Could someone answer intelligently please?

Question

So our national debt as of today is $8,420,928,866,982.88 according to http://brillig.com/debt_clock/ . Who exactly do we owe this money too, and why does this figure increase by $1.62 billion a day?

Answer 1

The United States of America national debt, who do we owe, is a complicated question.

The answer is creditors whom ever they might be. Largely our national debt is owed to our own treasury. We borrow from ourselves.

Our (US) debt is not bad. Consider that we used to carry a balanced budget before the great depression and FDR (a democrat) was the first president to begin deficit spending to bring us out of the depression. It was sound fiscal policy.

Deficit numbers today are largely a political football.

Answer 2

Well, you've had a couple of good intelligent answers. Here's another one which is not very frequently discussed in most circles, even at the undergraduate levels.

Our currency, when you spend it, does not have the legal authority to satisfy a debt. This is a legalese term which means literally that you don't legally possess ownership of that which your are purchasing. All you are 'buying' is the use of that item. I know its a little bit more than most people are capable of understanding, however, that is the nature of our current monetary system. Prior to this time we did have a system whereby ownership (not just usage) was transferred upon payment. That was when debts were discharged. See the difference in words? Satisfied does not equal discharged.
And no, its not a conspiracy thing, spend some time looking at legal dictionaries and studying monetary statutes.

All those points being made, as Federal Reserve Notes get passed from person to person (buying this, then buying that) more goods enter the economic stream. However, they aren't being discharged from one individual to another. This equation causes the 'debt' to increase.

Answer 3

We mostly owe this money to China and Japan, we owe OPEC countries 44 billion, a vast # of countries have loaned us $$. We do not have it in the treasury, that is why we are borrowing it.

The problem is going to be getting out of this hole. Also, word is other con tries are not just going to keep lending us money.

I believe the current deficit was put in place as a part of policy, to help kill social programs, and raise the volatility worldwide, isn't that what the current regime is about?

Answer 4

It just means the government spends more money than tax money it receives from us taxpayers.

So with a war, there are unexpected expenses. What is done is based on the strength of the US economy, the government sells bonds which pay investors interest.

So the deficit equals:

Tax Money Received less Government Agency funding (salaries and expenses of those who work for the federal government) less Government Spending less interest paid on Bonds purchased by investors.

As long as investors have faith in the strength of the US economy, the deficit can still be managed and the country can still spend more than it levies in taxes.

Answer 5

See instead of taking care of our own country, we are taking care of others not in our country and helping them. (Examples: The War in Iraq, feeding/taking care of homeless people in the other countries, help building homes for the ones we destroyed--which is a good thing, giving money and supplys to illegal immigrants; etc...). The figure increase by one point sixty-two billion dollars a day because for another reason is Americans are spending more money than they have, so the government makes more money to buy more stuff. Thus is also creating the clasp of the dollar bill.

Answer 6

In the U.S, there are two main categories of national debt. First, is intragovernmental holdings - things such as social security debt, pension funds, and trust funds.

Second (and largest), are purchased debts - primarily treasury securities known as T-notes, T-bills, and T-bonds that are purchased by citizens or foreign entities from our government.

We owe much of the national debt to ourselves. The debt we owe to foreign entities is from their purchase of bonds and notes that are basically types of loans - they purchase the note, giving us money and we pay it back with interest later.

Money our government donates to foreign countries for aid and disaster relief is not directly part of the national debt. Those are donations that we don't expect repayment for and are not a debt. Ways that our government gets money include taxes and the sale of purchased debts, so indirectly securities debts play a role in funding those donations as well as our own national welfare programs.

To learn more, start here:
http://en.wikipedia.org/wiki/U.S._National_Debt
http://eh.net/encyclopedia/article/noll.publicdebt

Answer 7

The government fund its running by taxation; but if government spends more than what they tax borrowing from the people and financial institutions is needed (in terms of government, treasury or even municipal bonds); naturally the borrowings can not be without added liability of interest; which could be as high as 10% per year sometimes (starting from about 4-6%) level.

Answer 8

It is owed to other countries for help in the war on terrorism. How we doing so far? Seriously, not sure who the exact creditors are, but you can bet Tony Blair is one of them.

Will our children live in a free USA? Or will they be slaves to our creditors? I think Exxon and Shell should contribute to paying it off!

Exxon Mobil's profit for only three months...
$10,400,000,000!

Bet they're glad dubya cut taxes for the wealthy!

Why would the Republicans rather starve poor children than tax the wealthy?

Answer 9

Who exactly do we owe this money to? That is a darn good question. Wish I had an intelligent answer - sorry. Let me know what you learn OK?

Answer 10

There the text book answer is this is money printed on a promissory note to the Federal Reserve.

The truth is this is a way to tax the people or a hidden tax by way of inflation. if browering is faster that the growth of the economy.