National Debt: Payments on the interest (not the capital)

[AZRedhawk44]

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

So:

The budget is typically around $2.9 trillion. 

Obama is proposing a $3.8T budget.

http://www.foxnews.com/politics/2010/01/30/report-obama-propose-trillion-budget/

The INTEREST PAYMENTS against the debt in 2007 were $429 billion.  Just in INTEREST.

In 2008, we paid $451 billion.  In INTEREST payments.

In 2009, we cut the payments to the INTEREST on the national debt.  We only paid $383 billion.

So, with a $1T increased budget, and revenues down, we are going to increase borrowing by $1T.

If our interest payments were $451 billion in 2008 and reasonably on-track for responsible repayment of a $9T debt, and we increased borrowing in 2009 and lost revenues due to a slow economy so that we could only pay part of the interest payment ($70 billion less in payments but increased borrowing to $12T total), then we are probably facing a responsible repayment amount of nearly $650 billion dollars a year against a $13T debt.

$650 billion dollars a year.

The 2008 Department of Defense base budget was only $481.4 billion.
http://www.whitehouse.gov/omb/rewrite/budget/fy2008/defense.html

We added another $141.7 billion in 2008 deliberately to fight a war, for a total DoD budget of $623.1 billion.

We're in trouble.

[makattak]

Deficit

[41magsnub]

So, we "only" had a 400 and some odd billion dollar debt in 2008 per Mak's graph and then suddenly a 1.85 trillion dollar debt in 2009?  I'm confused...

[makattak]

So, we "only" had a 400 and some odd billion dollar debt in 2008 per Mak's graph and then suddenly a 1.85 trillion dollar debt in 2009?  I'm confused...

That's deficit, not debt. (edited to reflect that- I had it there at first, but liked the simple graph post).

Debt in 2008 was almost $10 Trillion. In 2000 it was $5.6 Trillion. It's projected to be 14.5 Trillion this year.

[41magsnub]

That's deficit, not debt.

Aha..  should have thought of that.  Thanks

[makattak]

That's deficit, not debt. (edited to reflect that- I had it there at first, but liked the simple graph post).

Debt in 2008 was almost $10 Trillion. In 2000 it was $5.6 Trillion. It's projected to be 14.5 Trillion this year.

And I'll highlight this again: Bush took 8 years to grow the debt by 4.5 Trillion (roughly). Obama will do it in 2 years.

And there's no difference between the two parties?

[41magsnub]

And I'll highlight this again: Bush took 8 years to grow the debt by 4.5 Trillion (roughly). Obama will do it in 2 years.

And there's no difference between the two parties?

One sucks, the other sucks more?

[makattak]

One sucks, the other sucks more?

There's a metric. I believe the other one sucks FOUR TIMES AS MUCH. (8 years to run up the debt the other does in 2...)

[AZRedhawk44]

In all seriousness...

What's the fix?

No generalities.  Step-by-step:  How do we increase revenues, decrease expenses, achieve a deficit-neutral budget and pay off this monster?

Or... do we as lay citizens simply shrug our shoulders, get our Mormon food supply in order and say "screw it, I'll help start over when the trash dies off?"

[DenaliPark]

 I don't believe that the United States will survive Obama and the neo-comms, we're now at the precipice and they're not even attempting to pull back, not that it really matters, we are now enslaved to the massive economic pull of our own inertia, to such an extent that it no longer matters one way or another what we wish to do, the laws of physics say we're going over the edge....

[41magsnub]

In all seriousness...

What's the fix?

No generalities.  Step-by-step:  How do we increase revenues, decrease expenses, achieve a deficit-neutral budget and pay off this monster?

Or... do we as lay citizens simply shrug our shoulders, get our Mormon food supply in order and say "screw it, I'll help start over when the trash dies off?"

I wish I had a real answer.

It will take the courage to do what is right, instead of what will get them reelected, by a large number of elected officials.  The budget needs to be cut, new entitlements need to not be established, and I think a national debt tax is in order.  As much as it would suck, the USA is in a debt hole and we need to dig ourselves out.

[Northwoods]

In all seriousness...

What's the fix?

