U.S. National Debt

[Jerome Scuggs]

I'm not too educated on the topic, but my AP Macroeconomics teacher taught us that our national debt isn't that bad. Relative to our GDP, our national debt is at the same level as all the other countries. We just produce a lot, so of course we spend a lot. So, as veloce said, not necessarily a bad thing.

but hey, i'm not too educated on the topic.

you realize if you remove govt expenditures, which should not count as production anyways, our GDP is only 45% of what it is thought to be?

[Jerome Scuggs]

This is assuming that the average American makes $30,000 a year. So technically, the debt is higher but America actually owes less per person, thus they actually have a chance of paying their debt back.

I'm no economics major though.

so basically- americans can't pay back their debt, so our government is converting private debt into public debt, which somehow americans can then pay back?

???

[Cops]

I think you need to read my previous post, I already stated that this process of borrow, and reallocate funds with no plan on how to actually pay the money back doesn't make any fucking sense.

What i was trying to say in that post is that the actual debt in America compared to other countries isn't exactly third world, it might look grim but shit looks a lot grimmer all across the world. Maybe it'd be a good time for people to realize this, that no matter how bad things are there is always someone worse off than you. Maybe then if economists stopped scaring people we would see a change in consumer confidence. The American governments tried to buy that confidence, and still it hasn't worked out the way they thought it would.

I think South Park did a bang up job on this issue, the economy isn't real, it's something we made up, and the sooner people realize this the better off we'll be.

There's also a two sided coin to this entire thing, people need to realize that America owes a lot of money, and that money can't be paid off over night. You guys are going to be carrying this load for a long time, and unfortunately there's no way around this. The whole "Well I don't want my Children carrying this debt", bullshit needs to stop, your kids and most likely their kids will be paying back money your country recklessly invested. The problem that you and me have is that we probably differ on the necessity for regulation, I believe in strict regulation and oversight which would have prevented this whole thing in the first place. However, the real people who caused this whole thing to happen are Conservative Americans who believe in limited Government Regulation.

I hate to say this, but Right Wing America has done nothing but bankrupt nations, blindly invest money, and force people out of their homes. Call it socialism, call it government control, it's not. I'd rather invest my money in a state run bank than a privately owned bank, of course my return might be lower but at least i know I could sleep at night. Want to know why? Because I know my bank is looking out for its citizens by imposing strict regulation in giving out loans and mortgages, where as the multinational corporation just wants my fucking money.

[Jerome Scuggs]

so basically, we're not in trouble because there are countries who are in more trouble, and because south park claims the economy is imaginary?

???

[Epinephrine]

The USA's debt to GDP ratio is nearing 80% or so which is one of the worst ratios since World War II. Japan is around 120% I believe.

Meanwhile Canada was closing onto 30%, but now with our huge deficit this year, we're back up a bit again, especially since it's now predicted our economy will shrink 7% at an annualized rate in the 1st quarter!

[Cops]

so basically, we're not in trouble because there are countries who are in more trouble, and because south park claims the economy is imaginary?

???

You are in trouble, I never said you weren't. I'd actually like Americans to realize this and stop expecting this to be fixed over night.

The reality of the whole situation is that America isn't in the position many other countries are, it's going downhill but it's not like America is a third world country...

[Cops]

The USA's debt to GDP ratio is nearing 80% or so which is one of the worst ratios since World War II. Japan is around 120% I believe.

Meanwhile Canada was closing onto 30%, but now with our huge deficit this year, we're back up a bit again, especially since it's now predicted our economy will shrink 7% at an annualized rate in the 1st quarter!

Students and recent graduates are being hit the worst, entry level jobs are down in general and those that exist are being filled by laid off workers. I'd like to see our Provincial government issue some sort of help to OSAP students.

I read an article about Students and the Economy in an article posted in the Toronto SUN. It basically said, "well it's not all doom and gloom, Mcdonalds and Wonderland is still hiring". However true this might be, it's like "okay great I went into debt for $8,000 and now the only thing I have to look forward to is fucking McDonalds". I'm alright (I guess) about this whole thing, I'm a pretty entrepreneurial person who can find money anywhere. I network well, so I think no matter what I'll always have freelance work to look forward to. I can see the positives in any situation, but my main point was that Economists besides the ones who need to be hung should stop fear mongering the entire fucking population. Once the media is done sensationalizing this whole economic debacle I think we as a people can work towards making sure this shit doesn't ever happen again. AKA, fuckin' regulation.

