I didn't miss that point. You missed the point. I have explained this countless times. Future expenditures for the every department of government will be paid too. That doesn't make future anticipated government spending debt. First, that isn't the case. The only people who want to expand Social Security and Medicare benefits are Republicans and there are only two of them in the race and there are at least 3 Republicans in the race. Two, it depends on how and what they do to Medicare and Social Security and how they fund it and if they can it through congress. And most importantly, and has been explained many times, those SS Trust Fund bonds are IOUs from the government to the government. The creditor is the US government and the debtor is the US government. It's an accounting artifact. Social Security Trust Fund bonds are not debt. It's like you loaning yourself a thousand dollars, because you took money out of your car repair budget and put it into your home repair budget. It's not debt. You just really have a difficult time wrapping your mind around the fact that if you loan yourself money, where you are both the creditor and also the debtor, it isn't debt.
I believe it to be true. You see no incentive for politicians to pay down or pay off the debt. (You see the ongoing problems with your style?)
That is all true but irrelevant. The federal government’s debt to the Social Security Administration is to finance the Pay Outs to the "baby boomers" et. al., not payments to itself. When SS was set up, dozens of people paid in for every one collecting. The surplus was used to buy a special type* of government bond DEBT. These bonds were to be cashed in (as some are beginning to be now) to cover expenses of SS when the number of collectors became larger than the number of people paying in. Or more accurately stated: When, as now, the total of SS tax collections (plus interest on the bonds in the SS trust fund) is less than total of SS pay out obligations. * These special bonds can not be sold in the bond market, but in compensation for that lost option, the SS Administration can demand the face values at any time (i. e. not just when bonds mature) to meet their pay out obligations. If there is no reduction in the SS benefits paid** and no increase in the level of SS taxes, all of these bonds will be paid by the federal government by a not very distant date. (I don't know the latest budget office estimation of the date when SS's trust fund is exhausted, but something like 2040.) ** Considering that the average voting age is increasing, it is essentially impossible to reduce the level of current benefits. ARPA, would organize to see that any Congress man/woman who votes for reducing the benefits is not re-elected. - Thus Congress will not mess with the main source of retirement income for most people.
Well, politicians have paid down the national debt in the past. Clinton ran a budget surplus when he left office 16 years ago. WWII debt was paid down. Additionally, your question assumes there is good reason to payoff or pay down the national debt and there isn't. For all the talk of debt in the US, US debt is quite low especially when you compare it to other nations. The biggest fiscal problem the nation faces is the Baby Boomer retirement. Back in the 80's payroll taxes were raised significantly, ostensibly to fund Baby Boomer Social Security and Medicare benefits. Those excess Social Security and Medicare taxes which have accumulated over the course of the last 30 years account for more than 5 trillion dollars of the current reported US debt. So the next question is what happened to those excess Social Security and Medicare taxes? And the answer is very simple. Those excess payroll taxes were used to fund tax cuts for America's wealthiest residents. And just as the answer was simple, so is the solution. The US will need to go back to Reagan era tax rates - the rates we had before the tax cuts were implemented. Now do politicians still have the guts to do what needs to be done? That remains to be seen. I guess that depends on which politicians are in control. Democrats are far more likely to raise taxes than their Republican colleagues. Democrats have not signed pledges to never raise taxes under any circumstances as their Republican colleagues have done. Because people don't understand finance and macroeconomics, the national debt has become a popular and easy topic for demagogues. The fact is a good portion of the reported US debt is debt the government owes to itself and of course debt one owes to yourself where you are both the creditor and debtor really isn't debt.
It's all true and it is critically relevant. That isn't the least bit relevant. Debt one owes to yourself isn't debt. It really is that simple. At best, what you are doing here is treating a future anticipated expense which is no different than any other future anticipated government expense and wrongfully calling it debt. They can't be sold because they aren't debt. They are IOU notes the government writes when it takes money out of one fund and puts in in another. As has been repeatedly explained to you, it's an internal accounting process. It isn't debt. As has been endlessly pointed out to you, if government used the same kind of accounting process used in private industry, these IOUs would never be reported as debt. They would be eliminated in the consolidation (i.e. reporting) process. Well, let's hope not as that would be devastating for many Americans. What the government can do, what the government should do is, for America's wealthiest residents, go back to the Reagan era tax rates and remove the caps on Social Security taxes (i.e. all earned income should be subject to Social Security taxation not must the first $118,500 as is the case today). And that's what Democrats have advocated. Republicans have been and remained diametrically opposed to any increase in taxation and that is just plain stupid and very dangerous. https://en.wikipedia.org/wiki/Grover_Norquist
As a % of GDP it is certainly not low, at least as of 2013 stats per wiki... Of the main global economies... USA is at 104.2% U.K. is 88.7% Germany 79.9% France 89.9% Japan 229.2% Russia 12.2% China 31.7% In Europe only Greece, Ireland, Iceland, Italy and Portugal were higher than the USA. Even Spain was lower (just) as % of GDP - and Spain was in major crisis (as were the other 5). As for the rest of the smaller economies, there are only a handful higher than the US, it seems. So I wouldn't call it low. Please Register or Log in to view the hidden image!
