Its basic math
https://www.msn.com/en-us/money/markets/new-budget-numbers-show-us-careening-toward-calamity/ar-AAXWgHH?ocid=entnewsntp&cvid=d44948aea15e42349bb63216a83af985
The Center for a Responsible Federal Budget, a respected nonpartisan group, reminded us yet again Tuesday that federal spending plans and debt levels are unsustainable. Lawmakers should get serious about debt reduction now — before it’s too late.
Counting only debt held by the public — which is some 20% lower than total government debt, including intragovernmental transfers — CRFB says that absent strong corrective action, the federal debt is likely to reach 125% of gross domestic product within a decade. Most nations are in a serious danger zone for economic collapse when debt exceeds 100% of GDP.
A lot of this is the fault of former Presidents Barack Obama and Donald Trump. In raw numbers (not GDP), and not blaming either for crises beyond their immediate control (the 2008 financial crisis and the coronavirus pandemic), the evidence of their outlandish spending is indisputable. Obama allowed the national debt to grow by $6.625 trillion in the seven years between the end of 2009 and the end of 2016. In the next three years, before the pandemic hit, Trump allowed it to grow by another $2.748 trillion. But regardless of who or what is to blame, the simple fact is that since Obama took office in January of 2009, the debt compared to GDP has grown from less than 44% to 99.6% as this year began.
Then, President Joe Biden and the Democratic Congress went on another spendathon, making long-term prospects even worse.
For historical comparisons, only as a result of (and in the 15-year aftermath of) World War II has U.S. debt-to-GDP ever exceeded 50%. In other words, today’s bad numbers aren’t just a small anomaly but a potentially catastrophic break with ordinary fiscal practice and common sense. The catastrophe would come if major creditors (including foreign nations or foreign bondholders) try to “call in” the debts all at once, causing a panic akin to what happened in the Great Depression and in the 2008 financial crisis.
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The debt will never be “ paid down” regardless of who is elected. HTH.
If may accumulate at slower rates over time and perhaps in some years we may have a small surplus, but nothing that is going to make a dent in it over the long term. The only hope is for economic growth to outpace the borrowing.
People seem to think the debt will “come due” at some point or China will “call in the debt”. Debt is financed by US treasury bonds bought by anyone or entity that wants them. They can’t be “called in”. Debt is being retired all of the time. US Treasuries mature in 20 - 30 years. They can can be bought and sold on the open market. I suppose a large holder of bonds could dump them all on the market, but that would be a massively bad financial move for the seller.
When someone says China can call in their debt it means that person doesn’t understand US debt. Same when someone says or alludes to all of our debt is being borrowed from China. As if we go to China with loan papers. Foreign governments can buy treasures like anyone else. In fact, Japan owns more US debt than China. China owns around 5% of US debt. -
When your dollar becomes worthless because you have nothing to back it with but bad debt, you will tip over. It is unavoidable. The math game does not work if you are underwater in your debt compared to your income. At some point it creates a bankruptcy. What we are doing right now is unsustainable and as you can see we have rats who want to globalize everything which means our GDP will continue to grow at a rate slower than our debt.
I disagree on paying down debt. It can be done, it just takes a country who is willing to get financially healthy. One that recognizes the distinct advantages over swarming debt. -
If your outflow exceeds your inflow, your upkeep will be your downfall.
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So you just said what I said.Bendintheriver said:When your dollar becomes worthless because you have nothing to back it with but bad debt, you will tip over. It is unavoidable. The math game does not work if you are underwater in your debt compared to your income. At some point it creates a bankruptcy. What we are doing right now is unsustainable and as you can see we have rats who want to globalize everything which means our GDP will continue to grow at a rate slower than our debt.
I disagree on paying down debt. It can be done, it just takes a country who is willing to get financially healthy. One that recognizes the distinct advantages over swarming debt. -
There’s good debt and bad debt. The worst thing that has happened in the last two years economically speaking was the bailing out the states with federal money. It allowed the states to avoid the uncomfortable analysis of opportunity cost of spend and allowed them to continue to impose restrictions on the population and businesses. No long term pension/benefit liabilities needed restructuring and it’s business as usual, so we’ll need another bailout in a few years.
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The Federal Reserve has to get shutdown or completely revamped...as long as they keep printing money you will never get a President and Congress to act in a sane manner. It used to be the argument of Conservatives saying lower taxes/lower government spending and Liberals saying higher taxes/higher government spending...now its an argument from both of lower taxes on my supporters and higher taxes on people I don't like and WAY higher government spending on my pet projects and just higher spending on the rest. All because the Fed enabled that behavior.
Right now the Fed is like an adult putting a pile of candy in front of a toddler (Congress/President) and asking them not to eat any when they leave the room. When those crooks got the idea interest rates should be under 2%, much less negative, and they should "expand the balance sheet" to buy the govt debt no one else would it was all over.
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MMT is the answer!HoustonHusky said:The Federal Reserve has to get shutdown or completely revamped...as long as they keep printing money you will never get a President and Congress to act in a sane manner. It used to be the argument of Conservatives saying lower taxes/lower government spending and Liberals saying higher taxes/higher government spending...now its an argument from both of lower taxes on my supporters and higher taxes on people I don't like and WAY higher government spending on my pet projects and just higher spending on the rest. All because the Fed enabled that behavior.
Right now the Fed is like an adult putting a pile of candy in front of a toddler (Congress/President) and asking them not to eat any when they leave the room. When those crooks got the idea interest rates should be under 2%, much less negative, and they should "expand the balance sheet" to buy the govt debt no one else would it was all over.
