Tuesday, July 14, 2009

Of Debt and Deficit...

Understanding is the First Step to Solution

Who caused the Deficit?

Click on picture to enlarge

How the U.S. Federal Debt and Deficit Differ and How They Affect Each Other

The U.S. Federal Deficit is when government spending is greater than revenue received for that year. In Fiscal Year 2009, the budget deficit will be $1.75 trillion. The FY 2010 deficit will be $1.17 trillion.

The U.S. Federal Debt is over $11 trillion. This is nearly double the debt in 2000, which was $6 trillion.

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Budget deficit tops $1 trillion for first time

The federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher interest rates, inflation and the strength of the dollar.

The deficit has been widened by the huge sum the government has spent to ease the recession, combined with a sharp decline in tax revenues. The cost of wars in Iraq and Afghanistan also is a major factor.

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The U.S. National Debt and How It Got So Big

What the U.S. National Debt Is:
(Updated January 2009) The U.S. debt is $10.6 trillion, and is the sum of all outstanding debt owed by the Federal Government.

Over half is the public debt, which is owed to individuals, corporations and foreign governments, who have purchased Treasury Bills, Notes and Bonds.

The rest is owed by the government to itself, and is held as Government Account securities. Most of this is owed to the Social Security and other trust funds, which have been running surpluses. The securities are a promise to repay these funds when Baby Boomers retire over the next 20 years.

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Wallace H. said...

This is good information for someone who is looking to understand the situation. Unfortunately some of the individuals writing here don't seem to want to understand so much as derail any meaningful conversation.
Thank you for continuing to post good information and trying at least to help folks understand what is taking place.

It would appear that President Bush made virtually the same set of errors that President Johnson made with respect to taking the nation to war while trying to shield the population from having to sacrifice for and invest in, the war effort.

I've seen you quote Roosevelt, they should have learned the lesson he provided. But they didn't and the country now once again must pick up the pieces and put them back together.

Anonymous said...

Obama was president in February when we had the largest deficit increase in history. We just went over the 1 trillion dollar deficit mark for the first time in history, under Obama's watch and even alot of Democrats say it will go over 2 trillion. Fulk you can blame anyone you want to but this has taken place under Obama as President. Mark my words Obama will get the credit for this.

Toni D. said...

I'm afraid Lowell, that the information you keep providing is over the head of your trolls and they obviously don't want to learn anything anyway.

That being said though, it looks like we find ourselves as a nation in the position of needing to find a balance whereby we use enough stimulus to get things going and then instead of finding ways to use up the increased revenues made available when the economy begins showing a profit, simply pay off debt.
I remember conversations with you in 2000 when you said what bothered you about both Bush and Gore was that instead of using the surplus to pay down the national debt, Gore wanted to increase spending, and Bush wanted to cut taxes.

Bubby said...

Remember 2005 when Bush gave us the Medicare Prescription Drug Benefit, told us it would cost taxpayers $400 billion...then after his Republican majority gave it to him it mysteriously became $535 billion. And the medicare actuarial testified before Congress that he was threatened if he disclosed his own cost estimate ($600 billion).

And remember how Bush and the Republicans required that medicare NOT be allowed to negotiate group prescription discounts. That was quite the perk to their Pharma lobby buddies. Maybe that's why they don't want any competition for private health insurance companies.

The Medicare Drug Benefit is expected to cost American taxpayers $1.2 Trillion over the next 10 years. Ask his daddy, George Bush never was any good with money.

Anonymous said...

The pie chart is obviously designed to play numbers. For instance, "Recession" is blamed for a large piece, whereas "Bush..." is blamed for others. Obviously, Obama's healthcare reform is not included in his "agenda," because the numbers, even with all the taxes implemented and proposed don't add up. There are some non-political websites and videos that explain this clearly. If the chart uses items like "Recession," it should also use specific labels like "Iraq War," etc. Obama proposes and has implemented the largest spending bill(s) in history.

I have learned over the years that numbers can be skewed to say anything you want them to say. This is an obvious example.

And I used the Iraq War as an unpopular example. I guess that the president and many people feel that Saddam should have been able to go on killing without our stopping him -- but wait -- isn't the situation in Darfur the same? Obama wants to to into Darfur. Is this included on his "agenda" section of the pie chart? He has only been in office a few months. Hopefully, he won't stay eight years. We can't afford him.

Sammy Newcomb said...

Jeez anon, you ought to try reading before spouting.

From the pie chart article:

— “The first category — the business cycle — accounts for 37 percent of the $2 trillion swing.”

— Second, Bush-era legislation “like his tax cuts and the Medicare prescription drug benefit, [that] not only continue to cost the government but have also increased interest payments on the national debt.”

— Third, “Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000 [...] 20 percent of the swing.”

— Fourth, “About 7 percent comes from the stimulus bill that Mr. Obama signed in February.”

— Fifth, “only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.”

In other words, the very high deficits are not Obama’s fault according to any normal way of assessing political blame. That said, large deficits aren’t a moral failing that we need to hold someone accountable for. Rather, they’re a potential future practical problem that will have to be solved. Doing that will probably require a mixture of higher taxes, somewhat more hard-core health care reform that is likely to pass in 2009, and reductions in defense and possibly Social Security outlays.

