Opinion: The national debt hits the big 2-0 (trillion)

One of these men only increased the national debt. The other one is looking no better so far. That’s bipartisanship in contemporary America.
(Stephen Crowley / The New York Times)

I failed to bring your attention last week to this grim milestone (from CBS News):

“The U.S. national debt reached $20 trillion for the first time ever last Friday (Sept. 8) after President Trump signed a bipartisan bill temporarily raising the nation’s debt limit for three months. 

“While at Camp David, Mr. Trump, with the stroke of his presidential pen, increased the statutory debt last Friday by approximately $318 billion, according to the Treasury Department. Before the bill’s completion, the U.S. debt was sitting around $19.84 trillion. 

“The legislation allowed the Treasury Department to start borrowing again immediately after several months of using ‘extraordinary measures’ to avoid a financial default. The bill passed last Thursday 80-17 in the Senate and in the House 316-90 on Friday. Around $15 billion in emergency funding for Hurricane Harvey recovery efforts was attached to the borrowing measure. 

“The $318 billion increase raised the U.S. national debt to $20.16 trillion by Friday. Since Mr. Trump’s inauguration, the debt has increased about $215 billion from around $19.94 trillion.”

The news is pegged to the debt-ceiling increase, because that’s what technically allowed the red ink to grow to this level, but as always it’s inaccurate to blame the debt-ceiling increase for this development. The debt was essentially incurred the moment Congress authorized spending above what it collects in taxes.

And this trajectory isn’t changing anytime soon. We need tax reform, but we also need to modernize entitlements to fit the way our country has changed — fewer workers for each retiree, longer lives, and so on. Fully one-quarter of the debt, more than $5 trillion, is owed by one government agency to another (for example, the Treasury owing money it spent out of the Social Security trust funds). That money is going to cost someone: taxpayers, beneficiaries, or both. And much of future debt growth will be driven by entitlements: Counting future revenues against future liabilities (such as Social Security and Medicare obligations that have been promised but which aren’t yet due), federal unfunded liabilities actually total some $66 trillion. That’s more than three times larger than the U.S. economy.

Yet we have President Trump opposing entitlement changes because they are unpopular; congressional Republicans backing down in fear of going against Trump; and congressional Democrats actually making matters worse by proposing vast expansions of entitlements (“Medicare for all”) without any semblance of a plan to pay for it.

Just last week Sen. Bernie Sanders was back at it, proposing a universal health-care plan that would cost an estimated $32 trillion over 10 years — above what the federal government already spends on health care — while bringing in (at most) $16 trillion in new revenues over 10 years. In other words, whereas the federal debt is projected to grow by $1.1 trillion per year in the near future, Sanders’ plan would make it more like $2.7 trillion per year. If he were to be elected president and implement his plan, the debt would more than double before his theoretical second term could end. If our current trajectory is like a slow national suicide, Sanders’ plan would speed up the process considerably.

Either that, or Sanders could try to pay for the whole thing, which would require nearly doubling federal tax revenue from current levels and sending the economy into a depression.

(I would add a part here about the math for Trump’s tax-reform plan, except that we don’t know what the plan is. Also, unlike universal health care, there is a way to do tax-reform in a revenue-neutral way that still yields most of the benefits and doesn’t simultaneously kill the economy.)

Worse, the inaction of the past few administrations and Congresses means the solution gets harder all the time. Changes that could have been made on a smaller scale if done earlier would now need to be bigger — rendering them more unpopular and thus less likely to happen. Changes that could have been made only with respect to future beneficiaries will, the longer this goes on, become inevitable for those who are already dependent on the government for income and health care. In normal times, spending doesn’t actually have to be reduced to eliminate the budget deficit and reduce rather than increase the debt; it just has to grow more slowly, as was done in the late 1990s. But Democrats have demonized any such slowdown as a “cut,” and Republicans have lacked the spine to argue otherwise, make the changes and let Americans judge for themselves whether they’re better or worse off.

Both parties have created this America, in which the fastest-growing portion of federal spending is what we pay in interest on our debt and voters believe there’s an easy solution just waiting to be applied — to someone else. “Tax the rich” … “cut welfare spending on deadbeats” … and you can no doubt name others.

And yet we seem not just determined but content to drive straight toward this cliff, and even to hit the accelerator along the way.

Reader Comments 0

177 comments
peyaxeb
peyaxeb

"My friend just told me about this easiest method of freelancing. I've just tried it and now II am getting paid 15000usd monthly without spending too much time. you can also do this.

