OT: US National debt

[Starhawk]

Ah, very interesting info there Geoschmo thanks .

[Will]

And the problem with the US debt is that the interest payments on it is the second biggest expense each year for the Federal government... the only thing costing more is the military. I think right now, the breakdown is something like 40% of income tax (this excludes the SSA and Medicare taxes taken out of paychecks, as these are supposed to be seperate budgets) goes to the military, and about 33% goes to interest on the debt. (I can't seem to find any numbers Online to confirm this...) Which is why I'm not happy with Bush for cutting taxes, because now I'm going to have to carry that huge debt for most of my life. I know it's not feasible to completely pay it off, and I don't expect the Feds to pay off everything. But paying off enough to get payments down to around 7%-12% of total budget from income tax would make things infinitely better (IMHO).

At the rate we're going now, there can legally be no more debt (we've hit the $7.4 trillion limit already). So, we're either increasing the limit to pay for the wars, or Bush is cutting more programs to keep his precious corporate tax cuts, or he raises taxes on everyone, going against his promises... While Osama laughs as his plans succeed yet again. Something has to break soon.

[Starhawk]

Will said:
And the problem with the US debt is that the interest payments on it is the second biggest expense each year for the Federal government... the only thing costing more is the military. I think right now, the breakdown is something like 40% of income tax (this excludes the SSA and Medicare taxes taken out of paychecks, as these are supposed to be seperate budgets) goes to the military, and about 33% goes to interest on the debt. (I can't seem to find any numbers Online to confirm this...) Which is why I'm not happy with Bush for cutting taxes, because now I'm going to have to carry that huge debt for most of my life. I know it's not feasible to completely pay it off, and I don't expect the Feds to pay off everything. But paying off enough to get payments down to around 7%-12% of total budget from income tax would make things infinitely better (IMHO).

At the rate we're going now, there can legally be no more debt (we've hit the $7.4 trillion limit already). So, we're either increasing the limit to pay for the wars, or Bush is cutting more programs to keep his precious corporate tax cuts, or he raises taxes on everyone, going against his promises... While Osama laughs as his plans succeed yet again. Something has to break soon.

Okay that whole Last Paragraph was rather useless as you had made a good point with the first on and then just blew that out the window with your second paragraph.

Okay we get the point you don't like Bush but at least we aren't paying for his laywers while he bangs interns lol.... Or in Kerry's case at least we're not paying for his botox hehe. (just a joke don't start anything!)

[Will]

Umm... the Last paragraph is why I don't like Bush, not me just saying I don't like him. I thought Kerry would have kept up the deficits too, just not as huge as Bush is keeping them. Just about any other politician would have run up the debt as well.

I fail to see how my point in the first paragraph (that it would be a Good Thing(tm) to get the debt down to the point where it's 7%-12% of the annual budget from income tax, instead of 33%) is invalidated by me applying it to a specific politician. Would you have prefered that I apply it to Kerry instead, even though he lost and has almost no influence on budget issues now (except as a minority senator)? That doesn't do anything.

My second paragraph makes a very valid point as I see it. The law as it stands now says the Federal government cannot accumulate more than $7.4 trillion in debt. We now have $7.4 trillion in debt, and are spending more than we have every day. At some point, Bush either has to stop paying for things, or raise taxes, or (most likely option) he continues to screw over my and your generation by shifting the burden to us. There are estimates that take the average economic growth in the US over the past few decades, and extrapolate to several decades in the future, and the estimate is that the people just now about to enter the work force will be paying 75%+ of income in taxes, if government programs stay the same. Osama stated his goal is to bankrupt this country, and so far we're doing it. And, something has to break soon.

Tell me, what part of this is not valid? Because I certainly can't see it, even after putting my conservative blinders on.

[Starhawk]

I just meant that you basically just made it sound like you were going off blaming one man for every problem of the country's economy, instead of leaving it at a good point that we need the defecit down and how to do it (or at least as far as your opinion on the matter goes), I mean face it the president does not have AS MUCH say on the economy as people seem to think, that relies mainly on what the Senate can do as well you know?

