America's Unsustainable Long-Term Debt Trajectory

Whitehouse.govWhitehouse.govIn the past year or so, the White House has become increasingly aggressive in touting President Obama’s achievements in reducing the deficit. The deficit has been “cut by more than half since 2009,” a 2013 blog post by the White House Office of Management and Budget declared, pointing to the shrinking of the deficit as a percentage of the economy. The budget office trotted out the same line last week. “Under the President’s leadership, the deficit has been cut by more than half as a share of the economy, representing the most rapid sustained deficit reduction since World War II, and it continues to fall,” an OMB official said. The president himself has downplayed the deficit problem, saying last year, “We don't have an urgent deficit crisis. The only crisis we have is one that's manufactured in Washington, and it's ideological.”           

It is unquestionably true that, judged relative to overall size of the economy, the deficit—the annual gap between federal spending and revenue—is down significantly since 2009.

But when thinking about the burden of debt and deficits on our economy, now and in the future, that’s not the only factor to consider. Yes, annual deficits are down since 2009, but in no small part because the deficit that year—which was not exclusively Obama’s doing—came in at a record-breaking $1.4 trillion. Deficits in subsequent years came in over $1 trillion as well. Deficits have dropped significantly under Obama only because they were unusually elevated during his first years in office.

Meanwhile, even out reduced annual deficits are still adding to the sky-high federal debt. They’re just adding somewhat less each year to the total federal tab.

What that means is that, even if the budget picture isn’t as gloomy at this very moment, the longer-term debt problem remains. As the Congressional Budget Office notes in a report today on the long-term budget outlook:

If current laws remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits would push debt back to and above its current high level. Twenty-five years from now, in 2039, federal debt held by the public would exceed 100 percent of GDP, CBO projects. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.

Via the CBO, here’s what that looks like:

Congressional Budget OfficeCongressional Budget Office

And here are the major spending components driving the long-term rise in debt:

Congressional Budget OfficeCongressional Budget Office

The health care component is the most talked about. That’s part of what President Obama was getting at when he argued that there’s no “urgent deficit crisis.” Instead, he said, the nation has “a long-term problem has to do with our health care programs.” Even with some recent downward revisions, they are still the biggest part of the problem. But what gets less attention is that the growing role of interest. We’re set to pay more and more on our debt—just to keep carrying ever-larger amounts of debt. Whether or not that's an urgent crisis, it's one that our current budget path doesn't address. 

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  • Plàya Manhattan.||

    "We cut the deficit in half after we tripled it!"

  • Palin's Buttplug||

    The Bushpigs left the trillion $ plus deficit although I imagine you are too young to remember.

  • entropy_factor||

    still in 0.6 TRILLION now, every year. That's assuming no more "stimuli" if we go into recession after Q2.

    Look man, I know you are a mendacious troll, but it's perfectly acceptable to reject both Obama AND Bush. I think most people here do. So this "but but but Bush did it!!" doesn't really fly.

  • Palin's Buttplug||

    I correct ignorance sometimes - see 'Playa Manhattan' above. Obama never tripled the deficit as he falsely claims.

    It is just sheer Team Red hackery which is something you should not encourage.

  • JPyrate||

    Christfags ????

  • Plàya Manhattan.||

    I didn't claim that. It was in quotation marks.

    /Buttplug's trolling manual.

  • Sudden||

    So then BOOOOOSSSSHHHHH didn't fritter away the "Clinton Surplus" right? Because if you're not on the hook for the first fiscal year of your administration (2001, 2009) then BOOOOOSSSSHHHHH inherited the Clinton deficit.

    Just wanna make sure we're all on the same page here....

  • TopherB||

    Like most here I'm on neither side. And to me deficit should simply be last year debit - this year's debt. The Clinton 'surplus' was an accounting trick. The debt still went up all eight years.

  • Sevo||

    Palin's Buttplug|7.15.14 @ 5:05PM|#
    "I correct ignorance sometimes"...

    Not possible, turd.

