Our national debt is currently reaching unprecedented and dangerous levels. This debt, especially when combined with unfunded liabilities such as medicare, medicaid, and social security are a serious threat to our republic. The deficit for the fiscal year 2009 came in at more than $1.4 trillion—about 11.2 percent of GDP, according to the Congressional Budget Office (CBO). That's a bigger deficit than any seen in the past 60 years—only slightly larger in relative terms than the deficit in 1942. We are, it seems, having the fiscal policy of a world war, without the war. And that $1.4 trillion is just for starters. According to the CBO's most recent projections, the federal deficit will decline from 11.2 percent of GDP this year to 9.6 percent in 2010, 6.1 percent in 2011, and 3.7 percent in 2012. After that it will stay above 3 percent for the foreseeable future. Meanwhile, in dollar terms, the total debt held by the public (excluding government agencies, but including foreigners) rises from $5.8 trillion in 2008 to $14.3 trillion in 2019—from 41 percent of GDP to 68 percent. In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman. In 1945, the figure was 113 percent. Well, let's leave aside the likely huge differences between the United States in 1945 and in 2039. Consider the simple fact that under the CBO's alternative (i.e., more pessimistic) fiscal scenario, the debt could hit 215 percent by 2039. That's right: more than double the annual output of the entire U.S. economy. Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt. "My prediction is that politicians will eventually be tempted to resolve the [fiscal] crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar." Already, the federal government's interest payments are forecast by the CBO to rise from 8 percent of revenues in 2009 to 17 percent by 2019, even if rates stay low and growth resumes. If rates rise even slightly and the economy flatlines, we'll get to 20 percent much sooner. And history suggests that once you are spending as much as a fifth of your revenues on debt service, you have a problem. It's all too easy to find yourself in a vicious circle of diminishing credibility. The investors don't believe you can afford your debts, so they charge higher interest, which makes your position even worse. This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power. The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat. Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next. Newsweek So what to do? The government, under both Republican and Democratic administrations has demonstrated an inability to restrain spending. Every six months or so Congress, unwilling to live within its means, goes thru the charade of raising the debt "ceiling". As though a ceiling that's constantly being raised means anything. What if we created a real ceiling? Pass a constitutional amendment that sets the ceiling at its current level. No more borrowing. At least not until we pay down what we already owe. Our government is acting like a kid with his dad's credit card. Credit cards have limits. It's time the government did too.
bad idea mad. Lets say some disaster hit the US, maybe the yellowstone national park exploded (it IS a super volcano after all), californa fell into the sea or the US was attacked (oviously the least likly of the 3 as the other 2 are garentied to happen at any time) or it could be something compleatly unexpected like another compleate collaps of the stock market or a major drought or deadly outbreak ect ect. Now if the goverment needs money fast to deal with this they wont have time to go through the proccess of changing a consitutional ammendment (even if there is a parliment sitting during a disaster) so you would compleatly hamstring the goverments responce for an ideology of having a balanced budget. VERY bad idea, much much better to elect a goverment you can trust (on balance) and leave them as many options as required to deal with any situation which arises
A government we can trust? Such a creature exists? We could deal with your issues (valid, I'll admit) by giving a supermajority (say 2/3 or 3/4 of the house and the Senate) the ability to declare a state of emergency which would allow them to temporarily raise the ceiling to deal with such emergencies. Of course, if they would simply pay down the debt, we'd have the ability to borrow during emergencies without increasing the debt ceiling.
and if a metroite hits washton and wipes out congress? Thats the problem with the consitution, its blunt and you cant predict all situations. Why do you think there is so much resistance to anything stronger than a legislated bill of rights in Australia? ill be the first to admit i used to strongly surport a consitutional bill of rights as the best way to ensure that these rights are protected forever no matter what but its simply not that simple. Even the most widely surported (freedom of speach) carries dangers, as shown in a real sense by the website hoasted in the US which has the potentual (if it hasnt already) to lead to suicides by some of the people attacked in it and though there is VERY strong public surport for dealing with it none of the branches of goverment (police, the goverment themselves, the courts, the legislative branch) can do anything because its hoasted in the US and therefore protected by the first ammendment. Thats even ignoring the tobacco companies potentually using it to get around advertising restrictions and 100 other dangers some of which arnt even aparent right now and wont be until the day comes when they apear. The same is true no matter WHAT your trying to protect and no matter how right it seems. Its a much better propersition to make something electroly unpalatable to do than to make it unconsitutional.
