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The U.S. national debt reached $20 trillion for the first time ever last Friday after President Trump signed a bipartisan bill temporarily raising the nation's debt limit for three months.
While at Camp David, Mr. Trump, with the stroke of his presidential pen, increased the statutory debt last Friday by approximately $318 billion, according to the Treasury Department. Before the bill's completion, the U.S. debt was sitting around $19.84 trillion.
The legislation allowed the Treasury Department to start borrowing again immediately after several months of using "extraordinary measures" to avoid a financial default. The bill passed last Thursday 80-17 in the Senate and in the House 316-90 on Friday. Around $15 billion in emergency funding for Hurricane Harvey recovery efforts was attached to the borrowing measure.
https://www.cbsnews.com/news/national-debt-hits-historic-20-trillion-mark/
[That works out to just shy of $62,000 per American. --Ed.]
(Score: 2) by srobert on Friday September 15 2017, @02:49PM (25 children)
When it first became $500 billion, the austerity crowd started wringing their hands and warning that if it got any higher all of society would collapse. Then it got to $1 trillion, and the sky did not fall. Then it became $5 trillion, same thing. So who do U.S. taxpayers owe this $20 trillion to? Mostly, other U.S. taxpayers, i.e. we owe the money in our right pocket to our left pocket. Don't panic over this. It's a number on a piece of paper. If it's really that much of a problem, maybe would should return the top marginal income tax rates to where they were when Eisenhower was President, i.e. 91%.
(Score: 0) by Anonymous Coward on Friday September 15 2017, @03:04PM
Time.... it will catch up... don't worry. (Banks are institutions that shift money from the future to the present, but have to repay at some point).
(Score: 0) by Anonymous Coward on Friday September 15 2017, @03:11PM (11 children)
it's not the right pocket owing money to the left pocket.
it's future generations being supposed to pay for the retirement years of their parents and grandparents.
if future generations don't pay (for whatever reasons), you get inflation and the retired lose all their savings.
(Score: 2, Informative) by Anonymous Coward on Friday September 15 2017, @04:05PM (10 children)
That's what this endless horde of suckers never understands.
Money is just an accounting technology; there are real resources being allocated and used up.
That $20 trillion debt represents resources that have been used up, with no sign of that use having been productive enough to make society wealthier.
People, it really is just like a credit card debt: If you buy TVs and computers and groceries and toiletries on credit, those are real resources being allocated to you, and you are promising to use those resources in a way that will benefit be productive enough to benefit the lender, too. Well, if you don't work a day in your life, and therefore never pay off that credit card debt, then you're just going to use up those resources without anyone else benefiting. That is theft.
(Score: 3, Funny) by aristarchus on Friday September 15 2017, @06:48PM (9 children)
You have it completely backwards, that $20 tril represents resources created! It's capital, not expenditure! What is it with these concrete-thinking types that something abstract like money escapes them entirely?
Back when some were pushing the Obama Trillion dollar coin idea to get around the dumb-as-dirt conservatives who were opposing the raising of the debt limit, some of these concrete types said that there was not enough platinum in the world to make a trillion dollar coin! As if a trillion dollar coin had to be make of a trillion dollars worth of metal, just like how a bitcoin is made of just that much worth of computing power, and a hundred dollar bill is made of a hundred dollar's worth of paper and ink. Idiots, why are there so many of them?
(Score: 0) by Anonymous Coward on Friday September 15 2017, @07:11PM (8 children)
As very eloquently explained by your parent, you cannot know whether resources have been created until the debt has been paid back.
The money is an accounting technology: So far, the accounting says that $20 trillion worth of resources have been allocated, but there's no proof that such an allocation of resources has been productive for society; the lender cannot know that allocating to you the "TVs and computers and groceries and toiletries" has been productive until the lender has been paid back (with interest).
Until your debt has been paid back, a conservative observer must assume that you have simply used up those resources, rather than created more wealth from those resources.
