Talk:United States public debt

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[edit] Admission of bias

As one of the main contributors to this page, I do want to admit that I realize my opinion is based on the works of Austrian Economists, and I therefore tend to look through this topic through that lense. I find the Austrain School's explanation of currency and the history of trade among nations to have allowed me to grasp in concrete terms what has otherwise become a murkey and unintellegable topic. I feel that the reader would be enlightened to at least understand the basics of how the economy used to function before we went to an entirely fiat money paper system. Prestonp 21:40, 8 October 2006 (UTC)

Wiki has rules: fringe groups get very brief mention.. No one is allowed to make POV arguments. Rjensen 21:45, 8 October 2006 (UTC)
The idea's referenced are fairly straight forward- as the money supply expands, inflation arises. Furthermore, Rothbard meticulously cites his works for historical accuracy. He was a Professor of economics at UNLV. Any ideas presented deserve to be dealty with on their own merits as opposed to your ad hominen attacks on the speaker. Furthermore, the field of economics is rather subjective and has different POV's reflected in different schools of thought- of which Austrian is one. To say no POV arguments is ludicrous given that nothing in economics is truely free of the school of thought from which the observer subscribes. On my "To Do" list is to read Milton Friedman and become familiar with the Chicago School of Economics but these are rather dry texts that take a while to consume and understand, and I welcome anyone to present the POVs of the other school of thoughts. Prestonp 00:00, 9 October 2006 (UTC)
NO wiki is not a debating forum. We are only allowed to present the consensus of the economics profession---not the 1001 fringe ideas that abound. This is an encyclopedia. Rjensen 23:58, 8 October 2006 (UTC)
As I said, economics is a subjective science. Ideas are best analyzed on their own merits rather than labeling things as best left unexamined because you feel someone with a PhD was too fringe.

[edit] Debatus.com link

Is anyone interested in making an external link out to a related wiki debates on this topic on www.debatus.com, a site founded by myself and a team of Georgetown students. The first is "Is there a "fiscal crisis" on the Horizon for the United States?" and the other is "Has the Bush administration demonstrated fiscal responsibility?" I think that doing so would fit the criteria of "improving" this article because Wikipedia does not seek to cover the entire scope of the arguments made on controversial issues, and traditional mediums that are provided as external links do not present all of the arguments of the debate in a kind of concise bird’s-eye way. In addition, Debatus, being a wiki, follows the same philosophy as Wikipedia, producing refined debate content, which should be considered in favor of doing this.Loudsirens 16:55, 26 September 2006 (UTC)

[edit] New Shortened Discussion Section

This page used to be 54 Kb long. Much of which was discussing section of the article that are no longer present. I have removed the bulk of this text.Prestonp 04:18, 7 August 2006 (UTC)

This Wikipedia help page states: "When a talk page has become too large or a particular subject is no longer being discussed, don't delete the content — archive it." Hence, I added a link to an archive of the prior talk page above. Lineman 05:31, 23 August 2006 (UTC)

[edit] Net debt position

I'm surprised to see that there's no section about the US's net debt position. Back in high school, someone in my U.S. history class yelled that other countries owed us because of wars. The BBC has an article about the UK paying off the last of its loans from the US for WWII. The following is the link and the purpose is to clarify and stimulate thinking about this matter so that hopefully someone writes about it in this article. -Amit[1]

[edit] Extremely biased article

I just read the "United States public debt" article for the first time. It is very biased and political in nature, much more so than most Wikipedia articles. The section on foreign holdings of US debt is a particularly egregious example. There is absolutely no discussion of the benefits of foreign holdings of dollar assets, including government debt, or of the unlikelihood that foreign investors would dump their dollar assets. Does anybody else agree that this article needs a major rewrite? --Bond Head 16:15, 7 June 2006 (UTC)

Reply: Well, since Italy's Central Bank just announced a major sell-off of their US Securities, I think we can say it's not all that unlikely. [2]Prestonp 04:28, 7 August 2006 (UTC)

  • One way we address such proposals is to create a temp page (e.g. United States public debt/temp) and editors can re-write the article there and present it to the interested community for review. BD2412 T 16:33, 7 June 2006 (UTC)

I'll look at whatever major re-write you propose, but that idea that foriegn ownership of US assetts is some great thing is itself a biased standpoint.Prestonp 05:32, 7 August 2006 (UTC)

  • OK, thanks for the feedback. I wasn't suggesting that the article present only the arguments in favor of non-US investment, but rather that it present both sides, in contrast to the current version, which only presents the arguments against foreign holdings. I'll start working up some ideas. Bond Head 05:57, 21 June 2006 (UTC)

[edit] Can the U.S. go bankrupt?

