is anyone concern about the US deficit?

[Zorba]

Quick question. Isn't a large amount of the federal debt owed to the Social Secerity trust fund? As in, if it doesn't get paid back SS goes to sh!t? Correct me if I am wrong here.

 

[TheToOTaLL]

Two constants: death and taxes (unless you Amish, then, there's only just the death part )

 

[Hector13]

Originally posted by: XZeroII
*SIGH*
Do any of you understand what inflation actually is? If Bill Gates recieves $7 trillion, according to you people's theories, inflation would go up so much that there would be a massive depression and the world would end. IT DOESN"T WORK THAT WAY.

wow.. I honestly, truly hope that you are a high school student with no experience (and hopefuly no influence!!!) in the real world.

Say willy gets 7 trillion. What is he going to do with this? spend it? If he does, the money obviously goes to "ordinary people". But, according to you, since bill is soo rich, he won't spend this money (where you got that idea from, I'll never know). So now, he can invest this money.. again it will end up going to "ordinary people" as whoever he invests the money with will spend it.

Lastly, he can put this money in the bank.. at which point the bank will have 7 trillion more dollars to lend to... guess who... "ordinary people" again.

 

[Hector13]

Originally posted by: XZeroII

Originally posted by: Staley8
I'm not real concerned. First of all I really don't even know who we owe this money too. Secondly, do these people who we owe money to have collectors and repo people to come and get it, breaking our knee caps if we don't pay up?

You are the smartest person I know on this topic (except for me, of course). The debt is NOTHING. It means nothing. It is a 100% political tool that politicians and the media use to scare people. We could have a $5 trillion dollar deficit for the next 20 years and it would mean nothing. People who say different are just spreading misinformation.

The money is being borrowed from us, the people. It's like you owing yourself $20. What does it matter if you ever pay yourself back? NONE. The way it works is this: Rich people buy gov't bonds with the understanding that they will recieve a guarenteed rate of interest on those bonds (for those of you who don't know how bonds work). Our gov't takes that money and spends it. But where does any of this money come from? Our gov't has unlimited funds because it can simply print money whenever it wants. So whenever it needs to pay off a bond, it just wishes up some money and pays it off. Sure, it introduces extra money into our system and thus SHOULD cause inflation, but it doesn't because the money is going to people who already have billions of dollars. Inflation happens when ordinary people have more money.

do you guys really think this is how things work?!?!

for christ's sake, people own bonds from the government.. many of these people are outside of the US. Even if they were all US citizens, you can't just say the government doesn't need to pay its creditors back.

Think of a bank.. it takes people money (deposits) and lends it out to other people. So, in effect, when you borrow money from a bank, you are borrowing it from me and from other people here (including yourself).

Does that mean you wouldn't care if you went to the bank and you savings account was all of a sudden gone? After all, this was money that you "lent to yourself".

 

[Hector13]

Originally posted by: Dissipate

Originally posted by: ChicagoMaroon

Originally posted by: Dissipate

Originally posted by: wyvrn
It's money owed to ourselves. The government issues securities to raise the funds (like bonds and t-bills), and to default on any of these issues would send the value of our currency plummeting. Not good.

No, it is not money we owe to ourselves. Read above, the Federal Reserve Bank holds a good portion of the debt. The Fed is a private bank owned in part by foreigners.

Wow, given that you don't even know what the Fed is, you sure yap about economics like you're Milton Friedman.

http://www.federalreserve.gov/default.htm

U.S. government debt is held by the Federal Reserve, our central bank, which engages in open market operations to regulate the money supply (buy debt to increase the money supply, sell debt to decrease the money supply). The debt is also held by private citizens, domestic and foreign, as well as foreign central banks.

Its a private bank. That's what it is, how am I wrong?? Yes it is kind of half public, but it is also private which is what I said.

okay.. I take back what I said above. At this point it is clear that you have no clue what you are talking about... the fed is NOT a private bank and it does NOT own most of our debt.

