The Debt Clock

[imoldernu]

After spending about ten minutes looking over the US Debt Clock, eyes glaze, the mind wanders and it's lost in the panoply of those amazing web pages that we resolve to visit when we have time. (maybe)

After a few hours of learning how to read the statistics, a different point of view. More of a global overview of the US economy, and a look ahead to the future, and what we may expect to see in the coming years. The comparisons to other nations in terms of debt, GDP, and a historical purview of the past 38 years, points up the good and bad of where we've been as a country, and, more important, the direction to, and speed of, where we are headed.

Some of the sidelights to be considered are gold, homes (mortgages), energy and interest rates.

Individual statistics like the numbers of retirees, the number living in poverty, veterans, the disabled, number of students, the number receiving federal aid, and a host of other numbers that are eye opening... all put together to provide a perspective of who we are and where we are headed.

For me, the time spent in putting the numbers together, has resulted in a more centered understanding of not just who we are, but how these statistics may influence our future. Yes... for the present and the neartime, but more importantly next year and perhaps 10 years out.

I think the staring point may be a comparison of nations, followed by an historic review of national debt, interest rates, and especially the total dollars in unfunded liabilities, especially Social Security and Medicare.

My personal interest has grown to include looks into GSE's and the relationship of government by department:
https://thebalance.com/current-u-s-federal-government-spending-3305763

Admitting my own financial ignorance, putting all of this together, has become an interesting project, as I now see many of the daily headlines in a different light. Tariffs, trade, debt ownership and international relations have taken on a much different light. Knowing what the real dollars are behind intra-national interests gives a more measured view of what the headlines mean to our economy.

Consider a bookmark for the clock.
U.S. National Debt Clock : Real Time

 

[Helena]

.

The most important debt clock is your own.

 

[RobbieB]

Nah, mine's too boring. Numbers are not high enough.

 

[njhowie]

I seriously doubt it ends in a good way.

 

[Oz investor]

i have tried to keep my debt ( and expenses) very low , but i expect an extravagant government to find more ways to tax me , to keep THEIR spending rampant

what i do think is the public debt is gross ( in Australia as well )

i very much doubt the reducing of the public existing debt , will be painless or easy

 

[FIREmenow]

Some good data to look at here - other countries available also:
https://tradingeconomics.com/united-states/government-budget

 

[brucethebroker]

After a few hours of learning how to read the statistics, a different point of view. More of a global overview of the US economy, and a look ahead to the future, and what we may expect to see in the coming years. The comparisons to other nations in terms of debt, GDP, and a historical purview of the past 38 years, points up the good and bad of where we've been as a country, and, more important, the direction to, and speed of, where we are headed.

Some of the sidelights to be considered are gold, homes (mortgages), energy and interest rates.

For me, the time spent in putting the numbers together, has resulted in a more centered understanding of not just who we are, but how these statistics may influence our future. Yes... for the present and the neartime, but more importantly next year and perhaps 10 years out.

I think your idea is a good one-but, I am one who would snooze while trying to digest the information you enjoy pulling out of the debt clock.

I would, however, read with great interest anything you learned while digging around. Why not post a "Reader's digest" version of things you found interesting in regards to the "gold, homes, energy and interest rates" for example.

Your journal on being retired is always a good read. I look forward to your thoughts on the "DC".

 

[imoldernu]

I would, however, read with great interest anything you learned while digging around. Why not post a "Reader's digest" version of things you found interesting in regards to the "gold, homes, energy and interest rates" for example.s a good read. I look forward to your thoughts on the "DC".

Yeah... tough to get started, and "learning " debt, for me, doesn't come from a book, and the gurus' are away over my head. I simply go to comparisons... first off, countries, then when trying to understand what is happening, I use the time factor for separate parts of the different parts of the US Debt. Checking the real dollars of something like unfunded liabilities over a ten or twenty year span, can give a pretty good idea of how much we have borrowed in order support Social Security or Healthcare.

So for starters... take a good look at the World debt clocks... (upper left hand corner of main page) the do the simple comparisons of debt to GDP internel, and then external... don't try to do every country, but first, the ones that are big, like China, India, Russia, Mexico, Nigeria, Brazil, and Nigeria. The numbers, by themselves are meaningless, but the percentages give a pretty good idea of the amount of dependency on foreign investors.

