[Ikrleprl]

Thought this was interesting ... an article from Oct. 15, 2004, in the Washington Post:

The federal government reached its $7.4 trillion debt ceiling yesterday, forcing Treasury Secretary John W. Snow to delay contributing to one of the federal employees' pension systems to avoid running out of cash and possibly defaulting on government debt. ... Snow has pleaded with Congress since Aug. 2 to raise the debt limit, but Senate Republican leaders -- whose aides said they were worried about the possible political backlash -- adjourned for the campaign this week without acting on Snow's request. And some history...

The federal government regularly sells Treasury bonds to finance the difference between the amount of money it collects in taxes each year and the amount it spends. The debt ceiling was first imposed in 1917 to act as a brake on the total amount of accumulated debt the government owes. Today the total debt includes money owed either to private investors or, in the case of funds borrowed from surplus Social Security taxes, to other government programs.

Since then, the Treasury has on five occasions delayed pension fund payments as it approached its limit on borrowing. Three of those incidents came under President Bush -- in 2002, 2003 and yesterday -- as Republicans in Congress have become leery of voting to raise the debt limit. The others were during the rapidly spiraling deficits of 1985 and the budget showdown between the new Republican Congress and President Bill Clinton in 1995.

When Bush came to office, the debt ceiling was $5.95 trillion and had last been raised in 1997.

[BopeDolaNeone]

I just saw this come up. How long will it take us to pay this off? What's the best way to reduce spending? This is out of control.

What appears to be most significant is that US Gross National Debt has increased by 50% since GWBush took office.

And by so doing, the USA has lost their #1 least-debted nation position to their friendly neighbours to the north... Canada has spent the last ten years paying down our national debt - we reached parity with the USA this year, and as of the end of this year, Canada overtakes the USA for the first time for 'least-debt' nation (I'm only comparing western nations).

I see no optimism for the future here. The lead edge of the Baby Boomers has just turned 60 years old... that powder keg is getting ready to explode your entitlement programs - Medicare more than anything else.

USA may be better placed to deal with this than Japan, France or Germany, but still, the USA is going to have some big nasty choices to make...

[gooseCile]

I guess. I just find it hard to understand how, within 5 years, a government can go from a surplus (or at least fairly balanced) budget to the highest defecit in history for 2 years running, and more projected.

That's because Clinton's balanced budget in his last year was a 'one-off' occurance - not the product of measured policy, but rather a bonus due to the huge jump (temporary) in capital gains tax revenues from the dot-com-bubble-boom of the late 1990's.

The following year, capital gains tax revenues returned to 'normal' and thus the balanced budget slipped into deficit. Bush's massive tax decreases and massive spending increases did the rest of the damage since. Most reputable non-partisan studies have concluded that it was the tax cuts specifically rather than the spending increases that have done the most damage to the US fiscal position here. Unfortunately, 'supply-side' theory doesn't actually work.

[Uninkipsyncp]

That's because Clinton's balanced budget in his last year was a 'one-off' occurance - not the product of measured policy, but rather a bonus due to the huge jump (temporary) in capital gains tax revenues from the dot-com-bubble-boom of the late 1990's.

The following year, capital gains tax revenues returned to 'normal' and thus the balanced budget slipped into deficit. Bush's massive tax decreases and massive spending increases did the rest of the damage since. Most reputable non-partisan studies have concluded that it was the tax cuts specifically rather than the spending increases that have done the most damage to the US fiscal position here. Unfortunately, 'supply-side' theory doesn't actually work.

MM Thank you for this. I couldn't understand why there was such a big difference between Clinton's last year and Bush. It now makes more sense. Much appreciated.

@ Matt, Hudson & Little Acorn. This is what I was having problems understanding. Given this information I will submit I was mistaken. Thanks for the patience.

[DYjLN8rF]

According to an article from ABC News, "The increase to $9 trillion represents about $30,000 for every man, woman and child in the United States." Now that's one helluva sobering thought. Yeah, and one helluva proof that the mass media is either biased or stupid. As written, that's false. With a little explanation, the misstatement is easily explained, but in the meantime, the sheeple are left with a ten-fold magnification of a reason to dislike Bush. The 30K figure applies to the 9 tril, not the increase.

Granted, 30K debt per capita is not a good thing, and W has violated his oath of office in the process of getting it there, but he's had plenty of willing accomplices in both ruling parties over the years for things to get that far.

It's a cliche to talk about Democrats as "tax and spend", but "tax and spend" is far better than "tax cut and spend"... A cliche perhaps, but that doesn't make "tax and spend" inaccurate or any less bad. And the worst word of either phrase is "spend", so in a perverted twist of logic, "tax cut and spend" really is better, because it hastens the bankruptcy that it will apparently take to bring the general public to their senses as far as cutting back that ruinous spending.

Unfortunately, 'supply-side' theory doesn't actually work. It depends on what you mean by 'work'. Tax cuts do help stimulate the economy, generally making everyone better off. But claims that W's tax cuts would be 'self-paying' in short order due to the enormous economic boost they would entail and the taxes on that activity, yes, those claims were B.S. from day one. That only happens when the pre-cut tax rates are extremely high, which was not the case.

[Mjyzpzph]

WarOnIgnorance
That's it.
You guys can no longer enter the Eurozone.
Max debt is 60% of GDP.

All kidding apart, you WILL live to regret this. You're at 75% of your GDP. Ask any Belgian or Italian (both countries had a debt above the GDP) what it takes to get it down again. It ain't funny, and it doesn't matter which political party has to clean up. Well, fact of the matter is GROSS Federal Debt stands at only 64.3% of GDP, but the REAL debt (the PUBLICLY HELD DEBT) is around 37.4% of GDP which is actually BELOW the average for that number during the 1990s