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National Debt -- How much is too much?

mwi

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09/22/2005 $7,921,117,558,891.38
http://www.publicdebt.treas.gov/opd/opdpenny.htm

(Keep in mind that about half of the above figure is from U.S. Securities -- T-Bills and such)

So, ~$4 Trillion of the debt is a result of borrowing to cover government expenditures. Are we headed for financial trouble if we don't pay off some of this debt or can we continue to borrow and spend and add to the national debt?

Your thoughts.......
 

Iriemon

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mwi said:
09/22/2005 $7,921,117,558,891.38
http://www.publicdebt.treas.gov/opd/opdpenny.htm

(Keep in mind that about half of the above figure is from U.S. Securities -- T-Bills and such)

So, ~$4 Trillion of the debt is a result of borrowing to cover government expenditures. Are we headed for financial trouble if we don't pay off some of this debt or can we continue to borrow and spend and add to the national debt?

Your thoughts.......

All the debt is the result of borrowing to cover government expenditures. It is all made up of debt instruments like T-bills and treasury note. The difference in the figures is to whom the debt is owed.

$4.6 trillion is owed to "the public" which includes individuals, corporations, and foreign countries, like our good friends Japan, China and Saudi Arabia, to whom our Government owes hundreds of billions of dollars it has borrowed to finance decades of deficits (which is a problem in itself because it makes us vulnerable to China and Saudi Arabia -- should they decide to dump dollars and stop lending our Govt money it would have a major negative impact on the economy).

The remaining balance, about $3.3 trillion, is money the Govt "borrowed" from other Govt entities and trust funds, like the Govt pension funds and the Social Security trust fund. The latter is the largest fund, and is owed about a trillion and a half dollars from our Govt. Why?

(And this actually has to do with your question) You have heard about the SS crisis? It is coming because hordes of baby boomers start retiring over the next 10-15 years, and there won't be enough workers to supprt them without a huge raise in taxes. But economists and politicians have known about this for decades. And in 1983, they actually did something about it: They passed an law, raising SS rates higher than was necessary to pay current retirees. These excess, surplus payments were to be built up in a SS trust fund that would be worth trillions of dollars, to help pay for the boomers' retirement when they started retiring.

Amazing foresight for politicians, eh? So for two decades, we have all (those who work) been paying more SS taxes than we should have had to, to build up this trust fund. You can see these overpayments in the Congressional Budget Office data figures, http://cbo.gov/showdoc.cfm?index=1821&sequence=0, Table 1. Last year, the surplus tax received from these extra high SS taxes was $151.1 Billion dollars! Over $600 billion surplus tax payments have been collected since 2000!

(You remember when the president talked about surplus taxes belonging to the people and that is why we should have tax cuts? Apparently that logic didn't apply to people paying SS taxes, but that is another story.)

So far so good, right? So with all these hundreds of billions of surplus SS tax payments, why are they saying we have a SS crisis now? Why did President Bush a few month ago tell us there is nothing but a bunch of IOUs in the SS trust fund and that is why we need SS reform?

Because, about the same time the SS Reform Act was passed in 1983, the Reagan tax cuts and military build up kicked in and the government started running huge deficits -- spending every year hundreds of billions more than it was taking in through taxes. Like any person, when the Govt spends more than it takes in, it has to borrow the difference. Since 1980, the Government has borrowed $7 trillion dollars because of these deficits. [You can check that on the Treasury Department public debt page you cited]

But, rather than borrowing all that money from the public, our politicians thought, why not just take those surplus SS tax payments, and rather than put those in a trust fund, use those to help cover our deficits, and we will put our debt (IOUs, T-Bills) in the SS trust fund.

So what you say? Well, SS trust fund was not set up to be a gigantic pool for funding for the Govt to borrow from -- it was supposed to be an actual fund to help cover for SS costs when the boomers retired. The IOUs the Govt puts there are essentially meaningless, because the Govt has to pay SS obligations anyways!

