Talk:National debt of the United States/Archive 2

Admission of bias
As one of the main contributors to this page, I do want to admit that I realize my opinion is based on the works of Austrian Economists, and I therefore tend to look through this topic through that lense. I find the Austrain School's explanation of currency and the history of trade among nations to have allowed me to grasp in concrete terms what has otherwise become a murkey and unintellegable topic. I feel that the reader would be enlightened to at least understand the basics of how the economy used to function before we went to an entirely fiat money paper system. Prestonp 21:40, 8 October 2006 (UTC)
 * Wiki has rules: fringe groups get very brief mention.. No one is allowed to make POV arguments. Rjensen 21:45, 8 October 2006 (UTC)
 * The idea's referenced are fairly straight forward- as the money supply expands, inflation arises. Furthermore, Rothbard meticulously cites his works for historical accuracy. He was a Professor of economics at UNLV. Any ideas presented deserve to be dealty with on their own merits as opposed to your ad hominen attacks on the speaker. Furthermore, the field of economics is rather subjective and has different POV's reflected in different schools of thought- of which Austrian is one. To say no POV arguments is ludicrous given that nothing in economics is truely free of the school of thought from which the observer subscribes. On my "To Do" list is to read Milton Friedman and become familiar with the Chicago School of Economics but these are rather dry texts that take a while to consume and understand, and I welcome anyone to present the POVs of the other school of thoughts. Prestonp 00:00, 9 October 2006 (UTC)


 * NO wiki is not a debating forum. We are only allowed to present the consensus of the economics profession---not the 1001 fringe ideas that abound. This is an encyclopedia. Rjensen 23:58, 8 October 2006 (UTC)
 * As I said, economics is a subjective science. Ideas are best analyzed on their own merits rather than labeling things as best left unexamined because you feel someone with a PhD was too fringe.

Debatus.com link
Is anyone interested in making an external link out to a related wiki debates on this topic on www.debatus.com, a site founded by myself and a team of Georgetown students. The first is "Is there a "fiscal crisis" on the Horizon for the United States?" and the other is "Has the Bush administration demonstrated fiscal responsibility?" I think that doing so would fit the criteria of "improving" this article because Wikipedia does not seek to cover the entire scope of the arguments made on controversial issues, and traditional mediums that are provided as external links do not present all of the arguments of the debate in a kind of concise bird’s-eye way. In addition, Debatus, being a wiki, follows the same philosophy as Wikipedia, producing refined debate content, which should be considered in favor of doing this.Loudsirens 16:55, 26 September 2006 (UTC)

New Shortened Discussion Section
This page used to be 54 Kb long. Much of which was discussing section of the article that are no longer present. I have removed the bulk of this text.Prestonp 04:18, 7 August 2006 (UTC)

This Wikipedia help page states: "When a talk page has become too large or a particular subject is no longer being discussed, don't delete the content &mdash; archive it." Hence, I added a link to an archive of the prior talk page above. Lineman 05:31, 23 August 2006 (UTC)

Net debt position
I'm surprised to see that there's no section about the US's net debt position. Back in high school, someone in my U.S. history class yelled that other countries owed us because of wars. The BBC has an article about the UK paying off the last of its loans from the US for WWII. The following is the link and the purpose is to clarify and stimulate thinking about this matter so that hopefully someone writes about it in this article. -Amit

The cross-reference to the Wikipedia article on "external debt" is misleading. Instead, the article should be re-edited to distinguish between the U.S. Government's nominal debt and the U.S. Government's "publicly held" debt.

For reference, see http://www.cbo.gov/Spreadsheet/7731_Tables.xls.

The U.S. nominal debt of about $8.6 trillion consists of two parts, debt that conforms to the commonsense definition of "debt", which is termed publicly held debt, and 2) debt that really is in accounting terms a "reserve," primarily reflecting Social Security tax surpluses. In 2006, of the $8.5 trillion in total nominal debt, about $4.8 trillion was "publicly held." Consequently, U.S. publicly held debt was only 37% of U.S. GDP and, the the Congressional Budget Office's projections are correct, that percentage will diminish through 2017 to about 20%. It is the "publicly held" dept percentage of GDP which should be used in comparing the U.S. to other countries, because governments like the U.K or France and most others would not report as "debt" their future governmental expenditures on healthcare and pensions.

U.S. "publicly held" debt is in part held by U.S. people and institutions and in part is held by foriegn central banks and foreign private institutions. Of that $4.8 trillion, some fraction is indeed "external" debt, being held by persons or institutions outside the U.S.Fultonwilcox 16:56, 23 April 2007 (UTC)


 * Well the article begins by discussing the composition of the debt and making the internal versus external distinction. As far as using only the external as a comparison benchmark, I'm not sure if that's really presenting a true picture. Prestonp 15:30, 24 April 2007 (UTC)


 * It makes a misleading "external" distinction and, as it happens, the CIA is wrong in its rankings because of inconsistency with how other countries report debt (and other countries way makes more common sense). The U.S. government's total nominal debt is about $8.4 trillion, but it has issued to the public only about $4.8 trillion. Therefore, U.S. "public debt" is 37% of GDP, not 67%. If one compares the U.S. with the U.K, the apples to apples comparison is between the U.K.'s 42.2% of GDP and the U.S. figure of 37%. Note that "external debt" is yet another category and is mostly non-governmental in nature. For example, the CIA factbook entry for U.S. external debt shows $10.4 trillion of "external" debt, a figure that includes (mostly) private debt along with some fraction of governmental debt. If a foreign bank buys a U.S. corporations bonds, that would show up as U.S. external debt. Fultonwilcox 00:46, 27 April 2007 (UTC)


 * But that figure would be far larger if the country's accounting were subject to Generally Accepted Accounting Principles (GAAP). Under those rules, unfunded debt obligations would have to be included. As it is, David Walker of the General Accounting Office is arguing our position is worse than we've been lead to believe. In these discussions, people are always tempted to bring in their own numbers, but we are more or less stuck with what the government itself is publishing. If you want to revise the article to add a sentence arguing that it's not as bad as the CIA says, go ahead. But that can't be the thrust of the article. Prestonp 17:05, 27 April 2007 (UTC)

Extremely biased article
I just read the "United States public debt" article for the first time. It is very biased and political in nature, much more so than most Wikipedia articles. The section on foreign holdings of US debt is a particularly egregious example. There is absolutely no discussion of the benefits of foreign holdings of dollar assets, including government debt, or of the unlikelihood that foreign investors would dump their dollar assets. Does anybody else agree that this article needs a major rewrite? --Bond Head 16:15, 7 June 2006 (UTC)

Reply: Well, since Italy's Central Bank just announced a major sell-off of their US Securities, I think we can say it's not all that unlikely. Prestonp 04:28, 7 August 2006 (UTC)


 * One way we address such proposals is to create a temp page (e.g. United States public debt/temp) and editors can re-write the article there and present it to the interested community for review.  bd2412  T 16:33, 7 June 2006 (UTC)

I'll look at whatever major re-write you propose, but that idea that foriegn ownership of US assetts is some great thing is itself a biased standpoint.Prestonp 05:32, 7 August 2006 (UTC)


 * OK, thanks for the feedback. I wasn't suggesting that the article present only the arguments in favor of non-US investment, but rather that it present both sides, in contrast to the current version, which only presents the arguments against foreign holdings.  I'll start working up some ideas.  Bond Head 05:57, 21 June 2006 (UTC)

Can the U.S. go bankrupt?
Hey, everyone, I revised the "Risks" category (adding some sub-categories) and added a new paragraph asking "Can the U.S. go bankrupt?" The paragraph has a source from a Federal Reserve Bank of St. Louis official (via the London Telegraph). The source is here:

I also added this source to the "External links" section. Keep up the good work. ProfessorPaul 17:43, 15 July 2006 (UTC)

The accrual basis national debt is $46 Trillion as of 2005 (according to the Financial Statement of the United States Government) and individual wealth (the only real kind) is estimated at $45 Trillion in 2005. So, yes, I think a country can go bankrupt, that is unless it resorts to unleashing war and transfering wealth back to the Treasury. Borrowing by Nation States only has efficacy as long as it has the power to use force.

You haven't read the book, which contains the exact information you claim to want. You cite Rome, Colonial US, the British Empire and Latin America, though you have no idea what happened to them. You don't seem to realize how much the financial world has changed in just the past 30 years. I've been puzzled by all this until I read the telling statement:  You were 7 during the Reagan administration. That explains everything. Rodger Malcolm Mitchell
 * Dear Mr. Mitchell,


 * I don't have enough time in my life to read the books of all the crackpots who believe that they have reinvented everything in a field of science despite possessing no formal training. I am well aware of what happened in Rome, Colonial US, British Empire, and Latin America because I have read books detailing their history. And I am aware that these historical precidents totally and completely refute your argument that money can created out of nothing and not lose value. I have given you ample opportunity to present your arguments, but the fact of the matter is, you seem to be a one-trick pony. You basically claim that: 1. The modern financially system can perpetually create money out of nothing 2.This money will never lose it's value. And have no fall back position if we don't buy your arguments. I do want to applaud you, however, for finally attaching your name to a post as opposed to writing of yourself in third person as you used to do.  Prestonp 22:18, 29 January 2007 (UTC)

Zimbabwe and an "Expert tag"
There is an interesting story about the Zimbabwe cash crisis of 2006 that I believe does relate to this article (here ). I may attempt to add it to this article. Also, Wikipedia has an expert tag; do you think this article would benefit from "an expert"? I teach Economics at the college level, and I think it would benefit. ProfessorPaul 02:45, 7 August 2006 (UTC)

Reply: Hey Paul. Welcome aboard, although you're really been adding for a while. I removed the expert tag since we now have you here. Prestonp 04:13, 7 August 2006 (UTC)

Mixing of different measurements of the debt
I removed the following edit made at 05:22 on 12 August 2006:

'''Between 1980 and 1993, the debt went from 30.3% of GDP to 58.8%. In 2006 it was down to 48.0% of GDP. '''

The reason I removed it is that it is comparing apples and oranges. First of all, the paragraph up to this point is looking at current dollars, not dollars as a percentage of GDP. The third paragraph after this one is looking at percentages of GDP so any discussion of this should be moved there. Secondly, the given source is looking at something called "Government Net Debt". This is defined on the International Monetary Fund web site as follows:

'''Government net debt comprises the stock (at year-end) of all government gross liabilities (both to residents and nonresidents) minus all government assets (domestic as well as foreign). Gross debt includes government assets. To avoid double counting, the data are based on a consolidated account (eliminating liabilities and assets between components of the government, such as budgetary units and social security funds). Net debt of the general government should reflect a consolidated account of central government plus state, provincial, or local governments.'''

Looking at the numbers, the net debt appears to be much less than the gross federal debt and somewhat more than the debt held by the public as shown in Historical Table 7.1 of the 2007 U.S. Budget. Hence, it likely does not include all of the money owed to Social Security and other trust funds. In any event, it is not the gross federal debt that is being discussed in this article. Lineman 05:11, 14 August 2006 (UTC)

Regarding Rodger Malcom Mitchell
Mr. Mitchell has published a book which advocates the abolishment of all government taxes and has instead given a vision of the United States freely printing and using all the money it wants. From an historical standpoint, this has been tried and failed by every major empire from Rome onward.
 * [Absolutely untrue. Clearly the writer has absolutely no idea about what "every major empire" has done, and this misstatement is typical of his entire article] - Mr. Mitchell


 * Let's see, who has engaged in the practice of printing money/debasement of metalic currency in order to support an empire. Ancient Rome, the United Kingdom (cited by Nobel Laureate Milton Friedman as one of the causes of the Great Depression), the Colonial United States (origin of the term, "Not worth a Continental") are notorious offenders. In addition, several European Kingdoms debased the metal content of their currency in order to coin more (France with the livre tournois from 1200-1600, Spain with the dinar in the 1200, etc). In each case, printing more money/debasing the currency of coinage lead to a devaluation of that currency over time. Prestonp 04:02, 19 January 2007 (UTC)

He periodically posts his viewpoints here and uses a great deal of verbage. The discussion archieve shows that I tried to have a dialogue with him but he is unshakable in his fervent belief that the his way is the right way (perhaps because it will sell more books). After a self imposed exile, I noticed Mr. Mitchell is back. I deleted his comments in the discussion section because I didn't want another 52kb diatribe of everyone trying to talk sense into Mr. Mitchell. Prestonp 06:20, 5 September 2006 (UTC)


 * In fact, Preston posts no facts. He merely parrots the ancient, common knowledge "debt is bad; surplus is good," without demonstrating why this is so.  He is so fearful of facts, that he immediately deletes any postings that contain facts disproving his beliefs.  Then he excuses his actions by claiming he is deleting "verbage" (which he probably doesn't understand), and claims he tried to have a "dialog."  Now, Preston, it's time to put up your facts.  Please show everyone, when in the past 75 years, a decrease in Total Debt has benefitted the American economy and an increase has hurt the economy.  Also, show when the U.S. government has had difficulty borrowing, as you claim.  Dates and figures, please.  No vague, common-knowledge generalities.  Do it or forever hold your peace. - Mr. Mitchell


 * You are cherry picking your time frame. The last 75 years coincides with the end of the second World War and the Bretton Woods agreement in particular. Under those agreements, the United States was in the unique position of printing the world's reserve currency. But this situation is untennable from a historic stand point. To argue otherwise is to argue (as you do) that the US Government can keep printing as much money as it wants forever and everyone else will accept it as being worth exactly the same value- a ludicrous proposition. As far as holding my peace, it's you who is adopting a ridiculous and provative POV just to sell some books. Prestonp 04:02, 19 January 2007 (UTC)


 * Actually, Mr. Mitchell should have "cherry picked" the past 30 years, because the world of money changed completely, back then. Mr. Preston has no idea what happened -- and by the way, still no facts from Mr. Preston. Will we ever see any facts? - Mitchell


 * Mr. Mitchell, I have provided nothing but cited facts. It is you who has invented theories out of thin air such as "a growing economy requires a growing amount of money" without any substantiation whatsoever. I have pointed out several times in US and World history where your ideas completely fall apart. You reply by ignoring, as you always have. Prestonp 05:58, 20 January 2007 (UTC)

Refund on Government Debt
I would like to add that the U.S. gets a refund of 98% on all interest it pays on the debt. Even foreign debt is subject to this since it must be paid in newly minted reserve notes. The federal reserve is part of the U.S. Government because it's stock acts as bonds. Very useful and very clever of our government. Peatiedog 09:03, 6 December 2006 (UTC)


 * That's just not so. Someone buys a T-Note, they get their money back plus interest. How do you figure the government get's a refund? Prestonp 05:33, 3 January 2007 (UTC)

Hey, I agree with Preston on this one. Peatiedog, what the heck are you talking about? Rodger Malcolm Mitchell


 * I think what Peatiedog was misunderstanding is that the Fedearl Reserve gives a refund of all interest collected on the bonds it holds. They only keep money equal to their operating expenses. But bonds held outside of the Fedearl Reserve collect interest as normal. Prestonp 02:12, 29 June 2007 (UTC)

Estimates of US debt by Bush
Hi all, I feel that the Bush estimates of future debt are a particularly bad example of why it is difficult to predict swings in future debt. While trying not to sound partisan, I don't think that its stated reasons really explain why the estimate of the swing from surplus to debt was so far off.

Look at the reasons: "Technical" reasons are responsible for more than half. That is akin to saying "Oops, we lost a trillion dollars, our bad." That is not plausibly due to the difficulty of predicting the future, rather, it is just an admission that their accounting was bad (trillion dollars bad, 10% of GNP bad).

The effect of the tax cuts is responsible for an additional 29%. How can Bush say these tax cuts were not predicted? Did the Republican congress force him to sign tax cuts that he never dreamed would pass? Did they pop out of the sky?

The only parts that he could reliably say were not predicted were the recession, which is now over, and the effects of the wars and terrorism, which were only responsible for a combined 22% of the swing.

Several commentators said beforehand that Bush's economic policies would greatly increase the debt were they enacted. The impact of his economic policies was "both predictable and predicted" like that of many other of his policies.

David s graff 22:24, 11 February 2007 (UTC)


 * Yep. Prestonp 02:14, 12 February 2007 (UTC)

Splitting Up The US
Wouldn't the ultimate consequence of the national debt be the total control of federal property by foreign bankers ? In this worst-case scenario, America would be brought back to pre-revolutionary times because its national assets would have to be divided among its many shareholders. On the other hand, resisting debt payments could cause major wars, like when Napoleon got mad at all his creditors. 69.157.247.71

in the event of a surplus
I am new to wikipedia, sorry if this comment is not appropriate, or too ignorant for this forum.

What would the US government do if it were to eliminate the budget deficit, thus running positive net cashflow, effectively rendering the US government a profitable institution. Alan Greenspan discussed this possibility briefly in his recent book, and used this "frightening" prospect as justification for endorsing the Bush tax-cuts. Indeed, tax cuts have been the conventional method for diffusing excess govt revenue. But is a tax cut the most efficient use of capital? Could the US Government become the worlds biggest investment bank? Who would decide where or how the US government allocates its capital? Could it issue equity? on public stock exchanges?? what would stop politicians from going about buying out the world's assets? is the current system of checks and balances strong enough to avoid the potential catastrophy of Congress and the President being in control of trillions of dollars. The current system is that congress reserves the right to 'earmark' federal money to political benificiaries and friends, as well as tax cuts. Is there any ongoing discussion about whether this is really the most efficient way of distributing capital??

Doug —Preceding unsigned comment added by 41.210.24.246 (talk) 21:51, 12 January 2008 (UTC)


 * That seems highly unlikely and is beyond the scope of this article at any rate. Prestonp (talk) 01:59, 13 January 2008 (UTC)

quibbles
Hello $9 trillion. —Preceding unsigned comment added by 149.159.113.25 (talk) 13:45, 7 September 2007 (UTC)

Yes, that $9tril is what I've read & is shown in a table, mid-way in the article. However, the first paragraph lists a much smaller figure. If that figure is to be used, the discrepancy of public vs intergovernmental transfers (i.e. S.S.) should be explained. 68.180.38.41 21:11, 9 November 2007 (UTC)


 * As it says in the article, $5t is the debt held by the public. $9T is the $5T figure plus the intragovernment amount of roughly $4T. Prestonp 00:34, 11 November 2007 (UTC)

Major Error
The chart for this page shows total debt as a percentage of GDP, not public debt. The public debt as a percentage of GDP is much lower, around 40%. See http://www.aaas.org/spp/rd/debt04b.pdf for some accurate data for both total debt and public debt.

