Who owns America's Debt?

[fallout2600]

http://izismile.com/img/img2/20091026/daily_picdump_271_50.jpg

[Skyhi]

Serious hypothetical question for the economists here: What if the USA said, "Sorry. We're not paying you back."

[fallout2600]

In the case we said that, which would likely never happen, then I could see our dollars being returned to us in the form of each one of those countries buying up corporations and real estate through the USA. Then, hyperinflation on scale never seen before...

Remember when everyone went nuts over the Dubai port deal...just imagine the mind job everyone would have if China owned the entire West Coast, etc.....

[msmith198025]

Interesting graph. thanks:thumbup:

[DodgerKing]

Serious hypothetical question for the economists here: What if the USA said, "Sorry. We're not paying you back."
The value of the dollar would diminish greatly and the Euro would become the new world trade currency.

[Bear Paws]

The value of the dollar would diminish greatly and the Euro would become the new world trade currency. Exactly as Fallout said.
The dollar value in the US would still hold, though not against the Euro or other exchanges.. The debt holders would not necessarily flood us with our own money. They would just quietly buy up everything like the Japanese did in the 80s. That still doesn't guarantee they will get their money's worth.. Unfamiliarity with our real estate could cost them. They would likely target properties in trouble to try to maximize the "fire sale" value of the dollar they hold.. If the US economy won't support the price they paid they will operate at a loss and have to throw more good(?) money after bad.

Remember Mitsubishi Estate buying Rockefeller Center and Sony’s deal for Columbia Pictures two decades ago? A few years after those high-profile deals were struck, Sony had to take a $2.7 billion write-down of goodwill, and Mitsubishi sought bankruptcy protection for the property.

In the end everyone losses. Especially us because we don't produce much any more.. Energy in particular. No one would trade with us. We can't use Euros or yen to trade with. Trade is all in paper trade credit and debits, Aka the trade deficit. Only goods change hands not actual cash. Our trade is only good as our or rather their faith in our credit.

[Bob Haller]

might be a good thing. tell our owners we declared bankruptcy.

they dont want to trade? thats fine we would have to go back into business building stuff. since we export so little loss of exports meaningless........

The US is basically like a old steel company, overpaid employees, too many workers highly inefficent operation.

go out of business and get reborn.

new minimum wage 2 bucks a hour, executives TOP PAY 50 grand.

[Skyhi]

The value of the dollar would diminish greatly and the Euro would become the new world trade currency.
We'd be forced to bring manufacturing back home - - a positive side-effect if you ask me! :)

[fallout2600]

We'd be forced to bring manufacturing back home - - a positive side-effect if you ask me! :)

Really? You think American corporations are going to come home to a country whose new tax rates might be > 50%?

[HDRoberts]

Interesting some of the "socialist" countries you whine about have extra money to lend to us, like Germany and Ireland. Heck, the largest holder is actually communist.


In the end everyone losses. Especially us because we don't produce much any more.. Energy in particular. No one would trade with us. We can't use Euros or yen to trade with. Trade is all in paper trade credit and debits, Aka the trade deficit. Only goods change hands not actual cash. Our trade is only good as our or rather their faith in our credit.

It may be painful, but maybe a good devaluation of our currency would be good for us. It could finally put a stop to big international trade. America could get back to manufacturing. We still do some manufacturing, just not nearly enough. What we do produce, including grain, would be in even higher demand because our currency is cheap. Kind of like a painful surgery to cut out cancer.

[HDRoberts]

Really? You think American corporations are going to come home to a country whose new tax rates might be > 50%?

Why would our new tax rates suddenly become 50%? And where else would they go? Americans can't afford stuff manufactured overseas anymore. And if they don't come back, I'm sure some upstart will take their place.

[fallout2600]

Why would our new tax rates suddenly become 50%? And where else would they go? Americans can't afford stuff manufactured overseas anymore. And if they don't come back, I'm sure some upstart will take their place.

The govt would be forced to collect more dollars (as they would be worth less) from individuals and businesses to pay for all the entitlements and welfare....tax rates would soar and everything would be expensive as hell.

[Skyhi]

The govt would be forced to collect more dollars (as they would be worth less) from individuals and businesses to pay for all the entitlements and welfare....tax rates would soar and everything would be expensive as hell.
If we elected politicians who wouldn't raise taxes, our tax rate would stay the same. Plus, if we had a manufacturing boom, there would be less demand for entitlements.

[HDRoberts]

If we elected politicians who wouldn't raise taxes, our tax rate would stay the same. Plus, if we had a manufacturing boom, there would be less demand for entitlements.

Agreed. Plus, as Bear said

The dollar value in the US would still hold

[fallout2600]

In the scenario of a manufacturing boom, then I would bet on hyperinflation for sure. I don't see the dollar holding, I see it more like what happened in Argentina during their crisis.

[Madtown HD Junkie]

who owns our debt....?

MY great great great great great great great great great great great great great great great grandchildren, that's who....

[vurbano]

Serious hypothetical question for the economists here: What if the USA said, "Sorry. We're not paying you back."

You would be in a soup line.

[Bear Paws]

If we elected politicians who wouldn't raise taxes, our tax rate would stay the same. Plus, if we had a manufacturing boom, there would be less demand for entitlements. "WE", and your mouse, should have thought of that last election... Correction...last primaries. The horse may be out of the barn now..

[Skyhi]

"WE", and your mouse, should have thought of that last election... Correction...last primaries. The horse may be out of the barn now..
Your taxes have gone up?

[Bear Paws]

who owns our debt....?

MY great great great great great great great great great great great great great great great grandchildren, that's who.... Correction...OWE. I would love to own it..

[Bear Paws]

Your taxes have gone up?Not really.

[DodgerKing]

Your taxes have gone up?
They will be when the tax cuts expire. Plus, my state sales tax has already gone up (making the tax in LA county near 10%) and my state income tax will be going up.

[Skyhi]

They will be when the tax cuts expire. Plus, my state sales tax has already gone up (making the tax in LA county near 10%) and my state income tax will be going up. If I remember correctly, Obama has said he will only roll back the Bush tax cuts on the top two brackets. So if you're married and your household is making 208k+, then you may have a valid concern. I'm not sure if Obama/Congress plans on rolling back the capital gains rates.

I was only talking about Federal income tax, but since you brought up state tax, aren't you a teacher? If you work for the socialist public education system, perhaps you should organize your union comrades statewide and give some of your salary back. If California is anything like Ohio, a portion of state income tax receipts is distributed to local school districts. Perhaps if you and your comrades (assuming you work for a public school system) are willing to take a paycut, a state income tax increase will not be needed.

[Bear Paws]

If I remember correctly, Obama has said he will only roll back the Bush tax cuts on the top two brackets. So if you're married and your household is making 208k+, then you may have a valid concern. I'm not sure if Obama/Congress plans on rolling back the capital gains rates.

I was only talking about Federal income tax, but since you brought up state tax, aren't you a teacher? If you work for the socialist public education system, perhaps you should organize your union comrades statewide and give some of your salary back. If California is anything like Ohio, a portion of state income tax receipts is distributed to local school districts. Perhaps if you and your comrades (assuming you work for a public school system) are willing to take a paycut, a state income tax increase will not be needed. Alright...who stole SkyHi. No Commie loving lawyer speaks that way about their socialist brethren. Unless he is Comrade O'brien trying to set you up. (1984) Beware Winston Smith, these are are the dangers I spoke of.