National Debt exceeds $12,000,000,000,000.00

[FerrelGeek]

Actually most talking heads on Fox railed Bush and the GOP for spending like drunken sailors. Not that you would know. You just parroting the left talking points?

(nevermind, that was a rhetorical question)

As did Rush, Hannity, and Beck, but that's conveniently forgotten as well. I criticised Bush's spending on the forums I belonged to at the time as well, not that I think my opinion matters. 😉 Fact is, there were a fair few on the right that grew incresingly disenchanted with the GOP, mostly due to fiscal policy vs foreign policy.

 

[boomerang]

Debt is not inherently bad. Debt can be used as an investment. No debt is preferable, but if the ROI is greater than the interest then debt is useful for moving ahead.

What's bad is the way the US uses debt. We're not using it to move ahead. There are no massive, capital intensive infrastructure projects happening which will give us that high ROI. What we're doing is using debt to pay for regular operating expenses.

Skoorb pointed this out already and I agree. In rereading my post, my point was too simplistic. Although we essentially agree, you both expressed it far better than I was able to.

 

[LunarRay]

IF you're looking for a donkey to pin the tail on regarding the debt then you have to go to the logical core factors.
Ask why is there less revenue coming in than being spent. It's not a Left or Right issue. It is the policies of both parties over the long term. The policies are those that seek to encourage a World Economy. To think that Mexico, for example, is going to increase their economic growth and buy US products by sending or allowing our Manufacturing base to move there a few short term affects will be seen. First, the US looses jobs and Mexico gains jobs... Then when the Mexican folks are rich and famous like we use to be they will buy what ever we may now make that they don't already make. Secondly, to foster such a plan we've to incur debt to cover the outflow caused by the job loss revenue reduction or find a way to sustain that revenue inflow by job creation. Thirdly, we've to insure that the World [Mexico] continues to value the dollar so that we can find borrowings to sustain our debt.
So, in essence, I see NAFTA and like that as being the cause of our short term economic woe. That and the folks who choose to encourage their own economy at the expense of the US economy... non level playing field. We are about World domination and isolationism don't get us there! We probably could all drive Mercedes autos and have total free health care if we consumed only what we made... We'd have total employment and still import to meet out needs...
So don't blame Bush or Obama or the wars or the Old folks (Like me 😉) Blame those who'd rule the World via Economic guns...

 

[BoberFett]

Just stupid. I should have said faux libertarians (as in voted for GWB twice but are too ashamed of the (R) party to side with them anymore). Sorry.

Fair enough. At least you're smart enough to see the difference, sorry to call you stupid. It just irks me when libertarians get lumped in with Republicans because many Democrats refuse to educate themselves on the difference. I can't speak for others, but these nouveau "libertarians" annoy me as well because they give the rest of us a bad name. They're suddenly for fiscal responsibility now that Democrats are in office but still yearn for that controlling social conservatism which is in direct opposition to true libertarianism.

 

[StageLeft]

The 'overseas contingency operations' were projected over $2 trillion at 2011 troop levels and 'expensed' down to $1.7 trillion over the term. I don't recall what the troop levels were but will guess something in the range of 120-130k for both Iraq and Afghanistan.

Further reduction to 75k troops by 2013 knocked $650 billion off that $1.7 trillion --- 30k troop level by 2013 knocked $1 trillion off.

As far as the recession/TARP stuff I think all that is on the books as a 'loan' account that is reported as part of the Federal debt. It seemed to me that they fully expect those funds to be paid back with interest - hope they can pull that trick off.

Since this is a thread about "$12 TRILLION DEBT!" 😛 I don't want to deflect from that point too much but more than 1/3 of that debt is not publicly held - 1/3 of the debt is the gov't IOUs we owe ourselves. I only point this out because I think there is around $1.5 trillion or so that we are going to 'borrow' from the trust funds over the next 7 or 8 years (I can't remember if that is simply principle or both principle and interest).

The cost to continue the 2001 and 2003 tax cuts was around $2.6 trillion. I believe the budget knocked $600 billion off that. IIRC Obama at one time had proposed an additional $700 billion in tax cuts and credits but I think that got 'wacked' to something in the $200-250 billion range. I'll whip out an 'ass-fact' and hope we can recover around $1.25 trillion in this mess to cut the debt.

The cost to index the AMT to inflation is approaching $600 billion if I recall correctly, and that number is reflected in the projected debt figures.

As far as playing 'weatherman' on the natural disasters, who knows if it will be $150 or $350 billion? At least they did acknowledge expenses we will most likely incur in the future and not play 'rosey scenario' with the projections.



