So in the UK the tories and media keep saying the national debt is the highest its been since the ww2 (which is true of pretty much any year since the 80s). And that we need to raise taxes, tighten our belts etc to pay back what we borrowed to get us thru the pandemic.
Now I know this kind of treating a countries finances like household finances and talking about national debt like its credit card debt is disingenuous and just used as a way to justify squeezing people more than they are already.
But what I don't know with enough authority to be able to talk to people about it is why this is the case? How is national debt different and wtf is it? Who do we owe it to and do we even need to pay it back etc?
Ofc I know the whole thing is bullshit anyway any only exists to preserve the current power structure but let's leave that for now.
Be good to hear thoughts from someone who knows things.
It depends who you ask. Economics isn't a hard science.
example: https://en.wikipedia.org/wiki/Modern_Monetary_Theory#Comparison_of_MMT_with_mainstream_Keynesian_economics
it's all just complete garbage. it's why america just invests in bombs. say you lent somebody some money right? and then they got an endless amount of guns. are you going to go collect on that debt?
edit: bombs.
Yeah that's not how debt or imperialism works at all. Most of debt is owned to private actors and branches of government, not other states. Who are they gonna bomb, JP Morgan? The US has to and does pay up debt constantly. But also it accrues new debt via issuing bonds. It's not like owing to a loan shark where the loan shark bangs your door and tries to force you to pay, but if you've become like a mobster or something you can tell him to fuck off. The US constantly pays debt while also getting more in debt, it's what pretty much every country does, and if they default it is not at all good.
Oh my god your link literally proves my point, it is literally the subtitle to your article.
you claimed corporations are owed the debt. in reality it's the citizens and foreign governments.
I said private actors, not corporations. Citizens are private actors. Foreign governments only own a small part of the debt.
Jfc I have no clue what you are trying to prove here, if you cut a slice from a bread and then cut the rest of the bread up into much thinner slices, then the original slice isn't most of the bread. It's really simple.
No one has ever proposed your theory because it is extremely silly and obviously false. By far the largest part of US debt is owed either to other branches of government, or to private actors. Then a comparatively small part of debt is owed to foreign governments. IT DOES NOT MATTER at all if all foreign governments combined own more than other actors do separately, they still own a minority of US debt, and of that minority most of it is owed to close allies of the US, and most of it is also paid up (including debt to enemies of the US) constantly, while more is being accumulated, because foreign governments generally own US BONDS just like every private actor who owns a US bond and the US pays all of them, or else they will default. Your idea of national debt is completely false. It is not at all the reason the US buys so many bombs, that happens so that the US maintains the role as a global hegemon, exapand its sphere of influence so that corporations have more and more available space to expand into, and maintain the petrodollar. It has nothing to do with preventing other places from collecting their debt, it's simply not how national debt works.
if you cut up a slice of bread into three chunks and then two thirds of the chunks go to hundreds of different causes the one third of the chunk is still the largest chunk.
the largest part of the debt is owed to foreign governments, and there's a reason that the US doesn't actually give a fuck about the national debt and that the defense budget is the largest of the next like 7 countries combined.
edit: the US isn't the only fucking country that's bowing down to corporations. corporations have become basically an entire entity of their own that have influence on lots of different governments.
if you cut up a slice of bread into three chunks and then two thirds of the chunks go to hundreds of different causes the one third of the chunk is still the largest chunk.
It is the largest COMPARED TO THE REST OF THE CHUNKS SEPARATELY which doesn't matter at all because it's simply a result of how you decide to categorize the rest which has no consequence. You might as well name the rest of the debt "not foreign government debt" and then suddenly it is by far the largest chunk. Or you might split it up to all the different private actors and branches of government who own it separately in which case you have hundreds of millions of different slices and they're tiny. Except it doesn't change the situation one bit. The only thing that is relevant is that debt to foreign governments is less than 30% of debt.
the largest part of the debt is owed to foreign governments, and there’s a reason that the US doesn’t actually give a fuck about the national debt and that the defense budget is the largest of the next like 7 countries combined.
