National Debt - infinitely expanding

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I've never had the opportunity to discuss this with people, I think it's very important to realize the scam of national debt in my views and others.

What is the point of national debt which infinitely expands? We act as if it matters when addressing certain subjects then contradict ourselves in other situations. We use deficit as an excuse to keep poor people and disabled people in horrible living conditions yet infinitely expand debt and infinitely expand the debt ceiling as if debt doesn't matter. Every president seems to increase debt, our government expands to increase debt and we never actually try to pay that debt off to reach a point of not having debt, we do the exact opposite. Yet when it comes to helping the less fortunate out, we act as if debt prevents us from doing that??

Debt seems to not matter, as we infinitely expand it, so why do we use it as an excuse to justify not helping those in need? Doesn't this seem pretty messed up, it certainly does to me? How does everyone else feel about this? It's not a US matter, this infinite debt scandal is pretty popular all over the globe and the contradiction is we all use it to infinitely spend on government programs and needs while we justify debt as a means of keeping poor people and disabled people in poverty.

Basically debt doesn't matter until it does. When that day comes there will be a reckoning. See Greece circa 2010.

I will look into that, maybe I can find a youtube video about it?

My major point though is we use debt as excuse to not help people or communities in poverty which lack any kind of support to give them any hope at all, pretty much insuring that they have extremely limited positive outcome. We have abandoned people, then we use money that we don't have to build roads and maintain infrastructure, we are basically pretending that infrastructure and government spending is more valuable than human lives within our own country. Basically, it's ok to pave a road with money we don't have, it's not ok to help a person have the opportunity to be successful. Seems like, as a whole, we have very misplaced values, where a road is more valuable than a human life.

Hmmm, i figured more people would have more to say about this? I guess this is why it's completely ignored in mainstream conversations also, because it makes no sense.

National debt, in itself, doesn't matter. What matters is the interest payments on the national debt. As long as these don't grow faster than the economy then you're fine. If they do then you don't have as much money to use productively.

Borrowing to fund infrastructure spending like roads is sufficiently beneficial to the economy that it earns more money than it costs in interest. Early-years education offers an even greater return on investment, although it takes a long time to pay off so I'm not sure it makes sense to fund it using deficit spending (ask an economist). But a lot of social services don't provide very good average return on investment. Sure, it's a good thing to help people turn their life around - but if the government invested too much money in this, then it wouldn't be able to keep doing it over the decades to come because people would stop buying government debt.

All in all this is a subject with a lot of complicated technical details that I must admit I don't entirely understand. I'm not surprised that people don't find it an interesting thing to talk about.

What do you mean here? What are interest payments on national debt, like tax money or something, the tax money the government collects?

As long as interest payments don't grow faster than the economy then you're fine? What does that mean?

(Sorry, I just don't know much about this stuff. I find it odd that debt always grows, how do we live off of money we don't have and never seems to get paid?)


I know you say you don't know much about this stuff, explain what you can though, if you don't mind. Like, what does it mean to buy government debt?


Maybe it's just that I don't know much but I would think that everyone had better education they would be able to get better jobs and be smarter, thus creating more businesses. I just wish our government would care a little more about the people within our country and worry less about policing the world. I understand that people outside of the US need help but so do people in the US. So it seems as if they basically say, screw US citizens and spend billions on policing the world. I think if we just stopped doing that, stopped sending soldiers to other countries and stop giving money to other countries, that would give us plenty of money to help the people in the country. There are to many things that are screwed up about how people operate our systems, like our public schools. It's like, I don't think a lot of these democratic systems are bad ideas, I think what happens is they take a good idea and poorly execute it.

Like, to focus on the public school system, they seem to focus more on having a good looking building than actually teaching the kids. They pay a ton of money to create new buildings like every ten years and completely abandon the old buildings. I know they did that in my county, the education was horrible yet every so often they are building a new building or adding things like new gyms, so it's not even as if the needed more room for students, it just makes no sense. A brick building can last for 50 years with little maintenance needed, hell, my mom lives in a brick house that is 70 years old and there is nothing wrong with it. Seems they could use that money to pay for better teachers so the students actually got a good education.

