Let's keep this in mind whenever we feel the urge to spend hundreds of billions of dollars to "rebuild" the Middle East, the Halliburton corporation, or whatever our pet project is. We're broke.
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November 1, 2003, 02:39 PM
No, we're way beyond being broke. Won't be long and we'll be $7 trillion dollars in debt.
The Outstanding Public Debt as of 01 Nov 2003 at 07:36:46 PM GMT is:
November 1, 2003, 05:21 PM
I'll tell ya what I'm gonna do.
I'll cover the $4.60.
No, no thanks necessary. I'm feeling an early Christmas spirti.
November 1, 2003, 05:35 PM
Yup, Lyndon Johnson sold us welfare hell in the 60's. Called it a hot tub. :evil:
November 2, 2003, 01:58 AM
Is there a figure somewhere of the total capital invested in all the worlds' markets, and the total capital invested in U.S. markets? I can guess the former is in the many trillions, but I don't know just how many trillions...
The debt's gone up about a billion since wonder9 copied it. :(
November 2, 2003, 07:54 AM
Hey, if you could print your own money, borrow as much as you liked, any time you liked, and set your own repayment terms? Wouldn't you run up some major debt?
Gov't out of the economy!
November 2, 2003, 01:54 PM
One simple minded question:
It the $7 trillion debt just funded liability or is it the combination of funded and unfunded liability?
Reason I ask is I think the $7 trillion is the debt incurred when fed.gov actually borrows money to hand out. I don't think it includes future obligations have have yet come due.
I think the total obligation is something on the order of $40 trillion.
Just read the article. Looks like my estimate is not that far off.
November 2, 2003, 01:59 PM
> I think the $7 trillion is the debt incurred when fed.gov actually borrows money to hand out. I don't think it includes future obligations have have yet come due.
You're right (it's in the NCPA link in the first post...)
November 2, 2003, 03:47 PM
"Fire up the printing presses, boys!"
Hey, it worked for the Weimar Republic; it must be good enough for us too!
November 2, 2003, 06:26 PM
I read a theory a few years back stating it would be possible to void the
debt. However many experts voiced concerns that it could destabilize the world economy.
November 3, 2003, 05:47 PM
We're FAR FAR more than $7 trillion in debt.
See, the thing thats never talked about is that our money is actcually debt. Every dollar you have in your hand is a promisory note.
What does it promise payment in, silver? gold? No. In Dollars.
Which means that the whole financial system is a shell game built up on paper liabilities.
If you look at the annural reports of your local federal reserve, you'll note that they have every dollar circulating in their area set as a liability, and they have a tiny amount of gold "certificates" and then a lot of treasury bonds on the assets side to balance it out.
Now, the gold certificates do not represent real gold-- they are, just like FRNs, a promisory note from someone who sold the gold and promises to pay it back at some point.
Our whole system is build up on promisory notes that promise to pay back in "dollars" which are themselves promisory notes. So whenever something needs to be paid, but they money isn't there, they can print more....
They can do this forever, and have been doing it for 70 years.
But the system seems to get by because we have a net import economy. We import more than we export, and have to pay for those exports. Which we do. In dollars. Well, the other countries keep those dollars in their central banks as a reserve currency, which undercuts their local currency a little bit, makes their exports cheaper, which makes it easier to export to the US, and keeps their economy going ok. But, that means that vast numbers of US dollars are sitting in banks in other countries doing nothing.
Since they aren't circulating, they are not having the market effect they would on the economy.
Imagine if the US produced 1 million new cars a year. IF you take half of them out and put them in storage elsewhere, then the value of a given car woudl be higher, than if all 1 million were on the market, all trying to be sold this very year.
The free market affects the value of the dollar. As long as there is no major competitor for dollars, and people keep stockpiling them we can keep running the printing presses at an inflation rate of %8 a year and get away with it.
But some things are changing. We're now inflating at %10 a year. The mainipulated consumer price index-- which most people think is "inflation" - it isn't-- is getting ignored because people are actually noticing that things really do cost more than they expet, and more than last year. They're starting to notice it in the gut, especially wit hthe sluggish economy.
