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US Debt Clock

40 points by it 6y ago

programmarchy 6y ago
Here's a dumb question. It says $7 trillion of the $28 trillion is owed to foreign governments. To whom is the rest owed?
- itisit 6y ago
  Itself: https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124 https://www.thebalance.com/who-owns-the-u-s-national-debt-33...
- seibelj 6y ago
  Private owners of US bonds, foreign or domestic. The US has an enormous privilege by having the global reserve currency. Through our military and political influence we have also forced several commodities, specifically oil, to only be priced in USD. This has driven global demand for USD in order to pay for goods not exported by the US - everyone needs oil, and oil can only be purchased with USD, so everyone needs USD. This causes countries to export to the US at cheaper exchange rates, basically guaranteeing that US manufacturing is at a permanent disadvantage for low-complexity goods that don’t play into our research strengths. This also allows us to run insanely high deficits, as we can print dollars more easily than other countries without reducing demand for further dollars. However I think the reserve status of USD is under serious threat. I don’t think US citizens care for war and are much more isolationist than politicians want. I don’t think using our military to enforce reserve status will be palatable anymore, and threats from China and experimental currencies like bitcoin will undermine the reserve currency status.
- anm89 6y ago
  Anyone who owns a government bond holds the government's debt. You could hold government debt tomorrow if you wanted to. This includes Both American and non American individuals and companies.
- deleted 6y ago
  [deleted]
- addicted 6y ago
  Americans for the most part.
neolog 6y ago
From a Nobel prize winner. > In other words, those dire warnings we used to hear (and will soon be hearing again) that America faces imminent disaster once government debt crosses some red line were always misguided. We weren’t and aren’t anywhere close to that kind of crisis, and probably never will be. https://www.nytimes.com/2020/12/03/opinion/biden-republicans-debt.html https://www.nytimes.com/2020/12/03/opinion/biden-republicans...
- anm89 6y ago
  Paul Krugman is an idealogue and has a history of making wildly innacurate statements, poor predictions, and failing to understand Econ 101 level concepts. From the same Nobel Prize Winner >“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” He also said > [America] needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.” So I guess having a nobel prize isn't an argument in itself. Of course in both cases he "wasn't being serious" as clearly noted years after it was very obvious that these things were ridiculous things to say and people were constantly calling him out on them, yet he said them.
  - addicted 6y ago
    1 -> He has already accepted he was mistaken. Yet, it’s not so obvious he was wrong, because his argument wasn’t that the internet wasn’t gonna have a huge impact as much as the fact that the fax machine had a huge impact as a communication device and the internet would have a similar impact as a communication technology. He clearly didn’t understand how the internet could go beyond the communication aspect but that has nothing to do with being wrong about the logic but more so not understanding the internet. Something most people didn’t, including people like Bill Gates. 2 -> I’m not sure what was wrong here because this is exactly what happened. Greenspan created a housing bubble to offset the fact that a dot com bubble had just popped. His “needs to create” wasn’t an endorsement of this strategy. It was a prediction of what a conservative governement would need to do, which is exactly what they did. But even setting aside these nuances, even if you think he was wildly wrong(I’m still not sure what he was wrong about #2), it’s not a misunderstanding of Econ 101 or Econ of any level by any measure. At worst it’s a bad prediction of stuff that was basically unpredictable.
addicted 6y ago
Let’s say the worst case scenario happens. All of America’s creditors demand their money back. And let’s assume none of them are Americans who the US government can tax. What actually happens? All the debt is denominated in dollars. The US will simply print dollar bills that match exactly what it owes each creditor and give it to them. And they’re done. But before they do that, they will create a new currency, the USDNew, replace every existing $ with USDNew on a one to one basis, and then pay back their debt in old dollars. And the US will change its constitution to say it doesn’t need to always honor its debt. And the US will say that old$ don’t matter anymore. What will be the impact? New$ will basically become $. The old debt will be completely wiped out for free. All the creditors who decided to fuck with the US will be growth worthless pieces of paper or bits. The US’s reputation will be damaged and the dollar hegemony will be severely weakened, but a lot of people who keep pushing the “debt crisis” narratives aren’t fans of the dollar hegemony to begin with and believe it hurts US exports and competitiveness. So basically in the worst case situation the US would have enjoyed decades of benefits for the dollar hegemony, and will now take the advantages of those benefits to compete inehat will be a slightly more even global economic market. IOW, the US doesn’t get hurt at all.
