Defecit Spending, despite it's widespread use for decades to propell economic development, is developing rapidly into a dire situation for America.
In the last five years, we have seen our Nation's debt rise by over 50%, and we now have approximately 8.4 trillion dollars in government debt[1], a great deal of it held by foreign governments that could be described as less than friendly. In order to protect the economic future of our country, we MUST pay down this debt before unfriendly regimes use it as a tool against us. At this point, all they would have to do is begin selling Treasury Bonds to cripple the American government, and are no doubt well aware of this.
It has been especially damaging to erode the tax base (by cutting taxes for the wealthiest Americans) while at the same time drastically increasing borrowing to make up the difference.
It is essential that we restore balance to our government checkbooks for the sake of national security, stabilizing our currency, protecting against inflation, and ensuring a positive economic environment for American investors and labor alike in the global marketplace of the 21st Century.
A Red Herring?[]
The deficit may not be nearly the problem most people think it is. While the current spending does indeed seem to be fiscally irresponsibile, focusing on the size of the deficit is the wrong argument; the rate of growth is more key.
The U.S. deficit was reckoned 35th in terms of debt in comparison to GDP, at just under 65% of the GDP. This places our relative debt as less than France's, Israel's, Belgium's, Italy's, Greece's, and Japan's, the last of which has 170% debt. [2] Measuring the debt in terms of GDP places a perspective on the debt in terms of our financial well-being, just as $1,000,000 debt would be nothing to Bill Gates but most people would be filing bankruptcy.
The real problems are our involvement in Iraq and our absurd Social Security structure. Defense and SS are the top two government programs. [3] -Jjensenii 20:37, 6 July 2006 (UTC)
Dissent
Despite the fact that the United States has less debt in comparison to GDP then 34 other countries, that does not change the fact that the U.S. owes more than half of its GDP (64.7%). Yes, stressing merely the size of the number is a sort of straw man, but the problem is still quite real.
There are two terms being conflated here: debt and deficit. The Federal Debt is how much the U.S. Federal government currently owes other countries. This is the number being thrown around as 64.7%, and the thing where the U.S. was reckoned 35th. The Federal Deficit, however, is how big of a shortfal there is on a yearly basis. This is how much additional money the government has to borrow each year, or alternatively, how fast the debt is growing. The deficit has gone from negative (a surplus) in 2000 to around 4.5% of GDP in FY 2004. (From factcheck.org). This is very large, especially given that the U.S. is a developed nation with a wide tax base. I have not yet found statistics on other countries though.
Discussion[]
Spending[]
- (Defense) We spend almost 1/3 of the federal budget on defense, how many of you would be willing to spend 1/3 of your yearly income in securing your home crazy is it not?
- If my home didn't have the protection of a police force, and I lived in an anarchic realm (as does the US and every other nation-state), I'd probably have to spend a small fortune to keep my house protected.
- Where is the anarchy? For the most part, there is no great threat to American soil. All major countries with a sizable military force would be committing suicide to go to war with the US, thanks to an interwoven global economy. Defense spending needs to be seriously reevaluated, because there is no need for such a burgeoning military force. We need a extremely effective small strike force that is able to fight the problems that exist in our world today. --Bobcobb 18:01, 7 July 2006 (UTC)
- I agree that military strategy is moving towards emphasis on Special Forces. But you can't defend a nation with a razor (Special Forces). You need a shield to prevent damage while the razor does it's work crippling your opponent. -Mkhulu 7 July 2006
- The more resources and economic prowess a nation has the increased probablity of hostile competition and enemies. Also, as part of the US constitution it is part of the government's responsibility to provide adequate defense of the people. However, the military industrial complex has significant influence in our nation's spending policies. See Dwight D. Eisenhower's Military-Industrial Complex Speech, 1961 warning about the effects of a strong military industrial complex to future generations.
Existing Debt[]
- I am personally extremely worried about where the debt is held. I have heard reports that half of the debt is being held in a few East Asian countries (like China). Should they decide to call in that debt, we'll have to gush paper and do horrible damage to the value of the dollar. -Mkhulu 7 July 2006
One can get an idea of who is holding U.S. debt by watching dollar foreign reserves buildup. Essentially, those reserves are held in the form of bonds, aka debt. This helps some for official flows (one can follow China doing this), but a lot of debt is also held by hedge funds (likely fronts for other money). A good guess is countries that have the largest current account surpluses... these would be China and oil exporting nations like Saudi Arabia. For those interested, Brad Setser's blog follows a lot of these issues. -Kbal11 23:00, 7 July 2006 (UTC)
Perspectives[]
As a way of starting a deeper conversation around Deficit spending, please post your "Perspective" below. This will give us a clear structure for looking at all the diverse and interesting perspectives we all hold. Each Perspective may be formatted as follows:
"I am _______, and I believe _______."
What counts is what we believe. I am may be used to put your statement in context.
Remember to "sign" your comment with four tildes (~~~~)
- I am a student and I believe that any systems's life span is essentially temporary, and that with the creation of a global system, it's only a matter of time before a subsequent global collapse; the carriage follows the horse, always. I believe that our national debt won't matter very much when major cities are burning to the ground and millions are starving to death and being butchered at the hands of an anarchy-driven mob.
- I am a 21-year old university student and I am very much angered by the fact that my generation-- Generation Y will have to pay for the spending recklessness of the supremely selfish and short-sighted Baby Boomers.
- I am an American businessman who has finally come to comprehend the "debt" as an offspring of our leaders, in my opinion misguided, decision to continue with the switch from gold-standard currency to fractional reserve banking established with the passing the Federal Reserve Act of 1913. Fiat currency is now being printed without a reserve of value (a dollar or a hundred-dollar reserve note costs the Fed pennies to make) and each time another printing takes place the original dollar loses more value. This is deflation, not "inflation" as is reported to us. The decision appears to have been made to have enough currency to finance a succession of wars and to bring a great deal of profit to the International bankers heading the Federal Reserve Board. The end is near for the dollar which will hit rock bottom on this system if we don't switch back to a gold-standard. See the Global Alliance Association website for explanation and solution options.--Bluemoon 23:03, 28 August 2006 (UTC)
- (Insert yours here)