Economics

Our Unsustainable Debt

America is on the verge of financial disaster.

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America's financial situation is unsustainable. In 2009 the federal government spent $3.5 trillion but collected only $2.1 trillion in revenue. The result was a $1.4 trillion deficit, up from $458 billion in 2008. That's 10 percent of gross domestic product, a level unseen since World War II. Worse, the Congressional Budget Office (CBO) projects that we'll be drowning in red ink for the foreseeable future, with annual deficits averaging $1 trillion during the next decade. 

While these figures are dramatic, they pale in comparison to what the federal government owes foreign and domestic investors. According to the CBO, in 2009 America's public debt reached $7.5 trillion, or 53 percent of GDP, the highest it has been in 50 years. In 2010 the debt will cross the 60 percent threshold, a level at which many economists believe a country is putting itself in financial peril.

And the situation is deteriorating rapidly. Figure 1 compares the CBO's long-term public debt projections from 2010 with long-term projections calculated in 2007. Three years ago, the CBO projected that the debt held by the public would not surpass 60 percent until 2023.

What's more, with the impending entitlement crisis requiring more future borrowing, the national debt could grow faster than the economy. In 2020, if current trends continue, the country will owe more than $20 trillion, or 85 percent of GDP. There are six reasons why these deficits matter.

First, debt is very expensive. The more we borrow, the higher the cost of borrowing. By 2020 the federal government will spend a projected $900 billion each year just to pay interest on our debt. That's more than what the U.S. spends right now on two wars, plus the Departments of Defense, Education, Energy, and Homeland Security combined.

Figure 2 shows the projected interest the government will pay on the federal debt as a percentage of GDP between 1962 and 2082. The projections follow what the CBO calls its "alternative" (and generally more realistic) scenario. It assumes, for instance, that George W. Bush's tax cuts will expire rather than be extended. Figure 2 also shows the CBO's projections for the cost of Medicare and Social Security as a percentage of GDP. As you can see, the cost of debt (net interest payments) rivals the cost of two of our nation's most expensive social programs.

Second, large and sustained deficits and debt inevitably cripple economic growth. The money the federal government borrows comes from Americans' savings. So does the cash that Americans invest in private sector growth. There comes a point where there just aren't enough savings to satisfy both masters. Unfortunately for economic growth, the government always helps itself first.

Third, our growing debt means the federal government has to rely increasingly on foreign investors to pay its bills. This reliance can give significant bargaining power to individual foreign governments, such as China, in their diplomatic negotiations with Washington. According to a recent National Affairs article by Donald Marron, an economist at the Georgetown Public Policy Institute, countries such as China and Japan have been the largest buyers of Treasury securities. They believe, Marron writes, "that their willingness to finance our debt gives them leverage in negotiations about other issues, ranging from nuclear proliferation to human rights. Such leverage cannot be beneficial for America's competitive or strategic interests."

Fourth, a growing debt sends signals to investors that we are becoming riskier borrowers. What happens when you max out all your credit cards and still don't have enough money to pay your bills? One thing you could do is get another credit card and roll over the balance. But how long will it be until no one gives you another card? How long before your interest rate goes from 12 percent to 30 percent?

That is the game the United States is playing right now. We are constantly rolling over short-term debt. When our lenders wise up and start setting our interest rates to reflect the risk we've become, access to capital will become harder for everyone. It will be more expensive to buy a house, fund a business, or save for the future.

This development fuels a fifth concern: inflation. To get deficits under control the federal government could cut spending, increase taxes, or do some of both. Neither of these policies is popular; hence the temptation to print money (or "monetize the debt") to pay the bills. The resulting inflation would reduce the value of each dollar, and introduce high levels of uncertainty into the economy. Imagine what it would be like to try to calculate the net present value of your investment in an environment where you can't predict what your dollars will be worth tomorrow. Such a situation mean less innovation and less entrepreneurship, and therefore less economic growth and more hardship.

The Federal Reserve is unwilling to take the inflationary route today. But investors know that other central banks have done so in the past and that the scenario could happen again. In exchange for extending more loans to a federal government that has become a riskier borrower, lenders will ask for an inflation premium. American families and businesses will pay those prices, further hindering economic growth. 

If these growing deficits aren't addressed by immediately and dramatically slashing spending—and there's zero indication that such a shift will happen anytime soon—we are about to embark on the most massive transfer of wealth from younger taxpayers to older ones in American history. It will be not just unprecedented but unfair: Our children will have to pay for the decisions we make today.

To stop that from happening, the country must change course. We need to reform entitlement spending, put both military and domestic spending on the chopping block, and start selling off federal assets. Better to do it now than during a fire sale later.

Contributing Editor Veronique de Rugy (vderugy@gmu.edu) is a senior research fellow at the Mercatus Center at George Mason University.

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  1. Raise taxes. That’ll fix everything.

    1. Works for me.

      1. I am soooo horny after reading Chony’s post. Who’s into frottage?

        1. Me Me ME! (jumping up and down)

          1. I’ll toss my hat into that ring!

            1. Who is this Chony guy? He’s got me feeling all warm and fuzzy.

              1. “Chad, how could you say that” , rubs tears from eyes, “he’s our love baby”!

        2. That rubs me the wrong way.

    2. The five percent of my income that I pay in taxes is an unconscionable burden that limits my freedom to, ummm, I don’t know really. How dare MY money be used to subsidize those lazy freeloaders. Oh wait, with my puny tax rate, I AM one of the freeloaders. But don’t ask for a refund. It is MY money.

      And get your gub’ment hands off MY Medicare.

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      2. If you are paying only 5% of your income in taxes then you can bet your ass that you are one of Barry’s posse. That posse includes welfare sponges of all types from General Electric (paid no federal taxes), Citi, GM and all the crybaby food desert dwellers. They are all for more “stimulus” (handouts).

      3. Lucky you. I pay 10%. And that doesn’t count state and local taxes or my Social Security or Medicare (which I’ll never get to use since I’m under 30 and those programs will be long gone by the time I’m old).

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  2. Big deal, we can just get another bailout. The Fed will help keep the economic cycles moderated, this is why it was formed.

    We aren’t bound to some stupid old barbaric relic, we have some of our brightest economic minds working at papering over the minor problems you describe. Have you no faith in our most modern economic theories? are you some sort of cavegirl?

    1. the more you have of something the less it is worth that is what happens whenever the fed prints a large amount of money. the federal reserve has already inflated ? of the dollars value since it’s founding in 1913.