  • NotAnotherSkippy||

    Just more Team Blue ass licking. Barry has run the highest levels of post-war spending of ANY president. Did he vote for TARP? Yes he did, so he owns it. Did he vote for stimulus? Yes he did, so he owns it. Did vote for BarryCare, why yes he did. His primary "fix" for the deficit? Raise taxes, of course. Very libertarian of him.

  • Harun||

    Sorry, no dice. Some of us remember the actual history.

    FY2009 budget was signed by Barrack Obama as president.

    The Dem didn't want Bush to get credit for the stimulus, so they waited until Obama was inaugurated so he could sign it in a big ceremony.

    "The United States federal budget for fiscal year 2009 began as a spending request submitted by President George W. Bush to the 110th Congress. The final resolution written and submitted by the 110th Congress to be forwarded to the President was approved by the House on June 5, 2008.[2] The final spending bills for the budget were not signed into law until March 11, 2009 by President Barack Obama, nearly five and a half months after the fiscal year began."

    I'm sorry, but if the Democrats wish to get credit for the budget by doing this, then they should get the bad credit, too.

    Also, Barry was in the Senate, and probably voted for that budget as a Senator. I think its okay to pin it on him if he voted for it and then also signed it into law.

    After all, he could have refused to sign the law.

  • MegaloMonocle||

    still in 0.6 TRILLION now, every year.

    Dficits since FY 2009 have been over a trillion, except for FY 2013, which came in, if memory serves, at @ $600BB, although around $300BB was shifted into FY 2014 during the sequester/debt ceiling kerfuffle.

    Deficit this year (which includes the shifted debt), is over $800BB.

    I think our current "structural deficit" is probably more like $700BB.

  • Palin's Buttplug||

    The U.S. government’s deficit will fall to $492 billion this year, according to the Congressional Budget Office, a steeper drop than originally predicted from $680 billion in fiscal year 2013.

    http://www.bloomberg.com/news/.....n-cbo.html

  • MegaloMonocle||

    The U.S. government’s deficit will fall to $492 billion this year,

    Yet the deficit for the year to date is over $800BB.

    Check it yourself:

    http://treasurydirect.gov/NP/debt/current

  • Palin's Buttplug||

    That is not the deficit. That is Treasury sales. You are looking at only one side of the ledger.

  • GregMax||

    385 to date.

  • Red Rocks Rockin||

    That is not the deficit. That is Treasury sales. You are looking at only one side of the ledger.

    Wrong--that's not just Treasury sales, that's the amount that the actual debt goes up, you dumbass.

  • TopherB||

    No No No. You aren't allowed to look at it rationally. Actual debt accrued allows for no method of factual manipulation and as such is exempt from contemptation. The deficit must always be calculated using a complex system of accounting tricks.

  • Sevo||

    Palin's Buttplug|7.15.14 @ 7:47PM|#
    "That is not the deficit. That is Treasury sales. You are looking at only one side of the ledger."

    Yeah, and we rely on you to examine both sides?
    Go fuck your daddy, turd.

  • Mark22||

    Bush was an incompetent president who wrecked the economy, piled on massive debt, attacked our civil liberties, and paid off his cronies in big corporations.

    Obama has managed to be worse than even Bush in just about every way. Quite an achievement.

  • Zunalter||

    I seem to remember sub 5% unemployment during that time.

  • Mark22||

    Bush was an incompetent president who wrecked the economy, piled on massive debt, attacked our civil liberties, and paid off his cronies in big corporations.

    Obama has managed to be worse than even Bush in just about every way. Quite an achievement.

  • Tony||

    Not in the ways you listed. Perhaps there are other ways you're referring to?

  • Sevo||

    Tony|7.15.14 @ 5:18PM|#
    "Not in the ways you listed."

    Yes, exactly in those ways.

  • JPyrate||

    Tony. Eat a bag of dicks.

  • Harvard||

    LOL. And you wish to reward Tony, why?

  • Suicidy||

    God damn you're a servile cog for the communists.

  • Tony||

    Which is about 1000 times less embarrassing than being a Bush apologist.

  • Palin's Buttplug||

    The economy is much better now in every measure, debt is higher but deficits are lower, civil/personal liberties are unchanged or slightly better (gay marriage and legal pot in some states) and Obama if fining the fuck out of greaseball corporations (BP, Citi, Goldman, Morgan).

