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US Published National Debt: $28T. The Truth: $146T. Each Taxpayer's Share: $951k
- sharemywin 5y agoHere's an interesting article about how much the total US is worth. https://finance.yahoo.com/news/much-entire-united-states-america-170634255.html#:~:text=Total%20U.S.%20assets%20amount%20to%20about%20%24225%20trillion https://finance.yahoo.com/news/much-entire-united-states-ame.... It's interesting about how much is owned by foreign corporations and other entities. basically we slowing turned our entire workforce into indentured servants to foreign "investors"
- RealityVoid 5y agoThere is this old joke that if you owe the bank 10 thousand dollars, it's your problem. But if you owe the bank 10 million dollars, then it's the bank's problem.
- boringg 5y agoWhat would be more interesting if this was done for all countries of the world. The web of connectivity is quite fascinating.
- vmception 5y agoThe nationalism is for the plebs. The entire point of the United States is for foreign investors to come to this continent and lever up on the resources here. That's how this reign started, culminated into the United States, and continued. Over the last 600 years there was a brief moment when Andrew Jackson was like "hey stop that", and then 80 years later they all came back and got the second central bank formed and slapped his face on a $20 fiat bill for the lulz. Its actually an ongoing gag, when you see it from that perspective.
- janandonly 5y agoThis is more a discussion of semantics than about the amount itself. The way I read the statistics is that the current debt is $28T of money that is already spent while the quoted debt of $146T is the amount of money needed to be spent to fill full current promises and expenses. It's interesting that since the USA got off the gold standard in 1971[1], and thereby all countries that had a currency backed by dollars, the average household income has risen 5x but the price of goods like a house have gone up 10x. This became possible because all for a sudden money was not backed by gold anymore, but could simply be printed when needed. This created huge money supply inflation [2]. Everything is getting too expensive, and the only reason we don't feel this too much just yet, is because often times cheaper alternatives where available. My parents are in their 70's and they still have furniture that was (second hand) given to them when they got married. Can you imagine an piece of IKEA furniture being used daily and lasting for >40 years? My point about "cheaper alternatives" exactly... [1] https://mises.org/wire/today-1971-president-nixon-closes-gold-window https://mises.org/wire/today-1971-president-nixon-closes-gol... [2] https://twitter.com/WTF_1971 https://twitter.com/WTF_1971
- throwdecro 5y ago> Can you imagine an piece of IKEA furniture being used daily and lasting for >40 years? Yeah. IKEA's not bad.
- chucknthem 5y agoSome of the higher end IKEA stuff is not bad, I have a bed frame that's solid wood, looks great and I could easily keep it for decades. Most of the IKEA furniture I bought in my younger days is compressed cardboard and have been replaced because it was starting to fall apart after a few house moves and wear and tear.
- deleted 5y ago[deleted]
- makoz 5y agoIIRC my parents IKEA dining table is solid wood and we've been using it 20+ years.
- grawprog 5y agoEvery piece of IKEA furniture I've owned has collapsed or fallen apart within 5 years. I've got an old coffee table I carried in on a skateboard when I was like 13 or something that I found during spring cleanup. It's solid and made of real wood. It's been going strong for 20 years now of heavy use and who knows how long it was used before I got it. I can see it lasting another 20 years easily.
- Jensson 5y agoEverything in my home as I grew up was Ikea. It is all there still working 20 years later. If what you are buying isn't holding then you bought some brittle stuff, there is plenty of cheap and sturdy things from ikea but they might not be the best looking furniture.
- hncurious 5y ago
- coding123 5y agoI remember when I was a kid and the number was 4T going soon to 5 and it was like actually something democrats and republicans wanted to tackle. What the fuck did we do?
- outside1234 5y agoPeople got old and wanted social security and medicare The reality is that the Baby Boomers only cared about the deficit when they were paying taxes. Now they aren't (retired) so f it, let's spend on us as much as possible until we die.
