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National Debt Clock Overflowed, Extended By a Digit
hackingbear writes "The National Debt Counter, erected in 1989 when the US debt was 'merely' a tiny $2.7 trillion, has been moving so much that it recently ran out of digits to display the ballooning figure: $10,150,603,734,720, or roughly $10.2 trillion, as of Saturday afternoon. To accommodate the extra '1,' the clock was hacked: the '1' from "$10.2" has been moved left to the LCD square once occupied solely by the digital dollar sign. A non-digital, improvised dollar sign has been pasted next to the '1.' It will be replaced in 2009 with a new clock able to track debt up to a quadrillion dollars, which is a '1' followed by 15 zeros. That should be good enough for a few more months at least, I believe." Adds reader MarkusQ, "I know Dick Cheney has assured us that 'Deficits don't matter' but I can't help wondering if we should be fixing the problem rather than the sign."
First of all, 2.7 in 1989 are worth more than the same amount in 2007. Inflation calculator says 2.7 trillion in 1989 equal 4.6 trillion in 2008.
Secondly, what's really important is the debt-per-capita ratio, and the US population has increased. In 1989 the US population was 246 million; in 2008, it's 305 million.
That means, that in 2008 dollars equivalent, the per-capita debt in 1989 was $18,000, while in 2008, the per capita debt is $32,000.
Yes, we do owe more. But we "only", per capita and in equivalent monetary value, owe about 80% more, as opposed to 370% more, as the original numbers would make you believe.
that might be true if our society weren't so dependent on global trade. but if our trade partners suddenly cut all economic relations with us our domestic economy would collapse. we depend on other nations for manufacturing, investments, and imports/exports.
we might be able to raid other countries for their oil, but we can't use military coercion to force other countries to import our goods or manufacture our raw materials. and since our trade relations with other nations are generally good for us, bad for them, if we're no longer an economic superpower, i imagine most of the developing nations we exploit would cut their ties with us and just nationalize the resources we've hijacked from them like Venezuela has done.
i mean, if we don't have money to lend other nations, the IMF & World Bank would cease to be relevant. and without the power and influence of the IMF/World Bank, we wouldn't be able to dictate the domestic policies of other nations anymore. so 3rd world nations who've allowed us to privatize their industries and open up their markets to us would cease to allow themselves to be exploited.
and quite frankly, we need them more than they need us. many American-based corporate conglomerates would tank if our globalization policies were reversed. WalMart and other retailers wouldn't have cheap sweatshop made goods to sell. Monsanto would lose most of their profits made from selling developing nations GMO seeds every planting season. and 38% of Microsoft's annual revenue comes from sales outside of the U.S. heck, Hollywood makes more money from foreign ticket sales than from the domestic box office ($12 billion a year versus $9 billion).
if our money was certainly no good internationally, or if countries like China decided to collect on our debts, we would be royally screwed.
What "fiscal conservatives"!
But wait, the debt has grown insanely under every single Republican president in the last 40 years.
How could that be?
The Republicans aren't fiscally conservative at all. Every single republican president has spent like a drunken sailor and GWB is the worst of the lot.
The only thing more stupid than Tax and Spend is Spend and Spend.
"There are laws that enslave men, and laws that set them free. " - Sean Connery as King Arthur
Yeah, but Cheney was the one dumb enough to draw the "Reagan proved deficits don't matter" conclusion from Reagan's actions.
We need engineers in government, not politicians and lawyers. They don't have any respect for what happens when you ignore science and mathematical facts and press on as if they didn't matter.
The Logic of Failure....
"There are laws that enslave men, and laws that set them free. " - Sean Connery as King Arthur
If China got pissed and cut off all exports to us... their economy would implode. And the people would hold the communist party accountable--revolution would be in the streets and China would become be under new management by the end of the month.
The US is integral to the world market. This is a classic shoot your face to spite your nose situation.
To me it would be business as usual, with one less "customer".
Agree with your general point, but it's not quite that trivial...the US is a big customer.
it wasn't the war that ended the surplus, it was the .com bubble collapsing. And it was only a surplus if you include FICA contributions.
Bullshit.
The surplus was ended by Bush and cronies deciding to spend it all on a huge, unnecessary tax refund, most of which went to the extremely rich.
Considering the US are paying with IOU's at the moment, I dont think China would mind collecting. If China and the EU both decided to cut off the US at the moment and collect on their debts, if they get their money back their economies may bounce back and the US would be screwed.
