CDZ David Stockman on our current debt

[Listening]

David Stockman craps on the CBO for it's "rosie" budget projections. I've not seen the actual projections, but things can't look to good.

Stockman then rehearses the tired tale of how we are at 18 trillion in debt and going in the wrong direction.

David Stockman US Federal Debt Will Keep Growing at Fast Pace

He believes the rosy scenario currently projected by the Congressional Budget Office (CBO) for 4 percent GDP growth in coming years is ridiculously optimistic and "does not have a snowball's chance of materializing over the next decade. Rather than $8 trillion of cumulative baseline deficits over the next 10 years as projected by CBO, the current policy stalemate in Washington — that has been running for 30 years now — will generate at least $15 trillion of new public debt in the decade ahead."

When that new debt is added to the current $18 trillion hole the nation has dug itself, the mountain of public debt will hit $33 trillion in 10 years, he wrote. At that point, Stockman estimates America's public debt will total a whopping 140 percent of GDP.

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I wonder if Chenny (who I have always liked...but don't agree with on this one) still thinks deficits don't matter.

I mean we are in deep doodoo.

I would suggest we need to balance our budgets now in order to get this turned around.

Next, we are going to have to understand how wealth is accumulating in the hands of a few. I don't begrudge them wealth. But economics teaches that if people are making good money...others come after those profits. Why does Walmart still exist as it does ?

 

[Listening]

I've been going back and looking at the chatter on deficits, especially as it relates to the Reagan years. While I had wished that we didn't have deficits, I understand some of what went on.

I still don't see how others can claim Reagan is to blame for our current situation. The deficit got to around 3.3 trillion under Reagan.

Many will claim that Reagan also initiated a period of great financial expansion. Deficits leveled off during the end of his second term.

The debt still went up under Clinton (contrary to some claims).

It was Bush who really got the ball rolling and Obama hasn't done much to slow it down.

So why is Reagan to blame ?

 

[jwoodie]

5% interest on $20 trillion will be $1 trillion every year. How are we going to be able to pay that?

 

[Listening]

5% interest on $20 trillion will be $1 trillion every year. How are we going to be able to pay that?

Painfully as near as I can tell. And the longer we wait, the worse off it will be.

When Reagan tried to cut social spending, he met with resistance.

 

[Staidhup]

The tax cut proposed by Reagan included a reduction in government spending of which congress approved the tax cut, however, not the corresponding cut in spending. Bush, the first, capitulated to the cry for reducing the debt and increased taxes, again congress chose in increase government spending not reduce debt and contain the growth in government.
One way to cut government spending is to freeze the size of government, zero growth. One of the most controversial requires those able bodied recipients under the age of 65 to preform public service in exchange for government assistance, holding birth fathers liable for the care of their children, disband the Department of Commerce, take all federal funds dedicated to the department of education and turn it over to the states..........the list goes on. The task is not insurmountable, however, a bitter pill to swallow. The alternative is financial ruin from within.
When one scans the current political horizon it becomes apparent courage and resolve are lacking on both sides of the political spectrum.

 

[jwoodie]

Inflation/devaluation is the only option left to us and we need to implement fiscal reforms now, while rates are still low. The fairest way to do this is to freeze per capita spending on entitlements with no COLAs allowed unless the federal budget is balanced. This would avoid drastic cuts and allow people to plan their future expenses.

 

[iamwhatiseem]

Inflation/devaluation is the only option left to us and we need to implement fiscal reforms now, while rates are still low. The fairest way to do this is to freeze per capita spending on entitlements with no COLAs allowed unless the federal budget is balanced. This would avoid drastic cuts and allow people to plan their future expenses.

Freezing entitlement payouts is not enough.
The current administration has increased the food stamp crowd by 43 million people.
Most of the debt in the past few years is on entitlements. So simply freezing it will do no good.
Having said that, cutting entitlements in half to get it back to where it was prior to 2009 - would reveal the real economy for what it is. Obama will never do this. It would show what his policies and lack of policies has really did to the poor while grossly improving the wealth of the top 1%.
Entitlement cuts is the ONLY way to return to a sane economic policy.

 

[jwoodie]

Inflation/devaluation is the only option left to us and we need to implement fiscal reforms now, while rates are still low. The fairest way to do this is to freeze per capita spending on entitlements with no COLAs allowed unless the federal budget is balanced. This would avoid drastic cuts and allow people to plan their future expenses.

Freezing entitlement payouts is not enough.
The current administration has increased the food stamp crowd by 43 million people.
Most of the debt in the past few years is on entitlements. So simply freezing it will do no good.
Having said that, cutting entitlements in half to get it back to where it was prior to 2009 - would reveal the real economy for what it is. Obama will never do this. It would show what his policies and lack of policies has really did to the poor while grossly improving the wealth of the top 1%.
Entitlement cuts is the ONLY way to return to a sane economic policy.

Inflation will do this automatically without draconian cuts that are politically impossible. For example, 7% inflation would cut the value of entitlements by 50% in only ten years.

 

[waltky]

Granny says, "Dat's right - we goin' deeper in debt...

