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where's the money? (i.imgur.com)
submitted 2 months ago by shyam14111986
[–]thedude213 88 points89 points90 points 2 months ago
In the case of the Federal Reserve: It's printed and loaned to the U.S. with interest attached to it, so the only way to pay it back is to print and loan more money. In short, if someone loans you 20 bucks and it's the only 20 bucks in the world, and they want you to pay it back next week, but instead, they want 25 dollars, then you have to borrow that as well to pay the original debt back and that 5 dollars will have interest attached to it as well.
[–]-Tommy 11 points12 points13 points 2 months ago
So basically America will NEVER be out of debt unless we start using a different currency?(never)
[–]thedude213 9 points10 points11 points 2 months ago
Yes, that's the point. The Federal Reserve is a complete fucking sham, and we should have never left the gold standard.
[–]makeshiftreaper 3 points4 points5 points 2 months ago
That's such an awful idea. The amount of gold needed to support that kind of system would be impossible to gather.
[–]kingcherub 3 points4 points5 points 2 months ago
That's a stupid fallacy. You don't need more money for an economy to grow...the money is supposed to gain in value as the economy grows. Money isn't some magical thing that makes people wealthy. It's a abstract representation of real wealth creation that serves as a store of value and a means of exchange.
[–]makeshiftreaper 4 points5 points6 points 2 months ago
But inflation happens and when it does some economic scenarios like the various collapses that happened recently would cause people to go running to get their gold from the bank. When the bank runs out you know what happens? Because I bet your grandfather does. A depression.
[–][deleted] 2 months ago
[deleted]
[–]RedditGreenit 4 points5 points6 points 2 months ago
Deflation is a risk (it happened post-Civil War, causing the gold vs silver debate). Gold standard seems very limiting to growing an economy and I think our economy is too complex to have it's currency placed in some random metal we assign arbitrary value to.
That said, I'm up for dumping the Fed and putting its useful functions back to the Treasury like it deserves to be
[–]jhabitearockinspace 0 points1 point2 points 2 months ago
The total amount of money is in no way represented any more by physical assets like gold houses bread whatever. Banks only need a very small percentage of actual assets to give out a loan on. I.E. All the shit bankers drive and live in is basically a margin they create in making our money less valuable.
It´s the world´s largest pyramide scam and the intire system is based on creed. It´s only a short time until a massive revaluation of money will take place. That or we convert to bottlecaps or shells.
[–]argh523 -1 points0 points1 point 2 months ago
I think the way this system works is actually quite beautiful. But it's missused, and it is easy to missuse because people don't get how it works..
But yeah, there might be some revolution around the corner where we difuse the dangerous effects to some degree with loan free social services, basic income or some other mechanisms. But that's unlikely. Going back to, lets say, 80's standards of banking would probably go a long way in reducing unnecessary risks already.
[–]argh523 0 points1 point2 points 2 months ago
If an economy grows, and the money supply doesn't grow with it, the value of money grows. Like you say it is supposed to do. That's deflation, and the problem with that is, it's less attractive to invest in stuff or take a risk, because if you can only gain a few percent (which is the case in most investments), you might as well just leave it in the bank an wait for the currency to gain in value, so it's bad for the overall economy because it's hard to find capital.
Yes it's an abstract thing that should represent value. In an ideal world, it shoud always represent the same value (a loaf of bread should aways cost the same), but that's impossible, and a little inflation (a little inflation) is much less of a problem than deflation, for the reason stated above.
[–]blackpanther6389 0 points1 point2 points 2 months ago
Could you elaborate?
[–]argh523 16 points17 points18 points 2 months ago*
Have an upvote! Sadly, nobody seems to be interrested in the actual answer..
edit: Hurray, I was wrong!
[–]Quasid 9 points10 points11 points 2 months ago
Ish.
The main cause of U.S. debt is four fold. It's military spending, medicare, social security, and interest on the debt.
The problem with interest is that it only grows bigger as time goes on.
With military spending it's not just the planes and bombs, but mostly the salary of people in the military, particularly those who spend 20 years in the military then collect a pension for three times that timespan. There's a reason businesses in the U.S. moved away from pensions back in the 90's and it's because it's an unsustainable business model and is like having twice the staff on payroll.
For social security and medicare, the biggest problem is that the money was collected over many years. It was supposed to be used to pay them back, instead presidents like nixon and clinton dipped into the funds (quite heavily) to make it seem like the deficit wasn't nearly as bad. (nixon used it to fun Vietnam, clintion used it to show that we weren't running a deficit. Which is true, at the time, we were taking in more money for social security than we were spending. Just that, in the long run, it doesn't work that way.)
