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Archive for Monday, April 15, 2013

Letter: Ticking debt

April 15, 2013

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To the editor:

I keep hearing news lately that our national debt is getting pretty high, now $17 trillion and rising. We need an analogy to help grasp that number. Let’s use clocks and timepieces for reference. My old manual watch ticks five beats per second or oscillates at 2.5 Hz. Quartz watches have replaced the old mechanical watch, as most everyone has them, so we can all relate to these electronic timepieces. Quartz electronic watches oscillate at 32,768 cycles per second, quite a bit faster and more accurate.

If I let each cycle of the quartz oscillator in my watch represent $1, it will have run up $1,966,080 in a minute or over $2 billion in a single day. At this rate, it takes about a full year of quartz watch oscillations to spend $1.034 trillion. To illustrate the magnitude of this $17 trillion debt, it would require purchasing a brand new car every second for 17 years to run up this debt.

Any bets that our leaders who belong to the most elite and expensive clubs in the world will change their ways and balance the federal budget so they can purchase the cars with cash instead of borrowing and paying interest? This debt is unconscionable. I would not bet a single tick from my old watch that the national debt will EVER be paid off. Am I wrong? Or are WE enabling and eventuating a national bankruptcy that our children and grandchildren will have to deal with?

Comments

JohnBrown 1 year, 7 months ago

If you want to be mad at the people who created the debt, then be mad at Ronald Reagan--who doubled the debt during his time as president,and blame George W. Bush,who doubled it again. W's policies had the double whammy effect of also ruining the economy, so when O'Bama took office the deficit was still in free fall. Since O'Bama has taken office (and with no help from the Republicans in congress --who wanted him to fail so they could keep him to one term), O'Bama has managed to halve the deficit -- each year the deficit under O'Bama has declined.

Also look back to Bill Clinton's tenure as president. His policies, including his tax policies, provided the government with surpluses, which is what is needed to begin paying off the debt.

JohnBrown

Leslie Swearingen 1 year, 7 months ago

You just never know who is going to turn out to be Irish do you? They are all over the place. Might be one sitting right next to you, right now.

Made you look! :-)

jafs 1 year, 7 months ago

Actually, Reagan tripled the national debt.

Bruce Bertsch 1 year, 7 months ago

One must also look at to whom the debt is owed. Over 70% is owed to ourselves. The balance to various foreign governments. Offsetting the 30% is that the US owns foreign assets worth more than that amount. We do not have a short or medium term debt problem, what we have is an unemployment problem. If we could stimulate the economy and put people back to work the deficits and debt would take care of themselves. We are still a demand based economy (no apologies to Arthur Laffer).

jafs 1 year, 7 months ago

It doesn't really matter that some is internal and some external. The problem is that we spend much more than we have, and thus are in massive debt.

Unemployment is a real issue, and we need to deal with it. But, I'm not at all sure that deficits and debts just "take care of themselves".

If they did, we wouldn't have been running them consistently over the last 30 years or so, with a little blip during the Clinton years.

just_another_bozo_on_this_bus 1 year, 7 months ago

"Unemployment is a real issue, and we need to deal with it."

Putting people to work doing what really needs to be done to save an economy and a society that's headed off a cliff (and giving Wall Street record profits on the way) is the ONLY way to fix the deficit/debt. Austerity will only worsen the debt/deficit, and accelerate our trajectory off that cliff.

jafs 1 year, 7 months ago

I said we needed to deal with it.

But, that alone won't fix our financial problems - we need to change our habits.

just_another_bozo_on_this_bus 1 year, 7 months ago

The fiscal debt/deficit is an abstraction. If we deal with our real problems, the debt/deficit will fix itself.

jafs 1 year, 7 months ago

Only if one of our "real" problems, according to you, is the fact that we spend more than we take in in taxes.

