If the US economy is far stronger than the rest of the world,why is the US so in debt?

Question

in canada there reducing their debt and its dollar is matching the US

the canadian dollar closed at 91.35 yesterday

Answer 1

The US is in debt because the system is full of waste, special interest groups, we give to much away to other countries, politicians are buying votes and support by giving their support for projects that are not needed like the multimillion dollar bridge to nowhere project in Alaska and etc... If politicians would spend our tax dollars like it was coming out of their bank account we would not have this problem.

Answer 2

Actually, the reason we are in debt is BECAUSE our economy is strong. The United States has powered past other nations in terms of value creation by creating a liberalized free-market economy with respect for the rule of law.

The result is that we import low margin goods and export high margin goods. The trade deficit only tracks gross trade, not margin.

The account deficit is the evidence that we are making maximum use of our good credit to generate maximum profits.

Put in other words -- we are borrowing money from foreign countries at an interest rate of 5% and then selling them goods where we make 20% gross margin, while they sell us goods where they have 0.5% gross margin.

In the end, the dollars have to come back into the U.S. -- and they do -- through the purchase of our government bonds, which keeps are interest rates low and stable (yes, I know, interest rates seem high and unstable right now, but that is only relative to the insanely low rates of past years. Relative to other coutnries and the U.S. in previous decades, our interest rate environment and our economy are solid solid solid.)

Answer 3

I think a Canadian dollar is like 70 cents still I think.


Other economies are also strong.

The US is in debt for the same reasons people get into debt. : Borrowing and buying, trade deficits , etc.

Answer 4

It's called the "trade deficit". We are importing way more than we are exporting. Essentially, we are buying more than we are selling. There is an equilibrium where what were sell is equal to what we buy, and thus far, we are in the negative. You can thank our reliance on foreign oil and the Iraq War.

A reason we became so strong economically after world war II was because we were loaning out huge sums of money and getting interest on it, enriching us, just like a bank makes its money from the interest it makes from loans.

Answer 5

Because most of the people in the U.S. are mathematically challenged unlike other countries such as Japan and Germany.

We have more goods in the U.S. because of accumulation which makes us an "Economic Empire". But the majority of Americans are unable to budget, leading to a world of utter chaos. This also applies to some of the U.S. government officials who have no concept in being resourceful and respectful to the U.S. debt problem. They welcome every opportunity to get free money, gamble on investments (wall street), and swindle in bank account schemes because someone is always in cahoots with another, as a result leading to the economic Armageddon.

People may brag about doing math, but when it comes to getting tested on math, everybody seems to go towards being remedial. But when it comes to receiving money, hardly anybody in the U.S. is stupid at all. Greed lives on.

Answer 6

Answer,, its all a paper trail... the whole world is dependent upon the world bank now.... we borrow from it,,, and use IOU's set up on futures contracts within our on amout of sales we can make..
The only thing that is keeping the US afloat,, is we have more stuff to use as barting power ...
IF the stock market folds,,, anywhere ,, in the world,,,,,
Everyone in the world will be broke and a churchmouse.....it will domino everyone....

Answer 7

It's not Bush! Althoug Bush stinks...the debt was there for him when he came to office. The US is like a washed-up celebrity...more money going out than coming in.

Answer 8

Because they consume more than they produce! Canada is a resource based country and with the oil prices now they have a big excedent. (number one exporter of oil to US).

Answer 9

Because we rely too much on importing of goods anymore instead of producing our own, and the producing our own would generate more tax revenue which we could then use instead of going into debt.
It is called bad business management.

Answer 10

More and more we are selling to ourselves and buying from the rest of the world using our credit.