- munk-a 5y agoThe US National Debt being viewed like a bad loan is a load of BS - that's a sum invested and leveraged against the projected continued growth of the country and, honestly, nobody on earth has the ability to forcefully collect from the US government.
- mattnewton 5y agoAs far as I understand it, it has nothing to do with creditor’s ability to collect but the interest future creditors will be willing to part with their money for. With an institution even a fraction the size of the US federal government, I don’t think people can reasonably collect, and instead the incentive to take care of current creditors is to give future creditors confidence that their investment is safe. Historically this allows the US to borrow at very low rates.
- merpnderp 5y agoPeople often get all full of bravado about this, but they miss your point. It isn't about the money already loaned, it is about the billions a year the US government needs to borrow to stay functional. Scare off investors and they'll find somewhere else to keep their money safe.
- heinrichhartman 5y agoWho are those creditors? Who set's that interest rate? It's largely the FED, right? What prevents the FED from keeping the interests low, if the US-Gov does not want to pay?
- mattnewton 5y agoWhen we talk about debt, we are usually talking about bills, notes, and bonds the US treasury issues. The Federal reserve does buy lots of treasury bonds but it’s a fraction of the public market as a whole. Most of the debt is held by American institutions and private individuals, then American government agencies and the fed, then the remaining third or so are foreign governments/institutions. https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124 https://www.thebalance.com/who-owns-the-u-s-national-debt-33... My understanding is that the Fed buys treasuries at the market rate and does attempt to keep interest low that way by creating some demand at the current rate, but that it’s ability to influence the treasury rates is not as important as the perception that American debt is rock solid. It works by buying a small amount to “soothe markets” and keep other players interested, and is unable to create all the demand by itself without basically destroying the value of the dollar. Disclaimer: I’m not an economist and probably have massive gaps in the details and mechanics of The US’s fiscal policy (or monetary when we talk about fed creating credit to buy treasuries).
- tomcam 5y agoThese numbers don't include state debts and state pension fund liabilities.
- bserge 5y agoNobody cares anymore. People are working, resources are being extracted, created and traded, economies are rolling. Money is there to facilitate that, but on its own it's pretty much worthless. Just wish inequality wasn't so fucking huge.
- TbobbyZ 5y agoInequality will keep getting greater till businesses stop sleeping with the government AND the government stops handing out free money. Corporations, and that means executives, got fatter cause they lined their pockets with all that free covid money.
- boringg 5y agoOn the inequality front - I just wish the media didn't fan the flames all the time and make it feel like the only thing that matters. If I didn't know how the rest of the world lives I probably wouldn't care as much about it. If I see stories about it all the time and people flaunting their wealth it aggravates me. I also recognize it is a real problem and we can solve it likely through policy/political will power. It in and of itself is not going to solve our problems.
- adventured 5y agoIt is exceptionally deceptive, particularly in massive economies like the US which produce dramatic scaling outcomes like a Bezos or Gates, an Apple or Netflix or Walmart. China is going to struggle with that same issue persistently. And it's also true that it's pretty clear the US median wealth figure should be higher than it is, considering the vast average wealth figure in the US. The gap between those two numbers should not be as great as it is. And blatantly the bottom 50% of the population should have a lot more wealth than they do at present. Maybe if the US had eg a good universal healthcare system (and no more medical bankruptcies), half of the country wouldn't mind so much that that median vs average wealth gap is what it is. Social contracts are important. You get this, they get that. As it is, the US social contract is not so great these days, compared to other affluent peer nations. The US has a large welfare state and gets a lot less for its spending compared to other peers. If our healthcare costs matched Britain per capita, Medicaid could instantly expand to cover 40-45% of the population for example, at no additional cost.
- TbobbyZ 5y agoFlat tax, cut spending, cut welfare programs, fire everyone in the government who overspends the budget during their term. Problem solved.
- TbobbyZ 5y agoAhhh I love left wing hacker news. Lots of down votes on conservative principles, zero responses.
