[rogerhb]

U.S. NATIONAL DEBT CLOCK = $8,212,065,477,371.73

Each citizens share is $27,510.55

How will you pay your share?

Note: the US gov basically treats each tax payer as an underwriter to the tune of around $1.5million per head, so there is plenty more room to borrow.

[Falconoffury]

I have tried very hard in my life to avoid debt, so I don't understand why I should be responsible for a share of the government's debt. The government needs to pay down the debt through taxation but it doesn't want to do that. It knows that there is no tomorrow, so there is no point in getting ready for tomorrow.

[gt1370a]

I've already paid over twice that in federal taxes, and I've only been out of college for 4 years...

[Kingcoal]

It's all chicken and egg. If you've studied physics, you've heard of curved spacetime. The dollar exists in curved spacetime and the one controlling the curving is the Federal Reserve. Hint: curving = inflation.

The Federal Reserve authorizes the printing of fiat money, records the debt and then has the audacity to charge interest on it. Then the Treasury Dept takes this "authorized loan" and auctions it off, kind of like your home mortgage has probably traded hands. In the old days, the primary buyers of this debt were Americans. The amount of debt when adjusted as a percentage of GDP is not out of line with other countries. The "problem" these days is that the primary buyers of T-bills are foreigners.

You have to remember that our money system is not unlike an old amusement park ride ticket. The tickets you buy are needed to get on the rides. If you go home with unused tickets you keep them for the next time you go to the amusement park. They have value outside the park because they are the type of currency needed to get on the rides. You can even sell your extra tickets on eBay if you want.

The dollar is the ticket to play the financial markets which tend to resemble amusement park rides. As far as I know, every other country out there these is using fiat money. The world financial markets tend to be denominated in dollars because after WW2, most of the rest of the world used the dollar as a gold certificate because it was a gold certificate.

This brings me around to your personal share of the public debt. The debt is paid in dollars, which really are just ride tickets. If the economy (ride) stops moving, the tickets very quickly become worthless. So the most important thing of all is to keep the economy constantly growing. What exactly is growth? Now we are at the root question. Has the economy in the US actually produced any value over the past 30 or so years? By value I mean better ways of doing things, technological discoveries. Well, it's a fact of life that you can't schedule invention, so what you can do is just keep people busy until value is created. Right now, America is keeping millions of Chinese very busy. Americans are also very busy trying to beat inflation and make money.

What about dollar competition; the euro? It's like you are the owner of the amusement park and you watch as someone else starts building one across the street. If they don't take your tickets and their park is better than yours, you are in a quandary. You will have to upgrade and quick. You could start taking their tickets in exchange for them taking your tickets, but if they really are that much better, you are looking at quick decline.

Of course if their park isn't as good as yours, then they are just a thorn in your side, not a real, head to head competitor. I believe that this is the current situation that exists between the dollar and the euro. Remember that the euro, until further notice, is not pegged to a certain value of gold. The dollar used to be pegged to gold. One ounce of gold was worth exactly $35. That valuation was held constant. Making the dollar a real life, good as gold thing of value. Today it's just a ride ticket, but so is the Euro and every other currency I can think of. Of course if Islamic nations carry through with their plan for the gold Dinar for oil purchases, we have a big problem, but that is a different topic.

Europe's protection of their manufacturers slows their economy. How? In this case, Europe's workers, with four months vacation, a 35 hour (or less) work week and extremely high pay, are anything but a bargain. Chinese workers, with no benefits, extremely low pay and few work place regulations are a bargain. America has already made the choice between protectionism and dollar hegemony and for the most part, chosen the later, with good results. It hasn’t been easy for the American worker, who has had to be more versatile. Former steel workers now sell cars, work on cars, work in construction or just sit around and post on peakoil.com. Sure, a percentage of the formerly high (over) paid steel workers have a tough time selling their skills, but that is often a matter of personal choice. I know a lot of guys that fly around the country and work as millwrights, etc. There is always a demand for people willing to travel because most people don't want to do it – a personal choice. The short term pain experienced by displaced workers often puts them in a better situation. I know a guy that became a boat engine mechanic after Bethlehem Steel laid him off. He now makes good money and has a much more satisfying job.

