How much is $17 trillion? Visualized for reference.
 

http://demonocracy.info/infographics...t/us_debt.html

This is nuts.

Darren

:thumbsup:

It's rather scary that most people hear these numbers all day long while listing to the news but they have no real concept of just how much a trillion is or even how much a billion dollars is.

Scary is that the government has liabilities of between 13 and 17 Trillion dollars..


Their assets are 1.5 trillion.. 35% of their assets are Student Loans..Mortgages are 9%. Misc., and tax receivable are 25%..

How do you run a business when your assets are that low, and your Debt is that high, and student loans are the largest chunk of your "assets"...:willy:

Wow, we better all get off of Lat-G and get back to work, the government needs our money! :rofl:

If the Federal government was a business that would matter.

Since it isn't a business, they don't care because it is other people's money, and they get paid and pensions, no matter what..

Then we get the government that we have...Bloated, mis-managed, and in crisis mode...

If they showed this on the major TV news networks -- it might FINALLY get America riled up enough to vote properly (which isn't a political statement - it's a statement that says pay more attention to what your LEGISLATORS are voting for - i.e., your Senators and Representatives!)

People all want to blame the President. The President DOES NOT make laws - he only signs them.... it's the other 535 bozos that piss your money away!

:woot:

I was shocked, in china everyone saves 40% of their income, we'd be in a very different position if that was the case in the west

Yes, that's true. We'd be way worse off:

http://en.wikipedia.org/wiki/Paradox_of_thrift

An excerpt:

The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth.

Ahhh. I see why Greg makes money and I don't now. :D

Yep -- Better lucky than smart.... I'm not very smart but I've had some very good luck! :lol:

AMEN Greg.. I am not smart enough to understand the paradox of thrift, or the kensian way of economics...Or am I ? I have been saving 20% of my pay for decades, and it seemed to work out great for me.

I see the out of control printing and spending that devalues our currency, as the problem. Not the individual who saves too much..

Also Luck is not blind luck.It is the meeting of opportunity and preparation..Leading to 2008, I would tell my Wife that a chance of a lifetime is coming. Bad for many, but good for those ready for what will happen..
All the preparation and Investing prepared me for that moment in time.

Sure I could have done better, but the mistakes I made in 2000, I did the exact opposite this time to great success..I am luckier than I am smart, but smart enough to use the luck when it presents itself.:cheers: :woot:

The Federal Government has between 13 to 17 trillion dollars in Debt.

The federal Governments assets are 1.4 Trillion..

35% of that is Student loan debt that they are depending on. Housing loans are only 9%. What if the Student loans are forgiven ???

There is a big problem with those numbers, and those that are not saving for a Rainy Day may be sorry..

Brings to mind an old saying -------


Figures lie -- and liars figure......



The government probably actually has no clue where it owes and to whom and how much... it's just too many departments and way to large of numbers to ever get a handle on it. Probably a good thing nobody knows - it would be too frightening!

:lol:

I was lying around figuring, and now I figured that I have been lied to...:wow: :rofl:

Let's use your number: $17T. It's only a number, and is actually smaller relative to GDP than it has been in the past. What scenario do you see playing out in the future that has you concerned? What is the apocalypse? I'm not being argumentative, just curious.

Here's another link about the history of Federal government debt back to the 18th century. It has some nice charts to compare our current situation with our past:

http://www.usgovernmentdebt.us/debt_deficit_history

The only time the debt was higher is World War One and World War Two.

And The printing and spending will only devalue our currency more.. I don't see any apocalypse for me, I am ready.

I see that the continued spending, printing, and entitlements will weaken this country . You cannot spend that kind of money, and not expect consequences..

I don't thing you are arguing at all, just asking..I feel people can do what they want, and I have prepared with the Investments and assets that I have..I do not buy into the media hype and by being prepared, I just don't have to worry..

I just think that people who are not properly deleveraged, and don't have access to liquid cash, and are not invested for the long term, are in trouble...:cheers:

Also those charts do not show the Interest payments due on Fannie and Freddie, so I do not rely on the charts at all..Maybe from the past, but today's charts can be manipulated for political gain.

I don't see armageddon, just a really long rough patch(10 years plus), for the non prepared..

Just look across the pond at Europe if you'd like to see where we're headed... Debt and an entitled population...

If it wasn't for the Chinese buying our paper - we'd already be out of business.

Are you referring to the slow growth and possible looming recession in central Europe? Or the high unemployment and sovereign debt crisis in southern Europe?

