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How much national debt should the U.S. have?

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bamacre

Lifer
Jul 1, 2004
21,034
1
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Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
...if the right people are in office.
And there's your unsolvable problem.
Not really. Ron Paul wouldn't change anything either, btw.
Of course not, he'd never get elected. Half the people in this country want tax breaks and "free" stuff. The other half want to kill brown people overseas.
 

First

Lifer
Jun 3, 2002
10,530
271
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Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
...if the right people are in office.
And there's your unsolvable problem.
Not really. Ron Paul wouldn't change anything either, btw.
Of course not, he'd never get elected. Half the people in this country want tax breaks and "free" stuff. The other half want to kill brown people overseas.
Americans have done pretty well the last 100 years, that's just the reality. Most Americans just don't want a kook who gives interviews to Alex Jones.
 

bamacre

Lifer
Jul 1, 2004
21,034
1
61
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
...if the right people are in office.
And there's your unsolvable problem.
Not really. Ron Paul wouldn't change anything either, btw.
Of course not, he'd never get elected. Half the people in this country want tax breaks and "free" stuff. The other half want to kill brown people overseas.
Americans have done pretty well the last 100 years, that's just the reality. Most Americans just don't want a kook who gives interviews to Alex Jones.
Oh boy. :roll:

Is that the best you got? :laugh:

Don't worry, I'm sure Obama will cut spending and balance the budget. ;)
 

First

Lifer
Jun 3, 2002
10,530
271
136
Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
...if the right people are in office.
And there's your unsolvable problem.
Not really. Ron Paul wouldn't change anything either, btw.
Of course not, he'd never get elected. Half the people in this country want tax breaks and "free" stuff. The other half want to kill brown people overseas.
Americans have done pretty well the last 100 years, that's just the reality. Most Americans just don't want a kook who gives interviews to Alex Jones.
Oh boy. :roll:

Is that the best you got? :laugh:

Don't worry, I'm sure Obama will cut spending and balance the budget. ;)
He believes in the Trilateral commission and has talked at length about the Amero. Dude is a certified kook and just short of a conspiracy theorist. And that's because his constituency in Texas that vote for him include many of these same conspiracy nuts, guys like Alex Jones whom he has given dozens of radio interviews too. Old style, gun-slinging, anti-gov't conspiracy theorists. He panders just as much to his base as any other politician. The problem he'd cause as POTUS is that his base represents an extreme fringe with no real world solutions, and he'd offer none as POTUS.
 

bamacre

Lifer
Jul 1, 2004
21,034
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Actually some of Paul's constituents are farmers, and as you know he is against farm subsidies.

Pandering is exactly one thing Paul does NOT do. There's a reason lobbyists avoid him like the plague. He has a political philosophy that he adheres to, not the ideas out of the mouths of those with their wallets out.

But this isn't about Ron Paul. He's irrelevant, like you say. His supporters are small in number. He has no strong say in what goes on in Congress. Maybe if you'd spend more time bitching about those who actually do, we could get some things done. Hold your own party and your own candidates to higher standards.

The only standard you guys seem to have is "better than Bush."

This country needs something better than that. Much, much better.

We need someone who has the courage to tell the truth. That our foreign policy is absurd. That taxpayers shouldn't be sending foreign "aid" to countries like Israel and its neighbors. That marijuana should be legal, and not just for medical purposes. We need someone who understands that the money Congress spends is OUR money. We need someone who believes that the Bill of Rights and the Constitution are things that aught to be respected, not trampled upon. Someone who can tell you WHY health care is a problem before discussing any solution.

But we won't get that.
 

First

Lifer
Jun 3, 2002
10,530
271
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Originally posted by: bamacre
Actually some of Paul's constituents are farmers, and as you know he is against farm subsidies.

Pandering is exactly one thing Paul does NOT do. There's a reason lobbyists avoid him like the plague. He has a political philosophy that he adheres to, not the ideas out of the mouths of those with their wallets out.
He is a strict ideologue, and the most unflexible kind of all; he doesn't budge on his positions nor his rhetoric. It's his greatest strength and his greatest weakness.

