U.S. Treasury predicts debt to rise to $20 trillion by 2015

[CycloWizard]

I think what he's getting at is that the amount of money owed always exceeds the amount of money in existence. Because money is created through debt, i.e. the selling of government bonds, all new money created is owed back with interest.

My statement was that the government could pay its debt not by increasing the tax rate 40% but to 100% for one year (not that this is a real solution - only that that's what it would take). What does that have to do with creating new debt or changing the amount of money in circulation? His statement didn't address this at all and only said that no, the debt can't be paid back because...something to do with interest being exponential.

 

[soccerballtux]

My statement was that the government could pay its debt not by increasing the tax rate 40% but to 100% for one year (not that this is a real solution - only that that's what it would take). What does that have to do with creating new debt or changing the amount of money in circulation? His statement didn't address this at all and only said that no, the debt can't be paid back because...something to do with interest being exponential.

if you have to ask, then you don't understand how money is created in the first place.

If we tried to pay off the debt, there will be no money left, and there will still be debt outstanding. On the way to paying it down we would enter a deflationary spiral.

 

[CycloWizard]

if you have to ask, then you don't understand how money is created in the first place.

If we tried to pay off the debt, there will be no money left, and there will still be debt outstanding. On the way to paying it down we would enter a deflationary spiral.

I understand that, but that has nothing to do with what I said. I said that the amount that we owe is almost equal to the GDP. Therefore, a 40% tax rate wouldn't cut it. If we actually taxed everyone at 100%, I don't think residual debt would be our biggest problem.

 

[Patranus]

I just love all the republican responses ... where were you when bush spent 12Trillion in his last 4 years? Hmmmmmmmmmmmmmmmm!

Um.....
The deficit in January 2001 was 5.6 trillion. (BOOSH takes WH)
The deficit in January 2007 was 8.6 trillion. (+3 trillion over 6 years) (Dems take control of congress)
The deficit in January 2009 was 10.6 trillion (+2 trillion over 2 years) (Obama takes WH)
The deficit in June 2010 is 13 trillion (+2.4 trillion over 1.5 years)

See a pattern?

 

[Darwin333]

if you have to ask, then you don't understand how money is created in the first place.

If we tried to pay off the debt, there will be no money left, and there will still be debt outstanding. On the way to paying it down we would enter a deflationary spiral.

Where did all the money that we paid back the debt with go?

If we give China $3 trillion dollars for $3 trillion in bonds they hold does that $3T we gave them disappear? The money still exists, granted we wouldn't be creating "new money" through credit (and we can still create new money if we needed) but the money we use to pay off the bonds is still in the market.

 

[Jaskalas]

Um.....
The deficit in January 2001 was 5.6 trillion. (BOOSH takes WH)
The deficit in January 2007 was 8.6 trillion. (+3 trillion over 6 years) (Dems take control of congress)
The deficit in January 2009 was 10.6 trillion (+2 trillion over 2 years) (Obama takes WH)
The deficit in June 2010 is 13 trillion (+2.4 trillion over 1.5 years)

See a pattern?

Exponential "growth"! Time for more stimulus!

 

[child of wonder]

Um.....
The deficit in January 2001 was 5.6 trillion. (BOOSH takes WH)
The deficit in January 2007 was 8.6 trillion. (+3 trillion over 6 years) (Dems take control of congress)
The deficit in January 2009 was 10.6 trillion (+2 trillion over 2 years) (Obama takes WH)
The deficit in June 2010 is 13 trillion (+2.4 trillion over 1.5 years)

See a pattern?

Since 2000 the annual deficit has been increasing.

We can sit around and point fingers all day long, but we're all to blame for it.

 

[soccerballtux]

Where did all the money that we paid back the debt with go?

If we give China $3 trillion dollars for $3 trillion in bonds they hold does that $3T we gave them disappear? The money still exists, granted we wouldn't be creating "new money" through credit (and we can still create new money if we needed) but the money we use to pay off the bonds is still in the market.

It's rolled over.

 

[StageLeft]

if you have to ask, then you don't understand how money is created in the first place.

If we tried to pay off the debt, there will be no money left, and there will still be debt outstanding. On the way to paying it down we would enter a deflationary spiral.

Is a deflationary spiral what all countries undergo when paying down national debts? Did the US when paying down great debts from WWII?

 

[Hacp]

if we paid off all our debt, there would be no more cash. As a matter of fact, we would not be able to pay off our debt. We would pay as much off as we could, all money would cease to exist, and we would still have debt that we are obligated to pay off.

Because interest is an exponential function....

I can't believe you think like that. Its not like the federal government operated on a surplus or anything ever. Its not like people OWED the government money at one point, not the other way around. Perhaps you should think before you make comments like that.

 

[Hacp]

if you have to ask, then you don't understand how money is created in the first place.

If we tried to pay off the debt, there will be no money left, and there will still be debt outstanding. On the way to paying it down we would enter a deflationary spiral.

Here is where you're wrong. Say the US government made a couple hundred million F22s and sold it to the chinese. We'd get chinese currency in return, then we can pay off all our debt with chinese currency.

 

[Special K]

Here is where you're wrong. Say the US government made a couple hundred million F22s and sold it to the chinese. We'd get chinese currency in return, then we can pay off all our debt with chinese currency.

I thought whenever one country purchases something from another, they have to first convert to the currency used by the producer. If China wanted to buy F22's from us, they would need to first exchange yuan for dollars.

