National Debt Clock Overflowed, Extended By a Digit 696
hackingbear writes "The National Debt Counter, erected in 1989 when the US debt was 'merely' a tiny $2.7 trillion, has been moving so much that it recently ran out of digits to display the ballooning figure: $10,150,603,734,720, or roughly $10.2 trillion, as of Saturday afternoon. To accommodate the extra '1,' the clock was hacked: the '1' from "$10.2" has been moved left to the LCD square once occupied solely by the digital dollar sign. A non-digital, improvised dollar sign has been pasted next to the '1.' It will be replaced in 2009 with a new clock able to track debt up to a quadrillion dollars, which is a '1' followed by 15 zeros. That should be good enough for a few more months at least, I believe." Adds reader MarkusQ, "I know Dick Cheney has assured us that 'Deficits don't matter' but I can't help wondering if we should be fixing the problem rather than the sign."
Cheney is right.... (Score:5, Funny)
Re:Cheney is right.... (Score:4, Interesting)
Yeah, but when the debters include China, where does that rule lead you?
Re:Cheney is right.... (Score:5, Funny)
Yeah, but when the debters include China, where does that rule lead you?
Wondering if a Rottweiler can beat 100 angry weaner dogs?
Re:Cheney is right.... (Score:5, Insightful)
that might be true if our society weren't so dependent on global trade. but if our trade partners suddenly cut all economic relations with us our domestic economy would collapse. we depend on other nations for manufacturing, investments, and imports/exports.
we might be able to raid other countries for their oil, but we can't use military coercion to force other countries to import our goods or manufacture our raw materials. and since our trade relations with other nations are generally good for us, bad for them, if we're no longer an economic superpower, i imagine most of the developing nations we exploit would cut their ties with us and just nationalize the resources we've hijacked from them like Venezuela has done.
i mean, if we don't have money to lend other nations, the IMF & World Bank would cease to be relevant. and without the power and influence of the IMF/World Bank, we wouldn't be able to dictate the domestic policies of other nations anymore. so 3rd world nations who've allowed us to privatize their industries and open up their markets to us would cease to allow themselves to be exploited.
and quite frankly, we need them more than they need us. many American-based corporate conglomerates would tank if our globalization policies were reversed. WalMart and other retailers wouldn't have cheap sweatshop made goods to sell. Monsanto would lose most of their profits made from selling developing nations GMO seeds every planting season. and 38% of Microsoft's annual revenue comes from sales outside of the U.S. heck, Hollywood makes more money from foreign ticket sales than from the domestic box office ($12 billion a year versus $9 billion).
if our money was certainly no good internationally, or if countries like China decided to collect on our debts, we would be royally screwed.
Re: (Score:3, Informative)
Re:Cheney is right.... (Score:5, Insightful)
If China got pissed and cut off all exports to us... their economy would implode. And the people would hold the communist party accountable--revolution would be in the streets and China would become be under new management by the end of the month.
The US is integral to the world market. This is a classic shoot your face to spite your nose situation.
Re:Cheney is right.... (Score:5, Interesting)
Actually, no it wouldn't. China's economy is a lot stronger than you think. Unlike the US, they have a massive manufacturing base that can ship to anywhere in the world. The US is just a "customer" - a bad one at that.
They have the rest of the world (Europe, Asia, Africa, Russia, the list goes on). To me it would be business as usual, with one less "customer".
Re:Cheney is right.... (Score:5, Insightful)
To me it would be business as usual, with one less "customer".
Agree with your general point, but it's not quite that trivial...the US is a big customer.
Re:Cheney is right.... (Score:5, Insightful)
I think alot of people on here (I am assuming americans) overestimate how big of an exporter they really are in actual goods. You guys seem to forget the manufacturing parts of american business have been outsourced overseas for years now with Wall St being (quote Ralph Nayder) nothing more than a gambling casino.
Re:Cheney is right.... (Score:5, Insightful)
Considering the US are paying with IOU's at the moment, I dont think China would mind collecting. If China and the EU both decided to cut off the US at the moment and collect on their debts, if they get their money back their economies may bounce back and the US would be screwed.
Except that they can't. Certainly China and the EU can try to collect on their debts. What happens if the US actually pays them? The first question you should ask is how. We could take those IOU's and redeem them for cash. Were does that money come from? Well, since we don't have an actual reserve, we would just print it. Instant inflation, devaluing the dollar and devaluing their own portfolios.
The issue is that financials are truly global now. The mortgage crisis underlines that. The Conventional Wisdom was that this would be contained in the US. Oops. If you were surprised that the real-estate correction hit global markets hard you might be surprised at how much worse a correction in the value of the dollar would be, especially through such a confrontational method. Unless you read any of the economists that predict such an effect.
I think alot of people on here (I am assuming americans) overestimate how big of an exporter they really are in actual goods. You guys seem to forget the manufacturing parts of american business have been outsourced overseas for years now with Wall St being (quote Ralph Nayder) nothing more than a gambling casino.
It really doesn't matter. In fact this bolsters the opposite viewpoint rather than defeating it. Since the US is not as big an exporter -- what are those countries going to do with all that US money? In your scenario, China doesn't want US$ anymore, the EU doesn't want US$ either. So, who are they going to trade them to? The US? And do what - buy bonds? /sarcasm Or are they just going to burn them then? As soon as they try buying stuff in the US, prices will be driven up. If they don't buy from the US, what are they going to do with the money?
