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InvisibleRandalFlagg
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Registered: 06/15/02
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An article from April 4, 1999 on the U.S. federal debt
    #3661413 - 01/22/05 01:39 AM (12 years, 6 months ago)

http://news.bbc.co.uk/1/hi/business/the_economy/411973.stm


Business: The Economy

US to buy back national debt


For the first time in 25 years, the US Government plans to reduce the size of the national debt.  The news represents a transformation of the US budget position, after struggling with huge deficits for most of the last decade.

US Treasury Secretary Summers wants to cut the debt and it comes as a riposte to Republican plans to use the budget surplus to fund more tax cuts.

The last time the US tried to reduce its debt was in 1972.

It now says it will begin repurchasing Treasury bonds before they fall due, as early as next February, cutting back on the $3.6 trillion (?2.4 trillion) it owes to the public.
 
Larry Summers, US Treasury Secretary talking on the BBC's Newsnight
Treasury Secretary Lawrence Summers said that "reducing the supply of Treasury debt held by the public brings enormous benefits for our economy".

He argued that savings could be used instead for more productive investment in factories, while reducing the total amount of debt would help cut interest rates.

But the repurchase scheme will not begin until after a consultation to consider "a number of complex issues that will need to be worked out".


Surplus squabble


The proposal comes as Democrats and Republicans squabble over what to do with the growing US budget surplus.

US government debt peaked during World War II

Last year, the government had a surplus of $69.2 billion, a total which is likely to be exceeded this year. It is the first time since 1957 that the US has had two consecutive years of budget surplus.

Official projections suggest trillions of dollars in budget surpluses over the next 15 years, boosted by a strong economy and strict controls on spending. :rotfl:  these idiots are ivy-league educated and they seem to think that the business cycle will not occur anymore and prosperity will ensue forever....????  Well...Bush's spending habits haven't helped at all either.

But there is no agreement on what to do with the money.

The Republicans are proposing a $792bn tax cut
The Rebluplican Party is the party of fiscal conservatism....my ass

, while President Clinton and the Democrats want to add funds to the social security retirement programme and Medicare, which provides health care for older people.

But in a change of tack last month, the Clinton administration indicated that it was also prepared to consider using some of the surplus to reduce the overall government debt.

Such a course of action has long been advocated by Alan Greenspan, the influential chairman of the US central bank, the Federal Reserve.

He argues that reducing government debt should take priority over tax cuts, as the move will free funds for private investment and lower government spending.


Less debt to sell


The government surplus means that it needs to sell fewer bonds to the public.

It is going to reduce the number of times it sells 30-year Treasury bonds, from three times a year to twice a year.

The government hopes that by making repurchases, rather than just selling less debt in the future, it can better manage its portfolio to save money.

By retiring longer term debt, while issuing more cheaper short-term bonds, it will keep the cost of the debt repayments lower.



Bwahaha!  Did anybody see that chart that showed the projected U.S. federal debt reduction from 1999 to 2009?  That graph sure as hell isn't accurate at all.  What a fucking joke...  These politicians will run this country into the ground.  They keep giving the public stuff in order to get elected and then they borrow money to pay for it all.  We are mortgaging our future and putting an insanely large debt load onto the future generations.


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InvisibleRavus
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Re: An article from April 4, 1999 on the U.S. federal debt [Re: RandalFlagg]
    #3661424 - 01/22/05 01:41 AM (12 years, 6 months ago)

The federal government is a huge waste of money

And money they don't even have at that

I wonder how this all will turn out in the end


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So long as you are praised think only that you are not yet on your own path but on that of another.


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Invisibleblacksabbathrulz
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Re: An article from April 4, 1999 on the U.S. federal debt [Re: Ravus]
    #3661481 - 01/22/05 01:56 AM (12 years, 6 months ago)

Quote:

Ravus said:
The federal government is a huge waste of money

And money they don't even have at that

I wonder how this all will turn out in the end




Not good. That's how. I'd rather flush my money down the toilet than give it to the federal government


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InvisibleRandalFlagg
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Re: An article from April 4, 1999 on the U.S. federal debt [Re: Ravus]
    #3661579 - 01/22/05 02:19 AM (12 years, 6 months ago)


The federal government is a huge waste of money

And money they don't even have at that

I wonder how this all will turn out in the end

Badly.

What is going on could be compared to the following analogy:


A family of four(a father, mother, and two children) live in a city. The two parents both work and earn a combined income of $3,000 a month. The parents do not feel like living off of $3,000 a month. They want to have a $4,000 a month lifestyle. So, they spend all of their $3,000 a month income and put another $1,000 a month on the credit card. They do this EVERY month. After years of doing this, the debt that is owed is huge. The amount of interest on the huge debt makes it practically impossible to pay down the debt even if they tried. Then all of a sudden the parents die and the debt that they have accumulated is shifted to their children. The children are horribly burdened by this debt and the interest that is owed on it.


That is what is happening with the federal government. It keeps spending more money(on the military, education, social programs, etc..) than it takes in. In order to pay for all of its expenditures it borrows money. It makes no effort to reign in spending. The federal debt is getting bigger and the interest on that debt is getting bigger. The future generations of this country will have to deal with this massive debt. Will they be able to survive if they are overly burdened with a huge and unmanageable debt? How moral is it to leave all of this debt for our children? How utterly despicable it is to spend a bunch of money and leave our children to deal with the immense bill left behind.

These politicians get elected by promising us stuff. They usually fail to mention that in order for them to give us this stuff it will cost money. They don't tax us enough to pay for all of this stuff, so they have to borrow money. They are afraid to raise taxes because people don't like paying taxes. Most people have no clue that the fiscal health of the government is so poor and that all of this stuff that is being given to us is being paid for with borrowed money. The average rank and file American seems unconcerned that the U.S. will go belly-up if things continue as they are. The federal government needs to at least start breaking even. It either needs to cut spending or raise taxes. Neither of those options are very popular but they are the only two options. Whatever is going to be done it needs to be done now.

If Americans want the poor and the old to be taken care of, it will cost money. If Americans want public schools, it will cost money. If Americans want a powerful military, it will cost money. You have to pay for what you have one way or another. That is a simple fact of life. It is appalling that these highly educated men who represent us do not understand this simple truth.


Edited by RandalFlagg (01/22/05 02:26 AM)


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OfflineBaby_Hitler
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Re: An article from April 4, 1999 on the U.S. federal debt [Re: RandalFlagg]
    #3662084 - 01/22/05 09:00 AM (12 years, 6 months ago)

Quote:

The children are horribly burdened by this debt and the interest that is owed on it.




I don't think this is how it works. The worst that can happen is that if the parents die in debt, the children get nothing.


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InvisibleRandalFlagg
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Re: An article from April 4, 1999 on the U.S. federal debt [Re: Baby_Hitler]
    #3662250 - 01/22/05 11:53 AM (12 years, 6 months ago)


I don't think this is how it works. The worst that can happen is that if the parents die in debt, the children get nothing.

You're right. My analogy was not based 100% within reality. A child in America(at least in my state) does not inheret debt. My example was not a 100% realistically accurate possiblity. However, I think it is an accurate representation of what is going on with the federal debt.


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