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Debt grows another $554 billion in fiscal '05.

Iriemon

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According to the Treasury Department, the US borrowed another $554 billion in its fiscal year ending 9/30/05. (Interestingly, another $38 billion was added between 9/30/05 and 10/3/05).

http://www.publicdebt.treas.gov/opd/opdpenny.htm

This is a $43 billion improvement over how much the Govt borrowed last year. It is, however, the 3rd straight year the Govt has borrowed more than $500 billion, the 4th straight year it borrowed more than $400 billion. And it is $534 billion more than was borrowed in fiscal year 2000.

Total US Govt debt now stands at $7,970 billion. $26,500 for each and every person in the US -- over $100,000 additional debt for the average family of four.

(Think about how much money a trillion is for a minute ... think about how much a million dollars is and what you could do with that -- now think about it a million times ... :))
 
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Let's just hope that the Chinese don't call all their notes or this country will be going the same route as the airlines.
 

aps

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Old and wise said:
Let's just hope that the Chinese don't call all their notes or this country will be going the same route as the airlines.
As horrible as this sounds, I would like them to call all their notes. I would just love to see how our little Bushy Wushy would handle this. Would he find a way to blame Clinton?
 

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Old and wise said:
Let's just hope that the Chinese don't call all their notes or this country will be going the same route as the airlines.
I am not familiar enough with world credit markets to estimate the effect that would have. Basic law of supply and demand says that if there is less supply (of credit) the demand goes up -- in the form of higher interest rates. Unless there are other major players out there that would step in and feed our Government's horrible appetite for borrowing, you would see that interest expense balloon rapidly, and other costs of credit would probably follow suit.
 

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Iriemon said:
I am not familiar enough with world credit markets to estimate the effect that would have. Basic law of supply and demand says that if there is less supply (of credit) the demand goes up -- in the form of higher interest rates. Unless there are other major players out there that would step in and feed our Government's horrible appetite for borrowing, you would see that interest expense balloon rapidly, and other costs of credit would probably follow suit.
Currently there is plenty of capital on the world market to float our debts. The real issue is in the costs of servicing it. The more we borrow, the more we spend servicing debt. Its like in a household when it continues to run up credit card debt. There are plenty of card companies to lend to you, but eventually even the minimum payments place a huge burden on you.

The other problem this causes is that big debts like this discourage foreign investment in our economy.
 

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SouthernDemocrat said:
Currently there is plenty of capital on the world market to float our debts. The real issue is in the costs of servicing it. The more we borrow, the more we spend servicing debt. Its like in a household when it continues to run up credit card debt. There are plenty of card companies to lend to you, but eventually even the minimum payments place a huge burden on you.

The other problem this causes is that big debts like this discourage foreign investment in our economy.
the crux of the matter is that you are now 6 trillion over what al greenspan
the guru said was the limit to borrowing
bush makes the dem. look like saints
he's down right embarassing the NEO~COn~ARTISTS
what is making the neocons even more upset is
Iran has stated it would start to selling it's resources on its own STk MRKT
and in EUROS
its making bush shake in his cowboy boots
 

oldreliable67

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the crux of the matter is that you are now 6 trillion over what al greenspan
the guru said was the limit to borrowing
Greenspan said no such thing.
 

oldreliable67

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Let's just hope that the Chinese don't call all their notes or this country will be going the same route as the airlines.
The US debt that the Chinese (and other entities around the world) is almost all in the form of U S Treasury Notes, Bonds, and Bills (which are simply U S Treasury debt instruments of varying maturities at the time of their original issuance). These securities are not callable by either the holder or the US Treasury (the US did issue callable bonds at one time, but that was a while back). Which means that a holder cannot simply take his Treasury bond to the Treasury or the nearest bank and demand redemption or exchange it for another. Nor can the Treasury arbitrarily redeem bonds from holders whenever the Treasury so chooses -- unless the holder has purchased a bond that specifically confers that privilege on the Treasury.

