Who owns America? Hint: It's not China
globalpublicsquare.blogs.cnn.com
globalpublicsquare.blogs.cnn.com
http://coding.pressbin.com/110/Treemap-shows-who-holds-US-de...
A good portion of titles are cut-off.
As has been pointed out, it's doubtful the US treasury itself counts as being in the same category as US house-holds (the US treasury prints the money it uses to buy US debt, that's hold money gets printed).
They aren't fretting about Japan anymore. But in the 1980s there was an anti-japan screed equivalent for just about anything you read today about China.
With regards to economics anyway.
How can the Treasury have US Debt?
See http://en.wikipedia.org/wiki/File:Holders_of_the_National_De...
[Edit: I didn't read far enough in the source: the linked article misstated "Federal Reserve" as "Treasury"] Also, how does the U.S. Treasury "own" the debt? I thought Treasury issued the debt, and the Federal reserve controlled (more exactly "influenced") the interest rate by deciding how much of those bonds to buy. So I expected the Federal Reserve should have shown up as a large debt holder.
The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous privately owned U.S. member banks and various advisory councils.[
The Federal Reserve System has both private and public components, and was designed to serve the interests of both the general public and private bankers.
It is also unusual in that an entity outside of the central bank, namely the United States Department of the Treasury, creates the currency used.
However, its authority is derived from the U.S. Congress and is subject to congressional oversight. Additionally, the members of the Board of Governors, including its chairman and vice-chairman, are chosen by the President and confirmed by Congress. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. Thus the Federal Reserve has both private and public aspects.
Various statutory changes, including the Federal Reserve Transparency Act, have been proposed to broaden the scope of the audits. Bloomberg L.P. News brought a lawsuit against the Board of Governors of the Federal Reserve System to force the Board to reveal the identities of firms for which it has provided guarantees.[140] Bloomberg, L.P. won at the trial court level,[141] and as of early September 2010 the case is on appeal at the United States Court of Appeals for the Second Circuit.
How can the Fed make a loan to the unqualified wives of Morgan Stanley executives with zero-risk to them without repercussion if they are so well controlled?
The two biggest treasury bond holder are agencies of the government. Which essentially is money that's been printed rather than debt.
The third largest holder of the debt is China. China plus Japan have more than US house holds.
The banks, mutual funds, etc. could themselves be owned by anyone, so I don't those figures saying much.
So, as far as I can, the figures seem to say foreigners own a huge amount of US debt. Of course, this "bonds in America", not "stock in America" so they don't have any option to remove the "board of directors". Still, given how the current management is doing, I almost they could.
Social security liability: 15 Trillion
Prescription drug liability: 20 Trillion
Medicare liability: 79 Trillion
US unfunded liabilities: 114 Trillion
So the person who really owns America is whoever is going to lend us the money to pay the seniors (and those becoming seniors) in the next 30 or so years.
(And yes I'm prepared to be Downvoted here too but I'd rather be downvoted while trying to get people to face an obvious truth than hide from a bully with a quick mouse finger)
We've essentially outsourced to the government what for millennia has been taken care of by families- caring for our seniors and elderly. If we want to have a sustainable path forward, this is something that we as a society will eventually have to confront, come to terms with, and hopefully solve.
The fact is tax increases of any kind are currently hard to get. Maybe as benefits for seniors start disappearing we'll see that change since seniors vote. If we ever get back to 20% of GDP for Federal tax revenues there's no special reasoning that says getting to 21% is going to be any harder then going from 18% to 19%. The whole 20% thing is just silly.
It doesn't show any such thing. The whole truth is that from 1940 to 2000 average taxes paid including state and local went from 18% to 32%. Plenty of governments around the world and a number of US states are over 20% in federal taxes alone.
"Tax avoidance behavior increases as tax rates increase, you have moving targets."
This is obvious but, unfortunately, does not get you to "it's impossible to collect more then 20% federal taxes"
Social security and medicare are both insurance funds. You pay in now to get benefits later.
The current generation of seniors going into retirement spent all their retirement before they retired. They elected the politicians who bankrupted social security through generous tax cuts and costly wars.
The solution isn't an end to social security. The solution is a temporary reduction in benefits for the baby boomers.
That would be fiscal responsibility.
