Well, there you have it. In order to decrease the National Debt in any given fiscal year, it’s not enough to have an overall Federal budget surplus. It’s not, even, enough to have a Federal on-budget surplus. The Federal on-budget surplus has to exceed the off-budget surplus for the same year!
Problem is, while the National Debt was $5,758 billion in January 2000, it was down to $5,674 billion by the end of September 2000. The fact that it is now $5,728 billion means that it has gone up since then.
Since they were taking their one-and-only sample of last year’s National Debt in the middle of the Federal fiscal year, and since the National Debt fluctuates up-and-down daily, I conclude that Barron’s has leapt to a premature conclusion.
They actually publish this figure every week, with no comment attached, so conclusions leapt to are mine and mine alone. The government publishes the figure every single day at that link, changing it by the amount they took in that day minus what they had to pay. It’s actually a very detailed statement, and fascinating, in a watching-the-paint-dry kind of way. Lately the tendency has been for the current to be slightly less than the year-ago, at least by my admittedly irregular glances at it. It mostly depends, I think, on when estimated tax payments roll in, 'though I’m not really certain of this. The dates for that are Jan 15, Apr 15 (the big kahuna, of course, when everyone has to pay), Jun 15, and Sep 15.
One encouraging thing, at least: the debt limit stands at 5,950 billion, and hasn’t moved in some time. At least they haven’t found it necessary to increase that.
George H.W. Bush was President of the Senate for most of the '80s, preceded by Walter Mondale for a little over a year (Jan 1, 1980-Jan 20, 1981) and with Danny Quayle rounding out the last 11 months, 11 days (Jan 20-Dec 31, 1989).
Ok I got lazy and didn’t read it all, so if someone already mentioned this, let me apologize in advance.
Some things should be financed using debt finance, yeah, seriously. Thus, there is actually a real need to have a national debt. The goal of debt finance in general is to match up the costs and benefits in the approapriate time frame. NOw the balloning in the debt in the reagan years may have not been quite along these lines, but nevertheless this is the reason we have debt finance. Think of it this way: we want to build a new bridge, a school, or a national defense system. Ok so do we pay for it up front? Force the current generation to pay the full cost of each of these “public goods?” Well we could, but would it be wise? Ok, now what if we issue bonds and pay for it using a bond, what happens now? Ok here is what happens, we are able to spread the cost across time. What is the benefit in this? Well should you pay for the public goods of you children and grand children? Or should the cost be matched with the benefit such that each generation pays for its share of the benefits? Public economist would argue that the key to any public good is to match benefits with costs, thus finace using bonds is essential. Therefore, you see this myth about have to “pay off” the nation debt is nonsense. Paying it down may be appropriate, but paying it off is silly. Its just political rhetoric nothing more. In fact, even the extravagant spending in the reagan years could be considered an investment in defence, thus an investment in peace and prosparity. Preventing war, ending the cold war, etc. etc. are also public goods. Thus, why shouldn’t we spread the cost over time to match cost with benefits? Ok, some people may not agree, but this is how its done, and this is why it is done that way. So in that respect, the national debt is not the issue many people think it is. Granted its the second largest expense we have (interest on the debt) second after the outlays for SS. So would you have us cut back SS benefits to save money? Not likely right. Well paying down the debt may not be a bad idea, but those who want to eliminate national debts need to do a little more reseach into how the system really works.
ok one more thing, increasing public spending, or cutting taxes are fiscal tools, nothing more. If the economy is slowing you can stimulate it by either cutting taxes or increasing government spending. The Dems like to use increased govt spending and the Repubs prefer tax cuts, but in the end each is really aimed at the same ends. So what happens in a booming economy? Well you should raise taxes or cut govt spending right? Well the repubs use of the tax rate to moderate the economy seems a little easier to impliment in this case doesn’t it. If you have a booming economy thats needs to be slowed, is it easier to cut govt spending or raise taxes? I would lean toward taxes, because cutting govt spending necessarily means eliminating jobs, however, chaning the tax rate is not so direct about this. Jobs are still likely to be eliminated, but a cut back in hours, or a drive towards efficency is equally likely. Now as for the dems tendency towards increasing govt spending in a down turn, well its hard to say well we don’t need ya any more everythings fine now, so your out of a job. While raising taxes is a little more politically feasible. actually I have a good link for you guys that are really interested in the economy and stuff, let me see if I can dig it up. I explained to someone at another site exactly how all this fiscal policy stuff works. And I’m really to lazy to repeat myself so I’ll go dig it up.
ok I’m RD_151 and RD over there so just start about a post or 2 before my first post if you only want the economic theory. If not read the whole thread, its quite good.
btw it spans over a few pages so its a lot of reading, but its a good explaination of economic theory if you are interested.
