The so called "experts".
 

Yes, but you are rational (on this issue, anyway). I would not characterize you as an "anti-government" type, or as a pseudo-libertarian fantasist, and I was not referring to you in my post to Captain.

The so called "experts".
 

When was the last time we had deflation? 1930s? At the end of the 19th century we had deflation because we were on the silver standard and the value of money was not controlled by the Fed but tied to a limited resource.

Ever since Jimmy Carters stagflation of the late 1970s the Fed keeps the inflation rate at the rate of growth. That seems to work and there is no reason to think that will change. I can't even think of a modern industrialize economy that has had deflation over the past fifty years. Japan and Germany have come close to zero inflation but never deflation.

The economy has grown consistently with occasional problems since the founding of this nation. So as long as the nation grows and and even if the Fed keeps a strict monetary policy (which we have had since the 1980s) todays huge deficits will be tomorrows chump change.

We don't need to pay the money back. We just need to balance the budget and everything will be fine. In fact, paying off the national debt could be a disaster. The entire world economy is dependent on the interest our government provides on our debt. The number our government uses to determine our interest payments sets all sorts of different numbers for the economy, and without the US government setting that number no one knows what will happen.

The so called "experts".
 

Govt doesn't help me make a living doing anything but being an unproductive paper pusher. Are you really suggesting we're better off with mountains of absurd regulations and laws and govt interference - nearly all of it totally inefficient and wasteful - than with a much smaller, less ambitious, less invasive govt? Are you suggesting the armies of tax specialists and lawyers and buraeucrats are a good thing?

You're just advocating maintenance of a flawed, wasteful system to protect your paycheck.

The so called "experts".
 

All that hand-wringing about that issue a few years back is not irrelevant. But I don't remember any good justification for having no debt. There are plenty of private debts people are willing to assume. And we can still have bonds even with virtually no debt--Anyone without a mortgage can do that--it's a savings account. OR a mattress.

(BTW, there's no reason to connect inflation rate and growth rate. Monetary theory says that the money supply should grow at the same rate as GDP, which will mean an inflation-less environment.)

The so called "experts".
 

Significant components of our economy are structurally deflationary right now. Technology and retail are two examples. There are demographic shifts that could turn large portions of the real estate market deflationary - deflation in the past has been linked with shrinking populations, and many regions have been experiencing loss of population.

I am not saying there will be deflation, merely saying that our planning should not rule it out. Some cycles are very long, and the inflationary/deflationary economy is one of them. But there has never been an inflationary economy that did not ultimately turn deflationary. In 2001, I remember hearing about the end of boom/bust cycles. We had it under control; the stock market and the economy could expand forever. What happened?

The so called "experts".
 

I never had a "duck and cover" but we did go sit along the wall in the hallway, as a "tornado-civil defense" drill. To the extent it was for the nuclear bomb, I suppose it's purpose would be to make cleaning up the corpes easier.

The so called "experts".
 

So did Reagan find a way to prevent tornados, too? Now that would be something worth paying (or borrowing) for.

The so called "experts".
 

Spanky, you need to check your facts.

The deficit in 1985 was $221 billion (including money borrowed from Social Security). That was 5.3% of GDP then.

The present value of that amount, using the CPI to adjust, is $388 billion. That would be 3.7% of today's GDP.

The current deficit is certainly higher -- 2004 was $521 billion, or 4.9% of GDP -- but to suggest that $388 billion in today's money is "puny" or "chump change" is simply absurd.

Or do you mean to suggest that, 20 years from now, the annual deficit will be a trillion dollars or so, and 8% of GDP, and that today's deficits will seem small by comparison? If so, then I guess your work for the party has been really successful.



Huh?

Yes, and some manna from heaven will help too. Is there some deficit reduction plan in existence that I'm unaware of? Even Bush's campaign platform was only to reduce the deficit by half in his second term (and even that required some extremely silly accounting tricks).


If we were to pay off the national debt in a year or five years, this would be true. But there is no danger of that happening.

Personally, I am far more scared of the way our mounting debt increases our dependence on China. Not that we should have anything against a Communist dictatorship, but....

The so called "experts".
 

How is that going to happen?

The so called "experts".
 

One of the few good things about the North's victory in the War of Northern Agression was that we never had to pay back anything we borrowed. Yes, I believe I still have some of the fine Yankee artwork I "obtained" during our forays north of the Mason-Dixon line.

Perhaps we can find a similar way to avoid paying these debts.

The so called "experts".
 

We'll take care of you with some of that there tort reform.

Yankee.

The so called "experts".
 

None have hit my house since he was President.

The so called "experts".
 

I was responding to the future generations B.S. Our grandchildren will have no problem paying off todays debt. It is only the recent debt that hurts.

221 Billion is not that much money compared to the two trillion dollars in revenue we receive every year.

It is just the interest that in the last twenty years is pretty punishing. The interest on the debt accumulated more than twenty years ago (a generation) is insignificant. The difference between you and the federal government is that the federal government salary is guranteed to grow every year by at least three percent and you never have to retire. That income will come in forever and will increase forever.

It didn't say the debt is not a problem. It just doesn't have to be "paid back" as long as the budget is balanced. Social Security is a whole different issue. The past debt is a fixed cost. Social Security is an unfunded mandate (pretty much an entitlement) that keeps growing every year. Medicare and Social Security are like the national Salary in that these are costs that continue to grow every year forever. So if these costs exceed your annual revenue you are screwed because the costs continue indefinitely. That is the problem we are facing.



You are missing my point. Deficits are a problem. I never said they were not. Crowding out by deficits reallly hamper growth. So deficits should only occur in recession years. However, this stuff about future generations have to pay it back is B.S. I was just pointing out that if we balance the budget then future generations won't have to pay back the debt. You don't ever need a surplus.

The so called "experts".
 

I Guess I thought you were confusing your position with Tys. Ty seems to think that since the government is necessary to allow free markets, then there is really no such thing as a free market. Which is similar to saying that since governments are necessary to create political freedom, there really is not such thing as political freedom.

If I set up a law that says you can not scream fire in a crowded theater, that law does not eradicate the right of free speech, just as requiring disclosures when you list a stock on the NYSE makes does not make the New York stock Exchange not a free market.

The so called "experts".
 

Wow, you really are a Bush Republican, aren't you?

You cannot be unfamiliar with the notion that a dollar in 1985 is worth more than a dollar today. And yet, you compare the 1985 deficit in nominal dollars to today's government revenues to make a "point".

So, where do I start? First, as I pointed out (and you gleefully ignored), 221 billion in 1985 dollars is about $388 billion today.

Second, 2004 revenues weren't two trillion. You're only off by six percent -- it was 1.88 trillion -- but 120 billion is a pretty big error, no? Between that error and ignoring inflation, you reduce the problem by two-thirds. Faith-based budgeting, indeed.

Third, even using your (false) numbers, you are talking about 11% of revenues. Using the real numbers, it's 21% of revenues. In my book, that hardly qualifies as "chump change".

As for your other points -- yes, if somehow we miraculously balance the budget for the next 20 years, all will be well. Now, how exactly is that going to happen -- particularly when people like you are spouting the "it just doesn't matter" garbage?

And, by the way, some of us see those "future generations", that you consider as a distant hypothesis, every day. They are our children, and for many of us on this board they will be adults in a decade or so, or even less. How much will interest on the national debt be then?