Yes. In the section entitled "A Brief History of the Debt," the table with columns entitled "US Public Debt USD billions" and "% of GDP" apparently shows data for the Gross Debt, not the Public Debt.Scot008 (talk) 17:54, 20 February 2008 (UTC)

Fraction of GDP
The statistics presented here need to be put in context of what percentage of GDP a given level of debt in a given year represents. -- Beland 22:00, 11 November 2007 (UTC)

Percentage of Interest Paid by the National Budget
I would think that the more important figure would be what percentage of the yearly budget is paid to the interest of the national debt.--84.154.94.25 04:33, 13 November 2007 (UTC)Jahns

This $318 billion conclusion should be further explained, as the information is not available at the provided reference link:


 * In 2003, $318 billion was spent on interest payments servicing the debt, out of a total tax revenue of $1,952 billion. (Unsigned Comment)

The calculation
In 2006 the tax revenue was $2,518 billion. According to National debt by U.S. presidential terms, spending that year was $2,655 billion (i.e. $137 billion deficit). The national debt that year increased from $7,905 billion to $8,451 billion (i.e. $546 billion). Therefore the interest on the national debt must have been $409 billion by my calculations (and I am by no means an expert). This site gives $406 billion. This would represent 16.1% of the total tax revenue. Corleonebrother (talk) 21:23, 26 February 2008 (UTC)

Table in section 'A brief history of the debt' has unverifiable figures
The table in the section 'A brief history of the debt' provides figures for the US national debt (total = public + government held debt) not only in US dollars, but in Euros and 'ounces of gold.' The figures denominating the US debt into euros and 'ounces' of gold are unreliable and invalid.

The euro numbers are unreliable for two reasons. First, the exchange rate used to convert US dollars to euros is not specified either in the wikipedia entry or on the webpage cited as the source of the exchange rate. Second, the date the exchange rate was valid is not specified. Therefore, the figures denominating the US debt into euros are unverifiable since the rate used for the calculation and the date it was valid are not provided.

Moving onto gold: First, there are several different mass units called an ounce: English units, Imperial units, United States customary units, Troy ounce, etc. The specific ounce being used is not specified and should not be assumed to be the customary Troy ounce. Second, the price of gold relative to the dollar fluctuates daily, and the spot price used to convert between dollars and the aforementioned unknown reference ounces of gold is not given. Third, the date on which the spot price was valid is not given. Therefore, the figures denominating the US debt into 'ounces' of gold are unverifiable since the units and prices used are not provided so the calculation cannot be checked.

This is not a personal attack on whoever put those figures up. Personally, I applaud the thoughtfulness and effort that was put into the work, but without explicitly stating the exchange rates, spot prices, dates and system of measurement used for the calculations the figures produced are meaningless and are not verifiable.

I'm deleting the euro and gold figures for the above reasons. Furthermore the calculations of these figures may be viewed as original research.

Mtiffany71 (talk) 23:16, 18 November 2007 (UTC)

Consequences of Foreign Countries Owning U.S. Debt
This section doesn't explain what the consequences are. It only mentions that foreign countries do indeed own a substantial amount of our debt. Either expand, or change heading. ydesai2008 23:57, 25 November 2007 (UTC)

Arguments against paying down the national debt
I removed a series of debdt pay-down periods and the following recessions. Three reasons:(1) There was not a good source; (2) Before world war II, there was no good understanding of how a central bank should operate, so who knows how many silly things they were doing without a really great analysis; (3) the ideal fiscal policy dictated by current thought on deficit spending is that the debt should be paid down when the economy is good, then the economy will eventually go south, and the debt should be increased--so if the economy causes the debt to change, it will look like the other way around to an observer who doesn't realize who's changing things and which is just hapening (you could say the same thing about a car--turning the car is associated with turns in the steering wheel--thus the car turning causes steering wheel changes.) Pdbailey (talk) 02:29, 30 November 2007 (UTC)


 * PDBailey, the argument you are making seems largely hersay. There are good arguments for paying down the debt, which is present in that section, which is well cited. Prestonp (talk) 00:28, 16 December 2007 (UTC)


 * Prestonp, I can't make sense of your claim, can you explain it? The word, |hearsay regards something one person says to another and the second person repeats the same in a court. I'm not sure where the court is, or who said something to me. In addition, my main point was the first, ("There was not a good source"), I guess this is something that I saw on the main page and then repeated here, but the claim of hearsay becomes a little nonsensical, don't you think? Pdbailey (talk) 16:31, 24 January 2008 (UTC)


 * No, I think it was a fine use of the word. Wikipedia being the metaphorical court and the statement that "before world war II, central banks had no good understanding of how a central bank should operate" being the statement which someone must have told you which you are now introducing as a factual argument that needs no support. Incidentally, you are citing Keynesian economics as gospel and there is no clear agreement that it is the job of a central bank and government to use counter-cyclical spending policies. Prestonp (talk) 04:15, 26 January 2008 (UTC)

Innaugulation
I've never heard of this word before (please forgive me, I'm not an econ guy). It doesn't show up on dictionary.com. Google has 4 hits. This article, another site in which it is used in the same exact sentence, and two sites where it appears to be a mistaken spelling of "inauguration." Might someone explain that word in this article, create a new article for it, or yank it?
 * I did a search on EconLit (the main database for economics articles) and even "currency and exportation" gave no English language hits. So I yanked lots of what looked like babel to me. Without a reference, I can't tell if it's made up or not. Pdbailey 13:31, 30 November 2007 (UTC)

CIA lies?
If you look at the CIA World Factbook (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html) US national debt, as of 2007 is 36.80% of GDP...a rather remarkable drop and down to the level when Bush Jr came to power. Any guesses for this? 62.56.107.49 (talk) 14:31, 23 January 2008 (UTC)
 * There are many ways to measure both debt and gdp. Which measure you choose impacts the results.  For a change that big I'd say they were not consistent year to year in which variables they used. 24.222.54.66 (talk) 16:09, 24 January 2008 (UTC)

If you look at the graph in the next section, you will see where this result is from (public debt per gdp) so it neglects the Social Security trust fund (among others). It might make sense for comparability between nations for the CIA to do accounting this way. Pdbailey (talk) 02:14, 4 February 2008 (UTC)


 * some part of the factbook is not very accurate or always up-to-date. i don't see any lies; you can find mistake on many countries on it, it is more likely that the factbook is maintain by a fairly small crew who gather data from newspapers and such. i doubt they are allow to use internal material from CIA as source as that would be a security risk. Akinkhoo (talk) 00:58, 21 February 2008 (UTC)

Images
Does anyone think the two images, Image:US Public debt per GDP 1791-2006.svg and Image:USDebt.png, are redundant? I prefer the former, because it is given as a percentage of GDP. Also, the latter should be remade as an SVG. Superm401 - Talk 10:31, 27 January 2008 (UTC)


 * Yes they are, and yes I favor the one that features the percentage of GDP. Prestonp (talk) 21:25, 27 January 2008 (UTC)


 * I'm most disturbed by the difference between them (why does the svg have a dip near 2000 while the png doesn't?) It would be nice if Image:US Public debt per GDP 1791-2006.svg listed the source of the data. Pdbailey (talk) 00:09, 4 February 2008 (UTC)


 * If you read the description, it tells you there is a slight discrepancy in the calculations from using Fiscal year debt data, and calendar year GDP. It's probably necessary in order to maintain consistency with the year-fixed early historical estimates used for GDP.  As a broad guide it could be of considerable value to readers.  I placed it under one of the subheadings.  216.165.199.50 (talk) 08:17, 7 February 2008 (UTC)

I updated the old image to (a) include the fraction of gdp data, (b) include public and gross debt, (c) use a deflator for the dollar denominated debt. the result is still at Image:USDebt.png. I'm also going to replace the existing because of (c) unless others object. Pdbailey (talk) 02:11, 4 February 2008 (UTC)

surplus = govt takes in more money than it pushes out
I just removed this: Paying down the federal debt requires the federal government to run a federal surplus. "Federal surplus" means the economy sends more money to the government than the government sends to the economy, thus reducing the amount of money in the economy. This reduction of money in the economy reduces the amount of lending funds. When the government pays down the debt, it does so by paying back more bonds than it sells, so that it is putting more money in the economy. The flip side of this (as is noted above) is that it is taxing more than it is spending. In the strictest sense, the net is a wash.Pdbailey (talk) 02:45, 18 February 2008 (UTC)

China's Nuclear Option
There is no such thing as "China's Nuclear Option" and it has rightfully been deleted from this article. It is an internet rumour found only on fringe chat boards. There is no article citing this as a real option in reputable media sources.--24.15.249.123 18:58, 14 September 2007 (UTC)JasonW

I have heard of China using the threat of selling of it's bonds from other author's. It's common sense really. They've paid a lot for that particular stick and it continues to lose value through inflation the longer they hold it and do nothing. Prestonp 17:15, 14 August 2007 (UTC)

This is not correct. There is no official campaign of threat of selling bonds and it didn't start in August (The article was published in August), the original writer simply posted it because he read it from that article. Also, it is not described as the "Nuclear Option" in the state media, it was described as that by the author of the article. If you wish to put this in, please rewrite it and discuss the possibilities of China using it's reserves against the U.S., but until then please do not continue to revert this secion. — Preceding unsigned comment added by IP address (talk) date


 * The article provided is a citiation by a reputable source saying that "Described as China's "nuclear option" in the state media,". So, unless you can provide some citations to back up your claims, I don't see why any rewrite is necessary. Prestonp 01:45, 15 August 2007 (UTC)

http://www.chinadaily.com.cn/bizchina/2007-08/13/content_6023228.htm
 * It has been rebuked by Chinese state media. China has not threatened to sell off dollars and bonds and there is no official campaign to threaten the U.S. — Preceding unsigned comment added by 210.84.9.134 (talk) 15 August 2007

It also strikes me that the difficulty in such a threat is that if China's holdings are significant enough to be a real risk (and here the TIC data and data on daily Treasuries trading volume are useful), that it would be difficult to unwind a position fast enough to beat the collapse in prices. That is, China could sell part of their position, but in so doing, they would wipe out the remaining value of their portfolio that could not be sold in time. If the collapse does not follow the unwinding of their position, then no real nuclear option existed. In fact, nuclear is a good analogy, since fallout is likely to rain back on the initiator of the action.Vajs 01:20, 28 August 2007 (UTC)


 * Very true. Essentially US Bonds are not a liquid asset for China and I'm sure they probably realize that just as I'm sure they know that the bonds are not in and of themselves a good investment. However by buying US bonds it drives the dollar up in comparison to the yuan which is part of their whole game plan in terms of trade. If we up and decide we're not trading with them anymore, they really have no need for the things. Prestonp 22:30, 29 August 2007 (UTC)


 * Oh man, talk about fear mongering to the extreme. If the dollar drops, China could lose trillions  in foreign reserve!  They will never let that happen.  The old saying are still true: "if you owe the bank $100, that's your problem.  If you owe the bank $1 million, that's the bank's problem".  24.89.245.62 02:27, 15 September 2007 (UTC)


 * that is not true, you must compare if the lost of USD 1.4 trillion is worth the damage of keeping it. USD is falling anyway, it is not like China expect to be able to recollect the money anyway! also China is not short on money, it doesn't need USD because the US is not willing to sell China anything useful anyway... if China itself is under risk, it wouldn't care about 1.4 trillion dolar. what is more important, your life or your money? this is seriously enough for the fed to travel to china to reassure them last christmas. the fact is even if china doesn't sell out, that it just stop the 1 billion dollar it is pumping into the reserve DAILY! USD will crash. it cost china as much money to keep USD everyday as if it was to just give it up.
 * "However by buying US bonds it drives the dollar up in comparison to the yuan which is part of their whole game plan in terms of trade." correct, but China does has alternative to keeping the yuan peg, it can divest to European market, middle east and the rest of asia. to keep the yuan at the same value, you just need to grow your foreign reserve at the same rate as the demand of yuan, it doesn't mean USD is the only market you can invest into. i wouldn't be surprise to learn that China is secretly building foreign reserve in other currency now. Akinkhoo (talk) 00:15, 21 February 2008 (UTC)

If there were such a thing as a "China Nuclear Option," it would be best described as Beijing assuming the (later abandon) role of Chairman Greenspan. Dr Alan, back in the early 1990s, threatened to raise interest rates if the budget deficit wasn't brought under control, and so it was. Get the federal budget under control, and there would be no need for anyone to threaten to sell T-bills. DOR (HK) (talk) 06:11, 4 June 2008 (UTC)

NYC Debt Clock
Is it too much to ask for to provide more current stats for the national debt. Just a few hours ago I stood in front of the NYC Debt clock and took a picture valueing the national debt at nearly $8.895 Trillion, with the Family Share at $96,782. That's a large disparity compared to the end-of-2006 stats currently stated. Alan 24.184.184.177 05:30, 25 September 2007 (UTC)

Can someone add a picture of this supposed debt clock because I think they're referring to the clock that is on the South end of Union Square. It counts in military time, down to the tiniest fractions of seconds. —Preceding unsigned comment added by 70.112.190.54 (talk) 06:01, 22 January 2008 (UTC)

The Debt Clock is in Times Square, not Union Square. Made fix and added ref.Sam (talk) 18:21, 23 January 2008 (UTC)

why do these graphs never go back to before 1913, when control if the money supply was usurped by the federal reserve? i believe the national debt was quite small before they began to steal everyone's money. —Preceding unsigned comment added by 91.110.12.229 (talk) 15:43, 8 May 2008 (UTC)

GDP?
According to the "A brief history of the debt" section, it states that in 2007, the debt was 9008 Billion (9 trillion), which was 36.8% of the GDP. Yet according to List of countries by GDP (nominal) the US's GDP is 13.79 Trillion. Now, using some simple Math, I can say with certain assurance, that 9 trillion is more then 36.9% of 13 trillion. Or is there something that I am missing here?--Passerby25 (talk) 22:27, 4 March 2008 (UTC)


 * the source provided is CIA factbook, maybe someone is messing with it >:) factbook is not a good source as they never claim it is verified data anyway. ok proper answer, because public debt refers to only the debt that is held in public US dollars. which is around 5 trillions. the total debt the government own is 9 trillion dollars. i include the following link for anyone interested in both figures:
 * http://www.optimist123.com/optimist/2006/04/the_best_debt_c.html
 * - Akinkhoo (talk) 15:05, 6 March 2008 (UTC)

The same paragraph says "The total debt is currently 66.5% of GNP." Since Wikipedia says GNP is becoming a less popular measure and the numbers are essentially the same, I have edited to use latest figures and GDP instead of GNP. Misterjosh (talk) 07:13, 18 June 2008 (UTC)

misleading presentation
The second paragraph, beginning 'As of April' is misleading. The writing makes it appear that if all the federal IOUs to the federal entitlement trust funds, such as social security, were to be included in the public debt, the federal debt would balloon to $59 trillion. However, Ref. 4 makes clear that the federal portion is just 0.85 of $59 trillion, which is about $50 trillion. (65.19.22.86 (talk) 23:13, 30 July 2008 (UTC))

Error in introduction
The introduction states that:

"In 2007 the public debt was 36.8 percent of GDP ranking 26th in the world,"

and references the CIA factbook. Following the link, the US indeed ranks 26th, but with a debt level of 60.8%. —Preceding unsigned comment added by 68.175.33.116 (talk) 17:02, 18 July 2008 (UTC)

Fixed. Thanks.Farcaster (talk) 03:25, 21 July 2008 (UTC) The confusion arises from a lack of understanding of the difference between national debt and public debt. The 36.8 figure is correct for U. S. public debt (the federal debt not owed by the government to itself--the link uses the wrong term)and the higher figure is correct for national debt. Every country except the United States refers to its public debt as national debt, which causes misleading comparisons. —Preceding unsigned comment added by 70.233.151.49 (talk) 17:30, 30 August 2008 (UTC)

auto archive?
This page could use an auto archive, would anyone mind if i added one. Say MiszaBot with maxarchivesize = 250K, algo = old(28d)? Pdbailey (talk) 23:06, 10 September 2008 (UTC)
 * How about 120 days. It's not that active. Or you could manually do it yourself. -- Yellowdesk (talk) 18:08, 12 September 2008 (UTC)
 * I threw it in at 180 days. Feel free to object or just remove it if you don't like this. Pdbailey (talk) 22:44, 14 September 2008 (UTC)

National Debt Decreasing?
The article states that the national debt has decreased for the last three years.

(1) Will this statement be automatically updated each year? With no mention of the year in the statement, it seems to be a recipe for outdatedness.t

(2) How does the debt decrease in a year when we are running a deficit? My understanding is that the RATE OF INCREASE in the deficit has been declining lately, not the total amount of debt, which has been increasing in every year in which there is an additional deficit.Geneven (talk) 09:49, 19 June 2008 (UTC)


 * The gross federal debt in the US has never decreased since the 1950s according to White House documents released which display debt data from 1940 to 2007. Editors of this article have done a poor job distinguishing between public and gross federal debt as well as debt in terms dollars versus debt in terms of a percentage in GDP.  Many times, editors are referring to one specific type of debt as increasing or decreasing but fail to specify which type of debt they are talking about.  The History section of this article is a clear example of this.  I have also found that the debt numbers are easily skewed depending on which deflators are being used. Gaytan (talk) 15:19, 25 September 2008 (UTC)

The October 3rd, 2008 bailout bill (H.R.1424), in section 122, raised the federal debt ceiling from 10 trillion to 11.3 trillion. So, this is PURE evidence that the debt is increasing.

Collapse of social security in 2030-2040


I am an American who understands these debt issues and the fact that it will grow beyond the ability of the federal government to pay for it. I generally accept that when I reach retirement age in about 2040, that the government's response to the problem is going to be "Well, I guess we'll just have to stop paying Social Security / Medicaid / Medicare / etc". Either that or the government is going to introduce creative new solutions to the fiscal problem like raising the age of retirement to 75 or 80, or only providing services to the most desperately poor or infirm.

I already accept that the money I am paying right now into Social Security / Medicare / etc withholding is about as good as mounding the paper bills in the backyard and burning them. I will never see any of that money when I reach retirement age.. the government is taking it to spend on stupid things now and it will not be there for me in the future.

