our Goverment debt?

Question

what are the causes and effects?
and who has to pay for it in the future?

Answer 1

Go to www.comedycentral.com the colbert raport. choose videos, guests and choose the 3rd or 4rth gou from the top left corner. That's what he talks about.

Answer 2

The cause is simply the government spending more than they take in. It's not a lot different from a personal credit card debt. When you don't pay as you go, it builds up.

As far as who will pay for it, that plan is built on presuming that there will be Inflation. As inflation increases the amount everything costs, it also increases wages, but debts are constant. Imagine if your grandfather had taken out a line of credit at the soda shop years ago when soda cost a nickel, and at the end of the year 1919 had a total bill for $15.00. That would have been a lot to him in 1919, but he could probably pay it off today. Of course, the two flaws in that theory are that in reality, he kept charging more over the years, so it's a lot more than $15.00, and the other flaw is that it basically robbed the store owner of the real value of that $15.00, which would be about $400 today.

The effects are largely ignored, even by those that feel them. You have to understand that you can't spend the same dollar twice. If the government debt is 7 trillion dollars, that's 7 trillion dollars that you can't borrow to buy a home. You have to compete with everyone else to borrow, but the amount available is less, driving interest rates up. If interest rates are 6% today, what would they be if that 7 trillion dollars were available? My guess is about 3%, which means if you buy a home with a $250,000 mortgage, you're paying $7,500 in annual interest that is attributable to the government's debt.

Answer 3

The powder keg in America's National Debt is they raided the Social Security Trust Fund and left behind IOUs. That is the issue Dubya has tried to bring to center stage. The call on those IOUs is starting now.

The voters would chose leaders with a different course of action if taxes funded policy. As it is, inflation will once again be how the government mollifies the voters but it allows foreign interests to purchase American assets cheaply. We may well see things like toll roads to pay off Federal Treasury Notes, purchased mainly by Asian countries that fund the National Reserve Banks. Which is a crime. Our tax dollars built the roads, yet we don't own them.

Answer 4

Normally, in slow economic times, we borrow money to fund programs to prime (as in an old water pump us geezers used to use in the good old days) the economy and lessen the severity of the downturn. This increases the cost of government to the extent that the interest on that debt must be paid currently, but that is also usually when interest rates are low due to the slow economy.

Then, when the economy is good, we repay the debt through increased tax collections and/or increased taxes.

But, since the guns & butter policies of Lyndon Johnson, Richard Nixon's disastrous wage/price freeze (the freeze wasn't disastrous but the dumb and 'gradual' return to normalcy was) and Ronald Reagan's tax and spend policies, economic reality has nothing to do with our national debt.

Now, politicians just borrow money for pork projects in their own districts, wars to reward their Military-Industrial Complex benefactors and whatever else they can get away with - oblivious to the future and just who will suffer the consequences and having to repay that debt, let alone the interest on it.

Answer 5

Today's debt pays for our massive social spending. It's paid off with long term debt to allow inflation to make today's debt cheep when it's paid off.

Just think what kind of car or home you could have bought 30 years ago. Social spending is no different.

Old people pay the most since inflation allows us to pay down the debt with our children's money.

Answer 6

Consumers always pay for Government debts.

Answer 7

Government debt is not so much of a problem as spending is and what we spend on.

All debt is not bad.

The largest problem we have is that our government does too much and spends too much. This is the real problem.

Answer 8

Didn't anyone tell you not open Pandoras box.

Now look what you have done.

Never a simple answer to that one.