Cutting the deficit, post 2017 tax reform

[Horatio Parker]

1. Govt spends. Private sector assets increase. Govt taxes. Private sector assets decrease. Net assets are unchanged.
3. Taxes are increased or spending reduced. Private assets are decreased. Debts are paid down. Bondholders receive cash. Private assets are increased. Net assets are unchanged.

"Private assets decrease" followed immediately by "net assets unchanged".

You realize those are incompatible?

Try this form, like my example:

1. Govt->Private
2. Govt->Private

 

[Philos]

Folks,

Republicans love a deficit.

A.

 

[Elixir]

Folks,

Republicans love a deficit.

A.

Yes, as long as they can blame it on the Democratz. Republicans have it figured out -
1) Cut taxes and run up a huge deficit
2) Bask in the glory of having put a few buck in the pockets of their base, while their oligarch donors get most of the money.
3) If they lose to the Democrats, blame them for the deficit and for raising taxes (which they have to do in order to stabilize the deficit and fund social programs cut by Republicans)
4) Get back in power on the strength of the deepened pockets of their "donors" (including foreign interests) who fund attack ads blaming Democrats for the dire situation they have created.
5) Lather, rinse repeat

There's almost zero chance that any Democratic administration will come into power under circumstances like what Trump inherited - they will always be stuck with situations like what Obama inherited. Americans have no sense of time; they think that if the economy is thriving it HAS to be because of the party currently in power, and likewise if things are a mess. So Republicans keep stealing, and Dems keep getting blamed for it. Not unlike how they are trying to blam Democrats for the pending shutdown, except that that is contemporaneous, so they're not as likely to get away with it.

 

[Jason Harvestdancer]

1. Govt spends. Private sector assets increase. Govt taxes. Private sector assets decrease. Net assets are unchanged.
3. Taxes are increased or spending reduced. Private assets are decreased. Debts are paid down. Bondholders receive cash. Private assets are increased. Net assets are unchanged.

"Private assets decrease" followed immediately by "net assets unchanged".

You realize those are incompatible?

Try this form, like my example:

1. Govt->Private
2. Govt->Private

It is not incompatible because in number one I wrote "Private sector assets increase" AND "Private sector assets decrease". They cancel each other out. The same goes for number 3. That is why the items result in "net assets unchanged."

Suppose Peter has $100 and Paul does not. At this point we're dealing with $100 of assets.

Government comes along and borrows that $100 from Peter and gives him back a promissory note for $100, and then gives that $100 to Paul.

According to your accounting, Peter has a $100 treasury bond and Paul has $100 cash, so the net assets are $100 + $100 = $200.
According to my accounting, Peter has a $100 treasury bond, Paul has $100 cash, and the Government has $100 debt, so the net assets are $100 + $100 - $100 = $100.

Now Paul recovers from his financial woes and now has $100 to return to the government via taxes. The government then returns that money to Peter to pay off the debt it owes.

According to your accounting, the net assets first went from $100 to $200, and now they go from $200 to $100.
According to my accounting, the net assets first went from $100 to $100, and now they go from $100 to $100.

 

[Horatio Parker]

1. Govt spends. Private sector assets increase. Govt taxes. Private sector assets decrease. Net assets are unchanged.
3. Taxes are increased or spending reduced. Private assets are decreased. Debts are paid down. Bondholders receive cash. Private assets are increased. Net assets are unchanged.

"Private assets decrease" followed immediately by "net assets unchanged".

You realize those are incompatible?

Try this form, like my example:

1. Govt->Private
2. Govt->Private

It is not incompatible because in number one I wrote "Private sector assets increase" AND "Private sector assets decrease". They cancel each other out. The same goes for number 3. That is why the items result in "net assets unchanged."

Suppose Peter has $100 and Paul does not. At this point we're dealing with $100 of assets.

Government comes along and borrows that $100 from Peter and gives him back a promissory note for $100, and then gives that $100 to Paul.

According to your accounting, Peter has a $100 treasury bond and Paul has $100 cash, so the net assets are $100 + $100 = $200.
According to my accounting, Peter has a $100 treasury bond, Paul has $100 cash, and the Government has $100 debt, so the net assets are $100 + $100 - $100 = $100.

Now Paul recovers from his financial woes and now has $100 to return to the government via taxes. The government then returns that money to Peter to pay off the debt it owes.

According to your accounting, the net assets first went from $100 to $200, and now they go from $200 to $100.
According to my accounting, the net assets first went from $100 to $100, and now they go from $100 to $100.

