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help me understand our debt crisis
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Anonymous
| I am by no means a brainiac when it comes to our gov, so I thought one of you may be and can explain in a layman term why we are in debt so deep in this country. I would think the simply solution would be clean our house first before trying to clean someone else, as in Haiti. I am all for helping out the needy but only if it is not going to harm my pocket in the process. I would not lend my brother a dime if it meant my child would not eat because I would then not have the money to feed him. If we have starving, homeless people in this country, should we not be concerned here first? As far as the war, bring our men and women home and let those people take care of themselves. Why loose our citizens in Afganistan when they don't want us and it is costing our country a fortune to be there. It would make more since to me to bring them home and protect our borders from terrorism, not go after it. Why do we insist on giving other countries our time, effort, food and money when we are in deep debt? That is just plain damn stupid. Any answers would be greatly appreciated. |
Anonymous
| Even with our problems, we are better off than most, and immeasurably better off than Haiti. Unless you are giving every dime you can spare to hungry people here, the fact that we have our own problems is a weak reason for ignoring massive suffering elsewhere. |
jsteele
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Your question is complex and involves a number of issues, many of which go beyond the national debt. In addition, some would dispute your basic premise. Why do you consider our current debt to be a crisis? I'd argue that like a number of issues today, the debt has been politicized. The debt is not analyzed academically, but from political perspectives. When Republicans ran up debts, Democrats criticized them. I remember as far back as when Mondale ran against Reagan, Mondale attacked Reagan for running up the debt. Democrats attacked Bush about the debt all through his two terms. Now, Republicans are suddenly concerned about the national debt, despite have ignored the topic for 8 years under Bush. I agree with Keynes' ideas about debt and investment. Perhaps not coincidentally, a Keynesian approach would lead to criticism of the Bush and Reagan debts (largely generated by tax cuts and military expenditures) and support of Obama's debt (to the extent that it is generated by stimulus investment). Think of it this way, if you borrow money for 5 years to buy a car, you end up with nothing but a five-year-old car. If you borrow the same money and use it to start a business, you will hopefully end up with a business that generates more revenue than required for paying back the loan. Reagan and Bush bought weapons and/or waged wars that offered little in return as far as investment is concerned (but did wonders for specific corporations). However, by building transportation infrastructure and undertaking other stimulative ventures, Obama's borrowing will have an economic return. In addition, the vast majority of spending increases under Obama are not due to stimulus programs or even government bailouts. The economic downturn triggered a number of automatic spending increases in government programs. These were things over which Obama had little control. Finally, in the long term, debt does have a significant number of negative ramifications. But, the time to have reduced debt was at the beginning of the Bush administration when the US had record budget surpluses. Instead of undertaking debt reduction, Bush supported tax cuts for the wealthy. This turned the record surpluses into record deficits. Now that we are in the hole economically, we have to spend our way out of it. Once we have recovered, we should focus on the debt. But, cutting spending during a time of economic problems will only increase those problems. |
jsteele
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|
Just to follow up, here is a concise article about the manufactured concern for the budget deficit (not the same as national debt, but related)
http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-budget-deficit-crisis-crisis/ |
Anonymous
You should totally try this line on Jesus at Judgement Day. |
Anonymous
Oh for Goodness sake, did you read my whole paragraph? I would not put my family in the hole for another, would you? Honestly? My point is why are we trying to fix the whole damn world when we ourselves are so broke? This isn't about Regan, Bush or Obama. I just wanted an answer in layman's terms. Guess I asked a bunch of bleeding heard liberals that took this as an opportunity to slam the Republicans again. Please, if you do not know the answer or can give me a logical reason to the question..shut up. |
jsteele