So, when I see numbers like our external debt, it makes me wonder "to whom do we owe this money?" Like... How much do we owe to China?

No answers from the debt clock, but for anyone interested in our national debt, and how important it is to our future... at the least, a starting point. Maybe it's important, maybe not.

On a general basis, onetime, develop a simple inflation table of $1000.00 of the CPI on a ten year basis from 1980 to 2022. Then using the debt CPI, from 1980 to today pick any single factor of the debt clock and do a rough comparison of the biggest differences.

CPI Year Inc
$1000 1980 100%
$1638 1990 168%
$2169 2000 217%
$2785 2010 270%
$3185 2018 310%

Any of this works, using the numbers from the clock, or on the opposite side, to check how expenditure have varied by year, in such things as defense or government operational expenses.

Tossing out a simple question... Did you know that Fannie Mae and Freddie Mac still exist. Not on the debt clock, but definitely important. Compare Dollars of guarantee today, versus 2008... This wasn't a risk in 2008/09, but a fact. In looking for possible breaks in the economy, could this still be a factor? Mortgage debt, mortgage rates.

Remember the DEW line? (Distant Early Warning). While we all watch the news, the financial predictions... in the past several economic crises the DEW line didn't work. Some familiarity with the parts that make up our national debt might give some extra, early, foresight.

At the very least, even after economic problems come to light, a way to look at the cause.

 

[Cut-Throat]

Checking the real dollars of something like unfunded liabilities over a ten or twenty year span, can give a pretty good idea of how much we have borrowed in order support Social Security........

Actually it is the other way around..... Social Security has never contributed 1 Cent to the National Debt EVER !! ....... In fact Social Security has over a $2.5 TRILLION Dollar Surplus.... The other Government Programs such as the Department of Defense are the ones that are responsible for the Majority of the Debt. And these Programs are borrowing the money from the Social Security Funds.

 

[harley]

Actually it is the other way around..... Social Security has never contributed 1 Cent to the National Debt EVER !! ....... In fact Social Security has over a $2.5 TRILLION Dollar Surplus.... The other Government Programs such as the Department of Defense are the ones that are responsible for the Majority of the Debt. And these Programs are borrowing the money from the Social Security Funds.

While I agree with your general point about SS not being the problem, neither is the DoD or any of the other departments. The blame lies squarely in the lap of Congress. No one else. Except maybe those of us who voted for the idiots over the decades.

 

[Cut-Throat]

While I agree with your general point about SS not being the problem, neither is the DoD or any of the other departments.

I never referred to the Debt as a 'Problem', I was merely pointing out the facts of the funding of Government Programs.

Social Security thus far has been a 'Self Funding' program and has never added a Penny to the National Debt. The Dept. of Defense however does not take in any revenue and every penny that it spends comes from either Tax Payers or is Borrowed and therefore Adds to the National Debt.

That is a pretty large distinction between these two Programs and should be kept in mind when talking about 'Fiscal Responsibility' and 'Budget Cuts'...... You can Milk Cows, but not Chickens.

 

[Mr._Graybeard]

I don't know how this discussion is going to avoid becoming political -- in fact, it already is. With regard to the national debt, I'll offer only one word: Iraq.

 

[braumeister]

 

[racy]

I'm one of those who think the national debt is not a problem. There's lots of information on this & I've lifted some points from the attached:

The federal debt is not like individual debt:
1) The federal govt has it's own bank to impact the economy, the currency and interest rates. Individuals do not.
2) The federal govt does not have a finite lifespan. We do.
3) The govt has the power to tax and to print money. We don't.

5 Things Most People Don't Understand About the National Debt | Money

 

[USGrant1962]

I'm one of those who think the national debt is not a problem. There's lots of information on this & I've lifted some points from the attached:

The federal debt is not like individual debt:
1) The federal govt has it's own bank to impact the economy, the currency and interest rates. Individuals do not.
2) The federal govt does not have a finite lifespan. We do.
3) The govt has the power to tax and to print money. We don't.

5 Things Most People Don't Understand About the National Debt | Money

That is a good article showing the complexity of the issue. I do think that debt at around 100% of GDP is a problem, but one word answers are nonsensical. IMO, the real problem is the ongoing structural budget deficit that is comprised of multiple revenue and expenditure issues. While we can certainly have some national debt (I like my USG bond funds!), annual budgets cannot spend more than they take in forever.

