“The ONLY way to watch the Total National Debt decrease is to cut year-to-year, Baseline Federal spending.”
Not true.
If federal tax revenue is used to pay down the National Debt, then of course the National Debt decreases, as long as new debt is not added.
National Debt in the form of treasury bills, bonds and all other federal instruments of debt will stay steady as long as the interest on it is paid and no new debt is added for example, no new treasury bond sales.
If the federal government were to cut a federal program and use all the savings or reallocate all to paying off federal debt, there would be no net reduction in federal spending.
The only way to see National Debt decrease while at the same time observe a reduction in overall federal spending is to pay off some national debt with SOME savings from cutting overall federal spending.
Consumer example: Joe spends all of his paycheck every payday. Joe has a balance of $1000 of debt on his credit card because of excessive spending over the holidays. Joe decides to return to his pre-holiday spending level so he decides to spend only his paycheck and not use his credit card but he wants to pay down his credit card by $200. Joe must find $200 in normal spending patterns to allocate for paying down his debt.
Has Joe reduced his spending? No, he is spending the same paycheck but part of his spending is being used to pay down his debt.
Government example: Program X costs 300 billion per year. Government decides to pay down 50 billion in bonds that were originally sold to fund Program X. Government decides to cut Program X by 50 billion to pay for the reduction in its debt.
Government spends 250 billion + 50 billion
250 billion for Program X and
50 billion for retiring debt from Program X.
But government is STILL SPENDING 300 billion in relation to Program X.
The way government cuts both spending AND debt is to cut further Program Z and not use any of the savings towards anything else.
At Pre-Obama spending levels, it would take possibly 30 years to paydown half the debt upon reallocating about 20% of federal spending to retiring debt.
Now here’s a question for you: what percentages of debt must be retired in order to keep federal government functioning adequately? This is a rhetorical question of sorts because it is too difficult for most of us to answer accurately without data and time to make the accounting.
Because the thing to keep in mind is that a fair percentage now of federal spending is allocated to interest on the national debt and you cannot cut this interest expense to use to pay down debt. The cuts have to be found elsewhere.
But once debt is cut there should be reductions in interest expense and so there is a snowball effect there that is possible.
Tough nut to crack, hence my tagline.
The absolute best way to get the ball rolling on this discussion is to get behind a movement to repeal the 16th Amendment and enact H.R. 25. To this end please read and study the following:
http://www.fairtax.org/site/PageServer?pagename=about_faq
” - - - - If the federal government were to cut a federal program and use all the savings - - - “
” - - - - Now here’s a question for you: what percentages of debt must be retired in order to keep federal government functioning adequately? - - - “
There are no “savings,” only profit and loss. Federal politicians have kept the US Federal Government in the loss column for almost 80 years. Our “Balance Sheet” is the Total National Debt which says that we are 52 Trillion dollars in debt, but the Federal politicians use the 15 Trillion dollar debt number.
Your question to me implies that the Federal Government stays at it’s current size, or continues to grow at the current rate of growth. Currently, the Federal Government is not “functioning adequately” because is has to borrow 40 % of the money it spends from sales of promissory notes (bonds) to anybody who actually believes that you and I and our descendants will have any money left to pay them back.
All your examples address the problem correctly, IF the Entitlement Plantation is to be kept at it’s current level.
However, the US Federal Government is now in the early stages of a financial death spiral, and the 40 % of Federal spending that goes to fertilize it is essentially what the promissory notes are used for.
In short, the Federal income is barely adequate to maintain the essential, NON-Welfare functions of Government.
To oversimplify, the Chinese are paying for The New Deal (FDR’s SSS), The Great Society (LBJ’s Medicare and Medicaid), Food Stamps (Nixon), No Child Left Behind (GWB), and all the rest of our Welfare System, including the illegal Obama”care.”
BTW, what we have here is a “Welfare Bubble,” and nobody seems to realize that we have been sitting on pins and needles for a very long time.