3 reasons to fear America's massive $70 trillion debt pile

[GrouchoTex]

America's debt load is about to hit a record. The combination of cheap money and soaring debt helped fuel the decade-long economic expansion and bull market, but America's gluttony of loans could work against it if its fragile economic balance shifts.
 
In the first quarter of 2019, the United States' total public- and private-sector debt amounted to nearly $70 trillion, according to research by the Institute of International Finance. Federal government debt and liabilities of private corporations excluding banks both hit new highs

www.msn.com/en-us/money/markets/3-reasons-to-fear-americas-massive-dollar70-trillion-debt-pile/ar-AAEsOln

[Free Vulcan]

Let's just cut the BS here. Quit fooling ourselves with this smug and douchy talk of 'passing this debt onto our grandcihldren' crap.

The debt problem is HERE and it is NOW. If interest rates were at historical levels, right now a third of our budget would be going to interest.

And as debt growth keeps outpacing revenue growth, within 10 years even current levels of interest rates will mean interest consumes our budget.

Imagine military and all social spending being cut by half or more because the rest is going to interest. A very ugly scenario.

It eventually will crush stocks, bonds, and our currency. Then look out Venezuela.

My only advice: Think Amish.

[GrouchoTex]

It is MSN, but the only thing that stood out to me as suspect in the article was that they blamed the tax cuts for the jump in the deficit.
Short term, this may be the case, but long term, this should actually increase the revenue into the Treasury, with more jobs, higher wages, enabling more taxes to be paid.
Fairly even-handed article.

[GrouchoTex]

This line:

America has a lot of debt to pay back. The Treasury Department reported that the budget deficit jumped more than 23% between October and the end of June, widening some $750 billion. That is in part due to President Donald Trump's 2017 tax cuts. US debt is at a new all-time high because of increases in government borrowings, which now amount to 101% of GDP, the IIF says.

This part, That is in part due to President Donald Trump's 2017 tax cuts, I think will be only a short term issue, as I've stated before.

Now, this is frightening:

101% of GDP

[roamer_1]

It is MSN, but the only thing that stood out to me as suspect in the article was that they blamed the tax cuts for the jump in the deficit.
Short term, this may be the case, but long term, this should actually increase the revenue into the Treasury, with more jobs, higher wages, enabling more taxes to be paid.
Fairly even-handed article.

No, the tax cut is not to blame, except in the fact that it was not followed with cuts in spending.
The spending is the problem.
The spending is the problem.
The spending is the problem.

[jmyrlefuller]

It is MSN, but the only thing that stood out to me as suspect in the article was that they blamed the tax cuts for the jump in the deficit.
Short term, this may be the case, but long term, this should actually increase the revenue into the Treasury, with more jobs, higher wages, enabling more taxes to be paid.
Fairly even-handed article.

Not when somewhere around 40% aren't paying into the income tax system, it doesn't work that way. It doesn't matter how much the economy grows; when someone's paying zero, it's still zero.

[GrouchoTex]

No, the tax cut is not to blame, except in the fact that it was not followed with cuts in spending.
The spending is the problem.
The spending is the problem.
The spending is the problem.

Agree 100%

[GrouchoTex]

Not when somewhere around 40% aren't paying into the income tax system, it doesn't work that way. It doesn't matter how much the economy grows; when someone's paying zero, it's still zero.

True, they are not paying income tax, but they are paying other federal taxes, excise taxes, fees, social security is still withheld, as well medicare.
I'd prefer a consumption tax or a flat tax.

[berdie]

No, the tax cut is not to blame, except in the fact that it was not followed with cuts in spending.
The spending is the problem.
The spending is the problem.
The spending is the problem.

It absolutely is @roamer_1 .  But they aren't going  to stop in our lifetime.

[roamer_1]

It absolutely is @roamer_1 .  But they aren't going  to stop in our lifetime.

Oh, it'll stop, sooner or later @berdie ... With a bang.

[rustynail]

Leave the 'Federal Reserve' say thanks we are going in different direction?

[corbe]

Deficit Continues to Swell as Debt Is Suddenly Not An Issue

By Dave Manual

https://www.davemanuel.com/2019/03/09/us-debt-clock-22-trillion-nobody-cares/

The approaching 22 Trillion in national debt does not seem to be in focus at all.Remember when the size of the deficit and national debt was a really big deal in the United States.

 These days it seems as though nobody cares anymore.

 Earlier this week, the United States debt clock ticked over the $22 trillion mark for the very first time. This came on the same week that the Treasury Department announced that the deficit through the first four months of the year was $310 billion, up 77% from the same period last year.

 The blame was placed at the feet of plummeting tax revenues and increased government spending.

 Of the $22 trillion that the United States owes, over $16.2 trillion is in the form of public debt (that is money that is owed to foreign governments, pension funds, individual investors, foreign investors, etc) and the rest is on the form of intragovernmental holdings (money that is owed to the Social Security fund, etc).

 Since 1999, the US government has added $16.5 trillion in debt.

 Since 2004, the US government has added almost $15 trillion in debt.

 Since 2010, the US government has added almost $9 trillion in debt.

 The cost to taxpayers is real, as the US government needs to spend countless billions of dollars per year servicing this debt.

 Nobody seems to care.