 

[Siddhartha]

Big deficits lead to high interest rates. High interest rates usually cause lower consumer and business borrowing. Lower consumer and business borrowing leads to a down turn in the economy.

I think Hoover tried to keep a balanced budget during a recession and well you have heard of the Great Depression...

 

[Dissipate]

Originally posted by: Hector13

Originally posted by: Dissipate

Originally posted by: ChicagoMaroon

Originally posted by: Dissipate

Originally posted by: wyvrn
It's money owed to ourselves. The government issues securities to raise the funds (like bonds and t-bills), and to default on any of these issues would send the value of our currency plummeting. Not good.

No, it is not money we owe to ourselves. Read above, the Federal Reserve Bank holds a good portion of the debt. The Fed is a private bank owned in part by foreigners.

Wow, given that you don't even know what the Fed is, you sure yap about economics like you're Milton Friedman.

http://www.federalreserve.gov/default.htm

U.S. government debt is held by the Federal Reserve, our central bank, which engages in open market operations to regulate the money supply (buy debt to increase the money supply, sell debt to decrease the money supply). The debt is also held by private citizens, domestic and foreign, as well as foreign central banks.

Its a private bank. That's what it is, how am I wrong?? Yes it is kind of half public, but it is also private which is what I said.

okay.. I take back what I said above. At this point it is clear that you have no clue what you are talking about... the fed is NOT a private bank and it does NOT own most of our debt.

"The Fed is a private bank." - Larry Bates, economist, author and former banker

It doesn't own MOST of our debt but as an entity it is the largest holder of the national debt.

Edit: I realize that I didn't make this clear in my original post. But your ad hom attack is not warrented which means your cred is about 0 right now.

 

[IGBT]

...don't forget about the 25 trillion un-funded liabilities we owe to social security. Oh..ya didn't know that?? SS is only a book entry..there is no physical SS fund. Lyndon Johnson signed that legislation that moved all the SS revenue to the general fund....voodoo economics...

 

[Ketteringo]

Cut welfare! Not completely, just put a 6 month limit on it or something. It's completely retarded for able bodied people to be able to leech off of gainfully employed people.

Social Security needs to go next. Let people be responsible for their own damn retirement. Why should I have to pay 5% of my earnings to old people? They had jobs, they should have saved and invested enough to retire on, I know I am going to.

After that, the military budget. More reactive, and less proactive would be better. Only attack someone if they attack us. Why the he11 should the US try to make every other country a democracy?

 

[Mill]

No, actually I'm not. The debt is 3.4% of GDP, and the debt was about 4.4% back in the early 90's. We made it back from then no?

 

[FoBoT]

no

 

[glen]

Originally posted by: Mill
No, actually I'm not. The debt is 3.4% of GDP, and the debt was about 4.4% back in the early 90's. We made it back from then no?

No.


The Deficit is over 20% of GDP.

The Debit is 70% of our GDP:
Debit = 7,028,853,169,555
GDP = 10,983,900,000,000

 

[dxkj]

Hrm,

Couldn't the United states just add another item to taxes that was called DPO (defecit payoff), and have it take like 2% out of everyones pay checks/income?


In a couple years we would be out of debt... I honestly think this would happen before we defaulted.



Also, I probably missed a few comments on it, but other countries owe us a lot of money too.... If we had to pay our debts, you can bet that we would be collecting on ours as well.

 

[glen]

Originally posted by: dxkj
Hrm,

Couldn't the United states just add another item to taxes that was called DPO (defecit payoff), and have it take like 2% out of everyones pay checks/income?


In a couple years we would be out of debt... I honestly think this would happen before we defaulted.



Also, I probably missed a few comments on it, but other countries owe us a lot of money too.... If we had to pay our debts, you can bet that we would be collecting on ours as well.

No, 2% would not even dent the intrest on it.
Look at the figures I posted. They are staggering.