The net effect is, for 20 years, the Govt has been taking OUR surplus SS taxes and STEALING the money from OUR SS trust fund to pay for THEIR deficits! And it is still going on today! When the politicians tell you the deficit this year will only be $325 billion or so, what they don't tell you is that includes over $150 billion in SS surplus taxes they use as general revenues. The real deficits -- non-SS revenues less non-SS expenditures, is really more like $500 billion!

Again, you can confirm this on the CBO website: Look at Table 1, bottom line. You see total deficit: $412 billion. That is the figure you hear about, but it includes the SS surplus revenues -- nobody says that. Under the column they call "on-budget" is the actual deficit from the Govt operations (and it is actually even worse than that because they figure they don't need to include things like the cost of the Iraq war in the budget).

And this has been going on for over 20 years. The politicians have stolen over $1.5 trillion from OUR SS trust fund to cover for THEIR stinking deficits!!

Unbelievable, when you think about it.

I'm sorry for ranting, but this is so outrageous and no one knows about it or cares about it or talks about it. But that explains the biggest chunk of the Govt debt that is not "to the public." Another big chunks is money owed is to the trust fund for Govt retirees -- same principle applies.

So back to your question -- and as I said, it is related to the SS thing. If you just look at the whole $8 trillion, the Govt debt, as of FY 2004, as a percentage of GDP is 62%, and is about as high as it has been since the 1960s. It got a little higher in the mid-90s but the deficits were coming down then, not getting worse. If you look at the Debt compared to total Govt revenues (including SS), the debt is 3.9x greater than income as of FY2004, worse than any other time since 1962, which is the earliest data published by the CBO. So by historical standards (at least since the 1960s) about the highest it has ever been. If you look at just the debt owed to the public as opposed to other government trust funds, the $4.6 trillion is a little more manageable, thought still high.

But here is the problem, back to the boomers. When they start retiring in 10-15 years, there will be humungous costs associated with their retirment and health care. The unfunded liabilities (meaning not paid for with current tax rates) will be trillions and trillions of dollars - or the tens of trillions some estimate.

How are we going to pay for that? You think the boomers are going to eagerly vote away their SS benefits? If not, taxes are going to have to be raised to crushing levels on the next generation of workers.

This is going to be a major problem for the generation coming up. The last thing they need on top of this is a huge Government debt!

Last year, gross interest on the debt was $325 billion. This year is will be closer to $350B. (Also in the public debt page you cited.) If interest rates shoot up, that figure will too. That is a lot of money! Almost as much as we spend on defense!

If we (or more accurately, our government) were responsible at all, if we cared about our own future, much less our kids' future, we would be doing what we can to give them a debt free America. Even more, we would give them a surplus to help pay for the boomers' retirement, which was supposed to be happening with the SS trust fun. And in fact, as of 2000, we had miraculously balanced the budget, and in that year paid down the Debt $100 billion; and the nation was poised to pay the debt down by trillions of dollars over the next decade. But then we had the tax cuts, and the Iraq war, and the economy slowed down -- and instead of paying down the debt, the debt has [B]increased[/B] by $2.4 TRILLION since 2000 - about 40%!

So to answer your question, with the obligations coming up, any debt is too much debt, IMO. We should be saving money for the future, instead our Govt is piling up the debt as fast as we can. As a consequence, we are failing our children, our grandchildren, and ourselves.

History will know us, and our leaders, and the "pass the buck" generation.
 
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128shot

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Can't wait till I'm old enough to run.


Anyway.


Why do they deserve SS benefits anyway? Its too bad we're in this situation that could have been prevented by wiping SS clean off..
 

Iriemon

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128shot said:
Can't wait till I'm old enough to run.


Anyway.


Why do they deserve SS benefits anyway? Its too bad we're in this situation that could have been prevented by wiping SS clean off..

We have SS because most folks don't like the idea of seeing little blue haired grannies begging for food at stoplights.

But I agree, I think it's insane we pay the SS dole to the likes of Warren Buffet.
 

SouthernDemocrat

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128shot said:
Can't wait till I'm old enough to run.


Anyway.


Why do they deserve SS benefits anyway? Its too bad we're in this situation that could have been prevented by wiping SS clean off..

There is a current surplus in SS revenues. If you got rid of SS, you would only have more debt right now.

