News Is the US National Debt Reaching a Dangerous Tipping Point?

[WhoWee]

Huh? Are you really arguing that the ideological aspects of those questions are less important than their associated costs? In the typical political debate about these issues I really don't think the costs are the main concern.

And about the students, or any other group, why should they be allowed to vote? Well, because they live in the country, and any decision made by the government affects them too...

The Left uses costs to sell gay rights - don't they?

http://online.wsj.com/article/SB10001424052748704562504575022043511627722.html

http://articles.chicagotribune.com/...ay-couples-same-sex-couples-equality-illinois

As for students (my twins are now college "freshpersons")- unless they work - they typically live in an idealistic alternative world - IMO of course.

 

[Oltz]

Let try to bring this back towards the debt and how much of the population should be carried and by what proportion of the remaining numbers.

We can have another thread about who really deserves to vote if you like.

With that said 15% of the population is now on foodstamps...

http://www.foxnews.com/politics/2011/11/02/some-15-us-uses-food-stamps/?test=latestnews"

And a Bi partisan group of 100 (60 dem 40 rep)representatives have signed a letter admitting both revenue and drastic cuts are needed and asking for 4 Trillion in debt reduction over 10 years instead of the 1.2 that is mandatory.

http://www.foxnews.com/politics/2011/11/02/dozens-lawmakers-urge-debt-panel-to-consider-all-options/"

With support showing that without at least 4 trillion in reduction the debt will out grow economic growth. (back to the chart on the first page as reference the colored bars will pass the black line with no white bar left and at that point the govt can only pay benefits and service the debt nothing else no army no mailman no roads ect.) I wish we had access to these reports by "Bipartisan budget experts".

Bipartisan budget experts who have produced plans for reducing the debt have urged the committee to produce at least $4 trillion in savings. They say doing less would not significantly alter the long-term financial nightmare the government faces, in which federal red ink continues growing at a faster rate than the U.S. economy.

 

[mheslep]

The federal government could take all income of the top 1% ($343K and up) and it would still not balance the US budget...

That ($343K) was 2009.

Changes across some of the other income brackets during the recession:

Income changes by threshold 2007, 2009
0.1% split point: fell 44%, $2.16M to $1.43M
1% split point: fell 26%, $410K to $343K
50% split point: fell 1%, $33.8K to $32.4K

http://www.taxfoundation.org/news/show/250.html#table7

 

[ParticleGrl]

With support showing that without at least 4 trillion in reduction the debt will out grow economic growth.

This has to be a nonsense. 30 year rates on US debt have been at historical lows, and won't rebound unless unemployment picks up and the EU starts to recover. We are paying less to service the debt now then we have in years. The deficit peaked at 1.4 trillion and has been steadily shrinking.

Also, Obamacare will have big impacts on fiscal numbers (if it does what supporters say, and lowers the long-term trend of health costs it will have a huge positive impact on long-term fiscal health. If detractors are right, it will accelerate costs. Either way, it will do SOMETHING to fiscal outlook). Trying to identify major costs now, shortly before the landscape changes, seems a bit silly.

But hey, we have an increasingly broken-down power grid, increasingly awful roads, etc. Its not like we should borrow cheaply to fix this stuff. We should wait until it breaks completely and fix it in the most expensive way possible. That makes sense.

 

[WhoWee]

This has to be a nonsense. 30 year rates on US debt have been at historical lows, and won't rebound unless unemployment picks up and the EU starts to recover. We are paying less to service the debt now then we have in years. The deficit peaked at 1.4 trillion and has been steadily shrinking.

Also, Obamacare will have big impacts on fiscal numbers (if it does what supporters say, and lowers the long-term trend of health costs it will have a huge positive impact on long-term fiscal health. If detractors are right, it will accelerate costs. Either way, it will do SOMETHING to fiscal outlook). Trying to identify major costs now, shortly before the landscape changes, seems a bit silly.

But hey, we have an increasingly broken-down power grid, increasingly awful roads, etc. Its not like we should borrow cheaply to fix this stuff. We should wait until it breaks completely and fix it in the most expensive way possible. That makes sense.

I agree - Obamacare will have some kind of an effect. But I don't have much confidence in the estimates.

