U.S. debt surpases 25 trillion

https://usdebtclock.org/

So, it's a quarter of a hundred of a trillion dollars. That's 25 000 billion dollars.
But where does the situation go?
Deflation or Inflation?
Will they print the debt out of oblivion or let the debtors fail and suck it?

Smells like hyperinflation to me.

 

The national debt..... Its like the experts actually say - "Its not a problem till it is"

Impossible to predict the breaking point, may be 100 trillion for all anyone knows. Wont be a problem till their is a collapse, its like predicting a recession, which most cant till you have one.

 

Yeah, how do you pay off 25 000 billions, let alone 100 000 billions dollars of debt?

 

Click. Select all, delete, Just a couple clicks of the mouse.

 

Stimulus. Money to spend generates taxes which bring deficits down. Andrew Yang was right about how that works. Here's a simplified story of how a stimulus works:

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything……. However, the whole town is now out of debt and now looks to the future with a lot more optimism.

*And that, ladies and gentlemen, is how a Stimulus package works*

 

The election year concern for the deficit is cycling through again.

 

And anyone with a functioning brain knows they have zero problems handing out trillions for the wealthy to stay that way. But, if it for the masses, no way.

 

Yep. It’s pass time we protect the working class or the freaking consumers that spend to keep this economy afloat.

 

related older threads:

Current U.S. National Debt approaching $20 Trillion

U.S. debt $150,000 per taxpayer


more recent thread:

National debt could crash the economy

 

This is what happens when you leave the gold standard. I predict if everything does crash, the new USD will be tethered to gold. A dollar in 1933 money when we went off the gold standard was worth only $1.18 in 1875 money, $1 today is worth $6.65 in 1971 dollars when we went completely off the gold standard.

Unlike fiat currencies, gold has never been worth zero.

 

I predict if everything crashes, they might just as likely make gold illegal again.

(Many people might not remember that the US actually made it illegal between 1933 and 1974, and it was illegal in Australia as well. Could be a piece of history to go research if anyone's not familiar with it.)

 

Also a related thread that touches on the issue of a cashless society and "negative interest rates":

Australia plan to ban cash purchases over $10,000 looks like it may soon become law


We can only imagine what sort of ingeniously creative devilish schemes our overlords and masters will devise for us if there should ever be an economic disaster.

Imagine having to pay to save money every year.
They will call that "trying to encourage people to spend money to stimulate the economy".
I've delt with this same sort of brain-dead logic in discussions in the Economics & Trade section of this very forum.
So I know there are already plenty of people who would love to impose this scheme on us.

 

Handing out money doesnt work like that. It would be nice. Giving everybody money and going into debt for the money doesnt work like that at all. The governement borrowed the 100 dollars and owes extra money on it. They dont just owe 100 they 105.

 

Tell me, won't that work in reverse when taxes have to go up to pay for this, or when there's inflation and people don't have as much money to pay back their debts because more of it is having to be spent on the same things they were buying before?

Besides that, all this debt in your story can really be seen as acting like a form of money, somewhat. They will get paid, the only question is when.

And when government borrows money, they'll issue more Treasury bonds, which is debt, and many people will use that like a form of money.

If people take out a loan and borrow money from the bank, that leads to the creation of more money in someone else's bank account.

The only possible reason you could justify a stimulus here is if you believed personal individual debt was bad and that it was better to shift that debt onto government.

 

I hope the 2020 president finally starts taking the debt seriously.

 

I wouldn't count on it.

Nothing will be done until the government absolutely has no other choice than to start doing something about it, when the country's finances are very close to falling off the cliff.

Government often works in a knee-jerk fashion. No response until there is a strong enough stimulus to convince everyone a change of course is needed.

However, the way interest rates work, this could be a very dangerous situation. Interest rates are so low right now, there could be a big multiplier effect if they start going back up. (which would feed uncertainty, driving higher interest rates, in a feedback effect) Until you have a big part of the government budget going to just paying off interest rates, and no money to pay off the debt.

That is, if you get too close to the edge of the cliff, the sand might start getting slippery, and could start to slide down and fall even before you reach the edge.
We can look a little bit at the debt spiral Greece was faced with to get some idea of what would happen.

Since everything is pretty much tied together, all the factors will converge at once: inflationary pressure, higher interest rates, reduced ability of the Central Bank to lower interest rates, drastic budget cuts, increasing budget deficits, increased tax rates, slowing economy, reduced tax base, lower demand for government debt.
Sort of like a perfect storm seemingly coming out of nowhere.

 

Where are all the Tea party folks who whined and cried about the deficit for 8yrs while Pres. Obama was in office. We had to listen to Sean Hannity whine and cry about his children and grand children and great grand children were going to have to pay for decades. Trump hits the scene and has been running it through the roof and not a peep out of any of these folks.

 

That's a scary situation. The longest any politicians looks out is 6 years and that's best case scenario. If we started to run a yearly surplus even if small that would be substantial.

 

They are still here.

 

Yep and quiet as hell.

 

Why risk it cut government spending and pay our debts..

 

The masses pay so little on taxes they aren't entied to getting anything bsck.

 

That was widely ignored and probably unconstitutional. The Constitution requires the government to coin gold and silver money. They sort of step around that with commemorative coins.

 

I agree, not only is it sane, its logical. BUT>>

1) As I already stated, most of the top guys don't see it as a problem until it is one. We have not seen major downsides yet and most common people have been hollering every trillion that has added. Could have collapsed at 15 trillion, hitting 25 trillion and there is no indication how high it can go. At this point they have no reason not to add to the national debt as crazy as it sounds. No household or citizen would operate in that manner and expect good things to happen in the long term.
2) To pay off such a large amount would take time, its more than the entire countries GDP so it would have to be a long term possibly decades long strategy. I think we could only hope to chip away some of it over a few years, and that is hoping for no natural disaster, pestilence, famine, depression/recession or war to throw it off track. Being a two party system would also be a hindrance for a long term plan like that, most of the time a party only has 8 years at the most then the other guy will have to fiddle with the budget. It could be campaigned that the party paying off the debt would be hindering growth ect.

 

You can't count on one hand the number of decades it has been so. More debt is better has to be true.

With the country now in an actual emergency it's too bad all the money was borrowed previously over those decades for no good reasons.