 

[sMiLeYz]

Is a deflationary spiral what all countries undergo when paying down national debts? Did the US when paying down great debts from WWII?

I don't necessary agree a deflationary spiral will happen but it is very possible should the United States pay off all it's liabilities. (It doesn't make sense to and a country is simply not utilizing it's resources by doing so)

What happen after World War II was that all the investment (debt) caused exponential growth in GDP relative to debt. The U.S didn't pay down the debt very much at all it's just the economy grew alot faster than the money they owed.

This is why alot of economists simply aren't worried about the debt, because the economy, unemployment are especially more important pressing problem.

 

[Acanthus]

Our debt to income ratio isn't even bad at this point.

As a flimsy comparison, it is the equivalent of a person making $100,000 a year having ~$80,000 in low interest long-term debt.

Spending does need to be curbed, but we aren't "raping our children" at this point.

 

[Acanthus]

I don't necessary agree a deflationary spiral will happen but it is very possible should the United States pay off all it's liabilities. (It doesn't make sense to and a country is simply not utilizing it's resources by doing so)

What happen after World War II was that all the investment (debt) caused exponential growth in GDP relative to debt. The U.S didn't pay down the debt very much at all it's just the economy grew alot faster than the money they owed.

This is why alot of economists simply aren't worried about the debt, because the economy, unemployment are especially more important pressing problem.

This is great information.

We are actually fighting free fall deflation now with very powerful fed incentives to invest. Treasuries are at low yields and money from the fed is practically being given away to invest. The low rates dramatically increase the money supply which would under normal circumstances drive major inflation.

If you follow the CPI (from multiple sources) and inflation numbers, we are still in a state of very hard deflationary pressure. The credit crunch on consumers is taking its toll on prices, and the Fed only has so much power to control the economy.

Lowering taxes will not fix this now. Becoming more spendthrift or cutting outgoing expenditures will not fix this now.

You do things like that when the economy is roaring.

 

[soccerballtux]

I thought whenever one country purchases something from another, they have to first convert to the currency used by the producer. If China wanted to buy F22's from us, they would need to first exchange yuan for dollars.

Yes you're right, they do.

 

[CycloWizard]

Our debt to income ratio isn't even bad at this point.

As a flimsy comparison, it is the equivalent of a person making $100,000 a year having ~$80,000 in low interest long-term debt.

Spending does need to be curbed, but we aren't "raping our children" at this point.

Except the $13 trillion is debt of the government, not the people. The debt of the people is well over and above that. The GDP is the income of the people, not the government: the government's income is tax revenue, which is ~$2.5 trillion. Thus, it's more like the guy making $100,000 owing $520,000.

 

[Jaskalas]

Lowering taxes will not fix this now. Becoming more spendthrift or cutting outgoing expenditures will not fix this now.

You do things like that when the economy is roaring.

You're telling us what we can't do. What CAN we do, multiple trillion dollar boondoggles?

 

[Pneumothorax]

Don't worry be happy.... When the Dems continue to be in control of 2 of the main branches of government after november, they'll quickly pass the "Son of Stim". This time, they'll spend 1.5 Trillion as since the first one didn't work as well, might as well double it the 2nd time around.

 

[sMiLeYz]

Don't worry be happy.... When the Dems continue to be in control of 2 of the main branches of government after november, they'll quickly pass the "Son of Stim". This time, they'll spend 1.5 Trillion as since the first one didn't work as well, might as well double it the 2nd time around.

That's actually an excellent idea.

 

[Acanthus]

You're telling us what we can't do. What CAN we do, multiple trillion dollar boondoggles?

Protectionism. Really.

 

[Zebo]

LOL you are one stupid mother fucker.

Edit: Acutally, you are most likely a lying mother fucker. Computing your income on a 1040EZ, your AGI would be $27650, therefore your tax would be $3764. So, your effective tax rate would be 10% for Federal. I'm gonna doubt your state tax rate is 20%.

Either you are a liar, or simply stupid on the order of McOwned. Either way, you are a moron who is best served by shutting the fuck up. But hey, you wanna own yourself, keep posting.

He said total taxes. And I believe it.

Food and goods is 8% in my state, Property is 2%, Gas is 25%, cell phone bill is 5%, Booze is 36%, Cigarettes are 75% and so on. It's easy for a low income person to hit 30% total tax rate with all those regressive taxes figured in and they spend all their money so all income is subject to some tax right after feds get ahold their share

Lifetime hunting and fishing licenses I just got for my boys was $775 ea. That's a tax. Not to mention thousands of other licenses and fees from car registration to doing any business. 30% EASY.

 

[Zebo]

And people think Gold is overvalued. I used to think my dad crazy hoarding the shit and saying $25,000 an ounce someday soon, not anymore. Well at least not on that...he's still into truffer stuff and other conspiracies. Don't retire it fucks up your mind.

 

[Acanthus]

And people think Gold is overvalued. I used to think my dad crazy hoarding the shit and saying $25,000 an ounce someday soon, not anymore. Well at least not on that...he's still into truffer stuff and other conspiracies. Don't retire it fucks up your mind.

$25000 an ounce? maybe if we get Zimbabwe-like inflation.

 

[Anarchist420]

They need to sell 2.5T worth of weapons and have the states pay back 5T over the next few years based upon their population. Plus cut spending to a 1/3.