The total national debt is irrelevant. The real question is at what point does the cost of servicing that debt become a real problem.
 

128shot

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Iriemon said:
We have SS because most folks don't like the idea of seeing little blue haired grannies begging for food at stoplights.

But I agree, I think it's insane we pay the SS dole to the likes of Warren Buffet.


you can bitch and moan about paying out to buffet, but you forget, he is a united states citzen, and he paid into the same system you do.

Thus, he deserves benefits too.


talk about blind hate.....
 

Missouri Mule

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mwi said:
09/22/2005 $7,921,117,558,891.38
http://www.publicdebt.treas.gov/opd/opdpenny.htm

(Keep in mind that about half of the above figure is from U.S. Securities -- T-Bills and such)

So, ~$4 Trillion of the debt is a result of borrowing to cover government expenditures. Are we headed for financial trouble if we don't pay off some of this debt or can we continue to borrow and spend and add to the national debt?

Your thoughts.......

According to the latest figures through 2004, the U.S. had 65% of the national debt to our GDP. That is about what most other countries have. Japan has something like 165% debt to GDP.

Having said that, it is too high but our annual deficits are the more important figure. Bush hasn't vetoed a spending bill since he became president. It's likely to get worse before it gets better.
 

Iriemon

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128shot said:
you can bitch and moan about paying out to buffet, but you forget, he is a united states citzen, and he paid into the same system you do.

Thus, he deserves benefits too.

talk about blind hate.....

I disagree with the concept that paying taxes gives you "entitlements" that you "deserve."

Our country is borrowing itself into a slow disaster. We simply cannot afford to expend as much as we do based on the taxes the Govt receives. The Govt is spending beyond its means. We simply cannot afford it.

In this situation, again, it is insane our Govt pays $24,000 a year dole to a guy like Warren Buffet.
 

Missouri Mule

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Iriemon said:
I disagree with the concept that paying taxes gives you "entitlements" that you "deserve."

Our country is borrowing itself into a slow disaster. We simply cannot afford to expend as much as we do based on the taxes the Govt receives. The Govt is spending beyond its means. We simply cannot afford it.

In this situation, again, it is insane our Govt pays $24,000 a year dole to a guy like Warren Buffet.

So, you want "means testing" for SSA beneficiaries? Is that about right? Do you have any idea of how many caseworkers that would require? We're talking in the hundreds of thousands, if not millions to do all the paperwork and checking. Of course we might get some volunteers to work for free but I doubt it.

I once read (and believe it to be accurate) that for every welfare beneficiary there is in the U.S. that it costs about $40,000. Most of this money is eaten up in overhead costs and only a small trickle reaches the actual recepient.
 

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Missouri Mule said:
So, you want "means testing" for SSA beneficiaries? Is that about right? Do you have any idea of how many caseworkers that would require? We're talking in the hundreds of thousands, if not millions to do all the paperwork and checking. Of course we might get some volunteers to work for free but I doubt it.

I once read (and believe it to be accurate) that for every welfare beneficiary there is in the U.S. that it costs about $40,000. Most of this money is eaten up in overhead costs and only a small trickle reaches the actual recepient.

Sure -- again, why pay are we paying what is essentially welfare to millionaires? we can't afford it now, and we certainly aren't going to be able to afford it in 15 years. SS should be a last resort minimal support system for those who were too poor, unlucky, or stupid to have saved for their own retirment.

It wouldn't cost anymore to determine SS means testing (based on income) than it already does to calculate income taxes.
 

128shot

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I agree,

thus all those Baby boomers should lose their SS benefits. 10-15 years is plenty of time to re-invest your retirement...


BAM! it works.
 

Missouri Mule

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Iriemon said:
Sure -- again, why pay are we paying what is essentially welfare to millionaires? we can't afford it now, and we certainly aren't going to be able to afford it in 15 years. SS should be a last resort minimal support system for those who were too poor, unlucky, or stupid to have saved for their own retirment.

It wouldn't cost anymore to determine SS means testing (based on income) than it already does to calculate income taxes
.

