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No mention from any of the candidates how they will tackle this. It seems like they won't
Currently the debt is accumulating at the rate of about US$12,621,600 per hour It went up by about US$7,8 billion during the current administration based on the figure 15 December 2015. It' possible nearing an increase of US$9 billion now.
Instead we see Clinton and Trump saying how each other are unfit to lead the country.
https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778
What Is the Debt of the United States?
The U.S. debt is the sum of all outstanding debt owed by the Federal Government. It's greater than $19 trillion and is tracked by the national debt clock.
America's debt is the largest in the world for a single country. It runs neck and neck with that of the European Union, which is an economic union of 28 countries. For more, see Sovereign Debt Rankings.
Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds.
How Did the Debt Get So Large?
First, the debt is an accumulation of Federal budget deficits. Therefore, the best way to look at how the debt got so large is to compare the budget deficits by President. President Obama added the economic stimulus package, the Obama tax cuts and roughly $800 billion a year in military spending.
For more, see National Debt Under Obama.
The national debt grew rapidly even before the 2008 financial crisis. Between 2000-2007, it ballooned from $6-$9 trillion, a 50% increase. The $700 billion bailout expanded it to $10.5 trillion by December 2008. President Bush also added the EGTRRA and JGTRRA tax cuts and the War on Terror.
President Reagan cut taxes, increased defense spending and expanded Medicare. All of these Presidents also suffered from lower tax receipts resulting from recessions. For more, see U.S. Debt by President.
Second, the Federal government couldn't keep running deficits if interest rates skyrocketed, like they did with Greece. Why have interest rates remained low? Purchasers of Treasury bills still reasonably expect that the U.S. will pay them back. For foreign investors like China and Japan, the U.S. is such a large customer it's allowed to run a huge tab so it will keep buying exports.
Countries like China and Japan maintain large holdings of Treasuries to keep their currencies low relative to the dollar. Even though China warns the U.S. to lower its debt, it keeps buying more Treasuries. During the recession, foreign countries increased their holdings of Treasury Bonds as a safe haven, which kept U.S. interest rates low. These holdings went from 13% in 1988 to 31% in 2011.
Many of the foreign holders of U.S.
debt are investing more in their economies. Over time, diminished demand for U.S. Treasuries could increase interest rates, thus slowing the economy. Furthermore, the anticipation of this lower demand puts downward pressure on the dollar. That's because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand. For more, see What Is the U.S. Debt to China?
Third, the U.S. has been able to borrow from the Social Security Trust Fund. It took in more revenue through payroll taxes leveraged on Baby Boomers than it needed. Ideally, this money should have been invested to be available when the Boomers retire. In reality, the Fund was "loaned" to the government to finance increased deficit spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing. However, it's not actually a loan, since it can only be repaid by increased taxes when the Boomers do retire.
The debt ceiling is supposed to limit the debt. In 2015, Congress suspended it until after the 2016 Presidential elections.
Congress realizes it is facing a debt crisis. Over the next 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to Baby Boomers. That could mean higher taxes, since the high U.S. debt rules out further loans from other countries. Unfortunately, it's most likely that these benefits will be curtailed, either to retirees younger than 70 or to those who are high income and not as dependent on Social Security payments to fund their retirement.
http://www.bbc.com/news/business-24453400
What is a US debt default?
At its most basic level, a default is when a person or an entity cannot repay a debt on time. For instance, when a person can't make a payment on a mortgage or a car loan.
When a country does this, it's known as a sovereign default. This is when the country cannot repay its debt, which typically takes the form of bonds.
So if the US were to default, it would essentially stop paying the money it owed US Treasury bond holders.
A quick refresher: the US government spends more money than it collects in taxes. So to make up the shortfall, it raises funds by asking investors to buy US Treasury bonds. Investors, such as the Chinese government and pension funds, do this because these bonds are seen as a safe place to invest money.
What are the consequences of a US default?
No one really knows exactly what would happen, but the likelihood is that markets around the world would plunge and global interest rates would rise.
This is because if the US government could not repay the money it owed bondholders, the value of the bonds would decrease. And the yield - the return the government pays to an investor - would rise. This is because it would be perceived as a less safe investment.
This would prompt interest rates around the world, which are often tied to those of US Treasuries, to spike.
Furthermore, the impact on the US's creditors could be dire. Japan, for instance, owns about $1.14 trillion of US debt - which is equivalent to 20% of its annual economic output.
In the US, Goldman Sachs estimates that $175bn would immediately be withdrawn from the US economy and it could lead to a very deep recession.
How does the US government pay its bills anyway?
