America has a 3 trillion dollar debt..?

Question

that your grand childrens "grand chidren" have to pay off.

God knows if they will ever be able to pay it off...or if the debt will be 500 trilion by the time it reaches them..

Most european countries have democratic socialism and no debt at all.


So how come capitalism considered so successful,..when you are looking at such debt?

At what point does it become a total failure?

8.8 trillion?

man that is a serious lot of poverty you could sort out.

Critter...My country owes nothing...that couldn't be repaid in the next economic cycle.

Bigdorix...Britain paid you back. Last year they owe you nothing.

Answer 1

The amount of debt the US faces is simply mind boggling. I am an avid reader of the financial pages and keep a close watch on the stock market.

To put the US debt into perspective I have heard it equates to the equivalent of $500,000 for every family of 4! I always had difficulty trying to comprehend the size of the universe but I think it’s easier to do than grasp the size of the US debt!

Who’s to blame for the current situation? Politicians. They have a great way of making everyone happy. Unfortunately in order for governments to meet the needs for infrastructure, welfare, defence expenditure etc. they need to tax people. The problem is that taxes make you terribly unpopular. After a hard week at work the average guy wants to see as much of the money he has earned in his own pocket and not that of the government.

Governments have to deal with the competing interests of budget expenditure and taxes. However, there is a great way to please everyone ALL of the time and that’s by borrowing money! By borrowing money you can prevent any increases in taxation whilst at the same time funding government targets. There is only one problem and that is one day you need to pay the money back.

The US federal reserve in order to pay back the money it owes has been printing dollars. This allows the US to pay back the money at virtually zero cost. After all what is a $20 bill apart from a piece of printed paper? The price for the average US citizen is frightening as the value of their dollar sinks. Take a look at a graph of the US dollar over the last 5 years and you’ll get the picture.

Money, like any other commodity, is subject to the laws of supply and demand. Where the market has more supply than demand, as in the US dollar’s case, the price will fall - hence the reason it is falling on world markets. If this continues to happen we may eventually see a crisis in the dollar. Currently China and Russia hold massive reserves in the US Dollar but with the dollar declining these countries are seeing a massive devaluation in their reserves which equates to billions. They have 2 options:

1. Sell the currency and divert - e.g. gold or another currency such as the Euro;
2. Hold and see their reserves fall even further.


Admittedly the problem could rectify itself but this seems highly unlikely as the US continues its relentless onslaught of flooding the market with more money.

One of the things that has always given the dollar artificial backing in a sense is oil which is internationally priced in dollars. If you want to buy oil at some point your currency is exchanged from one currency into another. When this exchange occurs dollars are purchased. This “buying” of the dollar is helping it at the present time. OPEC, due to the problems with the dollar, are considering pricing oil in Euros. Obviously they don’t like to tell the US about it because they don’t wish to exacerbate tensions between the US and the Islamic world which are already strained after recent events.

OPEC are in the same situation of not wanting to hold a falling dollar. If the change from Dollars to Euros does occur it will send the mighty dollar into the abyss which in turn will trigger panic selling worldwide. Eventually the dollar will reach equlibrium eventually - nothing falls forever. The question must be asked though that if such an event occurs how much damage will have occurred to the dollar as an economic instrument on the world stage? We have a “chicken and egg scenario” in that people will only hold dollars if they have value and the dollar will only have value if people buy it!

If the dollar is relegated to the economic status of the rouble then the world will need to seriously look at a new international currency (by the way it begins with “E”).

I do not believe the current economic problems are a failure of the capitalist system. Despite all the criticisms thrown at capitalism it has been shown to be the ultimate tool in delivering products and services with unrivalled efficiency. China and Russia, once vehemently opposed to the free market, have now embraced it. There systems have perished and died - capitalism as always is triumphant!

The problems with the US have been created by politicians. They are the ones who have made decisions for which American will pay - at a very expensive price too!

It’s rather like saying that cars are to blame for killing children on the streets when who you should really blame is the person behind the wheel!

Answer 2

Actually, the National Debt is currently just under 9 trillion.

It was a little over 4 trillion and dropping when Clinton left office.

To give you a little perspective on this:

A million dollars makes a stack of hundred dollar bills about two feet high.

A billion dollars would make a stack of benjamins taller than the Empire State Building.

A trillion dollar stack of hundreds would extend into outer space.

At the current median income of a little under $33,000 a year for a a family of four, it would take more than 300,000 years to earn a trillion dollars.

But don't blame Capitalism, it don't hardly exist anymore beyond the small business and startup level. Blame the Business Schools and Reaganomics for replacing Classic Capitalism with Corporate Socialism, "From each according to his ability, to each according to his Class."

Answer 3

well, when American corporations pack up their factories and send them to India they don't have to pay taxes on their profits. Big Oil pays the American People NOTHING for the rights to drill for oil on public lands, neither do mining and lumber companies. so when the mega wealthy get huge tax cuts and more and bigger tax loop holes where is the money to run the country suppose to come from? that's right ... the middle class. the middle class that is not only carrying the financial burdens of America but struggling to make ends meet with gas, food and clothing prices going sky high. college for their kids? ... for get it, babe. so yeah ... future generation will not only be paying GW's war debt but will be living in a toxic wasteland since the Bush admin believes the environment is a "use it up now/somebody else pays for it later" deal too.

but oh well .. as well as GW's "haves and have mores" get wealthier that's all that matters in PNAC' s neoCON America.

Answer 4

America has no intention of paying its debts. The World Bank is under US control and they think they can do what they want. Why do you think the Chinese are moving out of dollars fast? It's the Weimar Republic all over again.

Soon you'll be able to leave a sack of dollar bills in the street and someone will steal the sack and leave the dollars behind.

Answer 5

It never really becomes a total failure. If successive US governments didn't keep voting massive tax breaks to uber-uber-rich capitalists who don't need the money anyway, then the government might get a tad more revenue - if you could trust them to spend it wisely, that is, which they can't even do in 'The West Wing'.

Basically, America is screwed. Forget about it and let it go down like it deserves to.

Answer 6

it is successful because you can rack up 3 trillion dollars in debt and are still able to exist. IT becomes a point of total failure when no one will let us borrow money.

Answer 7

Much of the debt is caused by socialist programs such as welfare, schools, medicare,subsidized businesses (farming and such) and the list goes on and on. If programs like these did not exist then the debt would be much less , but we will not make people be responsible for themselves because then we appear to be mean. Our government takes on many programs/ areas that were never meant to be done by them. We have also taken the problems of other countries on our backs and spend tons of money in foreign aid.


Big business pays over 90% of the tax bill. The rich pay more than their share even with the loop holes. If I was a self made millionaire why should I be peanalized for my hard work. If a person is lazy why do they feel they are entitled to the same life style as a person who has worked hard to get ahead?

Answer 8

First of all, it's SEVEN trillion, not three.

It isn't Capitalism that's the failure, it's the Federal Government that spent money they didn't have that's the failure. You know who I'm talking about, Ted Kennedy, John Kennedy, John Kerry, John McCain, George Bush, Newt Gingrich... all those guys that decided it was a pretty neat idea to spend money they didn't have.

If the US Government goes under, no one is going to look to me to pay the money back. Whoever is holding the notes for that debt are going to be the ones that have the problem, not my grand-children.

Answer 9

Actually, I read that it was about 8 trillion. It was 6 trillion about 6 years ago.

Answer 10

Nope. 8.8 trillion.

Note, this is comparable to a familly with $46,000 household income (the median) owing $29,000 on thier mortgage, car loan, & credit cards, combined...