- gizmo686 6y ago
  I'd go a step farther (or maybe less far). All the US creditors demand their money back. The US prints new $ to pay them. What is the impact? People now have a bunch of $ sitting under their mattress instead of treasuries. However, those treasuries were already effectively as good as $, since the market for them is highly liquid. If someone wasn't going to spend their wealth when it was in the form of treasuries, their not going to suddenly decide to spend it just because it is in the form of $. The real risk in this scenario is not that people are cashing in their debt; but rather the reason they are doing so. If they are cashing in on their debt because they want to get out of USD all together, the US will have a major problem. But that problem is people moving out of USD; the cashing in of the debt is just a symptom. They could also be doing it because they have stuff they want to spend USD on. Generally speaking, we like it when people spend USD, as that is a sign of a healthy economy. But if people suddenly decided to spend all of the wealth they had been saving in US debt, we would be in a very market. But, again, the problem hear is the overheated market; it doesn't matter that the mechanism is people cashing in on their US debt instead of other savings vehicles. For all practical purposes, the effect of the debt occurs when the government re-spends the money they got as a result of issueing the debt. In exactly the same way fractional reserve banking increases the money supply by issuing debt and having the debtors spend it; treasuries increase the money supply by issuing debt and having the debtor (US government) spend it. The only difference is the debtor has the option just increasing the money supply any way. As a practical matter, US bonds play an important role in the financial system, and it is not clear what would replace them if people suddenly stopped using them.
jonahbenton 6y ago
I remember the early days of debt clocks, the huge tallying numbers in Union Square in NYC, and rhetoric, always from Republicans, claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party. Now we know what utter bullshit that was, not only fallacious on the merits- because governments, especially the US, are not households or businesses- but also that those false narratives and warnings were produced with wholly mendacious intent. We also know about proper data visualization and numeric communication, about picking useful numbers, and presenting them in context; and we know about dark patterns, and lying with statistics, and data malpractice. This page is at best a deceptive curiosity. A more fair assessment is that it attempts to induce anxiety while failing to communicate anything of actual utility or insight. Best to just turn it off, come back with something useful. Free speech, and all, sure. But some speech is garbage. Cheers.
- 0xy 6y ago
  >claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party "Leader Schumer and Speaker Pelosi issued this statement in advance of Wednesday’s meeting with the White House on a $2 trillion infrastructure plan [...] we look forward to hearing the President’s plan for how to pay for this package" [1] You're ignoring the partisan rhetoric from the other side, no? [1] https://www.speaker.gov/newsroom/52119-5 https://www.speaker.gov/newsroom/52119-5
  - deleted 6y ago
    [deleted]
- bko 6y ago
  > I remember the early days of debt clocks, the huge tallying numbers in Union Square in NYC, and rhetoric, always from Republicans, claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party. The clock in Union Square wasn't a debt clock. You're thinking of the much smaller display on 44th and 6th. [0] That Union Square clock originally told the time just styled as a single number. Ironically it has recently been reprogrammed to illustrate a critic window for action to prevent the effects of global warming from becoming irreversible [1]. About 7.5 years left. Do with that what you will [0] https://en.wikipedia.org/wiki/National_Debt_Clock https://en.wikipedia.org/wiki/National_Debt_Clock [1] https://www.nytimes.com/2020/09/20/arts/design/climate-clock-metronome-nyc.html https://www.nytimes.com/2020/09/20/arts/design/climate-clock...
jbverschoor 6y ago
The top tech companies are a sizable chunk of that 28T
jl2718 6y ago
The important figure is the bottom line. US total assets and total liabilities. So you see, everything you own is actually borrowed.
malinens 6y ago
I am not American but I am interested in American politics for a very long time. I am not very pro-republican or pro-democrat either but what I have noticed that debt clock becomes much more posted when democrat is in the office. When republicans are in power debt clock magically disapears :)