I can think of tons of ways to improve schools, so why can't they? Like, for slow students, you could separate classes into kids who learn slower and kids who can learn at a decent rate, then kids who can learn very fast(gifted). Also, they have stupid rules in place, why would you want to guarantee that a horrible teacher that does the kids no good keeps their job? That sounds just crazy, it makes people like me think that they do that on purpose, like they don't actually care about educating the kids. That is how my school was. Now, if I can think of things like this, why can't they? Are you from the US?

Like I said though, I don't think the issue is lack of funds, I think it's poor management. Why make the appearance of the school a higher priority than the education it offers?

In the US, and many places, central banks can't allow free market interest rates, because these countries are so much in debt.

Higher interest rates means higher interest payments.

So, debt matters now.

This hurts savers and causes them to seek riskier investments.

Care to go into more detail? I don't see the connection between national debt and private bank interest rates. Only thing I can think of is that treasury bonds have low interest rates because of high national debt, and banks cannot invest in these to guarantee return, but this does not prevent banks from investing in other sources.

Interest rates reflect the supply/demand of money.

There is tepid demand for treasury bonds, so in the US, the Federal Reserve provides that demand, or interest rates would shoot up to where people would want to buy them.

a. So, the "FED" keeps rates low and that hurts savers.

b. It also creates inflation, because the "FED" merely prints the money to make these purchases.

The US appears to be on a bad trajectory

a. "As reported by The Wall Street Journal citing data from the Congressional Budget Office (CBO), the U.S. will spend more on interest than it spends on Medicaid in 2020
https://www.foxbusiness.com/economy/us- ... y-spending

b. "in 2023 interest spending will exceed national defense spending, and by 2025 it will spend more on interest than on all nondefense discretionary programs combined".
https://www.foxbusiness.com/economy/us- ... y-spending

I don't want to inadvertently mislead you but also can't really think of a good resource for you to check out that is easily accessible. Maybe an EdX Macroeconomics course?

I think the general gist is that "national debt" actually take the form of the government selling "bonds" which it guarantees a certain return on (maybe you'll get your money back plus 2% after three years). Because the US government is big, rich, and secure, American government bonds are seen as a very secure investment for the risk-averse because you're guaranteed to get your money back. But the government needs to make sure it actually gives people what it promised, otherwise the "promise" of the bond won't be as secure and people won't be prepared to invest in them. This would limit the government's ability to sell bonds and run deficits (i.e. spend more money than they take in taxes and other income).

The interest payments are the 2% or whatever that you promised to bond holders. The government has to set aside tax money to pay the interest, because borrowing to pay off your debts is almost as stupid for governments as it is for people (not entirely though, as governments spend so much money that it distorts the economy in a way that individual households can't... but that's another matter). If you borrow money to pay interest then you just need to borrow more money to pay the interest on that... it's a vicious circle. So it's important to keep paying down the interest. On the other hand, borrowing to pay back your debt (excluding interest) is sustainable.
(Sorry, I just don't know much about this stuff. I find it odd that debt always grows, how do we live off of money we don't have and never seems to get paid?)


On this point - US foreign and defence policy is entirely self-interested. It happens to be very good for most of the rest of the world too, because what's good for me is probably good for you.

You spend so much of defence because your country spans across an entire continent from sea to shining sea. The US government wants to be able to fight two existential wars, one in the Pacific and one in the Atlantic, at the same time. Sound crazy? Well, WWII happened, and it was entirely possible in the years following the war that Russia would push west into Europe and east into Alaska.

The US's oversea's bases are basically there to help contain wars away from America. During WWII, very few American civilians died, because the fighting was elsewhere. The fighting was near Britain, so quite a lot of British civilians died in bombing raids. And the fighting was actually happening in most of continental Europe, so a lot of these countries (particularly Russia) were razed. The US has a big base in Germany so that if Russia invades Europe, the US will be able to fight it in Germany rather than waiting until it has crossed the Atlantic and is knocking on the door of Boston. Similarly, the bases in South Korea are there to stop any war in Asia from affecting the US West Coast. If China or Russia were to push East, the US could contain the fighting around Korea and Japan and keep Americans safe.

The war in Afghanistan was about ensuring American security after 9/11. Iraq was a bit more pre-emptive, and while Saddam had WMDs they weren't capable of the things that Bush and Blair said they were. Obama repeatedly refused to attack Assad even after he was caught using chemical weapons against civilians (this is one of the few ways I think Trump is an improvement on Obama).

