US Debt: We're screwed...

[Jay]

I think we need smaller government without porkbarrel spending and make congress read all the bills they vote for... (Read the Bills Act)

Linky

[Gary]

Any graph that refers to the "First Oil War" and "Second Oil War" loses credibiliity instantly.

[Christopher]

The numbers are still facts.

[Gary]

The numbers are still facts.

No, they are interpretations of data presented in an obviously biased way (what party the President belongs to is irrelevant, as it is Congress who controls the economy, not the President, as just one example.)

The "source" for the first chart is listed as "Encarta and the US Government" which is entirerly far too vaugue. What study? What agency? Where is the fact-checking?

The second chart doesn't even state a source.

So, no, numbers are not always "facts".

[Deleted]

So post a fact-based rebuttal chart.

[Gary]

Why? I'm not the one that's trying to make a point. I'm just questioning the presentation and source of the facts. If someone wants to make a statement, they are the one that needs to present verifiable statistics, not just show colorful charts.

[bernardjenkins]

porkbarrel spending is not going away. it plays a major role in reelections. If we were truly interested in this issue we would try term limits. Isaid "try". It might not work either but I bet it would help

[Deleted]

> Why? I'm not the one that's trying to make a point.

Oh. I thought you were trying to make the point that the chart was somehow bogus.

[Gary]

Yoda - you have cause and effect backwards. Jay started the thread to make some sort of point. I stated that I believe the charts are inaccurate. He is the one who wanted to make a point of some sort.

Is that clear enough, or do I need to smack you upside the head with a clue-by-four?

[traveler]

Gary has already pointed out that Congress, specifically the House, has the responsibility of authorizing the expenditure of federal funds, not the President. All the President does is submit an operating budget to Congress, which then slices and dices, adds and subtracts, before passing authorizing bills to spend federal dollars. Monies then flow to federal agencies, etc based upon the authorization of Congress, not the President. On that note, in the first graph, notice that Congressional spending began to accelerate significangtly during the Reagan years and did not taper off until the 1994 sweep of Congress by the Republicans. It actually leveled off. This is fact. 9/11 prompted a renewed spending spree, primarily with the creation of the Department of Homeland Security and increased defense spending but the primary budget driver is mandates spending such as social security, medicare and medicaid, etc. These programs are on auto pilot and are increasing the overall budget at a dramatic rate. Again, this is fact.

For example: Four line items from the Federal Budget show the following numbers, comparing the 2003 outlays to 2006 outlays.

Social Security increased from 474 Bil to 544 Bil, 14.7%
Defense increased from 404 Bil to 447 Bil, 10.6%
Gen. Gov. decreased from 23 Bil to 19 Bill, -8%
Medicare increased from 249 Bil to 345 Bil, 38%

Social Security is mandatory.
Medicare was impacted by the new Medicare laws but it can hardly be catagorized as pork. The elderly are benefiting by this in a big way.
General Government spending has decreased, yes decreased. There are very tight fiscal controls inside government.
Defense spending has obviously increased due to the war.

The point is, the only people who have responsibly cut government spending over the preceding twenty five years have been members of a Republican Congress. This is fact.

Regarding the second graph, at best it is misleading. First, the top line of the GDP numbers stops at $12 Trillion. The current GDP numbers are very closely approaching $14 Trillion. That being the case, the actual percentage of federal debt to GDP is off the mark. The current federal debt is approx 8.8 Tril, measured against a gdp of 13.6 Tril, the percentage is 64% and is only slightly above the 60% mark when Bush came into office and when the US economy was headed into recession. Had 9/11 not occurred which prompted an explosion of spending in the name of national security and national defense, the budget deficit would have likely been non existent for most of the past few years and the debt would have been reduced.

I am not defending or critcizing. I am simply pointing out the facts.

Source: www.bea.gov (Bureau of Economic Analysis)

[legaltender]

Medicare was impacted by the new Medicare laws but it can hardly be catagorized as pork.

The Medicare reform legislation was "pork" for insurance companies, drug manufacturers, lobbyists and doctors.

Talk about misleading.

The U.S. trade deficit - the amount by which America's imports exceed its exports - has quadrupled since the Bush administration took office in 2001. The point being, this has good and bad consequences. Cheaper imports help middle-class incomes to go further and therefore allow them to have a higher standard of living.

"Facts" are fungible, just as deficits are not necessarily awful. Except where they invite budget cuts in the wrong areas, that is, social programs instead of our bloated and redundant defense budget.

[legaltender]

traveler said:

The current federal debt is approx 8.8 Tril, measured against a gdp of 13.6 Tril, the percentage is 64% and is only slightly above the 60% mark when Bush came into office and when the US economy was headed into recession.

Somebody may be doing a little rounding-off, even allowing for the difference between the '01 fiscal year and Bush inauguration.