  • Sevo||

    Palin's Buttplug|7.15.14 @ 5:19PM|#
    "The economy is much better now in every measure,"

    Yes, if you choose to compare now to the worst, it's better.
    Known as cherry picking, turd

  • Palin's Buttplug||

    Bush left a pile of shit in 2008 like no one since Hoover.

    That is the ONLY way a black nerd named Hussein kicks a war hero GOPers ass in a near landslide.

  • Concerned Citizen||

    Own the housing bubble. It's yours.

  • MegaloMonocle||

    That would be the housing bubble that the Bush administration tried to address, but was blocked by the Democratic Congress?

    I think the housing bubble is on TEAM BE RULED's ledger.

  • Palin's Buttplug||

    Nonsense. Bush blocked HR 1461 - the GSE Reform Act that Mike Oxley wrote and that passed the House.

    Bush also gave each qualified first time homebuyer $10,000 for a down payment. Bush was all about blowing the housing bubble up.

  • Sevo||

    Palin's Buttplug|7.15.14 @ 5:27PM|#
    "Bush left a pile of shit in 2008 like no one since Hoover."

    Yes, turd, and your fave ass-lick has been adding to it ever since.
    Go fuck your daddy.

  • WhatAboutBob||

    The economy is much better now in every measure


    Except that U.S. Labor Force Participation Rate Lowest Since 1979

    civil/personal liberties are unchanged or slightly better

    Except Chomsky: Obama ‘Determined To Demolish The Foundations Of Our Civil Liberties’

    PB, stupid and dishonest as always!

  • Palin's Buttplug||

    LFP today is higher than it was in our booming 60s economy.

    It is basically a desperate last ditch statistic Team Red hauls out to distract others more informed than they are.

    Chomsky's predictions mean nothing either.

  • MegaloMonocle||

    So you have to go back 50 years, to before women fully entered the workforce, to get a participation rate better than what we have now?

  • Palin's Buttplug||

    LFP is nearly meaningless. A wealthy country has more retirees and inheritance kids. The highest LFP is in shithole third world countries.

    SSDI can account for much of the US rate decline.

  • GregMax||

    Labor participation is UP for people over 55. It's down for people under 35.

  • Brian||

    Right, because back in 2008, a lot of people retired and gave a bunch of money to trust fund kids.

  • MegaloMonocle||

    You can always tell a healthy economy by the number of people on welfare.

    Which is at a record high.

  • GregMax||

    You're sucking on your own buttplug. You're just too fucking stupid to be here - are you new?

  • RJ The Terrible||

    Nope.PB is a fixture, like an old backed up commode.

  • Suicidy||

    Fag marriage is a bonus for only a percentage of the fag population. So nay be 2% benefit from that bullshit. Obama gas zilch yo do with legal pot. So do t even start that shit.

    Obama is the friend of corporate America and we are now a lower earning part time nation thanks to him. You and the rest of team blue will hopefully be killed in some purges when everyone else has had enough if your theft and murder. I can only hole your end is agonizing.

  • Sudden||

  • MegaloMonocle||

    This can't be right. As long as the Fed has electricity, it can create money. So we'll never run out of money, and always have all we need.

    Right?

  • Lady Bertrum||

    Smaller deficits are contingent on near zero interest payments on debt. How long can the Fed keep rates under control? Japan's situation is beginning to spiral so we may soon have an example of where deficit spending, bond buying, and ZIRP eventual take you.

    Watching Yellen's testimony today, Robert Menendez asked her if additional fiscal "investments" in infrastructure would accelerate the "recovery". She like the good Keynesian she is respond yes.

  • Palin's Buttplug||

    Again, Obama put a deficit reduction commission together that got Tom Coburn's approval on a plan.

    Congress shat on it (both sides equally).

  • Sevo||

    Palin's Buttplug|7.15.14 @ 5:29PM|#
    "Again, Obama put a deficit reduction commission together that got Tom Coburn's approval on a plan."

    OH! LOOK! Turd's fave ass-lick *promised* he'd, uh, well, maybe look at it!
    How
    .
    .
    .
    turdish.