You realize "net" can refer to only one side of the ledger? A net covering both sides defeats the purpose of the accounting.

 

[Lumpenproletariat]

Why the chronic deficits? It still smells like the old "JOBS! JOBS! JOBS!" babble in disguise.

I'd like a common-sense non-babble answer to the question: Why do we keep running these deficits every year? I believe the following answer is babble-nonsense, but it's difficult to determine for sure. Is there a way to answer the question without the jargon?

I find it difficult to believe that the reason we're running up these deficits is in order to stimulate savings:

You seem to be saying we must have budget deficits or else there is no savings. Which is false, contradicts history. We have had both savings and balanced budgets, simultaneously.

So what's the real reason why we have to run deficits? It's not the reason you're giving.

The domestic and govt sectors can both be in surplus if there is a trade surplus.

OK, assuming that makes sense (I'm not sure it does), still, who cares whether we have the "domestic" sector in surplus? Let the domestic sector do whatever it's going to do. Meanwhile, why can't the government run even, over time, having some surpluses and some deficits, offsetting each other?

And meanwhile, who cares whether trade is balanced or not? Let there be a trade deficit if that's what happens. All we should care about is not running up government debt. Private debt will take care of itself. Stay out of debt if you want to, but if private persons or businesses choose to run up debt, that is their private choice. Whatever, it is not good for the public to keep running up debt unnecessarily. You're giving no good reason why it should keep doing so.

We do not have a trade surplus.

We had mostly trade surpluses up until about 1960-1970. During most of that time we also had budget surpluses, in the 1800s and early 1900s, with a net debt, but no need to run up debt other than to pay for war. And who cares whether during that time we might have had some private debt?

I don't believe you that there must necessarily be high private debt if we have a budget balance and open trade. Your scheme seems designed to insist that we MUST always run trade deficits AND MUST run budget deficits, in order to insure that the private sector does not bankrupt itself. Or some such theory. Do we have to take this on faith?

Why don't we just experiment. We CAN balance the budget (over 3 or 4 years, getting it down) if we choose to. Nothing prevents that. Why don't we just do it, then do free trade and let the trade deficit do whatever it wants to do, and also let the private debt do whatever it does. You're saying the sky will fall? Why?

What's so great about 21 trillion debt and 300 billion annual interest on the debt?

Issuing debt with deficit spending is a choice; if you don't want to manage reserves that way or provide corporate welfare, then don't issue debt.

Which means we reduce spending and increase taxes -- that's the choice we have to make to stop issuing so much debt. Why shouldn't we make that choice, to get the deficit down? Regardless whatever consequences some theorizer says it leads to? Why don't we do it anyway?

As for the $21T, it's a residual, like say the total money you've spent in your lifetime. What's the significance of that? Answer: none.

So then let's stop doing it if it's not significant. Why run up all that debt which runs up future costs which future generations might be unable to meet, if there's nothing significant about it? If it serves no purpose, then let's not put all those obligations on future generations who might not be able to pay it. What is the need for this insignificant unnecessary debt which will damage future generations if those obligations cannot be met or if the lenders stop providing the loans?

OK, so again, why are we running constant deficits and running up this debt, beyond 20 trillion, heading to 30 trillion? Why do we keep doing this if there's no need to?

In order to satisfy the savings desires of our domestic private sector and our trading partners.

Forget their "savings desires"! Let's stop doing it if the only reason is babble about someone's theoretical "savings desires." Let whoever is worried about their "savings desires" worry about it. Why should the taxpayers pay for someone's private "savings desires"?

I don't believe you that this is the reason we're running up these deficits. Why should I believe such jargon?

If you want a society without savings, then fine, tax it all back.

It's only jargon. Don't tax anything "all back" (whatever that means). Just increase taxes and reduce spending as needed to balance the budget. And let "savings" take care of itself. I believe that "savings" were OK in the 19th century when we didn't have these excess deficits. Are you saying no one ever saved money in the 19th century?

Unless you can say something of substance, this sounds like jargon only to justify the high deficits. And I believe the purpose is to "stimulate the economy" ("create jobs") rather than this jargon you're giving here.

But to date, we want people to save. And we want our trading partners saving dollars.

I don't think "we" or anyone gives a barn door about that. People will save if they want to. They don't need the U.S. taxpayers to keep running up trillions of debt in order to give them a reason to save. And if these excess debts are causing some extra savings that wouldn't happen otherwise, maybe those savings are unnecessary. Who says we need them?

