NEWS: 2004 US Deficit Reaches Record $413 Billion

So instead of fixing the deficit problem and actually taxing some of the corporations that put us in this situation, instead they give them more tax breaks and legislate this kind of crap...

Treasury Skirts $7.4 Trillion Debt Limit
By JEANNINE AVERSA, AP
Treasury Secretary John Snow called on Congress to increase the debt limit.
WASHINGTON (Oct. 14) - Treasury Secretary John Snow announced Thursday that the government has begun using various accounting procedures to avoid hitting the $7.4 trillion national debt limit.Snow made the announcement in a letter to Congress, which has not passed legislation needed to boost the government's borrowing authority, which now stands at a statutory limit of $7.4 trillion.''Given current projections, it is imperative that the Congress take action to increase the debt limit by mid-November,'' when ''all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted,'' Snow wrote in the letter to House and Senate leaders of both parties.Democrats used Snow's announcement to attack the Bush administration's record budget deficits, which will force Congress to increase the debt ceiling for the third time in three years.''Though the administration tries to diminish the gravity of the problem, there is no way to dismiss debt ceiling increases at historic highs. This is the burden Republican policies are passing onto next generations, and there is no plan or prospect for confronting it,'' said Rep. John Spratt of South Carolina, the top Democrat on the House Budget Committee.
Congress is expected to come back in a special session after the Nov. 2 elections to deal with the debt limit and pass a massive spending bill to keep the government running.epublican leaders did not want to take up the debt issue before the election and open themselves up to Democratic attacks about the record federal budget deficits run up during President Bush's first term in office. The government recorded a $374 billion budget deficit last year - a record in dollar terms - and projections call for this year's to be even larger, more than $400 billion, which would set a new record.Snow said in his letter he would begin halting new investments in a retirement fund for federal workers as a way to stay under the debt limit. Snow said the maneuvers would have no lasting impact on the fund because the government would make up the lost investments and any lost interest payments once the government's borrowing authority has been boosted.Snow also noted that the same maneuver had been used by his predecessors.

Originally posted by taibunsuu

I have to laugh, because things are so bad. Too bad people don't care about the numbers as much as they do seeing someone 'they like' in office.

The numbers don't lie. What they show is that this country is effectively close to economic collapse.

The entire DoD budget is on LOAN for this year, and last year.

Defecits do matter. Once the debt is high enough, confidence in the dollar will weaken.

Massive economic problems are the biggest threat to our country, bar none.

Do you own a house? A Car? Look debt is not good but it is life. We need to get it paid down, but the sky is not falling, the said the same crap in 1982 and within 10 years we were loooking real good!

Originally posted by twitchy
So instead of fixing the deficit problem and actually taxing some of the corporations that put us in this situation, instead they give them more tax breaks and legislate this kind of crap...

It is called spending to get out of debt, get growth, pay down debt. I ahd to do the same thing to get my college degree.

Originally posted by edsinger
It is called spending to get out of debt,

Yeah, that's some real logic there man.

Now why is this in terror analysis, should be more like current events or something. There aint nothing wrong with the defecit. There always was and always will be a defect. The percent of the defecit that we are paying every year has stayed the same compared to the GDP percentage wise.

Originally posted by twitchy

Originally posted by edsinger
It is called spending to get out of debt,

Yeah, that's some real logic there man.

It is called, instead of getting paid $10 an hour at a factory, I go into debt ex. school, to better myself, then get the $30 an hour job and pay back the debt with my much higher purchasing power...so hard to understand?

Originally posted by IBM
The percent of the defecit that we are paying every year has stayed the same compared to the GDP percentage wise.

Thank you!

[edit on 15-10-2004 by edsinger]

Four dollars for a gallon of milk and your telling me the economy is in good shape? We aren't talking about paying off a student loan to get a better job, we are talking about 7 trillion dollars owed. Call up the federal reserve bank sometime and ask them how much that twenty dollar bill is worth, the answer might suprise you.

I don't know, maybe someone has mentioned this part of the problem....we've had foreign companies coming in and buying our our failing businesses...
and well one is National Grid from, I believe England..
Well, once here, they started negotiating with the union over their new contract...and I have no idea what they are proposing, or why the union is finding it unacceptable. But, this company is planning on importing workers when the union goes on strike.

Maybe we should be considering something like this a "terrorist" threat. How much of our companies, corporations, real estate is owned by foreigners now? Between this and China owning a large share of our treasury notes or whatever they are called.....economically, I think we are weak enough and wide open for foreign manipulation for them to bring us down if they wanted to. They've swiped (or was given) any technological advantage we may have had, and the only thing we are good for is to fight their wars, and consume their products....so, just what do they need us for?

