US Economics

[Peterkin]

It was about debt and whether debt decreases opportunity. That's pretty vague.

In general, debt is people borrowing money and people lending money, at interest. How that affects the economy of a nation varies according to how much is borrowed, who borrows it, how it's used and whom it benefits.

I have attempted to cover some aspects of national debt and consumer debt and how each might affect the economy.

If my efforts are inadequate, at least they're sincere.

 

1 hour ago, iNow said:

2 hours ago, Peterkin said:

The other government expenditures, whether financed from contributions or with loans or a combination, the recipients of those moneys stay inside the country,

Wait, what? Will you please clarify what you’re trying to say here? 

I'm saying that there are some government services that are funded by contributions such as paycheck deductions benefit the same people who contributed to them. Welfare programs, Medicaid, and other social services benefit people who live in the country where they pay income tax and sales tax and property tax. When they get that money, they spend it on food and rent and interest payments on their cars and gasoline and hydro and cable bills and their children's shoes. They support the businesses and sevrices in their community. Whatever tax revenues that spending generates also go to the same government. 

A trans- or multinational corporation can invest its profits in any country in which operates, and not pay tax on those profits in the country where the profits were made.  And the individual share-holders are even more free to take profits out of the economy.

Capital is mobile; government and workers are border-bound.  

[iNow]

17 minutes ago, Peterkin said:

In general, debt is people borrowing money and people lending money, at interest.

Right, but as evidenced right there in the subject… this was about the US Economy 

19 minutes ago, Peterkin said:

Capital is mobile; government and workers are border-bound.  

Wait, what? Will you please clarify what you’re trying to say here?

[Peterkin]

Just now, iNow said:

Right, but as evidenced right there in the subject… this was about the US Economy 

Which carries an enormous - without looking it up, I'll venture to guess, the biggest in the world - debt-load, both in personal and public finances. Which, in turn, does limit the range of opportunities available both to individuals and government.

 

[iNow]

3 minutes ago, Peterkin said:

Which carries an enormous - without looking it up, I'll venture to guess, the biggest in the world - debt-load, both in personal and public finances. Which, in turn, does limit the range of opportunities available both to individuals and government.

 

Look it up then. Why guess?  This question has an answer 

[Peterkin]

No, I was wrong  https://tradingeconomics.com/country-list/households-debt-to-gdp

https://tradingeconomics.com/country-list/households-debt-to-gd

It's big in numbers, only fifth or so in standing.

 

It must be somebody else's turn to look something up - no?

[beecee]

On 9/8/2021 at 10:41 AM, iNow said:

The US government is not a household. They need not budget as if they are. 

That said, I tend to agree we should address debt. One of the best ways to do so is to enforce tax laws and prosecute tax evasion. 

Is there a country that doesn't government debt? Australia's debt [mainly due to the current reasonably generous covid19 payments to businesses and individuals that have lost jobs] is approaching 2 trillion dollars.

Personal debt, I have been in on a few occasions during my long life, and all efforts are made to pay them off as quick as possible. 

Australia's interest rates at this time have been stable for around 18 months and at an all time low of 0.1%

Edited September 9, 2021 by beecee

[iNow]

8 hours ago, Peterkin said:

No, I was wrong

Thank you. It's generally better IMO when one finds their own path to the correct answer than when they have it handed to them by someone else. 

8 hours ago, beecee said:

Is there a country that doesn't government debt?

Yes. There are nearly 30 countries right now that are working from a budget surplus (some larger than others): https://www.worldatlas.com/articles/countries-with-the-top-budget-surplus.html

[SergUpstart]

On 9/8/2021 at 3:41 AM, iNow said:

One of the best ways to do so is to enforce tax laws and prosecute tax evasion. 

I remembered how in 1998, a couple of weeks before Russia's default, Sergey Kiriyenko (then he was the prime minister of Russia) came to the Gazprom office and demanded to pay all taxes.

[Peterkin]

29 minutes ago, iNow said:

Thank you. It's generally better IMO when one finds their own path to the correct answer than when they have it handed to them by someone else. 

You're welcome. I have handed in my homework. 

[zapatos]

8 minutes ago, Peterkin said:

You're welcome. I have handed in my homework. 

It's not homework. It is the responsibility that comes with participation on a site that has high standards.

[Peterkin]

5 hours ago, zapatos said:

It's not homework. It is the responsibility that comes with participation on a site that has high standards.

Sorry, I phrased that wrong. I meant that completes my contribution to this topic.

[iNow]

7 hours ago, iNow said:

Yes. There are nearly 30 countries right now that are working from a budget surplus

I realize I made an error here. Countries can have a budget surplus while also being in debt. I've conflated deficit with debt in error with my comment above. 

The more accurate answer to @beecee's question is yes, there is 1 country currently considered debt-free according to the IMF and that is Macau (famous gambling region in China just outside of Hong Kong, which itself comes very close to being debt-free)

[beecee]

5 minutes ago, iNow said:

I realize I made an error here. Countries can have a budget surplus while also being in debt. I've conflated deficit with debt in error with my comment above. 

The more accurate answer to @beecee's question is yes, there is 1 country currently considered debt-free according to the IMF and that is Macau (famous gambling region in China just outside of Hong Kong, which itself comes very close to being debt-free)

I was busy elsewhere, trying to placate and reason with some philosophers, and was going to get back to you. 😉

[Phi for All]

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Moderator Note

A new thread for Global Economy has been split to here.