US Debt History The Real Facts

[drudixon]

In case anyone's tired of being told what to think about all this debt business, tax rates (corporate and individual), inflation and GDP, I have made a spreadsheet that documents all of this back to WWII. It shows the 90% tax burden for highest wage earners for example post WWII. I think the best thing all of us can do is educate ourselves about these things, come to our OWN conclusions, and respond to our congress people directly. I've always been a moderate republican and have voted generally straight ticket (not always). That said, I completely disagree with Republicans on their current opposition to tax increases. The facts (in my mind) show that the economy still grows even when taxes are higher. I think we should go to Pre-Reagan era taxes and close many of the loopholes used to reduce earnings.

Feel free to check out the spreadsheet and come to your own conclusions.

Note: currency is normalized to 2000 rates.

[Barry Bonds]

for the closest choice to my beliefs.

My actual choice would have been "Raise Ceiling, Cut Spending, Raise Taxes, Jail those who have spent tax money irresponsively".

I honestly don't recognize either of the two main parties anymore. One says and does ridiculous things. The other says what I consider more rational statments, but often doesn't do them.

One of the truest statements I've ever heard is that "History repeats itself". I don't believe you can tax yourself out of a depression or spend yourself out of a depression. People who don't pay taxes shouldn't be allowed to vote on taxes.

[paolo59]

I don't believe it's simply a matter of raising taxes, but rather reforming the entire tax code. Rates should come down, broadening the base. Loopholes should be eliminated and most of the corporate tax breaks should be revised considerably.

That said, I don't believe our current financial crisis is driven by any lack of revenue. It is driven by profligate spending. In the last decade the federal government has literally doubled in size and scope.

[drudixon]

Very good points both. I like fair tax myself, but that'll never happen. Jail for dumb politicians, I like that too. We need a compromise on something fast. If we default it'll make the 2008 melt down look like 1999.

[NYkarate]

They spend more, they want more. When they get more, they spend it and ask for even more. Income taxes are nothing but wealth preventions laws. Those with real money don't worry about incomes, they make their money off of investments. So the rich get richer and everyone else is prevented from entering the elite world of the wealthy through graduated income tax. I have no idea why we have let this scam continue for so long, it is so Un-American.

[paolo59]

Very good points both. I like fair tax myself, but that'll never happen. Jail for dumb politicians, I like that too. We need a compromise on something fast. If we default it'll make the 2008 melt down look like 1999.

I don't believe that there will be a 'default.' If it comes down to it they'll go for the option to authorize the president to raise the debt ceiling on his own, (which I don't like in the least) or they'll come up with a short term fix/extension of one kind or another.

I watched Senate hearings on tax reform back in February on C-Span. Such reform has broad base bipartisan support on the whole. I don't know for the life of me why the hell something hasn't been done about it already!

Nobody wants their 'ox gored!' LOL This is one of those situations where everyone is going to have to take a hit. The sooner the better. The longer they play around with this and 'kick the can down the road' the more likely it is that we could end up with no oxen to gore!

[freebirdmac]

The Economist is a good source for understanding economics. And they are btw, a small government, conservative group. You can read 10 articles before needing a subscription.

http://www.economist.com/node/18928600

[Wildtim]

Vote for me in 2012!!!!!

I promise not to do anything at all as president, not one single thing until there is a fair tax bill revising the entire code on my desk awaiting my signature.

[paolo59]

The Economist is a good source for understanding economics. And they are btw, a small government, conservative group. You can read 10 articles before needing a subscription.

http://www.economist.com/node/18928600

Interesting perspective. (The Economist is an excellent publication) I would say that the spending cuts in any deal would at a minimum have to be some 4 trillion over 10 years, not just 2.

Tom Coburn of Oklahoma has proposed a cut of some 9 trillion, with at least 1 trillion in tax hikes over the next decade. I think something in the middle, around 6 to 7 trillion would be right on the money. With tax reform, there could be upward movement on the revenue side as well.

Politics is compromise. We'll see how this thing plays out, won't we?

[cowboybiker]

Fire everone in charge and start over.


