Comments on: Laurie Anderson on the National Debt http://smashingtelly.com/2008/09/25/laurie-anderson-on-the-national-debt/ A hand picked TV channel Thu, 10 May 2012 11:22:01 +0000 http://wordpress.org/?v=2.8.2 hourly 1 By: admin http://smashingtelly.com/2008/09/25/laurie-anderson-on-the-national-debt/comment-page-1/#comment-1401 admin Tue, 30 Sep 2008 19:41:17 +0000 http://smashingtelly.com/2008/09/25/laurie-anderson-on-the-national-debt/#comment-1401 Surely when you are a reserve currency, you can avoid a forced default by printing money, although admittedly at the risk of continuing to be so? Anyway, thanks for the answer - makes sense. Surely when you are a reserve currency, you can avoid a forced default by printing money, although admittedly at the risk of continuing to be so?

Anyway, thanks for the answer – makes sense.

]]> By: Ben http://smashingtelly.com/2008/09/25/laurie-anderson-on-the-national-debt/comment-page-1/#comment-1384 Ben Sun, 28 Sep 2008 16:21:06 +0000 http://smashingtelly.com/2008/09/25/laurie-anderson-on-the-national-debt/#comment-1384 Part of the concern today is who finances our debt, the other part is the sheer numbers involved and the long-term total liabilities of the US. Percentage of GDP is not a clear indicator of the problem - other countries have managed with higher ratios (Japan was close to twice GDP). The big problem is that our major lenders now include Russia, China, Saudi Arabia and other Gulf States making the possibility of a politically driven forced default much more worrying than it was during the 80's when the lenders were primarily Europe and Japan. The second critical issue is that though the current outstanding debt is only at around 9 Trillion, it is rising and forecast to rise much higher (total promises to pay may be on the order of 50 Trillion). If the US reneges Medicare, Medicaid and most importantly Social Security, the overall problem may be much more manageable. Part of the concern today is who finances our debt, the other part is the sheer numbers involved and the long-term total liabilities of the US. Percentage of GDP is not a clear indicator of the problem – other countries have managed with higher ratios (Japan was close to twice GDP).

The big problem is that our major lenders now include Russia, China, Saudi Arabia and other Gulf States making the possibility of a politically driven forced default much more worrying than it was during the 80’s when the lenders were primarily Europe and Japan.

The second critical issue is that though the current outstanding debt is only at around 9 Trillion, it is rising and forecast to rise much higher (total promises to pay may be on the order of 50 Trillion). If the US reneges Medicare, Medicaid and most importantly Social Security, the overall problem may be much more manageable.

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