Who profits from the US national debt?

  • #1
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
Who makes all of that interest?

Why do Republicans always seem to favor deficit spending?
 

Answers and Replies

  • #2
Locrian
1,882
253
Well as I remember it, around 40% of the debt the govt owes to itself in one way or another, probably largely due to social security. That money that the social securty admin loans the fed earns interest for the social securty fund. Unfortunately retirees are taking in more money in SS than they ever put in, even after interest.

Most of the rest of the debt is foreign financed; that used to be the reason our currency was so over valued. Once social security outlays catch up with inputs into the system the fed will no longer be able to borrow from that fund. Since they will also be paying back the SS administration, that debt will just be reissued in new bonds, and this time we can only hope that foreigners will be there to continue to pick up the slack, because our savings rates are dismal.

As for republicans favoring deficit spending, I don't find that to be a fair statement, as no one has really run much of a surplus since before WW2. Those few green blips on the map are too short lived for anyone to take much credit. The most recent surplus we kinda almost had can certainly not be credited to Clinton. If his healthcare plan had been implemented we would have never seen that money. More credit goes to the GOP who, back then in those ages past, actually showed some fiscal conservatism.

You knew all that already I'm sure, but I was bored so there it is again!
 
  • #3
Locrian
1,882
253
Ivan Seeking said:
Why do Republicans always seem to favor deficit spending?


So in my opinion a more accurate question would be:

Why do US citizens favor deficit spending? Loads of personal, business and governmental debt, everywhere. If we were in a time of high inflation that might be understandable.

But we haven't been.
 
  • #4
gravenewworld
1,127
25
Why do US citizens favor deficit spending? Loads of personal, business and governmental debt, everywhere. If we were in a time of high inflation that might be understandable.

If inflation were high, the government would NOT want to run up large deficits. It would make inflation worse. How were those 4 straight years of surpluses not Clinton's doing? Clinton cut government spending and raised taxes (which he should have done) to create the surplus.
 
  • #5
Locrian
1,882
253
Inflation is bad, but its a lot less bad to debtors than those who hold a lot of equity. I was talking in general about the US public, who are certainly more inclined to spend if they feel their money is losing value, regardless of whether it is the right thing to do.

As for clinton, you are wrong about him cutting spending. He is not capable of doing any such thing. This power is granted to Congress, who was mostly republican. Clinton's budgets did not pass without great changes. If he had implemented his healthcare changes, you would not have seen that surplus.

What is also true, however, is that he didn't fight this fiscal policy. I think it is fair to call him an economic centrist. It is not fair to give him or the democrats - or maybe even the republicans - credit for the surplus.
 
  • #6
russ_watters
Mentor
21,863
8,829
More on the debt (not just the obvious, but the hidden debt like SS and medicare) HERE.
Locrian said:
As for republicans favoring deficit spending, I don't find that to be a fair statement, as no one has really run much of a surplus since before WW2. Those few green blips on the map are too short lived for anyone to take much credit. The most recent surplus we kinda almost had can certainly not be credited to Clinton. If his healthcare plan had been implemented we would have never seen that money. More credit goes to the GOP who, back then in those ages past, actually showed some fiscal conservatism.
I agree except that I won't even give the Republicans credit for the surplus under Clinton. Yes, its true, if they'd have allowed national healthcare to go through, there would have been no surplus, but the surplus wouldn't have existed anyway had it not been for the internet boom - which the government had virtually nothing to do with.
So in my opinion a more accurate question would be:

Why do US citizens favor deficit spending? Loads of personal, business and governmental debt, everywhere. If we were in a time of high inflation that might be understandable.
And the answer is: people really don't care about their children.

As for your characterization, Ivan, the way I see it, Republicans want a government that doesn't do much but spends a lot more than it needs to and Democrats want a government that does a lot but spends a lot less than it can. Neither is realistic.
 
Last edited:
  • #7
Locrian
1,882
253
russ_watters said:
but the surplus wouldn't have existed anyway had it not been for the internet boom - which the government had virtually nothing to do with.

