The National Debt

by **steveschneider** 2020-10-21, 11:18

Can someone explain what this even means to me? I read Paul Krugman and he says it's good to borrow which goes counter to the way I operate which is living within my means.

https://www.usdebtclock.org/

I look at that link and it just makes my head spin. Is this country fucked or is this just all bullshit? If you think about it the concept of money really just exists in our mind. A dollar is just paper and it kind of melts my mind to even think about what gives it the value it has.

by **Robert J Sakimano** 2020-10-21, 12:08

I don't really know what it means, but Republicans were very concerned about it when the colored boy was president (it wasn't because they're racists.. they assured us of that.. over and over).

they're not so much concerned about it now, though.. and I'm not sure why. Can't quite figure it out.

by **Watch Out Pylon!** 2020-10-21, 12:10

Wait till everything is crypto.

by **steveschneider** 2020-10-21, 12:32

Watch Out Pylon! wrote:Wait till everything is crypto.

Can you expand on that?

by **steveschneider** 2020-10-21, 12:35

Robert J Sakimano wrote:I don't really know what it means, but Republicans were very concerned about it when the colored boy was president (it wasn't because they're racists.. they assured us of that.. over and over).

they're not so much concerned about it now, though.. and I'm not sure why. Can't quite figure it out.

I keep referencing it but that Reagan Doc outlines it clearly Reagan cut taxes, ran up deficits and increased the national debt. Counter to all the stuff I've ever heard about what the conservative party stands for. Clinton seems to be the most fiscally conservative president of my life which is also counter intuitive to what you are raised to believe about the two parties. Is the tea party aware of this?

by **Robert J Sakimano** 2020-10-21, 12:56

yeah - Democrats are always having to clean up after Republicans and their fiscal incompetence.

by **MiamiSpartan** 2020-10-21, 13:13

I'm not strong on financial stuff (luckily I married someone that is), but I have often heard in general that it is good for companies to carry a certain amount of debt. That doesn't mean people should, though.

by **Watch Out Pylon!** 2020-10-21, 13:45

steveschneider wrote:
Watch Out Pylon! wrote:Wait till everything is crypto.

Can you expand on that?

Oh, I was just making an offhanded comment about the security issues of cryptos. Bitcoin has been stolen through hacks quite a few times. If we ever transition from fiat currency to crypto the security needs to be a lot better.

https://www.forbes.com/sites/billybambrough/2019/09/01/bitcoin-warning-as-serious-security-vulnerabilities-uncovered/#43c0f32a38f1

Also, Bitcoin is seeing a nice bump this week. Ty has to be yelling at someone about it right now.

https://www.forbes.com/sites/billybambrough/2020/10/21/is-this-when-to-buy-bitcoin-ethereum-litecoin-ripples-xrp-chainlink-and-other-cryptocurrencies/#757acd5819b2

by AvgMSUJoe 2020-10-21, 14:02

Money is a construct of the us govt. Govt "owing" money isn't the same as people being in debt. The big issue is (supposedly) with inflation. Since inflation hasn't been an issue, the debt is essentially meaningless....

by AvgMSUJoe 2020-10-21, 14:03

Plus as a percentage of the gdp, it's actually a lot lower then when inflation was an issue. (As I understand it)

by **steveschneider** 2020-10-21, 14:14

Robert J Sakimano wrote:yeah - Democrats are always having to clean up after Republicans and their fiscal incompetence.

Spending imo can be a good thing. If the argument for Reagan to borrow and spend was to defeat russia (win the cold war) to open up eastern Europe for investment and to stimulate our econonmy (flowing cash through the military industrial complex) I can see a reasonable basis for that. For Obama and Trump with their bail outs I can see a reasonable basis for both, can't have corporations collapsing and people in the streets rioting. For Trump I think if they didn't deny the pandemic and take such an awful approach to handling it I think they could have save a lot in stimulus or the need to make another stimulus package like they are doing right now.

by **GRR Spartan** 2020-10-21, 14:31

It’s going to be a big deal in 2021 but remember The Tax Act of 2017 is untouchable because if you raise taxes on the wealthiest corporations and individuals the economy will collapse.

The only recourse is to cut Social Security and Medicare and have more tax cuts.

by AvgMSUJoe 2020-10-21, 14:34

GRR Spartan wrote:It’s going to be a big deal in 2021 but remember The Tax Act of 2017 is untouchable because if you raise taxes on the wealthiest corporations and individuals the economy will collapse.

The only recourse is to cut Social Security and Medicare and have more tax cuts.

That's what they will argue. Of course it's bullshit.

It's difficult for people to understand the national debt isn't the same thing as your credit card bill

by **Floyd Robertson** 2020-10-21, 14:40

[tw]1318777281297481728[/tw]

by **Cameron** 2020-10-21, 14:43

If nobody has the capability of enforcing collection, is a debt even real?

by **steveschneider** 2020-10-21, 14:49

AvgMSUJoe wrote:
GRR Spartan wrote:It’s going to be a big deal in 2021 but remember The Tax Act of 2017 is untouchable because if you raise taxes on the wealthiest corporations and individuals the economy will collapse.

The only recourse is to cut Social Security and Medicare and have more tax cuts.
That's what they will argue. Of course it's bullshit.

