permafrost Loc: Minnesota

As the right wing has spent 8 years complaining about the natl dept and now it seems a forgotten topic, I felt a small reminder of the consequences of your v**e was in order..


Francis Dickinson
Francis Dickinson, Green Party activist (and, like many, former Lib-Dem)

To quote that well known left winger Vice President Dick Cheney talking about a President from the far left when his White House was busy spending money like a sailor on shore leave after Clinton had balanced the budget “You know, Paul, Reagan proved that deficits don't matter. We won the mid-term e******ns, this is our due.” Meanwhile if we look at the 2016 e******n we find which candidate it was that wanted to ignore the debt - and as ever it wasn’t the Democrat.


In short the idea that left wing people ignore deficits is completely counter-factual. Right wing people ignore deficits unless it’s a left winger in power as has been demonstrated consistently over the past 36 years when the only right winger to try balancing the budget was George H W Bush - and his base turned on him for it.

Left wing people on the other hand accept that there are legitimate times where you can run a deficit. The two obvious ones are you can do it to recover from a disaster (like 2008) or you can do it to invest if you’ve costed it out in the same way you might borrow money for a house, a car, or a college education.

sweetlips

like Paul Krugman?

dtucker300 Loc: Vista, CA

[quote=permafrost]As the right wing has spent 8 years complaining about the natl dept and now it seems a forgotten topic, I felt a small reminder of the consequences of your v**e was in order..


Francis Dickinson
Francis Dickinson, Green Party activist (and, like many, former Lib-Dem)

To quote that well known left winger Vice President Dick Cheney talking about a President from the far left when his White House was busy spending money like a sailor on shore leave after Clinton had balanced the budget “You know, Paul, Reagan proved that deficits don't matter. We won the mid-term e******ns, this is our due.” Meanwhile if we look at the 2016 e******n we find which candidate it was that wanted to ignore the debt - and as ever it wasn’t the Democrat.


In short the idea that left wing people ignore deficits is completely counter-factual. Right wing people ignore deficits unless it’s a left winger in power as has been demonstrated consistently over the past 36 years when the only right winger to try balancing the budget was George H W Bush - and his base turned on him for it.

Left wing people on the other hand accept that there are legitimate times where you can run a deficit. The two obvious ones are you can do it to recover from a disaster (like 2008) or you can do it to invest if you’ve costed it out in the same way you might borrow money for a house, a car, or a college education.[/quote}

History seems to support your thesis in some respects. However, the Progressive movement has been the real culprit; and the cooperation of the RINOs. Under Bill Clinton, a surplus was achieved during a time of economic prosperity thanks to the Republicans because when left to their own devices Democrats always find more and more ways to spend OPM (other people's money) on more programs rather than saving for a rainy day. This has caused the growth in bureaucracy with both parties at fault, but primarily the Progressives. California is a perfect example of a state where Progressive Democrats have never met a tax they don't like. Unfunded liabilities, another problem on the state and local level, are slowly choking our economic freedom. Both parties have not done us any favors by putting us into wars without asking for the American Citizen to share the costs in other ways. We ran a higher deficit and debt by the end of WWII but we were the only real surviving economic power so that we had our way through the post-war era until other economies could rebuild. Since that time our priorities have become so skewed with entitlements that is is nearly impossible to have a consensus about what to cut in order to bring back some economic sanity. This has become one of our most acute problems in the 21st Century. Ask yourself, what entitlements are you willing to give up? if you aren't part of the solution, you are part of the problem!

MarvinSussman

NO! WE DON’T HAVE TOO MUCH FEDERAL DEBT !


Now (January, 2017), foreigners own about half of our $14.3 trillion publicly-owned US debt. With their trade surplus, foreign exporters accumulate US dollars and buy US debt for trade collateral. Their US bonds provide some protection against inflation and eliminate currency exchange fluctuation and costs. Foreigners will hold our debt until they find a safer refuge; none is now in sight. They will want to keep earning and holding our dollars unless the US goods that our dollars would buy are not competitive. It’s the job of Congress to keep us competitive by giving us the world’s best infrastructure.

Our debt/GDP ratio is now about 70%. It was over 120% during World War II, which was followed by 35 years of prosperity. Prosperous Japan’s ratio is now over 200%. We have no federal debt crisis!

Federal budget deficits are necessary for prosperity. Just as an individual judges her financial success by her after-tax earnings, so should the public relish the after-tax savings and cheap foreign goods provided by Congress’ spending deficits, which can only exit circulation into savings accounts or imported goods.

Deficit spending should not be large enough to cause harmful inflation but the budget deficit should exceed our trade deficit. Otherwise, we are exporting our savings to import foreign goods. Instead of cutting spending, we should be reducing our trade deficit by spending as much as possible on infrastructure that would lower industry’s costs, raise its exports, and reduce our trade deficit.

Will our debt always find buyers? Designated “primary” dealers are required to bid without collusion and the Fed can always buy their debt without limit, collect the interest, and return 94% of its annual profit to the Treasury, as law requires. And Congress has already and can again seize the Fed’s reserve.

