How likely is the u.s. to go into another depression? What could happen to the other countries that we do business with and owe money to? Would they forgive our debt?
209295
We won't go into a depression.  We could go into a recession though, a really bad one.  If the economy ever took that type of tailspin again (I assume you are referring to the great depression of the 1930's), it would be devastating to our country!  It would also affect the world economy is a big way!!  Back in the 1930's, the U.S. nor other countries, did business together (loaning money) the way they do now...so it is nearly impossible to compare what happened then to what would happen now...but it would be very very bad.  Interest rates could shoot WAY up...at recent as the 1980's interest rate for even home mortgages were in the middle teens...what do you think would happen to the average American that carries mortgages, huge credit card debt, etc....the interest on these loans alone would way surpass what people are paying right now on principle and interest.  Many people would lose EVERYTHING!  But as in the 30's, the folks who have lived conservatively and have money saved would make out like bandits.  Their money would be accruing interest at those high interest rates and all the items that are repossessed would be able to be purchased at a fraction of their worth.
599304
well, there are two kinds of debt. Domestic and international. So yeah, come to think of it who does the US owe money to? Maybe they haven't been paying contractors or national lending organizations, or maybe they owe the IMF or World Bank some money.
655231
I heard 25% of our deficit is owed to Japan and China.  I don't know the exact amount per country.
529541
The US is on the decline.  The Romans began to decline when they went to  a mercenary army and so are  we now.  It is a symptom of no longer being willing to make the burdens shared by all, but instead hiring them done.  As we continue to  outsource jobs and pile up trade debt to countries like China, we become more and more dependent and beholding to others.  We continue to have the strongest military, but it won't  be long until China's economy will challenge our own.  And as we erode our moral leadership on the world's stage, we will also lose respect. Further, the quality of education in  this country has fallen so far that our math and science scores are now 38th in the world, and we are in a competitive hi-tech  world economy, we will shortly lose our competitive edge and head in the  direction of  our  scores.  So probably China will become the next superpower on the way up,and unless we do something about our debt and world respectability, we will soon pass them on the way down.
149808
I couldn't understand what is it exactly what you are asking. But i will do my best to give and honest answer that might shed some light on you.\n\nThe idea of a negative effect of the trade deficit has been discussed thoroughly by economists and it seems like we haven't got a proper answer yet. Is it good or bad? we don't know yet. WE know deficit and surpluses are favorable and unfavorable.\n\nAn expanding U.S. economy fuels demand by American consumers and producers to buy more imports as well as domestically produced goods and services.\nRising U.S. domestic output, in turn, attracts the foreign investment that finances an expanding U.S. current account deficit. \nIn contrast, slowing U.S. domestic demand not only depresses U.S. output and employment growth — but also lessens demand for imports and the inflow of foreign investment. \n\nIn addition to the uncertain causality, the evidence also does not address the question of how persistent and rising current account deficits may affect the U.S. economy in the long run.\nThe "sustainability" of the U.S. current account deficit has been much debated among the experts. But whatever negative impact the deficit may have in the long run, there is no evidence that it poses a drag on the U.S. economy in the short run. \n\nWhy does all this matter? The answer is simple. Misperceptions about the U.S. trade deficit and the economy can tempt U.S. policymakers to "do something" about the deficit to show that they are concerned.\n\nFrom my point of view i would say that a trade deficit (just as a fiscal deficit) is a tool used by a country to do some economic policy.\n\noh, and that "natural market consequence" that you are looking for might be the exchange rates. A fall in the exchange rates will cause foreigners to buy more of our goods and us to buy less foreign goods.
361859
Neither is good or bad. You really need to get away from this shallow method of thinking.\n\nUnless you consider how the debts were incurred, what the economic and geopolitical conditions were, then you'll never have a clue as to understanding national debt.\n\nYou voted Democrat, didn't you? Obvious.
546467
the current rate need not be extended for your hypothesis to take effect\nthe damage is done, it is irreperable\ni predict that the country will financially crumble by 2012\nthere will probably be another party in power and they will take the fall for the ineptness of the republican party
572707
I'm sure you could probably find it on wikipedia.com or something.\n\nBut to 4A:\n\nThe Great Depression resulted in a more secure way to organize the U.;S. economy in the furture.  Like they have to check to make sure stocks are worth what they are selling for or something like that.  People would get all of their money back if there was another depression instead of totally losing it all.
181395
no, the more we war with the middle east, the higher prices are gonna go. south america is laughing because they arent gonna sell to us either. we are alienating ourselves. by this, we'll choke off any oil contacts & grind our production, tranportation & economy to a halt. uk isnt gonna back us anymore, we lost any european alies with the last iraq campaign, the saudis have other customers & dont necesarilly need us & irael has always sabbotaged usa, obviously not our friend. we have 20 years of oil at best here at home. china & russia wont buddy up. who do we have left. we're wedging ourselves into a position of having to attack & steal. yeh, the global economy will change in the near future, for the worst.