"At the end of fiscal 2001, the national debt was 57.4 percent of gross domestic product, having dropped from 67.3 percent at the end of fiscal 1996. At the end of the current fiscal year, the national debt is projected to be 65.5 percent of GDP." [Washington Times (editorial) 02/17/07]

washingtontimes.com/op-ed/20070212-091022-6828r.htm

[traveler]

Federal Debt at the end of FY 2001: $6.2 Trillion
www.treasurydirect.gov
US GDP 2001: $10.12 Trillion
www.bea.gov

6.2/10.12=61.26%

These are actual numbers, not spin from an Opinion Editorial.

[traveler]

The Medicare reform legislation was "pork" for insurance companies, drug manufacturers, lobbyists and doctors.

Talk about misleading.

You are certainly entitled to your cynical opinion but the fact is the elderly are benefitting by this program in a fairly significant way, especially those on a strict fixed income.

[legaltender]

And you are certainly entitled to spin from the pharmaceutical industry, but the fact is that drug industry ended up with bigger sales and no pressure to lower its prices. Private insurance companies effectively administer the benefit. Obviously, new money that would otherwise not be spent will help the elderly. The point is, insurance companies get extra money to take on customers but can still drop out on a month's notice if the profit margins are unattractive.

Could they have asked for and gotten more?


Edit: Grammar

[legaltender]

These are actual numbers

So are these:

debt/GDP

Bush/2001 57.4%

Bush/2005 65.7%

Bush/2009 69.8% (projected)

www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf

[legaltender]

Follow-up citations [reflecting 57.4% debt/gdp, FY2001]:

www.eclecticismo.com/hhblog/content/OMB-Historical-Table-7-1.pdf

www.gpoaccess.gov/eop/tables06.html

Scroll down to B-79. "Federal receipts, outlays, surplus or deficit, and debt, as percent of gross domestic product, fiscal years 1934-2007."

The national debt is approaching $9 trillion, up from $5.728 billion in 2001, and growing on the average of $1.91 billion each day. In 2001, this debt was 57.4% of GDP; by the end of this year it is expected to be 65.5%.

www.startribune.com/blogs/bigquestion/?page_id=289

[traveler]

Fair enough. That is a better source. I stand corrected.

Regarding Medicare, I have not defended the Pharmaceutical industry. I simply stated that the elderly are benefiting by the new law.

The Pharmaceutical industry benefits just as the road building industry benefits when an interstate is built. Why is that such a bad thing, besides the standard big business is bad argument?

[Jay]

Regardless of the specific president or a democratic or republican congress, I believe that having
so much debt is something to be scared about.. The trade deficit is also something that is worrisome...

[legaltender]

The Pharmaceutical industry benefits just as the road building industry benefits when an interstate is built. Why is that such a bad thing, besides the standard big business is bad argument?

Road building usually involves competitive bidding for contracts paid for with public tax revenues. The 2003 Medicare Modernization Act (Part D) forbids bargaining. Wal-Mart can negotiate; why in the world shouldn't Medicare be able to do that?

Ever heard of Pharmaceutical Research and Manufacturers of America (PhRMA)?

[traveler]

I believe that having
so much debt is something to be scared about..

There is nothing wrong with carrying debt as long as income is strong enough to carry the debt, which it is. Just look at the graph. Relatively speaking, our debt as a percentage of national income is both lower and higher than it has been in the past. The key is continued economic growth through low taxes. Note also that the highest point was during the time of war. Should the debt be reduced? Of course it should. Should we start slashing programs, defense, national security, social security etc, just to reduce the debt? No.

[Justin Thyme]

There is nothing wrong with carrying debt as long as income is strong enough to carry the debt, which it is.

There is always something wrong with carrying more debt than is required whether or not the income is great enough to cover it or not. There is so much we are spending on right now that the general public doesn't require that we could pay down the debt to a point that we could pay cash for much of the waste that got us into this problem just off the reduction in the cost of servicing out debt.

[traveler]

Why? Who says that debt is bad? Should margin accounts be outlawed, for example? Should a person be prevented from buying a home which is larger than needed for example and taking on a larger payment, even if it is affordable, simply because debt is bad? Are student loans inherently bad? What about home improvement loans? Should credit cards be outlawed? Who is to decide how much debt is too much?

Debt is not inherently a bad thing. Managing debt is the issue.

I am not defending the size of the federal budget and some things can always be cut around the edges but what major programs could/should be eliminated in the name of debt reduction or reducing the size of government....and what implications would the elimination of the programs really have? Where would the costs be shifted?

[legaltender]

Debt is not inherently a bad thing. Managing debt is the issue.

We're not talking about unified annual budgets. The year-to-year change in the national debt often bears little relationship to FY budgets. The national debt went from $5.728 trillion on Jan. 20, 2001, to $8.713 trillion last week. It will exceed $9 trillion on September 30, by administration forecast.

