Ten Inconvenient Truths About The National Debt: It's Worse Than You Think...

[TakeAStepBack]

1.) The amount by which the public debt — the portion of the national debt not borrowed by the U.S. government from funds it administers — has increased since President Obama took office is unprecedented, not politics as usual: more than $4.75 trillion (more than 75%), according to the Treasury Department. If the president’s second-term budget is implemented, he will end up (according to the Congressional Budget Office) increasing the public debt by $8.9 trillion. That exceeds the public debt incurred by all previous presidents combined — by more than $2.6 trillion.

2.) Large as the public debt is, it doesn’t include amounts the government has promised to pay but lacks the funds to pay. For example, the Social Security and Medicare trustees have estimated that we need more than $63 trillion right now to make promised payments for Social Security and Medicare benefits not covered by current Social Security and Medicare taxes.

3.) The government can’t keep incurring debt without consequence. High debt slows economic growth (meaning fewer jobs and less income), according to one study by Carmen Reinhart and Kenneth Rogoff and a second study by Manmohan Kumar and Jaejoon Woo (refuting the claim that it is slow growth that causes higher public debt and not vice versa).

4.) It’s not like the government is skimping on spending. The Office of Management and Budget (OMB) has estimated that this year the federal government will spend 24.3 cents out of every dollar of the value of all final goods we produce and services we provide (add state and local expenditures and that figure increases to 44.2 cents).

5.) Interest payments on the debt are skyrocketing. The CBO has estimated that the president’s proposals will more than triple interest on the public debt from $237 billion in 2013 to $743 billion in 2022 (more than the Department of Defense is spending on military programs and more than seven times what the Department of Education is spending). That money will enrich other countries (the Treasury Department estimates that almost half of the debt is held by foreign investors).

6.) There aren’t enough rich people to balance the budget on their backs. Ending President Bush’s income and estate tax cuts for the “rich” (defined as individuals with taxable income exceeding $200,000 and couples with taxable income exceeding $250,000) would (according to the OMB) reduce the 2013 deficit by less than 5% ($46.6 billion)...

Read more: Ten inconvenient truths about the national debt | The Daily Caller

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

 

[Full-Auto]

Because there isn't even enoughh money in rotation to pay down all of the debt. Once our creditors stop loaning us money, there will be a default. Paying it off all at one time isn't even a possibility unless we go the full round and completely debase our currency iWeimar republic style...hyperinflation.

the question isn't will the US default, the question is when and what types of interventionist policies will the government take to keep itself alive.

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

We will continue borrowing until default, or the paper is worthless. Which can be one in the same.

To answer your question....

WE DONT........We could, however a good number of Americans have grown FAT, LAZY and DEPENDENT so I give Obama a better then even chance......

 

[DontBeStupid]

Because there isn't even enoughh money in rotation to pay down all of the debt. Once our creditors stop loaning us money, there will be a default. Paying it off all at one time isn't even a possibility unless we go the full round and completely debase our currency iWeimar republic style...hyperinflation.

the question isn't will the US default, the question is when and what types of interventionist policies will the government take to keep itself alive.

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

In your completely fabricated, made up, fantasy example, they don't. But that's why you completely made it up and detached it entirely from reality.

 

[DontBeStupid]

1.) The amount by which the public debt — the portion of the national debt not borrowed by the U.S. government from funds it administers — has increased since President Obama took office is unprecedented, not politics as usual: more than $4.75 trillion (more than 75%), according to the Treasury Department. If the president’s second-term budget is implemented, he will end up (according to the Congressional Budget Office) increasing the public debt by $8.9 trillion. That exceeds the public debt incurred by all previous presidents combined — by more than $2.6 trillion.

2.) Large as the public debt is, it doesn’t include amounts the government has promised to pay but lacks the funds to pay. For example, the Social Security and Medicare trustees have estimated that we need more than $63 trillion right now to make promised payments for Social Security and Medicare benefits not covered by current Social Security and Medicare taxes.

3.) The government can’t keep incurring debt without consequence. High debt slows economic growth (meaning fewer jobs and less income), according to one study by Carmen Reinhart and Kenneth Rogoff and a second study by Manmohan Kumar and Jaejoon Woo (refuting the claim that it is slow growth that causes higher public debt and not vice versa).

