The national debt continues to rise

[Tidewater]

Executive Order 9250 Establishing the Office of Economic Stabilization October 3, 1942.

"... In order to correct gross inequities and to provide for greater equality in contributing to the war effort, the Director is authorized to take the necessary action, and to issue the appropriate regulations, so that, insofar as practicable no salary shall be authorized under Title III, Section 4, to the extent that it exceeds $25,000 after the payment of taxes allocable to the sum in excess of $25,000. ..."

 

[some_al_fan]

Executive Order 9250 Establishing the Office of Economic Stabilization October 3, 1942.

"... In order to correct gross inequities and to provide for greater equality in contributing to the war effort, the Director is authorized to take the necessary action, and to issue the appropriate regulations, so that, insofar as practicable no salary shall be authorized under Title III, Section 4, to the extent that it exceeds $25,000 after the payment of taxes allocable to the sum in excess of $25,000. ..."

Did that apply only to government employees?

 

[mdb-tpet]

Until Social Security and Medicare get fixed, the debt will continue to rise. Budget cuts and layoffs of personnel might play well on TV, but don't even scratch the surface.

Conceptually, both SSI and Medicare / Medicaid are pretty easily fixable. For both, life expectancies are significantly longer than the actuarial assumptions underlying the payouts. Additionally, revenues (i.e., payroll withholdings) are insufficient.

So I've posted proposed details several times, but any plan that will fix the problems involves phasing in a delay in the age for benefits and an immediate increase in payments into the plans.

The solution also involves returning to the original Obamacare plan -- everybody must have health insurance. Could be through an employer. Could be an individual plan. Could be through the Obamacare plan. But one way or another everybody must have it.

After a sputtering start, it was actually working until a Republican Congress removed the universal mandate. That gave healthy young people a huge incentive to drop it altogether. Which is exactly what they did. No health insurance plan ever devised works when you're effectively insuring only less-healthy and/or old people.

We actually addressed Social Security in the 80s, and it worked until people kept on living longer.

Since then, both parties have had periods of time where they controlled both the White House and Congress. But they both sat on their hands. We simply don't have the political will to do any of that now and have a Congress of noodle-spines. And it applies to both parties.

Numbers is numbers, guys, and everybody will have to be part of the solution....it will not be painless for anybody.

Would you rather go back to shorter life expectancies?

I won't point to a party, but one group of incredibly influential guys/lobbyists/companies are dead set against paying a reasonable share of their profits in any sizable amount that pays for our country's expenditures. We have historical record of what proper tax rates are for building and investing in our country after WWII, and we're so far away from them, it's stunning. It simply doesn't matter what you spend or don't spend if those in power only plan to cut revenues far below expenditures in some fever dream of trickle down economic fantasy. The drown the government in a bathtub folks have almost won, and the vultures will start circling and picking off the easy to grab pieces if we keep this downward spiral going. We can say goodbye to Alaska and probably Hawaii if we keep this up, and maybe far more.

 

[Tidewater]

Did that apply only to government employees?

I think it was universal. Let's say that FDR interpreted his mandate liberally. If he felt he needed to do something, he did it.

 

[Tidewater]

I won't point to a party, but one group of incredibly influential guys/lobbyists/companies are dead set against paying a reasonable share of their profits in any sizable amount that pays for our country's expenditures. We have historical record of what proper tax rates are for building and investing in our country after WWII, and we're so far away from them, it's stunning. It simply doesn't matter what you spend or don't spend if those in power only plan to cut revenues far below expenditures in some fever dream of trickle down economic fantasy. The drown the government in a bathtub folks have almost won, and the vultures will start circling and picking off the easy to grab pieces if we keep this downward spiral going. We can say goodbye to Alaska and probably Hawaii if we keep this up, and maybe far more.

If my family spends $68,000 a year while earning $49,000 a year (and maintaining a $380,000 credit card balance), I do not have an earning problem. I have a spending problem.
Since 1980, almost every year has produced record revenue.

The exceptions were 1981-82 (the recession that finally killed inflation), 2001-2003 (the dot com bubble bursting) and 2007-2009 (the Great Recession). Almost every year is a new record for revenue.
But federal spending has grown even faster.
If the federal budget had grown at the rate of population growth since 1981, the federal government would be spending $764B and the US would be running a $4.470 trillion budget surplus in FY2025. The entire federal debt would have been paid off years ago.