It really is quite a bit of mess. The whole world has helped in leveraging the US dollar. The total amount of wealth on the books does not match wealth in reality. Any attempt to realize that "wealth" causes that "wealth" to lose significant value.
It does look like this trend is unsustainable - that is we create more faery money at a greater rate than actual growth and insist that this is also "growth". This growing inequality is not just a figment of imagination and sooner or later must be addressed, but I'm not sure the "system shock" method is viable.
While some level of unreality is fine for economic markets, periodically all structures get touched with cold iron. When that faery support evaporates if the structure can no longer hold itself up it will collapse in a heap (or more politically correct, "be restructured"). The impression that US$ represent some stable container for value creates a portion of that value and that portion of value disappears into thin air the minute actions are taken that refute this impression.
Re:Cheney is right.... (Score:4, Informative)
Seeing as we bought $25 BILLION more from China than China bought from the US just in August 2008, I'd say that we are a pretty integral customer of Chinese manufacturing.
Check out the stats: http://www.census.gov/foreign-trade/balance/c5700.html [census.gov]. We've already bought more than $167 billion of Chinese goods than we have sold the Chinese. That is not an insignificant number, and that figure only takes into account the first 3/4ths of the year.
Re:Cheney is right.... (Score:5, Insightful)
Which is why the Chinese economy is stronger.
What would the difference be if instead of shipping those goods to the US, China instead dumped them in the ocean?
The US wouldn't have those goods. And china wouldn't have yet more IOUs from the United States. We pay them with dollars, they exchange them for treasuries (or equities when we let them) in order keep the yuan artificially low.
I think the Chinese could do without essentially worthless IOUs (like the US can afford to pay its debts) a lot more than the US can do without imports (of clothes, food, etc, etc).
And of course China doesn't have to dump them in the ocean, they can sell them to their own people - who will be much richer than Americans once their currency stops being artificially surpressed.
Of course there's plenty of pain in the middle - but since the US is about to have a very severe recession these events might be forced on China anyway.
Surely you can see that the consumer half of the producer/consumer relation is the less important half. Anyone can buy and watch a TV, it takes actual industry to be able to make one. Chinese people can start consuming much more easily than American people can start producing - if that trade stops.
Re:Cheney is right.... (Score:5, Insightful)
Indeed, China's earnings from exporting goods and services stands at ~25% of GDP, the US accounts for less than half of that. This is good for the economy here in Australia, not so good for the economy in the US. As for China, if the US stopped importing from them tomorrow their growth rate of ~10% would make up for the loss in ~1yr.
It's also interesting to note that China lifted it's ban on buying and selling gold 2-3yrs ago (when oil & gold abruptly started climbing). For a while the government encoraged China's middle class to put some of their savings into the traditional 'rainy day' plan of hoarding gold in the form of trinkets. The middle class really didn't need much encouraging, China's new retail gold market drove the gold price up for the first 6-12 months of it's operation.
Disclaimer: Even though it was concieved by Newton I am not calling for a return to the gold standard.
Re:Cheney is right.... (Score:4, Insightful)
When one of your customers purchases more than 1/5 of everything you sell, it's not "just one customer" anymore.
China could certainly do without the US, but they would have a few hard years recovering. I don't see them taking that risk.
But it doesn't really matter in the context of this discussion, because China won't ask for their money back for the same reason. It's like a nuke - the most important fact is that you have one, so actually using one is silly (because then you no longer have one, and you've pissed someone off very badly). If anything, I think that Chinese will happily invest even more into the US economy while it's in bad shape - to help it recover sooner (too big a market to lose, once again), but also to establish a bigger foothold for themselves in the US.
And then, give it 40-50 more years, and you'll see how the Sino-American Alliance is to be born.
Re:Cheney is right.... (Score:4, Informative)
> Unlike the US, they have a massive manufacturing base
Actually, the two have approximately equally sized manufacturing bases in terms of production. The US has much higher productivity, so many fewer manufacturing _workers_, but the total production is pretty similar. Further, China's total exports are about the same as those of the US. It's just that the US imports so much more than China does that causes our current trade imbalance.
There's also the fact that China's manufacturing base has been growing recently while ours has been shrinking, so if current trends continue then eventually what you say will be true.
> They have the rest of the world (Europe, Asia, Africa, Russia, the list goes on).
The real problem is that they employ people by producing all sorts of stuff that their own people don't (can't, largely) buy. So they HAVE to export to keep the economy going. They've been managing it so far by keeping a currency peg against the dollar so that their production is cheap in the US. This works because the US doesn't impose tariffs much on manufactured goods, even in the face of blatant currency manipulation.
The situation with Europe, Asia, Africa, Russia is quite different. No qualms about tariffs there, especially if it will protect domestic industries. So attempts by China to shift their exports elsewhere might be met with strong protectionist measures, making the US rather hard to replace.
Of course all this is speculation. And really, China should be working on creating domestic demand for its products. The problem is that doing too much of that threatens the political stability of the current setup, so it's been a pretty slow process.
Re:Cheney is right.... (Score:5, Interesting)
Yes and no. China does have the world's largest standing army and citizens with a tradition of taking their orders from the government. If it comes down to a question of which county can suppress the riots for longer, my money is on China. They do a LOT of business with the EU and other nations, even if their single biggest trade partner is the US.
My guess is that if trade between the US and China was cut off, China could hold back the riots for as long as it took to retool their production and markets. If Walmart ran out of stock, there would be rioting in the US within the week.
