National Debt Passes 18 Trillion [W:232]

[Critter7r]

Re: National Debt Passes 18 Trillion

I dont see anyone trying hard. We have fixed our positions. And now we just wage a political battle to take ground.

No.

No no no no no no.

Myself, I'm trying to understand your position. I want to know WHY your position is better. WHAT about it is 'the thing' that makes it worthwhile?

I don't want to hear over and over and over again about how your position IS better, I want to hear WHY it's better.

So far, all I've heard is that "this" is happening, and "that" is happening and if it weren't for "that party" doing "those things" everything would be rosy.

Sweet, it's raining. I just planted grass today. Awesome timing. Yay, me.

 

[pdog]

Re: National Debt Passes 18 Trillion

Thats a 180 thousand for ever worker, so yes. So you would tax more, spend more, borrow more. Even if given full power, you still wouldnt say, tax the rich, and at least make it balance?

Sure I would tax the rich - I said that immediately before responding to your post (#313). But again, why does this matter? I already know what I believe and why it makes logical sense. What we're trying to do right now is find out why the debt is a negative thing.

 

[pdog]

Re: National Debt Passes 18 Trillion

I see people defending their position. Not trying to understand.

You call questions about inflation and trade balance as defense? What happened to that conversation about inflation? Do you agree with me? If so how does it change your point of view?

 

[jonny5]

Re: National Debt Passes 18 Trillion

Sure I would tax the rich - I said that immediately before responding to your post (#313). But again, why does this matter? I already know what I believe and why it makes logical sense. What we're trying to do right now is find out why the debt is a negative thing.

If you had the choice, would you put forth a budget that is balanced, or spends more than is expected in revenue? If you had a surplus, would you pay back debts, or spend it? In your post earlier you said govt should spend more, and raise taxes to pay for it. That implies you wouldnt deficit spend. Why not?

 

[JohnfrmClevelan]

Re: National Debt Passes 18 Trillion

*

It's becoming painfully clear to me that none of these deficit hawks have the first clue as to why they are deficit hawks.

They can't explain how deficits and/or debt are negative things, yet they want to cut government spending, which would not only hurt people, but it would hurt the economy as well.

Worst of all, they show no inclination to learn about the system that they obviously do not understand.

 

[The Penguin]

Today's debt and deficit are entirely the fault of the Conservatives. We had a surplus back in 2000 that if maintained, could have paid off the debt by 2010. But what happened instead? Conservatives took over and passed the Bush Tax Cuts, so a $236B surplus in 2000 was turned into a $157B deficit by 2002. Then over the next 7 years, Bush ran what were -at the time- four record deficits culminating in the largest deficit ever of $1.4T in his final 2009 FY.

Back in 2001, Conservatives said "surpluses are immoral" and "meant we were being overcharged", and that paying off the debt too soon "wouldn't be fair to the bondholders"...bondholders, some of whom were foreigners.

And we're expected to take Conservatives seriously when they scream about debt and deficits today?

Conservatives deliberately created deficits and debt for no other reason than to use those manufactured crises as an excuse to cut social spending they could never legislate away otherwise because it's popular and it works. Deliberately undermining the fiscal health of the United States in order to push through a narrow ideological agenda is terrorism, people.

 

[JohnfrmClevelan]

Today's debt and deficit are entirely the fault of the Conservatives. We had a surplus back in 2000 that if maintained, could have paid off the debt by 2010. But what happened instead? Conservatives took over and passed the Bush Tax Cuts, so a $236B surplus in 2000 was turned into a $157B deficit by 2002. Then over the next 7 years, Bush ran what were -at the time- four record deficits culminating in the largest deficit ever of $1.4T in his final 2009 FY.

Back in 2001, Conservatives said "surpluses are immoral" and "meant we were being overcharged", and that paying off the debt too soon "wouldn't be fair to the bondholders"...bondholders, some of whom were foreigners.

And we're expected to take Conservatives seriously when they scream about debt and deficits today?

Conservatives deliberately created deficits and debt for no other reason than to use those manufactured crises as an excuse to cut social spending they could never legislate away otherwise because it's popular and it works. Deliberately undermining the fiscal health of the United States in order to push through a narrow ideological agenda is terrorism, people.

This post is proof that deficit fright happens on both sides of the aisle, unfortunately. Ignorance of how the economy operates is not a political problem - both major parties are clueless.

 

[The Penguin]

This post is proof that deficit fright happens on both sides of the aisle, unfortunately. Ignorance of how the economy operates is not a political problem - both major parties are clueless.

