The seemingly easy answer to this question is YES! But in fact economists disagree fervently about the degree to which national debt is a real worry. As you read the articles below, compile a list of arguments for and against worrying about the debt. A "T-Chart" will work well for this purpose. One you read and compile your lists, post a response on the blog explaining whether you are a "worrier" or not based on the evidence. Be prepared to discuss as the activity for Tuesday. Feel free to bring in additional sources of your own choosing.
http://www.forbes.com/sites/sharding/2013/11/08/dont-worry-so-much-about-government-debt/
http://www.cbsnews.com/news/national-debt-passes-16-trillion-should-you-worry/
http://mic.com/articles/73067/america-is-17-trillion-in-debt-here-s-why-you-shouldn-t-be-worried
http://keithhennessey.com/2014/02/17/high-debt-bad/
Subscribe to:
Post Comments (Atom)
60 comments:
When it comes to national debt, I am not a worrier. Although we are in debt and the debt is increasing, it is increasing at a much slower pace. Like the article said, the government will never go broke. We will always be supported by our government. Our economy is constantly surprising us. Back when everyone thought the banks would fail due to the numerous loans they had to pay off, the bank surprised people by becoming strong and paid back all of the loans. The government predicts that the debt will be payed off soon and a surplus will occur. We are currently experiencing the lowest annual deficit since five years ago. Our government and economy may be in debt, but we have several examples from our past that show this will not be a problem that we can't solve.
Based on the news stories, I can say that I am not a worrier. The national debt does not affect individuals directly on a daily basis. We do not wake up each day thinking that the debt has increased another billion or so dollars. In reality, it is difficult for the average person to truly understand the capacity of a billion dollars let alone $16 trillion. It seems to me that many points for the argument against worrying about national debt surpass the ones for worrying about it. Because our country’s economy is not yet completely stabilized or close to full employment, deficit spending is actually beneficial when spent correctly. Since the economy is operating below its potential, money piles up in banks and there is little increase on the price of loans or interest rates. In addition, the government does not face the same financial problems as individuals. Therefore there is no limit as to the US running out of money. The flat currency isn’t tied to a standard or other currency and consequently does not have an affordability issue.
In my personal opinion and research on the topic of national debt, I have decided that I am not a "worrier," or someone who is constantly nervous about the nation’s debt crisis.
The reason I feel that one shouldn't worry to much about the national debt is the fact that the majority of the people who are fearful of the debt are mostly fearful due to the belief that the current or even previous problems with the debt will carry over in the near and far future. This is not something people should be doing because things change as time does, and the assumption that the nation will be under financial burden in future times is one that cannot be made accurately.
There are also trends that have been picked up over the last couple of years that show that the debts deficit has been decreasing significantly, giving the nation a boost in its fight on national debt.
I, personally, don't really care about the national debt because it doesn't really affect me. But I do think that it is something that should be worried about because, obviously, like Keith Hennessey said "we can't allow debt to increase forever" because then it'll end up affecting everyone and no one will be happy. I think that at one point, if the government hasn't been taking enough action to decrease debt already, they will at some point. And at that point, whenever it may be, it will affect that generation, and that generation will not be happy in the slightest because the government should've taken more aggressive action long ago.
I, after reading these articles, am not personally worried about the debt our country is in. It is not a good position to be in, but i think there are other things going on that should receive much more attention. We went through a financial crisis in the 80's when the reagan administration increased its spending, and everyone had their "doomsday" predictions as to where we are going to end up. But, in the early 90's, we got out of it. And we even had one of our only government surpluses during the Clinton administration. Also, reading about how the numbers we see on the news are not totally accurate persuaded me as well. Of the 16.7 trillion we are currently in debt for, it is estimated that 30 percent of that is "owed to federal agencies and about 10 percent is owed to the federal reserve itself. Only 5 billion is actually owed to institutions and people in different countries. I had no clue this was the case, and i think other people were as surprised at me, so i am now not as worried as i was before.