I think they have a pretty good idea what needs to done on the mandatory side. One thing for sure - they won't be doing it in an election year BUT we all need to know where the prospective candidates stand. Maybe by 2011 they can get down to serious business (possibly by reaching a gentleman's agreement to not 'skewer' each other on raising the retirement age, means-testing, etc. ...)



In principle only I think we are approaching $1 trillion and the DoD recently asked for a 'supplemental' this fiscal year of another $60-80 billion (not even six weeks into the budget year!)

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Thanks for taking the time to post the details 🙂

 

[QuantumPion]

It's been growing steadily for more than 40 years. Go ahead and tell me how it being 12 trillion is significantly different than it being 6 trillion as it relates to your life?

It's not a good thing, but next year it'll be 13+ trillion most likely. It's an abstract number which doesn't really represent anything other than to rally the hooples.

Edit - A balanced budget cannot be achieved at this time, and a surplus is just crazy talk.

a) the debt was growing steadily, until Obama & Pelosi came along and skyrocketed it to new, never before seen heights.

b) people that claim the huge federal debt has no negative impact on their life are the same people that carry tens of thousands of dollars of credit card debt and think everything is fine since they can easily make the minimum payment.

 

[ayabe]

a) the debt was growing steadily, until Obama & Pelosi came along and skyrocketed it to new, never before seen heights.

b) people that claim the huge federal debt has no negative impact on their life are the same people that carry tens of thousands of dollars of credit card debt and think everything is fine since they can easily make the minimum payment.

A. Nice revisionism. You know the debt goes up to never before seen heights every second without anything being spent?
http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms -study these graphs carefully, reevaluate your partisan paradigm and join reality.


B. Not sure how you're making that leap.

I've asked this fucking question twice and you all cannot come up with an answer, what effect does this have on you if any? If the debt were cut in half tomorrow, what affect would it have on your life?

The answer is NONE.

 

[QuantumPion]

A. Nice revisionism. You know the debt goes up to never before seen heights every second without anything being spent?
http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms -study these graphs carefully, reevaluate your partisan paradigm and join reality.


B. Not sure how you're making that leap.

I've asked this fucking question twice and you all cannot come up with an answer, what effect does this have on you if any? If the debt were cut in half tomorrow, what affect would it have on your life?

The answer is NONE.

What effect does having $20,000 in credit card debt have on you if you are able to make the minimum monthly payment?


p.s. Why would you link an out-of-date article with no mention to Obama's to-date spending as a rebuttal to my statement that Obama & Pelosi have increased the national debt far far more then previous presidents?

 

[nergee]

Well, obviously you have to pay more interest on 12T of debt than 6T. So that's money that could have been used elsewhere and wouldn't taxes have to be raised to cover the increased debt interest payments....

 

[ElFenix]

Well, obviously you have to pay more interest on 12T of debt than 6T. So that's money that could have been used elsewhere and wouldn't taxes have to be raised to cover the increased debt interest payments....

no, not obviously. if the interest rate is low enough the 12 T could be lower. obviously if the interest rate is the same, the 12T is going to be higher. but the interest rates don't stay the same and debt is piled on continuously. so, if you look at payments as a % of GDP, iirc dub actually improved the situation a lot before going back to where it was when he took office.

 

[AbAbber2k]

It's hard to keep up... Hitler, Marx, Stalin, Chevez, Lil' Kim. Am I forgetting anyone? 😛

You forgot T Pain

http://www.youtube.com/watch?v=ITT6bYYGVfM

 

[Darwin333]

What does that number really mean to you and I? Nothing.

If it were only 6 trillion would your life be any better/worse?

It has everything to do with your way of life. Lets take a look at a few things the government relies on that debt for.

the government is about 1/4 of the economy give or take.
Social Security
Medicare/Medicaid
Military/DoD
FDIC
FHA (a huge portion of todays housing market)


The list goes on and on. If our lenders decide we are no longer credit worthy because of our outstanding debt we instantly can not afford the government we rely on due to the fact that we require 100's of billions of borrowed dollars a month to survive. If that happens we get either hyper inflation or a deflationary depression if we are lucky. If we aren't lucky we get mass rioting when checks people depend on for food don't go out.

As it is now a simple bump in our "interest rates" will cost us a few hundred billion more a year, which we can't afford and will be forced to borrow. Its akin to you maxing out a bunch of your credit cards while using other credit cards to make the minimum payments while applying for even more credit. Your lenders tend to look at that badly and price your credit accordingly.

