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| Economy |
| Our deficits may finally be coming home to roost (opens to video) |
| 2018-12-03 |
| [The Hill] With a new Congress set to take office, the most recent projections have the U.S. budget deficit reaching nearly $1 trillion in 2019, or more than double the level of 2015. The deficit is a perennial topic of discussion for politicians, reporters, pundits and economists, yet many people have difficulty understanding why it’s a problem. Spending more than we take in sounds irresponsible, but how does the deficit actually impact the life of average Americans? The downside is especially hard to see when deficit spending generates immediate benefits, while the costs occur well into the future. The recent debt default in Greece, along with the lingering deficit crisis in Italy, has highlighted the danger of excessive public borrowing. Those countries lack their own currency, however, which makes their situation very different from that of the United States. The fact that our government is able to print money means that outright default is extremely unlikely; rather, the cost of excessive borrowing shows up in more subtle ways. These costs can, for example, show up in the form of some combination of inflation, tax increases and spending cuts. Given the political difficulty of cutting popular entitlement programs, future tax increases are more likely than spending cuts. This option imposes a burden on the private sector of the economy. |
| Posted by:Besoeker |
| #7 It is also a generational tax. Boomers spending Millennial's earnings. |
| Posted by: ruprecht 2018-12-03 23:27 |
| #6 Deficit spending is simply a hidden tax on savings. |
| Posted by: Glenmore 2018-12-03 17:46 |
| #5 The real risk is the financial collapse after banks realize that they will not be able to get back the money they have lent idiotic governments like the US and EU for generations. |
| Posted by: Vernal Hatrack2366 2018-12-03 16:43 |
| #4 The national debt isn't really a problem in the way that most people assume that it is. Most people seem to assume that the government will break itself trying to pay it back. It won't. The government will, like every other government in history, tell the people who foolishly lent it money, to get bent, and laugh all the way back to the Senatorial Palace. There is always risk in lending idiots money. |
| Posted by: Vernal Hatrack2366 2018-12-03 16:43 |
| #3 National debt is payable with the full weight of a photocopier. Of course, right sizing the state and kicking the rent-seekers off the taxpayers backs is good for the economy, but those rent-seekers have a lot of wealth and own the media to lie to you about negative effects of cutting their loot. |
| Posted by: Bright Pebbles 2018-12-03 15:20 |
| #2 I think the national debt is now insurmountable. The USA is the best in a barrel of rotten apples. It seems like every other country's national debt is even worse. |
| Posted by: Anguper Hupomosing9418 2018-12-03 13:43 |
| #1 Deficit was unsustainable before Obama doubled it, but now GOP is in charge folks are finally noticing. Good, put heat on Congress, they control the budget. |
| Posted by: rjschwarz 2018-12-03 11:24 |