Re:Cheney is right.... (Score:5, Insightful)
You're in for a shock. The end result of the current financial problems is China waking up to the fact that it doesn't need to lend the Americans money so they buy its crap - its own consumers can instead of saving money to be loaned to Americans, buy crap themselves.
Yes, the Chinese economy is going to collapse along with the US economy.
However, they have the production base (that America shipped over there...) and a large population, and India is a big importer of Chinese goods already.
The US has consumer debt with no capital investment to show for it, crumbling infrastructure, and a production base smaller than it once was.
Also, when it comes to poor people rioting and killing the rich people and destroying yet more infrastructure - China has more experience with dealing with that (in a way one would hope America wouldn't deal with it).
So China will recover faster, and will be the new engine of the world economy - both production and consumption...
The US is a drain on the world economy (that's what a trade deficit is - historically you ran a trade deficit in order to invest in capital works, so you could pay the money back later, the US has instead invested in flat screen TVs and vacations), the sooner it is cut off the better for the rest of the world.
Yes, short term is will tank the whole world economy - but it has to be done at some point. And right now there's enough motivation to pull the trigger - it's pretty obvious that money loaned to the US isn't getting paid back with dollars worth anything close to what the ones loaned were worth.
It's not that simple (Score:5, Insightful)
It's not that simple.
1. For a start, it would work that way if the USA were the only market in the world. I do believe that China can also sell to Europe, or to its own damn citizens. I don't think the Chinese would revolt if they could buy good computers instead of exporting them.
The USA survived pretty well by selling its best stuff locally instead of exporting it all, didn't it?
Anyway, the USA has, what, 5% of the world's population? There's a whole other 95% who could buy that stuff.
2. Whatever advantage there may be in selling to the USA, would disappear overnight if the USA decided not to pay, which is (I believe) what the GP was getting at. The whole deficit scheme is, basically, borrowing money from those countries in exchange for their products. If the USA decided to just pocket some trillions of dollars overnight, on the justification that, basically, "our dogs are bigger than the tax collectors'", it would find itself a much less attractive market. Equally overnight.
3. The whole lopsided market situation exists because countries are made to export their raw materials for cents and have to buy high-tech stuff for thousands of dollars. Or, ridiculously enough, lately manufacture that high-tech stuff themselves in their own sweatshops, sell it to themselves, and send the profits to some overseas corporation.
Basically think: you want new shoes. So I send you my permit to raise your own pig, slaughter it yourself, tan its skin, and make your own gloves. Only now you have to pay me for the gloves. I'll even pay you back a few cents for the leather, 'cause that's raw materials and dirt cheap, and charge you lots for the gloves.
And you can't just say "fuck you, buddy" because there are some international treaties and that forbid you from using my patented design and my "Le Moraelin Haute Couture" label. Oh, and to add insult to injury, you designed that design for me too, but I patented it, 'cause I'm the big international corporation with teh moneyz.
And while for gloves that's just a matter of being a fashion victim, for a lot of other stuff it's less black and white.
That's the shit end of the imperialism stick, that those countries get. Mostly because we, the western world, promise to give them a black eye one way or another, if they don't abide by that kind of an arrangement.
Far from being some kind of great help that China would be foolish to cut off, it's a very disadvantageous system for China and a lot of other countries. If they threw it off, their economy wouldn't implode, and their standard of living would go up overnight. Again, they have a billion of their own people to sell that stuff to, instead of selling it to 300 million foreigners. Other than an artifficial financial and trade system imposed on them saying that it's better to sell to an American than to 4 Chinese, there is no real reason why that is so.
_If_ the western world decided to just plunder the existing debts, that might just be the excuse they're waiting for, to get out of that system.
Re:Heh. No. (Score:4, Insightful)
Not so sure, six armour piercing arrows per minute can be quite persuasive...
Re:Cheney is right.... (Score:5, Insightful)
Which reminds me of a tale from the Depression years:
At the funeral of a banker, one of the mourners goes up to the Banker's son, and tells him, "Your father was a good man. Why, one time I was a mite short, and he offered to lend me $20. When I told him I wasn't sure I'd be able to pay him back, he told me not to worry about it. He said that if I gave him $1 every week, I could pay him that $20 back just whenever it suited me. Let me tell you, he was as good as his word - I paid him $1 every week, and he never did ask for his $20 back, and that's been nearly 30 years now."
Cheney's strategy was "starve the beast" (Score:5, Interesting)
If you spend a lot on your administration, to win over voters or do whatever it is you want, then when the Democrat gets into office, he or she will be forced to cut spending so as to create a surplus while keeping the Republican's low taxes, lest they get "tax hike" backlash. At the same time, whenever "starve the beast" fails, deficits don't matter, or deficits are the grease that keeps the gears of the economy going.
Republican politicians like McCain say we're supposed to reduce spending, (in order to reduce national debt, though this step on the flowchart may be skipped depending on the audience), and we also should reduce taxes further, but then how will we get rid of the national debt?
Furthermore, if the Republicans are to perpetually starve the beast and fail, clearly their strategy needs to change. They need to raise deficits so much that the interest itself is as burdensome as the current deficit levels by themselves. That, and if the Republicans are perpetually starving the beast, maybe they should at least be doing so with programs like national healthc----oh, wait.
The preferred method of starving the beast is through increases in the national defense budget, it would seem. John McCain has expressed need for a spending freeze in all areas but that, which would cut off funding for new NASA projects (which aren't entitlements, including Orion, which was approved in a separate bill), while his close colleague Lindsey Graham wants to cut the budget by 5% in all areas but national defense.
