Freakonomics, Abortion, and Crime

[RandomGuy]

But Random Guy, isn't all that government debt money we owe ourselves? So when we pay it back it just goes back into the economy, right?

Not really...

[RandomGuy]

Charts and graphs to back it up, I know it's scary compared to the usual half-baked crap that pervades most message boards, so I hope it doesn't freak y'all out too much.

[RandomGuy]

First, approximately 17 cents out of every dollar of total tax revenue collected is immediately used merely to pay the burgeoning interest on the Federal debt. This is now surpassing the costs for our entire defense establishment, and it is exceeded only by the revenues needed to fund the total Medicare and Medicaid programs. (Ostensibly, Social Security is funded independently.) We are held hostage by this horrendous debt; 17 cents is the ransom to be paid out of every dollar we must cough up in taxes.

A good article on this topic


Somebody tell me again how Reaganomics works?
The effect of all this is essentially tax raises on the future.

[RandomGuy]

I might claim to be an accounting student next. I might even claim to know something about finance due using all my electives on finance courses that I got A's in.

But since this is the internet, I would probably be lying, because I couldn't possibly know more than any randomly selected Joe-schmoe.

[RandomGuy]

Having said that:

[RandomGuy]

Saying that Clinton's declassifications were the sole cause of Chinese information theft is quite ridiculous. The Cox Report is replete with Chinese espionage techniques that had nothing to do with paging through declassified do ents.

Maybe not ridiculous, but rather:

The evidence doesn't support such a conclusion.

Believing it does, THAT is ridiculous.

[RandomGuy]

Hmm, I seem to have killed this with too many facts.

(turns on his conservative-mind reader device, and turns up the volume)

"That damn random guy! we were trying to have a completely baseless defense of the Bush administration and he keeps bringing up these inconvenient facts. How can we argue like mindless parrots when all these facts keep getting in the way?

[scott]

Trust me, inconvenient facts won't get in the way for some...

[Extra Stout]

I have a few questions:

At what percent of GDP does the national debt get so high that creditors lose faith in the ability of the U.S. to pay it back? How does the national debt load compare to other industrialized nations? How does it compare to major corporations? Are comparisons to major corporations valid?

Also,

How does the return on investment for our deficit spending compare to the interest it is incurring? Are we getting any return on it or is Congress just looting the Treasury?

[boutons]

The EC demands that member countries keep their deficit below 3% of GDP. France is currently in trouble with the EC for not being able to get below 3%, and risks fines, but will probably wiggle out claiming "special cir stances":

http://news.bbc.co.uk/2/hi/business/3160494.stm

For the USA:

http://www.usatoday.com/news/washing...1-26-def_x.htm

.... projected 2005 budget deficit at 4.2% of GDP.

There's no return on the portion of the deficit going up in smoke in the Iraq war. But the biggest cause of the explosion the US budget deficit is tax cuts. What is the return for the US govt in tax cuts?

Keynesian principles would say running temporary deficits to stimluate the economy are advisable. But the US economy isn't in need of stimulation. Temporary tax cuts are a way to incur temporary deficits for temporary problems. But the Repubs don't give a about solving problems, only cutting taxes blindly, so they want to make tax cuts, predominantly for the rich and crops, permanent, making the budget deficit permanent and increasing.

The obvious Repub goal of running big deficits is to accelerate the inevitable point where the deficits have to reduced, the interest on the debt paid. The Repub reponse has been and will be to cut programs for the poor. eg, disqualifying people from Medicaid (200K people were disqualified from Medicaid recently in KY or TN to "fix" that state's budget problem). The whole approach is the well-known "starving the beast", where the US govt is all bad, govt is THE problem, and taxes are a form of stealing.

The Repubs see Katrina and Rita as opportunities, pretexts to over-spend like , no monitoring, dropping $Bs on the Gulf Coast region, like sand bags of $$ from helicopters. Just another Repub tactic to run up deficits and justify cutting back govt programs, esp social safety net programs, later.

[RandomGuy]

I have a few questions:

At what percent of GDP does the national debt get so high that creditors lose faith in the ability of the U.S. to pay it back? How does the national debt load compare to other industrialized nations? How does it compare to major corporations? Are comparisons to major corporations valid?

Also,

How does the return on investment for our deficit spending compare to the interest it is incurring? Are we getting any return on it or is Congress just looting the Treasury?

HOOORAAAYY!!! Intelligent questions.

Q. At what percent...?
A. Nobody knows until they stop buying our treasuries, and by then it is too late, and interest rates go through the roof.

Q. How does the US debt load compare to other countries?
A. Bloody good question, and one I don't know myself. (fires up google for an answer)

Germany:
Every second, Germany's national debt increases by €2,186 ($2,621), BdSt, the self-proclaimed "financial conscience of the nation" calculated. That figure reflects the average monthly salary of a German employee. The group estimated that Finance Minister Hans Eichel had to spend every fifth euro paid in taxes last year to cover the €38 billion interest the national debt acquired.
Nearly too fast for the naked eye
The last four digits on the clock move so quickly you can hardly register them. On Friday morning it stood at €1,361,959,207,548.
article on the german "Debt clock" ((( http://www.dw-world.de/dw/article/0,...239561,00.html ))
Note current euro exchange rates are about 1.17 dollars to one euro.
This suggests to me that german debt is running roughly the same as ours, that is about 20% of governmental revenue. Given that the german government consumes more of a percentage of the GDP than the US government, I would estimate their debt level to be larger in proportion to ours.

Japan:
http://www.mof.go.jp/english/budget/...4/2004f_01.htm
Tax + Other Revenues (A)45,520.9 National Debt Service (B)17,568.6
The Japanese have done a LOT of deficit spending in a rather fruitless attempt to kick-start their moribund economy, so based on the above their level of debt service is about at 24 percent or so of their government revenues.

I would guess that other industrialized countries are running about the same as the US, or worse.

This leads me to a really good page on the topic:
http://www.sumeria.net/politics/debt.html

It is a bit dated, but has some interesting points in it. I am not sure I agree with the guy on everything, but the article is a very educational one.

I MUST get some sleep, so I will get to the rest of it later.