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US Debt Could Double in 25 Years With Current Policies

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donsutherland1

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From CNBC:

U.S. public debt would balloon to twice the size of its economy in 25 years if current tax and spending policies are extended, Congress' budget referee said on Tuesday, delivering fresh fodder for a year-end budget brawl.
The Congressional Budget Office said in a new report that if tax cuts enacted under George W. Bush are allowed to expire as scheduled on Dec. 31, along with some other tax and spending policies, U.S. public debt would shrink significantly, falling to 53 percent of gross domestic product by 2037 from 73 percent this year.
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News Headlines

The CBO's entire report can be found at: http://www.cbo.gov/sites/default/files/cbofiles/attachments/06-05-Long-Term_Budget_Outlook.pdf

Supplemental material accompanying the report can be found at: CBO | The 2012 Long-Term Budget Outlook
 
It is way past time for fiscal responsibility. Cut spending, enhance revenue, and reduce the debt. We need to come to grips with reality. The day of "me first" should be over. Congress and the President needs to do the right thing for our childrens children.
 
mike2810 said:
It is way past time for fiscal responsibility. Cut spending, enhance revenue, and reduce the debt. We need to come to grips with reality. The day of "me first" should be over. Congress and the President needs to do the right thing for our childrens children.
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awwe the results of gerneration me,the screw tomorrow,i dont care if my kids have to work like chinese laborors mentality,because money is there today borrowed from next week and paid over the next month to support me.


it is really saddening,america cannot afford debt at its current rate and shows no plans of reducing it by any means,but rather to keep spending money in hopes of making money,last time i checked spending your way into prosperity doesnt work.
 
Why allow the tax cuts to expire when we could just cut everything that makes American society not devolve us into a Somalia-like state?
 
Tettsuo said:
Why allow the tax cuts to expire when we could just cut everything that makes American society not devolve us into a Somalia-like state?
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Well said!
 
I would bet on the national debt doubling a lot sooner than that (my bet is in about 12 years). It is now growing at over one trillion per year, due to a 40% federal "budget" deficit. As the debt increases and the interest rates increase (they surely can't get any lower, or stay this low for long) that additional interest expense must be counted into the mix as well. All future economic predictions seem to include better economic growth and lower federal spending, neither of which are based on anything real, simply hope. Everyone seems to agree that neither federal taxation will rise nor that federal spending will fall, in any combination thereof, that even approaches 40%. HUGE spending cuts are now talked about in the 3% to 5% range, and significant tax increases are taboo "until things improve a lot", even then only about 5% at most. No they can't!
 
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mike2810 said:
It is way past time for fiscal responsibility. Cut spending, enhance revenue, and reduce the debt. We need to come to grips with reality. The day of "me first" should be over. Congress and the President needs to do the right thing for our childrens children.
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The majority of the 535 morons now in DC would definitely disagree, and even if they did the head moron would veto it. ;-)
 
Tettsuo said:
Why allow the tax cuts to expire when we could just cut everything that makes American society not devolve us into a Somalia-like state?
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well if we let the tax cuts expire,umm wouldnt even raise enough to fund the government by far.

at our current rate of spending,well probably have to run 75% tax rates for everyone to pay down this debt without cutting costs.

god forbid we cut programs america survived without,because not handing out stimulous checks and funding deads green companies and buying frivilous military gear will turn america into somalia:confused:
 
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beerftw said:
well if we let the tax cuts expire,umm wouldnt even raise enough to fund the government by far.

at our current rate of spending,well probably have to run 75% tax rates for everyone to pay down this debt without cutting costs.

god forbid we cut programs america survived without,because not handing out stimulous checks and funding deads green companies and buying frivilous military gear will turn america into somalia:confused:
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Could you please show us how you got to this 75% tax rate for everyone? How long are you taking to pay down the debt?
 
haymarket said:
Could you please show us how you got to this 75% tax rate for everyone? How long are you taking to pay down the debt?
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can you please show me where ending the bush tax cuts would pay for our deficits????

if you read the part AT THE CURRENT RATE WE ARE SPENDING,not what we owe now.
 