No, that's a phony correlation. In the late 90s we had balanced budgets -- lower deficit down to zero -- and yet the trade deficit increased at a faster rate. Which disproves the theory that trade deficits cause budget deficits.

The late 90's govt surpluses caused a recession in 2002.

OK, now you're making some sense. The purpose of deficits is to "stimulate the economy." The excess spending and lower taxes causes some extra jobs. Why didn't you just say that in the first place:

The purpose of government deficits is to CREATE JOBS!!!

We don't need all the excess jargon and babble about the need for "savings" etc. It's just about "jobs! jobs! jobs!" -- and that's all there is to it.

The private sector borrowed enormously during this time to invest in dotcom business and y2k. Much of that investing went bust, . . .

And much of it made us all richer and was good. And the bad part was paid for by those who made the bad investments. It was a genuine boom that then ended.

which is how the private sector deficit spends.

But the surpluses did not cause the private sector to make bad investments. Some investing goes bust, other investing generates benefit = profits = wealth. The bad investing was not caused by the government trying to balance the budget by increasing taxes or reducing spending or benefiting from a boom and receiving higher revenue which it uses to reduce the deficit. So why shouldn't it do the latter, without running chronic deficits?

So, nothing about the good or bad investing gives any reason why the government should run deficits. Why shouldn't it just try to run balanced budgets over years, with deficits offsetting surpluses?

That spending drove the govt into surplus, but without lower taxes or increased govt spending, it couldn't be sustained. And wasn't.

No, the reason it was not sustained is because of waste and bad investing. And artificial deficits to try to sustain it would only sustain the BAD investing and waste. But the good investing will sustain itself without any government deficits to prop it up. Why can't the good investing sustain itself without lower taxes or increased govt spending to sustain it? Who says it cannot? How do you know? How do you know it's not just the BAD investing which is unsustainable?

You're insisting that we MUST run those government deficits for some purpose, but the only purpose you can give is to sustain BAD investing and "creating jobs" and "stimulating" the economy even if it's all BAD investing and BAD spending and phony jobs and phony "stimulus" for the sake of goosing the economy or getting it "humming" etc. just for the sake of the humming itself, the activity, the boom-boom smokestack banging clanging noisy robustness of the economy without anyone really being made better off. Except the "job creation" for its own sake, jobs for the rabble, to get the riff-raff off the streets -- this is all your jargon ends up saying, behind the code language about "savings."

You're not giving any legitimate reason why we MUST run these deficits. You're trying to articulate it without using the slogan "job creation" and "stimulus" etc. But what other meaning is there to your "savings" rhetoric, except the same old "jobs! jobs! jobs!" babble?

 

[Horatio Parker]

Considering the amount of babble you type, I'm surprised you excoriate it. Looked in a mirror lately?

These comments

OK, assuming that makes sense (I'm not sure it does), still, who cares whether we have the "domestic" sector in surplus?

And meanwhile, who cares whether trade is balanced or not?

Not only do you not understand the economy, you don't care.

So what is the big problem with govt deficits? Why are they so evil to the point you ignore the rest of the economy?

My suggestion to you is: since you don't care about large portions of the economy, let the rest go and stop worrying about govt debt.

 

[Lumpenproletariat]

Has there ever been chronic debt in history as bad as this one?

Has there ever been one entity owing this much over an extended time period? (as a percent of its total wealth)

who cares whether we have the "domestic" sector in surplus?

And meanwhile, who cares whether trade is balanced or not?

Not only do you not understand the economy, you don't care.

How are we made worse off by a trade imbalance (other than the old "jobs! jobs! jobs!" babble)? And why isn't the "domestic sector" better off without these chronic deficits?

The economy is better off if we do not run up future debt which might cause an eventual default and collapse of the economy worse than the Great Depression. If you care about the economy you should want to prevent that. But instead you dismiss it all with rhetoric about "domestic surplus".

So what is the big problem with govt deficits? Why are they so evil to the point you ignore the rest of the economy?

The "rest of the economy" is made worse off by them. If not, then let's run up an annual deficit of 4 trillion $$$ to pay the federal budget. Is that what you favor? Why not, if debt is not so evil?

What happens if 10 (20) years from now we suddenly can't pay it anymore, the lenders stop subsidizing it? The budget increases 50% or higher just paying the obligations? because of higher interest rates than now? Why is that good for "the rest of the economy"? We get closer and closer to that as the debt goes higher.

