US National debt is beyond staggering

[washunut]

Uh huh

If you're referring to government debt, the "horror" a default, which happens when the government can't pay off the interest. This would be highly problematic for the United States, as we still have a reserve currency and the biggest economy in the world.

However, the chances of the US defaulting because it is unable to pay its bills? Extremely low.

In 2015, interest on the debt was $229 billion. Revenues were $3.2 trillion. Interest on debt is around 7% of federal revenues (and around 6% of federal spending).

And while default would be disastrous, it won't be the end of the world. Many nations have come back strong after a default... including the US, which effectively defaulted in 1790 and 1933.

While we should not take this as an excuse to continue profligate spending and a total abandonment of fiscal responsibility (such as, oh... slashing taxes for the wealthy and corporations, while increasing spending on defense and screwing our economy by starting trade wars), the reality is that federal debt is incredibly safe. The Horrors of Debt will not be visited up us any time soon.

Most educated people understand this, by the way. :mrgreen:

Using the above logic consistently would mean that you would be against spending money now to avoid some far in the future problem we might have due to climate change. With China growing its GDP at a 4-5X faster rate than we are, their having the largest economy and perhaps reserve currency will probably occur sooner than NYC will be underwater due to the seas rising.

Regarding the amount we spend on our debt. That may change in a major way fairly quickly. The Fed is expected to raise rate 3-4 times this year and a similar amount the year after. Plus we have the unwinding of QE which will have the effect of the US having to pay interest on an additional $3 trillion. So because the government for the last 7 years foolishly did not lock in low rates for super long periods of time, old cheaper debt will roll off and have to be replaced with new more expensive debt.

 

[fmw]

Actually, the value of the dollar rose more under Obama than the previous President... So, the people are not paying for it in loss of value. If your are speaking only of domestic value, there too you are not correct. At no time during the Obama years did inflation reach the level of that of the Bush years. Try again!

https://www.forexcrunch.com/dollar-stronger-under-obama/
United States Inflation Rate | 1914-2017 | Data | Chart | Calendar

Why? I lived through it. I speak from actual experience.

 

[jaeger19]

If the amount the government spends domestically > domestic tax receipts, then 100% of the money we pay in taxes is spent right back into the economy. How am I wrong here?

Also, I never claimed that all government spending has the same effect in the long term. Didn't I just make the claim that spending on education would be more beneficial to our economy in the long term than defense spending?

Because the amount the government spends john is more than what is spent domestically... And we are talking about what government spends.. all of it.. which currently includes deficit spending which adds to the debt.

and John.. we know that this is not really the case:

I never claimed that all government spending has the same effect in the long term

When it suits your purpose you definitely treat all government spending as the same. When called to the carpet on it.. you then admit that its not the same

Look.. I can see that you are even quibbling on using the term "long term".

John.. even in the short term government spending doesn't all have the same effect. Please explain how spending millions overseas to support a military base in Germany or Japan helps the US economy in the short term as much as say spending the same amount to increase teacher pay in the US? ..

If you were more honest about these discussions they would go better for you.

 

[ALiberalModerate]

The $20 trillion debt is already twice the annual revenues collected by all the world’s governments combined.


ounting unfunded liabilities, which include promised Social Security, Medicare, and government pension payments that Washington will not have the money to pay, the federal government actually owes somewhere between $100 trillion and $200 trillion. The numbers are so ridiculously large that even the uncertainty in the figures exceeds the annual economic output of the entire planet
https://fee.org/articles/trillions-in-debt-and-were-just-scratching-the-surface/

I'm reminded of the old adage- if sometiing can't go on forever,it won't.

If only we would have stayed on the same fiscal path the Clinton administration left us on.....

 

[JohnfrmClevelan]

If only we would have stayed on the same fiscal path the Clinton administration left us on.....

Federal surpluses remove dollars from the economy. What happened during the Clinton years was not sustainable. Those surpluses weren't paid for by clawing back past deficits - that money is already in the hands the people and the countries that earned it, and it doesn't get taxed. Those surpluses were taken from taxpayers, from actively moving money, money that normally is used for consumption and investment. A lot of people (myself included) believe they (at the very least) contributed to the recession of 2001.

That was the point of Hawkeye's (of all people) article.

 

[JohnfrmClevelan]

Because the amount the government spends john is more than what is spent domestically... And we are talking about what government spends.. all of it.. which currently includes deficit spending which adds to the debt.

and John.. we know that this is not really the case:

When it suits your purpose you definitely treat all government spending as the same. When called to the carpet on it.. you then admit that its not the same

Look.. I can see that you are even quibbling on using the term "long term".

John.. even in the short term government spending doesn't all have the same effect. Please explain how spending millions overseas to support a military base in Germany or Japan helps the US economy in the short term as much as say spending the same amount to increase teacher pay in the US? ..

If you were more honest about these discussions they would go better for you.

Jaeger, you are digging up a debate you lost months ago. Get over it.

