Who's to blame?
Today its Barack Obama and every Democrat sitting in Washington!
Why do you ask?
It doesn't matter, it is not real debt. Manifested debt that is borrowed from itself and raped through commission. The only true cost is servicing it, if that's taken out of the equation a country can lend and borrow for eternity. Do you really believe that there is someone out there borrowing your country the money? What would they be, Martians? Derivatives market is valued at 11 times the size of the entire world economy, do the maths!
Everything comes from somewhere.
The only way that the debt is "not real" is in the same way that the money that underpins it is also "not real."
This is right. Also the money system is not a stationary block that can be examined and understood as discrete pieces - it is a moving cloud of interactions where everything affects and is affected by everything - and some things move everything.
To look at any one piece is misleading before it starts and so it can all be argued about for ever, or until it stops, and then we have it still at one point to be examined.
The bottom line for the US is that - in the world - it has spent more than it has made for over eleven years now. On top of that money (or value) has been skimmed from the top and invested in other countries for benefit in those countries. To make up the missing money you, the people, have had money removed from you collectively (this is why your house and everything costs you more relative to what you earn and some people have lost everything) and those higher up the food chain have borrowed from other countries, including China, through government bonds etc. Exporting more than you import and stop spending vast amounts on wars would help.
The whole world is changing around the US and when the sh*t hits the fan other countries may not react in the same way as in the past, you may not be able to control the dollar and in that scenario it can crash, that means everyone loses and the debt increases in value proportional to the decrease in the dollar making it harder to get out of the pit. And maybe the rest of the world will find it convenient to leave you there so that you are forced to withdraw from everywhere and look to thing at home, as the USSR was forced to do.
If the US wants a good place in the new world it should find a way to change from the current dangerous path it is on.
So far so good.
True(-ish, depending on how you want to date the Clinton years, etc.).
True, as far as it goes. But the way you say this implies two things: one, that it is a priori bad (which is silly, though it can be, see Israel); and two, that it is removed or taken out in a way different from all the other money the federal government spends, which is also not true.
The first part is true, insofar as taxes have been increased (which mostly they haven't, that actually being one of the main problem: that they were lowered for certain segments of the population). That part in parentheses is not so true, unless I miss your meaning. I'm sure levels of government spending affect the economy in ways which can change the value of your house relative to your income, but that's mostly the market that does that, since the value of your house is based entirely on what people are willing to pay for it. If you're referring to inflation, then you may have a point, except that salaries, on the whole, keep pace with inflation (if they didn't, we'd all still be trying to buy penny candy with pennies). Additionally, the comparison to a food chain is misplaced. Also, I feel that mentioning government bonds in a foreign context but refraining from mentioning their domestic use is slightly dishonest.
The second one is true, the first not so much. Simply because we import more than we export does not a priori mean that government debt increases, as it need not have an affect on government spending. If anything, it will often have a positive affect on revenues as tariffs are levied to protect jobs.
That's not true at all. In fact, that is the opposite of what is true. As the value of the dollar decreases the value of the debt, which (as you pointed out earlier by speaking of government bonds) is in dollars, likewise decreases, because it is not even slightly indexed to inflation. This is why inflation is good for debtors. For instance, the good old debate over whether or not silver should be considered specie was divided along rich/poor lines.
That could be true, but this whole "The monetary system is collapsing" is a bit overblown.
Money and value can be removed from the country in many ways, not just by govenment. Cheney has been found to have invested much of the profit he made from the Iraq war through Hailburton in Europe.
Money is not just taxes, mortgages for instance are to do with interest rates and the banking system - which has supposedly 'mis-handled' their business but in fact have just transferred money to the pockets of the rich from the rest of society. Same from the pension funds. maggie Thatcher in the UK blatantly did this by raising interest rates and many people lost their house and most small business went under - to the benefit of those who bought the houses cheap as investment and big business that brought all the little niche places where small business can operate into their corporations. Even house cleaners now usually come from agencies who are part of vast national corporations.
