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alucard13mm
11-02-2013, 03:50 PM
http://smallbusiness.yahoo.com/advisor/national-debt-double-17-0-trillion-34-0-162053952.html



Can it be true?
The U.S. Department of the Treasury has reported that for the federal government’s fiscal 2013 year, which ended on September 30, 2013, the U.S. government budget deficit was $680 billion—the smallest budget deficit in five years. (Source: Bureau of the Fiscal Service, October 30, 2013.)
Should this be taken as great news? No, it’s “smoke and mirrors,” as I will explain below. But the mainstream certainly thinks this year’s budge deficit, which came in below $1.0 trillion, is good news. They forget that no matter how you look at it, any budget deficit, no matter how small or large, is adding to a bigger problem at hand—our massive national debt (http://www.profitconfidential.com/national-debt/).


Let’s face it: a budget deficit at the end of the day means the government spent more money than it received. Where does this extra money that the government spends come from? The answer is simple: it borrows. And as a result, the national debt rises.


Our national debt has increased significantly over the past few years. At the beginning of 2008, the U.S. national debt stood at $9.2 trillion. Today, it stands above $17.0 trillion. (Source: Treasury Direct web site, last accessed October 31, 2013.) This represents an increase of almost 85% in the national debt in the matter of a few years.


I believe the national debt will double from here…from $17.0 trillion to $34.0 trillion.

Why am I so negative on the national debt? I’m skeptical because I don’t believe this year’s numbers present the real story on government spending. Let me explain…


In the fiscal 2013 year, the U.S. government paid interest of $415.7 billion on the national debt. In the fiscal year 2012, the interest payments were $359.2 billion. This means the interest payment on the national debt has increased almost 16%. The more the national debt increases, obviously, the higher the interest rate payments.


But here is the real kicker: interest rates are being artificially kept low. The Federal Reserve is buying government T-bills with the new money it prints. The process is a scam, a Ponzi scheme at best. If the government was paying the interest rate it has historically paid on its debt over the past 30 years, then the annual interest expense on the national debt itself would be over $1.0 trillion!
But that’s not all…


We have cities across the U.S. economy struggling to balance their budget deficit and failing. Cities like Detroit and others in California have already filed for bankruptcy; I expect this trend to continue. And I potentially see the U.S. government jumping in and bailing them out.
Then there is the student debt problem that has surpassed $1.0 trillion. Increasing delinquency rates for student loans, the majority of them backed by the government, are a big risk.


Then there is Obamacare. I have read so many different reports on the “true” cost of Obamacare, I can’t pinpoint a number. But if Obamacare is the stepping stone to socialized healthcare, as some have suggested, the cost to run the program could be well above the estimates I’ve seen. Throw in an aging population that is more dependent on Social Security than ever and more poor people being dependent on government handouts than ever, and we are looking at real budget deficit problems going forward.


If what I’m saying above materializes even a bit, foreign creditors could say “give us our money back,” at which point the Federal Reserve would have to buy all new U.S. debt. The national debt is something to be very worried about.


Michael’s Personal Notes (http://www.profitconfidential.com/michaels-personal-notes/is-the-federal-reserve-playing-with-fire/):

The Federal Open Market Committee (FOMC) decided this week to keep quantitative easing and easy monetary policy going. The statement by the Federal Reserve (http://www.profitconfidential.com/federal-reserve/) said, “To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.” (Source: Federal Reserve, October 30, 2013.)


I’m one of those economists who believes the longer this goes on, the more troubles we are going to see. Is the Federal Reserve playing with fire?
It’s been almost five years since the Federal Reserve introduced the idea of quantitative easing to the U.S. economy. The goal was to help spur the economy and to help the average Joe, who, at the end of the day, lost his job and his house.


Has that happened?


It’s very clear: quantitative easing and the easy monetary policy that the Federal Reserve has been implementing for some time haven’t really filtered down to the average American. But it is helping the big banks (http://www.profitconfidential.com/big-banks/); we have seen their profits grow significantly since 2009, while the average consumer has seen his/her real wages decline. Those who are closing in on retirement are forced to stay longer in their career or rethink their options because their savings have either been depleted or haven’t grown enough.


