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Started By
Message
re: The Difference in Federal Defict/Debt, and Why the Debt Doesn’t Really Matter
Posted on 12/9/24 at 6:26 am to RFK
Posted on 12/9/24 at 6:26 am to RFK
Ummm...no.
Right now, we are spending nearly one trillion dollars per year to service our massive massive debt.
That's $1,000,000,000,000 per year. That's a one with TWELVE zeros behind it.
OH BTW, over the last 4 years, just the last 4 years, $13,000,000,000,000 has been added to the national US debt.
Did they tell you? All those short term bonds that are financing our US debt are about to be due and new bonds will have to be sold AT HIGHER INTEREST RATES, causing the annual US deficit to go even higher.
Insanity.
Right now, we are spending nearly one trillion dollars per year to service our massive massive debt.
That's $1,000,000,000,000 per year. That's a one with TWELVE zeros behind it.
OH BTW, over the last 4 years, just the last 4 years, $13,000,000,000,000 has been added to the national US debt.
Did they tell you? All those short term bonds that are financing our US debt are about to be due and new bonds will have to be sold AT HIGHER INTEREST RATES, causing the annual US deficit to go even higher.
Insanity.
1
Posted on 12/9/24 at 6:54 am to Reubaltaich
I understand your point. I don’t necessarily agree with allowing the debt to increase, but politicians from both sides are wholly unconcerned.
Case in point: the debt increased by almost $8T during Trump’s term.
The concern about the U.S. federal debt increasing due to refinancing short-term bonds at higher interest rates is somewhat overstated.
While it's true that higher interest rates will increase the cost of servicing the debt, the U.S. economy is resilient and has a long history of managing higher debt levels effectively.
The demand for U.S. Treasuries abroad also remains strong, allowing the U.S. to borrow to at lower rates compared to other nations. And if there is an economic downturn, rates will likely decrease, reducing borrowing costs.
Case in point: the debt increased by almost $8T during Trump’s term.
quote:
Did they tell you? All those short term bonds that are financing our US debt are about to be due and new bonds will have to be sold AT HIGHER INTEREST RATES, causing the annual US deficit to go even higher.
The concern about the U.S. federal debt increasing due to refinancing short-term bonds at higher interest rates is somewhat overstated.
While it's true that higher interest rates will increase the cost of servicing the debt, the U.S. economy is resilient and has a long history of managing higher debt levels effectively.
The demand for U.S. Treasuries abroad also remains strong, allowing the U.S. to borrow to at lower rates compared to other nations. And if there is an economic downturn, rates will likely decrease, reducing borrowing costs.
Posted on 12/9/24 at 6:56 am to RFK
Soon the interest payments will make up half of our annual budget and more.
You cannot possibly spin that to make it not a problem.
You cannot possibly spin that to make it not a problem.
Posted on 12/9/24 at 6:59 am to RFK
We all know the definitions of debt and deficits. The fact that you went thru the trouble of defining them makes me wonder how old you are. Debt always matters. We are paying interest on that debt with our taxes when we could be doing something else with it. And there is a point at which you can no longer pay interest because it gets too high. When that happens the economy will collapse. Banks can't lend money because rates skyrocket. Inflation skyrockets and your currency becomes worthless. I don't know when that will happen but we are getting close. Let's hope Trump can cut spending enough to put it off a lot longer.
Posted on 12/9/24 at 7:01 am to RFK
Not a very enlightened take. While it is true the debt, and deficits which exacerbate it, don’t “matter” in the third-world country sense given we can print money to pay our obligations, it absolutely matters in that too much debt is “digested” via inflation primarily and higher interest rates which must account for inflation.
Posted on 12/9/24 at 7:29 am to RFK
quote:
Secondly, much of the U.S. federal debt is held domestically, either by citizens or U.S. institutions, which means interest payments largely recycle within the economy rather than being lost to foreign entities
How much? What percent?
Does the foreign-held get recycled back to their economy?
Personally, Are you okay with owing someone trillions of dollars on interest as long as they are recycling that debt back to your country? Would you rather pay it off or keep paying interest?
Recycle that debt back to me, then, baw.
This post was edited on 12/9/24 at 7:32 am
Posted on 12/9/24 at 8:10 am to dstone12
quote:Personally, no.
Personally, Are you okay with owing someone trillions of dollars on interest as long as they are recycling that debt back to your country? Would you rather pay it off or keep paying interest?
But we’re not talking about your personal checkbook or family finances.
Countries (and large businesses) must operate on continuous and deep “lines of credit.” Their very nature demands it.
This is essentially what this is.
Posted on 12/9/24 at 8:14 am to RFK
I still need to know how much is being recycled?
Who is recycling? Is it a DEI guy that is studying how climate change affects LGBTs?
We need to know which domestics own this debt or it might as well be foreign.
There are a lot of questions to answer before people will agree to your argument.
If you aren’t willing to answer them, you’re not going to like this thread too much.
Who is recycling? Is it a DEI guy that is studying how climate change affects LGBTs?
We need to know which domestics own this debt or it might as well be foreign.
There are a lot of questions to answer before people will agree to your argument.
If you aren’t willing to answer them, you’re not going to like this thread too much.
Posted on 12/9/24 at 8:14 am to RFK
quote:
I’ve seen these terms thrown around the past couple of weeks and there seems to be confusion between the two, and how they practically affect the economy.