How do you know a disaster is not coming because of this? What precedent in history says we can keep doing this? If you think we can, then why don't you think we could just pay the federal budget by borrowing 4 trillion per year?

My suggestion to you is: since you don't care about large portions of the economy, let the rest go and stop worrying about govt debt.

You're demanding that everyone just believe you, on faith, that "large portions of the economy" are made better by running up debt out of control worse than it's ever been done in history. Why should we believe that?

You're giving no reason why we have to do this, other than the need to goose the economy ("create jobs"), and that's all you mean by "the rest of the economy". I.e., the "jobs" religion is the only reason to keep doing this and run the risk of an economic disaster worse than ever in history.

You can't camouflage this with rhetoric about "domestic surplus" and the need for "savings" etc.

You made sense at one point, where you said the budget surpluses in the late '90s caused a recession. That may be partly true, and that's the only reason we should not have balanced the budget but should have continued running up more debt.

But it's better to risk a "recession" and loss of some artificial "jobs" than to keep running up debt like this which will eventually wipe out our economy worse than ever before. Again, if you imagine it doesn't matter, then what would be wrong with $4 trillion annual deficit to pay the budget and create even more "jobs" and more "domestic surplus" and more "demand" and more "growth" and "stimulus" (the "large portions of the economy")? What is the limit? How do you know we're not already surpassing the limit?


bottom line: It's all about "Jobs! Jobs! Jobs!" Except for this jobs religion, we would not be doing this. For both Democrats and Republicans, what else are these deficits about? Why can't we give up this religion?

 

[laughing dog]

You're demanding that everyone just believe you, on faith, that "large portions of the economy" are made better by running up debt out of control worse than it's ever been done in history. Why should we believe that?

You are demanding everyone just believe you - that gov't debt is evil because we will not be able to pay it back. Why should we believe that? You've given us no fact-based or reality-based reasons.

 

[Horatio Parker]

There's never been an economy this large. So, no. But so what?

First of all, the debt is not debt in the traditional sense. It's a legacy of the times when the money supply was fixed to a commodity. That has not been the case since 1971.

Now it's a reserve management operation, a way for our trading partners to earn interest on the dollars we pay for imports, and corporate welfare.

There is no issue with repaying the debt. It never has to be repaid. It's money we owe ourselves.

Like Jason, you have no understanding that a dollar spent into the private sector is an asset to the private sector and a liability to the govt. Collectively, these liabilities are the national debt. If the govt taxed back all of its spending every year, the private sector wouldn't be able to save any of it. Selling exports is another way to accumulate savings, but we buy more than we sell. So, again, deficits are necessary to satisfy the savings desire of the private sector.

Currency issuing govts are not like households or businesses. They create the money they need, ex nihilo. They can never run out, they can always pay bills due in their own currency. No matter how large ten gazillions, whatever. It's just a number. The US cannot be forced to default, not by foreign powers, not by the bond markets.

Show

"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund

"As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational." Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

If you want to critique the money system, you need to understand it. And you don't.

 

[humbleman]

There is only one sure way to get away from the deficit and finally having Congress discussing "the balancing of the budget" in the future.

Other countries -even Russia- have their leaders discussing the balance of their budget, only the US is the abnormal and only has the political leaders discussing "how to increase the debt".

To balance the national budget won't require of "magic" neither is a trick, and less there is the need of raising taxes or making new ones. And forget the idea of changing the US democracy into a dictatorship.

There is only one sure solution, however the President of the US can't present it, and if he does, he might be out of his seat as the president.

The current increasing deficit will continue forever regardless of how great the economy grows in the private sector.

We are talking of the US government and the national debt "of the US government".

To reach this initiative of balancing the budget in a period of 8- 10 years from now, the action must come from the government at the cost of many political heads supporting the goal of enforcing the initiative.

This is why a real and sure solution to stop and reverse the current national debt won't be able to be applied, it will be "suicidal" for most political leaders. The path for a "balancing of the budget" status does exist, the problem is finding the right person in power to apply it and enforce it.

 

[Lumpenproletariat]

Never in history were borrowers/lenders harmed by excess debt -- right?

You're demanding that everyone just believe you, on faith, that "large portions of the economy" are made better by running up debt out of control worse than it's ever been done in history. Why should we believe that?

You are demanding everyone just believe you - that gov't debt is evil because we will not be able to pay it back. Why should we believe that? You've given us no fact-based or reality-based reasons.

So then you claim it would be OK to increase the deficit to $4 trillion per year, so we can pay for everything and still have our "jobs". There's no limit.

