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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (2391)	9/12/2008 8:25:34 PM
From: TimF	Respond to of 86356

The $10 trillion in debt on our books are bonds sold to investors around the world, including some investors in the US. No only $5.53 tril of it represents bonds sold to investors, see below. Also most of that $5.53 tril is owed to Americans, and only a minority of what is owed to overseas interest is owed to China. Default on those debts I was not suggesting, predicting or talking about default, or making any statement even remotely connected to default. That $10 trillion isn't lending to ourselves and it is a very real obligation. The debt to the American private sector is a real obligation. The debt to companies, individuals and governments in other countries in a real obligation. Any debt owed to local or state governments in the US would also be a real obligation. "Debt" of the US federal government to itself is no more a real contractual obligation than I would have an obligation if transfered money from my savings account at a credit union to my checking account at a bank. I might, if I so choose, write an IOU to myself, and even "pay back" the "debt" with "interest". But I would be both the "creditor" and the "debtor", so I would be under no real obligation. I could arbitrarily cancel or double this debt level, without shifting funds any further, and canceling it would not represent default. The amount that is debt from the government to itself (or not real debt) isn't $40tril. $40tril (or some other amount, estimates vary) represents projected future spending, not real debt or even nominal debt balanced by a nominal trust fund. The total offical US debt is $9.67 tril as of 9/10/08 However only $5.53 tril of this is real debt. The other $4.14 tril is government "debt to itself". Its the "nominal debt balanced by a nominal trust fund". treasurydirect.gov So you have $5.53 tril of real debt. Of that about $500bil is owed to China. But that doesn't mean we are borrowing $500bil a year from China it means that the total borrowing for all years up to the present day total $500bil. Per year borrowing from China is a small fraction of that (again averageing $45bil per year for the past eight years)

To: RetiredNow who wrote (2391)	9/16/2008 9:18:14 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 86356

That $10 trillion isn't lending to ourselves and it is a very real obligation. Ok.. so I guess the US Treasury is lying to us all? Because they're telling us that the PUBLIC debt is $5.5 Trillion, not $10 Trillion. treasurydirect.gov When you combine that with intragovernmental holdings (debt the government owes to itself.. eg.. Social Security Trust Fund), THEN we're talking $10 Trillion. But only $5.5 Trillion of the US national debt is actually sold to the public. And consequently, that ALSO happens to be the same pool of treasuries from which the Fed executes its open market transactions for adding or withdrawing liquidity. Hawk