The federal debt and the federal deficit, while interconnected, are distinct financial concepts; the deficit represents the annual shortfall in government revenue compared to spending, whereas the federal debt is the accumulation of past deficits over time, highlighting different aspects of fiscal policy and its implications.
The federal deficit is the amount by which government spending exceeds its revenue in a single fiscal year. When the government spends more than it collects in taxes and other income, it must borrow money to cover the difference, thus increasing the annual deficit. This annual measure reflects immediate fiscal imbalance and can fluctuate with changes in economic conditions, policy decisions, or emergency spending.
The federal debt is the total sum of these annual deficits over time, plus any interest accrued on borrowed funds. It represents the total amount of outstanding government debt obligations. Unlike the deficit, which can be seen as a flow of money, the debt is a stock, accumulating year after year unless there's a surplus to pay it down. It's a measure of long-term fiscal health and the legacy of past fiscal policies.
Here’s why the federal debt isn’t necessarily alarming:
Firstly, the concern over federal debt often overlooks the context of economic growth and inflation. As an economy grows, so does its capacity to manage larger nominal debts. If the debt grows at a rate slower than GDP or inflation, its real burden on the economy might actually decrease. Historical data shows that countries have managed high debt-to-GDP ratios during periods of economic growth without triggering crises, suggesting that debt sustainability is more about economic vitality than the absolute debt number.
Secondly, much of the U.S. federal debt is held domestically, either by citizens or U.S. institutions, which means interest payments largely recycle within the economy rather than being lost to foreign entities. This internal circulation can stimulate economic activity. Moreover, the U.S. dollar's status as the world's reserve currency gives the U.S. unique leverage, allowing it to borrow at lower interest rates, thus reducing the cost of servicing the debt.
This scenario contrasts with countries that must borrow in currencies they do not control, facing higher risks when debt levels rise.
This is why neither party is (apparently) actually serious about reducing our debt.
This Wall Of Text simply screams I Want What I Want When I Want It, And I Want YOU To Pay For It
Posted on 12/9/24 at 8:21 am to Tantal
quote:
service the interest on the debt.
Which, if set by markets would be substantially higher. Fed buying their own bonds, anyone?
How do you think inflation got so high? Why do you think the Bidrn govt. tried so desperately to play it down?
Posted on 12/9/24 at 8:21 am to RFK
quote:
Case in point: the debt increased by almost $8T during Trump’s term.
I'm curious, if you have a breakdown of that added debt, how much was added after February 2020?
Posted on 12/9/24 at 8:28 am to 4cubbies
quote:
I learned this in Econ 1001 a million years ago. The debt doesn’t matter
Then why don't we 10x it and have the greatest of everything in world history?
Roads paved with gold, every welfare queen a millionaire, cities that look like Wakanda?
Because it does matter and you and the OP know it.
Posted on 12/9/24 at 8:30 am to RFK
quote:
Case in point: the debt increased by almost $8T during Trump’s term.
I don't know anyone that is OK with this, or was OK with it at the time. Trump did a lot of stupid shite, and even his supporters will admit. Just saying "Trump did it" does not mean it was good.
But it was Covid so at least there is a somewhat arguable defense. (I still disagree, however)
Posted on 12/9/24 at 8:47 am to RFK
You are technically correct and there are a few situations where the demand for dollars can increase, which would allow for more open market operations.
Everything rests on the demand for dollars remaining high, which underpins our geopolitical interests.
Everything rests on the demand for dollars remaining high, which underpins our geopolitical interests.
Posted on 12/9/24 at 8:58 am to RFK
quote:Stupid. This presumes two things that are plainly false. It presumes we can always continue to borrow by attracting external capital. And it or swines thst the debt payback terms are infinite (they aren’t). We have to contiinually retire and re-borrow money since bonds have a set lifetime.
Firstly, the concern over federal debt often overlooks the context of economic growth and inflation. As an economy grows, so does its capacity to manage larger nominal debts. If the debt grows at a rate slower than GDP or inflation, its real burden on the economy might actually decrease.
quote:Also silly. Everyone thst lends money to the government has alternatives.
Secondly, much of the U.S. federal debt is held domestically, either by citizens or U.S. institutions
Posted on 12/9/24 at 11:07 am to Taxing Authority
quote:Even if true, it doesn’t negate the fact that most U.S. debt is held domestically.
Also silly. Everyone thst lends money to the government has alternatives.
Posted on 12/9/24 at 12:17 pm to RFK
quote:
Even if true,
It’s inarguably true. quote:Where did I say debt wasn’t majority owned domestically?
it doesn’t negate the fact that most U.S. debt is held domestically.
It isn’t relevant, tho. A default to domestic bond holders is no less problematic than to foreign borrowers.The inability to roll over maturing debt is the same in either case.
This post was edited on 12/9/24 at 12:19 pm
Posted on 12/9/24 at 12:43 pm to TBoy
quote:
This is the exact same pivot right wingers did the last time Trump was elected to attempt to justify Trump almost doubling the debt.
fricking retard he isn’t a Trump supporter and I’d live to see ONE LINK showing what you post is true. Hell any post. Luke the one you did and deleted before running away you poopdick
Posted on 12/9/24 at 1:13 pm to RFK
your a f’ing idiot! post less!
i won’t even spend the time to show you how dumb and ignorant you are, your not worth it!
i won’t even spend the time to show you how dumb and ignorant you are, your not worth it!
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