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Originally posted by TeinosukeUS debt is considered to be the closest thing to an absolute guarantee that the financial world can offer.
A recurrent theme on these threads is that almost all national governments have borrowed money and are in debt, and are continuing to accumulate debt. This is a vicious circle, since money spent paying off interest is money that can't be spent on things such as health care, pensions, education, transport, defence, and so on.
My question is this: what wo s and businesses internationally? Who would benefit and who would suffer?
Any thoughts?
Money that is invested in US debt is money that a given person or organization simply cannot afford to lose. This isn't "I'm going to Atlantic City - maybe I'll win the jackpot" money - it's the "I need this to pay the rent and if I lose it, I'm going to be living in the subway" money.
But if the US suddenly declared all it's debt to be worthless, many many people and institutions would now be "living in the subway".
Originally posted by MelanerpesThe closest thing? Surely there are other countries which provide a lower interest rate on their debt papers?
US debt is considered to be the closest thing to an absolute guarantee that the financial world can offer.
Money that is invested in US debt is money that a given person or organization simply cannot afford to lose. This isn't "I'm going to Atlantic City - maybe I'll win the jackpot" money - it's the "I need this to pay the rent and if I lose it, I'm g ...[text shortened]... be worthless, many many people and institutions would now be "living in the subway".
Originally posted by KazetNagorraHard to say off hand. Remember that in cross-country comparisons you have to take into account inflation risk and exchange rate risk as well. You can't just look at the nominal rates.
The closest thing? Surely there are other countries which provide a lower interest rate on their debt papers?
Originally posted by FMFya, let's go back to tallysticks shall we?
Yes. Maybe so. But I don't think the foolish-smart dichotomy you allude to applies as inevitably as rational observers like to think. Societies obsessed with debts that they cannot cope with are forgetting that money is not real but is instead a conscious agreement on measuring abstract value. It's unhealthy to treat it as something concrete because it destroys ...[text shortened]... ckon someone, somewhere would soon start the ball rolling again. But maybe you're right. 🙂
Am I the only one who finds the concept of national debts that survives generations of people born
into its clutches like slaves on a farm utterly disgusting? Am I the only one who finds it ridiculous that
there's literally billions worth of non-existing resources that some people has to pay for without
getting anything in return, because, well... they're paying for non-existing resources? World economy
is a laughable mess, and it would do more good than harm to just shut it all down and start all over,
with a few new rules so as not to get all carried away again.
Originally posted by JigtieThe fact of the matter is that the debt of most countries is not all that big. It's comparable to having a $50k mortgage.
Am I the only one who finds the concept of national debts that survives generations of people born
into its clutches like slaves on a farm utterly disgusting? Am I the only one who finds it ridiculous that
there's literally billions worth of non-existing resources that some people has to pay for without
getting anything in return, because, well... they' ...[text shortened]... t all down and start all over,
with a few new rules so as not to get all carried away again.
Originally posted by KazetNagorraNevertheless, it's money that could be spent on other things.
The fact of the matter is that the debt of most countries is not all that big. It's comparable to having a $50k mortgage.
When Tony Blair's New Labour government came to power in 1997, they deliberately held spending to Tory levels for two years, and used the money saved to pay off some of the national debt. This freed up money for the government's subsequent spending programmes - at least until Iraq threw us into debt again!
the main reason for most government debt is that when you enact new programs or tax cuts, there are three ways to pay for it
1. Raise Taxes elsewhere
2. Cut Spending elsewhere
3. Borrow from China
It's kind of like offering your kid a choice of broccoli, brussels sprouts, or unlimited cookies. The healthy options don't stand a chance.
The rest of the world should be very thankful that the Chinese save so much of their money.
Originally posted by KazetNagorraI suppose it's a matter of how the debt came to be in the first place, but even if you don't consider
The fact of the matter is that the debt of most countries is not all that big. It's comparable to having a $50k mortgage.
$50K to be a lot of money for one person to pay (even though that person has done nothing to
attract the debt in the first place or even benefited from the loan), I think it's sort of unfair in the
most basic sense of the word. Especially considering people in countries where the debt is more than
they can hope to earn in a lifetime, so their children and their children's children will have to keep
paying for it. Then it's just plain slavery and no other word can possibly describe that situation.
National debt is pure idiocy for the common public to accept if they're not getting anything worthwhile
in return, and absolute cruelty by the wealthy elite (it's always the wealthy elite behind political
power, isn't it? - democracy or not) to put on the poor.