 

[some_al_fan]

If my family spends $68,000 a year while earning $49,000 a year (and maintaining a $380,000 credit card balance), I do not have an earning problem. I have a spending problem.
Since 1980, almost every year has produced record revenue.
View attachment 53961
The exceptions were 1981-82 (the recession that finally killed inflation), 2001-2003 (the dot com bubble bursting) and 2007-2009 (the Great Recession). Almost every year is a new record for revenue.
But federal spending has grown even faster.
If the federal budget had grown at the rate of population growth since 1981, the federal government would be spending $764B and the US would be running a $4.470 trillion budget surplus in FY2025. The entire federal debt would have been paid off years ago.

Not sure that it is a correct comparison.
It is more like your family is earning $80,000, but deciding to share $49,000 out of that money to pay for $68,000 spending.

Here is spending graph as % of GDP:

Federal Net Outlays as Percent of Gross Domestic Product

Graph and download economic data for Federal Net Outlays as Percent of Gross Domestic Product (FYONGDA188S) from 1929 to 2024 about outlays, Net, federal, GDP, and USA.

fred.stlouisfed.org

We are currently spending ~23% of GDP

And here are tax receipts vs GDP:

Federal Receipts as Percent of Gross Domestic Product

Graph and download economic data for Federal Receipts as Percent of Gross Domestic Product (FYFRGDA188S) from 1929 to 2024 about receipts, federal, GDP, and USA.

fred.stlouisfed.org

As you can see, we are near the top of our spending and near the bottom of our tax receipts. Both items have to be considered. Instead, Trump has permanently cut taxes; thus, our debt will continue to grow, and we will be paying higher & higher numbers to service the debt

 

[Bamaro]

If my family spends $68,000 a year while earning $49,000 a year (and maintaining a $380,000 credit card balance), I do not have an earning problem. I have a spending problem.

You could have both.

 

[some_al_fan]

Trump’s budget will push US debt levels beyond those of Greece or Italy, IMF predicts

President’s allies say deficit is going down, but predictions for 2026 still range as high as $2.2 trillion

www.independent.co.uk

 

[Tidewater]

If my family spends $68,000 a year while earning $49,000 a year (and maintaining a $380,000 credit card balance), I do not have an earning problem. I have a spending problem.
Since 1980, almost every year has produced record revenue.
View attachment 53961
The exceptions were 1981-82 (the recession that finally killed inflation), 2001-2003 (the dot com bubble bursting) and 2007-2009 (the Great Recession). Almost every year is a new record for revenue.
But federal spending has grown even faster.
If the federal budget had grown at the rate of population growth since 1981, the federal government would be spending $764B and the US would be running a $4.470 trillion budget surplus in FY2025. The entire federal debt would have been paid off years ago.

I looked up the inflation rate between the two years 1981 and 2024 and $517B (1981 pre-inflation dollars) would be $1.726T (2024 post inflation dollars).
If you compensate for inflation and population growth, the federal revenues would be would $2.54T and the US would still have a surplus of $2.37T.

You can change tax law and project what you will bring in in terms of government revenue, but you cannot absolutely control that (some people will quit, some will find other tax shelters you did not include in your calculations). The one variable you can absolutely control is what you spend (The Anti-Deficiency Act; it is illegal to spend more than your congressional budget allocation).

We simply spend way, way too much. And every time we add a new budget item or expand an "entitlement," it is a step in the wrong direction.

And nothing in the foregoing means you cannot also raise tax rates. The two are not mutually exclusive. In fact, they are complementary, maybe indispensable.

 

[92tide]

Trump’s budget will push US debt levels beyond those of Greece or Italy, IMF predicts

President’s allies say deficit is going down, but predictions for 2026 still range as high as $2.2 trillion

www.independent.co.uk

 

[some_al_fan]

The Anti-Deficiency Act; it is illegal to spend more than your congressional budget allocation.

Illegal? The current Administration did it...

America's pocketbook is shut down. Trump is taking over the purse strings.

Congress has control of federal spending. During the government shutdown, Trump is changing that.

www.businessinsider.com

 

[Tidewater]

Illegal? The current Administration did it...

