Let me see. We pay interest to ourselves and some how that is a profit.

One part of the government borrows money from the other part and pays interest on it.

That means there is a profit. Ingenious.

I never thought of it that way. Nothing flawed there.

The United States public debt is presented by the United States Treasury as two calculations: "Debt Held by the Public", defined as U.S. Treasury securities held by institutions outside the United States Government, and the "Gross Debt," which includes intra-government obligations (e.g. money owed to the Social Security Trust fund).

During FY2008, the government also accrued a non-cash interest expense of $212 billion for intra-governmental debt, primarily the Social Security Trust Fund, for a total interest expense of $454 billion. This accrued interest is added to the Social Security Trust Fund and therefore the national debt each year and will be paid to Social Security recipients in the future.

Public debt owned by foreigners has increased to approximately 50% of the total or approximately $3.4 trillion. As a result, nearly 50% of the interest payments are now leaving the country, which is different from past years when interest was paid to U.S. citizens holding the public debt. Interest expenses are projected to grow dramatically as the U.S. debt increases and interest rates rise from very low levels in 2009 to more typical historical levels. CBO estimates that nearly half of the debt increases over the 2009-2019 period will be due to interest.

We owe foreigners $3.4 Trillion? We are paying interest on $3.4 trillion bucks and that money goes offshore?

The resulting surplus [money paid in vs money paid out] is accounted for in the Social Security Trust Fund. As of the end of calendar year 2008, the accumulated surplus stood at just over $2.4 trillion.

Dang. We owe foreigners more than that and we have to pay them interest on it. Is that flawed?

Projections are that current receipts will continue to exceed expenditures until 2017 (according to Charles Blahous, Special Assistant to the President for Economic Policy). Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund, although the Trust Fund will continue to show net growth until 2025 because of the interest generated by its bonds.[6]

The Trust Fund will gradually be drawn upon to cover the difference between tax receipts and benefit payments. It will be completely depleted by 2042.

Well I guess we better let our economic whiz [the only person in the US that knows secret location of the Lake Pontchartrain dam so terrorists can't blow it up] tell us where to make the cuts. Definitely not snail darters or turtle tunnels though. Maybe schools. Maybe food subsidies for hungry kids.