It's difficult for people to understand the national debt isn't the same thing as your credit card bill

Avg Joe, color me impressed you seem to know your stuff. Do you have a econ/finance background?

by **steveschneider** 2020-10-21, 14:54

Floyd Robertson wrote:[tw]1318777281297481728[/tw]

That checks out with me. I'm no expert when it comes to this stuff but my understanding has always been you cut taxes and raise spending that's a bad thing.

by AvgMSUJoe 2020-10-21, 20:46

steveschneider wrote:
AvgMSUJoe wrote:
That's what they will argue. Of course it's bullshit.

It's difficult for people to understand the national debt isn't the same thing as your credit card bill

Avg Joe, color me impressed you seem to know your stuff. Do you have a econ/finance background?

Holiday inn express... And the internet.
https://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?src=tp

by **Trapper Gus** 2022-09-27, 20:36

https://www.reuters.com/markets/us/white-house-revises-fiscal-2022-deficit-projection-lower-2022-08-23/

We are coming the end of the fiscal year (September 30th) and the deficit is projected to be lower than it was at the beginning of the year.

Let's go Dark Brandon!

by **Trapper Gus** 2022-11-13, 08:22

Circling back around to the national debt because this popped into my awareness. (This is going to be wonky)

Projections, back on TOB and back during the Clinton / Bush / Obama era by the COB always showed the debt increasing, and a significant portion of that increase was spending on HealthCare.

This increase in spending on HealthCare was also part of the discussion on the Medicare Trust Fund being exhausted, and the Social Security Trust Fund being exhausted, although for the Social Security Trust Fund a significant driver of its demise was the projected over 65-year old's' life expectancy increases based on past life expectancy increases.

To me, it was always obvious that the numbers the CBO projected for Health Care spending were pie-in-the-sky fiction, since Heath Care spending would expand to be almost 50% of the economy if the CBO numbers were correct.

Now a real economist has written a report showing that Health Care costs have stopped increasing as a percentage of the economy, at least during the last few years, and that they have dropped as that percentage.

How does this affect the National Debt and Yearly Deficit?

Well, since the CBO and EBO assume the Health Care costs will keep rising as a percentage of the GDP (the economy) it means that the projected spending is too high and thus the predicted government debt (and yearly deficits) is also too high.

https://cepr.net/the-crushing-health-care-cost-burden-that-never-came/

by **Trapper Gus** 2022-11-13, 08:25

MiamiSpartan wrote:I'm not strong on financial stuff (luckily I married someone that is), but I have often heard in general that it is good for companies to carry a certain amount of debt. That doesn't mean people should, though.

It is good for corporations with public stock to carry debt so that their cash on hand and assets don't become attractive targets for leveraged buy outs.

The argument for private companies is that they are not growing at the full potential since they are not leveraging their assets into money to be used to expand.

by **Trapper Gus** 2022-11-13, 08:28

Watch Out Pylon! wrote:Wait till everything is crypto.

And as the crypto world crashes down, it seems that good old government backed, and controlled money is still the gold standard.

by **Trapper Gus** 2022-11-13, 08:35

]

steveschneider wrote:
Floyd Robertson wrote:[tw]1318777281297481728[/tw]

That checks out with me. I'm no expert when it comes to this stuff but my understanding has always been you cut taxes and raise spending that's a bad thing.

According to Keynes, a famous economist in the 1930's, that isn't true.

His theory, which has pretty much been proven over the years, is that when the economy is humming along the government should raise taxes and, since it will be spending less on Safety Net programs, lower spending, to reduce the debt (as a percentage of GDP) by having government deficits which are lower (as a percentage of GDP) than the growth in GDP.

When the GDP drops, typically a recession, then the government is to spend more and / or lower taxes, to correct for the issues in the private economy, thus providing so Safety Net for the people.

by **Trapper Gus** 2022-11-13, 08:47

AvgMSUJoe wrote:Plus as a percentage of the gdp, it's actually a lot lower then when inflation was an issue. (As I understand it)

Winner, winner, chicken dinner.

Wheb talking about government money issues the conversation always must be done in terms of percentage of GDP.

While one trillion dollars sounds like, and is, a lot of money, in the US economy of roughly twenty trillion dollars per year, it is only 5% of the yearly "cash flow", or with a rough estimate of federal tax revenues of 5 trillion dollars per year (20% of GDP) it is still just 20% of tax revenues.

When you all bought your houses, I'm guessing many of you borrowed more that 20% of your yearly incomes, although this comparison is stupid, and here is why.

The government never has to pay off the debt, and never really has. (There was one point in around 1830 when it was close to paid off). The government is constantly paying off bonds and notes and reissuing bonds and notes for the same amount. These government bonds and notes are the foundation of the global financial system, providing a source of borrowed money that is 99.9999 sure to be repaid, thus a very safe place to store money.

by **Trapper Gus** 2022-12-01, 11:09

https://zfacts.com/national-debt/

by **Trapper Gus** 2022-12-17, 08:41

The Energy Department called the purchase “a good deal for American taxpayers″ since the price will be lower than the $96 per barrel average the U.S. oil was sold for. The replenishment also will strengthen U.S. energy security, the department said in a statement.

https://apnews.com/article/biden-inflation-business-opec-climate-and-environment-cd15107ef2e0bb49db9165eb190b450c?utm_source=homepage&utm_medium=TopNews&utm_campaign=position_05

Who knew that Keynes intended for the government to make a profit?

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