US Economy Continues to Grow

[Uncle J]

U.S. economy grows at blockbuster pace in third quarter

The U.S. economy grew by an annual rate of 4.9 percent in the third quarter, the strongest pace since 2021, as spending — by families, businesses and the government — accelerated, even in the face of fast-rising borrowing costs.

New government data released Thursday by the Bureau of Economic Analysis shows that gross domestic product expanded between July and September, capping five straight quarters of growth and eluding a long-feared recession.

 

[Uncle J]

Oh geez....not sure why the link didn't come through. Here...

https://www.washingtonpost.com/business/2023/10/26/gdp-third-quarter-economy-growth/

 

[Soldiers]

Maybe we can repay that 17 trillion dollar debt now

 

[Uncle J]

Maybe we can repay that 17 trillion dollar debt now

That's not how the debt works.

 

[hawkman]

Our Gov and wapo says things are great , imagine that .

 

[Uncle J]

Our Gov and wapo says things are great , imagine that .

Just reporting the facts. The GDP grew by 4.9%, so the WP reported it, just as they've reported GDP figures for decades.

 

[Soldiers]

That's not how the debt works.

You can't just make a statement and expect a stranger to take it

 

[Uncle J]

You can't just make a statement and expect a stranger to take it

Well then perhaps you can expand and explain how you think the federal gov't can just "pay off" the debt.

 

[Soldiers]

Well then perhaps you can expand and explain how you think the federal gov't can just "pay off" the debt.

Is it some magical entity or special debt that cannot be paid off? Sure it's more complex, but debts are to be paid...

 

[Uncle J]

Is it some magical entity or special debt that cannot be paid off? Sure it's more complex, but debts are to be paid...

The federal debt is made up of securities (treasury bonds, notes, bills) sold to investors and the US government (yes, the gov't owes itself money). The investors buy the securities with the expectation that they will make money from them, such as when some securities "mature" (with interest).

So let's say an investor buys a set of treasury bonds that mature in 25 years. That investor will hold on to those bonds until they reach their maturity date, at which point he will "cash them in" and collect his original investment cost plus 25 years of interest.

The federal gov't cannot pay that debt until the investor cashes it in at its maturity date. The gov't can't just come to the investor and say "We're going to pay off our debt to you now, rather than on the 25 year maturity date". That would be illegal and a violation of the terms under which the bond was issued.

Does that make sense and explain why the gov't can't just "pay off the debt" whenever it wants?

 

[Soldiers]

Does that make sense and explain why the gov't can't just "pay off the debt" whenever it wants?

That makes better sense thank you! How about the other major areas, in which the government is simply spending money it doesn't have? There are other ways to decrease the debt:

"The National Debt Explained
The national debt is the amount of money the federal government has borrowed to cover the outstanding balance of expenses incurred over time. In a given fiscal year (FY), when spending (ex. money for roadways) exceeds revenue (ex. money from federal income tax), a budget deficit results. To pay for this deficit, the federal government borrows money by selling marketable securities such as Treasury bonds, bills, notes, floating rate notes, and Treasury inflation-protected securities (TIPS). The national debt is the accumulation of this borrowing along with associated interest owed to the investors who purchased these securities. As the federal government experiences reoccurring deficits, which is common, the national debt grows.
Simply put, the national debt is similar to a person using a credit card for purchases and not paying off the full balance each month. The cost of purchases exceeding the amount paid off represents a deficit, while accumulated deficits over time represents a person’s overall debt.

Funding Programs & Services​

The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone. Decreases in federal revenue are largely due to either a decrease in tax rates or individuals or corporations making less money. The national debt enables the federal government to pay for important programs and services even if it does not have funds immediately available, often due to a decrease in revenue. Decreases in federal revenue coupled with increased government spending further increases the deficit.

Consistent with the purpose of the federal government established by the U.S. Constitution, money is spent on programs and services to ensure the well-being of U.S. residents. The Constitution’s preamble states that the purpose of the federal government is “…to establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.” Uninterrupted funding of programs and services is critical to residents’ health, welfare, and security.

