Balance The Budget & Pay Off The Debt, Where Is A Legit Plan?

[cb7010]

These Are Good Points..

I'll try to get back to the OP:



I understand that you are trying to distinguish between annual deficits and accumulated debt, but I'm not sure what you mean by "operating in the red".

The "deficit" we normally hear about is the net of this year's cash spending and taxes, where spending includes interest on the debt. So if we got to the point where we had no annual deficit, we would freeze the nominal amount of the debt. If the nominal economy grows (due to number of workers, productivity, or inflation), then debt as a percent of the GDP decreases. If interest rates are stable, then the burden of paying interest on the outstanding debt decreases.

That's essentially what we did from 1945 to about 1980 - years when the federal gov't usually ran a deficit, but the debt as a percent of the GDP kept decreasing.

I agree that it's frustrating that nobody in DC is actually willing to make the decision to balance annual budgets (there appear to be many versions of "let's make future politicians do that"), and I think every democracy should. However, I don't know that it's necessary to go the next mile and pay off the outstanding debt.

I think another poster framed it pretty good in saying that there must always be an ability to borrow for an emergency expenditure and that as revenues fluctuate with economic cycles, so could a modest amount of debt and surplus.

Specifically, I mean that we seem to take it for granted that the federal government operates each year with a deficit ("in the red"). Some will cite a couple Clinton years where this did not happen; but, I think it was more do to the building .com bubble than a sustainable phenomena. And, so far that has proven out.

I enjoy reading the various posts on these topics and tend to learn a thing or two. Of course, nothing will get "settled" here; but, it is interesting and educational for me to hear other's perspectives.

A theme that I keep hearing is how the lure of re-election is a primary factor in motivating elected officials to keep giving/promising unsustainable handouts. And, every now and then I hear somebody screaming for term limits. Do you really think limiting elected officials to a single term (even if you had to extend some of the terms to make this rational) would make a big difference?

 

[kujo]

Actually if we "balance" the budget, that includes paying down the debt. 40% of our spending includes paying down the debt. But we also keep borrowing so the overall new amount increases. During the Clinton era we actually had a slight surplus. If that had continued until now we would of nearly paid off the debt.

An interesting thing would be if we did not have to pay off this debt, we would be able to significantly reduce taxes and still have enough money to fund many programs like NASA, Education reform.... Countries like China can do this now and for many years to come while we will have to rebuild our economic infrastructure.

The main problem we are having now is not spending or lack of taxes, but lack of a good economy. Because we have so many unemployed as well as businesses investing overseas ..., we lack the revenue creation we use to have. The focus on the congress now to cut expense actually can be causing us more debt creation. Congress needs to focus on economic expansion ASAP.

As a hopeful early retirer I would like congress to be more accountable on its taxation and spending. I.E. let social security manage itself. Let its income being brought in pay for the expense going out. Same thing for medicare. Don't lump these revenues/expense with the rest of government. If cost is running up too high, lets look at why the cost of these programs are so much. If that is what it needs to cost to run medicare, then that is what we all have to pay.

Lets pay for our road improvements with taxes on gas.

For other items then we can group that into an over all tax. We may need to relate the amount that goes into each of those categories by GDP. If GDP goes up, the amount can go up.

Military spending is of course the area that gets us into trouble. We really need to get a control of military spending. This is where we different from other countries around the world. We should work much more with UN and have total UN involvement to solve the worlds problems.

If we just "balance" the budget, then we would have no money left over to pay down the principal on the accumulated national debt. So, don't we actually have to have a plan to run the budget at a surplus in order to have extra money to pay off the debt?

With all the grandstanding and bickering that I see on TV; I am entirely bewildered that the competing parties/sides aren't even talking about actually paying off the debt. Both competing plans that are being discussed still lead to ongoing deficits and large increases in the national debt.

So, does anybody really think it is a good idea to allow the federal government to keep operating in the red? And, can anyone tell me exactly when we will be a debt free nation?

To a certain extent, those are rhetorical questions; but, how do we all let these politicians hoodwink us like this? They've overpromised, overspent, wasted, been inefficient, and mostly bankrupt our country. I, for one, demand to see a concrete plan to show how we are going to get out of this hole and, to date, I am extremely disappointed. Somebody please take their credit card away!

 

[sheehs1]

All politicians, regardless of what platform they are elected on, eventually discover that the best way to be re-elected - apart from good old-fashioned vote-rigging - is to bribe people with their own money.

Even the Teabaggers will eventually get round to this; they're just taking a little more time to sell out than everyone else.

+1

 

[samclem]

We should work much more with UN and have total UN involvement to solve the worlds problems.

Kujo,
Welcome to the board! Your first post, but you've already gotten the spirit of the place and are cracking funny jokes!

 

[kujo]

Its unfortunate but true. (that it is funny)

 

[BigNick]

At least this behavior inspired some awesome music.

Yup...
Cattle prods and the IMF

 

[FinanceDude]

The US govt takes in about $170 billion a month, or $2.04 trillion a year. We spend about $3 trillion a year, give or take, how long can we keep doing that?

 

[rescueme]

The US govt takes in about $170 billion a month, or $2.04 trillion a year. We spend about $3 trillion a year, give or take, how long can we keep doing that?

More than a few generations?

That's (my) problem with the debt. Although the argument has been made that "government spending is different", I know (in my little world) what needs to be done to keep myself solvent.

I don't feel that those that come after me need be responsible for my debt.

But what the heck do I know? I have solutions, but no power to invoke them (and don't get me started on voting )...

 

[Texas Proud]

The US govt takes in about $170 billion a month, or $2.04 trillion a year. We spend about $3 trillion a year, give or take, how long can we keep doing that?

Yea.... that is why my boss says that if they do not cut $9 trillion dollars then it is still the same old same old in Washington.... just a a reduced level.... $9 trillion is just the minimum to get to even....

 

[Ed_The_Gypsy]

I do not believe congress will change anything. Congress has no incentive, no reason, to change anything. It would take "courage" (code for telling the truth), which would lose elections.

At the best, they will design revenue enhancements that will further kill business.