How much debt is enough?

[Yossarian]

We all know they are going to raise the debt limit so we really should skip the Kabuki theater. But I wonder when people finally say enough.


Did you know that since President Obama came into office, the debt limit has been raised seven times?

With those increases, Congress has added $43,000 in debt for every American household in just the last four years.

And now the debt limit deadline is looming again. Treasury will run out of tricks to keep paying the bills on October 17, Secretary Jack Lew announced yesterday.

Instead of pursuing significant spending cuts and entitlement reforms that are desperately needed to get spending under control, House Republicans reportedly are proposing to suspend the debt ceiling for more than a year, which would add $1.1 trillion to the debt.

So, take that $43,000 per household that was added in the last four years and tack on another $8,800 per household.

http://blog.heritage.org/2013/09/26/morning-bell-43000-per-household/

[JaneV2.0]

Wikipedia has this to say:

US government indebtedness has been the norm in the financial history of the nation. The carriage of debt in Western Europe and North America by governments has been normal for the past 200 years, so the US situation is not unique.

The US has been in debt every year except for 1835.
...
Every President since Herbert Hoover has added to the national debt expressed in absolute dollars. The debt ceiling has been raised 74 times since March 1962,[1] including 18 times under Ronald Reagan, eight times under Bill Clinton, seven times under George W. Bush, and three times under Barack Obama.

[ApatheticNoMore]

The time to decide that is when actually passing budgets, not when deciding to actually spend the money that they already agreed to spend.

Suffice to say that looking at it terms of paying it back seems the wrong way to look at it as I'm sure there is no plan to ever pay it back (so the total per household doesn't matter). So scratch that. So then it becomes about ability to service interest on the debt, and get enough purchases on new debt, keeping in mind they can just monetize some of it. And when they do I'm not sure that is any different than that which they've ALREADY done for the banks to purchase MBS and other "toxic assets".

[Alan]

The time to decide that is when actually passing budgets.
And when was the last time the Senate allowed a budget to proceed?


Suffice to say that looking at it terms of paying it back seems the wrong way to look at it as I'm sure there is no plan to ever pay it back (so the total per household doesn't matter).
Sure it does. Even if the debt is never repaid, it still must be serviced....do you have any idea how much of our annual budget is simply servicing the debt, without reducing principle?

[Rogar]

We all know they are going to raise the debt limit so we really should skip the Kabuki theater. But I wonder when people finally say enough.

In all fairness it is interesting to look not just at Obama, but to the Reagan and two Bush administrations where debt rose from some where around 30% of GNP to close to 90%. With Clinton bringing the ratio down a little. And the Obama administration, after bailing out the auto and banking industry, continues to offer economic stimulus through quantitative easing. Which all seems to be helping an economic recovery after one of the most severe recessions in recent history, while keeping inflation at bay.
http://zfacts.com/p/318.html

After all, it's as much about politics as economics.

[Yossarian]

In all fairness

I'm sorry, but in all fairness that is total crap. Anyone who looks at the debt as a partisan poltical issue is, IMHO, a moron and ought to have their citizenship revoked. Politics is the only way to stop the growing deficit, but the "well the other side got to do it" mentality is the type of BS that leads to nothing ever getting fixed because it goes on ad infinitum. There will always be an excuse if the each side claims a free pass because the other did it. People need to be responsible for their own actions.

[iris lilies]

I'm sorry, but in all fairness that is total crap. Anyone who looks at the debt as a partisan poltical issue is, IMHO, a moron and ought to have their citizenship revoked. Politics is the only way to stop the growing deficit, but the "well the other side got to do it" mentality is the type of BS that leads to nothing ever getting fixed because it goes on ad infinitum. There will always be an excuse if the each side claims a free pass because the other did it. People need to be responsible for their own actions.

Yes, agreed.

"GW isn't the President now, try to get over it." --PDQ

makes me laugh every time, it's so silly but true.

[Rogar]

I'm sorry, Yossarian, but I see the resolution of the debt issue as being quite partisan with sides being drawn up clearly between conservatives and liberals with neither side interested in much compromise. I agree that the way to get out of this gridlock is for this to end.

I also see a lot of demonizing of Obama, when the issue goes much deeper historically.

[gimmethesimplelife]

I'm sorry, Yossarian, but I see the resolution of the debt issue as being quite partisan with sides being drawn up clearly between conservatives and liberals with neither side interested in much compromise. I agree that the way to get out of this gridlock is for this to end.

I also see a lot of demonizing of Obama, when the issue goes much deeper historically.I couldn't agree with you more. Rob

[ApatheticNoMore]

And the Obama administration, after bailing out the auto and banking industry, continues to offer economic stimulus through quantitative easing. Which all seems to be helping an economic recovery after one of the most severe recessions in recent history, while keeping inflation at bay.

the QE "stimulus" seems to be mostly helping the richest segments of society while everyone else grows progressively poorer.

As for people being responsible for thier own actions, yea for the stuff the Obama administration does by itself I do hold him responsible, but much domestic spending isn't. And deficits grow out of historical context, not just the debt built up in the past (although that is part of the interest cost), but also tax policy passed in the past as well.

I regard it as almost entirely political and hopeless. I don't think there is any desire to resolve it in a way that will benefit the vast majority of citizens.

[Rogar]

the QE "stimulus" seems to be mostly helping the richest segments of society while everyone else grows progressively poorer.

I agree that the recovery has been slow and the gap between the rich and poor grows, but I think generally speaking the partial recovery of the housing market, improvement in employment, and higher stock prices have helped the middle class.


As for people being responsible for thier own actions, yea for the stuff the Obama administration does by itself I do hold him responsible, but much domestic spending isn't. And deficits grow out of historical context, not just the debt built up in the past (although that is part of the interest cost), but also tax policy passed in the past as well.
I think if you subtract two questionable wars, tax cuts, and parts of the stimulus all under the Bush watch and only look at laws passed by Obama that had spending increases he comes out looking fairly good relative to previous administrations. For that matter, isn't it congress that is in charge of spending? Placing blame doesn't solve problems, but public perception of the issues guides elections and the future leaders. See:
http://talkingpointsmemo.com/dc/an-obama-spending-spree-hardly-chart?ref=fpb


I regard it as almost entirely political and hopeless. I don't think there is any desire to resolve it in a way that will benefit the vast majority of citizens.
I guess my take is the old argument that a balanced approach where revenue is increased and spending reduced makes sense, but is basically unacceptable on the tax side to one group. And when we talk about reducing what is considered discretionary spending the big culprits are medicare/medicaid and social security which seem like sacred cows to most of us. And no one seems to want to make big cuts in military spending, which is another huge outlay. At least congress and the president don't seem headed this way, although I think public opinion is different. So it does seem sort of hopeless.

[puglogic]

"GW isn't the President now, try to get over it." --PDQ

I'll get over it when I'm no longer paying for it. As of today, I still am.

Without the incredibly irresponsible debt run up by the Reagan/Bush years (and its continued servicing, thank you Alan), it's possible we'd still be in the mess we're in, but equally possible we would not be. My time machine is in the shop. (edited to add: I'll say the same thing about Obama's stupid costly moves ten years from now)

It's quite political. And because it's so politicized, I don't believe there's any way out of it without catastrophe. Party on, Garth!