federal debt
Why are people so ignorant about federal debt?
85 percent of the debt is to Americans in the form of treasury bonds. Every generation has counted on bond investment to help during retirement. US government does not borrow from China. China freely invests in US by their own choice. It shows they have faith in the worlds largest economy. Any foreign investment in US is at their own risk, payback is the freewill of US. Also, the national debt as a percent of the GDP is pretty average, the same as France, and much lower than 1950 after WW2. 1950 was the begining of the most economic expansion in US history.
They don’t want to know and therefore think somehow it will disappear if they ignore it. Sadly ignorance is not bliss
A debt is still a debt whether due today or tomorrow and therefore has an effect on any future borrowing. Enron, Worldcom and American Airlines should tell you that. Everything was going fine until some cash actually had to be paid out. Nothing worse than looking at a CEO with his pockets turned inside out talking about “Gee, Am I embarrassed.”
FYI the quickest way to take over a company is through the backdoor by buying their debt. It worked extremely well for Federated when they bought Macy’s debt.
T-Bills are not the same as the $100, $50 etc savings bonds grandma buys. She’s not going to buy millions or billions at a clip, but a government can. Since the U.S. is not going to buy its own debt that leaves FOREIGNERS:
“T-Bills or Treasury bills are a debt obligation backed by the U.S. government with a maturity of less than one year sold in BULK. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks).”
If you look at this in terms of the $10 TRILLION deficit we currently have. This is a case of robbing Peter to pay Paul btw. Better known as a pyramid scheme taking new money to pay off an old debt. In private circumstances illegal. Just thought I’d point that out. Considering the substantially reduced tax revenue to spending I can’t even make the case for revenue matching against the principal. So the debt continues to grow while the dollar weakens. Any sane person would believe it’s time to raise some interest rates and taxes boys. Oddly enough for all the low tax crap both Reagan and Papa Bush realized that and did. Papa Bush was a little more transparent than Reagan. Reagan called them “Revenue Enhancements”
Also if the faith in the U.S. is so great why is the dollar so poor?
Obviously enough countries seem to be in agreement concerning the U.S. creditworthiness and therefore the true value of a dollar is not as great as we think it is. So you are correct in one respect any investment in the United States is at the investors risk. Which is why we really don’t have any outside of real estate. With interest rates so low and the dollar so weak it is a poor investment strategy. The interest rate required for a decent return and conversion into the home currency is far greater than the interest a CEO or anyone is willing to pay. Better if you can to make investments outside of the United States. I guarantee if you were to look at the portfolios of wealthy individuals most are outside the U.S. I know mine are. Also looking at the sales of U.S. companies most are coming from outside the country.
Payment at the Freewill of the U.S. eh? An economist made mention of this. If the U.S. should decide to renege on the debt owed to these foreign countries I think all Americans maybe not Republicans are well aware that militarily speaking China and India are in a position to collect. That is one hell of a margin call. So gee I guess we better pay up. Comparing the U.S. to France is like apples and oranges smacking of b.s. like Republican unemployment numbers.
