How REAL is the "deficit"?

[bruchi]

I mean, so much money is spent on useless stuff and more so there is so much overpaying of stuff and waste that I "wonder" how real this is?

Then who the hell do we owe all this money to?

Printed numbers, reports, charts, "whatever" on white paper and politicians do not make anything real IMO!

Another tool to dupe us into thinking those running things are indispensable, the ultimate "shell game"?

[Nomadac]

Our Fiscal Debt and Excessive Spending is a serious as a Heart Attack. http://www.usdebtclock.org/ When you perpetually Spend more then you take in Revenue the interest on the debt is unsustainable, as it will continue to rise, eventually you will go bankrupt and the economy will collapse. Just watch what is happening in the E.U. countries, i.e. Greece, etc.

[alphasigmookie]

Then who the hell do we owe all this money to?

Have you ever heard of treasury bills or treasury bonds? Our debt is sold at auction to banks and investors. Those bonds are then traded on a secondary market. Anyone in the world can buy them. When a foreign government holds "currency reserves" they are most often holding US currency in the form of treasury bonds (vs. hard cash that provides no return). The largest chunk of treasury bonds are held by banks and retirement funds. They are viewed by most as one of the safest investments in the world (not sure I totally agree with that). In some ways a certain amount of government debt is necessary and important for the financial markets and economy to function effectively. If we were to somehow magically pay down all our debt treasury bonds would cease to exist depriving banks and retirement funds of an important safe haven for their cash. On the flip side, too large a supply of treasury bonds leads to too much capital sitting in treasury bonds that might otherwise be lent to someone else or invested in a more productive way (although at higher risk to the investor).

[shootbrownelk]

IMO, China is buying up the United States lock, stock & barrel. Our government owes China big-time!

[horselips]

When you start paying the taxes that must eventually be levied to satify the debt, then you'll know how 'real' the debt is.

[agewon]

I believe China holds somewhere around 16% of our debt. What's scary is that every time they play kick the can on the Hill, it puts our rating in jeopardy, like the last time one of the rating houses dropped our rating because of the inability to agree to raise the debt ceiling.
IMO, the mentality on the Hill is to spend but not regulate or monitor. I just read today that we spent over several billion to fund nursing homes that don't even meet the minimum requirements set by the fed in 2010. But we keep paying. And the mentality of "let's just tax more" is not the answer. If we can learn anything it's that once you give them an inch, they'll take a yard. And before you know it, the 450k$ income bracket tax hike will eventually become the 100k.
Essentially, we borrow 50cents to every dollar we spend. Now how will that ever end is my question.

[bruchi]

So we spend a lot more than we take in... we then borrow from some source to fill that void and due to this we have to pay interest on what we borrow.....simple enough?

On one hand it is said that the US is the richest country in the world, the one with the deepest pockets, who the hell is doing the lending, what it is being used as collateral, the White House, government land, nuclear submarines, movie stars, gold reserves, good faith?

[Jeeper]

Essentially nothing. We just print more money.

Luis

[alphasigmookie]

So we spend a lot more than we take in... we then borrow from some source to fill that void and due to this we have to pay interest on what we borrow.....simple enough?

On one hand it is said that the US is the richest country in the world, the one with the deepest pockets, who the hell is doing the lending, what it is being used as collateral, the White House, government land, nuclear submarines, movie stars, gold reserves, good faith?

The government taking out a loan is not like a loan that you take out at the bank. There is no collateral. They issue financial instruments and people bid on them (or basically the interest rate they have to pay). It is actually very similar to how public companies raise money through bond auctions, except when companies can't pay they usually go through bankruptcy and creditors sometimes get a chunk of what their owed from the sale of assets of the company. If a country declares bankruptcy they say tough luck, what are you going to do? The purchase of bonds is a risky endeavor, thus why those who do so are paid interest for the risk that they take. The purchaser accepts that risk when they buy the bond and the risk is reflected in the interest rate whether they buy bonds from the US govt, the Greek govt, General Motors, or Goldman Sachs.