I love milestones, don't you?
The U.S. debt surpassed 100 percent of gross domestic product after the government's debt ceiling was lifted, Treasury figures showed Wednesday, according to AFP.
The debt, which had been in somewhat of a holding pattern over the past several weeks, rose $238 billion after President Obama signed the debt-ceiling deal into law Tuesday to avoid the country's first-ever default.
[. . .]
The last time the debt topped the size of its annual economy was in 1947 during World War II, according to AFP. But the deficit at the time was driven by war spending -- a degree of spending that ebbed once the war ended.
And not to tax your tolerance for "too much too fast," there is also this:
"While Washington and Americans have been focused on the debt ceiling, the Obama administration has continued to roll out more crushing red tape," said a spokesperson for Wyoming Republican Sen. John Barrasso, who's been championing the regulation fight.
At Tuesday's GOP Senate caucus lunch, the lawmakers said that they will renew their efforts, supported by business groups like the U.S. Chamber of Commerce. In a memo Barasso handed out to the lawmakers, he claimed that the administration in July only has put in $9.5 billion in new regulatory costs by proposing 229 new rules and finalizing 379 rules. Among those he cited were EPA, healthcare reform, and financial regulatory reform rules.
Lord -- $9.5 billion in red tape in one month. Even allowing for a little partisan hyperbole, that's staggering. In the meantime, President Obama is "pivoting" to concentrate on jobs for about the
Comments
"Yes We Can" has now obviously given way to "Oops We Did".
When they convinced you all that you'd be a part of history you probably thought that was a GOOD thing, huh?
Thanks. Thanks a lot.
I don't see what you're celebrating. The ultra-conservatives bullied Obama into giving them virtually everything they wanted, while giving nothing in return (such as tax increases on the wealthy).
What happened? The market immediately tanked.
Let's see what tomorrow's unemployment numbers look like.
Look, you guys won. If your economic philosophy is correct, things should start getting a great deal better. Let's just watch a while and see.
Littlejohn, it's a shame they didn't offer any math classes at that high brow school you ar so proud of graduating from.
Neither side won anything in the last congressional showdown, we all lost. The minute we caved in and let them raise the credit limit on the national mastercard our debt surpassed 100% of our gross GDP.
The market drop today had nothing to do with the "debt ceiling" deal and everything to do with the "debt". The events in Italy & throughout Europe today fueled it also because it's exactly what's going to happen here.
And while we're at it, would it be too much to ask that you and your ilk at least own up to being intellectually honest enough to admit your "tax the rich" mantra is a canard because you know (if you can borrow a calculator) that even if you confiscated 100% of "rich peoples" money it won't pay for but a few days of our structural debt problems? We spend $4 billion a day,
Small place..... - Just who are "you guys"in your comment?? You must be talking to Reid, Lugar,Biden,Durban,Pelosi and yes"the one"! Moody's and the other rating agencies had stated that anything less than a $4 trillion cut in spending would result in a downgrade - well we got it today!!
Of course, for a guy in your position, you will still get your 99 weeks of payments,
The market has tanked because reality is finally setting in on the US economy. Each and every year since 1958, the US Debt has increased. Simply put every politician who has stated the US had a surplus in the past 53 years has lied.
The US is now learning that spending money it did not have for things previous generations wanted (Social Security, Medicare, Medicaid, Food Stamps, SSI, Space Program, Mini wars, etc) did so at the expense of future generations. We took Trillions in Social Security and Medicare taxes, gave them to a small group who spent it on things they would not have bought or could not have afforded. All these trillions were part of the wealth of this country, now spent and now the bill is coming due. The General Budget is the cause of $14.4 Trillion in debt and the deficit this year of greater than $1.5 Trillion will nearly equal all General Revenues collected. In simple terms the congress that the people vote for is spending nearly 100% more than they take in.
It does not take a rocket scientist to figure out that at some point in time the US files for bankruptcy like many Latin American Countries have or we begin paying for the things we want. Paying for everything in the budget will simply kill the economy because there will be absolutely no disposable income.
Gold was an indication something was amiss. The dollar falling was another indicator. Companies not hiring because of the unknown is another. Companies building up cash reserves meant they were unsure about the future. Greece, Spain, Portugal, Ireland are causing major problems in Europe. Everyone has borrowed from one another, even countries. The Debt ceiling should not have been raised. Just think in ten years the debt will be $28.9 Trillion and if we believe congress will have the fortitude to actually cut the amount they say, it will be $27.4 Trillion.
