FDR Caused Our Huge Debt!

[PoliticalChic]

Intragovernmental debt is still just debt, money the government doesn't have...

Work with me on this.

The government writes an IOU for $5T but doesn't take any money from anyone and doesn't give the IOU to anyone. The $5T can be money the gov't doesn't have but if it did then it would pay itself and still no money would have to move. As long as the government holds the paper and doesn't take in money, that IOU represents a promise to pay no one but the gov't itself. We can agree that it's meaningless, and we can also agree that it's not a debt that the taxpayers will pay to anyone but themselves.

Not so.

Is there a reason for the government to produce that IOU...?
Or are you suggesting that there is a department what is charged with creating meaningless fiduciary instruments.
After all, it didn't produce one that authorized a million McMansions that is has no use for, so it doesn't actually build same.

No, the IOU has a specific meaning: it promises to repay the money it has taken from the imaginary lock-box. As you may be aware, there are two distinct methods of accounting used by the government.

1. The Unified Cash Basis Budgeting. Just as with any one of us who writes a check, it is recorded as an expense, and when we receive a check, it is listed as income. Generally, government treats budgets in the same way. U.S. GAO - Search :: "Cash basis accounting"

a. So, a deficit means that the government spent more than it received during a specific fiscal year.

b. Now, using the cash basis method, you plan for a vacation in January by taking a $2,000 loan in December. This will appear as an asset in your bookkeeping- even though you will be obligated to repay this loan: it is actually a liability! This is exactly the situation that allowed Clinton to raid the Social Security Trust Fund, and claim this as revenue, even though it is an obligation to pay in the future. Beck, Balke, “Broke,” p. 172.
It is the reason for the IOU.

c. Now, watch the sleight-of-hand: using the money received now as revenue, even though it is supposed to be for paying future benefits! http://www.gao.gov/new.items/d05958sp.pdf
It is the Social Security surplus that helps offset the huge deficits!

d. So, by this method we can pencil it in when cash is paid: it gives a picture of finances at a given moment…but fails to account for resources used but not yet paid for. Retirement costs of employees? No! This is the method used by the CBO for budgeting purposes.
The federal budget: politics, policy ... - Allen Schick, Felix LoStracco - Google Books


e. This is the preferred method to use if you wish to convince folks that things aren’t as bad as they really are.

 

[PoliticalChic]

the right has lost their minds

Does that mean that you can't find one itsy-bitsy error in the OP????

C'mon....try.

if a man gives you a rope you can either use it wisely as a great tool or you can hang yourself with it.

If you hang your self with it, its not the other mans fault

It is better to light one candle than to curse the darkness!

And...

A journey of a thousand miles begins with a cash advance.


OK....your turn.

 

[edthecynic]

1. Total US debt is $64.2 trillion...

Wow, we take the total public debt, add to it the money the gov't owes itself, and then toss in all the things the gov't doesn't even owe but might owe later. $64.2T --NEAT! Now let's forget about revenue, gov't assets, and the strength of the American people and compare our bodacious figure to what, FOREIGN GDP!!!

Now it looks to big for even someone like Ronald Reagan, it's now become a job for---

Seriously, it's a real bad idea to spit out this stuff. Sure, everyone does it, but it wastes people's time, it confuses the issue, and there is really serious stuff out there that nobody believes with all the 'wolf-crying' going on.

Let’s see all of the debt in one place:
a. National debt $13-14 trillion
b. State and Local debt $2.5 trillion
c. State and Local pensions (underfunded) $3 trillion
d. Social Security $7.7 trillion*
e. Medicare $ 38 trillion*
f. Total US debt $64.2 trillion
g. Total GDP of entire world $61.0 trillion

*covers commitments for 75 years

b., c. The Other National Debt - Kevin D. Williamson - National Review Online

d., e. The 81% Tax Increase - Forbes.com

f. The Final Hour: 65 Trillion - U.S. Financial Obligations Exceed The Entire World's GDP

g. Silver: Declining supply, increasing demand - Precious Metals - Resource Investor

So SS and Medicare for 75 years, but world GDP for 75 years?????
You gotta just love how CON$ play fast and loose with their FUZZY MATH!!!

