Stressed
100% is my opinion :-)
You don't borrow money from China ....... who's buying all of those T-Bills?

"i will actually go research it a bit more, but tax revnues are up, so either there is more people paying taxes, or taxes are higher. "

From http://www.irs.gov/taxstats/article/0,,id=172265,00.html, "Gross Collections by Type of Tax" (in thousands of dollars):

2000 2,096,916,925
2001 2,128,831,182
2002 2,016,627,269
2003 1,952,929,045
2004 2,018,502,103
2005 2,268,895,122
2006 2,518,680,230
2007 2,691,537,557
2008 2,745,035,410
2009 2,345,337,177
2010 2,345,055,978
2011 2,414,952,112

So yeah, technically tax revenues are up, but hardly near the pre-recession peak in 2007. 2011 saw 234 million individual returns filed, up from 230 million in 2010, up 1.8%. Don't have the amount per person paid, but I would think it would follow the same trend as gross collections - down for the past few years, slightly up from last year, to mirror the *slight* recovery from the recession as more people enter the job market again.

They buy it from that turd of an organization called the Federal Reserve. The Federal Reserve is actually the largest debt holder against our 17 trillion. Maybe that has changed as of late, but I think I saw on CBS very recently that The Fed owns the most of our debt.
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No, your comment about China owning all our debt fact factually incorrect, and so not even an opinion. Are you American?

Actually, the Fed buys quite a bit of them. And China's buying T-bills to keep their currency artificially strong. They actually need us as much as we need them, so it's hardly fair to call it 'irresponsible' anymore than calling a scientist 'irresponsible' for depending on being able to buy food from a farmer's market.

Though, on the other hand, going into absurd debt in the first place is fairly irresponsible. I'm still not sure how that's the fault of free-market capitalism.

@Stressedlines - no, we do not borrow from the Fed. All of our debt is denominated in Treasury bonds, which are sold on the open market. The Fed has a reserve of Treasury bonds which it keeps to influence the open market, yes, but we don't "owe" anything to the Fed. Besides, the Fed pays the Treasury any surplus from its operations, so it just doesn't make sense.

What we do owe, is our Social Security and Medicare systems. That's who we owe.

"Also, we do NOT borrow money from China, in reality we borrow from the Fed (what a corrupt thing that is). "

Yeah, we do borrow from China. The Chinese gov't is the largest owner of US Gov't debt because US TBills are the most stable investment in the world.

Draug, the cognitive bias can still exist. Only a few people will become the next Bill Gates or Steve Jobs, just as only a few people can win the lottery... You can work hard and not make it in America. Sure itnis a harder calculation to understand and make, but the cognitive biases which affect people are the same.

And Eden has it right. Debt is irresponsibility, not the fault of capitalism. Run surpluses in good economic times, debts in bad economic times, and it should all even out. We haven't been doing that.

Ok, but again, Chia is not the largest holder of debt here, The Fed is.

You Techincally, we dont 'borrow' from the Fed, but really, they buy up most of our T bonds, so we owe them money. To me that is borrowing, knowing that the Fed, which is a shit of an organization, owns the bulk of our debt.


They own a debt, so yes, we owe it.

"The Fed is."

http://bit.ly/HdiDbP

We do not get money transfers from China, we sell them T bills. They buy them because we always pay the interest on them.

And The Fed still owns the most T bills, more than even China.

And yes, China is the largest "foreign" owner of our debt.

But back to the point of this thread, I do believe the American Dream still exists. My girlfriend's father came over here in 1993 from India without much of anything (except a good education in India, which is an advantage) and her mom came over two years later and got a job (and she didn't really have much in the way of higher education) and now the both of them earn six figure salaries and own a couple of apartment buildings here and in India. Its probably not the norm, but I'll if that's not the American Dream, I don't know what is.

Looks like we have a few self-confessed economic experts getting a little confused ...... don't you guys have GOOGLE !!

The Fed holding our bonds is effectively 'owing' debt to ourselves. Sort of. It's not really easy to describe

Do you have any idea what the Fed actually is, Stressed? Any idea what they do or what function it serves? You do know it's a government body, not run by the Illuminati for their own sinister purposes? The Fed exists to regulate the money supply in the United States through short term bank loans and open market operations. "Buying" T bills means they *give* Americans or any bond holder money for that debt. At least read the Wikipedia and learn something, Christ.

1) Fed Reserve 1.65 trillion
2) China 1.13 trillion

As of July 2011.

US debt holdings, 6.32 trillion (medicare and SS in this number, along with the Fed.

self-confessed? 2wl, goldfinger and I are all econ majors so... take that for what you will.