You're mistaken. I don't care about the deficit at all. I'm merely pointing out the fact that Conservatives deliberately created deficits for no other reason than to force through their ideological agenda.

 

[JohnfrmClevelan]

You're mistaken. I don't care about the deficit at all. I'm merely pointing out the fact that Conservatives deliberately created deficits for no other reason than to force through their ideological agenda.

Sorry. When you used the word "fault," I took that to mean you thought it was a negative. And yes, Starve the Beast bordered on treason (but it did boost the economy).

I actually agree with the Bush tax rebates, and some of the tax cuts (the ones on the lower end). Plus, I think the Clinton surpluses, small as they were, were harmful, and probably contributed to the 2001 recession. Federal budget surpluses serve no purpose but to suck dollars out of the economy, which is only called for in (rare) times of excess demand.

 

[American]

Seems to me after 300 posts we should check to see if we're passed $19T yet. :2razz:

 

[JohnfrmClevelan]

Seems to me after 300 posts we should check to see if we're passed $19T yet. :2razz:

That would mean another $1 trillion in the pockets of the private sector (that's us). Do you understand that?

 

[American]

That would mean another $1 trillion in the pockets of the private sector (that's us). Do you understand that?

It's not that simple, AND YOU KNOW IT.

 

[JohnfrmClevelan]

It's not that simple, AND YOU KNOW IT.

THEN EXPLAIN HOW!!!

I have explained, with plenty of detail, why debt and deficits are not the problems that most people think they are. Now it's your turn - but I don't think you really understand economics enough to make a cogent argument. Same goes for the rest of your team.

If you think you have some insight into this, share it with the rest of us. Until that time, you are bringing nothing to the debate.

 

[American]

THEN EXPLAIN HOW!!!

I have explained, with plenty of detail, why debt and deficits are not the problems that most people think they are. Now it's your turn - but I don't think you really understand economics enough to make a cogent argument. Same goes for the rest of your team.

If you think you have some insight into this, share it with the rest of us. Until that time, you are bringing nothing to the debate.

That money does not got one for one to us, there's an interest charge on it. It also funds govt overhead.

 

[pdog]

Re: National Debt Passes 18 Trillion

If you had the choice, would you put forth a budget that is balanced, or spends more than is expected in revenue?

You're looking at this completely opposite to the way I do. I look at public expenditure FIRST as making up a shortage of labor demand in the private sector. There are people willing to work that are not working, there are people working in jobs far beneath their ability, and there is more than enough work to be done. THAT is inefficiency. As long as the private sector is not employing people and they are not constrained from doing so due to capital availability, then the government should step in. That said, I'm fine with raising taxes to meet what ever spending level is necessary - but that tax has to be progressive - it only makes economic sense to tax idle dollars. If you tax dollars that would be spent anyway there is no positive economic gain. But if you tax dollars swirling around doing nothing in the stock market and put them in a place where they'll be spent again, then we increase demand and economic activity. If balanced budget is what you seek, that can be done. Just don't let a bias against the public sector tell you that the only way to that balanced budget is thru cuts. Cuts make no sense to me - they simply add more labor supply to a private market that is already saying it doesn't need more labor.

That said, we must keep are tax rates marketable globally. So I have no problem with deficit spending especially during recessions. Nobody can tell me why we shouldn't deficit spend. Further, I'm not sure I want to experiment with our modern economy with a constraint that hasn't existed since the 1800s.

If you had a surplus, would you pay back debts, or spend it? In your post earlier you said govt should spend more, and raise taxes to pay for it. That implies you wouldnt deficit spend. Why not?

Following with the above, the first question I'd ask is what is unemployment? What kind of advancements are we looking to make and if that is low do we need to spend more on education?

I believe the MMT guys are correct - our nation with it's fiat currency is not constrained like a household, city, or state is. But that said, why not just pay for things with dollars that are doing nothing but inflate the stockmarket. Frankly, I don't think they even disagree with me, but they are even more determined than I am to discover what logic exists that says debt is bad in the first place so I think they're trying to keep the conversation free of details that detract from the point.

The problem is that those with a balanced budget desire also have aversion to taxing money back into productive use, so the only option for them is to cut spend, and because of the labor demand problem mentioned above, that makes NO sense to me. To me this one of the points you should be able to explain.