Re: (Score:3, Interesting)
It's the Laffer curve. Lower taxes allow the economy to flourish, and tax receipts go up. It worked in the 1980s -- taxes collected ran well ahead of inflation. The catch is that it only works to a point.
There's a range where you can lower taxes and increase revenues. At the same time, there's a range where you can increase taxes and increase revenues. The real problem is that it's very hard to accurately determine which part of the curve you're on. We could be right on the perfect spot right now, whi
Re: (Score:3, Insightful)
If it were an extremely asymmetric war, where it'd be the military up against Joe Sixpack, the effectiveness of smart missiles and the JSF are vastly reduced.
Re:Exccept.... (Score:4, Insightful)
People from other countries like to avoid being murdered by the American military too; perhaps at some point in the future, the American soldier might extend his circle of care to included mothers, fathers, brothers, sisters and neighbours from other countries too?
Re:Exccept.... (Score:4, Interesting)
The citizens of Eastern Europe rose-up against their governments. These citizens didn't even own guns. By your reckoning they should have been squashed, but that didn't happen. Most of the soldiers refused to fire on their own neighbors, and the governments collapsed under the sheer weight of numbers.
Re:Except.... (Score:5, Funny)
Better dead than red!
Re: (Score:3, Funny)
push the on button, wait for the tutorial lady to tell you why there are 6 pedals when there are only 4 directions.
red button activates auto-fire sequence. Be sure to have some shovels ready.
Signed Binary FTW (Score:5, Funny)
The largest bit became a one? It overflowed?
So now it's negative?
We're rich! So that's how we were going to pay for the bail-out, SS, medicare, medicaid...
Re: (Score:3, Insightful)
Freighteningly, $10,000,000,000,000 does not even come close to covering the expected costs of SS, Medicare, Medicaid, ...
Sure, it may not cover the expected costs if we continue with the benefits promised today, it will work out just fine if we drastically cut benefits. Just wait until the baby boomers die out in large enough numbers so that their voting bloc is not longer so powerful. Then we will see substantive cuts to entitlement programs.
Re:Signed Binary FTW (Score:5, Funny)
Bring back trans-fats!
Will you like to have fries with that? Lots of fries? Supersize? Add fried chicken?
And sir, smoking is encouraged in the chain smoking section
Thank you for being a Patriot! You have been nominated for the Black Lung and Fatty Heart awards.
We don't need no purple hearts here...
Solutions (Score:4, Funny)
I think I understand now...eventually we're going to get to the point where no computer will be able to track how high the debt gets...and it will simply rollover and the US economy is back, baby!
Analog it (Score:4, Funny)
Why don't they just make it an analog clock? The hands could simply spin around faster and faster as the situation worsens, which would be much more amusing. The numbers are fairly meaningless anyway.
Re:Analog it (Score:5, Funny)
Why don't they just make it an analog clock? The hands could simply spin around faster and faster as the situation worsens, which would be much more amusing. The numbers are fairly meaningless anyway.
George W. Bush is that you?
Re:Analog it (Score:5, Funny)
George W. Bush is that you?
Must be. In the right part of his brain nothing is left and in the left part of his brain nothing is right!!!
Re:Analog it (Score:5, Funny)
Great idea for a DIY fan!
According to how much the debt increased lately [treasurydirect.gov] if you wrote values from $0 to $10,000 around the frame of your fan, you'd need to make the fan run at about 1,300 - 1,500 rpm to represent the rate at which the debt is increasing.
Be careful though, on some days it can hit an average of 6,900 rpm (like on the 30th of October). That would suck if the public debt made your fan fly apart!
Clock can run in reverse. (Score:5, Informative)
This is the second debt clock. The first version could only count upward, and when the budget had a surplus back in the Clinton years, and the debt began to decrease, the debt clock was shut down. After a year or so, it was then replaced with the current version, which has the ability to count both upward and downward. The downward capability has not been used during the Bush years.
Comment removed (Score:5, Interesting)
Re: (Score:3, Insightful)
it wasn't the war that ended the surplus, it was the .com bubble collapsing. And it was only a surplus if you include FICA contributions.
Re: (Score:3, Informative)
it was only a surplus if you include FICA contributions.
I seem to recall Al Gore pointing that out in his campaign at some point. Something about putting Social Security contributions into a "lockbox" and balancing the budget without borrowing from those funds. Couldn't really hear it though, cause conservatives were so busy laughing.
Needless to say Bush didn't mention the thing about FICA contributions when he argued that we should "give back" the surplus in the form of tax cuts.
Re:Clock can run in reverse. (Score:5, Insightful)
it wasn't the war that ended the surplus, it was the .com bubble collapsing. And it was only a surplus if you include FICA contributions.
Bullshit.
The surplus was ended by Bush and cronies deciding to spend it all on a huge, unnecessary tax refund, most of which went to the extremely rich.
Re: (Score:3, Insightful)
Re: (Score:3, Interesting)
Time to get rid of my karma.
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with
Re:Clock can run in reverse. (Score:5, Interesting)
Attempting to deceive people by the means of an analogy and a degree is a vile act of the highest order. You sir, should be ashamed.
Absolutely ridiculous (Score:5, Insightful)
That analogy is absolutely ridiculous. The rich man is not a goose who poops golden eggs and shares them out of kindness. The rich man's wealth is where everyone else's is: In the bar.
When ten men go to a bar, the first five clock in and start working. The next four buy their own drinks. And the tenth gets a free beer because he owns the place. If ANY of them stop going to the bar, the musical chairs just shuffle around, until there are too few people left to operate a bar. And then it closes. And no more rich man.
