It's OK to Burden Our Children With an Enormous Debt

[Puppycow]

People who worry about the national debt worry too much. It's really not that big a deal. Unless you expect progress in science and technology to come screeching to a halt sometime soon, standards of living and average purchasing power will continue to rise over time. The people of the future will be richer. The last time the government ran up a huge debt was WW2. Compared to the GDP at the time it was bigger than the current debt. Nonetheless, the postwar period saw rapid economic growth and rising standards of living and eventually the economy grew so big that those debts we easy to pay off.

This article explains more

[Ziggurat]

Originally Posted by Puppycow

The last time the government ran up a huge debt was WW2. Compared to the GDP at the time it was bigger than the current debt. Nonetheless, the postwar period saw rapid economic growth and rising standards of living and eventually the economy grew so big that those debts we easy to pay off.

That was made possible because government expenditures were able to significantly shrink in the wake of WWII. But we face a situation completely different today. Spending on entitlement programs is projected to balloon in the future. Not only could this prevent us from shrinking the national debt, but it could very easily continue to expand. In fact, it's pretty much guaranteed to expand unless something is done to curb it.

[Dr Adequate]

Originally Posted by Ziggurat

That was made possible because government expenditures were able to significantly shrink in the wake of WWII. But we face a situation completely different today. Spending on entitlement programs is projected to balloon in the future. Not only could this prevent us from shrinking the national debt, but it could very easily continue to expand. In fact, it's pretty much guaranteed to expand unless something is done to curb it.

Good point. Let's raise taxes.

[leftysergeant]

Originally Posted by Dr Adequate

Good point. Let's raise taxes.

It worked from 1942-1960. You could even say that it worked up until 1980. The famous Kennedy tax cuts also closed a lot of loop holes. (That is also why Reagan's tax cuts screwed the up budget. He made more loop holes.)

[dudalb]

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

[WildCat]

Originally Posted by dudalb

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

Investor class blah blah blah.

[Brainster]

The irony, of course, is that the people who will pay the lion's share of that debt (or at least the interest on it), are the same people who pay the lion's share of the taxes today, that evil top 5% of income earners who about 60% of the income taxes in this country. So to put it another way, it's okay to burden the children of the very rich (and the children who will become very rich in future generations) with that enormous debt. Who feels sorry for rich kids?

[Puppycow]

Originally Posted by Dr Adequate

Good point. Let's raise taxes.

Noes!!! Socialism!!!

[Puppycow]

Originally Posted by dudalb

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

Yes. That's it. I wonder why "conservatives" HATE poor people and sick people.

[Puppycow]

Originally Posted by Brainster

The irony, of course, is that the people who will pay the lion's share of that debt (or at least the interest on it), are the same people who pay the lion's share of the taxes today, that evil top 5% of income earners who about 60% of the income taxes in this country. So to put it another way, it's okay to burden the children of the very rich (and the children who will become very rich in future generations) with that enormous debt. Who feels sorry for rich kids?

I'm not quite sure what is ironic in that. Are you agreeing with the OP or is that supposed to be sarcastic (or ironic)? BTW, it is not necessary to think of rich people as "evil" to think they should pay higher taxes. Warren Buffet thinks he should pay higher taxes.

True, the top x% pay more than everyone else, but their after-tax earnings are also much higher than everyone else.

[Puppycow]

Here's an article in the WSJ just out today.

While the last year has been an exception to the long-term trend due to the financial crisis, overall the top 1% have been getting the lion's share of the increases in income since the 1970s. In particular, click the Interactive Graphics and take a look at the long-term trend in CEO vs. worker comparison.

[WildCat]

Originally Posted by Puppycow

Warren Buffet thinks he should pay higher taxes.

There's nothing stopping Warren Buffet from writing a big old check to the government, is there?

eta: and if this is the old "my secretary pays a higher % than Warren does" stuff bear in mind that the secretary puts none of her money at risk when she goes to work.

[Towlie]

The most common figure I've seen for the thickness of a $1 bill, which is also the thickness of a $100 bill, is .0043 inches.

Therefore:

Ten thousand $100 bills would be worth a million dollars and would make a stack 43 inches high.

Ten million $100 bills would be worth a billion dollars and would make a stack 3,583 feet, 4 inches high.

Ten billion $100 bills would be worth a trillion dollars and would make a stack 678 2/3 miles high.

