So, while Canada's got a balanced budget and New Zealand's paying down its national debt and Australia's government debt is about 11 per cent of GDP (versus 100 per cent of GDP in the United States), Americans are supposed to be encouraged because, in a spirit of comity, the bipartisan kleptocracy in Washington has nodded through a plan to make things worse.
An analysis by the Senate Budget Committee Republicans noted that 56 percent of the offsets for the reversal of the sequester come in FY 2022 and FY 2023 — a decade from now.Of course the Democrats are laughing all the way to the bank. While Republicans are making excuses.
Speaker Boehner called that "deficit reduction." I call that a fraud and everyone with any common sense would agree with me. What kind of message does it send to voters when Republican leadership is claiming that you can offset increases in spending today with cuts in spending a decade from now?
Everyone should be outraged by the actions of the House and Senate. Yet not a word from citizens, the media lap dogs remain quiet as usual. It would be better if no more bi-partisan agreements are passed as it costs Americans dearly every time.
It sends the message that the US is a joke. Canada, Australia and New Zealand are doing it now, not legislating fairyland cuts that kick in eight years after the legislators' terms of office end. Granted, all those countries have conservative governments, which the US is in no danger of getting any time soon.
But here's why the Republican Party really isn't good enough: it's not just that the GOP is less fiscally conservative - by which I mean fiscally responsible - than other conservative parties, it's less fiscally conservative than many left-wing governments.
If only we could get American conservatives to be as fiscally responsible as Canadian liberals.
When the left or the CBO tells you austerity, which we have never experienced , hurts the economy, look at the successful countries above. Compare them to the our pathetic recovery, our safety net which has become a joke as more Americans are encouraged to jump in, the waters fine. The job growth in the last 5 years after massive stimulus from the Fed. The millions who remain unemployed, all the while your politicians screaming we need more immigrants. The divided country as government pits business against worker, rich against poor, middle class against everyone. Those that pay for insurance against those that do not. The country vs. the evil insurers, oil companies, doctors, corporate jet owners, wealthy who refuse to pay their fair share, except Warren Buffet, gun owners, the Tea Party, Fox News. Is there anyone Obama hasn't hit yet, excluding the far left?
Maybe it's time to return to the 60's and question authority instead of remaining quiet, once again rebelling against a corrupt president (Nixon). Time for change we can believe in.
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ReplyDeleteWhat else do those 4 countries have in common Lou? They all have some level of universal healthcare, so my friend I guess it can be done and costs be kept under control. This by your own admittance in this post. They owe less per citizen to Government debt then we do. Guess maybe the joke is on you
ReplyDeleteWow Rick... some times your over active imagination (and bitterness) gets in the way of your own logic...
DeleteDebt per capita has nothing to do with what services a government provides and everything to do with services paid for with borrowed money.
Given that, except for Medicare, we pay for our medical care privately, cost of medical care has nothing to do with the amount of money the government borrows.
The fact that they (other countries) balance their budget or reduce their debt is a function of spending equal to or less than they take in revenues and not buying things they cannot pay for.
It's very logical TS. They pay for most of their peoples health care. But we still owe more per person and have more people. Where did all our money go that we can't do the same? Military industrial complex.
DeleteMilitary industrial complex??
DeleteMaybe at one time however the last 7 years have seen cutbacks in the military and increase in social spending. Having said that the common denominator in all the countries is fiscal responsibility. Sadly lacking in the US for the last 30 years, more so in the last 13. In 13 years they have increased the debt by 12 trillion dollars.
That in itself tells you it's not a R thing or a D thing but a lack of fiscal responsibility from both parties.
Healthcare is a straw man in the conversation.
Oh... were do we start.... Hey, what say we start with... education. We spend more than all of the countries that you mentioned but have performance results far lower than any of them...
DeleteRick,
DeleteHow do you get from countries that spend less on government to they have healthcare so they spend less for government.
