So, have you heard that the U.S., as a whole, is overextended? Have you heard that the federal government is “rescuing” the bad debt in the private sector by taking it on as their own, really all our children’s own, hopefully not-quite-as-bad debt?
We’re just moving the debt around in our economy, not getting rid of any of it. For proof one need only look up at the National Debt Clock in NYC, which in the past week had to give up its dollar-sign digit for a “1″. The owner of the sign is working on getting a couple more digits added to the clock. Why do I worry that folks might interpret that as an increase in the debt/credit limit of the country?
(The debt clock shows gross debt, which as of yesterday was at $10.2 trillion, which includes the debt the federal government “owes” to itself through the Social Security trust fund.)
The “debt held by the public,” what the government owes to others, both in this country and abroad, is just under $6 trillion, but it’s gone up just as fast as the gross debt in the past week, because all of this new debt we’re issuing to finance the rescue is real debt, really owed to others–not just to the trust fund. Want to learn more about the different measures of debt? See this page on Concord’s website.