 In the past, the national debt and deficit were two very big election issues. In the upcoming 2020 Presidential election, they will almost certainly be secondary issues behind immigration, national security, the economy and foreign relations.

 None of that seems to matter anymore.

 According to the CBO, the United States will be posting deficits that will average $1.2 trillion by 2025, and this will further increase to $1.4 trillion by 2028, provided that things don't change.

 Where is the outrage over deficits and debt now?

[edpc]

I’m not worried about the debt. A stable genius told us we’d grow our way out of it.

[corbe]

I’m not worried about the debt. A stable genius told us we’d grow our way out of it.

   You're being too harsh @edpc He's still got 5 years (hopefully) to complete his 8 year plan of eliminating it entirely.

[roamer_1]

   You're being too harsh @edpc He's still got 5 years (hopefully) to complete his 8 year plan of eliminating it entirely.

Yeah... and that's a long time, jacking up the credit cards before declaring bankruptcy.

[GrouchoTex]

I’m not worried about the debt. A stable genius told us we’d grow our way out of it.

 

Seriously, though, that's only part of the solution.
The other part is cutting spending, which neither party or the President, and those that preceding him, seemed too concerned about.
No, they won't worry.
They'll be fine.
The congress members will have their wealth stashed someplace safe.
Even the relatively poorer Clinton's and Obama's have more money (somehow) than they can spend in their lifetimes.
Just us poor fools, hoping that our Social Security checks will cash, and we aren't spending $20.00 on a loaf of bread and $15.00 for a gallon of gas.
Not a problem, they'll just find a way to tax us all more.

[Hoodat]

If interest rates were at historical levels, right now a third of our budget would be going to interest.

But if you simply print up new money to finance government excess, then you can set interest rates as low as you want because you no longer have to borrow anything from anyone who currently has any money.  You simply steal from the value of that money without their consent.

[roamer_1]

But if you simply print up new money to finance government excess, then you can set interest rates as low as you want because you no longer have to borrow anything from anyone who currently has any money.  You simply steal from the value of that money without their consent.

Which is exactly what is happening.

[Hoodat]

Which is exactly what is happening.

Econ 101 - Interest rates are always higher than inflation.  If you ever find this untrue, then someone is playing with the money supply.

Funny how we bitched about it when Obama was doing it.  But now that Trump is doing it (and even worse), his sycophants give him a free pass.

[roamer_1]

Econ 101 - Interest rates are always higher than inflation.  If you ever find this untrue, then someone is playing with the money supply.

It explains an exploding stock market - more dollars needed for the same trade - which looks like prosperity... And  it explains why the same effect hurts Main Street. more dollars to pay for the same groceries.

[Free Vulcan]

But if you simply print up new money to finance government excess, then you can set interest rates as low as you want because you no longer have to borrow anything from anyone who currently has any money.  You simply steal from the value of that money without their consent.

Until the foreigners swamp our debt and currency markets with our unwanted paper and crash them.

Then you just simply financially implode.

[edpc]

Apparently, all the talk we’ve heard about deficit concern has been BS, even from the loudest voices. That - or they’ve completely sold their souls to the current admin.


LIMBAUGH: Nobody is a fiscal conservative anymore. All this talk about concern for the deficit and the budget has been bogus for as long as it's been around.


https://www-m.cnn.com/2019/07/17/politics/rush-limbaugh-debt-trump/index.html?r=https%3A%2F%2Fwww.cnn.com%2F

[Bill Cipher]

It is MSN, but the only thing that stood out to me as suspect in the article was that they blamed the tax cuts for the jump in the deficit.
Short term, this may be the case, but long term, this should actually increase the revenue into the Treasury, with more jobs, higher wages, enabling more taxes to be paid.
Fairly even-handed article.

Doubtful.  The Laffer Curve only has positive net revenue effects from a tax cut when the existing marginal rates are extremely high, as they were in the 1970s.

[Victoria33]

It is MSN, but the only thing that stood out to me as suspect in the article was that they blamed the tax cuts for the jump in the deficit.

No, just the tax cuts did not cause this.  Saying that is just to use one thing to blame it on, which is ridiculous.  The last time our budget was balanced, in fact the last two times, was when John Kasich was in charge of the budget in the US House.  Has never been balanced since he left congress.

Now, some of you will post hateful things about Kasich as you always do, but no matter what you say, no balanced budget since he left.

"John Kasich. Kasich served nine terms as a member of the United States House of Representatives, representing Ohio's 12th congressional district from 1983 to 2001. His tenure in the House included 18 years on the House Armed Services Committee and six years as chairman of the House Budget Committee.

[InHeavenThereIsNoBeer]

It explains an exploding stock market - more dollars needed for the same trade - which looks like prosperity... And  it explains why the same effect hurts Main Street. more dollars to pay for the same groceries.

That would make sense, except prices for things like groceries aren't rising.  And I can't think of anything that's rising in price at the same rate as the markets.

For our exploding stock market, one big cause is low interest rates provide an incentive for companies to borrow money to invest in productive resources buy back their own stock, juicing prices higher and bringing in bonuses for the execs.  It's been a year or three, but at one point I saw an article claiming that stock buybacks during the "Great Recovery" roughly matched market cap gains.  Low interest rates also push people into the stock market, because they can't make any money elsewhere.  And there's the whole bubble thing to go along with it.