What's the point of even using money if you don't actually use it do any sort of accounting?
If the allocation of that $20 trillion worth of resources has been productive, then do something to make the accounting reflect that fact! Pay it off!
Let's say that said allocation has indeed been productive; let's say that the world has received a 100x return on investment.
Well, so what?!
Had those resources been left to the allocation decisions of the "private" sector, maybe the return on investment would have been 900x; there's no proof that government is a particularly good steward of society's resources—indeed, history lends itself to the argument that the "private" sector is a far better decision maker for how society's collective resources should be allocated.
(Score: 2) by aristarchus on Friday September 15 2017, @08:24PM (5 children)
This is completely ridiculous! Are you Bain Capital? Corporate raiders that can only rate an enterprise by liquidating it? There is no place for the $20 trillion to go. If it was not debt, it would not exist. Debt is someone else's asset, whether it is ever paid off or not.
(Score: 0) by Anonymous Coward on Friday September 15 2017, @08:40PM (4 children)
The $20 trillion debt represents a lack of accounting for the return on investment.
It cannot be clearer.
(Score: 1, Troll) by aristarchus on Friday September 15 2017, @10:14PM (3 children)
No, it does not. Just because you think so, does not make it so. A Puritan background in tightwaddyhood and asceticism may make you abhor debt as a moral sin, but it is perfectly acceptable to have debt in perpetuity. Or are you suggesting that the United States of America should go out of business? Are you a Nazi, or a Reb?
(Score: 2) by aristarchus on Saturday September 16 2017, @07:21AM (1 child)
And aristarchus WINS the Troll mod of truth! Victory lap, y'all! Goldbug neo-nazis feeling the burn! So sad, too bad. I sometimes wish our more repugnant ACs were a bit more literate and schooled in the ways of economics and monetary theory, but you know, there is something to be said for reprehensible stupidity. Not sure what that is, but someone once said it takes all types! Shortly after he said that, he was dragged away by a mob of Christians in Alexandria, cut into very small pieces, and burned on a pyre.
So we try one more time: Private debt and public dept are not the same thing. There is nothing wrong with fiat currency. We will tax your ass, with guns if necessary, because you should understand civic responsibility, and if you do not, when, the guns thing. And, you are stupid and deluded, and a libertariantard. So there!
(Score: 0) by Anonymous Coward on Saturday September 16 2017, @04:19PM
dude, stop with the colorful adjectives and nouns for your descriptions of people and concepts, and turn to the side and count to 10 when the righteous fury of being able to correct a wrong you have seen on the forum arises, and maybe you'd be less likely to offend when your rhetoric is toned down.
its hard to stay on your side when you seem to trade brains with ethanol-fueled--but he is at least consistent. we know what to expect from him. you don't have the same condition, but appear to be related somehow--you just got the passive gene and he got the dominant one.
unfortunately we are learning that you react strongly to perceived personal slights or misunderstandings--but you were not always that way.
i can't say lighten up, but I can say tone it down. you're free to post as you like, but remember, the community mods you if you don't mod yourself. i am not speaking of self-censorship either --i'm saying phrase your same ideas more professionally than resorting to name calling when it seems like people don't agree with you.
it may work on other forums, but it doesn't seem to be working here
(Score: 0) by Anonymous Coward on Saturday September 16 2017, @05:26PM
It is perfectly natural to be poor, doesn't mean it is a good idea or desirable...
(Score: 2) by PiMuNu on Saturday September 16 2017, @03:51AM
> you cannot know whether resources have been created until the debt has been paid back.
One can at least study the balance sheets; debt incurred vs expenditure on improved infrastructure.
The UK has an issue, I believe, because the balance sheets show that the debt is incurred to cover operating costs, rather than improved infrastructure. The investment on infrastructure improvements is rather small while the debt keeps growing.
Another way to look at it might be productivity as a function of debt. In the UK at least, productivity has not improved while the debt keeps growing.
I can't speak for the US...
