Who to blame then? Possibly the founders. For former colonies, it’s much easier — it’s their overlords. See: Haiti, Zimbabwe, Peru, many others.

If you look at that graph, you can pretty clearly see where that sentiment comes from. Nice steep stair step up into fiscal responsibility.

http://img.skitch.com/20100202-jwb4wwjk162th5mmn6uhbc25ei.gif

Otherwise I think the deficits for most of the 2000s would be much larger.

The fact is if the debts were called in, the United States just wouldn’t pay. And actions like sanctions on imports or outright ban on trade with the US would be called acts of aggression and could be used as an excuse for war from a nation that has already proven more than ready to engage in just about any conflict we deem fit.

Fixed payoff of debt by reduction of military, social security spending, a revamp and cut of medicare and medicaid into a nation health program, and raising taxes to try and eliminate a large portion of our debt sound great but just will not fly now. As much as I’d like them to.

Please stop fretting about the US’s debt being “called in”. The deficit spending is financed with bonds. To the extent that China “owns” US debt, what it actually owns is US bonds, which are paid off on a fixed schedule over decades. They cannot suddenly demand payment, that is not how bonds work.

The downside of bonds is it costs more and more every year to pay off those bonds, meaning a larger and larger portion of our budget is dedicated to paying the debt, meaning a smaller and smaller portion is available for actual work.

Deficit spending is important and undesirable, but it does not come with a threat of instant financial annihilation.

Thank you.

The only good thing about the 1990s was that the print-and-spend Ponzi scam was still in its early days.

Yes! Just like Iceland! Oh, wait…

The fact is if the debts were called in, the United States just wouldn’t pay.
Icesave, an Iceland bank, went bust a while ago; some 4 billion euro’s were owed to individuals in the UK and The Netherlands. After the initial “of course we’ll pay everything back!!!”-promises, Icelandic people came to their senses and figured they might as well NOT spend 20 years paying back the debt created by a handful of bankers. So we’ve got at least the UK and The Netherlands who are now in exactly this situation :)

Side note – in an extremely, weird, odd case of good karma, I decided on a whim one friday afternoon to pull all my savings out of Icesave. I hadn’t read newspapers or watched TV for weeks but somehow wanted to move my money to a ‘greener’ bank. I did this on friday afternoon, and on monday morning, the bank was bust.

The fact that they printed an obviously biased, breathless “news article” regarding the deficit from the Peter Peterson Foundation (without mentioning the conflict of interest) displays its lack of integrity. The fact that it continues to ignore the bursting of an $8 trillion housing bubble as the primary driving factor behind the recession displays its complete and total ignorance of basic economic facts.

Economist Dean Baker, in his blog Beat the Press, routinely slams the Washington Post for its complete lack of journalistic integrity and economic reporting. Check it out before taking anything the Washington Post says about economics seriously.

It looks like they are following George W. Bush’s spin and not including the war expenses in the deficit

Actually, it’s worse than that, and not entirely W’s fault (as much as I might like to blame him). The government has been using increasingly arbitrary techniques to overreport GDP and underreport inflation and unemployment. More realistic estimates of GDP growth are more like 1-2%, of inflation more like 8-12%, and unemployment well into the low double-digits, if not higher.

So, a graph that represents the deficit as a percentage of GDP is going to drastically underreport the deficit in recent years (the last two to three decades, with the disparity being worse more recently).

As for our “debt being called”, inasmuch as some debt is represented as bonds, sure. We’re not in risk of having to pay off a big loan.

But the US dollar is the reserve currency around the world, and as countries see the value of the dollar falling and decide it’s no longer an appropriate investment, they sell those dollars back to us. This, at the same time that the Federal Reserve is basically adding a large volume of new dollars to the supply.

More dollars in circulation means each dollar is worth less, means higher inflation. And of course, higher inflation means higher prices, with less spending power for a given dollar.

In fact, one way one can see that the reported inflation numbers don’t add up is to compare them to the actual new dollars added to the economy through lending by the Federal Reserve (the Federal Reserve, unlike any other bank, can lend money it doesn’t actually have…thereby creating new money out of nothing).

We’re already in big trouble inflation-wise, and if the government keeps up this huge deficit spending, so-called “stimulus” approach, we’re screwed.

See authors such as Jim Rogers, Peter Schiff, Chris Martenson, and Thomas Woods for details.

Actually, it’s worse than that. He didn’t just triple the deficit; he tripled the National Debt. Jaw-droppingly impossible as that may seem.

One other friendly amendment I’d propose to your post above, if you’re willing: change ‘God rest his soul’ to ‘may he shriek in the bowels of Eater of Souls for ten thousand years’. Would that be OK? :-)

As far as I recall (from school), the last true balanced budget was when John F. Kennedy was President.

It is, at times, necessary to run a deficit. For America, for now, it is one of those times.

The problem is that even when it is not necessary to run a deficit, America still does, because the American people want the services of a European-style social democracy and the taxes of . . . American-style capitalist plutocracy. Which does not work.

But I’m sure that this will be resolved should the Republican Party return to power, because as everyone knows, their supporters would punish them if they put tax cuts before a balanced budget:

http://tpmdc.talkingpointsmemo.com/2010/02/poll-republians-prefer-having-a-deficit-with-tax-cuts-over-a-balanced-budget-and-higher-taxes.php

Oh, wait.

Since it seems to me that at the times when them deficits were “going on up”, that the social programs (and income supports like welfare and moderate bankruptcy law) were “coming on down”.

If the poor & middle class did not “get the juice”,then who in fact did?
Seems we’ll never know: some facts on he budget:

http://www.counterpunch.org/spinney02032010.html

Peace out!

http://www.craigsteiner.us/articles/16

With that proper accounting in place, there hasn’t been a surplus since the 60s. Those chickens are coming home to roost sooner rather than later too (like, this year):

http://finance.yahoo.com/focus-retirement/article/108747/next-in-line-for-a-bailout-social-security?mod=fidelity-readytoretire

I am paraphrasing here but I think there is famous quip by John Keynes (Father of Keynesians economics) where he says who cares about debt because “In the long run we are all dead,” when the bill comes due.

Well, you have the quote correct, but the context entirely wrong.

many don’t even consider it viable economic theory

Many also think that climate change and evolution do not occur. Many are stupid.

The entire agenda to “kill government” was the foundation for no-bid contracts, wanton disregard for oversight, appointment of unqualified hacks to regulatory positions, the Fed cheerleading of excessive debt/mortgage practices with the coup de grace of a 3 page Paulson $700B ransom note.

Geitner sheparding $150B through AIG straight into Goldman Sacks, the $9B of cash currency that left NY Federal Reserve bank on pallets and “disappeared” in Iraq, and the rest.

Crimes have been committed. The Treasury has been robbed.

Where is the investigation?

chirp chirp chirp