412829
Here's just a small part of why the dollar is weak and none of that's good. It is correct that it will make the trade deficit LOOK better than it is. The stock market has very little to do with the economy-it has to do with buying and selling. For the most part, the stock market today loves the inflation numbers which say inflation is low overall, but largely because it includes prices of vehicles, clothes and luxury items most of us can't buy. Food and housing costs are way up-and that's what most people need first. Corporate earnings are falsely inflated by cost cutting not by true growth. Our ever-increasing deficit-yes, our Treasuries-our US debt is 51% foreign owned. China is our largest foreign debtor. Most pundits as well as the administration don't want to tell us the bad news because US optimism-the will to shop-and the US consumer's desire to ignore problems-leads to "growth" and "profits". Sure, War is Peace and Debt is Wealth.\n\nLONDON (AFP) - The dollar sank to a 20-month low against the euro and a 14-year low against the pound as investors seized on weak manufacturing data in the US to drive the currency lower, dealers said. \n\nThe Chicago PMI index of business activity fell to 49.9 in November from 53.5 in October, well below analysts' expectations for a pick-up to 54.5, data showed.\n\nAnalysts said the data could portend a fall in the closely watched ISM manufacturing index which is to be published on Friday.\n\nCalyon currency analyst Mitul Kotecha played down talk of a recession in the US, which has been driving heavy selling of the dollar in recent days.\n\nThe euro has gained 3.7 percent agaist the dollar since November 21, taking it from 1.28 dollars to its present level of 1.32.\n\n"It's maybe too early to talk about a recession," said Kotecha.\n"Clearly the risk of a recession has increased in recent months.\n\nBank of New York currency analyst Michael Woolfolk said the Chicago PMI, combined with other income and spending data, "were the one-two punch that knocked the dollar back on the ropes, leaving little doubt over the near-term direction in the beleaguered greenback".\n\nLONDON (AFX) - The dollar stayed weak, hovering around the 1.32 mark against the euro and staying at 14-year lows against the pound following disappointing US weekly jobless claims numbers. \nUS jobless claims surged by 34,000 to 357,000 in the week just gone, well below analysts' forecasts for a fall in claims to 314,000, although the figures are likely to have been distorted by the Thanksgiving holiday. \nThe news broadly offset a stronger-than-expected core PCE deflator, the measure of inflation favoured by the Federal Reserve. \n"A larger than expected rise in jobless claims, even though the Labor Department says the Thanksgiving holiday skewed the data, is being emphasized by the market more than the unexpectedly firm core PCE deflator," said Jamie Coleman at Thomson IFR Markets. \nThe PCE measure showed that core inflation rose by 2.4 pct on an annual basis, above expectations for a more moderate 2.3 pct.
490124
I read "Today our annual interest payment of more than $200 billion eats up every dollar of income tax paid by everyone living west of the Missisippi River."\n\nI've also read that it's not a problem, that a debt for a nation is different from an individual debt. I don't get why it's not a problem. Sure seems like a problem to me. I've also read that it's a small percentage of the GNP so not to worry. But I worry.
284887
The Great Depression was an economic slump in North America, Europe, and other industrialized areas of the world that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world.\n\nThough the U.S. economy had gone into depression six months earlier, the Great Depression may be said to have begun with a catastrophic collapse of stock-market prices on the New York Stock Exchange in October 1929. During the next three years stock prices in the United States continued to fall, until by late 1932 they had dropped to only about 20 percent of their value in 1929. Besides ruining many thousands of individual investors, this precipitous decline in the value of assets greatly strained banks and other financial institutions, particularly those holding stocks in their portfolios. Many banks were consequently forced into insolvency; by 1933, 11,000 of the United States' 25,000 banks had failed. The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to much-reduced levels of spending and demand and hence of production, thus aggravating the downward spiral. The result was drastically falling output and drastically rising unemployment; by 1932, U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force.\n\nThe Great Depression began in the United States but quickly turned into a worldwide economic slump owing to the special and intimate relationships that had been forged between the United States and European economies after World War I. The United States had emerged from the war as the major creditor and financier of postwar Europe, whose national economies had been greatly weakened by the war itself, by war debts, and, in the case of Germany and other defeated nations, by the need to pay war reparations. So once the American economy slumped and the flow of American investment credits to Europe dried up, prosperity tended to collapse there as well. The Depression hit hardest those nations that were most deeply indebted to the United States, i.e., Germany and Great Britain. In Germany, unemployment rose sharply beginning in late 1929, and by early 1932 it had reached 6 million workers, or 25 percent of the work force. Britain was less severely affected, but its industrial and export sectors remained seriously depressed until World War II. Many other countries had been affected by the slump by 1931.\n\nAlmost all nations sought to protect their domestic production by imposing tariffs, raising existing ones, and setting quotas on foreign imports. The effect of these restrictive measures was to greatly reduce the volume of international trade: by 1932 the total value of world trade had fallen by more than half as country after country took measures against the importation of foreign goods.\n\nThe Great Depression had important consequences in the political sphere. In the United States, economic distress led to the election of the Democrat Franklin D. Roosevelt to the presidency in late 1932. Roosevelt introduced a number of major changes in the structure of the American economy, using increased government regulation and massive public-works projects to promote a recovery. But despite this active intervention, mass unemployment and economic stagnation continued, though on a somewhat reduced scale, with about 15 percent of the work force still unemployed in 1939 at the outbreak of World War II. After that, unemployment dropped rapidly as American factories were flooded with orders from overseas for armaments and munitions. The depression ended completely soon after the United States' entry into World War II in 1941. In Europe, the Great Depression strengthened extremist forces and lowered the prestige of liberal democracy. In Germany, economic distress directly contributed to Adolf Hitler's ri
202900
America fought almost entire world war 2 with paper money.And today on an average every American spent already the entire money of next budget with credit cards.And America`s deficit budget makes it necessary to break records in printing currency.The joke is that the money you do not have is not of much value due to inflation.Relax.