Not knowing many specifics on the subject of the national debt, I had assumed that the accumulation of $16 trillion in debt was a hugely negative concern to the US. But upon reading the articles, I found that maybe it's not so threatening after all. In the short term, it doesn't look so good, but from a long term perspective, things don't seem so bad. One point that brought me to that conclusion was that government spending has been on a constant decrease while the revenues from taxes have been rising. So the government is beginning to bring in more money, while spending less than in the past. The country's annual deficit has slowly transformed into an annual surplus. Another thing is, is that the government can never technically "go broke" like the average citizen or business may. If needed, the government can print money here in the US, this would lead to other problems if done excessively, but it can still be done. Also, the $16.7 trillion of debt really isn't that much. 30% of that is owed to other federal agencies, and another 10% owed to the federal reserve. The example they gave for this was, "This is like the left hand owing the right." So a more accurate total of the National Debt is around $10 trillion. And only $5 trillion of this is owed to foreign bondholders. So, after reading about all these facts, I am not extremely worried about the nation's debt. That is, as long as the government keeps it under control and doesn't let it increase too much too quickly.
I would not characterize myself as a "worrier" considering today's economic status. Yes, the debt our nation accumulates over the years can be devastating to many, and it is something that affects us all, but it will always be there. I believe it is not worth stressing so greatly over, due to our economy always needing to pay back loans, and distribute funding to various programs. Since Obama has taken office, our debt has risen $1.44 trillion, compared to Bush's exceeding number of $5.07 hole in the budget. The author of "National Debt Passes"even remarked that "Interest rates are at rock bottom levels, and despite the dire warnings that have been coming for several years from some analysts that higher interest rates are just around the corner, investors have continue to view our debt as one of the safest places in the world to park their money." I believe this is a good sign that other nations have faith in the US economy, and will allow us the time necessary to pay back such debt, while rebuilding our economy slowly.
I choose not to worry about the national debt because:
1. Our deficit is shrinking. Time and time again in the past, when major spending increases have occurred and our deficit grew to record levels, economists predicted the collapse of the US economy. This never happened and it will not happen this time around
2. While there have been riots and chaos in the streets of nations like Greece in the past years over their debt burden issue, the United States
does not face these same threats because it is able to print money to pay its debts unlike the Greeks under the Euro
3. Those who we borrow from have no worries about getting the money back right now. Interest rates are at "rock bottom lows" and there isn't a direct or immediate threat to the country
4. During periods of high unemployment, increasing deficits have been shown to benefit the economy - not harm it.
While I believe that the debt should be lowered, just like someone at risk of heart disease should lose weight, I do not think the country will be suffering a heart attack anytime soon and I see that there is still time to fix the issue at hand and make for that healthier economy.
Debt is terrible no matter what. If you owe someone money, it could have dire consequences depending how the situation is worked out. Its the same issue for the Federal Government. Although I am concerned about the national debt, I'm a little less worried now that I have knowledge of the debt. First of all, the U.S. Government simply cant go broke since our currency isn't pegged to a single item such as gold. This was a major concern of mine before reading these articles, especially after learning about the French Revolution. Investors purchase government bonds, which are a secure investment which doesn't discourage people from investing in the U.S. However this doesn't mean that we should turn a blind eye to debt, it has many negative aspects. Higher debts lead to higher interest rates by causing loan shortages and having a low confidence in the economy. Higher interest rates reduces investment and limits future growth. Also capital stock and wages will lower and gives lawmakers less flexibility in the lawmaking process. As I said before, I am concerned about the debt and it is a pressing issue, however I am not as worried as much about it anymore.
I do not believe that people should worry about the national debt. Like many other "crises", much of the fervor for lowering the national debt is caused by hysteria--most people would automatically assume that a higher debt is bad without actually looking at the facts. One example of this is the panic people produce when they see that every decade, the national debt nearly doubles, so they predict that the national debt will follow the same trend and exponentially increase over the years. Many of these people do not realize that the debt will not exactly follow the trend and that other conditions that could just as readily decrease national debt as well as increase exist.
Furthermore, it is impossible for the government to actually go bankrupt since the US currency isn't backed by gold or other currencies, the Congress could easily spend or lend money into existence; however, Congress simply chooses not to do so.
