The Instigator
Fykwa
Pro (for)
Losing
0 Points
The Contender
Blade-of-Truth
Con (against)
Winning
6 Points

Is the U.S. going to fall because of it's debt

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
Blade-of-Truth
Voting Style: Open Point System: 7 Point
Started: 4/7/2014 Category: Politics
Updated: 2 years ago Status: Post Voting Period
Viewed: 605 times Debate No: 51808
Debate Rounds (3)
Comments (3)
Votes (1)

 

Fykwa

Pro

The fall of the U.S. will be because of its debt. The U.S. debt has amassed to a total of $17,075,590,107,963.57 on October 17, 2013. The U.S. economy will start to fail if other countries stop buying U.S. treasuries
Blade-of-Truth

Con

I accept and will maintain the position that the U.S. is not going to fall because of its debt.

I will use this round for acceptance and eagerly await my opponents initial argument. I ask my opponent if he would like me to hold rebuttals until R3 or if I may present them along with my argument in R2?

Lastly, the resolution seems to encompass the U.S. as a whole - not a specific element of the U.S. and so I will approach my position accordingly. I thank my opponent for starting this debate and wish him the best of luck.
Debate Round No. 1
Fykwa

Pro

Sorry I was not clear enough, this is my first debate I have ever started. I mean that the U.S. economy will fall, not necessarily the nation as a whole. As for the rebuttal you can include it in R2 if you wish. The best of luck to you Blade-of-Truth.

The U.S. has a major problem coming up, Baby Boomers. As of February 10th, 2014 10,000 will retire a day, all the way up to 2030. The U.S. has made financial promises to the Baby Boomers that are worth tens of trillions of dollars, even without all the current debt and financial problems we currently have, paying that much would be nearly impossible. The thing is, we do have financial problems and massive debt so this sum would be impossible to pay off, leading to a near instant destruction of the economy.
Blade-of-Truth

Con

I would like to thank my opponent for sending me a PM to correct the issue. I will present my argument in accordance with the original Resolution.


I. The U.S. has faced financial hardships in the past.

The resolution asks a pretty straightforward question, "Is the U.S. going to fall because of its Debt?" When such a question arises, it is wise to carry out some research on related situations in the past in order to create a broad scope of reference. In this case, I analyzed one of the greatest financial downfalls our nation has ever endured 'The Great Depression' (1929 - 1940's) and in doing so, will hope to show the audience how the intelligence and determination of the American people has and will continue to keep this country moving forward - even when faced with a financial crisis like an exponentially rising debt.

The Great Depression

What started as a recession in the summer of 1929, quickly turned into a full-blown financial crisis. Millions of Americans were jobless, the stock market investors had lost all faith in the market (if they even happened to have any money left) and we were stuck with a president who preached optimism without doing any real good. The recession had become a depression so great that its effects were felt all around the world. [1] Many Americans felt hopeless and it wasn't too uncommon at the time for one to hear the rumor that America will never make a comeback. But then came along WW2 and a newly-elected president, Franklin Roosevelt, who immediately closed down the banks until they could stabilize and began implementing several experimental projects and programs which collectively are known as the New Deal. [2]


Many historians credit the inception and our involvement in WW2 as the saving grace for America. But some economists beg to differ, especially Robert Higgs who wisely credited the war with, "only postponing the debt situation but ultimately not fixing it." [3] The reason it is important to note this is because during these uncertain times, it was the spirit and hope of the American people to continue on that allowed us to make a financial comeback and ultimately kick-off the golden age of America: The 1950's. We pushed through the war, President Roosevelt worked endlessly to see that these programs were successful (which some, respectively, weren't), and we were able to reclaim our position as the #1 world power even when still facing a growing debt. We must not be quick to forget that at the end of the day, in times of global uncertainty, we always manage to pull through.

[1] http://www.britannica.com...
[2] http://www.history.com...
[3] http://www.fee.org...

II. Inflation

Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. [4]
But if you are the government, and you need to pay back a debt, inflation would actually be beneficial.


Example:

The government says, "Come get your food stamps" and everybody comes and gets $500 worth of food stamps and they go and cash it. Well, that money is coming from the federal government. So the federal government has to come up with that money, and if it doesn't have that money - it borrows the money. So let's say the federal government borrows $100,000 dollars and we have inflation which is like 10% a year (now that's really high inflation obviously but let's say it's 10% a year). So next year, the equivalent of that $100,000 would have to be $110,000 to buy the same things. If you could buy a car for $100,000, and inflation is 10% then that next year it's gonna cost you $110,000 to buy that same car. But the neat thing is that your debt is only still $100,000... so go ten years down the road and $200,000 buys the same thing that, ten years before, would have only cost $100,000.