The entire debt, as collateral, could be converted by bankers into dollars that would be added to a similar amount already in the money supply (M2). So, re-phrasing our question: would $29 trillion be too many dollars chasing too few goods and services, thereby causing inflation? If the few individuals owning most of those dollars increased their buying, what would rise in price, other than financial assets? Not food or other essentials! It is difficult now to see inflation being caused by federal debt.

But what about the future? Every year sees a large and growing federal budget deficit with an associated interest burden. Is that sustainable? The answer, according to the math at http://www.levyinstitute.org/publications/?docid=1379, is that growing deficits are sustainable provided that the rate of GDP growth exceeds the debt interest rate. That implies that our economy must always be competitive, which implies that our infrastructure must be among the best. Our future will not be secure unless we invest in it. Yes, Congress can fund any unfunded liability!

If v**ers really want to reduce the US debt held by the public, their Congress can easily provide steeply progressive estate tax brackets that will, over time, destroy much of the domestically-held debt. We certainly do not need a hereditary aristocracy with rich kids growing up with enough money to buy a Congressional v**e to cut spending on education while our kids are drowning in school debt.

So, how should Congress spend and tax? To maximize infrastructure, Congress should spend almost enough to cause inflation and should tax little enough to almost cause inflation. Ideally, always on the verge of inflation, everybody and every resource would be employed and every material would be in adequate supply or rationed to suit our national priorities, as if we were at war.

When small government nuts cut spending to cut taxes, they also reduce needed infrastructure. The spending scolds are depressing our economy, c***ting our grandchildren out of infrastructure, and weakening our defense, which depends on bridges and dams as well as on arms.

Shun the deficit hawks!
© 2017 Marvin Sussman, All rights reserved.

dtucker300 Loc: Vista, CA

You are ignoring the real problem. Federal debt is only a small part of the problem.

Jean Deaux

The only times the national debt debacle raises its head is when discussing obama, the great architect of debt. You remember, the one who raised our national debt to the highest debt in the history of the world but managed to ignore its consequences while he was out golfing or on vacation (most of the time). By the way, Cheney wasn't a left winger but a RINO neo-conservative. And Trump, being a businessman, has to raise the money to start to pay down that monstrous debt. He is doing his best in trying to keep the US from being the world's screwee, encouraging trade and manufacturing, lowering unemployment, bringing industry back to our shores, etc. Believe me the amount of debt that must ultimately be paid down is absolutely towering. It will take time and cooperation from all the citizens to remove this blight on our honor and integrity: patience in all things. Jughead went absolutely mad with the checkbook and squandered trillions in an effort to bankrupt us per soros' philosophy of "h**e America". Don't try to shift the blame on this gigantic spending scheme to the Republicans, it lies squarely on the last administration for the ballooning effort that took it from bad to impossible.
During the last e******n you say the democrats didn't ignore the debt. I don't know what news you listen to but I'll tell you it wasn't the Republicans that ignored it. So my question to you is what democrats mentioned the national debt and how to fix it. The dems were so busy trying to hide it under the rug that didn't even let hillary mention it. You're all booshwaa and nonsense but good try.

dtucker300 Loc: Vista, CA

We not only have too much Federal Debt; we have too much debt, period! State and local debt is an even bigger problem. But since they don't have a Federal Reserve to print more money, they have to achieve their goal through sound fiscal policy.

The eggheads always try to make something simple look confusing. Some debt is unavoidable, but going on a spending spree with credit is never a good idea. America used to be a lender nation. Now it is a borrower. Which would you rather be? The debtor or the debtee?

Jean Deaux

Frankly, I think you are whistling past the grave yard. The biggest national debt in the history of the world is not the real problem, only a small part? I can only conclude that you must have lost your senses. The interest on this monstrosity is incredible and growing yearly and very little way to pay it off short of genuine national prosperity. Should the rest of the world decide that our money handling capabilities do not warrant our dollar continuing to be the world's reserve currency and they make other arrangements, the good life, the easy road, the prosperity we have become used to for years is going to disappear with a gigantic sucking sound. At that point, I believe you'll find that the federal debt was, in fact, a major problem, ignored with the hope it would go away. What are you going to do when you run out of suckers to fund a nation that can't control its spending? Go begging?

MarvinSussman

You forgot to explain the "real problem"

MarvinSussman

US debt needs to be auctioned ONLY to drain deficit spending from the bank reserves or for the Treasury’s convenience and NEVER because Congress is running out of money.

DO FEDERAL TAXPAYERS PROVIDE CONGRESS WITH SPENDING MONEY ?

No! Only the contrary is true: Congressional spending provides taxpayers with money to pay their taxes. To spend, Congress uses only its “…power to…coin money…” (Article I, Section 8, of the US Constitution). Only Congress, by spending, can create debt-free money. (Banks can create loans up to a multiple of their reserve assets. The Fed, created and empowered by Congress, can lend money and buy certain financial assets.) Money spent by Congress enters circulation and exits circulation only when taxed by the IRS or saved or exported for trade. Savings may circulate again but the Treasury effectively destroys all federal tax revenues and loan payments, keeping taxpayers’ and creditors’ money out of Congress’ reach, as told here:

After a bank is closed, its loan officer compares its outstanding loans against its reserve requirements. If reserves need to be increased or decreased, they can be borrowed or lent in the overnight federal funds market at an interest rate close to the Fed’s federal funds rate, which is the most important interest rate because, via arbitrage, it anchors all other rates.