I think that the federal debt is not something that is worth worrying about. The reasons not to worry seem much more rational than those to worry. I do agree that there likely is a point where the debt could become a worry, but US debt is nowhere near that critical point, and I do not think that it will ever reach that point. The current borrowing trend will not continue like this forever. In the 80’s, we had debt, and by the late 90’s, we were producing annual surpluses. It is not logical to base predictions on a continuance of current trends. One reason that many people think that the debt is a bigger problem than it actually is, is that the government is financially different than citizens. The government can not go bankrupt and does not have the same limits that we have. Money is technically an infinite resource and the government can spend or lend more into existence. Not only is debt and deficit spending not bad, but it can also be good! When the government deficit spends, the added money flows to private sectors which increases employment and output of goods and services. I do, however think that debt can become a big problem if it passes a point where investors become afraid of default and raise the interest to account for higher risk. At this point, interest will cut deeper into debt, and it will be much more difficult to get new loans.
Before reading the four articles, I definitely would have said that the national debt is something every American should worry about. The same government that makes all major decisions for its citizens is trillions of dollars in debt- how could that not be concerning? However, this actually is not the case because simply put, the high debt is something that won’t last forever, and if there wasn’t a national debt, the effects on the nation would be more severe. Most importantly, economic conditions change frequently so a constant debt increase that the nation is experiencing now most likely won’t steadily grow for much longer. Additionally, the deficit is showing signs of shrinking because it is the lowest that it has ever been in the past five years. Another major factor that should convince Americans to not worry so much about the national debt is that the other nations that we borrow money from are not concerned about getting the money back any time in the near future. In other words, the United States still has time once the government starts repairing the national debt issue to get some borrowed money back to the nations it was taken from. Lastly, in terms of a more common sense approach to the issue, Americans shouldn’t worry about the national debt because they aren’t the ones seated within the White House every day, responsible for making changes to the budget and trying to reduce national debt. People have more appropriate things to worry about in their own lives, so they shouldn’t worry about something that is essentially out of their hands.
Although economists say there is to be no worry about national debt i disagree. Economists say there obviously are short term disadvantages due to the debt, but based on studies the longer term worries people seem to have actually come back better and stronger than they were before. I dont see this as the case, I believe the national debt to be a huge controversy. The resulting government can either largely sink or have major cuts in social security, medicare, etc... Also future generations will have to deal with a huge debt that we are responsible for, a debt probably so deep it will be difficult to fix.
Based on the evidence that was found, I believe that the national debt is something to worry about. Recently, the national debt has crossed the $16 billion threshold, and as a result of this increasing debt, there will be a rise in interest rates, a reduction in investments, and our nation’s future economic growth will be harmed. If the debt were to get worse, which is expected to happen, there is an increased risk of a fiscal crisis where lenders will then begin to demand higher interest rates to compensate for the increased risk of default. Because federal borrowing generally reduces national savings, the capital stock and savings will be smaller than if debt were lower. Due to this, there would be smaller capital stock which then reduces productivity and leads to lower wages. By having such a high national debt, our nation is less prepared for future risks that would require significant short term deficit spending or tax relief. For example, if another recession, war, or terrorist attack were to occur, we would not have a strong budget to support the nation in these times of need. Due to these risks that are cause by our nation’s large nation debt, I believe that this deficit is something that should be worried about.
After reading these four articles, I feel like I am on the against worrying side of this argument on national debt. One reason why I am on this side is due to the annual deficit dramatically shrinking. Most people assume that the national debt is increasing, which it is, but most people fail to realize that the government is spending less and less each year. In the third article, the author mentioned that the US government can really never go "bankrupt". If the government needs something, they will always have the money to pay for it no matter what the circumstances are. This point is what really persuaded me towards the non-worrying side because it provides security to the reader that if the US was ever in dire need of something, we will always have enough money no matter what the national debt is. Another positive sign about the national debt is that investors continue to put more money into the debt. This shows that the national debt isn't really something to worry about if investors feel safe storing their money there. The only fear about national debt in the United States is fear itself.
