How is United States the country with the most Debt?

Answer 1

Because it borrows liek 2 billions a day, amirite?

A bunch of retards will claim that the world owes us more than the us owes them, or that the debt as a fraction of the economy is small.

Guess what. The national debt is at least THREE times as large as the GDP. The relation was 1/1 in 1983 and lower and lower as we go back in time. Debt is being created faster than the economy grows.

So someone owes the US money. Well... who, and how much?

Jamaica?

Answer 2

For the simple reason that the US is about 90% of the entire world put together. Not only do several US states have bigger annual budgets than most countries but several US cities have bigger budgets than many countries. The US is just huge compared to anything else that's out there, nothing else comes close.

Answer 3

It all depends on who in the U.S. is in debt or not. If you do not know already, Americans have a lot of bills to pay off probably more than any other country. Yes, some Americans know how to manage their bills or saving money to keep out of debt. If life was not full of bills then we would have it easy as to other things too.

Answer 4

Because the federal reserve is not operated by the government. It is privately held corporation that charges the us government interest on all money it creates.

The only way to pay off the debt, is with more money, created with interest and debt associated with it.

It is a cycle that can never end.. It is unconstitutional and its only result is more debt.

http://www.zeitgeistmovie.com/

Ron Paul, is the ONLY canidate that has spoken out against the fed reserve.

Answer 5

Because we are the largest economy. I'm sure all of our creditors will extend our line of credit. But when debt is compared as a percentage against gross national product, we are far down the list and most countries on it owe US! Sorry for the reality. It is easy to criticize this administration without lies and misconceptions.

Answer 6

maximum worldwide places have and shop debt. effectively handling and paying off debt will boost credit, so that's sensible to have some debt. States do have debt. the issue is whilst spending over arches any real looking thank you to effectively pay it returned.

Answer 7

Can you make money out of thin air and then borrow against it?

Either can the United States but it does and if you look you will see that the money is borrowed in our names .

Answer 8

The Bureau of the Public Debt divides the national debt into two main categories: debt held by the public, and intragovernmental holdings (debt that the government has essentially lent to itself). Intragovernmental debt includes money for government trust funds, such as pension plans and the debt for social security. Overall, intragovernmental holdings account for over $3.79 trillion of the total debt at this time.

The remaining $5.04 trillion or so has been purchased by the public, including foreign entities. This largely comes from the issuance of U.S. Treasury securities. Nearly half ($2.4 trillion) is composed of Treasury notes (aka T-notes), while T-bills and T-bonds (including savings bonds) cover most of the remaining public portion of the debt. Bonds sold for infrastructure projects are also part of the national debt.

It is common for individual Americans and businesses to buy bonds and other securities, though much of the debt is now held overseas. At the end of 2006, foreign holdings of Treasury debt were $2.223 trillion, which was 44% of the total debt held by the public. Foreign central banks owned 64% of the Federal debt held by foreign residents; private investors owned nearly all the rest (figures are from the Analytical Perspectives of the 2006 U.S. Budget, page 257 and the U.S. Treasury website).

The country holding by far the most U.S. debt is Japan which held $612.3 billion at the end of the first quarter of 2007. The People's Republic of China has been increasing its holdings of US debt instruments, end the first quarter of 2007 with over $1.2 trillion in total foreign reserves, of which about $420.2 billion are U.S. Treasury securities.[4] [5]

When the total amount of revenue collected by the U.S. Government is exceeded by the amount of money it spends (including spending on debt payments that are coming due), it issues new debt to cover the deficit. This debt typically takes the form of new issues of government bonds which are sold on the open market. However, the debt can also be monetized by which the Federal Reserve creates an entry on its books to credit the US Government for an amount equal to the dollar amount of the bonds it is acquiring. The money created in this process not only includes the new dollars that came into existence just to purchase the bonds, but much more because this new money is now sitting in the form of checkbook money at the Federal Reserve. Under the scheme of Fractional Reserve Banking this new checkbook money is treated as an asset to lend against. Economists estimate the expansion of the money supply as being many times the amount of the initial money created with the exact amount of the expansion being a function of the marginal propensity of the consumer to consume (rather than save) each new dollar.[6] [7]

The ultimate consequence of monetizing U.S. debt is that it expands the money supply which will tend to dilute the value of dollars already in circulation. Thus, expanding the pool of money puts downward pressure on the dollar, downward pressure on interest rates (the banks have more to lend) and upward pressure on inflation. Typically this causes an inflationary boom that ends in a deflationary bust to complete the business cycle. Note that money supply expansion is not the only force at work in inflation or interest rates. United States Dollars are essentially a commodity on the world market and the value of the dollar at any given time is subject to the law of supply and demand. In recent years, the debt has soared and inflation has stayed low in part because China has been willing to accumulate reserves denominated in U.S. Dollars. Currently, China holds over $1 trillion in dollar denominated assets (of which $330 billion are U.S. Treasury notes). In comparison, $1.4 Trillion represents M1 or the "tight money supply" of U.S. Dollars which suggests that the value of the U.S. Dollar could change dramatically should China ever choose to divest itself of a large portion of those reserves.[8] [9] [10]

When the U.S. Government has a surplus, it may pay down its outstanding debt. It does this by paying back the principal of the outstanding bonds redeemed for payment while not issuing new bonds. The U.S. Government could also purchase its own outstanding securities on the open market if it was searching for a way to use a surplus to reduce outstanding debt that was not due for redemption in a given year.

Answer 9

This is not accurate. If you include only debt, it is large because we are large. If you include what other's owe us, we come out near the very top of creditors.

This is a very inaccurate question.

Do some research before posting again unless your goal is just to undermine the U.S., in which case we'll see it soon.

Answer 10

We've squandered the budget supporting those jackals in Israel and whiny minorities who breed like rabbits in heat.