This analogy only works if the guy on the bus has no intention of ever paying
back his debts and expects his children and grandchildren and total strangers to
pay it back.
Breck, I think you are a bit confused. In rough terms, the current US spending
is about $4T (trillion) a year, income is about $3T, deficit is about $1T, and
debt is about $16T. In other words, the country's debt is currently more
than five times it's income. This is very similar to the Guy you say is
irresponsible. And it's getting worse every year.To continue
your analogy, in order for your Guy to be as bad as the government, he must
still be spending $4 for every $3 he earns, continually increasing his debt at a
staggering pace. Is that what he should be doing? Is that what the country
should be doing?
Well, nice try, but as has been pointed out more often than I can count, a
nation's budget is not at all similar to a family's budget. The
nation's budget has to account for all sorts of things a family can
conveniently ignore. I don't have any debt right now, having paid off my
mortgage and car loans, so maybe I'm an anomaly in our society, but a few
years ago when I did have some debt, my income was still greater than my
expenses. The problem with the national picture is that both political parties
basically agreed to increase spending while giving up a higher-paying job for a
lower-paying one. That, my friends, is stupidity.
Anyone who tries to justify and promote a $16T debt is just being silly.
Nothing good can come from that. But let's l;ook at what we've done.
In 2000, just when the total debt was about $5T and we were starting to balance
our annual budget, the CBO calculated that with current conditions continuing it
would take about 10 years to erase the entire federal debt. Not the deficit,
the debt - gone, zero. But then the new president proposed, and we all went
along wwith it (be honest, it doesn't matter which side of the aisle you
were on) that our taxes be reduced. "Afterall", the new president
declared, "it's your money, not the government's." Of course
the strong economny faltered then (in 2000) but we also started two wars without
any funding mechanism to pay for them and the government passed a huge
prescription drug benefit bill. Then the bottom fell out of the economy. So,
if we had left taxes where they were and paid for the wars and benfits with new
taxes would we be debt free? Probably not, but we would be on the other side of
$5T, you can bet on it.
Breck,The mortgage, car loan, and student loans all have one thing
in common; they are installment debt. Each month they get SMALLER. Each day,
the federal debt under BO's mismanagement, gets LARGER. Who is really
irresponsible?What did the guy on the bus get for his debt? A house
(which is worth more than he owes unless he fell victim to barney frank's
housing bubble), an auto, and an education that increases his earnings
capacity.What does the govt get for most of the debt it is incurring
now? generally Nothing.ECR,The CBO may have shown a reduction
in the debt, maybe even the elimination. But the Treasury reports otherwise.
Gross federal debt was still INCREASING under slick willy. The treasury was
borrowing from social security, so the US treasury's debt was still
increasing. The only reason the CBO reported those numbers was because
SS's surplus was larger than Treasury's deficit, and SS's surplus
could not continue with an aging population.The economy, as
evidenced by slick's inverted yield curve, was showing signs of distress
when bush took over.
...so in other words this little ole 17 trillion is nothing to worry about."The problem is, is that the way Bush has done it over the last
eight years is to take out a credit card from the Bank of China in the name of
our children, driving up our national debt from $5 trillion for the first 42
presidents -- #43 added $4 trillion by his lonesome, so that we now have over $9
trillion of debt that we are going to have to pay back — $30,000 for every
man, woman and child. That's irresponsible. It's unpatriotic." -
Barack Obama, July 3, 2008"We don’t have an immediate
crisis in terms of debt,” President Obama said in an exclusive interview
with George Stephanopoulos for “Good Morning America.” “In
fact, for the next 10 years, it’s gonna be in a sustainable
place.”So in 2008 it was "unpatriotic" at 9 trillion
and now it's no big deal at 17 trillion?? Sure gives you a load of
confidence in your commander and chief doesn't it. What a nightmare!
Breck England said, "The federal debt is equal to about one year of its
income." Actually, the federal debt is larger than the entire GDP. Does he
actually think that the federal government's income equates to GDP? Wow.