By your logic, we should spend a trillion a year, healthcare for all, no limits, no restrictions and Obama will reduce spending by 2 trillion a year. A great trade, I'm for it. Where do we sign the petition? By the way, what gets cut? SS? Medicare? Medicaid? Welfare? DOE? DHS?
ps. This government, the joke is on me and every other American except for the faithful.
DeleteReminds me of the Nixon years, the faithful 20% could never be convinced he was wrong. The Obama 20% can never be convinced he is wrong
Hold on folks, check out the Treasury web site. 85% of the debt is owed to American Citizens. So, if you eliminate them, since one can't owe debt to oneself, you get $8,640 per person, less than all the other countries cited.
ReplyDeleteGood one. You could also erase the fed's holdings as well as SS holdings and reduce the debt another 5-6 trillion dollars. Problem solved.
DeleteROTFLMAO.
When I buy a $100,000 Treasury Note, I pay $100,000 minus the interest paid at maturity. At maturity the Treasury pays me the full $100,000, thus giving me a profit equal to accrued interest. During the maturation of the note, I don't owe the government anything, they owe me, I am the creditor and they are the debtor. Okay, not all the national debt is owed to U.S. interests, just the majority, and, by the way, the fraction of the debt owed to China is only about 3%, which represents Treasury instruments they currently hold because they feel that those notes are the safest investment for their spare cash. So, my frient, what do you find funny about all this?
DeleteYour right, the government should erase the debt to the citizens, maybe tell them, we are sorry the debt is smoke and mirrors so it doesn't need to be repaid.
DeleteYou have an interesting line of logic. The debt owed to citizens doesn't count. Either the government has to pay it back and it counts as it needs to be repaid or the government doesn't need to pay it pack and it doesn't count.
China, which owned an estimated $1.317 trillion in U.S. Treasuries, is the number-one investor among foreign governments, according to the November 2013 figures released by the U.S. Treasury. This amounts to over 23.1% of the U.S. debt held overseas and about 7.5% of the United States’ total debt load.
According to U.S. Treasury data, the percentage of U.S. debt held by foreign investors was about 33.0% of the United States’ total debt load as of November 2013.
No no. The original story states how much each American owes due to the national debt. Since most of said debt is actually owed to Americas who invest, directly or indirectly, in Treasury instruments, I say the numbers are artificially contrived. I apologize for understating the Chinese share, but I maintain that my original premise is still valid.
DeleteYou are right Mick... except for the real possibility that monetizing debt will leave you with considerably less in purchasing power than your committed capital and interest will purchase when you cash out.
DeleteMorning All and a disclaimer to open proceedings.
ReplyDeleteI am responding here as an Australian with a long standing interest in Debit and Deficit and national debit as a percentage of GDP. I also write as a personal friend of Lowman who has so often and for so long has guided me through some of the facets of your politics, Laws and the philosophy of being an American.
Lou holds Australia up as a shining beacon of hope for those who wish to live within their capacity to control their nations debit.Ric uses us as an example of a nation having universal health care and from the input of both my friends, we could be excused for believing we are living in the Garden of Eden.
The truth is far removed and our situation is different to the rest of the developed world for two reasons. Firstly, we have just (last September) completed six years of Socialist (Labor/Democrat) government and second we must remember that when Labor came to power, Australia had no fiscal debit; in fact the treasury had something like 20 billion in surplus. In addition to the above, the onset of Labor government coincided with the beginning of the GFC.
As with socialist governments since Lenin, the new government reacted to the GFC in the only way they understand; they threw money at it and when the treasury was empty, they borrowed and continued to throw even more money on the fire. In September last when the Liberals (Conservatives/Republicans) were elected, the country had a level of fiscal debit of about 300 billion.