- msla 5y agoFlat tax is regressive: https://www.investopedia.com/terms/f/flattax.asp https://www.investopedia.com/terms/f/flattax.asp > While a flat tax imposes the same tax percentage on all individuals regardless of income, many see it as a regressive tax. A regressive tax is one in which the government taxes high-income earners at a lower percentage of their income and low-wage earners at a higher percentage of their income. > The tax is seen as regressive due to a more significant portion of the total funds available to the low-income earner going to the tax expenditure. While the upper-income payer still pays the same percentage, they have enough income to offset this tax load. Cutting spending never seems to involve military or police or coal subsidies... "Welfare" doesn't exist anymore: https://fivethirtyeight.com/features/most-welfare-dollars-dont-go-directly-to-poor-people-anymore/ https://fivethirtyeight.com/features/most-welfare-dollars-do... Fire anyone in government who overspends? OK, how do you define overspending?
- TbobbyZ 5y agohttps://youtu.be/EPjrFjAxwlw https://youtu.be/EPjrFjAxwlw
- david-cako 5y agoInvisible works require invisible funds. Don't worry about it, it's not good for you.
- m_ke 5y agoSounds like we need to start taxing the rich a lot more to pay it off.
- deleted 5y ago[deleted]
- TbobbyZ 5y agoIf you tax 100% of the money rich people have, it wouldn’t even put a dent in the debt.
- ceejayoz 5y agoSure it would. We could pay the entire thing off with that. https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent... > The wealthiest 1% of Americans controlled about $41.52 trillion in the first quarter, according to Federal Reserve data released Monday. Can't do it again as easily, of course.
- TbobbyZ 5y agoMost rich people don’t have all their wealth in cold hard cash. They have assets. You can’t force rich people to sell their assets. And if you did, it would crash the economy.
- jfengel 5y agoIt's a misleading way of calculating the number, since it refers to all of the future debt obligations, including Social Security out many decades -- but also ignoring the fact that we'll be collecting taxes all that time. It's a bit like concluding that you're a million dollars in debt because you are going to need to buy food for the rest of your life. I suppose it's true -- it is something you need to plan for. But it's misleading to suggest that it means you're automatically destined for bankruptcy. The fact is that Social Security is in trouble: the pay-as-you-go plan doesn't work with an increasing lifespan. The establishment of the Trust Fund didn't really solve it -- it really just increased the size of the federal government without having to explicitly borrow money (and then still somehow managed to also have to explicitly borrow money). But that doesn't make "$146T" a meaningful number. The meaningful number is 2033, the year Social Security is projected to run out of money. Also, conveniently, the year I qualify for Social Security -- this is something Gen X'ers have always expected, though it got worse during the pandemic. That doesn't automatically mean we won't get anything, but it does mean that the government is going to have an even harder time meeting its obligations.
- megablast 5y agoWouldn’t the date it runs out of money be pushed out further due to increased deaths during the pandemic?
- ceejayoz 5y agoThat might be confounded a bit by https://www.ssa.gov/benefits/survivors/ https://www.ssa.gov/benefits/survivors/.
- smaryjerry 5y ago600,000 over the last two years may seem like a lot of deaths at face value but over the same period of time about 4,500,000 died from other non COVID things and 6,000,000 people were born. So the deaths from COVID are relatively small in comparison. Plus the debt only increased due to COVID as they printed and spent trillions upon trillions of dollars.
- 5y ago
- VictorPath 5y ago> medicare...social security....pension & retiree Funny how all the money given to Raytheon etc. to fund 20 years of Afghan war and nation building, and military bases all over the world never adds any debt! The only government spending lobbyists and think tanks ever see is the spending that I might at some point see some benefit from.
- literallyaduck 5y agoIf America defaults and wipes the foreign debt, what happens worldwide?
- ivalm 5y agoWhy would it default? It has USD (fiat it controls) denominated debt, it can literally pay any debt through monitory expansion.