What are some of the major spending categories?
toggle contents
Below are some of the federal government’s largest spending categories. Visit USAspending.gov to explore federal spending by the types of items and services purchased by the federal government. Explore federal spending by Object Class or learn how spending categories and subcategories break down by viewing federal spending by Budget Function
Income Security
Supports programs such as unemployment compensation, federal employee retirement and disability, and food and nutrition assistance; spending for this program increased during the COVID-19 pandemic because of the CARES Act and American Rescue Plan Act
Social Security
Supports programs for beneficiaries including retirement, disability insurance, and supplemental security income payments
Health
Supports spending for programs related to health care services, health research and training, and consumer and occupational health and safety, except for Medicare which has its own category
National Defense
Supports spending related to the military and defense-related activities
Medicare
Supports spending programs providing health insurance for people such as those aged 65 or older and certain younger people with disabilities

(Source: https://fiscaldata.treasury.gov/ame...money the federal,), a budget deficit results.)
We can easily cut unnecessary programs (like funding the slaughter of babies, military expansion and construction work that's not going to be finished).

So while the debt held by the public cannot just be "paid back" the 33 trillion dollar debt can be decreased by other means.

 

[Uncle J]

That makes better sense thank you!

You're welcome.

How about the other major areas, in which the government is simply spending money it doesn't have? There are other ways to decrease the debt:

We can easily cut unnecessary programs (like funding the slaughter of babies, military expansion and construction work that's not going to be finished).

So while the debt held by the public cannot just be "paid back" the 33 trillion dollar debt can be decreased by other means.

That's politics. A lot of people have different views than you about what the federal gov't should or shouldn't fund, and that all gets decided via elections.

 

[Consecrated Life]

I hope they can find a way to stop it ?
All this growth is killing the middle class.

Inflation is driving up consumer credit card debt by billions of dollars​

Though inflation has fallen considerably from its 9.1% peak in June 2022, it's still higher than the Fed's 2% target, so you're spending more for less.

 

[Uncle J]

I hope they can find a way to stop it ?
All this growth is killing the middle class.

Inflation is driving up consumer credit card debt by billions of dollars​

Though inflation has fallen considerably from its 9.1% peak in June 2022, it's still higher than the Fed's 2% target, so you're spending more for less.

US inflation has been declining for well over a year now.

US inflation outlook brightens as underlying price pressures subside

We're also doing well relative to other developed countries.

 

[Consecrated Life]

US inflation has been declining for well over a year now.

US inflation outlook brightens as underlying price pressures subside

We're also doing well relative to other developed countries.

Why is all this low inflation causing the American middle class to kill their financial futures to make ends meets then ?

Americans’ credit card debt hits a record $1 trillion​

By Alicia Wallace, CNN
4 minute read
Updated 12:41 PM EDT, Tue August 8, 2023

​

More Americans are taking money out of retirement accounts early​

The finding, based on a BofA survey, shows that the rates of both hardship withdrawals and borrowing from accounts increased in Q2 2023

 

[Uncle J]

Why is all this low inflation causing the American middle class to kill their financial futures to make ends meets then ?

Huh? Your question makes no sense.

 

[Consecrated Life]

Huh? Your question makes no sense.

You can't make sense of the current reports of financial desperation Americans are in ?

​

Americans’ credit card debt hits a record $1 trillion​

By Alicia Wallace, CNN
4 minute read
Updated 12:41 PM EDT, Tue August 8, 2023

More Americans are taking money out of retirement accounts early​

The finding, based on a BofA survey, shows that the rates of both hardship withdrawals and borrowing from accounts increased in Q2 2023

 

[Uncle J]

You can't make sense of the current reports of financial desperation Americans are in ?

You think Americans taking on debt is a new phenomenon?

 

[hawkman]

US inflation has been declining for well over a year now.

Yeah , but are prices going down ? The cumulative effect of inflation is the problem .

100 dollars in 1956 are equivalent to 1,076.6 dollars in 2022

 

[Consecrated Life]

You think Americans taking on debt is a new phenomenon?

I think you are unable to reconcile the record & still rising debt currently being taken on by an increasingly squeezed middle class, with your news of economic growth and plummeting inflation.
Thus no attempt by you to do so?

Americans’ credit card debt hits a record $1 trillion​

By Alicia Wallace, CNN
4 minute read
Updated 12:41 PM EDT, Tue August 8, 2023

More Americans are taking money out of retirement accounts early​

The finding, based on a BofA survey, shows that the rates of both hardship withdrawals and borrowing from accounts increased in Q2 2023