 

[racy]

That is a good article showing the complexity of the issue. I do think that debt at around 100% of GDP is a problem, but one word answers are nonsensical. IMO, the real problem is the ongoing structural budget deficit that is comprised of multiple revenue and expenditure issues. While we can certainly have some national debt (I like my USG bond funds!), annual budgets cannot spend more than they take in forever.

One might think Japan's government, at a GDP-to-debt ratio of 250, would have to pay high interest rates, but they don't. Here's US GDP-to-debt history and below is a list of other countries.
https://tradingeconomics.com/united-states/government-debt-to-gdp

 

[swaneesr]

The US National debt and our annual deficits will become a problem. One of the weaknesses of our form of government is our politicians are unable to use budgetary restraint.

When has lack of self-control lead to good results at any level? The results will be negative, any excuses to the contrary are lame rationalization and wishful thinking.

We as a nation will suffer consequences for our lack of vision and self-control.

Swanee

 

[Cut-Throat]

The US National debt and our annual deficits will become a problem. One of the weaknesses of our form of government is our politicians are unable to use budgetary restraint.

"Our Politicians" are elected by Idiot Voters..... So, no need to blame the Politicians...



If the Politicians ran on the "I want to raise taxes to balance the budget" or the "I want to cut the Defense Budget by 50% to balance the Budget"



........................... What would their chances of Election be? --- Would you even vote for them?

 

[Walt34]

If the Politicians ran on the "I want to raise taxes to balance the budget" or the "I want to cut the Defense Budget by 50% to balance the Budget"

........................... What would their chances of Election be? --- Would you even vote for them?

Sure, as long as they raised somebody else's taxes. I forget where I read this so can't give credit but it's an old rhyme:

"Don't tax you, don't tax me, tax that guy behind the tree."

 

[Running_Man]

One might think Japan's government, at a GDP-to-debt ratio of 250, would have to pay high interest rates, but they don't. Here's US GDP-to-debt history and below is a list of other countries.
https://tradingeconomics.com/united-states/government-debt-to-gdp

The reason is simple the Central Bank is purchasing the debt and returns the interest it receives back to the government. This means the debt is held at actually no cost. By purchasing 95% of the debt each year, the stated goal is to buy enough to hold 10 year treasuries under .1 %. The debt purchase is merely the funding of a negative national account under the government. A side benefit is that they are also buying 95% of the debt that is rolling over, lowering interest costs to contain budget deficits that would otherwise rise. As the Japanese defict spending is not causing an acceleration of monetary supply at the present time (money in circulation is not showing increased velocity), the Central Bank's purchase effectively causes nothing as the increases as the monetary impact of the central government spending is not causing inflation. This appears to mainly be due to the aging of Japanese society.

Once inflation begins however, the Japanese government have no means to control the mechanism and the years of effective cancellation of debt will be over. The time this will occur is totally and completely unpredictable however when it occurs, the fallacy of the former process will be clear to see.

As an example,
If you were to issue a mortgage to yourself and take the proceeds and buy a house, as long as the homeowner takes your currency and the currency used to purchase the house continues to rotate through the economy as being seen of value there is no problem. It could circulate throughout history and if it is acknowledged as holding value it does. You will not foreclose on yourself so there is no risk of default and the currency is always "backed". But there is no backstop once the market decides your currency does not have sufficient value to hold and the holders spend to rid themselves of it.

 

[97guns]

Yes guys take notice when you travel it’s the Chinese that have money right now. They’re coming off tour busses by the hoards and they literally think they own the joint(which they actually do). They will cut the line, cough and sneeze without covering up and literally make like no one else exists except for them, I hate them and I’m one of them.

 

[braumeister]

Which has nothing to do with the topic.

 

[97guns]

Which has nothing to do with the topic.

You may not believe so but it has a lot to do with the thread. China being the largest debt holder knows this, they are prospering from it and can crush us anytime they want

 

[97guns]

It’s been a transfer of wealth from us to them

 

[USGrant1962]

You may not believe so but it has a lot to do with the thread. China being the largest debt holder knows this, they are prospering from it and can crush us anytime they want

China is the largest foreign debtor. They hold less than 6% of the U.S. national debt ($1.19T out of $21T).

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124