question about the national debt

That was very informative. I hadn't thought about the consequences of debt reduction on Treasuries and the financial system. So I wonder what the optimal level of government debt would be?

The European Union has a Stability and Growth Pact which requires member countries and potential member countries to maintain a public debt to GDP ratio of less then 60% and yearly deficits are not to exceed 3%. Obviously a lot of work went into this and the Europeans must believe that 60% is where things start to go wrong and get unstable. With a public debt of 4.1 trillion and nominal GDP close to 11 trillion, that puts us at 37%. It's something to think about, but the ramifications of the EU's system won't be clear until it's been around for a lot longer.

 

You can dig as deep as you want around the septic tank but all you will find underneath is shit.

The only thing I am learning is that you are a W ass kisser.

 

I don't think that is right. In a thread in NOTD I researched all of that quite a bit, and the surplus did not happen until 2 years after the budget had been submitted and was caused by much larger revenues coming in than were expected.

 

:gaga:

 

From what I'm reading, they count the Social Security surplus as part fo the general Surplus. So if SS collects an extra 50 billion, and taxes generate an extra 10, they call the surplus 60 billion, even though theoretically they arent supposed to be spending that 50. They take the 50 billion, replace it with Treasury Bills, and presto Whammo, it shifts from the "debt" column to the "intragovernment debt" column, which strangely, doesnt get reported when some government apparatchik quotes the debt figure.

Note: this makes about as much sense as government spending estimates. If they spend 40 billion this year on item A, and next project to spend 60 billion, but in fact only spend 50 billion, to the goverment, they have cut spending by 10 billion dollars. (neat trick huh? )

 

I agree about the surplus being different. But I was looking for info on what is included in the national debt, and figuring out what intra-gov't debt was. Have any ideas on it?

 

Right, but the "balanced budget" that Clinton submitted was not balanced when he submitted it. It was balanced by the US gov't receiving like 12% more revenue than it had been expecting. SS would not have been part of that extra revenue.

 

Debt the government is holding that it owes to itself and considers extremely long term (ie they never intend to pay it back. ) From what I'm reading it's a parking place for items they intend to carry over year to year, and so segregate to focus the "debt" numbers on what they think will come due in the current fiscal. Think of it as long term debt and short term debt.

 

Because they had already taken the SS funds, replaced them with T bills, added those funds to the budget, spent all of that and further into a deficit. The "debt" ran a surplus because they collected 12 billion more than they thought they would, but they made it look like a surplus by injecting dollars, a balance sheet manoever. The debt didn't do away, it got shifter to a place where it doesn't regularly get reported. It ran that because when they report debt, they dont include intragovernment, which they seem to think they can roll over indefinitely. Borrowing Peter to pay Paul.