|More about this graph|
Who Did It, and Why?
We Are in Danger! … but Not from the Debt
The danger is from the Great Recession that has cost America 10 million jobs. The debt frenzy is making that worse. Take a look (in the graph) at how the debt skyrocketed during World War II. That’s how we ended 12 years of Great Depression.(1) No the devastation of Europe did not helped the US. This is a crazy story made up by Republicans. But (1) We pulled out as we started building the Pentagon, which was before Pearl Harbor, and before the devastation of Europe. (2) It was GM building military trucks and tanks, etc. that did it.Take a look. This time it’s tougher because Reagan and the Bushes ran the debt much higher in good times than it was at the start of WW II. But as Reagan understood, cutting government spending in a recession only makes it worse. Yes, we must pay down the debt, as Clinton was doing, but not while 17 million are out of work. … more
Debt or Savings
|In the last
|Borrowed by the General Fund||– $ #*||$ #|
|Saved in Social Security Trust||+ $ error||$ error|
|Saved by other Gov. Trust Funds||+ $ #||$ error|
|Debt [#Owed to the Public]||$ error†||$ error|
*Gross National Debt ♦ †Debt Held by the Public ♦ Debt Clock Source Data
What is the General Fund?(2) The General Fund is the main federal government fund, and its big expense is the military. Then there are the trust funds (Highway, Social Security, etc.). On average the trust funds have extra money that they are loaning to the General Fund, so a lof of the debt is owed to the trust funds. ♦ What is “Owed to the Public”?(3) "Owed to the Public" AKA Debt Held by the Public is the amount of Treasury Bills and Bonds that have been bought by American citizens and companies and by foreigners. The rest of the debt is owed by the General Fund to other government Trust Funds that have run a surplus. Note that since America mainly borrows from Americans, the debt is mostly owed to Americans. ♦ What Is “Total Debt or Savings”?(4) Total Debt is the national debt (total accumulated debt) — the sum of all the annual deficits less any surpluses. The "deficit" is one-year's shortfall. This shortfall must be made up by borrowing. But the Social Security Trust Fund and other government trust funds are not in debt. They have trillions in savings and the General Fund (which has the total debt, borrows from them). ♦ What determines the speed of the clocks?(5) Speed of the Clocks: Some days the debt actually goes down, and others it goes up extra fast. No one knows what it will do on any given day, so we just show it increasing at its average rate, because that's the best guess.
Some Debt Facts:
- Social Security is $2.7 trillion in the black (Nov 2012). In 2010 it ran a $90 billion surplus.
- Clinton reduced the debt as a percent of GDP.
- G. W. Bush restarted the deficits with tax cuts tilted toward the rich, and then continued with Medicare D, two wars and more.
- Red ink hit a peak rate of $1.1 trillion in 100 days just before Obama was elected.
- Obama’s stimulus was only $0.8 trillion.
- Only $1.2 trillion is owed to China (11/2012).(6) From CNN July, 2011.
How Do the General Fund and the Trust Funds Get their Money?
The General Fund: All personal and corporate income tax.
Social Security Trust Fund: Payroll taxes on wages up to $113,700 (as of 1/2013).
Medicare: Payroll taxes on all wages.
Why we should price carbon. Solving the climate problem requires cooperation, and caps just cause bickering. A common global price is the only way change self interests and gain cooperation. Find out why the top 3 US climate economists agree.