 

[Hector13]

Originally posted by: Dissipate
Edit: I realize that I didn't make this clear in my original post. But your ad hom attack is not warrented which means your cred is about 0 right now.

ohh.. no not "0 cred"... your baseless argument gave you zero cred about 20 posts ago.

 

[Mill]

Originally posted by: glen

Originally posted by: Mill
No, actually I'm not. The debt is 3.4% of GDP, and the debt was about 4.4% back in the early 90's. We made it back from then no?

No.


The Deficit is over 20% of GDP.

The Debit is 70% of our GDP:
Debit = 7,028,853,169,555
GDP = 10,983,900,000,000

I meant deficit, and my numbers were actually TOO liberal.

The CBO, Congress' nonpartisan fiscal analyst, predicted that the deficit for the 2004 fiscal year, which runs through Sept. 30, would hit $477 billion -- a record in dollar terms and substantially higher than last year's $375 billion shortfall. But at 4.2 percent of the GDP, it is still below the gargantuan deficits of the 1980s. The new projection was similar to the agency's estimate of last August.

Current GDP is 11.2 Trillion. Current Debt is 7 Trillion. So the debt is about 62% of current GDP. You've got to have debt for country to run correctly, and at 62% of GDP that means that we can work on the debt if it comes a problem. Currently we need to pay it down, but it isn't dire straights. How did you get 477 billion as being 20% of a 11.2 trillion dollar GDP? 3.2% is nothing compared to the deficit we had in the 80's. I was reading FT yesterday at the doctor's office and it said that our deficit is not that big of a deal.

 

[Insane3D]

Originally posted by: Mill

You've got to have debt for country to run correctly

You do? I am nowhere near an expert on these matters, but are you saying the country couldn't run correctly if we had little or no debt?

 

[omega2]

Isn't there a limit to the deficit can go? I mean wouldn't it get to a point where you would have to declare bankruptcy? If it keeps going on, and everything seems ok, then it would look like the money they owe, will never get it.

 

[Czar]

Originally posted by: Insane3D
Originally posted by: Mill

You've got to have debt for country to run correctly

You do? I am nowhere near an expert on these matters, but are you saying the country couldn't run correctly if we had little or no debt?

think norway has no debt now, they struck oil, payd the debt and put most of the rest in a trust fund for future generations

 

[glen]

Originally posted by: Mill

Originally posted by: glen

Originally posted by: Mill
No, actually I'm not. The debt is 3.4% of GDP, and the debt was about 4.4% back in the early 90's. We made it back from then no?

No.


The Deficit is over 20% of GDP.

The Debit is 70% of our GDP:
Debit = 7,028,853,169,555
GDP = 10,983,900,000,000

I meant deficit, and my numbers were actually TOO liberal.

The CBO, Congress' nonpartisan fiscal analyst, predicted that the deficit for the 2004 fiscal year, which runs through Sept. 30, would hit $477 billion -- a record in dollar terms and substantially higher than last year's $375 billion shortfall. But at 4.2 percent of the GDP, it is still below the gargantuan deficits of the 1980s. The new projection was similar to the agency's estimate of last August.

Current GDP is 11.2 Trillion. Current Debt is 7 Trillion. So the debt is about 62% of current GDP. You've got to have debt for country to run correctly, and at 62% of GDP that means that we can work on the debt if it comes a problem. Currently we need to pay it down, but it isn't dire straights. How did you get 477 billion as being 20% of a 11.2 trillion dollar GDP? 3.2% is nothing compared to the deficit we had in the 80's. I was reading FT yesterday at the doctor's office and it said that our deficit is not that big of a deal.

I get the GDP from here:

http://www.bea.doc.gov/ $10,983,900,000


http://www.brillig.com/debt_clock/ $7,028,916,598,605.53

The deficit is rapidly increasing, especially with Bush's proposed increase.
What magazine said it was no big deal?

 

[Mill]

Originally posted by: Insane3D
Originally posted by: Mill

You've got to have debt for country to run correctly

You do? I am nowhere near an expert on these matters, but are you saying the country couldn't run correctly if we had little or no debt?