That's an excellent point too. It's worth remembering that these surpluses were insignificant compared to GDP, and that the government's "bookkeeping," if you can call it that, has a great affect on it. Some estimates show four years of surpluses; a different analysis suggests as little as one.
 
  • #8
russ_watters
Mentor
21,863
8,829
Locrian said:
That's an excellent point too. It's worth remembering that these surpluses were insignificant compared to GDP, and that the government's "bookkeeping," if you can call it that, has a great affect on it. Some estimates show four years of surpluses; a different analysis suggests as little as one.
And with that thread on "the looming economic disaster," I'm more inclined to say there never was a surplus.

There is another deficit costing us hundreds of billions a year (and growing) that most people (democrats and older people especially) choose to ignore.
 
  • #9
selfAdjoint
Staff Emeritus
Gold Member
Dearly Missed
6,881
10
Ivan Seeking said:
Who makes all of that interest?

Why do Republicans always seem to favor deficit spending?

Actually China owns most of the US Federal debt, and will receive most of the debt service. And they benefit because by doing so they keep interest rates low and encourage consumer spending to buy the products China offers for sale in the US.

According to the Economist, trade, counting both exports and imports, is 75% of China's GDP. Only of a quarter of their economy is making stuff and services that they sell to Chinese. And the great majority of their trade is with the US.
 
  • #10
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
selfAdjoint said:
Actually China owns most of the US Federal debt, and will receive most of the debt service. And they benefit because by doing so they keep interest rates low and encourage consumer spending to buy the products China offers for sale in the US.

China! Interesting. I have seen something about this before and I am pretty sure that the Queen of England is a large creditor. I know that some notable private individuals are involved. I found this -

The Treasury Department borrows money through the sale of Treasury Bills, Notes, Bonds, and United States Savings Bonds to the public. We have copies available of Table OFS-1--Distribution of Federal Securities by Class of Investors and Type of Issues and Table OFS-2--Estimated Ownership of Public Debt Securities by Private Investors. These tables can be found in the TREASURY BULLETIN, which gets published monthly by our Financial Management Service. You will be interested to know that a yearly subscription to this document is available from the Superintendent of Documents. You may place your order by calling 202-512-1800 or by writing to the Government Printing Office, Post Office Box 371954, Pittsburgh, PA 15250-7954. This material may also be available in your local library or in a depository library.

http://www.ustreas.gov/education/faq/markets/national-debt.shtml#q5 [Broken]

but I was hoping to find a list.
 
Last edited by a moderator:
  • #11
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
So China is not only raking in our jobs, they're also pocketing the interest from our debt.
They're making out pretty good. So how much does each one of us owe the Chinese?
 
  • #12
chroot
Staff Emeritus
Science Advisor
Gold Member
10,275
40
Ivan Seeking said:
They're making out pretty good. So how much does each one of us owe the Chinese?
Considering the amount of chinese food I eat, I should be exempt.

- Warren
 
  • #13
Aquamarine
160
4
Actually, it is Japan who owes most of the debt.
http://mwhodges.home.att.net/debt_b.htm [Broken]

There is no need to worry that foreigners will continue indefinitely to work day and night to produce cheap goods in exchange for promises. Nor it there a need to worry about thoses promises, the US will not be able to repay what it owes it citizens and will certainly not repay the work of foreigners. So in the end, there will be enough declining imports, hard work, expensive goods and cut benefits to satisfy all.
 
Last edited by a moderator:
  • #14
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
How long will that take?

Also, I am worried: Every time I pay my taxes.
The 14 year sum was $5 Trillion in interest, equivalent to $17,182 per person over that period - or $68,728 per family of 4. To further place that sum in perspective: 14 years of interest was enough money to run the entire federal government for more than 2 years without any other revenue - - or enough to run all state and local governments (nation-wide) for more than 3 years, or run social security for 10 years without any FICA taxes, or run Medicare for 20 years.

So why do Republicans argue for deficit spending again? I know they have a really good theory.
 