How about Japan? Is that also why their debt is fucking massive, much larger compared to their GDP but don't care? BTW Japan is iirc the largest holder of US debt. How about Singapore? Is Singapore also expecting to strongarm creditors? Furthermore, are you implying that the US ISN'T paying back debt? Your entire argument seems to be that the US has actually already defaulted but other coutnries pretend nothing has happened because they are afraid. Sorry, but that is simply not the case. Yes, the US can say "fuck you we're not paying" but that's pretty much what defaulting is, almost any country can do it but none want to because then no one will buy their bonds any more.
edit: the US isn’t the only fucking country that’s bowing down to corporations. corporations have become basically an entire entity of their own that have influence on lots of different governments.
What does this have to do with anything?
less than 30% of the debt, you make that sound like a fucking miminal amount, but when you compare the GDP of tons of fucking countries how you minimalize it would be tantamount to a fucking deserved death sentence.
japan isn't ruffling any fucking feathers asshole, they have long ago decided they were willing to participate in the global hegemony. they're a fucking capitalist country completely aligned with the united states. singapore is also on good terms with the capitalist government of the united states.
the argument is that the US completely runs the fucking global economy and should they fucking choose to default on whatever the fuck they want they've got the bombs to do whatever the fuck they want. why the fuck do you think we've got all the nukes?
almost any country can do it but none want to because then no one will buy their bonds any more.
yeah it's just bonds... that's all it is, tell that to grenada. you let us get your resources by "competing" in the global market or we'll just take your shit. and the US doesn't even really give a fuck about the corporations, if it came down to it and the corporations did anything to try to bow out, the US would just go full fascist, ban travel, and take everything.
less than 30% of the debt, you make that sound like a fucking miminal amount, but when you compare the GDP of tons of fucking countries how you minimalize it would be tantamount to a fucking deserved death sentence.
What? What does the GPD of other countries have to do with this? Your argument is that the US doesn't care about debt because somehow they don't have to pay back foreign debt. Except they do, and even if they didn't have to, what about the other 70+% of debt that isn't concerning them?
japan isn’t ruffling any fucking feathers asshole, they have long ago decided they were willing to participate in the global hegemony. they’re a fucking capitalist country completely aligned with the united states. singapore is also on good terms with the capitalist government of the united states.
So? Again, what does all this irrelevant shit have to do with this? Are you saying that other countries are not expecting Japan or Singapore to pay back debt because they aren't annoying the US? Have they also secretly defaulted? Wtf is your argument lol.
the argument is that the US completely runs the fucking global economy and should they fucking choose to default on whatever the fuck they want they’ve got the bombs to do whatever the fuck they want.
Yes, any country can default regardless of bombs, and in the case of most countries, no one will invade them. Like, idk, Argentina last year. In fact many do. It's just really bad for their economy because not just other countries, but also private entities WITHIN the country don't want to buy the bonds any more as well as a bunch of other related consequences.
National debt is not a downpayment. National debt is interest on bonds semiannually as well as a larger sum when the bond matures, which is usually a set date years later. There's a bunch of different types of Bonds you can buy, with different maturities etc. So the US has to CONSTANTLY pay all of these (either interest or payments after the bond matures) to different creditors. It's not a case of "gimme money, I'll give it back to you whenever I want". If the US stops paying, then they default. The US has never defaulted in its history, and, again, it's not a case of having to pay back the debt EVENTUALLY, there isn't some kind of big payment day that they're pushing back, there's just an ever increasing sum that they pay back all the time, month after month after month with no signs of being anywhere close to default, because debt is not just losing money, debt is also the way countries cover their deficits and gain a large sum of money they need for the short term to function and/or create growth. So your claim simply does not correspond to reality.
why the fuck do you think we’ve got all the nukes?
I already explained it to you, jeez.
yeah it’s just bonds… that’s all it is, tell that to grenada.
Did Grenada own US debt and wanted the US to pay it back? LOL.
you let us
Who tf is "you"?
and the US doesn’t even really give a fuck about the corporations,
Lol what
I'm not sure there is much point in continuing this, you seem dead set on being wrong and you're ignoring what's being said.
your entire point of view ignores imperialism as a precursor to capitalism, and fails to address the US defense budget.