Interestingly, I don't think it is possible for an American citizen to completely cash out of Social Security and put that money in a personal retirement account instead. The government must have that continuous influx of money now from its income tax subjects, or the whole IOU shell game it is running will collapse even quicker than 2030. Allowing people to get out now before it all comes crashing down in 30 years would be just simply unacceptable to Washington.

It would be nice if someone could recalculate these figures to show what happens if Social Security, etc payouts decline starting in 2030, or just disappear from the graph entirely. I bet that debt won't be so hard to manage, once most of the American people have been forced to fend for themselves in retirement, and have let go of that pipe dream of a government that will take care of them in their old age.

DMahalko (talk) 08:49, 22 September 2008 (UTC)

Hello DMahalko; read the Social Security debate (United States) article and you will feel better! It won't take much to make Social Security be solvent forever. Further, if the program is NOT reformed payroll taxes (which are dedicated to Social Security first) will pay about 75% of benefits for us and our kids. Because Social Security is mandatory, unless the government changes the law, it will be there for you. AARP and the growing number of seniors are not about to let the payments go down much. What is more likely is that you will see massive cuts in discretionary categories such as defense spending and federal programs that states can handle, like education. Further, Medicare is a much worse problem (about 5X as bad). That is the one that must be reformed soon.Farcaster (talk) 19:53, 22 September 2008 (UTC)
 * Sorry Forecaster, I have to disagree. Federal Spending never gets cuts much (as you can see from my efforts to show that the gross federal debt has not decreased significantly since the 19th century and has not decreased at all since the 1950s).  Special interests have a strangle hold on our government.  If you think federal education spending will be cut anytime soon, I have some property I would like to sell you.  No one is giving up their piece of the federal spending pie.  And knowing politicians (who care only to increase their votes so they can stay in office to continue reaping their special interest perks and benefits), they will simply take the easy way out: print more dollars to pay for every federal program imaginable thereby continuing the steady increase of inflation.  Politicians prefer inflating the currency because this is a method of "making their cake and eating it too", with no immediate consequences with respect to the public sentiment or in the economy.  But soon, this will become hyperinflation and the economy will be severely effected.  As a matter of fact, we are seeing some clear effects of overprinting dollars in the US economy today.  Wall Street is now asking for a bailout for the risky investments they dove into made possible by the flood of dollars the goverment (the Federal Reserve) created for them.  How will this bailout be accomplished?  By printing up more dollars and creating more inflation, of course. That's been the American way ever since 1913. Gaytan (talk) 16:04, 25 September 2008 (UTC)

Paying off national debt with land?
Can the USA government pay off the national debt with land? Like if the US government gave Japan a piece of California. —Preceding unsigned comment added by 70.106.219.166 (talk) 02:01, 7 August 2008 (UTC)

LOL. Very funny--but not out of the question in about 40 years. I was thinking Alaska; closer and not part of the continental USA. Or maybe Hawaii. In the meantime, we just sell companies, not land. Note that the more the Republicans cut taxes, the weaker the dollar gets, the more interest we pay, and the more likely both are to happen.Farcaster (talk) 04:02, 7 August 2008 (UTC)

This appears more and more likely the value of the dollar has decreased as well as the value of land. China and Japan who are the biggest debt holders are also a little crowded so this would be a good explanation of why they would continue to buy US junk debt. After all when it gets down to it the land is really all there is. 99.228.151.16 (talk) 14:02, 29 September 2008 (UTC)

Last Year Debt Lowered?
Hey should it be noted that the last fiscal year the debt was lowered was in 1957 and has only gone up since than? You can see it's true here: http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm just click on the years 1950 - 1999 & # 2000 - 2007 and it shows the last fiscal year the debt actually went down was 1957. So should it be added? —Preceding unsigned comment added by Mrjason22303 (talk • contribs) 04:46, 29 September 2008 (UTC)

Debt held by the public does matter
This may have been discussed here before, but the concept isn't really reflected in the article, so I'll throw it out. You can argue that in an economic sense, the gross federal debt isn't really important. What's important is debt held by the public. Debt held in government trust funds is just money the government owes itself. If you talk about the OASI trust fund (and other governmemt funds) debt as liabilities, you also have to talk about it as assets, which quickly becomes kind of silly. When the trust funds "buy" securities with their excess payroll tax collections (or other "funds"), there is no arm's length transaction where actual money changes hands. If the trust find debt is real government debt, whom is it owed to? Bond Head (talk) 06:58, 7 October 2008 (UTC)


 * Hello Mdeckerz and thanks for many good edits I've seen from you out here. The trust fund debt is owed to American citizens for Social Security.  The government will have to pay it back to the U.S. citizens, mostly between 2017 and 2041 once Social Security goes into deficit. See the Social Security debate (United States) article for more explanation on the trust fund.  What is likely to happen is that what is currently in these trust funds as intergovernmental debt will become debt owed to the public, because the U.S. government will likely borrow the funds (through public debt channels) to pay for the Social Security.  Your statement would be correct if the U.S. government paid off the trust funds while the budget was balanced, but that is unlikely to be the case.  I hope that makes sense.  If you want to explain this in the article, that would be helpful and I'll pitch in...gives you some practice understanding the trust fund, if you need "homework" lolFarcaster (talk) 14:08, 7 October 2008 (UTC)


 * Oh, thanks, but I'm pretty familiar with the trust funds. What's owed to Social Security program participants--"American citizens"--are cash benefits, not debt.  And those benefits are paid from current revenues, not accumulated assets.  It's true that when aggregate benefit payments begin to exceed payroll tax collections, benefit payments will begin to be paid in part from the proceeds of borrowing from the public (absent any change in law).  But that doesn't bear any relation to the current trust fund balances except in an accounting sense.  See the Social Security Trust Fund article for more explanation on the trust fund and the debate over whether it is "real."  Your statement would be correct if the budget were in balance net of the annual payroll tax surplus or if the trust fund held "real assets" other than "special treasury securities" or if the fund managers had the ability to diversify the trust fund's investments into other asset classes.  What the article may need is an explanation of why intergovernmental debt isn't really debt in an economic sense.  If you loan yourself a dollar, do you really owe anything? Bond Head (talk) 20:52, 8 October 2008 (UTC)


 * Let me try it this way. Starting in 2017, payroll taxes don't cover all social security benefits.  So the government will start to draw money from the general tax revenues.  It will need to borrow to do this.  So while it is drawing down the Social Security trust fund (the intragov debt) it will be increasing the public debt.  In other words, between 2017 and 2041, when the trust funds are liquidated, the government will be replacing the intragov debt with "real" public debt.  That is why the trust funds should be treated as "real" or public debt.  The government does not owe it to itself, it owes it to citizens, just as if we held treasury bills that we could cash in during that time.  The government will be diverting an average of $200 billion or so each year from the general funds to social security between 2017 and 2041.  It won't have the money (unless we cut spending in all other categories like 10%), so it will borrow it.Farcaster (talk) 22:06, 8 October 2008 (UTC)


 * I think you're missing something. Let me break it down.  The government takes in cash from many sources: income taxes, FICA payroll taxes, user fees, proceeds of borrowing from the public, etc.  Then the government spends that cash on a variety of expenses: Social Security benefits, jet fighters, bureaucrats' salaries, whatever.  At the same time, somebody makes a bookkeeping entry that adds to the "balance" of the "trust funds" and adds to the "debt."  But they're not real transactions because no money changes hands.  The credit to the trust fund is just a bookkeeping entry.  It's like moving some of your own money from one of your bank accounts to another; it doesn't increase your net worth.  Or like Enron pretending one of its "special purpose" subsidiaries is really a separate entity with its own assets and income.


 * Now suppose there were no trust fund. The government took in cash and spent cash the same as it does now, but there were no bookkeeping entries related to the trust funds or phantom debt issuance.  It wouldn't change anything in an economic sense.  The government's net assets and liabilities would be the same.  The trust fund, its "assets," and the associated debt don't matter.


 * I'll bet you won't see my point. That's OK.  It just demonstrates that there is a legitimate debate over whether the trust fund assets and the associated "debt" matter.  That debate should be reflected in the article.  When I have time, I'll write my side, and perhaps you can write yours. Bond Head (talk) 00:46, 11 October 2008 (UTC)


 * I'll try one last time; once we get on the same page, there is no debate. Payroll tax revenues (every dime) are owed to the people, because Social Security law says so; the program is mandatory (not discretionary like defense). When the government gets a payroll tax surplus, it borrows and spends the money and credits the trust fund.  Between 2017 and 2041, not only will all payroll taxes go directly to Social Security, but an additional $200 billion (on average) will be pulled from the general fund each year and paid to retirees to pay back the trust fund. The government will issue treasury bills (public debt) to get that $200 billion.  As those amounts are paid to us, the trust fund goes down.  Essentially, the intragov debt becomes public debt between 2017 and 2041.  The total won't go up, but the components will be almost entirely debt owed to the public by 2041.  Using another analogy, suppose the government decided to take the $2.2 trillion trust fund today and create personal accounts in our name (it's our money, right?)  The government wipes out the intragov debt, but has to issue $2.2 trillion worth of t-bills (public debt) to fund that. Works the same way, only slower for real.  In short, the only way for the govt. to pay that intragov debt off is to trade it in for public debt.  So the total debt is real; it will become more real each year between 2017 and 2041 as the trust fund is liquidated by the issuance of real t-bills.Farcaster (talk) 01:18, 11 October 2008 (UTC)


 * OK, well, we're definitely not on the same page, so I guess I'll have to write both sides. Keep thinking it through.  You'll come around. Bond Head (talk) 01:49, 11 October 2008 (UTC)


 * There is a scenario where you are correct, but it is unlikely to occur. That would be if the non-payroll taxes (income, corporate, excise primarily) represented a $200 billion surplus each year during 2017 to 2041 against non-social security expenses. During the 2017-2041 period, all payroll taxes go to Social Security, which can also claim about $200 billion each year on top of that from the general fund.  If the government can pay that from the non-payroll tax base, it can pay down the trust fund without adding to the public debt.  But we'd have to cut all non-social security programs by about 10% to do that.Farcaster (talk) 02:27, 11 October 2008 (UTC)

Off-topic sections deleted
I've deleted the following sections, which are not NPOV and which are substantially off-topic. ... Kenosis (talk) 19:40, 25 October 2008 (UTC)

The mechanics of U.S. Government debt, according to the Austrian School
When the expenses of the U.S. Government exceed the revenue collected, it issues new debt to cover the deficit. This debt typically takes the form of new issues of government bonds which are sold on the open market. However, the debt can also be monetized by which the Federal Reserve creates an entry on its books to credit the US Government for an amount equal to the dollar amount of the bonds the Federal Reserve is acquiring. The money created in this process not only includes the new dollars that came into existence just to purchase the bonds, but much more because this new money is now sitting in the form of checkbook money at the Federal Reserve. Under the practice of Fractional Reserve Banking this new checkbook money is treated as an asset to lend against. Economists estimate the expansion of the money supply as being many times the amount of the initial money created with the exact amount being a function of what percentage of deposits banks must set aside as "reserves".

The ultimate consequence of monetizing U.S. debt is that it expands the money supply which will tend to dilute the value of dollars already in circulation. Thus, expanding the pool of money puts downward pressure on the dollar, downward pressure on short-term interest rates (the banks have more to lend) and upward pressure on inflation. Typically this causes an inflationary boom that ends in a deflationary bust to complete the business cycle. Note that money supply expansion is not the only force at work in inflation or interest rates. United States Dollars are essentially a commodity on the world market and the value of the dollar at any given time is subject to the law of supply and demand. In recent years, the debt has soared and inflation has stayed relatively low in part because China has been willing to accumulate reserves denominated in U.S. Dollars. Currently, China holds over $1 trillion in dollar denominated assets (of which $330 billion are U.S. Treasury notes). In comparison, $1.4 trillion represents M1 or the "tight money supply" of U.S. Dollars which suggests that the value of the U.S. Dollar could change dramatically should China ever choose to divest itself of a large portion of those reserves. 19:40, 25 October 2008 (UTC)

Arguments for paying down the national debt


Economists from the Austrian School point out that the United States experienced depreciation CPI from 1800-1912 in two spurts from 1810 to 1820 and 1860-1870 : a period of strong economic growth in U.S. history.

Furthermore, it is not always true that an increase in the money supply leads to an expansion of the economy. For example, consider the failure of Japan's Central Bank to do just that. In an attempt to follow Keynesian economics and spend itself out of a recession, Japan's central bank engaged in ten stimulus programs over the 1990s that totaled over 100 trillion yen. Because of these large deficits, Japan has a national debt that is 194% of GDP.

In the absence of debt monetization, when the Government borrows money from the savings of others, it consumes the amount of savings there are to lend. If the government were to borrow less, that money would be freed to work in the private sector and would lower interest rates overall.

Lastly, raising interest rates is one of the traditional ways that the U.S. Federal Reserve uses to combat inflation (which can be brought on by government debt), but a large national debt figure makes it difficult to do so because it raises the interest paid in servicing that debt.

Net interest on the public debt was approximately $239 billion in fiscal years 2007 and 2008. This represented approximately 9.5% of government spending. Interest was the fourth largest single budgeted disbursement category, after defense, Social Security, and Medicare. In addition, the government accrued a non-cash interest expense of $194 billion for intra-governmental debt, primarily the Social Security trust fund, for a total interest expense of $433 billion. This accrued interest will be paid to Social Security recipients in the future. Paying off the national debt would free up these funds for other purposes.19:43, 25 October 2008 (UTC)

Arguments for repudiating the national debt or declaring bankruptcy
Murray Rothbard proposed simply repudiating the national debt or declaring bankruptcy. He noted that the creditors knew all along that the debt could only be paid off through taxation (or through the hidden taxation of inflation), which Rothbard regarded as tantamount to theft: The government gets the money by tax-coercion; and the public creditors, far from being innocents, know full well that their proceeds will come out of that selfsame coercion. In short, public creditors are willing to hand over money to the government now in order to receive a share of tax loot in the future. This is the opposite of a free market, or a genuinely voluntary transaction. Both parties are immorally contracting to participate in the violation of the property rights of citizens in the future. Both parties, therefore, are making agreements about other people's property, and both deserve the back of our hand. The public credit transaction is not a genuine contract that need be considered sacrosanct, any more than robbers parceling out their shares of loot in advance should be treated as some sort of sanctified contract.

Rothbard also pointed out that repudiation could help prevent the government from borrowing such large amounts in the future. However, noting that some might view this as too draconian, he proposed as an alternative that the U.S. Government be treated like any other bankrupt organization, with its assets being liquidated via auction in order to pay the creditors a pro-rata share of those assets. 19:45, 25 October 2008 (UTC)

Austrian School Material
I'm an Austrian School man myself, but all of the material dealing with the Austrian School needs to be moved or removed. It's a bit too specific and oblique to earn mentioning in this article. Further, I think that it's inclusion here borders near being unneuteral.

--Nogburt (talk) 19:17, 25 October 2008 (UTC)

You don't wish to associate yourselves with the burgeoning debt. I understand. 87.194.21.39 (talk) 14:06, 27 October 2008 (UTC)

Graph
What is the source for the graph on this article? Using the GDP numbers from here, I come up with:

2000: $5,674.2 bil Debt / $9817.0 bil GDP = 54.8%

2006: $8,506.9 bil Debt / $11319.4 bil GDP = 75.2%

This should look more like sudden spike, however the graph shows just a small bumb. What source is the graph using? Neitherday 03:53, 23 September 2007 (UTC)


 * If the graph can't be sourced, I move that it be removed as possibly misleading. Neitherday 22:34, 24 September 2007 (UTC)


 * I'm removing the graph as misleading and POV. If anyone can explain why it is not, they can always readd it to the page. Neitherday 00:12, 26 September 2007 (UTC)

Hi Neitherday, I'm the one who made that graph. I used those same GDP values from EH.net -- and have now added the source data to the image page. (You're right -- I should have included source data in my first version!) But note that the relevant GDP values must be nominal, not real. Federal debt values are given in nominal values, and must be compared with nominal GDP values. So the value for 2000 is $5,674.2 bil Debt / $9817.0 bil GDP = 54.8% while for 2006 it is $8,506.9 bil Debt / $13194.7 bil GDP = 64.5%. This is exactly what the graph shows. Also, if you have problems with a graph, why not contact the person who made the graph? Let me know if you have any other questions. Citynoise 13:34, 7 October 2007 (UTC)


 * I just noticed that the graphs depicting total debt (public or gross) all reflect a decrease in debt roughly between 1997 and 2001. This decrease in debt is not found on any of the referenced tabular data included with these graphs.  There was no decrease in debt in those years.  Anyone suggesting there was will need to come up with some tabular data supporting this claim; for now I rule it as POV.  Provide some data that backs up this claim before including into article.  And at the same time, you will have to debunk the debt data that shows there was no decrease in debt over that period.  But I don't think data showing a decrease exists anyways (since there was no decrease in debt in the last couple decades). -Gaytan (talk) 21:47, 6 August 2008 (UTC)

Gaytan, clarify your comments before you attack the tables please. I reverted. First, the graph with deficit and debt comparisons by year is accurate and sourced, so don't remove that. The ones showing public and total debt to GDP I didn't put there personally, but look about right as they are vs. GDP.Farcaster (talk) 23:32, 6 August 2008 (UTC)


 * Farcaster, there is a serious problem with the gross federal debt portrayed in these graphs (a close look at the late 1990s data will reveal this). A common argument in favor of President Clinton is that he managed the federal budget well.  According to data at various government sites, the gross federal debt steadily increased under his tenure as it did under every president since the 70s.  To display graphical data which matches well with tabular data prior to the 1990 but is then skewed after that, is simply sneaky POV (and the author of this graph even cites the tabular data which does not match his graphs!).


 * USDebt.png data displayed on Wiki shows the following (which is referenced to and matches data found in Table 7.1 at http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf) for total federal debt (data in millions):

1990,3206290 1991,3598178 1992,4001787 1993,4351044 1994,4643307 1995,4920586 1996,5181465 1997,5369206 1998,5478189 1999,5605523 2000,5628700 2001,5769881 2002,6198401 2003,6760014 2004,7354673 2005,7905316 2006,8451350 2007,8950744


 * Yet the graph displays a decrease in the debt in the late 1990s lasting through to 2001 (aligning very closely with President Clinton's second term in office). This is completely at odds with the above cited data.