US Treasury securities are however, highly marketable. And the market for US Treasury securities is one of, if not the, largest single securities market in the world. That means that anywhere in the world, a buyer/seller can call up a dealer, either by phone or more often these days, electronically, and buy/sell billions of US Treasury securities with one call or mouse click. The market handles billions of $s in transactions daily.

So, instead of saying 'call all their notes', a more technically correct phrasing would be simply 'sell all their Treasury securities at one time'. Despite being a huge and very liquid market that typically trades billions every day, there is of course a limit as to how much any market, even this one, can take without becoming disorderly. Should the market become disorderly from massive selling, the Fed would step in (in its mandated role as lender of last resort) and restore order.

Thats brief and there is lots more to it than that, but maybe that will help some understand the process.
 

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you would like it to be that way but your rubbish is like sands in the hour glass it has caught up to you

keep your head in you ass and dont listen to me
dont buy gold or stk
keep lots of funny money in your bank accounts

and you will nash your teeth if you have any real teeth left that is
your straw man tactics dont work on me your foolish attempt at one makes me laugh
 

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Ah, something interesting from you tonite after all!

So, show me where I'm wrong, if you can.
 

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Canuck seems to think that there is something erroneous in my post, but as yet hasn't responded to my request for specifically what that might be. In the meantime, I'll add a couple of stats and a chart to illustrate what I said about the liquidity and trading volumes in the U.S. Treasury market.

There are currently 22 dealers in U.S. Treasury securities that are recognized as 'primary dealers' by the Fed. Being designated a primary dealer means that the Federal Reserve, in its conduct of monetary policy, will enter into transactions in U.S. govt securities with you. As such, these 22 dealers account for the lion's share of transactions is U.S. govt securities. Smaller amounts are traded by other, non-primary dealers, and treasuries are traded on the NYSE.

The stats: according to the Fed, primary dealer transactions in U.S. Treasury securities have averaged almost $560 billion per week thus far in 2005. On 9/7/2005, they traded $765 billion. Averaging over 1/2 trillion per week. Peak week, almost 3/4 of a trillion on 9/7. Staggering amounts, aren't they? The only market in the world that can do this volume.

Data is available at www.fed.gov.
 

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Iriemon

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oldreliable67 said:
The US debt that the Chinese (and other entities around the world) is almost all in the form of U S Treasury Notes, Bonds, and Bills (which are simply U S Treasury debt instruments of varying maturities at the time of their original issuance). These securities are not callable by either the holder or the US Treasury (the US did issue callable bonds at one time, but that was a while back). Which means that a holder cannot simply take his Treasury bond to the Treasury or the nearest bank and demand redemption or exchange it for another. Nor can the Treasury arbitrarily redeem bonds from holders whenever the Treasury so chooses -- unless the holder has purchased a bond that specifically confers that privilege on the Treasury.

US Treasury securities are however, highly marketable. And the market for US Treasury securities is one of, if not the, largest single securities market in the world. That means that anywhere in the world, a buyer/seller can call up a dealer, either by phone or more often these days, electronically, and buy/sell billions of US Treasury securities with one call or mouse click. The market handles billions of $s in transactions daily.

So, instead of saying 'call all their notes', a more technically correct phrasing would be simply 'sell all their Treasury securities at one time'. Despite being a huge and very liquid market that typically trades billions every day, there is of course a limit as to how much any market, even this one, can take without becoming disorderly. Should the market become disorderly from massive selling, the Fed would step in (in its mandated role as lender of last resort) and restore order.

Thats brief and there is lots more to it than that, but maybe that will help some understand the process.
Your points are sound, and correct that Treasury debt is not "callable." On the other hand, you seem to discount the risk associated with continued fiscal irresponsibility and the possibility that a major lender like China would decide to stop lending money. I have doubts that the world lending market is that elastic.
 

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oldreliable67 said:
Canuck seems to think that there is something erroneous in my post, but as yet hasn't responded to my request for specifically what that might be. In the meantime, I'll add a couple of stats and a chart to illustrate what I said about the liquidity and trading volumes in the U.S. Treasury market.

