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A half trillion this year alone. But lets use GDP it doesnt sound as bad.
All we need to do is repeal the Bush tax cuts and get out of Iraq and Afghanistan.
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.
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?
All we need to do is repeal the Bush tax cuts and get out of Iraq and Afghanistan.
You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.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
You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.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
Quite the contrary. It would send them lower. The manufactured "Debt Crisis" has caused the 30 yr Treasury bond to drop from 4.4% to 4.19% as of today. Why? The fact is the Treasury would never allow the country to default- bond holders would be paid first and the bondholders know it. Also, with a balanced budget (which refusing to raise the debt ceiling instantly creates) the USA is a far more desirable borrower.
A bond default would send interest rates lower??? According to Standard Poors and Moody's, a default would lower US bond rates from AAA to D. A rating lower than an A would mean treasury bonds would not be considered investment grade. That means they could not be purchased by many financial institutions such as banks, insurance companies, pension funds, etc.. Interest would rise sharply as the prices fell.You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.What neither side seems to recognize — or at least acknowledge — is that what matters about the debt isn’t the dollar amount per se, but how much it costs us to service it. And by that measure, the debt isn’t nearly as big a problem as it’s 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 let’s call it $250 billion. That’s 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
Quite the contrary. It would send them lower. The manufactured "Debt Crisis" has caused the 30 yr Treasury bond to drop from 4.4% to 4.19% as of today. Why? The fact is the Treasury would never allow the country to default- bond holders would be paid first and the bondholders know it. Also, with a balanced budget (which refusing to raise the debt ceiling instantly creates) the USA is a far more desirable borrower.
A bond default would send interest rates lower??? According to Standard Poors and Moody's, a default would lower US bond rates from AAA to D. A rating lower than an A would mean treasury bonds would not be considered investment grade. That means they could not be purchased by many financial institutions such as banks, insurance companies, pension funds, etc.. Interest would rise sharply as the prices fell.You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.
Quite the contrary. It would send them lower. The manufactured "Debt Crisis" has caused the 30 yr Treasury bond to drop from 4.4% to 4.19% as of today. Why? The fact is the Treasury would never allow the country to default- bond holders would be paid first and the bondholders know it. Also, with a balanced budget (which refusing to raise the debt ceiling instantly creates) the USA is a far more desirable borrower.
However, I also believe there will be no default. It can be avoided in several ways. The most probably, Congress will eventually raise the debt ceiling. Also the Fed working with the treasury can probably raise enough funds to hold out to the end of Aug. If all else failed, the president would use 14th amendment to ignore the debt ceiling entirely.
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.
You're a fucking idiot, you really are.
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.
You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.
You're assuming Teabagers don't force the country into a default, which will send interest rates on treasury bills skyrocketing.
How can "TEA baggers" force the country into a default? They don't have the authority to prevent the government from paying interest on the debt. Only Obama has that authority.
You're a fucking idiot, you really are.
Seems to me your "drowning in excuses"
No. It's not what they can pay, it's what they will pay. Government must refinance the debt because they are running a deficit. Treasury bill rates are determined by weekly auctions. They are set by the market. If you had a AAA credit rating, you might be able to borrow money at 3% for 10 yrs. But if you were defaulting on your obligations, who would loan you money at 3%? You would have to offer better rates.A bond default would send interest rates lower??? According to Standard Poors and Moody's, a default would lower US bond rates from AAA to D. A rating lower than an A would mean treasury bonds would not be considered investment grade. That means they could not be purchased by many financial institutions such as banks, insurance companies, pension funds, etc.. Interest would rise sharply as the prices fell.Quite the contrary. It would send them lower. The manufactured "Debt Crisis" has caused the 30 yr Treasury bond to drop from 4.4% to 4.19% as of today. Why? The fact is the Treasury would never allow the country to default- bond holders would be paid first and the bondholders know it. Also, with a balanced budget (which refusing to raise the debt ceiling instantly creates) the USA is a far more desirable borrower.
However, I also believe there will be no default. It can be avoided in several ways. The most probably, Congress will eventually raise the debt ceiling. Also the Fed working with the treasury can probably raise enough funds to hold out to the end of Aug. If all else failed, the president would use 14th amendment to ignore the debt ceiling entirely.
So our government defaults and you claim they can then pay more interest on their T bills?
Government T bills ARE NOT private sector. A default would make them go down.
All we need to do is repeal the Bush tax cuts and get out of Iraq and Afghanistan.
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.
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?
Congress does have the constitutional authority to make laws and that is exactly where the authority comes from for government to manage these programs.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.
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?
ALL THREE
Social Security, Medicare: There is NO CONSTITUTIONAL AUTHORITY for fedgov to manage those programs. Uncle Sam should sell federal property to fund those two plans to pay those who paid premiums and have reached certain age.
The plan should then be abolished and younger Americans should be allowed to invest in the plan of their choice.
Defense: there is Constitutional authority for congress to defend the nation. There is no authority to have a standing army nor to manage those plans as if it a welfare scheme.
.