- literallyaduck 5y agoNot that it would, it just a thought experiment. Hyperinflation and passing the tax via watering down the money supply to the foreign investors is essential the same as default right?
- Ekaros 5y agoNot exactly, but end result is very much the same. Raise of rates you have to pay for new loans to above your inflation rate. Probably overall you have slightly less to pay as risks are lower, but it won't be pretty.
- medvezhenok 5y ago> Why would it default? It has USD (fiat it controls) denominated debt, it can literally pay any debt through monitory expansion. Not if it wants to be able to borrow in the future... Look at what happened in 1978 - they had to issue non-USD bonds since foreign banks weren't willing to purchase USD bonds: https://en.wikipedia.org/wiki/Carter_bonds https://en.wikipedia.org/wiki/Carter_bonds
- mywittyname 5y agoI don't think we want to find out. Best, and most probable case, the government renegotiates the debt and agrees to pay stiff penalties. Worst case? Countries start seizing assets worldwide. Maybe just America government assets, maybe also American citizen's assets. Who knows how far that escalates. Perhaps the government will reimburse citizens, maybe they will sabre rattle. It's hard to tell. This is like Brexit. It's really hard to predict what will happen as a result, but we know it's going to be both bad, and far reaching. I strongly suspect that the Administration, Treasury, and Fed all have provisions in place for if this were to happen. The debt ceiling debacle has been getting worse every year, and given the events of 2020, it's not crazy to think that there is a real possibility of default. There are probably members of Congress who are hoping for a default, thinking it may cripple the country.
- kingforaday 5y agoIf I were to accept the numbers as real and accurate. Am I correct to assume $951k over my "working" lifetime? Assuming if I start working at 18 and stop at 67, is that 951K "owed" over that time period? ~20K/yr in taxes owed to repay the debt. Is this correct thinking? Asking for a friend. :)
- mempko 5y agoThat's the amount that went into the private sector. It's literally how much money went into the private sector, every penny of it. To put it another way, if the government didn't spend, then the private sector would get less income. Or, every American would be fiscally poorer. One's spending is another person's income.
- ivalm 5y agoWhat matters is velocity of money, and to be fair that number has gone down.
- ivalm 5y agoYes, but better since with inflation the “real” dollars are lower. At 3% inflation that 20k in 30 years is like 8k now.
- glenstein 5y agoNumerous good responses already, but basically the first thing you should do when you see anyone talk about The Debt is say "Okay, now do assets and revenues." The second thing you should do is note that talk of "unfunded liabilities" is a 10 year old debunked talking point that invites you to imagine future spending over an infinite horizon without setting it side by side with future revenue. Nobody will ever give you a clear, simple explanation of why you should think that way. The third thing is take to heart some good points being raised here - debt is an investment in U.S. growth and not just a bad loan you are carrying around, the whole thing gets reframed if you consider what the U.S. is "worth", and probably many more after this post has been up for an hour or two. I think articles like this really highlight the value of a place like hackernews. The instinct to tear apart assumptions and unstated premises is at its best in response to articles like these, so I tend to upvote these items even though I disagree with their framing.
- adventured 5y agoAnd since that $146t figure is long-term obligations looking out decades, the US net worth also must be adjusted for future terms matching those forward decades. Even a modest growth rate applied to the US asset base over 30-40 years produces an extraordinary sum. As you note, the people that like to pretend the $146t is actual debt, go out of their way to evade such discussions. Since the peak of the real-estate bubble circa 2007 (right before household assets dropped), US household wealth has more than doubled, while household debt has remained very tame by comparison. The gain has roughly been $66t to ~$145t since 2007, in household assets. The debt increase has been $14.6t to ~$17.3t. So nearly $80 trillion in added wealth, stacked against $2.7 trillion in new debt, over ~14 years. That's beyond extraordinary. You can hear the skeptics though: yeah, but that's bubble wealth; ok, chop it in half, $40t stacked against $2.7t in new debt, still extraordinary. Over that time US households produced more new wealth than China did, to put that gain into perspective (and yes, most of it went to the top 1/3). Also interesting, the debt of US states has shown no consequential increase in those 14 years. The total debt of the states went from $3t to $3.23t. That's another great positive for the US when it comes to debt (stacked against the growing federal debt mess of course). States fortunately often have restrictions on deficits.
