Serious question about the math deficit? How would we ever pay it?

[Change Happens]

Deficit is about $14 trillion...Current budget projections show us adding about a 1$ trillion MORE per year for the next 10 years. Interest rates will for sure be a huge burden, something like a $1 trillion per year for the interest alone, right?

I know there is a good chunk of cash the IRS can get from increased taxes (on the rich), but we simply don't have enough "rich people" to make up the difference, or do we?

How much more can the government realistically get from them?

We can also possibly cut defense in half, down to about $400 billion per year, still not enough?

Has anyone calculated all of this out?

How will this work?

I realize the deficit does not have to get to zero...But overall, how do we move the needle?

[spanone]

1. just put republicans back in charge and you won't hear about the deficit again

[Change Happens]

4. :)

[spanone]

6. remember cheney said 'deficits don't matter' (unless the President is a democrat)

[Change Happens]

9. We were talking about $3 trillion back then.

[spanone]

23. they mattered then.

[meegbear]

2. WE won't, your great grandchildren will

[Electric Monk]

3. The deficit is nowhere near 14 trillion. The outstanding debt is near 14 trillion.

http://en.wikipedia.org/wiki/Deficit
A deficit is the amount by which a sum of money falls short of the required amount.


http://en.wikipedia.org/wiki/Debt
Debt is that which is owed


It really bugs me when people use those terms interchangeably.

[kentuck]

5. Loopholes alone account for about $1 trillion dollars in lost revenues.

Close the Bush taxcuts for everyone. That would save another trillion over 10 years. Stop the wars in Iraq and Afghanistan and you save another trillion. Not only would this cut the deficit to zero but it start to put a big dent in the national debt.

[Change Happens]

7. Loopholes are a trillion? over how long?

I do think taxes will go up on everyone in 2013, not just the over the $250K folks.

[kentuck]

11. per year.

is what I heard on the TV the other day.

[Change Happens]

15. Does not sound right to me....nt

[kentuck]

19. Here is a graph

[Change Happens]

25. Ok, not loopholes...They are the all important Tax Expenditures...

Loopholes are things like setting an off shore trust to hide money, or funneling money through an entity which you know shows tons of losses just to get tax breaks...etc.

[RUMMYisFROSTED]

8. Wrong, wrong, wrong.

Deficit is about $14 trillion...Current budget projections show us adding about a 1$ trillion MORE per year for the next 10 years. Interest rates will for sure be a huge burden, something like a $1 trillion per year for the interest alone, right?
$1.6T deficit. Appx. $400B in interest.

I know there is a good chunk of cash the IRS can get from increased taxes (on the rich), but we simply don't have enough "rich people" to make up the difference, or do we?
It's not the number of people, it's the amount of money available.

How much more can the government realistically get from them?
A shitload.

We can also possibly cut defense in half, down to about $400 billion per year, still not enough?
Enough for now.

Has anyone calculated all of this out?
Yes.

How will this work?
The way it has worked in the past.

I realize the deficit does not have to get to zero...But overall, how do we move the needle?
Revenue, Defense, FICA cap, Inheritance Tax, Corporate Tax, Tariffs, etc...

[Change Happens]

10. Last time Clinton did this, we were talking about $500 billion ONLY...

And it is $1.6 trillion per year, not overall, not over the next 10 years.

[RUMMYisFROSTED]

13. When Clinton did what?

Spell it out.

[Warren Stupidity]

12. We pay it off incrementally every year.

The bonds used to float this debt are actually very cheap - consequently servicing our debt is not the monster it is being made out to be:

Budgeted net interest on the public debt was approximately $240 billion in fiscal years 2007 and 2008. This represented approximately 9.5% of government spending. Interest was the fourth largest single budgeted disbursement category, after defense, Social Security, and Medicare.<71> Despite higher debt levels, this declined to $189 billion in 2009 or approximately 5% of spending, due to lower interest rates. Average interest rates declined due to the crisis from 1.6% in 2008 to 0.3% in 2009.<72>
http://en.wikipedia.org/wiki/United_States_public_debt

Interest rates of 0.3% are actually negative rates as they are lower than the official inflation rates: we should borrow more money at these rates!

The made up Debt Crisis is a con intended to get you to agree to scrapping social security and medicare.

[RUMMYisFROSTED]

14. 11% vigorish to the bankers.

When does it become predatory?

[muriel_volestrangler]

20. One thing to notice: that 0.3% rate is for treasury *bills* of less than one year

which are only about a third of the debt held by the public. From the link the Wikipedia reference goes to:

                    2009           2008
                Amount   Av rate Amount    Av rate
Treasury Bills $1,986,174 0.3%   $1,484,332 1.6%
Treasury Notes  3,772,964 3.0%    2,623,364 4.1%
Treasury Bonds    677,491 6.5%      578,504 7.1%
Nonmarketable    $563,925 3.7%     $598,541 4.1%

(in millions). And:

The difference between bills, notes and bonds are the length until maturity:

* Treasury bills are issued for terms less than a year.
* Treasury notes are issued in terms of 2, 3, 5, and 10 years.
* Treasury bonds are issued in terms of 30 years, and were reintroduced in February 2006.

http://useconomy.about.com/od/bondsfaq/f/Treasury_Bonds.htm

The weighted average for 2009 is about 2.6%. If the amount of short term borrowing at those low rates can remain or grow, that's great.

[SoCalDem]

16. We need well defined stages .

Like maybe a 5 year plan where people would pay taxes at a "former" rate, with only deductions for home mortgage interest for FAMILIES making less than 250K, for ONE home..the one they live in.. and the normal exemptions for self & kids...

ALL "income" should be taxed equally, whether it's on a paycheck or just money-making-money...

There should be NO cap on SS/FICA payments

This whole situation is like when people just dump unopened bills into a drawer, and then months/years later they start opening the bills & realize they can never pay it off..

We need new definitions too... start with "family farm" & "small business".. eliminate subsidies on MOST of them.. If we are to believe in capitalism, we have to allow businesses/farms to fail without propping them up or allowing MEGA companies disguise themselves as Mom&Pop ventures so they can get free govt money..

and of course we need to halve (at least) our military and let them come home..

[Warren Stupidity]

18. How about we just raise taxes on the rich first?

250,000+ or even 1,000,000+: raise the rates. Then we can discuss what else needs to be done.

[SoCalDem]

21. That is definitely a place to start,, they have gotten a free ride for too long

:)

[denverbill]

17. The budget was balanced when Clinton left office. Rollback everything he did.

End every tax cut for individuals and corporations. End the Medicare prescription drug program. End the wars in Afghanistan and Iraq. Right there is fully 1/2 the annual budget deficit in those three things. The remainder is entirely due to the economic slowdown and increased interest payments on the debt.

[Earth_First]

22. 1. Defund the wars. 2. Defund the wars. 3. Defund the wars.

Any questions?

[dems_rightnow]

24. Deficit isn't $14 trillion

Debt is $14 trillion.