    2. i don’t know if you see it but on my computer the 95 percent value has been replaced.

      if the keynesian economic system is correct then why don’t free market institutions and companys follow it government is the only institution that seeks to solve debt with more debt. no companies try it because like I they probably realize that unless extremely lucky they’ll never pull it off. Of course government is also the only institution that relies on money that is not their own.

  3. Win/win…the new taxes will balance the budget and save the planet. The VAT will help reduce that troubling value that keeps getting added to stuff and the Carbon tax will get rid of that carbon that is polluting the planet.

    1. and by carbon you mean humans, don’cha?

      1. just the non-lizard type humans

        1. I grovel before your wisdom, CO.

  4. I’ll lower taxes and raise wages!

    1. I wonder what percentage of the earth is carbon?

  5. Balko-level depressiveness.

    1. DE RUUUUUUUUUUGGGGGGGGYYYYY!!

  6. “It will be not just unprecedented but unfair: Our children will have to pay for the decisions we make today”

    what? that is crazy…you chicken littles never stop.

    In the long run we are all dead, we have to be practical about things now and that means more wars, give the fed whatever powers they need and keep the bailout money flowing. We can worry about the little problems like 2.4% inflation when we get through the storm.

  7. What we need is more lawyers to protect our intellectual property rights, China is stealing our wealth.

  8. If all the major western governments have too much debt then could we get them all to merge and write off at least the portion of the debt they owe each other. Wouldn’t that help fix a lot of the debt problem? If we centralize all the power in Europe and North America together then surely we’d be able to fix things then. The more we centralize power in one spot the more manageable our problems become.

    1. Give it a rest, bitch.

  9. The Federal Reserve is unwilling to take the inflationary route today. But investors know that other central banks have done so in the past and that the scenario could happen again.

    It has to happen. It is happening. But there has to be a strongly imaged “free market” character they can hang the chaos on, and even if the Republicans took over both houses, none of them stands (or speaks) out like Gingrich did in ’94, so the Big One has to wait. It needs a body.

    (Cantor and Ryan do both have a little Satan’s Accountant thing going, but our media’s probably not ready to go there, yet.)

    2017 should be fun.

    1. Which is why the Fed should remain independent with Bernanke in charge.

      Greenspan (a self admitted failure) was too cozy with Bush the Lesser as it was and he refused to enforce capital requirements — which led to TARP.

      Idiots like Michelle Bachmann and Maxine Waters don’t need to have a vote on Open Market policy.

    2. Which is why the Fed should remain independent with Bernanke in charge.

      Greenspan (a self admitted failure) was too cozy with Bush the Lesser as it was and he refused to enforce capital requirements — which led to TARP.

      Idiots like Michelle Bachmann and Maxine Waters don’t need to have a vote on Open Market policy.

      1. Right we need to make sure the Fed has the power to give money to whoever it wants without the public finding out, if the people were allowed to see who was getting bailed out it could hinder the bailouts.

        1. You want Fed emergency loans made public?

          So when BigASS Bank needs $20 billion they publish it? Then their credit costs rise, insurance on bonds skyrocket and they go into a death spiral which will require an FDIC/TARP like bailout for depositors?

          That is pretty fucking stupid.

          Like Ron Paul stupid.

          1. Providing any agency a blank check to do whatever they please without informing you is stupid beyond stupid.

            1. Well, the Fed has a lot of blank checks and they don’t take taxpayer money.

              In 2009 – a tough year – they made a $46 billion profit and sent it to the Treasury.

              1. Bernie Madoff made regular dividend payments to his investors as well.

                “Trust us” doesn’t cut it.

              2. yes the Fed is making us money..give them more power. Only the Fed truly LOVES the people!

                1. We need the big banks to get bigger too..please protect the secrecy of their deals…it won’t cost you a penny, the banks love the people as much as the Fed. Just trust them.

              3. Give me the authority to fabricate money out of nothing, and I’ll make $46b a year in profit too.

                They don’t TAKE taxpayer’s money as much as erode its value by stealth inflation.

                1. ya, eroding is completely different than taking.

              4. Did you really say they don’t take taxpayer money? Flooding the economy with dollars which depreciate the value of all the dollars out there is not taking taxpayer money?

              5. In 2009 – a tough year – they made printed a $46 billion profit

              6. “In 2009 – a tough year – they made a $46 billion profit and sent it to the Treasury.”
                To be wasted on other worthless shit!

          2. I think what’s stupid is the entire Federal Reserve system in the first place. It only works if it can act in absolute secrecy from the public, thereby ensuring that sooner or later it will become super corrupt and just start giving money to whoever bribes it the most.

        2. What is this “Fed” you speak of? I did not authorize a private bank to control the nation’s currency.

  10. “But there has to be a strongly imaged “free market” character they can hang the chaos on,”

    maybe, but I think the free market will be scape goated for the coming “austerity” measures that take place afterone more round of inflationary fixes over the next 6 months….once the inhumane nature of this austerity is publicized the public will be ready for a second helping of team blue inflation in 2012.

  11. By the way, in case anyone missed it, Fannie Mae has the begging hand out again for another eight billion dollars.

    1. And here’s the sobering news Mikey, eight bil isn’t going to do it.

      1. Yeah, I know. Crazy Barry and Bawney Frank have given them a blank check for endless bailouts.

    2. In 20/20 hindsight, when the dust and ashes settle, everyone will agree that getting the government involved in the housing market, especially in guaranteeing mortgages, was one of the truly colossal fuckups of modern times.

      I hope.

      1. well they had good intentions

        1. Yeah, we know where the road paved with good intentions leads.

          1. Yeah Straight to the White House.

  12. Gold, my man, gold. And get it in coins, not bullion or stocks. The Feds don’t know you have it, how much you have, or when you sell it.

    Or food, you could stock up on string beans.

    1. Give me a string bean, I’m a hungry man.

      1. Shotgun fired so away I ran.

    2. Or food, you could stock up on string beans.

      Or guns and ammo. Because when the turds REALLY hit the fan, the fellow with the guns and ammo will have the guns, ammo, stringbeans and gold.

      1. Or guns and ammo.

        I dunno. Seems a few guns and 40 pounds of ammo is little comfort against armed military or paramilitary forces who might loot your food locker in teh basement… I guess you could fend off a hungry neighbor or two though.

