Yes, We Do Have a Debt Problem

The president and his supporters try to downplay the continuing crisis.

In mid-May, the Congressional Budget Office (CBO) revised its previous estimate of the federal government’s 2013 deficit downward by 24 percent. The fiscal year (which ends on September 30) will feature red ink of merely $642 billion, down from the $1 trillion-plus of the previous four years, said the CBO. For many Democrats, this proved what they knew all along: The national debt is not a clear and present threat.

“We don’t have an immediate crisis in terms of debt,” President Barack Obama declared in an ABC News interview in March. “In fact, for the next 10 years, it’s going to be in a sustainable place.” In the same month and venue, Republican Speaker of the House John Boehner (Ohio) joined the president in a rare moment of agreement: “We do not have an immediate debt crisis,” Boehner claimed.

This attitude is reminiscent of the yarn about a man jumping off the roof of a 10-story building and, around the third floor, saying, “Everything looks fine so far!” 

After years of bipartisan overspending, public debt today—that’s the money that the federal government owes to domestic and foreign investors—is almost 90 percent higher than at the onset of the financial crisis in 2008. It climbed by $1 trillion dollars between December 2011 and December 2012 alone to its current level of $12.03 trillion, according to the CBO in May. Public debt is now 75.1 percent of GDP, the highest level since 1950, and it is projected to reach 76.2 percent next year. 

And things won’t improve much in the next 10 years. Assuming current laws, the CBO projects that the debt is scheduled to grow to $19.07 trillion by 2023, or 73.6 percent of projected GDP. To put that number in perspective, in its February report the CBO reminded policymakers that “as recently as the end of 2007, federal debt equaled just 36 percent of GDP.” 

If Congress changes current law and reverses the March 1 spending cuts forced through sequestration, the projections get even more dire, with debt held by the public rising to 83 percent of GDP, the CBO projects. And those numbers don’t tell the whole story: Add in the debt that the government owes to other accounts (such as Social Security), and gross federal debt right now totals $17 trillion—or 106 percent of GDP. 

And even these dire debt numbers pale in comparison to the magnitude of current unfunded liabilities. According to the Financial Statement of the United States, which looks at the government’s net financial position, as of 2012 the American people have been promised about $55 trillion worth of future benefits (through Social Security, Medicare, and other government programs) that the federal government does not have the money to pay. 

With the impending entitlement crisis requiring even more future borrowing, by 2023 interest on our debt, plus autopilot programs such as Social Security, Medicare, and Medicaid, will account for 75 cents of every dollar spent by the federal government, up from 45 cents in 2010. In other words, starting now, non-interest and non-autopilot programs will gradually be squeezed out by everything else. 

So why are we waiting to cut spending and shrink our debt? The most common argument is that interest rates are very low and as such it really doesn’t cost that much money to finance government spending through borrowing. 

But these historic low rates can’t last forever. In fact, the CBO assumes an increase in interest rates within the next 10 years from 2.1 percent in 2013 to 5.2 percent 2023. These are still fairly low rates and yet borrowing remains a wildly expensive habit. Under current projections, by 2023 the federal government is expected to spend $823 billion each year just on interest payments. That’s up from the $223 billion we are paying today, and it’s more than what the U.S. spends right now on two wars, plus the Departments of Education, Energy, and Homeland Security combined. Furthermore, the current low interest rates are not likely to persist forever, which should chill any plans for an open-ended debt surge. 

Others argue that today’s slow growth can only be addressed by increases in government spending, hence the need for debt. That position doesn’t hold water even from a purely Keynesian perspective. Government spending can’t effectively stimulate growth in a high debt environment. 

Empirical research by Christiane Nickel and Isabel Vansteenkiste published by the European Central Bank in 2008 finds that when a country’s debt level is somewhere between 44 percent and 90 percent, the multiplier on economic activity is positive but likely below 1—that is, the government spends a dollar but gets less than a dollar in growth. When debt passes 90 percent, fiscal multipliers go to zero; no growth emerges from the spending. In these situations, an increase in deficits today reduces private spending by increasing the magnitude of future fiscal adjustment costs. 

In other words, Keynesians shouldn’t expect any growth from spending at our current debt levels. In addition, there is ample academic evidence that higher debt levels slow economic growth. While there have been challenges to the landmark 2010 paper by Harvard University economists Carmen Reinhart and Ken Rogoff—which demonstrated that countries with debt/GDP ratios higher than 90 percent have notably lower economic growth—the fundamental claim has been supported by numerous studies, including papers by the European Central Bank, the International Monetary Fund, and the Bank for International Settlements.

