Why Don't People Understand Technically There Is No National Deficit?

Question

I know I am about to get blasted by Liberals and some from the Right as well after this question is asked. But let me explain myself first. It is very easy to understand and is the truth.

Since our Nation was founded we have beaten other nations in Wars and helped many many other nations during Wars, and other times of need. h**l if you take World War I & II alone, there is no national deficit.

About 85% of the world's Nations owe us Trillions upon Trillions if you added it all up. From countries defeated to countries we helped out by lending money, sending supplies, food, weapons, you name it. We have done so for over 200 years.

If the United States tomorrow decided to "Collect" on all of those debts, we would not only be positive with our money but positive in the Trillions! We could take the money owed to us by all the nations of the world and double our Military in advances and equipment. House the Homeless, feed our "own" hungry and h**l even have money for Al Gore's Green America Program that would cost about 3 trillion.

And h**l we could say don't worry about it to our close Allies. But other Nations that like to bad mouth us whenever they feel like it "Germany cough", France cough, Russia cough, ect ect". We could and should just go and collect what is owed to us. Then watch those nations crumble.

So why can't people see this? It 's so d**n clear as day to understand. There would be no National Deficit if our country just said "s***w You, Pay the Rent Owed", to all of these Nations around the world.

Let's see who is still number 1 after that.

We give more than any other nation does to all these other nations that need help. And we just give it all away.

Many of the nations we help talk c**p about us. Why are we bothering helping these people?

The other Nations we have defeated, owe us a lot more!

If for once the United States actually said " s***w you, Pay Me Back". We would not have any debt. We would be collecting on debts and be very far in the positive for our money. Our dollar would Soar above all other currencies and we would be better off.

We are owed many times more than we owe others.

So if we subtracted what he owe them from what they owe us, we wouldn't have to pay a dime and they would still owe us Trillions if you added it all up.

So how come we have never done that?

Answer 1

Well you said it best:  "We give more than any other nation does to all these other nations that need help"

You can't demand recompense for a donation to a charity.

Also, we give a lot of money for unadvertised benefits, like taking natural resources, etc.

Not to mention if we paid off the national debt our banking system would collapse... so let's leave that alone, k?

Answer 2

because the people we loaned money and aid to would not be able to pay it back. The amount we loan to others is not going to cause us as many problems as when our own creditors come knocking.

That's why the deficit is much more important to the American economy than the amount outstanding in loans.

And I am not sure but I am pretty confident we aren't collecting on WWII rebuilding anymore.

Answer 3

Okay, I see where you're coming from. If we had outlined contracts or instruments of debt before going into war or a humanitarian mission, we'd have a case to argue for repayment. As is, we can ask for several billion from the UN in the form of unpaid rents on the New York building. There is actually a contractual agreement that we, for some reason, haven't been pressing to enforce.

What you're asking has precedent - most notably in the Treaty of Versailles that closed matters on the First World War. In assigning the blame for causus belli on the Germans, the French demanding compensation for their efforts. They received some of it, and perhaps would have received more if they had structured the repayment differently.

As far as debts arising from international assistance and aid, military assistance and blood, we never stipulated terms of repayment. Maybe that was a dumb move. Maybe it was intended as a "pay it forward" sort of thing, hoping our allies would bail us out of the next crisis (in reality, they mostly just bailed). These weren't stated as gifts, but they technically were because we never voiced demands for compensation. I doubt we even maintained a full accounting of these debts.

Essentially, then, if we look at the balance sheet of the US, we have classified all the goodies we've given away as Unamortized Goodwill, which is an amortizing intangible asset. You cannot, according to GAAP, buy or sell goodwill, nor can you convert it to cash. It is the difference between the book value and market value of an asset at the time of its transfer. To take WWII as an example, say we gave $4 Trillion in overall assets between the military forces, the war tribunals, the reconstruction and the occupation of defeated Axis powers. We received nothing (and did not stipulate that we should receive anything). Goodwill takes on the full value of what was given. At the same time, Goodwill has no exchangeable value - it's merely a repository for balancing the accounting equation. Goodwill generally gets adjusted out of a balance sheet before determining the net asset value of an entity.

Fair? In many perspectives, hardly, but it is what it is, and while we can change our procedures going forward, I doubt we'd have success in demanding repayment for Goodwill past (ie, a recapture of the asset).