A simple addendum that allows for an imbalanced budget ". . . in case of national emergency or time of war, which state of emergency shall not exist except upon the approval of 2/3 of senators and representatives. No state of emergency, allowing for an unbalanced budget shall extend for a period greater than 12 months, after which time it shall be considered null and void." Thus, the option of a state of emergency is allowed in extreme circumstances. ~String
All spending is controlled by congress. If a meteor wiped it out, we'd have to elect or appoint new members before we could pass any new bills anyway. If worse came to worse, the president (or his successor if he were also dead) could simply ignore the constitution as Lincoln did during the civil war. The rules become much more flexible during such an existential crisis. Well phrased. Maybe we should pass the idea on to the tea party activists to give them something to be for, rather than just against.
and afterwards the goverment cant do anything at all because it has to draw down the debt imidiatly? Very smart if the state of disaster causes national unrest or national poverty. What about a 10 year drought? (something we are already facing though thankfully it hasnt progressed to a point of not enough food for the domestic market only abject poverty and bankruptcy for the farmers) what about another world war? (WW2 lasted ALOT longer than 12 months) so did the great depression i might add You simply cant predict the future and no matter what you do there will come a point where it gets in the way of any outs you put into it unless its to weak to be meaningful anyway. Oh and BTW i know this is the case here and i though it was in the US, isnt a state of disaster decleration a power of the executive? After all it takes time to organise a legislative branch and there are situations where its not even possable (for instance a major earthquake which tookout the parliment) It was something we got to watch first hand how a state of disaster was handled in victoria during black sat. The last thing the goverment needed was to call a sesion of parliment to deal with it. The premiure, the goverment and the various agencies (especially the police commissioner) needed as free a hand as was possable. Even the federal parliment had absantses because the local members were out doing what local members need to be doing during a fire disaster (not to mention trying to take care of there OWN familes). The federal parliment was basically confinded to condolance motions while the PM and his goverment delt with providing the assistance both the victorian goverment needed during and after the fires AND the flooding in queensland which was overwhelming the queensland goverments resorces. Just look at how bad things were handled during the cyclone in the US. Do you really want to add MORE beuocracy on top of what was already there when dealing with even just a city wide disaster, let alone a state or national one like a major deadly outbreak.
I'm not quite sure where these numbers are coming from, but it looks like we have a smaller debt (as a percentage of GDP) than several countries, including Japan, Italy, France, Germany, Canada, Israel and Portugal. (source) The numbers are all closer to 60%-70%, so I don't know where the 11.2% figure comes from. Also note that the US ran deficits of over 100% after WWII. So in spite of fighting two wars and spending our way out of a recession, we're still in better shape (financially speaking) than we were in in 1946: see here Anyway, it will be funny to dig this up, but I posted a thread along the lines of ``US Debt No Big Deal'' after reading an article in Newsweek. The claim was that the US didn't have much to worry about because most European countries were in sadder shape than we were, when it came to debt as a percentage of GDP. The article (whose author I've long forgotten) claimed that absolute debt was a pretty meaningless concept, because America contributed more to the world I will have to dig that thread up, and see how people's opinions have changed on the subject, and how this correlates with their voting tendencies Please Register or Log in to view the hidden image!
this is why we shouldn't vote republican presidents( 85% of the debt was accrued under republican presidents most of it under the last 3(you know the in the supply side era of the republican party))
This is a typical right wing simple solution to a complex problem. This is exactly what I hate about the right wing. This proposal is analogous to curing a sore finger by chopping of the entire arm. It may get a lot of viseral support. But is is absoutely the wrong thing to do. The nation faced a huge crisis last year and early this year. With any of the thus far proposed balance budget solutions, the US economy would have been dead by now and our streets filled with rioters...food riots. That is not the time to declare an emergency. There are very good reasons for, legitimate reasons for deficit spending (e.g. wittness what we have just been through). The problem is with those politicians who run up the defiict for the sole purpose of personal whim and to benefit their financial supporters (e.g. george II and his merry band of Republicans). I think we need to take a lesson from history on this one. The only president in the last hundred years to run a budget surplus was Democrat, Bill Clinton. His approach was, pay as you go. Similar to what President Obama is espousing. As Ben pointed out other nations have higher deficits as a percent of GDP and doing just fine. Some like Japan are complaining about how highly valued their currency is in relation to the dollar. Just because you stubbed your toe does not mean you have to blow off the leg with a shotgun. A little calm, rational thought will go along way here. Take some lessons from history and economics. A better solution would be to implement serious campaign finance reforms that puts the focus on the candidate and the issues and not on how much money is in his/her campaign coffers. A better solution, is admending the consititution to prohibiting the influence money has on our congressional and political leaders. I would also like to remind my conservative brothers and sisters that there has never been a time in our history where there has not been public debt. http://en.wikipedia.org/wiki/History_of_the_U.S._public_debt
