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View Full Version : Representation of US Debt With $100 Bills



oivind_dahle
07-27-2011, 01:41 PM
http://izismile.com/2011/07/27/staggering_representation_of_us_debt_with_100_bill s_9_pics.html

Damn! No wonder US is called the mega Greece...

JohnnyChance
07-27-2011, 01:57 PM
Mega-greece?

Odd choice to use the World Trade Centers in the graphic...

bprescot
07-27-2011, 02:02 PM
That's a great visual aid to bring the problem home. My only quibble is on that last graph. That's not the US National Debt, or even the Total US Debt (the debt owned by federal, state, and municipal governments, US corporations and private citizens) which stands at just north of $50 Trillion. Instead, that $114.5 trillion is what's called the US's unfunded liabilities. These are not funds that are owed to anyone, they are projected funds that will be expended in the coming decades that don't have a revenue offset. It's like a vendor committing to his suppliers to buy 50% more inventory every month forever, but his sales trends aren't increasing. He may not be currently in debt, but unless he starts selling more or charging more, he will be soon! Except this isn't a vendor, this is the entire nation, government and private sector included (though mostly government as private sector doesn't generally make these types of commitments).

So the statement "114.5 trillion dollars. This is the US debt now." is a bit misleading, but definitely a figure to pay attention to. It's a great graphic though!

bprescot
07-27-2011, 03:08 PM
For those interested, here's an article that touches on the concept of our (the US govt's, anyway) unfunded obligations. They don't call it that, but that's what they're getting at.

http://money.cnn.com/2011/07/27/news/economy/debt_ceiling_fight/index.htm?cnn=yes&hpt=hp_t1

Eamon Burke
07-27-2011, 03:17 PM
That should be piles of Yen.

Eamon Burke
07-27-2011, 04:59 PM
*edit* that should have been Yuan. Piles and piles of Yuan.

Andrew H
07-27-2011, 06:05 PM
That's a great visual aid to bring the problem home. My only quibble is on that last graph. That's not the US National Debt, or even the Total US Debt (the debt owned by federal, state, and municipal governments, US corporations and private citizens) which stands at just north of $50 Trillion. Instead, that $114.5 trillion is what's called the US's unfunded liabilities. These are not funds that are owed to anyone, they are projected funds that will be expended in the coming decades that don't have a revenue offset. It's like a vendor committing to his suppliers to buy 50% more inventory every month forever, but his sales trends aren't increasing. He may not be currently in debt, but unless he starts selling more or charging more, he will be soon! Except this isn't a vendor, this is the entire nation, government and private sector included (though mostly government as private sector doesn't generally make these types of commitments).

So the statement "114.5 trillion dollars. This is the US debt now." is a bit misleading, but definitely a figure to pay attention to. It's a great graphic though!

Very misleading, but a fun graphic nonetheless.

EdipisReks
07-27-2011, 07:34 PM
No wonder US is called the mega Greece...

only by people ignorant of economic systems. the US is not a household with a credit card, it's a functionally immortal system with 300 million people and a huge GDP (with a massive manufacturing base: iPods aren't made in the US, but if you want boilers, a ship to put those boilers in, or a crane to lift both the boilers and the ship, the US is pretty high on the list) and a high GDP/PPP per capita. Greece meets that first definition, marginally (they didn't have a stable democratic system just a few decades ago), a small population and a middling GDP highly supported by tourism and mediocre GDP/PPP per capita. that last one is a killer at their debt levels. the US doesn't have that problem. the US can only have similar problems when it's taken hostage by extremists who don't actually care about the country. see you Tuesday!

chazmtb
07-27-2011, 08:01 PM
only by people ignorant of economic systems. the US is not a household with a credit card, it's a functionally immortal system with 300 million people and a huge GDP (with a massive manufacturing base: iPods aren't made in the US, but if you want boilers, a ship to put those boilers in, or a crane to lift both the boilers and the ship, the US is pretty high on the list) and a high GDP/PPP per capita. Greece meets that first definition, marginally (they didn't have a stable democratic system just a few decades ago), a small population and a middling GDP highly supported by tourism and mediocre GDP/PPP per capita. that last one is a killer at their debt levels. the US doesn't have that problem. the US can only have similar problems when it's taken hostage by extremists who don't actually care about the country. see you Tuesday!

