all 19 comments

[–]Mason11987 3 points4 points ago

Could you be more specific about what you mean?

We have a budget of about $3.5 trillion this year. I think about $50 billion was spent on all foreign aid, or about 1.5% of our budget. Having a national debt doesn't mean we can't spend any money, and 1.5% is a really tiny portion of our spending.

Debt doesn't mean a country can't spend money, so since we believe the money is well spent on foreign aid we continue to spend it.

Are you asking why we spend 1.5% of our budget on foreign aid?

[–]whatgiftshouldiget[S] -4 points-3 points ago

With that reasoning America will never balance back to 0. 1.5 % here, 1.5% there, it would add up. Would it solve the problem? No, but spending more is not the answer here. (IMO)

[–]Mason11987 1 point2 points ago

Spending was the answer last time we were in a similar debt issue. Or at least spending was correlated to a lowering of the debt.

We know historically that cutting spending when in this situation causes problems, see greece for an example of that.

[–]DemonFrog -2 points-1 points ago

The goal is not and never should be to get the balance to 0. A balance at 0 would cause far more economic havoc than having sizes me debt.

[–]moobiemovie 4 points5 points ago

Let's say you're starting a business and I loan you the money to get started. You make your payments and manage to keep the lights on. Soon, you start making a profit. I, who loaned you money, don't come demanding more money because you're making the payments on which we agreed.
Your buddy Jeff has a business, too, but it's not doing well. He says, "Lend me some money so I can keep going." You agree.
Replace "businesses" with "countries" and you've got your answer.

[–]Not2BeaDoucheBut 1 point2 points ago

If you make 40k a year, and have a 120k mortgage, no one freaks out. If you had that same mortgage and decided to give $50 to charity/church every month ($600 a year), no one would freak out. Why? Because that's only like 2% of your annual budget.

The US government has close to a 3.5 trillion dollar budget, and gives something around 40 billion to foreign aid a year. And... that equals something like 1% of the budget.

Why are you freaking out?

[–]bulksalty 0 points1 point ago

Generally because the financial aid is usually only given in forms that have to be spent on American made weapons or services or because a few billion dollars can buy a reasonable amount of goodwill.

[–]corpuscle634[M] 0 points1 point ago

Search before submitting with keywords from your topic. The search box is in the upper right corner of the subreddit.

also loaded

[–]fedges 0 points1 point ago

Foreign aid only makes up a small percentage of the federal budget. Also, it's not like we're giving out that money for no reason. Military aid is often basically a subsidy of the U.S. weapons industry, we give a country money so they can buy weapons from American companies. Otherwise that money is probably either meant to foster growth in a developing country or to build or maintain political relationships.

Also, the U.S. debt isn't really that big of a deal. Our debt might sound big when you look it as being however many trillion dollars, but you also have to consider that the U.S. GDP is trillions of dollars as well. Japan, Belgium, France, the U.K., Canada and Germany all have higher debts as a percentage of GDP. Our debt isn't a problem as long as nobody doubts our ability to service it. The use of our debt as a political tool is orders of magnitude worse than the debt itself. There's absolutely no reason for anyone to expect the the U.S. to default on its debt anytime in the foreseeable future, other than for internal political reasons.

[–]PandaDerZwote 0 points1 point ago

It's not about how much debt you have, it's about how much you are making. Japan has waaaaaay higher debts and they are doing "just fine".

[–]whatgiftshouldiget[S] 0 points1 point ago

So debt is something we can all piss on? It will never get paid off?

[–]Mason11987 2 points3 points ago

Sovereign (national) debt isn't like credit card debt, it doesn't need to be "paid off" we pay of a portion of it every month, and others continue to loan us more money to fund our projects and programs.

Regardless though, the last time our debt was this high (compared to our GDP) we actually did pay it off, and not by cutting programs, in fact during that period we increased spending, the economy grew drastically, and that ended up leading to surpluses that lowered the debt.

[–]whatgiftshouldiget[S] 0 points1 point ago

Makes sense, but given the track record of the past few years its not looking like that model will work. America is no longer the only economic super power in the world, it has to compete.

[–]Mason11987 1 point2 points ago


What do you mean by that? We're growing out of the recession just fine and the world economy is much better off than it was 5 or so years ago.


I'm not sure what you mean by this. When has competing ever meant "cutting back on spending". We compete by growing the economy and our interests through strategic spending, and by taking advantage of our position as world reserve currency and our position as the safest investment.

People want to loan us money, given inflation we really don't pay much on it. Why not use it to grow?

[–]PandaDerZwote 0 points1 point ago

Thats not the point. There are two things about debt:

  1. They are not that bad. As long as you can pay the interesst and your economy is stable and has a decent future, you will be lent money.

  2. If you invest in something, it can turn out to be better than the money you initially invested. Think of it as an investions rather than giving someone somewhere a lot of money and waving them goodbye.

In these times, having no debt at all is kinda unheard of.

[–]bulksalty 0 points1 point ago

Yes, the debt will never be paid off.

[–]multia-z -1 points0 points ago

It is not real money its just pretend currency, they just add a few 0's on a computer, give an iou to the fed and the fed tells a bank it can add a few 0's to an account and loan it to the government, and then the people pay off the interest to the fed and the banks... or something like that. you can find an easy explanation here with pictures.

[–]AmishRockstar -3 points-2 points ago

In a nutshell it's because we've stupidly entrusted our wealth to people that do not know how to manage it. That's not going to be a popular answer, but it's the truth.

[–]earthbridge 0 points1 point ago