But the main reason why our debt crisis needs to be addressed today is that failing to do so will result in burdening future generations with higher interest rates, lower growth, higher unemployment rates, and lower standards of living. We are about to embark on the most massive transfer of wealth from younger taxpayers to the elderly in American history. It’s both unprecedented and unfair. 

Most economists understand the negative consequences of high debt levels. However, they can’t pinpoint at what point these debt levels become unacceptable to global credit markets. They can’t reliably predict what form the resulting fiscal crisis will take. It could mean the slow-motion destruction of our economy. It could also be more abrupt, with creditors losing faith and pulling their money from the United States overnight, throwing the country into a vicious debt spiral, another deep recession, and ultimately a lower standard of living here and around the world.

Congress should circumvent these scenarios by acting now to cut spending and reduce future entitlement obligations. In particular, lawmakers need to reform Social Security, Medicare, and Medicaid, which are the main drivers of the future spending explosion. 

No level of taxes can address the phenomenal fiscal imbalance that our country is facing now and into the future. Higher taxes would merely act as a drag on growth, exacerbating the debt and deficit problem. History will not judge the debt-denialists kindly.  

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  • Fist of Etiquette||

    “We do not have an immediate debt crisis,” Boehner claimed.

    The only time the opposition party will acknowledge that the United States government has us underwater is when it is politically advantageous. These are the same people who encourage people to into home ownership regardless of whether it would be economically feasible for them. Debt is as much a means to a political end as anything for them.

  • some guy||

    They also encourage people to go to college regardless of economic feasibility. And this is even more insidious because it is directly subsidized by the taxpayer.

  • JeremyR||

    We have a spending problem.

    And adding 11-13 million more people wanting a handout isn't going to help, just because some of them will work for minimum wage.

  • RG||

    We've passed the threshold where the debt can reasonably be paid down. There's no sense in worrying about it anymore. Just document the idiocy coming from the spend more crowd for historical evidence.

  • some guy||

    Just document the idiocy coming from the spend more crowd for historical evidence.

    Do you really think the next generation of politicians will care about your documentation? At best when the next system crashes as well you'll be able to point back and say "See, we told you so... again!"

  • RG||

    Its more to show the citizens when the train crashes. Let them take it up with Krugman et al. That's why I favor giving the Dems carte blanche with spending. At soem point fighting the good fight gets you nowhere but painted as the bad guy obstructionist.

  • Palin's Buttplug||

    Spending increases far faster under GOP administrations than it does under Dem ones as Reason has pointed out many times.

    That is a fact one should consider when ladling out blame.

  • RG||

    During the last two Dem presidencies there was stiff opposition from a Republican Congress/House.

    People forget the government shutdown of the 90s. And Obama certainly proposed spending more, but his budgets were DOA in Congress as soon as the Republicans took over the house.

  • some guy||

    True. The problem is when one party controls all of government. Opposition (a.k.a. "obstruction") is a good thing for deficits. It's not as good as, say responsible spending, but it is better than no opposition. Also, a large part of our total liabilities going forward are coming from entitlements that were instituted by Democrats decades ago.

  • Palin's Buttplug||

    I like gridlock too.

    The worst scenario of all was 2002-2006 and full GOP control.

  • WTF||

    BOOOOSH!!!11!!!!!!

  • Swiss Servator - past LTC(ret)||

    Well, he has a point, I mean, look how responsible the Donkeys were when they got hold of the whole thing... spending went down, less regulation and control over our lives, medicine was freed up from the dead hand of government, taxes went down, etc.

  • Sevo||

    ..."look how responsible the Donkeys were when they got hold of the whole thing... spending went down, less regulation and control over our lives, medicine was freed up from the dead hand of government, taxes went down, etc."

    I long for those good, old days!

  • Free Society||

    sarcasm?

  • anon||

    Shriek really is a one trick pony.

  • Art Vandelay||

    Shreek is a troll with a very boring schtick.

    Why can't we get good trolls here?

  • soflarider||

    Don't strain your neck peering around the spending levels of 2009 and 2010.
    Who was in charge then?

  • PD Quig||

    And spending is greater in years when the NFC wins the SuperBowl. Congress controls spending and the president goes along with it. Congress was virtually a Democrat stronghold for most of the 20th century and all the biggest entitlements were Dem ideas. Not that the GOP has any legitimate claim on small government credentials. They have willingly acquiesced as long as they got a share of goodies for their campaign contributors.

    It won't matter who gets pinned with the blame for the inevitable collapse. The problem is going to be that the Dems and the NEA (but I repeat myself) have so dumbed down the public via government schools that it's unlikely that the correct lesson would be derived by the voters anyway.

    We need a good old civil war to sort this POS out.

  • MoreFreedom||

    As de Rugy, Reason and a few others have pointed out, both parties are responsible for the spending.