A do-over FTW!!!

[paolo59]

The Economist is a good source for understanding economics. And they are btw, a small government, conservative group. You can read 10 articles before needing a subscription.

http://www.economist.com/node/18928600

LOL I would take issue with another point in that article: "America's net indebtedness is a perfectly affordable 65% of GDP." That doesn't sound particularly 'conservative' to me! I would be much more comfortable with somethiing on the order of 25 to 30 percent, under extraordinary circumstances.

[freebirdmac]

LOL I would take issue with another point in that article: "America's net indebtedness is a perfectly affordable 65% of GDP." That doesn't sound particularly 'conservative' to me! I would be much more comfortable with somethiing on the order of 25 to 30 percent, under extraordinary circumstances.

I ran out of my 10 article limit to revisit other articles on the subject. But the consensus of what I have been reading is that 65% really isn't that bad, especially with the current recession. The drive to reduce spending is all well and good, but do it too fast, too deep, and the small gains we've seen thus far can go away in a flash. Sinking us further. Spending less isn't going to create jobs. Which is what we need. The recession is over for a lot of companies, but they've learned how to continue with fewer employees. These companies won't expand until they feel the public is ready to spend. The pubic won't spend until there is a better job market. So the real question is how do we create jobs.

[Korr]

They spend more, they want more. When they get more, they spend it and ask for even more. Income taxes are nothing but wealth preventions laws. Those with real money don't worry about incomes, they make their money off of investments. So the rich get richer and everyone else is prevented from entering the elite world of the wealthy through graduated income tax. I have no idea why we have let this scam continue for so long, it is so Un-American.

Ding! correct.

Fire everone in charge and start over.


A do-over FTW!!!

100% agreed. Seriously.

[paolo59]

I ran out of my 10 article limit to revisit other articles on the subject. But the consensus of what I have been reading is that 65% really isn't that bad, especially with the current recession. The drive to reduce spending is all well and good, but do it too fast, too deep, and the small gains we've seen thus far can go away in a flash. Sinking us further. Spending less isn't going to create jobs. Which is what we need. The recession is over for a lot of companies, but they've learned how to continue with fewer employees. These companies won't expand until they feel the public is ready to spend. The pubic won't spend until there is a better job market. So the real question is how do we create jobs.

I would agree wholeheartedly with your last point. Unfortunately, jobs cannot simply be 'legislated' from Congress. Many politicians seem to think that that is indeed the case. Government can facilitate the creation of jobs by helping to create an atmosphere in which investment and expansion can take place within the private sector. It can do very little else in the long term for sustainable growth and prosperity.

Spending less, while perhaps not producing jobs, will certainly go far in advancing investor confidence in long term US prospects economically. International rating agencies have already let it be known that simply increasing the debt ceiling will do nothing to minimize the probability of a downgrading of the United States' credit worthiness. A minimum of some 4 trillion in spending cuts is required.

The United States simply spends more than it has to spend. It has for decades, under the leadership of both political parties. It is simply not sustainable in the long term. We think in 2, at the most, 4 year cycles, all dependent upon elections in the fall. This is a recipe for eventual economic ruin. In my opinion there needs to be a serious, long term, rational, responsible reigning in of government expenditures over the period of some 2 to 3 decades.

[Rhinoclan]

In my humble opinioin, corporate income tax rates should be 0...because in reality, corporations don't pay taxes...their customers do...they are just an intermediary.

Now, I think stiffening up the tax code for individuals makes a ton of sense, not allowing deductions, and making sure everyone has "skin in the game" so to speak would be idea...as does some decent regulation on how golden parachutes and the like work.

Nothing hurts conservative and pro business people more than when boards hand out gross and negligent bonuses/salaries/stock option. A perfect case is M&I bank, located here in WI.

The same management that made disastrous decisions, causing the stock price to drop so far, that they became extremely attractive to be purchansed, have reaped 10's of millions of dollars in bonuses once the company was sold. To me, that is criminal, and certainly not anywhere close to the meaning of upholding "fiduciary responsibility".

