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Thread: US National Debt

  1. #1

    Default US National Debt

    The national debt has had its peaks and valleys throughout US history but there are two things I find troubling with our current level of debt.

    1. After adjusting for inflation this is our all time largest national debt and it is still rising with no end in sight.

    2. All the other instances of significant increases in national debt were triggered by wars, and in those cases the debt started declining again right after the war was over. Our current debt started shooting skyward in the early 1980s and the reason there is no end in sight is that there is no war to be over. This is the first time in our history that a major peak in the national debt happened without a war.

    Throughout the 50s 60s and 70s we had good schools, one of the best health care systems in the world, a growing space program, a substantial cold war buildup, and welfare and social security along with other entitlements, yet we were able to pay down the huge national debt left over from world war 2 at a good rate and still had enough left over for the working class to buy cars and houses. Our national debt was on track to be eliminated in the 90s.

    We need to look at the 80s to understand what caused our current debt crisis. I hate to use the word "crisis" but I think it's apropriate here because, unlike previous times, our current record debt is increasing during peace time. We can all rattle off our favorite sacrificial lambs for spending reduction but the problem isn't just a matter of selecting which programs to eliminate. The problem goes much deeper. It's systemic.

    There was a fundamental shift in economic policy in the early 80s which corresponds directly to the rise of our current debt and I refuse to accept this as mere coincidence. Politics aside, we really need to ask "Is our current economic model sustainable?"

  2. #2


    Yep the US is in crisis. Your national debt is higher than your GDP. With your interest rates at basically nothing every dollar printed not underpinned by something other than nuclear threat it is a dollar made in credit which needs to be paid back sometime.

    Personally I don't think the US can get out of the current crisis without the system breaking but I really really hope it doesn't.

    U.S. National Debt Clock : Real Time

    Not that Australia is any better situation but the US is the land of the free with an absolutely phenomenal constitution. I think you can do better.

  3. #3


    Debt-to-GDP ratio does not, in and of itself, indicate anything more than the amount of debt as compared to the subject's gross domestic product. Let's remember that Japan's economy seems to be doing just fine yet their debt-GDP is something like 210 percent. If we use the flawed comparison that so many like to use, the average household, you'll see most households are rocking debt to annual income (since that's basically a household's gross domestic product) ratios much higher than pretty much any nation out there. It's not the debt itself, but rather the ability to pay it. As for the debt increasing during "peace time," let us also remember that we haven't been at peace in 11 years. Our last president, the one with the fake accent and the drinking problem, got us going on two wars. One of them is still going, and that's costing us a shitload of money every day.

    As for our current economic system, well, that's a complex question that involves questions of what we want our government to do and at what level of service/quality and how we go about raising the revenues to do those things. Like I said before, the problem isn't the debt. It's the ability to service the debt. Right now, as I see it, we have a fundamental imbalance between the things we as a society want our government to do and its ability to raise the revenues to do those things. In a political environment in which one party spends like mad while campaigning on the idea that the taxes are too high and that government should be small enough to drown in a bathtub, it makes it much more difficult for the other party to engage in an honest conversation about revenues versus costs of services. On the other side is a party that sees plenty of opportunities for governmental policy interventions, but sometimes doesn't want to have an honest conversation about what those services might cost.

    It's not the fact that we want to have our government do nice things that's a systemic flaw or even a problem. It's the fact that we have a political climate in which we want our proverbial cake AND to eat it too. If we want to have nice things, we have to be prepared to spend the money on them. One of the big things that pissed me off during the Obamacare/ACA public conversations was that supporters of it started with the idea that ACA was going to save us a bunch of money over what we're doing now (and then had to do some convoluted accounting to make it true). In my mind, starting with the fact that the product is cheap means the product or service has few positive attributes of its own to sell it. "This car is the best value you can find!" does not mean that it's the nicest car that you can find. It means that its primary positive attribute is the cost, and any features with which it comes equipped are bonus extras. It's the same with Obamacare and really many government programs these days. We don't talk about why we want the program or the positive attributes (beyond histrionics and blatant and basic appeals to raw emotion with imagery of grandma eating cat food). We talk about the cost.

    I believe that focus on cost is part of why we're in the spot we're in now. Instead of deciding what we want, working to craft the best solution, and having an honest conversation about what we want to spend, we start from a place where we want to stop grandma from eating cat food but we don't want to spend any money. We get patchwork solutions that cost us way more in the long run but no revenue to support even those. Until we address the societal issues I'm talking about, e.g our pathological inability to have a rational conversation about money, we're going to have these same concerns or hit the proverbial rocks trying to figure out why we're having these concerns. Until we can re-establish the societal connections between having nice things (like programs to keep grandma from having to eat cat food), the fact that these nice things cost us money, and that we have to be willing to spend the money and should be willing to spend the money because the nice things are worth paying for, we're going to continue spinning around.