(probably not the solid growth exhibited by northern European social democracies with their cradle-to-grave government programs :) )

To be fair: Portugal, Ireland, and Spain do have similar problems to the U.S., in that much of their current issues can be traced to a de-leveraging private sector after their housing bubble burst.

But we're talking about government debt, and there is a huge difference between the U.S and Europe: currency. The U.S. has its own currency and can borrow at historically low rates. European governments cannot (due to their shared currency), and borrowing costs are sky-high for them since there is no European bond that would correspond to U.S Treasury bonds.

Anyway, here's the point of my ramble: the UK and much of southern Europe have been on government austerity experiments for the past 2.5 years. And the results have been very disappointing: cutting government spending has reduced growth, reducing tax receipts, resulting in more debt. It's proved to be self-defeating. Recent elections there seem to be pointing to more "growth" policies with more government spending. In fact, many economists and politicians there have started to point to the US as a model. Even though our economy is way below optimum and our unemployment rate is way too high, our growth has been better, in part because we did do some (not that much, but some) stimulus, rather than austerity.

Whew. I need a nap. :cheers:

I try to do that but then I go on Lateral G and get ideas for my car and there goes my saved money again...:(

Debt is a "product" -- which, when offered, needs a buyer... when the buyer is afraid of the product - he'll demand a higher premium or he won't buy.

It's the oldest market in the world... Our debt is "cheap" (Low coupon rates) because we are seen as having the ability to pay back the debt with the interest. Europe's debt carries a high coupon rate because there is a far higher risk of default.

As a buyer of bonds and corporate bonds etc... I wouldn't care if Europe paid 15% - I wouldn't touch it. It wouldn't make me a buyer even if all of Europe backed the bonds, because their problems are so systemic that issuing more bonds to cover their current crisis is only adding to their problems.

It's like getting pregnant to save a marriage - or borrowing a third mortgage on your house because you have a debt problem... either way - it's going to end badly.

The real issue is - whether you're a household, or a government - you can't spend more than you earn.

The problem is fixing what got you here in the first place...

Just a couple of points here.
1. "Europe" can't sell debt government debt. Only sovereign governments can, and there's a big difference in yields between Spanish yields and German yields in bond markets. That's a significant problem in how the euro is set up. Shared currency, but not a shared ability to raise money via bond auction.

2. I agree with you about why the yields are so different between the US and Spain, or the US and Italy. The markets see the US as the safe place to invest their funds, with little risk of default or future inflation. That's why yields are so low, and they are low on 10 year bonds too. IOW: the market disagrees with your assertion (and BucketList's) that the US is headed for debt difficulties similar to that in southern European governments within the next decade.

Well - exactly - and think of it this way.... you pay your bills and have a low mortgage rate (Germany)... would you consider guaranteeing your neighbors (Greece/Spain/Italy) debt when you know he's out of work, and owes everyone in town, and spends money like a fool??

The market ? You mean the "free" market ?

The one artificially propped up with worthless dollars ? Pumping money into the markets and the government by the Federal Reserve only prolongs the agony.

You do not see a Debt crisis ? Well you are entitled to your opinion, but there is a Debt crisis, now and in the future.

The Market is feeding on the stimulus money.Take that away and let the market settle to where it should be..

I have set my Investments for "stimulus" for the last 4 years. If it continues, you will be left with the Rich and the Poor, the middle will be hollowed out.

Stimulus without Debt reduction is madness..And the only way to prove it is to let the next few years play out...Charts and opinions mean nothing and time to let it play out is the true way to see who is right. I will bet on the debt crisis..I bet on the 2008 Crisis and was right, so I will follow my gut on this debt crisis..Our opinions are just that, and the true test is Time.

Mikes "summation".....


You can not spend your way to wealth...:D


I agree.


If you're in debt - and someone gives you some money - you have two choices. Pay off your debt - or spend it, and spend even more, on your credit card while you're at it. Choose the latter and the guy that gave you the money might get pissed and start making demands that you change your ways, or chooses to cut you off. At some point you either go bankrupt, or you make a deal with your creditors to take a haircut, and you wise up and eventually pay them off.

Greg,

I have come to find that you can take my long winded posts and summarize them in a few sentences..:cheers:

Also this thread is just to get people thinking about Debt, and the government's debt. It isn't about changing each other's minds. It is just about different opinions. Parsons has his, and we have our's. It gives the readers something to think about.

