As we close down Iraq and Afghanistan we too will also see some sharp reductions in spending. And we did just fine rebuilding building capacity. And as then, it would take a while to sustain or even grow some new markets so we’d enjoy our preferred market status for a while. I’d like to see if the people of Mexico would be willing to shove aside their government for a mini-Marshall plan there. With the understanding that once they live at a higher economic level, as more of a partner at our border, it would then be their turn to do the same for those at their other border. We need a long term strategy for creating more global wealth and Europe will need to participate as well.
How to do that with an ever smaller environmental footprint will probably take a cultural shift for how we do things and would be another discussion for another time.
Someone isn’t all that good at doing math on the WSJ staff. It’s coming down. And notice the spike that started only a few months into Obama’s presidency just barely away from the free fall of the crash about 4 months before he took office. And while the U6 didn’t go back that far, the U3 official US rateunder St. Ronnie was right up there in the 10% range and thereabouts during the good times under his great leadership.
Consider the implications of this analogy for a moment. A smart home-buyer makes sure of things before he takes the loan. He knows what his salary his and he knows that it’s decently secure. He also gets a fixed-rate loan so he knows exactly what he’ll be paying.
The USA right know is more like a stupid home-buyer who lied about the salary on his application form and got an ARM. We don’t know how much money we’ll be earning at any future date, and we certainly don’t know what interest rate we’ll be paying. That’s why many of us are afraid that the USA will get foreclosed on.
Foreign-owned debt is a minority of our overall debt.
And the home, household, and family economics model is not a good analogy for the country’s economy. In the larger economy, one person’s debt is someone else’s asset.
Household economics is different from macroeconomics. Of course. Snag used the argument that the national debt ratio is much smaller than the typical debt ratio of a normal household, and my post drew attention to the problems with that comparison.
I think this strikes, if obliquely, at the root answer to the OP’s question (“Why is the Debt/Deficit issue #1 for so many people?”)
Ultimately, it comes down to “Because their political leaders have TOLD them it should now be issue #1.”
Reagan and Cheney, while in office during the greatest expansions of government debt in our history, both opined that debt was no big deal…that it was a GOOD thing, and that we’d “grow out of it.”
Bush Jr. entered office with an annual budget surplus and pledged to pay down all the retirable debt of the nation during his term(s) in office. Didn’t happen. Anymore than it did under Reagan, who took the U.S. from the largest creditor nation in the world to the largest debtor nation in 8 short years.
While some began grumbling about the debt under Bush’s tenure, the Right as a whole was either oblivious to the issue or adopted the traditional stance that there was no need to worry about it; we’d just pay it back after we “won” the “war on terror”.
It was only when a DEMOCRAT took office that a chorus of politicians and commentators on the Right began getting their panties in a knot over “THE DEBT!” and how “RUNAWAY GOVERNMENT SPENDING!” was dooming the country.
Why, all of a sudden, did this issue loom so large in the minds of the Right? Because now it could be used as a political battering ram and a tool of obstruction against a Democrat and his agenda.
As Kevin Phillips (political/economic writer and former Nixon advisor) has pointed out, this tactic is nothing new; by spending like drunken sailors and building up debt while in office (on things like defense, tax cuts for the wealthy and big business, and government programs like the Medicare Prescription Drug Plan and the Wall St. (or Savings and Loan) bailouts, which amount to huge give-aways to the private sector) Republicans accomplish two goals simultaneously;
They redistribute the wealth to their cronies in the private sector and in the top tax brackets AND they pre-emptively tie the hands of any future incoming Democrat (who might seek to spend on priorities they oppose).
The fact that government spending has grown at the slowest rate under Obama than it has under any President in the last 60 years is beside the point.
"…Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.
But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s…"
“…So, using raw dollars, Obama did oversee the lowest annual increases in spending of any president in 60 years…So, using inflation-adjusted dollars, Obama had the second-lowest increase – in fact, he actually presided over a decrease once inflation is taken into account.”
EDIT: And it should be noted that this slow-down in spending is not entirely due to a Republican controlled Congress since the mid-terms; Obama’s first budget was smaller than Bush’s last one…he spent less from the get-go.
The current screaming about “Obama’s debt and spending” is akin to the infamous “tax and spend liberal” sound-bite; a bit of political gamesmanship designed to both whip up voter anger and throw up roadblocks to Democratic spending (say, that 2nd stimulus so many economists have long been saying we need to speed up the recovery, or increased investment in alternative energy research and development).
If you can make the debt the #1 issue, you can make it very difficult for a President to justify spending on policies and programs you oppose. And you make the sitting President look bad.
Yes, it went up, for one month. The first rise in 12 months. Claiming that means “unemployment is rising” is at best silly and at worst downright dishonest.
I don’t know that I would consider it my #1 concern, but as a taxpayer it is a concern because there is little doubt that I will be one of the people who end up paying taxes to bring it down.
It was a big issue during the Bush years. Since the debt has grown, Republicans jumped on the band wagon and are now whining the whine from the previous 8 years.
I see the bit about the ‘tax bite’, but frankly I’m not comfortable paying 10% of the country’s receipts on debt interest. I realize that is manageable and also low in mid-term context, and I realize we can’t derail overall growth but nonetheless I’d still like to see it further reduced.
Notice I didn’t mention ‘Obama’ in that. I don’t think Obama is the crazy president people portray him to be. On the contrary, he is probably the sharpest one any of us will ever see.
Anyway, at some point in the future the GOP will probably take the reins again. When that does happen I fully expect them to STFU and pay down the debt- no more tax breaks for corporations and the wealthy, no more dubious military crusades against the brown people, no destruction of Social Security or Medicare (or Obamacare either), no economic hostage games with the debt ceiling, none of that. I’ll never vote for them, but I expect the pubbies to pay down the debt when they are again at bat, no excuses.
Lol, so you expect that when the GOP has the reigns again, they will suddenly become a fiscally responsible party. Despite the fact that they repudiated that completely back in 1980 and have never shown any signs of looking back since then.
I guess hope springs eternal. Which is the reason why people are still voting GOP despite their record.
I said I wouldn’t vote for them. But they have ‘shown a sign of looking back since then’. Exhibit A- all the hootin’ and hollerin’ about runaway spending and the debt. If their party regains control instead of disintegrating and being replaced by cooler heads, I expect them to pay down the debt. No excuses.
In one of my favorite political satires, one of the characters said “the less you plan to do about something, the more you must talk about it.” I’m with mister nyx, I think if the Republicans got back into power they’d start running up the deficit all over again. Oh, they wouldn’t say it that way, of course. They’d say they were balancing the budget by cutting taxes (mostly for the rich) and throwing money at the Pentagon (because our national security is too important to play politics with the funding).
And while we’re all waiting for it to work, four (or eight) years pass. Then there’s a Democrat in the White House again that they can blame for the soaring deficit.
No, I’m not in favor of raising taxes, but I am a realist, and I know that taxes will be raised eventually one way or another to pay the deficit. It makes me sad, but what can you do, I accept that it is inevitable.
And the longer we put it off, the worse the hit will eventually be, and the more it will be borne by people who didn’t enjoy the good times that were financed by the government borrowing the money in the first place.
All right, bad word choice. I should have said I’d demand they pay down the debt. I expect the GOP to be insincere.
Anyway, taking another stab at the OP: it is hard to deny that the debt is a problem. People differ on the seriousness. But as far as threats to the nation go, these days an economic meltdown seems a helluva lot more likely that a military defeat, for instance. Which are you going to worry about?