Yep. How do you think cities and states do public work projects? Through bonds. How did the Hoover damn and many other public work projects get built? Bonds. Corporations do the same thing. They issue bonds as one form of capital for when they start new projects. Then they pay it back at a later date with a set interest rate. We've had debt since 1969 because of Lyndon Johnson's social programs and the Vietnam war. I'm not saying this much debt is good, but we can be relatively comfortable with some deficit and some debt.

That's just my realistic take on it. I'm sure a country could run fine on little to no debt, but then we the economy falls what are they going to do for money. What I mean, is when tax collections fall, and the country is saying they WILL remain debt free, what can you do? Do you cut programs that people are now dependent on? There's plenty of waste that can be cut, but I think have some debt and/or deficit isn't that big of a deal. I think our current one is too large, but I'm not worried about it. We just came out of a recession, had to expand defense and add a new department to the government, and 9/11 hurt the bottom of the government and corporations as well. In few years if it gets worse then I will worry.

 

[Mill]

Originally posted by: glen

Originally posted by: Mill

Originally posted by: glen

Originally posted by: Mill
No, actually I'm not. The debt is 3.4% of GDP, and the debt was about 4.4% back in the early 90's. We made it back from then no?

No.


The Deficit is over 20% of GDP.

The Debit is 70% of our GDP:
Debit = 7,028,853,169,555
GDP = 10,983,900,000,000

I meant deficit, and my numbers were actually TOO liberal.

The CBO, Congress' nonpartisan fiscal analyst, predicted that the deficit for the 2004 fiscal year, which runs through Sept. 30, would hit $477 billion -- a record in dollar terms and substantially higher than last year's $375 billion shortfall. But at 4.2 percent of the GDP, it is still below the gargantuan deficits of the 1980s. The new projection was similar to the agency's estimate of last August.

Current GDP is 11.2 Trillion. Current Debt is 7 Trillion. So the debt is about 62% of current GDP. You've got to have debt for country to run correctly, and at 62% of GDP that means that we can work on the debt if it comes a problem. Currently we need to pay it down, but it isn't dire straights. How did you get 477 billion as being 20% of a 11.2 trillion dollar GDP? 3.2% is nothing compared to the deficit we had in the 80's. I was reading FT yesterday at the doctor's office and it said that our deficit is not that big of a deal.

I get the GDP from here:

http://www.bea.doc.gov/ $10,983,900,000


http://www.brillig.com/debt_clock/ $7,028,916,598,605.53

The deficit is rapidly increasing, especially with Bush's proposed increase.
What magazine said it was no big deal?

Look at the GDP.

And it's still only 4.2% which is more than 3 times less than your figure of 20%. And it wasn't a magazine. I was reading Financial Times.

 

[glen]

Originally posted by: Mill

Look at the GDP.

And it's still only 4.2% which is more than 3 times less than your figure of 20%. And it wasn't a magazine. I was reading Financial Times.

From your link, the GDP is $10,983,900,000,000
So, if deficit spending is only 4.2% of GDP, you get the figure 461,323,800,000.

Where did you get the $461 billion number?

It does not matter too much anyway. For a short period it was a negative number and we were paying off the debt. Currently it is not negative, and it is about to sky rocket another 1 trillion.

 

[Mill]

Because after the 4th quarter of 2003 GDP was 11.2 trillion. Deficit Spending is estimated to be 477 Billion. It's around 4.2% of GDP.

 

[glen]

Originally posted by: Mill
Because after the 4th quarter of 2003 GDP was 11.2 trillion. Deficit Spending is estimated to be 477 Billion. It's around 4.2% of GDP.

You know that number is decieving.
The deficit varies between negative amounts(meaning we are paying off debt), and 1 trillion dollars.
Just a little while ago it was negative, but that only lasted a few months.
The debt is looming large at 10 trillion