In your dreams. Determining welfare benefits (which is what you would make SSA into) is a very complicated, costly and labor intensive operation. One has to have access to all bank accounts, all assets such as motor vehicles, homes, cash, etc. to determine eligibility. Everyone's bank accounts would have to be verified; stock holdings; pension benefits, and the post office and all these financial institutions would be overwhelmed with paper work to accomplish this monumental task.

Obviously Buffett would not be eligible, but many other people who have paid into the SSA system would also not be eligible. You would be surprised at the number of actual millionaires existing within the U.S. after their assets and liabilities are all added up and subtracted. I've seen figures as low as one out of every 40 Americans that are "paper" millionaires.

SSA has been popular precisely BECAUSE it is not means tested. Take that away and invite a revolution. People would not put up with it after having paid into all these years.

Bluntly stated, you don't know what you speak of. I do.

I believe that H.L. Menchen once observed that all big problems have simple solutions -- and they are all wrong. (or words to that effect.)
 
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Iriemon

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Missouri Mule said:
In your dreams. Determining welfare benefits (which is what you would make SSA into) is a very complicated, costly and labor intensive operation. One has to have access to all bank accounts, all assets such as motor vehicles, homes, cash, etc. to determine eligibility. Everyone's bank accounts would have to be verified; stock holdings; pension benefits, and the post office and all these financial institutions would be overwhelmed with paper work to accomplish this monumental task.

Obviously Buffett would not be eligible, but many other people who have paid into the SSA system would also not be eligible. You would be surprised at the number of actual millionaires existing within the U.S. after their assets and liabilities are all added up and subtracted. I've seen figures as low as one out of every 40 Americans that are "paper" millionaires.

SSA has been popular precisely BECAUSE it is not means tested. Take that away and invite a revolution. People would not put up with it after having paid into all these years.

Bluntly stated, you don't know what you speak of. I do.

I believe that H.L. Menchen once observed that all big problems have simple solutions -- and they are all wrong. (or words to that effect.)

I'm sure that SS is popular because everyone gets $$. Popularity is why your Govt is borrowing $600 billion a year and is $8 trillion in debt.

I was thinking of means testing based on income -- which is reported anyway.

But you make good points. Let's continue paying Buffet types welfare and cut health care spending for those living in poverty instead.
 

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SouthernDemocrat said:
There is a current surplus in SS revenues. If you got rid of SS, you would only have more debt right now.

The total national debt is irrelevant. The real question is at what point does the cost of servicing that debt become a real problem.

Correct on the SS surplus. I always wondered why that didn't count when we were cutting income taxes because of the surplus.

I agree that the interest obligation does pose an fundamental obligation of the debt. In 2004 gross interest on the debt was $320 billion (http://www.publicdebt.treas.gov/opd/opdint.htm), which is quite enough, in my opinion. We could rebuilt New Orleans for free every year but for the interest we pay on the debt that was largely accumulated since 1980. That's enough to make it a real problem to me.

This year interest may exceed $350 billion. As interest rates go up and the debt increases, that number can go up rapidly.

But interest is not the only risk associated with a large debt. It puts us at risk to countries like our good friends China and Japan, to whom we owe almost a trillion dollars. If they decide to stop lending up more money, the inevitable effect will be a rise in the interest rates.

Finally, a few of us just think it is morally wrong that we pay for our Government services by borrowing and increasing the debt that future generations will have to deal with.

"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
 
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Iriemon said:
I'm sure that SS is popular because everyone gets $$. Popularity is why your Govt is borrowing $600 billion a year and is $8 trillion in debt.

I was thinking of means testing based on income -- which is reported anyway.

But you make good points. Let's continue paying Buffet types welfare and cut health care spending for those living in poverty instead.

One other thing to keep in mind is that we already have federal welfare. It's called SSI (Supplemental Security Income.)

Not everyone gets SSA. One must have 40 quarters of earnings (10 years) to qualify.
 

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Missouri Mule said:
One other thing to keep in mind is that we already have federal welfare. It's called SSI (Supplemental Security Income.)

Not everyone gets SSA. One must have 40 quarters of earnings (10 years) to qualify.

The real problem is that our Govt for the last 20+ years has squandered (stolen) the boomers' retirement savings (SS trust fund) with their deficits.