Oh, and one more thing, the Euro. The Euro is a decent currency, that is, like the dollar, backed by a fairly large economy. The euro is being considered for a reserve currency. Everybody sees the state of the US economy and the state of the dollar, and suddenly those vaults of US dollars are not looking like such a good reserve. So, supplanting a fraction of that reserve with the Euro seems wise.
We're just on the cusp of them doing that. The euro is gaining credibility, and they are slowly adopting it.
IF they supplant a fraction, %10, thoudh %20-%50 over time would be expected-- of the dollars with euros, the dollar plunges. We saw this this year, just with a recognition of the euro being useful the dollar plunged %20 against it... that was the echo of the crash that is about to come.
They replace %10 of their reserves, and suddenly you have a massive number of dollars dumped onto the market all at once. That can cause a crash.
But maybe they go super slow... in that case, you have the same crash as the dollar supply skyrockets-- but not fast enough for a panic-- and everything gets much more expensive because there are too many dollars out there.
Either way, we're already in the wiemar republic. They cranked up the printing presses very fast... we've done it slower, but are living in the bubble created by exporting so many dollars that they didn't affect the inflation rate percieved. When they come back to roost ,they will be just like us cranking up the printing presses.... and as prices get higher we'll crank up the printing presses as well. Hell, we already are to pay for the war in Iraq.
There's much more to all this, but don't take my word for it. Read "What has the government done with our money" by Murry Rothbard, which you can download free at www.mises.org. Or go read the Federal Reserves annual reports... they don't actually hide the fact that our money is debt backed by debt backed by a printing press.
Its a shame dollars don't mean anything anymore... but as long as the sheeple keep trading them as if they do, the house of cards will build ever higher until gravity forces the resolution... a painful, resolution.
November 3, 2003, 06:44 PM
If we build up our military enough, it won't matter how much we owe. :p
November 3, 2003, 08:20 PM
If we build up our military enough, it won't matter how much we owe.
Is that a quote from Stalin? Anyway, it does matter, because government spending comes out of your pocket whether they call it "taxes" or "inflation".
November 3, 2003, 11:05 PM
"I have ever been the enemy of banks, not of those discounting for cash, but of those foisting their own paper into circulation, and thus banishing our cash. My zeal against those institutions was so warm and open at the establishment of the Bank of the United States, that I was derided as a maniac by the tribe of bank-mongers, who were seeking to filch from the public their swindling and barren gains. . But the errors of that day cannot be recalled. The evils they have engendered are now upon us, and the question is how we are to get out of them ? Shall we build an altar to the old paper money of the Revolution, which ruined individuals but saved the republic, and burn on that all the bank charters, present and future, and their notes with them ? For these are to ruin both republic and individuals. This cannot be done. The mania is too strong. It has seized, by its delusions and corruptions, all the members of our governments, general, special and individual. Our circulating paper of the last year was estimated at two hundred millions of dollars." --T.J. to John Adams, Jan. 24, 1814
"And I sincerely believe, with you, that banking establishments are more dangerous than. standing armies ; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." --T.J. to John Taylor, May 28, 1816
"The bank mania is one of the most threatening of these imitations [of England by the U.S.]. It is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties. That paper money has some advantages, is admitted. But that its abuses also are inevitable, and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied. Shall we ever be able to put a constitutional veto on it?" --T.J. to Josephus Stuart, May 10, 1817
"The evils of this deluge of paper money are not to be removed, until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then we must be content to return, quoad hoc, to the savage state, to recur to barter in the exchange of our property, for want of a stable, common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers." --T.J. to John Adams, March 21, 1819
Jefferson goes into detail on banks and the economy in letters to John Eppes, June 24, 1813, and November 6, 1813, in the latter quoting Adam Smith as saying, "the commerce and industry of a country cannot be so secure when suspended on the Daedalian wings of paper money, as on the solid ground of gold and silver; and that in time of war, the insecurity is greatly increased, and great confusion possible where the circulation is for the greater part in paper."