Call me a pessimist, but there were high hopes for this as well. Please see pages 3 and 4
http://www.recovery.gov/About/Pages/The_Act.aspx

"Total Job-Years Created
For some purposes, looking at the effects at a single point in time is not the most useful
approach. Since the economy is likely to be operating below capacity for several years, job
creation any time over the next several years is valuable. Thus, a second way to look at the
employment effects of the program is to estimate the number of job-years the program will
create over the President’s first term. A job-year means simply one job for one year.
To estimate the impact of the ARRA in terms of job-years, one simply adds up the
average jobs created per year over the total number of years. Two statistics summarizing the
estimates are presented in Table 2. The first is the familiar estimate that the ARRA will save or
create approximately 3.5 million jobs as of the fourth quarter of 2010. The other is an estimate
that the Act will save or create about 6.8 million job-years by the end of 2012. This estimate is
obtained by simply adding the estimates of the amount the program will increase average
employment in each of 2009, 2010, 2011, and 2012. (The slight difference between the 6.8
million figure and what one obtains by summing the numbers reported in Table 1 is due to
rounding.)"

Based on these projections of job growth - is there any reason to believe the Obamacare estimates?

 

[CAC1001]

I'd be okay with a VAT tax and some other taxes to shore up the social safety nets and allow us to balance the budget while affording both the military spending we need and the social safety system, but the problem is that the politicians always come up with more ways to spend the money then there is money, so we'd just end up worse off then we are now I think. The government will rarely respond to a huge influx of cash by saying, "Oh goodie, look at all of this additional money, think of the massive surplus we can generate!" no it's always, "Oh goodie, think of all the new ways we can spend this money!"

This has to be a nonsense. 30 year rates on US debt have been at historical lows, and won't rebound unless unemployment picks up and the EU starts to recover. We are paying less to service the debt now then we have in years.

The problem though is that with a larger and larger debt, which grows by leaps and bounds each year with such a large deficit (even if it is shrinking, it is still very large nevertheless), the amount of money it takes to service the debt will grow and grow, so that if the interest rate has to increase by one percentage point let's say, it can massively increase the amount of money it takes to service the debt if the debt itself is very large. One factor the credit rating agencies look at is how much of the federal revenues go towards servicing the debt. 18% is considered a major red flag. While the U.S. isn't at that point right now, if the interest rate ever has to rise, it could end up there.

But hey, we have an increasingly broken-down power grid, increasingly awful roads, etc. Its not like we should borrow cheaply to fix this stuff. We should wait until it breaks completely and fix it in the most expensive way possible. That makes sense.

Yes, but it also doesn't make sense to assume that interest rates will remain as low as they are for the forseeable future and to thus engage in a massive spending spree. We could get blindsided by a European crisis that causes our financial system to need a second bailout, no one right now knows what exactly is going to happen with China, which looks to be on the verge of a major credit crisis and real-estate bubble bursting. Some say the concern is way overblown, that China's real-estate market is not tied into the global economy as the U.S.'s was and that the Chinese government can deflate the crisis in a controlled manner, others say China is Dubai x 1,000.

With all that risk, I'd wait before spending on infrastructure!

 

[Oltz]

Also, Obamacare will have big impacts on fiscal numbers (if it does what supporters say, and lowers the long-term trend of health costs it will have a huge positive impact on long-term fiscal health. If detractors are right, it will accelerate costs. Either way, it will do SOMETHING to fiscal outlook). Trying to identify major costs now, shortly before the landscape changes, seems a bit silly.

But hey, we have an increasingly broken-down power grid, increasingly awful roads, etc. Its not like we should borrow cheaply to fix this stuff. We should wait until it breaks completely and fix it in the most expensive way possible. That makes sense.

First name one time that something the government ran ended up being more cost efficient with less over head hten when it was ran privately?

Its called budget Creep every year you are given X amount of money for your department and every year you strive to spend slightly more hten that so that the following year they will give you more. This is great for each little department it allows them to gradually increase staff and ammenities as well as preforming your task. When every government office at every level does it every year we end up with a behemoth government that is layered to create more work for less results.

The phrase "if we don't spend it this year we will get less next year" is common and believed.

Second of course we all want to rebuild the infrastructure that is disturbingly close to failure, But the governement and congress already has substantial means for funding these projects unfortunatly this funding has been consistently routed to pet projects for the last ~35 years.