America's pocketbook is shut down. Trump is taking over the purse strings.

Congress has control of federal spending. During the government shutdown, Trump is changing that.

www.businessinsider.com

It may come as a surprise to you that some things the administration does are not legal.

 

[bamacpa]

Until Social Security and Medicare get fixed, the debt will continue to rise. Budget cuts and layoffs of personnel might play well on TV, but don't even scratch the surface.

Conceptually, both SSI and Medicare / Medicaid are pretty easily fixable. For both, life expectancies are significantly longer than the actuarial assumptions underlying the payouts. Additionally, revenues (i.e., payroll withholdings) are insufficient.

So I've posted proposed details several times, but any plan that will fix the problems involves phasing in a delay in the age for benefits and an immediate increase in payments into the plans.

The solution also involves returning to the original Obamacare plan -- everybody must have health insurance. Could be through an employer. Could be an individual plan. Could be through the Obamacare plan. But one way or another everybody must have it.

After a sputtering start, it was actually working until a Republican Congress removed the universal mandate. That gave healthy young people a huge incentive to drop it altogether. Which is exactly what they did. No health insurance plan ever devised works when you're effectively insuring only less-healthy and/or old people.

We actually addressed Social Security in the 80s, and it worked until people kept on living longer.

Since then, both parties have had periods of time where they controlled both the White House and Congress. But they both sat on their hands. We simply don't have the political will to do any of that now and have a Congress of noodle-spines. And it applies to both parties.

Numbers is numbers, guys, and everybody will have to be part of the solution....it will not be painless for anybody.

Would you rather go back to shorter life expectancies?

Our DHS secretary is working on those shorter life expectancies as we speak.

 

[4Q Basket Case]

Our DHS secretary is working on those shorter life expectancies as we speak.

I want to laugh, but it isn’t really funny.

 

[some_al_fan]

That is how you should spend taxpayers money during the government shutdown:

Kash Patel used government jet to watch girlfriend sing at wrestling event: report

The FBI director is mandated to use a government plane for travel, but lawmakers have criticized Patel for overutilization

www.independent.co.uk

---
FBI Director Kash Patel traveled to Pennsylvania State University over the weekend to watch his girlfriend perform at a wrestling event, according to a recent report that cited flight records associated with a government-registered jet.
---

 

[Bamaro]

Until Social Security and Medicare get fixed, the debt will continue to rise. Budget cuts and layoffs of personnel might play well on TV, but don't even scratch the surface.

Conceptually, both SSI and Medicare / Medicaid are pretty easily fixable. For both, life expectancies are significantly longer than the actuarial assumptions underlying the payouts. Additionally, revenues (i.e., payroll withholdings) are insufficient.

So I've posted proposed details several times, but any plan that will fix the problems involves phasing in a delay in the age for benefits and an immediate increase in payments into the plans.

The solution also involves returning to the original Obamacare plan -- everybody must have health insurance. Could be through an employer. Could be an individual plan. Could be through the Obamacare plan. But one way or another everybody must have it.

After a sputtering start, it was actually working until a Republican Congress removed the universal mandate. That gave healthy young people a huge incentive to drop it altogether. Which is exactly what they did. No health insurance plan ever devised works when you're effectively insuring only less-healthy and/or old people.

We actually addressed Social Security in the 80s, and it worked until people kept on living longer.

Since then, both parties have had periods of time where they controlled both the White House and Congress. But they both sat on their hands. We simply don't have the political will to do any of that now and have a Congress of noodle-spines. And it applies to both parties.

Numbers is numbers, guys, and everybody will have to be part of the solution....it will not be painless for anybody.

Would you rather go back to shorter life expectancies?

I thought that SS did not contribute to the 38T debt.

 

[4Q Basket Case]

I thought that SS did not contribute to the 38T debt.

Sort of. That's the way it's purported to be. But like a lot of things, it doesn't really work the way it's represented.

For decades, it did work as designed. During that time frame, the baby boomers drove both population increases and income increases as they progressed up the value-added ladder. The resultant and consistently increasing contributions drove massive increases in the Social Security Trust Fund.

I've seen lots of charts showing various numbers, but at the beginning, there were something like 20+ workers contributing to each retiree's benefits.

