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Historically deficits have run between 2-5% on average. The worst non-WWII year was 1985 at 5.88%. Last year was 9.92% and this year is projected to be 10.64%.Quote:
Originally Posted by chuck34
Don't get me wrong, I think deficits are wrong, but just like global warming, I am questioning my assumptions because I fail to see where deficit spending has done us long term harm or caused runaway inflation. I have to believe there is some other dynamic at play here that is not being accounted for.
Also, you are right total debt is approaching 100% of a typical year's gdp. So I guess we have a debt to income ratio of 1:1. We might have to go to sub-primes or junk bonds. :p :
Trying to put it in perspective on a personal level, which may or may not be relative; I am trying to become debt free, and am except for my house. I owe more on my house than I made last year, but I'm not upside down nor do I have trouble making payments, so as long as the US "has value" and can make payments, do deficits really matter?
This is the problem Alex. The percentage vs GDP is getting out of line and the debt is being held by Chinese banks. How do you run your economy when you are beholden to banks who don't have your best interests at heart? China is the world's largest economy now and they wont be doing anything any time soon to give the US anything but more debt if they want it. The USA has always been able to manage its debt, but the fiscal realities of the spending of Congress have yet to hit home and the experts are saying it will be nasty if someone doesn't get a handle on it. Then one looks at Pelosi, Reid and Obama and realize, that they are not really looking for that handle yet...Quote:
Originally Posted by Alexamateo
It isn't a problem when you are not trying to add more entitlements that you cannot control or cap. What is the healthcare plan? You think that is saving money or adding debt? What about the bailouts to the banks and GM? You figure the US gov't really had that money to lend to that when you may need more as a nation to cover the cost of a growing social security deficit? Why go into the hole to protect unionized jobs and the grow the civil service when the economy is in recession? Everything that is being done is counterproductive to how you or I would run our finances. When you are not getting as much income, you don't go buying MORE luxuries or giving MORE to a charity. You cut back. Not government. IT never tries to do with less, and instead tries to tax more income out of the "rich". What do the rich do when they decide they have had enough? They invest offshore or in tax shelters that don't help the economy. Or they quit working so hard and make LESS. Making the Rich pay usually makes them and their money LEAVE. That is NEVER good for a country...Quote:
Originally Posted by Alexamateo