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| Reply #1 By: jesusstayscrunchy - 9/16/2004 11:55:57 AM The National Debt hurts this country because we must pay an interest on that debt. Therefore, revenue that could go for other things -- military, social programmes, whatever, goes to paying down interest on a debt. It's like if you run up a credit card bill, suddenly a percentage of your income must go to paying the interest on the debt -- and that's money you don't have to spend on other things, like food and other bills, etc. And I'm just talking about INTEREST here, not even the PRINCIPLE. So far, in FY2004, the interest payments on the debt alone have cost the USA $309 billion. That's twice what the war in Iraq has cost us. Without the debt, that's $309 billion that could be in any government programme you choose (or several). |
| The current debt of $5.7 trillion is 60-plus percent of our income. Is that a lot? By way of reference—though it is probably irrelevant—Canada’s debt is 87 percent of its income. Japan’s is 105 percent. The annual interest on the publicly held portion ($3.7 trillion) of the national debt is $200 billion. That’s about 2 percent of our national income of $9.5 trillion. Does the size of the debt make interest rates, now at about 6.5 percent, unduly high? Probably not. After the U.S.’s experience with inflation, the 6-percent range is not surprising. And interest rates came crashing down under Reagan even as the debt was skyrocketing. So it’s difficult to argue that lower debt would, by itself, produce lower interest rates. Is the current level of debt hurting us? Given the huge success of the U.S. economy, now in its 18th year of expansion— thank you, Mr. Reagan—that’s an impossible case to make. Then why do the politicians so furiously rage to pay off the debt? The real reason is this: although the current debt is only 2 percent of our national income, it is about 11 percent of total federal government spending, and a whopping 35 percent of the politicians’ discretionary spending. Although interest payments are in the non-discretionary portion of the budget, if that portion could be shrunk, politicians would have an easier time expanding the discretionary portion. That means more money for pork. Some politicians have almost admitted as much when they have said we should pay down the debt now so that the government would have borrowing power in the future in case of an economic downturn—or, of course, some other need (education, children, the environment—and re-election?). The politicians don’t care about the debt. They just want that money for themselves. MARCH 2000 VOLUME 1, NUMBER 6 PRI WASHINGTON BULLETIN Why Washington Wants Less Debt 1 The Tax Revolt Lives 2 Don’t Give Up on Taxes 4 A publication of Pacific Research Institute for Public Policy |
Reply #5 By: CrispE - 9/16/2004 5:42:30 PM drmiler: The national debt is currently 7.2 trillion, not 5.9 (there is a national debt clock website). The problem with the debt is that it SUCKS money out of the economy. It hurts business by causing higher interest rates, which leads to more business failures, especially among small businesses. It hurts the people because it keeps credit costs higher and makes it harder for people to get out of debt. Some believe, btw, that lower interest rates are good because it means the lower debt means lower borrowing costs. But that is fantasyland. Small businesses pay no where's near the 4% prime. They are paying 8 to 10% depending on collateral. So, say a businessman borrows $100,000 to open a bicycle shop. His cost of money at 10% is $10,000 per year. So, the first 50 bicycles he sells turns on not one light, pays no employees, and keeps no doors to the store open. Finally, lets talk about the dollar. When the U.S. runs debt like we are now, it makes the dollar less dependable. This means we see erosion in the value of the dollar. So, between 2000 and now we have seen over 30% loss in buying power overseas. So, if you were making $50,000 in 2000 and you are making $60,000 now, you can buy less than in 2000. But don't worry..... The debt isn't that important, unless you drive a car, own a home or a business, or want to retire |
| The annual interest on the publicly held portion ($3.7 trillion) of the national debt is $200 billion. |
| Reply #7 By: Don Bemont - 9/16/2004 6:10:23 PM The annual interest on the publicly held portion ($3.7 trillion) of the national debt is $200 billion. It seems to me that thisis the truly relevant part of your post. Would you like to add $200 billion in new welfare costs to the next budget? Helath care costs? I didn't think so. So why would you be so sanguine about this kind of money as debt service |
| And you think what? That Kerry won't add to it? Get REAL!!! Of course this is assuming that your talking about GW. |
| Clinton lowered it. Kerry will do his best to lower it. IT HAS TO BE DONE. |
Reply #12 By: ShoZan - 9/16/2004 6:26:56 PM Clinton lowered it. Kerry will do his best to lower it. IT HAS TO BE DONE. Internet Bubble Lowered it, because there was more cash flow, not Clinton, I hate how presidents get or take credit for the economy failing or not, when all the control they have over it is too slow acting that it does more often than not more damage than good to the economy. The economy should get the credit for the economy period, last thing we need is an executive waving a magic wand making the economy better or worse. |
| And you think what? That Kerry won't add to it? Get REAL!!! Of course this is assuming that your talking about GW. |
| Reply #16 By: CrispE - 9/16/2004 6:52:54 PM drmiler: http://www.toptips.com/debtclock.html is the site for the national debt. BTW: Do you know what you would get if you took the 7.2 billion and put that into social security? A system you never had to pay another dollar into and it would NEVER run out. So as you contemplate your meager payment from the government for the 40 or more years of service you had to our society, think of why Mr. Bush wants to raise the social security age to 70. |
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