The Us has a deficit of around 17 trillion dollars. That is a lot of my money but for the short term the government can continue its path of deficit spending. Deficit spending can actually create job growth as what FDR can attest to during the Great Depression. However the debt is a problem in the long term. It is a problem because if the debt passes a threshold hold then the investors who purchase the debt will become more worried of the debt which could led to a debt that is too large to manage leading to a Greece like situation. A higher debt can also lead to higher interest rates which harms investing in the stock market. Should the debt rise and another recession hits the people in charge of making economic decisions will not be able too respond as quickly because the money needed to address the problem right away will be harder to come up with. President Obama has said the deficit has shrunk and while it looks that way for the short term in the long term the deficit looks to increase to a level of 80% of the GDP
Based off of these articles, it seems as if there is nothing that is tremendously in need of worry from the American Public. While many economists argue that the National Debt is going to hinder investments and future economic growth, it seems as if they are completely ignoring the fact that the deficit is decreasing each and every year. This means that we could follow a similar trail that the economy followed in the 80's and 90's, when a continuous decrease in the deficit lead to a surplus. I agree with these big economists. We are just exaggerating these problems.
The idea of debt in general makes me very nervous, because when I think of debt I think of credit card debt and student loans, which are extremely difficult to pay off and can place financial strain on a person for a very long time. The evidence, however, suggests that the United States government's debt does not work in the same way that individuals' debt does. The U.S. Government, because its currency is independent of other nations' currencies, can print money to pay off debts, unlike European nations who use the euro. In addition, he issue at hand concerning the national debt is not a shortage of money, but a matter of resources that backs the money. Foreign lenders, like China (to use a very common example), are also not simply lending us money; the U.S. buys goods in exchange for dollars, and then foreign nations exchange the dollars for bonds, which yield interest. The articles also bring up the point that a good portion of the money that is "owed" by the government is owed to other departments of the government, which is basically insignificant. Overall, the national debt of the United States, while it doesn't appear to be a pressing immediate concern according to most of the articles, is increasing at a decreasing rate, which projects a healthier economy in the near future.
I think that I am sort of in the middle. I don’t see the reason to worry a lot but there may be some reason to worry about what a future increase in debt would cause. In the first article the author made showed past records on national debts and how we were able to come out of them with little harm done. He also pointed out that any speculation on whether there will be an increase or not is just speculation based on the current trends of the National Debt and are not as reliable as we think. However, some good points were made in the second and fourth articles arguing that we should fear what is to come of the economy. If there were to be a Greece Scenario we will not be in good shape and because of the speculations and analysis that have been put forth we can possible see this. Then again we are not Greece and can produce more money if needed, as stated in the second article. So I am on the fence about whether or not I should be worried. I would be able to argue both sides.
I am not a worrier about the national debt. There were many cases were the articles proved to me that people who worry about our country owing money need to relax. For example, “According to the most recent Treasury Department report, the deficit, at $680.3 billion for fiscal year 2013 (ended September 31), has fallen to its lowest level in five years, as government spending has declined, while tax revenues increased to $2.77 trillion, a record high.” We cannot just assume that the government will always fall into this trend of spending, spending, and spending. Also, “The U.S. government can’t “go broke.” Ever. The government doesn’t face the same fiscal pressures as you or me. The U.S. fiat currency isn’t pegged to gold or other currencies, and there’s no hard cap on dollars in the world. Hence, there’s no inherent affordability issue”. The US doesn’t have this extreme liability. Conventional wisdom wants us to believe that being $17 trillion dollars in debt is the end of the world. We have nothing to fear but fear itself. We cannot worry about being in debt, we are not the only country. Yes we might have one of the highest national debt amounts, but it is possible to keep lowering it.
Based on all the readings I am somebody who does not worry about the national debt. The economy usually goes through high and low points in a rather cyclic pattern. The economy goes through times of recession, depression, recovery, and prosperity on its own. The articles claim that interest rates right now aren’t too high and that investors continue to view our debt as a safe place to put their money. We shouldn’t worry because the people who lend us money and purchase our government debt aren’t worried about our ability to repay the money we borrowed. I found it interesting that deficit spending can increase employment and the production of goods and services and that high unemployment and increase in deficit helps the economy if proper adjustments are made to taxing and spending. The article said not to worry about the national debt because the government can always lend or spend money into existence. The annual deficit is also shrinking. There are things that could possibly go wrong of the debt continues to get worse though. If the national debt gets way out of hand cuts in Social Security and Medicare could occur and taxes could be raised. However, I think there is a lot more evidence to support the claim that people should not worry too much about the national debt.