[Displaced]

[Mega Newbie]

Pay Your Debt , Americans.



Foreign owners of US Treasury Securities (January 2009)
Nation billions of dollars percentage
People's Republic of China 739.6 24.07%
Japan 634.8 20.66%
Oil exporters 186.3 6.06%
Caribbean banking centers 176.6 5.75%
Brazil 133.5 4.35% what WHAT WHAAAAAAT
United Kingdom 124.2 4.04%
Russia 119.6 3.89%
Luxembourg 87.2 2.84%
Taiwan 73.3 2.39%
Hong Kong 71.7 2.33%
Switzerland 62.1 2.02%
Germany 56.4 1.84%
Republic of Ireland 50 1.63%
Singapore 38.3 1.25%
Thailand 37.2 1.21%
Mexico 34.9 1.14%
India 32.5 1.06%
Turkey 31.3 1.02%
Korea 31.3 1.02%
Norway 21.9 0.71%
France 17.9 0.58%
Israel 16.9 0.55%
Egypt 16.9 0.55%
Netherlands 16.8 0.55%
Italy 15.6 0.51%
Belgium 15.5 0.50%
Chile 15.2 0.49%
Sweden 12.4 0.40%
Philippines 11.6 0.38%
Colombia 11.3 0.37%
All other 179.4 5.84%
Grand Total 3072.2


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[Xog]

I'd leave it to the government officials to deal with all this debt stuff, not some group of freaks on an internet forum for 1 zone from a free decade old 2d spaceship game.

meanwhile, continue the thread by pointing out how much debt everyone has.

[D1st0rt]

we'll just give you some trees and the debt will be settled

[Cornelius]

8 months later of the start of this thread

And 1 trillion up! And growing....

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

$ 12,119,477,772,201.12!

the consequences? to the future.

[Xog]

John was in the fertilized egg business. He had several hundred young layers (hens), called 'pullets,' and ten roosters to fertilize the eggs. He kept records, and any rooster not performing went into the soup pot and was replaced. This took a lot of time, so he bought some tiny bells and attached them to his roosters. Each bell had a different tone, so he could tell from a distance, which rooster was performing. Now, he could sit on the porch and fill out an efficiency report by just listening to the bells.

John's favorite rooster, old Butch, was a very fine specimen, but this morning he noticed old Butch's bell hadn't rung at all! When he went to investigate, he saw the other roosters were busy chasing pullets, bells-a-ringing, but the pullets, hearing the roosters coming, could run for cover. To John's amazement, old Butch had his bell in his beak, so it couldn't ring. He'd sneak up on a pullet, do his job and walk on to the next one.

John was so proud of old Butch, he entered him in the Renfrew County Fair and he became an overnight sensation among the judges. The result was the judges not only awarded old Butch the No Bell Piece Prize, but they also awarded him the Pulletsurprise as well. Clearly old Butch was a politician in the making.

Who else but a politician could figure out how to win two of the most highly coveted awards on our planet by being the best at sneaking up on the populace and screwing them when they weren't paying attention.

Vote carefully next time around, the bells are not always audible.

[Vatican Assassin]

I'd leave it to the government officials to deal with all this debt stuff, not some group of freaks on an internet forum for 1 zone from a free decade old 2d spaceship game.

This forum doesn't hold the answers xog is searching for, and he is not impressed with your graphs, please read his last post to find out what a real contribution to this forum looks like.

[Vatican Assassin]

Oh, did Xog's story about a rooster not help you to understand why America's debt is so important and unique from other nations? Maybe this will help. Copy, and paste... I'm going to bold some important parts! Please don't read up to the 4th or 5th word in this essay and decide you already know all about it.