    But fixing the blame doesn't solve or prevent the problem. Thus, we make efforts to solve the problem (via getting government problem making out of the picture, and leaving it up to individuals to solve for themselves) now, and hopefully prevent the failure of the US.

    When the US government can no longer pay its troops (or pays them with worthless paper) that will be the end of it. What happens from there, is likely to be worse.

  • sarcasmic||

    As absurd as this sounds, when it all goes to shit they'll say it was because government didn't spend enough, and people will believe it.

    This because government spending is the only thing that can increase demand in a depressed economy. If a depressed economy doesn't recover, it's because government didn't spend enough. Or because the wrong people were in charge and spent government money on the wrong stuff. Or the right people were in charge but were obstructed by the opposing party.

    Wise people learn from the mistakes of others. Smart people learn from their own mistakes. Most people just don't learn.

  • RG||

    In the long term people learn very little, but in the short term I'll hold out hope that the hucksters are held accountable.

  • sarcasmic||

    Accountable? What does that mean?

  • RG||

    Hopefully, thrown out of the public square and discredited for awhile.

    Thats what I almoast hope the budget hawks throw up their hands and give up the fight. Let the spendanistas have their way. They break it, they own it.

    If they are right, I'll gladly own up to being wrong, as debt in a fiat world would become essentially meaningless.

    If they are wrong, they won't be able to blame anyone else.

    The constant back and forth is tiring. If we're gonna hit the wall, lets get on with it already.

  • sarcasmic||

    I'd settle for drawn and quartered.

  • PD Quig||

    I'm with you. Turn it up to eleven.

  • anon||

    Accountable? What does that mean?

    That's the account that you're able to pay your bills out of after fucking the taxpayers out of their money.

  • VG Zaytsev||

    As absurd as this sounds, when it all goes to shit they'll say it was because government didn't spend enough, and people will believe it.

    That line of bullshit is working in Europe.

  • VG Zaytsev||

    We've passed the threshold where the debt can reasonably be paid down.

    We passed that point at least sixty years ago.

  • Rasilio||

    "We've passed the threshold where the debt can reasonably be paid down"

    This is not true. The Debt, while huge is actually managable, especially with the rest of the world being in even worse fiscal shape causing our interest rates to be artificially low.

    The problem is not the debt but rather the inability to responsibly deal with never ending deficits (if you don't stop running deficits you can never pay down the debt) or unfunded liabilities.

    Politically this would be impossible but eliminating Social Security and replacing it with a means tested welfare system for the elderly, eliminating government funded health systems and replacing them with government funded Health Savings Accounts, a handful of cuts to non essential departments, a 25% reduction in Military spending, and tax reform that simplifies the tax code and is designed to pull in about 20% of GDP would effectively end our debt problem as it was paid down over the next 40 or so years.

  • Gray Ghost||

    Add to this a general gutting of the regulatory Leviathan and I think you could pay down the debt even faster. We're not in the Dark Ages yet here. People know how to work and build things; it's just that they can't plan or create if they have to deal with the monstrosity that is the CFR and the unelected bureaucratic class.

    But I like your ideas for where to cut.

  • Swiss Servator - past LTC(ret)||

    We seem to be running a massive alt-text deficit here at reason as well.

  • RG||

    Further proof that ther multiplier is less than one.

  • Rich||

    History will not judge the debt-denialists kindly.

    Of course, in the long run they'll all be dead.

  • SugarFree||

    What does this have to do with George Zimmerman?

  • RG||

    He'll have a debt problem after the civil case?

  • SugarFree||

    Doubtful. He gets to access all the money he was donated. And he gets a book deal and a movie-rights on BET.

  • Live Free or Diet||

    If the protests are any indication, the BET version will feature Zimmerman as shooting Martin from 1800 yards with a .338 Lapua.

  • WTF||

    And then punching himself in the face and bashing his own head on the curb to fake injuries from being attacked.

  • SugarFree||

    This thing writes itself.

  • WTF||

    But how do we account for eyewitness testimony of Trayvon Martin on top of Zimmerman punching him? Oh, I know! Zimmerman pulls dead Trayvon on top of himself and flails about with the dead body screaming "help me, help me!"

  • VG Zaytsev||

    But how do we account for eyewitness testimony...

    Obviously part of the same white supremacist coven as Zimmerman, one ultimately controlled by the Kochs and Zionists.

  • sarcasmic||

    On the drive home yesterday someone on the radio was arguing exactly that.

  • Rich||

    "We don't need you to do that."

  • ||

    He gets to access all the money he was donated. And he gets a book deal and a movie-rights on BET.