The debt is currently as unsustainable levels, that, I think no one would disagree with. The question is this: How do we decrease the debt?

Personally, I would like to argue against austerity.

First there must be a clear definition of the term austerity. Austerity is defined as "A state of reduced spending and increased frugality in the financial sector." (Austerity Definition | Investopedia)

While this may seem good, in reality what occurs is that the services that mainly poor and middle class people use are decreased. This can be seen in Greece where health and education spending were decreased. (What the Greek austerity measures look like - World - CBC News) Privatization also occurs as well. (NEWS: Greek austerity measures include water privatization, oil exploration)

Overall, austerity measures aren't good as they make long-term unemployment worse. (IMF Report: Austerity Measures Hurt Income, Make Long-Term Unemployment Worse)

Such measures won't work due to the fact that they haven't worked anywhere else and only create a worse situation in the long-run rather than resolving systemic problems. Austerity doesn't have a history of working, for proof one only need to look at the structural adjustment programs that the IMF handed out to the third-world countries. In the case of Jamaica, where the government agreed to IMF austerity in 1977, by 1980 “the economy in Jamaica was in worse condition than before the IMF loan. Thirty percent of the island’s workforce was unemployed and the foreign exchange deficit was significantly higher than in 1977.” (Neocolonialism - Bibliography - African, Countries, Independence, and Africa - JRank Articles)

One may argue that cutting spending would be a good thing, however Washington is utterly paralyzed. When push came to shove, both parties couldn't even agree on how to enact the spending cuts. (U.S. Supercommittee Fails to Reach Agreement as Across-the-Board Cuts Loom - Bloomberg) In addition to this the House Republicans have shown themselves to be untrustworthy as they agreed to defense cuts, but instead cut social programs. (To Avoid Military Cuts, House Passes Domestic Ones : NPR)

Thus, this has created a situation where not only can both parties agree on how to do cuts, but neither side will trust the other. This does not bode well for the country at large.
 
Mr. Invisible said:
The debt is currently as unsustainable levels, that, I think no one would disagree with. The question is this: How do we decrease the debt?

Personally, I would like to argue against austerity.

First there must be a clear definition of the term austerity. Austerity is defined as "A state of reduced spending and increased frugality in the financial sector." (Austerity Definition | Investopedia)

While this may seem good, in reality what occurs is that the services that mainly poor and middle class people use are decreased. This can be seen in Greece where health and education spending were decreased. (What the Greek austerity measures look like - World - CBC News) Privatization also occurs as well. (NEWS: Greek austerity measures include water privatization, oil exploration)

Overall, austerity measures aren't good as they make long-term unemployment worse. (IMF Report: Austerity Measures Hurt Income, Make Long-Term Unemployment Worse)

Such measures won't work due to the fact that they haven't worked anywhere else and only create a worse situation in the long-run rather than resolving systemic problems. Austerity doesn't have a history of working, for proof one only need to look at the structural adjustment programs that the IMF handed out to the third-world countries. In the case of Jamaica, where the government agreed to IMF austerity in 1977, by 1980 “the economy in Jamaica was in worse condition than before the IMF loan. Thirty percent of the island’s workforce was unemployed and the foreign exchange deficit was significantly higher than in 1977.” (Neocolonialism - Bibliography - African, Countries, Independence, and Africa - JRank Articles)

One may argue that cutting spending would be a good thing, however Washington is utterly paralyzed. When push came to shove, both parties couldn't even agree on how to enact the spending cuts. (U.S. Supercommittee Fails to Reach Agreement as Across-the-Board Cuts Loom - Bloomberg) In addition to this the House Republicans have shown themselves to be untrustworthy as they agreed to defense cuts, but instead cut social programs. (To Avoid Military Cuts, House Passes Domestic Ones : NPR)

Thus, this has created a situation where not only can both parties agree on how to do cuts, but neither side will trust the other. This does not bode well for the country at large.
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in reality austerity is something that should be applied to a good economy allowing financial room under a bad economy.austerity like seen in europe is out of necessity.america would not suffer much from austerity,since most services do not run the economy,and the public sector jobs are not used as much in america as they were in countries like greece.simply put its hard to sustain a country by paying out more than what you make,and european countries face the problem of where the money comes from,they cant just endlessly borrow money and expect creditors to not say at some point enough is enough!!!