Lastly think of Federal Debt as an adjustable rate mortgage. Remember how well it worked out for all of those people who took out more in debt then they could handle when the rates changed? More debt now is not the answer period. It will bite us cheap easy money does not exist the rates will go up we need to plan 10 + years ahead just like your family should for major debt choices.

We need to stop planning things in election cycles and start actually looking at an accurate long term forecast.

 

[FlexGunship]

Lastly think of Federal Debt as an adjustable rate mortgage. Remember how well it worked out for all of those people who took out more in debt then they could handle when the rates changed? More debt now is not the answer period. It will bite us cheap easy money does not exist the rates will go up we need to plan 10 + years ahead just like your family should for major debt choices.

I agree with what you've said Oltz, but I want to add one caveat. It does make sense to borrow money when it's spent on an actual long-term investment. An example of a good investment could be scientific facilities... an example of bad investments are roads and education.

Before I get flamed, let me explain: education has always been a gamble. An amount of money given to a top-notch educator is WORTH MORE than the same amount given to an average or poor educator. With unions and tenure policies in place, there's ABSOLUTELY no guarantee that education money is well spent.

Roads are similar for the exact reason outlined above. Almost all infrastructure money goes directly to "pet projects" for Senators and their home states as opposed to expanding and optimizing the national road networks. In New Hampshire we're getting huge poles installed all along Route 16 with cameras on them. About ever half-mile there's a pole with two cameras.

WHY?

Here's four that are already running: http://www.nhtrafficcams.com/towns/spaulding_turnpike_traffic_cam_rochester.htm

It's a toy, at best. But MILLIONS of dollars was allocated to this project. Meanwhile, the road that leads to my house (by several local businesses) is cracked and has pot holes. This was someone's pet project.

In contrast, investment in scientific facilities often yield wonderful results. Technological facilities are well covered by the private sector now including aerospace. However, purely scientific laboratories which promote a better understanding of the physical universe are largely academic or government, and they yield great results.

The James Webb space telescope is a GOOD investment... new desks for a school full of kids that destroy them is a BAD investment.

Let the flaming begin.

 

[WhoWee]

First name one time that something the government ran ended up being more cost efficient with less over head hten when it was ran privately?

Its called budget Creep every year you are given X amount of money for your department and every year you strive to spend slightly more hten that so that the following year they will give you more. This is great for each little department it allows them to gradually increase staff and ammenities as well as preforming your task. When every government office at every level does it every year we end up with a behemoth government that is layered to create more work for less results.

The phrase "if we don't spend it this year we will get less next year" is common and believed.

Second of course we all want to rebuild the infrastructure that is disturbingly close to failure, But the governement and congress already has substantial means for funding these projects unfortunatly this funding has been consistently routed to pet projects for the last ~35 years.

Lastly think of Federal Debt as an adjustable rate mortgage. Remember how well it worked out for all of those people who took out more in debt then they could handle when the rates changed? More debt now is not the answer period. It will bite us cheap easy money does not exist the rates will go up we need to plan 10 + years ahead just like your family should for major debt choices.

We need to stop planning things in election cycles and start actually looking at an accurate long term forecast.

I think a new discussion of wasted stimulus funds is long over-due - in response to calls for additional (special) infrastructure spending. A quick sample from the list.

http://www.foxnews.com/on-air/hannity/blog/2010/03/12/waste-102-the-final-list/

"81: Six woodlands water taxis getting a new home in Texas ($750,000)
80: Maryland group gets money to develop "real life" stories that underscore job and infrastructure-related research findings ($363,760)
79: Studying social networks like Facebook in North Carolina ($498,000) "

a few more


"14: Arizona universities examining the division of labor in ant colonies (combined $950,000)
13: Fire station without firefighters in Nevada ($2 million)
12: "Clown" theatrical production in Pennsylvania ($25,000)
11: Maryland town gets money but doesn't know what to do with it ($25,000)
10: Investing in nation-wide wind power (but majority of money has gone to foreign companies) ($2 billion)
9: Resurfacing a tennis court in Montana ($50,000)
8: University in Indiana studying why young men do not like to wear condoms ($221,355)"

 

[FlexGunship]

I think a new discussion of wasted stimulus funds is long over-due - in response to calls for additional (special) infrastructure spending. A quick sample from the list.