It's not difficult to see where Marx got some of his ideas. I'm sure neither Smith nor Jefferson could have imagined the consequences of paper money combined with two world wars and a 4-decade cold war.
http://www.constitution.org/tj/jeff.html (mostly 13-15) or http://memory.loc.gov/ammem/mtjhtml/mtjser1.html
November 3, 2003, 11:13 PM
…per-capita numbers, to better show the debt's impact on each person:
…we didn't carry much debt for the first 100 years of the country, then incurred massive amounts during the Civil War, World War I, World War II, and Reaganomics. Though we never actually pay off the debt, the debt per person seems to shrink by about a third as the population expands, before the country gets sucked into the next Big Thing.
November 3, 2003, 11:55 PM
Durin' the reign of America's first socialist president.:D
I wonder how we could ever get the giveamint back to pre-Roosevelt-the-Red's days?:confused:
Wellsir, I reckon bankrupting that big giveamint might be worth a try;) .
Sure to get folk's attention, anyhow:what:
November 4, 2003, 01:17 AM
Lookit where that line begins to soar…Ronald Reagan.
FDR fought WWII and also had to deal with Hoover's Great Depression, so he had an excuse, unlike Reagan. Also, Truman started paying down the WWII debt.
As for allowing America to become more and more indebted to foreign bankers in order to try to bankrupt America. That seems like something that Osama bin Laden would hope for to weaken us economically which will in turn weaken us militarily. Research Argentina for an example.
I suppose the government could renege on that debt. There'd be a backlash though…
November 4, 2003, 03:06 AM
The federal reserve was instituted in 1913, though it took a few years for it to have its impact. The IRS soon after.
Between the two of them, with some external factors, they created the crash of 1929.
Then in 1933, private ownership of gold was criminalized (going from memory on that date).
And in 1968, Nixon reneged on the governments promise to pay gold to foriegn entities (long before domestic dollars stopped being backed by gold)
The constitution is pretty clear on the issue, granting congress the power to coin money-- and by coin they didn't mean printing paper, they meant only money backed by actual metal.
The great depression would have been much shorter if Roosevelt had moved the country back onto a gold standard and DONE NOTHING ELSE.
All public works projects to try to stimulate the economy do far more damage to the economy than they do good. (Look up the Broken Window Fallacy if this doesn't immediately make sense.)
November 4, 2003, 03:15 AM
Lookit where that line begins to soar…
Ronald Reagan.Yep, that ol' Reagan guy just sat there all day long writin' checks.
November 4, 2003, 03:30 AM
Its worth noting that the chart only goes to 1999. Clinton did have some positive effect on the debt (well, with the help of Reagans boom economy in the late 90s.)
But I suspect if we had the last couple years in there, it would be in the process of taking off again.
Up another 87 Billion today!
November 4, 2003, 10:01 PM
was instrumental in the downfall of the Soviet Union.:)
All Roosevelt's policies did was empower them at the end of WWII:mad: .
November 5, 2003, 10:09 AM
In re the "Clinton surplus" years - there was no surplus. Federal debt continued increasing each of the years there was a "surplus".
November 5, 2003, 10:23 AM
"Surplus" is newspeak for "overtaxation" like "gun safety" is newspeak for "gun control".
November 5, 2003, 11:09 AM
The "surplus" was to be used entirely to pay down the national debt (plus a tax cut for folks making less than half a million per year) by a Gore presidency.
Instead, the national debt grows, the interest on the national debt grows, and more and more of the taxes we pay go to the foreign bankers who Bush is making us more and more indebted to.
The national debt is a future tax hike, because there isn't any spending left to cut that wouldn't result in a huge political backlash. Social Security is **extremely** popular. Military spending is **extremely** popular. Medicare is **extremely** popular. Every thing else is already down to the bare bones: road maintanance, police, public education (which, also, is **extremely** popular).
November 5, 2003, 11:20 AM
There never was a surplus. All the excess revenue was social security tax receipts which were to go towards "shoring up social security". What nobody mentioned is that the Social Security administration is required to invest 'excess receipts' in treasury bonds (which is government debt). The politicians looked at the money the govt received from the sale of the bonds and said WOW! Surplus! Let's spend it! They just included those funds in the pool with regular income tax receipts and spent it as if it were tax revenues.
Lying, cheating, self-serving politicians (regardless of party affiliation) will always spend every $ they get their hands on - it's called "buying votes". Gore would have done exactly the same thing. He is a politician.