No it doesn't. You're just wrong and confused by what national debt is. I explained to you why US imperialism is a thing, and it has nothing to do with national debt default, which the US has never ever done and is not interested in doing. Also imperialism is not a "precursor" to capitalism wtf are you saying lol read, idk, something, for instance Lenin.
Also imperialism is not a “precursor” to capitalism wtf are you saying lol read, idk, something, for instance Lenin.
What is it with you constantly posting links that disprove your point in the title and somehow thinking they prove your point?
Imperialism, the Highest Stage of Capitalism
the Highest Stage of Capitalism
Do you know what precursor means? If you actually read the book it literally says imperialism came AFTER colonialism, and it is a product, NOT a precursor of modern capitalism.
Now can you find ONE instance of the US defaulting on debt, or any serious economist, marxist or otherwise, who believes the US is planning to default on debt any time soon?
the point is not that the US has defaulted, it's that they will never have to. whether they have or not is irrelevant. nuclear weapons ensure they won't have to. ever. is anyone collecting on US debt? we have the highest national debt, do you think it's a fucking coincidence that no one is knocking?
do you think imperialism existed before or after capitalism?
Sigh. Look, this is gonna be my last reply., you can simply google all this stuff or idk ask someone, all of what I'm gonna say is uncontroversial info, none of it is opinion.
First of all, "precursor" means "before". Except the book you linked to is literally about imperialism being a product of modern capitalism, so after.
Second, yes, everyone is collecting US debt, all the time. This was explained multiple times. Ask any rando with a bond. Again, national debt isn't like a loan shark banging your door to get his money. It's a bunch of coupons and payments that are happening all the time for millions of different bonds that have been sold to millions of different entities, including entities that own thousands of different bonds purchased at different dates with different properties, due dates, and interest rates. All of these entities are pretty much automatically receiving what they are supposed to bit by bit regularly. The reason US debt is increasing is not because the US is ignoring the creditors and failing to repay (which would be a default) but because it is issuing more bonds and accruing more debt (often but not necessarily to the same entities) than it repays. Again, not by failing to pay up, but by getting NEW debt. The creditors aren't tapping their feet impatiently waiting for the US to decide to repay them, the US does repay them exactly when they expect to be repaid (which is why the US can have a stable AAA credit rating), it's just that they (or other creditors) are also lending more to the US by buying new bonds. These new bonds are in turn sold precisely because US bonds are extremely reliable, and the US regularly pays interest as well as the payments after the bonds expire all the time. And if they were ever short on money to pay the bonds they'd just print more.
Third, a default is literally when you stop paying your debt. If they have never defaulted it means they've never failed to pay up debt. When you say "they will never have to default", then what you're saying is that they'll never fail to pay back debt. It's the opposite of what you are trying to say.
"highest" doesn't always mean "latest." if you think that imperialism only existed after captialism you're fucking wrong and rethink your position.
your second paragraph was just a wall of bullshit.
default means officially saying that you can't pay. the US will never have to default because if anyone feels like collecting and they don't want to pay they'll just invade or bomb them.
adios.
“highest” doesn’t always mean “latest.”
Then read the book lol. Direct quotes from the book:
We have seen that in its economic essence imperialism is monopoly capitalism. This in itself determines its place in history, for monopoly that grows out of the soil of free competition, and precisely out of free competition, is the transition from the capitalist system to a higher socio-economic order.
[...]
Monopolies, oligarchy, the striving for domination and not for freedom, the exploitation of an increasing number of small or weak nations by a handful of the richest or most powerful nations—all these have given birth to those distinctive characteristics of imperialism which compel us to define it as parasitic or decaying capitalism
It's free and only 90 pages or so.
default means officially saying that you can’t pay. the US will never have to default because if anyone feels like collecting and they don’t want to pay they’ll just invade or bomb them.
Bonds have expiration dates and interest you have to pay. No one has to come and tell the US "hey you have to pay up". It's literally written on the bond. If the US stops paying that then it's a default, it doesn't even have to be "officially" announced by the party defaulting, the announcement is not the important part. If you can find just one case where the US failed to pay up these obligations by all means share it. Srsly this hurts my brain just google this stuff lol
We have seen that in its economic essence imperialism is monopoly capitalism. This in itself determines its place in history, for monopoly that grows out of the soil of free competition, and precisely out of free competition, is the transition from the capitalist system to a higher socio-economic order.
this isn't at all in opposition to what i'm telling you. if you don't think that nukes are a form of capital you're not thinking
I have no clue how that is relevant. You're saying imperialism came before capitalism and that somehow this is what the book said. It is not.