Also, lobbyists avoid him because his views represent less than 5% of the population. Most R's and D's hold positions in line with 40-50% or more of the population. Again, that's good for Paul in that lobbyist don't influence him, but bad because his interests don't reflect 95%+ of Americans. You want change that 95% of people don't want.

But this isn't about Ron Paul. He's irrelevant, like you say. His supporters are small in number. He has no strong say in what goes on in Congress. Maybe if you'd spend more time bitching about those who actually do, we could get some things done. Hold your own party and your own candidates to higher standards.

The only standard you guys seem to have is "better than Bush."

This country needs something better than that. Much, much better.
Huh? Congress' approval rating is in the low teens. Who isn't pissed off at Congress? Come no now.

We need someone who has the courage to tell the truth. That our foreign policy is absurd. That taxpayers shouldn't be sending foreign "aid" to countries like Israel and its neighbors. That marijuana should be legal, and not just for medical purposes. We need someone who understands that the money Congress spends is OUR money. We need someone who believes that the Bill of Rights and the Constitution are things that aught to be respected, not trampled upon. Someone who can tell you WHY health care is a problem before discussing any solution.
Except what realistic proposals does Paul offer? His foreign policy is extreme, he wants to cut out embassies and foreign aid altogether, without even considering (out loud anyway) that he'd be ignoring the massive panic and political/social/economic consequences of not offering aid/embassies/support to other nations that would ensue. Paul believes in cutting spending, certainly, except he'd cut it out completely, as in get rid of proven systems like the Federal Reserve, IRS, CIA, etc. Ludicrous shit like that. And he's relevant in this discussion because this guy is the same man you go to for advice on how to balance the budget. Come on, the guy doesn't have a solid plan to do any of it. He just doesn't. He's so radical that he wants to live in an era that, currently, no one was alive to see.

Originally posted by: bamacre

But we won't get that.
And, ironically, you won't get that for one simple, infallible reason; democracy.
 

Nemesis 1

Lifer
Dec 30, 2006
11,379
0
0
Got a question . IS USA A democracy or a republic. If its not a republic when did this Happen .. If its a Democracy when did that happen . They are not the same thing.

From what I see THIS is a republic and always has been .
 

venkman

Diamond Member
Apr 19, 2007
4,955
11
81
Originally posted by: soccerballtux
Originally posted by: venkman
If taking on debt allows you to generate a greater % increase in return than you are paying interest on debt, then go for as much as you want.
counting chickens/hatch. Nobody knows the future. This is why I say...moderation.
Obviously nobody knows the future but you an estimate, predicate, and do risk assesments to figure out where the best places to invest that tax money would be. It happens every minute of every day in every company in the world.

If NASA wanted the government to fund a billion dollar mission that is expected to produce 2 billion in risk adjusted returns, the government would be foolish not to borrow to make sure that program happened.
 

freegeeks

Diamond Member
May 7, 2001
5,460
1
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there is also difference if a countries debt is domestically owned of foreign owned. There are countries like Italy that have a gdp/debt ratio of 104% (yes you read that right, their public debt is higher then their gdp). They can do this because the debt is almost 100% domestically owned because the Italian population has a high household savings ratio. This is the inverse for the USA, the household saving rates are down considerably since the 80's. Bottom line, countries with high household savings can absorb more debt without negative effects on their economy.

household savings
 

Jhhnn

No Lifer
Nov 11, 1999
61,955
14,111
136
Originally posted by: halik
Originally posted by: bamacre
Originally posted by: halik
Alright, let me add to it - if you say as little as possible, why is debt bad?
Debt in the general sense does not have to be bad. I would never support a forced balanced budget, because there could be times of emergency when it would be wise to run a temporary deficit.

But this is certainly not what we have today. Why is it bad? Because of interest payments for one. Wasted money. Malinvestment.
Right, but it's interest payments vs. opportunity costs (taxing people). If the return on people keeping their tax money is greater than the interest on the debt, then it would be irrational to tax - the more debt you have, the more return you get on your $1 of taxes paid due to the additional risk from leverage.