4.) It’s not like the government is skimping on spending. The Office of Management and Budget (OMB) has estimated that this year the federal government will spend 24.3 cents out of every dollar of the value of all final goods we produce and services we provide (add state and local expenditures and that figure increases to 44.2 cents).

5.) Interest payments on the debt are skyrocketing. The CBO has estimated that the president’s proposals will more than triple interest on the public debt from $237 billion in 2013 to $743 billion in 2022 (more than the Department of Defense is spending on military programs and more than seven times what the Department of Education is spending). That money will enrich other countries (the Treasury Department estimates that almost half of the debt is held by foreign investors).

6.) There aren’t enough rich people to balance the budget on their backs. Ending President Bush’s income and estate tax cuts for the “rich” (defined as individuals with taxable income exceeding $200,000 and couples with taxable income exceeding $250,000) would (according to the OMB) reduce the 2013 deficit by less than 5% ($46.6 billion)...

Read more: Ten inconvenient truths about the national debt | The Daily Caller

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

Yup. They are. And every other accountant in the world counts those over a given time frame, something Pauli and his copy and paste article aren't doing.

Or are you suggesting that all mom and pop businesses keep $65M on hand to fund their company for 65 years?

 

[Full-Auto]

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

In your completely fabricated, made up, fantasy example, they don't. But that's why you completely made it up and detached it entirely from reality.

It wasnt a bad example................


We had to borrow to pay SS, I know you recall the uproar with the president stating he could not guarantee the checks would go out.

Come on....LOOK...........

 

[TakeAStepBack]

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

In your completely fabricated, made up, fantasy example, they don't. But that's why you completely made it up and detached it entirely from reality.

Your example is not in line with the real fiscal/financial problem the US is in. Go look at the debt clock adn get back to me. My example more closely relates to the problem the federal government has with debt.

 

[eflatminor]

1.) The amount by which the public debt — the portion of the national debt not borrowed by the U.S. government from funds it administers — has increased since President Obama took office is unprecedented, not politics as usual: more than $4.75 trillion (more than 75%), according to the Treasury Department. If the president’s second-term budget is implemented, he will end up (according to the Congressional Budget Office) increasing the public debt by $8.9 trillion. That exceeds the public debt incurred by all previous presidents combined — by more than $2.6 trillion.

2.) Large as the public debt is, it doesn’t include amounts the government has promised to pay but lacks the funds to pay. For example, the Social Security and Medicare trustees have estimated that we need more than $63 trillion right now to make promised payments for Social Security and Medicare benefits not covered by current Social Security and Medicare taxes.

3.) The government can’t keep incurring debt without consequence. High debt slows economic growth (meaning fewer jobs and less income), according to one study by Carmen Reinhart and Kenneth Rogoff and a second study by Manmohan Kumar and Jaejoon Woo (refuting the claim that it is slow growth that causes higher public debt and not vice versa).

4.) It’s not like the government is skimping on spending. The Office of Management and Budget (OMB) has estimated that this year the federal government will spend 24.3 cents out of every dollar of the value of all final goods we produce and services we provide (add state and local expenditures and that figure increases to 44.2 cents).

5.) Interest payments on the debt are skyrocketing. The CBO has estimated that the president’s proposals will more than triple interest on the public debt from $237 billion in 2013 to $743 billion in 2022 (more than the Department of Defense is spending on military programs and more than seven times what the Department of Education is spending). That money will enrich other countries (the Treasury Department estimates that almost half of the debt is held by foreign investors).

6.) There aren’t enough rich people to balance the budget on their backs. Ending President Bush’s income and estate tax cuts for the “rich” (defined as individuals with taxable income exceeding $200,000 and couples with taxable income exceeding $250,000) would (according to the OMB) reduce the 2013 deficit by less than 5% ($46.6 billion)...

Read more: Ten inconvenient truths about the national debt | The Daily Caller

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

Curiously, all private corporations MUST consider unfunded liabilities on their balance sheets. The law requires it...but not so for the federal government. The Federal Accounting Standards Board (FASAB) should require the federal government to record the trillions of dollars in bonds owed to the Social, Medicare and other so-called "Trust Funds" as a liability of the federal government.