  • NotAnotherSkippy||

    Barry shat on it. He wasn't willing to accept the recommendations of his own panel. What a lying piece of shit you are.

  • Suicidy||

    You're in the wrong place to preach team blue asshole.

  • ||

    Where should I put the apostrophe?
    You're in the wrong place to preach, team blue asshole
    OR
    You're in the wrong place to preach team blue, asshole.

  • MegaloMonocle||

    Suppressing interest rates for the benefit of the federal government has the unfortunate, dare I say "unintended", effect of financially destroying fixed income investors. This is known as "financial repression".

    And later, when rates rise, this will destroy the asset value of existing low-interest bonds, putting pension plans, insurance companies, etc. in even greater distress.

  • GiveMeLibertyorGiveMePie||

    Lady hit it right on. The artificially low rates from the FED are the cause of shrinking deficits, which is perfect for Barry and Co because that gives them wiggle room to ask to borrow even more because "look the deficit is shrinking!". And some still think the FED isn't being run by the government (who appoints the fed members by the way..)

    But rates will have to rise and probably will over correct, ever heard of regression to the mean?

  • JPyrate||

    Currency debasement just means more money in your pocket. YAY !!!!!

  • Dweebston||

    The only crisis we have is one that's manufactured in Washington, and it's ideological.

    Borrowing gobs of cash to inject into teetering financial messes, not to mention maintaining its own dead weight, isn't a crisis. The crisis is that some people believe that's a crisis.

  • Sudden||

    It's crises all the way down

  • Pro Libertate||

    I'm rather stunned by the number of crises going on now or seemingly on the near horizon. Is this how things were in Europe when the weight of government finally got too heavy? Will I soon be driving a Yugo?

  • Sudden||

    After the great Gasoline Crisis of 2023, Kommissar Obama banned the use of all internal combustion engines, leading to a huge new growth in sleek government buses that ran on unicorn flatulence. And the citizenry was quite pleased.

  • Loki||

    Don't forget about the trains that run on recycled rainbows.

  • Dweebston||

    The trains run on thyme. They exhaust rainbows.

  • Loki||

    Not just crises, manufactured crises. Everything's a "manufactured crisis."

  • Lady Bertrum||

    "Remain calm. All is well."

  • Pro Libertate||

    We're spending far, far beyond our means or the means of the foreseeable future. That is not sustainable. It's not a question of if we'll face major economic consequences but when.

    This isn't complicated or hard.

  • Sudden||

  • Dweebston||

    You forgot the part where TEAM UBER ALLES.

  • Almanian!||

    heh heh - you said hard

  • Pro Libertate||

    America is no longer hard in that sense, either.

  • Brian||

    The best thing about a falling deficit is that it's a great excuse to borrow more money.

  • Almanian!||

    I brought everyone a can of beer. YOU'RE WELCOME.

    Let's open them together now....

    BOOOOOOOOOOOOOOOOOOOOOSSSSSSSSSSSHHHHHHHHHHHH!

  • Tony||

    It kind of was his tax cuts, his wars, and his recession that blew up this alleged problem.

  • Palin's Buttplug||

    Team Red knows that. But by going all RIDICULOUS!!!!!!!!!!! they think they are distracting others from the cause of our fiscal problems.

  • Horatio||

    Fine, you dumbasses win. BUSH SUCKS AND MADE EVERYTHING AWFUL!!

    Happy?

    Now how the fuck has it been fixed? I didn't see any sea-receding and planet-healing level awesome that one would expect (historically and based on team blue rhetoric) after such a turrble recession. Still waiting on it. When are you hacks going to own this shit?

  • Hyperion||

    Look, it's our two resident trolls going all huggy and kissy derptard together. Isn't that cute?

  • Concerned Citizen||

    1st Quarter 2014.

    -2.9% growth.

    Reagan laughs from the grave.

  • DarrenM||

    I think that was annualized growth.

  • DarrenM||

    (At least I hope so.)

  • Palin's Buttplug||

    Simpson-Bowles would be a damn good start.

    3 times now - Obama and Tom Coburn support it. The House does not.

  • Sudden||

    Robert, the former 15th Earl of Bruce: "Support it from our lands in the north. I will gain English favor by condemning it and ordering opposed from our lands in the south."