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Origin of the Federal Reserve

In 1910, the following men met secretly on the privately-owned Jekyll Island off the Georgia coast for nine days to change America's financial structure forever. They included:

-- Republican Senator Nelson Aldrich;

-- A. Piat Andrew, Assistant Treasury Secretary;

-- Benjamin Strong, head of JP Morgan's Bankers Trust and later de facto Fed chairman as governor of the New York Federal Reserve Bank, the mother bank;

-- Henry Davison, Sr., JP Morgan partner;

-- Paul Warburg, Kuhn, Loeb & Co. partner, representative for the Rothshilds and Warburgs in Europe, and the main Fed architect;

-- Frank Vanderlip, William Rockefeller representative and president of National City Bank of New York; and

-- Charles Norton, president of 1st National Bank of New York.

On December 23, 1913, they prevailed when Congress passed the Federal Reserve Act to let private bankers control the nation's money and effectively annul the Constitution's Article I, Section 8, mandating only to Congress the power to coin (create) money and regulate the value thereof. Nothing ever since has been the same. Thereafter, "we the people" meant Wall Street, not the "general welfare" or "the blessings of liberty" as the Constitution's Preamble affirms.

Congress established the Fed in the middle of the night by shepherding the legislation through a carefully arranged Congressional Conference Committee meeting between 1:30 - 4:30AM on December 22. It was then enacted the next day when many members were away for the holidays, most others hadn't read it, and it didn't matter for those who did because the text was intentionally vague. The nation's money would be printed by the US Bureau of Engraving and Printing, then issued as a government obligation, or debt, to the private Federal Reserve with interest.

Woodrow Wilson was Morgan's man in the White House with an administration full of his cronies. The Federal Reserve Act was a major coup, giving them what they long wanted and finally got, control over the nation's money and unlimited power with it. According to Brown:

Private bankers got "the exclusive right to 'monetize' the government's debt (that is, print their own money and exchange it for government securities or IOUs)." The obscure language hid the scheme's real aim "to create money out of nothing, lend it to the government at interest, and control the national money supply, expanding or contracting it at will."

Wilson signed the act, then later said:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government of free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men" running everything today more than Wilson ever could have imagined.

Ron Paul: "The Federal Reserve Isn't Federal and Has No Reserves" - It's Privately Owned by a Powerful Banking Cartel that Runs America

Dominant member banks own it in each of the 12 Federal Reserve districts. The amount of stock each holds is proportional to its size. As mother bank, the New York Fed is most dominant, owning 53% of all shares because the nation's largest commercial banks are on Wall Street, including JP Morgan Chase, Goldman Sachs, Citigroup, and Morgan Stanley. Bank of America was founded in California, remains heavily concentrated in Western and Southwestern states, yet operates globally like the other giants. The same is true for Wells Fargo.

The largest banks are financial superpowers with interests in commercial and investment banking, insurance, real estate, home mortgages, credit cards, and virtually everything related to finance, insurance and real estate globally (the so-called FIRE sector).

The Fed is composed of a Board of Governors in Washington (its headquarters) and the 12 regional Districts/Banks in New York, Boston, Philadelphia, Richmond, Atlanta, Cleveland, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

Several times previously, the Fed's legitimacy was challenged in federal court to no avail. Each time, the the current system was upheld under which each Federal Reserve Bank was ruled a separate corporation owned by commercial banks in its region. In one case, Lewis v. United States (1982), the Ninth US Circuit Court of Appeals held that "federal reserve banks are not federal instrumentalities....but are independent, privately owned and locally controlled corporations (statutorily) empowered to conduct (their affairs) without day to day direction from the federal government." In other words, they're independent of government, can do as they please, and take full advantage as the Federal Reserve Act allows, yet Congress does nothing to deter them.

Madison, Jefferson, Jackson, Lincoln and Kennedy Disagreed

In 1691, three years before the Bank of England's founding, Massachusetts became the first colony to issue its own money backed by the full faith and credit of the government. Other colonies followed, called "scrip." It freed them from British banks to run their affairs inflation free with no taxes. For over 25 years, they needed none, yet achieved sustained, stable, prosperous growth, the kind impossible under a privately run system. More on that below.