In other words, we be fucked. Might not be today or tomorrow but relatively soon we will be forced to live within our means and we aren't gonna like that one bit. No the rich bastards can't bail us out because they simply don't have enough money. No this isn't a partisan issue, both parties are at fault. And no, I don't have any faith that it will be fixed, we won't elect anyone that tells us we can't have our "free" stuff anymore.

 

[Robor]

a) the debt was growing steadily, until Obama & Pelosi came along and skyrocketed it to new, never before seen heights.

b) people that claim the huge federal debt has no negative impact on their life are the same people that carry tens of thousands of dollars of credit card debt and think everything is fine since they can easily make the minimum payment.

This is what you call steady?

 

[RoloMather]

Meh. Let me know when it reaches 50 tril.

 

[Ausm]

I blame it all on the Democrats.

 

[blackangst1]

A. Nice revisionism. You know the debt goes up to never before seen heights every second without anything being spent?
http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms -study these graphs carefully, reevaluate your partisan paradigm and join reality.


B. Not sure how you're making that leap.

I've asked this fucking question twice and you all cannot come up with an answer, what effect does this have on you if any? If the debt were cut in half tomorrow, what affect would it have on your life?

The answer is NONE.

And if thousands of little girls are trafficked out of SE asia and into Russia it doesnt affect me at all. But I still give a shit.

 

[Darwin333]

This is what you call steady?

Fiscal Year-Year Ending---National Debt------Deficit
FY1993 09/30/1993 $4.411488 trillion
FY1994 09/30/1994 $4.692749 trillion $281.26 billion
FY1995 09/29/1995 $4.973982 trillion $281.23 billion
FY1996 09/30/1996 $5.224810 trillion $250.83 billion
FY1997 09/30/1997 $5.413146 trillion $188.34 billion
FY1998 09/30/1998 $5.526193 trillion $113.05 billion
FY1999 09/30/1999 $5.656270 trillion $130.08 billion
FY2000 09/29/2000 $5.674178 trillion $17.91 billion
FY2001 09/28/2001 $5.807463 trillion $133.29 billion


Sure looks like a steady rise to me. Although I do give Clinton a lot of credit for not spending like a complete drunken sailor, you are completely full of shit if you imply that one party is responsible for our borrowing habits.

BTW, you might wanna send whoever made that an email. You can only give W 8 years and since they gave him 01 (which is Clinton not Bus) that means Obama gets 09 and yall have been arguing (for the most part correctly) pretty hard against that. I know it looks better on the chart the way it is but I am not sure they want to cheat on this one given how bad it looks if you throw Obama on the chart for 2009.

 

[Stunt]

I agree, not all debt is bad. Even in our personal lives we know giving money to our deadbeat drunken relatives is not productive (ie.welfare), buying pharmaceutical drugs is not productive (ie. heathcare) but a necessary evil; travel, electronics, cars, boats, etc are all not productive. Stocks, housing, savings can be productive (ie. infrastructure, investment).

I like seeing the government help push initiatives the private sector has a tough time justifying either due to insufficient foresight or unjustified return but known to at some point raise the standard of living. Prime example is R&D where most companies are only looking 5 years out but need grants and university involvement to encourage the 7-10 year investment. Also things like high-speed railway networks are very costly to initiate especially for a single private group, but could make travel much more efficient. I actually see huge value in the role of military as a research and manufacturing vehicle to drive technology and innovation. But not in the way it is now with invading other nations and nation building.

Unfortunately government has become a vehicle for mass charity where everyone is voting themselves money and looking out for their own self interest. Companies are donating to the politician who will give them the biggest subsidy, hand out, tax cut, etc. People are the same, looking to not pay for healthcare, pay less tax, retire younger without saving. The spending seems to continue the trend of a consumption based economy not a productivity based economy.

 

[Svnla]

This is bad? only 12 Trillions.

Wait until the "UNFUNDED" liabilities such as SS, Medicare, Medicaid, et al rear their ugly heads. IIRC, they were about 56 trillions and that were before all the messes with that last 2 years or so.

Also don't forget about the unfunded pensions/retirement accounts from states/counties/cities entities.

China can't bail us out forever and they won't.

 

[jhu]

At least we're better than Japan. Their national debt exceeds their GDP!

 

[Genx87]

At least we're better than Japan. Their national debt exceeds their GDP!

By the end of Obamas first term we are expected to be in that realm as well.

 

[Fenixgoon]

This is what you call steady?

there's something that's misleading about that graph - it's graphing how much debt *increased*, not total debt.

in other words, if debt is D, that graph is the rate of change of debt, dD/dt.

regardless of the president - democrat or republican - the debt increased across all years. That is a fundamental problem.

