Survivalist Chronicles

Amy B asked:


Does the size of the government’s debt and the size of the budget deficit indicate potential problems for the economy in any of these cases?

1. The government’s debt is relatively low, but the government is running a large budget deficit as it builds a high-speed rail system to connect the major cities of the nation.
2. The government’s debt is relatively high due to a recently ended deficit-financed war, but the government is now running only a small budget deficit.
3. The government’s debt is relatively low, but the government is running a budget deficit to finance the interest payments on the debt.

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Ranger asked:


I’ve heard several candidates claim that by spending too much we go bankrupt? how is a nation with our economic status exactly go bankrupt ?

I’ve never taken an economics course so this idea of a nation going bankrupt is very confusing to me.
Yeah but don’t we always spend more than we have, and just have the fed print the rest of the cash needed or borrow it from another nation ?

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greatelderone asked:


I know the US external debt is around 12 trillion, but what is the composition of the said debt? Treasury securities? What?

And second, does anyone have figures for who owns this outstanding debt? I have heard for example that China owns anything from 400 Billion to over 1 trillion. Does anyone have definite figures of these?

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interdependent globalized world asked:


How does the debt system work, what happens when the other countries buy our debt, can they sell our debt to other countries, can they force us to pay our debts at any given time, please explain how the national debt system works?

Thanks, I need lots of details and really want to understand so thanks again for your help!

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George B asked:


What happens when someone pays his debt in a fractional-reserve banking system?

Is only his past debt subtracted from the reserve or also all subsequent debts that was loaned to other people with his initial debt?

For instance, a person A borrows 100$ then it becomes part of the reserve, then a person B can borrows from his deposit 80$, then a person C 64$, given a reserve requirement of 10% for banks.

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