Same way from a tax payer perspective, you can maintain a constant amount of debt and your return in the form of government services is greater than if government only uses taxes to finance themselves. It's really a questions of capital structuring much like any other company.

I think that's false logic. A private concern can think in such terms because they make a profit on borrowed money. That's an impossible task for the govt- they just pay interest on it. Giving tax breaks to the wealthy so that they can buy govt bonds with the difference merely grants them financial safe haven and a permanent subsidy. Making federal debt available to foreign entities flush with balance of payment deficit dollars also props up dollar value in the world market, greatly encouraging offshore investment and domestic job loss.

Permanent deficits mask the negative effects on taxpayers, for as long as they're sustainable. If I spend 10% of my income on debt maintenance and borrow a lot more, too, it all appears to be peachy. If I keep doing it, I'll eventually go broke, and that can happen rather suddenly.

How much debt is too much? Probably a lot less than we have today, particularly when the enormous amount of govt revenues derived from SS contributions will disappear over the next 10 years, and the citizens who loaned the govt that money will, understandably, want the govt to start paying it back...

That *is* the deal Ronnie Ray-guns made with Boomers, right? Or are his ideological heirs less concerned with honoring his contracts than exploiting his memory?

Gotta love Greenspan's pious intonations from 2001 wrt the undesirable nature of govt ownership of private assets, too. I guess that's all different now, just so long as the govt takes a loss on the "assets" bought with borrowed money, everything's copacetic, right?
 

Mursilis

Diamond Member
Mar 11, 2001
7,760
11
81
Originally posted by: Evan
Americans have done pretty well the last 100 years, that's just the reality.
The Romans had a pretty good thing going for a while too, but even Rome fell. Prior success is no guarantee of future success.
 
Oct 30, 2004
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Zero. The government should have zero national debt.

A good government would enact economic policies that bring about widespread economic prosperity which means having to spend less money on social welfare programs and a good government would be fiscally responsible.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
Interest never sleeps and it never takes a holiday, while you are sleeping it is busy working. If you ignore interest it will bury you.

Just keep this in mind. It is not a direct quote, but one of the presidents of the Mormon Church was a banker, and he had a plaque with a saying similar to this on his wall.

Having debt is not necessarily a bad thing. However, when half of the country's income goes to paying off the interest payment on the debt it is not necessarily a good thing. If we default on the debt, our country will come to a standstill and we will be forced to stop sending out all aid checks, govt retirement checks, and all Social Security checks and we will have to lay off all govt employees that are deemed not essential. That would be most of them.
 

BoberFett

Lifer
Oct 9, 1999
37,587
9
81
Originally posted by: Jhhnn
Originally posted by: halik
Originally posted by: bamacre
Originally posted by: halik
Alright, let me add to it - if you say as little as possible, why is debt bad?
Debt in the general sense does not have to be bad. I would never support a forced balanced budget, because there could be times of emergency when it would be wise to run a temporary deficit.

But this is certainly not what we have today. Why is it bad? Because of interest payments for one. Wasted money. Malinvestment.
Right, but it's interest payments vs. opportunity costs (taxing people). If the return on people keeping their tax money is greater than the interest on the debt, then it would be irrational to tax - the more debt you have, the more return you get on your $1 of taxes paid due to the additional risk from leverage.

Same way from a tax payer perspective, you can maintain a constant amount of debt and your return in the form of government services is greater than if government only uses taxes to finance themselves. It's really a questions of capital structuring much like any other company.

I think that's false logic. A private concern can think in such terms because they make a profit on borrowed money. That's an impossible task for the govt- they just pay interest on it. Giving tax breaks to the wealthy so that they can buy govt bonds with the difference merely grants them financial safe haven and a permanent subsidy. Making federal debt available to foreign entities flush with balance of payment deficit dollars also props up dollar value in the world market, greatly encouraging offshore investment and domestic job loss.