In 1751, colony-based British merchants and financiers got King George II to ban new paper money and force colonial governments to borrow it from UK bankers. In 1764, Benjamin Franklin petitioned to stop it without success. Instead, the Bank of England got Parliament to pass a Currency Act making it illegal for the colonies to issue their own money. It turned prosperity into poverty, the root cause, Franklin believed, for the Revolutionary War.

America's Founders and later presidents railed against bankers. James Madison, called them "Money Changers" saying:

"History records that the Money Changers have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over governments by controlling money and its issuance."

Thomas Jefferson said:

"I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."

Jefferson opposed the first Bank of the United States, Andrew Jackson the second, and both for similar reasons:

-- distrust of profiteers controlling the nation's money; and

-- concern about the nation's banking system falling into foreign hands.

At Jefferson's urging, Congress refused renewal of the first 1811 Bank of the United States charter and discovered on liquidation that two-thirds of its owners were foreigners, mostly British and Dutch, none more influential than the Rothschilds. Later, Madison signed a 20-year charter, but after congressional renewal, Jackson vetoed what he called "a hydra-headed monster" entrapping the nation in debt.

Lincoln feared:

"The money powers prey(ing) upon the nation in times of peace and conspir(ing) against it in times of adversity. It is more despotic than a monarch, more insolent than autocracy, and more selfish than a bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at the rear is my greatest foe."

In "Web of Debt," Brown explained that they wanted 24 - 36% interest to fund the North's war on the South. As a result, Lincoln got Congress to pass the 1862 Legal Tender Act empowering the Treasury to issue "Greenbacks," interest free to finance the war and grow the economy prosperously.

In spite of assassination threats before inauguration as well as "treason, insurrection, and national bankruptcy" during his first year in office, he:

-- built the world's largest standing army;

-- defeated the South;

-- turned the country into the world's "greatest industrial giant;"

-- launched the steel industry, a continental railroad system, and a new era of farm machinery and cheap tools;

-- established free higher education;

-- gave settler ownership rights and encouraged land development through the Homestead Act;

-- had government support all branches of science;

-- standardized mass production methods;

-- increased labor productivity by 50 - 75%; and

-- more still "with a Treasury that was completely broke and a Congress that hadn't been paid."

How? By nationalizing banking so government could print its own money, interest free, without paying usury to bankers. As a result, "the economy was jump-started with a 600 percent increase in government spending and cheap credit directed" toward productive growth, the kind impossible under a predatory bank-run financialized system for their own self-interest.

After the war, Lincoln was assassinated, of course. The Legal Tender Act was rescinded. A new national banking act was passed, and money became interest-bearing again in private hands.

Nonetheless, John Kennedy confronted Wall Street by issuing Executive Order (EO) 11110 on June 4, 1963 to:

-- amend EO 10289 (dated September 17, 1951) designating and empowering the Treasury Secretary to perform certain "functions of the President without the approval, ratification, or other action of the President;"

-- perhaps bypass the Fed and empower the president to issue currency; it constitutionally empowered the federal government to create and "issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury;"

-- though not verified, some believe he then ordered the Treasury Secretary to issue nearly $4.3 billion worth of United States Notes, perhaps to replace Federal Reserve Notes; whether or not he planned to end the Federal Reserve System is speculation, but perhaps fearing it, among other reasons, led to his assassination five months later;

-- in 1964, Lyndon Johnson said: "Silver has become too valuable to be used as money;"

-- in late 1963, US Notes were withdrawn from circulation; and

-- noted Fed critic and author of "The Creature from Jekyll Island," G. Edward Griffin, wrote on page 569 of his book:

"There was a third point, however, which everyone seemed to overlook. The Executive Order 11110 did not instruct the Treasury to issue Silver Certificates. It merely authorized it to do so if the occasion should arise. The occasion never arose. The last issuance of Silver Certificates was in 1957....six years before the Kennedy (EO). In 1987 (it) was rescinded by (EO) 12608 signed by Ronald Reagan."

Without mentioning EO 11110, it did it by amending EO 10289, rescinding the Treasury's right to issue silver-backed notes.

