strange leap, since Iraq could far less expensively simply default. Anyway, it's the wrong direction -- $14B debt to Kuwait would make Kuwait less interested in invading Iraq for risk of forcing default. But either way, the value of the oil spoils (in either direction) dwarfs the cost of the debt.
      • vkou 8y ago
        Because generally, the rich are the ones who miss out in the former, while the poor miss out on the latter. Someone whose house gets destroyed will lose out a lot more from that, then from some small fraction of their pension fund going belly up because the belligerent nation has stopped making bond payments. Since wars tend to be started by the rich (and their proxies), and fought by the poor, this puts skin in their game. At least, that's the reasoning. I don't really agree with it.
  • nxcho 8y ago
    External debt is not the same as national debt and does not in it self say very much about the health of the public sector economy, since it includes private debt including accounts held in the country by foreigners for business reasons, tax evasion etc.
• synaesthesisx 8y ago
  Debt is irrelevant when you can literally print money out of thin air. There are many creative ways of doing so, particularly when you're a global superpower
  • freedomben 8y ago
    Not sure why this is being downvoted. You are correct. I suspect the downvotes are because people don't read carefully and assume you are endorsing it, despite the fact that nowhere did you say it was good or ok, simply that they can. There have already been indications that the US intends to print their way out of debt. We have already printed billions over the past few years. If you look at graphs and charts of inflation, it's breathtaking.
    • 0th_Place 8y ago
      Your last paragraph is very misleading. While it's true that the US has printed billions of dollars in the last few years, that is not all that significant when you consider that we have trillions in circulation. Also, our inflation rate is far from breathtaking, and has been consistently hovering around 2% a year for decades (https://fred.stlouisfed.org/series/T10YIE https://fred.stlouisfed.org/series/T10YIE)
      • freedomben 8y ago
        I'm not generally a "don't trust the government numbers" kind of person, but in the case of inflation their numbers are wrong. They don't capture true cost of living changes and the reduction in purchasing power. This article gets at some of the things I had in mind when I wrote my comment: https://www.investopedia.com/insights/how-will-fed-reduce-balance-sheet/ https://www.investopedia.com/insights/how-will-fed-reduce-ba... Also I apologize for lack of coherence. I'm very tired and should have gone to sleep 6 hours ago. Side note: I really like your user name :-)
        • 0th_Place 8y ago
          The Bloomberg article you linked in reply to another comment about the mis-measurement of CPI was very interesting, but even the alternative measurements discussed in that article estimated inflation to be below 3%. The Investopedia article discusses how the Fed will reduce their balance sheet, which is actually more or less the opposite of printing money. During the Great Recession, the Fed bought a lot of financial assets (i.e other people's debt) in order to restore faith in the economy and prevent a complete meltdown. Now, they have to decide whether to sell these assets or hold them to their maturity. Regardless of what they choose, they will be receiving cash either in the form of the sale price or dividends. The Federal Reserve has a mandate to keep inflation rates low, and they generally do a very good job at that. That doesn't mean we shouldn't worry about our national debt, but I wouldn't be too worried about hyperinflation now or in the near future.
• ww520 8y ago
  From the appropriation bill. Don't worry about the debt. The debt is used to create money.
• daenz 8y ago
  Why are you worried if $1.2B of American taxpayer dollars is going towards quantum tech if you're not an American taxpayer?
• tdsamardzhiev 8y ago
  America isn't in serious debt. But let's pretend for a minute that it is -- so, how do you intend to make them pay?
  • 0th_Place 8y ago
    When people talk about US debt, they're not talking about something like your credit card bill. When the US needs to take on debt, they do it by issuing Treasury bonds. These bonds are a contract saying that in exchange for your money today, the US government will pay you a fixed interest rate every month until the bond expires. In order to raise the money to pay off these fixed interest rates, the US government can either tax its citizens or issue more bonds. For the past hundreds of years, our government has fulfilled its contracts and paid off the interest on all of its bonds. If we ever neglected to do so (AKA defaulted), it would be MUCH harder for our country to raise money in the future. Also, much of our government's debt is owned by American citizens, so we would be shooting ourselves in the foot, hurting domestic investors, and possibly causing a global economic crash. That's what's making us pay, not some loan shark knocking on the White House door
    • tdsamardzhiev 8y ago
      Well, obviously the US is not going to tell its creditors to go screw themselves. They'll just re-structure the debt in a less favorable for the creditor way. And the latter will agree to that because it has no better options.
      • manquer 8y ago
        That will still tank the economy.. creditors no longer have liquid funds and trust is gone. Any future bond issues will have very interest rates, while the debt now is not actually very large compared to gdp in the U.S and is quite serviceable, if the interest rates become high it will become difficult to service it causing runaway effects and future investments/spending will be hampered leading to all sorts of problems
      • wbl 8y ago