America's national debt has now surpassed $31 trillion. Does it matter?

[Adaeva]

One hundred years ago, common labor was $1 a day and gold was about $20 per ounce. Now common labor is about $10 per hour and gold is $1,914 per ounce, That is, prices have increase by a factor of about 80. Therefore, in 100 years the dollar has lost over 98% of its value and inflation has averaged about 4%. That is close to the current inflation rate.

The US deficits are a little over $1 trillion a year. Therefore, in twenty years prices will double and the US national debt will also double to about $60 trillion. Then in another 20 years prices will double and the US national will double again to about $120 trillion. Wages can be expect to increase by a similar amount.

What this implies is that nothing changes except the value of the dollar which has no real value anyway.

[abc3643]

Does it matter?

No, not really.

A few reasons:

1. Most of the money is owed to the American people anyway. We are paying ourselves.
2. In principle, money can be printed and debts paid. Now, at 14, you don't know a lot, but there are some important numbers in economics. These include the M1 and M2 money supplies. The Federal Government makes those numbers public and that's because the US Dollar and the US Federal Government are considered the safest bets on Earth. However, in principle, M1 and M2 could become classified numbers. If I was President, I would consider classifying them although I probably would not. But, if M1 and M2 were classified, then printing money to pay debts would not be an issue.
3. You don't fuck with people who have nuclear weapons and the systems to be able to deliver those weapons anywhere. So, when you're the wimpy kid demanding that the bully pays you, you get your money when the bully WANTS to pay you.

>>> That's the real world.

[abc3643]

Measuring Money: Currency, M1, and M2
courses.lumenlearning.com/.../

Money Stock Measures
www.federalreserve.gov/.../default.htm

[Adaeva]

Thank you for the link describing M1 and M2. That was interesting and informative. I didn't understand the second link.

[abc3643]

The second link wasn't easy to understand. The point of the second link is that is the Federal Government's current report for what the M1 and M2 levels are.

Notice that it was published by The Federal Reserve.
The Federal Reserve is sort of an independent entity associated with the Federal Government. This is very hard to explain and it's been about a year since I did any research on this for G@G, but the Federal Reserve was created after The Great Depression to be an independent agency regulating US "monetary policy".

In economics, there's microeconomics and macroeconomics. Micro- has to deal with personal or business economics - supply and demand and prices, etc. But macro- has to deal with economies on the national scale - things that affect everyone.

In macroeconomics, there are two major parts to it:
Fiscal policy which is related to taxing and spending - the stuff Congress does.
Monetary policy which is related to the money supply and interest rates. In our government, we decided that Congress should not have complete control of the economy since Congress is a very political entity and nobody trusts anybody there. "The Fed", as The Federal Reserve Board is called, is independent. The President appoints the Chair of the Federal Reserve Board (I am not sure if the Senate has to approve) and that Chair serves for a 7-year term; that number was chosen so the choice of the Fed Chair would not be a major political issue.

Anyway, The Fed controls US monetary policy so it would publish the M1 and M2 numbers. The website I gave was the most recently published M1 and M2 numbers.

[abc3643]

A few things:
I was wrong - the Fed is older having been created in 1913 about 10 months after the ratification of the 16th Amendment which permitted income taxes.
Also, the President appoints all 7 members of the Board of the Fed and they DO have to be approved by the Senate.

https://www.federalreserve.gov/aboutthefed.htm
The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U. S. economy and, more generally, the public interest. The Federal Reserve

*conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U. S. economy;
* promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U. S. and abroad;
* promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;
* fosters payment and settlement system safety and efficiency through services to the banking industry and the U. S. government that facilitate U. S.-dollar transactions and payments; and
* promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.

(more)

[abc3643]

www.federalreserve.gov/faqs/about_12594.htm

What is the purpose of the Federal Reserve System?
The Federal Reserve System, often referred to as the Federal Reserve or simply "the Fed," is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law. Today, the Federal Reserve's responsibilities fall into four general areas.
* Conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.
* Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers.
* Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.
* Providing certain financial services to the U. S. government, U. S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation's payments systems.

There is a very good short video explaining The Fed at these websites. You should watch it.

===
Oh, I was wrong about something else; members of the Board of Governors are appointed to 14-year terms, but the Chair is appointed to a 4-year term.

www.federalreserve.gov/faqs/about_12799.htm
What does it mean that the Federal Reserve is "independent within the government"?

[abc3643]

By the way, that table in the original second link, had the definitions of M1 and M2 according to The Fed:

M1 consists of (1) currency outside the U. S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U. S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of other checkable deposits (or OCDs, which comprise negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions) and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and other liquid deposits, each seasonally adjusted separately.

M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing small-denomination time deposits and retail MMFs, each seasonally adjusted separately, and adding the result to seasonally adjusted M1.