There are currently 22 dealers in U.S. Treasury securities that are recognized as 'primary dealers' by the Fed. Being designated a primary dealer means that the Federal Reserve, in its conduct of monetary policy, will enter into transactions in U.S. govt securities with you. As such, these 22 dealers account for the lion's share of transactions is U.S. govt securities. Smaller amounts are traded by other, non-primary dealers, and treasuries are traded on the NYSE.

The stats: according to the Fed, primary dealer transactions in U.S. Treasury securities have averaged almost $560 billion per week thus far in 2005. On 9/7/2005, they traded $765 billion. Averaging over 1/2 trillion per week. Peak week, almost 3/4 of a trillion on 9/7. Staggering amounts, aren't they? The only market in the world that can do this volume.

Data is available at www.fed.gov.
But most of that is simply rolled over existing debt, isn't it?
 

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Canuck said:
the crux of the matter is that you are now 6 trillion over what al greenspan
the guru said was the limit to borrowing
bush makes the dem. look like saints
he's down right embarassing the NEO~COn~ARTISTS
what is making the neocons even more upset is
Iran has stated it would start to selling it's resources on its own STk MRKT
and in EUROS
its making bush shake in his cowboy boots
Cite to Greenspan's statements, please?
 

oldreliable67

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Iriemon,

you seem to discount the risk associated with continued fiscal irresponsibility
Oh, no, quite the contrary! While I have no problems with Bush's Middle East policy/strategy (so far), I'm very disappointed with his lack of leadership and initiative on spending. A Republican representative recently put it very well:

"Whether we want to admit it or not, the Republican Congress's failure to discipline itself is sending us all down a flower-strewn path to financial insolvency. That the Democrats would get us there faster should be of little consolation to anyone." WSJ, 9/28/2005 www.wsj.com and search "Opinion" for topic.

Being somewhat socially liberal and fiscally conservative, I find myself in the strange position of applauding Clinton's tax increase and one or two of his other fiscal measures that helped (emphasize 'helped') balance the budget in his time and being critical of Bush for lack of spending restraint.

That being said, our fiscal situation as of this moment is quite sustainable and not a particular problem. We have much, much more capacity for additional debt should it be needed. But I am not happy with the pork; I am not happy with the free-spending character of Congress; I am not happy that Bush has not exercised any of the powers of the Presidency (recission, veto, etc) to demonstrate fiscal restraint. We're ok for now, but I am not happy with where this could lead, if it continues unchecked.

And I apologize if my previous posts on this matter gave anyone the wrong impression.
 

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But most of that is simply rolled over existing debt, isn't it?
'Rolled over' is not quite correct terminology, but I think I take your meaning. 'Rolled over' is terminology typically applied to the replacement of maturing debt with new debt. As noted above, the market of U.S. Treasury securities trades billions every day. The securities that are traded are predominately outstanding debt, that is, debt that has been previously issued, not debt newly issued to replace maturing debt. Debt instruments change ownership every day, just like stocks. A principal difference though, is that the majority of debt instruments change hands in the 'over-the-counter' market. That is, not on any organized exchange, but through the network of primary dealers.

Now, to be sure, the Treasury periodically auctions new debt, both to 'roll over' maturing debt and to raise new funds when the need arises (all too often lately). These auctions occur weekly for Treasury Bills (less than a year to maturity), monthly for Notes (ten years or less to maturity, currently mainly 2,3, or 5 years to maturity), and quarterly (for combinations of Notes and long-term Bonds).

While the total amount of U.S. debt currently outstanding is almost $8 trillion, only about $4 1/2 trillion is held by the public. The balance is held by government and other official agencies.

Hope this helps.
 

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oldreliable67 said:
Iriemon,

That being said, our fiscal situation as of this moment is quite sustainable and not a particular problem. We have much, much more capacity for additional debt should it be needed.
We may have a capacity for more debt. But debt comes at a price -- last year our interest expense on the debt was about $350 billion. How does it help the country to pile on more debt and have a greater interest burden?

