” - - - The fact is that while the GOP Congress of Newt’s tenure was ‘balancing’ the budget, the telltale sign of a mirage was in watching the National Debt increase.”
Well said.
The ONLY way to watch the Total National Debt decrease is to cut year-to-year, Baseline Federal spending.
“The ONLY way to watch the Total National Debt decrease is to cut year-to-year, Baseline Federal spending.”
Not true.
If federal tax revenue is used to pay down the National Debt, then of course the National Debt decreases, as long as new debt is not added.
National Debt in the form of treasury bills, bonds and all other federal instruments of debt will stay steady as long as the interest on it is paid and no new debt is added for example, no new treasury bond sales.
If the federal government were to cut a federal program and use all the savings or reallocate all to paying off federal debt, there would be no net reduction in federal spending.
The only way to see National Debt decrease while at the same time observe a reduction in overall federal spending is to pay off some national debt with SOME savings from cutting overall federal spending.
Consumer example: Joe spends all of his paycheck every payday. Joe has a balance of $1000 of debt on his credit card because of excessive spending over the holidays. Joe decides to return to his pre-holiday spending level so he decides to spend only his paycheck and not use his credit card but he wants to pay down his credit card by $200. Joe must find $200 in normal spending patterns to allocate for paying down his debt.
Has Joe reduced his spending? No, he is spending the same paycheck but part of his spending is being used to pay down his debt.
Government example: Program X costs 300 billion per year. Government decides to pay down 50 billion in bonds that were originally sold to fund Program X. Government decides to cut Program X by 50 billion to pay for the reduction in its debt.
Government spends 250 billion + 50 billion
250 billion for Program X and
50 billion for retiring debt from Program X.
But government is STILL SPENDING 300 billion in relation to Program X.
The way government cuts both spending AND debt is to cut further Program Z and not use any of the savings towards anything else.
At Pre-Obama spending levels, it would take possibly 30 years to paydown half the debt upon reallocating about 20% of federal spending to retiring debt.
Now here’s a question for you: what percentages of debt must be retired in order to keep federal government functioning adequately? This is a rhetorical question of sorts because it is too difficult for most of us to answer accurately without data and time to make the accounting.
Because the thing to keep in mind is that a fair percentage now of federal spending is allocated to interest on the national debt and you cannot cut this interest expense to use to pay down debt. The cuts have to be found elsewhere.
But once debt is cut there should be reductions in interest expense and so there is a snowball effect there that is possible.
Tough nut to crack, hence my tagline.
The absolute best way to get the ball rolling on this discussion is to get behind a movement to repeal the 16th Amendment and enact H.R. 25. To this end please read and study the following:
http://www.fairtax.org/site/PageServer?pagename=about_faq