The Social Security Trust Fund is called that because the funds in it are held in trust for the SS beneficiaries, when the current income to the SS Aministartion can not pay for all its required out lays to the retired, etc. Those funds are NOT HELD IN TRUST FOR THE FEDERAL GOVERNMENT. The SS Trust Fund holds bonds of Government debt that will be cashed as SS needs to, so it can pay out their benefits of the retired.
Well, as I previously explained, it helps if you know what you are talking about. Apparently, you didn't get the part where I explained US debt is overstated, and US debt is unique in this respect because of the aforementioned accounting issues. I'll lay it out for you. Here are the real and most current numbers: Reported US Debt: 19. 2 trillion dollars Debt US Government Owes to Itself * Inter-agency Debt (e.g. Social Security & Medicare): 5.4 trillion dollars * US Debt Held by Federal Reserve (An Independent Agency of US Government): 2.8 trillion dollars True US Debt: 11 trillion dollars US GDP: 18.2 trillion dollars True US Debt to GDP: 11/18.2 = 60.44% It helps to know something about the subject matter and use the correct numbers, rather than just mindlessly accepting what people tell you. Please Register or Log in to view the hidden image! The numbers you are using include debt the government owes to itself, as previously explained. So it's not a fair comparison. The US is carrying a lot of inter-agency debt which is directly attributable to two programs, Social Security and Medicare. For more than 3 decades now US workers have been paying taxes to fund those programs which have far exceeded the costs of those programs. Those excess taxes have been recorded as debt by the US Treasury due to the uniqueness of the accounting method used by the government. As previously stated, the accounting method used by the government isn't like the accounting method used by private industry. References: http://www.treasurydirect.gov/NP/debt/current https://research.stlouisfed.org/fred2/series/FDHBFRBN https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Additionally, and most importantly, I'm still waiting for someone to name the economic imperative and wisdom of paying down the the debt at this particular time. So all you debt hawks, let's hear it. Please Register or Log in to view the hidden image!
As has been repeatedly explained to you over the years, excess tax receipts aren't debt. The government is a trust. It doesn't make any difference what the government wants to call this fund or another. The fact remains the Social Security and Medicare programs are government programs. Benefits, if any, are determined by government fiat, and not by the taxes used to fund the programs. The 5+ trillion dollars of inter-agency debt is excess Social Security and Medicare taxes paid over the course of 30+ years by American workers. It isn't debt. The government is both the creditor and the debtor.
I do, thanks. I did miss that part, so apologies. But my figures are not overstated: you're merely talking about Net Public debt, which for the US was still, in 2013, 72% of GDP - so still not "low": better than the UK (83%), and France (84%), but far higher than Germany at 57%. Now maybe the situation has changed since the 2013 numbers - I'm not that close to them to be able to say - but based on the 2013 numbers I'd still say that the US is not low. Why would you think I am a "debt hawk"? Because I raised issue with what I perceived as unsubstantiated national pride? I have no problem with the high levels of debt - as long as they are serviceable not just in the short term but the long term, and as long as there are plans to keep them under control. That said, "control" is a fairly subjective term, but so as long as I'm not adversely affected... who am I to say what is an unsustainable level of debt for a nation to have? I trust my politicians in that regard, to an extent. After all, Japan is still around with debt in excess of 200% of GDP. There will come a time when debts around the world do get too high, though, and at that point our Chinese overlords will claim dominion. Please Register or Log in to view the hidden image! But it's not happening today.
Who said I think you are a "debt hawk"? Facts are just facts, that has nothing to do with national pride. And why would one be prideful of national debt levels? The US has much more to prideful of than its debt levels. OK... serviceability varies depending on geopolitical and economic circumstances. Currently US debt service amounts to 1.24% of GDP. That's very serviceable. https://research.stlouisfed.org/fred2/series/FYOIGDA188S For countries who are truly and completely sovereign and denominate their debt in their currency, they always have the capacity to service and even eliminate their debt, because they can print all the money needed to service their debt. EU members states who have adopted the Euro no longer have that ability. Countries like Russia and Ecuador do not and have never had that ability because their debt is denominated in foreign currencies and for good reasons (e.g. political and monetary risks, etc.). Well, it's a complicated subject, that most people do not understand and because most people don't understand it, it becomes an easy target for demagoguery. In the US the right wing constantly demagogues many issues, including the national debt. Fiscal policy is a much more complicated than most people understand. They think they can apply the principals of household finance to national finance, but nothing could be further from the truth. There is no reason to believe collective national debts around the world will become too high. I suspect it will be as it always has been. Some countries will run into debt problems and others will continue along just fine. As for China...China isn't even close to become any kind of overlord. If you have been paying attention, China is mired in tremendous fiscal and economic problem. China has some very serious structural economic problems. At this point, it is living on its substantial foreign currency reserves. Whither China recovers remains to be seen, but if it succeeds, China will need to make changes it has thus far refused to make. China won't be anybody's overlord despite its ambitions. PS: This doesn't mean that the prospect of another liquidity crisis like the one we witnessed in 2007-2008 is off the table, that is always a risk. That could happen again in countries which have not put in place adequate controls. But that has nothing to do with fiscal policies (i.e. how governments tax and spend money).