Permanent deficits mask the negative effects on taxpayers, for as long as they're sustainable. If I spend 10% of my income on debt maintenance and borrow a lot more, too, it all appears to be peachy. If I keep doing it, I'll eventually go broke, and that can happen rather suddenly.

How much debt is too much? Probably a lot less than we have today, particularly when the enormous amount of govt revenues derived from SS contributions will disappear over the next 10 years, and the citizens who loaned the govt that money will, understandably, want the govt to start paying it back...

That *is* the deal Ronnie Ray-guns made with Boomers, right? Or are his ideological heirs less concerned with honoring his contracts than exploiting his memory?

Gotta love Greenspan's pious intonations from 2001 wrt the undesirable nature of govt ownership of private assets, too. I guess that's all different now, just so long as the govt takes a loss on the "assets" bought with borrowed money, everything's copacetic, right?
Best post in the thread.
 

dullard

Elite Member
May 21, 2001
22,802
1,031
126
Debt is a reverse robin-hood scheme. It takes from those with little (through the little taxes they pay) and gives to the wealthy (who have money to buy the government bonds). Debt is a method to move the wealth from the many to the few. Most people dislike this concept.

Think about it. How much federal tax did you pay last year? Include income tax and the payroll taxes and any miscellaneous tax you might have paid. Now think, almost 10% of that did absolutely nothing for you. Even if you think goverment spending is wasteful, at least it usually has a chance of helping you. But, 10% had no chance to even do anything useful for you. It didn't provide security, nor education, no roads, nothing. What happened? It went into Warren Buffet's pocket since he held government debt. Wouldn't you have rather kept that 10%?


That said, debt itself isn't bad or evil. Debt is necessary for success. Debt to get a college degree is usually good. Debt to expand a small business is usually good. Debt to jump-start a bad economy is usually good.

(1) When times are bad, the government needs debt to smooth out the economy. (2) Since the government tends to get its revenue at descrete times (such as quarterly business tax payments) and needs to pay out daily, the government needs debt to cover the payments until the next lump of tax money comes in. (3) When building long-term projects, it is fairest to have long term payments. Think about a new bridge in your hometown. Should you pay for it now even if you don't plan to stay there for very long? Or should it be paid for over 30+ years from the people who use it in the next 30+ years? I certainly perfer to have the people who stay there and benefit from it pay mostly for it.

So, since debt can be good, but since debt payments are a waste of your money and an undesired giveaway to the wealthy, we need a balance. I'm always an avocate of surplusses in good economies and deficits in bad economies. That way, we use debt when we need it and we keep debt minimal to avoid the debt problems. Our debt should be as large as it needs to be in bad times. But it should be as small as possible in good times. I think an average debt of about half what we currently have would be close to ideal. Remember, even in good times we need a bit of debt to smooth out the payments from the government--we don't want to have to pay federal taxes daily.
 

bamacre

Lifer
Jul 1, 2004
21,034
1
61
Originally posted by: Evan
He is a strict ideologue, and the most unflexible kind of all; he doesn't budge on his positions nor his rhetoric. It's his greatest strength and his greatest weakness.

Also, lobbyists avoid him because his views represent less than 5% of the population. Most R's and D's hold positions in line with 40-50% or more of the population. Again, that's good for Paul in that lobbyist don't influence him, but bad because his interests don't reflect 95%+ of Americans. You want change that 95% of people don't want.
Oh please, if this is how you think lobbyists in DC work, you're very naive. And this is one of our biggest problems.

Huh? Congress' approval rating is in the low teens. Who isn't pissed off at Congress? Come no now.
Gee, maybe the 95% of voters who are supporting Senators McCain and Obama?

Except what realistic proposals does Paul offer? His foreign policy is extreme, he wants to cut out embassies and foreign aid altogether, without even considering (out loud anyway) that he'd be ignoring the massive panic and political/social/economic consequences of not offering aid/embassies/support to other nations that would ensue.
Damn right. We are broke. We are $10 trillion in debt, with massive SS and Medicare expenditures about to explode.