And we are seeing consumer confidence slide lower. This is the exact opposite of what the quantitative easing was supposed to do. For the week ended October 27, the Bloomberg Consumer Comfort Index declined to the lowest level in more than a year. The index tracking consumer confidence stood at negative 37.6, plunging from negative 29.4 a month ago. (Source: Bloomberg, October 31, 2013.)


Economics 101 suggests that when you have an abundance of money supply, you have inflation. The Federal Reserve has been doing exactly that through the help of quantitative easing and keeping interest rates lower. Take this as an example: in just the last few years, the Federal Reserve has printed more than $3.0 trillion of new money out of thin air, and it continues to print another $85.0 billion a month.


And we are starting to see inflation creep up into the U.S. economy. Mind you, the official numbers don’t show this, but if you ask the person who shops, they will tell you how goods and services are getting more expensive.


With all this, I hear the mainstream talking heads speaking against gold. They say the yellow metal doesn’t hold any value any more and it’s not useful. It may be a hedge against inflation, but we currently don’t have any, say the “official” figures. Unfortunately, the mainstream forgets money continues to be printed by the Federal Reserve and the taper talks have diminished.


The Federal Reserve is playing with fire, hoping it will not get burnt. All of this keeps me bullish on gold bullion and negative on the U.S. dollar.


mostly positive comments.

there are some that still deny it and there are actually people saying how obama is so awesome to reduce our proposed spending from over a trillion down to 680 billion for the year.

enhanced_deficit
11-02-2013, 05:46 PM
If it did, it will be fully result of US Foreign Policy.. since Barack Hussein Obama is 100% a product of GOP led US Foreign Policy of 2000-08.

Go "Fiscal Only" Tea Party.

Drone king SWC nPlant has added $7 Trillion to national debt in just first 5 years already compared to $4.8 Trillion added by Bush in 8 years? At this rate, nPlant would have added $10-11 Trillion to national debt by end of his term.. provided Congressional impeachment or UN war crimes prosecution doesn't cut short his term.

National Debt has increased more under Obama than under Bush


http://i.i.cbsi.com/cnwk.1d/i/tim/2012/03/19/chart_620_deficit_120319.jpg
CBS News/ March 19, 2012
(CBS News) The National Debt has now increased more during President Obama's three years and two months in office than it did during 8 years of the George W. Bush presidency. The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.

http://images.smh.com.au/2013/08/12/4655867/nw-nr-obama--300x0.jpg (http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&docid=Ql5nnz6XlZWPwM&tbnid=uw8YI4UcojaFBM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.smh.com.au%2Fworld%2Fobama-on-holiday-means-chaos-for-locals-20130812-2rsaf.html&ei=hrB1UoCbEIyrkQest4HIBg&bvm=bv.55819444,d.cWc&psig=AFQjCNF7okv9RQmEhkGllv4bS87PVueNFw&ust=1383531003349721)

Zippyjuan
11-02-2013, 06:42 PM
It probably will double- eventually- question is by what year. If deficits go back to $1 trillion a year, it will be in 17 years.

69360
11-02-2013, 06:51 PM
I think less. I think it will be 34 trillion by 2018-2019

Zippyjuan
11-02-2013, 07:03 PM
We just started Fiscal Year 2014. To add $17 trillion by 2019 (five years) would require $3.5 trillion deficits every year. That would require (if taxes stay the same) almost doubling of government spending starting this year since the entire budget was about $3.8 trillion. http://en.wikipedia.org/wiki/2013_United_States_federal_budget

aGameOfThrones
11-02-2013, 07:04 PM
Tax the rich!

bolil
11-02-2013, 07:52 PM
Lucky for me that I do not recognize the debt as legitimate.

Nic
11-02-2013, 07:56 PM
So basically what this is saying is that the national debt doubled in 8 years under Bush and will have doubled again in 8 years under Obama. So it's not really unrealistic to surmise that in 8 years under our next president, the national debt will have doubled again. So $34 trillion by 2025 isn't unfathomable, but there's not really any way in the world the system will survive to that point.

Zippyjuan
11-02-2013, 09:22 PM
So basically what this is saying is that the national debt doubled in 8 years under Bush and will have doubled again in 8 years under Obama.