Restating the above: Thru 2019, the SS taxes and interest earned on bond in the SS Trust Fund, will allow SS to pay its obligations, without cashing in any of the bonds in the trust fund. After that an increasing number of bonds will be cashed in every year, as needed. This will drive the trust fund assets to zero in about 2034. I. e. by then if there are no changes in benefits or SS taxes, the Federal government, will have fully paid off its DEBT to SS so SS can pay the funds out to the public beneficaries of SS. These Trust fund bonds are, as the name suggest, held in trust for the people begining to collect their SS after 2019 and will be distributed to them during 2020 until exhaused in 14 years. It is illegal for the government to tap into this trust fund as that money does not belong to the government. It is held in trust for others. These bonds are DEBT, just like other government bonds.
is democracy a pyramid scheme? http://www.theguardian.com/money/2015/oct/13/half-world-wealth-in-hands-population-inequality-report
Democracy is a philosophy for the every day people. As it was meant to be. But on further thought ; Democracy also comes from those who have the money and therefore power to keep a true Democracy alive ; even when the people don'the understand that their democracy is slipping away ; because of others of money and power ; that are against the peoples rights. Democracy only loses when those in power lose it.
It seems to me that any political system will suffer from that problem. If decisions are imposed by elites from above that much of the rank-and-file citizenry don't agree with, there will be dissatisfaction. At least democracy gives people the hope that they might win in the future, if they can convince a majority that they are right. And in a decentralized form of democracy, where a great deal of power is retained on the local, state or provincial level, the possibility exists that different regions might opt for different policies, as opposed to having a one-size-fits-all diktat being imposed from above on everyone. If one side in a controversy loses out in region A, they might be winners in region B. So internal diversity remains a possibility and being a loser isn't an absolute thing. That's a different problem. In the Modern period, people used to identify with their broader community, symbolized as 'state' or 'nation' or 'people'. Patriotism was the expression of that. In medieval times, they were more apt to identify with 'Christendom' than with the feudal lord in whose territory they found themselves. But since World Wars I and II, 'nationalism' has become a dirty word in Europe and increasingly in the United States, blamed for those conflicts and for millions of deaths. Apparently people are supposed to identify with humanity in general or something. But that's too vague and airy to really work for all but the most idealistic people. Most people need to feel identity with something closer to home, something more connected with their lives. So what we see instead is the intentional promotion of identity-politics, where people are encouraged to identify first and foremost with their own race, class and gender. (As long as they aren't whites and male.) We see people identifying with their profession, political party, or their favorite football team. Sadly, the attempt to create a sense of peaceful community has led to the exact opposite, to people feeling stripped of any previous sense of community they might once have had, and to their grasping tightly to things that divide them from those around them. And with that change, we see the gradual loss of social cohesiveness. We see it here in the United States. If immigration law is going to be treated as if it is merely optional, with no penalties for ignoring it, then why shouldn't everyone treat tax, environmental. labor and civil-rights laws the same way? The whole idea of obeying the law because it is the law disappears with the loss of our sense of community and social cohesion. The belief that everyone in the community is equally subject to the law and equally obligated to honor it is lost when the sense of belonging to a larger overarching community fades away and where ethnicity and national origin become the things that people most identify with. I think that democracy can easily survive. But I'm not convinced that it will. It seems to me to be self-destructing as we speak. It's probably the greatest tragedy of our time.
You seem to think that these class, race, and gender identities people claim are matters of their own voluntary adoption. In the US all these political identities were assigned, imposed, by self-identified "white" men. Period. White men are the only US group that has intentionally and voluntarily created political identity based on race, class, or gender. Everyone else had it forced on them.
Not in present day. Perhaps in the past. But today any and all identities acquired are not the fault of white men. There is personal responsibility. Putting blame elsewhere is part of another stigma i see growing as well, but thats a topic for another time. But no, despite whats happened in the past, its not the white mans fault that certain groups identify stongly in race, and they objectively did not have it forced on them.
