Heavy debt threatens American economy

Duty Honor Country

Active member
I was going to put this in the News of Other Interest Forum, but this issue is very political since the US government and its citizens are spending way too much money on everything these days. Oh yeah, each American owes $145,000 just in promises made by the federal government. Doesn't that make you have that fuzy feeling all over?

Experts warn that heavy debt threatens American economy
The Associated Press

You owe $145,000. And the bill is rising every day.

That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor.

And it's not even taking into account credit card bills, mortgages — all the debt we've racked up personally. Savings? The average American puts away barely $1 of every $100 earned.

Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society America spends $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services.

A new Associated Press/Ipsos poll finds that barely a third of Americans would cut spending to reduce the federal deficit and even fewer would raise taxes.

If those figures seem out of whack to you, if they seem to cut against the way you learned to handle money, if they seem like a recipe for a national economic nightmare — well, then, at least you're not alone.

A chorus of economists, government officials and elected leaders both conservative and liberal is warning that America's nonstop borrowing has put the nation on the road to a major fiscal disaster — one that could unleash plummeting home values, rocketing interest rates, lost jobs, stagnating wages and threats to government services ranging from health care to law enforcement...

READ MORE
 
this isn't just a problem in the US either....credit debt is something that pretty much all the western nations are dealing with.


but as a country...the US has racked up this debt in frightning speed. am i right in thinking that Clinton came very close to paying off all of the US's foriegn debt? and then with the war on terror and the war in Iraq that surplus turned into a massive debt?
and then of course to keep voters happy you have to promise them things...tax cuts ETC wich put you even more in the hole


here in NZ the main opposition party seems to be trying to attack the government for having TOO MUCH money in surplus...now is it just me, or is that ludicrous? surely it is better to run a country at a profit?
more money for healthcare and social programmes, education etc?
 
Almost all of our national "debt" is not owed to foreign countries, it is to our citizens in the form of bonds.

That being said, got to love a system by which we reward the short-term 2 year plan with elections every other year while having no control over the implications that come 10 years down the road when all of the persons who created the problem are long out of office.
 
Hi,


U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 28 Aug 2005 at 06:25:42 AM GMT is:
$ 7 , 9 4 2 , 1 8 3 , 2 6 8 , 4 2 9 . 3 3

The estimated population of the United States is 296,847,179
so each citizen's share of this debt is $26,755.12.

The National Debt has continued to increase an average of
$1.70 billion per day since September 30, 2004!




It Should not be too much of a Worry ...... there are still many factors in favour of USA right now.... Dollar earns itself Dollars ....... Until some big Countries start to shed Dollar as their Base Currencies and take up Gold or Other things Dollar will keep on Earning itself ...... Until these Countries use Dollar as their base Currency they will not let Dollar or US Economy go down because they go with it ......... there are a few other Factors as well ....... Most of the US's foriegn debt is to Countries like Saudi Arabia , Japan and China which will be written off in the Form of Arms and other Business deals .. and they never have to pay it back.

Whispering Death said:
Almost all of our national "debt" is not owed to foreign countries, it is to our citizens in the form of bonds.

owed.gif


Foreign Debt also make a Big Chunck of it ............ But Most of it to Federal Reserve Bank and to other government accounts .... like One Government Agency ows to other Agency.............

Citizens ? :?: are we talking about Public Debt ? ........


The following graph shows how the National Debt has grown year by year since 1940 in actual dollar amounts, ...... without taking Inflation into Account
history.gif


National Debt Corrected for Inflation
inflation.gif



Source:
Bureau of Public Debt

Debt Clock

Peace
-=SF_13=-
 
yeah i was going to say, i dont know a lot abt it but i know that a heck of a lot of your debt is to foreign countries,
hell most countries owe most of thier debt to other countries
 
With that ammount of debt America does not have a problem, the people that lent it to America have the problem.
 
chewie_nz said:
but as a country...the US has racked up this debt in frightning speed. am i right in thinking that Clinton came very close to paying off all of the US's foriegn debt? and then with the war on terror and the war in Iraq that surplus turned into a massive debt?
and then of course to keep voters happy you have to promise them things...tax cuts ETC wich put you even more in the hole

Clinton did balance the budget, but the $236 billion budget surplus did little to quel the massive amount of debt (5 or 6 trillion dollars) the US had at the time. As for Bush's tax cuts you mentioned, I never supported the cut. If you read the article in full, I am one of the 1% who favor raising taxes and curring government services in an effort to take on debt. I am in favor of just cutting spending across the board with the way our government spends money.