 

[LunarRay]

This is bad? only 12 Trillions.

Wait until the "UNFUNDED" liabilities such as SS, Medicare, Medicaid, et al rear their ugly heads. IIRC, they were about 56 trillions and that were before all the messes with that last 2 years or so.

Also don't forget about the unfunded pensions/retirement accounts from states/counties/cities entities.

China can't bail us out forever and they won't.

First thing we should insure is that all that debt is fixed LT at the lowest level of interest we'll see for awhile... Don't issue much, if any, ST debt instruments...
Sure there is about 50 - 60 trillion in mandates some of which is partially funded like SS and Medicare/aide trust.. but it holds US debt securities too.. hehehe
Think of it this way... when they come due each year folks will contribute to them, hopefully... IF this was a pension in a private company a sinking fund or some vehicle would be used to provide for it... and record the expense today. We assume that in the future we'll fund it and expense it then... Creative Accounting!... Why count the calories you'll eat tomorrow to determine how fat you are today?
hehehe:sneaky:

 

[heyheybooboo]

there's something that's misleading about that graph - it's graphing how much debt *increased*, not total debt.

in other words, if debt is D, that graph is the rate of change of debt, dD/dt.

regardless of the president - democrat or republican - the debt increased across all years. That is a fundamental problem.

The Fed ran a surplus in the unified budget for three years in the late 1990s.

The reason the level of debt increased was because the Treasury Department initiated a refinancing program to reduce both the term and the interest rate on all the paper.

High interest long-term paper from the Reagan years was called and replaced with short-term notes at lower interest rates --- a 'Win Win Win' no matter how you look at it.

IIRC, the average term and interest rates were reduced by more than one-third overall, eventually leading Treasury to completely drop the issuance of 30-yr paper.

No more. I think they brought back 30-year bonds in 2006. Not sure what the call provisions are with the new paper. There has been some discussion of actually using 40- and 50-year debt but I doubt that will ever happen.

I can't recall with certainty but I think the average term on the current Fed debt is less than 5 years and they are committed to keeping it in that range for the time being.

And once again, not to minimize the $12 trillion figure --- only two-thirds of that debt is publicly held. The remainder of the debt is inter-gov't IOUs.

Folks additionally need to focus on all the other external debt of the USA. It would not surprise me if foreign entities hold much more of our private debt than our public debt (haven't checked that in awhile some one needs to look that up) ...

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[Darwin333]

The Fed ran a surplus in the unified budget for three years in the late 1990s.

The reason the level of debt increased was because the Treasury Department initiated a refinancing program to reduce both the term and the interest rate on all the paper.

High interest long-term paper from the Reagan years was called and replaced with short-term notes at lower interest rates --- a 'Win Win Win' no matter how you look at it.

IIRC, the average term and interest rates were reduced by more than one-third overall, eventually leading Treasury to completely drop the issuance of 30-yr paper.

No more. I think they brought back 30-year bonds in 2006. Not sure what the call provisions are with the new paper. There has been some discussion of actually using 40- and 50-year debt but I doubt that will ever happen.

I can't recall with certainty but I think the average term on the current Fed debt is less than 5 years and they are committed to keeping it in that range for the time being.

And once again, not to minimize the $12 trillion figure --- only two-thirds of that debt is publicly held. The remainder of the debt is inter-gov't IOUs.

Folks additionally need to focus on all the other external debt of the USA. It would not surprise me if foreign entities hold much more of our private debt than our public debt (haven't checked that in awhile some one needs to look that up) ...

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Rolling the debt to the short end of the curve isn't always a good thing.

Take our current position. We will have to roll over almost ALL of our debt in the next 4 years even though our "interest rates" are at historic lows. Two potential problems from this:

1. That is a fuckton of debt that we MUST roll over, plus new debt to pay the interest and thats before we sell a single bond to fund new deficit spending. At the same time, we are putting a pretty good hurting on the dollar so its not a stretch to think other countries might be a bit hesitant about buying a few trillion bucks in bonds a year from us.

2. Since the vast majority of our debt is short term, as you pointed out, small bumps in "interest" almost instantly cost us a ton of money in interest payments. Right now we are actually doing pretty good on yearly interest payments on the debt because of the extremely low rates but a relatively minor bump can literally cost us hundreds of billions next year, more the following year, etc..


Any combination of the two can put us in a real bad way and also have the ability to be self reinforcing. Its not a good position to be in when our ability to borrow is life or death.