        1. You’re amused, but a case could be made to invest, heavily, in dried/canned food goods if you suspect really grim times. When the VERY worst happens…and it does happen…foodstuff is more easily bartered than gold itself. Remember too, when the bad end comes, your armed military functions in direct proportion to how full you can keep it’s belly.

          1. Invest in whiskey. It barters even better than food.

  13. Inflation is a bad thing if you have money, a good thing if you owe money.

    1. Should be perfect for Donald Trump and his friends; not too good for Widow Brown on her small s.s. check and $10,000 tucked away in the bank.

      1. And here he says he doesn’t like the rich.

    2. Inflation is a bad thing if you have money, a bad thing if you owe money. Because eventually, you won’t be able to borrow any money to owe it.
      Dan T., simple-minded fuck, strikes it rich again!

      1. Actually, I have to give Dan T full marks on this, if you treat it on an individual basis.

        On a system-wide basis, the destruction of the value of a currency wreaks havoc with the credit markets as borrowers start to demand rates high enough to compensate for inflation. Also, inflation tends to accelerate over time as the ‘velocity’ of money increases. No one wants to hold cash, so they spend it faster, effectively increasing the momentary demand for goods and services.

        If you are smart enough to borrow at a low fixed rate before inflation kicks in, you are going to “win” the inflation game. The lender is going to lose.

        1. “If you are smart enough to borrow at a low fixed rate before inflation kicks in, you are going to “win” the inflation game. ”

          it depends on what you buy with you loan

  14. Veronique, eat something. And don’t throw it up!

  15. Counterpunch has been running some of its lefty commentary on the problem. Dean Baker seems to think we need to run bigger deficits to stimulate the economy, but he fails to explain why Japan is un-stimulated after 20 years of trying (now at 200% debt-to-GDP ratio!).

    Michael Hudson has a more interesting argument, namely, that tax policies have changed over the past 35ish years in ways that drag down economies. Specifically, he says that shifting taxes from high incomes, finance, and the rentiers to middle- and lower-class incomes has hurt the growth of the middle class. I assume, though he does not specifically say it, that the huge debts burdens are caused by borrowing to keep up middle-class standards lost to the tax shift. Are there any libertarian wonks writing on this? It looks like a fruitful line of study.

    1. The 47% of Americans that pay no income tax aren’t the ones with high incomes.

      1. That 47% shouldn’t have to pay anything. All living expenses for that group should be paid by the rich.

        1. They are.

        2. It doesn’t bother you that nearly half the country has become too poor to support itself? I mean, didn’t we have a war on poverty or something in the 1960’s?

      2. Once you include all taxes, our tax system is only mildly progressive, with the top 20% paying only a slightly higher fraction of the taxes as they would under a perfect “flat” tax, and the bottom 40% receiving the resulting windfall. No quintiles’ actual net taxes deviate more than a few percent from a theoretically perfect flat tax.

        1. Wow, I have never been spoofed while writing a response to the same post. You guys must really love me.

          1. You could have written every “Chad” post on here, Chad, and no one could tell the difference.

  16. Then: You got old and lived off your savings and left something to the kids.

    Now: You get old, live off your kids who are borrowing furiously to stay afloat.

    Soon: Tuesday is Soylent green day…

    1. Either that or lots of people get used to the Science Diet.

  17. Its certainly not getting any better now is it?

    Lou
    http://www.online-anonymity.tk

  18. The 47% of Americans that pay no income tax aren’t the ones with high incomes.

    That’s true, but there are a lot of other, more regressive taxes that the middle- and lower-classes pay, and those have definitely increased: FICA, property taxes, sales taxes, alcohol taxes, tobacco taxes, etc.

    1. thanks patriot…repubtards like to forget that.

      Payroll taxes have grown from less than 9% of the government revenues to almost 40% in the last 40 years. Payroll taxes take almost as much from the people as income taxes and the growth rates are far greater.

      Federal Revenue History

      1. But who do you have to thank for all those other taxes? Democrats bear 90% of the blame for them.

        1. I thank overlord puppets on the left and the right hands of the creature.

          1. I agree that sales taxes are regressive, but they are far better than direct taxes on employment that incentivize employers to hire less people. Sales taxes have little direct negative effect compared to payroll taxes and progressive business or investment taxes.

            Aren’t all taxes regressive as the wealthy and the business owners are not tax payers, but tax collectors? Don’t businesses just pass on the cost of higher taxes and more regulations onto their customers and employees in the form of lower pay and more expensive products?

            1. Actually, taxes on businesses get split between the owners, the workers, and the customers in a complex pattern that is neither fully understood nor constant from situation to situation.

              Frankly, this is true of all taxes, even your income taxes – some of which you recover by jacking the price of your services.

              1. It seems to me that a high profit, high demand company such as an oil company will be able to pass on all increased taxes to its consumers. The businesses that will be most hurt by taxes will be the less profitable ones, or the ones that are more subject to fluctuations in demand. So basically, higher business taxes and wealth taxes will hurt smaller, more experimental businesses the most, and powerful, rich corporations with a high demand product will be least effected. Doesn’t that prove that progressive taxation has some very regressive effects?

            2. Liberals hate the FairTax, yet love the VAT and higher gas taxes – which are definitely regressive.

              But, hey, gotta keep subsidizing the poor!

              1. VAT and gas tax create dependency in the poor to the state.

                1. I get so horny reading posts like yours, Doc. Dependency on the state is such a turn-on.

      2. I take it you are deliberately and sneakily overlooking the fact that these “taxes” are actually wealth transfer programs? And that anyone of average wealth or less is going to get back when he retires far more than the value he put in? (That’s why these programs are headed for disaster, of course.)

        Saying that lower-income people are “paying taxes” when they pay their Social Security and Medicare “taxes” is highly deceptive, when over their lifetime (or even when averaged over both working and retired cohorts) these “taxes” are negative, i.e. they are a net source of income.

        That’s way different from paying your Federal income tax and never seeing the money again, nor even the benefit when it’s shoveled out to the unions or green jobs boondoggles.

        1. Yes, SS and Medicare are designed to transfer wealth from the top quintile to the bottom two…and that is exactly what they do. Get over it, dude.

          Btw, I am in the top quintile, and don’t begrudge the extra year or so I will have to work because of SS. Why? Because it means working-class folk like my little brother and won’t have to work until he drops dead. The fact that you do begrudge this only proves that you are a sociopath.

          1. Actually they are designed to transfer wealth from the young to the old.

            At least that’s what they are doing right now. Since current retirees are mostly getting significantly more in benefits than average have earned from contributions. Even the richest current retirees are pulling in checks larger than their contributions would justify.