The current national debt is rising so fast that it's hard to post a figure that would remain accurate for long, but it has just recently surpassed a stack of $100 bills 8,000 miles high, which is greater than the diameter of the Earth.

National Debt Clock


Somehow, I don't think "enormous" quite says it.

[Dr Adequate]

Originally Posted by dudalb

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

Because they live inside your head, where you are free to imagine their opinions to your own sweet content.

[WildCat]

Originally Posted by Puppycow

Yes. That's it. I wonder why "conservatives" HATE poor people and sick people.

Originally Posted by Dr Adequate

Because they live inside your head, where you are free to imagine their opinions to your own sweet content.

I'm pretty sure dudalb was responding to lefty, and lefty is an unapologetic Marxist.

[Puppycow]

Originally Posted by Towlie

The most common figure I've seen for the thickness of a $1 bill, which is also the thickness of a $100 bill, is .0043 inches.

Therefore:

Ten thousand $100 bills would be worth a million dollars and would make a stack 43 inches high.

Ten million $100 bills would be worth a billion dollars and would make a stack 3,583 feet, 4 inches high.

Ten billion $100 bills would be worth a trillion dollars and would make a stack 678 2/3 miles high.

The current national debt is rising so fast that it's hard to post a figure that would remain accurate for long, but it has just recently surpassed a stack of $100 bills 8,000 miles high, which is greater than the diameter of the Earth.

National Debt Clock
http://www.brillig.com/debt_clock/debtiv.gif

Somehow, I don't think "enormous" quite says it.

All of these absolute numbers are irrelevant. Ratios are what matter.

If I say I owe about 30 million yen to a bank (which I do) can you say whether that is a large debt or a small debt? Not until you know what my income is. BTW, this is roughly 5 times my annual income (although I'm afraid my income is going to be lower this year than last year). By comparison, the federal debt of the US is projected to rise to approximately 100% of GDP. Let's assume tax revenue of 25% of GDP. That would be a debt ratio of 4 times tax revenue. So compared to what I owe on my mortgage versus my income, the projected federal debt is reasonable in relative terms. Not to mention that the government has lower borrowing costs than an individual like me. Because I might lose my job, become disabled or die. Unless there's armageddon, the US government will be there to pay its debts, and if it isn't, the national debt will be the least of our worries.

[Puppycow]

Originally Posted by WildCat

There's nothing stopping Warren Buffet from writing a big old check to the government, is there?

This old chestnut. How 'bout we let the people who want the Iraq war pay for it with voluntary contributions? How 'bout we let the people who want prisons pay for it with voluntary contributions? Do you also agree with those positions?

[WildCat]

Originally Posted by Puppycow

This old chestnut. How 'bout we let the people who want the Iraq war pay for it with voluntary contributions? How 'bout we let the people who want prisons pay for it with voluntary contributions? Do you also agree with those positions?

No, but I do expect Warren to lead by example. At the very least he could not claim any deductions, credits, etc. on his taxes.

[lomiller]

Originally Posted by WildCat

No, but I do expect Warren to lead by example. At the very least he could not claim any deductions, credits, etc. on his taxes.

So, you don’t think Warren should have to pay, but can if he wants. I take that to mean you are volunteering to pay any tax he doesn’t.

[WildCat]

Originally Posted by lomiller

So, you don’t think Warren should have to pay, but can if he wants. I take that to mean you are volunteering to pay any tax he doesn’t.

Huh? Warren's running around complaining that he isn't paying enough taxes. Now, if he really thinks that no law prevents him from paying more.

What kind of person complains that he's not required to do what he claims he wants to do but then doesn't do? A grandstanding jackass drama queen, that's who.

[WildCat]

Alternatively, Warren could pay himself a token salary of $1 and divide the rest among his employees.

Nope, he's not doing that either. Invested billions in Goldman Sachs instead.

Poor guy, forced to make money hand over fist and unable to do anything about it.

[Cobalt]

Originally Posted by WildCat

Alternatively, Warren could pay himself a token salary of $1 and divide the rest among his employees.

Nope, he's not doing that either. Invested billions in Goldman Sachs instead.

Poor guy, forced to make money hand over fist and unable to do anything about it.

I can take it off his hands...

[WildCat]

Originally Posted by Cobalt

I can take it off his hands...

