Leo Marvin: $40,000 buys a nice house in the suburbs?

In some places. Especially with the raging success of the stimulus bill.

But seriously, family of 4 = 4 x 40K = $160K.
Figure that half the people don’t pay taxes, so it’s $320K. Which most places buys a pretty nice house.

Sandy MacHoots: Wow, a current debt of $40,000 for every man, woman, and child in the U.S.Which means $160,000 for each family of four.And when you realize that only half of us pay significant taxes . . . .It’s like we’re each buying a nice house in the suburbs that somebody else will live in.

$40,000 buys a nice house in the suburbs?

Brett Bellmore: I would also point out that the graph, improperly in my opinion, is displaying a ratio of debt to GDP, which causes exaggerated swings due to economic fluctuations.

Then you can change it to a moving average. Debt/GDP is a very important economic indicator because it is a measure of capacity to pay back the debt. The key is actually not to necessarily freeze or decrease the level of nominal debt — it is to ensure the growth rate of nominal debt is less than the growth rate of nominal GDP.

It’s like we’re each buying a nice house in the suburbs that somebody else will live in.

Where have people been for the past decade ?

There will also be no tax increases, at least enough to solve the spending problem. Taxes can be raised to some degree, but not enough to solve the problem without cutting spending also. And since there’ll be no spending cuts, any tax increase won’t matter. Additionally, tax increases will do more harm than good, even if they increase revenue, because any increased revenue will only fuel more spending.

So there will be a default. When something can’t continue forever, it won’t.

Guy: Well, maybe we could carpet bomb everyone except our creditors, then maybe they’d be willing to give us better interest rates?Or we could carpet bomb Christmas, so we don’t have to worry about being able to spend for it?Carpet bomb Wall Street?I refuse to believe there exists a problem that can’t be solved by carpet bombing, otherwise how can we justify our deficit spending?

I say we Nuke The Moon

As a percentage of GDP, military spending–an actual article 1 spending item–isn’t at historically high levels (post-WW II), unlike spending on entitlements. So I’ll know when Democrats (and Republicans) are serious about the federal budget deficit when they address the solvency of the entitlements we already have rather than trying to outdo President Bush in adding even more of them.

The key moment was the approval of the 1983 tax increase to keep Social Security solvent for a while longer.

Mark Field: The key moment was the approval of the 1993 tax increase. Under a Democratic Congress.

That is that which is seen. That which isn’t seen is what the level of spending growth would have been under a Democratic congress.

Meh, best not to think about it….

You do understand that Social Security currently runs a huge surplus, right?

Which is to say that non-FICA taxes are too low to account for non-FICA-related spending while FICA taxes are higher that FRS. When the trend reverses, we will have both a deficit in FRS and a deficit in NFRS.

Now, quick, someone make a joke about a lockbox.

I’ll propose a deal: Democrats get to put Clinton back in the White House, and Republicans get control of the Senate and House.

I might even take that deal if you undo every single thing Bush did and didn’t do in his presidency. Give back the tax cuts, the wars, the spending on wars, the torture, the housing bubble, everything.

Besides, isn’t spending controlled by Congress? When did “Clinton’s budget surplus” take effect?

The key moment was the approval of the 1993 tax increase. Under a Democratic Congress.

And since when do presidents NOT get credit or blame for spending? They aren’t just sitting there passively — they give the budget to Congress, and they have veto power. How many veto fights did Reagan lose? W? Shall we call the 80s the era of the “Congressional Democratic Revolution” instead of the (fatuous) “Reagan Revolution”?

And on a related note, the “surplus” wasn’t really a surplus, it was accomplished by accounting tricks.

Which Republican presidents can’t seem to learn. It’s called “living within your means”.

The idea that we’re somehow not taking in enough in revenues is ridiculous, if you ask me.

Mark Field: Just to add to byomtov’s comment, you apparently missed the large budget surpluses — you know, the money that actually is the opposite of and reduces the deficit — under Clinton.

I’ll propose a deal: Democrats get to put Clinton back in the White House, and Republicans get control of the Senate and House.

Besides, isn’t spending controlled by Congress? When did “Clinton’s budget surplus” take effect?

And on a related note, the “surplus” wasn’t really a surplus, it was accomplished by accounting tricks.

And I’ll know the Democrats are serious about the deficit when they start talking about…

Just to add to byomtov’s comment, you apparently missed the large budget surpluses — you know, the money that actually is the opposite of and reduces the deficit — under Clinton.

When you get through giggling you might check out Clinton’s tax increases, and the GOP claims that they would be utterly ruinous.

You might giggle some more, but at different people.

Unless, of course, we get “lucky” and let inflation devalue our debt to the point it becomes manageable – ignoring the collateral damage to domestic retirement savings, the loss of the dollar as the world reserve currency, etc.

egd: But I thought that Social Security and Medicare are both government programs that work. The people in power keep saying that these programs are widely successful, and haven’t harmed our national economy at all.

They aren’t actually lying. It’s like the guy that jumped off the ten-story building. As he passed the forth floor he said, “So far, so good.”

Mahan Atma: I’ll know Republicans are serious about the deficit when they start talking about cutting spending for the military and the invasion of other countries.

And I’ll know the Democrats are serious about the deficit when they start talking about…

Sorry, there’s just no way to finish that without giggling.

Until then, I’ll always know that “cutting spending” really means “eliminating programs I don’t like.”

I would add to what Brett Belmore says that much of the federal government’s debt and annual deficit are due to unfunded Social Security and Medicare obligations.

??

You do understand that Social Security currently runs a huge surplus, right? There are unfunded liabilities for sure, but those won’t hit for years out, and do not affect the annual deficit.

“In Just a Decade the U.S. Interest Burden Could Be as High as It Was in 1992!!!!!!!

That might not sound scary to most people, but this was the punch line of a front page NYT news story that included all sorts of unsupported assertions about the crisis posed by the government debt.

The fourth paragraph asserts that:

“Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.”

No, this is wrong. There is no evidence presented in this article that the rise in interest rates will place the U.S. government in a situation where it will be unable to pay its bills and no one cited in this article makes such a claim.

The article is also completely unbalanced in not presenting the views of any economist who could put the deficit/debt issue in perspective for readers.”

The three things people need to know about the deficit are:

In the long term–after 2020–we get health care spending under control or else.

In the medium term–between 2012 and 2020–we don’t have a debt and deficit problem if congress sticks to PAYGO; we do if it doesn’t.

In the short term–between now and 2012–our problem is not that our deficit is too large but that it is too small.
And Edmund Andrews’s piece doesn’t help people learn any of those three.

“I like to be kissed when someone is doing sex to me!”

They’re both extremely popular programs, which in a politician’s mind is synonymous with programs that work. Heck, the Republicans even ran ads in Florida recently portraying themselves as champions of medicare, even as they rail against “socialized medicine.”

Tamerlane: Underfunding Social Security was LBJ’s great contribution to federal financing. Medicare debt could mostly be blamed on Democrats until George Bush II added the prescription “doughnut”.

But I thought that Social Security and Medicare are both government programs that work. The people in power keep saying that these programs are widely successful, and haven’t harmed our national economy at all.

You’re not suggesting that the politicians are lying to us, are you?

I concur.

I saw where Goldman says they are doing Gods work.

18 months of this first PLAGUE, I’m not looking forward to the next 6, one of them is likely to be, very bad.