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I honestly wonder are people that delusional that they overlook the ridiculous debt that the country is in? Don't get me wrong, I am not from America myself but

I honestly wonder are people that delusional that they overlook the ridiculous debt that the country is in? Don't get me wrong, I am not from America myself but I have a lot of friends from there, and I generally don't hear anything good about the 'American dream'. If you take a hard step back, like way back. And take a moment to look at the "situation" with an outside perspective, don't you think it's a little ridiculous that the debt keeps growing, and somehow the numbers get adjusted, and more loans are given. And it makes me wonder, if this is not being actively resolved now, then when? In a 1,000 years? I have a hard time believing that society is going to survive that long with all the idiocracy that's going on.

rainsil 8y ago
The national debt problem is somewhat overblown in popular opinion. Sovereign debt, in a country that pays it in its own currency, is bounded by inflation, not tax receipts. In practice this means that the US can reduce its debt to more manageable levels by permitting mild inflation (something I can see the Fed doing) and instituting greater fiscal responsibility at the federal level (perhaps less likely). Also, it's important to note that strictly speaking, growing debt doesn't matter as long as the GDP grows by the same amount. Of course, that's not happening, so there is a problem. But as long as there is some leeway for inflation to increase (which there currently is), the debt is ultimately manageable.
JDiculous 8y ago
Government debt denominated in one's own currency is not really a serious issue because governments can print their own currency to pay it off. Yes this can result in inflation, but the inflationary effects are vastly overstated. Most of the inflation happens at the point of spending. I recommend reading up on Modern Monetary Theory (MMT) http://neweconomicperspectives.org/2014/01/diagrams-dollars-modern-money-illustrated-part-1.html http://neweconomicperspectives.org/2014/01/diagrams-dollars-...
- seibelj 8y ago
  MMT says that printing money has no effect if you give it to certain people. I’ve yet to hear of a real-world example where a major economy doubles or triples their monetary supply with no negative effect, which is what MMT will have you believe (“don’t give it to the banks - give it to poor people in Idaho!”). If it sounds too good to be true then it is.
  - stephenbez 8y ago
    The US M1 Money Supply has tripled since 2000 according to the St. Louis Fed: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL There have not been issues with high inflation.
  - AlexTWithBeard 8y ago
    The problem is that once the debt is repaid you have to provide something in exchange for that money. If it's good and services, fine, we can produce a lot of these. But if that's land and factories, the country will be owned by foreign investors pretty soon. Not sure if it's a good thing.
  - notfromhere 8y ago
    MMT is economics for morons
    - mac01021 8y ago
      What is the less moronic theory that I should read up on instead?
  - JDiculous 8y ago
    The Fed increased the monetary base by 5x during the Great Recession. Where's the hyperinflation?
- rhacker 8y ago
  Is it really not serious? Is there a possible chance that countries that we get our debt resolved from can just start buying US land and US businesses? Isn't there a reason more and more US companies are re-incorporating in the bahamas or other locations? The net effect of the last 20 years of economic policy will likely be felt... suddenly - when a decision is made by the new owner.
owie829 8y ago
From an outside perspective the problem of household debt to household disposable income is not a uniquely American problem, nor is it even most acute in America. Total household debt as a % of net disposable income is 109% in US. European countries with higher levels (in increasing order) are Greece, Spain, Belgium, France, Portugal, Finland, United Kingdom, Ireland, Luxembourg, Sweden, Switzerland, Iceland, Norway, Netherlands, and Denmark. In Denmark, household debt is 280% of net disposable income. https://data.oecd.org/hha/household-debt.htm https://data.oecd.org/hha/household-debt.htm
deleted 8y ago
[deleted]

rainsil 8y ago

The national debt problem is somewhat overblown in popular opinion. Sovereign debt, in a country that pays it in its own currency, is bounded by inflation, not tax receipts. In practice this means that the US can reduce its debt to more manageable levels by permitting mild inflation (something I can see the Fed doing) and instituting greater fiscal responsibility at the federal level (perhaps less likely). Also, it's important to note that strictly speaking, growing debt doesn't matter as long as the GDP grows by the same amount. Of course, that's not happening, so there is a problem. But as long as there is some leeway for inflation to increase (which there currently is), the debt is ultimately manageable.

JDiculous 8y ago

Government debt denominated in one's own currency is not really a serious issue because governments can print their own currency to pay it off. Yes this can result in inflation, but the inflationary effects are vastly overstated. Most of the inflation happens at the point of spending. I recommend reading up on Modern Monetary Theory (MMT) http://neweconomicperspectives.org/2014/01/diagrams-dollars-modern-money-illustrated-part-1.html http://neweconomicperspectives.org/2014/01/diagrams-dollars-...

seibelj 8y ago
MMT says that printing money has no effect if you give it to certain people. I’ve yet to hear of a real-world example where a major economy doubles or triples their monetary supply with no negative effect, which is what MMT will have you believe (“don’t give it to the banks - give it to poor people in Idaho!”). If it sounds too good to be true then it is.
- stephenbez 8y ago
  The US M1 Money Supply has tripled since 2000 according to the St. Louis Fed: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL There have not been issues with high inflation.
- AlexTWithBeard 8y ago
  The problem is that once the debt is repaid you have to provide something in exchange for that money. If it's good and services, fine, we can produce a lot of these. But if that's land and factories, the country will be owned by foreign investors pretty soon. Not sure if it's a good thing.
- notfromhere 8y ago
  MMT is economics for morons
  - mac01021 8y ago
    What is the less moronic theory that I should read up on instead?
- JDiculous 8y ago
  The Fed increased the monetary base by 5x during the Great Recession. Where's the hyperinflation?
rhacker 8y ago
Is it really not serious? Is there a possible chance that countries that we get our debt resolved from can just start buying US land and US businesses? Isn't there a reason more and more US companies are re-incorporating in the bahamas or other locations? The net effect of the last 20 years of economic policy will likely be felt... suddenly - when a decision is made by the new owner.

owie829 8y ago

From an outside perspective the problem of household debt to household disposable income is not a uniquely American problem, nor is it even most acute in America. Total household debt as a % of net disposable income is 109% in US. European countries with higher levels (in increasing order) are Greece, Spain, Belgium, France, Portugal, Finland, United Kingdom, Ireland, Luxembourg, Sweden, Switzerland, Iceland, Norway, Netherlands, and Denmark. In Denmark, household debt is 280% of net disposable income. https://data.oecd.org/hha/household-debt.htm https://data.oecd.org/hha/household-debt.htm

deleted 8y ago

[deleted]