    Of course, suggesting that Obama pretended to support Simpson-Bowles knowing full well that his Dem controlled congress would never let it see the light of day is just teh RACISMZ!

  • Concerned Citizen||

    The IRS scandal, with 7 crashed hard drives, is all we need to know about your team. FYTW has never been said more plainly.

  • Sevo||

    Palin's Buttplug|7.15.14 @ 6:00PM|#
    "Simpson-Bowles would be a damn good start.
    3 times now - Obama and Tom Coburn support it"

    OH! LOOK! Turd's fave ass-lick *promised* he'd, uh, well, maybe look at it!
    How
    .
    .
    .
    turdish.

  • NotAnotherSkippy||

    Lying sack of shit. Barry ran as fast as he could from his own commission. He supported nothing.

  • NotAnotherSkippy||

    But your boy kept the vast majority of Bush's tax cuts, so it's really Barry's tax cuts now. Barry supported the war in Afghanistan, so you only get half credit on that. And you still haven't explained exactly how Bush caused the recession. Hell, Bush spent like a good little Team Blue Feeler.

  • Suicidy||

    Recessions are normal economic corrections in a healthy economy. Permanent recession is not.

  • JPyrate||

    I bought a bottle of fine absinthe. With PB, and Tony around I predict total inundation.

  • american socialist||

    Hi peter, wouldn't one solution to long term debt for social security be to tax someone that earns 1,000,000/yr at the same rate as someone that earns 10,000/yr?

  • Palin's Buttplug||

    SS is the least of the debt problems. Medicare, defense, and general operations are the killers.

    SS could be fixed by raising the cap to 125k from the 108k or so it is now or just implementing C-CPI (better).

    Peter likely won't answer.

  • JPyrate||

    I know. Lets just print more money, and say that the economy is improving. =)

  • DarrenM||

    It's just bookkeeping. Ultimately, everything ultimately is in the same pot.

  • MSimon||

    Can I get a bag?

  • NotAnotherSkippy||

    Funny how you forget Medicaid in that little list. It won't be long before it exceeds defense spending. The killers are SS, Medicare, Medicaid, i.e. welfare or really shitty pension plans.

    SS could be fixed by privatizing the damn thing, which as the supposed libertarian you claim to be you should be in favor of.

  • Horatio||

    Does this hypothetical millionaire get benefits commensurate with his income, or up to the 108K cap?

  • Palin's Buttplug||

    Depends on how long he lives.

  • Horatio||

    Talking about the amount printed on the benefit check...

  • american socialist||

    Libertarians are concerned with how much money a rich person gets from the government? How revealing.

  • Sevo||

    american socialist|7.15.14 @ 7:39PM|#
    "Libertarians are concerned with how much money a rich person gets from the government? How revealing."

    Revealing? How stupid.

  • JPyrate||

    Amsoc said."Libertarians are concerned with how much money a rich person gets from the government? How revealing."

    Libertarians look at stolen money as stolen. How revealing.

  • JPyrate||

    Amsoc. Eat a bag of dicks.

  • JPyrate||

    A flat tax ? You don't say.

  • Sevo||

    american socialist|7.15.14 @ 5:33PM|#
    "Hi peter, wouldn't one solution to long term debt for social security be to tax someone that earns 1,000,000/yr at the same rate as someone that earns 10,000/yr?"

    So, commie kid, you're proposing cutting taxes on high earners?

  • american socialist||

    On social security? A rich person pays a fraction as a percentage of their income that a poor person pays. But you know that, right?

    You once said that social security and Medicare were welfare benefits. Well, I accept your premise and don't think there's anything wrong with paying for welfare like we do with other government programs-- through a progressively indexed income tax.

  • MegaloMonocle||

    A rich person pays a fraction as a percentage of their income that a poor person pays.

    And they get a benefit that is identical to that of a poor(er) person who paid in as much as they did.

    The tax is capped, so the benefits are capped.

    Seems fair to me.