Plus, I agree what both Reagan and Bush said -- it is wrong to ask the next generation to pay for what our government spends.

Finally, hopefully you are correct about the capacity for more debt. There are trillions or tens of trillions of unfunded liabilities coming just around the corner as the boomers start to reach benefits age en masse. Unfortunately, Congress stole the SS trust fund assets that were supposed to help pay for this with their freaking deficits.
 

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oldreliable67 said:
'Rolled over' is not quite correct terminology, but I think I take your meaning. 'Rolled over' is terminology typically applied to the replacement of maturing debt with new debt. As noted above, the market of U.S. Treasury securities trades billions every day. The securities that are traded are predominately outstanding debt, that is, debt that has been previously issued, not debt newly issued to replace maturing debt. Debt instruments change ownership every day, just like stocks. A principal difference though, is that the majority of debt instruments change hands in the 'over-the-counter' market. That is, not on any organized exchange, but through the network of primary dealers.

Now, to be sure, the Treasury periodically auctions new debt, both to 'roll over' maturing debt and to raise new funds when the need arises (all too often lately). These auctions occur weekly for Treasury Bills (less than a year to maturity), monthly for Notes (ten years or less to maturity, currently mainly 2,3, or 5 years to maturity), and quarterly (for combinations of Notes and long-term Bonds).

While the total amount of U.S. debt currently outstanding is almost $8 trillion, only about $4 1/2 trillion is held by the public. The balance is held by government and other official agencies.

Hope this helps.
That was exactly my point. It's not like there's hundreds of billions of new credit coming in each month.

Yes -- I understand that about $3.3 trillion of the total debt is owed primarily to retirement trust funds -- SS, Govt and military pensions. These trust funds are supposed to have assets in them to help pay for upcoming obligations as the boomers retire. Instead, the Government has treated these funds as a giant piggy bank, using the funds to cover it's deficit spending and putting in IOUs in the trust funds instead of real assets. The IOUs are essentially meaningless (as Bush acknowledged) because the Govt has the obligation to make the payment anyways.

It's like if you had a retirement fund with $100k of stocks in it, and decided to sell them off and buy a boat instead, and put an IOU to yourself in your retirement savings. You still have $100k in "assets" in your retirement account, but the assets are meaningless.

And now Bush tells us we have a "crisis" in SS because there are no real assets in the trust fund, just IOUs. What he didn't say is that it is because of the stinking Republican (including his) deficits.

It's really outrageous. These people have got to go.
 

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Iriemon,

We may have a capacity for more debt. But debt comes at a price -- last year our interest expense on the debt was about $350 billion. How does it help the country to pile on more debt and have a greater interest burden?
Repeating bits and pieces that I have previously posted...

The single best measure of US debt, IMO -- and the measure that I see most often quoted by analysts (and has the Alan Greenspan seal of approval -- see the note, below), is the amount of annual surplus or deficit relative to annual GDP. In other words, it is a measure of our capacity to service our debt, not the absolute size of the debt. As you can see from the chart below, the current percentage is well within the zones of historical experience (figures for 2005 and beyond are CBO estimates). As you can see from the chart, we are still well above the levels seen in the mid-1980s. In fact, much better than expected tax revenues have helped stabilize the situation of late. So while I conclude that we presently still have adequate capacity for additional debt, it is not inexhaustible.

And you are absolutely right to be concerned, IMO, about the future impact of entitlements (SS and medical care). I give Bush credit for having the political nerve to bring SS up and put forth something that was sure to be controversial. I hate it that he has been so silent on the subject of late. It doesn't have to be done tomorrow, but it has got to be addressed, and sooner better than later. It will take someone with political skill and courage to do so. I don't see anyone like that around just now.