113301
1) <Know it all> The Quote "In God We Trust" IS actually a metaphor for our currency, if means that we don't really get paid in anything worth of value except a paper with a scripple, basically an I.O.U, and it says that because as long as the Americans beleive in currency there will not be any problems with the economy- Completely irrelevant to this situation though\n\n I think America will fall eventually, and it can't be surely predicted because many things could be a factor to this. There is no true answer except opinions. Yes I do beleive America will eventually fall or at the least will crumble down to a smaller country but i doubt anytime soon. And the reason that America seems to reject God or God-like figures is because many people find it offensive to mix Religion with Government. And i suppose they have a point seeing as many people came to America to be freed from strict laws and religious beleifs in other countries. You must understand that America is a very diverse place and I really do hope that America does not fall because it , aside from any corruption and greed, is one of the greatest and most free countries, NO i'm not being patriotic, but you must understand that many rights are available here than in other countries, and even though America might seem evil and vile to many people, i'd rather live in a democratic fucked up countr rather than a communist one where our freedom is limited.....so yeah good question
133195
The US dollar is backed by the US Government, (not great but it works). The US government, thankfully, is back by its taxing power over the American people (which is VERY good). I don't think you'll have much to worry about. But I won't keep cash laying around not collect interest or working for you. Inflation is what will really eat away your money.
58392
The flow of funds from other nations enables U.S. firms to finance more investments in capital goods, but it also creates concerns. For example, in order for foreigners to invest in U.S. savings accounts and U.S. government or corporate bonds, they must have dollars. As they demand dollars for these investments, the price of the dollar in terms of other nations’ currencies rises. When the price of the dollar is rising, people in other countries who want to buy U.S. exports will have to pay more for them. That means they will buy fewer goods and services produced in the United States, which will hurt U.S. export industries. This happened in the early 1980s, when U.S. companies such as Caterpillar, which makes large engines and industrial equipment, saw the sales of their products to their international customers plummet. The higher value of the dollar also makes it cheaper for U.S. citizens to import products from other nations. Imports will rise, leading to a larger deficit (or smaller surplus) in the U.S. balance of trade, the amount of exports compared to imports.\n\nForeign investment has other effects on the U.S. economy. Eventually the money borrowed must be repaid. How those repayments will affect the U.S. economy will depend on how the borrowed money is invested. If the money borrowed from foreign individuals and companies is put into capital projects that increase levels of output and income in the United States, repayments can be made without any decrease in U.S. living standards. Otherwise, U.S. living standards will decline as goods and services are sent overseas to repay the loans. The concern is that instead of using foreign funds for additional investments in capital goods, today these funds are simply making it possible for U.S. consumers and government agencies to spend more on consumption goods and social services, which will not increase output and living standards.\n\nIn the early history of the United States, many U.S. capital projects were financed by people in Britain, France, and other nations that were then the wealthiest countries in the world. These loans helped the fledgling U.S. economy to grow and were paid off without lowering the U.S. standard of living. It is not clear that current U.S. borrowing from foreign nations will turn out as well and will be used to invest in capital projects, now that the United States, with the largest and wealthiest economy in the world, faces a low national savings rate.
613191
I think the issue is more then a depression. The United States is losing confidence throughout the world. Foreign and American investors are turning to Europe as the solidified economy. A depression indicates a periodic significant drop in the economy. I think its going to be much worse. It will be permanent. New jobs consist of unskilled and underpaid positions. When 10,000 Americans are applying for jobs that pay 8 dollars an hour, just so they can work, and basic fuel products, gasoline, natural gas, heating oil etc are skyrocketing, how are people going to afford this at 8 dollars an hour? We are watching the decline of the American dream and hence its empire. This is sadly written by someone who loves America.