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Foreign holders of U.S. Treasury securities
21–30 of 47 posts
Re: Foreign holders of U.S. Treasury securities
#22Earlier quoted context omitted.
No, bankruptcy would be if we default. Having debt != being bankrupt.
This is from last year, but: The government has an “official” debt of $15.8 trillion and mounting. But wait, there’s more. This doesn’t include the liability from Social Security and Medicare. When you factor these in, the amount according to some, exceeds $120 trillion. With U.S. Federal tax revenue of just over $2.3 trillion, that puts our debt-to-income ratio somewhere around 5,082%.
I don't think that changes the fact that having debt != default.
I have a mortgage for a multiple of my current income, that doesn't mean I'm bankrupt because I'm unable to pay it off right now if demanded by the lender. Same thing with Social Security, if we had to suddenly pay out the entire amount tomorrow to everyone, yes we would be bankrupt but that's not how Social Security (or I would guess 90% or more of our debt securities) work.
Re: Foreign holders of U.S. Treasury securities
#23isn't "we" in the title a bit US-centric? (realize it's the original page's title, but probably deserves an edit when submitted to an external site like HN) edit: original title of submission was "Who we owe"
Given the cnn.com domain name, I think it's pretty clear who "we" refers to.
I honestly assumed that it was an article about who CNN owes money.
Re: Foreign holders of U.S. Treasury securities
#24Monthly data from the treasury:
http://www.treasury.gov/resource-center/data-chart-center/ti...
Foreign net purchases of US long-term debt: http://www.treasury.gov/resource-center/data-chart-center/ti...
More info: http://www.treasury.gov/resource-center/data-chart-center/ti...
Debt held by public is $11.918T.
China owns 10.7% of all treasury debt, Japan 9.5%, and all foreigners hold 46.9%. I imagine we're making the world a little nervous right now.
Re: Foreign holders of U.S. Treasury securities
#25Conservative economists are constantly wrong but somehow people keep believing them. Where's that runaway inflation that they've been predicting over and over again for years?
In any case, the US cannot default on its debt because it is denominated in US dollars, and we can always print more dollars. That is unless Tea Party extremists force us to jump off that cliff.
Re: Foreign holders of U.S. Treasury securities
#26Earlier quoted context omitted.
No, bankruptcy would be if we default. Having debt != being bankrupt.
This is from last year, but: The government has an “official” debt of $15.8 trillion and mounting. But wait, there’s more. This doesn’t include the liability from Social Security and Medicare. When you factor these in, the amount according to some, exceeds $120 trillion. With U.S. Federal tax revenue of just over $2.3 trillion, that puts our debt-to-income ratio somewhere around 5,082%.
Except that is not how liabilities work. On an account ledger there is no column liabilities.
Because of political posturing the whole meaning of liabilities has been distorted
Re: Foreign holders of U.S. Treasury securities
#27Conservative economists are constantly wrong but somehow people keep believing them. Where's that runaway inflation that they've been predicting over and over again for years? In any case, the US cannot default on its debt because it is denominated in US dollars, and we can always print more dollars. That is unless Tea Party extremists force us to jump off that cliff.
In any case, the US cannot default on its debt because it is denominated in US dollars and we can always print more dollars.
There's a name for that solution - it's called a soft default, and it's not a new idea. Clearly there is a limit to this, or politicians wouldn't bother with a budget or taxes at all - they'd just print money as required. It dilutes the value of existing currency and is a dangerous game which is not sustainable. Kingdoms and empires which have devalued their currency (and many have tried) have always paid for it in the end, with interest. It also punishes the poor disproportionately with inflation - which doesn't have to be hyperinflation to be damaging if it is sustained.
So anyone suggesting it should also be suggesting a way to balance the budget and get back to a sane monetary policy. That's not hard though - the US spends a lot on military budgets (much more than any other country in the case of the military), pensions and healthcare. You might argue how to cut and how fast, but there is a lot which could be done if necessary. Printing money is not a solution, it's just a stop-gap to avoid a hard default.
Re: Foreign holders of U.S. Treasury securities
#28"United Kingdom includes Channel Islands and Isle of Man" Well, I'm glad they specified that! Though I am left wondering if the total for France includes New Caledonia... and of course, it's something of a travesty that they didn't indicate whether or not the total for Russia includes the Kaliningrad oblast.
New Caledonia isn't a tax haven. The Channel Islands and the Isle of Man are, and most likely contain quite a large proportion of the UK's t-bill holdings.
The Channel Islands are not a 'tax haven'[1], though we sometimes get called this by foreign politicians[2]. It is easy to take a cheap shot at a few islands outside your voting district. A much easier idea for a politician to sell, than a plan to balance the budget at home.
[1]http://www.jerseyfinance.je/ceo-blog/it-s-official---jersey-... [2]http://www.bbc.co.uk/news/world-europe-jersey-23902431
Re: Foreign holders of U.S. Treasury securities
#29I don't understand why China (and Japan) did get into this so lightheartedly. I mean, the devaluation strategy applied by the US has been obvious for so long now. I'm actually surprised to not see some kind of "bank run".
Where's a better place for they to put their money/all those dollars coming in from exporting to the US?
This. China buy t-bills because they really have no other safer/better options. That they basically get a negative interest rate at that (due to inflation) is just a cost of not having the money burning a whole in their country's economy.
Re: Foreign holders of U.S. Treasury securities
#30Conservative economists are constantly wrong but somehow people keep believing them. Where's that runaway inflation that they've been predicting over and over again for years? In any case, the US cannot default on its debt because it is denominated in US dollars, and we can always print more dollars. That is unless Tea Party extremists force us to jump off that cliff.
In any case, the US cannot default on its debt because it is denominated in US dollars and we can always print more dollars. There's a name for that solution - it's called a soft default, and it's not a new idea. Clearly there is a limit to this, or politicians wouldn't bother with a budget or taxes at all - they'd just print money as required. It dilutes the value of existing currency and is a dangerous game which i…
Inflation doesn't punish the poor. It punishes the savers.
Balanced budget/deficit/surplus are tools and not goals. When the business don't/can't spend it is the government job to pick up the slack (deficit). And when business is investing it makes sense for the government to not compete for the same capital and labor with the private sector (balanced/surplus).