Yes you are right, my mistake, too early in the morning here and not enough coffee
Michael, Servicing debt is (NOT) the only true cost!! It is the debt process that forces us to (mortgage our future productivity) in order to have a medium of exchange. Top that with the fact that there is no money created to pay the interest required to sevice any debt. When we borrow, we are always creating a debt greater than the debt money supply created, leaving our children and grandchildren an ever growing debt obligation. In order to service that debt obligation, they will have to borrow more. If they do not, the system will collapse. If they do borrow more, they go even deeper in debt. At some point, just servicing the interest on debt, will surpass total gross consumer income!
Yes, whose fault is it? Your graph left out some important contributors like social security and medicare/medicaid. Also your graph included tax cuts as a cause for a deficit, but tax cuts don't cause deficits, spending money you don't have causes deficits. Also you attribute the Iraq war to Bush and this is really unfair since congress has the power to declare war and to fund it which they did from both sides of the isle.
When did I attribute the Iraq War & Afghanistan War to Bush?
As for the tax cuts, of course they contribute to the deficit. Tax receipts - expenditures = Deficit. If your tax receipts plummet, that changes the balance of the equation.
Your graph did.
I uderstand the math but you missed my point. Even if tax rates were 100% for everybody, that is every single dollar made was sent to the government, you could still have a deficit and on the flip side, if the government never spent a penny taxes could be zero.
With the government taking over more of the economy and issuing more entitlements increasing the size of government as well as spending can only mean greater deficits until taxes are raised to fund the spending. On you graph the war in Ira is a significant source of spending yet Obama's health care bill will be more than double that.
Read the graph again. The only place I see Bush mentioned is for the tax cuts. But, let's be honest, the Afghanistan & Iraq wars were started by Bush (and continued by Obama).
You still don't grasp the equation. I'll state it again:
Tax receipts - Expenditures = Deficit
I am aware that if tax receipts were 100% of GDP we could still run a deficit (i.e. if expenditures were higher) and the converse. That doesn't detract in any way from the fact that Bush-era tax cuts contributed enormously to the deficit.
Conservatives would sound more convincing about their commitment to fiscal responsibility if they had concrete proposals to lower the deficit through concrete, explicit expenditure cuts, and if they cared about it at all when a Republican were running the country. Unfortunately, they never manage to do either.
You should look at your graph again. It's hard to imagine how you could miss the clear reference to the Iraq and Afghanistan war. As I said earlier those wars had bipartisan support, but if you want to attribute them to Bush that's fair enough. In spite of that, the Obama budget promises deficits three times that of Bush right through 2019 based on CBo numbers! It's hard for me to accept the case that is the result of Bush and yet liberals continue to make that case. When will Obama ever be faulted for anything? Is he the Teflon President? It seems the only things that stick to him are his spending accomplishments, awards he's earned for doing nothing and praise for carrying on the same policies that Bush was criticised for.
"Tax receipts - expenditures = Deficit."
If the wealthy in this country paid their fair share, tax receipts would go up - and the deficit would go down. It's also true that if you reduce expenditures, the deficit wold go down - and I'm all for pruning waste. (Why does the US have to spend more on defense then the rest of the world - COMBINED?) Actually balancing the budget will require working BOTH receipts and expenditures.
Well I think we piss off a lot of people and the military industrial complex explodes it into a huge need through their lobbyists.
First define "wealthy" then define "fair" share. In 2007 according to the NTU, the top 5%, taxpayers earning 161,000 AGI, paid 60% of all the taxes, the top 50% paid 97% of all taxes which is higher than when Clinton was president.
Lets see. Social program spending, continues to rise and has passed the military and Homeland security budgets. More programs are in the works. jobs are in the tank. The Government acts surprised that High unemployment equals less tax collected. and there fore raises taxes and spends more money.
Sounds like we keep electing dimwits, who shouldnt be allowed to touch even a penny bank.
The deficit and it's causes?
Hmmm, Let's see! A senate and house that have both bowed before
Emperor Greenspan, and continue to bow before current emperor
Bernanke. (A federal resereve that is never audited).
Corporate lobbyists running rampant in the halls of congress, with the permission and blessings of both parties, with occasionally uncovered bribes discovered.