  • #15
Locrian
1,882
253
Ivan Seeking said:
So China is not only raking in our jobs, they're also pocketing the interest from our debt.
They're making out pretty good. So how much does each one of us owe the Chinese?

If it makes you feel any better, the average chinese citizen isn't profiting much from it. The chinese government has worked the currencies to its advantage in trade, but this hurts the people's quality of life.

I recently read an article on the polution in china; it was frightening. It said there are small rural towns where death by stomach cancer (and not in old age) is the primary cause of death. I haven't done a great deal of research to prove that true, but if it is even hlaf real then things are terrible there for many human beings.
 
  • #16
Locrian: it's true. Stomach cancer is about 10 fold of the western average. Main course though is the bad food; preserved vegetables, spicy hot pots and things like that. Pollution is a disaster. Shanghai, as the pioneer city of China, is trying hard to (literally) clean up it's act, but even here it's terrible. Cars, buildings and everything you put outside is covered with a layer of soot. Chinese don't seem to care, they throw out garbage from their cars on the roads wherever it suits them. I have never seen any governement campaign to change their disgusting habits in my 6 years in China. Bush has a point there: China should be included in the Kyoto agreements. He should show real leadership though and ratify Kyoto. Then talk to the Chinese, now he has no leg to stand on.
 
  • #17
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
China has its own version of job loss. Industry has flourished along the coastal areas, but now the standard of living has increased for these areas enough to justify moving to cheaper labor inland. So now the coastal populations are objecting.

There is mind boggling levels of construction taking place in the north. Miles and miles of new fabrication facilities are springing up alongside virtually new cities filled with high rise housing. Composite materials for aircraft construction is a real focal point - such as for the 777E and Airbus. The next generation of commercial aircraft will be composite materials and made in China.

That aside, there are specific parties claiming profits from our debt. Personally, I would like to know who they are and who they know. For example, if the Chinese people aren't profiting from this, who is, and what role do they play in our affairs? Considering the significance of this to all americans, I think people should be interested in knowing who their creditors are.

I am pretty sure that the Queen of England is still a major creditor.
 
Last edited:
  • #18
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
From the link
http://mwhodges.home.att.net/debt_b.htm [Broken]
We should not be mad at foreign interests. We are the ones creating trade deficits PLUS excessive federal spending.

I'm not blaming foreigners for our debt; I'm blaming Republicans. They are the great advocates of deficit spending.
 
Last edited by a moderator:
  • #19
russ_watters
Mentor
21,863
8,829
Ivan Seeking said:
So why do Republicans argue for deficit spending again? I know they have a really good theory.

[separate post] I'm not blaming foreigners for our debt; I'm blaming Republicans. They are the great advocates of deficit spending.
Well, its about the same as the theory that if you commit your kids to pay for it, it really isn't a deficit (Democrats, re: Social Security).

The debt that Republicans create/advocate is peanuts compared to the debt that Democrats create/advocate.
 
  • #21
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
This is why we are in debt: these guys and their buddies.
 
  • #22
russ_watters
Mentor
21,863
8,829
Wow, Haliburton is worth forty trillion dollars? I didn't know that... :uhh: Ok, well, fine - then its a problem of equal scope to Social Security. But hey - who needs facts when conspiracy theory is more fun?
 
Last edited:
  • #23
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
When you say conspiracy theories, I assume that you mean Bush's conspiracy theories about the Iraqi WMDs. I was talking about business. You know, like the one that partners the Bin Ladens and the Bushs.

It didn't help that as the World Trade Center burned on Sept. 11, 2001, the news interrupted a Carlyle business conference at the Ritz-Carlton Hotel here attended by a brother of Osama bin Laden. Former president Bush, a fellow investor, had been with him at the conference the previous day.
http://www.washingtonpost.com/ac2/w...e&node=&contentId=A25406-2003Mar14¬Found=true

Also
Influence peddling charged over Iraq’s debt
Do Washington heavyweights have a private interest at stake?
In meeting after meeting, President Bush's special envoy, former Secretary of State James Baker, has lobbied world leaders to reduce the crushing debt owed by Iraq.