  • Cunning Linguist||

    Doesn't seem fair to me. I will never see a dime of the $$ that were taken from me when I retire. Writing is on the wall. I would write all of the last 20+ years off as a sunk cost if I could opt out. Insurance, welfare benefit, whatever you call it, it is a bad deal for most of us.

  • Suicidy||

    We could just line up and shoot all the progressive friendly billionaires and divvy up their assets as reparations. They won't mind since they approve of wealth redistribution.

  • ||

    Lower income earners actually get more as a percentage of their income. As your income increases (up to the cap), your percentage goes down.

  • JPyrate||

    A flat tax ? You don't say !!! But.. But... You would also be taxing poor people.

  • Brian||

    Well, I accept your premise and don't think there's anything wrong with paying for welfare like we do with other government programs-- through a progressively indexed income tax.

    Fine. Let's treat it as a welfare program like medicaid, and keep the benefits out of the hands of people who aren't poor.

    Yeah, it's a tragedy when a disabled person can't work their whole life and reaches the age of 65.

    When grandpa just blew all his cash because he assumed that, once he turned the magic age of 65, he became someone else's responsibility, that's just stupidity.

  • american socialist||

    I think this is fine as long as the benefit is increased for poor people. Though, if grandpa blew all his cash, wouldn't he qualify for a government-sponsored retirement? This might be a fine idea to stimulate spending for the 62-64 year old demographic. Vegas buffets and cruise boat trips to the Caribbean might be suddenly the rage.

  • Sevo||

    american socialist|7.15.14 @ 7:45PM|#
    "I think this is fine as long as the benefit is increased for poor people."

    What you "think" is so much horseshit. No one here cares what slimy lefties claim to "think".

  • Suicidy||

    Exactly. His opinion is so valuable to me that I imagine him buried with all his fellow travelers in landfills.

  • Brian||

    american socialist:

    Though, if grandpa blew all his cash, wouldn't he qualify for a government-sponsored retirement? This might be a fine idea to stimulate spending for the 62-64 year old demographic. Vegas buffets and cruise boat trips to the Caribbean might be suddenly the rage.

    So, you're assuming that, if a person qualifies for welfare by blowing cash, they'll just blow cash to qualify for welfare?

    OK. I accept your argument. Congratulations on undermining the entire credibility of welfare programs.

    I had no idea that you agreed with Thomas Sowell: If you subsidize poverty, you get more of it.

  • JPyrate||

    The problem with people like you AmSoc, is that you talk a good "Equality" game, but when the time comes for you to pony up, you leave the table, and the bill for someone else to pay. You are what is called a "Chew and Screw".

  • Bgoptmst||

    They want equality of outcome, which is patently unfair.

    Case-in-point, I feel like the cute admin chick show give me gunners during lunch. The reality is unless I get flexible there will be no felatio during the work day. My feelings don't FUCKING MATTER to anyone but me, and I'm okay with that.

  • Sevo||

    american socialist|7.15.14 @ 7:06PM|#
    "On social security? A rich person pays a fraction as a percentage of their income that a poor person pays. But you know that, right?"
    Not a tax, but then you knew that, didn't you?

    "You once said that social security and Medicare were welfare benefits. Well, I accept your premise and don't think there's anything wrong with paying for welfare like we do with other government programs-- through a progressively indexed income tax."
    So? Why should I care what a slimy lefty thinks?

  • NotAnotherSkippy||

    Please do. Right now they're taxed much, much higher. In fact, in 2012 the effective tax rate on someone earning $10k was... -9% (yes negative) and for someone earning $1MM? 34%. It's even worse now with Barry's tax and spend.

    http://www.taxpolicycenter.org.....ocTypeID=1

  • Whahappan?||

    So the government would pay the guy making 1,000,000 a year?

  • Rich||

    We really need a better word than "unsustainable" for describing our economic situation. For example, life on Earth is unsustainable, because at some point the Sun will go nova or we'll get clobbered by a comet or something, yet we don't worry much about that.

    How about, with props to you-know-who, DOOMED?

  • Hyperion||

    We can never have enough debt. Pauly Krugman said so, and he writes for the New York Times, and he's an economist and he even won prizes and stuff. And they only give prizes to the really smart people, like Al Gore and Obama who do things like invent the internet and bring world peace.