            1. That is largely true of older retirees…people like my grandmother, who has collected for over 40 years without having had paid a nickle. However, people just entering the system largely paid real SS taxes for most of their earning years, especially the prime ones.

              The transfer from “young to old” is kind of meaningless, since almost all of us will be both at some time. The important transfer is from the top quintile to the bottom two.

              1. “Because it means working-class folk like my little brother and won’t have to work until he drops dead. The fact that you do begrudge this only proves that you are a sociopath.”

                Then you take care of your little brother, if you’re so fucking successful. As someone who makes less than 35k a year, I’d like to opt-out of this SS bullshit and put it in my 401k.

                1. Not all people like my little brother have someone like me to take care of him. And there is certainly no guarantee that I *will* be able to take care of him.

                  If you make 35k and want to opt out of SS, you are mathematically inept. SS will provide you with a real return of something like 8%. Low income people like yourself will not face major cuts to benefits, either.

                  Clearly, you should not be in charge of your own finances, for your own sake, if you are calling for both your risk to be increased AND your return to be lowered simultaneously.

                  1. Where do you get that 8% from?

                    http://www.socialsecurity.org/reformandyou/faqs.html

                    “We know that young workers can expect a return on their Social Security taxes of 1.5 percent or less. Furthermore, workers and retirees must keep in mind that Congress can change their benefits at any time. Thus workers and retirees must always consider the political risk of paying into the Social Security system when they have no legal right to benefits. ”

                    Also go here: http://politicalcalculations.b…..te-of.html

                    The best rate of return I could get was 2.6%, seriously where is this 8% from?

                    And just running the numbers, if I invest the SS money in my 401k, that’s at least an additional $250,000 by the time I retire (with an estimated 5% rate of return). If I’m really lucky and get the magical 8% that you seem to think Social Security can give me, then it’s an additional $410,00.

                    1. Ooops 410,000

                    2. “seriously where is this 8% from?”

                      If Chad pulled his head out of his ass, the 8% figure would probably be stuck between his teeth.

                    3. Why don’t you type “ROI Social Security” into google and education yourself? Or you could dig into how your benefits are actually calculated, and see how obvious it is that anyone with a low-to-moderate income over their entire life makes out very well.

                    4. A bit more informative.

                      http://www.angrybearblog.com/2…..tment.html

                      Note how this one actually explains the methodology.

                  2. Clearly, no one should be in charge of their own finances.

                    1. social security’s own site:

                      http://www.ssa.gov/OACT/NOTES/ran5/an2004-5.html

                      Let’s see, medium income, born around the 70s what’s my rate of return…1.96%. Apparently, SSA needs to google some shit too.

                    2. Still don’t see the 8%, Chad. Where is it?

                    3. Still don’t see the 8%, Chad. Where is it?

                      Probably the *effective* ROI given what the benefits actually are for current retirees vs. actual payments to the system. This is why the “trust fund” has no money in it, and unfunded liabilities of $10 trillion. The so-called treasury bonds maybe theoretically be earning a puny 2% interest, but we’ve been paying retirees much more than they’ve earned.

                    4. 2% real rate of return.

                      Sounds like bonds to me.

                      Dear god! What an injustice!

                      Of course, many people do much better than that.

                    5. So you’ve gone from 8% real rate of return, to saying that 2% is good (in not-so-funny snarky kind of way). BTW, my stable value fund gets at least that much every year, and that’s only 1/3 of my portfolio. Given that historically the S&P has given a return of about 9.4% per year, and I have a fund that is indexed to it and it is about 50% of my 401k (the rest is in foreign markets), yes I would be doing much better when I retire if was able to opt-out of social security.

                    6. Well, now I’m using the wrong figures from 1950-2008 the real rate was 6.8%,http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm, was using a nominal one for the above.

              2. The transfer from “young to old” is kind of meaningless, since almost all of us will be both at some time.

                Rephrase it as “from the future to the present”. Current workers are expected to pay NOT ONLY for current retirees, but also to fund their own future retirements. And future workers will be paying down dept to fund PAST retirees.

  19. All we need are few bailouts to stimulate our economy. Also tax the rich, they don’t invest money as efficiently as the government does.

    Now if you’ll excuse me, I’m off to try and figure out a way to blame the private sector for Greece’s financial meltdown. I mean, there’s no way a centralized economy could of lead to a disaster of this proportions!

  20. Typical libertarian dogma. None of her remedies included increased taxation. Dogma Dogma Dogma Dogma Dogma Dogma Dogma…

    1. Dogma Dog Dick

      Ingredients: Dogma Dog Dick, cayenne pepper, ass

      Directions: Stick Dogma Dog Dick in ass after covering with cayenne pepper.
      Keep sticking Dogma Dog Dick in ass over and over, until colon burns and you get fucking Dog AIDS and die, you fucking loser, Peter.

      Serves: One. One fucking dick named Peter, who will die of Dogma Dog Dick AIDS.

    2. We have let these libertarian idealogues control this country for long enough. It is time to try something new and show some compassion for once.

      1. Oh man. That actually made me laugh.

      2. We have let these libertarian idealogues [sic] control this country

        Oh, I do wish.

    3. Except several libertarians have advised raising taxes in the short term to make people feel the sting of government spending. However, raising taxes is not a long term solution, if the focus isn’t shifted wholly onto the spending side of things.

  21. How come nobody quotes the GROSS DEBT anymore? When Bush was president, and dems were attacking his borrowing, they always used the gross debt to bash him over the head with. Now people only quote the net debt, which doesn’t include the money that is “borrowed” intragovernmentally, from the SS coffers. It makes the debt seem much smaller than it is , especially considering that the government has no plans to raise the funds to pay that money back, and it isn’t like SS will be in a large surplus anytime in the future.

    http://en.wikipedia.org/wiki/United_States_public_debt

    If you include the gross debt, the debt to GDP ratio is much closer to 100% of GDP.

  22. If the debt-to-GDP level is a predictor of rough sailing, why are 20 year Japanese bonds only paying 2%? Japan has the highest debt-to-GDP level of any country (except Zimbabwe, but who counts that).

    This is not a rhetorical question. I am puzzled.

    1. Japan has a high domestic savings rate that is allowing them to borrow much of that money from their own people. Of course, now that their population is aging and their economy is stagnant, people might start cashing in their savings accounts to pay for their old age living. The japanese will then be forced to sell their debt to foreigners who will demand a much higher interest rate. Japan’s coming apocalypse is in the making, don’t worry.

