How can a nation be the richest and the most indebted at the same time.

you hear democracy you hear republic but lets be honest it is a hypocrisy lol

The nation you might refer to, let's say the U.S.A. has vanished from the globe. They do not exist. They only exist when some need a stab in the back.

Last Edited by Desertportal on 09/19/2013 07:44 AM

Because ultimately the assets far, far outweigh the debts.

Fractional reserve banking

^^THIS^^

I thought it might be that, but It has been estimated that paying the interest off alone - could take a thousand years and its growing every year.

Massive demographic separation, richer rich, poorer poor.

It isn't nice with sharing

The problem was that somebody (or some political circles) have tried to sell the lifetime in debt as "new normal" but most normal people knew beforehand that notion was actually bullshit.

because our wealth is debt. the debt is sold back and forth between financial institutions and then leveraged to manipulate currency

I think the wealth + assets belong to the Mega Rich and the debt belongs to the people (Nation).

Because of fractional reserve system.
Debt = money.
Without debt, there wouldn't be any dollar in circulation.

Asset is only worth what the buyer will pay for the asset and not how much the asset owner thinks the asset is worth.

correction it was the richest

fractional reserve banking and derivatives etc

have caused excessive lending on gdp that cannot be repaid

very soon those debts are going to need to be repaid

and the economy will just explode in on itself

Sounds like the perfect time to start World War 3 - neat little distraction.

BACK IN THE BOX...YOU DAMN CRITICAL THINKER!

Because money is debt. Money doesn't create debt. Debt creates money.

This is how its always been.

Therefore, by having the most debt, you have the largest money supply. Having a large money supply and an even larger multiplier effect creates the largest economy.

Rich = Resources (that you have access to and can profit from)

Debt = Stupid plastic crap from China, and ability to spend/live beyond our means

Currently resulting in massive misallocation of resources as we pay the financial sector to give themselvs bonuses and shift money overseas for creating risky financial products (derivatives), while we allow our infrastructure to crumble.

CAFR.

The wealth is just on paper, it doesn't really exist.
"Real" wealth is only in our politicians bank accounts. The debt comes from our politicians poking their noses in everyones business making it "better" both domestically and abroad.

Richest??? Israel has a higher percapata income than the U.S. along with many others.

Sure...no problem.

#1. Google "the expanded accounting equation" and study it until you understand it both in terms of how to balance it mathematically as well as in terms of its philosophical implications. (Assets = Liabilities + Owner's Capital + Revenues – Expenses – Owner's Draws). Here is a link to get you started. [link to www.accountingcoach.com]

#2. Pay special attention to the "assets = liabilities" part.

#3. Familiarize yourself with how ALL currency-run economies issue said currency, irrespective of whether that currency is fiat, gold/silver backed, or backed by another currency. (Hint: they issue BONDS of various types, durations, and pay-outs).

#4. Learn about what a bond actually IS. For the issuer of a bond (in this case the government issuing the currency) a bond is a DEBT. For the bond holder a bond is an INVESTMENT. Assets = Liabilities, remember?

#5. Learn about the Time Value of Money (TVM) equations. Study them until you get to the point where you unequivocally understand that the "DETAILS" of a debt/liability such as interest rate, term, duration, dividends, opportunity cost, and how interest is compounded is far more mathematically significant than the face value of said bond or security in determining whether it's a GOOD investment or a bad one.

#6. Learn about how the "rules" change in the world around you when applied to microcosms and macrocosms. Economics and finance are very much like physics this way. Relativity does an excellent job of explaining the universe on a grand scale as it relates to solar systems and galaxies...but is wholly inadequate to explain the quantum world. Similarly, Newtonian physics does the best job of explaining our day to day observable realities on our morning commutes.

#7. Understand that applying the "rules" of household finance to micro and macro economics is like trying to explain to your boss that you aren't late for work, because Time is Relative and mathematically can be converted to Space, hence Time is really more of a shape than anything else.


...let me know if this helps.

Ironically, the 'wealth' the USA holds is essentially money held in the ether of the markets. And it is to be frank, utter bullshit.

Our richest companies produce nothing and sell ad space.

I knew It would be something fairly obvious which I had overlooked!

You obviously never had a credit card.

I have a $5000 limit and I never cross it.
If I can't afford it I don't need it.

What happens when the assets are gone because debt outweighs profit?

No assets = broke.

The State of Michigan is so bankrupt they sold off over 700 properties (assets) for cash only 3 weeks ago to pay off their debt to the fractional federal reserve freaks and their foreign banksters.

Helicopter Ben can print all he wants and loan it out to the state again, but it's still a gargantuan debt and the assets are gone.

Nothing wrong with debt.
The richest corporations and people have lots of debt.

Incorrect.

Assets = liabilities!!!

Debt/liabilities aren't inherently "bad". If we had ZERO debt...then we would ALSO have zero assets. We would be a bunch of hunter-gatherers. Period.

What's RELEVANT is what TYPES of debt we have, what we are using the raised capital for, what the interest rate is, who we are paying said interest to, etc.

The reason we are "broke" is because all of this capital we raise in the form of bonds isn't being INVESTED in our civilization. Instead we fire 1.5 million dollar cruise missiles off of $100 billion dollar aircraft carriers to blow up 2 guys and a camel sitting in a $6 tent in Bumblefuck....and then hand out TRILLIONS to a bunch of pricks who already made TRILLIONS by screwing your neighbor out of their home.

Conversely, of we used this raised capital to do something....ANYTHING worthwhile for our civilization...our economy would be BOOMING.

...and I do mean ANYTHING.

- we could bury our rickety electrical grid and install industrial size capacitors on every mile to protect us against an EMP pulse (from the sun or a high-altitude nuclear attack.

- we could invest heavily in an unmanned asteroid mining program...Christ knows we are going to need the lithium for our batteries and it's a hell of a lot more realistic with a higher payoff than manned missions to Mars or moon colonies.

- We could switch our petroleum economy over to methanol (not ethanol) without effing up the price of corn and food.

- we could run year-long k-12 school so maybe our kids might actually learn something.

- we could criss-cross this country in fiber-optic cable.

- we could secure our terrifyingly SCADA grid.

- we could tear down rotting and abandoned industrial buildings to make it more attractive for private companies to construct new, modern ones by providing them a clean slate to start over that is likely still conveniently located next to rail lines, harbors, and ports.

Any of these things would be a GOOD use of debt. An investment...not a "bill" that would be sure to foster economic growth and in general improve our civilization and security.

Unfortunately though, Americans are too stupid and/or lazy to want to think about anything other than whether "spending" or "debt" is either wholly good or wholly bad.