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U.S. government debt soars
http://edition.cnn.com/2007/US/12/03/us.debt.ap/index.html?iref=mpstoryview ^

Posted on 12/03/2007 5:56:48 AM PST by chessplayer

WASHINGTON (AP) -- Like a ticking time bomb, the national debt is an explosion waiting to happen. It's expanding by about $1.4 billion a day -- or nearly $1 million a minute.

What's that mean to you?

It means almost $30,000 in debt for each man, woman, child and infant in the United States.

Even if you've escaped the recent housing and credit crunches and are coping with rising fuel prices, you may still be headed for economic misery, along with the rest of the country. That's because the government is fast straining resources needed to meet interest payments on the national debt, which stands at a mind-numbing $9.13 trillion.

(Excerpt) Read more at edition.cnn.com ...


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To: chessplayer
The debt is rising faster than the reported deficit because of the government "fund" accounting trickery. The government needs to take the following actions:

Split the government budget into true funds- disclose the numbers to the public using Generally Accepted Government accounting principals (like all the states):

Ban federal funds from buying treasuries. Limit the amount of private investment. Investment board nonpolitical.

The general fund needs to be balanced;

* Stop paying interest payments on treasuries held by federal funds, this would eliminate the general deficit by approximately 40%;

* Federal government out of the secondary education and welfare business- move to the states.

Privatize over time social security. SSA will forgive any bonds it holds after private system is solvent;

Stop paying interest payments on treasuries held by federal funds;

Use true "manciple" bond systems for other federal funds like transportation, airports, etc.

21 posted on 12/03/2007 6:46:34 AM PST by 11th Commandment
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To: jmyrlefuller

Yes. The real problem is the baby boomers. This generation funds that supported entitlements was repeatedly raided by Washington incurring debt to this generation. Now this generation is top-heavy of retirees demanding the same entitlements they paid for. There will be be little choice but for future US politicians to raise taxes and cut defense spending. A good economic team could come up with a way to create a market such the hydrogen economy as a massive export product and cheaper domestic consumption to solve a lot of these problems and eliminate the debt over a 20 year period but I see too little movement from either party on gaining any real progress of how to deal with this massive issue.


22 posted on 12/03/2007 7:03:58 AM PST by quant5
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To: chessplayer

Both of our political parties have sided with the enemy (us) on this one. Our banking system trembles over a mere 400-500 Billion in bad mortgage loans. What a joke. A mere bag of shells.

In addition to what is mentioned below, we currently have about $50 Trillion (1 trillion= 1,000 billions) in unfunded, mandates off the books. As Everitt Dirksen used to say, a billion here, a billion there, soon you talking about real money. If you are actually paying taxes your individual DEBT is closer to $400K in the form of a sub-prime, interest only, balloon loan, with a reverse amortising principal amount.


23 posted on 12/03/2007 7:12:43 AM PST by Agent Smith (Fallujah delenda est. (I wish))
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To: Brilliant
And the Dems haven't even passed their budget yet.

If only it were that simple. The sad fact is that both parties have a dismal record on reining in spending and controlling debt. In many ways the GOP is worse than the dems.

24 posted on 12/03/2007 7:13:57 AM PST by turducken
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To: Realism

Yes, you nailed it.


25 posted on 12/03/2007 7:16:51 AM PST by quant5
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To: Realism

I guess that since they published the last National debt estimate 3 weeks ago and it shown the deficit and debt decreasing... it is a good bet that it is.

LLS


26 posted on 12/03/2007 7:27:45 AM PST by LibLieSlayer (Support America, Kill terrorists, Destroy dims and vote Fred!)
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To: chessplayer
"It's expanding by about $1.4 billion a day ..."

State & Federal spends over $1.8 billion per day on welfare. Drop welfare and the problem is solved.

27 posted on 12/03/2007 7:29:28 AM PST by avacado
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To: chessplayer
Why the heck don't they just raise taxes to pay down the debt? I mean, with all the super-rich people and bloated corporations in this country, there's no reason for the government to be in debt!

< /dippy liberal, university-student mentality>
28 posted on 12/03/2007 7:32:12 AM PST by LIConFem (Thompson. Lifetime ACU Rating: 86 -- Hunter Lifetime ACU Rating: 92 (any combo will do, fellas))
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To: LIConFem
Why the heck don't they just raise taxes to pay down the debt? I mean, with all the super-rich people and bloated corporations in this country, there's no reason for the government to be in debt!

I think your having a 90's flashback......

