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Originally posted by charles1952
One question at the start though. If George Bush starts a policy, then Obama and Democrats approve of it and extend it, is it still Bush's responsibility? I would argue that it is no longer, but rather belongs to the people who approve and continue it.
OK, looking at your first graph's headline. You notice that it only refers to publicly held debt. Intra-governmental debt is at least half of that and is primarily the funding for entitlement spending. You'll notice that health care and Social Security are not even mentioned on the first graph. That omission skews everything.
Thanks for working with me on this issue.
Social Security’s finances significantly worsened last year, according to the new 2012 trustees report, because of a weakened economy and structural problems with the program. The April 23 report shows that all people who receive Social Security benefits face about a 25 percent benefit cut as soon as 2033—three years earlier than predicted in last year’s report.
The poor numbers come from a number of factors, including the continued weakness of the U.S. economy, high energy prices holding down wages, and a significant increase in the number of people who receive benefits from Social Security’s disability program (SSDI). SSDI has its own sub-trust fund that will be exhausted in 2016. While some SSDI costs will be paid from money that would have gone to pay retirement and survivors’ benefits, SSDI recipients face across-the-board benefit reductions in just four years.
In net-present-value terms, Social Security owes $11.3 trillion more in benefits than it will receive in taxes. This 2012 number consists of $2.7 trillion to repay the special-issue bonds in the trust fund and $6.5 trillion to pay benefits after the trust fund is exhausted in 2033. This is an increase of $2.2 trillion from last year’s report. This is the largest one-year drop in the program’s finances since 1994.
Net present value is the amount of money that would have to be invested today in order to have enough money on hand to pay deficits in the future. In other words, Congress would have to invest $11.3 trillion today in order to have enough money to pay all of Social Security’s promised benefits through 2086. This money would be in addition to what Social Security receives during those years from its payroll taxes.
Counting both programs together, in 2011, Social Security spent $45 billion more in benefits than it took in from its payroll tax. This deficit is in addition to a $49 billion gap in 2010 and an expected average annual gap of about $66 billion between 2012 and 2018. These deficits will quickly balloon to alarming proportions. After adjusting for inflation, annual deficits will reach $95 billion in 2020 and $318.7 billion in 2030 before the trust fund runs out in 2033. Now is the time to focus on solutions.
The existence of a trust fund does not make Social Security healthy. Although those assets are guaranteed by the full faith and credit of the United States, the bonds it contains must be repaid using general revenue that would otherwise go to other programs. Similarly, the interest that Social Security receives on existing trust fund balances is not spendable income. It merely inflates the numbers in the trust fund and increases the amount that Social Security will eventually receive from general revenue. (emphasis added)
Notice that repayments of debt (bars below the 0% line) can only occur when other federal funding exceeds operating expenses (bars extend above the 100% line).
The heavy debt incurred from 1917-19 to finance WWI was significantly repaid during the 1920s when federal tax collections exceeded expenses for several years. Not so for the debt incurred from 1940-46 to finance WWII.
It is also of interest that extensive Federal borrowing from the public has typically occured during times of war (1917-19, 1940-45, 1965-75, and the early 2000s) and in hard economic times (the Great Depression of the 1930s). The significant increases in peacetime borrowing that occured during the 1980s and early 1990s were unprecedented in US history.
Originally posted by IsThisThingBugged
reply to post by pajoly
See this is the problem I have with this... HOW CAN government count money that Americans are allowed to keep as adding to the debt?!
The bush era tax cut was never the governments money it's OURS dangit. So how can they accuse this program of adding to the debt?! That's typical big government BS! It's our money!edit on 28-8-2012 by IsThisThingBugged because: (no reason given)
I'm not sure I can entirely agree with you here. Our deficits have been over a trillion dollars a year for the last four years. The president has asked for $740 billion for defense and the wars in the 2011 budget. In addition, Congress still has that sequestration issue to deal with, which may reduce defense even more. Further, looking at the charts in The Huffington Post article you linked, I saw that the deficit grew quickly under Bush from 2001-2003. Then, surprisingly, it started to turn around and get smaller. Then, in 2007 and 2008 the deficit became huge. What happened? The war was still going on, that hadn't changed. My belief was that the increase in the deficit for 2007-2008 was due to to the fact that for the first time in his administration the entire Congress, both houses, were Democrat controlled.
But the thing is this...the economy began a decidedly worsening downward shift in the year 2001. And every year that follows, with nothing changed that the events of that year instigated...i.e. continued increased military involvement in the world and war still in Afghanistan...the national debt gets larger and subsequently the yearly federal budget reflects this...because debt continues to accrue but nothing can be paid back since every penny possible must be spent on the expenses incurred by the activities of military and defense.
Originally posted by detachedindividual
I don't think you understand the numbers here. This is revenue from tax that is not being generated because the wealthy are not contributing as they should. That equates to debt.