>>>>>>>.www.2morepath.com

breckenridge
breckenridge

Sept 19 - A FOIA request shows that an employee of the conservative Heritage Foundation had complained to Attorney General Jeff Sessions back in February that the planned “voter fraud commission” might include Democrats or “mainstream Republicans.” Including people who are not ideological anti-voter-fraud crusaders, the email said, would “guarantee” the commission’s “failure.” It was quickly revealed that the author of the email was Heritage fellow Hans von Spakovsky, now a member of the commission.

Another exercise in wingnut conspiracy idiocy.

FIGMO2
FIGMO2

@Visual_Cortex 

A question you're not obligated to answer, but I'll need one to make my point about low-interest rates.

How old are you? 

Doomy
Doomy

And in other news I remember when the progs were screaming about Trump's bogus claim that the Obama administration had wiretapped Trump tower. Uh-ohs. Looks like the Obama administration was wiretapping Trump tower all along. LOL! I guess they aint laughing now over Trump's claim. 


"Washington (CNN)US investigators wiretapped former Trump campaign chairman Paul Manafort under secret court orders before and after the election, sources tell CNN, an extraordinary step involving a high-ranking campaign official now at the center of the Russia meddling probe." 

breckenridge
breckenridge

@Doomy 

They tapped one individual - Paul Manafort.  But you take that run with it all you want.  You just get out there and spread manure and falsehoods all over the place. 

Doomy
Doomy

@breckenridge @Doomy


And they tapped conversations between Manafort and Trump. Facts are facts. So when Trump claims that they tapped Trump tower, where Manafort had an apartment, the claim is true. And when Trump says he was wiretapped then that claim would also be true since conversations between him and Manafort were tapped. 

Doomy
Doomy

"Somehow every other first world country on Earth can accomplish this without much difficulty. And they get far better outcomes. Lower rates of heart disease, diabetes, and they live longer."- Hedley


So other first world countries have accomplished universal care "without much difficulty" you say? Not quite, Hedley. As Kyle pointed out in a previous article at the midway 50% here in the U.S. the federal tax burden is 13% for Americans. The Europeans on average are paying anywhere from 28-35% at the 50th percentile. That extra tax burden is something they are willing to pay for universal health care. The difference is that people here are simply unwilling to pay it. People like yourself seem to think the money comes from Santa Claus or from taxing the rich. But as the Europeans have found out there simply are not enough wealthy people to pay this burden. The middle class must pay. And they don't want to. 


As for lower rates of heart disease, diabetes, etc. any rational and intelligent person understands that there are many factors that go into world life expectancy rates. If we are the fattest,heaviest drinking, heaviest drug abusing, and least exercised nation on Earth then why wouldn't we have higher rates of these maladies? The best medical care system in the world, which we have, can't do a dang thing about the personal choices and lifestyles that people make which effects their health. 



Visual_Cortex
Visual_Cortex

@Doomy

The difference is that people here are simply unwilling to pay it. 

And we know this because... oh, wait.

Doomy
Doomy

@Visual_Cortex @Doomy


Logic, sir. Logic. If the middle class were willing to pay an extra 20% of their income to have health care they would already be doing it. Many people simply choose to go without cause, you know, they got other priorities like a flashier car, nicer clothes, eating out at restaurants, vacations, beer money, etc. 

FIGMO2
FIGMO2

Our monopoly-money payments to service this debt have been around two hundred billion every year for a coupla decades. 

I see VC has allowed himself to fall victim to the federal reserve.

The "unintended" consequences of low to negative interest rates are well known.

VC obviously chooses not to know.

Visual_Cortex
Visual_Cortex

@FIGMO2

You obviously choose not to highlight these unintended consequences you speak of that'd be of significance in this context because, well, who the hell even knows.

Visual_Cortex
Visual_Cortex

@Doomy @Visual_Cortex @FIGMO2

linkee 404ed.

Ever thought about summing up a thought in a sentence or two?

I mean, I can imagine what y'all are on about about low interest rates but why don't you say what you mean, already?

Doomy
Doomy

@Visual_Cortex @Doomy @FIGMO2


Google consequences of low or negative interest rates. There are plenty of articles for your perusing. 


Summing up a thought in a sentence or 2? That would be nice if everyone lived in the 10 second sound byte or bumper sticker sloganeering world of the far left. But real life explanations of economics and why things are the way they are usually require more time and explanation. 