I’m all for sending the entire consumer auto industry overseas to China. Not only will they love us for that, but we will export that much more inflation to them. If you really look closely at the US manufacturing sector, you see companies which are engaged in either high end markets, restricted markets (military, medical) and highly custom markets (systems integration, construction.) Vehicles will still be produced in the US; they will just fit into one of the slots mentioned above. In light of peak oil, I think it’s a good thing to get rid of your general auto production.

There you have it. The US exports its industries and moves up the food chain in doing so. Pressure is put upon its Citizens to improve themselves. The debt is paid down with inflated dollars by the people who are exporting to the US. That has been the US economy for the last 30 or so years. When there are no industries left to export or when the Chinese or whoever can no longer take on anymore industry, prices will rise and the world economy will slow. I say world economy because the US economy has become the world economy. If and when peak oil starts making a big dent, heavy industry, with it’s razor thin profit margins will suffer greatly. America has exported most of its low profit margin industry. The reason why high oil prices haven’t hit the US to a large degree is because of this.

The great danger is if and when China crashes. This will force the US to stop inflating and pay down its debt. This will mean punishingly high taxes on Americans. For that reason it is in the best interest of the US to keep the world economy moving and to keep weeding out loosing industries and exporting them.

[gego]

$this->bbcode_second_pass_quote('Falconoffury', '.')...The government needs to pay down the debt through taxation but it doesn't want to do that.

[rogerhb]

$this->bbcode_second_pass_quote('gego', 'I')t will be eliminated either by default, by hyperinflation,....

[TorrKing]

Some questions:

Why does the creditors not understand that they will never get their money back? Are they lending USA the money, since they know that if the US falls, world economy goes with it?

What common banks would do, if a person is not liquid (and there is no prospect of him ever becoming so): they would take the loss and declare him bankrupt (and stop lending him money). That seems most sensible. Any suggestions of why we don't do the same with the US?

Torjus Gaaren

[MicroHydro]

The Kiwi savings rate, household leverage, and current account deficits are even worse than US. Those $800,000 condos in Auckland and the lenders that financed them are as doomed as anyone in the US.

[TommyJefferson]

$this->bbcode_second_pass_quote('Kingcoal', 'i')t is in the best interest of the US to keep the world economy moving and to keep weeding out loosing industries and exporting them.

[jaws]

It's actually a lot more than 27k since the majority of Americans are either too young or too old to work, or they work for the government (thus consume resources instead of producing them).

How will it be paid back? When did a country ever pay back its national debt?

[cube]

$this->bbcode_second_pass_quote('jaws', 'W')hen did a country ever pay back its national debt?

[frankthetank]

I think its simple...it never will get paid off!

We'll just file chapter 7 or 11

[Tyler_JC]

Wait a second, I only owe 27k?

This must be my lucky day!

I would gladly take that 27,000 under my name if it meant my taxes would decrease by 22% (the current cost of the interest on the national debt as a % of Gov. spending).

I could probably manage to pay off that debt in a few years and not have to worry about it.

But I know that my share is not 27,000. It's probably closer to 127,000. Don't forget, only 2/3 of Americans work. And many of those people work for low wages. The top 20% of income earners will have to pay for a far larger % of the national debt than the bottom 80%.

The top 20% pay virtually all of the federal income taxes...but they also earn like half of all of the income. So I suppose it balances out somehow.

[pup55]

$this->bbcode_second_pass_quote('', 'E')ach citizens share is $27,510.55

[smallpoxgirl]

$this->bbcode_second_pass_quote('rogerhb', 'E')ach citizens share is $27,510.55

How will you pay your share?

Note: the US gov basically treats each tax payer as an underwriter to the tune of around $1.5million per head, so there is plenty more room to borrow.

[Doly]

$this->bbcode_second_pass_quote('smallpoxgirl', 'T')hey may extort money out of my paycheck every month, but I'll be darned if I'm assuming responsibility for their debts.

[smallpoxgirl]

$this->bbcode_second_pass_quote('Doly', 'O')n the other hand, "their" debt might be paying for stuff that YOU use.

[Doly]

$this->bbcode_second_pass_quote('smallpoxgirl', '
')Such as?

[smallpoxgirl]

$this->bbcode_second_pass_quote('Doly', 'R')ead the budgets. See if any of the items applies to you.

[Falconoffury]

The USA government wants a sudden and quick crash rather than a long, transitional crash. They just keep pushing more economic growth and more inflation, rather than allowing the dollar to deflate slowly.