Posted on 03/14/2006 1:37:52 PM PST by LouAvul
Maybe the national debt clock was retired too soon.
Between 1989 and 2000, the electronic display near New York's Times Square tracked the rise of the nation's red ink until it reached $5.7 trillion. When it shut down, the federal budget was running a surplus.
Today, the national debt totals $8.3 trillion, a level that could force Congress this week to raise the debt ceiling for the fourth time in George W. Bush's presidency.
The pre-vote debate may be tinged by election-year rhetoric, but the underlying issue goes beyond partisan politics. The rising debt tally is a reminder, economists say, that the nation is on an unsustainable fiscal course.
The economic burden posed by the national debt, economists say, is more serious now than in 1980, when a $1 trillion figure stirred national anxiety. Today, the public debt is larger as a share of the American economy, more than half is held by foreigners, and the wave of baby boomer retirements is no longer decades away.
"The situation now is really very different from the 1980s," says Alice Rivlin, former vice chair of the Federal Reserve. As the costs of programs such as Medicare rise, she says, "we can't go on into the next decade ... still running deficits as our major way of coping."
Economists don't have a simple formula for calculating how big a debt, as a share of America's gross domestic product (GDP), is sustainable. But many warn that devoting an ever-larger share of GDP to paying off interest on the debt is not healthy.
That could happen as government spending rises during the baby boomer retirement wave. And the trend could be worsened if those who finance the debt — including foreign investors — start demanding higher interest rates.......
(Excerpt) Read more at cbsnews.com ...
Yes, we can devalue our way out and sustain it by suffering a high rate of inflation.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
Isn't it more accurate to say that creative accounting was allowing Clinton to project a surplus?
Sustainable? IMO, no. Once the confidence in the dollar is sufficiently shaken, for whatever reason, it will all come crashing in around us.
Date
| Amount | ||
| 09/30/2005 | $7,932,709,661,723.50 | |
| 09/30/2004 | $7,379,052,696,330.32 | |
| 09/30/2003 | $6,783,231,062,743.62 | |
| 09/30/2002 | $6,228,235,965,597.16 | |
| 09/30/2001 | $5,807,463,412,200.06 | |
| 09/30/2000 | $5,674,178,209,886.86 | |
| 09/30/1999 | 5,656,270,901,615.43 | |
| 09/30/1998 | 5,526,193,008,897.62 | |
| 09/30/1997 | 5,413,146,011,397.34 | |
| 09/30/1996 | 5,224,810,939,135.73 | |
| 09/29/1995 | 4,973,982,900,709.39 | |
| 09/30/1994 | 4,692,749,910,013.32 | |
| 09/30/1993 | 4,411,488,883,139.38 |
Sure just as long as the rest of the world (especially the oil arabs) love the US dollar...
We can just keep printing as much as we like...heck it's only paper....
I had forgotten about the debt clock. I haven't been to Manhattan in years.
Soo... It's exactly like having a 400K mortgage on a 100K salary. Is that affordable ? Yea, I think so. Ask anyone in San Diego, for example.
As long as your salary keeps growing, you're fine. Last time I checked we were posting a solid 3% annual GDP growth.
We're DOOOMED.
I got news, man. Dollar is going nowhere but up. Eurozone's growth is crap, and will remain so as long as they retain structural inefficiencies in their labor markets (ie, socialist welfare state). They need to lower rates, if anything, to get any growth out of their economy(es), and - that implies stronger dollar.
Someday the goldbus will have their day - but not yet.
With all the uncertainty since 9/11, if it has not happened yet it wont for quite a few years.
And Congress plans to raise it year by year.
(5) DEBT SUBJECT TO LIMIT.--The appropriate levels of the public debt are as follows:
Fiscal year 2006: $8,526,578,000,000.
Fiscal year 2007: $9,190,311,000,000.
Fiscal year 2008: $9,766,883,000,000.
Fiscal year 2009: $10,302,957,000,000.
Fiscal year 2010: $10,815,812,000,000.
Fiscal year 2011: $11,355,281,000,000.
I think this is inaccurate. The percentage of debt to GNP is less today than it was during the Reagan era, not larger as they claim. A lower debt ratio means our economy is stronger, not weaker.
Think of it this way: 10 years ago I paid 40% of my income for housing. Today, I pay 25% of my income for housing. HOwever, that 25% is a bigger amount of dollars than than the 40% was. I make way more money per month; and my new house cost more than my old house.
Am I better off ?
Something tells me we are going to find out.
Uh huh. And the tech stock market bubble is never gonna bust, right? I'm speaking in the long term, not in the short term. The dollar as a currency is backed by what of real value? Oh, that's right, nothing! Just the full faith and credit of the government. Now that's real value, NOT! Let some event or other countries shake the confidence in that faith and see if the value of the dollar keeps "going nowhere but up"!
I guess they've stopped teaching the concept of fiat money in college economics. I'm not saying the dollar will devalue anytime soon because of rising debt, but go get yourself a few million dollars more in debt each year and see how "sustainable" you will remain in the long term.
Ahem, I *was* talking in the long term. Next 30 years, say. European demographics and their welfare state are only set to decrease growth there. They've got a baby boomer population too. By some estimates there will be 2 retired cheese eating wine drinking europeans for each one working, in 25 years. They're buying our TBills in order to even come close to being able to pay this. Lower growth in EU vs stronger growth in US translates to stronger dollar. Investors buy dollars to benefit from the higher interest rates.
The point is not that it's not backed by gold, as you'd obviously prefer, but that what does back it is the most secure thing in todays world. That's why its going nowhere but up. If something shakes the faith in Dollar, where will that leave other currencies, which are *far* more vulnerable to 'events' ?
If I was making a couple million a year I wouldn't mind taking out a couple million dollar loans to expand my business. That's the point.
Oh, and, don't get me wrong - I'm all about the balanced budget. We need to go there. But the sky is definitely *not* falling.
It doesn't have to be indefinitely sustainable. Bush only needs it to hang on until he is back 'home on the range'. Just another can kicked down the road.
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