That's the funny thing. All of what i just listed is 88% of the U.S. Budget. Even if we cut all federal spending except for those 4 (FBI, white house staff, air force one, IRS, USDA, post office, subsidies for companies, EVERYTHING) then that'd only be 12% of the budget cut.
[–]argh523 2 points3 points4 points 2 months ago*
Have an upvote for the answer that sums up where the money is actually going. But still, the fact that people don't know shit about how money actually works means it's hard to have a meaningful discussion about what should be done about the finacial sector, where quite a few things are just crazy.
And I don't mean the various mechanisms of money creation, that's actually quite beautiful. And don't mistake me for one of those who want to go back to the gold standard, that's just all kinds of wrong.. I mean the low "reserves" banks need, the abolishment of the Glass-Steagel Act, high frequency trading, the new finactial products who got us in this mess, the people who pushed or welcomed all those changes that are now in charge of "fixing" the problems that come with them (their idea is to don't change a thing, exept maybe reduce government influence even more), and stuff like that. Without people understanding the basics of money, it's hard to get them to see the magnitude / implications of those things.
edit: grammar and stuff
[–]billdietrich1 0 points1 point2 points 2 months ago
Social Security is easy to fix. Remove cap on SS-taxable income (currently about $110K); tax all income. Then might even be able to implement a "floor", so first $10K or whatever is not taxed. And means-test benefits; no need for wealthy retirees (such as me) to collect SS benefits.
[–]Cowzer 1 point2 points3 points 2 months ago
This. And I think of the 4 main spending sources you listed military is like ~50-60% of all US spending. thedude123's answer is not right at all though, anyone who has taken a upper level college econ course would know this.
[–]Quasid 1 point2 points3 points 2 months ago
this image sums it up nicely. It's from 2005, but the federal budget hasn't changed much since then (unless you count moving some funds from "medicare" to "national affordable healthcare act")
Keep in mind "income security" is analogous for pensions, but this is pensions for all federal employees. Veterans is different then the pensions (VA ect). But, basically, if everything associated with the military was to just go away, it'd be closer to the 50% mark; but yes, you are essentially right.
Actually, i heard a while back that if all the countries in the world were to get into a war, and the only measure of winning was how much money the countries were throwing at teach other, the U.S. could take on the whole world and only lose by 9%. wiki source
[–]kerrigan7782 2 points3 points4 points 2 months ago
Why is death and taxes going unmentioned in this thread? http://www.deathandtaxesposter.com/
[–]Quasid 0 points1 point2 points 2 months ago
for me, it's because i've yet to come across it. Thanks for sharing, i'll be sure to check it out.
[–]gak001 0 points1 point2 points 2 months ago
You mean the Patient Protection and Affordable Care Act? There is no "National Affordable Healthcare Act" that I'm aware of and that makes it sound like nationalized healthcare, which it most certainly is not.
[–]1pointlessidea 0 points1 point2 points 2 months ago
Pensions aren't unsustainable if it is the norm. It only becomes unstustainable as the competition cut's there pensions.
[–]DeadlyLegion 0 points1 point2 points 2 months ago
Ah awesome! I was just about to post the same example, only with cats, but your example seems to get the point across. Here, have an up-vote! :)
[–]Graywolves 1 point2 points3 points 2 months ago
The link takes me to Dragon's Dogma on eBay...
[–]TuriGuiliano 0 points1 point2 points 2 months ago
Fuck, wrong link
[–]olee_bear 72 points73 points74 points 2 months ago
China
[–]gedSGU 8 points9 points10 points 2 months ago
enuff said. I'm curious how things will work out in like 20 years
[–]awesomeness1234 10 points11 points12 points 2 months ago
Didn't China owe everyone money for a long ass time then just decide it wasn't going to pay? I think we will just do that.
[–]awesomeness1234 19 points20 points21 points 2 months ago
Given the downvotes, might as well educate you fucktards:
http://americanbondholdersfoundation.com/
http://en.wikipedia.org/wiki/Sovereign_default#List_of_sovereign_debt_defaults_or_debt_restructuring
http://www.nber.org/papers/w13946.pdf
[–]zookeepier 12 points13 points14 points 2 months ago
How dare you support your position with facts and evidence!
[–][deleted] -10 points-9 points-8 points 2 months ago
CHING CHANG CHONG MOTHER FLOWER.
[–]awesomeness1234 2 points3 points4 points 2 months ago
ANYTHING GOES!