The wars against communism were stupid and wrong (and I say that as an anti-communist), but they weren't done out of concern for the countries suffering under communism, they were done because the US didn't want Soviet satellite states in key locations. In particular, the Monroe doctrine... I hope I'm using this correctly... basically says that the entire continent of the Americas should be occupied by US allies so that the US never has to worry about invasion by land and can use the Atlantic and Pacific as the world's two greatest physical defences.

The US supports UN Peacekeeping missions because they help maintain its standing within the international community and also help make the beneficiaries more pro-American. This motivation could also be said to underpin the more "benevolent" conflicts the US has been involved in, such as the first Gulf War and Obama in Libya.

I can't speak to the specifics of your case. I would point out that buildings can be crucial to the quality of education. Children can't learn if they're too hot or too cold, for example. There are lots of potential unseen answers here, some of which may indeed be bad incentive schemes rather than actually benefiting students.

Isn't streaming pretty commonplace? I think most American schools offer bright students the chance to do AP classes for college credit, for example. Certainly in the UK most schools offer setting or streaming at least for some classes (Maths is most common, along with languages). However, while the evidence suggests this benefits outcomes for gifted students, it seems to be harmful for lower sets - there's now a greater concentration of disruptive pupils in the class and fewer smart kids who can help their neighbour. Good reading here: https://educationendowmentfoundation.or ... streaming/

Conservatives were very outspoken about debt and deficits during the Obama administration: since Trump however, and even more considerable deficits thanks to tax reduction to its friends the rich, it just don't seem to matter to them anymore; at least until a Democrat president.

Dear Crimadella: you are right.
If you are in the US.
Basically, in 2008 the US banking sector collapsed and the whole world panicked and started buying US bonds.
In a situation like this, you can do whatever the f**k you want. Print money and just hand it to the banks, for example, as the US government did. Or give money to people. Or spend it on things a state needs to function, like infrastructure and efucation. Two things the US government isn't doing. It easily could though.

Greece is a different matter. Greece is a highly corrupt country. That's one thing. It's balso economically weak, and doesn't export anything but olives. It's also in a monetary union with germany, so it can't print money to devalue its currency, and the interest payment to the ECB are crushing the economy.
The ECB is lending money to greece at an interest rate that would require greece to grow at chinese rates. Ten percent growth would be great... In other words: Greece is being dismantled for a generation or two to come.
Yes, it's a corrupt cpuntry, but what the Eurozone is doing to it amounts to a crime.

I wonder how much longer it's going to be before all these countries which developed nonsense economic princibles crash and cause global panic?

You obviously can't go into debt forever, that means every country that continues down the path of increasing debt is going to fail. Really sucks they managed to cheat Americans by breaking rules the constitution amended and allowing bills of credit to be giving out rather than global currency metals. When the country crashes, everyone in america will be pennyless, it's sad that the founding fathers put forth these rules specifically to prevent this, yet corrupt people went against it anyway.

People always tend to make the argument about, how bad would it be to have to carry gold and silver coins around? I don't know, I imagine it's not as bad as a country adopting ridiculous spending habits and handing out bills of credit that will eventually be as valuable as toilet paper.

Sticking to the gold standard (or similar) is complete economic nonsense, much worse than the existence of Treasury bonds. It requires every other nation to agree with you on the relative worth of your currency and gold. If they disagree then they'll drain your reserves of whichever one you have undervalued and the system will collapse.

Furthermore, the gold standard prevents you from increasing the monetary supply during recessions, it increases short-term price fluctuations, and it doesn't give central banks much control over the rate of inflation (which needs to be positive but low).

There's a reason there isn't a single country in the world which uses the gold standard.

Replace the word conservative with republican representatives and you are correct. Rand Paul was against the omnibus spending bill, and spoke out against other republicans hypocrisy on deficit spending.

Yeah, I mean, it's much better for all countries to eventually collapse because their debt does nothing but climb. Seems that the gold standard was the way to go. Do what you can afford to do. not dig a hole of debt you can never climb out of. It's not different than handing a kid a credit card. Do what you can afford to do, that is how I have lived my entire life, I am not in debt, I owe nobody any money.