    You know because of Obama bringing world peace and all that, there was this thing called Arab Spring and now all the people in the middle east live in peace and harmony and like, they don't fight anymore and the Arabs trade hummus and camels to the Jews for Kosher stuff now, instead of calling each other mean names and fighting.

    I suppose all you wing nuts here think you are smarter than a guy who writes for the New York Times and has prizes and stuff?

  • Palin's Buttplug||

    Actually, I hate to defend Krugman, but he says we do have a big debt problem. It is just not important RIGHT NOW with low interest rates.

  • Hyperion||

    Actually, I hate to defend Krugman

    After spending 6 years defending Obama, I won't be surprised at all to see you defend Pol Pot or Kim Jung Un.

  • JPyrate||

    Low interest rates are the problem. You are such a fucking retard.

  • JPyrate||

    Sorry... Don't lock eyes with it....

  • Palin's Buttplug||

    Not for the borrower, dumbass.

  • Sudden||

    How about when the borrower (fedgov) is the same entity as the issuer(fedgov)?

  • JPyrate||

    PB is to dumb to comprehend that.

  • NotAnotherSkippy||

    Tell me again how zero interest loans worked out in the mortgage market...

  • Sudden||

    Yes, because there's nothing smarter than doubling your debt under the anticipation that ZIRP will continue ad infinitum.

  • Brian||

    Actually, I hate to defend Krugman, but he says we do have a big debt problem. It is just not important RIGHT NOW with low interest rates.

    You're aware that interest rates can change, right?

    When the interest rate goes up, does the debt magically disappear, such that it's not a problem?

  • Palin's Buttplug||

    That would be at a future date and not RIGHT NOW.

  • Nooge.||

    That would be at a future date and not RIGHT NOW.

    Yes. The future. Where debt and spending are unsustainable. The thing that's kind of the whole point of the post. That future.

  • Brian||

    Right. And a person with lung cancer will die at a future date, not RIGHT NOW.

    Therefore, it's not a problem right now.

  • Brian||

    I mean, by god, if the idea is that the government doesn't treat a problem as a "real problem right now" until the shit hits the fan, what's the point?

    Apparently, it's not stability, safety, or security.

    Or, put it this way: the housing crisis really wasn't Bush's fault, because, for most of his presidency, it wasn't a problem RIGHT NOW. And, when it was a problem, he addressed it.

    So, what's your problem with George Bush and his problems?

  • JPyrate||

    You know what cracks me up the most. The "Arab Spring" was started by a guy in Tunisia, who set himself on fire, because he was sick of nepotite, government cronies shaking down his street side fruit stand

  • Knarf Yenrab!||

    Someone kindly krugsplain to me how the House intends to cover the interest payments on the current 17.5T debt once rates rise.

    There must be an explanation beyond Yellen demanding her interns push the big red INFLATION button faster, harder, and deeper, but I'm not economist enough to understand.

  • Hyperion||

    All that anyone, almost anyone, in government positions understand anymore, regardless of being elected or appointed, is to funnel as much wealth to themselves, their families, friends, allies, whatever, while they still have time to do so.

    If you understand that, you understand everything that they do.

  • Palin's Buttplug||

    There is no plan. The House is abjectly irresponsible. As I said upthread the only deficit reduction plan was Simpson-Bowles that super conservative Tom Coburn and Obama support.

    The House killed it. Both sides, the Dems were NO CUTS TO ENTITLEMENTS and the GOP are just assholes who say no to everything.

  • Horatio||

    "the GOP are just assholes who say no to everything"

    Cutting edge political insight. If only it were as you say...

  • Palin's Buttplug||

    They only say NO! when there is a 'D' president. Otherwise it is spend spend spend.

  • Horatio||

    Yes. Now do you understand why the "BUSH!" meme is so damned tired? We get it - politicians are mendacious fucks. Stop trusting (any of)them to fix anything please.

  • Cunning Linguist||

    PB, surprised to see that politicians are political.

    Shit, man. The system doesn't fix problems, the system is the problem.

  • Sevo||

    Palin's Buttplug|7.15.14 @ 6:09PM|#
    "They only say NO! when there is a 'D' president. Otherwise it is spend spend spend."

