Talk:National debt of the United States: Difference between revisions

US Public Debt vs US Private Debt

Something's missing here. If there's a page dedicated to "United States Public Debt", why isn't there one so titled for "United States Private debt"? If understanding the "debt ceiling" invokes this page on "United States Public Debt", why not one similarly titled and detailed called "United States PRIVATE debt"?

Understanding the economic buzz surrounding the term "debt ceiling" might be easier to grasp if there was a similarly titled page called "United States PRIVATE Debt". I know I'd like to compare and contrast the two concepts. I'd write it myself, but I don't know what I'm doing, and the person who wrote and formatted the former should also format and write the latter to better contrast the two concepts (besides, quite frankly I don't even know what balancing a checkbook means (bozo_de_niro@37.com).

Also, the article frequently refers to "total debt". Total debt includes public (government) debt, personal debt and corporate debt for both financial and non financial corporations. All references to "total debt" should be qualified as "total public debt" or more clearly "total governmental debt". — Preceding unsigned comment added by 192.100.130.7 (talk) 08:20, 18 June 2013 (UTC)

Carmen & Rogoff debt-to-GDP threshold at 90 % is gross debt NOT public debt

I emailed Carmen Reinhart about this question specifically and asked which one it is that they meant. She replied that it is gross debt, not public debt(or net debt).

Our exchange:

Hello,

I just wonder about the 90 % threshold of public debt which usually induces a GDP growth slowdown.

In the latest working paper from April this is defined as 'public debt'. Correct me if I am wrong, but the net public debt is around 68 % for the U.S.(and forecasted to rise to about mid-70s within a year or two and then stabilize).

However, America's gross debt is now over 100 %.

Which measure should be used? And can gross debt be used too for this? The term used in the working paper from April was 'public debt' - not net public debt.

I would be very happy if there was some kind of clarification on this as googling have not made me wiser!

_______________________________________________________________________________

Yes it is gross debt, which for the US is above the 90% threshold. This is the longest time series beginning in 1790. It is central (federal government), so it does not include state debt and government sponsored enterprises, which now include the two mortgage giants best Carmen

Carmen M. Reinhart Dennis Weatherstone Senior Fellow Peterson Institute for International Economics 1750 Massachussetts Avenue, NW Washington DC 20036-1903 tel. 202-454-1325 fax. 202-659-3225 creinhart@piie.com http://terpconnect.umd.edu/~creinhar/ www.carmenreinhart.com

_______________________________________

Unhelpful nominalization and other shortcomings

Section 3, Debt Ceiling, states: "The U.S. government proposes a federal budget every year, which must be approved by Congress." 'The U.S. government' is far too vague. I came to this page because I don't know how the debt ceiling works and I want to learn. I know the Executive Branch, the House, the Senate and the Judicial Branch each have budgets they publish periodically (probably also the Pentagon and every government agency). They are all 'the U.S. government' and none of them is. Who, exactly, proposes this budget and does it include all these other budgets? Is it the same as the Executive budget or separate from it? Also, "extraordinary measures" further down in the section, needs at least one concrete example. The first paragraph, about the Bond Act of 1917 is very clear. The limit applied to the total amount of issue in bonds. Then things get vague: "nearly all federal debt" - what has been added to bonds? "The Treasury is authorized to issue debt needed to fund government operations..." - does that mean or include regular issuing of currency or is the distinction between bonds and currency inmaterial? Sorry, I know this is a difficult topic to write about, but I'm just not finding what I need to know on this page. Can someone fix, please?Baon (talk) 22:59, 5 December 2012 (UTC)

Clarified government; changed to U.S. president and linked the federal budget process article.Farcaster (talk) 00:01, 7 December 2012 (UTC)

Gave an example of extraordinary measures and included a link to the Geithner letter, which spells out the measures.Farcaster (talk) 00:01, 7 December 2012 (UTC)

Issuance of currency is probably immaterial.Farcaster (talk) 00:03, 7 December 2012 (UTC)

Wrong numbers in foreign/domestic debt ratio

This article from gao.gov: http://gao.gov/assets/650/649848.pdf , states that about 5 % of the debt is from foreign investors, on Page 18. But the wikipedia article says around 40%. The sources to this page are from the banks of the lending countries, and I would say that the US have more credible numbers, than China and Taiwan.