@goldfinger - It is, but the crucial component that allegedly made the American Dream so great was that anyone could achieve it with hard work. I'm not sure that's the case (and with the qualification that "It's probably not the norm," I'd assume you're not sure it is, either).

yes, I know what the Fed is. It is a private institution according Lewis vs United states (1982). Is there government regulation involved? Sure there, is, but was there another court case saying they are not a private firm? Show me.

Many business and private firms have government regulation involved on them, but the Courts say they are a private firm.

The Fed also transfers all profits to the U.S. Treasury. So much for your idiotic conspiracy theories. POOOOF.

what conspiracy theory? Where did I say anything about that? I said it was a shit organization.

You said its not private, but it is. You said it did not own any debt, I say it does, even though it uses it for a differetn reason than china does.

Are decisions made by the Fed ratified by Congress? answer...no

100% of all shareholders of the Fed are private banks...yes or no?

I am simply disputing the fact that he said they are not a private institution, and they are indeed are.
Are decisions made by The Fed approved by the president? answer...no.

@Eden - But the Am,erican Dream is different for everyone. I am living my American Dream (home, wife, pets, great yard and woodworking shop, jeep to offroad in, poker on weekends, etc.) and working towards my second American Dream (saving up so we can travel when I finally retire and live in some comfort and style without concern about the future).

Technically, Stressedlines is right on holdings of bonds. The Fed holds more than China because China has been dumping them lately (something I didn't know) and the Fed has been acquiring more because of the bad economic times.

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://www.federalreserve.gov/releases/h41/current/

But we owe much more to our social safety net than those numbers. Anyways, Stressed, the Fed gives over all of its profits to the Treasury. So the Treasury is, in a sense, paying itself for all the bonds the Fed holds. But to clear it up, the Fed is a quasi-government institution. They are still likely to be manipulated by the political cycle (as they were during Nixon's presidency. You wanna know how the inflation of the 70s started?) and are appointed by Congress, but have an independent revenue stream so are not strictly liable to the government.

And Eden, they both worked really hard, but I say its not the norm because he had a doctorate in satellite engineering from IIT (Indian Institute of Technology, not the one featured on commercials here in the states) and I doubt that many other immigrants have that coming here.

If the Fed was subject to Congressional checks and balances, it could never accomplish anything because of political whims. Our economy would go to shit because the Fed would never be allowed to sell or buy bonds or print money. I mention conspiracy theories because your poor understanding of a basic function of our federal government would seemingly indicate reactionary views regarding our central bank, which includes many conspiracy theories about the Fed, some ridiculous, some less so but still crazy nonetheless.

"100% of all shareholders of the Fed are private banks...yes or no?"

Shareholders? Do you mean depositors? That's called the reserve requirement buddy. Its kinda one way in which the FED regulates banks and where banks go to deposit money in uncertain financial times.

and not all profits, you forgot they take their nice fat 6% off the top, didnt ya?

They are not subject to an audit either, so lets not say they are really returning it all back to where it belongs, to American treasury, ok?

Do I think there is some dark powers behind the Fed? Sure Do I think they are as bad a smany CT think? Sure not.

Do I think that their reported 78 billion profit they returned to the treasury last year is a good number? no, I think they owe us more, but since we can not open the books, no way to know, right?

However, I am not discussing the ins and outs of the Fed, I simply disputed that China was the largest debt holder, and that the Fed was not a private institution. You are the one that decided to drag it out further, and call me a CT.

"IIT (Indian Institute of Technology, not the one featured on commercials here in the states)"

Well I would hope not considering that is ITT here in the states, not IIT. :-)

@Draugnar: Then what's the point of even calling it anything? If the American Dream is decided by each individual, then why do we give it a name? That's just a dream.

@goldfinger: Not just immigrants - people at home too - but yeah, the legit education really helps. My girlfriend's dad came over from Soviet Ukraine with a pair of PhDs in nuclear physics and... family issues (to put it diplomatically) aside, would undoubtedly be living, more or less, the American Dream.

US Code already stipulates that the GAO is allowed to audit the Fed at any time. I'll even give you the section: http://www.law.cornell.edu/uscode/text/31/714

Do your research before you start your rabbling.

goldfinger, I never disputed any of that. I simply said "China was not the largest holder of debt" which is factually correct. Why The Fed holds more (you are right on that reason) was not discussed, I was simply disputing what Nigee said, and as I already said, I know other Government instittions (MEdicare and SS trust) are bigger holders of debt, something I also said.


What I said was not wrong, or incorrect.

I also know where the profit goes, again, something I never disputed or even IMPLIED otherwise.