Hey, everyone, I revised the "Risks" category (adding some sub-categories) and added a new paragraph asking "Can the U.S. go bankrupt?" The paragraph has a source from a Federal Reserve Bank of St. Louis official (via the London Telegraph). The source is here: [3]

I also added this source to the "External links" section. Keep up the good work. ProfessorPaul 17:43, 15 July 2006 (UTC)

The accrual basis national debt is $46 Trillion as of 2005 (according to the Financial Statement of the United States Government) and individual wealth (the only real kind) is estimated at $45 Trillion in 2005. So, yes, I think a country can go bankrupt, that is unless it resorts to unleashing war and transfering wealth back to the Treasury. Borrowing by Nation States only has efficacy as long as it has the power to use force.

You haven't read the book, which contains the exact information you claim to want. You cite Rome, Colonial US, the British Empire and Latin America, though you have no idea what happened to them. You don't seem to realize how much the financial world has changed in just the past 30 years.
I've been puzzled by all this until I read the telling statement: You were 7 during the Reagan administration. That explains everything.
Rodger Malcolm Mitchell

Dear Mr. Mitchell,
I don't have enough time in my life to read the books of all the crackpots who believe that they have reinvented everything in a field of science despite possessing no formal training. I am well aware of what happened in Rome, Colonial US, British Empire, and Latin America because I have read books detailing their history. And I am aware that these historical precidents totally and completely refute your argument that money can created out of nothing and not lose value. I have given you ample opportunity to present your arguments, but the fact of the matter is, you seem to be a one-trick pony. You basically claim that: 1. The modern financially system can perpetually create money out of nothing 2.This money will never lose it's value. And have no fall back position if we don't buy your arguments. I do want to applaud you, however, for finally attaching your name to a post as opposed to writing of yourself in third person as you used to do. Prestonp 22:18, 29 January 2007 (UTC)

[edit] Zimbabwe and an "Expert tag"

There is an interesting story about the Zimbabwe cash crisis of 2006 that I believe does relate to this article (here [4]). I may attempt to add it to this article. Also, Wikipedia has an expert tag; do you think this article would benefit from "an expert"? I teach Economics at the college level, and I think it would benefit. ProfessorPaul 02:45, 7 August 2006 (UTC)

Reply: Hey Paul. Welcome aboard, although you're really been adding for a while. I removed the expert tag since we now have you here. Prestonp 04:13, 7 August 2006 (UTC)

[edit] Mixing of different measurements of the debt

I removed the following edit made at 05:22 on 12 August 2006:

Between 1980 and 1993, the debt went from 30.3% of GDP to 58.8%. In 2006 it was down to 48.0% of GDP. [5]

The reason I removed it is that it is comparing apples and oranges. First of all, the paragraph up to this point is looking at current dollars, not dollars as a percentage of GDP. The third paragraph after this one is looking at percentages of GDP so any discussion of this should be moved there. Secondly, the given source is looking at something called "Government Net Debt". This is defined on the International Monetary Fund web site as follows:

Government net debt comprises the stock (at year-end) of all government gross liabilities (both to residents and nonresidents) minus all government assets (domestic as well as foreign). Gross debt includes government assets. To avoid double counting, the data are based on a consolidated account (eliminating liabilities and assets between components of the government, such as budgetary units and social security funds). Net debt of the general government should reflect a consolidated account of central government plus state, provincial, or local governments. [6]

Looking at the numbers, the net debt appears to be much less than the gross federal debt and somewhat more than the debt held by the public as shown in Historical Table 7.1 of the 2007 U.S. Budget. [7] Hence, it likely does not include all of the money owed to Social Security and other trust funds. In any event, it is not the gross federal debt that is being discussed in this article. Lineman 05:11, 14 August 2006 (UTC)

[edit] Regarding Rodger Malcom Mitchell

Mr. Mitchell has published a book which advocates the abolishment of all government taxes and has instead given a vision of the United States freely printing and using all the money it wants. From an historical standpoint, this has been tried and failed by every major empire from Rome onward.