    2. Interest rate is a price that equilibrates savers and borrowers. Japan has a very high saving supply, so very low interest rates.

  23. Yep, we have debt problems. Time to raise taxes. Get back to me when you quit crying and get over the need to both cut AND pay. Waah! You might have to downsize your Mc Mansion. Wahh! No new SUV for you! Wahwah! No more borrowing money from the Chinese so you can cut your taxes and spend the windfall on shit that falls apart within six months! Wahpoutwhine! Cryweepslitthroat! Waaah! Boofreakinhoo!

    Man, it’s fun to spoof you guys.

    1. Chad, in your blind hatred of successful people, you neglected to surmise that most of us don’t own “McMansions”.

      But don’t let that get in the way of one of your patented, pointless wealth-envy rants.

      1. Dude, both myself and almost all of my friends are “successful” by any reasonable definition you can come up with.

        1. Nobody ever denied there might be some self-hatred involved too.

        2. Sounds like Internet Male Syndrome to me.

        3. Then why do you constantly rag on rich people, Chad?

          If you hate them so much, why become one?

          Wait… I think I know the answer to that last question. Never mind.

      2. Tax hikes always work!

    2. Chad, I’m relatively poor by almost anyone’s standard. However, even I recognize that the costs of higher taxation on wealth producers will inevitably trickle down to me in the form of less opportunities (that aren’t government subsidized, fake jobs) and higher cost goods and services.

      1. Yes, because I am just sure that the titans of Wall Street will quit their jobs and spend the rest of their lives chasing hookers and building castles if we demand that they pay, you know, the same tax rates as their secretaries.

        I might suggest you think about the difference between “producing” wealth and “capturing” it, and then ponder which group the rich usually fall into.

        1. More likely they’ll find more and more creative ways to avoid the U.S. tax system. More outsourcing, relocating offices overseas… Once all the rich have left for greener pastures, who should the U.S. tax then?

          1. A few very rich people may flee the country, which is why we should be working with other nations to synchronize our tax codes and close down havens, but this effect is pretty limited. If you haven’t noticed, this has been happening for decades and would happen faster if it weren’t for the right, who whether it wills it or no, enables tax dodging.

            1. We moved to another country to avoid high tax rates… but we’re special.

        2. When two parties exchange anything voluntarily, both parties benefit, as they both give up something that they don’t need, or already have enough of, for something that they’d rather have. Anyone who has wealth, and continues to have wealth must obtains it through creating surplus value for each individual. I may not have much, but I’m pretty happy in my life, and I can honestly say that my life has always gotten better over time, even during the two recessions that I have endured at the lower end of the income scale. I don’t receive much in the way of government benefits, outside of the education forced upon me and the public roads that I’ve driven on, but I sure have received a lot of benefit from private producers who have given me computers, tv’s, and cars in return for my meager earnings. Most taxes are going to pay for the excess of other parts of society, not poor people like me, and I refuse to play the big government’s game and buy their lies. The private sector has done much more for this low class individual than the government has ever done.

          1. When two parties exchange anything voluntarily, both parties benefit

            Actually, this is false, quite often. And even when it is true, the resulting distribution of the net profit is highly unlikely to be “fair”. Indeed, standard economic theory doesn’t even think it matters. It is also highly likely that third parties who have no role in the exchange are affected by the exchange, often negatively. And I am presuming you are ignoring game theory, and all the negative-sum situations it creates, correct?

            Hmmm…I don’t even have to read past the first clause of the first sentence of your free-market prattle before I poke four serious holes in your theory.

            1. Chad, you don’t have the first clue what game theory says.

              As for third parties being negatively affected by a voluntary exchange, those claims have about as much validity as a man being “negatively affected” because a chick he wants decides to fuck someone else.

              What other people do with their time and money is not yours to decide, or control, in ANY WAY, regardless of how you feel it negatively affects you. If you don’t like it, too fucking bad. Suck it up and deal.

              1. Hazel, if you can’t come up with at least a dozen instances where game theory results in negative-sum economic interactions, it is you who doesn’t have the first clue about it. Ironically, it sometimes leads to GOOD outcomes; for example, game theory makes collusion among firms difficult. This implies that for free-market theory to be right, certain games need to result in cooperation, but others need to result in defection…and apparently you believe in some fairy that sorts this out.

                And then you run off, pretending that externalities (both positive and negative) don’t exist, which is simply absurd. If I buy something from WalMart, and Walmart, in the act of producing that piece of junk, dumped a gallon of toxic waste in your lawn, you are negatively affected, aren’t you? Are you saying the government should just ignore our exchange, despite the obvious fact that it violates both your rights and, in all likelyhood, fouls some public property as well?

                If you don’t like our rules, Hazel, you can just hop on a boat and sail 12 miles out. Have fun, and keep your hands off our fish.

                1. A) There’s a lot more to game theory than one-shot prisoner’s dilemmas.

                  B) In reality, people don’t behave exactly the way they should, and hence the suboptimal results don’t tend to occur. This is a subject of considerable research.

                  C) As you know perfectly well, libertarians argue for property rights and coasian bargaining to deal with pollution issues.

                  D) When you say “It is also highly likely that third parties who have no role in the exchange are affected by the exchange, often negatively” you are explicitly NOT limiting yourself to pollution issues. I’ve heard you argue before that someone not getting a job they want counts as an externality, or getting a product at a price they want. That’s what I was referring to.

                  1. So, Hazel, how are you and I supposed to “Coasian bargain” about the pollution you are dumping in MY property. Care to kindly send me your address so that we can begin lawsuit #0000000000000000001 of 6.5 billion squared that would be necessary for everyone to sue everyone else? It is patently obvious that Coase’s theory does not work well for non-local pollution.

                    And you now just dismiss all of game theory with a magic claim that it doesn’t tend to occur, without any justification for that claim whatsoever and despite the mountain of examples of it occuring.

                    Your third point is nothing more than a straw man. The things you claim that people are claiming are externalities are not. However, they are something that matters, and lie outside of standard economic theory.

            2. “Actually, this is false, quite often. And even when it is true, the resulting distribution of the net profit is highly unlikely to be “fair”. Indeed, standard economic theory doesn’t even think it matters.”