GTBob
GTBob

Well, I'm sure that the new record defense spending bill and the upcoming corporate and upper 1% tax cuts will help curb this. Lets face it, Democrats want to tax and spend. Republicans want to cut taxes but still spend. Obviously. neither is a solution to improving our debt situation.

Visual_Cortex
Visual_Cortex

@Kyle_Wingfield @Visual_Cortex

if you were talking about this: http://www.fixthedebt.org/the-state-of-the-debt well, I'm not sure how it could be any plainer or easier to understand.

Yes, I was talking about the screamy "fix the debt" page, which was pretty awful and missing any useful source info for that scary "Projected debt" mountain 'o red.

I'm going to go back to where I was before, since I've heard bupkis to counter it. Interest rates are basically nothing, which makes me assume the world thinks we're about as rock solid an investment as it gets. Our monopoly-money payments to service this debt have been around two hundred billion every year for a coupla decades.

And the sky hasn't fallen. And mostly we just hear about how we HAVE TO DO SOMETHING whenever it comes time to Screw The Poors. Not when we have to open yet another damn front in our endless Global War On A Tactic. Nope, just "entitlements," or whatever term is in vogue today among debt/deficit scolds.

Well screw that. Increase taxes on the wealthiest, put the damn DoD and NSA on a diet first, see how that works out before you talk about tearing up any social contracts between the government and its citizenry.


/Ranty McRantface

Kyle_Wingfield
Kyle_Wingfield moderator

@Visual_Cortex I'll just point out that the source (CBO) is right there as a sub-hed on the graphic and that principal is a far bigger problem here than the interest rate (you're better off paying 5% on $100 than 2% on $300) before I get off your lawn.

Visual_Cortex
Visual_Cortex

@Kyle_Wingfield @Visual_Cortex

Well yeah, it says "Data Courtesy of the CBO" but there's no link to check where they got it, what data they're using to justify the chart's red section.

before I get off your lawn

I didn't edge this week, would you mind, while you're there...?

Doomy
Doomy

@Visual_Cortex @Kyle_Wingfield


"Our monopoly-money payments to service this debt have been around two hundred billion every year for a coupla decades."


And if the Fed in the future is unable to keep interest rates low and rates rise, as they invariably do, then we would be close to the tipping point where we would be unable to meet our debt payments. It would be similar to the housing meltdown where interest rates rose, mortgage owners payments then reset at significantly higher levels, and the predictable result was  mass default. So its happened already just in the past decade where the economy collapsed due to higher interest rates resulting in default. 

Doomy
Doomy

@Visual_Cortex @Doomy @Kyle_Wingfield


Typical progressive. That's about the 4 millionth time that I've seen it. The first thing you guys think of is to raise taxes. The idea of reform or cutting expenditures never even occurs in those little noggins. Never. 

straker
straker

What about countries like Mexico, Canada, Ireland, England, France, Italy and Germany. Are their national debt problems as bad as ours? If not, what are they doing that we are not?

Kyle_Wingfield
Kyle_Wingfield moderator

@straker In descending order:

Italy: 132.5% of GDP

Canada: 98.8%

France: 96.5%

U.K.: 92.2%

Ireland: 77.9%

U.S.: 73.8%

Germany: 69%


Not sure Mexico is really a good comparison to these other, more industrialized countries but FWIW: 49.7%.


Most of the other developed countries you'd probably compare us to WRT health care are also higher. Here are some of them (higher and lower): Japan 234.7%; Greece 181.6%; Portugal 126.2%; Belgium 106.7%; Spain 99.6%; Austria 85.8%; Finland 64.9%; Netherlands 63.7%; Sweden 41.4%; Denmark 39.6%.


Obviously, things other than health costs come into play here. 


Source is the CIA Factbook via this easier to read page: https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

LogicalDude
LogicalDude

I think the US should implement a "War tax" while we are at war.  (oh yes, we have been at war for . . . ohhhhhh. . . 20 some odd years now?) 


put 10% on top of everyone over 100K, 5% on top of everyone 50K-100K, and 0% on anyone under 50K. 


If the US thinks that our defense is so needed for war, then they should keep paying for it via a War Tax.


If the war tax become unpopular due to outrage by the wealthy, do you think the US will continue the unpopular wars? 