Note: according to Greenspan:
"In general, fiscal systems are presumed stable if the ratio of debt in the hands of the public to nominal GDP (a proxy for the revenue base) is itself stable. A rapidly rising ratio of debt to GDP, for example, implies an ever-increasing and possibly accelerating ratio of interest payments to the revenue base. Conversely, once debt has fallen to zero, budget surpluses generally require the accumulation of private assets, an undesirable policy in the judgment of many. "

http://www.federalreserve.gov/boardd.../testimony.htm

BTW, I re-read some of your previous posts on this topic on a couple of other threads. Good stuff.
 

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Thanks to a 15% increase in revenues from continued relatively brisk economic activity and a lesser 8% increase in spending, the 2005 budget deficit was 2.6% of GDP, according to figures released by the Treasury today...

"WASHINGTON (Reuters) - The budget deficit narrowed to $318.62 billion in the 2005 fiscal year, marking the third biggest gap on record, the Treasury Department said Friday.

But the deficit could rise again in the current fiscal year due to emergency spending after Hurricane Katrina, economists have said.

The 2005 budget deficit was 2.6 percent of gross domestic product (GDP), the department said. The government's fiscal year ended on Sept. 30.

The deficit was the third biggest on record in dollar terms, smaller than the record $412.8 billion shortfall in fiscal 2004 and the $377.6 billion gap in fiscal 2003.

September's budget surplus rose roughly in line with expectations to $35.76 billion after a surplus of $24.61 billion in September 2004."

http://money.cnn.com/2005/10/14/news/economy/budget.reut/index.htm
 

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galenrox said:
Damn straight, well said there brother.
But let's be fair, since the creation of social security there've definately been a lot of democrats who love defecit spending too, but I'm quite certain Bush is one of the worst, and the only democrat in my lifetime was one of the best! Oh ho ho, party of fiscal responsibility my ass!
Carter was criticized by Reagan in the 1980 election because the deficit the year before was about $40 billion (and growing to 72 billion in 1980). It was one of the reasons I voted for him. Plus I thought we needed tax reform at the time.
 

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oldreliable67 said:
Iriemon,

Repeating bits and pieces that I have previously posted...

The single best measure of US debt, IMO -- and the measure that I see most often quoted by analysts (and has the Alan Greenspan seal of approval -- see the note, below), is the amount of annual surplus or deficit relative to annual GDP.
I know that is a measure frequently used. But it only shows how the deficit is for any given fiscal year. A deficit in one particular year is not a problem or even necessarily bad, depending on your view of economics. But big deficits year after year result in a lot of debt -- that is where you get the problem.

Aside from the economic aspects, IMO there is a moral aspects of expecting future taxpayers to pay for what the current Govt expends.

"Future generations shouldn't be forced to pay back money that we have borrowed. We pay back money that we have borrowed. We owe this kind of responsibility to our children and grandchildren" President Bush 3/3/01

www.senate.gov/~budget/democratic/charts/2003/debtpacket040803.pdf

In other words, it is a measure of our capacity to service our debt, not the absolute size of the debt.
It is the relative size of the debt, not deficits, not the absolute size of the debt, that is important. But even the relative size of the debt in isolation does not tell the whole story. I'd be a lot less bothered about the debt increase if we weren't facing baby boomer retirement and the massive govt expenditures that will entail.

But if we are talking about capacity to service the debt, isn't the most relevant measure the size of the debt relative to the Govt's revenues?

Year Revenues Debt Debt/Revenues.