To keep the federal funds interest rate on the Fed’s target, the total quantity of money in the nation’s bank reserves must be kept fairly constant.
While the reserve balance is not changed by ordinary checks that cause equal debits and credits, it is changed by the Treasury check, which credits the recipient’s account and the bank’s reserve account but debits no reserve account. The balance is also changed by payments to the Treasury for US debt instruments and by tax payments to the IRS. All payments to the federal government debit the payers’ accounts and the banks’ reserve accounts but credit no reserve account. Change of the bank reserve balance is minimized when checks to and from the federal government are treated as follows:

The public randomly deposits Treasury checks at an average rate of about $25 million per minute but often at a much greater rate. To maintain a near-constant bank reserve balance, the incoming Treasury credits must be matched with near-equivalent debits provided by the checks paid to the government. As payment checks are deposited, they debit the private accounts but not the banks’ reserves. Instead, they are placed in a “Tax and Loan” (T&L) account grouped in “debit bundles” valued near $25 million, $50 million, $100 million, etc. As incoming Treasury check credits exceed the desired reserve balance by the value of one of the debit bundles, that bundle debits the reserve accounts and approximately restores the bank reserve balance.

Deficit spending or a seasonal shortage of tax payments could require added debt payments, forcing the Treasury to auction bonds. Thus, US debt needs to be auctioned ONLY to drain deficit spending from the bank reserves or for the Treasury’s convenience and NEVER because Congress is running out of money. A surplus federal budget (with an excess of tax payments) would require additional Treasury checks to be deposited, forcing the Treasury or the Fed to purchase bonds from private owners - and possibly causing a shortage of debt in the market!

So, by matching debits with credits, these exceptional checks cancel each other and are effectively destroyed. In fact, cash payments received by the IRS generate equivalent payment checks while the paper bills are physically shredded and any coins are melted for scrap.

If Congress doesn’t need our stinkin’ money, why do we have a federal income tax? Mostly because, otherwise, consumer spending would increase and eventually cause harmful inflation.

© 2017 Marvin Sussman, All rights reserved.

cephusbob

Clinton didn't balance the budget he was d**gged fighting all the way by the Republican congress at the time. The Republican congress balanced the budget!

lpnmajor Loc: Arkansas

Now, come on! You know there's no such thing as a deficit or a national debt, those are artificial, manufactured things, dusted off for political warfare. I know the old joke about the Government just printing more money when they need it, but it hasn't used real money in nearly 100 years. The Government, the economy, here and globally, runs on debt, i.e., virtual money. First it was traded with little pieces of paper, now in the technological age it's traded in "bits", which is imminently more flexible - and fast.

How will China reclaim it's money, when the money ONLY exists in cyberspace? They simply hack the US Treasury, change the numbers, then change theirs - and all the Treasury has to do is - change them back. What could be simpler than that?

meridianlesilie Loc: mars

if illnois does not have there budget straighten out they will be declared junk status & maybe bankrupt too !!! i live in st.louis county & that is what the news says !!!!just think obama come from there & i got some news that the police in chicago cannot control the gangs there !!!!!

samtheyank

Just think what our economy would do if just half the debt was paid off? It is that Boogy Man, that is real, that will eventually pounce out of the shadows. I think the only way, in my opinion, is to invoke Article Five of the Constitution and tightened the screws real hard in terms how we allocate the people's money. Too many special interests have their hands in the till and benefit real well off the backs of the hardworking people in this nation. Irresponsible government is your biggest problem. I believe in a strong military, but the pentagon doesn't have an accounting process in terms of how they allocate money. Cost over runs, fifty dollar screws, etc. When asked where is the money, they can only say, "I don't know!"

Corporate welfare is another big rat hole. Why should Uncle Sam continue year after year to give Corprate America billions and billions of dollars of the people's money, in the form of subsidies, so that some high ranking Joe Executive can keep increasing his salary and fatten his bank account every year? Other things such as foreign aid, welfare, food stamps and the amount of money the government spends on i*****l i*******ts. Forgive my French, but if we could cut a lot of this s**t out, we could cut the budget in half.

If we were to do this, the crybabies would start coming out of the woodwork and you would have to pass out a lot of towels. The main theme would be "Oh! Woe is me". The liberal Democrat could not call a Congressional Committee fast enough to shame the policy and the people who support it. We need to start saying NO, NO, NO. We need term limits, tough minded people who believe in fiscal responsibility and a balance budget amendment. For example! President Trump pulled the United States out of the Paris Accords dealing with C*****e C****e. The majority of the money, if not all of it, went to corrupt countries, governments, officials. They could have cared less about the climate. They were getting fat off the American taxpayer. The amount of money was about somewhere between 130 to 150 billion dollars a year. Over a ten year period, you could pay the debt down by well over a trillion dollars or more. Something to think about!