    Most of that will probably end up going to the, uh, grieving parents (from whom BET will need to license the name "Trayvon Martin" - they were so concerned after his death that the first thing they did after obtaining a lawyer was trademark it). His ass gets roasted in a civil trial. And that 4.5 million from the HOA goes fast...

  • Live Free or Diet||

    He's in debt up to the gills for mounting his defense?

  • SugarFree||

    No price is too high to pay in order to keep your neighborhood safe.

  • Rich||

    For many Democrats, this proved what they knew all along: The national debt is not a clear and present threat.

    And, even it it were, we owe it to *ourselves*.

  • Free Society||

    Hogwash. Public indebtedness isn't owing to ourselves, it's society being beholden to the government. Unless you literally think that "ourselves" is government. To pay this debt to "ourselves" nonetheless wealth will be confiscated and those not in compliance will be put into a cage. Can you be put into a cage for owing money to yourself?

  • VG Zaytsev||

    It is a mistake for libertarians and conservatives to focus so much attention and effort of the federal debt. Wrong on the politics and wrong on the economics. The debt is largely the consequence of the world's demand for dollars and is not a problem, at all, as long as that demand exists. And when the demand vanishes, a quick default, via inflation, will adjust the actual debt to a sustainable level.

    Economically, the real problem the US has is one of overspending and over intervention in the economy. Those are the two areas that need to addressed, not the level of federal debt.

    Politically, the petro-dollar policy begun by Nixon will run its course no matter what secondary efforts are put in place to slow or halt them. In the long run, a temporary halt won't matter in the least, no more than the near balance achieved in 2000 mattered in 2008 or today.

  • RG||

    Spain and Italy's shadow economies are both estimated as over 20% of GDP.
    Perfect examples of the results of overregulation and taxation

  • Mr Whipple||

    Triffin's Dilemma?

    But we have the guns and the bombs and the Drones to force the petro-dollar on the rest of the world. So, the best "plan" would be to continue to increase our military presence around the world, and continue defense spending.

    The petro-dollar will not run its course until a bigger, badder military force prevents the US from shoving the dollar up everybody's ass.

  • VG Zaytsev||

    Pretty much. And that will likely be way off in the future.

  • Mr Whipple||

    Unless, of course, there is an unforeseen collapse.

  • Libertymike||

    How about the war spending? Talk about spectacular misallocation of resource!

  • anon||

    Yet, in the standard Krugabe fashion, Dear Ruler probably believes it has a stimulative effect.

  • Floridian||

    But, but, but war ended the Great Depression!

  • Mr Whipple||

    But look at the bright side. At least there is no inflation.

    (No, I didn't say that with a straight face)

  • anon||

    A debt problem, or a blessing? /cheryl

  • Beelzebozo||

    +1 ocelot

  • Tony||

    No, we have a libertarians wanting to shove their radical social policy down our throats problem, and debt has been the excuse you've relied on so you don't have to say "we want to take money from poor old people and give it to rich people." So that excuse can't be given up without a fight, despite no evidence whatsoever that it's causing or will cause any real-world problems (unlike unemployment and decreases in public spending).

  • Libertarius||

    How does one steal money from people who don't have any money, don't produce anything, and don't intend to?

    How does one exploit the unexploitable? If leftoid losers like you were worth a damn, you would want someone to exploit your talents by paying you.

    This debt is going to be a huge problem, it is a mathematical suicide machine just waiting for interest rates to move and for other countries to stop importing our inflation (via the global dollar reserve status, for which the clock is ticking).

    Your time is just about up, leftoids. A society based on consuming without producing (which is the premise of your backwards, ridiculous Keynesian economics) will meet the fate of all human designs which attempt to exist in contradiction with the rules set by reality: destruction.

  • Mr Whipple||

    I wasn't aware libertarians had a specific "social policy". I thought it was based more on ethics and deductive reasoning. I don't know too many libertarians that are "social planners".

    Of course, the repercussions of too much debt is the result of too much money creation. The only way to get people to accept the money is to force it on them with force. Therefore the result is intentional death and destruction. That is much better than a little temporary unemployment, doncha think?

    Why do you hate people?

  • sarcasmic||

    If you don't take money from one group and give it to another, you are actually taking from those who would have received the money and giving it to those from whom it would have been taken. See? Not taking is giving and not giving is taking.

    That and if you don't allow people in government to arbitrarily initiate force upon the citizens, you are using force against people in government. That makes you a tyrant for using force.

    See?

    Ignore things like cause and effect, the order in which events occur, or the meaning of the words used to describe things. Just emote, then work backwards to rationalize what you feel.

  • ||

    And, not taxing people, or giving them a tax break, is a "tax expenditure", that produces bad incentives and creates inefficiencies.

    Of course, this only applies to tax breaks. Other "tax expenditures" (i.e., all government spending) are awesome, and never have these effects. Ever.