We don't need to send $3 billion a year to Israel, another $3 billion a year to it's neighbors, $1 billion to Georgia, and so on and so on.

That's outrageous. This is taxpayer money. To send that overseas in this manner is absurd.

Paul believes in cutting spending, certainly, except he'd cut it out completely, as in get rid of proven systems like the Federal Reserve,
Proven huh? Read a newspaper lately? The Federal Reserve played a big part in creating the economic turmoil. It's proven alright, proven to create booms and busts and economic instability.

But he couldn't do this without Congressional approval.

He would have worked to dump the IRS. But as he has said, this could not be done unless Americans change their attitudes about what government is and should do.

It's not like he'd go out and get a hatched and start cutting things without any regard for people.

Paul is about moving in a direction, not overnight change. This is a common fallacy.

And he's relevant in this discussion because this guy is the same man you go to for advice on how to balance the budget. Come on, the guy doesn't have a solid plan to do any of it. He just doesn't. He's so radical that he wants to live in an era that, currently, no one was alive to see.
This is just another stupid common fallacy. As if implementing his political philosophy would suddenly make today's technologies and advancements just disappear. That we'd all be riding horse and buggies. Totally ignorant point of view.

And ironically, the other candidates are moving this country toward ideologies much older than his.

And, ironically, you won't get that for one simple, infallible reason; democracy.
Exactly. And it is the removal of our Republic to a Democracy that will lead us to Fascism.
 

First

Lifer
Jun 3, 2002
10,530
271
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Originally posted by: bamacre

Oh please, if this is how you think lobbyists in DC work, you're very naive. And this is one of our biggest problems.
That's exactly how they work. Lobbyists don't target Paul because he speaks for less than 5% of the population, they have no interest in someone with little influence. It's why McCain and Obama were recorded as receiving the most offers/pitches last year.

Gee, maybe the 95% of voters who are supporting Senators McCain and Obama?
And exactly why are McCain and Obama any worse than Ron Paul? And please explain why Congress is at all time low if no one is "bitching" about them as you say? You know you can't.

Damn right. We are broke. We are $10 trillion in debt, with massive SS and Medicare expenditures about to explode.

We don't need to send $3 billion a year to Israel, another $3 billion a year to it's neighbors, $1 billion to Georgia, and so on and so on.

That's outrageous. This is taxpayer money. To send that overseas in this manner is absurd.
The explanation on entitlement expenditures was spoon-fed to you on the first page.

And don't deflect now, it's unbecoming; please explain the benefits of the U.S. pulling out trillions in overseas embassies, bases, aid, support, etc. and the benefits/costs of that action socially, politically, economically, etc. You'll have to explain what kind of signals pulling out from Taiwan sends to China, or what kind of signal withdrawing support from Georgia signals to Russia, or what kind of signal pulling out funds and support from Israel sends to the ME. You fail to acknowledge any of this, much like Ron Paul, and it's why you're both doomed to obscurity.

Proven huh? Read a newspaper lately? The Federal Reserve played a big part in creating the economic turmoil. It's proven alright, proven to create booms and busts and economic instability.
Please explain its part in detail and compare the pros and cons of the Fed and no Fed. You'll actually have to be specific if you want to be taken seriously here. We all know you won't, though.

He would have worked to dump the IRS. But as he has said, this could not be done unless Americans change their attitudes about what government is and should do.
It's ludicrous, the U.S. wouldn't be able to operate without federal income tax, which is a 20% tax on Americans currently. The U.S. as we know it would collapse, and no way in hell are Americans going to change their mind about the IRS because they're not naive enough to believe the gov't can function without income taxes. Like I said before, Paul is so radical he wants Americans to go back to an era that currently no one was alive to see.

It's not like he'd go out and get a hatched and start cutting things without any regard for people.

Paul is about moving in a direction, not overnight change. This is a common fallacy.
Except he has provided absolutely no guidance as to how he'd do it. Can you link to an explanation of his plan? I'd love to see it.

