This isn't a post about investing with debt. My views on that are well known and do not need to be repeated.

I like to check usdebtclock . org occasionally to see how things are going. A few numbers worth noting...

Total US National Govt Debt: $19.9 Trillion; $168,000 per tax payer; $61,000 per citizen (includes the baby born one second go). Includes public and intra-Govt debt, all of which still has to (theoretically) be paid somehow via a revenue stream.

Student loan debt: $1.4 Trillion

Mortgage debt: $14.5 Trillion

Social Security liability (actuarial accrued bennies): $16.2 Trillion

Medicare liability (as with SS): $27.7 Trillion

There are lots of other numbers to look at, and like any numbers one ought to ask "what is the source?" I don't know. They do seem to match within 1% the numbers I see at other sites such as SSI.gov and treasury.gov.

I was talking with a local business owner on Saturday about whether or not the Govt can afford to raise interest rates, as that effectively makes our continued debt and refinancing of maturing debt more expensive. A 1% increase in t-bill rates means hundreds of billions of $$$ in more interest payments as we continue to borrow to finance current shortfalls and roll over existing debt into new debt. Basically, it becomes a self-destruct mechanism because it makes us even less fit to pay for current expenses and debts than we currently are...sort of like the tenant who borrows from one Pay Day lender to pay off another, taking on more interest all the while.

We are now at the highest level of Debt to GDP in our nation's history (103%) EXCEPT right after WW2 (113%). At that time, millions of GIs/sailors/airmen were getting the pink slip which lowered our GDP back to historic levels of between 40%-60% within a decade.

So here we are in 2017 with no war of any major size and no foreseeable mass "layoff" to get us back on track. This time, it appears to be the "War on Poverty" (i.e. entitlements) getting ready to kick us in the tail, as the dollars pledged to those programs outnumber the national debt by a ratio of 2.3 to 1.

I wonder how much longer the can is able to be kicked? Will it go over the cliff in our lifetime? Fallout, repercussions? Or will it go on forever like some immortal version of Ancient Rome? I don't know the answer. All I know is we live in interesting times.

Look at the stock market, unemployment. It looks like we're on track to me, but who am I, just ask the president.

If you do not understand how our money system works then I urge everyone to watch videos by Mike Maloney called The Hidden Secrets of Money. I believe there are seven episodes. He pushes metals purchases but please do not let that deter you from the excellent explanation he gives for how our money system was created and what will most likely happen down the road. This is something everyone should take into consideration. Once you spend some time learning how our money system works you will grasp the concept that our economic growth is based on DEBT and the only way to continue growing the economy is to produce more debt. This will be impossible to continue and our fiat system will do the same thing that all over fiat currencies have done in the past...go to zero!!

Sorry to say that we are all slaves in this system whether we like it or not!

David, you raise an interesting point. I wouldn't mind buying a piece of Yosemite at auction. Or maybe I could get that box of Vietnam-era gas masks my supply sergeant has. So cool!

Hey S i d, it's good to hear that you're aware about Rome... Michael Hudson and Chris Hedges have spoken about the parallels in case you're interested.

Sid, just because YOU can't buy yosemite, doesn't mean it doesn't have value. And I'm pretty sure you can buy gas masks on ebay and amazon.

I always trying to figure out what can I do to be safe?

Unfortunately I can't offer to buy out my portion of debt and ask to cross my name out.

David...who can argue with such rock solid logic? Certainly not me! P.S. Zillow overvalues my house by 40%, but that is probably not true for everyone.

Salernitana, yes, I was a history minor in college...1 class away from a Major, but decided to forego a double major and graduate on time. Western Civ has always been a fascinating subject for me. I focused mainly on 700 BC up thru 16th Century AD, with focus on Greece, Rome, and the Byzantine Empires. I understand many of the parallels between Rome and the USA as much as a layman who cannot be immersed in the daily new discoveries can. To be clear, I don't know what is going to happen, but if history is to be our teacher then I could see this whole game lasting another 10 - 500 years. There are some who argue Rome would not have fallen if not for the early rounds of the plague coming from Chinese/Mongol empires. Others place the blame at ineffective leadership. Who at the time knew what would be the proverbial final straw that broke Rome's back? If we knew that answer, we could always pull back at the last second. Whether or not we WOULD pull back is a question for philosophers, not historians.

Randy, I don't dispute that we have more stuff now than ever before...but does that change the fact that it could all be our undoing? As Salernitana and I are aware, Roman citizens enjoyed the pinnacle of civilization at one point too. I don't think we'd collapse like a house of cards, but there could be a very painful unwinding in the making. I don't know. No crystal ball here. It is, as I said earlier, "interesting times."