You talk as though the rich are the lynchpin of capitalism. They're not; they're a byproduct, and in many cases a sign of inefficiency or poor regulation. The middle class are the lynchpin of capitalism. And they have been slowly disappearing into WalMart, CostCo, and the military industrial complex for the last 25 years. Have you noticed that the steps are getting a bit narrow on your ivory tower?
Re:Clock can run in reverse. (Score:4, Informative)
Re:Clock can run in reverse. (Score:4, Insightful)
Other than being a well-known fake, the biggest problem with this analogy is that it leaves out the income of each of the men. If the tenth man is making as much money as the other nine put together, then paying 60% of the tab is about as affordable for him as what the other people are paying (given that basic necessities, etc. are a smaller share of his income).
So while it seems unfair that the richest person should pay such a large share, in fact the burden is being shared pretty fairly. Progressive taxation, and estate taxes, are designed to share the tax burden and prevent extreme concentrations of wealth. Concentration of wealth was a big factor in creating the Great Depression, and a large part of the New Deal was to reverse the trend and lessen its effects. We have gotten back close to the same concentration of wealth as the 1920's, and I hope the correction is less devastating this time.
-Esme
Re:Clock can run in reverse. (Score:5, Informative)
it was only a surplus if you include FICA contributions.
I already posted a reply to this, but it occurs to me that a lot of people may not be clear on what it means.
You see, most working Americans see two kinds of Federal tax on their paystub. The first is plain-old Income Tax, which is probably in the low 20% range for most people with a "decent" full time job. The second is "FICA", which rolls up your contribution to Social Security and Medicare. For most people that tax covers another 7.6% of your income (6.2% Social Security, 1.4% Medicare). However, this number is misleading since the government actually makes your employer pay an equal amount. This is money that could be going to you, so really 15.2% of your salary is going to the government. (If you happen to be self-employed you'll see this directly, since the government makes you pay both halves.)
An important thing to note, however: the Social Security portion of your paycheck only applies to the first $90k or so of your income. So if you make, say $1m/year, your effective Social Security tax will be only a fraction of a percent. Basically it's a tax on the working class.
Now clearly 15.2% of your income is a huge chunk. In fact, considering that most people are probably paying only 20-22% of their income in regular Income Tax, that means you're really giving the Federal government 35-37% of your income! So it's worth knowing where the tax came from and where the money is going.
A bit of history: in the mid 1980s, Ronald Reagan came into office with the idea to slash income taxes, particularly for people who were "important" to the economy, i.e., very wealthy. At the time there was some belief on the Republican side that cutting taxes would magically produce new economic activity that would pay for the reduced tax cuts. Unfortunately, that never really happened and the nation started to go deep into debt.
Coincidentally (or not), right around the same time, a Republican chairman of the Federal Reserve came up with the idea to massively increase the Social Security Payroll tax. Recall that this is a tax that only applies to the first $90k of your income (it was less then), so raising it isn't going to have a big impact on high earners. In theory the tax hike was designed to build up a big reserve of cash so that Social Security could operate in the 2020s when the baby boomers started to retire. However--- and this is the really important part of the story--- the same chairman insisted that all this cash should not be put away someplace safe, but should rather be made available as a kind of piggy bank for the government to borrow from.
You can probably figure out the rest of it. Free money. Tax cuts to give. Weapons systems to buy. Amazingly, even after eating up all of the Social Security funds, the government still had to borrow hundreds of billions from the outside throughout the Reagan and Bush years.
So far it's possible to cause this a bipartisan cheat, since Democrats were equally to blame. But then in 1992 a Democrat named Bill Clinton got elected and decided to get serious about reducing those deficits. And over his term he succeeded, through a combination of slightly higher taxes (mostly on the high end of the income scale) and reduced spending (particularly military). The economy also boomed--- many say as a direct result of all of this fiscal responsibility. And so balancing the checkbook begat revenue which meant an even more balanced checkbook.
By 2000, Clinton (and his VP Gore) had cut the deficit all the way back to a "surplus" which means we were still borrowing some from the SS funds, just not from the outside world anymore. Al Gore ran on a campaign of even further deficit reduction, basically saying: let's finish the job, take those SS taxes you're paying, and put them in a special fund ("lockbox") where the government can't spend them. Republicans scoffed, and promised an even bigger round of income tax cuts (focused at the very wea
Re: (Score:3, Insightful)
"When the budget had a surplus back in Clinton years,"
What struck me most about those times were all the optmistic projections of surplus. There may or may not have been an actual surplus at the time, but even that is questionable when it turns out all these years that the whole basis of wealth and money was questionable.
So maybe there was a surplus, but in what? Real dollars?
Re: (Score:3, Insightful)
Actually, the debt never went down under the Clinton administration.
http://www.letxa.com/articles/16 [letxa.com]
Comment removed (Score:5, Informative)
The debt did go down (Score:5, Informative)
Actually the debt realtive to the GDP went down which is all that matters.
Re: (Score:3, Interesting)
10 trillion in debt, and where did the money to bail out banks come from? Borrowed! Genius!
Oddly enough, this reminded me of SimCity.
When I first started playing the game, I'd borrow heavily to fund agressive growth, thinking that if I cuold grow fast enough, I'd make the money back fairly quickly.
After a while I realised that the borrowing was hurting me far more than any other factor, so I started trying slow, organic growth. My cities were a bit of a hodge-podge at first, but I stayed in positive cash fl
As Feynman said ... (Score:5, Interesting)
Perhaps they can get a new model that displays the debt in scientific notation -- it could be named the "Cheney Memorial Clock".