Now there isn't enough money to pay for the boomers' SS retirement benefits.
 

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Iriemon said:
The real problem is that our Govt for the last 20+ years has squandered (stolen) the boomers' retirement savings (SS trust fund) with their deficits.

Now there isn't enough money to pay for the boomers' SS retirement benefits.

That's absolutely untrue. In point of fact, the SSA fund isn't going to run out of money until about 2037, last I heard. The more immediate problem is the Medicare issue.

What is going to happen is that the younger generation will not have the necessary funds to pay for their SSA benefits. They will be taxed higher and higher taxes to pay for the boomer's benefits. At some point it will become too much to suffer and will hurt the economy. That point has yet to be reached. This is what Bush was trying to say (but poorly) and it will be swept under the rug for another president and congress to deal with.

The bottom line is that our government is fnancially irresponsible and has been for a long time. Politicians are elected and reelected by bringing home the pork. That won't change any time soon. They have managed to gerrymander themselves into permanent lifetime tenure in the House. The Senate can't do this as the senators represent an entire state. But all politicians with one or two exceptions have huge war chests to be elected over and over again. That's why it is so hard to dislodge one except when the voting patterns change substantially. Some of the states to watch that happen would be Ohio swinging to the Democrats but Wisconsin and Minnesota swinging to the Repubicans. Last I heard the Republicans were once again favored to win the 2008 election on the betting web sites. 50 to 48% as it now stands even with all of Bush's current polling problems.
 

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Missouri Mule said:
One other thing to keep in mind is that we already have federal welfare. It's called SSI (Supplemental Security Income.)

Not everyone gets SSA. One must have 40 quarters of earnings (10 years) to qualify.

SSI benefits are not dependant on quarters of earnings. Low income, and over 65, blind or disabled qualifies one. SSI is not paid for by Social Security taxes, but is paid for by U.S. Treasury general funds, although the Social Security Administration manages SSI.
 

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C.J. said:
SSI benefits are not dependant on quarters of earnings. Low income, and over 65, blind or disabled qualifies one. SSI is not paid for by Social Security taxes, but is paid for by U.S. Treasury general funds, although the Social Security Administration manages SSI.

Are you disagreeing with me or just adding additional information? SSI doesn't require 40 quarters of work as does SSA. It is, in fact, federal welfare that came into being a number of years ago to replace the state aid to the aged and disabled. It is, however, as you say, administered by the SSA office. It is means tested compared to SSA which is not.
 

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Missouri Mule said:
Are you disagreeing with me or just adding additional information? SSI doesn't require 40 quarters of work as does SSA. It is, in fact, federal welfare that came into being a number of years ago to replace the state aid to the aged and disabled. It is, however, as you say, administered by the SSA office. It is means tested compared to SSA which is not.

Just adding information, but no it requires no working quarters. Welfare? Yes it is, mainly because it hinges on no prior input from the recipient.
 

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C.J. said:
Just adding information, but no it requires no working quarters. Welfare? Yes it is, mainly because it hinges on no prior input from the recipient.

That's correct. It doesn't require ANY working quarters as compared to SSA.
 

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Iriemon said:
All the debt is the result of borrowing to cover government expenditures. It is all made up of debt instruments like T-bills and treasury note. The difference in the figures is to whom the debt is owed.

$4.6 trillion is owed to "the public" which includes individuals, corporations, and foreign countries, like our good friends Japan, China and Saudi Arabia, to whom our Government owes hundreds of billions of dollars it has borrowed to finance decades of deficits (which is a problem in itself because it makes us vulnerable to China and Saudi Arabia -- should they decide to dump dollars and stop lending our Govt money it would have a major negative impact on the economy).

The remaining balance, about $3.3 trillion, is money the Govt "borrowed" from other Govt entities and trust funds, like the Govt pension funds and the Social Security trust fund. The latter is the largest fund, and is owed about a trillion and a half dollars from our Govt. Why?