Not raising the debt limit was a balanced budget amendment!!! Everyone talks the talk, but cannot walk the walk.
Each year since 1958, the national population has increased. Each year since 1958, the dollar has experienced inflation. The relevant measure, that of the per-capita national debt in chained (constant) dollars, has gone up and down.
Interestingly, before Dutch was president, the per-capita national debt in chained dollars generally went down during Republican administrations and up in Democratic administrations, but since 1980, the debt has gone up more in Republican administrations than in Democratic ones. As a party, at that point, we stopped favoring balanced budgets and started favoring deadbeat-ism in order to promote lower taxes.
Too bad. People don't invest in equities because of opportunism, but out of fear. The first rule of investment is capital preservation. In periods of lower taxes and lower inflation, there's no reason to put your money any place except the bank. Raise taxes or inflation, and you create jobs with your money, because the risk of losing money in a bad investment is better than the certainty of your savings eroding if you just sit on them. We have the greatest economic growth when the top tax rate is in the 57-67% range, depending on how you calculate it.
This isn't the first time the national debt exceeded the GNP. It happened in the late 1940s as well, Eisenhower gave us the IRS Code of 1954, which gave us a top tax rate of 94% and an extended period of prosperity and economic growth.
Eisenhower also dealt with a debt limit crisis like ours by selling off gold from Fort Knox, which was worth far more than its book value.
I would stimulate the economy by a slightly different Quantitative Easing. We'd probably be wise to do that by issuing specie rather than by borrowing from the fed, because specie doesn't draw interest and it doesn't have to be repaid. It costs more to produce pennies than they are worth. Stop producing pennies and use those machines start making a penny-sized coin of "rolled gold" with a face value of $1000, using those coins to redeem treasury bonds. (The actual gold in such a coin would be worth a couple of bucks at most.)
We reduce the national debt at comparatively little cost with each redemption, and we increase the money supply, causing minor inflation, which stimulates the economy. Oh, and we stop wasting money by selling pennies below cost.
Combine that with some decent cutbacks - especially a policy of not fighting other countries' wars for free - and we could turn around the economy in 2 years, and be in pretty good fiscal shape in a decade.
Geezus, I'm STILL laughing at the "Oops We Did" comment at the top...brilliant.
Move over Spain...and Greece...here comes "US".
I hope NOT.
(Bill, at this point, they can't even "crawl the crawl"...)
The CPI in 1958 was 28.60 Today it is 225.72. ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt
This is an increase of 689% over 53 years.
The US Average Wage in 1958 was $3,673.80 while the latest source is 2009 was $40,711.61 or an increase of 1008% over 51 years
The National debt at the beginning of 1958 was $275,882,213,704.27 as of yesterday it was $14,574,607,940,062.25 This is an increase of 5183%
In summary Inflation has grown by 689%
Debt has increased by 5,183%
Wages have increased by at least 1008%
The US population has not quite doubled in the past 53 years.
Based on population alone the debt has increased by 2,591% per person in the US. As a percent of wage growth, it has out paced it by over 2 to 1. When compared to inflation, it has outpaced it by 3.76 times.
Now it took 53 years to get to this point and we are now paying interest on this size debt. I do not believe it possible to reverse the course of this debt as easily as you state. In 1958 the FICA tax was a total of just 4.5%, on the first $4,200. Today it is 15.3% on the first $106,800 and 2.9% on every dollar of wage above $106,800.
I do not think the US economy will recover in my life time unless radical changes take place. But the problem is we do not have a decade to reverse course. The CBO projected a debt of over $28 Trillion in ten years. We are not reversing course nor are we actually slowing debt, but adding to it. I do not think people realize the size of the debt and the services they have voted for.
Keep in mind that in 1958 Medicare, Medicaid, SSI most tax credits, schedule A exemptions did not exist. The general budget was much smaller then than today. Who has the fortitude to cut general spending by 80% and this does not count the cuts in Medicare or Social Security?
In 1947, the national debt was $258,286,383,108.67, and the GNP was $238.10 billion. Our national debt was 108% of the GNP.
Today, the national debt is $14.569 trillion and the GNP is $15.094 trillion. Our national debt is 96% of the GNP.