Re: (Score:3, Insightful)
Reagan was the one who set us on this path. It should be named after him.
Re:As Feynman said ... (Score:5, Insightful)
Yeah, but Cheney was the one dumb enough to draw the "Reagan proved deficits don't matter" conclusion from Reagan's actions.
We need engineers in government, not politicians and lawyers. They don't have any respect for what happens when you ignore science and mathematical facts and press on as if they didn't matter.
The Logic of Failure....
Math says it bad, but not quite AS bad (Score:5, Insightful)
First of all, 2.7 in 1989 are worth more than the same amount in 2007. Inflation calculator says 2.7 trillion in 1989 equal 4.6 trillion in 2008.
Secondly, what's really important is the debt-per-capita ratio, and the US population has increased. In 1989 the US population was 246 million; in 2008, it's 305 million.
That means, that in 2008 dollars equivalent, the per-capita debt in 1989 was $18,000, while in 2008, the per capita debt is $32,000.
Yes, we do owe more. But we "only", per capita and in equivalent monetary value, owe about 80% more, as opposed to 370% more, as the original numbers would make you believe.
Re:Math says it bad, but not quite AS bad (Score:4, Insightful)
You're wrong to think it linear (Score:5, Interesting)
Consider repaying $1000/month on your credit card. For many people that might be hardship. For most people, repaying $2000/month is not 2 times as hard, butmuch harder.
Similarly, repaying $18k per person is a lot easier than repaying $32k, by much more than a factor of 2.
Of course that's all academic since nobody seems to be planning on repaying this debt.
Re:Math says it bad, but not quite AS bad (Score:5, Insightful)
Re:Math says it bad, but not quite AS bad (Score:5, Insightful)
Take a temporal trip. The average family enjoyed a better standard of living in 1970 than in 2008, even though the average family income, adjusted for inflation, was lower. There was more likely a stay at home parent, and the amount of non-disposable income (that is, income not spent on "necessities" - health care, mortgage, daycare for kids, education, car, etc. - was much less than today. Today, two incomes are required for many families to enjoy a middle class lifestyle. This may sound like an OK thing at first, but once you start reasoning through the implications - higher chance for loss of income, less family time, etc., it is clear that today's middle class families are far less secure than those a generation ago.
That's good value! (Score:3, Insightful)
For 2007, the Bulletin of the Atomic Scientists listed the U.S. with about 5,400 total nuclear warheads.
So that means each warhead is worth about $1,879,741,432 each.
he supports the terrorists (Score:5, Funny)
Adds reader MarkusQ, "I know Dick Cheney has assured us that 'Deficits don't matter' [CC] but I can't help wondering if we should be fixing the problem rather than the sign."
Why does this guy hate America so much?
Re:he supports the terrorists (Score:5, Funny)
Who, Cheney? It does seem odd, he's certainly profited by the country's action.
Oh, wait.
Perfect Time (Score:5, Funny)
Now is the perfect time to convert to the decimal system!
National debt goes from $10.2 trillion to only $10.2 billion (10^6) without paying a single cent of it!
Re:Perfect Time (Score:5, Informative)
We use the decimal system. We just run off of short scale instead of long scale [wikipedia.org].
Absolute number tells us nothing (Score:4, Informative)
Wrong (Score:5, Interesting)
The debt clock gives a per family portion. ~$86k. Compare that with the median income. Whoo!
Re: (Score:3, Insightful)
oh yes, ignoring that... it could all be paid off in a mere 10 years if every family (ignoring the ones who are truly at the poverty line, and ignoring that the truly wealthy can stand to pay much, much more) were to pay $8.6k/year? Sounds doable. Never gonna happen, of course.
Don't forget that's the public debt only, it comes on top of any other debts they might have. According to wikipedia the average household income in the US is about 50k so that's 17% of the income. Less taxes, cost of living and the interest on private debt (some 140k average I believe, about 80% in mortgage) I don't think there's 8.6k left over just like that.
Re: (Score:3, Informative)
I'm not sure that percent of GDP is such a great way to measure the national debt, since government spending and investment (e.g. making loans to the government) both count positively [wikipedia.org] towards the GDP. All else being equal, I would expect that the debt/GDP ratio would decrease as a result of deficit spending.
Re: (Score:3, Insightful)
A lot of countries have debts greater than a year's GDP. I think that even less than a year's GDP is a problem, as you suggest. If the economy is growing, we can afford to pay for today's stuff next year, but what happens when the growth turns out to be unsustainable?
In the US, it's a problem of reigning in entitlements, as well as reigning in stuff like military spending, and the same for pork barrel spending, but there aren't enough courageous legislators that are willing to do all that, and the same go
Re: (Score:3, Insightful)
Yes, but the GDP is bullshit. It makes societal harms into positives (Hurrican Gabby hits and causes $5 BILLION damage, that ADDS to the GDP). Another common scenario is a foreign car bought in the US at a dealership, because the transaction is in the US, it, again, adds to the GDP. Peter Schiff and many others put forth arguments much better than mine, go google it. It is a feel-good measure put out by the government in the same fashion the offical inflation figure is (which hardly accounts for real in
Re: (Score:3, Interesting)
Someone else said that Clinton paid off the national debt. Can you explain how you came up with the 60% figure?
What nonsense! (Score:4, Funny)
10,150,603,734,720.00 (decimal) = 93,B5F,213,EC0.00 (hex)
Whoever came up with the idea of buying a new LCD clock should be fired for wastefulness.