    That's progressive logic.

  • Tony||

    You can't make an anarchist argument and then claim not to be an anarchist, and you can't be for some government taxation and coercion and then claim the line you draw is absolutely in the right place because you say so.

  • ||

    can't be for some government taxation and coercion and then claim the line you draw is absolutely in the right place because you say so.

    Don't you do this constantly?

  • Tony||

    No, I reject completely "big vs. small government" rhetoric entirely. I think it's bunk. Government should fill whatever portion of GDP it needs to in order to accomplish the social goals the people task it with.

    I don't mind if you advocate for a minimalist government. I mind that you think you're moral and I'm immoral just because you're somewhat less of a socialist than I am. Morality with respect to the role of government should be determined by the outcomes for living human beings, not by how well it fits a preconceived model of functions--because that's just circular self-congratulations.

  • ||

    Government should fill whatever portion of GDP it needs to in order to accomplish the social goals the people task it with.

    That's never gone wrong.

    I mind that you think you're moral and I'm immoral just because you're somewhat less of a socialist than I am.

    You're a big boy. You can get over it.

    Morality with respect to the role of government should be determined by the outcomes for living human beings, not by how well it fits a preconceived model of functions--because that's just circular self-congratulations.

    Did the strawman police answer your call? I'd like to talk to them, when you're done.

  • Tony||

    Your ethics are childish and your reasoning skills nonexistent. It's an ideology based on certain wrong assumptions about how people are and on crackpot theories about how economies work.

    You deny being social planners but you can't escape the fact that you want to be. You want to impose a regime more radical than any favored by any liberal. Just because you slap it with a sticker that says "freedom" doesn't mean it's any less large-scale central planning you're up to.

  • sarcasmic||

    So by not using force to impose central planning and allow emergent order, libertarians would be using force to impose central planning in the form of emergent order.

    You're living proof that Peak Retard is infinite.

  • Tony||

    So describe the means of achieving this, and try not to include any fairy tales.

  • sarcasmic||

    In theory it's pretty simple. Government leaves people alone except to react to the initiation of force and fraud, but otherwise leaves people be.

    In practice it's an impossibility because government is controlled by people like you.

  • Tony||

    So you advocate something that's impossible? So you are admitting that you live in a child's fantasy world?

  • ||

    Fairy tales? This from a progressive who thinks that, if we just believe hard enough, and elect the right top men, abuse of power will stop.

    Keep dreaming.

  • coma44||

    "So describe the means of achieving this, and try not to include any fairy tales."

    That is rich!

    The exact same question can be asked (and not answered)of every single thing you and your ilk propose.

    Every last thing you people dream up is nothing short of feel good fairy tales.

  • Tony||

    So you got nothing?

  • ||

    Your ethics are childish and your reasoning skills nonexistent.

    I think you've lost the right to whine about childishness and reasoning, since you favor a nanny state, with cradle-to-grave care for everyone regardless of their decisions, and you embrace the very same logic you complain about, when they suit you (tautologies, standards outside of government, etc.), arguing against morality, and then embracing it, might makes right, unless it's a filibuster or gay marriage regulations, etc.

    Just because you slap it with a sticker that says "freedom" doesn't mean it's any less large-scale central planning you're up to.

    Yes, your "action and inaction are not distinguishable" argument makes for great semantic word games about "central planning" that totally miss the point. Bravo.

  • sarcasmic||

    Yes, your "action and inaction are not distinguishable" argument makes for great semantic word games about "central planning" that totally miss the point.

    Especially when words are defined by their opposites. Then anything can mean whatever you want it to mean because words don't mean anything anymore.

  • Tony||

    I embrace a welfare state because of its proven track record. Name a country you'd want to live in that doesn't have one. And specifically because I understand that the outcomes in people's lives have less to do with personal choices than you guys assume (that's the part where you're wrong about how human beings actually are) but because there is a certain amount of inherent risk to being human, and if societies can mitigate that to an extent, it's better for everyone. Not that busybody moralizing should inform public policy as you want it to even if that weren't the case.

    If your preferred form of society wouldn't require the passing or repealing of a bunch of laws (government doing stuff) or some other, less democratic, means, then I fail to see how it's more than a fairy tale.

  • ||

    but because there is a certain amount of inherent risk to being human, and if societies can mitigate that to an extent, it's better for everyone.

    And the only way to mitigate risk is through government, right? No one should be allowed to make their own risk decisions, right?

    Let's ignore the moral hazard we get into when we let people start defining their own risk tolerance, and start mitigating it with other people's money. That's an adult stance.

    If your preferred form of society wouldn't require the passing or repealing of a bunch of laws (government doing stuff) or some other, less democratic, means, then I fail to see how it's more than a fairy tale.