CDM, ditto what I said to Randy. I'm not a fortune teller. I agree it seems impossible for this all to collapse when we are THEE military and economic super power of the world aside from the EU which is a hodge-podge of old world schism under a tentative truce and without the military capacity to defend all of itself without our help. I don't think it will be a disaster per se, but again, a gradual painful unwinding...sort of like Japan's 3 decades of stagflation. I don't know for sure. It's just something I am fascinated by.

All, thank you for participating. I enjoy reading all of your thoughts, even David whom I have to tease on occasion because he and I are long-standing foils to one another on the topic of debt in general. We've met before at the Convention and I bear him no ill will, in spite of my sarcasm and prodding. I hope he feels the same toward me. I certainly don't mind being challenged.

The title of this post is "Nation of Debtors". One can argue about the Pros and Cons, the pluses and minuses, the theories of debt vs. cash economy until doomsday, but the truth still is, "We are a nation of debtors."

Sid, you try to pass off a statement as fact, when it is false.

You know full well that NET WORTH=ASSETS-DEBT. You only look at the DEBT and ignore ASSETS.

Not to worry, yes, if the US stops paying on the loans, then we will be deadbeats with a devaluing dollar. However, we're deadbeats with nukes, attack subs and aircraft carriers with bombers.

I'd feel sorry for the sheriff knocking on that door to put all our stuff on the curb.

Pmh, I saw your reply after mine. Yeah, I have long been the "religious guy" when it comes to debt and I still am. I hope you have noticed that I make most of my remarks on that for one of two reasons: 1) To show why I don't use debt even though it "makes sense" to most other REIs and 2) To encourage others who feel the same. Certainly not trying to "convert" anyone here. Just trying to be an advocate for what has proved to be a valuable strategy.

Btw, how's that $10 million buy-out offering coming? I'm ready to sign...

pmh, nobody wants to buy that land probably because the price they are willing to pay is less than the price the buyer will accept. We have a lot of empty land here , but someone will buy it for $1

Then inside of harping on the DEBT, argue why the assets values will decline. No one bothers doing that.

I didn't imagine any value, this is a really simple thought experiment.

The seller will sell this vacant land for some list price, but no one is buying. Simple economics tells us the value is less than the list price.

Now what is the lower bound of the value? It must be at least $1 , because do you really believe no one will buy it for $1?

As for gold, if I try to sell my gold coin for twice the spot price and no one buys, does that mean my gold has no value?

Pmh,

Yeah, I'm teasing you on the buyout. It's fun to have a little fun here. But if he ever wants to make the offer...let me know!

I have a friend who is overwhelmed with all of this debt talk. In essence the friend is filled with hate. This to me means that it isn't the subject of debt itself but underlying problems that the friend has inside.

I say this because after years of hearing about this debt I'm tired of it. I've turned it off. I'm effected by the consequences but only by my fraction...as in one over 320 million.

What I'm saying is there are more pressing problems at hand.

So I urge you all to enjoy the conversation and walk away educated but not offended.

A couple points:

Student loan debt averages out to about $30k per student. Sure their are outliers with a lot more and the media loves running stories on them. But lets remember that for every person with $250k in debt working a crap job, their are many with no debt and a paid for education working a great job. Judging by all the cars I see driving around, and various toys I don't think $30k is unreasonable or out of line to invest in ones future.

Secondly social security is properly funded and a tweak in the tax code along with maybe changing the ages a bit will keep it funded for a long time to come. Those numbers are touted by Fox but they are a lie, that's not debt its an unfunded future liability which tax collection in the future will cover. The attack on social security is from companies that dislike paying the match on it.

Thirdly national debt is a bit high, but I assume everyone noticed 2008 and a couple wars in the Middle East we were fighting? That stuff doesn't pay for itself. WW2 was paid for with higher taxes, look up income tax rates in the 50's. But no politician in DC has the balls to throw a 10% income tax rider on everyone for a war they want to fight. If they did they would not be in power for long.

Nothing is going to happen but more of the same. Don't guage debt to GDP. Guage debt interest to income.

The govt will just print more money, forever. This isn't Greece. Our debt interest is only like 10% of income, not 100% like Greece, etc.

It took me years to get my wife to understand

NET WORTH=ASSETS-DEBT. She was overwhelmed with the debt I had before we married. It took years but she has finally come around and now recognizes the value of the Assets and our net worth greatly outweigh the debt. I agree with David that assets of our nation are being overlooked and the political drumbeat directs attention to such things to gain mass mind control.

Never studied history or econ.

But I expect the same pronciples apply to countries:

-Debtor is slave to the lender.

-He who holds the gold (or the notes) makes the rules.

When China comes a knockin to collect our debt to them...

BRAD