 

[ALiberalModerate]

Federal surpluses remove dollars from the economy. What happened during the Clinton years was not sustainable. Those surpluses weren't paid for by clawing back past deficits - that money is already in the hands the people and the countries that earned it, and it doesn't get taxed. Those surpluses were taken from taxpayers, from actively moving money, money that normally is used for consumption and investment. A lot of people (myself included) believe they (at the very least) contributed to the recession of 2001.

That was the point of Hawkeye's (of all people) article.

I don't think we would have continued to have surpluses as those were contingent on booming economic growth. However, had the levels of spending relative to GDP and the taxation levels of the late 90s remained in effect, we would have had a much better fiscal foundation in place for the fiscal challenges of all the baby boomers retiring.

 

[jaeger19]

Jaeger, you are digging up a debate you lost months ago. Get over it.

no John.. I am pointing out a debate that I have won over and over and over and over and over again.

Its why you don't answer me:

Please explain how spending millions overseas to support a military base in Germany or Japan helps the US economy in the short term as much as say spending the same amount to increase teacher pay in the US? ..

Just be honest john.. it would go a long way to giving you some credibility.

 

[Visbek]

Using the above logic consistently would mean that you would be against spending money now to avoid some far in the future problem we might have due to climate change.

Only if you ignore what I actually said.

To repeat: "we should not take this as an excuse to continue profligate spending and a total abandonment of fiscal responsibility."

We also have lots of inherent reasons to either spend now to avoid future problems, or to borrow more to delay payment. My point to Hawkeye was that declinist screeching about the horrors of debt were inaccurately portrayed, and also fail to motivate.

With China growing its GDP at a 4-5X faster rate than we are, their having the largest economy and perhaps reserve currency will probably occur sooner than NYC will be underwater due to the seas rising.

China is growing faster than the US because its population is substantially larger, and growing significantly faster; plus, their economy isn't as well developed.

As a result, for China, their current 7% growth rate is practically a recession.

Regarding the amount we spend on our debt. That may change in a major way fairly quickly. The Fed is expected to raise rate 3-4 times this year and a similar amount the year after. Plus we have the unwinding of QE which will have the effect of the US having to pay interest on an additional $3 trillion. So because the government for the last 7 years foolishly did not lock in low rates for super long periods of time, old cheaper debt will roll off and have to be replaced with new more expensive debt.

Let's try that again.

Yes, the Fed is likely to bump interest rates. If they do 4 increases at 25 basis points each, that will increase rates by a whopping 1%!!!!

The Fed has been passively unwinding QE for a few years now, with no effect on rates.

The federal government has, in fact, "locked in" rates as much as it can. What it does is sell debt instruments at different maturities, and buyers decide the length they want. If people don't want to purchase 10-year T-Notes or 30 year T-Bonds, the federal government can't force people to buy them.

 

[Moderate Right]

Do you mean like the educated folks that were cited in your paper? Because they don't agree with you.

Face it, most of the people still stoking fears about the national debt are fat radio personalities, conservative pundits, and Republican politicians, not educated folks.

Why don't you humor me and list those realized horrors of excessive debt that you guys have been harping about for the past 36 years? You know, the ones that are beyond debate, because they have come to pass. Inflation? Inability of the government to meet its obligations? You're the expert on these horrors, not me. But I'll start you off:

1. ?
2. ??
3. ???

Most major mainstream economists don't favor a runaway national debt. Just a few minority wackos do. You are in the minority. That's why things frustrate you so easily, because you are not mainstream. In fact, you aren't even in the stream at all.

 

[Moderate Right]

Jaeger, you are digging up a debate you lost months ago. Get over it.

On the contrare, he won the debate. It is you who loses most debates while at the same time believing that you won them. After losing you regurgitate that same crap again later on, hoping to have a different audience next time around. Then you get frustrated because the different audience doesn't buy your crap either.

 

[JohnfrmClevelan]

On the contrare, he won the debate. It is you who loses most debates while at the same time believing that you won them. After losing you regurgitate that same crap again later on, hoping to have a different audience next time around. Then you get frustrated because the different audience doesn't buy your crap either.

"On the contrare"?

 

[Moderate Right]

"On the contrare"?

That's cute. Is that all liberals know how to do when the lose an argument, post cartoons, emogees, etc.?

 

[upsideguy]

Why? I lived through it. I speak from actual experience.

Anecdotes are not an argument. Because you experienced something does not make it true; it makes it a perception that may or may not be true. The macro economics say otherwise.

 

[Moderate Right]

Anecdotes are not an argument. Because you experienced something does not make it true; it makes it a perception that may or may not be true. The macro economics say otherwise.

I've never met an anecdote yet that didn't apply to a whole bunch of people.

 

[Motti]

Here is Michael Snyder's take on the issue:

According to the International Monetary Fund, global debt has grown to a staggering grand total of 152 trillion dollars. Other estimates put that figure closer to 200 trillion dollars, but for the purposes of this article let’s use the more conservative number. If you take 152 trillion dollars and divide it by the seven billion people living on the planet, you get $21,714, which would be the share of that debt for every man, woman and child in the world if it was divided up equally.