Toni D. said...

You're right Sammy,
some painful decisions will be necessary, and with each one there will be anonytroll blaming each bit of pain on Obama and the Democrats.
What we need in these times are non and bi, partisan that is, kick your shoes off, stay awhile, y'all come back now, ya heah?

Anonymous said...

Plain and simple the debts we are adding to the DEFICIT are Obama's debt if the stimulus had not been a flop you party hacks would have said "see the stimulus was the answer" but you don't want Obama to bear the blame for the highest DEFICIT in history? Obama is a good at record setting in Feb. he set the record for the highest Deficit ever in one month and in July he just set the record for the highest DEFICIT in history. Drink some more Kool-Aid party hacks.

Anonymous said...

I have been a life long Democrat and i voted for Obama but the huge amount of debt we are loading on now really has me worried for our kids and grand kids. We have to stop the wasteful pork spending, Obama promised before he was elected he would give voters 5 days to look at every bill before he signed it that has not happened. I voted for the change Obama promised not what we have now.

John Doe said...

Lowell, you seem like a nice guy, everybody who knows you personally seems to think so. Why then must you be such a shill for the Democrats. Life is not about covering up the fallibilities of your own party, and making shit up out of thin air, to bullshit people into buying into the Democrat or Republican point of view. Why not stick to the truth?

Of course you and I will see things differently, but it maddens me when you make shit up that just isn't true. Like thanking Kaine for Virginia's current ranking. There is plenty to honestly support Kaine about without making shit up. Stick to what he really did right, and quit crediting him where credit is not due.

At least in my blog I criticize Republicans. Of course, neither of us will criticize our own party as much as the other party, but you have absolutely zero credibility if you always puke up the DNC party line. We have Bubby and Toni D. to do that.

Admitting mistakes and differences with your party is not a sign of weakness, it is a sign of strength of character. Try living up to your motto at the top of the blog and be an independent thinker.

Anonymous said...

Some helpful links, for the kool aid drinkers here. Since you're all so independent minded and all, I thought you'd want to read some other perspectives on Obama's economy. Enjoy:




Oh, before I forget...Democrats are awesome, Obama is a GOD. YAY for Dems!!!

Rockdem said...

Taking a bit of time to look things over before I leave the office.

Thank you for the links anon, good additional perspective. I'll read them more closely this evening but I'd say that while there are a couple of contradictions in his opinion, I agree with Mort Zuckerman's conclusion:

"No wonder poll after poll shows a steady erosion of confidence in the stimulus. So what kind of second-act stimulus should we look for? Something that might have a real multiplier effect, not a congressional wish list of pet programs. It is critical that the Obama administration not play politics with the issue. The time to get ready for a serious infrastructure program is now."

I am all about the infrastructure.

"It's a shame Washington didn't get it right the first time." Is subjective and time will tell...

Anyway, thanks again.

And you're right, Dems are awesome, thanks for the recognition.

Anonymous said...

Fulk do a post on Crying Deeds son Gus you know you would if it was Sarah Palin's kid that had a alcohol charge.

Rockdem said...

Why don't you? And while you're at it, why don't you show everyone how I have tormented anyone over what their children have done. Put up big boy.

Rockdem said...

John Doe,

I have posted repeatedly, on several blog sites specifically addressed to you, my contact information. You have even committed to making contact directly, but have not done so.

If you wish to have a conversation I am, as I have both stated, and presented to anyone who reads the internet, so give me a call. Hell, you can call collect if you can't afford the charge.

As I have stated before on many more than one occasion, I'm not hard to find. My name is in the book. Look me up on anywho.com...
Thing is, you don't really seem to want direct contact, or confrontation... But know that I'm your huckleberry if you're so inclined.
Anon, I know you fear direct contact... You don't even count.

Either way, unless you're willing to man up and converse directly...

You're just noise.

Anonymous said...

Fulk what happened to this being the discussion page of free thinking individuals you are not so free thinking are you ? If everyone thought exactly the way you do you wouldn't have a problem with their comments would you ?

Bubby said...

New Rule: Until the Republican Party gets a vision for America's future and some true elected leadership there is no reason to treat the Republican Party as a viable national political party. It has become irrelevant in a time when much hard work is required.

As for Virginia; as per usual, the illusion survives...barely. What will November bring?

Anonymous said...

Bubby, November is going to bring something you really are going to hate, and you can thank BHO for helping the Republicans to win.

Rockdem said...


I've watched Tim and Mark both work to put the state in the position to make VA attractive to businesses looking for a location to settle.

I'm not making things up, and I'm being honest. I don't agree with Tim on some of the things he's pursued, and I agree strongly on some. But in my opinion, a considered opinion, I think he has contributed greatly to the rankings VA receives. I'm not claiming he did it all by himself however.

I'll be back later when I get home.

And I'm not kidding about giving me a call. Blog conversations are o.k. to a degree, but direct conversation is much preferable, by me at least. Your identity is safe.