Looks like the last time the debt was reduced, meaning there was an
actual surplus was 1957.
The four years of Clintons last term we had a balanced budget and
actually a surplus. What you don't understand is that the
national debt is borrowed money. Borrowed from china, saudi
arabia, etc. There is interest on that debt which today amounts
to 1.59 BILLION dollars per DAY. So if we add nothing to the
debt by having a deficit, it will still rise by 580 Billion
dollars a year. Or half a trillion more or less.
budget or surplus occurred in 1957:
You might be confused by the fact that the government counts all trust
fund surpluses as revenue in the current budget year, but doesn't count
the IOUs placed in the trust funds in exchange as an expense. This
Enronian bit of accounting magic currently masks close to $400 billion
of deficit a year, but the debt tells the real story. This practice is
called intra governmental debt and currently accounts for over $4
trillion of our over $9 trillion debt. This $4 trillion wasn't borrowed
from Saudi Arabia, China or any other foreign country, but from future
generations of US tax payers. The way the government pays interest to
these trust funds is by plopping another IOU into the funds for future
taxpayers to pay. They're gonna love us as all this trust fund
borrowing will make the total current debt look like peanuts when the
final bill comes due :-(
There are lies, damn lies, and statistics.--Mark Twain
Those funds are currently running a surplus, so the surplus is
indeed revenue. The fact that the government spends it, instead
of applying it to the program for which it is intended in the
future, does not detract from the fact that it is revenue. When
the revenue is less than the expenditures, it is a surplus. That
future debt will only become part of the national debt when it
becomes due in the future.
But you are right about the effects that that is going to cause.
Maybe we should have listened to Al Gore when he talked about
his "lock box".
Well, that's really good to know - our national debt is currently only
$5 trillion rather than $9 trillion. You've just whacked the debt
problem almost in half. One question - why does the federal government
pay out interest in more debt on debt that doesn't exist?
...and how exactly is a lock box different from what is the current
practice? Are you suggesting not having the funds purchase
non-negotiable government bonds with the surplus revenues? If so, what
should the funds do with their surpluses? Bury them in a coffee can in
the SS fund back yard, stuff them in a mattress, buy non government
securities (Oh no, the privatization thing)?
Perhaps I did not explain correctly. The amount that will become
due in the future and that is not listed as debt now, (that 400
billion a year that you mentioned) is not listed as debt, but it
really is. Those are the IOUs that you talked about. So the
debt should be higher, not lower.
Well, if the funds from SS and "other" taxes were not put in the
general fund for use, but instead put in its own account to
gather interest (the lock box), then the annual deficit would be
higher, but the failure of SS and Medicare would move much
farther into the future (if it would then occur at all). But
since we don't do that, someday SS will start running a deficit
which will have to be paid out of the general fund (since it is
owed by the GF to SS anyway). That is when the real problems
begin. You see, I am agreeing with you.
What I disagree with, is that Clinton did not have a balanced
budget. I believe the last budget under him was balanced even
with this "hidden debt" included.
It is absolutely listed as debt, but not counted in the current year
against the deficit.
Perhaps you have an idea of what that account would invest the surpluses
in to gather interest?
but the failure of
The date when SS and medicare are unable to make ends meet have zero to
do with any trust funds as all the trust fund monies have been spent.
The date for SS is about 10 years away or less when expenses exceed SS
Here's a question for you to consider . Suppose the government will
cover any future shortfalls in SS and medicare. Also, assume two
possible scenarios - the current system where more is currently
collected than required to meet current expenses and the surplus is
transferred to the general fund in exchange for non-negotiable IOUs, and
an alternative where only what is required to meet current obligations
Will there be any difference in these two scenarios in what options will
be available to cover those shortfalls? A yes or no answer will do, but
some more of your nouveau creative accounting explanations would be very
So you think GW Bush sneaked into the treasury IT department and hacked
in new numbers?
Isn't that what I just said? Or do you just like to parse words?
The nightly business report on Friday named a type of bond that
yielded much higher than government bonds, but I cannot recall
the name. But something that earns interest. But just keeping
them in government bonds would be better than an account full of
No. Do you envision a different scenario coming into being?
I don't think he would have the intelligence to do that. He
would more than likely send someone like you around to rewrite
history with statistics.
You said "The amount that will become due in the future and that is not
listed as debt now, (that 400 billion a year that you mentioned) is not
listed as debt, but it really is."
Maybe you were confusing debt with deficit.
Any type of government bond is an IOU. In fact, any bond is an IOU.
The difference is where the bond issuer gets the money to pay off the
bond holder upon redemption. For a non government bond, the earnings of
the bond issuer provide the money. For a government bond, the tax
payers provide the money.
No I don't, so the question becomes why collect excess funds to begin
with. As I said before, the only thing the trust funds accomplish is to
hide current deficits.
So you think the government debt figures have been altered by some Bush
minion for the purpose of rewriting history?
