The Debt Ceiling

@shinobinoz Said

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

Hong Kong: $121.9 billion (0.9 percent)
Caribbean banking centers: $148.3 (1 percent)
Taiwan: $153.4 billion (1.1 percent)
Brazil: $211.4 billion (1.5 percent)
Oil exporting countries: $229.8 billion (1.6 percent)
Mutual funds: $300.5 billion (2 percent)
Commercial banks: $301.8 billion (2.1 percent)
State, local and federal retirement funds: $320.9 billion (2.2 percent)
Money market mutual funds: $337.7 billion (2.4 percent)
United Kingdom: $346.5 billion (2.4 percent)
Private pension funds: $504.7 billion (3.5 percent)
State and local governments: $506.1 billion (3.5 percent)
Japan: $912.4 billion (6.4 percent)
U.S. households: $959.4 billion (6.6 percent)
China: $1.16 trillion (8 percent)
The U.S. Treasury: $1.63 trillion (11.3 percent)
Social Security trust fund: $2.67 trillion (19 percent)
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

@Richard142 Said

Thanks for posting this breakdown here. TFS is a great place to get a broad spectrum education. I'm still not fully sure what would be the consequencies if all these debts were to be written off so that current government income could go to financing the activities for which they were elected.

@El_Tino Said

The government owes a good chunk of it to itself ($4.6 trillion)
https://innovation.cq.com/media/debt_components/

@Leon Said

This is one good example why I will probably never fully understand how the economy works.

@Richard142 Said

Greece is about to be allowed to write off a large part of their National Debt. What will be the consequences?

@El_Tino Said

People will be more careful what countries they loan their money to. Not sure what Greece has to do with the US either.

@El_Tino Said

People will be more careful what countries they loan their money to. Not sure what Greece has to do with the US either.

@Richard142 Said

If the Euro goes down so will the mighty US dollar. If Greece defaults the ripples will even affect you El_Tino. That is why the relatively small pebble that is the Greek Economy will make waves in the US.

@drman321 Said

There are plenty of reasons Greece effects the US market but the most direct effect will be on our finance sector.

Greece issued bonds last year that were bought primarily by French banks.

The French banks issued bonds to get them the cash necessary to buy up the Greek bonds.

US banks bought up the French bonds and used them to back money market funds and provide a bit more competitive interest rate (they were AAA's paying more than 0).

Essentially the Greek bonds are owned now by US banks and the people who have money in their money market funds.

@El_Tino Said

That may all be true, but I still fail to see how it relates to my post about how $4.6 trillion of US debt is held by the government.

@drman321 Said

I'm not sure what you are talking about there. You asked why a Greek default would affect the US. I answered the question.

@shinobinoz Said
What's at stake?
Here the President is spot on. Can anyone really argue against this reasoning?
"This country now possesses the strongest credit in the world. The full consequences of a default -- or even the serious prospect of default -- by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns."

Defecit Plan - update

Quote:
US President Barack Obama Thursday formally asked the US Congress for another 1.2 trillion dollars in borrowing authority for the federal government.

@Forumless Said

How much more can the US take!

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