They should, but they don't. Hypocrisy of the highest order.

 

[Liability]

1.) The amount by which the public debt — the portion of the national debt not borrowed by the U.S. government from funds it administers — has increased since President Obama took office is unprecedented, not politics as usual: more than $4.75 trillion (more than 75%), according to the Treasury Department. If the president’s second-term budget is implemented, he will end up (according to the Congressional Budget Office) increasing the public debt by $8.9 trillion. That exceeds the public debt incurred by all previous presidents combined — by more than $2.6 trillion.

2.) Large as the public debt is, it doesn’t include amounts the government has promised to pay but lacks the funds to pay. For example, the Social Security and Medicare trustees have estimated that we need more than $63 trillion right now to make promised payments for Social Security and Medicare benefits not covered by current Social Security and Medicare taxes.

3.) The government can’t keep incurring debt without consequence. High debt slows economic growth (meaning fewer jobs and less income), according to one study by Carmen Reinhart and Kenneth Rogoff and a second study by Manmohan Kumar and Jaejoon Woo (refuting the claim that it is slow growth that causes higher public debt and not vice versa).

4.) It’s not like the government is skimping on spending. The Office of Management and Budget (OMB) has estimated that this year the federal government will spend 24.3 cents out of every dollar of the value of all final goods we produce and services we provide (add state and local expenditures and that figure increases to 44.2 cents).

5.) Interest payments on the debt are skyrocketing. The CBO has estimated that the president’s proposals will more than triple interest on the public debt from $237 billion in 2013 to $743 billion in 2022 (more than the Department of Defense is spending on military programs and more than seven times what the Department of Education is spending). That money will enrich other countries (the Treasury Department estimates that almost half of the debt is held by foreign investors).

6.) There aren’t enough rich people to balance the budget on their backs. Ending President Bush’s income and estate tax cuts for the “rich” (defined as individuals with taxable income exceeding $200,000 and couples with taxable income exceeding $250,000) would (according to the OMB) reduce the 2013 deficit by less than 5% ($46.6 billion)...

Read more: Ten inconvenient truths about the national debt | The Daily Caller

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

The US UNFUNDED Liabilities (bottom right of center) = almost at 120 TRILLION dollars.

Nothing to see here. Move right along.

 

[kaz]

Or are you suggesting that all mom and pop businesses keep $65M on hand to fund their company for 65 years?

Every public company does if they want to stay out of jail. Only government is allowed to not follow rules that government requires everyone else to follow.

 

[8537]

Because there isn't even enoughh money in rotation to pay down all of the debt. Once our creditors stop loaning us money, there will be a default. Paying it off all at one time isn't even a possibility unless we go the full round and completely debase our currency iWeimar republic style...hyperinflation.

the question isn't will the US default, the question is when and what types of interventionist policies will the government take to keep itself alive.

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

15 trillion in current debt, devalued at a rate of about 3% per year. So in 2032 it's worth about 8T. Meanwhile, the current 15T economy should be about 23T with very moderate growth in the intervening years.

If we simply move towards a post-recession fiscal position where the budget runs a debt of a couple hundred billion per year, the level is imminently manageable. We've been here before and found ourselves with very low debt levels within 15 years.

 

[TakeAStepBack]

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

Yup. They are. And every other accountant in the world counts those over a given time frame, something Pauli and his copy and paste article aren't doing.

Or are you suggesting that all mom and pop businesses keep $65M on hand to fund their company for 65 years?

So we borrow that money too? Is this what you're saying. We're already borrowing the money and have been for a long time. Yet in your world, magically, one day all we just correct itself. It's a fun game in fantasy land. It lacks reality on the side of full blown mental patient.

 

[Liability]

We are more than 1 tenth of the way to our first QUADRILLION of unfunded liabilities.

We're number 1.

 

[8537]

I stopped reading at #2. sorry but that's just retarded accounting.

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

Curiously, all private corporations MUST consider unfunded liabilities on their balance sheets. The law requires it...but not so for the federal government. The Federal Accounting Standards Board (FASAB) should require the federal government to record the trillions of dollars in bonds owed to the Social, Medicare and other so-called "Trust Funds" as a liability of the federal government.