He'd love to give it to you. Really, he would.

But he can't because there's no law requiring him to. And it's killing him inside, he can't even sleep at night.

[Skeptic]

First of all, I thought the "we're putting future generations in debt" is just evil republican lies.

Second, you're right about WWII: yes, clearly, supporting whatever cool policies the Obama administration feels will promote social justice, brotherly love, and sunshine and happiness are just as good a reason to put the country into near-bankruptcy as a world war against the bloodiest tyrant in history and his helpers.

Third, I thought the point of the $1T "stimulus" debt was to, at least, actually do some good economically now -- not merely to put future generations in debt under the breezy assumption that hey, it's Okay, things will work out and turn around somehow, due to the forces of history. Well, how is the stimulus working out?

[Puppycow]

Originally Posted by WildCat

No, but I do expect Warren to lead by example. At the very least he could not claim any deductions, credits, etc. on his taxes.

You are aware of his philanthropy, right?

And no, I don't agree that he should pay more taxes than the law says he has to pay.

[Dr Adequate]

Originally Posted by Skeptic

Third, I thought the point of the $1T "stimulus" debt was to, at least, actually do some good economically now -- not merely to put future generations in debt under the breezy assumption that hey, it's Okay, things will work out and turn around somehow, due to the forces of history. Well, how is the stimulus working out?

Apparently, quite well. You should maybe read the financial pages more often.

[Puppycow]

Originally Posted by Skeptic

First of all, I thought the "we're putting future generations in debt" is just evil republican lies.

I don't recall making that claim.

Quote:

Second, you're right about WWII: yes, clearly, supporting whatever cool policies the Obama administration feels will promote social justice, brotherly love, and sunshine and happiness are just as good a reason to put the country into near-bankruptcy as a world war against the bloodiest tyrant in history and his helpers.

The main reason the debt is rising so fast is because of the financial crisis, not Obama's policies.

Quote:

Third, I thought the point of the $1T "stimulus" debt was to, at least, actually do some good economically now -- not merely to put future generations in debt under the breezy assumption that hey, it's Okay, things will work out and turn around somehow, due to the forces of history. Well, how is the stimulus working out?

It is. The point of spending is not to incur debt. Do you have a mortgage on your house? Was the purpose of taking out a mortgage so that you could be in debt or so that you could buy a house?

[Dr Adequate]

Originally Posted by WildCat

Huh? Warren's running around complaining that he isn't paying enough taxes. Now, if he really thinks that no law prevents him from paying more.

What kind of person complains that he's not required to do what he claims he wants to do but then doesn't do? A grandstanding jackass drama queen, that's who.

No, he can't pay more taxes then he is required to pay.

He can give large amounts of his money away, which he does.

Also Bill Gates, as I recall, said that he didn't need or want the Bush tax break, and is the biggest philanthropist in the history of the world. "Grandstanding jackass drama queen" that he is.

[Puppycow]

Originally Posted by Dr Adequate

No, he can't pay more taxes then he is required to pay.

He can give large amounts of his money away, which he does.

Also Bill Gates, as I recall, said that he didn't need or want the Bush tax break, and is the biggest philanthropist in the history of the world. "Grandstanding jackass drama queen" that he is.

I'm not sure, but I think that theoretically he could pay more taxes than he is required to pay. But the main point is that he shouldn't if he is giving it to a good cause instead. Direct charitable giving can be more effective if spent wisely. There is nothing in the slightest hypocritical in his position.

Buffet might even rank higher on philanthropy than Gates, but I'm sure.
This says that Buffet is #1 but I don't know if it is correct.

ETA: Buffet is also famous for living very modestly considering his means.

[Dr Adequate]

Originally Posted by Puppycow

I'm not sure, but I think that theoretically he could pay more taxes than he is required to pay.

No, think about it.

If the government doesn't require you to pay it, then it isn't taxation.

[Skeptic]

Quote:

It is.

Well, how well is it working? What did it achieve? Is what it achieved, or is likely to achieve, worth a trillion bucks?

[Puppycow]

Originally Posted by Dr Adequate

No, think about it.

If the government doesn't require you to pay it, then it isn't taxation.

Ah. The extra would be a contribution, not a tax.

[Puppycow]

Originally Posted by Skeptic

Well, how well is it working? What did it achieve? Is what it achieved, or is likely to achieve, worth a trillion bucks?

