Why Are Politicians Not Increasing Spending?

[BakshisMouse]

None of this changes the fact we have a spending, not a revenue problem. Just saying.

And the problem is not enough spending. Just saying.

Yes, we understand that's what you're saying. Despite all evidence to the contrary. Despite history demonstrating how overspending has collapsed society after society. Despite seeing what's going in big spending countries in Europe right now. Despite all logic and reason, you think we should spend more. We got it.

How about this? Spend your own fucking money as you see fit and leave ours alone.

A large public debt is not as destructive as you think. Look at Japan. Its public debt is around 200% of GDP. For comparison, the USA's ratio is about 100%. Now, Japan is a very troubled country economically, but no one is predicting it will fall to anarchy if the debt isn't brought down.

Also, the yield on a 10-year Japanese bond is around 1%. The yield on 10-year bond from the USA is around 1.9%. Would bond traders accept such a low yield if the countries were in such dire circumstances?

The yield on a 10-year Italian bond is 7%. Could it be that the problems of the European countries are cause by the Euro currency that ties them to monetary policy set by the European central bank?

I think it's more accurate to see the USA going down the path of Japan rather than Greece.

 

[eflatminor]

And the problem is not enough spending. Just saying.

Yes, we understand that's what you're saying. Despite all evidence to the contrary. Despite history demonstrating how overspending has collapsed society after society. Despite seeing what's going in big spending countries in Europe right now. Despite all logic and reason, you think we should spend more. We got it.

How about this? Spend your own fucking money as you see fit and leave ours alone.

A large public debt is not as destructive as you think. Look at Japan. Its public debt is around 200% of GDP. For comparison, the USA's ratio is about 100%. Now, Japan is a very troubled country economically, but no one is predicting it will fall to anarchy if the debt isn't brought down.

Also, the yield on a 10-year Japanese bond is around 1%. The yield on 10-year bond from the USA is around 1.9%. Would bond traders accept such a low yield if the countries were in such dire circumstances?

The yield on a 10-year Italian bond is 7%. Could it be that the problems of the European countries are cause by the Euro currency that ties them to monetary policy set by the European central bank?

I think it's more accurate to see the USA going down the path of Japan rather than Greece.

Going down the road of either is unacceptable. That other countries are more fucked up than we are does not make our situation okay. There is simply no way you can justify every federal program in existence when 40% of what we spent is borrowed. You can't run your household like that and we should not run the country like that. Time to live within our means.

 

[BakshisMouse]

Yes, we understand that's what you're saying. Despite all evidence to the contrary. Despite history demonstrating how overspending has collapsed society after society. Despite seeing what's going in big spending countries in Europe right now. Despite all logic and reason, you think we should spend more. We got it.

How about this? Spend your own fucking money as you see fit and leave ours alone.

A large public debt is not as destructive as you think. Look at Japan. Its public debt is around 200% of GDP. For comparison, the USA's ratio is about 100%. Now, Japan is a very troubled country economically, but no one is predicting it will fall to anarchy if the debt isn't brought down.

Also, the yield on a 10-year Japanese bond is around 1%. The yield on 10-year bond from the USA is around 1.9%. Would bond traders accept such a low yield if the countries were in such dire circumstances?

The yield on a 10-year Italian bond is 7%. Could it be that the problems of the European countries are cause by the Euro currency that ties them to monetary policy set by the European central bank?

I think it's more accurate to see the USA going down the path of Japan rather than Greece.

Going down the road of either is unacceptable. That other countries are more fucked up than we are does not make our situation okay. There is simply no way you can justify every federal program in existence when 40% of what we spent is borrowed. You can't run your household like that and we should not run the country like that. Time to live within our means.

And to whom is the money owed? By in large, the huge increases in debt in the past few years is domestically held debt. It's money owed to American society. We're not about to put ourselves in debtor's jail, are we? Yes, too much domestically held debt is detrimental, but it can be reduced by economic growth.

Tell me, how is reducing the amount of money spent on government programs going to foster economic growth?

 

[eflatminor]

Tell me, how is reducing the amount of money spent on government programs going to foster economic growth?

Because every dime spent on government programs must first come out of the economy, either directly through taxes (from societies most productive and likely to hire entities) or debt, which is still a burden for taxpayers. Reduce those expenditures and less money is taken from job creators allowing them to invest, which creates jobs.

Again, your argument is akin to robbing a grocery store of their till, giving that money to a homeless guy, and then calling it stimulus when the homeless guy buys beer from the very grocery store from whom you took the money. Stop stealing from the grocery store and its owner can invest in expansion, new stores, etc...the kind of investments that foster economic growth.

 

[BillyV]

And to whom is the money owed? By in large, the huge increases in debt in the past few years is domestically held debt. It's money owed to American society. We're not about to put ourselves in debtor's jail, are we? Yes, too much domestically held debt is detrimental, but it can be reduced by economic growth.

Tell me, how is reducing the amount of money spent on government programs going to foster economic growth?

Nothing could be further from the truth! Foreign ownership of US public debt has gone from 17.5% of the total debt in 2001 to 31.5% of the total debt as of June of 2011. That's an 80% increase over 10 years.
Current Issue: Treasury Bulletin: Publications & Guidance: Financial Management Service (See "Ownership of Federal Securities")

 

[BakshisMouse]

And to whom is the money owed? By in large, the huge increases in debt in the past few years is domestically held debt. It's money owed to American society. We're not about to put ourselves in debtor's jail, are we? Yes, too much domestically held debt is detrimental, but it can be reduced by economic growth.

Tell me, how is reducing the amount of money spent on government programs going to foster economic growth?

Nothing could be further from the truth! Foreign ownership of US public debt has gone from 17.5% of the total debt in 2001 to 31.5% of the total debt as of June of 2011. That's an 80% increase over 10 years.
Current Issue: Treasury Bulletin: Publications & Guidance: Financial Management Service (See "Ownership of Federal Securities")

While you are right that the foreign ownership of the debt has gone up in recent years, and I was wrong on that point, what do you think this means? Foreign owners can't cash in their treasury securities at the same time. Plus, the USA owns a lot of foreign treasury securies, too.

 

[BillyV]

And to whom is the money owed? By in large, the huge increases in debt in the past few years is domestically held debt. It's money owed to American society. We're not about to put ourselves in debtor's jail, are we? Yes, too much domestically held debt is detrimental, but it can be reduced by economic growth.

Tell me, how is reducing the amount of money spent on government programs going to foster economic growth?

Nothing could be further from the truth! Foreign ownership of US public debt has gone from 17.5% of the total debt in 2001 to 31.5% of the total debt as of June of 2011. That's an 80% increase over 10 years.
Current Issue: Treasury Bulletin: Publications & Guidance: Financial Management Service (See "Ownership of Federal Securities")

While you are right that the foreign ownership of the debt has gone up in recent years, and I was wrong on that point, what do you think this means? Foreign owners can't cash in their treasury securities at the same time. Plus, the USA owns a lot of foreign treasury securies, too.

It means that, when that debt comes due, if the capital markets don't see us as a good risk at that time, you will have to replace it at much higher rates (if there is a market for it at all), or repay it. Intergovernment debt simply transfers wealth from one American to another American; while it may create problems, it's still internal. Foreign debt removes that money from the domestic economy altogether, and provides the creditor leverage to make demands that you would otherwise not consider. It seems that we are already catering to China, our largest creditor, and we're nowhere near where this path will take us in 4 more years.