So 10 years has past and you're the federal government and you've got to pay back the $100,000, but now you're paying it back with only $100,000 of what should be the equivalent of $200,000... You see, you're only paying back with half of the actual money, I mean - you are paying back $100,000 but it only has half the value of what it had when you took out the debt. So now the government is like, "We need a little inflation so that we can pay back those bigger dollars from way back when with the cheaper dollars of today"... as you can see, inflation actually shrinks our debt. [5] [6]

When someone understands this, it soon becomes apparent that the Government is fully aware of this as well. We can clearly see that our debt is not, in fact, out of control or running the risk of causing a collapse. Instead, upon understanding the true use of inflation, it is evident that we are controlling our debt in a brilliant way that works to our benefit in the future.


[4] http://www.investopedia.com...
[5] http://jaredbernsteinblog.com...
[6] http://www.nytimes.com...

III. Lack of Enforcement

When it comes to the national debt, we have to ask the question: Who are we in debt too? Who, exactly, do we keep borrowing money from? According to factcheck.org, the largest portion of the total debt — about 40 percent — is held by federal government accounts plus the Federal Reserve banks. Another 34 percent of total federal debt is owed to foreigners, including China (which owns nearly $1.3 trillion of the total debt, or about 8 percent), closely followed by Japan, which owns roughly $1.1 trillion, or 7 percent. Other major foreign lenders are various Caribbean banking centers including the Cayman Islands (2 percent altogether), various oil-exporting nations including Saudi Arabia (2 percent altogether) and Brazil (2 percent). [7]

The reason this is important is because in terms of last-ditch efforts to save an economy - we can look at Iceland for ideas. Between 2008 - 2011, Iceland was engulfed in one of the worst economic banking crisis the world has ever seen. Due to a lack of space, what I will say is that essentially the citizens of Iceland got pushed past the brink by the bankers and debt that was costing them higher taxes. After several protests and the removal of several government officials, the country jailed the corrupt bankers and made a monumental recover which to this day serves as inspiration for other debt-ridden countries at the moment. [8] [9]

The reason I bring this up is because ultimately, when looking at who holds our debt, it becomes evident that the debt holders would have no realistic means of forcing America into a collapse out of collection efforts. We currently have the largest arsenal of the most advanced nuclear weaponry in the world. [10] Without sounding too brash, who would dare force us to collapse by collecting a debt that would bankrupt the nation? China is wholly dependent on exports for survival and we provide the greatest consumer market in the world. Without our demand, they would lose a major portion of their economy and economic stability. [11] There are no other realistic threats aside from them in terms of debt collectors.

[7] http://www.factcheck.org...
[8] http://www.theguardian.com...
[9] http://dealbook.nytimes.com...
[10] http://www.armscontrol.org...
[11] http://www.csmonitor.com...

I wish to thank my opponent and will provide further arguments and my rebuttals in the final round.


Debate Round No. 2
Fykwa

Pro

Fykwa forfeited this round.
Blade-of-Truth

Con

My opponent has forfeited his last round.

My arguments remain unchallenged and I have nothing further to rebut since my opponent failed to provide any further arguments and rebuttals.


I thank the audience for taking the time to read this debate, and look forward to any and all challenges from my opponent in the future.


Debate Round No. 3
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by Blade-of-Truth 2 years ago
Blade-of-Truth
I'm sorry you weren't clear enough either, but you were smart enough to turn off your PM's and Comments as well as ignore me in the comments and instead change the resolution in the second round. Not gonna fly with me. The resolution states the U.S. - not the U.S. economy. I have stated that I will approach this debate as so. Feel free to turn on your PM's and message me if you have an issue. The only issue I see is someone trying to throw a curve-ball in a very cheap way, and I will not accept that - noob or not. Please correct yourself in the third round if you are going to continue to ignore me.
Posted by Blade-of-Truth 2 years ago
Blade-of-Truth
@Actionsspeak, good question - I'll accept this debate but that clarification will shape the argument greatly.
Posted by Actionsspeak 2 years ago
Actionsspeak
Are you saying the nation will fall, or the economy?
1 votes has been placed for this debate.
Vote Placed by Relativist 2 years ago
Relativist
FykwaBlade-of-TruthTied
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Total points awarded:06 
Reasons for voting decision: Pro FF.