National Debt vs Foriegn Debt

[sandy whitelinger]

This is a theory I have and I wonder if anyone out there has enough of a background in economics to help me out here.

Aproximatly half a trillion dollars leaves the country in a year in the process of foriegn trade. We also concoct about half a trillion dollars of new money a year in the form of national debt.

Is there a correlation?

If we keep sending money overseas are we not depleting our money supply?

Wouldn't that lead to a depression?

Does the national debt replenish that lost money?

 

[evearael]

It's not good to have a trade deficit. It's like buying too much with a credit card. But printing new money to make up for it, because it will drag the value of the dollar down, which will not only hurt America, but every country whose currency is based on it.

National debt in the short term is not necessarily a bad thing, but when it starts to extend over long periods of time it will certainly undermine the economy. The national debt does not replenish lost money.

 

[evearael]

We need to seriously bolster our education system from the bottom up, and take other measures to strengthen our economy, or we could stand to lose our dominance in the global market.

 

[Maxist]

We replenish it all. We have statictitions ---one of which happens to be my grandfather--- who insure that there is nothing like that happening.

 

[evearael]

There is lost... down a toliet... and lost to foreign countries. It is fine to print more to deal with the former....

 

[kevmicsmi]

There is lost... down a toliet... and lost to foreign countries. It is fine to print more to deal with the former....

But we dont lose money to foreign countries. There is no trade deficit. We trade our money for goods and services that we deem more valuable than the money we pay for them, so you could say there is a trade surplus.

 

[sandy whitelinger]

But printing new money to make up for it, because it will drag the value of the dollar down, which will not only hurt America, but every country whose currency is based on it.

A lot of the $s go to China who seems to be proping up the Yen artificially. Another large portion of it goes to the middle east as oil purchases both by us and those countries who purchase oil. The oil, I believe, is traded on the dollar. Now the oil suppliers have lots of dollars. Is it any wonder they want to buy our ports with them?

 

[sandy whitelinger]

But we dont lose money to foreign countries. There is no trade deficit. We trade our money for goods and services that we deem more valuable than the money we pay for them, so you could say there is a trade surplus.

Actually a fair amount of the greenbacks (technically they're probably data streams) make it back to our country when foriegn interestrs buy our national debt.

 

[Super Universe]

About 11% of all the income taxes we pay goes purely to pay interest on our national debt. This goes up about 1% per year. Our total budget is about $2.6 trillion so just think of what 11% of ($28.6 billion) could do for education.

Our current national debt is over $8 trillion and growing by about $500 billion a year because we refuse to cut back on spending. The Iraq war is not the cause of it, we haven't balanced our books but for a few years (Clinton) of our entire history.

Any home money manager knows that you are going to get in trouble if you only pay interest on your debt and continue spending.

I personally believe that a modest increase in income taxes to 3% is necessary along with an additional 5 cents on cigarettes, alcohol, and gasoline. Then cut back some of the military: retire the B-52's and mothball all the U.S. Navy's frigates. And a president just may have to veto every bill that comes from congress with any additional spending.

If we don't take steps now to balance our budget and begin paying down this debt our children will have to do it and it will hurt much more. Instead of 3% our children will be paying a 13% increase.

Congress, the President, and we are at fault. Would you vote for a President who says they are going to raise taxes 3%?

The Citizens Against Governmental Waste has a website that explains a lot more. Some of the things congress wastes our money on are amazing. Millions for a tropical jungle in Ohio?

http://www.cagw.org/site/PageServer

 

[kevmicsmi]

About 11% of all the income taxes we pay goes purely to pay interest on our national debt. This goes up about 1% per year. Our total budget is about $2.6 trillion so just think of what 11% of ($28.6 billion) could do for education.

It would do NOTHING for education. Money is not the problem, the lack of competition is the problem.

 

[Super Universe]

4 million primary and secondary education teachers in the country could use a raise.

 

[Ardent Listener]

Debt is the fatal disease of all republics, the first thing and the mightiest to undermine goverments and corrupt the people. -Phillips Wendell

 

[kevmicsmi]

4 million primary and secondary education teachers in the country could use a raise.

And I could use a boost in my height

 

[sandy whitelinger]

About 11% of all the income taxes we pay goes purely to pay interest on our national debt. This goes up about 1% per year. Our total budget is about $2.6 trillion so just think of what 11% of ($28.6 billion) could do for education.

Our current national debt is over $8 trillion and growing by about $500 billion a year because we refuse to cut back on spending. The Iraq war is not the cause of it, we haven't balanced our books but for a few years (Clinton) of our entire history.

Any home money manager knows that you are going to get in trouble if you only pay interest on your debt and continue spending.

I personally believe that a modest increase in income taxes to 3% is necessary along with an additional 5 cents on cigarettes, alcohol, and gasoline. Then cut back some of the military: retire the B-52's and mothball all the U.S. Navy's frigates. And a president just may have to veto every bill that comes from congress with any additional spending.

If we don't take steps now to balance our budget and begin paying down this debt our children will have to do it and it will hurt much more. Instead of 3% our children will be paying a 13% increase.

Congress, the President, and we are at fault. Would you vote for a President who says they are going to raise taxes 3%?

The Citizens Against Governmental Waste has a website that explains a lot more. Some of the things congress wastes our money on are amazing. Millions for a tropical jungle in Ohio?

http://www.cagw.org/site/PageServer

All that's nice but ignores my point. If we did nothing about the foriegn debt then the country would loose about half a trillion a year in currency. This would lead to a shrinking money supply which would lead to deflation and a recession.

By creating new money in the form of national debt this balances the supply.

It also allows foriegn countries to return some of the greenbacks we send them by buying our debt.

 

[kevmicsmi]

All that's nice but ignores my point. If we did nothing about the foriegn debt then the country would loose about half a trillion a year in currency. This would lead to a shrinking money supply which would lead to deflation and a recession.

By creating new money in the form of national debt this balances the supply.

It also allows foriegn countries to return some of the greenbacks we send them by buying our debt.

Sandy, all paper dollars that leave the country eventually return by either buying debt, or goods and services. If countries stopped buying our debt, they would have to send our money back for goods and services, therefore eliminating the trade deficit.

 

[sandy whitelinger]

Sandy, all paper dollars that leave the country eventually return by either buying debt, or goods and services. If countries stopped buying our debt, they would have to send our money back for goods and services, therefore eliminating the trade deficit.

There is also the option of putting it in banks which is part of what I believe is driving lower interest rates and the building boom.