If the US is trillions of dollars in debt?

Question

how are we supposed to pay that off? Or is the plan to pretend to try and pay it but don't since we'll all be dead in 100 years anyways?

I'm referring to national debt

Answer 1

Do you have any concept of "net assets"? Just curious.

Edit: I realize what you're referring to. But judging from your question, it doesn't appear that you have as solid a grasp on it - as every nation and business on the planet carries some sort of debt.

Most US Debt is in 1-year T-bills; so it doesn't extend forever.

Answer 2

No, we are not supposed to pay it off, why would we? That would be incredibly stupid. We will never pay off the accumulated debt. The debt is actually quite manageable and getting moreso all the time, so why would we ruin a good thing by monstrously overtaxing the population just to make some needless point?

You should understand that each individual piece of the debt -- each treasury bond -- will be paid off when due. The government redeems them using current tax cash flow or by "refunding", or selling new bonds. You may be shocked to learn that that's no big deal at all.

Besides, did you know that 40% of the national debt is the Social Security trust fund? Do you think it would make AARP happy if you eliminated their Social Security Trust Fund?

Answer 3

We are clearly not going to go write a check for trillions of dollars tomorrow and be free and clear. The debt will be around in 100 years, we just have to hope that it does not get large enough to derail the economy.

What is currently happening is that people are willing to keep lending us money until they do not see the U.S. as a viable place to invest and have some assurance of getting their money back. As long as we continue to offer competitive prices to lenders, and continue to keep making our interest payments on time, we will be offered credit in the world market.

If the world starts seeing the U.S. as unable to pay it's debts, or a risky place to invest, it will start selling dollar denominated debt at cheaper and cheaper prices until the returns on the debt equals that of other world currencies and there is no disadvantage to holding it. We will likely never pay the debt off itself (nor do we need to) but the more of it is in circulation, the more danger the U.S. economy faces from a devaluation of the dollar.

So no one is going to coming looking for our hundred trillion dollar check tomorrow, but we do have to keep up payments and ensure the rest of the world that eventually they will get paid back in order to keep borrowing and keep the dollar as a viable currency. Running up additional debt makes our position more and more precarious, since with higher debt payments we have less of a margin of error in weak economic times. Some debt is not necessarily a bad thing, but piling on debt indefinitely is unsustainable, since someday creditors will start asking for it back.

Answer 4

Think of a mortgage on your home
You buy a house for 500,000 dollars carrying a 400,000 debt. After x-amount a years you want out
You sell the home for 800,000 but owe 350,000 on the mortgage
does it make a difference that you were always in debt on that mortgage?

Answer 5

Are you aware of assets, and the concept of net assets?
Are you referring to the national debt?
If you are referring to the government's debt, then it doesn't generational change doesn't change a thing

Answer 6

The US external debt could be wiped out with the President's signature in about three seconds. The debt is in US dollars all we would have to do is wipe it out. And presto we are no longer in the hole. But, if we do that economic growth will slow down, and depression will settle in and the cost of goods and services goes to pot. Question why do you think we will all be dead in 100 years?

Answer 7

good question.
it will be a challenge for the next generation.
but if the economy can get moving again and overcome the china syndrome it can be paid down.
but somehow i doubt it will be any time soon.
especially with hundreds of billions being spent on the war in iraq.
God bless America

Answer 8

The most likely way of 'handling the debt' is to inflate our way 'out of it'.

Answer 9

By slamming taxes on our backs and stealing resources from other countries.