              I’m not talking about game theory and collusion. I am talking about an exchange. When two uncoerced parties engage in a transaction, both parties benefit. This is empirically true of every transaction that I’ve ever made personally. It doesn’t make logical sense for somebody to give up more than he/she receives in return. You can prattle on about game theory all that you want, but you are simply being too lazy to even argue with a simple truth.

              1. What does game theory even have to do with a voluntary transaction between two uncoerced individuals? If somebody give something up for something else, and there is no violent coercion involved, how can the transaction not benefit both parties, at least subjectively?

        3. If the wealthy are forced to pay more taxes, they won’t quit their jobs to chase hookers, sure, but they will be disincentivized from producing the wealth that increase the quality of life for every individual in society. This isn’t a philosophical point, this is math. Lower profits=less investment and therefore less productivity. There is empirical evidence for this.

          I’ve never heard of a society that taxed and spent itself into prosperity. Even in the cases where a high tax society does manage to do well, they still depend on a robust, private market to feed the beast.

          1. but they will be disincentivized from producing the wealth that increase the quality of life for every individual in society

            Not necessarily, and even if true, there is little evidence that what you are pointing out is quantitatively relevant. How much less do people work when you tax them? Very little, unless the rates are far higher than anything on the remotest horizon. Indeed, it is perfectly logical to respond to higher taxes by working harder or picking up a second job to make up for the loss of income. Think about it.

            This is especially true of well-off but not not rich; for example, professionals like doctors, lawyers, or scientists. Higher pay may well encourage them to retire earlier, because they can, rather than work longer because of the higher pay.

            Real life isn’t nearly as simple as your pathetic Chapter 1 level understanding of economics.

            1. Yeah, knowing I’ll be forced to give a greater percentage of my earnings away if I get wealthier is a huge incentive for me to try to earn more money than I currently do.

              No, wait, it’s the exact fucking opposite.

              1. Again, think about it. Let’s say you make $80,000 and pay $15,000 in taxes. Let’s say the government raises those taxes to $20,000, reducing your take-home pay to $60,000.

                Which is the realistic response:

                1: Damn, I have $5000 less per year to live on. I’ll have to find some way to make up for it.

                2: I think I will slack off and drop my income down to $60,000 so that my taxes are back where they were. Take that, government!

                Likewise with retirement. While a few people might go “I already have enough in the bank, and the loss of $5000 per year makes working just not worth it anymore”, there are probably ten who say “Damn, the loss of $5000 per year means I am going to have to work an extra year before I have enough”.

                It is not clear at all whether you will get more or less work via principle. Looking at the data, you don’t see much of a trend at all.

                1. It depends on the marginal tax rate. If earing $5,000 more puts you in a higher tax bracket that causes you to pay $5,000 more in taxes, that’s a 100% marginal tax rate.

                  When you’re talking about the bottom 47% paying 0% in taxes, or even getting tax credits back, and the top quintile paying 40%-50% or more, your marginal tax rates have got to be high. Say if a person making $50K a year is paying 0% and a person making $100K per year is paying 40%, then at t5he end of the year, the latter is really only making $60K.

                  And given that getting from 50K to 100K is a difficult jump, involving education, overtime, and higher stress work, for a lot of people, that extra 10K ultimately won’t be worth it.

                  1. Where do I begin, Hazel. First, “tax brackets” don’t apply to income below that bracket, as your post seems to imply. While it is theoretically possible to have a 100% marginal rate, the circumstances are quite unusual. They involve peculiar situations where multiple tax credits expire simultaneously. If anyone is in this situation, it usually can be avoided by ducking money into a 401k or some other gimmick anyway.

                    That 47% statistic is silliness. It ignores a whole horde of taxes, most of which are regressive. When looked at in total, our system is only barely progressive at all.

                    http://en.wikipedia.org/wiki/Taxation_in_the_United_States

                    According to Tax Foundation, when including comprehensive household income for 1991 to 2004, which consists of both market-based income and the net value of government transfer payments, the top quintile earned 41.5% and paid 48.8% of total taxes. The fourth quintile earned 21.0% and paid 22.4%. The third quintile earned 15.4% and paid 14.8%. The second quintile earned 12.2% and paid 9.6%. The lowest quintile earned 9.8% and paid 4.3% of total taxes.

                    Note that the 3rd and 4th quintiles are essentially breaking even. The top quintile supports the bottom two to a mild degree. Dear God, your freedom is withering before my very eyes!

                    Also, a single individual making $50k is paying quite a bit of tax, around $10k. Someone making $100k pays around $30k. That’s a difference in take home pay of $30k, not $10k. There is a huge difference in lifestyle between take home pay of $5000/month and $3000/month, and there is no shortage of people who would be motivated by this difference.

                    1. Also, a single individual making $50k is paying quite a bit of tax, around $10k. Someone making $100k pays around $30k. That’s a difference in take home pay of $30k, not $10k.

                      Yes, but you want taxes on the 50K person lowered, and on the 100K person raised. Probably to the point where that 30K take-home gap is reduced to a 10K gap.

                    2. Wrong, Hazel. Individuals making $50k easily can afford to pay more. I would guess that I would increase the taxes on the 50k guy from 10 to 12k, and the 100k guy from 30k to 35k. The gap would still be 27k in take home pay (38k vs 65k).

                2. What matters is the marginal rates. People work (unless prevented from it) until their marginal disutility from working is equal to the marginal utility from money. The this is why a tax on flat income (even if scaled by amount of income) is so much more effective at generating revenue than a marginal tax like our income tax.

                  1. 1: How many people have a quarter of a clue what their marginal tax rate is?

                    2: How many people have the flexibility to adjust their work to the vagaries of fluctuations in marginal rates?

                    Most people have a job, and it is what it is. However, you are right in the general sense that we need to avoid high marginal rates, which can crop up from time to time. In particular, the danger points in our tax code are the area where welfare benefits disappear, and the 70-90k (for individuals) range, where FICA taxes still apply and too many tax credits expire. The “rich” do not face high marginal rates on most of their income.

                    1. But a high marginal rate on the “rich” will be enough to fix all our problems, right, Chad?

                    2. Not at all. Indeed, the tax increases I support are a VAT and a carbon tax. I also support a decrease in the corporate tax rate to 25% (to make us consistent with everyone else) and a corresponding increase in the capital gains rate, which for most people should simply be the same as their income tax rate. While we are at it, we should get rid of most deductions, primarily the health care and mortgage deductions, both of which create all sorts of headaches.

                      And yes, we need to cut spending too, and that means SS, health care, and the military.

