National debt has been sloppily considered by most of us. We are not clear what it is...its some kind of funnymoney. The thing about bad debtors is that they have a pathological tendency to disregard or not see clearly just how much they owe and when its due. They forgive themselves far sooner than their creditors ever will. Our thinking just craps out when debt is scaled. Like the old Andy Capp cartoon: "If you owe a hundred pounds, your a failure. If you owe a few million, you are a tycoon [ask the Donald]. But if you owe a hundred billion, you are a government!"...ha ha ha. Money owed is funny, the more the funnier.
Its not funny to the creditor. As long as you are "good for it" your creditors love you. You want to see how fast they can turn on the slickest talkers once there's a wiff of rumor that they might welch? Look what happened to Bernie Ebber's loans.
Our nation's borrowing spree kicked into high gear when Reagan, one of the greatest economic minds the Republicans ever produced, moved into the oval office. Along with pollution control and population control, the great communicator also seduced us into abandoning fiscal control: All of these long term problems call for long term vision and we have not had it. Americans in the person of their economy kept winning free games in the pinball machine of macroeconomics until now: as long as our economy continued to expand, we could keep paying off the older, smaller debt by turning around and borrowing more. See if you can get three economists to agree on exactly what the US, you the worker, our weather, our petroleum resources and all our global trading partners would have to do to keep that expansion going until the now 8 trillion odd dollars is paid off. Go ahead. I'll wait.
What is the voter who now counts more than you? The guys who hold our country's IOUs. And what is that voter's hunch about our prospects as a debtor?
I checked a few sources. wikipedia says about the same things of the national debt... :
The Bureau of the Public Debt divides the national debt into two main categories: debt held by the public, and intragovernmental holdings. Intragovernmental debt includes money for government trust funds, such as pension plans and the debt for social security, which is about $1.7 trillion as of May 2005. Overall, intragovernmental holdings account for over $3.1 trillion of the total debt at this time.
The remaining $4.6 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 ($2.2 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 2004, foreign holdings of Treasury debt were $1,886 billion, which was 44% of the total debt held by the public.
...as the Treasury department does. This number is not exactly same as wikipedia's but if you can open a MS Word doc and scroll to the ownership table, it does show foreigners increasingly are the ones who have the loose change to pick up our debt...we are broke! Between 1995 and 2005, foreign governments share of US debt instruments increased from 1/8 to 1/4 of the national debt while the total debt nearly doubled going from 4.8 T$ to 8.1 T$
Here is a short explanation of the gruesome interest spiral that ends a binge of debt repayed by more debt.
If you don't know what happens when you have to borrow money to repay the money you already borrowed, you haven't watched enough gangster movies...or seen what the new laws will let credit card companies do. When Japan, China, Korea and others send Guido and Louie around to get back what's theirs, the interest spiral that ends the debt binge will fall on whom? Right! It will fall on those who have not been able to put incomes and assets out of the tax man's reach...which as things are trending under Bush won't be anyone but us wage slaves.
The average American pays 200$ a month of the interest on the national debt. This herd of politicians you sent to Washington think they do you a favor or buy your vote because they can "give" you a $200 to $600 per year tax cut? They know you haven't done the math. Now you know they can't do the math. You should fire the bums, especially the bum-in-chief. YOU are paying 50$/month out of your pay check to solvent foreign governments and bankers who bought up our debt. That money is NOT going to foriegners who really need our help...suckers!
I am not an economist but I can prove that I know financial responsibility when I see it. Is there something crazy-wrong about expecting my nation's finances to be in as good shape as my personal finances? The congress has given the credit card companies the tongs and lashes to make damn sure MY finances stay in the black. What have they given my country?
Now, about that inheritance tax thing...are you going to call your senator?
[ok, so I am a fiscal conservative in sheeps, uh er, liberal's clothing. So sue me...if you can do it using your tax refund to cover legal fees. ]
The formula for a stone age economy:
"Neither a borrower nor a lender be."
But if your promises are beyond your means, your hungers have played you false.
UPDATE: if you think I am exagerating, then so is Ben Stein.