The national debt is something that should be closely monitored but should not cause major panic. Although the debt is still increasing, it is increasing at a slower rate than in previous years. Additionally, the debt is being used to fund the creation of jobs and other projects. These projects are helping our economy because it decreases unemployment, creates products for consumers to buy and sell (export), and provides reason for creditors to keep loaning money at low interest rates. It is a very common practice to take out loans in order to get money to fund improvements: hence the saying, “you need to spend money in order to make money.” Taking out loans and increasing the debt allows for innovation and investments that help the economy now and will help the economy in the future. It is reported that “30 of [the national debt] is owed to federal agencies, 10% is owed to the Federal Reserve… and only about $5 trillion is owed to foreign bondholders.” A majority of the debt is internal and these places do not need the money right away. Like government issued war bonds, these agencies are actually helping themselves by loaning money to the government because they are getting interest on the money and the money is used to help agencies like their own. However, the national debt owed to foreign countries should be monitored because it should not be allowed to increase so far as to having other countries refuse to loan more money or help out in a time of need. Although the massive numerical figure of $16.7 trillion dollars is hard to not be afraid of, the actual problems caused by this number are slight and the amount poses no imminent threat to our nation.
I'm definitely a "worrier" based on the evidence in the articles. The fact that the United States government debt has more than tripled from $5.7 trillion in 2000 to $19 trillion in 2013 is alarming to me as an American citizen. I strongly feel that this signals catastrophe down the road for us as a country. Since President Barack Obama took office in January 2009, the national debt has increased $5 trillion, which economists say "is a drain in our economy." Although Obama inherited the recession of 2008, his policies are considered to have added an insane $1.44 trillion, largely a product of the stimulus package. While the package may have allowed banks to recover, it has added to our massive national debt. I have serious concerns that accumulating a large amount of debt will drive up interest rates, reduce investment and harm future growth because interest rates and price of loans increase when government attempts to borrow finance. Moreover, if America's debt continues to spike, the country might surpass the point where our creditors worry about the default risk on our debt. Additionally, America's debt problem is upping health care costs, something that I worry about. Over, it's absolutely vital that we stabilize debt load and decrease it dramatically. I don't want my generation to end up paying ridiculous taxes and be haunted by the past mistakes of old presidential administrations. I want to see America flourish and be a happy and desired place to live for all social classes. Furthermore, although it will take time to immensely reduce our national debt, it can be done with the patience of the American people and a phenomenal president or leader like Ronald Reagan was in the 1980's.
Overall on my lists of fears and worries about our country the national debt isn't exactly at the top of my list. The reason being is that there is no sign that the people who are lending us money are worried about our ability to repay them, also investors continue to view are debt as one of the safest places in the world to place their money. Another fact to note as to why our national debt is not something to freak out about is the fact that only about $5 trillion dollars of our debt is from foreign countries. So this constant fear of our foreign bondholders dumping their bonds like what happened with Greece is a) highly unlikely due to our ability to print money to repay our debts and b) not as catastrophic as its made out to be.
Based on the evidence shown in the articles, I believe that government debt is something to worry about. Since the year 2000 to 2008, national debt has doubled which means that the governent is spending more money than is taking in. Although some people might say that the debt is nothing to worry about and that the US has time to recover or pay back some money, I disagree. Governement debt is becoming a bigger issue everyday and should be considered a big problem. The US should keep in mind many risks and alternatives that could make the debt worse. For example, a recession would lower tax revenue as income falls or that large debt will increase interest rates and reduce investment.
Our debt is not very high now and that is why people who lend us the money are not worried about our ability to repay the money we borrow.An explanation of how the government is trying to solve the problem is by increasing taxes on everything- the more money the goverment has the greater the debt that is paid off. Since the debt is increasing everyday, the US will be poorly prepared to address future risks that require deficit spending or tax relief like a recession, war, terrorist attack, or a natural catastrophe. The US government should try to find a solution to this problem immediately because not only will the country relieve itself from debt but lower government debt means more factories and businesses with high wage jobs. On the other hand high debt will only increase pressure to raise taxes.