Re:What nonsense! (Score:4, Funny)
Just convert to hex
Better yet, convert to base 36, so we can use the entire alphabet. Every once in a while, the value displayed would spell out something interesting like HOLYSHITWEAREFUCKED.
Re:What nonsense! (Score:5, Funny)
HOLYSHITWEAREFUCKED = $182,396,328,105,409,846,882,664,606,244.00
You certainly would be.
Another Republican "Victory" (Score:5, Insightful)
What "fiscal conservatives"!
But wait, the debt has grown insanely under every single Republican president in the last 40 years.
How could that be?
The Republicans aren't fiscally conservative at all. Every single republican president has spent like a drunken sailor and GWB is the worst of the lot.
The only thing more stupid than Tax and Spend is Spend and Spend.
Re:Another Republican "Victory" (Score:5, Insightful)
"Republican" faction of the American Party:
Borrow and Spend
"Democrat" faction of the American Party:
Tax and Spend
Re:Another Republican "Victory" (Score:5, Insightful)
So in the slightly longer run the Republicrats are a 'Spend and Tax' party while the Democritans are a 'Tax and Spend' party.
Debt (Score:4, Insightful)
If I owe you a hundred dollars, I have a problem.
If I owe you a hundred billion dollars, you have a problem.
Deficits DON'T matter. (Score:4, Insightful)
I'm a god hating, baby aborting, marx reading liberal.
Deficits don't matter. Rather, the existence of a deficit doesn't. Having a deficit and a debt we CAN PAY BACK is a GOOD thing. It means our credit rating is great and that we can extend ourselves in times of crises and be a financial powerhouse in the world.
however, when we're struggling to pay our principle much less the interest, then that's a different story all together.
Is the rest of the world slaves to USA then (Score:4, Insightful)
If USA owes this foolish amount of money, but no-one dares to ask for it back because of the military and economic power - then USA effectively owns the world, and might as well just declare itself debt free, and carry on living off the backs of its slaves.
The rest of us aren't going to do anything about it.
I agree. (Score:3, Insightful)
We should be fixing the problem. All we need to do is cut spending and increase taxes.
I, for one, wish you luck getting elected on this platform.
I am a rat jumping ship (Score:5, Interesting)
Is anyone else, like me, making plans to move out of the US? Frankly I didn't get us into this mess and I'm not willing to do my part to bail out all those who did. I'm a liberal, not a libertarian, so I don't think taxes are always bad, but when I hear about what they're going to be going to, well I'd rather be paying taxes someplace where they're going to do some good. I hear european countries have high taxes, but they're not sending it all to Wall street, Iraq, and the world's largest military. I'd rather pay twice the taxes I am now if I knew it was going to more worthwhile things, like studying bear DNA.
I have no skill when it comes to convincing people of anything, especially not the average voter. I come across as arrogant, elitist, and condescending, because I am arrogant, elitist, and condescending, and that doesn't convince them of anything other than they don't like me. I give money to different causes to do that, but I myself am not helping my fellow citizen make the right choices.
While I like the place and the people, we've really painted ourselves into a corner. Every other country on earth makes stupid moves, because every person on earth is occasionally stupid, but the US keeps making such BIG mistakes. I feel selfish, or rather, I realize I'm selfish, but I'm not doing any good here, country is going to hell in a handbasket no matter what I do. I'm here for several more years in any event, so I guess there is time for us to shape up, but I'm making new plans anyway. Anyone else?
Well... (Score:4, Funny)
It's important to have goals.
Re:non-digital dollar sign (Score:5, Funny)
OMG the dollar sign is static... it's the end of the world!!!!
You're right. After the upcoming total economic collapse, we'll need the clock to be able to display the debt in terms of Chinese yuan or Euros. The current design does not allow for that.
Re:non-digital dollar sign (Score:4, Informative)
Re:non-digital dollar sign (Score:4, Insightful)
Now remember this: THE EXCHANGE RATE MEANS NOTHING. Think about it.....if the the exchange rate meant something, then the US economy would be doing about 106 times better than the Japanese economy right now, but it's not.
The only thing that really matters is the change and general direction of the exchange rate (and even that isn't entirely accurate, since it is possible for both sides to experience inflation at the same time, which is essentially what is happening right now, with the Euro dropping in value against the dollar). So once again, the Euro being at 1.35 of the dollar means very little by itself, despite the fact that two months ago the Euro was 1.6 times the dollar.
Eh. We're all gonna be livin' on the streets soon, so who cares?
Re: (Score:3, Insightful)
...except as a country we're taking it about that seriously, and we're all losing.
Re:i give it two years (Score:5, Funny)
Sort of a Moore's Law for debt, eh?
Every 2 terms of republican presidency, the national debt increases by a factor of 10. :D
Incidentally, anyone know what 1989's $2.7 Trillion is in today's dollars?
Re: (Score:3, Informative)
The national debt is completely inevitable (Score:5, Insightful)
If your money is created from nothing at the point of a loan [slashdot.org] and you want to inflate the money supply then you also have to increase the (exponentially growing) debt at the same time.
Now, if you want the "economy" to grow then clearly you have to increase the supply of money faster [wikipedia.org] than the interest on the debt which is consuming credit, or you get a recession.
Whether the debt is public debt, private debt or corporate debt, is irrelevant. The debt must be created. Or at least, it will be until you run out of people willing or able [realtytimes.com] to take on and service the debt, then the system collapses. Doesn't this requirement for perpetual growth sound like something else [wikipedia.org]?
