Francie Grace
Nov 20, 2009
That was the question raised by President Obama during an interview in China (one of our biggest creditors), as cartoonists seized the opportunity to comment on America's looming national debt. "It is important," said Mr.
Scott Bittle
Nov 16, 2009
World leaders flatly admitted this weekend what everyone pretty much knew: there won't be a major deal on climate change at the big conference in Copenhagen next month. Instead, leaders will try to keep the process going, in hopes of coming up with a deal next year.


I heard somewhere that payroll payments, that is contributions to the Social Security fund actually go into the general fund and the federal government issues treasury bonds to the Social Security fund to secure its loan from the Social Security fund. Doesn't that mean that we're paying interest to ourselves when we brorrow money from ouseelves - we are both the debtor and creditor?
Buying bonds would be one way to get your tax money back. During past times of big government spending there was an active push for citizens to by things like war bonds during World War II.
The difference now is that the amount of debt owed by foreign banks and other international investors has increased to the point that more than 2 of the 9+ trillion dollars in the debt that we owe are being financed by other countries. China is our second largest lender ($420.2 billion) and the fourth largest source comes from oil exporting nations ($113.0 billion).
Even if the debt was paid for with bonds held by US citizens, we would still have one additional problem, other than paying out interest and having put more into the pay out of Social Security than is being paid in. The money used for bonds is money that is not available for other credit needs, making credit funding scarcer and therefore more expensive. Without money for investment, the economy slows.
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