Whispering Death said:
That being said, got to love a system by which we reward the short-term 2 year plan with elections every other year while having no control over the implications that come 10 years down the road when all of the persons who created the problem are long out of office.

I agree with you Whispering Death. Medicare and Social Security are the 2 biggest entitlement programs the US has. For any politician to to suggestion cutting those problems equals death to ones career. It is sad that no one has the :cen: to tackle this problem.
 
personally i never trust a politician who promises tax cuts. the first thing that goes through my mind is "ok then, what service is going to suffer for it"

i would rather pay a high rate of tax and have access to free healthcare, free education, a competant police force etc etc.
 
The US Government is Constitutionly supposed to provide for National Defense and not run a social and medical business. That was one way President Clinton was able to trim the budget, by cutting Defense. It's always more expensive to re-arm than to stay armed with cutting edge weapons.
 
Missileer said:
The US Government is Constitutionly supposed to provide for National Defense and not run a social and medical business. That was one way President Clinton was able to trim the budget, by cutting Defense. It's always more expensive to re-arm than to stay armed with cutting edge weapons.

Actually the reason was that during the Clinton Administration the US experianced on of the largest booms in the past 30 years. It was that increase in tax revenue, that allowed Clinton to balance the budget and pay off a chunk off the national debt.

As for military spending, Spending decreased from $375 Billion in 1988 (Bush-Clinton) to $265 Billion in 1997. However in 1999 Clinton increased military spending by $124 Billion. So by the time he left office Military Spening was back to its 1988 level.


Doody

I find myself again in agreement. We must RAISE taxes in order not only to pay off the debt but to balance the budjet. I warn you all there is a rumour that Bush will announce a new cut next year. We must also prevent him from making permanent the disasterous tax cuts of 2001 and 2003.
 
mmarsh said:
I find myself again in agreement. We must RAISE taxes in order not only to pay off the debt but to balance the budjet. I warn you all there is a rumour that Bush will announce a new cut next year. We must also prevent him from making permanent the disasterous tax cuts of 2001 and 2003.

How much taxes do you pay? I say we cut the crap out of the budget and have a government that just does a few essentials (like defence, economic regulation, etc.) and do them well; not making the government pay for everything under the sun.
 
i pay arounf 33 cents in the dollar to tax,

but i know i can go to hospital for free, that my kids education is pay for till the end of high school, if i have an accident at work i wont be pennyless.


horses for course i guess, and as was stated in another thread...this is easier to pull off in a smaller country
 
chewie_nz said:
i pay arounf 33 cents in the dollar to tax,

but i know i can go to hospital for free, that my kids education is pay for till the end of high school, if i have an accident at work i wont be pennyless.


horses for course i guess, and as was stated in another thread...this is easier to pull off in a smaller country

But, how long would you wait on a heart or kidney transplant list?
 
mmarsh said:
Actually the reason was that during the Clinton Administration the US experianced on of the largest booms in the past 30 years. It was that increase in tax revenue, that allowed Clinton to balance the budget and pay off a chunk off the national debt.

So, that was actually the Reagan/Bush policies since Clinton himself said there would be no effect of his policies until 2003. Economies don't turn around four or even eight years.
 
funny how politics works like that
often a good job was not acheived by the person in power, but by thier predecessor who set the ball rolling, yet they tend to take the credit

yes mr bracks, im looking at you
 
Locke said:
funny how politics works like that
often a good job was not acheived by the person in power, but by thier predecessor who set the ball rolling, yet they tend to take the credit

yes mr bracks, im looking at you

And the next administration almost always changes your changes so they never make it into law anyhow. Ah, politics.
 
Missileer said:
mmarsh said:
Actually the reason was that during the Clinton Administration the US experianced on of the largest booms in the past 30 years. It was that increase in tax revenue, that allowed Clinton to balance the budget and pay off a chunk off the national debt.

So, that was actually the Reagan/Bush policies since Clinton himself said there would be no effect of his policies until 2003. Economies don't turn around four or even eight years.