They should, but they don't. Hypocrisy of the highest order.

Except the privately held liabilities and actual US treasuries are liabilities, while the special-issue treasuries held by SS and Medicare could (and will!) be voided without a default or a missed legal obligation.

Don't confuse the trust fund certificates with US Treasuries.

 

[TakeAStepBack]

If you own a home an owe $200K on it, could you pay it all off in one day? One year?

Then why should the U.S.?

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

15 trillion in current debt, devalued at a rate of about 3% per year. So in 2032 it's worth about 8T. Meanwhile, the current 15T economy should be about 23T with very moderate growth in the intervening years.

If we simply move towards a post-recession fiscal position where the budget runs a debt of a couple hundred billion per year, the level is imminently manageable. We've been here before and found ourselves with very low debt levels within 15 years.

We've been 15.6 trillion and counting in debt before? When?

Then IF we do this or that? If a lot of things, good sir. But IF IF is all we have, we're pretty far away from an actual solution. AND in reality we're running 1.3-1.4 trillion in deficit.

 

[Care4all]

SS is pulling in less surplus...Under Bush and under Clinton, they had huge SS and Medicare surplus funds that were used....(borrowed) to lower the supposed deficits.....

We have more boomers retiring and less of them working and have smaller Social security surplus to borrow from to lower the deficit now and future presidents will have no SS surplus to hide their deficits at all....because the day of the big SS surplus funds is over... thus more borrowing from creditors like China, Saudi Arabia, Japan etc....

yeah and obummer takes the above scenario and decides to "give folks a thousand dollars" and cuts the amount of ss withdrawn from paychecks. It's gonna eat your asses up in 20 years. It makes me chuckle at your stupidity.

so so so misinformed as par for the course with you willow....the SS tax break was part of the stimulus...it's not depleting SS funds, but general income tax funds... save the stupidity remark for yourself dearest....

 

[DontBeStupid]

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

In your completely fabricated, made up, fantasy example, they don't. But that's why you completely made it up and detached it entirely from reality.

Your example is not in line with the real fiscal/financial problem the US is in. Go look at the debt clock adn get back to me. My example more closely relates to the problem the federal government has with debt.

If you want a realistic example, the U.S. makes $160,000 a year, owes $160,000 on a mortgage and pays $2,688 a year in interest and according to you, is going to default or declare bankruptcy.

Of course, if you wanted to stop hiding behind made up examples and wanted to address the real world numbers, that would be fine with me.

 

[eflatminor]

They are called unfunded liabilities.

Here is the national debt clock for you to review.

U.S. National Debt Clock : Real Time

Curiously, all private corporations MUST consider unfunded liabilities on their balance sheets. The law requires it...but not so for the federal government. The Federal Accounting Standards Board (FASAB) should require the federal government to record the trillions of dollars in bonds owed to the Social, Medicare and other so-called "Trust Funds" as a liability of the federal government.

They should, but they don't. Hypocrisy of the highest order.

Except the privately held liabilities and actual US treasuries are liabilities, while the special-issue treasuries held by SS and Medicare could (and will!) be voided without a default or a missed legal obligation.

Don't confuse the trust fund certificates with US Treasuries.

Trust fund certs held by SS and Medicare will be "voided" how exactly?

 

[8537]

Let's try it again, maybe if I help you adjust the view, you'll come over to reality.

The US house is worth 200k that they currently owe 2.5 million on because they continued to borrow just to pay the home loan. Now, the 200k home is worth 150k, the interest on the 2.5 million is around 200k annually. They borrow from another bank (another country) to finance both the interest payments and the payment on the debt.

tell me how the US gets out of this financial trainwreck?

15 trillion in current debt, devalued at a rate of about 3% per year. So in 2032 it's worth about 8T. Meanwhile, the current 15T economy should be about 23T with very moderate growth in the intervening years.

If we simply move towards a post-recession fiscal position where the budget runs a debt of a couple hundred billion per year, the level is imminently manageable. We've been here before and found ourselves with very low debt levels within 15 years.

We've been 15.6 trillion and counting in debt before? When?

Relative to the economy or using real dollar values? Yes sir. 1946.