Your post below illustrates nicely that in order to do that, we need to both raise revenue and lower spending.

jafs 1 year, 7 months ago

Actually, there have been spending cuts as well.

just_another_bozo_on_this_bus 1 year, 7 months ago

We don't need to lower spending-- we need to spend what we do spend wisely, in ways that remake the economy into one that serves the great majority, not the interests of Wall Street and the wealthy who control it.

jafs 1 year, 7 months ago

Well, last time we had a balanced budget, we had lower spending and higher revenues than we do now.

That's the only time in the last 30-40 years that we had one, so it seems like a good model.

just_another_bozo_on_this_bus 1 year, 7 months ago

What is so essential about balancing the budget, given that the money upon which the budget, and the entire economy, is based, is a creation of the the government in the first place?

jafs 1 year, 7 months ago

This is where you go into la-la land.

Do you spend more than you have on a regular basis in your personal life? If not, why not?

Money is an abstraction, but it's also the means by which we get the things we need, like food, shelter, clothing, etc. Some may be able to get by with bartering, but the vast majority of people need money (more precisely, they need the things they can get with money).

I honestly can't help you if you really think that it's fine for us to have a $16 trillion debt, and don't see any problems with increasing it over time.

When you say the debt/deficits will "fix itself", what do you mean? If it's not a problem then it doesn't need to be "fixed", right?

just_another_bozo_on_this_bus 1 year, 7 months ago

You didn't answer my question. You merely repeated the notion that the government, which creates all of the currency we all use, is the same as you or I or any other entity that doesn't create its own currency. That's not to say that running large deficits can't have wide-ranging effects, but making such deficits analogous to what an individual or a business does is entirely unapt.

"When you say the debt/deficits will "fix itself", what do you mean?"

The "real" economy is all of the work that we collectively do that produces all of the goods and services required by everyone. The money that we use as a means of exchange is merely an abstraction that very roughly represents that economy. That representation can be distorted in any number of ways, and Wall Street and the stock market are the primary sources for such distortion, the subprime/derivatives/swaps debacle that took the economy down 5 years ago the latest prime example.

There are several prime drivers of the deficit. Our healthcare system is by far the most expensive in the world, for which we don't get either better or more comprehensive care. Unemployed people not only don't pay taxes, they require the support of the government for their survival. And over the last thirty years, there has been a massive redistribution of wealth from the bottom 80% to the 1% or above, simultaneous with a dramatic lessening of the tax burden on those at the very top, along with an expansion of military spending, which has benefitted almost no one except the wealthy owners of defense contracting corporations.

So the way to lower the deficit is to lower healthcare costs, cut defense spending, return to a system of progressive taxation and put people back to work doing the very long list of things that need doing. Putting seniors and the unemployed on starvation budgets, destroying the education system, ignoring the looming crisis of global warming/climate change and continuing to let public infrastructure deteriorate is nothing but giving in to a downward spiral, all in the worship of the abstraction of "fiscal deficits."

jafs 1 year, 7 months ago

So, they don't just "fix themselves".

They're fixed by doing exactly what I've mentioned numerous times, increasing revenue and decreasing spending, as you say. Lowering health care costs and cutting defense spending is lowering spending, while "progressive taxation" increases revenues.

What are you disagreeing with again?

I can't answer the question - it seems self evident to me that it's problematic. While it's true that there are differences between governments, businesses, and individuals, there are also similarities. And, fundamental principles of fiscal responsibility apply to all of them.

There's just no way to run huge budget deficits and debts over long periods of time without there being consequences for that, regardless of which entity does it.

just_another_bozo_on_this_bus 1 year, 7 months ago

It depends on what reason deficits are run. If they're run merely to give tax breaks to those who don't need them, and will merely park them in offshore banks, or to bail out poorly managed investment banks who made bad decisions, and now want their losses "socialized," a healthcare system that's designed to deliver profits, not healthcare, or for starting pointless wars that will drain the economy in negative ways for decades to come, there is absolutely no upside to deficits.