1962 99.7 303 3.0
1963 106.6 309 2.9
1964 112.6 317 2.8
1965 116.8 321 2.7
1966 130.8 329 2.5
1967 148.8 345 2.3
1968 153.0 358 2.3
1969 186.9 368 2.0
1970 192.8 389 2.0
1971 187.1 424 2.3
1972 207.3 449 2.2
1973 230.8 470 2.0
1974 263.2 492 1.9
1975 279.1 577 2.1
1976 298.1 654 2.2
1977 355.6 719 2.0
1978 399.6 789 2.0
1979 463.3 845 1.8
1980 517.1 930 1.8
1981 599.3 1,029 1.7
1982 617.8 1,197 1.9
1983 600.6 1,411 2.3
1984 666.5 1,663 2.5
1985 734.1 1,946 2.7
1986 769.2 2,125 2.8
1987 854.4 2,350 2.8
1988 909.3 2,602 2.9
1989 991.2 2,857 2.9
1990 1032.0 3,233 3.1
1991 1055.0 3,665 3.5
1992 1091.3 4,065 3.7
1993 1154.4 4,411 3.8
1994 1258.6 4,693 3.7
1995 1351.8 4,974 3.7
1996 1453.1 5,225 3.6
1997 1579.3 5,413 3.4
1998 1721.8 5,526 3.2
1999 1827.5 5,656 3.1
2000 2025.2 5,674 2.8
2001 1991.2 5,807 2.9
2002 1853.2 6,228 3.4
2003 1782.3 6,783 3.8
2004 1881.1 7,379 3.9

Source: CBO.gov historical data for the revenues, BEA data for GDP.

In 2004, the debt was 3.9 times greater than revenues, the worst since 1962.

As you can see from the chart below, the current percentage is well within the zones of historical experience (figures for 2005 and beyond are CBO estimates).
Largely because the history of deficits sucked for most of the last 25 years, except the late 90s.

As you can see from the chart, we are still well above the levels seen in the mid-1980s. In fact, much better than expected tax revenues have helped stabilize the situation of late. So while I conclude that we presently still have adequate capacity for additional debt, it is not inexhaustible.
What do you conclude of your data in light of the fact that we have untold trillions in unfunded liabilities right around the corners as the boomers start to retire?

And you are absolutely right to be concerned, IMO, about the future impact of entitlements (SS and medical care). I give Bush credit for having the political nerve to bring SS up and put forth something that was sure to be controversial. I hate it that he has been so silent on the subject of late. It doesn't have to be done tomorrow, but it has got to be addressed, and sooner better than later. It will take someone with political skill and courage to do so. I don't see anyone like that around just now.
If the @#$% politicians stopped stealing *our* SS trust fund assets to feed their freaking deficits, we'd have much less of a problem. It doesn't take political skill and courage to say "hey we got a problem" when it is your freaking government running deficits which are stealing the assets that were supposed to be there to fix the problem!!!

SS surplus tax receipts have been about $150 billion a year for the past few years. We should have over $1.5 trillion so far built up in assets to deal with the boomer retirment. Instead it is all gone, spent on the g*ddamn deficits, replaced with meaningless IOUs

Note: according to Greenspan:
"In general, fiscal systems are presumed stable if the ratio of debt in the hands of the public to nominal GDP (a proxy for the revenue base) is itself stable. A rapidly rising ratio of debt to GDP, for example, implies an ever-increasing and possibly accelerating ratio of interest payments to the revenue base. Conversely, once debt has fallen to zero, budget surpluses generally require the accumulation of private assets, an undesirable policy in the judgment of many. "

http://www.federalreserve.gov/boardd.../testimony.htm
So?

BTW, I re-read some of your previous posts on this topic on a couple of other threads. Good stuff.
Thanks. Sorry if I get carried away.
 
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Iriemon,

But big deficits year after year result in a lot of debt -- that is where you get the problem.
Only if you don't get increasing revenues to offset. If you don't, or if you suffer a period of declining tax receipts, as in a recession, then indeed, that is where you get the problem. And that is exactly where we are vulnerable right now, IMO. The economy has been pretty darned good for a while and tax receipts have grown at almost twice the rate (15% vs 8%) as the deficit. But how long can you reasonably expect that to last?

Aside from the economic aspects, IMO there is a moral aspects of expecting future taxpayers to pay for what the current Govt expends.
That is very true if and only if 100% of the current gov't expenditures are on current consumption. For example, future generations benefit from investments in capital projects with long lives, like airports, highways, and defense systems, so should they not help pay for some of that? The "Future generations shouldn't be forced to pay back money that we have borrowed. We pay back money that we have borrowed. We owe this kind of responsibility to our children and grandchildren" rhetoric has been used by every politician (elephant and donkey alike) since time began. It is a populist appeal that always attract at least some adherents because of its appeal to self-interest and the lack of willingness on the part of so many to think critically about where their tax dollars are going. They think it will help get them elected.

