Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 27, 2012 at 12:59 pm
Unfortunately, this debt accumulation is not going to stop until the world stops lending us money and/or the Fed stops printing money. Only then will the necessary adustments be made. And these adjustments will be more painful the longer we wait.
One can watch the European debt train wreck currently underway and the one that is about to start for Japan for hints of what is in store for us.
In the meantime, both political parties will continue to shine us on. Neither one is serious about solving this problem because they know they can get away with it and we won't hold them accountable.
Remember all that noise last summer about raising our debt ceiling to $15.2 Trillion? There was barely a peep this week when it was raised to $16.4 Trillion. It took us only 6 months to blow through $1 Trillion. I wonder how long it will take for the next
Posted by Sam, a resident of the Oak Hill neighborhood, on Jan 27, 2012 at 1:06 pm
I don't know where you're getting your numbers. The total US debt is actually closer to $15 trillion, not $62 trillion. And the debt per taxpayer is about $50,000 , which doesn't seem to agree with your $532,000 per household figure.
No doubt about it: The national debt is a big problem. But you could have made the point just as well without fudging the numbers.
Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 27, 2012 at 4:02 pm
The $62 Trillion is total debt including the present value future entitlement commitments (Social Security, Medicare, etc.). It is sort of like the unfunded pension liability for the entire country.
The $15 Trillion is current outstanding public debt. It has been shown through historical examples that once a country's debt/GDP ratio increases higher than 90%, it begins to negatively impact the economic growth potential of that country (Reinhard and Rogoff). We are currently above 100%.
And Phil - I'd much rather be guilty of misspelling faux pas than be guilty of your continue crime of ignorance demonstrated by mindlessly quoting irrelevant surveys and never having the intelligence nor courage to comprehend and debate actual facts.
Maybe you'll win more people over to your "informed" perspectives if you increase the amplitude of your vitriolic juevenile antics. You continue to prove that informed thought is not required to have a loud and obnoxious voice.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 27, 2012 at 6:59 pm
So says the Fo Paux-er GX: "And Phil - I'd much rather be guilty of misspelling faux pas than be guilty of your continue crime of ignorance demonstrated by mindlessly quoting irrelevant surveys and never having the intelligence nor courage to comprehend and debate actual facts."
Well, speaking of irrelevant surveys....
Fact is, GX, hasn't offered "actual facts." He's mindlessly projected a zany number that has been formulated without taking into account improving economy, expanded tax base, and, inevitably, tax hikes on the uberwealthy. Fact is, GX's inability to spell reveals a lack of reading skill, and both deficits -- spelling and reading -- contribute to his pathetic inability to reason. A high school freshman taking math can interpret stats better than he can. I once thought he was an incorrigible liar; I've since come to realize he's simply an undereducated hack. He needs to go back to school. It's never to late.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 27, 2012 at 7:37 pm
Moreover, it's never _too_ late, either.
On GX's 'reasoning', I'm currently running a $100 debt because next year I intend to drive from Pleasanton to Portland and back. All his hand-waving for attention, his slavish attitude toward any stat he gets from the right-wing blogs, and the poor pup can barely add 2 + 2 and get 4.
Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 28, 2012 at 6:01 am
Given Genius already knows this, let me use his/her example of spending $100 on a roadtrip to further the economic discussion for everyone else.
Spending is not spending as many Keynesians would have you believe. One needs to consider the spending from two perspectives: what the money will be spent on and where the money came from.
First, there is a big difference between money spent on an investment vs. consumption. Money spent on an investment will create future wealth (that can be used for future investments or consumption). Money spent on consumption is spent and then gone. So if Genius' road trip is to create a new company then he/she is essentially making an investment that may/may not lead to future wealth. If it is a party roadtrip, that's just consumption in the form of entertainment (which is OK as long as it is coming from savings).
Which leads to the second point of where the money came from - savings vs. debt. If Genius' $100 came from his/her savings account, that is fine. But it is a different situation if they had to borrow that money due to the interest they will need to come up with and the future consumption they will need to forgoe to pay it back.
It is common sense to recognize the difference between these two potential scenarios:
- borrowing $100 to do a party road trip to Portland
- spending $100 from savings to travel to Portland to help start a business
One leads to future debt while the other leads to future wealth. Unfortunately many of our leaders (on both sides of the isle) and many of our citizens have forgotten this basic economic lesson.