[edit on 15-10-2004 by dawnstar]

If the DOD dont spend any money for a year, it will be all cleared up.

Originally posted by edsinger

Originally posted by taibunsuu

I have to laugh, because things are so bad. Too bad people don't care about the numbers as much as they do seeing someone 'they like' in office.

The numbers don't lie. What they show is that this country is effectively close to economic collapse.

The entire DoD budget is on LOAN for this year, and last year.

Defecits do matter. Once the debt is high enough, confidence in the dollar will weaken.

Massive economic problems are the biggest threat to our country, bar none.

Do you own a house? A Car? Look debt is not good but it is life. We need to get it paid down, but the sky is not falling, the said the same crap in 1982 and within 10 years we were loooking real good!

I didn't say the sky was falling. Bad fiscal policy is the worst thing for this nation, and that poor policy doesn't include only the debt. It's being perpetuated by both Democrats and Republicans and has to cease unless you want your country to eventually disappear. We didn't have debt until about 1895, and it's only increased from there. Would you like a 22% tax cut, across the board? That's what analysts say the country could afford if we had no debt. Just because you like throwing your money away doesn't mean it makes sense.

I would agree that if we can grow yet control government spending, and maybe even lessen it 10-15%, we are home free...but wjat do you think the odds are?

At over 2 trillion in governement spending a year, 7 seems alot, but I could argue that the reciepts will grow as the economy does, maybe in 20 years they will be getting 5 - 7 Trillion a years in reciepts.

Thing is, I want to do away with the income tax, its illegal anyway.

A lot of the people behind the last several posts seem to me to be, consciously or unconsciously, advocating what is known as Reagonomics. Simply put, Reagonomics is based on what is known as the 'trickle-down' theory, where the gov't gives big tax cuts to industry and business, fallaciously assuming that these economic benefits to the rich will somehow 'trickle-down' to the poor. This is what both Bushes have tried. Please refer to Murcielago's excellent graphs above to see the results, noting in particular the blue section, where the deficit became a surplus, and then the pink section, where this trend was sharply reversed, from the highest surplus in US history in 2000to the largest deficit in US history in 2003. Also note the exponential-like curve displayed in 'National Debt from 1940 to Present', where the upward slope increases during the reagon/bush/bush.jr years, and started to level off during the Clinton years. Please view the following links to get a better idea of this brand of economics currently practiced by the US gov't.

www.parida.com...
www.youdebate.com...
www.mises.org...
en.wikipedia.org...

Quote:
Originally posted by edsinger
It is called, instead of getting paid $10 an hour at a factory, I go into debt ex. school, to better myself, then get the $30 an hour job and pay back the debt with my much higher purchasing power...so hard to understand?
Endquote

Yes, edsinger has good advice here, but the analogy is poor, because this is not what the US gov't is doing. Imagine, instead, if you will, this scenario:

I make $10/hr at a factory. I decide this doesn't cut it, and go into debt to go back to school. After 4 years of training, I now decide to return to work at the local fast-food restaurant for $6.50/hr. I am now making less money, plus I have to pay back all my debt. Not only have I foolishly cut my source of revenue, I have increased my expenditures (deficit in the form of interest payments) as well.

And now this scenario:

The government collects X dollars through tax revenues. They decide this doesn't cut it, and slash taxes for industry and business (the main recipients of Bush Jr. tax cuts). Not only that, they decide to increase spending at the same time. (this would be analogous to me buying a car and house during my previous hypothetical scenario) Now the US gov't is in the unenviable position of trying to pay off an increasing deficit, while simultaneously diverting financial resources to other concerns, and to top it all off, they have less money to do it all with.

Fiscal spending for 2005:
www.warresisters.org...

Fiscal spending for 2000: (Clinton's last year)
original source:
www.gpoaccess.gov...

Item 1. Social Security 22%.
Item 2. Net Interest 11%.
Item 3. Medicare 11%.
Item 4. Medicaid 6%.
Item 5. Other Mandatory 6%.
Item 6. Other Means-tested entitlements 6% (Footnote: Means-tested entitlements are those for which eligibility is based on income. The Medicaid program is also a means-tested entitlement.)
Item 7. Reserve pending Social Security reform 6%.
Item 8. Non-defense discretionary 17%.
Item 9. National defense 15%.

Tabular Information on the last 57 years of gov't spending
www.bea.doc.gov...
-noting in particular net lending/borrowing, which is highest during years in which Reagonomics was practiced