The stimulus? Since we don't know what the counterfactual is (counterfactuals are), we can't be sure how well it is working or whether it was worth it. This if for economists to argue about and it's doubtful that they will ever arrive at a consensus. They're still arguing about the Great Depression and the New Deal. So you may as well ask whether the New Deal worked or was worth it. We'll never know for sure.

[Dr Adequate]

Originally Posted by Skeptic

Well, how well is it working? What did it achieve? Is what it achieved, or is likely to achieve, worth a trillion bucks?

Apparently the Great Depression II has been averted. I guess that would be worth the money.

Of course, this depends which economists you listen to. However, I'm willing to bet that Obama didn't rack up the national debt just for the fun of it.

[Ziggurat]

Originally Posted by Dr Adequate

No, he can't pay more taxes then he is required to pay.

Yes, actually, that's rather easy for someone in his position to do. And I'm not even talking about donating to the government (which anyone can do): it's rather trivial to not claim deductions you are entitled to.

[Puppycow]

Originally Posted by Ziggurat

Yes, actually, that's rather easy for someone in his position to do. And I'm not even talking about donating to the government (which anyone can do): it's rather trivial to not claim deductions you are entitled to.

Yeah, but this whole line of argument is a red herring. For one thing, he's giving his money to charity. For another, just because you favor a certain general policy doesn't mean you should volunteer to individually pay higher taxes that would result from said policy. Do people who support wars of choice like Iraq donate extra money to the DOD? Do you think they should "lead by example"?
Of course not, it's just a cheap way to say look at you, you won't put your money where your mouth is. I'm happy to pay taxes for things I support which have a public benefit, but I'm not going to do it all by myself.

[Cain]

Originally Posted by Towlie

National Debt Clock
http://www.brillig.com/debt_clock/debtiv.gif

Somehow, I don't think "enormous" quite says it.

Someone once observed s "billions," with a 'b' as Sagan reminded everyone, are astronomical figures. Trillions are economical.

What's fascinating is how conservatives never cared much to hold Bush's feet to the fire for the surest and dumbest way of expanding government: war. Pointless trillion dollar wars that did not help improve the quality of life for the typical American. "Defense" contractors are an exception, but I'm sure they sheltered at least some of their redistributed wealth in the Cayman Islands. When Reagan pushes to spend billions on weapons, ballooning the deficit (thanks, dude), it's considered his greatest accomplishment.

As for Buffett "risking his" money are you talking about preferred stock options in Goldman Sachs? Speaking of Buffett, he ideally favors a consumption tax. A progressive consumption tax on the notion that those who consume the planet's resources ought to pay for them. I agree, but everyone knows that ain't gonna happen, so we're stuck with an income tax that punishes work. Bill Gates' father has worked on getting back the estate tax, the least painful tax, one that breaks up large inheritances. Of course, like "Death Panels" the "Death Tax" has been an incredibly powerful, useful lie.

There are too many dumb Americans proud to live in a country that can "blow **** up at will" and has a bunch of 10,000+ sq foot homes while children lack health insurance.

[leftysergeant]

Originally Posted by dudalb

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

Oh, but even in my opinion, you are entitled to keep the money you have earned. Where we come into conflict is in defining whether or not you have earned the money you have.

You have not actually earned it until you have paid all utility bills incurred while accruing it.

Government is a utility. Pay your bill and stop snivelling.

[joobz]

Originally Posted by Brainster

The irony, of course, is that the people who will pay the lion's share of that debt (or at least the interest on it), are the same people who pay the lion's share of the taxes today, that evil top 5% of income earners who about 60% of the income taxes in this country. So to put it another way, it's okay to burden the children of the very rich (and the children who will become very rich in future generations) with that enormous debt. Who feels sorry for rich kids?

You're right. I don't.
given the fact that the income earnings of the top 5% have increased ~72% over the last 40 years vs. the median income, which increased only ~20%.
These numbers are estimates based upon this graph.
http://upload.wikimedia.org/wikipedi..._1967-2003.svg

[Dancing David]

Originally Posted by dudalb

I wonder why "progressives" HATE the idea of people being able to keep the money they earn.

I wonder why I have to pay for a military that spends more than the rest of the world combined, I wonder why I have to pay for roads that I don't drive on, why I have to subsidise investment in bussiness?