....

We are living during the greatest debt bubble in the history of the world, and our financial engineers have got to keep figuring out ways to keep it growing much faster than global GDP because if it ever stops growing it will burst and destroy the entire global financial system.

Bill Gross, one of the most highly respected financial minds on the entire planet, recently observed that “our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”.

 

[upsideguy]

I've never met an anecdote yet that didn't apply to a whole bunch of people.

It just doesn't make an argument unless the proposition is "all" or "none"....

 

[JohnfrmClevelan]

That's cute. Is that all liberals know how to do when the lose an argument, post cartoons, emogees, etc.?

No, it's not all we know. But you don't understand the arguments, and you don't believe the data, so...

 

[Moderate Right]

It just doesn't make an argument unless the proposition is "all" or "none"....

That's ridiculous. But, I know that you live in a black and white world.

 

[upsideguy]

That's ridiculous. But, I know that you live in a black and white world.

It is not ridiculous... an anecdote proves nothing. It sways no legitimate argument and thus it is only irrelevant noise in argument. It only disproves an all or none argument. You have a great deal to learn about debate. Think of a debate as murder trial. Evidence must be pertinent and supportable. If challenged, it must be supported or it is considered not valid. You can only win the debate when you prove your postulate beyond reasonable doubt.

That is the first time anyone accused me of living in a black and white world... if you actually knew me, you would know that i secretly covet those that see things with more black and white. I actually have problem getting to hung up on gray to the point where I can struggle with decisiveness. I hate multiple choice tests as I can also come of with scenarios where what are suppose to be wrong answers can be true.

 

[fmw]

Anecdotes are not an argument. Because you experienced something does not make it true; it makes it a perception that may or may not be true. The macro economics say otherwise.

It makes it true to me.

 

[KLATTU]

If only we would have stayed on the same fiscal path the Clinton administration left us on.....

You mean a recession?

Actually, I would be all for that. If you notice, 1996-2002 was one of the few times where the cost curve was bent DOWN.




As I've brilliantly and famous pointed out before, not a single Democrat is for that, and very few Republicans are ( besides talk) .

 

[upsideguy]

It makes it true to me.

What is true to you is irrelevant. Truth is not subjective, but absolute. Debate is a public event organized around pursuit of truth. Yes, it starts with perspective, but its goal is truth and to align the public (those observing the debate) to that truth. You can have your own opinions, but you can not have your own facts (or truth).

Example: You could be unemployed and argue against the notion that America is at full employment. In this case, the anecdote that you are unemployed would be a good argument that not everyone is employed, but once the definition of full employment is on the table (which institutionally considers that some people are not employable and there is always some people between jobs, even at full employment), your anecdote that you were unemployed would be irrelevant to the notion that America is at full employment. In that case, the truth would be that you were unemployed AND the truth would be America is fully employed.... but, you would still have to admit, by definition, the America is fully employed once the facts and/or overwhelming expert opinion established that America met the generally accepted definition of full employment.

As to the dollar being worth less, within certain markets in America that dollar does not buy as much. I live in a very hot real estate market with low unemployment.... we are experiencing local "inflation".... but, that is local. It is not reflective of what is happening in America as a whole. You comment about the dollar being worth less was an indictment on American macro economics. You can not use a micro economic analysis to support you macro statement.

 

[Moderate Right]

No, it's not all we know. But you don't understand the arguments, and you don't believe the data, so...

The thing is John is that you start out with a false theory and then go into a detailed analysis of that false theory. If your false theory was correct then all of your data would be correct but you start out with the argument that one plus one equals five and then go into a detailed analysis of how and why one plus one equals five. If your theory is wrong in the first place that makes all of your detailed analysis wrong as well. That's why MMT is not accepted by most all mainstream economists. They know the theory isn't right in the first place. You have taken a wild minority theory that appeals to liberals and tried to convince them that one plus one equals five. The only people you can really convince are the ones who are already predisposed to believe that there is such a thing as free lunch that you don't have to pay for and those are the ones you try to convert. Everyone else knows that there is no such thing as a free lunch.

 

[Moderate Right]

It is not ridiculous... an anecdote proves nothing. It sways no legitimate argument and thus it is only irrelevant noise in argument. It only disproves an all or none argument. You have a great deal to learn about debate. Think of a debate as murder trial. Evidence must be pertinent and supportable. If challenged, it must be supported or it is considered not valid. You can only win the debate when you prove your postulate beyond reasonable doubt.

That is the first time anyone accused me of living in a black and white world... if you actually knew me, you would know that i secretly covet those that see things with more black and white. I actually have problem getting to hung up on gray to the point where I can struggle with decisiveness. I hate multiple choice tests as I can also come of with scenarios where what are suppose to be wrong answers can be true.

It's a person living in a black and white world who believes that it either has to be all or nothing. This is where the left is so wrong on Obamacare. According to them, Obamacare has helped 100% of everyone and that there are no losers anywhere. All losers are anecdotal or lies. They don't realize that anecdotal subtracts from that 100%.