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Thread: Proof that neither party really cares about the debt....

  1. #10
    Olympic Champ therick's Avatar
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    Default Re: Proof that neither party really cares about the debt....

    I wonder if these folks even have a clue that Afghanistan is boiling over again

    That seems to be the story that no one in the national news media is covering. Which means that the ignorant masses are oblivious. If you watch the national news you wouldn't know that there's even a war in Afghanistan at all.

    I agree with your first paragraph completely. I just find fault in their ability to get even a little bit of support from across the isle and construct bills that they'd be able to override a veto on. It's like they just sent the bills over expecting them to get vetoed and then they threw up their hands and quit.

  2. #11
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    Default Re: Proof that neither party really cares about the debt....

    My children and grandchildren will be paying for my little bonus. Too bad congress and the president don't have enough brains to actually solve our economic problem. All they are doing is putting a temporary band-aid over it and pandering to their voters.

  3. #12
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    Default Re: Proof that neither party really cares about the debt....

    The Paygo method assumes that national debt is bad. But, many economists don't think it is necessarily bad and neither do I. Remember that savings bonds and treasury bonds are components of our national debt. If you own either, you have contributed to our national debt -- you have made it bigger. A national debt isn't necessarily bad.

    The next time we discuss the future of Social Security, I'm sure the same people who make the above argument will change their tune. The debt-is-okay argument will change to debt-is-bad, and the soundness of govt bonds will likewise turn from good to bad.

    As to why debt is bad (I can't believe anyone is arguing otherwise except that maybe they read it in a religious pamphlet), think of it this way:

    The cost of govt to serve the public (the budget) is x.
    Debt in the budget means that portion (which comes from our taxes) cannot be used for public services (or tax reduction). Instead it is used to pay off the debt. It's like having a credit card balance with a 22% interest rate. It eats up your budget.
    Last edited by matclone; 01-30-2008 at 02:14 PM.

  4. #13
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    Default Re: Proof that neither party really cares about the debt....

    Quote Originally Posted by therick View Post
    I don't know if I agree that "the dept is pretty low as a percentage of GDP.."

    Approximately 66% seems like a pretty high number to me, but I agree that we can still grow out of it, if we can eliminate, or at least limit our deficit spending.
    I dont' know where 66% came from, but the debt is significant--last I checked, it was 15-20% of our budget.

  5. #14
    Olympic Champ therick's Avatar
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    Default Re: Proof that neither party really cares about the debt....

    I got that number from an article. However, here's the numbers rounded off:

    The GDP is around $14 Trillion

    The dept is just over $9 Trillion

    Which equals 64.29%

    I didn't say anything about the budget.

  6. #15

    Default Re: Proof that neither party really cares about the debt....

    Quote Originally Posted by matclone View Post
    The Paygo method assumes that national debt is bad. But, many economists don't think it is necessarily bad and neither do I. Remember that savings bonds and treasury bonds are components of our national debt. If you own either, you have contributed to our national debt -- you have made it bigger. A national debt isn't necessarily bad.

    The next time we discuss the future of Social Security, I'm sure the same people who make the above argument will change their tune. The debt-is-okay argument will change to debt-is-bad, and the soundness of govt bonds will likewise turn from good to bad.

    As to why debt is bad (I can't believe anyone is arguing otherwise except that maybe they read it in a religious pamphlet), think of it this way:

    The cost of govt to serve the public (the budget) is x.
    Debt in the budget means that portion (which comes from our taxes) cannot be used for public services (or tax reduction). Instead it is used to pay off the debt. It's like having a credit card balance with a 22% interest rate. It eats up your budget.
    A lot of people think in a simlar fashion about the national debt and it is easy to see why -- in our private lives, debt always comes due. However, governments do not operate the same way. When one debt comes due, the government issues another bond and takes on another debt to cover it. There never comesa time when we will have to colelctively reach into our pockets to pay the debt. Even if we did, we would not be shifting the burden to future generations because the generation that issued to bond would pay the value and interest. Thus, debt does not eat up our budget.

    Deficit spending that created debt could put a burden on future generations if it crowds out private investment (reduced private investment because of high interst rates generated by excessive borrowing), which reduces the amount of capital turned over to future generations.

    There is a whole set of philosophies, too, that cover externally held debt. Of all the debt philosophies, one thing remains constant -- the main way in which one generation can impose a burden on the next is to use up some of the country's productive capacity or fail to add a normal increasein productive capacity.

    Debt is not a bad thing -- especially if it is used to increase the productive capacity of the country.

    It should also be noted that the national debt is made up of a bunch of different sources, including people, foreign governments, and our own government. Of the $5.2 trillion national debt in 1996, $3.7 trillion was held by people. $1.5 trillion of our own national debt in 1996 was owed to our own government!!!!! (Source: Economics USA 5th Edition by Edwin Mansfield and Nariman Behravesh, WW Norton and Co., New York)

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