[–]lcdrambrose 1 point2 points3 points 2 months ago
"As of June 2012, debt held by the public was $11.04 trillion, while the intra-governmental debt was $4.81 trillion, to give a combined total public debt outstanding of $15.85 trillion, roughly 103% of current dollar GDP.[4][5] The public debt has increased by over $500 billion each year since fiscal year (FY) 2003, with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, $1.7 trillion in FY2010, and $1.2 trillion in FY2011.[6][7] As of February 2012, $5.1 trillion or approximately 50% of the debt held by the public was owned by foreign investors, the largest of which were China and Japan at just over $1 trillion each.[8] As of April 2012, nominal GDP of the United States was $15.46 trillion.[9]"
tl;dr: $5.1 trillion (about a third) of the US Debt is owned by outside investors. The other two thirds are owned by the government ($4.81 trillion, another third) and the US public (the last third).
[–]Esma698 16 points17 points18 points 2 months ago
Fuck you, Atlantis.
[–]Ragnalypse 16 points17 points18 points 2 months ago
All of the countries aren't all of the economic entities. The public sector owing the private sector is a pretty simple answer.
I'm sure Norway isn't in net debt, not with all of that oil money propping them up like trust fund kiddies.
[–]areus 2 points3 points4 points 2 months ago
Norway has debt, but not foreign dept. This debt comes from printing "national bonds", when you buy this type of bond you are basically loaning money to a state and the interest you get on the bond is the interest the state have to pay to loan money from you. This interest is very low on norwegian bonds because the norwegian state has money up to its ears but other states with a more rocky economy (Greece, Spain, Ireland and so one) have a high interest on their bonds/debt.
[–]dmanww 1 point2 points3 points 2 months ago
Also, Japan has a shit ton of debt (208.2% of GDP), but only small amount is owned by foreign investors (8.3%)
[–]FlankingSpineCrawler 0 points1 point2 points 2 months ago
Wrong actually we still have dept from the the 60's/70's when the infrastructure was built up, not joking. It's has been considered better to invest it rather than paying it back.
[–]Dabuscus214 2 points3 points4 points 2 months ago
Norway is always doing well
[–]Marcalogy 18 points19 points20 points 2 months ago
Banks
[–]Epithemus 7 points8 points9 points 2 months ago
And corporations.
[–]btechlol 11 points12 points13 points 2 months ago
If you want a very good explanation and have an hour to listen to a pod cast
[–]throwing_myself_away 2 points3 points4 points 2 months ago
This needs moar upvoats.
[–]btechlol 4 points5 points6 points 2 months ago
you heard the man, give me my fucking internet points.
[–]link2213 15 points16 points17 points 2 months ago
There's always money in the banana stand!
[–]Erilacity 4 points5 points6 points 2 months ago
Corrupt Leaders, Swiss banks.
[–]Professor_Pootis 1 point2 points3 points 2 months ago*
"I just need $10,000 to pay my bail from witch then I can give you half of $65,000,000,000,000,000 from my swiss bank account"
[–]argh523 -1 points0 points1 point 2 months ago*
I think $65,000,000,000,000,000 is more than the global GDP.
after looking it up When google says 63 Trillion, does it mean stupid wrong american trillions (1012 ) or "the rest of the world"-trillions (106*3 (milliontri(getit?) ) = 1018) ?
[–]Professor_Pootis 0 points1 point2 points 2 months ago
That made no sense to me
Someone correct me if it does make sense, I might just be really tired, but I never said anything about 63 trillion, i said 65 quadrillion. Also it was a joke referring to the Nigerian Prince scam, hence the quotes.
Sry, didn't get the reference. Somehow thought about global gdp. After looking it up, your number was right in the middle (kinda) of 65 trillion in the american sense and the 65 trillion in the "rest of the world"-sense. So I thougth it might have been the intention and you got it wrong either way.
Anyway, sry to bother you and have a nice day.
[–]philistic53 3 points4 points5 points 2 months ago
Mitt Romney.
[–]seml4 6 points7 points8 points 2 months ago
Here!
[–]this_is_suburbia 0 points1 point2 points 2 months ago
i looked up, and he was on TV
[–]Prowlerbaseball -17 points-16 points-15 points 2 months ago
Then why are we in debt dumbass
[–]Soaring_Leap 3 points4 points5 points 2 months ago
This philosoraptor really made me think. And now I am sad. And that is sad.
[–]DaveLambert 3 points4 points5 points 2 months ago
Where the money went
[–]aesamattki 2 points3 points4 points 2 months ago
messes up hair
Aliens.
[–]betafish37 1 point2 points3 points 2 months ago
Fucking magnets...