america definitaly has the wiggle room for austerity under a bad economy.the problem is the goofballs on the hill seem to think massive cuts to one program or massive tax increases will fix the problem.realisticly they can chop a little off of each program without causing any major problems,rather than cutting large amounts off of certain programs.taxes can be creeped in without causing any alarm or backlash from the economy,rather than the traditional tax hike which tends to leave immediate negative effects.iraq is over and afghanistan is winding down,naturally the military budget should wind down as well to pre war levels,and of course at the end of the day there are many forms of corporate welfare provided by democrats and republicans topay back their campaign debts.i mean if i actually looked through the budget i could find more,like the irs,our tax code is so complex its almost counter productive by costing billions to enforce rather than a simple effective tax code.

people in america may not like the thought of austerity now,but its better than waiting until we hit a brick wall like europe and end up suffering a no win economic situation like they did.
 
Conservatives like beerftw seem to think that the economy operates like an individual's bank account. There's no need to pay down the deficit, just reduce it. The US would not be able to pay down its deficit without becoming an export based economy, which isn't going to happen.
 
beerftw said:
in reality austerity is something that should be applied to a good economy allowing financial room under a bad economy.austerity like seen in europe is out of necessity.america would not suffer much from austerity,since most services do not run the economy,and the public sector jobs are not used as much in america as they were in countries like greece.simply put its hard to sustain a country by paying out more than what you make,and european countries face the problem of where the money comes from,they cant just endlessly borrow money and expect creditors to not say at some point enough is enough!!!

america definitaly has the wiggle room for austerity under a bad economy.the problem is the goofballs on the hill seem to think massive cuts to one program or massive tax increases will fix the problem.realisticly they can chop a little off of each program without causing any major problems,rather than cutting large amounts off of certain programs.taxes can be creeped in without causing any alarm or backlash from the economy,rather than the traditional tax hike which tends to leave immediate negative effects.iraq is over and afghanistan is winding down,naturally the military budget should wind down as well to pre war levels,and of course at the end of the day there are many forms of corporate welfare provided by democrats and republicans topay back their campaign debts.i mean if i actually looked through the budget i could find more,like the irs,our tax code is so complex its almost counter productive by costing billions to enforce rather than a simple effective tax code.

people in america may not like the thought of austerity now,but its better than waiting until we hit a brick wall like europe and end up suffering a no win economic situation like they did.
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Did you actually read what I wrote?

Austerity has never and does not work. Even the IMF admitted it when discussing Greece (IMF official admits austerity is harming Greece | Business | The Guardian).

Edit: While I agree with some of what you are saying, it isn't politically possible, at least not right now.
 
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Khayembii Communique said:
Conservatives like beerftw seem to think that the economy operates like an individual's bank account. There's no need to pay down the deficit, just reduce it. The US would not be able to pay down its deficit without becoming an export based economy, which isn't going to happen.
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you cant pay down a deficit,only the debt.the deficit is the amount per fiscal year that exceeded income.it doesnt take a genius to see at that rate it would not only never be payed down but would lead to an economic collapse down the road that would make the great depression look small.

you ofcouse can be in a budget surplus and pay down the debt quite easily,its called NOT SPENDING MORE THAN YOU MAKE and to fix this you need to both increase income and decrease spending.and last time i checked america was the wirlds third largest exporter of goods.
 
Mr. Invisible said:
Did you actually read what I wrote?

Austerity has never and does not work. Even the IMF admitted it when discussing Greece (IMF official admits austerity is harming Greece | Business | The Guardian).

Edit: While I agree with some of what you are saying, it isn't politically possible, at least not right now.
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that draws some confusion to me,if reducing spending doesnt work(austerity),and spending doesnt work(stimulous),i guess the only thing left would be to hit rock bottom and start over again.

http://www.nytimes.com/2011/12/30/opinion/keynes-was-right.html

heres an opinion piece from the nytimes about keynes saying austerity works under a boom not a slump,maybe austerity doesnt work only because they use it fix a problem rather than prevent it.
 