    Personally, I blame Democrats for this. Republicans and especially the far right clearly establish the link between government services and paying for them in their rhetoric, and then they clearly articulate that they don't feel we need these government services and that we should save the money (I'll leave their actual governance out of it for the moment). Democrats want nice things like health care, but then sound like they're trying to play shell games with the money when the nation's at least somewhat convinced we don't have it.

    *Yes, I realize the deficit's going down right now and spending is down and all of that, but I feel my points are still quite valid. Sequestration basically compelled spending cuts because we didn't want to have a conversation about what we wanted to do and how much we were willing to spend to do it and how much we would need to raise to do it.

  4. #4


    As I understand it, we haven't had an actual budget passed since Obama was elected. If this is actually true, to what extent do you think this contributed, and in what manner, to the issue?

  5. #5


    Quote Originally Posted by Traemo View Post
    As I understand it, we haven't had an actual budget passed since Obama was elected. If this is actually true, to what extent do you think this contributed, and in what manner, to the issue?
    Given that congress are the ones to pass a budget and haven't done so in/or about 2 years. I would say Obama has rather very little to do with it.

  6. #6


    The biggest problem I have seen in the last decade is that the country has turned awfully sour, call it war fatigue, the election of Obama, the bank bailouts, the housing market collapse, the auto industry mishaps.

    I dont know about what happened 60-80's, so I'll stay current. I mention the above because (spoiler, Opinion incoming) I believe that capitalism has gone too far in this country. I do believe a man has a right to prosper from his hard work and be wealthy and provide for his family however he sees fit, but how can we justify having the walton family being worth over 100 BILLION, (yeah with a B)and yet they don't provide Walmart employees any benefits, and worse yet they tell them to go apply for food stamps at taxpayers expense. This kind of greed has taken over and its sitting at a very deep place in our government.

    Well now that I got that rant out of me, yes the government spends a ton of money, but it was to save our society's ass, lest you wanna see this country become Mexico. Now the country needs to restructure, if republicans want to cut entitlement programs okay thats fine(which they did recently, it was the food stamp programs) but then wouldn't it be fair to raise minimum wages? (Which everyone goes apeshit over)

    Im not here to take the democrats side and I welcome friendly opposition. I believe the national debt could be managed responsibly if we could keep greedy hands from trying to buy the government.

  7. #7


    Well, if I can offer a partial reason.
    Back in the 60s when the social security program began, it took in hundreds of billions and was very profitable. Now the idea was to save this money and let it grow, then give it to the payees when they retire. Although what actually happened was the politicians took this money and spent it all, on defense, entitlements, etc for the next few decades. So now when the program is no longer taking in a net profit, and we have all the baby boomers standing to retire soon, the government no longer has this bubble of excess money, so although small, this is a reason why we are in worse shape than we were before.

    Also, I don't agree with raising the minimum wage, I think it would be cause major economic programs and force millions out of work.

  8. #8


    Social Security was started back in the 1930's and Medicare came in the 1960's when Johnson was president. Congress borrowed a lot from social security and there's
    a bunch of IOU's they put in there and have never paid back.

  9. #9


    I understand there is a second sequester on the horizon. One observation I've had as a teacher is this. After the crash of 2007, funding for public education was reduced both from the federal government and the states. In Virginia, we had millions taken from each of the local school divisions, mine included. We felt we could not operate on such a smaller budget, yet we have. Not only that, but by being creative and dedicated to our children, we have actually raised our SOL test scores even as Pierson has made the tests more difficult each year.

    I would apply this to our over bloated military. They build weapons that are out of date by the time they go into production. They build tanks, cruisers, other ships and helicopters that Senators get passed, but that the military hasn't even asked for. If they had to work from a radically reduced budget, they might become more responsible as to how they spent that money.

    17 trillion in debt scares me. As Americans, we want a lot of things, but we don't understand that these things have to be paid for. If we want more, taxes need to go up to meet the demand. If we don't want higher taxes, we have to decide and choose that which we can live without.

  10. #10


    Quote Originally Posted by farmgirl View Post
    Also, I don't agree with raising the minimum wage, I think it would be cause major economic programs and force millions out of work.
    The deal with minimum wage is businesses are always about maximizing profit, and higher wages cut into that. Possible effects of raising the minimum wage (which BTW states are always welcome to do for their own as long as they at least match the federal), in any real meaningful way include:
    Laying off workers
    Reducing the hours people work (higher wage? fine, but you will only be working less then 20 hours)
    Raising prices (costs pass on to the consumer)

    Raising minimum wage needs to be done in smaller bits, not jumps like from $7.25 to $15, in order to enable businesses to better adjust to the change. So the question might be more how much should it be raised and/or how often it should be raised?

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