November 5, 2003, 11:24 AM
The "surplus" was to be used entirely to pay down the national debt (plus a tax cut for folks making less than half a million per year) by a Gore presidency.A great juxtaposition. The "surplus" was as non-existent as the "Gore presidency".
Does the "surplus" also include all of those "off budget" items?
November 5, 2003, 11:36 AM
There never was a surplus. All the excess revenue was social security tax receipts which were to go towards "shoring up social security".Arguing over Non-Existent Budget Surpluses
by Harry Browne
President Bush has sent Congress a $2.12 trillion budget (http://www.cnn.com/2002/ALLPOLITICS/02/04/bush.budget/index.html). It might appropriately be titled, "We're All Big Spenders Now."
Of course, neither President Bush nor members of Congress are the least bit alarmed by the size of the budget. All the attention is focused on the supposed disappearance of those wonderful budget surpluses. Congressmen who have never given a thought to fiscal prudence are suddenly distressed that the government will be squandering trillions of dollars of surpluses it was supposed to enjoy over the next ten years.
But they needn't get so exercised. In reality, there hasn't been a true federal surplus since the Eisenhower administration — nor a series of surpluses large enough to be worthy of the name since the 1920s.
Since its inception, Social Security has taken in more money every year than it's paid out to Social Security recipients.
So the Social Security Administration lends the excess money to the U.S. Treasury to cover the Treasury's budget deficits. The reasoning is that it's better to keep those reserves in Treasury bonds than to play the horses with them.
Notice that there is a graph here that shows the national debt slowing it's rate of increase during the Clinton/Gore presidency, which drastically increases once the Republican Party gains control of the White House.
November 5, 2003, 12:18 PM
Notice that there is a graph here that shows the national debt slowing it's rate of increase during the Clinton/Gore presidency, which drastically increases once the Republican Party gains control of the White House.Notice also that the graph only shows a decrease in the rate of increase; not a decrease. There are no negative numbers there.
Clinton didn't have to deal with a wartime economy. He only used up half the arsenal lobbing cruise missiles into Kosovo (illegally, I might add). Those resources are now having to be replaced.
I find it interesting how the President always gets the blame for the profligate spending habits of the Congress. What part of "Congressional Appropriations Committee" is so foreign to the detractors that they cannot grasp the meaning?
One of the biggest problems we have with budgetary items is the hidden spending that is caused by the Congress authorizing unelected, unaccountable bureaucrats the authority to make law through "regulations". There is not now, nor has there ever been, any authority for the Congress to assign its powers to other entities at any level; yet they do exactly that all the time.
How much dose anyone here think the regulations put in place by Carol Browner, EPA head under Clinton, cost America?
November 5, 2003, 01:54 PM
Reagan tried to lower taxes without decreasing spending and then had to raise taxes to new heights 3 times to fix the mess allowing for a small cut during his last year.
Bush has lowered taxes and increased spending. The bill will come due and it will be huge.
If I could find one politician who didn't lie through their teeth and would actually cut government spending I'd be a happy man.
November 5, 2003, 02:17 PM
Accountant coming through.
Hate to break it to you guys, but that graph you are aruging about means NOTHING. The important question to look at is what is your debt compared to your assets? If I have 150 K mortgage debt, but I make 50 K a year. I'm fine. If I have a 700 K mortgage debt and still only make 50 K a year I'm toast. See what I'm getting at. Looking at our debt ratio compared to the population doesn't make any sense. Compare your debt to your assets.
87 billion for Iraq may sound like a lot, but what is it as a percentage of our GDP? 1%, 2%? Don't know just guessing. What was the cost of WWII, most of our GDP?
Just something to think about. I hate politicians too. :) And I think they are all lying sacks of crap that steal our money and hurt our productivity. I hate both parties. I just hate one less than the other.
November 5, 2003, 02:36 PM
If you want to really throw up, read "Breach of Trust" by Dr. Tom Coburn of Oklahoma. He was elected as a Republican in 1994, pledging as part of his campaign to serve no more than three terms. He served three terms then left as pledged.
It ain't a pretty picture.
November 5, 2003, 04:50 PM
Accountant coming through.