(And this actually has to do with your question) You have heard about the SS crisis? It is coming because hordes of baby boomers start retiring over the next 10-15 years, and there won't be enough workers to supprt them without a huge raise in taxes. But economists and politicians have known about this for decades. And in 1983, they actually did something about it: They passed an law, raising SS rates higher than was necessary to pay current retirees. These excess, surplus payments were to be built up in a SS trust fund that would be worth trillions of dollars, to help pay for the boomers' retirement when they started retiring.

Amazing foresight for politicians, eh? So for two decades, we have all (those who work) been paying more SS taxes than we should have had to, to build up this trust fund. You can see these overpayments in the Congressional Budget Office data figures, http://cbo.gov/showdoc.cfm?index=1821&sequence=0, Table 1. Last year, the surplus tax received from these extra high SS taxes was $151.1 Billion dollars! Over $600 billion surplus tax payments have been collected since 2000!

(You remember when the president talked about surplus taxes belonging to the people and that is why we should have tax cuts? Apparently that logic didn't apply to people paying SS taxes, but that is another story.)

So far so good, right? So with all these hundreds of billions of surplus SS tax payments, why are they saying we have a SS crisis now? Why did President Bush a few month ago tell us there is nothing but a bunch of IOUs in the SS trust fund and that is why we need SS reform?

Because, about the same time the SS Reform Act was passed in 1983, the Reagan tax cuts and military build up kicked in and the government started running huge deficits -- spending every year hundreds of billions more than it was taking in through taxes. Like any person, when the Govt spends more than it takes in, it has to borrow the difference. Since 1980, the Government has borrowed $7 trillion dollars because of these deficits. [You can check that on the Treasury Department public debt page you cited]

But, rather than borrowing all that money from the public, our politicians thought, why not just take those surplus SS tax payments, and rather than put those in a trust fund, use those to help cover our deficits, and we will put our debt (IOUs, T-Bills) in the SS trust fund.

So what you say? Well, SS trust fund was not set up to be a gigantic pool for funding for the Govt to borrow from -- it was supposed to be an actual fund to help cover for SS costs when the boomers retired. The IOUs the Govt puts there are essentially meaningless, because the Govt has to pay SS obligations anyways!

The net effect is, for 20 years, the Govt has been taking OUR surplus SS taxes and STEALING the money from OUR SS trust fund to pay for THEIR deficits! And it is still going on today! When the politicians tell you the deficit this year will only be $325 billion or so, what they don't tell you is that includes over $150 billion in SS surplus taxes they use as general revenues. The real deficits -- non-SS revenues less non-SS expenditures, is really more like $500 billion!

Again, you can confirm this on the CBO website: Look at Table 1, bottom line. You see total deficit: $412 billion. That is the figure you hear about, but it includes the SS surplus revenues -- nobody says that. Under the column they call "on-budget" is the actual deficit from the Govt operations (and it is actually even worse than that because they figure they don't need to include things like the cost of the Iraq war in the budget).

And this has been going on for over 20 years. The politicians have stolen over $1.5 trillion from OUR SS trust fund to cover for THEIR stinking deficits!!

Unbelievable, when you think about it.

I'm sorry for ranting, but this is so outrageous and no one knows about it or cares about it or talks about it. But that explains the biggest chunk of the Govt debt that is not "to the public." Another big chunks is money owed is to the trust fund for Govt retirees -- same principle applies.

So back to your question -- and as I said, it is related to the SS thing. If you just look at the whole $8 trillion, the Govt debt, as of FY 2004, as a percentage of GDP is 62%, and is about as high as it has been since the 1960s. It got a little higher in the mid-90s but the deficits were coming down then, not getting worse. If you look at the Debt compared to total Govt revenues (including SS), the debt is 3.9x greater than income as of FY2004, worse than any other time since 1962, which is the earliest data published by the CBO. So by historical standards (at least since the 1960s) about the highest it has ever been. If you look at just the debt owed to the public as opposed to other government trust funds, the $4.6 trillion is a little more manageable, thought still high.

But here is the problem, back to the boomers. When they start retiring in 10-15 years, there will be humungous costs associated with their retirment and health care. The unfunded liabilities (meaning not paid for with current tax rates) will be trillions and trillions of dollars - or the tens of trillions some estimate.