Now, having said that, let me also say that Bush's failure to exercise leadership on spending issues leaves me totally enraged. He has yet to take any effective action on any spending bill. The pork has been flowing. Even former Repub speech writer Peggy Noonan has criticized Bush, writing that Bush never met a spending bill that he didn't like.

What do you conclude of your data in light of the fact that we have untold trillions in unfunded liabilities right around the corners as the boomers start to retire?
Like I said, its a scary proposition and it needs to be addressed now , not tomorrow. On another thread, in response to something from CrackUpDuck, I posted the following...

Over the years, Greenspan has consistently been an advocate of budgetary discipline, as typified by this comment from his February 25, 2004 speech:

"For about a decade, the rules laid out in the Budget Enforcement Act of 1990, and the later modifications and extensions of the act, provided a procedural framework that helped the Congress make the difficult decisions that were required to forge a better fiscal balance. However, the brief emergence of surpluses eroded the will to adhere to those rules, and many of the provisions that helped to restrain budgetary decision making in the 1990s--in particular, the limits on discretionary spending and the PAYGO requirements--were violated more and more frequently and eventually allowed to expire. In recent years, budget debates have turned to choices offered by those advocating tax cuts and those advocating increased spending. To date, actions that would lower forthcoming deficits have received only narrow support, and many analysts are becoming increasingly concerned that, without a restoration of the budget enforcement mechanisms and the fundamental political will they signal, the inbuilt political bias in favor of red ink will once again become entrenched."

This is a political problem. We all need to put our elected representatives on notice that we are not only aware and concerned, but that we feel a sense of urgency that is apparently lacking in their ranks. E-mail, write, phone. Whatever you are comfortable with. But it needs to be done and done now.

And hey, its ok to get carried away on this subject. You want to get me cranked up on something? This will do it! Its very important, and I surprise myself by saying this, but CrackedUpDuck is wrong in some of his details but right in the underlying intent of his otherwise nonsensical remarks.

Comments in the press today have Greenspan as saying that the US budgetary process is out of control. I wish I could argue differently, but I can't. Something has to be done, and soon.
 

Iriemon

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oldreliable67 said:
Thanks to a 15% increase in revenues from continued relatively brisk economic activity and a lesser 8% increase in spending, the 2005 budget deficit was 2.6% of GDP, according to figures released by the Treasury today...

"WASHINGTON (Reuters) - The budget deficit narrowed to $318.62 billion in the 2005 fiscal year, marking the third biggest gap on record, the Treasury Department said Friday.

But the deficit could rise again in the current fiscal year due to emergency spending after Hurricane Katrina, economists have said.

The 2005 budget deficit was 2.6 percent of gross domestic product (GDP), the department said. The government's fiscal year ended on Sept. 30.

The deficit was the third biggest on record in dollar terms, smaller than the record $412.8 billion shortfall in fiscal 2004 and the $377.6 billion gap in fiscal 2003.

September's budget surplus rose roughly in line with expectations to $35.76 billion after a surplus of $24.61 billion in September 2004."

http://money.cnn.com/2005/10/14/news/economy/budget.reut/index.htm
The say the deficit was $318B, yet the Govt had to borrow $554B.

Why the difference? The politicians pony up the numbers so they don't look so bad. 1) they are so used to stealing our SS trust fund they don't even bother to pretend any more. So the $318B "deficit" includes $150+ SS suplus tax collections that are not supposed to be used to reduce deficits but are supposed to be saved up for the boomers' retirement. 2) There are numerous "off budget" items they don't count in the official budget numbers to make them look better -- like the costs of the wars.

The "real" deficit is reflected in how much the Govt had to borrow b/c its operating revenues were less than its operating expenditures - $554 billion.
 
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