29 posted on 12/03/2007 7:34:58 AM PST by Realism (Some believe that the facts-of-life are open to debate.....)
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To: chessplayer

“It is increasingly clear by now that a severe U.S. recession is inevitable in next few months...I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before. In this extreme scenario whose likelihood is increasing we could see a generalized run on some banks; and runs on a couple of weaker (non-bank) broker dealers that may go bankrupt with severe and systemic ripple effects on a mass of highly leveraged derivative instruments that will lead to a seizure of the derivatives markets... massive losses on money market funds with a run on both those sponsored by banks and those not sponsored by banks; ..ever growing defaults and losses ($500 billion plus) in subprime, near prime and prime mortgages with severe knock-on effect on the RMBS and CDOs market; massive losses in consumer credit (auto loans, credit cards); severe problems and losses in commercial real estate...; the drying up of liquidity and credit in a variety of asset backed securities putting the entire model of securitization at risk; runs on hedge funds and other financial institutions that do not have access to the Fed’s lender of last resort support; a sharp increase in corporate defaults and credit spreads; and a massive process of re-intermediation into the banking system of activities that were until now altogether securitized.” (Nouriel Roubini’s Global EconoMonitor)-—Roubini is a Professor at the Stern School of Business at New York University.


30 posted on 12/03/2007 7:46:49 AM PST by HockeyPop
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To: YouGoTexasGirl

Good factual post. Trust me, I know about these programs. There is no incentive to be reasonably frugal. The gov’t does try to prevent waste and abuse, but the program is simple too large to effectively manage. Further, many states are currently seeking to expand Medicaid and Medicare coverage as a work around to universal health care coverage. These monsterous programs are actually growing, and I believe critical mass is unavoidable.


31 posted on 12/03/2007 7:56:22 AM PST by Obadiah
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To: chessplayer

Let’s all declare national bankruptcy and start over.

There are a lot of companies out there who are willing to give new credit to reestablish our worth.


32 posted on 12/03/2007 8:16:55 AM PST by wildbill
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To: Agent Smith
There are certainly lots of bad programs and wasteful spending. However, getting into a huge swivet about "how will future generations pay the debt" is ahistorical. Debt as a fraction of GDP is a lot less than it was from 1945-65, when many of the same noises were made. That ratio hit a low point around 1975-79 (remember how good the economy was then??), and has risen some since then, but not a huge amount.

Thomas McCauley mentions exactly this issue in an essay around 1820, about laments on how would england pay the debts from the Napoleonic war. He pegged it then -- the future will be a lot richer than the past.

If, as is the case now, our deficit is around 2% of GDP, and GDP is growing at 3-4%, you see that the problem is not getting worse.

Again, this isn't to say that the problem is handled by itself. And, if SS and Medicaid/care grow at the rates projected, something will have to give. But simply staring at a debt of 6-8 Trillion, and forgetting that we are a $14 Trillion economy, doesn't make sense.

As an aside, the really sensible way to look at it would be to say "what are the nation's assets, to put against the debt?" (In the same way that a $100,000 mortgage "debt" isn't bad if you have a $200,000 house, but a killer if it's only worth $50,000) But politicians rarely want to look at that, because then someone might want to privitize something and reduce the debt! nevertheless, most estimates are that our national asssets have exceeded the debt since at least the mid 60's.

33 posted on 12/03/2007 8:36:22 AM PST by BohDaThone
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To: Agent Smith
There are certainly lots of bad programs and wasteful spending. However, getting into a huge swivet about "how will future generations pay the debt" is ahistorical. Debt as a fraction of GDP is a lot less than it was from 1945-65, when many of the same noises were made. That ratio hit a low point around 1975-79 (remember how good the economy was then??), and has risen some since then, but not a hauge amount.

Thomas McCauley mentions exactly this issue in an essay around 1820, about laments on how would england pay the debts from the Napoleonic war. He pegged it then -- the future will be a lot richer than the past.

If, as is the case now, our deficit is around 2% of GDP, and GDP is growing at 3-4%, you see that the problem is not getting worse.

Agiin, this isn't to say that the problem is handled by itself. And, if SS and Medicaid/care grow at the rates projected, something will have to give. But simply staring at a debt of 608 Trillion, and forgetting that we are a $14 Trillion economy, doesn't make sense.

As an aside, the really sensible way to look at it would be to say "what are the nation's assets., to put against the debt?" But politiuicand rarely want to look at that, becasue then someone might wat to privitize somehting and reduce the debt! nevertheless, most estimates are that our national asssets have exceeded th edebt since at least th mid 60's.

34 posted on 12/03/2007 8:50:31 AM PST by BohDaThone
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To: 11th Commandment
* Stop paying interest payments on treasuries held by federal funds, this would eliminate the general deficit by approximately 40%;

This wouldn't change a thing. We'd still pay the same benefits, doesn't matter if the funds get shortchanged or not.

35 posted on 12/03/2007 3:33:45 PM PST by Toddsterpatriot (What came first, the bad math or the goldbuggery?)
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