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Re: Debt 1929 to 2016

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@umbarch64 wrote:

@Snoopy48 wrote:

 

Since its inception the excess funds in the Social Security Trust Fund has been invested in Federal Securities. This investment has earned interest each year ranging from 11.6% to 3.2%. (since 1980)

 

The Federal Government is obligated to repay this investment just like all other investments in Government Securities.


Yes, it is.....so far.  Conservative calls for that obligation to be legally lifted to retire the ever increasing National Debt may be coming....wait for it.  The more who view Social Security as a pyramid scheme, the more likely it will be.


That seems like a very good reason to eliminate 'conservatives' from the government. Or maybe we should just get some conservatives who are honest.

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Re: Debt 1929 to 2016

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@Snoopy48 wrote:

 

Since its inception the excess funds in the Social Security Trust Fund has been invested in Federal Securities. This investment has earned interest each year ranging from 11.6% to 3.2%. (since 1980)

 

The Federal Government is obligated to repay this investment just like all other investments in Government Securities.


Yes, it is.....so far.  Conservative calls for that obligation to be legally lifted to retire the ever increasing National Debt may be coming....wait for it.  The more who view Social Security as a pyramid scheme, the more likely it will be.

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Re: Debt 1929 to 2016

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Debt 1929 to 2016

 

https://www.federalreserve.gov/boarddocs/speeches/2001/20010427/default.htm

 

Of more relevance for the nearer term, current forecasts suggest that under a reasonably wide variety of possible tax and spending policies, the resulting surpluses will allow the Treasury debt held by the public to be paid off. Moreover, well before the debt is eliminated--indeed, possibly within a relatively few years--it may become difficult to further reduce outstanding debt to the public because the remaining obligations will mostly consist of savings bonds, well-entrenched holdings of long-term marketable debt, and perhaps other types of debt that could prove difficult to reduce. Whether economic developments and tax and budget choices will, in the end, produce surpluses of the order of magnitude currently projected is open to debate. But the probability of substantial continuing surpluses is sufficiently high to require that, at a minimum, we begin to address their potential implications for fiscal policy decisionmakers, financial markets, and the Federal Reserve.

 

That was in 2001, endless wars and tax cuts later we are now twenty trillion in debt.

 

Republicans are " starving the beast " it's as simple as that, we saw the latest incarnation of that this year, tax cuts for wealthy people, roll back Social Security and Medicare for everyone else.

 

If the American people want more of the same keep voting the same people into office, it they want different vote for different people.

 

The problem is not insurmountable.

 

 

 

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Re: Debt 1929 to 2016

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The Federal Government is obligated to repay this investment just like all other investments in Government Securities.

 

Yes, "obligated" to "repay". But when you have a deficit greater than GDP, and you have to raise the debt ceiling to pay your bills, that "investment with interest" are just numbers on a ledger sheet.

 

The government will have to either raise taxes (not cut as we've been doing), cut programs, or print more money. None of which is good.

 

Toss in a growing number of part time and low wage jobs, technology replacing workers and a shrinking labor force.

 

Then there's college debt.

 

Since GDP is 2/3 consumer spending, I'm not optimistic about our economy.

 

Remember how optimistic people was before the Great Recession?

 

Myself? I'm waiting for the other shoe to drop.

 

 

jobs.jpg

 

 

 

 

 

 

 

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Re: Debt 1929 to 2016

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@gordyfl wrote:

How Did the Debt Get So Large?


First, the debt is an accumulation of Federal budget deficits. Each new program and tax cut adds to the debt. These show up in budget deficits by president.


The largest deficit goes to President Obama.


He added the ​ARRA stimulus package, the Obama tax cuts and $800 billion a year in military spending. These initiatives halted the 2008 financial crisis.


President Bush had the second largest deficit.


He also fought the financial crisis with the $700 billion bailouts. Bush added the EGTRRA and JGTRRA tax cuts to end the 2001 recession. He responded to the 9/11 attacks with the War on Terror.


President Reagan cut taxes, increased defense spending and expanded Medicare. All these presidents also suffered from lower tax receipts resulting from recessions.


Second, every president borrows from the Social Security Trust Fund. The Fund took in more revenue than it needed through payroll taxes leveraged on baby boomers. Ideally, this money should have been invested to be available when the boomers retire. Instead, the Fund was "loaned" to the government to finance increased spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing.

But it must be repaid by increased taxes when the boomers do retire.


Check out the Table at link below - Debt / GDP Ratio 1929 to 2016

 

https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

 

 

 


Since its inception the excess funds in the Social Security Trust Fund has been invested in Federal Securities. This investment has earned interest each year ranging from 11.6% to 3.2%. (since 1980)

 

The Federal Government is obligated to repay this investment just like all other investments in Government Securities.

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Re: Debt 1929 to 2016

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debt mountain.jpg

 

 

 

 

debt ceiling cards.jpg

 

 

 

debt solution.jpg

 

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Debt 1929 to 2016

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How Did the Debt Get So Large?


First, the debt is an accumulation of Federal budget deficits. Each new program and tax cut adds to the debt. These show up in budget deficits by president.


The largest deficit goes to President Obama.


He added the ​ARRA stimulus package, the Obama tax cuts and $800 billion a year in military spending. These initiatives halted the 2008 financial crisis.


President Bush had the second largest deficit.


He also fought the financial crisis with the $700 billion bailouts. Bush added the EGTRRA and JGTRRA tax cuts to end the 2001 recession. He responded to the 9/11 attacks with the War on Terror.


President Reagan cut taxes, increased defense spending and expanded Medicare. All these presidents also suffered from lower tax receipts resulting from recessions.


Second, every president borrows from the Social Security Trust Fund. The Fund took in more revenue than it needed through payroll taxes leveraged on baby boomers. Ideally, this money should have been invested to be available when the boomers retire. Instead, the Fund was "loaned" to the government to finance increased spending. This interest-free loan helped keep Treasury Bond interest rates low, allowing more debt financing.

But it must be repaid by increased taxes when the boomers do retire.


Check out the Table at link below - Debt / GDP Ratio 1929 to 2016

 

https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

 

 

 

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