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US National Debt and Budget Deficits
Topic Started: Sep 18 2003, 01:15 PM (285 Views)
gvok
Unregistered

I am a Bush supporter in the area of foreign policy, but I am a little bit worried about the national budget and the national debt. I know that the current size of the debt is managable but it always seems to be growing. As such the interest payments are growing as well. At what point does this debt and interest payments become unmanageable? Is this going to be a problem in the near future? Are the Bush tax cuts a good idea with respect to this issue? I have my doubts, but I also don't think the Democrats are any keener on this subject than the Republicans are.
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Admiralbill_gomec
UberAdmiral
Currently we are running a five and a half trillion dollar debt in a twelve trillion dollar economy.

Think of it this way... in a 60,000 dollar income, this would be the equivalent of a 27,500 debt. If you consider house payments, car payments, credit card debt, and the like, this is easily attainable. It is also manageable. The debt is being serviced through the sale of t-bills. You know who is buying these up? The Chinese are the biggest customer.

It can seem daunting, and I agree that something has to be done. Just as Reagan had to rebuild the miltary after Carter, Bush has had to do the same after Clinton. Add in 9/11, and the goal of ending terrorism (including rebuilding Iraq and Afghanistan), this will cost money.

Look at it this way... during WWII, expenditures for the war were a whopping ONE HUNDRED AND FORTY PERCENT OF GDP!! Current deficit expenditures work out to be less than four percent of GDP. In addition, the war in Iraq will cost less than one percent of GDP.

Yes, the Bush tax cuts are a good idea. Tax cuts are an investment multiplier. Modern macroeconomic theory says that giving people more money generates more money because that person will buy something... which creates a demand for a product, which generates income for the company, which pays taxes and employs people (who spend money and start the cycle over). It is estimated that every dollar of tax cuts can generate as much as TEN DOLLARS of economic growth and increase government revenue.

Just like in the 1990s, if we can rein in some of our expenditures, we can grow our way out of deficits.
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ImpulseEngine
Admiral
Admiralbill_gomec
Sep 18 2003, 02:35 PM
Currently we are running a five and a half trillion dollar debt in a twelve trillion dollar economy.

Actually that's a half a trillion deficit. The debt is approaching 7 trillion (at about 6.7 trillion). :blink:

I love the way people always point out how possible it is to bring this under control. The truth is it's just been growing and growing for years and, even if possible to control, no one has even been attempting to do so. Every year there is yet another deficit to add still more to the size of that debt. :wacko:

The only way to pay off any of that debt is to have a budget surplus. Yeah, that's the very thing all the Republicans were complaining about that we shouldn't have. "It's the people's money. Give it back. It shouldn't have been taken in the first place." :rolleyes: Well, we gave it back. And we paid down none of the debt... again... :whistle:
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gvok
Unregistered

Admiralbill_gomec
Sep 18 2003, 01:35 PM
Just like in the 1990s, if we can rein in some of our expenditures, we can grow our way out of deficits.

I've heard a very cynical theory lately that the Republican's long range plan is to raise the debt so high as to bring about a budget crisis so that there is no choice but to roll back the legacy of FDR.

At our current course we will eventually reach a point where we have three choices: (1) a major raise in taxes, (2) a major cut in spending (i.e. entitlement programs), or (3) declare bankruptcy.

It seems like nothing will happen until the crisis point is reached at which point the remedy will probably be more painful than if we did something now. Personally, I'd be in favor of paying higher taxes and / or a cut in social spending if the procedes were diverted towards paying down the debt.
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Admiralbill_gomec
UberAdmiral
ImpulseEngine
Sep 18 2003, 02:47 PM
Admiralbill_gomec
Sep 18 2003, 02:35 PM
Currently we are running a five and a half trillion dollar debt in a twelve trillion dollar economy.

Actually that's a half a trillion deficit. The debt is approaching 7 trillion (at about 6.7 trillion). :blink:

I love the way people always point out how possible it is to bring this under control. The truth is it's just been growing and growing for years and, even if possible to control, no one has even been attempting to do so. Every year there is yet another deficit to add still more to the size of that debt. :wacko:

The only way to pay off any of that debt is to have a budget surplus. Yeah, that's the very thing all the Republicans were complaining about that we shouldn't have. "It's the people's money. Give it back. It shouldn't have been taken in the first place." :rolleyes: Well, we gave it back. And we paid down none of the debt... again... :whistle:

Look at it again... "five and a half trillion dollar" debt... (480 billion in deficit).

The debt is currently just under 6 trillion dollars.

Something must be done.

Believe you me, I'm not giving the Bush Administration a walk on this. Spending has to be curtailed. I suggest certain NON-CONSTITUTIONAL services as a start. I'd also dismantle about two-thirds of government bureaucracy.

Before I hear "both parties do it" or "there's no difference between Democrats and Republicans" I'd much rather have Republicans controlling the purse strings.

I would truly love to see less government, and I think we will... eventually.