Visual_Cortex
Visual_Cortex

@LogicalDude 

Whadaya worried about, tax "reform" will give us like 7% growth from all that freedom, the cuts will pay for themselves, etc.

Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude Take out the war spending, and we're still borrowing hundreds of billions per year, and climbing.

Visual_Cortex
Visual_Cortex

@Kyle_Wingfield @LogicalDude

if only there were a way to collect sufficient revenue with which to pay for the spending. hmm. However could we do that.

Also, don't we have this ever-widening wealth and income disparity thingie I keep hearing about?

Kyle_Wingfield
Kyle_Wingfield moderator

@Visual_Cortex @Kyle_Wingfield @LogicalDude I would say that, the same way Republicans talk about cutting spending but never truly do it (at least not in a significant way), Democrats talk about raising taxes.

Like I originally wrote, both parties are complicit in this problem.

MarkVV
MarkVV

Kyle: “In other words, whereas the federal debt is projected to grow by $1.1 trillion per year in the near future, Sanders’ plan would make it more like $2.7 trillion per year………or Sanders could try to pay for the whole thing, which would require nearly doubling federal tax revenue from current levels and sending the economy into a depression.

Note that Kyle, in his fearmongering about the Sander s’ plan, has avoided the following from the cited report:

“The increase in federal spending is so large because the federal government would absorb a substantial amount of current spending by state and local governments, employers, and households.”

Kyle_Wingfield
Kyle_Wingfield moderator

@MarkVV You completely missed the point, which is that he only has means to pay for half of the spending he proposes. The state and local governments, employers and households aren't adding to the national debt to pay for those costs today.

MarkVV
MarkVV

@Kyle_Wingfield @MarkVV I did not miss any point. No rational person believes that a program such as Universal Healthcare or “Medicare for all” can be instituted without providing new funding mechanism for it. Attacking Sander’s plan because it would increase federal debt and ignores the fact that insured people and employers providing healthcare plans would save huge amounts.. It is the familiar story of the conservatives, who always point out the high taxes in other industrial countries, without mentioning the benefits the people there get for that.

Kyle_Wingfield
Kyle_Wingfield moderator

@MarkVV Actually, you did miss the point since this post was about deficits and debt, and yet you keep talking about all this money there is to pay for it ("Attacking Sander’s [sic] plan because it would increase federal debt and ignores the fact that insured people and employers providing healthcare plans would save huge amounts.") while ignoring that even Sanders doesn't propose to raise all that current spending in tax revenue. If all that money is available to pay for it, why doesn't Sanders propose to raise it in revenue (rather than proposing to raise only half)? And if all we're going to do is shift the cost from the private sector to the public sector, what's the point?

Spoiler alert: It's because Sanders & Co. refuse to acknowledge that taxes would have to go up -- way up -- on the middle class to pay for universal health care, because the true cost would be even higher than what we collectively (employees, employers, taxpayers) pay today for the coverage that exists.

MarkVV
MarkVV

@Kyle_Wingfield @MarkVV My point is that you were attacking the idea of a universal healthcare plan under the guise of the specifics of Sanders’ proposal and federal debt without mentioning the savings for people and employers. Yes, people would have to pay for it in one or another form of tax - like we are paying for other benefits. Then you have ignored the fact that such a program would have a lower overhead and eliminate the profit of the private insurance companies. (“And if all we're going to do is shift the cost from the private sector to the public sector, what's the point?”). It would also get rid of the outrages of the pre-Obamacare private sector system, while ending the complexity of ACA.

Kyle_Wingfield
Kyle_Wingfield moderator

@MarkVV This post was about debt and deficits. You can continue to ignore that if you want, but I'm done.

MarkVV
MarkVV

Quite predictably, a piece about spending and deficit is used to attack the proposal of a universal healthcare plan, in this case Bernie Sanders’ “Medicare for all.” Figures of trillions are being thrown here and there to scare everybody.

What is being lost in the mumbo-jumbo of the financial predictions are the basic questions and answers, mainly the following one: What is the expense of the proposed program to be used for?
We have seen the numbers for the overhead profit of private insurance, which is several time higher than in Medicare. So there is a saving right there. What, then, is the remaining cost of the universal healthcare plan? Why don’t the critics of such plan tell us that? Is that not the cost of treating people? And if it is tell us, pray, who and what do you want not to be treated?

stogiefogey
stogiefogey

"...above what it collects in taxes."

The tax collection piece of the problem is often overlooked. Most recent estimate of the annual US "tax gap" was >$350 billion, many $ billions more on the books that isn't being collected.