Currently the debt is accumulating at the rate of about US$12,621,600 per hour It went up by about US$7,8 billion during the current administration based on the figure 15 December 2015. It' possible nearing an increase of US$9 billion now.
Instead we see Clinton and Trump saying how each other are unfit to lead the country.
https://www.thebalance.com/the-u-s-debt-and-how-it-got-so-big-3305778
What Is the Debt of the United States?
The U.S. debt is the sum of all outstanding debt owed by the Federal Government. It's greater than $19 trillion and is tracked by the national debt clock.
America's debt is the largest in the world for a single country. It runs neck and neck with that of the European Union, which is an economic union of 28 countries. For more, see Sovereign Debt Rankings.
Nearly two-thirds is the public debt, which is owed to the people, businesses and foreign governments who bought Treasury bills, notes and bonds.
How Did the Debt Get So Large?
First, the debt is an accumulation of Federal budget deficits. Therefore, the best way to look at how the debt got so large is to compare the budget deficits by President. President Obama added the economic stimulus package, the Obama tax cuts and roughly $800 billion a year in military spending.
For more, see National Debt Under Obama.
The national debt grew rapidly even before the 2008 financial crisis. Between 2000-2007, it ballooned from $6-$9 trillion, a 50% increase. The $700 billion bailout expanded it to $10.5 trillion by December 2008. President Bush also added the EGTRRA and JGTRRA tax cuts and the War on Terror.
President Reagan cut taxes, increased defense spending and expanded Medicare. All of these Presidents also suffered from lower tax receipts resulting from recessions. For more, see U.S. Debt by President.
Second, the Federal government couldn't keep running deficits if interest rates skyrocketed, like they did with Greece. Why have interest rates remained low? Purchasers of Treasury bills still reasonably expect that the U.S. will pay them back. For foreign investors like China and Japan, the U.S. is such a large customer it's allowed to run a huge tab so it will keep buying exports.
Countries like China and Japan maintain large holdings of Treasuries to keep their currencies low relative to the dollar. Even though China warns the U.S. to lower its debt, it keeps buying more Treasuries. During the recession, foreign countries increased their holdings of Treasury Bonds as a safe haven, which kept U.S. interest rates low. These holdings went from 13% in 1988 to 31% in 2011.
Many of the foreign holders of U.S.
debt are investing more in their economies. Over time, diminished demand for U.S. Treasuries could increase interest rates, thus slowing the economy. Furthermore, the anticipation of this lower demand puts downward pressure on the dollar. That's because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand. For more, see What Is the U.S. Debt to China?
Third, the U.S. has been able to borrow from the Social Security Trust Fund. It took in more revenue through payroll taxes leveraged on Baby Boomers than it needed. Ideally, this money should have been invested to be available when the Boomers retire. In reality, the Fund was "loaned" to the government to finance increased deficit spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing. However, it's not actually a loan, since it can only be repaid by increased taxes when the Boomers do retire.
The debt ceiling is supposed to limit the debt. In 2015, Congress suspended it until after the 2016 Presidential elections.
Congress realizes it is facing a debt crisis. Over the next 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to Baby Boomers. That could mean higher taxes, since the high U.S. debt rules out further loans from other countries. Unfortunately, it's most likely that these benefits will be curtailed, either to retirees younger than 70 or to those who are high income and not as dependent on Social Security payments to fund their retirement.
http://www.bbc.com/news/business-24453400
What is a US debt default?
At its most basic level, a default is when a person or an entity cannot repay a debt on time. For instance, when a person can't make a payment on a mortgage or a car loan.
When a country does this, it's known as a sovereign default. This is when the country cannot repay its debt, which typically takes the form of bonds.
So if the US were to default, it would essentially stop paying the money it owed US Treasury bond holders.
A quick refresher: the US government spends more money than it collects in taxes. So to make up the shortfall, it raises funds by asking investors to buy US Treasury bonds. Investors, such as the Chinese government and pension funds, do this because these bonds are seen as a safe place to invest money.
What are the consequences of a US default?
No one really knows exactly what would happen, but the likelihood is that markets around the world would plunge and global interest rates would rise.
This is because if the US government could not repay the money it owed bondholders, the value of the bonds would decrease. And the yield - the return the government pays to an investor - would rise. This is because it would be perceived as a less safe investment.
This would prompt interest rates around the world, which are often tied to those of US Treasuries, to spike.
Furthermore, the impact on the US's creditors could be dire. Japan, for instance, owns about $1.14 trillion of US debt - which is equivalent to 20% of its annual economic output.
In the US, Goldman Sachs estimates that $175bn would immediately be withdrawn from the US economy and it could lead to a very deep recession.
How does the US government pay its bills anyway?