                3. People who make eighty thousand dollars a year ought to have sand pounded up their asses by the IRS.

            2. “Not necessarily, and even if true, there is little evidence that what you are pointing out is quantitatively relevant. How much less do people work when you tax them? Very little, unless the rates are far higher than anything on the remotest horizon. Indeed, it is perfectly logical to respond to higher taxes by working harder or picking up a second job to make up for the loss of income. Think about it.”

              I wasn’t just talking about the effect of taxes on labor. Sure, many people will work harder to cover their taxes leading to more productivity. But this is also a bit like slavery, in the cases where it works this way. However, I’m not talking about a laborer making 80’000 a year. Instead, imagine a company that makes bobby pins. People invest in this company rather passively, and will take their investment elsewhere if it fails to be a good investment. You can’t make machines work ten percent harder without either inventing a new process, which does happen from time to time, or reducing the machine’s overall work life. The fact of the matter is that lower profits for a production enterprise will lead to lower rates of investment. Nice try, though.

              Also, you are forgetting about the resources that will be used up by the public sector spending resulting from the taxes raised. When the government spends that money, often on wasteful projects that produce little value, they suck resources out of the rest of the economy (labor being the biggest and most important) that otherwise could have been used for actual productive purposes.

              1. I was not talking about the effects of the income tax on labor. I agree that income taxes have little negative or positive effect on overall productivity. I was speaking primarily about taxes that directly effect production.

                I would like to point out that income taxes on high income earners do tend to have a negative effect on overall productivity, however. Yes, somebody making 40,000 a year will work more to pay their income taxes, but somebody who makes 200,000 a year might be more willing to accept the lower paycheck, as they are still well off. Rich people don’t mind higher taxes so much, as they are still rich and have little to worry about. Plus, a rich person is more likely to reinvest their income into their business. If you tax a rich persons income or capital gains more, that leaves them with less to hire more workers to improve their business.

                Let’s recap:

                1. Higher taxation of production will lead to lower profits, which in turn leads to less production.

                2. Higher income taxes on the rich will lead to lower rates of reinvestment in their enterprises. A business owner or investor, cannot simply “work harder” to make up for higher taxation, and if they are still rich, they will have very little need to.

                3. As Chad pointed out higher income taxes can actually encourage somebody to work harder (just like slavery!), but this largely effect people who make less money, who are therefore more dependent on their earned income for the basic necessities. Yes, Chad is right, but in a way that makes him very wrong.

                4. To talk about the negative effects of taxation, we cannot forget the negative effects on the economy when the government spends the money, thus taking resources away from the productive sector. Even if the act of taxation had little negative impact (which it doesn’t), resources are still being diverted from productive processes to mostly unproductive processes.

                And regardless of Chad’s BS, two parties only exchange goods and services when both parties somehow benefit from the exchange. Otherwise they wouldn’t occur. Game theory has nothing to do with this discussion, as it goes beyond exchanges to more complex relationships. Even if there is an evil monopoly jacking up the price tenfold in a negative relationship with customers, more value is created than would otherwise be created in the absence of an oil industry altogether. The people buying oil from that “evil” conglomerate are still doing it, because they feel that having oil is worth the higher cost. Even a monopoly has little power to raise prices to infinity.

        4. If we took 99% of every dollar earned by evil rich people, we could solve every problem known to mankind.

    3. No more borrowing money from the Chinese so you can cut your taxes and spend the windfall on shit that falls apart within six months!

      You are suggesting that reducing people’s incomes and giving the money to the government will make people LESS likely to spend money on credit to buy crap from China?

      I think, if they are already maxing out their credit cards, taxing them even more isn’t going to change anything.

    4. Yeah, cause I’m sure that increased taxes are only going to be paid by rich people.

  24. A simple assesment and helping the usa citizen is important. Companies look at costs of materials and other costs then give us a price. It is not advanced algebra. I feel that the gov should help needy in the usa. And protect the wealthy from fraud and larceny. I beleive that the gov is wanting minamalist ideas. Why? I am for helping usa citizens and the starving. States should have a right to stop crime(arizona spec situa). And say no to abortion. Abortion kills a new person, genetics! Please fund regional bus transportation(helps poor, disabled, troubled). Help poor which may stop anarchist gangs.Some did not get help from mom and ada at 18 or when in hospital. Please check into cafeteria meat, if it is bad and quality, Farm Boy,grocery.?Vote for christian prolife moderates. Crosses on houses for lord to see. rom 12:2 kjvz, rev. 12:9 kjvz. Notice arbys old bread, low promo for mls soccer even by mls-no highlight videos, evil logos in the indoor lacrosse and the mls. Righteoussness not self right, not self center. Thanks.

    1. Finest piece of authentic gibberish I have seen today.

    2. That was brilliantly nonsensical. Bizarro world gives +3 (or, perhaps, -3? It is Bizarro world, after all).

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  25. Euoove gaut to bey kiddin I
    mean uuh ayeeve got money?!@*#(^…

    Wot the fuk?…uuhhhh…

    1. C’mon, love, let’s git yer back in th’ limo. We’ve got a nice wakey-wakey dowse all fixed up for ya.

      Oh, for the – put yer ya-yas back in, Keef!

  26. Massive government (public)
    debt, contrasted with massive
    (private) institutional
    investor wealth distribution…?

  27. Massive government (public)
    debt, contrasted with massive
    (private) institutional in-
    vestor wealth distribution…?

  28. Massive government (public)
    debt, contrasted with massive
    (private) institutional in-
    vestor wealth distribution…?

  29. We ARE on the edge of disaster, without question. But what amazes me is the general ignorance and lack of interest in obtaining this valuable, vital knowledge among the general populace. People — in general — don’t want to be bothered. It’s like a learned helplessness; they’d rather get smacked in the face with the collapse of civilization rather than actually put in the effort to prevent it. It’s pathetic.

    As an aside, you have to admit that the politicians, bankers and businessmen are aware of what the outcome of this all will be. These are very bright men and women who are running things. With that in mind, wouldn’t you agree that they’re either completely stupid or completely corrupt!? Either way, it’s no good for us!

    Check out our article on the topic:

    http://www.truthoffering.com/e…..rrupt.html

    Here’s another similar article about how the collapse is being engineered by the powers-that-be:

    http://www.truthoffering.com/s…..onomy.html

    1. The Democrats don’t want to give up their unpaid for social programs and the Republicans don’t want to give up their unpaid for wars, so both sides just ignore the fact that the United States is going to be like Greece in a few years.