No? But then what is the limit? How do you know we've not already passed it?

Even if you think we should have mostly deficits, but occasional surpluses to keep the debt down, then why are we still increasing it at this time?

Shouldn't the rule for today be to cut spending/increase taxes as necessary to get the deficit way down, whatever it takes? If not now, when?

The only alternative is the notion that we might as well raise deficits as high as necessary to pay the federal budget entirely, and thus maximum economic "stimulus" so no taxes are necessary and everyone can be provided with a "job" paid by debt increasing every year. (If you're right that historically there's never been harm caused by excess debt.)

 

[laughing dog]

So then you claim it would be OK to increase the deficit to $4 trillion per year, so we can pay for everything and still have our "jobs". There's no limit.

That is non-responsive to my post. You have given no factual reason nor theoretical reasons to believe you.

Basically your argument is "I don't know and I am afraid, so believe me". Sorry, that is not a convincing argument.

[
Shouldn't the rule for today be to cut spending/increase taxes as necessary to get the deficit way down, whatever it takes?

Give a rationale for the reason other than "I don't know".

[
The only alternative is the notion that we might as well raise deficits as high as necessary to pay the federal budget entirely, and thus maximum economic "stimulus" so no taxes are necessary and everyone can be provided with a "job" paid by debt increasing every year. (If you're right that historically there's never been harm caused by excess debt.)

You are employing the fallacy of the excluded middle. There are plenty of alternatives between run high surpluses and run high deficits to pay the federal budget entirely.

 

[Lumpenproletariat]

Whatever --- it's about "jobs! jobs! jobs!" --- right? That's the reason for the deficits.

That is non-responsive to my post. You have given no factual reason nor theoretical reasons to believe you.

Basically your argument is "I don't know and I am afraid, so believe me". Sorry, that is not a convincing argument.

Give a rationale for the reason other than "I don't know".

A reason why debt should be limited rather than increasing without limit? why it's not good to borrow way beyond your ability to ever pay it back without borrowing again and again, like a drug addict has to keep getting more and more?

The only alternative is the notion that we might as well raise deficits as high as necessary to pay the federal budget entirely, and thus maximum economic "stimulus" so no taxes are necessary and everyone can be provided with a "job" paid by debt increasing every year. (If you're right that historically there's never been harm caused by excess debt.)

You are employing the fallacy of the excluded middle. There are plenty of alternatives between run high surpluses and run high deficits to pay the federal budget entirely.

So then you agree that we should balance the budget, which is the middle course?

But if you're right that historically there's no harm from excess debt, then why not go to the extreme of high deficits, and pay the federal budget entirely from deficits high enough to pay it? I.e., $4 trillion annually for now, and later 5 and 6 etc. Why would you want to suppress the economy with higher taxes or less govt spending, as long as the spending and tax cuts can be "paid for" with more debt, which can do no harm, as you're saying?

Is there a danger from increasing debt, or isn't there? If not, then there's no reason why we should not increase the annual deficit to $4 trillion. That's best as long as there's no danger from excess debt, as you're saying there is not.

If there is a danger, then what is the limit?

But let's take your word for it that there is no limit. Or, we can run it up and up to wait and see what happens, and only when a disaster finally strikes do we need to determine where the limit is. Maybe we could run it to 2 or 3 trillion per year right now, so let's keep increasing it slowly to see what happens.

In which case there is still this question:

What is the reason to keep taking this risk, and running it higher and higher?

Why? What is gained?

Even if it's true we could take this risk and keep running higher deficits/debt above a trillion or 2 trillion, isn't it good to proclaim exactly why we're doing it? And isn't the reason


"Jobs! Jobs! Jobs! Jobs!"

That is the reason, isn't it?

And why wouldn't it be appropriate to ask WHY these "jobs" are so important? Why shouldn't someone be asking why we must keep worshiping at the altar of "job creation"?

 

[Horatio Parker]

And why wouldn't it be appropriate to ask WHY these "jobs" are so important? Why shouldn't someone be asking why we must keep worshiping at the altar of "job creation"?

PAUL RYAN: “Do you believe that personal retirement accounts can help us achieve solvency for the system and make those future retiree benefits more secure?”

ALAN GREENSPAN: “Well, I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created which those benefits are employed to purchase.”

Do you understand what the bolded portion of the quote means?

 

[Loren Pechtel]

The proper yardstick is % of GNP--and by that scale our debt isn't that bad.