@JACCIncome is not 3 trillion a year in the US. Otherwise federal revenue
(around 2.5 trillion a year) would be an 83% tax rate and that's obviously
not the case.
@JACCNevermind, I realized what you were going with. I was thinking you
were referring to something else.
lost in DC - I acknowledged that the economy was turning when President Bush
took over but the actions he took, and that we all cheered, just made a
situation that was teetering, fall way over the top. Add the lost revenue from
tax cuts to the cost of wars and drug benefits and the problem balooned only to
explode when an actual (rather than a self imposed) crisis hit us with the world
wide economuic downturn. And I'm not really in the mood to argue with you
about who caused that.A point I should have made was that when
President Bush said, "It's your money" he failed to include the
statement, "But it's also your debt." That would have been nice if
he just would have mentioned it.And one of these days, my greatest
hope, is that you can call the presidents, current and past, by their proper
titles, instead of the childish names you tend to want to call them. Am I
hoping for too much?
To "Breck England" here is the difference between households with debt
and the government. This is the one HUGE key that your example failed to
include.When does the government plan to have the debt paid off?Now ask any family when they plan to have their home paid off, student
loans, and car loans. Chances are the better the family is handling their money
the more likely they are to be able to tell you when they will be debt free.
The families that are financial messes have no idea when they will be debt
free.To "ECR" the study you refer to was proven wrong when
the conditions to pay off the debt were changed by the recession that began
ECR,I agree with some of what you said, even when you say bush
should have said "it's your debt".You bring up the
wars; I have asked numerous times why the deficit is higher now that the wars
are winding down then it was when they were going full bore. No one has yet to
answer. Yes, the wars contributed to the deficit, but obviously they were not
the sole factor.unfunded drug program? I have always maintained
that was bush's greatest mistake - the wars will evenutally end, but that
program goes on forever. remember also the demonrats were putting forth a more
expensive program, and the repubs just beat them to the punch. Let's not
forget that the new projections for Obamacare say it will cost up to 10 X
it's original estimates. You say my referring to BO by his
initials is disrepectful. I am sorry you are overly-sensitive. I give BO no
less respect than he deserves and certainly more than most liberals gave
bush.and thank you for admitting you can no longer defend barney
frank for bringing down our economy.
With the debt think Cyprus. Eventually the debt gets called or the wealth of
the citizens is stolen to pay for the governments continuation. New Zealand is
thinking of following suite. "Oh it won't happen here", but I keep
hearing the progressives talk about continued class warfare and taking the
capital of those that have saved.
lost in DC - I said nothing about Barney Frank and if you read "After the
Music Stopped" by Alan Blinder, you'll find that while Fannie and
Freddie played a minor role in the economic crisis, coming very late to the
sub-prime party as they did, it was a lack of oversight by government regulators
and the unethical and criminal actions of Wall Street bankers that caused the
lmeltdown. They used other people's money (OPM) to enrich themselves for a
time and then hide behind the enormity of their institutions to avoid
prosecution. Or, as the author of this letter suggests, the current
adminstration has, for some reason, been reluctant to prosecute them.The wars cost us trillions and they were never carried as deficit's
during the Bush Adminstration but were, instead, always funded as
"supplemental funding." The increased interest on the debt caused by
that spending, the lower tax intake caused of the economic downturn and the fact
that this president has been honest enough to cover the cost of war on the
budget, is why the deficit is much higher now than it was then.
If repubs think that Obama is a big spender then they must have really hated
The mortgage, car loan, and student loans all have one thing in common; they are
installment debt. Each month they get SMALLER. Each day, the federal debt under
Congressional mismanagement, gets LARGER while the GOP absolutely refuses to try
to compromise or seek any kind of balanced solution. Who is really
Sometimes when I read through comments on forums like this I wonder if people
that are interested in solving our problems rather than simply tyring to blame
them on the other side even exist. Sigh....