I have always said that I run MY economy, I am too small in the pond to run the Government's Economy. I can only see what I see, give my opinion, and position myself to protect my wealth, however small or large it may be..:lateral:

Governments (and especially governments with their own currency) are not the same as households or businesses. The government has an obligation to follow policies to support employment for all its citizens that's very different than what a household or business does. If your reaction to that statement is that that isn't in the Constitution -- imagine the US with a balanced budget and 30% unemployment. The government wouldn't last long in that scenario.

The data shows that the European (UK, Greece, Italy) experiments with austerity -- reducing their future debt by cutting government spending -- has proven counter-productive. Cutting government spending has increased debt by creating more unemployment and reducing tax receipts.

Simply put: you can't save your way to prosperity. You have to invest your way to prosperity.

Fixating on debt at a time when the economy is operating below capacity and millions of people are out of work (or working below their skill level) is a false savings. A better policy would be to pursue an agenda to support more employment and grow the economy to reduce debt in the future. And that's especially true when the US government can borrow money at historically low rates.

[QUOTE=parsonsj;425933]

Simply put: you can't save your way to prosperity. You have to invest your way to prosperity.


In one's personal life, Saving and Investing are keys to prosperity. The way you use the word "Invest", is code for Spending. They have changed the word from Spending to Investing. The government is the King of wasteful spending.

As with everything , it is all or nothing..They believe they will spend their way out of this mess..You can call it Investing, but it is spending.And the King of waste, Our government, will waste it away.

An example is California, the way the country is going, but on a smaller scale..They approve your "Investing" on a Bullet train..It will triple in costs, and not be finished.At a time when the state has 17 billion in the hole, and they continue to approve programs that are not funded. Also they pass a budget hoping for the upcoming vote on tax Increases..

Again we can agree to disagree. I won't ever agree with you, and you won't agree with me. I am cool with that.:thumbsup:

But this thread is to give Information for the readers of the thread, so I thank you for your views.:cheers:

Let the Individual Reader decide. That what this thread is about..Not you convincing me, or me convincing you.That for sure will never happen.

We can take the small pill now, or the large pill later..

my biggest concern is we enjoy this advantage because we can print our own money, and it's the world's currency. What happens when the Fed goes too far, and it ever lost that status? We could print all we wanted but it would be worthless, think Zimbabwe........... ;) Also realize that the debt is still owed, and the interest rates will not stay as low as they are. When they rise the more debt you have the worse it will be. And there is NO doubt they are going to go up. We HAVE to address the spending to some point.

There needs to be balance, but the fastest way to reduce the deficit is to get people back to work and see the increased revenues rather than trying to increase taxes. But if they are unwilling to pass a budget or reduce spending also, then I don't see it happening near term. They've proven they're willing to spend money, but at this point it's going to the wrong things in my opinion.

Speaking on currency..

In 1964 , you could take a Quarter and buy a Gallon of gasoline..You can take that same Quarter in 2012(Silver), and buy a gallon of Gasoline.

In 1964, you could take a paper Dollar and buy 4 Gallons of gasoline..In 2012, that same paper Dollar now buys 1/4 of a Gallon of gasoline.

That is the state of Fiat or paper currency..The Dollar.

I mentioned in an earlier post about Europe's bonds - or any bonds (BORROWING) for that matter....

Why is the US Treasury so low (rate)? And Europe's so high?

Nobody wants to own European debt. They'd rather have a negative net return (rate vs inflation) than own Euro debt.

I think what Mike (Bucketlist) and I are trying to say - and nobody wants to listen - is that what you're seeing in Europe NOW - is where the USA is headed continuing to spend what it doesn't have and to issue debt.

The reasons for the woes of Europe are many... but mostly it is based on entitlements and high tax rates. Too few paying too much - and too many doing too little and getting too much.

We have been given the opportunity to look into the crystal ball and see Americas future.

The assertion that "mostly it is based on entitlements and high tax rates" doesn't match the data. There is no such thing as "European" debt, and no such thing as a European bond. The argument needs to be based on the individual countries in Europe in order to have data to match the assertion, and when you do that you find the argument doesn't work so well. Here's why:
1. Northern European countries (Finland, Sweden, Norway) have the strongest growth over the past few years, and they have the highest tax rates and most comprehensive safety nets in Europe.
2. Central European countries are doing ok, though they may be in recession now or on their way to recession. Germany, France, Austria, etc. They have lower tax rates, and more private sector safety net (private health insurance, etc.).
3. Southern European and peripheral European countries are doing poorly. The so-called GIPSI (Greece, Ireland, Portugal, Spain, and Italy) countries are in this group, and they are the ones in crisis. These countries are the ones we need to discuss to see if there is a lesson for the US.