Considering the ridiculous prices for health care in the US, we could easily knock 50 trillion off that by just sending all those seniors to Canada for health care. Or perhaps reforming our health care system to not charge 3x as much for worse services than are available in more civilized countries? I think someone tried that, but the people who plan to pocket most of that $99 trillion weren't happy at all about the prospect.
I've lost multiple loved ones to precisely this "feature", and have gained a sister that almost certainly would have died in the queue -- because she happened to be studying in the US when she fell ill.
I think I personally prefer the risk, and choice, presented by a medical system with (expensive) oversupply.
I'd take waiting months or years over a choice between no health care or extensive debt/bankruptcy.
If I was in the country illegally, or had no assets or desire for future credit, I could go to an emergency room and receive plenty of services without a need to pay a cent. As a law abiding, legal citizen with moderate assets, my options are very limited in the US. In all directions regarding healthcare, there is an absurd subsystem seemingly designed to require that one works for a large corporation which provides health benefits.
That is simply not true. When was the last time you've been in the emergency room?
Unless you are close to death, private hospitals won't even treat you. They ship you off to the closest public hospital. Where, if you don't have the money you are the last seen. And in South Florida that can take days, depending on how busy the hospital is. And you get the minimal care to keep you alive. Period. Not to mention, the local governments pay for it. Trust me, public hospitals don't give services out of the goodness of their hearts. It's a terrible situation I know. But the solutions (universal health care) haven't work out so well.
some points to back up what i say: -my grandfather was diagnosed with colon cancer last year. they caught it early, and the next week he was undergoing treatment.
-i was diagnosed with a rare eye condition. within a week i was in the specialists office.
-i was in a car accident. it was fairly minor, but they insisted i stay in overnight for observation. i had cat scan, x-ray, etc as soon as possible
-me and my wife have had 3 kids. we never had any delays seeing a doctor, all were born healthy, and every one of them sees a doctor on a regular basis without long delays.
As far "unfunded liabilities" liabilities go, that's another politically-motivated relabeling.
The US will spend more on military spending than social security next year, just as it did last year and intends to do ten years from now. But social security is called an "unfunded liability" and military isn't. Guess why?
Here's some nice commentary about the reality of the debt limit: http://ftalphaville.ft.com/blog/2011/06/22/602761/the-imposs...
Many point out that, even if the government "shuts down", we have enough to pay the interest on all our debt, so we don't have to worry about default. But that completely ignores maturing treasury bills. In order for us not to be up shit creek, we need China, Japan, Wall Street, HK to rollover these bonds (i.e use the money we owe on them to buy more).
Most of this debt is short term (less than two years). What happens to our economy if China decides not to rollover $1T over that time? Or starts selling it? If it doesn't end with everyone else throwing in the towel, it will at least end with huge interest rates. The only thing stopping the US becoming 1930's Germany is the Chinese. It's nice that we have all the other requirements in place: Father^H^H^H^Hhomeland Security, Christian Fundamentalists, huge military, secret police, massive jails.
It's the same with the Koreas.
Governmental logistics aside, imagine the US sent a billion dollars in aid to a nation. Now imagine California also did the same. Did the US (the federal government) send two billion? No. They are clearly two different entities in this exchange, without trying to explain the nuance.
That said, the reason why they're separate is very important politically, but that can be best described with a link to simple.Wikipedia or something.
Raising taxes has proven ineffective when it comes to generating large amounts of revenue. Look at history and tax revenue as a % of GDP remains remarkably steady despite the top tax rate falling almost 70%(http://tinyurl.com/3dgkupq). So the old saying that you can't raise taxes higher than the amount it would cost a rich guy to cheat the tax system holds pretty true.
Maybe we'll find some miraculous way to fix that problem but as of right now we can't expect huge gains by raising taxes.
That means the roughly 43% we owe ourselves either (a) can't be paid back or (b) will have to be borrowed from foreign countries. Because we can't raise the revenue in time to pay out the debt to pension funds, Social Security and private citizens saving for retirement.
So the People/Government who owns America is really whoever will be willing and able to loan us money when the U.S. citizens we owe come to collect their money.
interest on 40% of GDP: 1.2% of GDP
QED.
http://reason.com/archives/2011/02/14/the-19-percent-solutio...