 * The Table in the 'History' section of this article displays numbers very similar to the above table (and to the referenced data at http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm) (data in billions):

1910,2.6 1920,25.9 1930,16.2 1940,43.0 1950,257.4 1960,290.2 1970,389.2 1980,930.2 1990,3233 2000,5674 2005,7933 2007,9008


 * US Public debt per GDP 1791-2006.svg has the same dip in the debt curve at the latter half of the 1990s which is clearly suspect because of the case above. Again, please Provide some data that backs up these skewed grpahs prior to re-inserting them into the article. Additionally, debt data currently referenced in the article will have to be debunked somehow.  For now I will remove this blatant yet disguised POV from the article.  Blatant POV has no place in Wikipedia.  We should not wait for a correction.  Let the graphs be re-inserted after the corrections have been made. -Gaytan (talk) 16:51, 7 August 2008 (UTC)

OK, seems like you are on to something. I put in a placeholder we should agree on. I'll look into this over the weekend and see if we can do better. I've always thought looking at debt relative to GDP was misleading anyway, as one would hope the government increasingly is a smaller part of it. More important to those of us who want Social Security, Medicare, defense, etc. is how much the debt is relative to tax revenue, more like a corporation. I've often thought the debt to GDP argument was from the "debt doesn't matter school" of conservative thought, which is fine if you are wealthy.Farcaster (talk) 18:51, 7 August 2008 (UTC)


 * Alright. I have proven my point.  I agree that the ratio of debt to GDP is misleading primarily because many economists disagree on the manner at which the GDP is calculated (as is inflation and other economic parameters).  The primary focus of this article is the U.S. debt, so gross debt should be portrayed accurately; ratios should be used with caution because they could very well be skewed depending on the economists' bias. Gaytan (talk) 19:08, 7 August 2008 (UTC)

You like this chart for the comparison?Farcaster (talk) 04:57, 8 August 2008 (UTC)


 * Your new chart looks reasonable but I would have to check the numbers to make sure its accurate. But that is the problem with the Debt % GDP charts.  These are difficult to verify because you need two data sets, one for GDP and one for total debt.  Then after one takes the ratio between the two data sets and is finally enabled to verify data.  But why all the trouble??  Because for some reason, politically tied economists don't like the fact that every single president and congress in recent history has done nothing to control our unmanageable debt and continues to do nothing, eventually leading the U.S. down a road many other nations pursued on their way out of existence.  That is why I prefer a clear, blunt graph on total debt - pure, unadulterated, ubiased and simple.  I could make one myself based on the data available from the referenced cites I just don't know how to get it onto Wiki yet. Gaytan (talk) 15:54, 12 August 2008 (UTC)

The reference I cited actually has the debt and the ratio right together, so easy to verify. You could use that to build your chart. What I do is build them in excel, then transfer to powerpoint. You can "ungroup" in PowerPoint to pretty the charts up. There is an "Upload file" button on the left when you are looking at any article on wikipedia. It walks you through the process of uploading; very easy.Farcaster (talk) 17:21, 12 August 2008 (UTC)


 * Now that I took a close look at your image, I don't like the fact that the resolution of your x-scale abruptly changes for the latter part of the 1990s; the data gets distorted that way. Here I finally made a graph and uploaded it.  No funny stuff going on here.  I took the data from the report and simply plotted.  No manipulation whatsoever.  Let me know what you think. Gaytan (talk) 17:36, 14 August 2008 (UTC)


 * Uploading is not as easy as you explained. Gaytan (talk) 17:37, 14 August 2008 (UTC)



I like the chart...very nice! I would suggest changing the color scheme or perhaps using dotted lines for one series or the other, as they overlap at certain inflection points. Easier to do in powerpoint.Farcaster (talk) 19:27, 14 August 2008 (UTC)


 * This graph lacks the property of looking good at three inches on a side. Can you fix the axis labels to make it look good as it appears in the article? Pdbailey (talk) 23:38, 14 August 2008 (UTC)

Farcaster, I finally updated the graph as you recommended and placed it at the top of the article. Gaytan (talk) 18:35, 10 September 2008 (UTC)


 * Looks great! Thank youFarcaster (talk) 19:16, 10 September 2008 (UTC)

Debt figure illegible


The figure, as it currently stands is illegible. The first question a reader asks when looking at a figure is, what am I looking at. The x and y labels, and the header should answer that question quickly. More detail should be provided in the caption so that, with caption the figure stands on its own. As is, I can not clearly read either label, but i can guess the X-label is year; the actual tick labels are beyond hope. In addition, there are four lines, so they need to be clearly delineated. The two axes makes these problems even worse. Fianally, it is lost on me what the advantage of the current version is over the version on the right. Pdbailey (talk) 19:35, 10 September 2008 (UTC)


 * Several of the graphs on this article are illegible. If readers really want to dig into the data, they should click on the graph in order to clearly see all the details they are interested in.  As for "what am I looking at?"  The reader is expected to know what total debt versus public debt is after reading the beginning of the article.  Lines are clearly labeled to show what is what.  So are the axis labels.  So if you would like some changes made, give me some specifics recommendations and I may incorporate them.  By the way, the first graph's color coordination led to possible misreading of the graphs since some of the lines interesected with similar slopes at intereception points. Gaytan (talk) 20:39, 10 September 2008 (UTC)


 * You are right that many images fail the criterion that their axies should be legible, but just because some of the article is bad isn't a great reason not to fix it. It raises the question why even have the image and not a link like thumb|right|350px|Total and Public Debt in Dollars and Percent of GDP if the axes labels are not legible. Again, can you give me any reasons the one with the illegible axes is superior to the one with the legible axes? Pdbailey (talk) 21:35, 10 September 2008 (UTC)
 * Pdbailey, if you slow down and read my complaint above about your graph you would see that the tabular data you claim is used in your graph does not match what is portrayed in the graph (specifically the plot for total gross debt). You obviously used other data since the tabular data shows no drop in the debt around the late 1990s.  That other data you used is what I would like verified.  My main problem with your plot is strange dip it portrays in the late 1990s.  This must be verified.  Sorry for not notifying you about this apparent problem directly on your talk page.Gaytan (talk) 23:13, 11 September 2008 (UTC)


 * Gaytan, I just replaced the excel version because it didn't even include deflators. This makes the y-axis far less understandable. You ask above about the source, the source is given on the images page. Pdbailey (talk) 21:46, 10 September 2008 (UTC)


 * In looking at your figure again, it looks like you actually deflated twice. I added some noted on why the table on my figures page is in the right terms. Pdbailey (talk) 22:49, 10 September 2008 (UTC)


 * Look again. I took my data straight out of the table 7.1 at http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf.  The data was pulled right out of the table from the "gross federal debt" column under the "in millions of dollars" section. My graph simply plots this data directly with no additional manipulation. Your graph does not match up with this data. So how did you manipulate your data to give you the graph with a dip in the late 1990s??  If no manipulation was made, then where is the tabular data showing a decrease in gross federal debt in the late 1990s?  The tabular data you present for your graph does not show any decrease in this time period yet your graph does?  Why the disconnect? I know some economist play some funny tricks with macro numbers like these. All I want to know is how you come up with the dip.  Gaytan (talk) 23:23, 11 September 2008 (UTC)
 * I will revert back to my graph (newly updated with larger labeling) if tabular data matching your gross federal debt "dip" is not provided. Gaytan (talk) 23:46, 11 September 2008 (UTC)


 * Gaytan, sorry you are right, I was thinking one axis was associated with the wrong line. My graph is deflated to constant 2000 dollars, you can see all the data, the deflator, the method use to make the graph, and even copy and paste the program into the freely available R graphics/statistics package or S-plus if you use that. If you want to talk about why one would deflate, we can do that too. Pdbailey (talk) 00:19, 12 September 2008 (UTC)

How am I right, exactly? Your total debt graph still has a dip in the late 1990s. It looks as though you have changed nothing. Deflators? I have read about them but never actually used them in data (I am no economist but I am very comfortable working with numbers due to my background). I cannot understand how a deflator can cause a dip like this in the data. The dip looks like POV to me since Democrats are always talking up Clinton's surplus yet the numbers show that the total federal deficit (as reported in Table 7.1 at http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf) did not decrease at all during his tenure (although it's rate of increase -- or derivative-- did slow down); I don't need a graph to see that there exist no such decrease. I need your data in order to validate your graph. Give me your original data (input -- is this from Table 7.1??) and the equations you used to include deflators in the data (transfer function). This way I can validate the data in your graph (output). I don't use R graphics/statistics package or S-plus. All I use is Excel since there I can control all variables and build necessary equations; that way I know exactly how my final numbers were reached. Gaytan (talk) 16:05, 15 September 2008 (UTC)


 * (1)You are right that your figure is not deflated, or double deflated, I was looking at the wrong line.
 * (2) From the document you linked to, (page 5 of the document, page 9 in the pdf)
 * "In 1998, the Nation recorded its first budget surplus ($69.3 billion) since 1969. As a percent of GDP, the budget bottom line went from a deficit of 4.7% in 1992 to a surplus of 0.8% in 1998, increasing to a 2.4% surplus in 2000."
 * (3)the data for the graph are on the images page, the sources are listed on that page. You can make the figures as follows (using the data labels on that page)
 * black line in top figure: gross federal debt dollars/(deflator * 1e6)
 * red line in top figure: total public dollars/(deflator * 1e6)
 * black line in bottom figure: gross federal debt gdp
 * red line in bottom figure:total public gdp
 * I hope that helps. Pdbailey (talk) 23:27, 15 September 2008 (UTC)

As for your points - you mention (in #2 above) numbers that do not have anything to do with the gross federal debt. Unless federal government takes surpluses and applies them to the gross federal debt, then we should see a drop in the gross federal debt, otherwise the gross debt will continue to climb. That proves that the federal government of the late 1990s simply spent the surpluses on various government programs and did not apply the surplus to reducing the federal debt. My graphs shows that the debt never dropped in the late 1990s, while yours does (this is my problem with your graphs, specifically gross federal debt dollars). Someone's graph of gross federal debt dollars is wrong. My data comes straight out of the link above with no manipulation, just plotted directly. Your data mixes in a deflator. What is the equation for this deflator? I need an equation for it in order to apply to the hard data from the link above to arrive at your numbers. It is likely this deflator that is throwing such a twist into these numbers, making it look like the gross federal debt dropped in the late 1990s. Gaytan (talk) 19:52, 18 September 2008 (UTC)

Deflators

 * OK. I re-plotted my gross federal debt graphs on my own and accounted for the deflator as you did in your graphs.  I did come up with the same data you did.  That does not mean I agree with using your graph in this article.  Here are my reasons why I don't think we should use deflated data for gross federal debt:
 * 1) Deflators can be arrived at in a number of ways by using any of the following: CPI, GDP deflator, unskilled wages, relative share of GDP, etc, etc. Why should we favor one of these methods over the others?
 * 2) Many have criticized the use of deflators. Take for example right now: is the U.S. in a recession or not?  The answer completely depends on which economist you ask and what deflators he is or isn't using.  So, deflators easily introduce political biases.
 * 3) Your use of deflators sets the value of the dollar to the 2000 value. Why not 1999?  Why not 2001?  Why not 1776 for that matter?  Its too theoretical and most people don't understand it anyhow.  What the public cares about is the nominal value not the theoretical,  economic, so-called "real" value which depends on which economist you are basing your information on.
 * 4) For examples of how deflators skew data -
 * a) The gross federal debt in 2007 was about $9 trillion. Deflating to 2000 dollars magically makes this debt about $7.5 trillion. Through the economic games of deflators, your graph has the appearance of wiping away $1.5 trillion dollars of legitimate federal debt.
 * b) According to any of the typical ways to measure inflation (CPI, GDP deflator, unskilled wages, etc.), the 2007 dollar is worth about 20% less than a 2000 dollar (and this is a conservative estimate). Deflators use inflation to their advantage.  The greater the inflation, the lower the federal debt will appear to be (since deflators make inflation and the debt inversely proportional to each other).  So while using deflators may help paint a pretty picture of gross federal debt, it completely ignores the negative effects of inflation.
 * Nominal dollars should be used on debt figures or else we are simply distorting the current picture of U.S. debt. Your graph should at minimum state that it is reporting its figures in 2000 dollars, which it currently does not state (but we shouldn't be using deflators anyways).  Besides, if nominal numbers are good enough for the White House, they should be good enough for Wikipedia as well.  Your total federal debt graph does not reflect the numbers presented in the White House document.  It makes Wikipedia look like it is deliberately misrepresenting the data.


 * Does anyone else have an opinion on this besides me and Pdbailey? Gaytan (talk) 22:20, 18 September 2008 (UTC)


 * I'll respond to you point by point.
 * (1) For GDP, I suggest using the GDP deflator. Here, I use the White house numbers, I don't think they are controversial, but maybe you can enlighten me. You also counter your own claim that which type matters in your 4b when you write, " According to any of the typical ways to measure inflation (CPI, GDP deflator, unskilled wages, etc.), the 2007 dollar is worth about 20% less than a 2000 dollar."
 * (2) You need to sharpen this criticism before I can respond. How does this relate to the debt? What makes no deflator better?
 * (3) I used 2000 because it is a round year. I think your points are good points and that the most recent year in the publication would make the most sense so that the reader can read it in current dollars.
 * (4) I think 4b hits the nail on the head for why we need to include the deflated values. Because the money supply keeps growing, the effect of inflation on the debt is only accounted for if you deflate the debt figures.
 * When you look at values in 1940 dollars for 1940 and 1950 dollars for 1950 and ... it becomes very difficult to compare what you are looking at. One way to reduce the confusion is to use a deflator to attempt to make the two dollar amounts more comparable because of additional money in the market, changes in velocity, et cetera. While these methods are not perfect (as you point out), they do make a first order correction, and the fact that the first order correction isn't perfect doesn't suggest that not making it is preferable.
 * You also write, " Your graph should at minimum state that it is reporting its figures in 2000 dollars." I am somewhat flummoxed by this one. I hope it will clarify matters if I point out that the figure's current y-axis reads, "debt (trillion 2000 dollars)." Pdbailey (talk) 02:15, 1 October 2008 (UTC)


 * Your points are all well taken but I still don't like deflators. Anyhow, I just wonder why we can't display the debt picture exactly as the White House does it (as is had in the reference we are using), without not deflators??  Aren't the White House economists good enough for you?  They don't use deflators in their table, why should we use them in the graphs on this article? Gaytan (talk) 14:39, 27 October 2008 (UTC)

Graphic
Is anyone willing to update the debt chart/graphic? It stops in 2000, and is several trillion dollars off--although it will probably soon be off by several trillion more. AdRem (talk) 23:16, 9 October 2008 (UTC)


 * Which one?Pdbailey (talk) 00:42, 10 October 2008 (UTC)
 * US Debt from 1940 on--the main one. AdRem (talk) 13:25, 10 October 2008 (UTC)


 * That series ends in 2007. There is no more official data from the White House. Pdbailey (talk) 13:40, 10 October 2008 (UTC)

You guys like this one? I thought it was just a little funny.Farcaster (talk) 03:27, 10 October 2008 (UTC)


 * Let's be a little bit fair here. A chunk of that increase is Katrina, for which the then Democrat leadership in Loiusiana and New Orleans was unprepared and unable to cope with. The Loiusiana Democrats shirked their responsibility and did their best to shift the blame for their failure onto FEMA and the Bush Administration. Another chunk is the war against al Qaeda. They bombed embassy after embassy and Bill Clinton did nothing. If Clinton had acted more forcefully, the current war would probably have been avoided altogether. Another chunk is going to be the Banking mess. The Democrat-run Congress changed the banking rules during the Clinton era. People in the Congress saw the banking disaster coming two years ago and refused to change the rules for ideological reasons. Now, the Congressional leadership is trying to shift the blame to the Bush Administration and "greedy bankers". The bankers say that they were merely following rules made by the Congress. Virgil H. Soule (talk) 19:05, 11 October 2008 (UTC)

LOL. Actually, about half of it is the unnecessary Bush tax cuts. About $1 trillion is Iraq, a discretionary war.Farcaster (talk) 20:14, 11 October 2008 (UTC)


 * So no additional data is available? That's fine, but if anyone is so able and so inclined, would they add the last year for which there is data (2007) to the chart? As it is, the date stops at 2000, and the graph runs way over. The chart would look more current, and would be much easier to read that way. Side note: I think Farcaster was just joking around, Zbvs; so please just relax, and please keep your lengthy political discourses and historical revisionism on your blog, or in your journal. AdRem (talk) 17:19, 15 October 2008 (UTC)


 * AdRem, sorry, I must not have communicated well, it has 2007 on the chart. As is, there are labels on the decade. 2007 is not a decade year, so it has no label. Were I to label 2010, I think that would also be confusing. In general, when one is confused about a chart, the title, axies, and caption are a good place to look. In this case the y-axis label says it is denominated in 2007 dollars. If you do not think this is clear, perhaps you could update the caption. Pdbailey (talk) 23:17, 15 October 2008 (UTC)


 * Pdbailey, I just meant the graph might be easier to read if 2010 were included, but I understand why that might seem more confusing. Whatever people want--it was just a thought. AdRem (talk) —Preceding undated comment was added at 13:54, 17 October 2008 (UTC).

The October 3rd, 2008 bailout bill (H.R.1424), in section 122, raised the federal debt ceiling from 10 trillion to 11.3 trillion. By October 2009, one year later, this will be reached. So, the graphic is going to need some editing. —Preceding unsigned comment added by 208.187.32.71 (talk) 01:06, 3 February 2009 (UTC)

Unfunded obligations are not debt
On November 21 a user reverted an edit which deleted the reference to "unfunded obligations." (The passage in question reads "Adding unfunded Medicaid, Social Security, Medicare, veterans' pensions, and similar obligations, this figure rises to a total of $59.1 trillion, or $516,348 per household.")

I disagree with the reversion and believe that a discussion of unfunded obligations does not belong in a discussion of the public debt.

Including the reference to unfunded obligations in the article suggests that these obligations will have an effect on the debt in the future. In fact, the much more likely outcome regarding unfunded obligations is that federal law will be changed to increase taxes or decrease benefits to address the issue as was done with Social Security in the early 80s. If we assume that unfunded obligations bear some relation to future debt obligatins because they are mandated in current law, we should also assume that discretionary programs will zero out at the end of the current fiscal year because they are not legally appropriated past September 30.