Over the past two decades, Australia has been in the fortunate position of having unlimited deposits of iron ore in the Western part of the country and an inexhaustible demand for the product from Asia, particularly China and Japan. Logistically we are in the best position of ore exporting countries, access to ports and shipping costs are favorable and as long as the boom continues, all should be well. It is dangerous however for any nation to be so reliant on one source of income. Our manufacturing capacity is following that of America and we have the beginnings of the rust belt. Motor car manufacture will cease in three years when Toyota, GMH and Ford cease to manufacture here. I heard this morning that the national airline QANTAS is looking to get rid of up to 5 thousand workers and in addition to any cuts now, we must remember that most heavy maintenance has already been sent offshore.
Unlike America, convention dictates that the annual fiscal budget is passed through the national Parliament with only token changes (perhaps by a reduction in allocation s of one dollar!). The task of the government (Republican Party in your speak) is to reduce the deficit while continuing to pay back the debit. For our Conservative party, this is holy writ and we the populace can expect some severe cutbacks including to what we call middle class welfare.
Ric mentions the public health care system. Yes, it has been effective for decades but in our now fiscal difficulties, it is becoming unaffordable. There are serious proposals for co payments for visits to the Doctor and increases for the pharmaceuticals we need which are heavily subsidized to all but the wealthy. I pay US$4 approx for any drug prescribed and I see my Doctor at no cost. Public Hospitals are all free to everyone and those earning above a modest salary pay about 5 percent of their taxable income as a levy to fund the universal system...
I hope this helps round out understanding and from the above, I wonder if you can understand why Australians shake our heads in wonderment as we watch your reserve printing truck loads of paper to prop up an economy totally unable ever to clear the fiscal debit.
Cheers from Aussie
Nice post and explanation King Thanks.
DeleteK,
DeleteEven with the Liberal control of your country for years it is still ahead of the US. We have vast natural resources we refuse to tap. We have an endless supply of cheap labor thanks to our southern neighbor that damages the economy every year it's allowed to continue. We have 2 parties which remain totally irresponsible when it comes to the budget and debt.
Do we have a future, some would say it's quite bright, I see the light dimming as we refuse to address our spending issues. The Fed and the government is depending on a strong recovery to pay the interest on the debt. Unfortunately we have an insatiable desire to spend more as you will see with O's next budget due out soon. The man who said it was unAmerican to raise the debt limit and spend more than taxes received will propose yet another round of higher spending.
The party will continue until no one will accept the treasury note.
Lou
ReplyDeleteThis should be sent as a private communication as have so many in the past. However, I do detect a softening of the attitudes of some posters and your comments do touch a nerve, so raw that I feel it must be cauterized in the public arena.
Of course there is no possibility of clearing your fiscal debit and you have now reached the point in your history where quantitative easing (printing money without backing) is the only way to go. Wall Street has demonstrated compound interest at a level higher than immediately before the GFC, which as we all know was a U S generated phenomenon.
I must ask, is Wall St once more leading your nation and the world into another financial crises? Looking back to the great depression, has America found another possible President with the backbone and the drive of FDR? Surely, none here, irrespective of their political loyalty can either wish this upon the world, or nominate a savior. I do think you only have one chance at this and I for one can feel the fear as I stare into the abyss of a global Armageddon for the financial system as we know it.
What can the world next invent to foster trade and global finance if our system collapses? From trading salt for sea shells and fish through tokens, gold, Stock Markets, bonds and hedge funds, we have arrived at quantitative easing.
If nothing else, let us talk to each other. Perhaps in the end it will come down to us, the ordinary people to attempt to fix a problem our leaders cannot.
Cheers from Aussie
You are correct K. The debt when put into perspective is daunting at best and when you look at how it will affect every American should we continue down this road, scary for our future.
DeleteMost Americans live in a bubble and really are day to day people and 17 trillion has no meaning. Americans have come to believe government is the answer to all our problems, more spending. Doesn't matter what the problem is, hurricane damage, welfare, unemployment benefits, healthcare, government will fix it. The only problem, like people here, they think someone else should pay for it. We have always had disasters, at one time we dealt with it, no government needed.
