Political Science

[disappoint]

Here's a bit of political science for you:

"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers."

Found it here: http://en.wikiquote.org/wiki/Talk:Richard_Feynman

I wonder if anyone would like to argue that the national debt doesn't matter and that it's of no significance to the future of the U.S. economy.

I mean if you had credit card debt, and you went to see a financial advisor, they'd most likely tell you to use your income to pay down the debt before investing your money elsewhere.

So is national economics different than personal economics?

 

[Howard]

So is national economics different than personal economics?

Yes.

 

[irishScott]

To answer: Is it different? Most certainly. Does that make current fiscal policy viable? Not in the least.

 

[disappoint]

How is it the wrong forum? The national debt is a political issue is it not?

 

[sandorski]

It is a meaningless comparison. Mainly because a century from now the current level of Debt will be a small fraction of Value of what it is today. Yet it will still outnumber the stars in the galaxy.

That said, certainly current levels of US Debt is very problematic. However, the issue of the sluggish Economy and high Unemployment is an even more pressing issue that needs addressed first.

 

[irishScott]

How is it the wrong forum? The national debt is a political issue is it not?

Sry, thought I was in OT for a sec.

 

[irishScott]

It is a meaningless comparison. Mainly because a century from now the current level of Debt will be a small fraction of Value of what it is today. Yet it will still outnumber the stars in the galaxy.

That said, certainly current levels of US Debt is very problematic. However, the issue of the sluggish Economy and high Unemployment is an even more pressing issue that needs addressed first.

You can't do first and second. If one blows up the other goes with it. That's the main crux of the issue.

 

[Schmide]

Next time you go to the zoo be sure to compare 2 elephants to 100 birds.

 

[disappoint]

It is a meaningless comparison. Mainly because a century from now the current level of Debt will be a small fraction of Value of what it is today. Yet it will still outnumber the stars in the galaxy.

That said, certainly current levels of US Debt is very problematic. However, the issue of the sluggish Economy and high Unemployment is an even more pressing issue that needs addressed first.

Right, but how is the economy and unemployment going to improve if the gooberment has to keep increasing taxes in order to pay for the ever increasing debt?

 

[sandorski]

Right, but how is the economy and unemployment going to improve if the gooberment has to keep increasing taxes in order to pay for the ever increasing debt?

Economic Growth increases Tax Revenue. It is not simply a matter of Increasing the Tax Rate, but of increasing Tax Revenue through Economic Growth.

 

[disappoint]

Next time you go to the zoo be sure to compare 2 elephants to 100 birds.

No one said dollars were like stars.

The issue here is: Shouldn't paying down the debt as soon as possible be a priority just like it would be in personal finance for the above stated reason that the economy will get worse if the giverment has to keep increasing taxes to pay down an ever increasing debt.

 

[disappoint]

Economic Growth increases Tax Revenue. It is not simply a matter of Increasing the Tax Rate, but of increasing Tax Revenue through Economic Growth.

Will the increase in tax revenue from economic growth outpace the interest on the debt? That's going to have to be some economic growth. You want to count on that happening while taxes are going up which has a stifling affect on economic growth?

Isn't it a snowball effect that will only get worse unless it is addressed?

 

[Schmide]

No one said dollars were like stars.

???

"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers."

You are specifically comparing dissimilar metrics for the purpose of inflating the, pardon the pun, gravity of the situation.

 

[Agent11]

Debt doesn't matter. Budgets matter.

As long as they balance the budgets it's all good. It doesn't matter if it takes 100 years to completely pay off the debt, just balance the damn budgets.

 

[sandorski]

Will the increase in tax revenue from economic growth outpace the interest on the debt? That's going to have to be some economic growth. You want to count on that happening while taxes are going up which has a stifling affect on economic growth?

Isn't it a snowball effect that will only get worse unless it is addressed?

It may or may not outpace the Interest, it all depends on the variables such as Interest Rates, Inflation, etc. Increased Tax Revenues through Economic Growth and Tax Rate Increases are only part of the solution though, there certainly needs to be Spending Cuts. However, the Economy needs to be righted first.

 

[Moonbeam]

Shouldn't this be discussed by people that know something?

 

[irishScott]

Shouldn't this be discussed by people that know something?

It should be decided by people who know something.

It should be discussed by everyone to further their knowledge.