 

[laughing dog]

A reason why debt should be limited rather than increasing without limit? why it's not good to borrow way beyond your ability to ever pay it back without borrowing again and again, like a drug addict has to keep getting more and more?

There is nothing stopping any gov't from staying in debt in perpetuity.

So then you agree that we should balance the budget, which is the middle course?

I wrote "You are employing the fallacy of the excluded middle. There are plenty of alternatives between run high surpluses and run high deficits to pay the federal budget entirely." Balancing the budget is just one of the many alternatives between run surpluses and running high deficits to pay the federal budget entirely.

But if you're right that historically there's no harm from excess debt, then why not go to the extreme of high deficits, and pay the federal budget entirely from deficits high enough to pay it? I.e., $4 trillion annually for now, and later 5 and 6 etc. Why would you want to suppress the economy with higher taxes or less govt spending, as long as the spending and tax cuts can be "paid for" with more debt, which can do no harm, as you're saying?

You seem to have reached the illogical conclusion that the any increase in debt is "excess" debt in order to justify your anti-jobs mania.

 

[Lumpenproletariat]

How is this not the worst debt, over an extended period, ever in history?

The proper yardstick is % of GNP--and by that scale our debt isn't that bad.

Only if you disregard the numbers, over 200 years, and the graph below.

It's more than just the percent of GNP/GDP for one year -- it's the extended time duration of the recent high debt-to-GDP ratio.

When it was high, end of WW2, this was for only about 5-6 years -- a quick spike up and down. But that high point was contributed to by the debt of the '30s. Prior to the 30s there was never any such high debt-to-GDP ratio. (This graph omits the last few years, so to see how bad it is now you have to see the numbers from 2010-present: https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287 and numbers at the bottom.)

Note that Hoover/FDR (1930-35, "The Great Depression" below) drove it up higher than anything prior, even all the earlier war debt.

Before WW1 the ratio was never above 31% or 32%, and then only for a short 2-3 years war period. What we are doing today is extremely beyond anything earlier.

Today's high debt-to-GDP ratio, driven by the "jobs" rage, is higher than anything before WW1.

For the latest years to now, the numbers are:

2009 -- 83%

2010 -- 90%

2011 -- 95%

2012 -- 99%

2013 -- 100%

2014 -- 102%

2015 -- 101%

2016 -- 105%

2017 -- 104%

For 5-6 years now, we are almost to the WW2 peak for just one year ('45). This is really worse than the worst of the War debt 1943-49 years.

Such extreme debt-to-GDP over so many years is unlike anything before in history.

It's partly just the recent years, from the 60s or 80s, but it's also the overall trend from about 1930 to the present. You cannot compare this to one short spike in 1943-48 and say that short spike is worse than the overall trend of high debt-to-GDP over such a long period.

 

[Loren Pechtel]

Such extreme debt-to-GDP over so many years is unlike anything before in history.

It's partly just the recent years, from the 60s or 80s, but it's also the overall trend from about 1930 to the present. You cannot compare this to one short spike in 1943-48 and say that short spike is worse than the overall trend of high debt-to-GDP over such a long period.

I wasn't thinking of historical, but in comparison to other countries.

http://www.nationmaster.com/country-info/stats/Economy/Public-debt

We are 37th.

 

[Lumpenproletariat]

Such extreme debt-to-GDP over so many years is unlike anything before in history.

It's partly just the recent years, from the 60s or 80s, but it's also the overall trend from about 1930 to the present. You cannot compare this to one short spike in 1943-48 and say that short spike is worse than the overall trend of high debt-to-GDP over such a long period.

I wasn't thinking of historical, but in comparison to other countries.

http://www.nationmaster.com/country-info/stats/Economy/Public-debt

We are 37th.

(in 2012) Today we're higher on the list -- #12 according to this source: https://www.statista.com/statistics/268177/countries-with-the-highest-public-debt/ But it's irrelevant. Every source seems to have its own version of the numbers.

So 36 other countries were in debt worse than the U.S. in 2012 -- And that reduces the danger? You think if another dozen countries should suddenly take on such debt and put the U.S. down to 49th, then the danger would be reduced?

So your solution to the problem is to have all other countries run up extreme debt, to 120% debt-to-GDP or higher, and that would reduce the danger, because the U.S. would move farther down that list.

You think it's a contest between competing countries, with each country trying to get the other countries to run up higher debt than their own, and the ones farther down the list are made more secure by the indebtedness of the countries higher on the list.

??