How are we going to pay for that? You think the boomers are going to eagerly vote away their SS benefits? If not, taxes are going to have to be raised to crushing levels on the next generation of workers.

This is going to be a major problem for the generation coming up. The last thing they need on top of this is a huge Government debt!

Last year, gross interest on the debt was $325 billion. This year is will be closer to $350B. (Also in the public debt page you cited.) If interest rates shoot up, that figure will too. That is a lot of money! Almost as much as we spend on defense!

If we (or more accurately, our government) were responsible at all, if we cared about our own future, much less our kids' future, we would be doing what we can to give them a debt free America. Even more, we would give them a surplus to help pay for the boomers' retirement, which was supposed to be happening with the SS trust fun. And in fact, as of 2000, we had miraculously balanced the budget, and in that year paid down the Debt $100 billion; and the nation was poised to pay the debt down by trillions of dollars over the next decade. But then we had the tax cuts, and the Iraq war, and the economy slowed down -- and instead of paying down the debt, the debt has [B]increased[/B] by $2.4 TRILLION since 2000 - about 40%!

So to answer your question, with the obligations coming up, any debt is too much debt, IMO. We should be saving money for the future, instead our Govt is piling up the debt as fast as we can. As a consequence, we are failing our children, our grandchildren, and ourselves.

History will know us, and our leaders, and the "pass the buck" generation.


There HAS to be a debt, that's how bonds operate. It's a necessity, although the size is certainly negotiable.
 

RightinNYC

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Missouri Mule said:
According to the latest figures through 2004, the U.S. had 65% of the national debt to our GDP. That is about what most other countries have. Japan has something like 165% debt to GDP.

Having said that, it is too high but our annual deficits are the more important figure. Bush hasn't vetoed a spending bill since he became president. It's likely to get worse before it gets better.

Bush hasn't vetoed ANY bill, mostly because he has a firm grasp on Congress, so the only bills that get sent to him are ones that he authorizes. It's less of a reflection on his "unwillingness" to veto legislation than it is a reflection on his ability to set the agenda.
 

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Missouri Mule said:
That's absolutely untrue. In point of fact, the SSA fund isn't going to run out of money until about 2037, last I heard. The more immediate problem is the Medicare issue.

What is going to happen is that the younger generation will not have the necessary funds to pay for their SSA benefits. They will be taxed higher and higher taxes to pay for the boomer's benefits. At some point it will become too much to suffer and will hurt the economy. That point has yet to be reached. This is what Bush was trying to say (but poorly) and it will be swept under the rug for another president and congress to deal with.

The bottom line is that our government is fnancially irresponsible and has been for a long time. Politicians are elected and reelected by bringing home the pork. That won't change any time soon. They have managed to gerrymander themselves into permanent lifetime tenure in the House. The Senate can't do this as the senators represent an entire state. But all politicians with one or two exceptions have huge war chests to be elected over and over again. That's why it is so hard to dislodge one except when the voting patterns change substantially. Some of the states to watch that happen would be Ohio swinging to the Democrats but Wisconsin and Minnesota swinging to the Repubicans. Last I heard the Republicans were once again favored to win the 2008 election on the betting web sites. 50 to 48% as it now stands even with all of Bush's current polling problems.


Last I heard, 2008 election polls were completely useless until about March of 2008.
 

Iriemon

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Missouri Mule said:
That's absolutely untrue. In point of fact, the SSA fund isn't going to run out of money until about 2037, last I heard. The more immediate problem is the Medicare issue.

The SS trust fund has no independent assets in it. The politicians stole it all to fund their (ie Republican) deficits. The SS trust fund's assets solely consist of govt IOUs -- debt. Which means nothing, because the Govt has the obligation to pay for SS benefits anyway.

Imagine you are saving for your retirement. You have $100,000 invested in the Big Dreams Trust Fund. But then you think, I'd really like that new boat. So you take the money out of BDTF and replace it with a promisory note, an IOU that you will pay to the BDTF. That is an asset to the BDTF, just like if it had a Govt IOU it would be an asset. Your friend says, "nice boat, but what about your retirement?" You say, no problem, the Big Dream Trust Fund still has $100,000 in assets."