[–]imperator285 3 points4 points5 points 2 months ago
They borrowed it all from China, Germany, and Singapore.
[–]Albinzero -3 points-2 points-1 points 2 months ago
yeah.... 'cause germany isn't in debt...
[–]imperator285 1 point2 points3 points 2 months ago
Yea, they are. But they're also a big creditor.
[–]TheFrenchGuySaid 1 point2 points3 points 2 months ago
MONACO!
[–]shyam14111986[S] 0 points1 point2 points 2 months ago
KELLY MONACO? Makes Sense.
[–]Nathonamore 0 points1 point2 points 2 months ago
Jay Z has the money.
[–]HKnoxx 0 points1 point2 points 2 months ago
War and stupidity.
[–]travdoty 0 points1 point2 points 2 months ago
CEO's
[–]Blarg44 0 points1 point2 points 2 months ago
CHINA!
[–]Connwaer 0 points1 point2 points 2 months ago
Mega millionaires owning mega corporations
[–]thicka 0 points1 point2 points 2 months ago
It never existed.
China, Germany, Japan, Saudi Arabia, Dubai, Bahrain, etc. Much of the money invested right back into USA T-bills.
[–]jspliff1 0 points1 point2 points 2 months ago
ALIENS
[–]tystevens64 0 points1 point2 points 2 months ago
It's the illuminati man!
[–]andified 0 points1 point2 points 2 months ago
Fucking China.... Or Japan.
[–]noodlesnstuff 0 points1 point2 points 2 months ago
To the future...
[–]knightmare07 0 points1 point2 points 2 months ago
to ten people
[–]Connor6 0 points1 point2 points 2 months ago
I think Canada is doing pretty well. I Haven't heard of us having a bad economy up here in the Great White North.
[–]andnowforme0 0 points1 point2 points 29 days ago
China. It went to China.
[–]MisterKibs 0 points1 point2 points 2 months ago
Dubai.
[–]Villainsoft 0 points1 point2 points 2 months ago
The value of currency and equity changes, so it is very possible for all economic powers to be in debt.
[–]InVultusSolis 0 points1 point2 points 2 months ago
ALL currency is a form of debt. Keep "making" more currency, debt will keep increasing.
[–]FixingGosling 0 points1 point2 points 2 months ago
Obviously it went to the Rothchilds and Rockafellas
[–]Darth2132 0 points1 point2 points 2 months ago
Same place socks go to.
[–]griff-labarum 0 points1 point2 points 2 months ago
Two Words. Central Banks.
[–]Melkath 0 points1 point2 points 2 months ago
The 1%
[–]vaginitischlamydia 0 points1 point2 points 2 months ago
THE BANKERS
[–]Calculator_on_Desk 0 points1 point2 points 2 months ago
It's in Bill's house, and Fred's House...
[–]Keane1522 -1 points0 points1 point 2 months ago
Muthafuckin SINGAPORE
[–]Dugen -6 points-5 points-4 points 2 months ago
Actual real humans have it.
There's a word for them. They're called "rich", because, you know, they have lots of money.
[–]Lost4468 -2 points-1 points0 points 2 months ago
If you all the money from every billionaire in the US then you don't even have enough money to pay off the added US debt for a single year.
[–]muttur -1 points0 points1 point 2 months ago
I think you a verb.
[–]Dugen -3 points-2 points-1 points 2 months ago
Right. It's not billionaires. It's thousands of multi-millionaires.
Also, corporations. They hold money. That should be stopped.
[–]MitchMerk -1 points0 points1 point 2 months ago
Can we not hit a big rest button on the worlds economic situation. That sounds like fun!!
[–]dpierce970 -1 points0 points1 point 2 months ago
China and Dubai
[–]Sandfox92 -1 points0 points1 point 2 months ago
Governments borrow from the private sector, not other governments, YO
[–]argh523 -2 points-1 points0 points 2 months ago
Money = Dept
[–]Rumplepickleskin -2 points-1 points0 points 2 months ago
It disappeared. Literally.
[–]Hansitheopgnome -2 points-1 points0 points 2 months ago
Loch Ness monster..
[–]LascielCoin -2 points-1 points0 points 2 months ago
Where did you get this information from? It's not true at all.
[–]MasterYoda458 -2 points-1 points0 points 2 months ago
Aliens
[–]bitza -2 points-1 points0 points 2 months ago
Individuals, corporations, companies, etc. This question isn't worth of a philosoraptor meme.
[–]Harwood8907 -2 points-1 points0 points 2 months ago
Japan
all it takes is a username and password
create account
is it really that easy? only one way to find out...
already have an account and just want to login?
login
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