- cs702 5y agoThis is disingenuous, alarmist, click-bait, bulls**t. The $28T figure consists of: * ~$6T held by the Federal Reserve: https://fred.stlouisfed.org/series/FDHBFRBN https://fred.stlouisfed.org/series/FDHBFRBN -- this is money that the government owes, quite literally, to itself, made possible by the independence of the Federal Reserve, which has been buying government obligations to keep interest rates low. * ~$7T held by foreigners: https://fred.stlouisfed.org/series/FDHBFIN https://fred.stlouisfed.org/series/FDHBFIN -- this is money that will have to be paid to foreigners, over the long run. * ~$15T held by US taxpayers, calculated as total held by the public (https://fred.stlouisfed.org/series/FYGFDPUN https://fred.stlouisfed.org/series/FYGFDPUN) less total held by foreigners (above). Thus the US federal government owes $15T to taxpayers. If you have a bond index in your 401(k), then YOU are one of those taxpayers to whom the US government owes those $15T. The federal government owes money TO you. Your share is how much you will receive. The social-safety-net figures in excess of the $28T are future obligations... also owed to, guess who? US taxpayers. If you expect to benefit from Medicare and/or Social Security in your old age, then YOU are one of those taxpayers to whom the US government owes those future obligations. The federal government owes those obligations TO you. Your share is how much you will receive.
- Ekaros 5y agoI think it is reasonable to count debt that is owned to other tax payers. As clearly that debt is not going to be defaulted on so taxpayers not owning it must pay it back to someone else...
- cs702 5y agoIt makes no sense for a single taxpayer to look at how much will be owed over time to millions upon millions of other taxpayers, without taking into account that all of those taxpayers are also simultaneously paying and will be paying taxes.
- lettergram 5y agoFor those interested, I wrote a website that lets you easily contact your local, state, and federal representation. Still building it out, if anyone has anything they'd like added please let me know: https://vocalvoters.com?category=increased%20government%20spending&sentiment=Very%20Opposed&policy_or_law=raising%20the%20debt%20ceiling https://vocalvoters.com?category=increased%20government%20sp... Note, the current options are all based on who was willing to work with me. If you have any suggests happy to add.
- mempko 5y agoEveryone reading this needs to watch The Gaurdian's short video about government debt with David Graeber. https://www.youtube.com/watch?v=LxJW7hl8oqM https://www.youtube.com/watch?v=LxJW7hl8oqM It's amazing how little the general public and especially our elected officials understand this.
- 999900000999 5y agohttps://www.politifact.com/personalities/truth-accounting/ https://www.politifact.com/personalities/truth-accounting/ It's worth researching the bias of your source before taking it too seriously. Like jfengel said, they're using funky math. Oh no I'm over 2 million dollars in debt because over the next 40 years I'll probably end up spending that much money on food and housing. The national debt itself is basically a fiction, it has absolutely no bearing on anyone.
- crobertsbmw 5y agoI don’t understand how social security isn’t a pyramid scheme. It seems to me like something we should just do away with.
- TbobbyZ 5y agoAmen. It takes away personal responsibility.
- ceejayoz 5y agohttps://www.washingtonpost.com/blogs/ezra-klein/post/is-social-security-a-ponzi-scheme/2011/08/25/gIQA2t0dcL_blog.html https://www.washingtonpost.com/blogs/ezra-klein/post/is-soci... > The superficial similarity to a Ponzi scheme is that different sets of investors are relying on future investors, or at least future growth, to get paid back. But that defines a Ponzi scheme so broadly as to make the term meaningless. In that definition, any intergenerational transfer system is a Ponzi scheme. > What makes a Ponzi scheme a Ponzi scheme is that it’s a giant fraud. People think they’re investing in postal stamps. Their money is actually being invested in nothing. In Social Security, conversely, it’s perfectly clear what is going on. Every year, Social Security’s actuaries release an insanely detailed report on the system’s finances, its balance of payments, the potential problems it could face, and so on. You can read their report here. In a Ponzi scheme, the finances are a secret, and that’s central to the enterprise. In Social Security, they are, as a matter of law, public.