CON$ always have to rationalize the Reagan GOP debt as being FDR's fault

 

[PoliticalChic]

Wow, we take the total public debt, add to it the money the gov't owes itself, and then toss in all the things the gov't doesn't even owe but might owe later. $64.2T --NEAT! Now let's forget about revenue, gov't assets, and the strength of the American people and compare our bodacious figure to what, FOREIGN GDP!!!

Now it looks to big for even someone like Ronald Reagan, it's now become a job for---

Seriously, it's a real bad idea to spit out this stuff. Sure, everyone does it, but it wastes people's time, it confuses the issue, and there is really serious stuff out there that nobody believes with all the 'wolf-crying' going on.

Let’s see all of the debt in one place:
a. National debt $13-14 trillion
b. State and Local debt $2.5 trillion
c. State and Local pensions (underfunded) $3 trillion
d. Social Security $7.7 trillion*
e. Medicare $ 38 trillion*
f. Total US debt $64.2 trillion
g. Total GDP of entire world $61.0 trillion

*covers commitments for 75 years

b., c. The Other National Debt - Kevin D. Williamson - National Review Online

d., e. The 81% Tax Increase - Forbes.com

f. The Final Hour: 65 Trillion - U.S. Financial Obligations Exceed The Entire World's GDP

g. Silver: Declining supply, increasing demand - Precious Metals - Resource Investor

So SS and Medicare for 75 years, but world GDP for 75 years?????
You gotta just love how CON$ play fast and loose with their FUZZY MATH!!!

CON$ always have to rationalize the Reagan GOP debt as being FDR's fault

Average Annual Spending Increases (excluding interest)
a. JFK 4.6%
b. LBJ 5.7%
c. Nixon 2.9%
d. Ford 2.7%
e. Carter 3.2%
f. Reagan 1.9%
g. BushI 2.0%
h. Clinton 1.9%
i. BushII 5.6%
Historical Tables | The White House

 

[uscitizen]

you do know FDR is dead and no longer president don't you?

 

[PoliticalChic]

you do know FDR is dead and no longer president don't you?

Thank you, Citi, for your pity and content-laden post!

I'm going to give it all the thought it deserves.

 

[CrusaderFrank]

liar liar pants on fire, PC...

You're not really a lawyer, are you? Did you read the OP?

 

[expat_panama]

...SS and Medicare for 75 years, but world GDP for 75 years?????...

It really goes on and on. The fact is that 75 years of SS and MC payments will only need to be paid to workers who'll be paying SS & MC taxes far into the future. On top of that, the payments themselves will be taxed.

Another question is why only compare the debt to the rest of the world's GDP, why not comparing the debt to the GDP for the entire world?

No way around it. This whole rant's an embarrassment to conservatives.

 

[PoliticalChic]

...SS and Medicare for 75 years, but world GDP for 75 years?????...

It really goes on and on. The fact is that 75 years of SS and MC payments will only need to be paid to workers who'll be paying SS & MC taxes far into the future. On top of that, the payments themselves will be taxed.

Another question is why only compare the debt to the rest of the world's GDP, why not comparing the debt to the GDP for the entire world?

No way around it. This whole rant's an embarrassment to conservatives.

So...you just want to qubble about how much debt? Or how far out into the future there will be huge amounts of debt???

Are you slower than a Zamboni??

Since you have been afraid to go all the way to denying that debt is a major economic and national security problem, you come across as one with hardly an ability to comprehend, much less understand the dimension of the problem.

Your whole post is an embarrassment to any who can read beyond the prologue.
I don't know whether or not you are a liberal...but you certainly have the requirements.

OK...I don't need your attention any longer...head back in the ground.

 

[alan1]

liar liar pants on fire, PC...

jillian, can you post that same graph, but this time do it by showing congressional control?
After all, it is ultimately congress that controls the spending.

 

[expat_panama]

...So...you just want to qubble about how much debt? Or how far out into the future there will be huge amounts of debt???

Yes, that's exactly the issue we need to focus on. We need to decide whether America should borrow and if so we need to decide how much.

Some people are religious fanatics and are out to cut off the hands of all money lenders. America's not like that. John Adams opened the first US embassy in Holland to borrow funds to finance the revolution. There's also the conservatives argument that the federal government should tax less and borrow more so it's not tying up the private economy as much.