Publicly-Run Banks Work

Their history is impressive:

-- in colonial America;

-- under Lincoln;

-- in early 20th century Australia when its Commonwealth Bank created money, made loans, and charged a fraction of privately-charged interest; until they took over, the country had one of the highest living standards in the world;

-- in the Middle Ages under a banker-free tally system;

-- in China for thousands of years before private banking, and today because Beijing directs the semi-independent People's Bank of China to grow the economy and create millions of jobs; and

-- in North Dakota, the only US state with its own bank that sustains its uniqueness and strength; it's one of two states, with Montana, running budget surpluses and the only one creating jobs because, as Brown explains:

"it('s) ha(d) its own credit machine (since) The Bank of North Dakota (BND) was established by the state legislature in 1919, specifically to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men;" ever since, BND was tasked with delivering "sound financial services that promote agriculture, commerce and industry," something no other state can match because they don't have state-owned banks.

Again Brown: It works because bankers can "create 'credit' with accounting entries on their books" through fractional reserve banking that multiplies each deposited dollar magically into about 10 in the form of loans or computer-generated funds. It lets banks re-lend many times over, and the more deposits, the greater amount of lending for sustained, productive growth. If all states owned public banks, they'd be as prosperous as North Dakota, and so would America. Instead, private bankers hold the nation hostage.

Ostensibly, the Fed was established to stabilize the economy, smooth out the business cycle, manage a healthy, sustainable growth rate, and maintain stable prices. In fact, it caused 19 recessions (including the Great Depression and current crisis nowhere near resolved and likely to intensify) and substantial equity market declines each time ranging from 18.8% in 1998 to 89% from October 1929 to July 1932.

In addition, the Fed is directly responsible for inflation and the decline in the US standard of living since 1913, and, besides the Great Depression, especially since the 1970s. From the late 18th century to 1913, virtually no inflation existed under the gold standard, except during times of war. Using government data, it now takes over $2,000 to equal $100 of pre-Fed purchasing power. In other words, a 1913 dollar is worth about a nickel, and given recent dollar weakness, even less.

Operating as a hidden government, Fed-created inflation dilutes purchasing power. It practices usury through interest rate manipulation, forcing borrowers to pay their rates. The income tax was established to pay interest on the national debt that wouldn't exist under a public banking system creating Treasury, not Federal Reserve notes.

The Constitution has no federal tax provision because the Founders believed private income was "the ultimate source of productivity." It wasn't coincidental that the February 13, 1913 16th Amendment (establishing an income tax) was ratified ahead of the year-end establishment of the Fed. It's run the country ever since, and when in trouble, gets the public to bail it out with more tax dollars, enough since 2008 to put a lien on future generations, perhaps in perpetuity unless public pressure forces change that won't come from the top down as long as bankers are in charge.

Congress empowered them to commit grand theft by transferring public wealth to themselves, a process especially virulent since the 1980s under Reaganomics-instituted "trickle-down" designed to trickle up. Ever since:

-- tax cuts for the rich replaced a progressive system;

-- the rich became super-rich;

-- consumer debt soared;

-- record high budget and national debt levels prevail;

-- real wages haven't kept up with inflation;

-- low-paying service jobs replaced higher-paying production ones offshored to low-wage countries;

-- technology-driven productivity pressures employees to work harder for less; and

-- during grim times like today, economic instability, lost jobs, home foreclosures, depleted savings, and personal bankruptcies have created growing poverty, hunger, homelessness, and despair with few measures taken to address them under a system favoring wealth by transferring it from the many to the few.

Privatized money control imperils democracy. If the public doesn't regain it, economic tyranny will prevail and eventually the political kind already entrenched with a strong foothold.

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site sjlendman.blogspot.com and listen to the Lendman News Hour on RepublicBroadcasting.org Monday - Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national issues. All programs are archived for easy listening.

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So there it is folks, thanks for reading, maybe this will show why our debt is so fucked up even though certain economists think it's a.o.k. to not be bale to borrow money from anyone because no one trusts you as our dollar currency drops like a bag of dirt. And if you think that by going back to a system of currency which is controlled by the government and not privatized bankers, that I am in some way advocating that we return to other modes of operation in the past, such as bringing back slavery, then you're just a fucking idiot.