A monetary system that fosters more and more debt because it monetizes debt. This system is kept in place because it gives congress a free hand on borrowing in the name of the citizenry.
Congress doesn't care. Their pork barrell projects ensure that they will be reelected. Face facts! Under a debt monetary system, if we don't borrow and spend, the system begins an immediate collapse. If we do continue to borrow and spend, we can only go further and further into the crapper.
Congress doesn't address this issue in the public forum, because people would realize that their wallets have beem picked by the banksters for their entire lives. Most are too ignorant or apathetic to understand or do anything about it.
When things get a little sticky in the jobs department, they start another war, so the military industrial complex can kick in some new jobs, even though it still fosters even more debt.
It makes them look good.
I could give a rat's ass about who is more responsible for the debt, (republicans of democrats). As far as I am concerned, they are all in cahoots in this farce that has so many people swallowing their gladiator game ruse. When things get bad, (use misdirection tactics so the public will argue among themselves about the causes).
Judging from some of the threads on this site, their plan is working. Instead of taking any kind of action, the public will continue to blame one party or the other.
Keep up the good work folks, argue amongst yourselves some more. You have the powers that be, right where they want you.
You and your children will pay them homage in the form of the interest charged on all of this indebtedness for your entire lives, or until the system comes to a collapse, at which time I believe they will want to start the same system over again.
Blame whomever you want.
A deficit is based on a yearly budget. When you spend more in that year you exceed the deficit and add to the National Debt.
Debt accumulates over time.
The reality is when you combine consumer debt with national debt the resources to EVER pay it off are not there.
If you want to blame someone... blame the Bankers who created DEBT and Fractional Reserve Banking.
Debt is the true cancer of the economy.
I'm with you on this one - debt is what controls the population, struggling to pay it off keeps us in line because if you don't keep at it then everything that you think you own is taken away from you.
And anyone thinks this is not done on purpose ?
I'm with Doug - what is the deal with all this defense spending? Is that ALL we are about anymore? What happened to programs and taking care of our own citizens (and I'm not talking about all the immigrants who are getting freebies)?
This is absolute insanity if you ask me - we use more of the world's resources than all other countries in the world and we spend more than they do on defense - is it any wonder that we are plunging deeper and deeper into a hole? I just wonder what our children and their children will say to us - the 'smart' generation who allowed this to happen!
Bottom line is America is again headed for deep shizer in 8 - 10 years after an initial recovery. Going to suck whomever ends up as the Prez then.
8-10 years? Try six months. With all our taxes going up to fund all the crap that Obama and the democrats passed, we'll be lucky if we all don't end up on welfare. Yes, this is definitely Change. Unfortunately there's no hope.
Please advise me what other crap apart from the Health Bill that Obama and the Democrats passed ? being Aussie, I am not always up on political events in the US.
Us Australians are in a good ( at least stable and slooooooooow growth) in our countries financial position, yet we are still seeing and know that the US and most of Europe are hurting financially and will remain to hurt for the next 2-3 years.
Who to blame? that's easy!
Keynes! Bernanke! Greenspan! The Federal Reserve! FDR! Nixon! Krugman!
... well that was easy!
by Doug Hughes 10 years ago
My Hat's off to Steve Benen for this column from which I post a portion."1980: Ronald Reagan runs for president, promising a balanced budget 1981 -1989: With support from congressional Republicans, Reagan runs enormous deficits, adds $2 trillion to the debt. 1993: Bill Clinton passes economic...
by Alex Frias 11 years ago
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by Brian 11 years ago
I was on facebook earlier today, and a friend of mine posted a Youtube video about just how much money is being used to support the Bush tax cuts for the rich. 100 Billion dollars of the average tax payer's money! Which amounts to over $83,000.00 a year for a single individual making over...
by carolegalassi 12 years ago
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by Jack Lee 2 years ago
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What do you think of this "factoid":Every Democratic president since Jimmy Carter left a smaller deficit than he inherited (including Obama).Every Republican president since Dwight Eisenhower left a bigger one.Does this: annoy you, anger you, surprise you?Discuss!
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