    Sorta like the Ds, right, turd?

  • Brian||

    They only say NO! when there is a 'D' president. Otherwise it is spend spend spend.

    Yeah, and the economy is rocking, right? This implies that the house obstruction really isn't a problem RIGHT NOW.

  • NotAnotherSkippy||

    Barry is abjectly irresponsible. He doesn't even support his own commission and you keep lying by saying he does.

  • FYTW||

    Evidence that Obama supports Simpson-Bowles? Has he ever actually done anything substantive to move it forward, as by persuading Congressional Democrats to get on board?

    No?

    Then shut the fuck up you leftard asslicker.

  • Suicidy||

    Obama's own budget proposals prove he has zero interest in Simpson-Bowles.

  • Suicidy||

    And no senate budget fir 6 years. Kill yourself you fucking cunt faggot traitor. Your bullshit is beyond the pale.

  • Suicidy||

    There have been a number of deficit reduction plans you goddamn liar. Including the penny plan.

  • Horatio||

    My finance buddies assure me that that will never be a problem. And if it is, we'll be dead.

    You see, since we are owed debt in our currency, and nobody but the US Mint can make our currency, we're bullet proof. There's simply no way countries can offload our dollars, nor would they want to. Reassuring to some degree, until you remember these are the same people who have correctly predicted exactly zero major financial catastrophes.

    So...hakuna matata I guess

  • Sudden||

    hasa diga eebowai

  • Horatio||

    Gesundheit!

  • MegaloMonocle||

    nobody but the US Mint can make our currency,

    Why does my currency say "Federal Reserve Note", not "US Treasury" or "US Mint"?

  • Knarf Yenrab!||

    Well, the Fed bought securities from the Treasury, so, uh . . . hey, did you know that Krugman won the John Bates Clark medal as well as a Nobel* Prize?

  • JPyrate||

    That must be the "Other" Federal Reserve. =)

  • Horatio||

    C'mon man, nobody reads the fine print.

  • JPyrate||

    Here you go Knarf. =) https://www.youtube.com/watch?v=LiNhNArP3PA

  • Knarf Yenrab!||

    My takeaway from this is that advocates of a priori economics should invest heavily in bars and smoke shops.

  • JPyrate||

    We are Crab People now !!!! =)

  • heartburn||

    If I was going to measure my debt, I'd compare it to my income. Comparing the national debt to the GDP is a little like comparing my debt to the value I create for my employer -- meaningless.

  • Sudden||

    Or better assets. Current debt (not including promised SS/MC payouts) is about $20 trillion (includes federal pension and HC obligations). Total assets, a little under $2 trillion (about $1 trillion in student loans due to collect hahahahaha and around $900 billion in real estate and M+E).

    So our govt is leveraged 10:1 at best. 100:1 if you count unfunded liabilities, 200:1 is you erase the questionable student loan collections.

  • DarrenM||

    Seems like business as usual. Too busy blaming the other guy to actually DO something about it. We are so screwed.

  • NotAnotherSkippy||

    The something about it is reforming, i.e. cutting entitlements which fucktards like PB and Tony will never, ever do.

  • Suicidy||

    Would it be feasible if PB and Tony no longer Drew breath?

  • Chumby||

  • Jayburd||

    I'm just glad they're "fining the shit" out of the banks. Get some of that tarp money back without having to dip into the "special reserve accounts". Is the interest rates for banks still at zero?

  • Sevo||

    AFAIK, the "interest" on the SRAs are negative, ignoring time.
    They are negative right now; the banks are paid to keep those balances.
    Call it M-1/2, and no one has any idea what will happen once interest rates get anywhere near market.

  • Harun||

    I really don't get how people get away with saying FY2009 was Bush's alone. Obama was not only in the Senate in 2008 voting on this, he also signed it into law in March 2009, 5 months into the fiscal year.

    They saved it all special so Obama could get the credit for all that spending, but look how quickly they don't want any blame.

  • XM||

    If the deficit isn't being shrunk due to spending and borrowing less, then.... why should we care.

    The CBO quietly dropped earlier pretense that ACA wasn't going to add to the deficit.

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