What?
Oh the U.S. has a problem ok, it is spending more than it pulls in by 50%. In 2010, the Federal government spent 3.77 trillion dollars, while it took in 2.15 trillion dollars. Even if you have a marginal tax rate of 70% (pre Regan marginal tax rate) of people making over $200,000, it would only be about 800 billion dollars and not enough to cover the current expenditures. We would still need to sell bonds to the Chinese to cover for the shortfall.

It really is about a spending problem. We cannot sustain a 1 trillion a year deficit for the remaing years. We have to change the federal budgetary process which makes it manditory to add percentage increases over the previous year's base line no matter if the increase is needed or not. This goes for all programs and agencies.

goodchef1
07-28-2011, 10:16 AM
smart man this Peter Schiff, followed this guy before the recession. Saved and made $ with this guy.


http://www.youtube.com/watch?v=_X7pS51AHfw&feature=player_detailpage

bprescot
07-28-2011, 11:07 AM
He might be an incredibly savvy guy, but on this one he's a little off. He's right in that the only way we default in August is if we choose to. Much the same way a restaurant in a really tight month won't automatically get their utilities turned off. The only way they get their utilities turned off is if they don't pay the bill. The US will only default on it's debt if we choose not to pay the debt interest. The problem is that much liked a cash-strapped restaurant has more than just the utility bill, the US has got more than just debt payments due in August. And there just isn't enough cash on hand to pay all of them without borrowing.

The biggest fallacy of this entire circus is the notion that cutting spending, raising taxes or pretty much ANYTHING will change the fact that in August the US will need to borrow money (i.e. raise the debt ceiling) to pay all it's bills. We've got enough to pay the bank (i.e. debt payments) but SOMETHING will have to get shortchanged. Is it Military? Social Security? Education? All have big bills due in August and there's just not enough revenue to cover all of it without borrowing. The people that say that no deal by August 2nd doesn't mean default are technically correct. But the implication that there won't be a huge impact is false. It may not impact them, you, or me, but there WILL be an impact. Oh, and just because we pay the bank, if they find out we're not paying everyone else ... well that tends to make them nervous. We don't need to default to get our debt downgraded, and that can be just as bad as default.

And lastly, we've only defaulted (TRULY DEFAULTED) once. And it's not what he's referring to. It was when a bookkeeping SNAFU held up payment of a $12M or so in debt payments. It got paid less than a week later. The result? The interest rate on the debt was raised .54% and was kept there for a little over two years adding over a billion dollars in debt payments. That was for a $12M glitch. This would be worse.

oivind_dahle
07-28-2011, 12:06 PM
http://izismile.com/2011/07/28/morning_picdump_72_pics-52.html

JohnnyChance
07-28-2011, 12:22 PM
http://izismile.com/2011/07/28/morning_picdump_72_pics-52.html

That is from here (http://www.theatlantic.com/politics/archive/2011/07/the-chart-that-should-accompany-all-discussions-of-the-debt-ceiling/242484/) I believe.

Eamon Burke
07-29-2011, 01:33 AM
Every plan, every way I've considered this problem, I cannot think of a single solution for this situation(regardless of whether or not politicians could be bothered to co-operate) that doesn't fundamentally change our view of what the US government is. We can either stay America, status quo, and ride this out the hard way over decades(which won't be any worse than it has been for 2 years), or we can deal with the fact that our government needs to look different and do new things if it wants to provide a new solution.

:2cents:

oivind_dahle
07-29-2011, 04:51 AM
I hope you guys sort it out :)
I live in Norway, and have our own problems.

mr drinky
07-29-2011, 10:51 AM
We don't need to default to get our debt downgraded, and that can be just as bad as default.

This is so true. In fact a lot of the damage has already been done. Even if we escape downgrade this time, a rehash of this issue during the election year will ensure a downgrade IMO with a double dose of uncertainty. We need a long term solution for many reasons, but the biggest reason for me is so we don't have to listen to these f*#kin' politicians.

And btw, this whole situation isn't helping the dollar slide. Just wait until a downgrade gives central banks a reason to sell off their dollar reserves. Yikes, more dollars yet. Those American knives are going to continue to get cheaper and those foreign knives are going to continue to get more expensive.

Thank goodness we have good domestic knife makers.

k.

Dave Martell
07-29-2011, 12:35 PM
Well at least they can't cut out our national healthcare plan..............because we don't ******* have one!!!! :angry1:

Cipcich
07-30-2011, 05:29 AM
Perhaps we actually live on Planet of the Apes?