[thomashenry]

"We don`t have deficits because we tax too little, we have deficts becasue we "the Gov`t " spend too much----Ronald Reagan

From IBD from July 7/11-----as the clock ticks down on the phony deadline for conducting deficit talks, the Democrats have lost all public debates on spending and higher taxes.
So their only hope is to manufacture a crisis, such as a supposed default date Aug 2nd,, and with the medias help, force the Republicans to agree to a bad deal !
NO NEW TAXES :--The economys expansion and job recovery is the worst since the depression,, more than 2 years after the recessions end, we still have unemployment at 9.2% & close to 30 million willing workers who cant find full time jobs.
As such, hiking taxes by 1 trillion to more than 3 trillion over the next 10 years, as Obama has suggested is unconscionable. It would do lasting damage to our economy and perhaps even cause a new recession.
GOVERNMENT MUST GET SMALLER : President Obama and the Democratic led Congress have expanded the scope and reach of the Federal Government to unprecedented levels thanks to Obamacare : Dood Frank: Stimulus : Governemnt takeovers of GM & Chrysler : a no drill, green energy policy & TARP.
Democrats now want to make this exapnded super state permanent, -turning the U.S. into another debt ridden, stagnant colossus, Like Europe & Japan. From 20 % GDP just five years ago, The Federal Government spends 25 % of all U.S. output,. By 2035 without entitlement reform, it will hit 35% or more.
Big Government shouldn`t take 1 dollar or more for every 4 dollars the private economy creates. Any Deal to raise the debt ceiling from 14.3 trillion must shrink Govt belong it`s long term avg of 20% GDP !
THE DEBT MUST SHRINK : --- That it has spiked from 9.8 trillion, in 2008,to 14.3 trillion now is alarming. A 2010 study of 20 rich countries done by economists Carmen Reinhart & Ken Rogoff found that a nation starts to struggle when it`s debt-to - GDP ratio rises above 90%. Ours is now above 100%----putting us in the same company as Greece, Italy, Ireland, Spain and Portugal.
Americans have long memories, ask President George H.W. Bush, he agreed to a "deal" and broke his promise of no new taxes, for every 2 dollars in spending cuts for every one dollar in tax hikes !

and since then the American Economy has shed 100k in fresh layoffs, Lockheed Martin, Borders Cisco,

[freebirdmac]

"So their only hope is to manufacture a crisis, such as a supposed default date Aug 2nd,, and with the medias help, force the Republicans to agree to a bad deal !"

Wow. Way to take what's essentially been said by the Economist about Republicans and spin it 180

So few try to actually understand and instead sop up the partisan bs.

[Meatpants]

Take some of this:
http://forum.bodybuilding.com/showth...hp?t=136649731

Or you could try fukitol.

[thomashenry]

I was responding "writing what I read in IBD" , "if I knew how to post the link I would have, I just typed it thats all, I am not responding to partisan bs nor would I think you would as well in spite of your link to the economist, we can go round & round if you choose, I happen and with good reason to enjoy reading the Paper or website Investors business daily, for a variety of reasons not the least of which it has helped me and my family Immensely in regards to staying on a path that would never leave me to the whims of any Politicians financially, helps to keep me in a nicer tax bracket :}-----I was not the originator of the article-----So if you were referring to me and the fact that I am narrow minded in regards to "so few try to actually understand and just sop up partisan BS" I would say your probably slightly off in that assessment, and if your not responding to me then so be it-----just in case, I do believe a certain chief of staff rahm, indicated never let a crisis go to waste !

[CRiTiCAL46]

You would think we would all learn from history that this great experiment in central banking, Keynesian economic thought is complete bunk.

The media is simply playing on fears. We have defaulted on our debt numerous times.

The greenback default in 1862, when FDR devalued the price of money by 40%, and then when Nixon completely took us off the gold standard.

We default every single day when the federal reserve prints money.


The sooner we restructure our debt and drastically cut government spending and lower taxes the better. It's just a matter of time before this whole facade comes down.

[justboo2u]

I don't believe that there will be a 'default.' If it comes down to it they'll go for the option to authorize the president to raise the debt ceiling on his own, (which I don't like in the least) or they'll come up with a short term fix/extension of one kind or another.