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beerftw said:
can you please show me where ending the bush tax cuts would pay for our deficits????

if you read the part AT THE CURRENT RATE WE ARE SPENDING,not what we owe now.
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That translates as : NO I cannot tell you that.
 
haymarket said:
That translates as : NO I cannot tell you that.
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and of course that translates into no i cant tell you how eliminating the bush tax cuts and save less than 1tril over ten years will pay off a deficit thats bigger than that in one year,

i provided my observation off the fact debt is rising at a fast pace,ifit continues to rise no amount of of tax cuts can pay for it,just raising it to pre bush levels cant even pay one years deficite and it takes a decade to save that,so how much would we need to pay it off at 25tril debt and probably by then double the deficite.unless gdp skyrockets and maintains a constant level no amount of logical tax hikes could ever cover the deficit!!!!!!!!!!
 
beerftw said:
that draws some confusion to me,if reducing spending doesnt work(austerity),and spending doesnt work(stimulous),i guess the only thing left would be to hit rock bottom and start over again.

http://www.nytimes.com/2011/12/30/opinion/keynes-was-right.html

heres an opinion piece from the nytimes about keynes saying austerity works under a boom not a slump,maybe austerity doesnt work only because they use it fix a problem rather than prevent it.
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He's quite correct. In a situation such as this the government should spend money to boost the economy and then when the good times come back. decrease spending and increase revenue to pay off the debt that was incurred from the stimulus. However, in real life, this doesn't happen, which is a reason why we even have this debt problem.
 
Tettsuo said:
Why allow the tax cuts to expire when we could just cut everything that makes American society not devolve us into a Somalia-like state?
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Balance the Budget=Instant Desertification and Tribal Warfare!
 
Khayembii Communique said:
There's no need to pay down the deficit, just reduce it. The US would not be able to pay down its deficit without becoming an export based economy, which isn't going to happen.
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Umm, sure it can.
 
Mr. Invisible said:
He's quite correct. In a situation such as this the government should spend money to boost the economy and then when the good times come back. decrease spending and increase revenue to pay off the debt that was incurred from the stimulus. However, in real life, this doesn't happen, which is a reason why we even have this debt problem.
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well like i said before though austerity should be practiced under a good economy,as stimulous and large benefits are not needed,so the idea would be to cut costs and savemoney,when the next crisis hits that country would have super low debt,thus allowing borrowing at manageable levels to contain the crisis,then afterwards pay the debt back down and return to surplus.

i know it doesnt work that way,but largely because many countries choose not to follow the path,yet ask why doing the opposite of keynesian economics gave the opposite results of what keynes said they would.keynes policy in essense was actually brilliant and allowed flexibility for both demand and supply side problems,and promoted austerity and stimulous where needed.

alot of said debt problem was countries spending during good times,and spending during bad,under rule of gdp,income is relevant to gdp,hence why austerity is practiced under good gdp,and stimulous under bad.europe however is screwed either way,they can run stimulous until they go bankrupt and no one has jobs,run austerity where they live at great depression level poverty,or drop everything and restart.for a country like greece,rock bottomaint too bad,they are almost their anyways.let everything fall and restart the economy on the gold standard,allowing their money to retain some value,then rebuilding and switching back to an elastic currency,it would work great so long as they reformed their system and didnt re implement the same things that caused the last failure.
 
I am quite sure that the U.S. national debt will double in far less then 25 years.

Both parties have shown they are completely incompetent when it comes to balancing the budget.

The national debt has risen 150% in just the last ten years - and the trend is getting worse, not better.

The days of American economic supremacy are numbered unless drastic action is taken - and it won't be (imo).
The politicians are too corrupt/economically stupid and the masses are too weak/economically stupid.

The-National-Debt2.jpg

http://www.google.ca/imgres?hl=en&s...07&start=14&ndsp=16&ved=1t:429,r:8,s:14,i:121
 
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We are just going to be like every other empire that has ever been on the face of this earth. We are going to fall.

We have the info. We have all the intelligence. No one wants to make the hard decision, so we are going to follow the path of every single empire before us.
 
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