But at the very same time, a high-powered consortium — including Baker's firm, the Carlyle Group, former Secretary of State Madeleine Albright and other Washington heavyweights — has been pitching a seemingly conflicting proposal. The plan urges one of the wealthiest nations in the Middle East to maximize what it collects from Iraq. [continued]

http://www.msnbc.msn.com/ID/6242360/
 
Last edited:
  • #24
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
russ_watters said:
Wow, Haliburton is worth forty trillion dollars?

Are you just making things up again?
 
  • #25
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
Have you ever heard of the cold war; the one in which we could destroy the planet some 50 times over, all at our own expense? Same guys.

NMD - the missile system that doesn't work but is being installed right now? Same guys

The WMD's that never were? Same guys.

Iran Contra? Same guys

Watergate? Same guys
 
  • #26
russ_watters
Mentor
21,863
8,829
Ivan Seeking said:
When you say conspiracy theories, I assume that you mean Bush's conspiracy theories about the Iraqi WMDs. I was talking about business. You know, like the one that partners the Bin Ladens and the Bushs.
And better yet, when faced with facts, change the subject so you don't have to deal with them! Lovely.
Are you just making things up again?
No, Ivan - you said:
Yes, lets go start some more wars for Halliburton and the Carlyle Group,
http://www.hereinreality.com/carlyle.html
and forget about social security.

This is why we are in debt: these guys and their buddies.
...which implies a problem of equal or greater scope than social security. Unless you can show that the problem you see is costing us as much as social secuirty (roughly $40 trillion), your arguement is specious.

And just be glad I'm not asking you to substantiate the conspiracy theories. I'll let them go for this thread because they are an irrelevant diversion, but feel free to start a thread discussing the validity (or lack thereof) of these conspiracy theories.

edit: my facts are off just slightly and since facts are important to me, I'll correct myself: our social security debt is "only" $12.7 trillion, however, there is $30 trillion in medicare debt. Total democrat-debt: $42.7 trillion.
 
Last edited:
  • #27
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
russ_watters said:
And better yet, when faced with facts, change the subject so you don't have to deal with them! Lovely. No, Ivan - you said: ...which implies a problem of equal or greater scope than social security. Unless you can show that the problem you see is costing us as much as social secuirty (roughly $40 trillion), your arguement is specious.

No Russ, you see, debt grows by how much we overspend, not how much we spend. So, not only do you again fail to understand the point, you know nothing of the facts.

The National Debt has continued to increase an average of
$1.71 billion per day since September 30, 2003!

http://www.brillig.com/debt_clock/

So the war in Iraq alone accounts for a significant portion of Bush's debt in the last year and a half.
 
Last edited by a moderator:
  • #28
omin
187
0
I'll give a good example why 911 benefited the upperclass: Debt.

When loans default, people loose there physical interest. The property then has to be bought once again. Those who invested, get no credit. Those who'll sell it once again, do. Who that owns most, who doesn't fall, benefits from economic disaster.

Debt and economic disaster is the ultimate selling short attitude, spread accross the county all at once for those who have the ideological titles, rather than physical interest titles(the people) which can be expunged by simple psychological means of the so-called elite.

You will not find a more siginificant fundamental point than this.
 
  • #29
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
In February 2003, less than a month before the U.S. invaded Iraq, Bunnatine (Bunny) Greenhouse walked into a Pentagon meeting and with a quiet comment started what could be the end of her career. On the agenda was the awarding of an up to $7 billion deal to a subsidiary of Houston-based conglomerate Halliburton to restore Iraq's oil facilities. On hand were senior officials from the office of Defense Secretary Donald Rumsfeld and aides to retired Lieut. General Jay Garner, who would soon become the first U.S. administrator in Iraq.