87 billion for Iraq may sound like a lot, but what is it as a percentage of our GDP? 1%, 2%? Don't know just guessing. What was the cost of WWII, most of our GDP? Not being burdened with an education in accounting, I have to question that assertion. I see those numbers all the time being used as an excuse for going into debt for this one $87 bil from the same people that claim that Bush's tax cut is stimulating the economy.
The GDP is meaningless. A lot of numbers generated by shuffling money between accounts at major banks. Banks create money by lending it to businesses that turn around and spend it at other businesses that turn around and spend it again. Each time it counts toward GDP. What counts is how much money, in some kind of constant dollar, does this represent to the population. Someone correct me if I'm wrong, but $87 bil comes to about $1000 per taxpaying household (very rough est based on < 100MM households). Some day it's going to have to be paid or will just help to weaken the dollar.
Let me put it another way: If it's such a small amount, why don't we just pay for it? Put a small war tax on the economy, and 1% should be no problem. We all know the answer, that raising our taxes enough to pay for it would be political suicide, and probably collapse the economy.
November 5, 2003, 05:25 PM
I think funded deficit spending other than for national emergencies to be wrong. Unfunded committments are wrong period.
The debate of $87 billion is hypocritical at best. Congress was sweating and pinching pennies and wondering how to justify it to the folks back home. Congressment then would go back to a committee rooom where they were hashing out a medicare drug bill which would start at $250 billion as a gift to all senior americans whether they wanted it or not.
Now to my simple mind if $87 billion is wrong then $250 billion is 3 times as wrong.
The flap is over whose ox is gored. It has nothing to do with principal.
November 5, 2003, 06:15 PM
Malone, perhaps. The hard thing here is that the gov. doesn't have to obey the same accounting rules that all of us normal folks do. So what the gov considers a surplus I would consider an accrued liability. Go figure.
So disregard GDP, go by our revenue. Any way you want to look at it, it makes looking at the debt as a single solid number over time kind of misleading.
November 5, 2003, 06:25 PM
Correia, that's fine, but the GDP is not an asset in the sense that the national debt is a debt. The government does not have access to the GDP, which according to the CIA's world factbook is 10.4 trillion. If the government says it's going to take away 100% of what everyone produces, I may not have a serious problem with that because I have no debt (well, a few hundred dollars, but it's covered by assets), but other people probably will. The government can't just annouce they're going to take 90% of next year's GDP - 7T to cover the debt and 2T for the budget - because people depend on that money to cover their own debts. There's really no difference between going from 25% or 31% (or whatever the hell they are now for the median tax bracket) tax brackets to 90%, and going from 25% to 26%. In either case, the government is taking away money that individuals may have been counting on to pay future debts.
I know GDP is defined as total goods and services produced, but where do they get the numbers for GDP, and who is "they," the GAO? Do the figures come from the IRS? Isn't that illegal? IRS data are only supposed to be used for tax purposes, are they not? And who else would have access to information about which money transfers were for goods and services, and which (determined by exclusion) were loans or debt payments?
November 6, 2003, 02:07 AM
Uh, everyone talking about Clinton not reducing the debt, look at the chart posted in this thread. By its methodology, the debt did actually go down under Clinton's last two years. Furthermore, Clinton's use of cruise missiles is just as illegal as the war in Iraq and Afghanistan-- both of which are blatently unconstitutional.
I'm not arguing that Clinton deserves responsibility.
Also the idea that the president can do nothing and it is congress that causes deficit spending is patently absurd-- the president signs all these laws, or they don't become laws.
And if you haven't noticed, our president isn't talking about reducing the debt... he's coming out with ever higher figures for everything all the time...
Bush clearly wants to increase the debt to accomplish his agenda... and whether you think it is worth it or not, we really should be in a situation where he doesn't have that power.
If the government didn't have the money to prosecute a war the public supported, the public would have plenty of money to voluntarily put forth to achieve it. REmember, every dollar the government takes in in taxation destroys 100 dollars of income for that american after 15 years or so.... the taxation does massive damage to the economy. If we didn't have it, people would have more wealth than they knew what to do with and would be spending it like crazy on charities and national defense, etc.... these things would b e much better funded.
Taxation destroys economic growth, and forces all government programs to be starved for money that people would freely give to accomplish the same goals if they didn't have to pay tax.
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