Under Obama: Federal Debt Up $84,266 Per Full-Time Private-Sector Worker
January 5, 2015 -- The federal government drove $789,473,350,613.20 deeper into debt in calendar year 2014, an increase that equaled $6,875 per household, $7,458 per full-time year-round worker, and $8,853 per full-time year-round private-sector worker.

According to the Treasury, the debt started calendar year 2014 at $17,351,970,784,950.10 and ended it at $18,141,444,135,563.30. When Obama took office on Jan. 20, 2009, the debt was $10,626,877,048,913.08. Since then, it has increased $7,514,567,086,650.22--which is $65,443 per household, $70,985 per full-time worker and $84,266 per full-time private-sector worker.

In 2013, according to the Census Bureau there were 105,862,000 full-time year-round workers in the United States. The $789,473,350,613.20 increase in the federal debt during 2014 worked out to $7,457.57 for each of those full-time year-round workers. Those 105,862,000 full-time year-round workers included 16,685,000 federal, state and local government workers and 89,177,000 private-sector workers.

The $789,473,350,613.20 in new federal debt in 2014 equaled $8,852.88 for each of the 89,177,000 full-time private-sector workers in the country. As of December 2013, there were 114,826,000 households in the country, according to the Census Bureau. The $789,473,350,613.20 in new debt equaled $6,875.39 per household. Ten years ago, at the end of 2004, the federal debt was $7,596,142,802,424.14. Since then, it has grown by $10,545,301,333,139.16—an average pace of $1,054,530,133,313.92 per year.

Under Obama Federal Debt Up 84 266 Per Full-Time Private-Sector Worker CNS News

 

[jwoodie]

Granny says, "Dat's right - we goin' deeper in debt...

Time for a new shtick, don't you think?

 

[iamwhatiseem]

You guys have of course noticed that while Bush was President the MSM railed on about the debt on a regular basis.
Today - with double the debt of the Bush years...crickets. Nah...no bias in the media.

 

[jwoodie]

Debt is such a dry topic. Let's talk about taxing the rich...

 

[Friends]

I've been going back and looking at the chatter on deficits, especially as it relates to the Reagan years. While I had wished that we didn't have deficits, I understand some of what went on.

I still don't see how others can claim Reagan is to blame for our current situation. The deficit got to around 3.3 trillion under Reagan.

Many will claim that Reagan also initiated a period of great financial expansion. Deficits leveled off during the end of his second term.

The debt still went up under Clinton (contrary to some claims).

It was Bush who really got the ball rolling and Obama hasn't done much to slow it down.

So why is Reagan to blame ?

Ronald Reagan is to blame because he popularized the delusion that cutting taxes generates more tax revenue than not cutting them, or than raising them.

From the presidencies of Harry Truman to that of Jimmy Carter the national debt declined as a percentage of gross domestic product. It tripled when Reagan was president.

 

[Friends]

You guys have of course noticed that while Bush was President the MSM railed on about the debt on a regular basis.
Today - with double the debt of the Bush years...crickets. Nah...no bias in the media.

When the national debt tripled under Ronald Reagan Republicans were either silent, or they blamed a "Democratic Congress." Anyone who remembers the Reagan years, or who has studied them, knows that this was not a time for bold new initiatives in domestic spending. Military spending increased.

During this time the Soviet Union was losing its war in Afghanistan, and collapsing from within. Therefore it was not necessary for the United States to spend more for our military. Nevertheless, if it was necessary, it was necessary to raise taxes to pay for it.

 

[iamwhatiseem]

You guys have of course noticed that while Bush was President the MSM railed on about the debt on a regular basis.
Today - with double the debt of the Bush years...crickets. Nah...no bias in the media.

When the national debt tripled under Ronald Reagan Republicans were either silent, or they blamed a "Democratic Congress." Anyone who remembers the Reagan years, or who has studied them, knows that this was not a time for bold new initiatives in domestic spending. Military spending increased.

During this time the Soviet Union was losing its war in Afghanistan, and collapsing from within. Therefore it was not necessary for the United States to spend more for our military. Nevertheless, if it was necessary, it was necessary to raise taxes to pay for it.

If you would have served in the military at that time you would not be saying this.
Most U.S. bases at the time had little updates since WW II. Our Navy was waaay out of date as well.
Reagan brought the military into that present time. Prior to that it was woefully neglected.
Military spending does not always relate with wars Friends.

 

[Mac1958]

.

Interest on the debt diverts tax dollars away from other government services and will ultimately lead to significantly higher personal income taxation. And not just for the evil rich.

And just wait until we have to start paying higher interest rates on the debt. Oh boy, that will be fun. Our overall standard of living is about to decrease.

And who's to blame? In the end, we are, of course. We're more concerned with Kim Kardashian than we are with holding our politicians accountable. We're more worried about temporary partisan political victories than we are about changing a system that allows politicians to be bought off, selling off our future for political gain.

Self-inflicted wound.

.

 

[jwoodie]

Ronald Reagan is to blame because he popularized the delusion that cutting taxes generates more tax revenue than not cutting them, or than raising them.

From the presidencies of Harry Truman to that of Jimmy Carter the national debt declined as a percentage of gross domestic product. It tripled when Reagan was president.

The Democrats in Congress refused to fund Reagan's defense budgets unless domestic spending was also increased. Maybe this was before your time?