The Chinese are in a similar boat. About 60% of their debt is domestic. Their inflating debt, however, is in part what is driving the gap between the two, and they are ramping up foreign debt faster as a result.
Politicians and their funders hope everyone is hoodwinked into forgiving the debt or just taxing everyone more to make up for the stolen^W borrowed money.
Where is the money in the social security trust fund kept. I had assumed it was in treasury bonds and therefore lent to the US Government general funds to be spent at the will of congress. Is the Social Security Administration actually holding VOO or physical gold?
So ... does that answer the question? I'm not sure. I'm used to thinking about how much money the US government owes to outsiders.
But, this "state owned enterprise" and "state owned bank" thing -- how do you make sense of that? The government, which also controls and creates the currency, has loaned its own enterprises a bunch of money. So what if they default? Does it matter?
How do you even think about that?
When and if the enterprises default, the banks will go under. This means that Chinese people will lose money (or the government will try to be fiscally prudent to recover money lost in bad investments, which will mean that Chinese people will lose money).
Money owed by a government owned bank to a government owned enterprise is a real debt, which if defaulted upon will have a lot of real effects.
The payments to the organization might come in the form of goats, chickens, timber, or even IOUs!
If the organization had used the debt to make a bunker instead of an electric system. The citizens may not be so interested in hanging out and using (paying) for the bunker, so all the IOU holders would be out of luck.
In other words, if the IOUs to the contractors aren't eventually repaid. People won't accept IOUs from the organization (bank) anymore.
Someone else can chime in with more depth, but basically the US government has been good about not borrowing too much from itself. I just hope we can stay rational as a country and this continues.
also, the US government has borrowed a whole hell of a lot of money from outside sources (e.g. corporations, US investors, and foreign governments from Japan to China to Saudi Arabia to European nations)
I think we need numbers because I don't know what you mean when you say, "a whole hell of a lot of money." It looks like the citizens hold 70% of the debt. And keep in mind, these countries come to us to put their money in treasury bonds. They buy bonds that don't pay a very spectacular rate either (2.28% for 10 year bond). I'd caution against the rhetoric that we are broke, or people don't want to lend to us. It's often pushed by people who want to reduce federal spending (usually spending cuts on healthcare and welfare for the less fortunate).
As for who buys government bonds from the US Treasury, I just wanted to emphasize that the Fed is not the only buyer.
The often repeated notion that, "to a great extent, we owe this money to ourselves," is not necessarily comforting. Most American citizens have very little, if any, savings. The "ourselves" in that notion is heavily weighted to a relatively small number of wealthy US citizens. It's fair to question whether their interests align with the interests of the average US citizen.
That can be a good thing. We separate the three branches, specifically not to have direct accountability to a single branch. And we buffer power changes over many election cycles. Otherwise one branch, say the executive, could just fire a judge or investigator when they broke the law.
> The often repeated notion that, "to a great extent, we owe this money to ourselves," is not necessarily comforting.
I wasn't repeating that notion. In my mind, going bankrupt is not a good thing in either case.
> Most American citizens have very little, if any, savings. The "ourselves" in that notion is heavily weighted to a relatively small number of wealthy US citizens.
I guess you could say, if you're wealthy you have more to lose, but poor people might lose their life if the US goes bankrupt whereas wealthy families would probably survive, though with a smaller balance sheet. So it matter to both poor and wealthy alike if we are reckless and go bankrupt, probably more so if you're poor. And I agree, we should be questioning if wealthy interests are putting themselves or the country first, because we don't have much use for those who aren't improving citizen's welfare.
The central banks, obviously. Many of them not being beholden to a nation but to private individuals.
That said, if you're holding the wealth, it's not too hard to keep the shop running (people happy) so long as you don't get bored, reckless and feckless.
Basically what I'm saying is, we can elect a government that serves our own interest if we cared to.
If it does get ugly, and the government/military turns on its citizens then the US as we know it will be dead or on life support. Probably, in such a scenario, people won't go quietly into that night.
In theory, I'm still waiting to see it in practice. The Bernie Sanders situation from last election was a decent illustration of how legitimate the election process is, and they took care of him before the gloves even came off. (Trump was far trickier but as it turns out he's more of the same, if not worse.)
Not to also mention that government's and militaries need people to supply it, and if their suppliers are now on the list of enemy combatants then such governments and militaries won't have the same leverage/power as those that are not combating it suppliers.
Example? The largest countries' central banks are accountable to their governments.
We're saying the same thing. Most central banks, e.g. the Federal Reserve, were created by law. The Congress giveth and the Congress taketh away. In any case, the comment I was replying to seemed to imply central banks are privately owned. That's what I was refuting.
I think the comment was implying that their policies, not being entirely democratically accountable - the effectiveness of these instruments themselves being arguable - are very likely going to be swayed by private interests.
I know there exists a revolving door b/w FDR and major Wall Street banks, but I'm not sure about other countries. I'd not be surprised if this were the case everywhere.
Edit:
'Princes of Yen' is a documentary that I found did a good job of illustrating the dangers of having such high powered unaccountable cabals (without all the BS that is typical in this genre).