(Score: 0) by Anonymous Coward on Sunday September 17 2017, @03:46PM
Because my buying them enabled the store to make money, the sales assistant to be paid. Plus whatever she spends that money on.
Plus the delivery guy got paid, and anything he spends his money on.
Plus the guy at the factory who made the TV's etc, and anything he spends his money on.
Plus the company who made the whatever to buy all the little whatevers and those people etc etc.
And all the dividends that the company pays, and whatever those people do with the money, spend or invest etc.
If I pay in cash or rack up a debt makes no difference to all those people. If I never pay back that debt it makes no difference to any of those people. The only thing harmed if I default is the bank. And here's the magic in the system. The bank created that money/debt out of thin air anyway.
But wait what if everyone did that? Well even if everyone defaulted, the bank is too big to fail and the fed will just create money and give it to them, also out of thin air.
(Score: 4, Interesting) by gallondr00nk on Friday September 15 2017, @03:21PM (10 children)
Precisely. One of the most insidious arguments of the austerity/fiscal hawk crowd is that all debt is equal, so the US govt. debt is the same as a credit card debt or a mortgage. It's nothing of the sort, and not like every citizen "owes" the government a 5 figure sum as stated in the summary.
I support this idea as well as high inheritance taxes. In the past, companies simply used to pay their high earners more to make up for the tax shortfall. The point of progressive taxation is not just to ease the burden on the low paid, but to engineer society so that it is more difficult to accumulate vast amounts of wealth through inheritance - the majority of the super wealthy stay rich through accumulating interest and low taxes on inheritance. What good does it do for the rest of us?
(Score: 5, Interesting) by ben_white on Friday September 15 2017, @03:29PM (5 children)
Inherited wealth adds no value to society, we should have significant estate taxes for the reasons you allude to. I like the analogy of playing Monopoly. A game of monopoly is over when one individual accumulates all of the assets. Imagine if the next game played, started with the winner's daughter starting with all of the assets her father accumulated in the previous game. Everyone else just gets to pass go and collect their salary. What chance do the other players have to accumulate any wealth of their own. We are rapidly moving toward this scenario in our economy.
(Score: 2, Insightful) by Anonymous Coward on Friday September 15 2017, @04:18PM (4 children)
Monopoly is a zero-sum game.
As you say, once one player gets all of the resources, then that player wins; yet, in the real world, taking everybody else's resources is not at all how it works—in the real world, wealth is created; the pie is grown, not stolen ever more from others.
The real world is not a zero-sum game.
Your analogy is therefore completely wrong, and thus your conclusions for the real world are completely wrong.
Inheritance is just one one person appointing another person to be the custodian of resources; though not guaranteed, a son may well be the best replacement for his father, having grown up in close contact with the man who accumulated (and hopefully created) that wealth in the first place. The whole of society is better off when there is that kind of continuity between stewards of resources; society is not better off when know-nothing, vote buying, paper-pushing bureaucrats are just arbitrarily handed the life's work of a productive person (I mean, why should that one particular organization be the new custodian? WHY?)
(Score: 2) by Grishnakh on Friday September 15 2017, @05:24PM (1 child)
The real world is not a zero-sum game.
That's not true. Just like in Monopoly, where the resources that are zero-sum are the properties on the perimeter of the board, in the "real world", there's a finite amount of real estate. Everyone needs a place to live, so when all the real estate is bought up and the prices constantly inflated, you get exactly the scenario the OP describes with the last Monopoly game's winner keeping all the assets for the next game. In theory, this problem is alleviated by multiple factors, like property owners dying and their property being both taxed (inheritance taxes) and split up among their heirs, and new real estate being built (e.g., subdividing open land and building a new subdivision, or buying up some single-family housing and building a high-rise condo there), but we've gotten to the point now that cities just can't expand much more because transportation becomes infeasible (it's not worth it to live on the outskirts where it's affordable if it takes you 2 hours to commute to work because the traffic is so bad and it's so far away), and also because the property owners and zoning boards are refusing to allow new high-density construction (as we see in SanFran now).