Even if there were a standing IOU from the rest of the world to the US, it's not enforceable. If we made a demand to claim it, it would be met with a resounding "No" and it would go the way of other sovereign defaults. Consider that when Argentina declared, essentially, bankruptcy in the late 1990s, creditors were at a loss about what to do. If a company goes Chapter 13, a court will sell off assets to pay off creditors. But there was no such motion to sell chunks of Argentina.

And consider the differences between collecting on private and national debt. The jurisdiction of American courts allows for the former, but in the end it may take military action to collect the latter - seize assets such as real estate. Even if we have the right, we do not have the means to garnish tax income. We could simply cancel our own obligations to pay for imports, but that would be short-lived. We'd collect only those goods in question and may find ourselves receiving no payment for goods we export, nor additional imports.

This is one reason why US Treasury notes are so highly esteemed, even while the dollar depreciates against other currencies. The US pays its debts on time. We have never renegged on a debt since our founding (even embracing the debt of the dissolved government that had been organized under the Articles of Confederation).

So interesting question, but it will remain in the realm of the theoretical because, even though you may be right, it's not enforceable.

Answer 4

This is actually an age-old question...it has been brought up MANY times through-out history.  I think we have (as Americans) gotten used to other countries being "beholden" to us..and knowing we can take away our help if they "get out of line"..so to speak.  Yes..MANY countries owe us alot...but the Christian way (upon which our country was founded...like it or not) is to give without ever expecting anything in return...that is supposedly what good people DO...

A lot of the people in other countries, only know the garbage they are being fed by their leaders (I'm talking about political garbage)...and do not understand our democracy, or that we are helping..

And Allies become all important when it comes to war...and that is why we help in some instances...

However, when France or Germany refuses to step in and help us, when our country helped to liberate them during Hitler's

regime" then I think it's high time we reminded them....

And yes...I think we should spend MORE time AND money on our OWN....it's a shame ANYONE in the country is hungry, poor or sick and can't afford proper medical help...

Shameful...

Answer 5

You are comparing apples and oranges.  First of all, the peope we owe money to are not the people you feel owe us.    We have loaned or given nothing to China, but we owe them billions if not trillions.

Second of all, a gift is a gift, not a loan.   We gave these things to other countries, we didn't lend it to them.  And it was not entirely out of generosity; a healthy world economy benefitted us.  They are under no obligation to pay us, and would laugh at us, rightfully, if we tried to collect, just as I am laughing at you.

EDIT:   You can not support your nonsense with facts.  Much of our debt is PRIVATELY HELD.    Much of our debt is held by countries like CHINA, and the SAUDI'S, whom we have not lent a dollar to.  You would be much more convincing if you could back up your NONSENSE with data, which you can't.

How does a nation we defeated in war owe us anything?  If we forgave debt, we forgave i for a reason (so that governments would not collapse and fall into anarchy, hurting the world economy and US)..  Once it is forgiven IT IS NO LONGER  OWED.    What dream world do you live in?

Answer 6

Haha.  I agree with you on this completely however there's still one little problem.  The politics factor of the situation.  Since it is logical that obviously the way that we will avoid (lol).  The problem is we weren't ever expecting to get money back especially from 3rd world countries.  We were helping and in order to secure a good will or rapport with the countries.  In doing so, they thought of the larger picture and the future of trading and possibly having more allies.  Well as we've seen , this was a terrible idea.  We can try to get money from these countries however first of all we will be more despised and hated for doing so and we won't probably see a dime.  

Answer 7

Because then we would like the bad guys I guess. I agree with you though. It's time for America to start looking out for itself and not other nations.

Answer 8

AMEN BROTHER!

Answer 9

Are you serious？America has a history of helping other countries, yes, but it also has a reputation of sticking its nose wherever. Have you ever thought about why America feels like it has to be the world police? As for other countries, can you blame France, Germany, Russia for badmouthing the US? America has poured money in the Iraq war while it could be going to good use, for example feeding our hungry, as you said.

If you think about it, saying s***w you to various countries will obviously cut ties with them. Most of the products on the American market are imported....America isn't that self sustainable and needs other countries in the world. America may be the big shot now, but if every country is pissed off at America, who'd win THAT war?