- medvezhenok 5y ago> In a Ponzi scheme, the finances are a secret, and that’s central to the enterprise. Reminds me of the Ponzi that explicitly announced it was a ponzi scheme - kind of like a game of hot potato. You can profit as long as you're not the last one in. Or maybe that's just called crypto :)
- mywittyname 5y agoIt's not a pyramid scheme because there's no promise of returns. One may pay $1,000,000 in social security and receive $0, but other may pay in only $10,000 and receive $100,000 over their lifetime. People who pay into it will get $X, unless the surplus runs out, in which case they get a reduced amount proportional to the amount of money coming in. A pyramid scheme guarantees returns, and those guarantees can, and will eventually, exceed the amount of money held by the scheme. Social security makes no such guarantee. Social Security is basically a modified tontine. You pay in during your working life, and then receive payments at some age until you die. Like a tontine, the longer you live, the more payout you receive.
- jazzyjackson 5y agoAnother way to think of "debt" is "money supply" The more debt the US government goes into, the more money there is to go around.
- goalieca 5y agoLiabilities are different than debt.
- DSMan195276 5y agoI honestly don't get why anybody ever mentions the "taxpayer's share" as though it means anything. Yes we have a lot of debt, but the debt has actual terms for paying it, it's not like someone can go "BTW we expect that $28T in the mail tomorrow" and we'd have to pay up. IE. I own a house, which costs more than I make in a year. But the bank is not allowed to just email me tomorrow and ask for all the money, I have 30 years to pay it off with a set schedule I'm capable of meeting, so the actual amount of debt is pretty irrelevant.
- hartator 5y agoAnother figure I like to focus on it's public spending as percentage of GDP. In 2020, the U.S. government has spent 46.18% of the total GPD. Which means almost half of every economic activities in the U.S. were directly spent by the government. I think it's a more interesting number than debt or taxation as you can immediately see how much the government controls the economy whereas debt and taxation are just technically playing the money supply at the end of day.
- dragonwriter 5y ago> In 2021, the U.S. government has spent 46.18% of the total GPD. Even for Fiscal Year 2021 (which ends tomorrow), we won't have solid GDP numbers for a while, so that's at best speculative, and higher than most projections I’ve seen (most of which are down several points from 2020, which was a little below that.) If the reference is to calendar year 2021 (which is the most natural unqualified reference), its even more speculative, as there is a day more than a full quarter of the year left. > Which means almost half of every economic activities in the U.S. were directly spent by the government. No, it doesn't. While GDP is the most common current measure of economy size, and may vary in proportion to total economic activity, it by design does not capture all economic activity. GDP measures end-purchaser value of production, not total economic activity. Lots of economic activity is (for instance) resale, which doesn't matter to GDP.
- hartator 5y ago> Even for Fiscal Year 2021 Sorry meant 2020. The number is from wikipedia and is not speculative as far as I know: https://en.m.wikipedia.org/wiki/List_of_countries_by_government_spending_as_percentage_of_GDP https://en.m.wikipedia.org/wiki/List_of_countries_by_governm... > Lots of economic activity is (…) resale, which doesn’t matter to GDP. The government reported expenses don’t included internal resale as well. GDP and public spending will go to infinite if it does, I fail seeing why it’s relevant here?
- GoodJokes 5y agoGovernment finances are not like household finances and I wish people were called out when they use that as a talking point to say we need to deal with the deficit. The dollar is the currency of the world and we actually way more debt capacity than what we currently have.