Hmmm our news is all full of this american debt thing and stuffs and i don't understand why it has a big impact on us here... i am wondering if someone can explain it to me... as this is a thread that has nothing to do with pb imma hoping it can not turn into a pb hate fest... i genuinely wanna understand this and figure someone out there can explain it....

Originally posted by hanako

Hmmm our news is all full of this american debt thing and stuffs and i don't understand why it has a big impact on us here... i am wondering if someone can explain it to me... as this is a thread that has nothing to do with pb imma hoping it can not turn into a pb hate fest... i genuinely wanna understand this and figure someone out there can explain it....

America's so boss it's affairs affect everyone.

We'z like Rome in it's prime. Just a lot poorer, apparently.

that don't explain what it is

Originally posted by hanako

Hmmm our news is all full of this american debt thing and stuffs and i don't understand why it has a big impact on us here... i am wondering if someone can explain it to me... as this is a thread that has nothing to do with pb imma hoping it can not turn into a pb hate fest... i genuinely wanna understand this and figure someone out there can explain it....

best i can explain is that US Gov't Debt (Treasuries) are regarded as one of, if not "the" safest investments in the world. gov't's, pension funds, banks, richest individuals in the world, etc hold their mountains of cash in them b/c 1) they're liquid (can turn to cash) very quickly b/c there's a huge market for them and 2) very safe.

reason it effects the whole world is b/c of those 2 things and b/c if they're downgraded or default, it costs the entire world lots and lots of $. also affects bank's( that all hold lots of these) ability to lend which slows all economies and business's down.

So how does a country end up in so much debt... and that was an excellent explanation by the way thank you

Originally posted by hanako

So how does a country end up in so much debt... and that was an excellent explanation by the way thank you

oh my...this is where it gets away from "facts" and in to subjective opinions. i'll list some of the obvious:

1) medical costs (33% of american gov't expenditures every yr)

2) entitlement programs (20% of us gov't spending every yr)

3) tax breaks for wealthy that causes the us gov't to miss out on substantial revenue

bottom line is it's like why an individual or a family might get into a situation when they can't pay their bills....Lost jobs (lost revenue) or high medical expenses or mismanagement of $ they do have (spending before actually have) or not saving enough to plan for future. USA gov't has done ALL of these as well as others.

This is why we are so broke.........

Originally posted by hanako

So how does a country end up in so much debt... and that was an excellent explanation by the way thank you

Just my view but I think a country ends up in so much debt by:

1. Shovelling government money at the rich and multi-natiional corporations under the mad delusion that this helps anyone except the rich and multi-national companies.

2. Making the condition of the poor and of ethnic communities so desperately bad that a very large percentage must rely on government assistance or wind up in the penal system and usually both.

3. Operating wars and military bases all over the world with expensive technology.

Originally posted by hanako

Hmmm our news is all full of this american debt thing and stuffs and i don't understand why it has a big impact on us here... i am wondering if someone can explain it to me... as this is a thread that has nothing to do with pb imma hoping it can not turn into a pb hate fest... i genuinely wanna understand this and figure someone out there can explain it....

The US wont default, I can pretty much guarantee that but we will most likely have our bonds downgraded, which will have the most effect on the world. Interest rates in the country will substantially rise, making borrowing more costly. The financial markets will also be hurt, which has negative effects on peoples retirements and the overall public sentiment. The list could go on and on but those are probably the main effects.

Originally posted by Caissa

Originally posted by hanako

So how does a country end up in so much debt... and that was an excellent explanation by the way thank you

Just my view but I think a country ends up in so much debt by:

1. Shovelling government money at the rich and multi-natiional corporations under the mad delusion that this helps anyone except the rich and multi-national companies.

2. Making the condition of the poor and of ethnic communities so desperately bad that a very large percentage must rely on government assistance or wind up in the penal system and usually both.

3. Operating wars and military bases all over the world with expensive technology.

very true but main reasons without too much detail needed are: 1) Greed 2) Misuse of funds