Not being an economist, I just barely have a grasp on the total
confusion that surrounds the debt, deficit and government
spending, much less the jargon.
That is why the surpluses should be applied to something besides
a promise to repay. Something that is secure, yet not reliant on
government. At least not the US government. But then you have
the problem of the leverage that that gives to whomever holds
Thus the lock box concept where those surpluses are secured for
the future when they WILL be needed. The concept I have, the
execution will have to be left to those more fluent in economic
terms and practices.
Not at all. I think that the figures remain constant while the
interpretation is parsed by those with an agenda. That is what
happens with statistics.
Surplus: Revenue exceeds expense in current fiscal year.
Deficit: Expense exceeds revenue in current fiscal year.
Debt: Amount of all accumulated deficits minus all accumulated surpluses.
Thus, if the debt increases in any given year, that year ran a deficit.
If the debt is reduced in any given year, that year ran a surplus.
Any investment of surplus trust fund monies other government bonds is
not allowed. It has been this way since FDR started SS. Any investment
in other than government bonds is "privatizing" SS, which as you know
is considered as "too risky" by the opponents of privatization.
Any surplus is already "invested" in non-negotiable government bonds,
which means essentially those monies are already in a "lock box".
So you disagree on the basic definitions of surplus, deficit and debt,
although you stated: "I just barely have a grasp on the total confusion
that surrounds the debt, deficit and government spending, much less the
As much as I've tried to ease you into critical thinking, I have failed.
You'll have to babble nonsense to someone else.
That is a good way to look at it. If you look at the government
alone, then when the revenue exceeds the budget expenditures, the
government is operating at a surplus. But if the revenue is less
than the expenditures, it is operating at a deficit. That is
just looking at the government itself, independent of the debt.
Which is how you describe government spending. Add to the
government spending the debt, and the US has not had a surplus
year and you would be correct.
True enough. That could be changed by legislation, though.
So you are saying that SS and Medicare are worth trillions of
dollars right now due to all the past surpluses plus interest.
Then we have nothing to worry about. Great!
And you will continue to fail with lessons like yours. There are
government surpluses and deficits, overall surpluses and
deficits, SS surpluses and deficits. You are saying that
overall, the US has not had a surplus when all things are taken
together. I am saying that the government expenditures were less
than their revenue during the Clinton last term. We are both
right. Service on the debt is not a part of government
expenditures, nor is it automatic that any surplus from
government will be spent to pay down the debt.
I said that I was no expert, I didn't say I was a fool. At least
I know my limitations.
If it doesn't die on it's own first. On the other hand, SS could also
end up means tested to the poor.
I'm 42, and my personal retirement plan is based on zero SS.
If I see any SS $, it's my vacation fund. <G>
Single-payer, AKA taxpayer funded national health care
five year lock on interest rates
I don't understand this argument. We are already paying through the
nose for health insurance. If the government RAISED my taxes $5,000/year
and then provided socialist, single-payer coverage it would SAVE me
$8500/year. When I left the railroad, the company was having me pony up
more than $200/month of my own money. That was 1994 and people that are
still railroading are shelling out hundreds more [per month] than that now.
Dave in Houston
Nope you really don't get it. What you are paying for is through a
private enterprise, that in most cases for which you are perfectly free to
seek other competitive sources. Government run health care will be owned
and run by the government, the same place with the speed of the Post Office
and Department of Motor Vehicles and the compassion of the IRS. You won't
have any other alternatives. Health care costs may be high now, but having
the government take over the industry is not going to solve any problems
(ask the people in Great Britain). Next comes rationing and other
government intrusions into your life in order to reduce the costs.
Health care is just the current incremental socialist meme. Do you think
that after health care is nationalized, the left will go away happy in
their victory while the health care system goes down the drain? They've
already telegraphed the next move -- some form of guaranteed housing.
After all, if health care is a right, then how much more so should be the
right to adequate shelter? The lock on interest rates is a start, next
will come some form of government subsidized interest or other form of
assistance (paid for of course, by the evil rich) followed by some form of
government housing program.
These people are statists who believe that the state is the ultimate form
of equalizer and dispenser of good. They ignore all the places where this
hasn't worked, can't find a single place where it does work for any period
of time, yet continue to push their agenda under the mantra that "they will
do it right this time." All the while, the capitalist society that they
are attempting to destroy has delivered a standard of living that is
unparallelled -- even our so called poor live better than many people
considered middle-class in developing countries.
Someone once penned the comment that socialism is misery shared equally.
Doesn't seem like a great system to me and I sure don't want people in
power who believe it is their destiny to wrest the fruits of someone's work
in order to give it away to someone else.
If you're going to be dumb, you better be tough
DMV is state run. Around here, it's pretty efficient. Over the years,
I've been a fairly heavy user of the postal services, and have found
them on the whole to be quite efficient.
IRS: no comment, as in my opinion it is an organization that should
not exist, and with which I've had my troubles in the past.
We're on our way to that now, but for the upper middle class, with
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