The next question is how much is enough, and the answer is as little as possible but enough to pay for what's needed. Four years ago it was the Democrats that were moaning and whining about 'out of control spending' as Senator Obama voted against extending the debt limit saying it was for 'failed leadership'. The Democrat fiscal responsibility was a sham. We all know it wasn't spending they hated, it was the fact that it wasn't being spent on them that they hated.

Trying to explain to them that deficit spending should be in proportion to the entire economy was impossible though they just ranted with snarky stuck question mark keys. Ya know????????????????????????

 

[PoliticalChic]

...So...you just want to qubble about how much debt? Or how far out into the future there will be huge amounts of debt???

Yes, that's exactly the issue we need to focus on. We need to decide whether America should borrow and if so we need to decide how much.

Some people are religious fanatics and are out to cut off the hands of all money lenders. America's not like that. John Adams opened the first US embassy in Holland to borrow funds to finance the revolution. There's also the conservatives argument that the federal government should tax less and borrow more so it's not tying up the private economy as much.

The next question is how much is enough, and the answer is as little as possible but enough to pay for what's needed. Four years ago it was the Democrats that were moaning and whining about 'out of control spending' as Senator Obama voted against extending the debt limit saying it was for 'failed leadership'. The Democrat fiscal responsibility was a sham. We all know it wasn't spending they hated, it was the fact that it wasn't being spent on them that they hated.

Trying to explain to them that deficit spending should be in proportion to the entire economy was impossible though they just ranted with snarky stuck question mark keys. Ya know????????????????????????

No, that is not the issue.

Debt is the issue, and whether or not it is THE issue.

Since you have retreated from 'how silly to total all the possible debt to which we have agreed,' to "The next question is how much is enough, and the answer is as little as possible.." it appears that you have begun to see the light.

True??????????????????????

Clearly, one cannot "explain to them that deficit spending should be in proportion to the entire economy" and the error of the current burden, without totalling up ones' debt.

Were you going to find some error in the enumeration in post #14?
No?
Then your posts were hardly more than arranging the deckchairs on the Titanic.

Oh....were you annoyed at the hyperbolic use of ????????????????
So sorry....I didn’t mean to hurt your feelings…I was aiming lower.

As far as your chances of deciding how I post, you have a better chance of finding a discussion of cats in the Bible.

 

[expat_panama]

... it is ultimately congress that controls the spending.

We can plot numbers from cbo.gov and infoplease.com easy enough...

--and it comes out fairly clear. Dems increase in power in the '70's reflected in spending, with a decline in both until the ugly reversal of '06.

 

[expat_panama]

...Debt is the issue, and whether or not it is THE issue...

Hard to tell what your position is. Do you oppose all federal borrowing?

 

[C_Clayton_Jones]

During the Depression, FDR asked for an receive unprecedented powers. Some poorly crafted legislation went to the courts. The first of the new deal statutes to reach the Supreme Court for review, arrived in January 1935. In the sixteen months following, the court decided ten major cases or groups of cases involving new deal statutes. In eight instances out of ten the decisions went in favor of the United States Constitution and against the new deal. Eight of the ten pieces of "must legislation" were found to be unconstitutional. Op. cit.

a. Under FDR’s threats to pack the court, they threw in the towel. In doing so, they said in effect, Congress would no longer be held to enumerated powers but instead could tax and spend for anything; so long as it was for "general welfare." The supreme court surrendered to the new deal on the most fundamental of constitutional issues.

This is inaccurate.

The key Supreme Court case that expressed the view that the taxation power is independent of the other enumerated powers (although this in itself only clarified a view that had been in place for a long time) was United States v. Butler. This case was decided a year before the Judicial Procedures Reform Bill went down to defeat in Congress, so it was NOT in response to Roosevelt's "court-packing" threat. Also, the language was found in a ruling that struck down one of the key provisions of the First New Deal, the Agricultural Adjustment Act.

While the Court found the Act to be unconstitutional, it expressed a general acceptance of the idea that the federal government may tax, and by implication spend, on any furtherance of the three purposes stated in the Constitution as justifying such taxation and spending: to pay the debts, provide for the common defense, or provide for the general welfare. Some of the language from that decision follows:

13. In Article I, § 8, cl. 1 of the Constitution, which provides that Congress shall have power

to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States,

the phrase "to provide for the general welfare" is not an independent provision empowering Congress generally to provide for the general welfare, but is a qualification defining and limiting the power "to lay and collect taxes," etc. P. 64.