Also I asked you to give me one instance where the US failed to pay its bonds, and you posted an article of the US breaking pacts. That's not the same, pls learn the difference. Read your link. Where does it say "defaulted on debt"?
Read the book here: https://www.marxists.org/archive/lenin/works/1916/imp-hsc/imperialism.pdf
Read this to learn how bonds work: https://www.investopedia.com/terms/t/treasurybond.asp
There is also bills and notes which are similar but shorter term than bonds, which last for years. Read this to learn about the rest of them: https://www.investopedia.com/articles/investing/073113/introduction-treasury-securities.asp
The US spends hundreds of billions of dollars of its budget for debt service, in particular debt interest is almost 10% of the federal budget. The US has an AAA credit rating, it wouldn't if it didn't pay up on the bonds. If it didn't, the US would have defaulted, it is literally the definition of defaulting, and that has never happened. Read the links. Again, none of what I'm saying is controversial.
the us is in charge of it's own credit rating and can fucking raise the debt ceiling whenever it wants. it's a fucking joke dude.
So you're still insisting that the US isn't servicing its debt? Where's the hundreds of billions of dollars dedicated for exactly that in their budget going to exactly? Why is no one saying "the US isn't servicing their debt to me"? Can you find one country or one person or whatever saying that they bought US bonds and they're not receiving their payments? Why are people even buying US bonds if the US isn't servicing them? When did the US default?
No, you have been saying something completely different, ie that the US isn't servicing debt because it has so many nukes that no one dares to ask for the money they are owed, which makes no sense and isn't how national debt works at all. That is much different from saying "it doesn't matter because the US controls the world reserve currency" which is what I am guessing you mean by "global currency". The dollar being the main world reserve currency means the US can borrow at low interest, and yes, that's partly why the US can manage a large debt, but it doesn't mean the US can ignore the debt. It just doesn't have to pay as much interest. Also the dollar isn't the world reserve currency primarily because countries are afraid of nukes but whatever. I won't go into that.
what the fuck are you doing here?
I am saying you have a very wrong perception of national debt and a completely wrong appraisal of how imperialism works and you are just ignoring everything said about it. I never said imperialism is not of enormous significance. But just because you recognize that, you know, imperialism is a thing and of paramount importance doesn't necessarily mean you know what you are talking about or that you have a correct picture of how all that stuff connects, because pretty much everything you said about the national debt was wrong and for some reason you keep insisting on ignoring that. If you don't really know how something works, no one is forcing you to have a take on it, and if you do, you don't have to keep insisting on wrong stuff after it has been explained to you why they are wrong.
It's not about buying the math. It's about understanding how stuff works. You're making up stuff about the national debt (and about Lenin) which are simply false. I'm begging you to read theory. "I'm not buying their math so I can just make up whatever kinda seems to me like it might make some sense without looking into it further" is not a viable standpoint. It's very clear you only know about this stuff from memes and you've synthesised it all into some kind of nonsense monster.
if you don't see how the national debt of the most imperialistic country relates to the defense budget of the most imperialistic country of the earth and it's relation to the most impoverished countries on earth, then you're missing a very large part of the entire idea of imperialism.
you seem to be under the belief that the debt is completely unrelated to the arsenal a country has.
Oh I see, you don't see it because you don't understand what national debt is. Yes, debt is almost entirely unrelated to the arsenal a country has. The only relation is that the US can borrow with very low interest rates because of how financially trustworthy it is seen, and how much of the world uses the dollar as a reserve currency, which are all things that hinge upon the US being the global hegemon and very powerful financially, which in turn are because of imperialism. But it is not because the US doesn't have to service its debts. It's the opposite. You think the US doesn't have to service the debts because of imperialism, where actually the US is ABLE to service the debts because of imperialism (mostly, there's also other reasons). Japan and Singapore have no issues servicing debts either despite having much higher debts compared to GDP than the US, it isn't because they are threatening anyone to write off their debts either. There is much more to debt than that.
it's seen as financially trustworthy because it can raise it's debt ceiling whenever the fuck it wants because of it's military capabilities.