Not always, econmic policies can have an immediate effect. In depends if its a long term or a short term policy.

Bush/Reagan Economy 1992 (in middle of major Recession) + Clinton 1993 tax increase on 1.2% wealthest Americans = Largest Economic boom in 30 years.

Clinton Economy 2000 (although slowing due to changing market conditions) + 2001 Bush tax cut + 2003 Bush tax cut = Present day Economic misery.

To summerize. Clinton raised taxes on wealth (increases tax revenue), economy went up. bush cuts taxes twice on wealthest 2% (decreases tax revenue) economy goes way, way, down.

So yes those are 2 example where ecomic policies CAN have an effect with 4-8 years.
 
mmarsh said:
Missileer said:
mmarsh said:
Actually the reason was that during the Clinton Administration the US experianced on of the largest booms in the past 30 years. It was that increase in tax revenue, that allowed Clinton to balance the budget and pay off a chunk off the national debt.

So, that was actually the Reagan/Bush policies since Clinton himself said there would be no effect of his policies until 2003. Economies don't turn around four or even eight years.

Not always, econmic policies can have an immediate effect. In depends if its a long term or a short term policy.

Bush/Reagan Economy 1992 (in middle of major Recession) + Clinton 1993 tax increase on 1.2% wealthest Americans = Largest Economic boom in 30 years.

Clinton Economy 2000 (although slowing due to changing market conditions) + 2001 Bush tax cut + 2003 Bush tax cut = Present day Economic misery.

To summerize. Clinton raised taxes on wealth (increases tax revenue), economy went up. bush cuts taxes twice on wealthest 2% (decreases tax revenue) economy goes way, way, down.

So yes those are 2 example where ecomic policies CAN have an effect with 4-8 years.

Mmarsh by your logic me eating McDonnald's drive through for breakfast instead of my normal yogurt and oatmeal on 9/11/2001 caused the terrorist attack.

This is all economics 101 and you aparently don't understand it. The economic ups and downs where caused by things much different than tax raises and cuts, those are just means by which to control the economy. The boom of the 90s had many economic principled factors most notably the increased productivity brought in by new technology. The reason taxes increased in this time was to gain revenue off of a booming economy, a prudent fiscal policy. The economic downturn in the 2000-2001 happened before the Bush tax cuts and was caused by another series of principled economic factors combined with the terror incident. The Bush tax cut of 2003 was to counter-act this economic downturn by getting more money in the hands of people (since America's economy is overwhelmingly a consumer driven economy as oposed to a government driven one) and economists largely agree that the 2003 tax cuts are largely responsible for kick-starting the economy back into positive numbers where today it remains healthy.

Here is the hard truth though. An economy like America's is actually influenced very little by the government. You can help control it with the federal reserve and federal taxation/spending, but it is far from "under control". Politicians love to take credit for the economy (Clinton 1996, Bush 2004) but although than can do things to motivate the economy, the vast majority of factors that drive an economy are completely out of politicians' control.
 
Whispering Death said:
mmarsh said:
I find myself again in agreement. We must RAISE taxes in order not only to pay off the debt but to balance the budjet. I warn you all there is a rumour that Bush will announce a new cut next year. We must also prevent him from making permanent the disasterous tax cuts of 2001 and 2003.

How much taxes do you pay? I say we cut the crap out of the budget and have a government that just does a few essentials (like defence, economic regulation, etc.) and do them well; not making the government pay for everything under the sun.

Cutting everything would not pay off the countries debts while at the same time opening the door for the worst Robber Barons you can image.
One only needs to look at the cheerful period of the Harding, Hoover, Administration for proof.

I believe the government has a duty to protect its citizens (espically those in low income brackets) from all threats (not just military) such as poverty, illiteracy, health+enviroment, etc. (Yes, these are liberal ideals, but I think the liberals are right on this topic). Most Western countries (Europe) do a lot better job on this score then we do. However, to do all this a country needs tax revenue, there is no other way. 800 years ago Alchemists tried turning lead into gold, it didnt work too well...

We do need to eliminate waste, pork, and corruption. The Highway Bill comes to mind (a.k.a Highway robbery) and various useless DOD projects is another. But Laisser-Faire economics like Radical Republicans want is a proven disaster for the rest of us, espically those in the Middle Class.
 
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