http://www.foxnews.com/on-air/hannity/blog/2010/03/12/waste-102-the-final-list/

"81: Six woodlands water taxis getting a new home in Texas ($750,000)
80: Maryland group gets money to develop "real life" stories that underscore job and infrastructure-related research findings ($363,760)
79: Studying social networks like Facebook in North Carolina ($498,000) "

a few more


"14: Arizona universities examining the division of labor in ant colonies (combined $950,000)
13: Fire station without firefighters in Nevada ($2 million)
12: "Clown" theatrical production in Pennsylvania ($25,000)
11: Maryland town gets money but doesn't know what to do with it ($25,000)
10: Investing in nation-wide wind power (but majority of money has gone to foreign companies) ($2 billion)
9: Resurfacing a tennis court in Montana ($50,000)
8: University in Indiana studying why young men do not like to wear condoms ($221,355)"

5: Storytelling festival in Utah ($15,000)
4: Door mats to the Department of the Army in Texas ($14,675)
3: University in New York researching young adults who drink malt liquor and smoke pot ($389,357)
1: Grant for one Massachusetts university for "robobees" (miniature flying robot bees) ($2 million)

 

[FlexGunship]

8: University in Indiana studying why young men do not like to wear condoms ($221,355)"[/I]

They got money for that study?! Give me $30 and I'll lecture you on the topic.

 

[Oltz]

To tell you the truth I am more worried about our Water, Sewage and Electric lines then the roads. They are equally important and in worse shape and people do not see them everyday. The point is we do not need to borrow more when funding already exists for these projects we just need to use it more wisely.

 

[FlexGunship]

To tell you the truth I am more worried about our Water, Sewage and Electric lines then the roads. They are equally important and in worse shape and people do not see them everyday. The point is we do not need to borrow more when funding already exists for these projects we just need to use it more wisely.

Locally, our power lines seem to be well served by PSNH. I haven't heard of water or sewage problems in my area, but winter wreaks havoc on small roads. So I guess the problems vary from area to area.

 

[WhoWee]

Locally, our power lines seem to be well served by PSNH. I haven't heard of water or sewage problems in my area, but winter wreaks havoc on small roads. So I guess the problems vary from area to area.

Our local power companies also do a good job. As for water and sewer - the housing boom was accompanied by improvements to the various systems - wasn't it?

 

[Oltz]

For some data about the state of our infrastructure

http://www.infrastructurereportcard.org/report-cards"

Check out some of the specific field reports

 

[Oltz]

Our local power companies also do a good job. As for water and sewer - the housing boom was accompanied by improvements to the various systems - wasn't it?

The problem is most major cities have a sewage system that was desgined for a smaller population and built to last ~75 years and are over capacity and over age limits. For instance a bunch of pipes in the Pittsburgh area are over 100 years old and could fail at any time. In all areas things need worked on and it is location specific as to what the "major" issue is.

 

[WhoWee]

For some data about the state of our infrastructure

http://www.infrastructurereportcard.org/report-cards"

Check out some of the specific field reports

Energy needs $10 Billion LESS than parks and recreation?

 

[mheslep]

If Pittsburgh needs a new sewer system why doesn't Pittsburgh pay to put one in?

 

[WhoWee]

The problem is most major cities have a sewage system that was desgined for a smaller population and built to last ~75 years and are over capacity and over age limits. For instance a bunch of pipes in the Pittsburgh area are over 100 years old and could fail at any time. In all areas things need worked on and it is location specific as to what the "major" issue is.

Yet new development was accompanied by sewer and water, roads, and power.

http://www.northhillsmonthly.com/201101/perspective.php

"NHMM: The new Pittsburgh International Airport was a landmark improvement. That was when—the early 1990s?

Onorato: It was 1992, and it was an important improvement; not only the airport, but all of the surrounding land. A decade ago, there were no water lines, no sewer lines or anything. Today we’ve built roads, water and sewer lines, and we have modern developments. There are about 15 separate developments that have been created near or on the airport property that didn’t exist just 10 years ago. Economic development is building on those old industrial sites and putting in the necessary infrastructure, whether that’s on brownfield sites or at the airport or wherever—it is probably the biggest change in the county."

 

[FlexGunship]

Energy needs $10 Billion LESS than parks and recreation?

Technically Parks and Recreation needs $0.0 Billion to operate properly, but people can't keep from mucking it all up.