Depends on where you count from- Obama did take office in January 2009 but the country was under a Bush budget until October of that year. In January, 2009 the debt was $10.62 trillion. For the debt to double while Obama is president, it must reach $21.24 trillion by January 2017. To do that, we must run total deficits of $4 trillion over the next three years or $1.3 trillion a year. Forcasts are for deficits to stay below $1 trillion a year during that time so while the debt will have greatly increased, it will likely not have doubled.

Also note Congress, not Presidents, determine spending and taxes and in turn deficits and the debt. They write the budgets- he only signs or vetos them.

RickyJ
11-02-2013, 09:42 PM
Lucky for me that I do not recognize the debt as legitimate.


It isn't, it is all funny money, only a problem to those that hoard dollars.

Nic
11-02-2013, 09:44 PM
Depends on where you count from- Obama did take office in January 2009 but the country was under a Bush budget until October of that year. In January, 2009 the debt was $10.62 trillion. For the debt to double while Obama is president, it must reach $21.24 trillion by January 2017. To do that, we must run total deficits of $4 trillion over the next three years or $1.3 trillion a year. Forcasts are for deficits to stay below $1 trillion a year during that time so while the debt will have greatly increased, it will likely not have doubled.

Also note Congress, not Presidents, determine spending and taxes and in turn deficits and the debt. They write the budgets- he only signs or vetos them


If the national debt was ~ $4.5 trillion when Bush took office and ~$9 trillion when he left and Obama took office and now it's soon to be ~ $18 trillion, then the last two presidents have doubled the national debt twice in 16 years. I don't really care about breaking it down to a precise month one's budget was enacted or what the exact figure is down to the last pennie. That's anal retentive and completely superfluous to the topic at hand. Find something better to do.

enoch150
11-02-2013, 10:09 PM
If the national debt was ~ $4.5 trillion when Bush took office and ~$9 trillion when he left and Obama took office and now it's soon to be ~ $18 trillion, then the last two presidents have doubled the national debt twice in 16 years. I don't really care about breaking it down to a precise month one's budget was enacted or what the exact figure is down to the last pennie. That's anal retentive and completely superfluous to the topic at hand. Find something better to do.

You're off by more than a trillion. That's not pennies.

When Bush took over it was $5,728,195,796,181
When Bush left and Obama took over it was $10,626,877,048,913

That's +85.5% on Bush's watch.

If it's $17 trillion now, that means it's already gone up 60% on Obama's watch, with 3+ years to go.

Constitutional Paulicy
11-02-2013, 11:17 PM
It isn't, it is all funny money, only a problem to those that hoard dollars.

Well, considering everyone in the world hoards petrodollars in order to purchase oil, I'd say its a a world wide disaster in the making.

RickyJ
11-02-2013, 11:35 PM
Well, considering everyone in the world hoards petrodollars in order to purchase oil, I'd say its a a world wide disaster in the making.

Everyone in the world doesn't, this is the beginning of the end of the petrodollar. That last nation to abandon it will suffer the most.

Constitutional Paulicy
11-02-2013, 11:37 PM
That last nation to abandon it will suffer the most.

That would be US.

Zippyjuan
11-02-2013, 11:46 PM
You're off by more than a trillion. That's not pennies.

When Bush took over it was $5,728,195,796,181
When Bush left and Obama took over it was $10,626,877,048,913

That's +85.5% on Bush's watch.

If it's $17 trillion now, that means it's already gone up 60% on Obama's watch, with 3+ years to go.

Today is a triple of what it was when Bush took office- and the trend in the annual deficit (the increase in the debt) has been downwards.

69360
11-03-2013, 09:14 AM
We just started Fiscal Year 2014. To add $17 trillion by 2019 (five years) would require $3.5 trillion deficits every year. That would require (if taxes stay the same) almost doubling of government spending starting this year since the entire budget was about $3.8 trillion. http://en.wikipedia.org/wiki/2013_United_States_federal_budget

The temptation to start another war will be too strong. Obama almost did it in Syria.

ClydeCoulter
11-03-2013, 09:35 AM
Today is a triple of what it was when Bush took office- and the trend in the annual deficit (the increase in the debt) has been downwards.

As long as the interest rate is really, really low. What happens if the interest rate doesn't stay really low?

alucard13mm
11-03-2013, 01:25 PM
The author was probably using the worst cast scenario. But I think we can all agree the debt will keep going up until the dollar is useless.

Or I won't be surprised that the dollar would be hyperinflated and that would give us that number.