Posts in "Debt"

By Nick Leavens at 11:45PM

Jul 27, 2010

CBO BOMB: 'Deficits will cause debt to rise to unsupportable levels'...

Below is the text from the Congressional Budget Office website (which has been inaccessible due to apparent inability of government servers to present data efficiently). The document details the importance of lowering federal debt by cutting spending or by increasing federal revenues (or both).

Federal Debt and the Risk of a Fiscal Crisis
Over the past few years, U.S. government debt held by the public has grown rapidly—to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II. The recent increase in debt has been the result of three sets of factors: an imbalance between federal revenues and spending that predates the recession and the recent turmoil in financial markets, sharply lower revenues and elevated spending that derive directly from those economic conditions, and the costs of various federal policies implemented in response to the conditions.
More after the jump...

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By Joseph Gauthier at 6:49AM

Mar 17, 2010

Government Borrowing

One naïve idea concerning government borrowing is that the amount being borrowed by the government in a given year is approximately equal to its budget deficit for that year. However, those who commit to such an idea are ignoring an important part of the equation.

Typically, past debts incurred by the government through borrowing become payable each year.

For example, consider the 10-year Treasury note issued August 15, 2000, which corresponds to CUSIP 9128276J6. On this particular note, interest is payable (to the owner of the note) every February 15 and August 15; therefore, interest is first paid on February 15, 2001, and interest is last paid on August 15, 2010 (where the latter date coincides with the expiration date of the note). Once the note expires, the outstanding balance (in this case, 22.438 billion) is due in its entirety to the owner of the note.

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By Robert Bentley at 10:50PM

Mar 7, 2010

President Obama's Proposed Budget Would Add More Than $9.7 Trillion to the National Debt

When most people think that $12 trillion is a lot of money, we get this story:

President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall.

The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama's budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020.

When is it enough? When do our officials in Washington have to wake up before they realize they are destroying the country through debt?

It has been said that the greatest danger we face in this country is our fiscal irresponsibility.

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By Sam Swedberg at 4:50PM

Feb 8, 2010

$107 Trillion

social uh oh

In 2009 alone we had $107 trillion worth of unfunded liabilites, 10 times our national debt. Unfunded liabilities are the difference between the promised benefits of current and future generations and the amount of taxes and Medicare premiums collected. How long will the American people, especially the younger generations, allow blatent stealing of their money for programs they'll never benefit from anyway? I haven't met anyone who is complacent about money they've rightfully earned, yet most people still don't bat an eye when looking at their paychecks. Is it based on a blind faith that government will always provide? Whatever the reason may be, something must change. The sooner the better.

This article from the National Center for Policy Analysis is a great tool for anyone interested in arguing why Medicare or Social Security should be scrapped.

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By Bonnie Kristian at 1:51PM

Feb 3, 2010

With government, "change" almost always means a change to more government.

And "bringing new ideas to Washington" means new ideas for how to spend your money. Bush's budgets were horrific, of course, but Obama has definitely made things worse (particularly note that large increase in aggressive war -- er, defense -- spending):

Click on the image for a larger view.

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By Roy Antoun at 4:56PM

Feb 2, 2010

Deficit & Debt: Goodbye American Power

The United States has an interesting role in global markets. Since World War II, the US has entangled itself in superfluous alliances and Keynesian markets, engaging in the same illusory markets as its European counterparts. As Jihan discussed, we have recently learned that President Barack Obama’s proposed federal budget may put the United States' economic legitimacy in even greater risk than it has been before for several reasons. Primary, our deficit is running off “nearly 11 percent of the country’s entire economic output.” But as the NY Times has stated, most deficits are usually brought down during peacetime. However, with the way the United States has been handling foreign policy as of recent, any form of “peacetime” seems like an ocean away from any “hope.”

From NYT - Carrying the Budget

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By Bonnie Kristian at 11:15PM

Dec 2, 2009

College graduates' loan debt climbs to record levels

For students in Oregon (and around the country) times aren't good. Debt and tuition are up; job opportunities are down:

More than 60 percent of Oregon's 2008 graduates in public and private colleges took loans averaging $21,029. That is the 22nd highest debt rate in the nation, and just slightly lower than the national average – a record high of $23,200.

Aggravating the problem is their difficulty in finding jobs that enable them to pay off their loans. National unemployment rates for college graduates ages 20 to 24 rose from 7.6 percent in 2008 to 10.6 percent this year....At the same time, tuition has gone up significantly.

Peter Schiff has an explanation for the first two problems (well, and the third, but that's another blog post):

It's the government's fault for handing out so much money through loans and grants. No government bailout, Schiffian logic goes, no inflated tuition.

"College should not be so expensive. It's the biggest recession since the Great Depression. How could college prices go up?" Schiff asked...

Read the rest here.

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By Dave Grabaskas at 11:25AM

Nov 24, 2009

YAL at OSU Protests Reckless Gov't Spending

Members of YAL at Ohio State took to the streets to protest rising government debt and runaway inflation. For most of the afternoon, YAL blanketed campus with their giant debt poster. Despite the rain and the cold, many students stopped by to get more information on the national debt, inflation, and the Federal Reserve.

Later in the evening, YAL moved downtown to the steps of the Statehouse to let people know that we will not let our generation be destroyed by current , reckless government policy.

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By Brian Beyer at 11:01PM

Nov 17, 2009

Oh Thank Heaven for 7-11

During President Obama's trip to China, he was questioned about the cost of the healthcare reform that he is pushing through by Chinese journalists (Hard questions for the president are something refreshing, especially from somewhere like China. It's also a bit hypocritical that he lectured them on censorship when he censors his own questions and when US press censorship runs rampant). The Chinese were rightfully concerned about the cost of this new proposal as they are, by far, the number one buyers of US debt. Despite the phony numbers being thrown around by the left, the Centers for Medicare and Medicaid Services delivered a "deathblow to Obamacare" showing that costs will increase and people will lose insurance, among many other travesties.

With increasing pressure from Beijing to stop the reckless spending, the US is quickly running out of options. Paying all of the debt back would require massive tax hikes and drastic cuts in governmental programs (something which I certainly do not object to). If nothing is done soon, the US will be forced to repudiate its debt. This would leave China terribly angry and the US government with hardly a speck of credibility.

Unfortunately, I think we're well past this point. The only question now is, chapter 7 or chapter 11?

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