Scumbria Re..All of the debt accumulated after 1981 (about $5 trillion) is directly attributable to Reagan's 1982 budget. Clinton would have been in the black all eight years if he didn't have to pay $300 billion/year in interest payments.<<<<<<
Why? Reagon inherited a debt of $800 billion dollars when he came into office, and increased the debt by 1.73 trillion; leaving the country with a total debt of 2.6 trillion when he left office. But of that 2.6 trillion, 22% was old debt. Don't we also have to pay interest on that debt. Secondly, look at your previous post.
To:twfowler who wrote (131563)
From: Scumbria Monday, Feb 5, 2001 1:18 PM
Respond to of 131704
Tim,
I believe that deficit spending is important to stimulate the economy during a major economic depression. In order to facilitate this for the future, you need to start with a clean slate (i.e. no current interest payments.)
The economy is doing great now, and there is no excuse for not paying back our current debt. We will need that buffer in the future.<<<<
In you first sentence, you state that it is important to stimulate an economy during a major economic depression. And that is precisely what Reagon did by increasing spending in order to get the country out of its greatest recession since 1929. Reagon just did what you say he should have done. What is so criminal in that? In the second paragraph you state that when the economy is doing great, the debt should be paid off. Fine and that is what Bill did eventually. But it did take Bill seven yrs to get a balanced budget and he didn't have a recession, high interest rates, high unemployment,and a cold war to fight. What is so great about a person doing exactly what you say he should have been doing.
Read this article
http://mwhodges.home.att.net/debt_a.htm
KEY COMPONENTS of federal spending (as a percent of the economy) since the War
- a POWERFUL PICTURE showing debt caused by un-funded run-away social spending - the CULPRIT
The following 'tell-it-all' chart (from the Federal Spending Report) provides some clues as to the main components of federal spending that caused our federal debt. We saw from the above charts that old war debt was paid-off between 1956 and 1964. It can be seen that the cause of current debt must be laid at the doorstep of run-away, consumptive social spending that our generation did not pay for - - which has increased much faster than growth of the economy.
This is a powerful chart. Look closely at which lines go up and which go down.
This chart shows the trends of total federal spending as a share of the economy (measured by national income) over the past 50 years, with the total broken down into 4 components: Defense, Social (sum social security, Medicare, Medicaid/health, welfare income) and net Debt Interest, and Other (meaning all items not covered in the first 3 components, which is balance of spending, incl. such items as Dept. of Energy, IRS, State Dept., etc.).
The declining black trend line is the defense spending ratio, which is now at 3.8% of the economy, well below its 1947 level - following a 4-decade downward slope.
AND, the BIG CULPRIT (rising red line) is rapidly rising Social spending, growing 14 times faster than the economy, more than eating up the decline in defense ratios (and has now reached a historic new high). (If it had been growing in dollar terms only at the rate of growth of the total economy, then that red line would have been flat on the chart. The fact the red line rises means said spending was growing much, much faster than the economy.)
Look closely at that red line on social spending. Note 3 points: (1)the acceleration starting mid-1960s, (2) this stopped rising (and declined) in the 1980s for the first time in 4 decades, (3)only to rise again thereafter to a record high in the 1990s.]
This chart almost looks as if increased spending on defense in the mid-1950's was a cover for the beginning of a socialization expansion never seen before in history. At the very least, social spending ratios were expanded 'under cover' of declining defense ratios. Social engineers certainly knew what they were doing - finding a way to camouflage their agenda. Since defense has declined to its post WW II ratios, the 'chickens are coming home to roost' - because defense reductions will no longer camouflage social spending, as occurred during the past 4-decades.
Interest (blue line) takes up an added 2% of the economy. But, it can only decline if the debt principal causing the interest is paid-down. However, debt principal is rising.
Since all war debt was satisfied by 1964, and defense spending % economy declined steadily since 1952, our nation's debt build-up must be considered non-defense - - predominately social spending growing much faster than the economy. Therefore, the interest curve (blue line) on our chart since the 1960s must be attributed also to social spending.
Anyone looking at this chart cannot escape the clear signal of the key trend that must be reversed - - its SOCIAL SPENDING! (the red line).
NOTE: For the period of the 1980s, as mentioned the 40-year up-trend in social spending was halted, and temporarily reversed. And, the rise in defense in the early 80s to complete the wrap-up of the Soviet Union (which was covered by an identical decrease in the social spending ratios). The defense ratio was then reversed to end 1980s about where it started. Today's debt totals must be laid squarely at the doorstep of long-term consumptive social spending, that still continues.
Social spending increases can no longer be camouflaged by defense reductions, and therefore must be planned to a downward slope. A political challenge considering the number of beneficiaries of such spending, but of vital necessity if we are to be equitable to our younger generation. After all, few would disagree that today's young families are paying a significantly higher % of their income for social & medicare spending, and higher total taxes, than did their grandparents, AND they will never see even the same level of benefits.
Summary - Inter-generational inequity?
In summary: we know from the Private Sector Report that all government spending (federal plus state/local) has increased from 12% of the economy to 40% of same, in the past 69 years. Further, we know from the Federal Government Spending Report that the federal component of total government spending has grown from 3% of the economy to 25% of same - - a 800% increase in its share of the economy. And, the above chart identifies the prime culprit of run-away federal government spending - - social spending growing 14 times faster than the economy. Further, we have shown that since the social spending ratio is the only rapidly rising component of the federal budget, all the current interest paid on the debt is just another form of social spending. Thus, we have identified the item of spending that has distorted our economic situation - - and is the cause of mountains of debt. Debt spent on items that have been consumed - gone - history - disappeared. AND, we are passing this on to the next generation, with zero benefit to our children and grandchildren. I don't like that!! <<<
Note several important passages from the above article. Note the graph wouldn't copy, so you have to go to the site to see it.
Since all war debt was satisfied by 1964, and defense spending % economy declined steadily since 1952, our nation's debt build-up must be considered non-defense - - predominately social spending growing much faster than the economy. Therefore, the interest curve (blue line) on our chart since the 1960s must be attributed also to social spending. <<<<<
Interest (blue line) takes up an added 2% of the economy. But, it can only decline if the debt principal causing the interest is paid-down. However, debt principal is rising. <<<<
You claim that we are accusing you of distortion, but isn't ignoring the greatest recession since 1929 a distortion. You claim Bill would have balanced the buget without the interest payments. True, but you totally ignore the fact that defense spending because of the end of the cold war declined even more that interest rates rose. You claim that Bill took better care of the economy, but the economy grew by a greater percentage during Reagons yrs. than Bills yrs. Both presidents did a fine job running the government under different circumstances. Its to bad Bill sullied his record with immorality and greed. |