40 points by it 6y ago

Here's a dumb question. It says $7 trillion of the $28 trillion is owed to foreign governments. To whom is the rest owed?

itisit 6y ago
Itself: https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124 https://www.thebalance.com/who-owns-the-u-s-national-debt-33...
seibelj 6y ago
Private owners of US bonds, foreign or domestic. The US has an enormous privilege by having the global reserve currency. Through our military and political influence we have also forced several commodities, specifically oil, to only be priced in USD. This has driven global demand for USD in order to pay for goods not exported by the US - everyone needs oil, and oil can only be purchased with USD, so everyone needs USD. This causes countries to export to the US at cheaper exchange rates, basically guaranteeing that US manufacturing is at a permanent disadvantage for low-complexity goods that don’t play into our research strengths. This also allows us to run insanely high deficits, as we can print dollars more easily than other countries without reducing demand for further dollars. However I think the reserve status of USD is under serious threat. I don’t think US citizens care for war and are much more isolationist than politicians want. I don’t think using our military to enforce reserve status will be palatable anymore, and threats from China and experimental currencies like bitcoin will undermine the reserve currency status.
anm89 6y ago
Anyone who owns a government bond holds the government's debt. You could hold government debt tomorrow if you wanted to. This includes Both American and non American individuals and companies.
deleted 6y ago
[deleted]
addicted 6y ago
Americans for the most part.

neolog 6y ago

From a Nobel prize winner. > In other words, those dire warnings we used to hear (and will soon be hearing again) that America faces imminent disaster once government debt crosses some red line were always misguided. We weren’t and aren’t anywhere close to that kind of crisis, and probably never will be. https://www.nytimes.com/2020/12/03/opinion/biden-republicans-debt.html https://www.nytimes.com/2020/12/03/opinion/biden-republicans...

anm89 6y ago
Paul Krugman is an idealogue and has a history of making wildly innacurate statements, poor predictions, and failing to understand Econ 101 level concepts. From the same Nobel Prize Winner >“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” He also said > [America] needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.” So I guess having a nobel prize isn't an argument in itself. Of course in both cases he "wasn't being serious" as clearly noted years after it was very obvious that these things were ridiculous things to say and people were constantly calling him out on them, yet he said them.
- addicted 6y ago
  1 -> He has already accepted he was mistaken. Yet, it’s not so obvious he was wrong, because his argument wasn’t that the internet wasn’t gonna have a huge impact as much as the fact that the fax machine had a huge impact as a communication device and the internet would have a similar impact as a communication technology. He clearly didn’t understand how the internet could go beyond the communication aspect but that has nothing to do with being wrong about the logic but more so not understanding the internet. Something most people didn’t, including people like Bill Gates. 2 -> I’m not sure what was wrong here because this is exactly what happened. Greenspan created a housing bubble to offset the fact that a dot com bubble had just popped. His “needs to create” wasn’t an endorsement of this strategy. It was a prediction of what a conservative governement would need to do, which is exactly what they did. But even setting aside these nuances, even if you think he was wildly wrong(I’m still not sure what he was wrong about #2), it’s not a misunderstanding of Econ 101 or Econ of any level by any measure. At worst it’s a bad prediction of stuff that was basically unpredictable.

addicted 6y ago

Let’s say the worst case scenario happens. All of America’s creditors demand their money back. And let’s assume none of them are Americans who the US government can tax. What actually happens? All the debt is denominated in dollars. The US will simply print dollar bills that match exactly what it owes each creditor and give it to them. And they’re done. But before they do that, they will create a new currency, the USDNew, replace every existing $ with USDNew on a one to one basis, and then pay back their debt in old dollars. And the US will change its constitution to say it doesn’t need to always honor its debt. And the US will say that old$ don’t matter anymore. What will be the impact? New$ will basically become $. The old debt will be completely wiped out for free. All the creditors who decided to fuck with the US will be growth worthless pieces of paper or bits. The US’s reputation will be damaged and the dollar hegemony will be severely weakened, but a lot of people who keep pushing the “debt crisis” narratives aren’t fans of the dollar hegemony to begin with and believe it hurts US exports and competitiveness. So basically in the worst case situation the US would have enjoyed decades of benefits for the dollar hegemony, and will now take the advantages of those benefits to compete inehat will be a slightly more even global economic market. IOW, the US doesn’t get hurt at all.