I watched Senate hearings on tax reform back in February on C-Span. Such reform has broad base bipartisan support on the whole. I don't know for the life of me why the hell something hasn't been done about it already!

Nobody wants their 'ox gored!' LOL This is one of those situations where everyone is going to have to take a hit. The sooner the better. The longer they play around with this and 'kick the can down the road' the more likely it is that we could end up with no oxen to gore!

Because the grandstanding is LOTS more fun!
Idunno, but Im beginning to believe that I need to find a small section of some state that will grow enough food to keep me alive (as opposed to my current condition), that has a good aquifer, is sunny and breezy (for solar and wind power).

I know for sure that if I dont 'bring in the bux' (not that I do now!) it isnt going to matter HOW LITTLE I spend. I am going to run out of money. Certainly the well-known 'tax and spend' policy attributed to the Demo party tends to lead to 'thermal runaway' but at THIS point I DO believe that some taxation (thru repeal or outright) needs to be done AS WELL as the spending reductions...
Our 'beloved president', while not solely at fault here, has emptied our pockets while giving it to thieves/crooks/AIG. Oops... same thing!

Cant agree with jail time for the perpetrators tho... Jailing these bastids costs money too!

Or, 'Its GOTTA COME from SOMEWHERE!'

Why is Aug 2 the default deadline anyway?

That was the projected date that the current funding 'runs out'... but apparently they have revised that number to the 10th due to lower spending than expected...

[drudixon]

"We don`t have deficits because we tax too little, we have deficts becasue we "the Gov`t " spend too much----Ronald Reagan

From IBD from July 7/11-----as the clock ticks down on the phony deadline for conducting deficit talks, the Democrats have lost all public debates on spending and higher taxes.
So their only hope is to manufacture a crisis, such as a supposed default date Aug 2nd,, and with the medias help, force the Republicans to agree to a bad deal !
NO NEW TAXES :--The economys expansion and job recovery is the worst since the depression,, more than 2 years after the recessions end, we still have unemployment at 9.2% & close to 30 million willing workers who cant find full time jobs.
As such, hiking taxes by 1 trillion to more than 3 trillion over the next 10 years, as Obama has suggested is unconscionable. It would do lasting damage to our economy and perhaps even cause a new recession.
GOVERNMENT MUST GET SMALLER : President Obama and the Democratic led Congress have expanded the scope and reach of the Federal Government to unprecedented levels thanks to Obamacare : Dood Frank: Stimulus : Governemnt takeovers of GM & Chrysler : a no drill, green energy policy & TARP.
Democrats now want to make this exapnded super state permanent, -turning the U.S. into another debt ridden, stagnant colossus, Like Europe & Japan. From 20 % GDP just five years ago, The Federal Government spends 25 % of all U.S. output,. By 2035 without entitlement reform, it will hit 35% or more.
Big Government shouldn`t take 1 dollar or more for every 4 dollars the private economy creates. Any Deal to raise the debt ceiling from 14.3 trillion must shrink Govt belong it`s long term avg of 20% GDP !
THE DEBT MUST SHRINK : --- That it has spiked from 9.8 trillion, in 2008,to 14.3 trillion now is alarming. A 2010 study of 20 rich countries done by economists Carmen Reinhart & Ken Rogoff found that a nation starts to struggle when it`s debt-to - GDP ratio rises above 90%. Ours is now above 100%----putting us in the same company as Greece, Italy, Ireland, Spain and Portugal.
Americans have long memories, ask President George H.W. Bush, he agreed to a "deal" and broke his promise of no new taxes, for every 2 dollars in spending cuts for every one dollar in tax hikes !

and since then the American Economy has shed 100k in fresh layoffs, Lockheed Martin, Borders Cisco,

History does not support your statements.

[drudixon]

Because the grandstanding is LOTS more fun!
Idunno, but Im beginning to believe that I need to find a small section of some state that will grow enough food to keep me alive (as opposed to my current condition), that has a good aquifer, is sunny and breezy (for solar and wind power).