That is exactly what is going on, and has been going on since 1983.

So it may be true that this "trust fund" will use up all its IOUs in 2037 (or whenever) the true fact is the Govt is going to have to find a source of revenues to pay back the $1.5+ trillion it owes to the SS trust fund decades before then. And how will it do that ...?

What is going to happen is that the younger generation will not have the necessary funds to pay for their SSA benefits. They will be taxed higher and higher taxes to pay for the boomer's benefits. At some point it will become too much to suffer and will hurt the economy. That point has yet to be reached. This is what Bush was trying to say (but poorly) and it will be swept under the rug for another president and congress to deal with.

That is exactly the problem. But sooner than you think, because there are no assets in the trust fund to help pay for the boomers retirement. We have a much bigger problem because politicians like Bush have stolen *our* SS trust fund for *their* deficits. And we our Govt is making the problem much worse by creating a debt-burdened America for the next generation to deal on top of these SS/medicare issues.

The bottom line is that our government is fnancially irresponsible and has been for a long time.

Actually the Govt was fiscally responsible in 1999-2000. In calendar year 2000, the federal debt was reduced by $116 billion. [source: http://www.publicdebt.treas.gov/opd/opd.htm] Arguably longer -- after a decade of record high deficits that quadrupled the national debt between 1980 and 1992, starting in 1993 (not coincidentally the year the tax rate was raised to 39%) the deficits started coming down and came down every year until we had a surplus in 2000.

Then came the tax deferrments, err, cuts, spending sprees, and the Iraqi war.

Politicians are elected and reelected by bringing home the pork. That won't change any time soon. They have managed to gerrymander themselves into permanent lifetime tenure in the House. The Senate can't do this as the senators represent an entire state. But all politicians with one or two exceptions have huge war chests to be elected over and over again. That's why it is so hard to dislodge one except when the voting patterns change substantially. Some of the states to watch that happen would be Ohio swinging to the Democrats but Wisconsin and Minnesota swinging to the Repubicans. Last I heard the Republicans were once again favored to win the 2008 election on the betting web sites. 50 to 48% as it now stands even with all of Bush's current polling problems.

Nothing will change, and we will keep borrowing away our future, until the citizens demand fiscal responsibility. Write your representatives tell them to stop borrowing. Here is a letter I wrote and sent, feel free to use it if you'd like. Or write your own. Tell them to stop borrowing away our future.

++++++++++++++++++++++++++++++++++++

Dear ,

Two recent items in the news prompted me to write to you. One item pointed out that U.S. Government spending has increased 6.1% so far this year. The other article noted that Congress is considering whether the tax cuts passed since 2000 should be made permanent.

According to the U.S. Department of the Treasury, the Public Debt owed by the United States Government has increased by over 500 billion dollars so far in fiscal year 2005. The data indicates that since 2000, the U.S. Government debt has increased by over 2.3 trillion dollars. The U.S Government debt is higher, as a ratio to federal tax revenues (including social security), than it has ever been in the last five decades (or longer).

As a taxpayer, I like to see a smaller portion of my paycheck being taken out for federal income taxes. As a father, however, I am more concerned about the government my children inherit being burdened with an oppressive level of debt. Their generation is going to have enough problems dealing with “baby boomer” retirement and health care, and whatever other problems the world hands them.

I wholeheartedly support the position taken by President Bush on March 3, 2001:

“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.”

I think it is wrong for our government to fund its operations by borrowing and creating debt the next generation will have to bear. This practice makes a mockery of the noble sentiments expressed in another statement by the President, in his state of the union address in January, 2003:

“This country has many challenges. We will not deny, we will not ignore, we will not pass along our problems to other Congresses, to other presidents, and other generations. We will confront them with focus and clarity and courage.”

I hope, when you consider issues related to additional spending and extending tax cuts, that you will do so with this noble sentiment in mind, and with fiscal responsibility, so that our generation will live up to the President’s promise and pass on to our children a strong America, not burdened by a massive debt; and so that history will not look at ours as the “pass-the-buck” generation.

Thank you for your consideration of these matters.

Yours truly,
 
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