Debt

[Chris]

Socialistic (not socialist) and yes like the Nordics, but also like the UK, Canada, Australia, Germany etc. They all carry a small fraction of the debt that the US carries. Given the pie charts about US spending and the level of debt, people receiving welfare in America should be living in mansions, but they're not. If the money is really going where the pie charts suggest, America has a massive leakage problem.

Socialistic has no meaning politically. The Nordic nations are capitalist. So are the UK, Canada, Australia, Germany etc.

[DGUtley]

The bigger question is why is America's debt so high? What is America doing that most countries with similar standards of living are not? America is ground zero for capitalism today. It should have the lowest level of debt, not the highest. Take the UK for instance: "The welfare state is a big part of British family life, with 20.3 million families receiving some kind of benefit (64% of all families), about 8.7 million of them pensioners. For 9.6 million families, benefits make up more than half of their income (30% of all families), around 5.3 million of them pensioners. The number of families receiving benefits will be between 1 and 2 million fewer now because of changes to child tax credits that mean some working families who previously got a small amount now get nothing." https://www.theguardian.com/politics...in-facts-myths

But by comparison the UK is only 3.5% indebted as a percentage of GDP and they have a national healthcare program. In the US 21.3 percent of U.S. population participates in government assistance programs each month. https://www.census.gov/newsroom/pres...5/cb15-97.html Clearly 'welfare' is not the problem, nor is public healthcare.

Clearly, we have a spending problem. It's our most acute national security issue. https://www.nationalpriorities.org/b...-101/spending/

[Chris]

Clearly, we have a spending problem. It's our most acute national security issue. https://www.nationalpriorities.org/b...-101/spending/

Exactly, we have a huge, centralized, big-spending government for which you can't expect anything but a huge debt.

[Chris]

Still, folks, pay attention to the graph in the OP, while the US has the largest percentage of world debt (size), it is moderate in term of debt to GDP ratio (color).

Keep also in mind that the graph represents government debt.

[Dr. Who]

Still, folks, pay attention to the graph in the OP, while the US has the largest percentage of world debt (size), it is moderate in term of debt to GDP ratio (color).

Keep also in mind that the graph represents government debt.

The US debt to GDP ratio is over 100% i.e. 104.3%. That still means that it is spending more than it earns.


"A study by the World Bank found that if the debt-to-GDP ratio exceeds 77% for an extended period of time, it slows economic growth. Every percentage point of debt above this level costs the country 1.7% in economic growth.

It's even worse for emerging markets. There, each additional percentage point of debt above 64% will slow growth by 2% each year.


~ snip


As the global economy continues to improve, investors will be comfortable with higher risk because they want higher returns. Yields on U.S. debt will rise as demand falls. When yields are high, look out. That means investors don't want the debt. The country must pay more interest to get them to buy its bonds.

That creates a downward spiral. High-interest rates make it more expensive for the country to borrow. This increases fiscal spending, which creates a larger budget deficit, which creates more debt. A good example is the Greece debt crisis.

That's why the debt-to-GDP ratio, for all its faults, is still widely used. It's a good rule of thumb that indicates how strong a country's economy is, and how likely it is to use good faith to pay off its debt." https://www.thebalance.com/debt-to-g...use-it-3305832

[Chris]

The US debt to GDP ratio is over 100% i.e. 104.3%. That still means that it is spending more than it earns.


"A study by the World Bank found that if the debt-to-GDP ratio exceeds 77% for an extended period of time, it slows economic growth. Every percentage point of debt above this level costs the country 1.7% in economic growth.

It's even worse for emerging markets. There, each additional percentage point of debt above 64% will slow growth by 2% each year.


~ snip


As the global economy continues to improve, investors will be comfortable with higher risk because they want higher returns. Yields on U.S. debt will rise as demand falls. When yields are high, look out. That means investors don't want the debt. The country must pay more interest to get them to buy its bonds.

That creates a downward spiral. High-interest rates make it more expensive for the country to borrow. This increases fiscal spending, which creates a larger budget deficit, which creates more debt. A good example is the Greece debt crisis.

That's why the debt-to-GDP ratio, for all its faults, is still widely used. It's a good rule of thumb that indicates how strong a country's economy is, and how likely it is to use good faith to pay off its debt." https://www.thebalance.com/debt-to-g...use-it-3305832

Yes, but in comparison it is moderate.

Listen, I'm the last one to justify big government spending...but you are, all your solutions to every governmental, social and even personal problem is a government solution, so how can you, an advocate of government spending, criticize government spending.

[Dr. Who]

Yes, but in comparison it is moderate.

Listen, I'm the last one to justify big government spending...but you are, all your solutions to every governmental, social and even personal problem is a government solution, so how can you, an advocate of government spending, criticize government spending.

As I noted, perhaps it's not where the money is being spent, but the efficiency of the spending. How much duplication of services is there, overlapping departments, wasteful administration? If the government is working like old MS operating systems, they just add new departments without eliminating the obsolescence along the way. That kind of thing just sucks money in useless overhead.

Another factor has to be the level of poverty in America:

"The poorest 20% of American households earn a before-tax average of only $7,600, less than half of the federal poverty line." https://en.wikipedia.org/wiki/Social...Public_housing

America has the highest poverty rate among all OECD countries:



https://sustainabilitymath.org/2018/...ecd-countries/

Welfare programs address the symptoms of poverty but do nothing to address the underlying causes. Meanwhile the cost of all of these programs continues to grow while the percentage of people who are impoverished remains static.

[Chris]

As I noted, perhaps it's not where the money is being spent, but the efficiency of the spending. How much duplication of services is there, overlapping departments, wasteful administration? If the government is working like old MS operating systems, they just add new departments without eliminating the obsolescence along the way. That kind of thing just sucks money in useless overhead.

Another factor has to be the level of poverty in America:

"The poorest 20% of American households earn a before-tax average of only $7,600, less than half of the federal poverty line." https://en.wikipedia.org/wiki/Social...Public_housing

America has the highest poverty rate among all OECD countries:



https://sustainabilitymath.org/2018/...ecd-countries/

Welfare programs address the symptoms of poverty but do nothing to address the underlying causes. Meanwhile the cost of all of these programs continues to grow while the percentage of people who are impoverished remains static.

And now we change topics to poverty rate.

[Dr. Who]

And now we change topics to poverty rate.

Because the poverty rate has nothing to do with social spending and the debt? God forbid anyone drill down in a topic.

[Chris]

Because the poverty rate has nothing to do with social spending and the debt? God forbid anyone drill down in a topic.

Governments are in debt because they overspend, period.