question about the national debt

Seems to me the national dept in relation to the GDP would be more telling. Anybody got those # ??

 

GDP is $11 trillion I think I read. I might be wrong.

 

yeah, nobody ever accused clinton of spending a lot of money...

what ever happened to that GOP favorite, the balanced budget ammendment? surely with the GOP in control of both houses and the executive branch, such a measure would have no problems passing today, right?

 

this explains nothing about the national debt. please don't answer questions with more questions. thanks, and don't call me shirley.

 

about 4 trillion of the national debt is publically held debt. i presume this means gov't bonds, tbills, and the like. we could simply not pay this money back. that seems to be the solution some people offer for fixing social security -- just don't pay it. i'm guessing the two pools of money are probably there to serve the same purpose -- ie, investing for retirement.

not sure where the other 3 trillion goes.


each year we're spending over 300 billion in interest payments. oddly, while our debt has risen, our payments have gotten smaller. in 1999, 2000 and 2001, the payments were in the range of 360 billion and in 2002 and 2003, they're 332 and 318 respectively. i would guess this is because clinton was more aggressive about paying down the debt, tho i'm not sure how you pay down a debt by borrowing more money...

the last time we paid as little interest as we did in 2002 it was 1995.

14.5% of the budget went to paying down the debt in 2003. and we borrowed an additional 450 billion that year.

 

Why would you want to do something smart like that when you can scare everyone with a number like $7 Trillion?

If you are evaluating the debt of a company, you don't look at the absolute value, you look at ratios like debt/equity, debt/assets, debt/cash flow. The question to ask after seeing debt/gdp is, am I looking at the right ratio? What is the difference between debt held by the public and intra-gov't debt?

Here is a site for debt FAQs from the Bureau of Public Debt
http://www.publicdebt.treas.gov/opd/opdfaq.htm

Here is a chart that paints too rosy of a picture. Makes me suspicious.
http://www.whitehouse.gov/news/usbudget/blueprint/bud01.html

Here is a chart similar to the last one, but also includes debt held by the gov't. Paints a much different picture. However, Economists consider Net Debt to be the proper measure of Federal Debt Which makes this chart misleading - net debt is the red portion on the bottom.
http://www.aaas.org/spp/rd/debt04b.pdf

The best source I've found with explanations is this report here:
http://www.house.gov/jec/fiscal/debt.pdf

 

Those reports make me more comfortable about the debt numbers. But other issues are still spiraling out of control like Social Security.

If you ever need to do any research on debt, employment, economy or any of these things, www.firstgov.gov is the place to look. If it can be measured, you'll find it on this site.

But if you're scared of numbers and facts like VOR and Reb, you'll just keep calling it all bullshit instead of making a real argument.

 

so in simple terms, what is the intra-gov't debt? social security and other trusts that have been pilfered? does that mean no interest is paid on this money?

so the best debt comparison would be debt to assets or net worth, right? how do you calculate these? or is there a good estimate for the US?

 

http://www.house.gov/jec/fiscal/debt.pdf

This report was made in 2001 when Clinton was drastically reducing the amount of Federal debt. The report addresses the negative impacts of debt reduction on the way our financial system works. It raises more questions than answers.

VII. Conclusion
Since 1776, the United States has been borrowing from global financial markets. After
the Continental Congress failed to service U.S. Revolutionary War debts fully and promptly, the
first Secretary of the Treasury Alexander Hamilton restored U.S. credibility by establishing
sound goals and principles for the management of U.S. government debt that made U.S. Treasury
securities the safest and most liquid investment in the world.
Treasuries do far more than finance federal budget deficits. Unique characteristics allow
Treasuries and Treasury derivatives to perform many other economic functions. These include: a medium for the Federal Reserve System to conduct monetary policy, collateral for foreign
currency boards, reserves for foreign central banks and governments, a pricing benchmark for
other debt securities and loans, collateral for repo transactions, a hedge against interest rate risk,
a vehicle for speculation on interest rate changes, a means to achieve the appropriate risk-return
profile on investors’ portfolios, and a regulatory tool.
The U.S. government is running substantial fiscal surpluses and is paying down federal
net debt. As a result, the supply of Treasuries is expected to decline significantly. This
momentous development is already having ramifications in financial markets.
Over the next decade, the sharp decline in the supply of Treasury may compel the Federal
Reserve System, international official entities, and market participants to find substitutes for
Treasuries. Given the importance of Treasuries to the U.S. economy and the projected reduction
of federal net debt during the next decade, the following questions will face U.S. policymakers:
• What are the opportunity costs for federal debt reduction? Will a rapid reduction of
federal net debt lower real interest rates sufficiently to stimulate more economic
growth or would a properly structured federal tax reduction be more likely to quicken
the pace of economic growth? What is the most economically advantageous balance
of debt and tax reduction?
• Could excessive federal debt reduction decrease the efficiency of the American
financial markets and increase systemic risk?
• Could excessive federal debt reduction affect the ability of the Federal Reserve
System to execute monetary policy? Will conducting open market operations with
financial instruments other than Treasuries have unintended negative economic
consequences?
Federal debt reduction raises important economic policy questions that require further
examination. This study demonstrates that current trends in the level of federal net debt raise
important issues related to tax and budget policy, monetary policy, and the efficient operation of
financial markets.
Robert P. O’Quinn
Economist

 

Raise taxes AND cut spending with specified amounts to be used paying down the debt. I think Americans are more rational than the politicians give them credit for.

Oh yeah, and quit spending hundreds of billions of dollars killing brown people.