14. The power to appropriate money from the Treasury (Constitution, Art. I, § 9, cl. 7) is as broad as the power to tax, and the power to lay taxes to provide for the general welfare of the United States implies the power to appropriate public funds for that purpose. P. 65.

15. The power to tax and spend is a separate and distinct power; its exercise is not confined to the fields committed to Congress by the other enumerated grants of power, but it is limited by the requirement that it shall be exercised to provide for the general welfare of the United States. P. 65. [p3]

The Court held the AAA unconstitutional nonetheless because it attempted to impose, by the back-door method of taxes and appropriations, regulations that the government is not authorized to impose; taxing and spending is a power granted by the first clause of Article I Section 8, but regulation is not. Despite striking down the law, the Court upheld the general idea of unlimited federal taxation and spending.

When speaking of the modern deficit, we have to recognize what is under discussion precisely. The government has always run a deficit in times of emergency, including wars and economic downturns. Prior to the 1980s, however, deficits, or at least not very large deficits, were not run during times of peace and prosperity. That's what has changed, and it seems to have changed only under Republican administrations, and certainly not all the way back to the 1930s (Eisenhower ran a balanced budget for example).

Roosevelt inaugurated a new era of increased government involvement in the economy, but NOT an era of increased public debt. That waited for Ronald Reagan.

Telling that the OP has elected to ignore this excellent and accurate assessment, destroying her argument completely. Actually no one can blame her.

If there’s any ‘fault’ it lies with conservatives and other rightists who have failed to get the Social Security cases overturned, or any other ruling dealing with the General Welfare, Commerce, or Necessary and Proper Clauses. These rulings are now considered settled law.

If it has excaped anyone's attention, FDR, and LBJ, the primary culprits, were both Progressive Democrats.

Well, which is it? FDR or LBJ? And what of Nixon, Ford, Reagan, and GHWB who all deficit spent and failed to balance the budget?

As for the current deficit, the primary culprits are GWB and Congressional Republicans who squandered a surplus starting in 2001.

Consequently, the OP’s effort to blame democrats for today’s current economic situation is a failure.

This is a situation equally the fault of both republicans and democrats.

 

[edthecynic]

Let’s see all of the debt in one place:
a. National debt $13-14 trillion
b. State and Local debt $2.5 trillion
c. State and Local pensions (underfunded) $3 trillion
d. Social Security $7.7 trillion*
e. Medicare $ 38 trillion*
f. Total US debt $64.2 trillion
g. Total GDP of entire world $61.0 trillion

*covers commitments for 75 years

b., c. The Other National Debt - Kevin D. Williamson - National Review Online

d., e. The 81% Tax Increase - Forbes.com

f. The Final Hour: 65 Trillion - U.S. Financial Obligations Exceed The Entire World's GDP

g. Silver: Declining supply, increasing demand - Precious Metals - Resource Investor

So SS and Medicare for 75 years, but world GDP for 75 years?????
You gotta just love how CON$ play fast and loose with their FUZZY MATH!!!

CON$ always have to rationalize the Reagan GOP debt as being FDR's fault

Average Annual Spending Increases (excluding interest)
a. JFK 4.6%
b. LBJ 5.7%
c. Nixon 2.9%
d. Ford 2.7%
e. Carter 3.2%
f. Reagan 1.9%
g. BushI 2.0%
h. Clinton 1.9%
i. BushII 5.6%
Historical Tables | The White House

You can't fabricate a rationalization for calculating spending for 75 years into the future but not calculating world GDP for the same 75 years into the same future, so you divert.

And those numbers you did post are pure bullshit. Obviously it's not the spending increases, but the money BORROWED to pay for the spending increases. Including interest, $12 trillion of our $14+ trillion of debt is from 3 GOP presidents' borrow and spending sprees. You know who they are, Reagan, Bush I and Bush II.

 

[expat_panama]

...Including interest, $12 trillion of our $14+ trillion of debt is from 3 GOP presidents' borrow and spending sprees. You know who they are, Reagan, Bush I and Bush II.

OK, the president can propose a budget and so can you and I. Big Deal. Congress controls spending.

Reagan first proposed a balanced budget and Tip O'Neil called it 'dead on arrival'. Clinton fought the balanced budget of the Republican legislature but was beaten down. After 9/11 W. Bush called for just restoring military spending but the '06 Democrats and blew everything away.