gizmo686 6y ago
I'd go a step farther (or maybe less far). All the US creditors demand their money back. The US prints new $ to pay them. What is the impact? People now have a bunch of $ sitting under their mattress instead of treasuries. However, those treasuries were already effectively as good as $, since the market for them is highly liquid. If someone wasn't going to spend their wealth when it was in the form of treasuries, their not going to suddenly decide to spend it just because it is in the form of $. The real risk in this scenario is not that people are cashing in their debt; but rather the reason they are doing so. If they are cashing in on their debt because they want to get out of USD all together, the US will have a major problem. But that problem is people moving out of USD; the cashing in of the debt is just a symptom. They could also be doing it because they have stuff they want to spend USD on. Generally speaking, we like it when people spend USD, as that is a sign of a healthy economy. But if people suddenly decided to spend all of the wealth they had been saving in US debt, we would be in a very market. But, again, the problem hear is the overheated market; it doesn't matter that the mechanism is people cashing in on their US debt instead of other savings vehicles. For all practical purposes, the effect of the debt occurs when the government re-spends the money they got as a result of issueing the debt. In exactly the same way fractional reserve banking increases the money supply by issuing debt and having the debtors spend it; treasuries increase the money supply by issuing debt and having the debtor (US government) spend it. The only difference is the debtor has the option just increasing the money supply any way. As a practical matter, US bonds play an important role in the financial system, and it is not clear what would replace them if people suddenly stopped using them.

jonahbenton 6y ago

I remember the early days of debt clocks, the huge tallying numbers in Union Square in NYC, and rhetoric, always from Republicans, claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party. Now we know what utter bullshit that was, not only fallacious on the merits- because governments, especially the US, are not households or businesses- but also that those false narratives and warnings were produced with wholly mendacious intent. We also know about proper data visualization and numeric communication, about picking useful numbers, and presenting them in context; and we know about dark patterns, and lying with statistics, and data malpractice. This page is at best a deceptive curiosity. A more fair assessment is that it attempts to induce anxiety while failing to communicate anything of actual utility or insight. Best to just turn it off, come back with something useful. Free speech, and all, sure. But some speech is garbage. Cheers.

0xy 6y ago
>claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party "Leader Schumer and Speaker Pelosi issued this statement in advance of Wednesday’s meeting with the White House on a $2 trillion infrastructure plan [...] we look forward to hearing the President’s plan for how to pay for this package" [1] You're ignoring the partisan rhetoric from the other side, no? [1] https://www.speaker.gov/newsroom/52119-5 https://www.speaker.gov/newsroom/52119-5
- deleted 6y ago
  [deleted]
bko 6y ago
> I remember the early days of debt clocks, the huge tallying numbers in Union Square in NYC, and rhetoric, always from Republicans, claiming debt doom when Democrats proposed spending and ignoring much larger deficits initiated by their own party. The clock in Union Square wasn't a debt clock. You're thinking of the much smaller display on 44th and 6th. [0] That Union Square clock originally told the time just styled as a single number. Ironically it has recently been reprogrammed to illustrate a critic window for action to prevent the effects of global warming from becoming irreversible [1]. About 7.5 years left. Do with that what you will [0] https://en.wikipedia.org/wiki/National_Debt_Clock https://en.wikipedia.org/wiki/National_Debt_Clock [1] https://www.nytimes.com/2020/09/20/arts/design/climate-clock-metronome-nyc.html https://www.nytimes.com/2020/09/20/arts/design/climate-clock...

jbverschoor 6y ago

The top tech companies are a sizable chunk of that 28T

jl2718 6y ago

The important figure is the bottom line. US total assets and total liabilities. So you see, everything you own is actually borrowed.

malinens 6y ago

I am not American but I am interested in American politics for a very long time. I am not very pro-republican or pro-democrat either but what I have noticed that debt clock becomes much more posted when democrat is in the office. When republicans are in power debt clock magically disapears :)