National debt surpasses $31T
foxnews.com
foxnews.com
Many facts can be true at once. Here’s a fact: the US national debt to GDP ratio is higher than any other point in 70 years, probably more.
Here’s another: the debt to GDP ratio of the US is still lower than Singapore, Italy, Portugal, and less than half of Japan.
This headline strikes me as dishonest and political to the extreme. It insinuates quite simply that the US is in trouble, which the facts do not support.
National debt is not a bad thing by definition. The US GDP is incomprehensibly large at somewhere around $23T for 2021.
This is because you can sell 10T of "good" debt for 5T of "bad" debt on the open market - the percent of GDP alone means little.
See for example about Greece: https://www.ft.com/content/71e828b3-4da1-3b3d-a7ca-073337fa6...
The headline is quite literally without bias. It is 100% unbiased and completely factual.
The article may try to make (or not make) a big deal of what means but by definition you couldn't write a less biased headline.
The act of it being a headline at ALL is where I think the OP is saying that it's dishonest/political.
Choosing WHAT to report/highlight/headline can be just as much of a statement than the actual story itself.
I've noticed this is especially pronounced with Fox News compared to the other 10 or so news sites I look at near-daily.
An example of the point I'm trying to articulate is if I said to a friend "Hey, I lost my job today" they'd probably feel bad and buy me a beer but what if the real story was "I won the lottery and then I quit my job today"
My first statement was factually correct but it wasn't the full story and it would connotate a much different meaning to the full scope of the day's events.
You probably hate Fox News so go yell at the NYT as well.. it says “ U.S. National Debt Tops $31 Trillion for First Time” which you should probably argue is more political than Fox News
https://www.nytimes.com/2022/10/04/business/national-debt.ht...
It's Fox News, they become more and more sensationalist and political-tabloid by the day
Eventually the US will need to stop growing by debt, or it will grow its debt to the point that it can only pay the interest not the principal
At this point it is probably the only thing holding the US dollar up?
It is easy to borrow when you hold the reserve currency, but once that is gone why would the world want to hold "dollars" anymore?
When (if) a replacement currency shows up, it's more likely that USD will continue to be "one of the primary reserve currencies" instead of getting completely yanked from central bank reserves all over the world. This gradual decline happened with British Pound around/after WW2 so it is not unprecedented.
So by "the only thing holding the US dollar up" you mean "rapidly strengthening against pretty much every other currency on the planet", right?
that's only because of the inflation brought about by the disastrous economic response to covid, a response which ironically was initiated by the same politicians that are now claiming inflation needs to be brought down.
The cause is simply that the US is well positioned and most other countries are not, so the demand for dollars is very high.
The same as when the markets are volatile people dump stocks and buy bonds.
Thanks for proving my point, that being a reserve currency gives you some pretty powerful special rights.
You also implied it was a fragile position. It is not. Because of the above.
He covers many historical "reserve currencies" and how they eventually ran out of time and were replaced by another.
He also feels the US is in a fragile position, and given he only makes money when he is correct..and he has been making money since 1974...
I did not imply it was fragile, i said that should it lose reserve currency status the US debt will become a far larger problem.
> i said that should it lose reserve currency status the US debt will become a far larger problem.
Again, the only way the US loses its reserve currency status is by already being in deep shit, so this is tautological. It's hardly inconceivable that the US is in a bad economic position in the future. But for the short term outlook of at least a decade or so, the US is in the best position it's seen in a century.
By admitting to bigoted ignorance, you lose the argument.
Money is half of practically every transaction. Therefore its value has an enormous influence on economic activity. All economic calculation of individuals going about their lives ends up based on these flawed artificial signals created by self-righteous academics & experts. Why does practically every important sector of the economy suck? They're managed by the government & based in expansionary monetary policy. Cheap money leads to cheap services & products. It's only when economic activity is based on long-term thinking (the opposite of near-zero interest rates) will society have a prosperous economy.
Also, the entire salaried economy is debased since the transaction cost of changing jobs will be a constant force along with devaluing money, in effect, constantly & indefinitely stealing money from every worker.
I'll grant you a win if you choose people who worship Ray Dalio religiously. That's totally fair.
The Yuan is radioactive now that the Western world is compartmentalizing China.
The Euro may not even survive the next few years if energy, conflict and other issues take down the EU.
Japanese Yen? British Pound? No way.
What's left? Nothing really. The dollar is it, and everyone knows it.
If the military weakens and/or the US is seen as very unstable or if for some reason defaults on its debt obligations, then it will lose reserve currency status.
Look at the Chinese RMB for example, their military is not all that tested and their stability hinges upon one guy Xi keeping power and they are fairly new to having a great economy with housing crashes, corruptiom purges, predatory loans in africa, looming conflict with US on multiple geopolitical conflicts. Most of the west might end up sanctioning their currency in a major war like with Russia.
Big, scary and stable wins the game everytime for reserve currency.
Do share with the larger audience how the US military is funded when you run a deficit year after year?
It is weird to conflate "military" with "currency strength".
Prior to the US being the reserve currency it was the British pound, how's that working out these days?
> for some reason defaults on its debt obligations,
this tells me you are unaware of the topic you discuss. You can NEVER default on a debt issued in your own currency. You simply print more (The US calls it quantitative easing).
You only default on debt which is NOT in your own currency.
So Russia's default for example:
"On 4 April 2022, Russia technically defaulted on its foreign debt by failing to pay its obligations in US dollars (and after the grace period it actually defaulted because it did not pay 30 days grace period interest of around 1.9 million USD)."
Notice this was "obligations in US dollars"??
Argentina:
"The Argentine debt restructuring is a process of debt restructuring by Argentina that began on January 14, 2005, and allowed it to resume payment on 76% of the US$82 billion in sovereign bonds that defaulted in 2001 '"
"Sovereign bonds" - Again, notice this is US dollar debt?
You did not add any new information here, refusing to print money to pay your debts means you defaulted right? I did say for whatever reason right? If you are so knowledgable then perhaps you might also know that printing money is inflationary and at some point the government will have to decide between devaluing its currency so much chaos and civil unrest breaks out or you stop printing money to pay your debts. This is most unlikely with the US so it is a good reserve dollar. But other countries like lebanon and venezuela were forced to be in that position. I mean whether or not they actual refuse to print money is not even the issue, it is the perception that they might have to make that decision.
It isn't like any President can just go spend $4T on some random thing or that the FBI or FDA can do the same. Usually you only see them misappropriating funds from a different mandated budget area and spent on something else.
That's like saying look at the small rate my debt is increasing because I went from adding 1000 a month to spending 100,000 a 3 months ago and I'm only adding 99,000 this month.
Biden's claims of enormous budget deficit reductions are relative to the 2020/2021 highs and are thus mostly irrelevant. But it's still genuinely lower than 2019 by a bit.
One could have imagined a world where the spending didn't fall back to normal yet. ymmv
No thanks.