US Debt

Post by **Dardedar** » Thu Oct 05, 2006 4:51 pm

Deeper and Deeper

The New York Times | Editorial

Thursday 05 October 2006

There is fresh evidence, if any more were needed, that excessive borrowing during the Bush years will make the nation poorer.

For most of the past five and a half years, interest rates have been low, allowing the government to borrow more and more - to cut taxes while fighting two expensive wars - without having to shoulder higher interest payments.

That's over now. For the first time during President Bush's tenure, the government's interest bill is expected to rise in 2006, from $184 billion in 2005 to $220 billion this year, up nearly 20 percent. That increase - $36 billion - makes interest the fastest-growing component of federal spending, and continued brisk growth is likely. According to projections by Congress's budget office, the interest bill will grow to $249 billion in 2007, and $270 billion in 2008.

All of that is money the government won't have available to spend on other needs and priorities. And much of it won't even be recycled back into the United States economy. That's because borrowing from foreign countries has exploded during the Bush years. In 2005, the government paid about $77 billion in interest to foreign creditors in China, Japan and elsewhere.

And that's not the worst of it. While foreign investors were putting up most of the $1.5 trillion the federal government has borrowed since 2001, they were also snapping up hundreds of billions of dollars in private sector securities, transactions that have been a big source of the easy money that allowed Americans to borrow heavily against their homes.

The result, as The Wall Street Journal reported last week, is that for the first time in at least 90 years, the United States is now paying noticeably more to foreign creditors than it receives from its investments abroad. That is a momentous shift. It means that a growing share of America's future collective income will flow abroad, leading to a lower standard of living in the United States than would otherwise have been achieved. Americans deserve better than this financial mess.

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Barbara Fitzpatrick · Post by **Barbara Fitzpatrick** » Fri Oct 06, 2006 9:59 am

America has spent most of her existence in debt - as have a sizeable portion of her citizens - but never has she owed so much money, and especially never has she owed so much money to foreign countries. A "no debt" amendment is not the answer, any more than "no borrowing" law for citizens would be the answer. (Arkansas tried outlawing banks prior to the Civil War - it didn't work. The merchants became the bankers - in fact, it worsened the problem, because each store issued its own "script" which could only be used at that particular store, unlike dollars which are good for "all debts, public and private" - that's how McIlroy got started.) However, spending all the money in the bank, cashing in the investment funds, maxing the credit cards, and then just getting more credit cards is what this administration has done - and only totally disconnected flakes or people who are trying to destroy the economy and the country would do something like that. My bet is this group is the latter.

JD Allen · Post by **JD Allen** » Fri Oct 06, 2006 2:19 pm

Barbara Fitzpatrick wrote:America has spent most of her existence in debt - as have a sizeable portion of her citizens - but never has she owed so much money, and especially never has she owed so much money to foreign countries. A "no debt" amendment is not the answer, any more than "no borrowing" law for citizens would be the answer. (Arkansas tried outlawing banks prior to the Civil War - it didn't work. The merchants became the bankers - in fact, it worsened the problem, because each store issued its own "script" which could only be used at that particular store, unlike dollars which are good for "all debts, public and private" - that's how McIlroy got started.) However, spending all the money in the bank, cashing in the investment funds, maxing the credit cards, and then just getting more credit cards is what this administration has done - and only totally disconnected flakes or people who are trying to destroy the economy and the country would do something like that. My bet is this group is the latter.

I've heard the theory that they are cutting taxes and wasting so much money in an effort to cripple welfare. I tend to think they are just greedy and corrupt

Barbara Fitzpatrick · Post by **Barbara Fitzpatrick** » Mon Oct 09, 2006 9:17 am

The Norquist school of thought wants to destroy the government (shrink it til it's small enough to drown in a bathtub - very libertarian for a Republican). Combine that with the group who want to make fortunes and ship them overseas first (modern version of carpetbaggers), the group that really is just greedy and corrupt (but too stupid to know that once they destroy the economy their fortunes will be worthless) and the nutcases who apparently believe god put them here to use up everything and as soon as it's gone we get RAPTURE - and we're in trouble.