If the passage remains, we should include a fuller discussion of the history of entitlement programs and options for dealing with their unfunded nature. However, that discussion does not belong in an article on the debt, so I suggest we delete the passage as the original edit did. Bond Head (talk) 02:48, 24 November 2008 (UTC)

I propose a compromise. I agree the unfunded obligations are not debt for the reasons you indicate. However, I would like some mention of it in the intro. Something that indicates that in addition to the debt, the government has made future payment commitments under current law, primarily Social Security and Medicare/Medicaid, that are not presently funded by future tax revenues. These amount to $41 trillion ($7 for Soc Scty and $34 for Medicaid) as of 2008.Farcaster (talk) 03:13, 24 November 2008 (UTC)

Agree with those who think this should be deleted, as it is simply not part of the debt. I also question the number. Source is USA today, but can't locate article. To be comparable to debt numbers, this should be a present value, not the total amount that will have to be paid in the future. Is it? --Sjsilverman (talk) 02:15, 26 November 2008 (UTC)

Check the unfunded section in the body for sources; there is a nice diagram. $7 trillion NPV for Social Security and $34 Trillion for Medicare / Medicaid, plus the current debt and a few knickknacks = $53 trillion. The number is real and it will get more real once we try to stop paying seniors their Social Security and denying them Medicare. We will have to borrow enormous sums to pay for these obligations and raise taxes until they are reformed, assuming the do-nothing Congress can get it done.Farcaster (talk) 02:29, 26 November 2008 (UTC)


 * An "unfunded obligation" is a bit of a crystal ball topic. It involves three assumptions: (1) the model predicting future costs is correct, (2) taxes will never change, and (3) future corporate profit and individual earnings are correctly projected. None of the assumptions is particularly good, but one could argue that the estimate does serve as a useful baseline with the caveat that it is probably off by a factor of 2 or more. PDBailey (talk) 04:34, 4 December 2008 (UTC)

National Debt identical to National Money Supply
The term 'National Debt' should not be used without clarifying that it is identical to the National Money Supply for all practical purposes.We use our debt for money and so do others use US Debt for money such as China when buying petroleum from Saudi Arabia. With this understanding such errors as " We will have to repay our debt" will be avoided because it becomes evident that money, once issued, need never be redeemed. Now, if anybody wanted to obtain Legal Tender in exchange for Treasury Bonds, there are normally a lot of banks willing to make this exchange for a small fee and at any time. It is, of course, true that only Legal Tender can be FORCIBLY exchanged for something else such as wheat and this applies in the USA only. The phrase " We will have to repay our debt" merely means that we might possibly have to print Federal Reserve Notes and supply them when the T.Bond matures. The phrase is thus next to meaningless. In this connection, I recall that small-denomination Treasury Notes were in circulation when I was younger. We then switched to Fed Res Notes, probably for a good reason. BUT it is reasonable to presume that the Fed.Res.Bank does now actually hold a Treasury Note to back up each Fed Res Note in circulation. —Preceding unsigned comment added by 12.72.34.148 (talk) 20:45, 27 December 2008 (UTC)

Your argument does not in anyway take into account the interest on the national debt, which is a massive burden in and of itself. And secondly no mention of inflationary effects, effectively crippling the dollar, if and when the Federal Reserve Notes have to be printed to pay off parts of the debt. Your argument is correct in stating the privileged position the US dollar has been as de facto world reserve currency for the past 60 years, but fails to fully expand on the limitations of having such a large debt in place and the detriment to the economy. Much like people who say the "debt does not matter", it will when the obligations (such as SS and Medicare) and borrowers who have effectively bought that debt want and need their money back. —Preceding unsigned comment added by 94.192.246.138 (talk) 14:22, 25 January 2009 (UTC)


 * I question the assertion above by 12.72.34.148 that it is reasonable to presume that the Fed.Res.Bank does now actually hold a Treasury Note to back up each Fed Res Note in circulation. I'm no expert, but I see that a DOT FAQ on US Currency says, among other things,


 * The italicized portion of that quote, "and United States securities" is emphasis which I have added. The lead sentence of the United States Treasury security article says that such a security is


 * The Federal Reserve Note article says that such notes


 * -- Boracay Bill (talk) 02:07, 21 April 2009 (UTC)

Bankruptcy?
Is bankruptcy an option? I don't see how the U.S. will ever be able to pay off the debt.


 * Raise taxes. —Preceding unsigned comment added by 98.223.205.196 (talk) 13:40, 19 April 2009 (UTC)
 * Oversimplistic approach. See e.g., Laffer curve. -- Boracay Bill (talk) 03:35, 23 April 2009 (UTC)


 * This talk page is supposed to be for discussion of the article, not for general discussion. However, you might note from table 7.1 on pages 126-127 here that in 1946 the national debt stood at 121.7% of GDP&mdash;up from a pre-WW-II value of 52.4% in 1940. The US never "paid off" that debt, but by the 1970s the figure was reduced to below 40% of GDP. As I write this, the website The Debt to the Penny and Who Holds It reports the debt at $11,193,459,542,379.92. The Economy of the United States article currently reports that the 2008 GDP was $14.26 Trillion, which would put our current debt expressed as a percentage of GDP at perhaps something like 100 * $11T/$14T, or about 78.5% (plus or minus a fudge factor for that dodgy calculation, and growing fast). The US needs to stop growing the debt/GDP ratio and begin shrinking it. That's my understanding anyhow, with very little training in economics under my belt. Boracay Bill (talk) 03:25, 23 April 2009 (UTC)

media misreporting debt
I just removed this line from the intro. "Since FY 2002, the deficit reported by the media has been significantly less than the annual change in the debt."

The article is too long, this is a separate issue, it was uncited, and the author probably intended to refer to the American media, which is a viewpoint irrelevant to this article. I am putting it here in the discussion board in case anyone wants to revise the point. Bluerasberry (talk) 16:32, 28 April 2009 (UTC)

current values template
Hi, I asked at the village pump about the appropriate update frequency and someone suggested sett up a template similar to User:Cool3/Debt with the template being User:Cool3/National_debt_template. Do others think this is a good idea? PDBailey (talk) 19:33, 26 May 2009 (UTC)

Debt as a percentage of the GDP
I didn't have time to analyze any data but the graph at the top of the article that shows the debt as a % of GDP since Truman seems to disagree with a chart toward the bottom under the heading " Recent additions to the public debt of the United States" by about a factor of 10. whoever made a these contributions may want to check their data.Enneagon (talk) 14:50, 18 June 2009 (UTC)


 * I didn't have the time for more than a quick look either, but it looks to me as if the percentages in the second chart at the top of the article are total debt as a percentage of GDP and the percentages under "Recent additions to the public debt of the United States" are debt added in particular years as percentages of GDP for those years (not saying anything about total debt either before or after the addition). -- Boracay Bill (talk) 04:11, 19 June 2009 (UTC)


 * Wtmitchell, that is right, the top chart regards the debt and the bottom chart regards the de facto deficit. 018 (talk) 17:41, 19 June 2009 (UTC)


 * Shouldn't it be mentioned that the EU's guidelines are "Total Debt cannot exceed 60% of Gross Domestic Product. Budget Deficit can be 3% of Gross Domestic Product." Granted this has to do with stabilization of the euro, but still... Student7 (talk) 20:08, 11 July 2009 (UTC)

Foreign ownership section
I second the sentiment that the article has improved significantly over the last year or so. It's an impressive piece.

The foreign ownership section makes the case that foreign investors have moved/will move out of Treasuries and suggests that this is a threat to the US's ability to continue to borrow cheaply. But the statements in this section are based on old (2006-2007) citations and some of those are broken or inaccessible. In reality, demand among foreign central banks as measured by the relative volume of indirect bids at auctions (the principal proxy benchmark for foreign central bank demand) hasn't really changed in the last five years. Moreover, some countries, like Brazil and others, are looking to increase their dollar borrowing because they see such strong demand for dollar assets in the international market.

How about for the article a chart showing indirect bidding as a percentage of auction size for the last five years (2s, 5s and 10s) to show that foreign central bank demand has been pretty much unchanged? I'm happy to make the graph, but I won't have access to a Bloomberg for a couple months, so if anybody has a source for the data (so I won't have to key it in from Treasury press releases) please let me know. Bond Head (talk) 11:36, 23 July 2009 (UTC)


 * I think that is a good idea for inclusion in this article, especially if it appears (as a table or figure) in another document. Lets try to make sure that when we add a figure we give it some text around it too. 018 (talk) 12:52, 23 July 2009 (UTC)

Real versus Nominal Debt
It is important that we use real or inflation-adjusted dollars when discussing debt levels. It really doesn't matter which year is chosen as the base year.--Mokru (talk) 00:39, 8 August 2009 (UTC)

External Debt
A small section on this maybe. Since it doesn't have its own wiki entry. I know the article mainly discusses the public and Federal debt which totals $9.7 trillion, but external debt should get a quick mention, which is the total of all debt the US owes to everyone, not just to itself but other financial institutions, governments etc.

US treasury website; Gross External Debt at $13.77 trillion, June 30th 2008. http://www.treas.gov/tic/debta308.html

Some relevance and importance of this figure should be included.


 * External debt Is a very different concept than national debt, I would say it might merit a see also, but it certainly way too different to just throw in there with a short paragraph. 018 (talk) 01:15, 8 August 2009 (UTC)

Incorrect history section
A claim is made that the debt decreased during Clinton's tenure, yet the graphs show otherwise. So does this wikipedia article. . It may be wise to correct this. 76.93.146.33 (talk) 20:59, 25 August 2009 (UTC)

Well, generally speaking when the line in the graph goes down that means that the number is lower and when it goes up the number gets bigger. That means that when the line went down when Clinton was president, the debt was decreasing (getting smaller).

I made a small edit in the history section. There was a syntax error on the last line in the table. I am new to Wikipedia and could not find any place to post a request for the edit so I made the edit myself. On this talk page, this is the only place I could find to place this notice. --Mr-Encyclopedia-Man (talk) 13:37, 15 September 2009 (UTC)

The Daily History of the Debt Results

Historical returns from 01/21/1993 through 01/21/2001

The data for the total public debt outstanding is published each business day. If there is no debt value for the date(s) you requested, the value for the preceding business day will be displayed.

( Debt Held by the Public vs. Intragovernmental Holdings )


 * Talk:United_States_public_debt\table1

looks like it went up to me. —Preceding unsigned comment added by 74.220.75.66 (talk) 03:13, 4 October 2009 (UTC)
 * I added a link to the table


 * So, the table is pretty much flat near 1/12/96 and shows negative growth in 2000 (start 5.75 trillion, end 5.66 trillion). 018 (talk) 01:35, 21 October 2009 (UTC)

Debt ownership: intragovernmental holdings
I've been trying to verify that the US Treasury does not make redemption payments for securities held by the Federal Reserve, but I have been unable to find anything on that issue (not even at the US Treasury or the Federal Reserve websites). Also these very different holdings are lumped together in the ownership pie graph. Clearly securities held by other government trust funds must be redeemed whenever those funds require liquidity. On the other hand Federal Reserve held securities must never be redeemed or the Federal Reserve member banks would be defrauding the public of the income form originating new money. Does anyone have a reference to a reputable source on this issue? 99.26.91.35 (talk) 14:55, 14 September 2009 (UTC)


 * The Fed holds regular, marketable securities, not the special, non-marketable securities held by the trust funds. When a security held by the Fed comes due, the Treasury pays it off the same as if it were held by you or me.  If the Fed wants to get rid of a security before it matures, it sells it in the open market through the New York Fed's trading desk.  I'm not sure what you mean by "Federal Reserve member banks would be defrauding the public of the income form originating new money." Bond Head (talk) 16:41, 14 September 2009 (UTC)


 * I understand everything you’re saying here. That wasn’t really my question. I've been looking into this further and I think the answer to my question might reside in the statutorily limited dividend that can be paid to Federal Reserve member banks. However, it isn't entirely clear to me that the limit is a minimum (which would allow the type of defrauding I'm talking about) or a maximum (which would be more appropriate). Much of this would be answered if the Federal Reserve every got audited by Congress, but there might be a way to answer it with statutory or structural limits.


 * The question I'm trying to get to is whether the Federal Reserve member banks (its shareholders) can benefit from the redemption of Treasury securities. Certainly the Federal Reserve holds these Treasury Securities in its System Open Market Account (SOMA) until maturity. Apparently (according to the last paragraph of this) it elects to either use redemption payments to buy new securities at primary Treasury auctions, or it elects not to do so. I’m interested in where those funds go when it elects not to do so. This is to trace the seignorage of US money. If those funds are returned to the US Treasury along with the surplus interest income than that is appropriate. If on the other hand those redemption payments make their way to Federal Reserve shareholders, that is not appropriate. It may be the case that it always elects to reinvest the redemption funds, in which case this point is largely moot. On the other hand, if it does not reinvest, then the Federal Reserve doesn’t really talk about those funds in all of its reams and reams of literature. I'm just trying to untangle that crucial issue, which is very vaguely addressed here in this article and everywhere else I look. —Preceding unsigned comment added by 99.26.91.35 (talk) 17:36, 14 September 2009 (UTC)


 * Also I should have said that the reason the trust fund and the federal reserve securities should not be lumped together is that the one segment (the trust funds) is a definite obligation of the Federal Government while the other (the Federal Reserve held securities) are not really an obligation in the sense that the redemption payment might be made (as well as interest payments), but that everything belongs to the Federal Government’s general fund (the Federal Reserve is simply holding onto the securities but returns all but a fraction of the interest payments and so like as redemptions are reinvested the securities represent an accounting/bureaucratic paper shuffling around of funds from the treasury and right back to the treasury). 99.26.91.35 (talk) 18:35, 14 September 2009 (UTC)


 * 99.26.91.35, do you realize that the Federal Reserve, unlike any other bank, can purchase money at less than its face value? It (usually) makes money, but it is not a profit maximizing firm (or else it would just buy lots of money). 018 (talk) 19:23, 14 September 2009 (UTC)


 * Well, I guess there are two components of what you're asking about. The first is what happens to the "cash" received by the Fed if the Fed's Treasury bonds are redeemed at maturity.  As far back as I can quickly find data, the Fed's holdings of Treasury securities go up every year.  So there are no net proceeds from redemptions.  Everything is plowed back into more Treasuries.  The second is what happens to the Fed's net income it earns every year.  Most is paid to the Treasury Department.  Some is transferred to "surplus," the Fed's version of retained earnings.  Some is paid to member banks as dividends on the Fed's paid in equity that all banks are required to contribute.  See here. Bond Head (talk) 04:18, 15 September 2009 (UTC)


 * Bond Head, thanks for the info. That was exactly the type of information I was looking for. Keep in mind though when you say “So there are no net proceeds from redemptions” that does not follow from the Fed’s holdings of Treasury securities going up each year. Since the Fed creates money it can increase its holdings of securities each year and still pass redemptions into its surplus, and on to its members as dividend income. This was just the type of shenanigans I was suspicious about. While the whole open market operations obscures what is going on, the payment of dividends to member banks means the whole apparatus is much like a money laundering scheme. The Federal Reserve could just as well originate new money and transfer that new money directly to its member banks as dividends (without money laundering). Instead it looks like it first buys Treasury securities until maturity and then transfers the maturity redemption payments to member banks as dividends. Of course only an audit would reveal what is really going on, since it looks like there is nothing in the Fed Reserve Act or its routine operations that prevents such member enrichment and money laundering. From what I can tell, the Act appears to have been amended in 1933 to allow this type of activity.


 * One more thing. It looks like the idea that the Federal Reserve monetizes US Debt is a common misconception propagated by the Fed itself. The only way the debt gets monetized is if the Federal Reserve uses redemption payments to reinvest in Treasury securities (the redemption then gets passed back and forth between the Fed and the Treasury in a pointless cycle of redemption and reinvestment that could be replaced by simply destroying the securities, just as the Fed destroys/de-originates money). When the Fed buys treasury securities it is no more monetizing the debt as when any private citizen buys treasury securities. Monetizing debt requires that debt be replaced by newly originated money. The Fed instead allows the debt and the newly originated money to both exist side-by-side. That means that lumping social security trust fund obligations with federal reserve obligations is not as mistaken as I said earlier because the Federal Reserve is actually defrauding the US Treasury and the obligations are therefore genuine obligations (i.e., not monetized debt). —Preceding unsigned comment added by 99.26.91.35 (talk) 14:42, 15 September 2009 (UTC)


 * I don't think there are any "shenanigans" or "defrauding" going on. Think of the Fed's transactions with Treasury in an accounting sense.  Suppose the Fed buys $100 of Treasury notes at auction.  The Fed debits its own securities account (increase in the Fed's assets) by $100 of notes and credits the Treasury's "deposit" account (increase in the Fed's liabilities) by $100.  When the notes come due, the Fed just reverses the transaction.  It credits its securities account (reduction in the Fed's assets) by $100 and debits Treasury's deposit account (reduction in the Fed's liabilities) by $100.  There's no transfer of redemption payments to member banks.