  30. “Give me control of a nation’s currency, and I care not who makes the laws.”
    -Mayer Amschel Bauer Rothschild

  31. People who don’t know what they’re talking about, but who want to sound erudite, love to use dramatic terms that can’t be disproved. A classic example is “ticking time bomb,” when referring to the federal debt and deficit.

    My blog contains three posts (“Federal debt: ‘A ticking time bomb”; “Debt bomb redux”; “More debt bomb nonsense” ) sampling the thousands of times since 1940, the debt has been called a “time bomb.”

    The nice thing about “ticking time bomb”: The users never needed to prove or substantiate anything. They didn’t have to say when it would explode or what would make it explode or what would happen after it exploded. They could just use the expression, then stand back, look wise and bask in the adoration.

    Well, another description of the federal debt and deficit can be included in the “I know nothing, but I want to look smart” club. This time the term is “unsustainable.” In a previous post I hoped never to see that trite, meaningless term again, but alas, it was not to be. It’s a favorite word of Chairman “Unsustainable” Bernanke, and he used it again, today.

    First, here are just a few of the uses in the past 28 years.

    ?February 7, 1982: Ronald Reagan: “[…]rapid, unsustainable expansion of Federal spending and money growth[…]
    ?December 11, 1983: The New York Times); Editorial Desk:”[…]large and growing deficits are unsustainable. They have to be reduced […]
    ?1998: Douglas Elmendorf and N. Gregory Mankiw: “Current patterns of taxes and spending are unsustainable.”
    ?February 28, 2001: George W. Bush:. “Social Security’s spending path is unsustainable in the long run, driven largely by demographic trends.”
    ?March 3, 2005: Edmund L. Andrews: “Alan Greenspan, chairman of the Federal Reserve, warned on Wednesday that the federal budget deficits were ‘unsustainable,’ and he urged Congress to scrutinize both spending and taxes to solve the problem.”
    ?February 13, 2006: Paul Krugman: “Last year America spent 57 percent more than it earned on world markets. That is, our imports were 57 percent larger than our exports. It all sounds unsustainable. And it is.”
    ?05/15/09: Lita Epstein, DailyFinance, “Anyone who understands the U.S. debt picture won’t be surprised by President Barack Obama’s statement that U.S. deficit spending is ‘unsustainable.’
    ?4/27/10: Reuters: By Pedro Nicolaci da Costa: “‘In the absence of further policy actions, the federal budget appears set to remain on an unsustainable path,’ Bernanke told the 18-member National Commission on Fiscal Responsibility and Reform.”

    All these years, the debt has grown, while remaining not only a ticking time bomb, but also unsustainable. How is that possible? Easy. No one knows what “unsustainable” means. Does it mean the government can’t pay its bills? Does it mean America will go bankrupt? Is there any data that proves the debt can’t be sustained?

    There is no such data. The federal government has the unlimited power to pay any bills of any size. No federal check ever has or ever will bounce, not because we’re big or lucky, but rather because the government creates money to pay its bills by reaching into vendors’ bank accounts and crediting them. The whole notion of federal debt unsustainability is not in accord with fact or possibility.

    Rodger Malcolm Mitchell

    1. They didn’t have to say when it would explode or what would make it explode or what would happen after it exploded.

      Okay, you want the answers to these questions? It’ll explode at some point in the future, nobody knows when, but the date is almost certainly drawing nearer. What will make it explode? The bond markets start deciding that our debt-to-GDP ratio indicates a high risk of default and the interest we have to pay on the debt shoots up. Servicing our debt becomes more expensive and makes trimming the deficit that much more difficult. Lather rinse repeat. Welcome to the fiscal death spiral. What will happen? Painful, society-wide austerity measures, imposed either by the government in the form of massive tax hikes and cuts in spending, or by the marketplace in the form of rapid inflation which makes all the foreign goods we currently enjoy much less affordable, or both. There’s currently a case study playing out on the other side of the Atlantic right now. Why don’t you try googling the words “Greek financial crisis”?

      No federal check ever has or ever will bounce, not because we’re big or lucky, but rather because the government creates money to pay its bills by reaching into vendors’ bank accounts and crediting them.

      I.e., pursuing a monetary policy that will result in runaway inflation. If you’re not acquainted with what kind of social effects that has, look up what’s happening now in Zimbabwe, or what happened in Germany in the 1920s and early 1930s. Neither is a pretty picture.

      According to your logic, we shouldn’t bother maintaining our bridges. After all, they haven’t collapsed yet, so it’s clear that they never will, right?

    2. Obviously you’ve never heard of the Weimer Republic.

  32. Just FYI, if the U.S. had a balanced budget for the next 10 years, and the income tax rate were increased to 70%:

    The average income for Americans would have to be ~$1.7 MILLION per year to get rid of the deficit in one year. Now keep in mind that only ~97 Million pay taxes. Everyone else is riding for free.

  33. What do you expect when you start a war and cut taxes at the same time?

  34. “Revenue” The government does not collect revenue. Let’s call a spade a spade. It’s theft. And thieves never prosper.

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  59. Nothing against the article, but I disagree with a couple of points to some extenct. I’m probably a minority though, lol. Thanks for sharing.

  60. it seems like our country will never be debt free again…i just dont see how with so much debt.

  61. If you want to learn more about our “unsustainable” debt, go to: http://rodgermmitchell.wordpre…..stainable/

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  65. This debt is a horrible thing, I fear for the future of America folks. I fear.

  66. its amazing how much debt our country has built up. will it ever go away or are we doomed?

  67. If politicians would quit blaming people from the past for all their problems and focused on budget cuts or finding a proper solution america would be much better off.

  68. america would be better off if the politicians would focus on finding a solution rather than blaming past presidents.

  69. Folks, the amount of debt is rising and rising, what we gonna do about it?

  70. our country is going down the drain. i wonder what our country will look like in 10 years with all this debt.

  71. I just dont see how with so much debt thanks.

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  74. I would say that such an huge debt is unsustainable folks, it really is indeed.

  75. O, in 2009 America’s public debt reached $7.5 trillion, or 53 percent of GDP, the highest it has been in 50 years. In 2010 t

  76. figures are dramatic, they pale in comparison to what the fed

  77. dramatic, they pale in comparison to what the federal government owes foreign and domestic investors. According to the CBO, in 2009 America’s public debt reached $7.5 trillion,

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