Then IF we do this or that? If a lot of things, good sir. But IF IF is all we have, we're pretty far away from an actual solution. AND in reality we're running 1.3-1.4 trillion in deficit.

Yes, serious structural changes need to occur. I'd be happy to discuss what those might be. But the quickest way to reduce the long term deficit is to increase the mid-term growth rate - and that's a problem that can only be addressed by focusing our energies on the current recession.

In other words, the debt is a long term problem made worse by our inability to fix the very short term problem we find ourselves in.

 

[auditor0007]

1.) The amount by which the public debt — the portion of the national debt not borrowed by the U.S. government from funds it administers — has increased since President Obama took office is unprecedented, not politics as usual: more than $4.75 trillion (more than 75%), according to the Treasury Department. If the president’s second-term budget is implemented, he will end up (according to the Congressional Budget Office) increasing the public debt by $8.9 trillion. That exceeds the public debt incurred by all previous presidents combined — by more than $2.6 trillion.

2.) Large as the public debt is, it doesn’t include amounts the government has promised to pay but lacks the funds to pay. For example, the Social Security and Medicare trustees have estimated that we need more than $63 trillion right now to make promised payments for Social Security and Medicare benefits not covered by current Social Security and Medicare taxes.

3.) The government can’t keep incurring debt without consequence. High debt slows economic growth (meaning fewer jobs and less income), according to one study by Carmen Reinhart and Kenneth Rogoff and a second study by Manmohan Kumar and Jaejoon Woo (refuting the claim that it is slow growth that causes higher public debt and not vice versa).

4.) It’s not like the government is skimping on spending. The Office of Management and Budget (OMB) has estimated that this year the federal government will spend 24.3 cents out of every dollar of the value of all final goods we produce and services we provide (add state and local expenditures and that figure increases to 44.2 cents).

5.) Interest payments on the debt are skyrocketing. The CBO has estimated that the president’s proposals will more than triple interest on the public debt from $237 billion in 2013 to $743 billion in 2022 (more than the Department of Defense is spending on military programs and more than seven times what the Department of Education is spending). That money will enrich other countries (the Treasury Department estimates that almost half of the debt is held by foreign investors).

6.) There aren’t enough rich people to balance the budget on their backs. Ending President Bush’s income and estate tax cuts for the “rich” (defined as individuals with taxable income exceeding $200,000 and couples with taxable income exceeding $250,000) would (according to the OMB) reduce the 2013 deficit by less than 5% ($46.6 billion)...

Read more: Ten inconvenient truths about the national debt | The Daily Caller

We need to raise taxes across the board, and we also need to cut spending in certain areas. Without a doubt, we could cut some military spending along with a number of other things. I would completely shut down the Department of Education. As for the biggest future expense, we should raise the retirement age for SS and Medicare to 70 and possibly higher down the road if life expectancy continues to rise.

There are ways to address these problems. Unfortunately, what we get are people demanding that we cut taxes and cut government spending in half while not telling us what to cut or how to do it, because there is no way to do what they think can be done. On the other side, nobody wants to cut spending, at least not in a realistic way. When we do discuss cutting spending, we get idiotic ideas like privatizing Medicare which would leave tens of millions of retirees with no health coverage at all. When intelligent people like Alan Simpson come up with reasonable plans, they are laughed at by people from their own party. We have let the lunatics get control, and so now we are paying the price.

 

[8537]

Curiously, all private corporations MUST consider unfunded liabilities on their balance sheets. The law requires it...but not so for the federal government. The Federal Accounting Standards Board (FASAB) should require the federal government to record the trillions of dollars in bonds owed to the Social, Medicare and other so-called "Trust Funds" as a liability of the federal government.

They should, but they don't. Hypocrisy of the highest order.

Except the privately held liabilities and actual US treasuries are liabilities, while the special-issue treasuries held by SS and Medicare could (and will!) be voided without a default or a missed legal obligation.

Don't confuse the trust fund certificates with US Treasuries.

Trust fund certs held by SS and Medicare will be "voided" how exactly?

They are not debts backed by full faith and credit. They are intergovernmental debt with no public holdings. Congress can, with the simple act of congress, decide not to transfer the associated payments. In fact, just about any reform to social security involves doing just that.