It is a predictable exponential function and therefore has a doubling time, so yes, you could create a "law" about it.
The national debt, the credit crunch, the stockmarket crisis are all the inevitable result of the way your money is created [wikipedia.org]... Long may it continue.
Re:What's the solution? (Score:5, Insightful)
It's this type of stupid story that the media JUST LOVE to splatter about. They don't understand that they are CAUSING the mess. Guess what? NOTHING HAS CHANGED IN ICELAND. The farmer still grows his stuff. The geothermal energy is still coming from the ground. The snow is still white and cold. Nothing is different except the assumed value of a few sheets of paper.
The problem is that those sheets of paper are extremely important nowadays. If you have a mortgage, the ownership of your house is regulated by those sheets of paper. If something goes wrong, you suddenly find yourself without a home.
Lots of consumption and production is not local anymore. We import lots of stuff, and depend on exports to pay for it. And we need sheets of paper to figure out who gets what.
Without the global economy this crisis wouldn't have been nearly as big a problem, but we fucked up our global economy to the point that sheets of paper are more important than actual production.
But we produce everything we need to exist, food, housing, medicine.
The US doesn't produce all the oil it currently uses. Without the sheets of paper, most people won't be able to drive cars, and it's back to horse and carriage again.
So, again, I ask, what's the problem? If I'm hungry, can I get food? Yes.
Unless you don't have money to pay for it. Not everybody works on a farm.
If I need a place to stay, is there one? Yes.
Unless you just lost your home because you can't afford your mortgage anymore.
Buy local
Buying locally is a very good idea, but it's not how our global economy is organised at the moment.
Anyway, these are not bad times if you are smart and not stupid and buy into their stupid panic stories.
These are very good times if you are smart and have sufficient means to take advantage of the situation. Average Joe who can't afford his mortgage because his employer can't afford to pay him because the bank won't lend them any money, could be in serious trouble.
I'm not saying there's trouble for everybody (personally I'm not worried at all), but some people are in very real problems.
Re:What's the solution? (Score:5, Interesting)
What's the problem? The *average* American spends $1.30 for every $1.00 they earn. The average house has a loan on it for 60% of its market value, while the market value is falling fast. And everyone is still hoping and praying for a quick fix wonder cure that will wipe all the trouble away and allow the fairy tale to continue.
And now everyone is turning to their governments to bail out this mess. This will only result in bankrupt governments as well.
There's only one way to fix this. Widespread bankruptcy.
All the people who have gambled with or spent their future earnings and thrown them away need to be cleaned out of the economy. It's going to hurt and there's nothing we can do about it. We might have been able to fix this 15 years ago during the last recession, but it's too late now.
I thought with the panic last week, the bubble would finally burst and we can start the healing and re-building process. But it seems there is still far too much optimism.
Oh, and that job you have? Once we stop borrowing more money, 30% of the economy (and therefore 30% of the jobs) disappear overnight. I hope for your sake you don't become redundant.
Re:What's the solution? (Score:4, Insightful)
So I am to gather that the current situation with Ford, GM and Chrysler is imaginary too.
Everybody knows that American and English cars are crap. The English car industry died 20 years ago because of this. The US industry is dying now but they made a great profit selling the same cars for 6 or 7 decades with minimal R&D. Now tesla (based on a lotus) may be creating a new US car market to suit the times. Bloody stupid that GM and Ford didn't do it when they had the money.
Re:The national debt is completely inevitable (Score:5, Informative)
LOANS DO NOT CREATE MONEY
Well, that rather depends on how and who's making the loan, doesn't it. If I lend you a fiver. I lose the use of the fiver and no money is created. But if I lent you a fiver but still had the use of half of it, then you have a fiver and I essentially have $2.50. Money is created.
"The bank hath benefit of interest on all moneys which it creates out of nothing." - William Paterson, founder of the Bank of England in 1694
"I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people." Reginald McKenna, Chairman of the Midland Bank, 1924.
"The banks do create money. They have been doing it for a long time, but they didn't realise it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create it." H W White, Chairman of the Associated Banks of New Zealand, 1955
"Banks lend by creating credit. They create the means of payment out of nothing. " Ralph M Hawtry, former Secretary to the Treasury.
http://en.wikipedia.org/wiki/Money_creation [wikipedia.org]
etc etc.
Comment removed (Score:5, Informative)
Re:i give it two years (Score:5, Funny)
And when that (inevitably) threatens to overflow, do it in scientific notation. The Neocons and their supports won't understand it, and hopefully leave economic policy to people who don't think you can fix the economy by praying in public for lower gasoline prices.
Re: (Score:3, Interesting)
Just because Bush claims to be a conservative doesn't mean he actually is one!
The US has an incredibly interventionist foreign policy, and Americans haven't experienced a free market for almost a century.
Historically, that _is_ conservative. Free markets are a hallmark of classical liberalism. Around much of the world outside the US, politics, that's still what those words mean.
http://en.wikipedia.org/wiki/Classical_liberalism [wikipedia.org]
Re: (Score:3, Insightful)
Re: (Score:3, Insightful)
Socialism requires the government to help and assist those with less money.
Giving the super wealthy more money is not socialism.
It's a completely different type of wasteful spending. If the bush years were actually socialist then everybody would have benefited and lower income Americans would have seen an improvement--seeing as things have just gotten harder and worse off it's insulting to socialism, as flawed as it is, to call taking from the poor to give to the rich as a socialist agenda.