To answer Gvok, there is no need to raise taxes, and there is no need to declare bankruptcy. There is a need to reduce entitlement programs. One that can be started on right now is social security. Allow taxpayers to use part of their SSN taxes to go into private savings accounts. In 30 years, when SSN is completely sunsetted, people will be in charge of their own retirement... as it SHOULD BE. Next, immediately cut any kind of foreign aid to allies of convenience... you know, the ones who badmouth us, but still take our money. Sunset payouts to farmers. Start with the conglomerates... ADM doesn't need federal subsidies. Reduce corporate income taxes in tandem with "corporate welfare". Sunset HUD and the Departments of Energy and Education.

I could go on, but I could be at this all day.
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ImpulseEngine
Admiral
Admiralbill_gomec
Sep 18 2003, 04:44 PM
Look at it again... "five and a half trillion dollar" debt... (480 billion in deficit).

The debt is currently just under 6 trillion dollars.

As for people being in charge of their own retirement, I don't really have a problem with that. 

Sorry Admiralbill, I did misread that. Somehow I saw 1/2 trillion the first time and completely missed the "five and". :blush:

The debt, however, is at $6.7 trillion by the reports I've seen. Regardless, even just under $6 trillion is enormous.
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Admiralbill_gomec
UberAdmiral
True, but it is managable.

I don't like debts either (I unscrupulously go out of my way to avoid them myself), but "debt happens!"
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ds9074
Member Avatar
Admiral
The thing is to me the USA seems to be running near continous structural deficits. OK run a deficit in a slow down but you need to run a surplus in the upturn to pay it back. That is the hardest part of the equation for the politician, when there is a surplus dont spend it, dont give it away just pay off the debt.
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nztrekkie
Lieutenant
ImpulseEngine
Sep 18 2003, 02:47 PM
Admiralbill_gomec
Sep 18 2003, 02:35 PM
Currently we are running a five and a half trillion dollar debt in a twelve trillion dollar economy.

Actually that's a half a trillion deficit. The debt is approaching 7 trillion (at about 6.7 trillion). :blink:

I love the way people always point out how possible it is to bring this under control. The truth is it's just been growing and growing for years and, even if possible to control, no one has even been attempting to do so. Every year there is yet another deficit to add still more to the size of that debt. :wacko:

The only way to pay off any of that debt is to have a budget surplus. Yeah, that's the very thing all the Republicans were complaining about that we shouldn't have. "It's the people's money. Give it back. It shouldn't have been taken in the first place." :rolleyes: Well, we gave it back. And we paid down none of the debt... again... :whistle:

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gvok
Unregistered

Admiralbill_gomec
Sep 18 2003, 03:59 PM
True, but it is managable.

I don't like debts either (I unscrupulously go out of my way to avoid them myself), but "debt happens!"

It is managable but ultimately gives a false sense of security and at the same time unsustainable. I don't know why more politicians don't more forcefully include this issue in their platforms.
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24thcenstfan
Member Avatar
Something Wicked This Fae Comes
Admiralbill_gomec
Sep 18 2003, 04:59 PM
but "debt happens!"

Is that anything like, "but shite happens!?" :P
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ImpulseEngine
Admiral
nztrekkie, you replied with a quote of my post and then no comment of your own. Was that deliberate? If so, please explain what that was supposed to mean. :huh:
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nztrekkie
Lieutenant
ImpulseEngine
Sep 18 2003, 10:01 PM
nztrekkie, you replied with a quote of my post and then no comment of your own.  Was that deliberate?  If so, please explain what that was supposed to mean.  :huh:

nothing at all. :whistle:






alright, I'm just too honest......I made the same mistake you did with bills post misreading billions and trillions and hurriedly tried to delete my post as soon as it was written - only my comments could be deleted, so the post had to stand naked as a jay bird.

I didn't think anyone was going to notice !
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ImpulseEngine
Admiral
nztrekkie
Sep 18 2003, 11:09 PM
ImpulseEngine
Sep 18 2003, 10:01 PM
nztrekkie, you replied with a quote of my post and then no comment of your own.  Was that deliberate?  If so, please explain what that was supposed to mean.   :huh:

nothing at all. :whistle:






alright, I'm just too honest......I made the same mistake you did with bills post misreading billions and trillions and hurriedly tried to delete my post as soon as it was written - only my comments could be deleted, so the post had to stand naked as a jay bird.

I didn't think anyone was going to notice !

Notice what? :whistle:

(no problem)
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Swidden
Member Avatar
Adm. Gadfly-at-large; Provisional wRench-fly at large
"Admiralbill_gomec
 
Just like in the 1990s, if we can rein in some of our expenditures, we can grow our way out of deficits


I agree with this particular point whole-heartedly. However, we must be very much aware that our ability to "grow our way out" is likely to be slower than it was in the 90's. Since we have learned that there is no such thing as "the new economy"; one without a normal business cycle that includes periods of recession.
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