It's best to make that amount a cross reference. It is too hard for Wikipedians to update changing numbers in multiple places. 40% is about right in 2013.

United States credit default

Should be merged into this article or possibly not at all. Seems like a trivial mention that has not received the depth of coverage or asserts any lasting effects to warrant a standalone article. Mkdw^talk 18:04, 18 January 2013 (UTC)

Yes, that is a good idea!--I am One of Many (talk) 18:22, 18 January 2013 (UTC)

Deficits vs. National Debt Increases

The article contains a nice chart titled "Total Deficits vs. National Debt Increases," which shows that each increase in national debt is significantly larger than the corresponding deficit.

Two in particular stand out:

• In 2001, there was a budget surplus, yet the national debt still increased.
• In 2008, the budget deficit was under $500 billion yet the national debt increased by more than twice as much (about $1000 billion).

This goes against the popular misconception that the national debt is simply the cumulative effect of all previous deficits. In fact, national debt is much greater than the cumulative effect of all previous deficits.

The article really ought to have a full explanation of why this is. 174.24.11.30 (talk) 16:14, 23 February 2013 (UTC)

See the section: Calculating the annual change in debt. Also, click on the chart for explanation.Farcaster (talk) 17:51, 23 February 2013 (UTC)

Why is Federal Debt Not Depicted in the US Debt Chart?

In the two charts with black and red lines, labeled 'U.S. debt from 1940 to 2011' there are black and red lines, gross debt and public debt. Gross debt being the public debt plus federal debt. I understand public debt being private debt of individuals and businesses. I came to this article in search of the federal debt. And I found private debt, and something almost completely useless, called gross debt, out of which I cannot decipher federal debt. So why are we getting private and gross debt here instead of federal debt? Fixthedebt.org is one of probably many organizations displaying charts that look like that one, while campaigning to cut the federal debt. But the chart does not depict federal debt. Is this some sort of mistake? Rtdrury (talk) 04:18, 15 March 2013 (UTC)

Maybe we can clarify it. National Debt = Debt held by the public + intragovernmental debt. The National debt is the gross debt (black line) while the debt held by the public is the red line. The difference is the intragovernmental debt. Securities owned by investors are the debt held by the public. The intragovernmental debt is owed to particular programs, such as Social Security.Farcaster (talk) 23:46, 15 March 2013 (UTC)

Intergenerational equity

This statement -- "For every dollar of debt held by the public, there is a government obligation (generally marketable Treasury securities) counted as an asset by investors. Future generations benefit to the extent these assets are passed on to them, which by definition must correspond to the level of debt passed on." -- isn't correct as it stands. The bonds "passed on" to future generations via inheritance or gift do not "by definition" correspond to the level of public debt. The U.S. Treasury Department sells bonds, which carry a maturity (up to 30 years). When the bonds expire, the Treasury must sell new bonds. Future generations will purchase bonds to finance a given amount of debt. Say the debt is 100% of GDP. That doesn't mean that bonds worth 100% of GDP will be transferred by inheritance and gift to future generations. (There's a secondary issue here with estate taxation, which means that even when assets are "passed on," their full value isn't.)--Jsorens (talk) 16:53, 20 March 2013 (UTC)

Yes, I believe they do by definition. Unless there are immortals running around. The debt is always offset by an equal amount of assets; that is why the debt exists. Let's use an example. Let's say a bunch of 30-year bonds are invested in by Generation 1 during a big debt run-up, then all dies on the same day and leaves the bonds to Generation 2. When the 30-year bonds mature, the government has to pay them off and issues new bonds to do so, giving the heirs in Generation 2 the cash and getting money from those in Generation 2 that want Treasuries and those in Generation 3. Sure, if everyone suddently decides not to buy treasuries, that is a fiscal crisis, but this is extremely unlikely. Either way, Generation 2 gets the money. I do agree on the tax point, although it is probably immaterial.Farcaster (talk) 17:30, 20 March 2013 (UTC)

The bottom line is that the asset value passed on to the second generation does not equal the debt that must be paid by the second generation. New bonds must be sold to the second generation to cover the difference. Whether certain scenarios are "unlikely" or not doesn't pertain to a definitional question.--Jsorens (talk) 16:51, 27 March 2013 (UTC)

You cannot pass a liability to a subsequent generation without passing the asset. It is impossible. Each dollar of debt the government has at any point is offset by investors who own the assets. But I think the point is made whether the text you removed is there or not.Farcaster (talk) 19:09, 27 March 2013 (UTC)

Federal government agencies?