 * Dividend payments to member banks (as well as the banks' purchases of Fed stock) are mandated in statute and make up a small portion of the Fed's disposition of net income--just 3.4% in 2008, or $1.2 billion across the whole banking industry. The large majority of the Fed's net income is paid to the Treasury--$31.7 billion or 89.3% in 2008. Bond Head (talk) 17:30, 15 September 2009 (UTC)

PDBailey, yes I realize that. However you're confusing currency notes with money. The Federal Reserve can create money without buying currency notes and therefore the profit-maximizing thing for them would be to avoid buying currency notes in the first place (comparing a fraction of a cent for the currency notes to zero cost for electronically created money). In any event, the Federal Reserve does have profits and issues dividends to all of its member banks. It also provides all sorts of other valuable perks to its member banks such as making loans collateralized with nearly worthless assets. The question I'm asking is not really about all of that, it is about whether the Federal Reserve shares the proceeds of its security redemption receipts with its member banks 99.26.91.35 (talk) 19:36, 14 September 2009 (UTC)


 * 99.26.91.35, I assure you, I am not confused about profit maximization. However, I think your question has nothing to do with the US debt, or this article and should be asked at one of the help desks or on another website. If this discussion does have something to do with improving this article, please continue on. Otherwise, please move it elsewhere. If you do think it relates to this article, please state very clearly how it relates. 018 (talk) 19:57, 14 September 2009 (UTC)

Borrow vs Issue?
Can it be accepted that the US Government will never balance it's budget? (There should be another wikipedia page to cover the concepts related to if that concept even makes sense) Perhaps rather than borrowing the money and pushing the problem into the future, it's much better to just issue the currency. Jeff Carr (talk) 06:51, 5 November 2009 (UTC)

Perspective on the size of the debt?
I think most people won't really understand how LARGE the debt is. Perhaps a link to a resource which explains just how huge 1 trillion dollars is? For example, if you download at 16Mpbs, it would take over 2 years (771 days) to download a file which is 1 trillion bytes large. —Preceding unsigned comment added by 24.83.165.236 (talk) 17:19, 10 November 2009 (UTC)

"Approximately 70% of federal spending is in four categories: Defense, Medicare, Social Security, and interest on the debt."
Where does the number 70% come from? johnpseudo 21:40, 19 November 2009 (UTC)

Hello John: Take a look at the pie chart at the top of the United States federal budget article. I'll cite a source for it here. Medicare and Medicaid is more accurate (healthcare).Farcaster (talk) 01:24, 20 November 2009 (UTC)

fyi from anon
FYI - Malaysia is listed twice in the table


 * Yes. The two entries give different figures and the table content is unsourced, so it's not clear which one to skotch. This source, apparently related to the table content and cited elsewhere in the article, gives info from treas.gov for "MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES" for verious recent months, but the "Grand Total" figures don't include the "3428.0" figure given in the table (the 3427.4 figure given for July 2009 is close). I'll leave it to others to try to straighten this mess out. Wtmitchell (talk) (earlier Boracay Bill) 00:34, 26 November 2009 (UTC)

Compliments
I have to say editors, this is a very well written article. It's very inspiring to bringing other articles to a higher caliber. Very surprised it did not get past the good article nominee stage.

Maybe it would have been rated higher if it weren't so blatantly partisan. Lose the Bush-hatred and maybe you'll do better. —Preceding unsigned comment added by 74.160.8.181 (talk) 02:33, 30 June 2009 (UTC)

--- This article has improved over the last year or so but it still shows a bias - namely a bias against debt. The mere inclusion of the long discussion on foreign ownership and the wildly irrelevant speculations and associations (what the debt might be someday, or what might happen some day if xxxxx also happens; associating public debt with the US balance of trade and various US policies/programs; etc...) is little more than an attempt to persuade - persuade people on the dangers of debt. There would be no problem including all this anti-debt talk in the guise of "facts" if a comparable amount of space were given to the benefits of the US debt - e.g. a readily available quality investment vehicle for investors worldwide, a cheap source of capital given currently low interest rates, a viable substitute for taxes by taking money from willing lenders versus unwilling taxpayers, etc... Jasoncward (talk) 04:32, 5 September 2009 (UTC)

I agree this article seems extremely biased against debt. As proof, a comparison of US to other countries' debt is missing. —Preceding unsigned comment added by 173.48.135.137 (talk) 22:11, 16 December 2009 (UTC)

CIA disagrees with Wikipedia
The CIA number is actually the gross debt, not the public debt which is what appears in the table. (see what I deleted here). If you look at the graph, CIA agrees with the White House on this one. 018 (talk) 17:12, 3 December 2009 (UTC)

Multiple reference sections
There are two reference sections in the article, one where it should be and one not labeled and in the middle. Someone should fix this. —Preceding unsigned comment added by 75.161.132.13 (talk) 20:14, 20 December 2009 (UTC) The extra reference section is after the Components section and before the Risks and Obstacles section.75.161.132.13 (talk) 20:18, 20 December 2009 (UTC)

Lead

 * On a side note, I think the WP:LEAD has too much emphasis on gross debt, being that the lead should summarize the article. -Shootbamboo (talk) 21:23, 6 January 2010 (UTC)

Quoting speculation
Despite the drawbacks of making future projections, however, a responsible government must arguably make long-run projections so it can prepare the country for future possibilities. The federal government does provide long-run budget projection in Table 13-2 on page 209 of the Analytical Perspectives of the 2006 U.S. Budget. It projects that the federal debt held by the public will reach 249 percent of GDP in 2075. This is more than double the maximum reached during World War II and nearly four times its current level. Most of this increase is due to projected increases in entitlement spending and the resulting interest on the debt. It is worth noting that this is a projection, not a prediction. This projection assumes normal economic conditions and that government policies will follow current law. The stress of a quadrupling of the debt would likely cause one or both of these items to change.

I cut this out because it's ridiculous to treat this projection as if it were grounded in any physical reality. Our %debt has never been 249% of GDP and probably never will be without a catastrophic collapse of the nation-state. Any slightly rational individual can look at the graphs on this Wiki-page and see that this projection is meaningless. Projections like this aren't facts, they're speculation, and not very good speculation at that. Quoting someone else's speculation doesn't legitimize it. To use some extreme examples, everyone would theoretically run off a road if steering wheels were arbitrarily locked into some position while driving. As we all know, sane/healthy drivers are always adjusting the steering wheel to keep their cars on the pavement. More humorously, if someone had taken my rate of growth at 13 and tried to extrapolate that to the age of 40, he would have predicted that I was going to be taller than a tree. Even quoting such asinine predictions is a waste of time and bandwidth, and certainly not good enough for a Wiki.

These projections were provided by the OMB, so they are pretty well sourced. I agree that it is extremely unlikely that the total debt will grow to 249% of GDP, but you are welcome to improve this section. Also, please sign your talk posts. Ausman (talk) 18:19, 17 January 2010 (UTC)

Discrepancy at the end of the last paragraph of the History section
During the administration of President George W. Bush, the total debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008,[7] rising from 54% of GDP to 75% of GDP. During March 2009, the Congressional Budget Office estimated that public debt will rise from 40.8% of GDP in 2008 to 70.1% in 2012.[8] The total debt is projected to continue increasing significantly during President Obama's administration to nearly 100% of GDP, its highest level since World War II. If the debt as a percentage of the GDP was 75% in December 2008, and 54% in 2001, it seems totally unreasonable that the Congressional Budget Office would say that the debt % of GDP was 40.8% in 2008. Also, if the debt is projected to hit 100% of GDP during Obama's administration, why would it only be 70.1% in 2012? I understand that there must be differing ideas on what these numbers should really be, but if Wikipedia is going to include all of them, it should include an explanation of why they disagree. Dakane2 (talk) 20:24, 1 January 2010 (UTC)


 * Without looking, I'm guessing your getting caught up in the gross debt versus public debt issue. See the first paragraph of the article. 018 (talk) 21:53, 1 January 2010 (UTC)

I found this to be kind of confusing as well, particularly since the graph at the beginning of the History section does not agree with the data in the table. After looking at it for a while, I realized that it was the Gross vs. Public debt issue, so I added a column to the table which includes the public debt.Ausman (talk) 18:04, 17 January 2010 (UTC)

gross debt??
What is gross debt? "includes funds held by the government" isn't an adequate definition. Rtdrury (talk) 20:16, 26 May 2009 (UTC)
 * maybe you can propose a new definition. The public debt is the sum of all outstanding debt that is not held by the government. The gross debt includes the debt held by things like the medicare trust fund and the social security trust fund. 018 (talk) 20:55, 26 May 2009 (UTC)

ok help me out here. (ie please rephrase the intro or something.)
 * US gov debt = "public debt" = "national debt" =amount of money owed by the US Gov to holders of U.S. debt instruments. OK this makes sense.


 * No! It doesn't.  If the purpose of this article is to distinguish the actual debt of the government, the error is in the first sentence that defines the public debt. The "public debt", as properly distinguised from the "gross debt" would be the debt owed to the  non US Government  entities that hold government securities.  And I will change this right here and right now.  There is also disagreement as to _OWNS_ the government liabilities (e.g. T-Bills) held by the Fed.  I am of the opinion that because these securities are purchased by the Fed as a department of the government with money created from thin air through government license, then these instruments are the property of the US government.  The distribution of interest from these holdings to the Treasury is a testimonial to this _fact_.  Therefore: The terms "public debt" and gross debt are bing incorrectly defined in that these include and describe these Fed assets as being privately owned.  These assets are no different from the assets owned by the SS trust fund as regards any distinction of money owed to entities outside the government itself.--The Trucker (talk) 23:35, 9 February 2010 (UTC)


 * "Debt held by the public is all federal debt held by states, corporations, individuals, and foreign governments, but does not include intragovernmental debt obligations or debt held in the Social Security Trust Fund."
 * Is 'debt held by the public' the same as 'public debt'?  Are you saying it includes Fed bonds held by States, Corps, gov of China, etc etc?  kindof a restatement of the first sentence?
 * Or do you mean, 'debt held by public' also includes the Cal state debt, the Nebraska state debt, and the state debts of all the other states too, and also includes the City of Omaha NE Debt and Lincon NE and Houston TX and all the cities and all the counties and all the regional transportation  quasi-governmental agencies and stuff in the US?  All of the debts of all the government things anywhere in the US, roll their debt all into one big lump, is that the 'debt held by the public'?

you can see it's a bit confusing as written. I take it that the first option above is what is intended we-re just talking about the US fed gov, not any of the states or anything. Maybe a better way to say it would be "Since the Social Security Administration, and other federal agencies, invest their excess funds in US Treasury Bonds, that amount is excluded from the "public debt".  Someone else make this change, I don't  know enough about it. OsamaBinLogin (talk) 06:13, 13 September 2009 (UTC)

NO! I understand now. You really have to rewrite that second sentence, I had to go read 'soc sec trust fund' to figure out this all. There's two concepts that sound exactly the same but are different: OsamaBinLogin (talk) 06:28, 13 September 2009 (UTC)
 * public debt = all outstanding US debt instruments.  It's owed by the Gov, and therefore by 'the public'.
 * debt held by the public = debt held by anybody or anything outside of the US Fed gov, including the Chinese gov, IBM corp, Joe Shmoe, Fidelity Growth Mutual Fund, mutual funds in Germany or Argentina, they are all 'the public' who holds this debt, in the phrase 'debt held by the public'. You can't reasonably use that word 'the public' to describe this concept, there's got to be a better term for this concept.

This WIKI article is VERY incorrect on this issue and needs much revision. Facts from TreasuryDirect.gov : U.S. national debt is now 12 Trillion. Intragovernmental holdings are 4.4 Trillion and has remained constant during the bailout crisis. US "Debt Held by The Public" is 7.6 Trillion and has risen from 5 Trillion at the beginning of the bailout crisis (Nov 2007). Total "unrealized debt" in the US economic system is 60-80 Trillion (based on the money multiplier effect from the public debt figure). Wolfram Alpha is more accurate than this article. —Preceding unsigned comment added by 208.187.32.71 (talk) 01:13, 12 November 2009 (UTC)
 * 208.187.32.71, can you clarify, where are you looking that you see an error? Also, Wikipedia is not a news source and is not intended to keep up to the minute results. The links to debt measures at the bottom of the page are intended to do that. 018 (talk) 04:05, 12 November 2009 (UTC)

I think the first paragraph does a good job of explaining the difference between gross and public debt. If you wanted to create a separate wikipedia page for the two concepts, that would be welcome. Ausman (talk) 18:21, 17 January 2010 (UTC)

It is interesting that the government as well as economists make the misleading distinction between 'debt held by the public' and 'intergovernmental debt'. The distinction is entirely pointless, in that, the intergovernmental debt is the social security 'trust fund' held by the government. Of course this 'trust fund' is a collection of senior treasury debt that not only is backed by the full faith and credit of the US, but also must be drawn on the budget itself. This last characteristic does not exist for normal government treasury instruments. Therefore, by virtue of their senior nature and the fact that as bonds they must specifically be defaulted on in the same way as any other government issued debt; they must be counted together will any other debt liabilities that have been issued by the treasury. A good analogy would be that the United States congress would pass a law defaulting its social security issued bonds while maintaining the promise to pay on the bonds issued to China, one can only imagine the results of the election that would follow! —Preceding unsigned comment added by 85.232.220.96 (talk) 06:53, 9 February 2010 (UTC)


 * It is even more interesting that some people see no difference whatsoever in current liabilities and future liabilities. The "debt owned by the public" (in this article, the "public debt") are current liabilities that must be financed immediately via the current budgets.  As these instruments mature they must be redeemed and interest must be paid from the current budget.  The internal debts are not part of the current operating budget and represent future obligations for which repayment or failure thereof has no effect on the credit worthiness of the US government.  The "on budget" accounting does not reflect any notice of these off budget operations.


 * I really hate RVing an entire edit, like I did to this edit, but I could see nothing to save. However, I feel I owe the talk page an explanation, since it was a good faith edit. Examples are not something to have in the lead, nor is mention of specific years. Also, "It is a debt owed _to_ the wage earning public by the non wage earning public that did not pay their share of the tax burden in every year that the SS trust fund increased its holdings of US debt instruments." is very POV. And a signature is totally inappropriate in the article. 018 (talk) 03:37, 10 February 2010 (UTC)

Public debt vs gross debt
I'm trying to understand here why this sentence:


 * As of early 2010, US gross debt as a percentage of GDP ranked 26th highest out of 202 countries, at 94.3%.United States Budget ref Within the remainder of this article the phrase "Public Debt" is employed as a shorthand for "Debt Held by the Public".

Relevant page: EXTERNAL DEBT

is better than this one:


 * As of early 2010, US National Debt as a percentage of GDP ranked 66th highest out of 129 countries, at 39.70%.ref Within the remainder of this article the phrase Public Debt is employed as a shorthand for Debt Held by the Public.

Relevant page: PUBLIC DEBT

The first sentence has a certain degree of WP:SYNTHESIS, I believe, since it takes the data from EXTERNAL DEBT and is creating the data based on the data we know of the US GDP. I think if we are going to use that number it has to be sourced from and external list.

Also, The first one is published as EXTERNAL DEBT whereas the second one is PUBLIC DEBT, which seems to be the focus of the article.

Anyone? -Zeus-u 18:12, 15 February 2010 (UTC)


 * Ah, I'm out of line here- public debt should indeed be the focus of the sentence. However, the original sentence uses very outdated data.  According to Table 7.1 of the Historical Tables in the FY2011 budget released a few weeks ago, our current "public debt" is somewhere around 60-70%, not 39.7%.  Also, I have no clue what the deal was with all those bold-faced phrases.  It is very distracting and out of line with project standards. johnpseudo 19:24, 15 February 2010 (UTC)
 * I did notice that the CIA factbook data was 'est 2009', but I'm lost as to what better approach we can take. The bold-face reads like some kind of legal document and wouldn't be missed, IMO. -Zeus-u 19:56, 15 February 2010 (UTC)
 * OK, now I do understand how that ref plays in, although we have to tag that it is specifically referring to section 7.1 (or maybe even link to the spreadsheet). As far as that data, looking at the spreadsheet, the number we want may be "Equals: Held by public/Total as Percentage of GDP" vs "Gross Federal Debt as Percentage of GDP". That drops the FY ending 2011 estimate from 99% to 68.6% (I believe that public debt takes out of account the internal debts such as social security, etc, which makes sense).  However, using this data, I'm not sure how we can rank it versus other countries. -Zeus-u 20:01, 15 February 2010 (UTC)


 * Zeus, any ranking would be synthesis, especially since all the other countries debt numbers are wrong for similar reasons, so updating one while leaving the others fixed is just a bad idea. 018 (talk) 01:58, 16 February 2010 (UTC)
 * Well, my original fix links to the CIA World Factbook, which does have them ranked, so we could just go with that. -Zeus-u 01:59, 16 February 2010 (UTC)
 * If the CIA factbook has the U.S. public debt at 39%, then it is very outdated. And if the debt amount is outdated, the ranking is likely outdated as well.  We just need to find a better source before we put the ranking back in. johnpseudo 12:17, 16 February 2010 (UTC)

Problems with Gross Debt Graph
I think I see at least two errors in the Gross Debt graph at the top of the article. 1) The graph states that the values are in 2008 dollars, but the numbers do not appear to be inflation-adjusted. I think the numbers are in absolute dollars (i.e., each number is the amount of debt that year). 2) The graph indicates that gross debt declined in 2000 and 2001. Table 7.1 of OMB article referenced at the bottom of the graph does NOT show a decline in debt for either of those years. The graph doesn't reference a specific table, but given what Table 7.1 says, there needs to be more proof that debt declined in those years. -PJMweb (talk) 20:32, 6 January 2010 (UTC)
 * PJMweb, the answer to your two questions is the other question. The debt decreased in real terms from 2000 to 2001, and yes, the debt is defalted to 2008 dollars--you can see the data and the source code that made the figures on the figure's page. 018 (talk) 02:37, 7 January 2010 (UTC)
 * Okay! Sorry about that. thanks for the clarification. -PJMweb (talk) 06:50, 7 January 2010 (UTC)

This graph needs to be updated with the 2009 data, which is now available from the OMB. I will do it, if someone can give me a copy of the data used to create the original graph. Ausman (talk) 18:36, 17 January 2010 (UTC)
 * Ausman, please tell me where you see the 2009 data and I will update the figure. The figures at only have 2009 as an estimate. 018 (talk) 19:30, 17 January 2010 (UTC)

This graph seems to be completely wrong. Its source is "own work", which won't do for Wikipedia. Here is another graph, sourced to the Federal Reserve and US Census data. It should replace the existing graph.

