Debt and Deficits

Federal Debt Still Completely Out of Control

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As the world seemingly goes to hell via armed conflict overseas and at home, here's a quick reminder from the Congressional Budget Office (CBO) that the money for all of that ammunition—whether the explicitly lethal stuff or less-lethal rubber bullets—has to run out eventually. Federal spending continues to outstrip revenue for as far into the future as the CBO can see. From the most recent 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.

Debt

Of course, that money running out doesn't actually fix anything. Not in a planned way. More than likely, it just generates a whole new world of hurt.

How long the nation could sustain such growth in federal debt is impossible to predict with any confidence. At some point, investors would begin to doubt the government's willingness or ability to pay its debt obligations, which would require the government to pay much higher interest costs to borrow money. Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country.

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  1. Weigel bait.

    But the deficit has been cut in half! Derp.

  2. I have a cunning plan: Reduce spending to revenue levels.

    1. That’s crazy talk.

    2. No, you spend. Fuck cutting.

        1. I’ve got all the right parts in there, so I’m pretty sure it’s perfect.

          1. Close enough for government work as they say.

      1. No, you cut. Spend fucking.

        1. Not another circumcision thread . . . .

  3. Let’s spend more on our brave men and women in uniform. After all, look at all they have done to protect our freedoms!

    Have you thanked a troosie for his or her service today? No? You should be ashamed of yourself!

    Troops need to be paid and they need better benefits!

    1. HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

  4. Government can just print money and create value out of thin air, because it’s like magic and stuff.

    1. True…as long as the public doesn’t notice the “coin clipping.”

  5. Present politicians with difficult choices? Oh please. Beside, this is all just pretend money anyway.

    1. Are you any relation to the Sparky who was a regular poster in these here parts last year?

      1. The very same. Finally settled into a new job a month ago so I’ve had a bit of stability restored to my life.

        1. Ke$sha is still disgusting. Thought you might like to know.

          1. I can see you still have no taste in women. By the way, I heard she’s dropping the $. I might have to update my handle again.

  6. The first problem with this analysis is that the total federal debt is actually $17.7 trillion, and thus already more than $100% of GDP.

    They play a nifty accounting trick in deducting $5 trillion of “Intragovernmental Holdings” and report only the “Debt Held by the Public”.

    This is exactly the sort of accounting fraud that would send a private sector CFO to prison.

    The Treasury is treating the Government Trust Funds (e.g. Social Security) as a subsidiary entity, but only consolidating their assets while leaving their liabilities off the balance sheet.

    I’m no CPA, but I’m pretty sure that approach is not in keeping with Generally Accepted Accounting Principles.

    1. I’m no CPA, but I’m pretty sure that approach is not in keeping with Generally Accepted Accounting Principles.

      GAAP is only for those who can’t steal their way out of hole.

    2. That’s wonderful news! That means that the government could just lend itself $17 trillion, sell the bonds to the public, and use the proceeds to pay off the debt. Problem solved!

  7. According to Debt to the Penny, the total deficit this fiscal year is $933BB.

    I still say we’ll hit another trillion dollar deficit this fiscal year.

  8. And, if you’re one of those folks who likes to say intra-governmental holdings don’t count, the deficit is $734BB so far this year.

    1. I love that nonsense. If it works for government, why not for businesses? Or for me? Sorry, I have IOUs to myself that offset my income. Please refund all withholdings for income tax, thanks.

  9. American government can’t fix this problem already for many years. They said before that things are getting better and that they can control it but we can see that the debt is already out of control. I think that people whose job is to control this debt know what to do but it seems that they don’t if there is no progress. But also it’s important to remember that the economical situation is tough now almost everywhere. So methods which would work if the economy would be healthy just don’t work when the economy is sick and depressed worldwide. Even in relatively stable countries more and more consumers apply for fast cash advance loans and make debts to stay afloat.

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