The opening sentence of the article reads "The United States public debt is the money borrowed by the federal government of the United States through the issuing of securities by the Treasury and other federal government agencies." What federal government agencies? I don't think this is ever explained or expanded in the article. — Preceding unsigned comment added by Bondwonk (talk • contribs) 14:47, 24 April 2013 (UTC)

Where has the money gone?

A considerable amount of the Debt is bound up in accounts held in private hands and by the Federal Reserve as counted in the M2 and M3 money supply numbers. Those values, however, fall short of the number posted for the National Debt by several trillion dollars. Does anyone have any idea what's happened to it? Lost in bankruptcies? Strayed? Stolen? Foreign banks? Has anyone tried to account for it? Does anyone care? Virgil H. Soule (talk) 18:47, 22 May 2013 (UTC)

Incorrect data, tables, charts

Wish I had time to fix all of the tables and charts in this article - most are at best incomplete or years old, some are simply incorrect with bad source data. The deficit chart at the top of the article has a bad horizontal axis (skips 1980). — Preceding unsigned comment added by 75.136.227.247 (talk) 01:46, 15 August 2013 (UTC)

I agree. Additionally, the main chart under "history of the national debt" cryptically shows projections. Why is it showing projections on a section that is historical? It's a total POV push. I don't have the time or expertise to fix either.69.255.44.231 (talk) 16:08, 8 October 2013 (UTC)

I discovered two-year old vandalism by 173.188.131.109 completely unremarked upon, replacing the total debt of FY 2010 of $13,551 billion with the incorrect $12,311 billion. Will someone with a registered user name please place a vandalism notice on this user's IP address? 99.165.238.66 (talk) 07:36, 10 November 2013 (UTC)

Where's the Money?

The article doesn't explain what's happened to all those trillions of Dollars that have been borrowed. Where are they? Do they form the basis for the US Dollar and the Money Supply? Isn't unlimited growth of the Debt a form of debasement? It might be useful to include a discussion of the relationship between the National Debt and the Money Supply and why the two don't match up. Virgil H. Soule (talk) 17:59, 28 January 2014 (UTC)

Government Shutdowns

In "Relationship to appropriation process" the 2013 shutdowns should be added. — Preceding unsigned comment added by GioCM (talk • contribs) 18:10, 5 February 2014 (UTC)

Chicago plan revisited

Re [1], none of the sources in the removed paragraph look unreliable to me, and some of them are clearly prestigious commentary on the original IMF documentation. What kind of an RS is needed here? EllenCT (talk) 11:23, 1 March 2014 (UTC)

Foreign holders - grouped economic areas

I recently revised the Foreign holders of US Treasury securities table to include collapsible lists for each separate jurisdiction of the three grouped economic areas per the Treasury's monthly holdings report (http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt). I also changed the order of those jurisdictions within each group list based on either estimated or exact volumes of holdings:

For the Treasury report's listings of "Caribbean banking centers" and "United Kingdom" (see note below) economic areas, I simply used the Treasury's annual survey to determine which jurisdictions are the more significant holders of securities: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/shla2013r.pdf. Example - in the Caribbean, the Cayman Islands and Bermuda are clearly the major contributors, so it's sensible to list them before Bahamas, Panama, etc.

For "Oil exporters", I used a combination of known values from the same annual survey (Indonesia, Venezuela, and Ecuador are listed separately there) and relative volumes of the remaining countries' oil outputs divided between the additional holdings breakdowns of "Middle East oil exporters" and "African oil exporters". My main source for the oil data was CIA World Factbook, but I'm open to other suggestions in that regard.

Additionally, the economic area which the Treasury lists as "United Kingdom" but which includes the Crown Dependencies (which are NOT part of the United Kingdom) should properly be listed as the British Islands. Farolif (talk) 01:53, 24 August 2014 (UTC)