 

[disappoint]

It should be decided by people who know something.

It should be discussed by everyone to further their knowledge.

Well said.

 

[disappoint]

Next time you go to the zoo be sure to compare 2 elephants to 100 birds.

???
You are specifically comparing dissimilar metrics for the purpose of inflating the, pardon the pun, gravity of the situation.

Your attempts to completely miss the point haven't gone unnoticed.

You could say my point flew over the cuckoo's nest.

 

[Anarchist420]

If spending went down, tax revenues could be reduced to zero with the debt (real national debt is always a maximum of 1/3 of face value; 1/3 is the most that should ever be paid off and none of it should be paid back to foreign creditors) paid off quickly. Andrew Jackson made a big ass mistake when he reduced the national debt to near zero... then he increased again when he expelled the Indigenous Peoples of North America. His admin paid the lowest ranking troop more than $100k/year in current dollars and the highest ranking troop got paid more than $1mn/year in current dollars... he wasn't as evil as FDR, but then he wasn't as intellectually able as FDR either. Van Buren spent a really large sum on the forced expulsion and he spent just as much as he took in because of that and not because of the panic. John Tyler is better because of that... he ended the indian wars and he paid off some of the debt. It's kind of a good thing WHH died early. Grover Cleveland didn't spend too much, the Republicans engineered a huge boom which had to result in a bust (Cleveland adhered to hard money policy and the silver money favored by B Harrison was not as honest as the gold favored by the "Last Good Democrat and the Last President of the Jeffersonian Tradition") and overrode his vetoes of spending... that's why it's neither honest nor true to say that he "left the country's treasury in the red". He was a victim of Lincoln's Party much like Obama has been.

So, the deficit or even the cumulative debt isn't the real issue, centralization of state power is.

As for the OP, personal debt should be paid down at the right time but usually before investing. It's hard for some to know when the right time is, however.

 

[Schmide]

Your attempts to completely miss the point haven't gone unnoticed.

You could say my point flew over the cuckoo's nest.

I understand your point, however you seem to misunderstand how loaded speech works.

If you would have made your point without artificially comparing what people perceive to be big, I wouldn't have posted what I did.

The way it plays on peoples perception of big. A star is a big object, there are billions of big objects in the sky. (uncountable to any one person) A dollar is a small object there are billions of objects in our debt. (still uncountable)

You could explain large numbers in may ways.

If you were to try and count to a 100 billion and you counted 3 numbers every second, it would take you approx 1000 years to do so.

 

[mammador]

Yes.

Huh?

It's pretty standard in economics that debt per is not bad. Nobody really gives a royal shit about national debt per se, unless it gets to too high a level.

 

[Rainsford]

No one said dollars were like stars.

The issue here is: Shouldn't paying down the debt as soon as possible be a priority just like it would be in personal finance for the above stated reason that the economy will get worse if the giverment has to keep increasing taxes to pay down an ever increasing debt.

I think the definition of "as soon as possible" is where the problem really starts. To use your financial adviser comparison, he wouldn't tell you to stop buying food until you can pay off your debt.

And as others have pointed out, the comparison doesn't really work anyways. If the government moves tax revenues from spending to debt reduction, that has a very real chance of harming the economy to the point where the fiscal issues become even worse. That doesn't happen on a personal scale, but imagine if EVERYONE in America suddenly stopped buying anything but the bare necessities and put all their money into paying off their credit card debt (assuming for a second that everyone had such debt). I can't imagine that would be very good for the economy.

Credit cards also aren't the best comparison, since simply holding them does regular and significant damage to your finances owing to high interest rates. Think of debt that's more normal to hold long term, like a mortgage. Using all your resources to pay it off quickly has the same issues, especially if everyone is doing it, and the problem is worse since holding it and trying to come up with a long-term plan to pay it off doesn't do much harm.

 

[Throckmorton]

Would you stop paying for health insurance in order to pay off your credit card debt? That's what Republicans want to do.

 

[disappoint]

Would you stop paying for health insurance in order to pay off your credit card debt? That's what Republicans want to do.

You're kidding right? Since when did the Republicans ever pay down the debt? Every single Republican administration has increased the debt.

You think Romney is really going to do that? He proposed lowering taxes and increasing spending to everyone except PBS which is some miniscule amount of the budget.

Romney is like the lottery. Makes sense if you're bad at math.