What neither side seems to recognize or at least acknowledge is that what matters about the debt isnt the dollar amount per se, but how much it costs us to service it. And by that measure, the debt isnt nearly as big a problem as its being made out to be. Yes, the federal debt has grown by nearly $3 trillion dollars in the past three years. And yes, the dollar amount of that debt is quite large (in excess of $14 trillion and headed toward $15 trillion should the ceiling be raised). But large numbers are not the problem. The U.S. has a large economy (slightly larger than that debt number). And, crucially, we have very low interest rates. Because of those low rates, the amount the U.S. government pays to service its debt is, relative to the size of the economy, less than it was paying throughout the boom years of the 1980s and 1990s and for most of the last decade. The Congressional Budget Office estimates that net interest on the debt (which is what the government pays to service it) would be $225 billion for fiscal year 2011. The latest figures put that a bit higher, so lets call it $250 billion. Thats about 1.6% of American output, which is lower than at any point since the 1970s except for 2003 through 2005, when it was closer to 1.4%. Under Ronald Reagan, the first George Bush, and Bill Clinton, payments on federal debt often got above 3% of GDP. Under Bush the second, payments were about where they are now. Yet suddenly, we are in a near collective hysteria. The U.S. Is Not Drowning In Debt | Moneyland | TIME.com
Hardly. If the debt is only costing us 1.6% of GDP, it is much less than the 3% it cost us under Clinton and Reagan. Sorry to bother you with the facts. Continue with your silly hysteria.
I dont have a paticular reason to be against that. But not until senseless spending is stopped. The only thing we should have overseas are airforce bases. We should withdraw from NATO and tell the sissy europeans time to man up.
What I learned from hanging out with deficit hawks The Fiscal Solutions Tour is the latest Peter G. Peterson Foundation effort to rouse the public against deficits and the national debt and in particular (though they manage to avoid saying so) to win support for measures that would impose drastic cuts on Social Security and Medicare. It features Robert Bixby of the Concord Coalition, former Comptroller General David Walker and the veteran economist Alice Rivlin, whose recent distinctions include serving on the Bowles-Simpson commission. They came to Austin on February 9 and (partly because Rivlin is an old friend) I went. A David Walker speech is always worth listening to with care, for Mr. Walker is a reliable and thorough enumerator of popular deficit-scare themes. Three of these in particular caught my attention on Friday. To my surprise, Walker began on a disarming note: he acknowledged that the level of our national debt is not actually high. In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct -- not the 90+ percent figure for gross debt, commonly seen in press reports and in comparisons with other countries. The relevant number is today below where it was in the mid-1950s, and comparable to the early 1990s. More HERE is our 'looming' crisis...
The point of the OP is well taken, we aren't paying a huge amount of interest this year, but what about 5 or 10 years down the road? The CBO estimates the interest on our debt by 2020 to be close to 1 trillion dollars a year, and that's at the current low interest rates and assuming Obama's rosy economic forecast. If, as many expect, our credit rating is lowered, those interest rates will go up and therefore cost us more interest to borrow mony. I heard a report his morning that healthcare spending last year was around 2.6 trillion, but is expected to be 4.6 trillion in 10 years. That extra 2 trillion is not in any of Obama's budget forecasts, they're saying costs will be contained. Bullshit, the latest estimates from the CMS says that Medicare will go broke in less than 10 years. So the debt/deficits will go higher than expected and so will the accompanying interest we have to pay on it.
Which senseless spending are you talking about? The vast majority of federal spending is Social Security, Medicare, and defense. Which one of those would you cut?
Unfunded liabilities are the "real" problem. These are future commitments or entitlements made today with no plan in place to pay for them when they are due. [ame=http://www.youtube.com/watch?v=Ln559gjNpW4]‪Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending‬‏ - YouTube[/ame]