When you dig into the the GIPSI countries' data, you find that the assertion that "high tax rates and large entitlements" argument doesn't match either. Recent attempts to cut government spending in those countries have resulted in even larger deficits, and worse, has put millions of people out of work. Cutting government spending is not working. If we look at the GIPSI woes, the lesson is pretty clear: it's better to pursue policies of increasing employment, and growing the economy to reduce future government debt.

Forget Europe for a second and then try the argument of continuing spending in America...Take California, and try to argue that you need to increase the spending and the debt to grow it's economy..

Instead of lowering the debt, they continue to spend on Government employees, and Bullet train projects ,that will triple in costs and be unfinished.

City after city is going bankrupt due to massive over spending..

The spending and growth you talk about is only on the government programs, and the government employees, not the private sector..The private sector is being punished with more taxes to pay for the spending.

This is the canary in the coal mine...The nation is following California's lead..

I can appreciate your posts , so that the reader's can decide for themselves.

But i guarantee that I don't see through your eyes and never will..When you say that it is clear what is happening, I say the same thing...It is pretty clear what is happening..There is a Debt crisis due to massive overspending..

Government has always been the most wasteful entity ever, and increasing it's size and power only lends to more wasteful spending..

More bankrupcies to follow.And they will all be cities and states...More bailouts, printing and spending is coming.

Yeah, California has real problems. It's a bit of a poster child for austerity efforts not working.. as each new round of spending cuts is instituted, the deficit goes up, not down. It was true for Gray Davis, the Governator (who can spell the man's name), and now for Jerry Brown.

What's the answer? More tax base. How? Invest in the population. Get the unemployed back to work paying texes. If you want to see the cause of California's budget problems, go back to Proposition 13 in 1978, and you can see a series of budget crises that have been happening since then.

There's no easy solutions -- but cutting government spending doesn't work. It hasn't worked in California, it hasn't worked in Texas, it hasn't worked in the UK, and it hasn't worked in Italy, Greece, or Spain. We need to do something else.

Wisconsin has shown some promise. Their approach has been to require government employees to provide a larger percentage of their pension contributions -- in effect, a tax on unionized government employees. I'm just spitballin' but maybe something to try in California is to invest in more school teachers (California is currently 48th in spending per capita in education) and require them to provide a greater percentage of their pension. :cheers:

Wow...It is the poster child for austerity not working ??? Now that is funny..Nice twist on things. It is the poster child for...well i cannot get political..But without cutting the government waste and spending, it will just be asking for a bailout soon..Moonbeam got it wrong the first time, and round two will be worse.

Again with comments like that, you and I will never agree...More spending on teacher's ? Less Illegal Immigration maybe. No bullet train..No 1000 employees of the government getting raises..

More spending ? Of money they do not have...They will punish the successful to fund the lazy.. More property tax, mileage tax, all to fund those not putting into the system.

I like your twist on things..In my humble opinion, completely off base and wrong, but again, good for the readers of this thread...

Let them decide what they believe..I know you have, and so have I.
We agree to disagree.:cheers:

In related news:

http://www.bloomberg.com/quote/USGG10YR:IND

I'm not trying to change the subject from California, but have a look at Japan.

Its bond yields are even lower than those of the US, with a debt to GDP ratio nearing 200%. And that's been true for a very long time.

I will check it out..

Gotta go, but like I said, it is good to hear all sides and let each reader decide for themselves..:thumbsup: :cheers:lateral:

If we go back and look at our own recent history, we can see what got us out of the depression. And despite what public school textbooks say, it was not going to war, but it was the ending of WW2, reducing taxes by 1/3 and cutting govt spending by 2/3. Those 3 key items gave us baby boomers and prosperity.

John, I don't know if you have Amazon Prime but I want to suggest a neutral movie called IOUSA. It's free to watch if you have Prime. I'm about half way through but so far it does a good job explaining the history of our debt and tells the story of how the Govt Accountability Office basically went on a tour trying to educate voters about the dangers of a then 14 trillion dollar debt.

But a large part of this too, is understanding the Federal Reserve. It is a private cartel of banks that by law is in charge of our currency and fixes interest rates. They are a blank check for a spend happy Congress, and they profit from govt spending. Think of Goldman Sachs financing our govt spending, and allowed to create money from thin air and charge interest on that. You can see how private institutions like this are only concerned with their bottom line and not the end users. Especially when they have a monopoly.

The truth is our govt (which is really us, you and me) is indebted to private central banks in which we are human collateral providing revenue by law. We have literally been enslaved and conquered by these institutions.