I think alot of people on here (I am assuming americans) overestimate how big of an exporter they really are in actual goods. You guys seem to forget the manufacturing parts of american business have been outsourced overseas for years now with Wall St being (quote Ralph Nayder) nothing more than a gambling casino.
Make SELinux enforcing again!
You're in for a shock. The end result of the current financial problems is China waking up to the fact that it doesn't need to lend the Americans money so they buy its crap - its own consumers can instead of saving money to be loaned to Americans, buy crap themselves.
Yes, the Chinese economy is going to collapse along with the US economy.
However, they have the production base (that America shipped over there...) and a large population, and India is a big importer of Chinese goods already.
The US has consumer debt with no capital investment to show for it, crumbling infrastructure, and a production base smaller than it once was.
Also, when it comes to poor people rioting and killing the rich people and destroying yet more infrastructure - China has more experience with dealing with that (in a way one would hope America wouldn't deal with it).
So China will recover faster, and will be the new engine of the world economy - both production and consumption...
The US is a drain on the world economy (that's what a trade deficit is - historically you ran a trade deficit in order to invest in capital works, so you could pay the money back later, the US has instead invested in flat screen TVs and vacations), the sooner it is cut off the better for the rest of the world.
Yes, short term is will tank the whole world economy - but it has to be done at some point. And right now there's enough motivation to pull the trigger - it's pretty obvious that money loaned to the US isn't getting paid back with dollars worth anything close to what the ones loaned were worth.
Which is why the Chinese economy is stronger.
What would the difference be if instead of shipping those goods to the US, China instead dumped them in the ocean?
The US wouldn't have those goods. And china wouldn't have yet more IOUs from the United States. We pay them with dollars, they exchange them for treasuries (or equities when we let them) in order keep the yuan artificially low.
I think the Chinese could do without essentially worthless IOUs (like the US can afford to pay its debts) a lot more than the US can do without imports (of clothes, food, etc, etc).
And of course China doesn't have to dump them in the ocean, they can sell them to their own people - who will be much richer than Americans once their currency stops being artificially surpressed.
Of course there's plenty of pain in the middle - but since the US is about to have a very severe recession these events might be forced on China anyway.
Surely you can see that the consumer half of the producer/consumer relation is the less important half. Anyone can buy and watch a TV, it takes actual industry to be able to make one. Chinese people can start consuming much more easily than American people can start producing - if that trade stops.
If your money is created from nothing at the point of a loan and you want to inflate the money supply then you also have to increase the (exponentially growing) debt at the same time.
Now, if you want the "economy" to grow then clearly you have to increase the supply of money faster than the interest on the debt which is consuming credit, or you get a recession.
Whether the debt is public debt, private debt or corporate debt, is irrelevant. The debt must be created. Or at least, it will be until you run out of people willing or able to take on and service the debt, then the system collapses. Doesn't this requirement for perpetual growth sound like something else?
It is a predictable exponential function and therefore has a doubling time, so yes, you could create a "law" about it.
The national debt, the credit crunch, the stockmarket crisis are all the inevitable result of the way your money is created... Long may it continue.
Deleted
"...they can sell them to their own people..."
Indeed, China's earnings from exporting goods and services stands at ~25% of GDP, the US accounts for less than half of that. This is good for the economy here in Australia, not so good for the economy in the US. As for China, if the US stopped importing from them tomorrow their growth rate of ~10% would make up for the loss in ~1yr.
It's also interesting to note that China lifted it's ban on buying and selling gold 2-3yrs ago (when oil & gold abruptly started climbing). For a while the government encoraged China's middle class to put some of their savings into the traditional 'rainy day' plan of hoarding gold in the form of trinkets. The middle class really didn't need much encouraging, China's new retail gold market drove the gold price up for the first 6-12 months of it's operation.
Disclaimer: Even though it was concieved by Newton I am not calling for a return to the gold standard.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
That analogy is absolutely ridiculous. The rich man is not a goose who poops golden eggs and shares them out of kindness. The rich man's wealth is where everyone else's is: In the bar.
When ten men go to a bar, the first five clock in and start working. The next four buy their own drinks. And the tenth gets a free beer because he owns the place. If ANY of them stop going to the bar, the musical chairs just shuffle around, until there are too few people left to operate a bar. And then it closes. And no more rich man.
You talk as though the rich are the lynchpin of capitalism. They're not; they're a byproduct, and in many cases a sign of inefficiency or poor regulation. The middle class are the lynchpin of capitalism. And they have been slowly disappearing into WalMart, CostCo, and the military industrial complex for the last 25 years. Have you noticed that the steps are getting a bit narrow on your ivory tower?