    For someone who hates tautologies, you sure do embrace the inherent legitimacy of anything that comes out of democracy. And, don't you want the passing and repealing of a bunch of laws?

  • Tony||

    make their own risk decisions

    Which is another way of saying don't do anything to mitigate the risk. Pooling resources is what I'm talking about, and on large scales that is what governments do. That's their entire and sole function if you get down to it. You want governments to pool resources (i.e., have thieving tax collectors take my stuff) to provide law and order, national defense, and a couple other things. I want it to pool resources to provide universal health insurance too. We are not operating from a different moral premise regarding government. You just want to give your minimalist list of policy preferences extra credit it didn't do anything to earn. Does it never occur to you that you think the world should and could be much simpler because you don't appreciate its complexity?

    And, don't you want the passing and repealing of a bunch of laws?

    Sure, I want to make changes. Not only do I accept the legitimacy of democratic government (what choice do I have?), but I believe in using it for positive ends. So far you've yet to explain your means of achieving your ends.

  • ||

    Which is another way of saying don't do anything to mitigate the risk.

    Have you ever purchased your own insurance product, that the government didn't force you to? Was this "not doing anything to mitigate risk"?

    Pooling resources is what I'm talking about, and on large scales that is what governments do. That's their entire and sole function if you get down to it.

    Can you go the final step, and show that it's the only way capable of doing such a thing, and that forcing people to participate is the only way you can pool resources?

    Otherwise, the point of government isn't to pool resources (clearly, people can do that without the government). The sole point must be to force people to pool resources.

    Does it never occur to you that you think the world should and could be much simpler because you don't appreciate its complexity?
    In what way is decentralization less complex and more simple than shoving the entire world into one, government-managed box?

    Not only do I accept the legitimacy of democratic government (what choice do I have?) No choice != legitimacy.

    So far you've yet to explain your means of achieving your ends.
    I know: you'd much rather dismantle someone else's ideas than defend your own. That way, you don't get caught in your double-standards.

  • Tony||

    Can you go the final step, and show that it's the only way capable of doing such a thing, and that forcing people to participate is the only way you can pool resources?

    Even if we didn't call the organizing entity "government" you'd still have to implement coercion on large, and probably on small, scales to address the free rider problem.

    No choice != legitimacy.

    You're free to devise an even more liberal system of government that somehow allows for people to opt in or out of various aspects of their society, but you'd have to figure out how to get newborn infants to express preferences. Good luck with that.

    you'd much rather dismantle someone else's ideas than defend your own.

    I am defending my own, and asking about how you go about implementing yours without coercion. It should be painfully easy to answer since coercion is the substance of your entire complaint.

  • ||

    People rejecting the initiation of aggression, and voluntarily coming together to solve their problems, on the scale they choose.

    Damn, that's hard.

  • Tony||

    We chose the scale of the population inhabiting the landmass between the Atlantic and Pacific Oceans and the Rio Grande and Canada. Sorry we can't tear the whole thing down and rebuild every time a new person is born, waiting of course until they reach the age of majority, then ask each how he'd like the society to be, but we must bow somewhat to the demands of efficiency.

    You can't be one of those who worship the constitution. For most libertarians it's just the social contract they're looking for, and everyone enters voluntarily to the extent that can be managed in a population of hundreds of millions.

    All you're saying is your little world isn't perfect and you're entitled for it to be. So go be one of those famed libertarian entrepreneur supermen and buy an island. Elsewhere, societies are functioning more or less fine and none of them manage to acquire the preferences of each newborn and making society exactly how she wants it, in addition to making society exactly how every other newborn wants it.

  • ||

    Sorry we can't tear the whole thing down and rebuild every time a new person is born, waiting of course until they reach the age of majority, then ask each how he'd like the society to be, but we must bow somewhat to the demands of efficiency.

    That's a nice way of saying that it's much more efficient for us to spend their money, not ours. If that's your moral standard, I can think of a lot of efficiencies you might be missing out on. Ah, some of that would effect voters. The unborn can't vote. Pity for them.

    Kinda puts "taxation without representation" in a different light, doesn't it? Or is there more special pleading?

    All you're saying is your little world isn't perfect and you're entitled for it to be.

    I'm saying, perhaps we should have empathy for the people who will actually be responsible for the burden. But then, empathy, like morality, is easily tossed aside, when it's convenient.

    Elsewhere, societies are functioning more or less fine and none of them manage to acquire the preferences of each newborn and making society exactly how she wants it, in addition to making society exactly how every other newborn wants it.