This is just another stupid common fallacy. As if implementing his political philosophy would suddenly make today's technologies and advancements just disappear. That we'd all be riding horse and buggies. Totally ignorant point of view.
No, the era he wants to go back to is before the Federal Reserve was created in 1913, before the first federal income tax was instituted during the 1860's Civil War (and later with the 16th Amendment). I said nothing about Paul being anti-technology. Though he's certainly anti-progress, or as he sees it, pro-Constitution.

And ironically, the other candidates are moving this country toward ideologies much older than his.
No, they're really not. Not when it comes to American history.

Exactly. And it is the removal of our Republic to a Democracy that will lead us to Fascism.
Sure it will.
 

SP33Demon

Lifer
Jun 22, 2001
27,935
141
106
Originally posted by: Evan
Originally posted by: SP33Demon

So what is your tipping point until hyperinflation hits? 100 Trillion?
Why would hyperinflation hit because of a mismanaged budget deficit? We are far and away the most trusted seller of promissory notes in existence, and 8 years of irresponsible spending by Bush and Republicans isn't going to doom us long-term. Bush's idiocy just made it harder to get out of the hole, nowhere near impossible.

And tell us why the Fed shouldn't give each of us $20,000 apiece (a 7Trill surplus to help our hard economic times)? Of course debt is good, but what is your number. And tell us YOUR estimate of the inflation rate once SS and medicare are fully realized from baby boomers in 20 years (2028).
You first have to tell me why on earth giving $20,000 per person is feasible or sensible since I never argued we should do something that irresponsible.

My ideal number for debt is simple; accumulate as much debt as the U.S. can afford, so long as 1) public funding exists for it in the short-term (i.e. taxes) and 2) all current long-term obligations that are locked in (e.g. Medicare extension written into law from a few years back) can be paid for according to the BLS' future estimates of population growth (more people, more tax revenue, more domestic and foreign investment). Continue to have the Fed guarantee dollars so our T-bills are still far and away the most credible in the world, and repeat ad infinitum to the end of time.

Also, who the heck can predict inflation 20 years from now? Please tell me your methodology because I'd certainly love to make millions off of it. Btw, what are your ideal debt numbers?
$20,000 a person sounds about right since corporations are getting bailed out. Hell, Bush gave us $600 so let's up the ante a bit. You still haven't explained why this would be a bad idea (increasing our national debt). Please enlighten us.

RE: My ideal debt number, how should I know? I'm not the one with the econ degree which is why I'm asking you (you purport to be an expert). Please tell me why giving $20,000 to each citizen would be bad, Mr. Economist.
 

BoberFett

Lifer
Oct 9, 1999
37,587
9
81
Originally posted by: Evan
And exactly why are McCain and Obama any worse than Ron Paul? And please explain why Congress is at all time low if no one is "bitching" about them as you say? You know you can't.
Democrats think McCain is worse than RP, Republicans think Obama is worse than RP. They're both right.
 

First

Lifer
Jun 3, 2002
10,530
271
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Originally posted by: SP33Demon

$20,000 a person sounds about right since corporations are getting bailed out. Hell, Bush gave us $600 so let's up the ante a bit. You still haven't explained why this would be a bad idea (increasing our national debt). Please enlighten us.
Because you reach a threshold where giving tax cuts doesn't represent a significant fiscal stimulus. Tax cuts historically have only a mild positive impetus on consumption. $20K is extreme, obviously, and you know that, so I get what you're saying; that there is such a thing as too much debt. And I agree with that. But the ideal number says that as long as you can pay back your obligations, as long as the right assets are rated investment grade/AAA, I think we'll be fine. Rating bad paper AAA, as was the case (I imagine) with a lot of Lehman bonds, is clearly the wrong way to go.

RE: My ideal debt number, how should I know? I'm not the one with the econ degree which is why I'm asking you (you purport to be an expert). Please tell me why giving $20,000 to each citizen would be bad, Mr. Economist.
You wouldn't know if I were right or wrong either way, based on this statement.
 

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