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View Full Version : US gross external debt more than $6 trillion-Trsy


Warrior
Oct 10th, 2003, 05:53 PM
http://biz.yahoo.com/rf/031008/economy_treasury_debt_1.html

Wednesday October 8, 7:40 pm ET


WASHINGTON, Oct 8 (Reuters) - U.S. debt owed to foreign governments, central banks, private banks and other investors topped $6 trillion in the quarter ended June 30, the Treasury Department said on Wednesday.
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Of that, about $1.270 trillion in principal and another $53.73 billion in interest is due within the next 3 months, according to a new report on the U.S. external debt position issued by Treasury.

"The overall magnitude of U.S. indebtedness to foreigners and some of the major components are already well known. This presentation provides more detail," Treasury said in announcing it was publishing quarterly data on external debt, broken down by type of creditor, how the debt is denominated and the expected payment schedule.

The report shows the extent to which the United States remains dependent on foreign investment. Even for an economy totaling $10.803 trillion annually, the $6.357 trillion in external debt is a hefty 58.8 percent of gross domestic product.

By comparison, the U.S. government takes in about $2 trillion annually in taxes and fees, and the anticipated 2003 budget gap of around $400 billion would be about 3.7 percent of the overall economy.

Treasury said it was publishing the report as part of an effort to come into compliance with the Special Data Dissemination System guidelines issued by the International Monetary Fund (News - Websites) to encourage transparency in global finance. The report can be found at http://www.treas.gov/tic/external-debt.html.

Warrior
Oct 11th, 2003, 07:19 PM
WHO'S RESPONSIBLE FOR THE THE NATIONAL DEBT?

Let us imagine for a moment that you go to a restaurant, you place an order for a hamburger. The proprietor of the restaurant tells you the cost is $5 for the hamburger, and you pay $5 for the hamburger. You get your food. No problems. Well worth the money you paid for it. No complaints.
Then when you are done eating, the owner of the restaurant shows up at your table, apologizes profusely, explains that he underestimated the real cost of providing you with the hamburger he agreed to serve you and hands you a bill for an additional sum he had to borrow in order to provide the meal plus interest since the start of your meal. Do you pay it? Of course not. You, the customer, entered into a verbal contract with the proprietor of the restaurant to provide you with your meal at the price agreed to by all parties prior to the transaction.

If the proprietor of the restaurant has miscalculated the cost of meeting his agreed-to obligation to the customer, is the customer obligated to cover the shortfall? No. The proprietor of the restaurant is responsible for the error, and if he cannot meet his agreed-to obligations for the agreed-upon price, he should declare bankruptcy, go out of business, and make way for a new restaurant with better fiscal sense.

Simple common sense.

Let us imagine for a moment that you live in a nation, and you request some benefits. The government tells you the cost is $500 for the benefits, and you pay $500 in taxes for the benefits. You get your benefits. No problems. Well worth the money you paid for them. No complaints.

Then when you have your benefits, the government shows up at your door, apologizes profusely, explains that it underestimated the real cost of providing you with the benefits it agreed to provide and hands you a bill for an additional sum it had to borrow in order to provide the services, plus interest since the start of your use of the benefits. Do you pay it? Of course not. You, the citizen, entered into a verbal contract with the government to provide you with your benefits at the taxes agreed to by all parties prior to the transaction.

If the government has miscalculated the cost of meeting the agreed-to obligation to the citizen, is the citizen obligated to cover the shortfall? No. The government is responsible for the error, and if it cannot meet it's agreed-to obligations for the agreed-upon price, it should declare bankruptcy, go out of business, and make way for a new government with better fiscal sense.

The claim is constantly made that "we" (meaning the citizens) have already spent the almost 6 trillion dollars that the Federal Government owes and that therefore "we" (meaning the citizens) must repay it.* This is nonsense. No taxpayer alive now ever voted or otherwise agreed to allow the government to borrow money on their behalf and agreed to underwrite the resultant ruinous interest obligation. No citizen spent that money. The government spent it, to keep promises it had no business making in the first place.

The Federal Reserve Act (Otherwise known as the currency act) was voted into law December 23, 1913. The people who voted in that law are all dead.

No taxpayer alive today had anything to say about repaying any money the government borrowed to keep it's promises. We did not have any choice in the matter. We did not choose to accept this obligation. It has been forced on us. It was manufactured for us.

Certainly the young people who are becoming voters and taxpayers this year have had no say at all about the almost 6 trillion dollar debt that our government hands to them and says, "This thou shalt pay". To so encumber our children without their permission is at best indentured servitude; at the worst outright slavery.

We The People didn't borrow that 6 trillion dollars. We The People, those of us alive today, paying taxes today, have never had the opportunity to decide whether or not we are obligated to cover the bad debts of a government that gets elected by selling $5 dollar hamburgers, only to tell us after election day that they really cost $7 and we are now obligated for that additional $2.

Every man, woman, retired senior citizen and even the tiniest newborn baby are being told that they owe $22,556 extra for services that were bought and paid for by an agreed-to tax rate.

Are those tiny newborn babies really obligated for $22,556 because of a law passed 84 years before they were born?

Are those tiny newborn babies really obligated for $22,556 because our government makes promises it cannot keep?

Or is it time for the Federal Government to declare bankruptcy and make way for something better?


To conceal the true size of the debt problem, the Federal Government has been returning less money to the states, forcing the states to borrow to meet their obligations. This transfers the debt from the Federal Government to the States. Taken together, the debt of the states and the debt of the Federal Government totals approximately $14 trillion. Guess who they want to pay it?

mboyle
Oct 11th, 2003, 09:40 PM
One problem with your logic: If the federal government goes bankrupt, and collapses, our entire economy collapses, and we become like 3rd world Africa.:rolleyes:

Rtael
Oct 12th, 2003, 04:48 AM
One problem with your logic: If the federal government goes bankrupt, and collapses, our entire economy collapses, and we become like 3rd world Africa.:rolleyes:


so we should just sit back and watch our government fall further and further into debt? Sounds like a plant to me! :yeah:

Warrior
Oct 12th, 2003, 07:03 PM
One problem with your logic: If the federal government goes bankrupt, and collapses, our entire economy collapses, and we become like 3rd world Africa.:rolleyes:

No. But people will have to bear the cost of debt through cuts in government programs like education and healthcare and higher taxes.