The Good News about the U.S. Budget Deficit: We're Still Doing Better than Russia or China

American Thinker ^ | 10/06/2021 | Beth Voth

[SeekAndFind]

Americans are rightly concerned about deficit spending in the United States, especially as directed by the perpetually reckless Congress that is constitutionally mandated to care for the purse strings of the nation. At present, the President, the House, and the Senate are locked in a strange budget battle that aims to spend trillions of dollars in the years ahead.

These proposals are in addition to a standardized set of costs that are around four to five trillion dollars. The increase in spending is primarily rooted in promises made by President Biden in his campaign and amplified by a growing radical wing within the Democratic Party that views deep spending as a proper response to the structural injustice that is the essential character of the United States.

Perhaps the first piece of good news is that the American public continues to provide a more generous revenue stream to our reckless legislators every year. Since 2010, annual revenue for the federal government has grown from 2.16 trillion dollars to an estimated 3.86 trillion for fiscal year 2021. That is an incredible 79% increase in revenue provided over the past decade by U.S. taxpayers. This fiscal point cannot be made enough -- it is not revenue problem, it is a spending problem. From about 2013 to 2017, spending was about 4.4 trillion dollars and ran about one trillion dollars over revenue each year. That is overspending a budget by about 25% every year. This is something the average consumer and citizen is unable to do. In 2018, 2019, and 2020 spending moved to $4.7T, $5.03T, and $6.9T.

Of course, 2020 was characterized by unlimited checks being sent to taxpayers and unlimited spending to pay for COVID health care and relief.

[SeekAndFind]

It's not hopeless and there are two pieces of good news (still ):

1) Despite the worst spending on record is that if the Congress could ever grow spending less than revenue growth, the U.S. would begin to gradually see declining deficits reaching zero. That did happen as recently as 20 years ago and could happen again by politically realigning Congress.

2) The power of U.S. borrowing is STILL INTACT.

Commentators typically want to lament that we cannot keep mortgaging our future. We cannot continually borrow. The rather shocking reality is that we can and we do. We utilize treasury notes to sell the debt we incur each year.

Imagine for a moment if you could personally sell your own debt. In other words, third parties would buy your mortgage, car payments, utility bills, college loans and so much more. The current interest rate for a ten-year U.S. treasury note is 1.48%. The U.S. has for decades sold its debt to domestic and international parties. A common fallacious argument among budget hawks is that this is dangerous since those parties could sell their treasury notes, burn them, or refuse to buy more notes.

The first two options of selling and burning notes have no adverse affect on the U.S. In fact, if parties decided to destroy notes then they would lose the promise of future returns and help the U.S. even more financially. None of us likely have a loan option as low as 1.48%. That means the U.S. has a very cheap credit card for running up charges here at home.

[FreedomPoster]

The reality is that everyone else is worse than us. But we may give them competition if this keeps up.

[SeekAndFind]

RE: The reality is that everyone else is worse than us.

Have a look at Switzerland and Singapore.

[FreedomPoster]

Let me qualify that. Everyone of any size.

[Little Ray]

Why do we care about how deep other nations have dug their holes?
Protect ourselves, maintain our credit, show respect to the taxpayer, and watch the pretty colors as the rest of the world burns.

[Paperpusher]

We have only gone half commie so far. Russia and China have both gone full commie.

[PGR88]

I don’t know about China, but this article is BS about Russia.

Russia, like other places, had a large budget deficit caused by Covid, and also low energy prices.

Russia’s Debt to GDP rose from about 15% to 17.7% in 2020. The USA, by comparison, is now at 127%. Russia also doesn’t have the massive future welfare-state liabilities the USA has, like medicare, social-security, etc...

Moreover, nearly all Russia’s debt is self-funded. They owe very little to foreigners in Dollars or other currencies.

Finally, with oil and gas now at 8 year highs, Russia’s income will boom, and Russia’s government have already said they intend to use coming windfalls to REDUCE recent government debt - and I believe they will

I know there’s a lot of Russian-haters here, but Putin and his government are not socialists, and have been all about decreasing economic risk to Russia

[Brian Griffin]

The cheap long-term money primarily comes from the Federal Reserve.

The cheap short-term money primarily comes from older Americans like me.

I’m spending down my money and in a few years very little will be left for banks or the federal government to borrow.

[wny]

….so we suck the least…..

[Brian Griffin]

“The power of U.S. borrowing is STILL INTACT.”

American money is being created electronically.

At some point in time the foreign exchange markets are going to wise up to our wastrel ways.

Houses might be sold with buyback right clauses. I might condition the sale of my house for $300,000 on getting assignable rights to buy it back for $500,000 in 2030 or $700,000 in 2040.

Foreign governments might only buy US debt if it is specified percentage of tax revenue or government spending linked.

[crz]

OH! So I guess this makes it all Ok then,

Ya Right..

[Brian Griffin]

There is another way houses can be sold.

A buyer might buy a 20% interest initially and additional 4% interests annually over the coming 20 years, paying monthly rents proportional to the percentage still owned by the seller.

Say the HUD fair market rent is $1200 for a one bedroom in my area. The multiplier for my single family house might be 1.6.

The initially monthly rent would be $1200*.8*1.6 or $1536/month.

[Brian Griffin]

There is no good news about the budget deficit.

The author of the article is thinking like a RINO.

Paying the ordinary bills of ordinary people is not something a government should do.

[Organic Panic]

WHOO HOO! Our side of the boat will sink last. Where’s my free stuuf?

[Brian Griffin]

That $4.7 trillion is about $15,000/American.

It is like Uncle Sam walking down each street each year and handing $60,000 checks to the head of every family of four.

We have a spending problem.

We also have a revenue problem because half the households are getting federal benefits for which they are not being asked to help pay for (in any substantial way).

[Brian Griffin]

FDR intended Social Security to be a self-funded system.

Nowadays, millions get Social Security benefits without having paid anything into the system.

[Brian Griffin]

Social insurance should come with appropriate premiums.

[PGR88]

Houses might be sold with buyback right clauses. I might condition the sale of my house for $300,000 on getting assignable rights to buy it back for $500,000 in 2030 or $700,000 in 2040.

Is this becoming common? Where might I find detailed terms of such a contract?

[Kickass Conservative]

Another “Fun With Numbers” bunch of baloney.

Lies, damn lies and statistics.

What other Country in the World has a $30 TRILLION DOLLAR National Debt that costs over half a Trillion Dollars (or more) to just cover the Interest Payments on that same Debt?

Once the Interest Rates explode, servicing the Debt will cost twice the current Defense Department Budget.

[Brian Griffin]

Mr. Drunk is so proud of himself, he is not like the guy dying of liver failure.