But forcing seniors, the poor, the sick, the disabled, the unemployed into destitution, or defunding schools and local governments, or allowing essential infrastructure to deteriorate, just to balance the budget, is a recipe for perpetual recession and a two-tiered society of a handful of haves and hundreds of millions of have-nots.

jhawkinsf 1 year, 7 months ago

So let me get this straight. If during one administration an economic bubble comes into being, whether it's cause is the result of that administration's policies or not, we give praise to that administration. Then, when the bubble bursts during the next president's tenure, we blame him, whether or not his policies had anything to do with the bubble or it's bursting. Got it!

jonas_opines 1 year, 7 months ago

No, I think there are actually two narratives in this particular vein, user-dependent.

One -- All of Reagan's problems were caused by Carter, all of Clinton's successes were caused by Reagan, all of GWB's problems were caused by Clinton, and all of Obama's problems are his own.

Two -- Everything bad was caused by Reagan and GWB.

just_another_bozo_on_this_bus 1 year, 7 months ago

The debt can be fixed with a few simple (although not necessarily easy) ways.

Bring true reform to the healthcare system that brings us in line with the rest of the world in terms of % of GDP spent on it, by implementing some form of single-payer, medicare-for-all system.

Eliminate imperial war spending, and create a true defense department.

Implement a financial transaction tax on Wall Street, return the top income tax rate to 50%, and tax capital gains at the same rate as all other income.

And, finally, remake the economy to dramatically reduce the use of fossil fuels, which would create millions of jobs while preserving the inhabitability of the planet for humans.

Here's a plan that could virtually eliminate the need for fossil fuels within a couple of decades.

http://news.yahoo.com/power-world-without-fossil-fuels-110000240.html

jhawkinsf 1 year, 7 months ago

You don't need to be a soothsayer to know that these proposals have exactly a zero chance of being implemented. Why not work within the realm of possibility and suggest proposals that might actually be enacted.

just_another_bozo_on_this_bus 1 year, 7 months ago

These types of proposals are the ONLY ones that will get us somewhere we (as in all of us, not just the captains of the status quo) want to be. If you want to work for pointless proposals that get us nowhere merely because they can be implemented, knock yourself out.

jhawkinsf 1 year, 7 months ago

Think of the economy like a freight train. You can't simply decide on a whim to stop something that big with so much momentum. Many absolve Obama for the mess he inherited. True. The momentum he inherited can't be turned around on a dime. (While largely overlooked because of the election mess of 2000 and then 9/11. Bush inherited a dot com bubble ready to burst)

In the past, Bozo, you've suggested things like a 90% reduction in defense spending. I can't even imagine how many would become unemployed, how many factories would close. The nearby stores would all suffer and would close. Homes would be foreclosed on. Whole regions of the country are dependent upon the jobs and revenue that's generated by nearby defense department projects.

Now if you suggested freezing defense spending for a year or two, followed by a percentage point drop for the next couple of years, followed by an assessment as to what those policies have done, then it would be a reasonable proposal. But 90%, it's really not a proposal that anyone can take seriously. That's why I suggested you work within the realm of possibility.

just_another_bozo_on_this_bus 1 year, 7 months ago

Continuing the status quo, as you propose, is suicide. I really don't care for your "realm of possibility."

jhawkinsf 1 year, 7 months ago

So you'd rather engage in diatribes of irrelevancy.

just_another_bozo_on_this_bus 1 year, 7 months ago

You might be right that there's nothing we can do but rearrange the deck chairs and party hard till we finally go under.

But some of us like to think that there are alternatives, if only we can have the intelligence the political will to implement them.

NoSpin 1 year, 7 months ago

Blah, blah, Bush. Blah, blah. Why has the deficit increased more over the past four years than total over the all the presidencies combined? Oh, right, Bush. We wonder why people never take responsibility for their actions these days? Starts at the top. Please come up with a better idea than to tax the middle and upper class and take away their retirements. Hasn't worked yet. Next idea will be to take the original rules of basketball away from KU and take them to Columbia, MO to be fair because they have such a bad program and can't have the rules. April 15th...... now let's talk fairness.