All that said, I consider myself Keynesian just shy of a balanced budget. Spend a lot in recessions when it's cheap to get stuff done and when people need the work. Spend less - maybe close to a balanced budget in good times. As far as paying back our debts, that goes back to one of my first questions. China does not want cash back - they want to hang on to their treasury with a crappy return because it's safe and they are not ready to transform into a country of consumerism and repatriate the dollars they have saved. If they did, that would be the answer to your smaller government desire - exporting to china would cause the private sector to ramp up. But of course unless you agree with my definition of inflation, you seem to be afraid of that too, right? How do you deny the ebb and flow of the world? This is just a time perspective. You would agree with a balanced budget at the end of the year, but you'll probably accept that it won't balance month to month. Why isn't this same concept perfectly acceptable from decade to decade or century to century? If we didn't balance after another hundred years. On the flip side if china never becomes a consumer, do we care? In 100 years time, they gave us stuff and we gave them paper.

Since you insist on asking me questions now, I ask that you don't reduce my posts down only to ask a 4 word question. Is there anything above that is not logical to you? If so what/why?

 

[JohnfrmClevelan]

That money does not got one for one to us, there's an interest charge on it. It also funds govt overhead.

Who gets the interest? Private sector bondholders.

Where does the money go for "govt. overhead"? People. Government employees and private sector contractors that get paid.

Every penny that the government spends and doesn't tax back stays with the private sector.

 

[pdog]

You're mistaken. I don't care about the deficit at all. I'm merely pointing out the fact that Conservatives deliberately created deficits for no other reason than to force through their ideological agenda.

When you look back to the 80s it's clear that somebody knew what they were doing. "Starve the beast" began - not only did this mark the beginning of deficit spending, it's positive stimulatory affects actually seemed coupled to the antigovernment rhetoric, despite it being exactly the opposite. But then when you look at the repeal of the fairness doctrine in 85, making the rise of fox news and other talking heads possible. There was certainly a powerful plan set in motion. I just hope we can undo it before it's too late.

 

[jonny5]

Re: National Debt Passes 18 Trillion

If balanced budget is what you seek, that can be done

So then you would advocate a balanced budget. Which means we're on the same page. So why are we arguing about it? The real issue seems to be HOW you go about getting to a balanced budget. You favor tax increases, I favor cuts. But we both appear to be against deficit spending.

Now what about the deficits we already accumulated. What would you do about that? Raise taxes to a surplus? Leave it forever?

 

[jonny5]

Seems to me after 300 posts we should check to see if we're passed $19T yet. :2razz:

No need. They havent raised the debt limit, so its stuck at 18.2 trillion. So their just moving some numbers around on paper to keep spending instead.

http://www.treasury.gov/initiatives/Documents/Debt Limit Letter 20150313.pdf

 

[pdog]

Re: National Debt Passes 18 Trillion

So then you would advocate a balanced budget. Which means we're on the same page. So why are we arguing about it? The real issue seems to be HOW you go about getting to a balanced budget. You favor tax increases, I favor cuts. But we both appear to be against deficit spending.

I'm hardly advocating for a balanced budget. I'm all for deficit spending in recessions. I just don't see the point in letting money be extracted by the rich and just pooling there. That's the REASON I would avoid the deficit. What is your REASON? I just told you that cutting spending would be bad for our economy, but you still want to do it anyway. I want to know WHY fixing the debt is worth these problems.

Now what about the deficits we already accumulated. What would you do about that? Raise taxes to a surplus? Leave it forever?

Jonny, are you reading my posts? For the most part I've answered this in detail. Creating a surplus is pointless. Why would you take money out of private markets in an attempt to give the holder of a treasury cash when he didn't want cash the first time he bought the T-bill? If china does actually want it (signaling consumerism), are you still worried about inflation? To make sure we are clear - I'd leave it forever just as we have for the last 100 years.


Please note, this is what I asked of you:

Since you insist on asking me questions now, I ask that you don't reduce my posts down only to ask a 4 word question. Is there anything above that is not logical to you? If so what/why?

Your response reduced my post down to one single sentence. I told you why cutting spending is a bad idea and you tell me you still want to do it. Please go back and tell me what part of my post is not logical so I can understand why you STILL want to cut spending.

 

[Khayembii Communique]

Re: National Debt Passes 18 Trillion

So then you would advocate a balanced budget. Which means we're on the same page. So why are we arguing about it? The real issue seems to be HOW you go about getting to a balanced budget. You favor tax increases, I favor cuts. But we both appear to be against deficit spending.

Now what about the deficits we already accumulated. What would you do about that? Raise taxes to a surplus? Leave it forever?

Budget deficits can be run perpetually. There's no reason to balance the budget.

 

[The Penguin]

When you used the word "fault," I took that to mean you thought it was a negative.

