Hugo Chavez just died

[kentonio]

Because it wasn't harmful to the economy. The tax cuts might have helped or might have had little effect depending on who you ask.

Clue: Economy != federal budget.

If the federal government is paying vast sums to finance its debts, then surely that is money which is not being invested into America and thus not helping the American economy, no?

[Kidlicious]

If the federal government is paying vast sums to finance its debts, then surely that is money which is not being invested into America and thus not helping the American economy, no?

It is if they are paying americans.

[kentonio]

It is if they are paying americans.

Since when did Americans own most of Americas debts?

[Kidlicious]

Since when did Americans own most of Americas debts?

We're just fine with others investing in our country.

[kentonio]

Actually I'm wrong, looks like a majority is still US owned. I wonder what the breakdown of actual debt payments is though.

[MichaeltheGreat]

Since when did Americans own most of Americas debts?

Americans or American organizations are the largest single group of treasury debt holders.

[MichaeltheGreat]

If the federal government is paying vast sums to finance its debts, then surely that is money which is not being invested into America and thus not helping the American economy, no?

We're not at a tipping point yet. Interest on the debt is still less than deficit spending, then you have the debt payments which either go to US investors, or foreign entities reinvesting it in the US. So more net cash is going into the economy as a result of the deficit spending. At least now. It's obviously not a sustainable approach.

[Dinner]

If the federal government is paying vast sums to finance its debts, then surely that is money which is not being invested into America and thus not helping the American economy, no?

The cost of servicing the national debt is near an all time low with real interest rates actually net negative right now once inflation is taken into account. I'd rather they increased the deficit to spend on things like rebuilding public infrastructure (thus building things we need anyway and increasing employment) instead of cutting spending the way Republicans want.

[snoopy369]

I'm not arguing that deficit spending is a good thing in the long run. However, the economic condition of today is not affected by deficit spending or the debt.

[MichaeltheGreat]

It is, though, indirectly. It's not affecting consumption of basic goods by those who are employed, but concern with long term trends and stability affects both consumer and business confidence and that ultimately keeps a lot of money out of the economy by delayed or cancelled consumption, home purchases, hiring and capital investment.

[snoopy369]

I highly doubt deficit spending by the US government has more than a trivial effect on any of those things. Nobody thinks the US government is going to go bankrupt or have to enter 'austerity' or whatever. Sure, current issues with governance are leading to some problems, but that's unrelated to Bush. The "Fiscal Cliff" and "Sequestration" are creations of current incompetent politicians, not past ones, and not really highly correlated with past performances (other than the general choice to permit deficit spending back in 18whatever).

I'm not arguing Bush was a competent leader or a economic genius or anything like that, by the way. I just don't think you can blame him personally for much of what we're currently going through. The President has relatively little effect on the economy, and even had he not led us into two expensive wars and whatnot, we'd still be in roughly the same place we are now.

[Alexander's Horse]

I should buy some Treasuries just for the satisfaction of knowing America owes me.

[DaShi]

Then you'll feel like everyone who votes democrat.

[Dinner]

I should buy some Treasuries just for the satisfaction of knowing America owes me.

They're a bad investment as the interest rate is below the rate of inflation. This is largely due to the fact that investors around the world have been spooked by the financial crisis and we've seen a "flight to quality" where people from Europe to Asia are looking for a safe, extremely low risk place to park trillions during the downturn. This has resulted in so much money begging to buy T-bills that the interest rate is now net negative in real terms. Even with America's deficit there just aren't enough T-bills to fill demand so yields plunge as people offer lower and lower rates for the privilege of loaning us money.

[Alexander's Horse]

I know but there is a sort of vicarious thrill in owning them, until they turn into wallpaper of course, note to self: buy just enough to paper a small room at some future date....