Armstrong 1 year, 7 months ago

It's painful to be part of a country experiencing a slow death via leadership, or lack thereof.

tomatogrower 1 year, 7 months ago

End the debt by ending the Bush tax cuts. It's simple.

Peacemaker452 1 year, 7 months ago

The only thing simple is that statement and the fact that you got two “thumbs up”.

The debt is rapidly approaching 17 trillion dollars. Do you really believe that you can tax that away?

Peacemaker452 1 year, 7 months ago

Even if you "got rid of" those groups and took all the money to pay down the debt, you would still be looking at 20 years. Is that quickly?

BTW, that would include getting rid of all military retirement benefits and veteran's benefits.

Good luck with that.

tomatogrower 1 year, 7 months ago

We have to pay for the war. Whether or not you approved of it, it has to be paid for. Tax cuts during wartime have never happened. They were irresponsible. All of these wars have been paid for with credit.

Peacemaker452 1 year, 7 months ago

The wars have created a small part of the overall debt, along with overspending on just about every function the government is involved with. Returning the government to its Constitutional limits would be a great start on reducing the deficit and the overall debt.

jafs 1 year, 7 months ago

bozo,

So you just want us to cut certain spending and raise certain taxes - you don't disagree that's necessary in order to balance the budget, right?

tomatogrower 1 year, 7 months ago

If you need to balance your budget at home, because you are in debt, you get another job (increase your revenues) and cut out the extra stuff, like invading countries that had nothing to do with the World Trade Center disaster.

jafs 1 year, 7 months ago

People balance budgets in a variety of ways, including the ones you mention.

We've already invaded Iraq, and as you mention, it has to be paid for, whether or not we agree with that decision.

I'm trying to pin down what bozo actually disagrees with me about, since he seems to agree, but acts as if he disagrees, which is a bit confusing.

Richard Heckler 1 year, 7 months ago

ANYBODY HAD ENOUGH OF GOP STONEWALLING YET? Stonewalling generally is a way to kill the economy. How many more Reagan/Bush and Bush/Cheney home loan frauds does America need? NO MORE OF COURSE!

Why let these irresponsible Supply Siders control the show?

Let’s cut corporate welfare to the wealthy across the board tomorrow…. Absolutely.

Social Security does not add to the debt and the USA has 20 years to make adjustments. Why is the GOP stonewalling?

--- Killing Social Security Insurance Is Not An Option. This would add billions to the debt a put the economy at yet a larger risk. http://www.dollarsandsense.org/archives/2010/0111orr.html

--- SSI Not Going Broke. That's right nothing but political rhetoric. http://www.truthdig.com/eartotheground/item/david_cay_johnston_social_security_is_not_going_broke_20120504/

--- Killing Medicare Insurance is simply not an option. Users are paying. http://www.thenation.com/article/159769/paul-ryans-plan-destroy-medicare

--- INSTEAD we improve medicare insurance to reduce the cost of government. Bingo! Physicians for a National Health Program http://www.pnhp.org/facts/single-payer-resources http://www.healthcare-now.org

President Obama and the Democrats have many more options in which to bring this economy around and put the GOP stonewalling out of business.

First off Uncle Sam needs to employ as many workers as necessary to rehab our nations federal highways and bridges that are 70 years old. Even if millions of workers are required. Our taxpayers owned resources do not deserve neglect.

Second the president should fill all the regulation enforcement vacancies that guard our food,pharmaceuticals,home loans and insurance industries. Fill the IRS vacancies as well.

We do this Robin Hood tax.....ABSOLUTELY! http://www.robinhoodtax.org

Let’s use 10 easy ways to fund what we need to do. Fiscally responsible indeed. http://www.motherjones.com/politics/2012/11/10-easy-ways-avoid-fiscal-cliff

Time to put GOP stonewalling out of business. This GOP has gone dumb.

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