The national debt includes (appropriately) the Treasury bonds in the Social Security and other government trust funds.

You know much about the Pharmaceutical Research and Manufacturers of America (PhRMA)?

[daworm]

Social Security is mandatory.

It may be law, but laws can be repealed. Pay what's owed up until today, and stop all payments into it, and all payments out of it beyond what has been paid in. There's nearly 20% of our tax dollars freed up for other uses, such as staying in our pockets. All the old timers who (stupidly) thought SS was supposed to be the end-all of their retirement (instead of the emergency supplement it was sold as after the Great Depression) will still get their money. All the youngsters can start preparing for retirement on their own, like they should have been doing all along. Those of us in the middle can begin our retirement savings today (for those who didn't begin when they should have) and will have what we put into SS to bridge the gap for having started so late.

Medicare was impacted by the new Medicare laws but it can hardly be catagorized (sic) as pork. The elderly are benefiting by this in a big way.

Oh, it's pork all right (Medicare in general, not just the prescription drug thing). It is just targeted to the elderly rather than a specific state like most pork. And since the elderly vote more often than the young, even though the young are paying the bills, it is a highly effective piece of pork, at that.

[Justin Thyme]

traveler said:

Why? Who says that debt is bad?

I did. Look back up there at my post you were responding to and you can verify that. I also qualified my statement. The problem is that once you get into debt so far, even if you are able to make payments on the debt and also cover your other expenses on your income, the payments you are making could be paying for the things you went into debt for without having gone into debt.

I have no problem at all with the very short term debt that is paid off within 90 days until the debt is taken on to pay off a debt that has already been delayed for the 90 days. I have no problem with long term debt for a durable asset that can be used as collateral for the loan. I do have a problem with debt to support a higher lifestyle than income will support. Government is doing that now in that it is using debt to buy support for its self.

I am not defending the size of the federal budget and some things can always be cut around the edges but what major programs could/should be eliminated in the name of debt reduction or reducing the size of government....and what implications would the elimination of the programs really have? Where would the costs be shifted?

I think that agricultural and energy subsidies could be eliminated. The money given out and the taxes credited on these two items could go a long way in paying down our debt or at least not increasing it. As far as the implications go, prices will go no higher than the market will bear and that's generally where the prices move to anyway. We are paying $3/gal for gas because we will pay $3/gal for gas. That goes for any commodity.

In fact, lets just do away with all subsidies, whether they be tax credits or money paid directly for the subsidy. Subsidies just screw up the markets anyway and in the long run won't change the cost of stuff anyway.

Oh, and I would love to see government stop subsidizing student loans. Let the colleges and universities work a little bit at finding other ways for their students to pay for their eduction other than going into debt forever.

[stray]

yodanbr2 said:

So post a fact-based rebuttal chart.

As you can see, we're in some fairly deep shit.



However, by checking the data against a different source, we might make it out of this with our GDP intact...

[traveler]

You know much about the Pharmaceutical Research and Manufacturers of America (PhRMA)?

Not a whole lot...but I know people who do. Why?

[traveler]

I did. Look back up there at my post you were responding to and you can verify that.

I know that. It was a rhetorical question to point out that it is your opinion and that others, such as myself, may differ in opinion. And I agree that there should be assets to balance debt in addition to having the ability to pay down the debt. Such is the case with the Federal Debt, national income is significantly higher than the total debt and national assets are several times that amount. (I don't recall the number but it is in the tens of trillions last time I checked)

In fact, lets just do away with all subsidies, whether they be tax credits or money paid directly for the subsidy. Subsidies just screw up the markets anyway and in the long run won't change the cost of stuff anyway.

Now, you are on to something.

Oh, it's pork all right (Medicare in general, not just the prescription drug thing). It is just targeted to the elderly rather than a specific state like most pork. And since the elderly vote more often than the young, even though the young are paying the bills, it is a highly effective piece of pork, at that.

This is always where conversations such as this get interesting in that one persons pork is another person's steak dinner....and I am not agreeing or disagreeing. Everyone has a different definition of what constitutes pork. For example, was TVA or any of the other Great Society programs of the 1930s simply pork or did it/they have an impact in reviving the economy? Some would argue that TVA (again, just as an example) is nothing but pork, others will argue that the entire Tennessee Valley Region would still be in the dark ages (no pun intended) were it not for the availability of inexpensive electricity.

Was the creation of the first transcontinental railroad purely pork or did it benefit our nation in such a way that one cannot really measure? What about the interstate system? Pork? For that matter, what about DARPANET which ultimately became the internet? Pork?

Obviously these are mostly rhetorical as well but the facts are that we, as a nation, have benefitted greatly from what many would categorize as pork by its classic definition.

[stray]

TVA started as a national busywork program so some poor southerners wouldn't starve to death.

Now, it's pork.