To "The Real Maverick" even comparing Reagan to Obama, Obama is a big
spender.Under Reagan the debt went from 33% to 51% GDP. Under Obama
it has gone from 69% to 106& GDP. Obama still has outspent Reagan.Another way is looking at the debt held by the public. Under Reagan it went
from 7.2% to 9.8% GDP. Under Obama is has gone from 40.3% to 76.3% GDP.Again, compared to Obama, Reagan was quite responsible.
@one old manThe mortgage, car loan, and student loans all have one thing
in common; they are installment debt. Each month they get SMALLER. Each day, the
federal debt under Democratic mismanagement, gets LARGER while the GOP proposes
multiple budget solutions, which are thwarted by the Democratic Senate who
refuses to even pass a budget, and a Democratic president who has never proposed
a responsible budget, attempting to divert attention from his own failure with a
mantra of class warfare, and has stated that the deficits are not even a
problem. Who is really irresponsible?
"Tyranny is defined as that which is legal for the government, but illegal
for the citizenry." Thomas Jefferson
The federal debt can never be paid off because our monetary system is debt
based. There is only 1.2 trillion dollars in cash in circulation.
Redshirt - in Reagan's first four years he increased federal spending by
8.7%. In Obama's first four years he increased spending by 1.4%. By that
standard Reagan was in outer space compared to Obama. Just sayin'.
Even though some of the comments here are trying to not point fingers, many
waste time on blaming one side or the other for the debt. A much more productive
endeavor would be to look at both parties plans to reduce the deficit (not the
debt). Neither side has submitted a plan that would balance in the next ten
years...ten years. Both are counting on the growth fairy to save them from
their ignorance. If GDP growth returns to 5% the deficit (not the debt will
begin to disappear on its own. So is anyone really serious about paying down the
debt? Really only the majority of Americans who believe that spending cuts and
tax increases in a long range plan are the way out of the mess.
Getting rid of all debt is getting rid of most money and all liquidity.
@ECR:"... it was a lack of oversight by government regulators and the
unethical and criminal actions of Wall Street bankers that caused the
meltdown."Government regulators had little or nothing to do with
it. Same with Wall Street Bankers. The meltdown was caused by government
action... Specifically, the removal of the so called red-lining where lenders
were required to lend to anyone who wanted to buy real estate regardless of
property location and/or the ability of the borrower to make payments. That,
and other action by the heads of the House and Senate Finance committees, Barney
Frank and Chris Dodd, are the major causes of the economic meltdown. In other
words our elected officials in government... not regulators. But, of course, it
was bankers' creation and usage of strange sounding financial instruments
such as 'mortgage backed securities,' 'credit default
swaps,' and 'tranches' that exacerbated the problem. @The Real Maverick:"If repubs think that Obama is a big spender then
they must have really hated Reagan."The Obama debt is more than
any other president and actually almost more debt than all prior presidents
We shouldn't make the mistake assuming a cut in taxes leads to less federal
revenue, or that an increase in taxes results in more federal revenue. The
reason is that tax rates influence economic activity. A graph of federal revenue
as a function of tax rates probably looks more like a bell curve (or the Laffer
curve, if you already know what I'm trying to explain). The peak of the
curve is where maximum tax revenue is collected. If we're beyond the peak
and tax rates are increased, revenue will go down; if we're beyond the peak
and tax rates a decreased, revenue will go up. It's counterintuitive, but
that's how it works. Given that the federal government is currently
consuming over 20% of the GDP, my guess is that we're beyond the peak in
the curve, so raising taxes will result in less federal revenue. I support those
in Congress who oppose raising rates for this reason - it will make a bad
situation worse.The elephant in the room is entitlements. They
should have been adjusted over the years to keep them sustainable (e.g., the
retirement age is way too low).