It is a negative and it is their fault. They didn't cut taxes for any other reason than to manufacture a budget crisis and no, the Bush Tax Cuts did not boost the economy at all. What boosted the economy was the Bush Mortgage Bubble, which was the result of the Bush Tax Cuts. From 2004-2007, the Bush Mortgage Bubble is what grew the economy. But of course we all know what happened there.

I actually agree with the Bush tax rebates

Why? They did nothing. They were passed in July 2001 and did absolutely nothing for the nation other than squander a surplus that -if maintained- could have eliminated the debt by 2010. OR the surplus could have been used to retrain all those laid-off, high-skill dotcom workers to build the nation's first smart-grid which would have saved trillions on our energy needs...OR the surplus could have been used to build high-speed rail, nationwide free broadband, etc. Anything other than the useless tax cuts which cost Bush 841,000 jobs in his first term...with most of that job loss coming after the Bush Tax Cuts were accelerated in 2003.

And don't blame 9/11 or the First Bush Recession. Despite both of those, GDP for 2001 was still positive and the market regained all 9/11 losses by November 2001.

Plus, I think the Clinton surpluses, small as they were, were harmful, and probably contributed to the 2001 recession.

What makes you think that? The 2001 recession was caused by the Capital Gains Tax Cut which led to the growth of the dotcom bubble, which burst in late 2000. But unlike the Bush Mortgage Bubble, the dotcom bubble wasn't tied into the credit markets, nor was it as large. Plus, when the dotcom bubble burst, we were left with a surplus of high-skilled tech workers. When the Bush Mortgage Bubble burst, we were left with a surplus of empty houses.

Federal budget surpluses serve no purpose but to suck dollars out of the economy

No, surpluses are used to pay down debt and/or pay for new spending on things like a smart grid, high-speed rail, free nationwide broadband, free college tuition...basically anything other than useless tax cuts that did no good for anyone except the 1%.

 

[The Penguin]

Every penny that the government spends and doesn't tax back stays with the private sector.

Ummm...which private sector? Not the US private sector...maybe the Cayman Islands or Switzerland. What do you think all those companies do with the money they been getting from the government via bailouts or the Fed? They've been stashing it offshore. How does that help us?

 

[The Penguin]

They havent raised the debt limit, so its stuck at 18.2 trillion.

Tell me something...when the debt stood at about $5T in 2001, and we had a surplus that could have paid off the debt by 2010 if Conservatives had done literally nothing, where were all the teabags as Bush took the surplus and turned it into record deficits that doubled the debt by 2009?

Doesn't the fact that you said nothing as Bush ran record debts on programs you wanted like the Bush Tax Cuts ($2T), the War on Terror ($2T), and Medicare Part-D ($1T) pretty much invalidate any argument you are making about debt today? Oh I'm sorry, did I say "invalidate"? I meant discredit.

Obama has lowered the deficit by 2/3 from where Bush left it, and reduced the debt-to-GDP and deficit-to-GDP ratio without any assistance from the GOP. So why should anyone listen to anything you people say?

 

[Fenton]

Re: National Debt Passes 18 Trillion

I would increase demand - I would spend more on education, infrastructure, nasa, r&d, etc. I would pay with it with progressive taxes and then deficit spending if necessary. Our country has a lead - we should continue to try to stay ahead, not perpetually find the cheapest way to stagnate.

But frankly, why does this matter? It is you that started a thread about the 18T in debt. To me the point of our discussion it to find WHY you believe that. If you're wrong about trade imbalances and inflation, doesn't this affect your thinking of the debt? Everybody is trying to make a point to you - our debt is not excessive household credit card debt. The household analogies simply DO NOT APPLY unless you have a money printer at home. "Inflation" is not a concern unless you can point to constraints on our productivity. Even if the household anology did make sense - I have a mortgage that is way more than 100% of my personal "GDP" for this year. Is this a bad thing? Should every American pay cash for their home? Should businesses not run deficits for years before making a profit? Even if you DID want to use real debt as an analogy, the real world runs on credit.

If you want search my old post - I used to be just like you - I was a debt hawk. But once too many times people put me on my heals when asking why the debt was a bad thing. Yes, 18T is a lot compared to your normal salary. But there's 350M people in this country. Is it really that big with that in mind? Abstract thinking and macro is hard - it's chaos theory. But that doesn't mean we have to try to ram it into the context of our own lives.

And you would be making a HUGE mistake, as its already been proven that " stimulus to increase aggregate demand ", doesn't work.