Thank (Republican) Congress for vilifying the IRS and cutting its budget year after year.

RafeHollister
RafeHollister

@stogiefogey Thank the IRS for spending their time playing politics by trying to limit tax breaks for only the Conservative PACS, instead of working to better collect the taxes owed.

Kyle_Wingfield
Kyle_Wingfield moderator

@stogiefogey Everyone says they're going to increase IRS enforcement. And yet, it never happens. It's almost like the overly convoluted tax code is bound to produce a certain amount of non-compliance, and is begging for reform ...

RafeHollister
RafeHollister

@Visual_Cortex @RafeHollister @stogiefogey The IRS and our tax code are what is laughable.  Priorities on collection are set by unelected bureaucrats that can choose to ignore or focus on whatever they want to spend their time on.  Who holds the IRS accountable, not Congress, they seem powerless, just look at the director who should have been fired long ago for multiple lies before Congress.

mgunter
mgunter

Obama's 8 years ran up th Debt more than all th other presidents combined!

SGTGrit
SGTGrit

By 2027 it's predicted that our federal debt will be 89% of GDP. That's right around the corner and unsustainable. We won't be able to service the debt interest. There's no possible way that we can fund universal healthcare. Our Western allies don't spend what we do on defense because they rely on us to cover it for them. Their healthcare is not superior to ours that's a myth.

Starik
Starik

@SGTGrit  That depends on what sort of healthcare you can pay for, or qualify for. We can take care of everybody if we try. That would be money well spent. 

SGTGrit
SGTGrit

@Starik @SGTGrit 

We don't have the money. It would break the bank just trying to implement an entitlement such as universal healthcare let alone fully funding it.

McGarnagle
McGarnagle

@SGTGrit @Starik


It can be done. Heard Clark Howard mention how medical billing is different than any other industry. You get billed after the service is render. If we had a breakdown of service charges, we reward the hospitals and clinics with lower pricing.

SGTGrit
SGTGrit

@McGarnagle @SGTGrit @Starik 

That's too simplistic. Implementing and funding a huge entitlement like universal healthcare would be impossible. Time to bury the Bernie pipe dream and focus on far greater needs in the country.

Kyle_Wingfield
Kyle_Wingfield moderator

@McGarnagle @SGTGrit @Starik Instead of making an enormous change like universal, publicly funded health care, why not start with a step like mandating price transparency? That's a regulation I could support.

JFMcNamara
JFMcNamara

@SGTGrit We are already at 106.1% of GDP and the number is falling as GDP grows and spending is stagnant.  You are making the exact opposite of your point.  We will have less debt, so we will have more money to spend on healthcare if we assume we can maintain the same debt level.

Visual_Cortex
Visual_Cortex

@SGTGrit

It's "unsustainable" except a) we've been at that level before and b) somehow we managed.

JFMcNamara
JFMcNamara

@SGTGrit @JFMcNamara I'm just pointing out that you were wrong in your assessment. 89% of debt is neither particularly high nor unsustainable.  We are already higher than that.

JFMcNamara
JFMcNamara

@SGTGrit @JFMcNamara


Words have meanings.


That's the Federal Debt Held By the Public.  That's not the entire debt. 


There are two components of gross national debt:[1]

  • Debt held by the public, such as Treasury securities held by investors outside the federal government, including those held by individuals, corporations, the Federal Reserve System and foreign, state and local governments.
  • Debt held by government accounts or intragovernmental debt, such as non-marketable Treasury securities held in accounts administered by the federal government that are owed to program beneficiaries, such as the Social Security Trust Fund. Debt held by government accounts represents the cumulative surpluses, including interest earnings, of these accounts that have been invested in Treasury securities.

Doomy
Doomy

@JFMcNamara @SGTGrit


Seems you're forgetting about the massive debt spending to come as more Boomers continue to retire every day. 

Doomy
Doomy

@Visual_Cortex @SGTGrit


Not quite. I think under Obama the debt exceeded GDP for the first time in U.S. history. So the claim that we have been at that level before is simply not true. And we've never been in the situation where we have so many future entitlements that are coming due with the retiring of the Boomers. 

SGTGrit
SGTGrit

@Visual_Cortex @SGTGrit 

The Federal Reserve can print money and the Federal Government can borrow money but at some point we've reached the end. China is our biggest creditor what do think would happen if China began selling.