==
I realize they may be difficult to understand; these definitions are more for economists and those in the finance industry.

[Adaeva]

Thank you for the additional information. I had hear the terms Macro and Micro but I didn't know what they were. Your definition of microeconomics and macroeconomics was outstanding.

[BJP21]

If we keep up with these wars we will be bankrupt.

[Anonymous]

None of it is really real. Nobody knows if the depth is really going to go up, down, sideways or in fucking circles, least of all the federal government, right? It’s all a fugayzi, you know what a fugayzi is? Fugayzi. It’s fake. Fugayzi, fugazi. It's a whazy. It's a woozie. It's fairy dust. It doesn't exist. It's never landed. It is no matter. It's not on the elemental chart. It's not fucking real. America owns North, South and central America, it owns most of Africa, most of Europe, the Middle east and most of Asia.

A good example is Saudi Arabia. It has had a lot of oil and made a lot of money over the decades out of oil exports but the oil is dwindling and once it runs out that money they've exchanged for their oil will be worthless because it has no value if its not backed by oil.

When you say America's debt is $31 trillion that's tiny, it's money the US owes itself and us gdp is 25 trillion per year and that doesn't count all the US owns globally.

[OddBeMe]

Not as much as you’re probably worried about. It’s like your credit card debt. Is it that intrusive on your life?


It is something we should take care of. Like taking back Trump’s Tax Cuts. That cost us more than both Obama’s terms combined.

[Adaeva]

Thank you for the additional information. I had hear the terms Macro and Micro but I didn't know what they were. Your definition of microeconomics and macroeconomics was outstanding.

[abc3643]

You are welcome, young lady although I don't know if those definitions are very good. I haven't taken those classes in almost 40 years.

So, I decided to let ChatGPT be your teacher (and my teacher too!)

The next few posts are questions that I asked ChatGPT.

(more)

[abc3643]

Define economics.

Economics is the study of how individuals, societies, and organizations allocate scarce resources to meet their unlimited wants and needs. It examines the production, distribution, and consumption of goods and services, and how these activities are influenced by the interactions of individuals, businesses, government, and the global economy.

[abc3643]

Define microeconomics.

Microeconomics is a branch of economics that focuses on the behavior and decisions of individual actors, such as households and firms, and how they interact in specific markets. It examines how the supply and demand for goods and services, and the prices that result, are determined by individual and group behavior. Microeconomics also looks at how market structures, such as monopolies and competitive markets, affect the actions of individuals and firms. Additionally, it analyzes how government policies, such as taxes and regulations, impact the economy at the micro level.

[abc3643]

Define macroeconomics.

Macroeconomics is a branch of economics that studies the economy as a whole, focusing on aggregate variables such as gross domestic product (GDP), unemployment, inflation, and trade. It examines the performance and structure of the economy, and how policies and events affect the economy in the short and long term. Macroeconomics looks at the economy from a "top-down" perspective, analyzing the overall economic activity and trends, rather than the specific behavior of individual actors. It also analyzes the monetary and fiscal policies of the government and Central bank, and how these policies impact the economy and the overall economic performance.

[abc3643]

What are the primary macroeconomic tools government can use?
The primary macroeconomic tools that governments can use to influence the economy are:

Fiscal policy: This involves the use of government spending and taxation to influence the economy. Governments can increase spending to stimulate economic growth or decrease spending to slow inflation. They can also adjust tax rates to influence consumer spending and investment.

Monetary policy: This involves the use of interest rates and the money supply by the central bank to influence the economy. Central banks can decrease interest rates to encourage borrowing and spending, or increase interest rates to slow inflation.

Trade policy: This involves the use of tariffs, quotas, and other trade barriers to influence the flow of goods and services between countries. Governments can use trade policies to protect domestic industries and promote exports.

Regulation: This involves the use of laws and regulations to influence economic activity. Governments can regulate industries to protect consumers and promote competition, or to encourage certain types of economic activity.

Direct controls: This involve the government directly controlling the economy by setting prices, wages, production quotas and rationing goods and services.

These tools can be used in combination or individually depending on the government's objective and the state of the economy.

[exitseven]

yes it matters. it will cause more inflation and when interest rates go up the US has to pay interest on that debt. It needs to stop.

[LiamJHayden]

It matters to me, and probably more to you since you are younger, because we are going to bear the brunt of the inflation from the uncontrolled borrowing.

[jshm2]

Yep. America's fall is going to be worse than the fall of Rome.

[KostasKouvalis]

When you give away billions of dollars to a corrupt eastern European leader, that's what happens.

[Fuentes]

NWO is coming soon, meanwhile Biden and his crazy weirdo I'd flock of retards Is throwing 100s of billions at Ukraine. Meanwhile crime & the homeless have shot up.

[Dav1dTh0ma3]

Thanks in large part to Republicans and their tax cuts for the rich