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If you want to have a rational discussion, I more than willing to engage you. But, this kind of rant doesn't suggest that you actually care to learn anything about this topic. You make a number presumptions that are overly simplistic and not easy to respond to in the course of a few paragraphs. Why do you think we want to "fix the whole damn world"? Do you think we are in Iraq and Afghanistan in order to "fix" them? I don't think we are there because of bleeding heart liberals. If you are opposed to providing assistance to Haiti, what is the alternative? You can tell the Haitians to fuck off and die, but many of them will not obey. Past experience has shown that we would soon find the Haitians washing up on Florida beaches. Do you propose that our navy blow them out of the water? And, what would be the cost of constantly patrolling the ocean and attacking (at time mistakenly) suspected refugees? That would probably exceed the money currently being spent in Haiti in pretty short order, not to mention what it would do to our standing in the world. If you feel that we should do more for our people at home, I'm right there with you. But, that is going to cost money. Complaining about an imaginary "debt crisis" while at the same time advocating that more be spent on our own nation is contradictory. We are providing $450 million to Haiti. That is a drop in the bucket as far as money is concerned. If you think cutting that off and diverting it to America would even be noticed in this country, you are fooling yourself. We need a jobs bill on the order of a half trillion dollars (but aren't going to get even close to it). Significant money could have been saved by not launching the wars in Iraq and Afghanistan. I agree with that, but I guess saying so makes me a bleeding heart liberal who is slamming Republicans. You probably wouldn't find that to be logical. But, we pay about $10 billion a month for those wars. They should be ended, but I'll just shut up. |
Anonymous
It is very simple. Every time you give someone else a dollar, you have one less dollar yourself (at least in the short term). Whenever you give charity, you make yourself and/or your family poorer, at least in material terms. Your argument is that the US cannot afford to give anyone else a dollar, because it has some debt. This is not correct. The US debt is sustainable, and reflects, amongst other things, a shift from private to public expenditure during a recession. The US spends less on development aid as a percent of wealth than almost any other developed country. So the US could afford to spend more, much more on aid than it currently does. You might be asking a different question, which is "should the US spend any money on foreign aid when there are domestic priorities that need funding"? The answer to this will depend on your value system. If you think all human beings are equally worthy of respect, then one dollar in aid can do much more to save lives (e.g. through vaccinating 12 children against polio in Africa) abroad than in the US, where problems like stunted growth due to under-nourishment are not common. |
Anonymous
|
I have a mortgage. That is debt. But I am not poor. I gave to Haiti relief. So can the U.S. government.
Despite the enormity of the tragedy in Haiti, the amount nations are contributing is incredibly small compared to the size of their economy. We pledged .0000069% of our GDP in the initial Haiti relief effort. To put that in perspective, if you make $75,000 a year, and you donated the same percentage, you would have pledged 1/2 of a penny. |
Anonymous
| Also, even *if* you cared only about the US "bottom line" you can bet that we'll be better off with a functioning economy/nation in Haiti than with a basket case. |
Anonymous
Priceless! |
Anonymous
| op here. Thanks for some of your comments. To the others, well I will leave it for you to think what I want to say to you. So back to my original post, am I to believe our country is in debt or not? Did Bush ruin the country or is Obama full of @#$!, It can not be both. Either the United States if broke or we are not. All I here is how broke this country is, how much debt we owe to _________, not sure who we owe money. Haiti was just an example, I am not against helping any one at all, just want to know how we justify sending money any where if we are really that broke. |
Anonymous
| Just answer the question OP asks. Inquiring minds really want to know. |
Anonymous
On the first point, it is surely possible that Bush screwed up the country AND that Obama has failed to deliver what we had hoped for. As to the second, it is possible for the US to be massively in debt and yet still have money to spend. Money is a promise, and as long as people believe the promise, our money works. I think the world still considers the US too big to fail. |
jsteele
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How do you define "broke". Are you broke when you owe more money than you currently have? Or, are you broke when you can no longer afford to finance your debt? Or, are you broke when financing your debt leaves you no money for anything else? Under the first definition, the US is broke. But, almost nobody would use that definition. Under the second definition, we are not broke or even close to broke. There are divided opinions regarding how close we may be to being broke under the third definition. The current cost of financing our debt leaves significant funds available for other expenditures. US Government debt is considered non-risky, so financing it remains low cost and generally easy to finance. But, there are legitimate concerns -- exaggerated in some quarters -- that this may not be the case for long. To put this in more familiar terms. If you purchase a house with a 30 year mortgage, the full cost of that mortgage will almost certainly be more than the amount of money you have on hand at any given time. Otherwise, you would probably have paid cash. But, you are not considered broke. As long as you can afford your mortgage and still have enough money left over on which to live, you are not broke. You are only considered broke when you can no longer make payments on your debt (mortgage, credit card, etc.). |