Why are people so ignorant about federal debt?

85 percent of the debt is to Americans in the form of treasury bonds. Every generation has counted on bond investment to help during retirement. US government does not borrow from China. China freely invests in US by their own choice. It shows they have faith in the worlds largest economy. Any foreign investment in US is at their own risk, payback is the freewill of US. Also, the national debt as a percent of the GDP is pretty average, the same as France, and much lower than 1950 after WW2. 1950 was the begining of the most economic expansion in US history.

Why are people so ignorant about federal debt?
They don't want to know and therefore think somehow it will disappear if they ignore it. Sadly ignorance is not bliss





A debt is still a debt whether due today or tomorrow and therefore has an effect on any future borrowing. Enron, Worldcom and American Airlines should tell you that. Everything was going fine until some cash actually had to be paid out. Nothing worse than looking at a CEO with his pockets turned inside out talking about "Gee, Am I embarrassed."





FYI the quickest way to take over a company is through the backdoor by buying their debt. It worked extremely well for Federated when they bought Macy's debt.





T-Bills are not the same as the $100, $50 etc savings bonds grandma buys. She's not going to buy millions or billions at a clip, but a government can. Since the U.S. is not going to buy its own debt that leaves FOREIGNERS:


"T-Bills or Treasury bills are a debt obligation backed by the U.S. government with a maturity of less than one year sold in BULK. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks)."


If you look at this in terms of the $10 TRILLION deficit we currently have. This is a case of robbing Peter to pay Paul btw. Better known as a pyramid scheme taking new money to pay off an old debt. In private circumstances illegal. Just thought I'd point that out. Considering the substantially reduced tax revenue to spending I can't even make the case for revenue matching against the principal. So the debt continues to grow while the dollar weakens. Any sane person would believe it's time to raise some interest rates and taxes boys. Oddly enough for all the low tax crap both Reagan and Papa Bush realized that and did. Papa Bush was a little more transparent than Reagan. Reagan called them "Revenue Enhancements"





Also if the faith in the U.S. is so great why is the dollar so poor?


Obviously enough countries seem to be in agreement concerning the U.S. creditworthiness and therefore the true value of a dollar is not as great as we think it is. So you are correct in one respect any investment in the United States is at the investors risk. Which is why we really don't have any outside of real estate. With interest rates so low and the dollar so weak it is a poor investment strategy. The interest rate required for a decent return and conversion into the home currency is far greater than the interest a CEO or anyone is willing to pay. Better if you can to make investments outside of the United States. I guarantee if you were to look at the portfolios of wealthy individuals most are outside the U.S. I know mine are. Also looking at the sales of U.S. companies most are coming from outside the country.





Payment at the Freewill of the U.S. eh? An economist made mention of this. If the U.S. should decide to renege on the debt owed to these foreign countries I think all Americans maybe not Republicans are well aware that militarily speaking China and India are in a position to collect. That is one hell of a margin call. So gee I guess we better pay up. Comparing the U.S. to France is like apples and oranges smacking of b.s. like Republican unemployment numbers.
Reply:Indeed. People also have no clue that treasury bonds are long-term investments, most are 20 or 30 year bonds. So all the scare tactics of "China could demand payment and collapse our economy" is pure crap. If China buys $1 billion worth of our debt today, they can't cash it in until the bond matures in 20 or 30 years.





This is the kind of knowledge and education we get from government-run schools. Yet another argument to get government out of everything and turn it over to the private sector. Imagine our children getting a real education for a change. Wouldn't that be nice?
Reply:I agree with you in that most are ignorant on the points you brought up.





However, most people don't realize that the true crisis looming on the horizon is the entitlement crunch.





Our current outstanding debt is ~$9 trillion. The current UNFUNDED portion of our entitlement liabilities is estimated to be $30-50 trillion. And given that the government is unlikely to not at least attempt to pay these liabilities, then IMO they are the same as debt - cash that will need to be paid in the future.
Reply:Bill O'Reilly thinks that China can "call" the debt.





Before I retired I was an investment officer at a major bank, and I chuckle every time our "DEBT" is mentioned as if Bush slips over to China and signs a loan agreement and pledges the National Mall as collateral before he comes home.





you are absolutely right in the way you define our debt....Also do not forget those "US Savings Bonds that every kid's grandma bought for him/her
Reply:What they can't see them, can't hurt them... or so they think. This is especially true with liberals.


They have the same idea with foreign policy. If we don't look, we won't see Iran and Russia preparing to do something horrible. Lets just stay home and pretend like there isn't any problem.





Most Americans do the same thing with their own debt. Swipe that card, go on, its easy! Then just peek at the bill and pay the smallest number that appears (minimum balance due.)
Reply:The average person does not understand economics in general and has no clue about how the economy actually works. There is just a tendency to only look at one number and never consider the entire picture in context. It's not just the debt. You see it in unemployment statistics, GDP growth, taxation etc.
Reply:You have described just a small part of how debt works. If you watch the video on the link below it will explain it much better. It is a fairly long video but well worth the effort. It takes a minute or two to start.





http://video.google.com/videoplay?docid=...
Reply:Because it's


boring and Americans have a very short attention span and the Government depends on that . So citizens don't pay attention to it . also most are stupid about whats really going on in this country .
Reply:It is the American way. Only for a short time in the early 1920s was the Government debt free. Our Government was founded on Debt and has stayed on the credit binge since.
Reply:because many administrations both democratic and republican use smoke and mirrors when they are talking about the deficit....so the average American is totally baffled which is part of their plan....while they plunder our resources...
Reply:Because they don't actually know that they will be the ones paying the debt.
Reply:IDK, you are suprised they are ignorant on this issue? LOL... That's just scratching the surface of their ignorance. They are spoon fed bs crap and believe the koolaid servers.
Reply:people are ignorant in general because the truth scares them. SO they prefer to be brainwashed by the media.


Both McCain and Obama have chosen to take the U.S. down the road of “global governance,” in which the U.N. and other international agencies, institutions and alliances determine our fate as a nation. Will you vote for them anyway,knowing you will continue to loose your freedoms or have any hope for the future as our country continues to loose its sovierenity?





Most Americans have now successfully been dumbed down by the Trilateral Commission-run media (Rupert Murdoch and most other media tycoons and journalists are members of the Trilateral Commission. The elitists are laughing as they are stepping all over the brainwashed American public and achieving their goals. The Federal Reserve is the banking system of the New World Order.
Reply:Why are Americans still attacking each other?





US I.O.U. the new film explains that we are now $50 TRILLION in debt.





Warren Buffet funded the film. It's sold out already.





We are going into being a third world country as soon as Bush leaves and the weak strings he is holding are broken. He let his friends steal this nation blind, and I mean BLIND. No one was noting what was happening.





Your great great grandchildren will still be paying it off. America will be dust. That's not fair.





So let Bush continue to fund your money to the war profiteers, to torture, to his mercenary army so they can tell you to leave your home one day.





He is building for a future empire that will control every American and tear down every right while we watch TV and populate chat rooms.





Remember, Bush said, "The Constitution is nothing but a piece of paper." We have forgotten how to defend that piece of paper.





The foreigners who helped him to to this to US are laughing all the way to the "federal bank."





If you attack Americans who are different from you, you are simply a propagandist for the global empire!