Skip to comments.U.S. debt sinkhole: How did it get so deep and how deep will it get?
Posted on 10/28/2013 2:56:21 AM PDT by TexGrill
Most economists agree that the current pace of U.S. spending is unsustainable in the long run, but how did it get this bad?
How did the U.S. manage to spend its way out of a surplus and into massive debt in roughly a decade, putting itself 17 trillion U.S. dollars in the hole? Moreover, as nations worldwide eye Washington's debt nervously, how will the world's largest economy pay it off?
The issue grabbed headlines earlier this month after a tense standoff between Democrats and Republicans that brought the nation to the edge of a debt default. After the dust cleared, U.S. Congress voted to raise the debt limit, enacting no significant budget cuts, once again putting off dealing with the problem until a later date.
A little longer than a decade ago, no one imagined the United States would find itself here. During the tech-led economic boom of the 1990s, federal revenues exceeded spending for the first time in decades, creating a surplus. And in April 2001, the federal budget hit a peak surplus of 2.61 percent of the GDP, according to Wells Fargo, a U.S. bank and financial services holding company.
Jobs were plentiful and unemployment was low. Young college grads jumpstarted their careers amid a booming economy, and the tech sector fueled a surging stock market. The future seemed bright.
(Excerpt) Read more at english.people.com.cn ...
Well, for one thing, we keep raising the debt ceiling ...
The question is, how do we move forward? To answer that, we need to know what the future of the petrodollar is.
..think domestic oil/NG gas franking.
franking = Fracking
I have and I don’t think it makes us any less dependent on foreign oil interests who can still dangle the petrodollar over our heads. Too few people understand the implications of that.
it’ll keep getting deeper until the dollar collapses... as there isn’t anyone in Washington doing anything to actually cut spending a significant amount (ie: more then 50%)
This nation has been in debt since Andrew Jackson, who was the last President to pay off the national debt.
These guys talk about 'surplus' which is just an accounting gimmick.
It’s much, much worse than 17 trillion.
If you add in all the unfunded liabilities.
Hope that doesn’t surprise anyone, but the 17 trillion is only the tip of the iceberg.
“Well, for one thing, we keep raising the debt ceiling ...”
The “debt ceiling” is an illusion. The concept is physical. You have to stop at the ceiling. But if you raise it even once, it’s not in any way real. It’s just the predefined point where you start the kabuki theater again. Republicans in their heavily makeuped Jefferson mask make play attacks with their deficit sword. The heavily makeuped liberal theatrically wrings her apron and points to her children or her sack cloth and ashes right-to-choose emblem and throws her forearm against her forehead as her bucket-sized tears flow. The Jefferson character gives in.
liberals will refuse to believe anything except that it was Bush’s fault for too much military spending and “tax cuts for the rich” (ignoring the additional $800 billion in tax revenue that resulted from the Bush lowered tax rates, and the democrat House spent as a windfall)
How many more years will we have to listen to this crapola as the waves gently lap over the deck
The present rapid rise is a gift from Speaker Bonehead who pushed to give CZAR B.O. an unlimited Credit Card to show his sense of compromise!
I am thinking the Pubs should have called Obama’s bluff and allowed the “default”. Why? If they don’t rein in spending, WE ARE GOING TO DEFAULT eventually. We would better be able to handle it now than later. Later, we will just be economically weaker. Plus, a default would have pretty much destroyed their spending plans and forced cuts.
This article sounds like mush....
You can have a annual “surplus” and still have a national debt. The national debt is the accumulated deficits, which had to be paid for with borrowing. Just because there were a few good years with a net surplus doesn’t mean that we made any progress with the national debt. Especially if those savings were achieved by ignoring growing national security threats such as Al Queda.
Mostly true, however there was no Al Queda last time we had a surplus.
How did it get so deep?
I could write a book on all the things that caused it...but the all encompassing answer is that we removed reason as the source of how to live one’s life and gave insanity a sanction it doesn’t deserve.
You are correct. What I meant to convey was that not dealing with terrorists threats more decisively in the 90’s lead to emboldened groups and the eventual rise of Al Qaeda. Is this more accurate?
Exactly correct. The Gov’t wants to confuse ‘deficit’ with ‘debt’. The issue is always the national debt and the interest that is being paid on it.
I have to agree with you. Although we had these “surpluses” the national debt grew every year since the Truman administration I believe.