National Debt

[ripper1]

The national has hit 22 trillion. Ouch. The next recession could be a doozy. Any worries.

 

[dtbach]

I try not to worry about things I can't control.

 

[Dtail]

Will be interesting along with any interest rate rise.

 

[bclover]

2 college kids and 1 "fighting adulthood" millenial at home. I worry more about whether or not I'll have to bury a body and come up with an alibi.

 

[flintnational]

I guess it helps that the Feds have a printing press. They can eliminate some of the debt through inflation (a tax on all). But, there has to be a tipping point. I don't know if anyone knows where that point is.

 

[latexman]

The national has hit 22 trillion. Ouch. The next recession could be a doozy. Any worries.

https://www.cnsnews.com/news/article/susan-jones/156945000-2018-ends-record-employment-participation-rate-hits-trump-era

To summarize the key point in this Jan. 4, 2019 article.

When Trump became president in January 2017, 152,076,000 Americans were employed. Last month, that number grew to a record 156,945,000, a gain of 4,869,000 in two years.

So, 22,000,000,000,000 / 156,945,000 = $140,176 / employed person

https://www.populationpyramid.net/united-states-of-america/2018/

This article says there were 328,835,763 citizens in 2018.

So, $66,903 / citizen.

Either way you cut it, HOLY MOLY!

 

[imoldernu]

If you feel courageous dig a little into the results of a Google of:

"China and United States Debt"

Be prepared for a few hours of reading to "get" the relationship. (go to the investment related websites. )

Hint... "It ain't gonna be easy".

 

[ripper1]

I think the last serious discussion about the national debt here was on 11/04/2007. Started by LeatherneckPA and 31 posts. Most seemed to blow it off and then we all know what happened in December of that year.... Just saying......seems pretty eerie.

 

[Independent]

I think this is a serious problem. At some point, the US prints money.

The issue isn't that our current debt is "too high", it's that we're adding $1 trillion per year during an economic boom.

But, having said that, I don't have a good way for retired people to protect themselves.

 

[Chuckanut]

The national has hit 22 trillion. Ouch. The next recession could be a doozy. Any worries.

Hush! Quiet!

Pay no attention to the man behind the curtain.

 

[bclover]

Hush! Quiet!

Pay no attention to the man behind the curtain.

I don't think it's a matter of not paying attention. more of a question of worrying. In reality there is very little I can do about the national debt outside of voting.

As @dtbach said, I try hard not to stress over the things I have absolutely no control over.

 

[scrabbler1]

When I think about the "day of reckoning," I think about what happened to New York City back in the mid-1970s when the banks closed their windows and refused to lend the city any more money until the city cleaned up its act and got its fiscal house in order. That began several years of tough times for New York City and forced its leaders to enact some tough measures, breaking with their normal ways of doing things. Can that ever happen at the federal level?

 

[audreyh1]

Worrying doesn’t accomplish anything. You can vote your opinion. You can assume economic headwinds going forward (such as somewhat lower GDP and higher interest rates/inflation) and adjust your investment plans accordingly.

I’m not interested in playing the survivalist prepper game.

 

[joeea]

The national has hit 22 trillion. Ouch. The next recession could be a doozy. Any worries.

What does the national debt have to do with the dooziness of the next recession?
Or were you just combining two distinct thoughts into the same paragraph?

 

[Lakewood90712]

Meh, It's only money

 

[HI Bill]

What does the national debt have to do with the dooziness of the next recession?

Ask Greece what happened when they went too far into debt, and their debt/GDP ratio became too high!

 

[stepford]

Ask Greece what happened when they went too far into debt, and their debt/GDP ratio became too high!

I would imagine they wished they had control of their own currency so that printing their way out of debt was an option - a situation we do not share.

 

[audreyh1]

Ask Greece what happened when they went too far into debt, and their debt/GDP ratio became too high!

Do you really see an equivalence?

 

[cbo111]

I see a national sales tax in our future, maybe half-penny on the dollar. It will be a bitter pill initially, but will be transparent to most of us in short order.

 

[HI Bill]

Do you really see an equivalence?

Not at the moment. Our current ratio is 104% In 2017, Greece was at 178%. With increasing interest rates, and continued government spending that outpaces income, our debt will continue to grow. The collapse point will likely come by the time the ratio hits 200% (my best guess), and we can no longer afford to pay the interest on the debt.

 

[audreyh1]

Not at the moment. Our current ratio is 104% In 2017, Greece was at 178%. With increasing interest rates, and continued government spending that outpaces income, our debt will continue to grow. The collapse point will likely come by the time the ratio hits 200% (my best guess), and we can no longer afford to pay the interest on the debt.

So the US dollar loses value......

Greece could not devalue the Euro.

I’m not saying that our national debt is of no concern. I just don’t think the Greece situation applies as they lack a sovereign currency among numerous other differences.

 

[RE2Boys]

I think this is a serious problem. At some point, the US prints money.

The issue isn't that our current debt is "too high", it's that we're adding $1 trillion per year during an economic boom.

But, having said that, I don't have a good way for retired people to protect themselves.

We may need to close this topic as it's hard to be nice about it. I highly respect the opinions of the members of this forum, but I've nothing nice to say about the Congress who voted to accelerate the growth of the debt and the clueless golfer.

I think I'd better put this thread on ignore.

 

[HI Bill]

So the US dollar loses value......

Greece could not devalue the Euro.

I’m not saying that our national debt is of no concern. I just don’t think the Greece situation applies as they lack a sovereign currency among numerous other differences.

Ok, then let's look at the #1 nation in terms of debt/gdp...Japan. They've gone so far into debt (238%), that they've been in a permanent recession for 20+ years. That's not the whole story there, of course, but they do have complete control of their currency.

Guess my point is that as the debt increases to multiples of the GDP, the interest payments rise, and we'll have to increase taxes significantly to pay the debt, which will be a major drag on the economy, unless we default/devalue the debt, which, in my current understanding, is not allowed.

 

[stepford]

We may need to close this topic as it's hard to be nice about it. I highly respect the opinions of the members of this forum, but I've nothing nice to say about the Congress who voted to accelerate the growth of the debt and the clueless golfer.

I think I'd better put this thread on ignore.

Before everyone piles on to either counter or support this position, let's note that BOTH sides have their own preferred methods of debt reduction that are strongly resisted by the other side. While we all certainly have our own partisan views, they are not germane to this discussion.

 

[imoldernu]

I don't see this as a controversy, but more of a matter of understanding just what the debt represents, who owns it, how it can changes, and gains or losses value as regards the person, country or entity owning the debt.

Digging in to this could allow a smart investor to see early warnings... not necessarily negative, but how the debt value may change. The Chinese/US relative debt ownership study, goes far beyond the two countries, and can be affected by seemingly distant activity in trade and debt owed to many other countries.

Some of the long term projections by international financial analytics have proven remarkably accurate. More to this than earnings or corporations plans that we look for in stocks.

A good example is the rapid and not well understood changes in population, as well as pending changes in the economic stress actions in countries such as Greece and Ireland.

A lot more than what I could understand after an hour or so reading about US/China Debt. While it all seems far off, once started,there is a chance that everything could move quickly.

#7 on the worry list.