The problem of "the people" The people have never bothered to find out. And they're not likely to anytime soon. The problem I see with such an amendment and its flexibility is demonstrated in the present international crisis we've brewed: When do you foresee the United States not being at war? The so-called "Bush Doctrine" National Security Strategy, a.k.a. the New American Century, is our next great endeavor. President Clinton formally rejected an early version of it as barbaric, the public has roundly criticized it as the Bush Doctrine, the Project for a New American Century has closed its website; yet we still go forward in some form. We're already easing our way into Pakistan, and for many it seems Iran is next in line. The United States has the appearance of endeavoring to repeat its Cold War victory in the Middle East. I'd like to think we can get out of Afghanistan by 2012, but I'm not hopeful. Nor do I expect that, when we are "finished" there we will be finished in the region. We're going to be at war for a long, long time. And, yes, I see the supermajority in there, too. Just remember how quickly the Democrats folded on the Patriot Act and Iraq. Without the people electing better leaders, there really isn't much point to a flexible balanced budget amendment. And, frankly, I think a fixed, inflexible amendment would be even worse. One way to go about it, perhaps, would be to look at our debt-related expenditures. Since the eighties, at least, we have been borrowing money to pay interest on our debt. That's not a good situation at all. Rather, finding a way to direct the government to pay down principal—that is, obliging substantial debt reduction as part of the federal budget, with benchmarks for reduced debt ceilings, e.g., every trillion dollars paid off—would provide a short-term approach that we can undertake immediately upon codification. And, yes, it would probably have to be a constitutional amendment, although I'm uncertain about the wisdom of devising such a specific rule at that valence of law.
Interesting. Did you notice that this thread is also based on a NewsWeek article promoting the opposite viewpoint?
The solution is to raise taxes on those best able to afford it. And it they don't like it tough. They are the ones who gave us george II. And he is the guy, along with his merry band of Republicans. who raided the Treasury. I think it is high time these Republicans/conservative/tea bag partiers or whatever they are now calling themselves man up and take responsiblity for what they have wrought upon the country rather than point fingers at others or point to red herrings like a balanced budget admendment that will further harm the country if enacted.
Funny how that works isn't it. It reminds me of term limits and the Contract with America. It was all fine and good durring the campaign. But once they got elected, they all figured that they were just to good to be limited to just one or two terms. Please Register or Log in to view the hidden image!
? Interesting... Have we now graduated from pretending that Bush didn't create the deficits, to pretending his wars no longer exist? So, in ten years' time we'll be looking at the level of debt that various advanced countries (western Europe, Japan) have run for generations without any obvious catastrophe. Yawn. ? We can't cut military spending? The DoD budget alone is half of the size of the deficit. But I suppose as long as we're pretending we aren't at war, we can also pretend that we aren't spending discretionary funds on the military. Or even discuss discretionary spending at all. ??? "Printing money" to inflate away debt is another word for "running low interest rates." Fortunately for us, the main function of the Federal Reserve is to raise rates only when the economy is growing quickly, and vice versa. Oh, now we bring up the military spending. Except it's apparently not part of the problem. One could easily write an equivalent article complaining that we must cut military spending in order to avoid damaging entitlement spending. And it would be just as one-sided and dishonest. If you want to have a serious discussion about dealing with the national debt, then you need to make a serious accounting of what the deferal expenditures are, what the federal revenue is, and do some honest prioritizing. Instead, we get blatant right-wing attacks on entitlement spending, framed as though military spending were sacrosanct. Coupled with the total silence on the debt for the previous 8 years, as both military and entitlement spending exploded, and those who consider "investing" in these ideas find themselves with a "credibility problem." What a laugh. Voters worry about debt because it means their Social Security and Medicare won't get covered as was promised. Which is why those two programs really are sacrosanct, when it comes to budget time. Congressmen who cut those find themselves losing elections, in a hurry. Or a reduction in entitlement spending. Which probably worries more voters than the prospect of having to bring the troops home, and maybe close some far-flung military bases. It's a bit amazing the way Newsweek is so comfortable presenting empire as more important than social welfare - literally, in exactly those terms. Every Democratic administration since Truman has left the national debt smaller than it was when he took office. Every Republican administration since Reagan has left the national debt substantially larger than it was when he took office. The debt accumulation of the Reagan and Bush administrations accounts for essentially all of the difference between our now-putatively-perilous state and being essentially debt-free. So I'd say the first order of business is to stop voting for Republicans, at least for President.
that's untrue the debt sadly has risen under dems to though at something like an eighth of the rate of republicans though.
