Who does the US government borrow money from for the deficit?

Question

I always here that the government runs a deficit, who do they borrow from? 2ndly, they say if foreign countries stop investing in the US, we're in trouble. What does that mean? There in investment in US corporations or buying US bonds and t bills?

Answer 1

ok...one thing u have to realize is that money is just like any other item to be traded...like trading corn for apples between farmers in the very old days...money is just another item to trade for....

one of hitlers downfalls was when he tried to make germany rich by printing lots and lots of marcs (the german currency)  so instead of giving stimulus checks and going into debt like our govt is doing...he simply paid for the paper to print the money on.  well the price of a loaf of bread shot up...from like 7 marcs to 7 million marcs!!!!

now that was a huge increase in the amount of money...but with our situation...china and japn own like a third of outr counties debt...through bonds or what ever other form of federal investment...well if they all ppull out their money that they invested in this country...300trillion of the total 900trillion...we only have 2/3rds of the money in the economy...

this mens recession time...because the noone is making as much money as they were...so prices have to drop in order to live...so the consumer still has to buy all of the rest of their items...bread, gas, food...and the baker still has to make money selling the bread...enough to make up for his dropped salery...so he doesnt want to lower his prices...and the same thing with the farmer...

so for lets say a person who was making 100,000 a year...used to pay 28,000 to his mortgage...another 25,000 for utilities and food...and 20,000 for his and his wifes cars and insurance....and the other 27000 would go toward his kids education and everything else

well with this drop in currency...he only gets 67,000 this year...his mortgage was a set rate...as well as his car....and those two were 48000 alone....and since everyone else is having the same problems...he cant sell them....this leaves him with 18000 to cover food and utilities for his family....gas...at 3.50 a gallon...and everything else....

so he isnt buying anything extra...well this hurts those who sell the extra...and now they cant afford their bills

and its a downward spiral after that

what i would be worried about is a forced rececion from china...like described...and then they start a war with us....and when we need those cheap chinese items....all that we have are the short supply of US goods

hope this helps

mike chapman

Answer 2

This guy named Harold Messiner. He lives down on 78th in Southie. He's a pretty good guy as long as he gets paid with interest. The reason he's the go to guy; he drinks whiskey by the barrel and forgets how much he lends out :)

I don't know your answer for 2. I'll see if Harold knows.

Answer 3

They issue securities that pay investors interest in exchange for their money now.  That's what's meant by interest on the debt.  They can also increase the money supply by changing banks reserve ratios which eventually increases the tax base.  Which makes paying off the securities at a future date easier if necessary.  One of the reasons most people worry about foreign investors views our governments debt status as junk if they devalue the currency.

Answer 4

They borrow from the banks, pensions, private individuals, foreign governments and corporations.  We are deeply indebted to foreign governments, particularly the People's Republic of China and the private citizens of Japan.

As to governments and corporates---both.