 --Beeson (talk) 15:43, 28 March 2010 (UTC)


 * Which graph is not sourced? 018 (talk) 04:01, 29 March 2010 (UTC)

Pro Arguments for Debt
What happened to the Positive arguments for having debt? All that talk about debt as money and vital to the nations health and growth? Where did that all go? I'm just asking for posterities sake, historical archiving and all that. —Preceding unsigned comment added by 94.192.246.138 (talk) 16:04, 4 March 2010 (UTC)


 * Look at the history of the article to find it. It is odd that there is no reason why the country would want to incur debts on this page. 018 (talk) 18:25, 4 March 2010 (UTC)

Debt ration must use same year
From the 'Risks to the U.S. dollar' section: "By 2019 the U.S. national debt will be $18.4 trillion, approximately 148% of 2009 GDP, up from its approximately 80% level in April 2009." Who cares about 2019 debt as a ration of 2009 GDP. That might be the most useless metric in the world and have deleted the line in question. Ender8282 (talk) 17:31, 14 April 2010 (UTC)


 * Yes. Thanks. Looking at this now more closely, the ref is from "whitehouse" but the material so negative, it could hardly have originated there. Ref needs to be attached to whatever it supports and people need to quit putting stuff in front of it. Right now statement sounds WP:CRYSTAL. Need to attribute statement to GAO, or whoever and use THAT ref. But don't strand whitehouse one. Tricky. Student7 (talk) 20:56, 16 April 2010 (UTC)

Hijacked page?
The caption to the graph looks strange:

"The. Ty and Kassie are a bunch of looser faces. so is mardee and pihneftuuh elston. he says text me my nunber isXXXXXXX. second chart shows debt as a percentage of U.S. GDP"

I would change the page myself but I'm a very new and unexperienced wikipedian. Hope someone else sees this and fix the page.Krille Katalog (talk) 22:45, 14 April 2010 (UTC)

Selective presentation of material
I just removed a new addition that seemed somewhat useful if rewritten. In order to make the US "look good" debtwise, the author had cherry picked several debt-ridden developed countries to compare the US with. This is clearly WP:BIAS. The article is about US debt and not a comparison article per se. Secondly, the US can be inserted into an overall list of all (developed, presumably) countries. That way, the material is not presented in a "cherry picked" manner. Student7 (talk) 13:13, 12 May 2010 (UTC)

If someone does compare the U.S. with Japan, the comparison should point out that Japan has $1 trillion of foreign reserves, which offsets its debt to GDP ratio considerably. By contrast, the U.S. has about $127 billion of foreign reserves. This data is available from the IMF.Farcaster (talk) 13:22, 12 May 2010 (UTC)


 * And traditional debt accounting doesn't include this? Do you have a ref for that? 018 (talk) 18:03, 12 May 2010 (UTC)


 * Here are some links to the data on the reserves. I don't know how the CIA Factbook and others handle the reserves/assets that might offset the debt to GDP ratio calculation for other countries. In other words, is it net debt or gross debt? Anyone an economist that knows this? I'll look into it further.Farcaster (talk) 23:57, 12 May 2010 (UTC)


 * IMF-Japan's Reserves $1,042B
 * IMF-U.S. Reserves $127B

Student7, what you call cherry picking is finding comparisons. Now, I think you could argue that secondary sources are not making these comparisons, but not that they aren't valid comparisons to make. 018 (talk) 02:00, 13 May 2010 (UTC)


 * Actually making comparisons is sometimes, maybe often, WP:OR. If in a bio about me, I write "I am bigger than you are" out of nowhere, I am trying to make some point - e.g. that I am bigger than somebody! This however, does not really "prove" anything and is really polemical and beside the point. If instead, I say, that compared to the average whatevers, I rank in the x percentile by height/weight/eye color, then maybe I have said something that might be useful to somebody. The point is, the article is about me, not you. Introducing "you" into the article is merely confusing and irrelevant to the user. Selective comparisons is almost always WP:OR, WP:BIAS, and WP:POV. Why is it even necessary BTW. Why is it important to make the US "look good" here. Why can't it be compared objectively. Why must the article have a WP:POV? If you haven't at least glanced at some of these "WP" references, you might do so. Student7 (talk) 15:43, 15 May 2010 (UTC)


 * Look. You can't have it both ways. Either change the sentence or accept the correct labeling of it. Have you looked at any of these WP references? Student7 (talk) 18:35, 18 May 2010 (UTC)
 * Student7, I have heard more than one Ph.D. economists make this point, so I'll bet it appears in a good secondary source. Instead of arguing about the definition of OR, why not just look for that secondary source. It will probably have a good explanation of how one should think about these comparisons too. If I'm wrong and these sources do not exist, lets remove the bullet. 018 (talk) 01:24, 19 May 2010 (UTC)
 * Here is an article on the topic . 018 (talk) 01:26, 19 May 2010 (UTC)


 * The problem is not reliability. Accuracy has never been the problem. The problem is WP:TOPIC. It is off-WP:TOPIC to explain (for example) in an article about Jimmy Carter, that he did x, while George Washington never even considered x. This is off-topic for that article. If an article were defined "Comparing the Carter administration with the Washington administration" it would be quite proper. Or comparing all the US presidents, maybe. Even that has limits. I couldn't then say that "Carter did y, while George III did the opposite." That would be beyond that article's topic.


 * Yes, there are plenty of references. The media is always ready to give a hand with bias, aren't they? That is what we are supposed to weed out when we insert encyclopedic information here.


 * The idea is to have boundaries for articles, so they don't just go wandering off. There is no sentence about the US in this article that can't be compared to some other country. Would you want an article full of "comparisons" on each sentence about the US?


 * "The US spent x% in 2002 on defense while Gambia only spent y%." Nevermind that I have reliable references for this coming out my ears!


 * Let's stay on topic! Compare with all countries here or none. Don't cherry pick. That is bias. Student7 (talk) 11:59, 21 May 2010 (UTC)

Whitewash and Strong Political bias in presentation
In the history section the bias is glaring : there is no legitimate reason to explicitly mention the debt increase under Reagan, Bush(I) and Bush(II) and avoid mentioning the debt increase that we saw after the 8 years of the Clinton presidency. Also, that section focuses on gross debt even though the article is explicitly focused on public debt, defined within the article as "Debt Held by the Public". —Preceding unsigned comment added by 69.213.86.192 (talk) 11:31, 7 July 2010 (UTC)


 * Yes, since the article is supposed to focus on public debt, a commentary on presidencies is in order only from a WP:RELY source and it should include all presidencies within the scope, if appropriate and the relationship of the president to the debt. Ford's attempt to veto spending (for example) was usually overidden. He was helpless and not politically responsible for the increase in debt (for example). But only an unbiased reliable historian can make that assertion! :) There may also be a delay in debt, having nothing to do with the (new) incumbent. That is, the next year's budget is determined by the former president. This should be taken into account as well. If it doesn't, presentation of debt as a "function" of the term of the president is pov IMO. Student7 (talk) 15:13, 9 July 2010 (UTC)

A lot of politics in here and little substance on the debt. I concur that the rise in the debt in modern times, during Reagan and G.W. Bush is not given much discussion. A little whitewashed and more projecting of what the debt will be is quite idiotic for an encyclopedia. An encyclopedia is not a crystal ball. Look at Bush II's predictions of the deficit in his first year; they were completely wrong. Clean up the predictions and the politics, which clutters an otherwise nice article. —Preceding unsigned comment added by 128.32.166.162 (talk) 00:30, 10 July 2010 (UTC)

Breakdown by Congress not President
Since the Congress has last word on the budget, is a color plot available that can break down deficit spending by Republican/Democrat control of Congress? —Preceding unsigned comment added by 71.227.105.206 (talk • contribs) 11:11, 1 May 2010


 * That would be another article. 018 (talk) 01:56, 3 May 2010 (UTC)


 * It's not appropriate for "another article". This article is about the public debt and the history of growth.  If it's neutral POV to link the growth of public debt to the party in power in the Executive Branch, then it's also neutral POV to link the growth of public debt to the party in power in the Legislative Branch.  I've created a color plot from the same data (which has been moved to http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/hist07z1.xls), depicting US Gross Federal Debt as a percentage of GDP, except that the color key identifies the periods that either Democrats (blue) or Republicans (red) controlled both the House and the Senate.  Periods in which control was split are purple.  I'd insert it immediately below the existing graph plotting debt vs. time and color coded by administration, but I'm not sure where to start.  Would someone point me to a "how to" to upload the image?  —Preceding unsigned comment added by 173.74.128.138 (talk) 21:45, 17 August 2010 (UTC)
 * Start here, at Wikimedia Commons. -Shootbamboo (talk) 21:48, 17 August 2010 (UTC)

US Businesses buy government municipalities to insure stock?
Is the US debt owned mostly by US businesses that buy government bonds? Do US businesses insure their stock with government bonds? —Preceding unsigned comment added by 66.99.132.30 (talk) 17:14, 14 July 2010 (UTC)

References hyperlinks are all raw html/broken
On Dec 1,2007, the references section hyperlinks are not displaying properly. All the raw html is showing and no links. Tried to go in an edit to see what might be wrong, but it was not obvious to me. I remove an extra that was still there in between the Reflist tag and that seemed to fix it.

Deletion
I don't understand why my edit was reverted, and I don't really understand what the editor meant in his summary line Dwightschrute1010 (talk) 19:27, 10 September 2010 (UTC)
 * Well I don't know who reverted you, but I find it a bit silly. Your sentence compares 2009 dollars to dollars in the 1800s and treats them equally, which is economically silly, in my opinion. I'm afraid I will revert your contribution also, sorry. -Shootbamboo (talk) 00:32, 11 September 2010 (UTC)
 * I support Shootbamboo's reversion as well. Do your best to present both sides of the argument. Bush added $5 trillion to the debt during his tenure. Obama has added about $2.6 trillion, but much of this is due to the economy he inherited. Japan has a debt to GDP ratio of 200% after running stimulus for a decade after a similar debacle around 1990. Our economy today is $14 trillion in size, much larger than Reagan and prior. I could go on, but you get the point.Farcaster (talk) 04:00, 11 September 2010 (UTC)
 * I think the most important point is that the source was a blog. Now, that blog was on a reputable news site, but it still doesn't get the credit for the quality of the editorial oversight of the magazine itself. 018 (talk) 15:59, 11 September 2010 (UTC)

There have been a few skirmishes over this, with Dwightschrute1010 adding sources to support his reiterated insertion, only to be rereverted. The most recent insertion was (refs converted to inline links):

I think that the assertion would be allowable if it identified source 2 of 4 as an opinion piece and replaced the unsupported 2.5620 trillion figure with an assertion that Obama's $3.6 trillion budget more than doubles the national debt (which that source supports). I would question whether the assertion belongs in the lead section, though. It might fit better in the Calculating and projecting the debt section. It also might be better to not rely on an opinion piece (even an opinion piece in the WSJ) for support but instead say something like "The 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than projected, and will raise the federal debt to 90 percent of the nation's economic output by 2020.", citing source 3 of 4 for support. Wtmitchell (talk) (earlier Boracay Bill) 02:38, 12 September 2010 (UTC)
 * Source 1 of 4 comes up as a dead link for me. perhaps it's a forum response in a blog, perhaps not -- I don't know. I do see that a google search for "2.5260 trillion" finds hits on several blogs.
 * Source 2 of 4 is a Wall Street Journal opinion piece which says, in part, "The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined."
 * Source 3 of 4 is a Washington Times news piece titled, "CBO report: Debt will rise to 90% of GDP" which, though it does speak to the general point, doesn't directly support the article assertion.
 * Source 4 of 4 is an opinion piece in usnews.com titled, "Obama's National Debt Dwarfs Bush's and Reagan's", which speaks to the assertion's general point but does not support its specifics.

File:Federal Debt-VS-Taxes.PNG
Can we get a source on the lines in File:Federal Debt-VS-Taxes.PNG? Specifically, did the top rate already go up? I thought it was just scheduled to go up in 2011. 018 (talk) 03:11, 11 September 2010 (UTC)

It's a nice looking chart that I'd like to reference. If only it referenced it's sources. Geek2003, please update with sources. —Preceding unsigned comment added by 71.101.111.233 (talk) 21:40, 14 September 2010 (UTC)


 * Because this figure is not verifiable (and apparently wrong), I'm removing it until their is a source. It seems like a good idea for the article, so I hope it can be sourced and included again! 018 (talk) 01:59, 15 September 2010 (UTC)

Sorry, I was swamped doing other research. A simple Google search for tax rates or Federal Debt produces hundreds of hits on the history of our income taxes and Debt, I have included several reference's. Geek2003 (talk) 19:34, 6 October 2010 (UTC)


 * Okay, looking at one of your refs and  the top did not increase in 2010, nor is it 40%. Your other two sources don't list a 2010 value that I can see. This is the one year I checked and it is wrong. The graph needs some more detailed verification. Can you please (1) add the data you used to the image page, (2) reference every year or range of years? I'm removing the image until we can verify it since it obviously disagrees with even your provided source. 018 (talk) 23:25, 6 October 2010 (UTC)


 * I think the spreadsheet referenced here would be a good source for the top and bottom tax rates, given it's from the IRS. The data is only through 2008 though, but should be able to find the rates for 09 and 10 on irs.gov fairly quickly.  Combine that with the debt numbers, and you're done with minimal sourcing.  5 sources for 3 lines just seems a bit much (realizing I'm suggesting 3 sources for just two lines ...).  I was a little uncomfortable with one of the sites used as sources - bargaineering.com  At the bottom of ones of the linked articles it mentions that it uses data from a bunch of random sources "and trusty Wikipedia" - sorry, that puts it into the unreliable category for me.  Ravensfire ( talk ) 00:32, 7 October 2010 (UTC)
 * I actually would like to see a secondary source for this (or a journal article). The lowest tax bracket is negative (with the EITC), plus, you have to take into account the parole deductions... I think it is more complicated than it is being presented as. Even if you get that, then who says the top bracket and debt should be on the same graph? Is this OR? 018 (talk) 04:14, 7 October 2010 (UTC)
 * Hmm, I think your last point may be the most interesting. Do we have anything in the article either relating debt to tax rates?  From looking at Geek2003's image, the inference is somewhat clear - as the highest tax bracket trended down, the debt went up.  That's probably not something that should be inferred by just an image with nothing in the article (referenced) to even remotely back it up.  And let's ignore just about anything else that might have affected things.  What might be a bit more interesting (and to me viable) comparison is the average effective tax paid per year for individuals, and see what that looks like.  No idea where to pull that number from though.Ravensfire ( talk ) 04:40, 7 October 2010 (UTC)
 * Interesting note - the IRS note that the 86 tax law change altered how AGI was calculated, which affects the average tax rate. Part of me still thinks the graph is a useful addition to the article, but it leaves a lot out (tax collected, budget, etc).  Geek2003 - any thoughts from you on this?  Ravensfire ( talk ) 14:30, 7 October 2010 (UTC)

OK - I have edited the lines to remove the 2010 information. Geek2003 (talk) 15:38, 11 October 2010 (UTC)
 * Geek2003, I think you have to talk about a lot more than that and add references as well as a table to the figure page. But the main question is, why isn't this WP:OR? 018 (talk) 15:44, 11 October 2010 (UTC)

National Debt Public Policy Organizations?
I'm sure there are both organizations that support a national debt and ones that oppose it. I think a new section/subsection/whatever listing those organizations would be most helpful to Wiki readers.

Phantom in ca (talk) 23:41, 11 October 2010 (UTC)

Request for expanded section on debt ceiling
It seems likely that raising the debt ceiling may become an issue this winter. (As opposed to just the usual sabre rattling.) This page is likely to get readers looking for info. Any chance of someone expanding the debt ceiling section? Specifically, the implications of raising or not raising the ceiling. Nosimplehiway (talk) 12:32, 6 November 2010 (UTC)

Percent held by China
The table "Leading Foreign owners of US Treasury Securities (July 2010)" needs an "all other" category so the numbers add up. The bottom line shows the numbers adding to 100% but in fact they only add to 73% since the table lists only the first 9 of the 35 countries (plus "all others") in the Treasury table. 98.166.249.58 (talk) 15:31, 12 November 2010 (UTC)

Since it wasn't a "primary" source, I didn't want to try to include a statement from my local paper that 17% of foreign-owned US bonds are owned by China. This seems less than anything I have seen before. I realize it is probably growing faster than it is for other countries, but the overall amount did not seem large. Student7 (talk) 14:59, 3 April 2010 (UTC)

Tagging along with that, in the main USA article there is a reference to Japan surpassing China in how much American debt they hold. But this article still shows that China has more. It is a little contradictory. Here is the reference link on the other article: http://news.xinhuanet.com/english2010/business/2010-02/16/c_13177277.htm Here is the main US article: http://en.wikipedia.org/wiki/United_States#Economy

136.176.97.46 (talk) 03:17, 7 May 2010 (UTC) Ethan


 * Uh, xinhua is not a reliable source. The US official statistics are. However, I too recall that being reported, but it seems the official statistics have been updated and it is not the case. Looks like nobody bothered to report that. 018 (talk) 03:24, 7 May 2010 (UTC)

---I figured this is probably the best place to state that someone keeps putting Taiwan as a Special Administrative Area of the PRC. That's CPC/PRC propaganda. The government of Taiwan is democratically elected and sovereign. —Preceding unsigned comment added by 159.53.46.140 (talk) 21:59, 21 May 2010 (UTC)


 * And so indicated in the article Taiwan. Thanks for pointing that out. (I was wondering what was going on there with all those changes to and fro but wasn't really paying attention). Student7 (talk) 18:47, 23 May 2010 (UTC)

Understanding the Intragovernment Debt / Debate about Whether it is "Real debt"
The following paragraph was removed: "However, one counterargument is that between the present and 2036, the Social Security Trust Fund will require the government to borrow $2.4 trillion from the credit markets (in the absence of significant budget surpluses), increasing the debt held by the public as it retires that portion of the intragovernmental debt. Other pension programs will have similar effects. In other words, the intragovernmental debt will be replaced by debt held by the public. These amounts are owed to Social Security recipients and other government pensioners, who will not relinquish these payments easily. Under this view, the distinction between debt held by the public and intragovernmental debt is essentially irrelevant."