Can the debt be repaid, yes. But before that magic task can happen, we need to face the reality of what do we really need, and what can really go away to cut the cost of government. Limited government with limited services cannot be the safety net for everyone and everything. A department of energy that has never reached energy independence and it is no longer their goal. A department of Education that redistributes tax dollars which is their primary goal. A president that hands out money like it's candy. Government is an addiction which never goes away.
A question, a government is much like a business, except business remakes itself, changes, downsizes, becomes more efficient. Government never downsizes and rids itself of useless programs. Radio Free Europe formed to combat communism during the USSR time, still in business still broadcasting to the regimes we don't like around the world.
All of it has to end to make a country take it's medicine and go back to work. Some would call it a return to personal responsibility. We cannot fix it as long as we have people saying government should do this, the debt doesn't matter. Well, one day soon when no one will buy our treasuries they will all discover, maybe debt does matter.
I think the problem with America and indeed the majority of the ‘free world’ (If that statement can still be made) is much more ideological than many are capable of admitting. Because this forum generally involves itself with domestic subjects, we rarely talk about world politics or how other countries have a vested interest in whether we as a nation and the free world in general, succeed or fail.
DeleteKingston once made reference to some of my comments about peoples associations as being similar to Sen. Joe McCarthy. It is interesting to me that Joe McCarthy is still a subject of vilification. While he certainly got the micro situation in America wrong on many occasions and cause considerable upheaval in the lives of many innocent people, his macro assertions were more than vindicated between the Venona files and many documents retrieved from Soviet archives in the 90’s. As I said about Nelson Mandela previously, he was financed, trained and funded by the Communist Party International who, through the SACP, worked as a foreign agent in South Africa to guide and form the ANC. That same organization has worked through the CPUSA , again verified by the Venona files and documents released by Russia after the collapse of the Soviet Union as being a conduit with many of the spies that operated in the US. The most highly placed spy was Harry Dexter White, the number two man the Treasury Department and one of the architects of the post-war international financial order — he designed the World Bank, the International Monetary Fund and the Bretton Woods agreement.
Far too many American historians believe that anti-communism or the search for Soviet spies was baseless paranoia. They recoil so strongly from McCarthy that they are unable to recognize that just because an objectionable politician cynically employed anti-communism does not mean that anti-communism was objectionable or unwarrented. The CPUSA was a haven for spies and Soviet subversion presented (presents) a genuine security threat to the United States.
At this point it is important for me to state that a distinction must be drawn between liberals, fellow-traveling liberals, and people who’s ideology it is to subvert any society not of a socialist mind to the communist way of thinking. As could be said of the CPUSA membership not all members were spies and subversives, but all spies and subversives were members either overtly or covertly.
Because of Joe McCarthy’s arm waving and the discredit it received, even though his as been proven very right on many counts and the breakup of the Soviet Union, we have turned our focus away from Russia, communism and their steadfast intentions. Little about Russia has changed and any westernization has been a matter of necessity. Make no mistake, Russia and China have people working every day to convert the common American, Australian and European away from the principles of liberty and freedom; to discredit the huge positive effects that capitalism has brought to the standard of living of a large percentage of people on this planet and convince people that without government in every facet of their lives, they cannot exist.
While we deliberate the actions and errors that lead us to the edge of a financial meltdown and how we extricate ourselves from it, perhaps we should spare a thought for the idea that maybe, others stick their noses in our business just as much as we seem to be doing in that of others. We don’t need to project our military might to keep ourselves safe but we do need to understand the enemy a bit better and remember that Stalin, Khrushchev and most recently Putin have all told us that we will destroy ourselves… and while most liberals are well intentioned as to motive, perhaps they are more guided than they know as to method.
Unfortunately the meltdown appears closer than we could imagine. Cuts in the military to fund social programs, more interest as 17 trillion has come and gone. The administration knows we have a problem yet will propose more spending. There will be no admission to the American people and the spending will be more than last year.
DeleteWill Americans wake to our reality or continue holding their hand out demanding more?
My money is on hands out demanding more. This is what our government has given us.