I'm 22 years old and I worry a lot about the economy and America's future. I don't like aligning myself with any political party because I don't decide what I agree with based on whether or not it's labelled with "Republican" or "Democrat" in front of it, I just look at facts and use common sense to decide what I agree with. So that brings me to the point of this thread. The fact about the American economy is that under president Obama the national debt has absolutely skyrocketed. I'm sure you're all well aware of the facts already but I'll point out that under president Obama the national debt has more than doubled. What I want you Liberal and Democrat readers out there to do is explain to me how you, as someone who aligns themselves with the same party as president Obama, how you can justify this kind of outrageous spending. And I feel I should point out this isn't meant to spark a political debate, like I said I don't align with any party and if a Republican president raised the debt to this level I would be asking the exact same question only it would be aimed at Republicans. So one more time I'll reiterate, how do you as a Liberal or Democrat justify president Obama raising the debt this much? Thanks for your time and feedback, it's much appreciated.
You're assuming that having a large national debt is a bad thing. That's the rhetoric spilled by both parties, and an easy buzz topic for most American's to focus on in an attempt to seem informed. The U.S. Treasury never has to default on any of its debts. That's because we control our own currency. If we owe debts and don't have the tax revenue to pay them, we can always just print the money and hand it over. That may not be the best approach, and in the very worst-case scenario this leads to hyperinflation so bad that defaulting is the less-bad option. But we're so far from that situation today that worrying about it doesn't seem worthwhile. You might suggest the debt will cause inflation, and there's a strong, non-linear relationship for developing countries or countries with high inflation to start with to agree with this, but not for developed countries with low inflation. Given that the U.S. has extremely low inflation at the moment, and is a developed country, that would seem to predict little inflation resulting from deficits going forward. Indeed, the history of the past decade, in which deficits have exploded with no commensurate rise in inflation, would seem to confirm that finding. Governments almost by necessity have to run deficits during recessions. Tax revenue tanks, payments through programs like food stamps increase, and so forth. So you want room to run deficits of an appropriate size to stave off the recession. But deficit spending reverberates back through the economy. All else being equal, the debt burden is increased the bigger the deficits we run. But the interest rates matter too, and at the moment we're adding onto a debt load that's decaying over time. Our national debt is actually decreasing. Economics is a lot more complex than who is in office. It's also a lot more complex than the deficit, which in all reality plays little part on your day to day life, if at all. In fact, deficit spending usually helps to stimulate the American economy. So it's a good thing. The role of debt in a national economy is not the same as in a household. The role of debt in a national economy is to cushion a downturn and to help increase demand. When the economy is stable and improving, that will provide the resources to pay down the debt.
I see what you're saying and thanks for the reply, it was very informative and has helped eased my nerves a bit. I just have one question: you said our national debt is decreasing but it's gone up tremendously since president Bush took office back in the early 2000's. Can you explain how exactly it's decreasing? And for the record I'm not trying to argue with you about the fact that it's decreasing, I'm just not sure how exactly it is decreasing when the numbers keep rising. Thanks again
Historically, the nation has had lower debt under Democratic leadership, than under Republican leadership. The economy also does better with Democrats, generally.
That could trigger a debt crisis. Much of this debt is short-term and has to be renewed periodically. If those who buy U.S. debt fear high levels of inflation in the future, they will demand higher interest rates accordingly. There's not really any way for a government to print itself out of debt.
The U.S. is in no way, shape or form, near a debt crisis. Unless the GOP goes over the edge and into Wackoville, and tries to cause a debt crisis.
6% of the budget goes to paying the interest on the national debt. What's going to happen when interest rates go back up to 7 percent?
provided conservatives don't usher in another one of their bubbles in the economy, and they don't reduce revenues further, if economic growth is large enough, with more people working and thus driving investment as companies seek to capture the demand, and combined with higher marginal and effective tax rates on the wealthiest income and capital gains earners, we can reduce the debt. Right now, long term interest rates on bonds are still incredibly low. And if the GOP stops blocking economic growth, the Fed can also reduce its balance sheet from the QE purchases.
don't worry about the deficit. If you want to understand the difference between your budget and the federal government budget, you need to grasp the nature of money. As for the future, don't sweat it. The left will continue to dominate as long as the right is fixated on issues and ideas that we left a long time ago. For starters, watch this clip. https://www.youtube.com/watch?v=YnyDRwSqp2E
Is our national debt a major problem? No. Our debt-service payments are modest compared to the size of the economy. That said, Would it be a good thing to pay down the debt? Yes. Debt payment is 6% of the economy, which amounts to hundreds of billions of dollars a year. If we paid down the debt, it would either free up money for other purposes, or let us lower taxes. Morally as well, I think each generation should pay in full for the government services it receives -- not pile a portion of it into the debt for later generations to pay. Problem is, the only plausible way to eliminate the debt is through a combination of tax hikes and spending cuts. We could eliminate nearly all discretionary spending in the federal budget, and STILL not be able to pay down the debt. Unfortunately, Republicans have rejected the very idea of tax hikes as part of a debt-reduction deal. Republicans in Congress were offered a 2.5-1 ratio of spending cuts to tax hikes; they rejected it. Their 2012 presidential candidates were asked if they would accept a TEN-to-1 ratio; they all said no. Until Republicans come to their senses, no debt-reduction deal is possible.
There's a HUGE difference between debt and the yearly deficit. Obama has decreased the defecit every year since he's been in office with zero help from the right wing The lie about the debt increasing being Obama's fault is propaganda geared towards MORONS too stupid too pay for a economic 101 class They cut taxes and declared war which is the first time this has happened in world history. In fact its the first time a country declared war and didn't raise taxes. Republicans are simply attempting too abolish social security and Medicare and by raising the debt by cutting taxes they can trick idiots in too supporting those cuts. And too cut benefits like social security while still charging taxes we already pay My advice don't be one of those idiots
Really? Because the House controls spending, and the House was not controlled by Obama. One of the big reasons for reduced deficits is also because of sequestration... I'm not fan of Republicans in general, but to give Obama total credit for deficit reduction is just silly.
The biggest reason for the deficits and the large national debt increase is the Bush tax cuts. Without them the national debt would have been about $2Trillion now instead of growing to over $16Trillion even when all the increased spending is included. The biggest reason for deficit reduction during the Obama presidency was increased revenues. Spending did not go down.
You don't need a liberal to explain this. Look at the deficit. The debt will go up, but the deficit is going down. This is a good thing.
Fascinating. Bill Mitchell keeps talking about "supply capacity" and that Weimar Republic and Zimbabwe both issued more currency than their economies' supply capacity and that was the problem in those hyperinflation disasters, but that the US isn't doing that. Oh? ShadowStats says actual unemployment is about four times as high as the official government number. And I've read numerous people saying Obama has redefined the word "unemployment" to exclude people who've been looking for a job longer than their unemployment benefits cover, which is apparently a lot of people. In short, the economy is in much worse shape than Obama says it is. And I've heard economists opine that the Fed will start QE4 this year--more and more money printing on top of eighteen trillion dollars. Plus, countries are now buying oil in currencies other than the USD. The dollar's reign as the world's reserve currency is nearing it's end. Are you SURE we haven't printed more dollars than our "supply capacity"? We manufacture most of our stuff in China now, so what do we supply anyway?
Let's hear what Dr. Paul Craig Roberts had to say: True. To put it in another light, if the government can print trillions of dollars to pay for lavish, vulgar spending, why oh why is it harmful and wrong for a counterfeiter to print a few thousand?