If our $15 Trillion deficit had been invested wisely to create economic/business enhancing infrastructure, that would be one thing but it wasn't. It was and is being spent on current consumption to allow us to live beyond our current means. We are not making investments to enhance our future wealth.
So this means that our future standard of living will necessarily be decreased so that we can pay back that $15 Trillion plus interest. Just like is happening in Europe (especially Greece) and just like what is starting to happen in Japan.
This is the "gift" we are giving our kids. We are not leaving this world/country in better condition than we received it.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 28, 2012 at 10:28 am
Once again GX's reasoning (and commentary) is infantile. First, what happened to the 62 Trillion dollar debt he was hawking not too long ago? Back to 15 trillion now are we?
Second, GX calls anything the fed does consumption and by fiat then is unable to calculate products created by govt spending -- such as world-saving inventions by innercity kids or children of undoc immigrants who are given an assist in college. Or transportation systems (highspeed rail). Or alternative energy systems. Or public workers who pave roads, build bridges, fight our wars, teach our children, etc. Well, I've got news for him: his mythologized private sector is no more productive than is govt.
Fact is, GX, as per usual, demonstrates serious confusion, not only mathematical but conceptual. He is, for example, unable to understand my most basic analogy. I'll make the point here more directly for GX and other softheads: One cannot calculate future debt without holding a slew of variables constant (or by manipulating those variables to suit your own bias). If you try to do that, you end up with the goofy 62 trillion debt number that GX and the other softheads are peddling, erroneously. In the real world, the future holds too many intangibles -- wars, inventions, economic booms (and busts), fluctuating tax rates and tax bases. Anyone with a modicum of intelligence should be able to grasp this. GX, the fo-paux-er, shows he is barely literate, unable to grasp an argument, and is mired in mathematical and conceptual confusion. He needs to go back to what he does best: cutting and pasting material from rightwing blogosphere and predicting small-minded tsunami gloom and doom.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 28, 2012 at 1:25 pm
Do I have a solution? I'd begin with GX and Dan getting some additional education that might help them to recognize a badly written and badly argued right-wing fluff piece when they see one.
On another thread, Sam has provided a link that shows high correlation between low IQ and support of socially conservative institutions. That same link might be appropriate here as well.
Also, to further educate Dan and GX, I'll try to extend my analogy. The $100 I anticipate spending next year on a trip to Portland is not a debt until it becomes a debt. It MAY simply be an expense; and it MAY be a relatively insignificant expense, especially if the economy improves over the next year and I get my well-deserved raise. To calculate that $100 future projected expense as a debt is simply dishonest. In GX's and Dan's respective cases, it isn't so much dishonesty as stupidity. How anyone could read that USA Today baloney and not laugh is beyond me.
Posted by Stacey, a resident of the Amberwood/Wood Meadows neighborhood, on Jan 28, 2012 at 1:35 pm Stacey is a member (registered user) of PleasantonWeekly.com
Phil's right. Anticipating to spend $100 next year is not debt. Legally obligating yourself to pay $100 next year is a liability. If you borrowed $100 to pay now for the trip to Portland and promise the lender to pay them back next year, you have debt. Debt is also a liability. You have to ensure you have the liquid assets in a year to pay it.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 28, 2012 at 2:07 pm
Which is why the debt stands at approx. 15 trillion, not 62 trillion. The economy is improving, and the extent to which it continues to improve will impact whether future liabilities are significant or not -- e.g., whether they are readily paid off with tax revenue or must be borrowed against. We won't know until we see fully how the economy continues to grow. See, for example, Clinton era surpluses.
Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 28, 2012 at 2:42 pm
I'm sorry Phil, but when I read this from you("I'm currently running a $100 debt because next year I intend to drive from Pleasanton to Portland and back") I assume your word "debt" means "debt".
Regardless, you'll see from my comments that the $100 become debt at the moment you spend it. My point isn't that debt is bad but that debt for investment/wealth creation is much better for the individual and society that debt for consumption.
I do hope your re-reading of these posts will help you distinquish the differences between the $15T and $62T numbers. Both numbers are valid. One is more comprehensive than the other.