The whole of society is better off when there is that kind of continuity between stewards of resources;
No, it's not, because wealth tends to accumulate and you end up with very wealthy families holding most of the nation's wealth. Honestly, your use of the word "stewards" makes you sound like a kool-aid drinking follower of Prosperity Doctrine.
(Score: 0) by Anonymous Coward on Friday September 15 2017, @05:56PM
You've said nothing new, and you therefore haven't countered your parent.
(Score: 2) by etherscythe on Friday September 15 2017, @05:54PM
This may or may not be true of a family business. It's almost certainly untrue of massive bank accounts. Warren Buffet and Bill Gates have limited their children's inheritance, probably so they don't turn out like Paris Hilton. Lineal succession has a long tradition, but its flaws are some of the most well-documented history on the planet.
"Fake News: anything reported outside of my own personally chosen echo chamber"
(Score: 1, Insightful) by Anonymous Coward on Sunday September 17 2017, @03:30PM
Ok, for each new game of monopoly, just add another board. The daughter of the winner just starts with a whole board full of property and a massive wad of cash. You start with nothing. Now you all fight it out on both boards. Who do you think will win? Next time when there's 3 boards and the next daughter owns the previous 2 your kids chances are even less.
(Score: -1, Redundant) by Anonymous Coward on Friday September 15 2017, @04:10PM
Please see this comment. [soylentnews.org]
(Score: -1, Redundant) by Anonymous Coward on Friday September 15 2017, @04:33PM
Please see this comment. [soylentnews.org]
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No, this comment is not redundant; it's a reply to another person—it's the only way to let that person know that someone has read his comment and has a reply. Redundancy would be copying/pasting the text at the other end of the above link, but I didn't do that. Instead, I linked to that text in order to keep the comments tidy, but you fuckers don't care for my attempts to be useful. Next time, I will just copy and paste, because fuck you.
(Score: 1, Interesting) by Anonymous Coward on Friday September 15 2017, @04:50PM (1 child)
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Please see this comment. [soylentnews.org]
(Score: 1, Troll) by aristarchus on Saturday September 16 2017, @07:46AM
Unpossible. If you earn a Redundant mod, it becomes an "informative" mod, since we will have seen what you did there. To truly be redundant, you have to not earn it, but just be it, like the TMB. Endless repetition, which no actual contribution to the discussion, spewed across all comment threads. Some might call it, "spam"? Or "Tim", but more likely spam, with or without bloody Vikings.
(Score: 1, Interesting) by Anonymous Coward on Friday September 15 2017, @05:11PM
The highest the debt has ever been was about $250tn following WWII when adjusted for inflation. We paid it down largely by inflating our way out of it and screwing over the people without enough money to be invested in stocks. It wasn't a huge problem at the time because the US was one of the few advanced economies at the time that hadn't just had all of its factories bombed out of existence. Of the remainder we were by far the largest.
The issue here isn't that the debt has reached $20tn, the issue is why we reached that figure and the complete lack of anything even remotely resembling fiscal responsibility by one of the parties. The GOP hasn't figured out that lowering taxes while keeping spending neutral or increasing it leads to increased debt. The point where lowering taxes results in increased tax revenue is extremely high to the point where the US hasn't even hit it. Even when the top marginal rate was above 90%, we hadn't hit that point and I'm not sure if we ever will.
The other issue is that the things we're spending the money are stupid. We're borrowing money not just to give tax breaks to the wealthy, but we're also wasting absurd amounts of money on wars and a military that's larger than the next dozen or so combined. We're also not spending money on things that we know will increase future prosperity, such as infrastructure, education, medicare for all and research and development that's not connected to the military.
The end result is that while we can pay the debt off in a reasonable period of time, we won't do it. And to make matters worse, it's just going to get larger because the politicians are owned by special interests that have no interest in budget that's balanced, unless it comes with massive tax breaks for the wealthy.