In 1947, this country was in crisis. There were shortages of just about everything, including jobs. Ike gave us prudent fiscal policy in the form of the IRS code of 1954, and we were in pretty good shape by the end of the 1950s.
None of us knows how long our own lives will be, so whether the economy recovers in your lifetime or mine is impossible to predict. We turned things around then in just a few years, but back then the GOP was devoted to fiscal responsibility. and the party did a 180-degree U-turn on that in the late 1980s.
"We turned things around then in just a few years, but back then the GOP was devoted to fiscal responsibility." Yes, that generation saved, worked and paid down the debt they accumulated during WWII. The problem was in 1957 the added SS-DI increasing the tax rate; in 1965 the passed the Medicare Act; in 1970 they enacted Earned Income Credit to help low wage earners who had been hit by the recent huge FICA tax increases in order to fund them.
"the party did a 180-degree U-turn on that in the late 1980s." I disagree with you. Under Reagan the shifted Personal Income taxes to FICA taxes by lowering income tax rates and raising FICA rates. In simple terms we paid in full for Medicare and SS while borrowing to pay general budget expenses.
"None of us knows how long our own lives will be, so whether the economy recovers in your lifetime or mine is impossible to predict." You are 100% correct. That is why each congress should not be making promises that affect people in the future. This is why the Federal Government should not have programs such as Social Security, Medicare, Medicaid, etc. It is using today's capital to pay benefits to those based on age, not what was contributed on their behalf and as a result unintended consequences and political ineptness becomes a problem. Each cohort should be paying its own way, but they are not. Promises made in the past, though not legally binding, are being forced on others to pay the consequences.
Harl, you are a very positive person, I surely hope you are right.
The National Debt
6/29/1940 $42,967,531,038
6/30/1941 $48,961,443,536
6/30/1942 $72,422,445,116
6/30/1943 $136,696,090,330
6/30/1944 $201,003,387,221
6/30/1945 $258,682,187,410
6/28/1946 $269,422,099,173
6/30/1947 $258,286,383,109
6/30/1948 $252,292,246,513
6/30/1949 $252,770,359,860
6/30/1950 $257,357,352,351
6/29/1951 $255,221,976,815
6/30/1952 $259,105,178,785
6/30/1953 $266,071,061,639
6/30/1954 $271,259,599,108
6/30/1955 $274,374,222,803
6/30/1956 $272,750,813,649
6/30/1957 $270,527,171,896
6/30/1958 $276,343,217,746
6/30/1959 $284,705,907,078
6/30/1960 $286,330,760,848
6/30/1961 $288,970,938,610
6/30/1962 $298,200,822,721
6/30/1963 $305,859,632,996
6/30/1964 $311,712,899,257
6/30/1965 $317,273,898,984
6/30/1966 $319,907,087,795
6/30/1967 $326,220,937,795
6/30/1968 $347,578,406,426
6/30/1969 $353,720,253,841
6/30/1970 $370,918,706,950
6/30/1971 $398,129,744,456
6/30/1972 $427,260,460,941
6/30/1973 $458,141,605,312
6/30/1974 $475,059,815,732
6/30/1975 $533,189,000,000
6/30/1976 $620,433,000,000
9/30/1977 $698,840,000,000
9/30/1978 $771,544,000,000
9/30/1979 $826,519,000,000
9/30/1980 $907,701,000,000
9/30/1981 $997,855,000,000
9/30/1982 $1,142,034,000,000
9/30/1983 $1,377,210,000,000
9/30/1984 $1,572,266,000,000
9/30/1985 $1,823,103,000,000
9/30/1986 $2,125,302,616,658
9/30/1987 $2,350,276,890,953
9/30/1988 $2,602,337,712,041
9/29/1989 $2,857,430,960,187
During the 80's, the national Debt nearly tripled.
9/28/1990 $3,233,313,451,777
9/30/1991 $3,665,303,351,697
9/30/1992 $4,064,620,655,522
9/30/1993 $4,411,488,883,139
9/30/1994 $4,692,749,910,013
9/29/1995 $4,973,982,900,709
9/30/1996 $5,224,810,939,136
9/30/1997 $5,413,146,011,397
9/30/1998 $5,526,193,008,898
9/30/1999 $5,656,270,901,615
During the 90's the National Debt doubled.