Then several representatives from Halliburton entered. Greenhouse, a top contracting specialist for the Army Corps of Engineers, grew increasingly concerned that they were privy to internal discussions of the contract's terms, so she whispered to the presiding general, insisting that he ask the Halliburton employees to leave the room. [continued]

http://www.time.com/time/magazine/article/0,9171,1101041101-733760,00.html
 
  • #30
russ_watters
Mentor
21,863
8,829
Ivan Seeking said:
No Russ, you see, debt grows by how much we overspend, not how much we spend. So, not only do you again fail to understand the point, you know nothing of the facts.
Uh huh. Have you even read the thread/article on the Social Security/Medicare debt? That's $40 trillion in actual debt. That's money the government has taken in and already spent on other things that it has promised to pay out later.

Which is the bigger problem, Ivan? Is $7 billion a bigger problem than $40 trillion? I know you (and everyone else who thinks social security is free money) want to close your eyes and pretend that money will fall from the sky when you retire, but it won't.
 
  • #31
Ivan Seeking
Staff Emeritus
Science Advisor
Gold Member
8,010
1,004
So you wish to redirect the the blame his father? Okay that's true in part. We had to rob social security in order to fund Bush's cold war. I really thought the ability to destroy the planet ten time would have been enough, but according to Bush Sr we needed more nukes.

I was talking about the deficit created by Bush Jr since he took office - a good portion of which can be attributed directly to Bush lies and his phoney threat - Saddam.
 
  • #32
selfAdjoint
Staff Emeritus
Gold Member
Dearly Missed
6,881
10
See this study of Republican and Democratic presidents and their budgets by a budget maven. Wake up and smell the coffee!


(PDF, courtesy of maxspeak)
 
  • #33
Locrian
1,882
253
Thanks for that link SelfAdjoint.
 
  • #34
russ_watters
Mentor
21,863
8,829
Ivan Seeking said:
So you wish to redirect the the blame his father? Okay that's true in part. We had to rob social security in order to fund Bush's cold war.
If I thought you actually believed that, I'd respond. Since I know you know its rediculous, thoughtless rhetoric, I won't.

SA - an admittedly leftist website is not a good place for an unbiased argument. It only mentions SS in passing on page 5 and basically just says we need to pay off the obvious debt before we can pay off the hidden debt (SS/Medicare). To use the mortgage analogy he presented (but make it accurate), its as if we're paying it off like a credit card (paying the interest while the principle increases) and now we have to save extra money just to be able to keep making the interest payments.

Yeah, a billion here, a billion there - the yearly "deficit" (as people like to call it...) isn't a good thing. But we've got bigger fish to fry and ignoring it won't make it go away (though it might allow you to die and leave the problem to your children).

I'd really really like to know what you guys think is going to happen to Social Security/medicare in the next 20 years. Are you just hoping you'll be dead by then and won't have to deal with it?

Here's my proposal: end SS and medicare pay-ins today. Give people back (when they retire) what they paid in, inflation adjusted, and nothing more. That way, the real debt that no one wants to talk about will stop increasing immediately.
 
  • #35
Russ, where do you propose to get the money from to perform your plan?

The money delegated for Social Security has been placed in government bonds which grow at less than 2% on average. Meanwhile, average economic growth for the U.S. is 2.98%. Thus, the money "used" for paying back social security is de-valued over time. This is where the problem lies with social security.

Additionally, if you eliminate social security, or simply pay back only what's paid in, you'll leave many older people destitute in a short time, and they will have to rely on entitlement programs, which in effect, further increases the national debt.


We have to work the problem out in a more efficient way and find the problems with our plans and create a greater plan to resolve the issues.

At some point here in the near future (hopefully today) I'll post "The Great Plan" and give a basic outline of my notion on where we need to go and how we need to get there, what the problems of my plan are, that I know of, and how we can overcome them.
 

Suggested for: Who profits from the US national debt?

Replies
2
Views
549
  • Last Post
Replies
23
Views
539
  • Last Post
Replies
24
Views
686
  • Last Post
Replies
16
Views
4K
Replies
7
Views
439
  • Last Post
Replies
11
Views
601
Replies
6
Views
142
Replies
9
Views
1K
Replies
22
Views
310
Top