I know for sure that if I dont 'bring in the bux' (not that I do now!) it isnt going to matter HOW LITTLE I spend. I am going to run out of money. Certainly the well-known 'tax and spend' policy attributed to the Demo party tends to lead to 'thermal runaway' but at THIS point I DO believe that some taxation (thru repeal or outright) needs to be done AS WELL as the spending reductions...
Our 'beloved president', while not solely at fault here, has emptied our pockets while giving it to thieves/crooks/AIG. Oops... same thing!

Cant agree with jail time for the perpetrators tho... Jailing these bastids costs money too!

Or, 'Its GOTTA COME from SOMEWHERE!'



That was the projected date that the current funding 'runs out'... but apparently they have revised that number to the 10th due to lower spending than expected...

Plz explain how aig is crooks.

[Dave1958]

I don't agree with a lot in washington. My opinion in a nutshell to not raise any taxes, and cut spending dramatically. Here's why, rich people, whoever that is, don't pay taxes. If you change the rules, they move their money to where they make money. Loopholes are intended to guide investment, in governents mind home ownership is important, so interest is deductible. We can't afford many of the social programs that have developed over the last 50 years. We can't afford to be the policemen of the world, and if that means we can only afford 8 aircraft carrier battle groups, instead of 15. Then so be it.
Medicare can only afford what is paid in payroll taxes. Social security is a promise made from one generation to the next, but COLA, age of drawing, and other changes may have to change. We must pay our troops, but many things- parks, BLM, post office must become self funded. Others like schools, highways have to be turned to states. Research products have to be scrutinized in ways beyond congressional pork, I have no idea how that can be done
Just my .02, and other ideas but I don't have enough time to type today

[hochspeyer]

Here is what i know to be factual:

I know how much I take in (income)
I know what my fixed costs are
I am in control of my other expenses (housing, food, transportation, etc.) and can adjust them to meet my income.

I CANNOT INCREASE EITHER MY SALARY OR MY DEBT CEILING.

From my perspective-

FIRED EVERY- EVERY (THAT'S EVERY) MEMBER OF CONGRESS, THE LEGISLATIVE AND EXECUTIVE BRANCHES OF GOVERNMENT THAT WILL NOT UNDERSTAND THIS.

Its very simple. I cannot live outside of my means- neither can the Fed.

[chodan9]

R&P forum --------------->> thataway

[jnwaco]

Nobody can convince me that raising taxes is required when the government is spending $900,000 on a study of the size of homosexual men's penises. As long as they are wasting money like this, they can learn to live within their means.

And I will never support the so called "Fair Tax". First, it is marketed with a giant LIE about the actual sales tax rate, and second, it will disproportionately tax the middle class. It would be one thing if Fair Tax proponents were at least honest about the rates, but they are liars.

[jnwaco]

I don't agree with a lot in washington. My opinion in a nutshell to not raise any taxes, and cut spending dramatically. Here's why, rich people, whoever that is, don't pay taxes.

You're a bit misinformed. Almost half the country pays no income taxes whatsoever. And the rich pay a ton, especially in income taxes. That is fact.

[DaddyR]

Bogus survey. I agree with my elected representatives in the House. The one option not offered: raise ceiling, cut spending, don't raise taxes.

Any tax increase is the dems asking for something more on top of the debt ceiling raise. They can negotiate for that separately.

Cut, cap and balance was the only offer anyone representing ME would have offered, and they did. If that is rejected, I am perfectly happy with letting it work itself out without granting the Usurper in Chief any favors.

Game is already over: Obama and Reid have rejected the only acceptable compromise, so now we see what happens without a deal. And the blame rests squarely on the 'rats. They keep trying to add raising taxes in top of the debt limit. Sorry, ZerO, but you don't get to dictate the terms this time. Elections have consequences.

[freebirdmac]

I like how revenue increases is framed as tax increases to rile the unwitting masses There are many ways to increase revenue to a 15 % level to pair up with 85% in spending reductions. This however would have meant a compromise by now and less time for everyone to trash each other. It is ridiculous.