9/30/2000 $5,674,178,209,887
9/30/2001 $5,807,463,412,200
9/30/2002 $6,228,235,965,597
9/30/2003 $6,783,231,062,744
9/30/2004 $7,379,052,696,330
9/30/2005 $7,932,709,661,724
9/30/2006 $8,506,973,899,215
9/30/2007 $9,007,653,372,262
9/30/2008 $9,575,181,268,036
8/04/2011 $14,574,607,940,062
By writing
I think GDP is a poor measurement and will go as far as to say it is misleading. For a long time I have thought that GDP is the wrong measurement to use. When I began to look at the GDP, Deficit, Debt and where money was spent, I found that looking at what makes up GDP is in many ways counting borrowing money as being good; building road that have a finite life span as good; hurricanes, earthquakes fires as good and the list goes on. GDP would be better if it subtracted off borrowed money. Borrowed money is an artificial stimulant as is Social Security, Medicare, Medicaid, Food stamps, etc.
In this day when we as a nation are in an economic slowdown or worse, borrowing money just delays the day of reckoning and if GDP was truly a good indicator, we simply would double our borrowing and our GDP would increase. It would be like me hiring a maid, chauffer and a Gardner to do create jobs. The problem is I cannot afford this for long and in the year I have to pay the borrowed money back would detract from GDP because I would restrict spending and fire the people I had hired.
I have looked at the GDP reported by the Federal Government and find it hard to believe the things that go into it. When debt has to be paid back or deficit spending is reduced, GDP drops.
Looking at 2010;
GDP was $14.527 Trillion
Deficit was $1.652 Trillion
Debt was $13.562 Trillion
It is my opinion the US economy went past the 1 to 1 ratio in 2010. In fact since it is mathematically impossible to continue the same level of Social Security and Medicare benefits in the future, any reductions in these areas will lower GDP.
"Can you name any time in human history when working-age adults did not support both their children and their elderly parents?"
Ah, support in what style? Prior to 1937, support meant parents, children and grand children lived many times in the same dwelling. My wife's grandmother lived with her parents for well over 15 years. What was the added cost to have her live with them; little, far less than trying to support a separate house hold with utilities, groceries, transportation, etc. And prior to 1965 working adults were not forced to pay healthcare bills for their parents.
You used the Consumer Price Index, which is based on a "market basket" of certain items. It ignores industrial goods, which may be included in the Producer Price Index, and it is really confused by techno change. As people buy $3500 PCs, should that show as an increase in inflation because they aren't buying typewriters any more, or as a reduction in inflation, because they aren't buying dedicated word processors?
When you talk of average wages, you ignore the many people who are self-employed. The self-employed have done MUCH better than employees in the past few decades.
The GNP is simply an all-inclusive marketbasket of all economic activity. It's illogical to not count the manufacture of autos or the construction of houses because they're usually purchased with borrowed money. When people (or the government) buy with borrowed money, it causes inflation - and that's the whole point. If you hire someone to assist you, you're removing their labor from the marketplace and driving up everyone's wages, causing inflation. When you RIF them, that's increasing unemployment and driving down everyone's wages, causing deflation. And that's the whole point, because we're looking at the ratio of debt to earning capacity. The GNP autmatically adjusts for technological change, for changes in population, for inflation - and it's raw data, unlike the CPI, which is cooked according to a recipe that constantly gets fidgeted with.
The GNP may be a better measurement than the GDP. The problem with both is that disasters increase both GNP and GDP and does not take into account Wealth changes.
What the US has experienced is a dramatic change in wealth.
"Each year since 1958, the national population has increased. Each year since 1958, the dollar has experienced inflation. "...
"You used the Consumer Price Index, which is based on a
At present, Social Security is NOT paying out more than it collects in payroll taxes. It's still building up the trust funds. That won't last forever, not with people having so few babies, and immigration significantly below historic levels, but at present, it's still collecting more than it pays out.
It doesn't surprise me that people want services without paying for them. When a salesman asks me, "How much did you want to spend?" I always answer, "I don't want to spend anything at all. But show me such-and-so." I pay what I need to pay; what surprises me is that the salesman expects people to say they have money burning a hole in their pocket.
I grew up hearing about "tax-and-spend Democrats" and yeah, the Democrats still tend to be tax-and-spend sorts, but the GOP used to be full of conservatives, and now it's full of deadbeats. When the editorial writers blame the Tea Party, it's a concession to those of us who still think kindly of the Republican party of years gone by, when conservatives had morals.
"At present, Social Security is NOT paying out more than it collects in payroll taxes. It