If Pittsburgh needs a new sewer system why doesn't Pittsburgh pay to put one in?

That's so naive. You can't expect people to actually pay for the stuff they want and need. Heartless Republican!

 

[WhoWee]

If Pittsburgh needs a new sewer system why doesn't Pittsburgh pay to put one in?

The City of Pittsburgh has unique challenges as per geography - costs more to do everything. Another problem is the surrounding areas along the rivers are comprised of small Burroughs (cities). Some of them maintain their own sewage operations and have experienced both an aging and declining population along with industry/job losses. The environment is cleaner - but jobs are few (IMO). A community of 4,000 with 2,000 retirees, 1,000 Section 8 tenants, and 1,000 (250-500 working) people - have difficulty maintaining a water works.

 

[mheslep]

A community of 4,000 with 2,000 retirees, 1,000 Section 8 tenants, and 1,000 (250-500 working) people - have difficulty maintaining a water works.

And a community of 4000 does not need much of a water works.

 

[mheslep]

The City of Pittsburgh has unique challenges as per geography - costs more to do everything.

Cost more than where? New York city? San Francisco? I don't think so.

 

[Oltz]

Why should I we fund a high speed rail in Cali?

Fine with me Lower federal taxes get them out of all infrastructure that does not cross state lines and create a county income tax.

In fact get them out of everything that does not cross state lines.


The sewers of pittsburgh was one specific example the point is a commuter city like pittsburgh that has not changed its city limits in my lifetime has a relativly small population to fund anything.

Pittsburgh is considered the 59th largest city in the country but keep in mind its city limits have never changed if the city limits were expanded to include th suburbs it would become the 10th an increase of roughly 1 million people who legally do not live in Pittsburgh but would tell you that's where they are from (including me) instead we have boroughs and townships and towns all touching each other and nobody wants to merge as it would mean joining schools and police/fire departments and everything else.

http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population"

 

[WhoWee]

And a community of 4000 does not need much of a water works.

My point is the facilities exist and must be maintained. One of the problems include river flooding into the plants.

There are multiple plants in Allegheny County.
http://www.achd.net/pdw/index.html

"The Public Drinking Water Division (PDW) is responsible for the inspection and oversight of 78 public water systems in Allegheny County, which serve 99% of the County's residents. Systems regulated include facilities such as the City of Pittsburgh Water Treatment Plant, to small systems serving less than 50 people, to water vending machines. All of these facilities are regulated under the Pennsylvania Safe Drinking Water Act, the primary purpose of which is to assure that proper water treatment is being performed and to reduce the threat of biological and chemical pollutants through proper treatment and monitoring."

Population 1.2 million.
http://quickfacts.census.gov/qfd/states/42/42003.html

 

[WhoWee]

Cost more than where? New York city? San Francisco? I don't think so.

I should have specified - more than in other locations in the region - such as Cleveland or Erie.

 

[Oltz]

Cost more than where? New York city? San Francisco? I don't think so.

Everything that enters the city needs to go through a tunnel or over a mountian and then across a bridge. there is approximatly 2 sq miles of flat land in the city and that is the "downtown" area. New york is mostly flat and has port access San Fran also has port access as well as a roadsystem that was designed by an engineer as the city expanded.

For instance the small town I live in was founded in 1680 something (9 miles south of center of downtown) the only options for getting into town are 2 lane roads with 35 mile an hour speed limits and red lights every couple hundred yards. Crossing through more then a dozen police jurisdictions. It takes 45 minutes to get into town without traffic. Or you can drive 30 miles and cricle around and come in I-279 and it still takes 45 minutes without traffic.

Anyway let's get back on topic

 

[mheslep]

New york is mostly flat and has port access San Fran also has port access as well as a roadsystem that was designed by an engineer as the city expanded.

And have tidal water flows and hydraulic water tables to deal with and an extremely high land values, labor costs, etc.

 

[Oltz]

And have tidal water flows and hydraulic water tables to deal with and an extremely high land values, labor costs, etc.

Land values and Labor costs are Geography now?

I never said most expensive I also do not think it matters every location will have its problems. Regardless infrastructuire spending is important but it should not be debt spending and perferabbly not federal funding at all.

 

[mheslep]

...problems. Regardless infrastructuire spending is important but it should not be debt spending and perferabbly not federal funding at all.

Agreed.