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If your debt servicing costs (interest payments) amounted to 1.6% of your total monthly take home pay, would you be panicked over it? Not likely, right?
Then why is it that so many Villagers, Partiers and GOP
That's it. The U.S. is paying less, percentage wise, to service it's debt today...than it did under Ronald Reagan, Bush the Elder, and Bill Clinton. During those administrations it cost the country over 3% of GDP to service its debt.
What neither side seems to recognize — or at least acknowledge — is that what matters about the debt isn’t the dollar amount per se, but how much it costs us to service it. And by that measure, the debt isn’t nearly as big a problem as it’s being made out to be.
Yes, the federal debt has grown by nearly $3 trillion dollars in the past three years. And yes, the dollar amount of that debt is quite large (in excess of $14 trillion and headed toward $15 trillion should the ceiling be raised). But large numbers are not the problem. The U.S. has a large economy (slightly larger than that debt number). And, crucially, we have very low interest rates.
Because of those low rates, the amount the U.S. government pays to service its debt is, relative to the size of the economy, less than it was paying throughout the boom years of the 1980s and 1990s and for most of the last decade. The Congressional Budget Office estimates that net interest on the debt (which is what the government pays to service it) would be $225 billion for fiscal year 2011. The latest figures put that a bit higher, so let’s call it $250 billion. That’s about 1.6% of American output, which is lower than at any point since the 1970s – except for 2003 through 2005, when it was closer to 1.4%.
Under Ronald Reagan, the first George Bush, and Bill Clinton, payments on federal debt often got above 3% of GDP. Under Bush the second, payments were about where they are now. Yet suddenly, we are in a near collective hysteria.
I point this out not because we shouldn't take our national debt seriously.....but to illustrate the fact that the over-the-top, hysterical, theatrical performances of elected officials over the debt, primarily from the GOP, as cheered on by the Village Idiots......is nothing short of ridiculous.
What we have been witnessing this summer is the biggest farce since the totally bogus campaign from the Bushies to attack Iraq back in 2002-03. Just as there was no legitimate reason to attack Iraq, so too there is no legitimate reason now to insist on multiple trillions in spending cuts before the debt ceiling is lifted.
The reason for the Iraq fraud was to please the PNAC neo-conservatives, the oil industry and the leaders of our military-industrial complex. The reason for the current farce over debt is for the purpose of pleasing very rich Americans and multi-nationals who don't want their taxes raised in order to pay for the damage many of their fellow class warriors did to the national economy when they gambled the country into oblivion.
Always keep in mind as we move into the final weekend before D-Day....what we've been witnessing is a contrived farce....play acting....insincerity....kabuki theater.
As the Time article is entitled: The U.S. Is Not Drowning In Debt. And we're not. We are not bankrupt, Social Security and Medicare are not bankrupt. The cost to service the debt we have is lower than during three of the last 4 presidents. Hardly a reason to put on a Tea Party-hysteria face.
Finally....because interest rates are at historic lows....now is the very time when the federal government should be borrowing a couple more trillion dollars for direct job creation. The only way out of this marathon recession is for the masses of Americans to have more money to spend. Because demand has shrunk, there's nothing the private sector can, or is willing, to do. That only leaves direct job creation by the federal government. And there's plenty of work that needs done throughout this nation.
Instead of staging grand political theatrical productions to confuse the cabbage-heads at home watching their flat screens....Washington players need to start borrowing more money to actually solve the problem at hand. America needs jobs. That's the sum total of our "problem." Government can create jobs....but conservatives will have none of it. Conservatives would rather cut spending so deeply that even more jobs are lost....and all over some make-believe hysteria.
Helluva way to run a country.