Simply not the case. This was explained. The US services all debt. It's not threatening anyone into writing off debts. Ever. It can service the debt because it has a robust economy, very low interest rates, and national debt isn't as big a deal as people pretend anyways. The aforementioned do mostly hinge on imperialism but not the way you think. I'm not sure you know what a debt ceiling is.
You know it's time to disengage when someone with the username Contrarian tells you to disengage.
right, foreign governments, a third, that's the largest portion, while the rest can just be credited. it's why the US invests in bombs.
A difference between a "national debt" and something like your household debt, is that a Nation can't exactly go bankrupt and a Nation can last forever.
A person, only has a limited amount of time (a lifetime) to pay back their debts. A person, can only pay back debt if they have a source of revenue.
A nation, can exist forever and has an infinite amount of time to pay back debt. A nation, can levy taxes and enforce their collection.
A nation has a loan that comes due in, say, 100 years. Year 99 hits and the nation finds that it wont have enough cash on hand by the end of year 100 to finish paying off the loan. The nation can just take out another loan to finish paying off the initial 100 year loan and reset the clock on that portion of debt.
For a person, a loan officer would see that you were 99 years old with a low chance of paying off another 100 year loan (cause you'll very likely be dead soon) and deny you a loan to pay off the last few years of your initial 100 year loan.
This was a general example, don't nitpick the tiny details, the idea is to try to explain the differences between personal/national debt and why they are treated differently.
I haven't read it yet but I've head Kelton's the deficit myth is a good primer for this very issue
Governments sell bonds, which are debt obligations with either fixed or floating percentage government pays tied to its central bank rate. Usually these bonds have some end date, when the government is required to pay the underlying price. I.e. government wants to finance some shit, they say will sell 5 million 1000 pound 2040 bonds, with 1 % yearly. So for 20 years they will pay 10 pounds for each bond, and then in 2040 they have to pay full 1000 pound to these bonds holders. If they don’t, it’s called default. If government needs good will from capitalists, they should not default.
As bonds are being traded their price could lower, which simultaneously raises the effective percentage (yield) rate, but also signals some concern from capitalists. I.e. bond worth 1000 pounds in 2040 could be trading at 900 pounds, thus 10 pounds of interest/year is suddenly 1.12 percent instead of 1.
To tack onto this, people talk about "stocks and bonds" in financial portfolios. A bond is vaguely like getting dividends from a country.
Anyone can buy bonds, but it typically ends up being people who have lots of money and trust/alignment with the government. Some of the national debt is foreign-owned, but a lot of it is owned by the nation's own bourgeoisie. With national debt around 100-150% of GDP, it's common for over 10% of the government's budget to just go to paying interest on the debt- using public coffers to exclusively pay rich people. Unless the rich are disproportionately taxed, it's a wealth transfer from poor to rich. And you can't easily tax foreign nationals, so taxing the rich to pay the debt looks like a handout to other countries. This is why "just not paying the debt" is not an acceptable policy to the mainstream.
beyond all the deficit shit, I think it's a feature of the global economy that a nation which exists at a trade deficit will naturally incur debt to their trading partner.
I think this has to do with currency valuation. like china sells us shit, chinese firms are sitting on mountains of accumulated capital in dollars. because they cant invest in china with dollars, or convert their stockpiles of capital all at once, they invest in bonds and other securities.
Folks like yanis varoufakis have written extensively about how america and western europe have maintained their dominance over the world despite no longer producing the world's goods. we essentially work as a vacuum cleaner. sucking up the world's capital and creating an empire of finance.
this system is like anti-mercantilism, nations dont compete to accumulate their own capital, they compete to accumulate each others capital as well. and how? BY MUNCHING
When you borrow in dollars instead of your domestic currency, as with IMF loans, the Anglos can fuck you over in whatever way they want.
When the US state borrows in dollars, since it's the domestic currency, it's functionally the same as inflation/taxes.
You can't change any of this without overthrowing the capitalist class. MMT'ers BTFO