    We're not talking about society. We're talking about the government. Confusing the two is pointless. We could have no government, and children would still end up with a society. That's no excuse for stealing from the unborn. We may not be able to give every child their perfect childhood, but we can at least not pick their pockets.

  • ||

    no evidence whatsoever that it's causing or will cause any real-world problems

    Yes, in the history of mankind, debt has never been a problem. Ever. Not once.

  • Tony||

    Where's the straw man police? The US at this point in history is in a unique situation what with ours being the global currency. Debt is something to be addressed, but only after unemployment is addressed, since that's clearly the more pressing problem. You guys are being fed a line of bullshit about debt from long-disproved economic snake oil because debt serves as the excuse for the social policy desired by the people feeding it to you. I'll be generous and assume you're just dumb and not being deliberately misleading in your focus on debt as they are.

  • Libertarius||

    Do you really think the world will let profligate American statists get away with exporting our inflation (via the dollar's global reserve status) perpetually?

    Moves are already being made to circumvent the dollar in foreign trade deals. The dollar IS going to collapse, and it's going to take your rotten leviathan welfare state down with it.

  • Tony||

    Maybe. But we do currently have high unemployment and a large income gap, which only contributes to the debt problem. Short-term problem vs. long-term problem. Addressing the former addresses the latter.

  • ||

    And that large income gap is due to free market capitalism running rampant, right? Couldn't have anything to do with the banking system, the monetary system, etc.

  • XM||

    Businesses aren't job distribution centers. Even before the Obamacare debacle, they already have all kinds of incentives NOT to hire, or engage in shadow economy that deals in cash - that means no revenue goes to the government.

    I've been working exclusively as a contractor or a freelancer for the past 2 years. I'm nearly convinced I may never find a full time job again. Do a job search anywhere, and as many as half the jobs listed are contract or seasonal / temp work. Your team screwed a lot of people, and O-care hasn't even been fully implemented yet.

    Unemployment is the more pressing issue. People will care more about their own bills and debt for the moment. But when that national debt becomes unmanageable, the whole country will go through a world of hurt.

  • ||

    Debt is something to be addressed, but only after unemployment is addressed, since that's clearly the more pressing problem.

    Why? you said it couldn't possibly cause any real world problems. And, doesn't that put the debt right up there with global warming, i.e., a problem that should be addressed, but only after we allow people to heat their homes and engage in economic activity?

    You guys are being fed a line of bullshit about debt from long-disproved economic snake oil because debt serves as the excuse for the social policy desired by the people feeding it to you.

    Then why do you want to address it at all, if it's all economic snake oil?

    I'll be generous and assume you're just dumb and not being deliberately misleading in your focus on debt as they are.

    You can be as insulting as you want. It reflects more on you than anyone else. It's the argumentative equivalent of a monkey throwing his own poop.

  • Tony||

    Normal old Keynesian economics doesn't say "never address debt." If you're going to favor a contrarian, not to say cultish, economics school, you should at least know what the mainstream school actually says.

  • ||

    Oh, I know what Keynesian say. And, when they don't say "never address debt," this is in stark contrast to someone who says that there's "no evidence whatsoever that it's causing or will cause any real-world problems".

  • Tony||

    I'm talking about right now. You guys have been crying wolf for five years now. Dealing with debt given current economic conditions is destructive to other ends, so you had better give a good explanation for why we need to deal with it right now (just as we have for the past 5 years), especially with austerity means which have proven not only to inflict pain on people but not to actually solve debt problems.

  • ||

    Well, for one, we're putting future generations on the hook for our debt so that we can spend money in the present, buying crap for people right now. Since you really don't care about the moral implications of that, I'll provide you with more.

    We really don't know what economic conditions those generations will be facing, but, since people really only care about themselves (unless you assume fairy-tale-like conditions about human nature?), they really don't care about what they're doing. There are many examples, both private and government, of that sort of thinking leading to disaster (i.e., cities and companies bankrupted by pension debt, leaving the retirees and government workers with far less income than they planned on, etc.

    Blaming austerity is like blaming a cliff after you jump off it.

  • Tony||

    So if you really mean what you say, then you surely propose massive tax hikes to pay down the debt now. Because by "on the hook for our debt" you can only mean that future generations will be stuck with taxes to pay it down. So we should do our duty and pay our own expenses, should we not? Are you the one libertarian in the world who is advocating for the current generation to pay more in taxes?

    No no no... you advocate paying for it entirely by cutting government to the bones--the main libertarian goal. How convenient! Doesn't make any sense on a human suffering level, but hey, you can mumble some bullshit about why we can't tax more to solve the very problem you claim is more important than all others.

