Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
What if the US paid off the Debt?
Old 10-26-2011, 05:35 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,280
What if the US paid off the Debt?

I've only read the summary, not the report or the audio yet, but I found it amazing that this was a real concern so recently. Maybe the details will provide more light, but it seems like the economists could only picture the future being like the recent past.

They were wrong.

What If We Paid Off The Debt? The Secret Government Report : Planet Money : NPR

Quote:
It sounds ridiculous today. But not so long ago, the prospect of a debt-free U.S. was seen as a real possibility with the potential to upset the global financial system.

We recently obtained the report through a Freedom of Information Act Request. You can read the whole thing here. (It's a PDF.)

The report is called "Life After Debt". It was written in the year 2000, when the U.S. was running a budget surplus, taking in more than it was spending every year. Economists were projecting that the entire national debt could be paid off by 2012.
note: I put this in the 'FIRE/Political' forum, since it talks about the govt debt, but I'm not trying to make any political statement with it. It is more just a fascination with economic forecasts.

-ERD50
__________________

__________________
ERD50 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-26-2011, 05:41 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by ERD50 View Post
It is more just a fascination with economic forecasts.

-ERD50
I think I remember some chatter about this possibility back then.

I believe that whenever one can cheaply fade a government prediction it is probably a good bet over time.

I don't know if they are mendacious, or just too pointyheaded to glance around at the real world.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-26-2011, 06:27 PM   #3
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,869
When I was a little girl, probably in the late 1950's or so, my father would moan and groan about the national debt while reading the paper. I hated to see him so upset, so I sat on his lap, put my arms around his neck, looked in his eyes, and told him (with a child's sincerity) that when I grew up, I'd work and work and work and pay off the national debt and he'd never have to worry about it any more. I honestly intended to try.

I think where I made my big mistake was in taking my EE degree and veering off into oceanography....
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 10-26-2011, 08:44 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,428
As I remember, the big issue with paying off the debt was the loss of Treasury Bonds. Most of the world's economy was based on buying bonds, and if we had no more debt we wouldn't be selling bonds to pay for that debt. Then what would all the loose money in the world buy? So they decided that it was best to keep a little debt to keep the wheels of the financial world greased. While I'm definitely in favor of paying down the debt, I can't say I disagree with keeping a little just to keep things flowing.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 10-27-2011, 12:02 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by harley View Post
As I remember, the big issue with paying off the debt was the loss of Treasury Bonds. Most of the world's economy was based on buying bonds, and if we had no more debt we wouldn't be selling bonds to pay for that debt. Then what would all the loose money in the world buy? So they decided that it was best to keep a little debt to keep the wheels of the financial world greased. While I'm definitely in favor of paying down the debt, I can't say I disagree with keeping a little just to keep things flowing.
I think there is no need to worry on that score. But you know that, you are just being incredibly subtle.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-27-2011, 07:09 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
Didn't some of the talk about the negative implications of too little debt contribute to the call to cut taxes? I think that was one of many things cited on a bipartisan basis for giving the "surplus" back to the people. Since we turned the corner and went 180 degrees the other way it is definitely an academic discussion now.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-27-2011, 05:46 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
I remember stories about "Should we really pay off all the debt?" around 2000. People with economic models found "surpluses as far as the eye can see". Alan Greenspan's famous testimony where he seems to have endorsed a tax cut (always hard to tell with AG speaking) was in this context. Some of the change was error in models, but most was things we can remember.

I saw a chart recently that compared the projections from 2000 to actual events and tried to estimate each of the steps that got us into this fix. I can't recall where I saw it, but the bulk of the change was the obvious stuff -

Tax cuts without corresponding spending cuts.
New wars without tax increases.
The economic collapse.

Then some miscellaneous (e.g. Medicare Part D was a new entitlement with no new taxes).

It all adds up.
__________________
Independent is offline   Reply With Quote
Old 10-29-2011, 06:15 PM   #8
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Quote:
Originally Posted by W2R View Post
I think where I made my big mistake was in taking my EE degree and veering off into oceanography....
I am not sure if it was a mistake or not, but I veered off my EE and went into a business role. I suppose that is a little more common than the path you took, although I suspect your choice was more enjoyable intellectually.
__________________
DFW_M5 is offline   Reply With Quote
Old 10-29-2011, 06:25 PM   #9
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,869
Quote:
Originally Posted by DFW_M5 View Post
I am not sure if it was a mistake or not, but I veered off my EE and went into a business role. I suppose that is a little more common than the path you took, although I suspect your choice was more enjoyable intellectually.
I think about half of physical oceanographers have a background in engineering, about half in physics. There are not many physical oceanographers of any background, all in all, compared with the numbers in business.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 10-29-2011, 08:07 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by haha View Post
I think I remember some chatter about this possibility back then.

I believe that whenever one can cheaply fade a government prediction it is probably a good bet over time.

I don't know if they are mendacious, or just too pointyheaded to glance around at the real world.Ha
I think it was based upon unrealistic growth rates of GDP. A lot of people forget about all the hype about Y2K and the huge run in tech stocks because they were all going to help us avoid Armageddon on 12/31/1999. After the non-event, look at some of those stocks like SUn Micro and Microsoft, they have done little if anything since 2000. All of those tens of billions of dollars spent by big companies ain't gonna happen again.......
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 10-29-2011, 08:24 PM   #11
Thinks s/he gets paid by the post
Brett_Cameron's Avatar
 
Join Date: May 2011
Location: South Eastern USA
Posts: 1,010
Hey! The effort to avoid Y2K armageddon worked!
__________________
Brett_Cameron is offline   Reply With Quote
Old 10-30-2011, 07:03 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
Quote:
Originally Posted by gsparks2 View Post
Hey! The effort to avoid Y2K armageddon worked!
+1
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-30-2011, 07:28 AM   #13
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,801
Quote:
Originally Posted by Independent View Post
I remember stories about "Should we really pay off all the debt?" around 2000. People with economic models found "surpluses as far as the eye can see". Alan Greenspan's famous testimony where he seems to have endorsed a tax cut (always hard to tell with AG speaking) was in this context. Some of the change was error in models, but most was things we can remember.

I saw a chart recently that compared the projections from 2000 to actual events and tried to estimate each of the steps that got us into this fix. I can't recall where I saw it, but the bulk of the change was the obvious stuff -

Tax cuts without corresponding spending cuts.
New wars without tax increases.
The economic collapse.

Then some miscellaneous (e.g. Medicare Part D was a new entitlement with no new taxes).

It all adds up.
I'd very much like to see the link or reference if you can find it.
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 10-30-2011, 09:34 AM   #14
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Quote:
Originally Posted by gsparks2 View Post
Hey! The effort to avoid Y2K armageddon worked!
Especially for the consultants
__________________

__________________
DFW_M5 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Balance The Budget & Pay Off The Debt, Where Is A Legit Plan? cb7010 FIRE Related Public Policy 34 08-04-2011 11:59 AM
Debt Ceiling - We Are Getting Hoodwinked cb7010 FIRE Related Public Policy 23 07-17-2011 12:24 PM
Speaking of Student Debt chinaco FIRE and Money 65 07-01-2011 03:56 PM

 

 
All times are GMT -6. The time now is 11:41 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.