Business Insider asked, “Who Own’s America?” and CNN posted the results for everyone to see. Apparently, most of America is owned by…not China…not Japan…by by America itself. Of our $14 Trillion Debt, “…America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion. (CNN, link above).
While many nations have invested in the United States and people are worried about default for harming our relations with other nations, let us think about what losing our high credit rating would do to our own ability to borrow, invest and grow our economy.
The current situation is not a responsible way to handle our country’s financial situation. We will be less able to grow, less able to break the mental constraints of recession and less likely to be seen as a land of opportunity if your politicians cannot solve a problem that simply takes courage and determination to resolve.
In the last presidential election the candidates said a lot of words about the United States being the Greatest Country in the world. If that is so, our leaders need to show some greatness and live as proof of their vitriolic speeches! If we are to continue towards prosperity, we need to meet our obligations while simultaneously widdling down the obligations we have made.
A good household, when strapped with too much debt, sees the future possibility of bankruptcy and being overstretched, withdraws from obligations. Some might cancel Cable, some might stop drinking coffee, some might cancel the landscaping service, others might have to end services that have made them feel comfortable. This is not the time to feel comfortable for any American. If some of us are uncomfortable, all of us should take away the pillow for a time until we can all step forward together.
Plato, seeing his culture, was concerned about the possibility of Democracy, and said something to the effect, that Democracy is like the flowers of the field with many colors. But from what I understand, he did not think it would work fully because the many colors have voices that all would be drowned out by the others.
The reason American Democracy has prospered is due to some very basic principles our culture is leaving behind:
(1) Each person should strive to be a good person. That is, we study ethics, care about others, and work for the common good.
(2) We all are to work hard, and share the excesses of windfalls and fortune, helping others reach upward who otherwise would not have had the opportunity. Those who work to the best of their abilities are rewarded, those who do not stagnate.
(3) All are ultimately accountable to the Creator, and while our branches of government are accountable to each other, each individual will answer for the good or wrongs that we have all done.
No one is perfect, but it is obvious that our system lacks courage and is fearful of its own constituents, other politicians and the spinning of the press. This engine is nearly seized. It is my hope that the eyes of our leaders will light up with both wisdom and the ability to press forward to do what is right, regardless of the personal cost. Spending our courage now will have great dividends for the future. Basically, America needs some political and economical heros.
Daniel Griswold Thought This 
Hi Dan, long time no speak!
In addition to China only holding ~8% of our debt, it’s also only about 8% of our GDP, whereas it’s about 20% of their GDP—so that debt is a lot more important to their economy than it is to ours.
Also, households & governments have a second tool at their disposal to make ends meet (in addition to decreased spending): increased revenue. Individuals take on extra jobs, work extra hours, etc., to boost income—and governments raise taxes. Everyone complains they shouldn’t, but why all the resistance to increased progressive taxes? (Especially given the record chasm now separating the wealthy from the middle class and the historically low tax rates.)
Obviously there’s a lot of resistance to raising taxes (oddly including progressive taxes, such as the estate and capital gains taxes), but why don’t people view taxation as part of our social contract? After all, it’s the stability & confidence provided by enormous modern governments that has enabled so much prosperity in modern times.
And keep in mind that much of the recent government debt is due to decreased revenue (recession) rather than increased spending (while much of the increase in spending is short-term, emergency spending to restore confidence/avoid depression).
But really, I’d caution against the assumption that government finances are similar enough to household finances that the ‘conventional wisdom’ of the latter ought to apply to the former. As a simple example: the circumstances under which declaration of bankruptcy is a smart move are obviously very different (assuming there even are situations where bankruptcy would be a smart move for a government).
Take care,
Cody
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Good stuff Cody. There are definitely smarter people tackling this situation than I and I’m glad about that.
It is funny that in a time of crisis, people would take certain stands regardless of the cost. One party saying we won’t decrease services, the other, no increased taxes.
It is odd that there can’t be some sort of compromise to just make things work.
I appreciate your thought out response.
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