U.S. Debt Question?

Question

is the only thing more valuable than the u.s. debt is the u.s. economy??

and could u sell the u.s. debt to somebody

Answer 1

Delicateharmony's concerns about US debt levels are wildly exaggerated. A good indicator of ability to support debt is to consider the ratio of Debt:GDP over time -- you compare the increase in debt to the nominal growth in GDP (that's measured growth, not corrected for inflation, since debt does not grow with inflation). If both numbers grew at the same rate (say) there is no change in your ability to service the debt and meet other obligations.

That ratio now is 65.5% [13.1 trillion GDP vs 8.6 trillion debt] -- not only is the US debt today easily manageable, that ratio is actually falling and is forecast to continue falling for years into the future. I.e., the economy is growing faster than the debt.

Anyway, to your question, it's not really a sensible question. You can put a value on the total debt, but the economy is not an asset with a value, it's a measure of income. GDP is larger than debt, but it not "more valuable" than the debt -- that's not a meaningful statement.

Lastly, the TOTAL debt is not a single asset that can be traded -- the US debt is made up of millions of separate bonds, bills, and notes that have been issued over the past 30 years (b/c the longest term gov't bond is a 30 year bond) -- so it's not possible to trade them en masse. Those bonds are held by many individuals, corporations, and government entities. But each of them can in fact be sold (except for the special non-tradable bonds in the Social Security trust fund and similar government funds).

Answer 2

The U.S. already sells its debt by borrowing money from various overseas banks, particularly in Asia (China and Japan own a great deal of it).

As far as comparing the U.S. dept to the U.S. economy - currently the economy is capable of supporting the level of debt, but as it increases, the charges in interest are growing as well. Within a decade or so the debt will be sufficiently great that we will reach a point were the best we can do is maintain the interest.

At that point - and Latin America is an excellent example - a Nation has to consider bankruptcy.

The current direction (assuming our course does not change with new leadership in congress) is similar to that in the Reagan years - where massive debt accumulated.

A failure to increase government income (taxes of some sort) or reduce expenditures will invariably lead to the afore mentioned bankruptcy.

The first Bush, and Clinton administrations demonstrated that fiscal prudence, along with increased taxes (generally on the rich and corporations) can stop or in the case of the Clinton administration, actually reduce debt and generate a government profit that can then be put into reserve or used for social, scientific, educational, etc matters.

Answer 3

Can you rephrase the question?
I think that some foreign dignitaries already own some of the assets of the US (7%) to be correct. I am not sure that I am answering your question correctly.
Email me for clarification!
I hope that I was able to help!

Answer 4

In answer to all your questions China.
You've been there, done that, and now you're renting the tee shirts from them until they pull the rug out!