No generalities.  Step-by-step:  How do we increase revenues, decrease expenses, achieve a deficit-neutral budget and pay off this monster?

Start by slashing and burning the number of federal agencies.  Education, HHS, etc.  Don't just pare them back, get rid of them entirely.  Look to the constitution for guidance on which areas are really authorized.  Strange concept I know, but stranger things have happened.  If you can't get rid of them entirely at least do serious reform to the "entitlement" spending (ideally make them not entitlements).  E.g. Roll back SS to what it was in the 30's - something to keep poor seniors from starving to death.  Kill Medicare/Medicaid while also doing real health care reform so medical care and nursing home care isn't so disastrously expensive.  Study the Laffer Curve effects of tax rates on tax revenue and work hard to hit the point where tax revenues are maximized (this will likely mean significant tax rate cuts on higher earning individuals, businesses, and capital gains - where they might be raised I have no idea).  Using that combination of maximizing tax revenue and massively reducing spending use the large budget surpluses to knock that debt down by huge chucks every year.  If you do this the way I would if I were in charge you'd probably be paying off around $1trillion each year.  Then once the debts are mostly if not totally paid off start slashing tax rates on people and businesses and capital gains until revenues match or slightly exceed expenses.

[French G.]

Pretty much what the above post said. Also, I'd kill the income tax, put in a national sales tax. The next one, our Repub buddies would skewer Obama on and they would be wrong. Legalize and tax Marijuana. Grow the crap here. Lots of it. More jobs, give states a cut of the excise tax revenues, heck, state colleges would probably pay for themselves just with the freshman class alone!  Probably tamp down some of the violence to our south too. The government would finally also have a surefire way to recover tax money from Willie Nelson, so several birds with one stone.

[FTA84]

It doesn't appear to me that there is any real lack of economically sound ideas to reduce the deficit.  What appears to be lacking is the political setting to make such a wildly unpopular move.

All entitlement programs were (in one form or another) aimed at garnering long-term favor with certain voting blocks.  They forced everyone else to pay for these entitlement programs, under the guise, that anyone could use the services.  Therefore, for every 1 vote purchased, it appears that there would be (depending on program), 10 or more votes lost in trying to end it as they've already paid into the service.  Ending entitlement programs is probably politically more unpopular than ending segregation was in the south -- something that needed to take a public-opinion-free route via the Supreme court.

The particular wording of the 16th amendment seems to make it highly unlikely the court could act on 'constitutional' grounds in this matter.  While an amendment limiting taxes, would be popular among voters, it would be rather unpopular in the congress, as after it was passed they'd have to make all the politically unpopular cuts there were avoiding.

[Standing Wolf]

It doesn't appear to me that there is any real lack of economically sound ideas to reduce the deficit.  What appears to be lacking is the political setting to make such a wildly unpopular move.
All entitlement programs were (in one form or another) aimed at garnering long-term favor with certain voting blocks.

That's in the X ring. Sooner or later, the United States is going to have to declare bankruptcy. That may force a change; then again, it may not. I don't see much hope for reason raising its voice and the neo-aristocrats in Congress and the White House paying even half a speck of attention.

How's that for a cheering thought?

[Waitone]

First step is to ban the word "entitlement" from political use.  Put everything, and I mean everything, FED.GOV does on the table.  Then go out somewhere and buy the political will to do what may well be impossible until after the chickens have spent time at home.  It has taken 100 years or so to create the mess.  It ain't gonna get fixed in an election cycle or two.

[Headless Thompson Gunner]

In all seriousness...

What's the fix?

No generalities.  Step-by-step:  How do we increase revenues, decrease expenses, achieve a deficit-neutral budget and pay off this monster?

Or... do we as lay citizens simply shrug our shoulders, get our Mormon food supply in order and say "screw it, I'll help start over when the trash dies off?"

The solution is to cut so-called "entitlement" programs.  Nobody in a free society is entitled to the fruits of someone else's labor. 

Other than that,  it's a matter of correctly managing the economy (i.e. not managing the economy) and waiting until we outgrow the debt.  Eventually GDP growth (~2% per year) and inflation (~3% per year) will conspire to shrink the national in a relative sense without any real pain or suffering anywhere.