  • ||

    Oh, if you want to do your duty and pay your own expenses, that's fine. How about we leave all this government spending for you, and the people like you who love it, to take care of it? You love SS. Why don't you, and a bunch of like minded people, organize and start voluntarily contributing extra to it? Save the trust fund from its projected collapse? Add a few more programs, a drug war, and foreign military intervention, and we're talking real money here. And, the people who need their money, and can't afford supporting military action in Syria, can spend it on their families?

    Of course, at that point, they would collapse from the sheer lack of economic rationality. So, we need government, to overcome economic rationality. It's no fun mitigating risks with your own money. That requires maturity.

    So, you make silly excuses: can't opt out of SS, because... democracy. You can't live in your own system, so you must accept everything congress has to offer as legitimate, even if it's incarcerating your own children for drugs. How convenient, indeed!

    At that point, people like you are not forced to pay for a drug war, foreign military occupation, etc. Consistency with your own beliefs requires you to. You must fund war in Iraq because...democracy. Just like everything else. Mumble mumble democracy mumble.

    Is this your idea of a great situation? If I really embraced that, I think I would have to kill myself.

  • Tony||

    It's my idea of an unavoidable one. Again, you seem to want to be able to live in a society in which you always get your way. It never starts wars you don't like, doesn't have any social programs you don't like. That's not a political philosophy, that's the worldview of a particularly slow child. You can't describe such a society that is not utterly chaotic.

  • ||

    Again, you seem to want to be able to live in a society in which you always get your way.

    Not being systemically stolen from != always getting your way.

    It never starts wars you don't like, doesn't have any social programs you don't like.

    No, it doesn't force me to fund wars I don't like, or social programs I don't like. Again, that's not always getting my way. It's just being respected, in terms of my own property.

    In contrast, who needs a society that can force others to support their wars and their social programs? Those are the people who need to live in a society where they always get their way. They're the people who are actually using the government to force others to support their profits and their pet projects. If anyone needs to live in a society where they always get their way, it's the people who use government force.

    That's not a political philosophy, that's the worldview of a particularly slow child.

    I accept that reality is reality: I live in a world that systemically violates people constantly. I feel no requirement to assign legitimacy to that, just because limited democracy is being utilized in some decision making. My concept of abuse extends past the filibuster. You can call me slow, but you're philosophy, embracing everything that comes out of democracy as not only reality but acceptable and good, sounds like Stockholm syndrome. It's not a philosophy. It's a coping mechanism.

  • Mr Whipple||

    Your ethics are childish and your reasoning skills nonexistent. It's an ideology based on certain wrong assumptions about how people are and on crackpot theories about how economies work.

    Wrong assumptions? It's wrong to not want to deprive people of their property? It's wrong to believe that I do not know what is better for someone else than they do?

    Not sure if you are a moocher or a looter. Either way, it is your l0ogic that is flawed because you think that causing a harm to someone is "good".

    I have no problem helping those that are less fortunate, and deserve a helping hand. What I do not believe is that I have a right to FORCE someone else, with the threat of violence and possibly even death from armed goons who kick in doors and shoot and kill defenseless animals, to help against their will. That is the difference, Toenails.

    Now, run along and play with your little Drones, and go kill some innocent women and children, you immoral piece of horse shit, and force the rest of the world to accept your currency.

  • ||

    For some reason, I always read Tony's posts in the voice of Kim Jong-il from Team America: World Police. It always seems appropriate, and I'm not sure why. Probably because of his lame insults:

    Why is evawyrone so fuckin' stoopid?

    Your plan will fail!

    When you see Arec Barrwin, you see the true ugriness of human nature.

    Now you see, the changing of the worrd is inevitabre!

    I'm afraid your world is over!

  • Tony||

    It's wrong to not want to deprive people of their property?

    No, but you're conflating robbing people with taxing them, and if you don't believe in taxes, you believe in anarchy. Godspeed but that's a conversation stopper.

    It's not that you don't believe in taxation and redistribution, you just don't believe in redistribution downward.

  • HiTechSurvival.com||

    So $17 trillion in debt isn't enough?

    OK double it and make it $35 trillion and all our problems are solved.

    Sounds stupid doesn't it - yes spending our childrens' money is always a stupid idea to make Obama look good.........

  • Emily Oliver||

    We need to go back to grass roots, and recreate jobs where they are lost, at a local level. For example, some counties in the US have countered deficit problems and created new jobs by engaging the services of the Orlando Bisegna Index, specialists in the economic crisis. From little acorns great oaks grow. There’s no reason why a successful local approach could not be appplied on a regional or even national scale.

  • Kroneborge||

    If this debt was actually investment it wouldn't be so bad. For example, if you build something like the hoover damn, even if it's more expensive than it should be at least when you are done you are left with a dam.

    But when you waste the money on consumption you don't have anything to show for it when it's done except a big pile of debt.

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