I mean face it if the Senate didn't like the Bush tax cuts they were have just used their veto powers right? (at least it is my understanding that the senate can veto any bill the President tries for if they want). So I mean you can't just blame a president for every thing that goes wrogn however convient that may be right?

And like I said at least we aren't paying his lawyers fees lol.

[Will]

Senate has no veto power. The House and the Senate have to ratify the same Version of a bill, which is then sent to the President to either sign or veto. The House and Senate can over-ride the Presidential veto by 2/3rds vote (67 Senators, 290 Representatives).

My comments have nothing to do with the US economy. It's all about the Federal budget, which consists of those taxes not already set aside for Medicare and Social Security. I don't have a paycheck handy, but as I recall from my summer job, I would be paid about $480 a week, and usually $60 was deducted for income tax, $35 for Social Security, and a bit under $30 for Medicare. The amount taken depends on how you fill out tax forms, how much you make, etc. YMMV. The $35 and $30 are (technically) not supposed to be touched by Congress, but are repeatedly robbed anyway. The overall budget comes from the $60, which I think right now the Federal government is spending around $75 for every $60 it takes in. I have no official numbers in front of me, this is all ballpark figures.

Now, since this is not about the economy, it is my position that the President does indeed have huge control over the Federal budget. Especially since he has the power to veto any measures which excessively strain the budget... such as large spending programs (I've seen reports that spending has increased 8% per annum under Bush Jr, compared to about 3% for the previous four Presidents) and huge tax cuts. And true, these bills must go through Congress before being signed by the President, but both houses of Congress are held, and have been held, by the Republican Party. As a Republican and the President, Bush Jr. is the head of the Republican Party, which pretty much means... what he says, goes. Republicans can break rank and vote against these measures, but in the past decade, the Party leadership has been especially brutal to those who do this, and they are soon replaced by politicians who more easily fall into line. This is harder to do in the Senate, since they have longer (6 year) terms, but the Republican Party has found a way to deal with these mavericks as well. Exhibit A, the character assassination of John McCain, who will likely never be able to run for an office other than Senator of Arizona again.

Because of the structure of the Republican Party, the fact that Bush Jr. is the current head of the Party, and the fact that the Party controls both the Presidency and the Congress (and probably the Supreme Court within a few years), means that Republicans have almost unlimited control over the Federal budget. What used to be the fiscally responsible party is now putting to shame even the most ambitious of the Democratic Party's spending campaigns from the 40s onward. That translates to huge debt. Which, unless you're planning on being an unemployed high school student all your life (trust me, it seems like it's going to take a long time to end, but it ends up finishing FAST), you and I are going to be paying for. If there's any country left to pay for.

Oh, and as for his lawyers' fees... what do you think the Department of Justice is? Just one big law firm for the Executive Branch.

[Starhawk]

Ah okay I misunderstood you there, sorry about that I thought you were talking about the economy as a whole.

BTW though I seriously doubt Kerry would be any better except he wanted to cut budgets we rather need at the moment (i.e intelligence budget/military budget) lol that and if he had been raising taxes people would whine about that in the end so it's just all funny in my opinion.

We Americans love complaining it's our real national passtime I just wish I could remember that hilarious song I heard on the radio this morning.

Oh and at least as I said Bush isn't trying to make us pay for his lawyers like a few Democratic politicos over the years so until he does that I don't care.

Oh and okay economy/federal budget lesson for me here, How does the federal budget/federal debt effect us as a citizen in the long run if we are not paying taxes for them?
This is an honest question as I am rather fond of learning, and the field of economics/government budgeting interest me a lot (I just can't find any good books on em) so please be nice when you explain lol.

