Anyhow. Yesterday, I spent much of the afternoon reading about fractional reserve banking practices used around the world. I read that banks have gained control of the land and resources of some of the poorest countries in the world. Today, I am trying to learn about our own countries debts.
It's common knowledge that our government has a deficit. But, we keep on spending, so, where is all that money coming from?
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| National Priorities Project. (2014). President Obama's 2015 Budget. Retrieved from: https://static.nationalpriorities.org/images/fb101/2014/presidents-budget.png |
According to this infographic created by the National Priorities Project, our federal government plans on borrowing 15% of the money (approximately $561 trillion) that it is projected to spend in the year 2015.
When the federal government needs to borrow money-as it will for 2015- it does so in two main ways. It will either borrow the money from other federal trust funds that have run a surplus (establishing what is known as federal debt), or, it will borrow from the people (establishing what is referred to as debts held by the public).
When the federal government borrows money from the people, the Treasury will issue bonds and other securities, and, the people who purchase these bonds are, in actuality, investing in our government.
Anyone can buy the bonds, but as you will notice in the pie graph entitled Who Does the U.S. Government Owe Money To?, international investors make up a whopping 47% of the federal debt held by the public.
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| National Priorities Project. (2014). Who Does the U.S. Government Owe Money To? Retrieved from: https://static.nationalpriorities.org/images/fb101/2014/us-government-owes-money.png |
It reminds me of the several times I have heard people say, "China will own us one day"? I mistakenly thought this referred to our imports of China's products. I mean, almost everything you see has a 'Made in China' stamp on it. Today, I am realizing that the meaning of that statements runs much deeper....
Out of all of our international investors, we owe the biggest chunks to China ($1.3 trillion) and Japan ($1.2 trillion).
Another interesting fact that I read can be reflected back onto yesterday's article, Are Banks Taking Over?, where I ponder Julian Websdale's theories of banks and banking families taking over the world. The second largest debt held by the public, is made up of domestic investors like American citizens, as well as, institutions like private banks. The pie graph doesn't give enough detail to determine exactly how much of that debt is owed to private banks.... but I suppose any percentage of the $11.9 trillion dollar debt can obviously be considered significant.
Our governments borrowing practices have become a pretty controversial issue. Some feel borrowing money will only help dig ourselves deeper-and-deeper into the hole of debt, while others believe that borrowing will help stimulate our economy, which would, in turn, help us to climb out of that hole of debt.
I don't believe I have acquired enough information to make that judgment for myself, but at least now I understand how our government borrows money and who it borrows money from.
Resource: National Priorities Project. (2014). Federal Budget 101. Retrieved from : https://www.nationalpriorities.org/budget-basics/federal-budget-101/