@Shaun:"The federal debt can never be paid off because our monetary
system is debt based. There is only 1.2 trillion dollars in cash in
circulation."The amount of dollars in circulation is no measure
of money supply. You're forgetting, among other things, private debt.@one vote:"Getting rid of all debt is getting rid of most
money and all liquidity. Economics 101."No one want to get rid
of all debt... just the federal debt. Common sense 201.Government
debt spurs our economy, of course. But only to the extent that the debt is
funded by foreign assets.Liquidity is the ease with which non cash
assets can be converted to cash assets. Has little or nothing to do with
@Pops:"The elephant in the room is entitlements. They should have been
adjusted over the years to keep them sustainable (e.g., the retirement age is
way too low)."Entitlements are called 'entitlements'
because taxpayers are entitled to them. And why are they entitled to them?
Because they put money (taxes) into them plus, the law says they are entitled.
And, at the present time the primary entitlement, Social Security, is being
sustained. If there is a problem with the sustainability of Social Security it
is essentially that there are too many 'fingers in the pie' that put
nothing into it.And, of course sustainability can be effected in a
number of ways including raising the retirement age and increasing the SS tax
Households should not start a huge unfunded war and cut taxes. Our Grandchildren
do not need debt to remove leader and rebuild middle east counties. When war
starts, taxes must go up and not down.
@wrz:Social Security is currently running in the red, meaning that
more money is being paid out in benefits than is coming in to the government in
the form of payroll taxes. I don't see how that constitutes "being
sustained".Many believe it's covered by the so-called trust
fund, which is only a box of IOUs - the money has already been spent on other
stuff. It's basically just an accounting trick wherein one branch of
government borrows from another branch. On the balance sheet for the entire
government, it boils down to an unfunded liability that can only be retired by
printing money (which is a stealth tax on cash accounts), raising tax rates,
borrowing money, cutting benefits, or some combination of the above. About the
only option being exercised by the government is the first, through
"quantitative easements" that debase the dollar and erode our savings,
probably because it's the only action that can be taken without
congressional approval. And they also have to cook the books with regard to the
consumer price index, otherwise benefits would go up with inflation.
@one vote "...unfunded wars..."Our social programs are
unfunded also, if we have to borrow 40 cents on the dollar to keep them running.
Both political parties are responsible. It's time to stop assigning blame,
stop running up the debt, and start paying our bills.Our current
federal debt amounts to about $138,000 per household. Who wants to leave this on
re:The Real MaverickObama has spent more (7 trillion) himself - that
is more than any previous president since George Washington combined. When
Barack took over the debt was 9 trillion - 4 trillion of that was under Bush and
Obama called that unpatriotic. Now Barack rings up 7 trillion himself in only 4
years!!! So should we call Barack unpatriotic ++?? Look- the debt question is
killing America - your kids and my kids future. That is unquestioned. This tit
or tat blame game that goes on is useless and serves no purpose. When your car
is in the river you get the thing out onto dry ground instead of arguing whose
fault it really is. The US WILL become Greece and Spain and Cyprus and others
very very soon - do the math because numbers don't lie. So do we just set
here borrowing ourselves into bankruptcy or do we take action to stop the train
from going over the cliff? There is no economic argument here - the raw
economics are not sustainable regardless of what our socialist president tries
to propagandize. I almost think he wants to the US economy to collapse. Nothing
else makes any sense.
You don't understand. The government running huge deficits is a good thing,
the more the better. It gives money to people to spend so it fuels the economy
and creates inflation, which is good. That is why the stock market is rising,
although it is too bad that the fat cats on Wall Street are getting all the
money. Obama will fix that soon. The USA will never go bankrupt. It
is too big to fail. The government won't let it fail. They can always print
money to pay the debts.Greece, Spain, and Cyprus are just flukes.
They don't know how to make the deficit spending work for them like the USA
@Liberal TodayThe trouble with parody is that thousands of liberals
are out there nodding their heads in agreement.+1, however. Well
Yes Nate, but sometimes the lunacy just is so deep that truth just doesn't
sink in, and parody seems the best coping mechanism.Hope it made
you, and many others smile. It did me good.
Liberal Today, you are so clever!