The Biden Economy

[donquixote99]

Originally Posted by Dondilion

I am sensing that you are comfortable with this ballooning debt.
Note I use the word sensing.

Comfortable may not quite be it, but neither do I view it as a crisis. Trends are reassuring. Sound policy as now in place is slowing debt growth to manageable levels.

[Dondilion]

Could you expand on manageable levels.

[Chicks]

Originally Posted by whell

I love how that photo of Schiff makes it almost look like he's sporting a halo.

Of course, compared to your hero, the snivelling, lying, weak, desperate little weasel McCarthy, he's certainly far more qualified to wear.

[nailer]

Originally Posted by whell

The federal balance sheet is published each year. You can find copies on the US treasury website that go back to 1975. It's really not that hard to find, but just to speed things up, here you go: https://www.fiscal.treasury.gov/repo...nancial-report. These reports account for tangible and intangible assets. So, if you missed that detail, maybe you weren't paying attention.

Back in 1975, the debt outstanding was over $394 billion (adjusted). Assets were $354 billion. You can already see when looking at the Liabilities and Equities" section of the report that 1975 debt increased by $57.9 billion over 1974. The easy answer to that is like we do every year, spending outpaced revenue.

How do you put a dollar value on the capabilities of our grossly large military? Or any intangible 'asset'?

[donquixote99]

Originally Posted by Dondilion

Could you expand on manageable levels.

I don't know how much debt the economy can carry. The question seems to raise a lot of argument. But out of an abundance of caution, I would make the goal to be debt growth on average equal to the rate of revenue growth, so that debt service as a % of GDP becomes constant.

As I noted before, there's plenty of space in the economy, compared to others, for increasing taxation, if we really wanted to erase the deficit and work on reducing the debt we could do it. It would get easier and easier to do it, once we got started, as the economy grew while the debt did not.

[whell]

Originally Posted by nailer

How do you put a dollar value on the capabilities of our grossly large military? Or any intangible 'asset'?

I don't. But the reporting from the gov't does...or at least attempts to. Have you looked? It is listed as an asset under Property and Equipment, with additional accounting under Inventories. It's also listed in liabilities under Depreciation.

[whell]

Originally Posted by Chicks

Of course, compared to your hero, the snivelling, lying, weak, desperate little weasel McCarthy, he's certainly far more qualified to wear.

Hate much?

[whell]

Originally Posted by donquixote99

I don't know how much debt the economy can carry. The question seems to raise a lot of argument. But out of an abundance of caution, I would make the goal to be debt growth on average equal to the rate of revenue growth, so that debt service as a % of GDP becomes constant.

As I noted before, there's plenty of space in the economy, compared to others, for increasing taxation, if we really wanted to erase the deficit and work on reducing the debt we could do it. It would get easier and easier to do it, once we got started, as the economy grew while the debt did not.

Your first paragraph appears to describe a scenario where debt is never retired, and allowed to grow proportionately to revenue.

The way the Federal Gov't works, as a general rule, spending increases each year in the budgeting process thanks to the Fed's use of baseline budgeting. Just by virtue of the budgeting processes, a spending increase is "assumed" into the budgeting process each year.

Bottom line - the Fed leads with an assumption in spending increases each year. It then traditionally overspends the increased budgeted spending amount each year. That's a level of fiscal irresponsibility that is reserved only for those organizations that can print their own money.

This is why your second point that "there's plenty of room for additional taxation" is, to me, analogous to giving the alcoholic another shot of bourbon. It's not sustainable to fix a system where spending over the budget is rewarded by more money to spend.

[donquixote99]

Originally Posted by whell

Your first paragraph appears to describe a scenario where debt is never retired, and allowed to grow proportionately to revenue.

The way the Federal Gov't works, as a general rule, spending increases each year in the budgeting process thanks to the Fed's use of baseline budgeting. Just by virtue of the budgeting processes, a spending increase is "assumed" into the budgeting process each year.

Bottom line - the Fed leads with an assumption in spending increases each year. It then traditionally overspends the increased budgeted spending amount each year. That's a level of fiscal irresponsibility that is reserved only for those organizations that can print their own money.

This is why your second point that "there's plenty of room for additional taxation" is, to me, analogous to giving the alcoholic another shot of bourbon. It's not sustainable to fix a system where spending over the budget is rewarded by more money to spend.

The bolded part is counter-factual. The spending of federal agencies is constrained by law, the budget is a law. The constitution says (look up the actual language if you want) that nothing goes out of the Treasury unless duly appropriated by congress. Overspending for emergencies must be 'paid for' with legally appropriated funds. A program that goes 'over-budget' cannot legally obligate the government to spend over-budget, until it gets more budget. You are mixing up Fed money supply activities with the funding of federal programs. The Fed does not 'print money' and hand it to federal agencies.

By the way, counter to your informal usage, when I say 'the Fed,' I mean the Federal Reserve Bank, not the federal government agencies collectively.

[nailer]

Originally Posted by whell

I don't. But the reporting from the gov't does...or at least attempts to. Have you looked? It is listed as an asset under Property and Equipment, with additional accounting under Inventories. It's also listed in liabilities under Depreciation.

Provide a link to the document and precise references (page numbers) and I will. If you've had a look you should have them.