[Karibu]

I hope you get your budget in line, for if US would go into depression, the rest of the world would soon follow. At the moment, US economy is based on the consumption of individual people, so if they one day decide to spare the money instead of buying a new car, we all are in the trouble. But there may be one good pint of Bush having his second period. If I remember it correctly, US constitution says that man can be president only twice. So no matter what, he can't have third period. Therefore he is able to make difficult economical decisions without thinking his popularity or next election. I hope he realises that and do what is necessary to stop the growth of debt.

[Will]

The Bush campaign's claim that Kerry wanted to cut military and intelligence budgets came from votes in the late 80's/early 90's, when he voted to cut back on the annual increases to those areas. At the time, it was at the urging of then Secretary of Defense... Dick Cheney. I always thought it was funny that the Bush campaign was criticizing Kerry for going along with what Cheney wanted.

But, regardless of past votes, Kerry wanted to INCREASE military and intelligence budgets, by adding two active divisions to the US Army, and increasing the prominence of Special Forces throughout the military. If his platform isn't up on his website anymore, I'm sure you can find a copy Online somewhere.

What Kerry was going to do to decrease the deficit was to repeal the tax cuts for the upper brackets ($200,000+ yearly income), close loopholes in corporate tax code that gives tax breaks for offshoring workers, put back capital gains taxes to their 90s levels (that's the tax levied on the sale of stocks), etc. Basically bring taxes to a point between what they are and what they were under Clinton for those in the highest tax bracket, while leaving the middle-class and lower brackets as they are now. He also wanted to accellerate the training of the Iraqi security forces, and try to bring in UN troops to alleviate the pressure on US forces. But probably the best that could be hoped for is half the troops in Iraq after two years.

The deficit is so large now, that it probably would have taken the entire term for Kerry to even make a dent in it. Probably what would have been the biggest thing to bring the budget down is the clash between a Republican Congress and Democratic Presidency. That combination under Clinton caused the budget to fall to the lowest common denominator politically, just so it could pass, which resulted in the surpluses. With the plans to increase military size, the deficit probably would have increased, who knows.

As for the civics lesson... it's late. I need to sleep and go to work in the morning. I'll write up something about the relation government debt has to the economic status of individual citizens (especially in the US) later. The very, very short Version: The bigger the government debt, the more taxes citizens have to pay to cover interest payments on the debt, which lowers the availible capital for citizens. In an economy like the US, driven by consumerism, this has an impact on how much people buy. As it is now, it's being made up by people accumulating their own debt to buy more things, which they then have to pay interest on, giving them less money to buy stuff. Which they make up for by borrowing to buy more, accumulating more debt, giving them less money to buy... vicious cycle. Eventually, the debts will get so high, that the economy will crash. We're already seeing warning signs with increased bankruptcies with individuals and companies, but those are just minor shockwaves. When it really hits... well, take a look what happened during the Great Depression. Then multiply it over the entire globe.

The dangers of debt...

[deccan]

Will said:
What Kerry was going to do to decrease the deficit was to repeal the tax cuts for the upper brackets ($200,000+ yearly income)...

I recently read this in "The Economist":

On the domestic side, Mr Kerry would repeal Mr Bush's tax cuts for people earning more than $200,000 a year. But he proposes to keep the middle-class tax cuts. The overall effect would be to cut taxes by $600 billion over ten years compared with the current position. That is still less than the sum of the reductions Mr Bush is proposing, and Mr Kerry plans to spend all -or possibly more than all- the difference on health care. In simple terms, he poses a clear domestic choice in the election: do you want more tax cuts or more health care?

It seems to me that based on campaign rhetoric, Kerry would have done no better than Bush in cutting the deficit. However, in all honesty, Kerry, if he had been elected into office, would probably not go so far as what he promised on the campaign trail and saved more money. The same issue of The Economist included a poll of 100 academic economists and concluded:

Although Americans overall seem relatively unconcerned about the budget deficit, a large majority of the economists rate it as a serious problem for the economy, with almost one in five describing it as a crisis. And they back Mr Kerry by a large margin (79% to 18%) to do more to promote fiscal discipline than Mr Bush.