Given how smart you are, I'm sure you understand the concept of Net Present Value (NPV) and how this concept has been used for decades if not centuries to estimate the value of future obligations and/or payments.
I'm sure you are also aware that the SEC is in the process of implementing a new rule to force government agencies to publish the NPV of their future pension obligations so they can no longer hide this unfunded debt from the public.
Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 28, 2012 at 3:09 pm
Phil - can you help me understand why Federal debt increased by nearly $1.5 Trillion if in fact he was running surpluses as you suggest?
Here is the URL you can use to check your numbers. And before you go there and disparage this as a right-winged, biased resource, please do note that the information comes from www.whitehouse.gov (table 7.1).
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 28, 2012 at 3:15 pm
GX again fails the reading test. He claims that I state: "I'm currently running a $100 debt because next year I intend to drive from Pleasanton to Portland and back." And then he says, I assume your word "debt" means "debt".
I tried to give the guy the benefit of the doubt by arguing he isn't so much a dishonest sleeze as an ill-educated buffoon. But I have to go back to my original view: he's ill-educated and a sleeze as well.
He's a sleeze because he intentionally misquoted me. My actual quote was, "ON GX's REASONING [my emphasis], I'm currently running a $100 debt because next year I intend to drive from Pleasanton to Portland and back." Yet he claims this is MY reasoning. You know what this shows? Dishonesty. What follows of his 'argument' is nothing but sheer stupidity.
GX shows he's incapable of seeing how a taxpayer financed bridge or transportation system or educational system is in fact a PRODUCTIVE investment. He raises the distinction between production and consumption, but is woefully unable to appreciate the distinction. ON HIS REASONING, taxpayer money going toward public education = consumption, and private money going toward manufacture and sale of toilet paper = productive. What a sillypuss.
This may help to underscore what separates a rational human being from the right-wing dolts who populate these sites like GX and Dan and the rest of the clown club. They'd rather have a society producing toilet paper than one producing knowledge. The first is a tangible commodity, I guess, and being the commodity fetishists they are, only IT must count as 'productive' commodity. The second, education, is beyond their grasp at any level -- can't place a dollar sign on it -- and so they call it consumption. Thankfully, we live in an increasingly rational society and the likes of GX and Dan only slither out from their rocks to attend Palin/Santorum/Paul/Romney/Gingrich rallies. Must suck to be them.
Posted by GX, a resident of the Another Pleasanton neighborhood neighborhood, on Jan 28, 2012 at 3:41 pm
While you are at it genius, can you help me understand the following?
Why is that government transfer payments have grown from 7% of total personal income in 1959 to 20% today and we will have all these entitled people crying out for more? You'd think that all these decades of free money and plenty of free/cheap educational resources, more people would have taken advantage of this to improve their lot in life.
Why is it that total government spending per GDP has grown from the 15-20% range during the FDR halcyon days to the 37-40% range today and yet people like you are still not happy with the level of entitlement spending?
Think about that, 37-40% our GDP is eaten up by a grossly inefficient, wealth transfering government. We are nearly half way there to your socialistic/communist nirvana.
Posted by Phil, a resident of the Foothill Farms neighborhood, on Jan 28, 2012 at 5:01 pm
Thoroughly thrashed, exposed as dishonest and dimwitted, GX now turns to petulant self righteousness and a new bevy of numbers that are beyond his cognitive ability to grasp.
Percent of govt spending relative to GDP: 1942 -21.7%; 1945 -41.54%; 1953 - 20.75%; today - est. 25%.
What's the big whoop? Things haven't changed in last 50 years? Clearly we've moved closer to a social welfare democratic state. More cars on the road, more trade to regulate, an expanded population, more elderly living longer, an increased societal push toward social justice, inter alia. Somehow, GX wants to move from 20% (his first paragraph) to 37-40% after he sucks on more fantasy fumes, and then make a big deal about this. The tsunami is coming, and blah, blah, blah.
Gotta love the way the boob disparages entitlement spending. I wonder if he's referring to his kids' public education, or his wife's unemployment compensation, or his parents' medicare help, or his brother's social security, or his own govt-regulated senility drugs? Nooooo, I don't think so. I think we all know who he's referring to. (Hint: they're likely not white.) Perhaps someone else wants to take this creep seriously? I've about had it. I simply do not suffer idiocy very well, at all.