In the next 25 years, the national debt is on an "explosive path," assuming we keep 2012 policies in place. Why did this happen? How worried should we be?
In Newsbound's latest graphic explainer, we take a look at the national debt and annual budget deficits that have been driving it upwards. We describe the nuts and bolts of government borrowing and examine what scenarios certain experts are worried about when they refer to the U.S. "debt problem." We also explain why efforts to bring down the deficit through simply raising taxes or cutting spending miss the point. (Spoiler alert: Real deficit reduction will require stimulating the economy and controlling health care costs.)
The explainer is published in Newsbound's stack format. To advance, use the arrow keys on your keyboard. If using a touchscreen device, just swipe the screen.
If you liked this, check out our previous breakdown of the so-called fiscal cliff. Additional explainers are available at Newsbound.com.
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Cut military spending by 75%.
Start a massive infrastructure rebuild.
Problem solved.
First, the US does not "borrow" money. I really don't understand what is so difficult to understand about this. As stated in the presentation the debt is the amount of outstanding treasury securities. The transaction goes like this, non-interest bearing notes (AKA dollars) are EXCHANGED for interest bearing notes ( AKA treasuries) BOTH which the US govenerment created. The exchanged is reversed when the treasuries come due with some interest payment. Nothing is "borrowed".
Second, why are securities sold? There are some valid reasons for the US to want to sell securities but there is no need to "borrow" money. There is an overdraft law that was passed 100 years ago that says that all appropriations that congress makes must be offset by selling equal amounts of treasury securities. This was done partly out of ignorance and partly because the US was on the gold standard and there was concern that increasing the money base would be detrimental to the economy. So much like the debt ceiling law, the overdraft law does not apply to our current monetary system and should be eliminated.
But, obviously, if you still think the world is 5000 years old and women who are raped can stop themselves from being pregnant. Then the overdraft and debt ceiling laws is way above your learning capability.
It shows that if Bush had no been elected, and we did not:
- have bush tax cuts
- have iraq war (and afghanistan for that matter)
- assuming minus above two, economy wouldn't have tanked
then our deficit would actually have been going down.
things that make you go hmmm.........
Nah, but in all seriousness, we've known for a while now our country charges the most for the least amount of medical care of any developed country. I'd really like it if we could have a government option for healthcare at a controlled cost and level of coverage and for the government to distribute vouchers worth the cost of care on that program that could be used to opt for a private health care provider if they wanted. Still a bit away from that but Obamacare did a pretty good job at making things much more affordable for people which will be fully implemented in 2014.
The country needs money -
so cut corporate welfare like oil companies,
and the military
and insource all government work - they do it better and cheaper!
If they want to give the people below 250K then that will be ok
We cannot keep pretending that doing nothing in the short-term, because it will hurt the poor and elderly too much, is a good reason. The poor and elderly are always going to be hurt by policies that continue to put them in the cross hairs each year. Unwind the entitlements back to a sustainable level that does not require payments that are more than the taxes received. The beaucracy that exists to "help" the poor and elderly will just have to figure out how to do the same with less (just like every other tax-payer).
And your call for a balanced budget amendment is just plain silly.
What we cannot keep pretending is that cuts to benefits from programs like Medicare and Social Security and other "social safety net" program is the smart way to go here. There are certainly ways to "reform" these programs and save billions per year, but all you guys want to do is cut benefits without doing ANYTHING to actually reform/improve the programs. That's a HUGE problem....