The Government Default Straw Man: It’s All About Unsustainable Spending

Confounded Interest ^ | 10/11/2013 | Anthony B. Sanders

[whitedog57]

The rhetoric in Washington DC and the media is … silly. Here is a chart of Federal government receipts and Federal government expenditure on interest for Treasury debt.

fedrecifedint

Does that look like the US can’t afford to pay its debt? Of course not.

The problems is the voracious spending in DC which no one seemingly wants to stop.

Now, if I plot Federal government current receipts against Federal government current expenditures, we see a different picture: its the spending that’s the problem.

govtrevexp

You can see in the picture that the much vaunted reduction in the deficit was a combination of a slowdown in government spending and an increase in taxes.

So while Democrats and Republicans debate the debt ceiling, no one will mention government spending. They tried that and all we got was sequestration … which was just a teeny slowdown in the rate of growth of government spending.

debtceilgst

To be sure, the explosion in social safety nets like Social Security, Medicare, Medicaid, Obamacare, etc., will lead to massive debt increases in the future. Congress should tackle this problem before it is too late.

debtprojection7

Instead, we get the Federal government shutting down national parks.

deercrossingclosed

[whitedog57]

Great dog and pony show in DC!

[Cyber Liberty]

When the GOPe ran everything (2001-2007) it didn’t stop, so I would say they’re not the answer. Need a new party, or some serious fixing-up of this one.

[upchuck]

The rhetoric in Washington DC and the media is … silly. Here is a chart of Federal government receipts and Federal government expenditure on interest for Treasury debt.

Does that look like the US can’t afford to pay its debt? Of course not.

The problems is the voracious spending in DC which no one seemingly wants to stop.

Now, if I plot Federal government current receipts against Federal government current expenditures, we see a different picture: its the spending that’s the problem.

You can see in the picture that the much vaunted reduction in the deficit was a combination of a slowdown in government spending and an increase in taxes.

So while Democrats and Republicans debate the debt ceiling, no one will mention government spending. They tried that and all we got was sequestration … which was just a teeny slowdown in the rate of growth of government spending.

To be sure, the explosion in social safety nets like Social Security, Medicare, Medicaid, Obamacare, etc., will lead to massive debt increases in the future. Congress should tackle this problem before it is too late.

Republican Congressman Paul Ryan is suggesting means testing of Social Security benefits (despite the fact that higher earners pay taxes on Social Security). Cutting any of the last massive entitlement, Obamacare, is dead with Democrats no matter how awful it is. President Obama has already cut Medicare. Good luck to any member of Congress that tries to take away the freebies from Uncle Sam.

Instead, we get the Federal government shutting down national parks.