All those big annual surpluses were required by law to be invested in US Treasury obligations. Ostensibly, that was for safety -- after all, what's safer than Treasuries? Really, it was to provide a ready-made and massive appetite for Treasury debt without making us vulnerable to foreign countries' machinations on exchange and interest rates.

Well, the worm started turning in 2011 when the first boomers (born in 1946) started retiring at age 65 -- you could make an argument that it first started in 2008 when the first post-war babies became eligible to draw early benefits at age 62.

Regardless, there now are fewer than five (maybe three?) workers contributing to each retiree's benefits.

So over time, current receipts were used more and more to pay current outlays and less and less to buy US Treasuries. So the market for Treasuries began to shrink and the appetite had to be fed by foreign borrowers.

That's been going on for a while now, accelerating as time goes on. So the surplus built up over decades has been whittled down and is now getting low. There are lots of estimates as to when it will be depleted, but it's coming.

When it happens, and assuming the status quo, you will have a whipsaw. Not only with the SSI trust fund not be buying Treasuries anymore at all, but more Treasuries will have to be issued to cover the gap.

Or retirees' benefits will be cut....which I'd bet a bunch of money the noodle-spines in DC will never let happen. Not only does it break a promises, but the bluehairs and pinkheads vote. It would be political suicide. So there might be a standoff, but soon enough they will fill the gap with the proceeds from selling more debt.

So like I said, the program was constructed, and is still billed, as self-sustaining. It used to be. It's been less and less so for some time now. Soon it won't be at all. When that happens, you get some serious operating leverage working the nasty way.

 

[Bamaro]

Sort of. That's the way it's purported to be. But like a lot of things, it doesn't really work the way it's represented.

For decades, it did work as designed. During that time frame, the baby boomers drove both population increases and income increases as they progressed up the value-added ladder. The resultant and consistently increasing contributions drove massive increases in the Social Security Trust Fund.

I've seen lots of charts showing various numbers, but at the beginning, there were something like 20+ workers contributing to each retiree's benefits.

All those big annual surpluses were required by law to be invested in US Treasury obligations. Ostensibly, that was for safety -- after all, what's safer than Treasuries? Really, it was to provide a ready-made and massive appetite for Treasury debt without making us vulnerable to foreign countries' machinations on exchange and interest rates.

Well, the worm started turning in 2011 when the first boomers (born in 1946) started retiring at age 65 -- you could make an argument that it first started in 2008 when the first post-war babies became eligible to draw early benefits at age 62.

Regardless, there now are fewer than five (maybe three?) workers contributing to each retiree's benefits.

So over time, current receipts were used more and more to pay current outlays and less and less to buy US Treasuries. So the market for Treasuries began to shrink and the appetite had to be fed by foreign borrowers.

That's been going on for a while now, accelerating as time goes on. So the surplus built up over decades has been whittled down and is now getting low. There are lots of estimates as to when it will be depleted, but it's coming.

When it happens, and assuming the status quo, you will have a whipsaw. Not only with the SSI trust fund not be buying Treasuries anymore at all, but more Treasuries will have to be issued to cover the gap.

Or retirees' benefits will be cut....which I'd bet a bunch of money the noodle-spines in DC will never let happen. Not only does it break a promises, but the bluehairs and pinkheads vote. It would be political suicide. So there might be a standoff, but soon enough they will fill the gap with the proceeds from selling more debt.

So like I said, the program was constructed, and is still billed, as self-sustaining. It used to be. It's been less and less so for some time now. Soon it won't be at all. When that happens, you get some serious operating leverage working the nasty way.

I understand that but of the 38T, is any of it a result of SS? What am I missing?

 

[4Q Basket Case]

I understand that but of the 38T, is any of it a result of SS? What am I missing?

None. Yet. But unless something changes, it’s coming.

 

[JDCrimson]

I understand that but of the 38T, is any of it a result of SS? What am I missing?

I dont think so. Not at this moment. That is the problem. We are $38T in debt largely from general fund spending. I dont even think Medicare is contributing to the deficit because it is funded by dedicated tax receipts.

We can look at the amount of the debt and surmise a good bit of it was incurred from wars and covid and a bloated military complex.