Republicans increase the deficit to 1 trillion dollars.
Democrats manage to reduce the debt by $999,999,999 and run a deficit of $1.
Republicans increase the debt again to $1T.
Democrats again manage to reduce it to $1.
Both parties added to the debt. Both parties are the same.
Also, the only option is not spending less, as you say. Any guesses as to what the other option is?
Edit: I actually got bombarded with misleading political ads in this vein in 2012. “Obama promised to reduce the deficit, but the debt has grown every year!” - Yeah, no shit. He did reduce the deficit. The debt still increases even with a reduced deficit. I suppose you may be the target audience for those ads.
I hope you realize that the principal on federal debt is constantly being paid off when the bonds become due. If the government issues more bonds than it pays off, the debt increases. If it issues fewer bonds because of increased revenues or even a surplus, than the debt decreases. All without paying anyone off early.
Which is what happened, based on septimus’s numbers.
Is that what he meant? About half of publicly-held debt is paid off in a typical year simply because the principle comes due, even if the government is running a deficit. 2014 was not one of the Clinton years, but it showed up first in Google and illustrates the point:
(In addition to that, the Federal Reserve Banks increased its own inventory of Treasury debt by several hundreds of billions of dollars during 2013-2014. Since the FRB is an arm of the U.S. Government these purchases pay down the publicly-held debt.)
I don’t know for sure what he meant, but he sure sounded like he meant calling bonds in early (which is how you would pay them off) and not doing what you described, which is the way it really works.
Principal, gosh darn it! Unlike most of my spelling errors, which are typos of some sort, I actually got principle/principal wrong for much of my life, due to a confused explanation by 3rd-grade teacher. :smack: But I do know the difference now, gosh darn it!!
Since the total debt increased under Clinton all that means is that the government increased the debt that it owes itself from raiding so called trust funds like Social Security and the Highway trust fund and didn’t increase the debt sold off to other investors
Unlike you and me, the government can issue bonds to itself and that debt is not counted as part of the public debt
Or it could just pay off the bonds that come due, and issue less in new bonds at the same time. That wouldn’t require calling anything in early, would pay down the debt, and I assume is what happened during the Clinton surplus.
This partly happened, but the surplus was coming in so quickly that the government paid premiums to buy back its securities on the open market because it was a better value than to stick it in a vault somewhere until the next bonds came due.
Okay, Blues, it is now clear that you don’t understand what you’re talking about.
First, you seem to have no idea what the “Great Bond Massacre” was. Clinton cut the interest rate on bonds by nearly half.
Second, Clinton reduced the debt held by the public by about half a trillion dollars. That is “paying down the principal.”
Third, an increase in intragovernmental debt is meaningless. Especially when it comes to Social Security, because during a booming economy, FICA receipts will far outpace needed expenditures. As long as that occurs, it is legally required that intragovernmental debt go up. There is nothing else you can do with the FICA “surplus” than increase the Social Security Trust Fund.
Fourth, calling a Treasury bond was only an option for some series of bonds, and consisted only of stopping the accrual of interest on it. Your “Three Stooges” version of calling a bond - “Hey numbskull, we have to pay off this bond before 4pm today or the kids lose the orphanage!” - doesn’t exist. You can’t force anyone to turn in their bond.
Finally, this is a great board to participate in if you’re willing to listen to others who know more about various subjects than you do. I’m not going to tell a computer expert why he’s wrong about things I barely understand, but refuse to learn about. This is definitely a topic you should listen more about, and talk less about.
The truth is, the federal debt is not a problem as long as Democrats are in power because deficits are spent on things that the public needs, which is not to say that the debt limit is inexhaustible.
Japan has been cited as an example to show why debt is not problematic, and it’s true up to a point because Japan spends money on things that the public needs, like retirement and healthcare and infrastructure (and yes, there’s a healthy bit of graft in there as well). So Japan’s economy keeps moving along and keeps racking up debt, which is caused because chiefly because Japan’s population is aging and there aren’t enough young people to pay taxes. So that’s why Japan’s national health system, which used to pay 80% of medical bills, now pays 70%.
The problem with Republicans and the national debt under Republican misrule is that they absolutely don’t give a toss about the federal debt except when Democrats are in power. In fact there are some on the far right who believe that reckless spending will eventually help make their case that government can’t afford social security and medicare, not realizing the critical roles that these programs play in protecting what’s left of the middle class and the economy generally. The federal debt in 2014 was a concern but a solvable problem. The federal debt in 2018 is a looming nightmare because Republicans, as a result of their massive tax giveaway to the rich, are threatening to create wealth inequality not seen since the Gilded Age.
Yes, but the debt to GDP ratio, which is more important than the debt load itself, actually declined significantly over an 8-year period. It increased in the entire 8-year period after that, and it exploded thanks to the Great Recession that Republican policies left us with.
Over the full course of his two terms in office, yes, it was. (In raw numbers, at least, I haven’t checked the debt-to-GDP ratio.) But this gets back to what I said earlier that the deficit can’t be zeroed out in just a single year. The budget during Clinton’s first year in office was largely dependent on policies and practices that were established before he took office. Was he supposed to cancel some big infrastructure projects what were half-built, or discharge half the members of the military? What did happen is that the deficit came down under Clinton; still adding some debt, but each year adding less debt than the one before, until the budget was balanced. If we could have kept up that disciplined approach, we’d have a much lower debt than we do now. We’ll never know for sure, but I suspect that Democrats would have done just that. What did happen is that George W. Bush became president, and along with Republicans in Congress passed tax cuts and massive new spending that caused the deficit to skyrocket again.
Republicans have made the problem worse. Democrats have made it better; they just can’t make it perfect in a single year, or even a single presidential term.
Because you don’t seem to know the difference between debt held by the public and intergovernmental debt. This is another reason why I’ve suggested you listen and ask questions rather than arguing that people who know what they are talking about are wrong.
Debt held by the public is the measurement of deficits caused by genneral revenues (income taxes, excise taxes, etc) and spending on general government operations (defense, interest on the debt, transportation, NASA, law enforcement, etc). Debt held by the public is the gold standard for fiscal health. As you can see, debt held by the public went down throughout Clinton’s term.
Realizing you will not want to admit your error, imagine this scenario. It’s like a quiz.
Income taxes pay for every cent of routine government operations, from defense to national parks. This part of the budget is perfectly balanced.
Collections from payroll taxes are substantially greater than expenditures for Medicare and Social Security.
Under this scenario, what happens to the national debt? Does it go up, down, or stay the same?