[Absolutely untrue. Clearly the writer has absolutely no idea about what "every major empire" has done, and this misstatement is typical of his entire article]
- Mr. Mitchell
Let's see, who has engaged in the practice of printing money/debasement of metalic currency in order to support an empire. Ancient Rome, the United Kingdom (cited by Nobel Laureate Milton Friedman as one of the causes of the Great Depression), the Colonial United States (origin of the term, "Not worth a Continental") are notorious offenders. In addition, several European Kingdoms debased the metal content of their currency in order to coin more (France with the livre tournois from 1200-1600, Spain with the dinar in the 1200, etc). In each case, printing more money/debasing the currency of coinage lead to a devaluation of that currency over time. Prestonp 04:02, 19 January 2007 (UTC)

He periodically posts his viewpoints here and uses a great deal of verbage. The discussion archieve shows that I tried to have a dialogue with him but he is unshakable in his fervent belief that the his way is the right way (perhaps because it will sell more books). After a self imposed exile, I noticed Mr. Mitchell is back. I deleted his comments in the discussion section because I didn't want another 52kb diatribe of everyone trying to talk sense into Mr. Mitchell. Prestonp 06:20, 5 September 2006 (UTC)

In fact, Preston posts no facts. He merely parrots the ancient, common knowledge "debt is bad; surplus is good," without demonstrating why this is so. He is so fearful of facts, that he immediately deletes any postings that contain facts disproving his beliefs. Then he excuses his actions by claiming he is deleting "verbage" (which he probably doesn't understand), and claims he tried to have a "dialog." Now, Preston, it's time to put up your facts. Please show everyone, when in the past 75 years, a decrease in Total Debt has benefitted the American economy and an increase has hurt the economy. Also, show when the U.S. government has had difficulty borrowing, as you claim. Dates and figures, please. No vague, common-knowledge generalities. Do it or forever hold your peace. - Mr. Mitchell
You are cherry picking your time frame. The last 75 years coincides with the end of the second World War and the Bretton Woods agreement in particular. Under those agreements, the United States was in the unique position of printing the world's reserve currency. But this situation is untennable from a historic stand point. To argue otherwise is to argue (as you do) that the US Government can keep printing as much money as it wants forever and everyone else will accept it as being worth exactly the same value- a ludicrous proposition. As far as holding my peace, it's you who is adopting a ridiculous and provative POV just to sell some books. Prestonp 04:02, 19 January 2007 (UTC)
Actually, Mr. Mitchell should have "cherry picked" the past 30 years, because the world of money changed completely, back then. Mr. Preston has no idea what happened -- and by the way, still no facts from Mr. Preston. Will we ever see any facts? - Mitchell
Mr. Mitchell, I have provided nothing but cited facts. It is you who has invented theories out of thin air such as "a growing economy requires a growing amount of money" without any substantiation whatsoever. I have pointed out several times in US and World history where your ideas completely fall apart. You reply by ignoring, as you always have. Prestonp 05:58, 20 January 2007 (UTC)

[edit] Refund on Government Debt

I would like to add that the U.S. gets a refund of 98% on all interest it pays on the debt. Even foreign debt is subject to this since it must be paid in newly minted reserve notes. The federal reserve is part of the U.S. Government because it's stock acts as bonds. Very useful and very clever of our government. Peatiedog 09:03, 6 December 2006 (UTC)

That's just not so. Someone buys a T-Note, they get their money back plus interest. How do you figure the government get's a refund? Prestonp 05:33, 3 January 2007 (UTC)

Hey, I agree with Preston on this one. Peatiedog, what the heck are you talking about? Rodger Malcolm Mitchell

[edit] Estimates of US debt by Bush

Hi all, I feel that the Bush estimates of future debt are a particularly bad example of why it is difficult to predict swings in future debt. While trying not to sound partisan, I don't think that its stated reasons really explain why the estimate of the swing from surplus to debt was so far off.

Look at the reasons: "Technical" reasons are responsible for more than half. That is akin to saying "Oops, we lost a trillion dollars, our bad." That is not plausibly due to the difficulty of predicting the future, rather, it is just an admission that their accounting was bad (trillion dollars bad, 10% of GNP bad).

The effect of the tax cuts is responsible for an additional 29%. How can Bush say these tax cuts were not predicted? Did the Republican congress force him to sign tax cuts that he never dreamed would pass? Did they pop out of the sky?

The only parts that he could reliably say were not predicted were the recession, which is now over, and the effects of the wars and terrorism, which were only responsible for a combined 22% of the swing.

Several commentators said beforehand that Bush's economic policies would greatly increase the debt were they enacted. The impact of his economic policies was "both predictable and predicted" like that of many other of his policies.

David s graff 22:24, 11 February 2007 (UTC)

Yep. Prestonp 02:14, 12 February 2007 (UTC)

[edit] Splitting Up The US

Wouldn't the ultimate consequence of the national debt be the total control of federal property by foreign bankers ? In this worst-case scenario, America would be brought back to pre-revolutionary times because its national assets would have to be divided among its many shareholders. On the other hand, resisting debt payments could cause major wars, like when Napoleon got mad at all his creditors. 69.157.247.71

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