 * I agree we could use some better sources for this, although the argument is spot-on. Deficits in the Social Security program over the next 25 years will require enormous Treasury security issuance as the Social Security Trust fund begins to claim general fund revenues to cover the $2.4 trillion trust fund claim. Each dollar of general revenues claimed for Social Security will add to the debt held by the public, as we expect to run large deficits for the foreseeable future. The "intragovernmental" debt represented by the Social Security Trust Fund will be essentially converted to debt held by the public unless we dramatically reform the program, affecting those within 25 years of retiring. That ain't gonna happen, as all reform plans exempt those over 55 making it practically impossible to avoid this from occurring. So the distinction between the two debt buckets is really irrelevant. To restate, we will issue about $2.4 trillion of debt held by the public to retire the intragovernmental trust fund balance over the next 25 years. But I cannot find good sources to point that out clearly, even though some economists are advocating using the gross debt figure, as are members of the Reform Commission.Farcaster (talk) 19:08, 31 May 2010 (UTC)


 * Farcaster, I guess the point is I don't think you will find a reputable source that agrees with many of the points. Key questions: what is the other pension program? How is this argument different than the sourced one? 018 (talk) 00:06, 1 June 2010 (UTC)


 * If Social Security is not reformed, intragovernmental debt is replaced by debt held by the public to the tune of the $2.4 trillion Trust Fund between now and 2036. The Social Security report indicates this when it says general funds will be required to plug program deficits; the meanings are synonymous. As long as we run large overall budget deficits (which everyone expects), every dollar of general fund revenue required to plug Social Security program deficits will both increase debt held by the public and liquidate the intragovernmental debt/trust fund balance. The complexity comes in with reform; there are two scenarios where the intragovernmental debt would not be converted to debt held by the public, both of which are unlikely: 1) Social Security law is changed, bringing payroll taxes dedicated to the program in line with expenditures, avoiding the use of general funds; and 2) The general fund runs a surplus sufficient to cover social security program deficits (about 1% of GDP), so that present general fund tax revenues can cover the program. The first scenario is possible; the second scenario would require a miracle. Does this make more sense now? Without reform, the intragovernmental debt will be swapped for debt held by the public. That is how the Trust Fund works by law if the general fund is in deficit also. Medicare works similarly and has a $380 billion trust fund. I don't know about the others trust funds.Farcaster (talk) 01:41, 1 June 2010 (UTC)


 * Let's use an example. Let's say Social Security runs a $100 billion program deficit, meaning program expenditures exceed the dedicated Social Security payroll taxes. Under current law, the program shortfall gets plugged by general fund transfers, until the Social Security Trust Fund is liquidated. Since the general fund is running a huge deficit, it doesn't have the money to cover this transfer so it issues new treasury securities to get the money. The debt held by the public goes up, and every dollar that is transferred to Social Security from the general fund brings down the Trust Fund balance. Per the source cited above, this type of trust fund liquidation will occur until 2036 when the Trust fund is exhausted. After that, Social Security has no authority to take general fund revenues and program payouts fall by about 25%.Farcaster (talk) 01:51, 1 June 2010 (UTC)


 * Farcaster, there are two sides who have spilled ink on this topic, they are presented in the article. Lets stick to what reliable sources say rather than what we might speculate or conclude based on what we see. 018 (talk) 04:00, 1 June 2010 (UTC)


 * The term "Public Debt" is a term that has been around for over 200 years, and it has a very well defined meaning, "Intragovernmental Debt" is a sub-category of the "Public Debt" just as "Debt Held by the Public" is a sub-category of the "Public Debt". So I don't see any debate.  "Intragovernmental Debt" is a part of the "Public Debt" . . . by definition.  Since this is an article about the "Public Debt" we should use these terms accurately and in the same way that the U. S. Treasury uses them.  The U. S. Treasury defines these terms here.18.4.15.74 (talk) 19:38, 19 October 2010 (UTC)


 * The term "Debt held by the Public" did not exist before January 31, 2001. It first appeared out of nowhere in the U.S. Treasury Monthly Report on the Public Debt issued January 31, 2001 . . . which so happens to be the first month George ...W. Bush held office. You can verify this here. It is a very poor choice of words, because it creates a situation where the sub-category "Debt held by the Public" sounds deceivingly like the super-category "Public Debt".18.4.15.74 (talk) 19:38, 19 October 2010 (UTC)


 * The term "Intergovernmental Debt" seems to include debt held by the Fed. Then the next thing I see seems to imply that these T-Bills bought by the FED are included in the "Debt Held By the Public".  And either way you want to go, you end up with a falsehood.  The term "Intergovernmental Dept" is always punctuated with "e.g. the Social Security Trust Fund".  This means that there are real live people who expect to be paid.  And the only way they can be paid is by taxation or borrowing.  But the debt held by the FED is not in any way a debt held by anyone expecting to be paid.  Those people who held these instruments have already been paid by the FED using its money creating powers. The FED has all the money it wants, right there at its keyboard.  The debt held by the FED NEVER NEEDS TO BE PAID.  So it is not like the SS trust fund.  The fact is that debt held by the FED is actually a subtraction from the real debt "public debt" or the real "national debt".  "quantitative easing" makes the relationship of the deficit and the national debt a lie.  If the deficit is financed by the sale of T-Bills and then the FED buys the T-Bills with money from its keyboard then the future obligation of the treasury and the tax payers is extinguished. The _REAL_ debt is removed by FED purchases. Here is a picture of the FED's Balance sheet.  The FED has announced that it will be purchasing an additional $600B in the secondary T-Bill market.  That is 3/4ths of the $800B stimulus.  And we say "Thank You Fed".


 * BOTTOM LINE -- If government spending does not create inflation, there is no reason to sell T-Bills in the first place.The Trucker (talk) 04:48, 15 November 2010 (UTC)

I think this section relies too heavily on blockquotes, the referenced sources should probably be summarized instead. 018 (talk) 04:19, 1 June 2010 (UTC)

Understanding the Debt Held by the Public / Debate about Whether it is "Real debt"
The Intragovernmental Holdings are Securities held by Trust Funds which are vital to the United States Governments ability to function, so in order to prevent eventual collapse, we most certainly need to make sure that those obligations are met and paid.

The holders of the Debt Held by the Public, are entities with money to invest: foreign nations, private investors, and speculators. Since these holdings are not so vital to the Nations health, it would be easier for us to say to the holders, "Sorry, that's the chance you take when you invest your money . . . Thank you for playing." Generally speaking, these holders are investors who are more accustomed to taking a hit on their investments.

Having established that the Debt Held by the Public is a lesser priority, this brings up the question "Is Debt Held by the Public real debt?" Perhaps we should use the Intra-governmental holdings as the true measure of the U. S. National Debt. . . this would send a clear signal where our (as a Nation) priorities lie. 18.4.15.74 (talk) —Preceding unsigned comment added by 71.255.168.254 (talk) 14:10, 20 October 2010 (UTC)


 * FYI if you use this U. S. Treasury web page as a guide:


 * then your view is in direct contradiction to the view officially endorsed by the U. S. Treasury.Csdidier (talk) 16:06, 24 October 2010 (UTC)


 * UPDATE: I sent a barrage of emails to the U. S. Treasury asking them if this website was representative of the official position of the U. S. Treasury. This website stated clearly in plain English that there were "several different concepts of debt that are at various times used to refer to the national debt" . . . this website then went further to explain that "Debt held by the public is the most meaningful of these concepts and measures the cumulative amount outstanding that the government has borrowed to finance deficits." . . . I received an answer, but it wasn't a straightforward answer . . . anyway . . . the website has since disappeared . . . I'm not sure what that means or if my emails had any impact. Csdidier (talk) 01:57, 19 January 2011 (UTC)

Whoever Put those definitions up in the intro paragraph . . . Thank You!
Seriously, that's great! Nice and clear! No ambiguity. . . One small technicality I'd like to mention however. . . The formal definition of Debt Held by the Public includes Guaranteed Debt of Government Agencies which are NOT issued by the U. S. Treasury. This is merely a technicality and a formality. . . And I'd like to stress that the addition that you've made to the introductory paragraph is such an enormous gesture of benevolence not only to the intelligent wikipedia-reading, voting U. S. Public but to the entire human race. . . that I will easily forgive this technicality for at least 6 months.

I'm busy sending emails to the U. S. Treasury. . . One website has been taken down. . . I think my emails may have had something to do with that. ..

I'm now trying to see if I can get them to straighten out their publications. . . I'm just going to keep pummeling them with reason until either they convince me that they are right. . . or I can convince them that I am right.

this is what I'm working on:

http://plugsandwire.com

Again, thanks Csdidier (talk) 03:06, 19 January 2011 (UTC)

request
table showing change in deficity by president. I know that at some level this is silly, as long term trends can overwehlm what a president does, but I think alot of people wouldlike the data. —Preceding unsigned comment added by 75.67.134.245 (talk) 23:36, 28 October 2010 (UTC)

need a chart to show national debt and deficit as a percentage of IRS tax revenues collected for the same year. debt as a percentage of revenue is way more meaningful and more accurate than debt as a percentage of GDP. no ambiguity in terms of dollars of revenue collected in taxes and payments to the u.s. treasury. —Preceding unsigned comment added by 69.138.67.226 (talk) 03:04, 31 January 2011 (UTC)

nuclear weapons
I'm undoing this edit. It looks like synthesis. I admit to being biased against things which say, "the debt can be attributed to X", because depending on how you order revenues and expenditures you can get lots of different things. In any case, I'll put aside that bias if one of the sources gives that conclusion on its own, rather than an editor putting different sources together to make the conclusion. (Also, the Brookings book should be referenced with page numbers.) C RETOG 8(t/c) 03:55, 2 February 2011 (UTC)


 * I agree with you Cretog8.Farcaster (talk) 04:02, 2 February 2011 (UTC)


 * It was indeed synthesis, because I could not remember where I first read that nuclear spending had approached $4 trillion, but it was in the late 90s. So just FYI, the same editor of the Brookings study wrote this about 3 years prior (1995) to the 679-page behemoth of Atomic Audit (1998):


 * "...the total figure will likely be equal to the $5 trillion national debt. In short, one quarter to one third of all military spending since World War II has been devoted to nuclear weapons and their infrastructure... -- "Four Trillion Dollars and Counting," Nuclear Weapons Cost Study Committee, Steven I. Schwartz, p. 33, Bulletin of Atomic Scientists, November 1995.


 * See Google Book Link. I am reinstating the edit shortly with another source or two, since not only had Schwartz (Brookings Institute) foreseen the link to the national debt, others had, also. Ambassador Thomas Graham, Jr. has been quite an influence in nuclear policy and is a good source. So yeah, the debt and the nukes are closely tied! Inseparable, as they say. I like to saw logs! (talk) 08:40, 2 February 2011 (UTC)


 * Just because the amounts are the same doesn't mean the public debt can be attributed to that source of spending. It could be the dramatic increase in entitlement spending, which has increased as a share of government spending and relative to GDP while defense spending actually declined relative to GDP through 1998. You can say the amounts are the same but assuming cause is where the text is in error. You can quote the source directly (use their words please) saying this if you want, but it is not factually accurate. One could argue Medicare, Medicaid or welfare are the cause too. Social Security is definitely not a cause, as it is funded fully by dedicated tax revenues. Technically, any government program without a dedicated source of funding that fully covered it is a cause of the debt, as is failure to tax sufficiently to keep the annual debt increases at zero.Farcaster (talk) 16:08, 2 February 2011 (UTC)


 * Ahem, I guess a lot of people on Wikipedia need some kind of training school. You see, sources are never wrong. Sounds stupid, but follow this for a minute. If one source says one thing and it is erroneous, there are a number of things that can and do happen.
 * It gets ignored. This is awful, since the author himself may never realize it. And it gets quoted years later, long ignored, and it can be difficult to see the error and correct it or do one of the below things. Imagine a typo from a source that is 2,000 years old that no one notices, until of course, it is printed in the English Wikipedia.
 * It gets corrected by the author, publisher, the author's descendants once he's dead, or by some later editor, or authority (especially for a government report). This can be a problem, especially when an author recants his ideas and yet the community continues to use the old info and attribute the erroneous info to the (now recanted author).
 * It gets refuted by one or more external sources. The problems are quite complicated, because a lot of people will never have the in-depth research for making proper refutations, depending on the complexity of the perceived error. So while controversy might ensue, the source is not "wrong," but instead we say it is refuted by (fill in the blank) a reliable, many reliable, some, some specific sources.
 * Later refutations can approach what amounts to a paradigm shift in thoughts, relegating the error to a constraint of the original author's world or environment. This has happened to things like Newton's laws, eugenics, religious teachings, and other ideas which may be taught as historical ideas which have been superseded or consolidated into more updated ideas.


 * So for example, if I was to indicate what people thought of gravity in the 19th century and backed it up with sources, then the 4th criteria (above) would imply that the sources would spout errors due to historical ideas. THE SOURCE WOULD NOT BE WRONG, but rather superseded by Einstein's theories. None of the possibilities is going to be "The source is wrong" unless it is a parody or mock source, so I will add this one:


 * 5. The Source was produced as a parody, a joke, a fiction, or a purposely false idea, conspiracy, propaganda, malicious lie that misleads a vast majority of the hidden truth. This has been the case, for example, when Frederick Cook supposedly went to the North Pole and Bernie Madoff when talking about his pyramid scheme. These are very special cases, and the proof for and against a particular statement of a liar can take historians, judges, lawyers, scientists hundreds and thousands of years to decide. So even though Herodotus is supposedly the "Father of History," his writings are vehemently opposed by people claiming he was merely a propagandist against the Persians, calling him in the same breath "Father of lies," i.e., the Devil himself. Herodotus and Cook are therefore unreliable sources. These sources are still not "wrong" like a math problem can be "wrong." So much for reliable sources!


 * Let me say this about nuclear spending attributable to over 100% of the national debt. There are lots of other ways to add up some numbers and make a comparison to the debt. Like social security, defense spending, etc. The Cold War, however, ended in the 90s, and a lot of people were discussing the costs. (This committee was formed in 1993... Gulf War and its costs... ring a bell?) Other authors have repeatedly made claims for other contributions to the debt, so perhaps you should quote them? But IMHO, I feel that the many hidden costs of nuclear weapons should shock and cause debate (such as we are having) because it's a little far-fetched to fathom. Eisenhower naively thought that nuclear spending was an economical way to beat the Russians. Hindsight says, "wow," and it serves to reason that the USA dominated the Cold War with a heavy financial toll. That being said, make modifications to what I wrote, by all means, to clarify whether "equals" is tantamount to "equivalent" or "attributable" and this debate becomes one of semantics. I like to saw logs! (talk) 21:13, 2 February 2011 (UTC)


 * I'm fine with comparison (and it is an interesting comparison) as long as we stay away from "cause" type verbiage. Equivalent works well for me.Farcaster (talk) 23:37, 2 February 2011 (UTC)

Broken links
I apologize if I'm not doing this correctly, but I noticed that reference 19 links to a page that no longer exists (404 error): http://www.whitehouse.gov/omb/budget/fy2009/sheets/hist01z1.xls Tgillet1 (talk) 01:21, 26 February 2011 (UTC)

U.S. Debt limit?
I don't see where in the article, nor in Wikipedia more generally, the U.S. "debt limit" is discussed. My understanding is that this is the big political issue that requires Congressional action and Presidential signature from time to time. Can anyone help point the average Wikipedia reader to where this subject is discussed? Cheers. N2e (talk) 04:25, 8 March 2011 (UTC)


 * It is discussed briefly here, in section 2.5, Debt ceiling. I think a change in name would be appropriate, however.  "Debt ceiling" is neither the common current usage nor the name of the section of U.S. law that establishes it (Title 31, Section 3101, "Public debt limit").  Rwessel (talk) 05:08, 8 March 2011 (UTC)


 * Thanks for the link. I sure could not find that despite being an experienced editor and pretty decent researcher.  I will create a redir page for U.S. debt limit in the meantime.


 * As for your idea to rename the article, I would support that. If someone ever gets to a formal proposal on it, let me know and I'll be happy to come back and weigh in with my rationale.  Cheers.  N2e (talk) 23:53, 8 March 2011 (UTC)

Unilateral US debt cancellation method towards Beijing chicom and only chicom
There is some rumor recently that USA will unilaterally cancel and declare null-void all of its debt towards chicom and only chicom, before year 2017, before the Bald Eagle's currently undisputed naval and air military supremacy starts to wear out.

I think this option should be discussed in this article, because the conditions in favour of USA make this option a very likely outcome!

- Red China could not oppose such a move but in words, lacking aircraft carriers or assault landing capital ships and 5th generation fighter jets, unable to invade either USA or Japan (although South Korea may temporarily fall victim to a land-based chicom invasion in such a case.)

- The cancelling of all US debt towards chicom would make huge sums of money available towards flawlessly fulfilling all other international creditors of USA, therefore such a move would be well-received in international stock markets and supported by all countries outside the Russo-Chinese sphere of influence (i.e. Eastern Eurasia and Africa).

- It is dubious if "letters of marque and reprise" issued by Red China gov't would entice many countries to help Beijing force USA to pay. Maybe Russia and some 3rd world countries would join chicom with their words and arms, for a share of the spoils, but they are not significant with regards to military might or hi-tech industrial output, which are decisive in modern warfare. Red China has much less nukes stockpiled, than France or Tel-Aviv for example! Neither Mexico or Canada is a significant force and otherwise USA is ocean-bound and the seas are under bald eagle's firm control.

- The USA could still recognize her debt towards the chinese PEOPLE, that is the Bald Eagle's duty to remove the oppression of communism from the great asian nation and allow all yellow skinned people to think, speak, worship, associate, invest and enterprise according to their free will. Such a gift of mental and economical liberty to the chinese people could replace the vast monetary payment which US currently owns towards the communist politburo of Red China. The world would recognize the proper egality of such an exchange!

- America has the potential to live without chinese imports, since her population has strong protestant work ethics and they were able to supply themselves and much of the world with all desired industrial output until the 1970s. Americans would have to work a bit harder again and not balk at sewing shoes, that's it. Furthermore, mexican people would be happy to take the place of chinese labourers.

Therefore this Wikipedia article should discuss the aspect of US unilateral debt cancellation with regards to bonds collected by the Beijing chicom leadership! 82.131.128.121 (talk) 17:37, 24 December 2010 (UTC)


 * Unlikely as it's just a rumor - see WP:CRYSTAL. Also, unless it's discussed in reliable sources, there's no way to put it in the article.  Ravensfire ( talk ) 17:55, 24 December 2010 (UTC)


 * This sounds WACK . . . I don't know who chicom is . . . If the U. S. Government were to do a specific and quarantined default on U. S. Treasury Bonds . . . I would imagine they would isolate and default on the OASDI Trust Fund (Much more money to be certain!). . . but I wouldn't even expect them to do that! . . . That would be unprecedented . . . after 200 years of making sure the interest on U. S. Treasury Bonds was paid on time . . . after 200 years of building up credibility and making sure that people knew that U. S. Treasury Bonds are the safest (risk-free) investment in the world . . . a move like that would be silly . . . and if this idea had any credibility it would certainly make the front-page news of the New York Times! . . . So I apologize but I dismiss this entry as "WACK" . . . I'm not even going to bother to look up what "chicom" is on the internet. . . . Csdidier (talk) 02:39, 19 January 2011 (UTC)


 * this sounds like general Communist chinese porpaganda more then anything. and even if we did do so, china would still own us around $11 trillion, as we gave them billions of dollars in the 1940s after world war 2 in a system similar to the marshall plan. Joesolo13 (talk) 23:32, 12 March 2011 (UTC)