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National Debt, help me out here.
Mar. 21st, 2009 02:03 amI'm trying to better understand U.S. economics because it's in the news so often now and, really, I am nothing like an expert on any of this. So anyone who wants to help me out, feel free.
Basically, I understand why the stock market trickles down into the lives of everybody, why fears about the econonomy lead to even worse recession, and why war costs so much and can cause stock market crashes and economic downturns. I also comprehend the basics of the debate between republicans and democrats re: capitalism vs socialism, and where we should draw the line between them for us.
I do not understand much about national debt. I know that our government's debt is basically taxpayers' debt, as we pay the taxes that fund their spending. So theoretically I assume that means that as debt rises, taxes rise, which could obviously effect the average American in a direct way. Right?
What I don't get is, who is the money owed to, and how do they enforce getting it? Like...where is Obama getting all the nonexistant money FROM, and what are potential consequences of making it appear out of thin air this way? Or, what is the real threat to our country of having a huge national debt, in laymans terms, for the average American?
Like, ok...our govt gets the non-existant money they're spending from either foreign govts or our own banks...right? And I would assume mostly banks/firms whatever here, but that is just my assumption. I remember enough high school to know they mostly do this through bonds and securities. Anyway...is it just that our govt is honor bound to adhere to the system of repaying debt and going through the motions of not being in the red? It seems to me that they could do that in small high interest payment that just go on literally indefinitely, as we re-build our economy with the massive loans...couldn't they? What would stop that from just helping the institutions they're borrowing from on such a grand scale on a very long term basis and ensuring their stability? Or are there actual consequences we will all feel of debt piling up as-yet unpaid? I sense on some intuitive level that it will make our dollar worth less on the international market, but am not sure WHY that would be in ways I can actually explain.
The truth is I feel that I personally have seen and heard talk of our debt growing to staggering new numbers my entire life and it's never impacted diddly squat that I, as an admittedly ignorant Jo Shmo, could detect. The number grows, who cares, what normal consumer can even conceptualize "trillions" anyway?
But, this is obviously a huge oversimplification on my part. So I'd like somebody to make it more clear for me HOW the $9 trillion debt McCain thinks we'll have in a decade will truly "topple our nation". Where is this idea coming from, how can/could it do such a thing, what exactly is the meaning of "topple" in his mind here anyway, etc...
National Debt 101, teach it to me somebody.
*Please try to avoid arguing about Partisan crap here if at all possible. If you need to say some biased stuff that's fine, but no attacking each other...
Basically, I understand why the stock market trickles down into the lives of everybody, why fears about the econonomy lead to even worse recession, and why war costs so much and can cause stock market crashes and economic downturns. I also comprehend the basics of the debate between republicans and democrats re: capitalism vs socialism, and where we should draw the line between them for us.
I do not understand much about national debt. I know that our government's debt is basically taxpayers' debt, as we pay the taxes that fund their spending. So theoretically I assume that means that as debt rises, taxes rise, which could obviously effect the average American in a direct way. Right?
What I don't get is, who is the money owed to, and how do they enforce getting it? Like...where is Obama getting all the nonexistant money FROM, and what are potential consequences of making it appear out of thin air this way? Or, what is the real threat to our country of having a huge national debt, in laymans terms, for the average American?
Like, ok...our govt gets the non-existant money they're spending from either foreign govts or our own banks...right? And I would assume mostly banks/firms whatever here, but that is just my assumption. I remember enough high school to know they mostly do this through bonds and securities. Anyway...is it just that our govt is honor bound to adhere to the system of repaying debt and going through the motions of not being in the red? It seems to me that they could do that in small high interest payment that just go on literally indefinitely, as we re-build our economy with the massive loans...couldn't they? What would stop that from just helping the institutions they're borrowing from on such a grand scale on a very long term basis and ensuring their stability? Or are there actual consequences we will all feel of debt piling up as-yet unpaid? I sense on some intuitive level that it will make our dollar worth less on the international market, but am not sure WHY that would be in ways I can actually explain.
The truth is I feel that I personally have seen and heard talk of our debt growing to staggering new numbers my entire life and it's never impacted diddly squat that I, as an admittedly ignorant Jo Shmo, could detect. The number grows, who cares, what normal consumer can even conceptualize "trillions" anyway?
But, this is obviously a huge oversimplification on my part. So I'd like somebody to make it more clear for me HOW the $9 trillion debt McCain thinks we'll have in a decade will truly "topple our nation". Where is this idea coming from, how can/could it do such a thing, what exactly is the meaning of "topple" in his mind here anyway, etc...
National Debt 101, teach it to me somebody.
*Please try to avoid arguing about Partisan crap here if at all possible. If you need to say some biased stuff that's fine, but no attacking each other...