Though some economists may ensure that we shouldn't worry about the national debt, it is a big issue that could negatively affect us in the future. First off, having a larger national deficit than we already have can cause there to be a fiscal crisis. This would be interest rates would rising due to loaners being unsure whether the loans would be paid off by the government. Raising the interest rates would only increase the debt and make the situation even worse. On the bright side, interest rates are low currently due to the economy coming out of a recession, but possible raises in interest rates can cause the government to lose vast amounts of money. An impact of the government trying to pay off the deficit can be that the budget for Medicare, Social Security, and Medicaid can be cut back and negatively harm the lower classes, the elderly and retired, and the disabled. Overall, there should be more of a concern over the rising national debt.
Is national debt a real worry? Some economists argue that there is nothing to worry about our high federal deficit. According to Sy Harding, when the government had a massive bailout for banks and automakers, people thought that it would destroy these two industries. But in fact it mathermore, these economists suggest that trends from the 70’s show that our rising deficit right now is a cyclic cycle that will slow down over a period, and this is proven as the rate of debt accumulated each year has indeed decreased. While this all may be true, I feel that we should still be significantly worrying about the government because the deficit is still incredibly high. Congress can continue to pass debt ceilings to continue to fund programs that they wish to enact, but this will not help in the growth of our economy. One of the main problems that we have is that interest rates are still low because the short term economy is still weak. If interest rates continue to stay low, additional debt will increase “government net interest by about 1.85% of GDP.” Therefore, although economists can argue that the future holds promise, I believe that we should be more focused on the current debt situation, and seek ways to solve this dangerously high deficit.
I do not feel that National Debt should be something that is worried about. It has been a common practice for the government to run a deficit, as it keeps the economy moving and helps to avoid economic crashes. First off, the bank bailout has allowed banks to recover and become stronger than they were before the crash, and the government has made money on its investments in providing funding for the banks to recover. Second, the rate that the debt is increasing is beginning to slow down, and although that means that the debt is still increasing it is at a much less significant rate, and the deficit can eventually turn into a surplus if this trend continues. At the same time, tax revenues are at an all time high, so as the deficit spending decreases, and the tax revenue increases, the National Debt can begin to decrease. These trends of National Debt have happened in the past, and in the past our economy has recovered and turned into a surplus, so it is likely to happen again. Also, our government literally cannot go broke. Unlike an individual consumer, our government controls the dollar, and controls spending. It cannot make itself go "broke." Lastly, 30% of the debt is owed to federal agencies, 10% is owed to the Federal Reserve and only half of the remaining $10 trillion is owed to foreign bondholders. This means the debt is not nearly as bad as it seems to be. Overall, I feel that the National Debt--although it cant be ignored-- should not be something that Americans are overly worried about.
Our national debt is something we should worry about. As debt increases, the risk of driving up interest rates, reducing investments, and harm towards economic growth increases. This increasing debt can only cause a major economic setback in the future. Many people blame deficits for the national debt, while currently deficits are helping our economy. As stated by Mark Thoma, it is believed that creditors don't need to worry about default risk. To help stop a potentially weaker economy, we should start worrying about our national debt.
I am not a worrier about the National Debt. The Forbes article made a good point when they pointed out that during the 1980’s “government debt reached then record levels.” It continues by saying that after this the government made changes in their budget and shrank the budget deficit each year until they eventually had a budget surplus. This is very similar to our situation now with our national debt reaching record highs. It also stated that the last few years that the government had decreased the budget deficits. This leads me to believe that eventually the government will regulate its spending and start paying back the national debt. I think that as long as the budget deficit is shrinking each year that the debt will not be a problem because eventually the government will be able to start paying a large chunk of the national debt back.
I have to admit that prior to reading these articles I shared a viewpoint with the Keith Hennessey article in being very worried about the national debt. The trillions of dollars that the U.S. currently has in debt is a staggering number that I cannot begin to fathom. However, after reading these articles I realized that if the government makes a few tweaks here and there they should be able to begin cutting back on their spending and start repaying their debt. I would be worried if the budget deficit continues to grow each year because to me that would signal that the U.S. does not have their spending under control. I think that it is important that the U.S. works very hard each year to come as close to a budget surplus as possible and that they make the cuts necessary to do so. Overall, I am not worried with the national debt at this moment however if the budget deficit begins to increase more and more each year I will become worried about the future of our government.
The national debt is a significant factor in the modern economy that ultimately ends up affecting everyone, no matter what one’s role in society is. There are many concerns that are affiliated with the increasing debt the nation is getting into, however, there is ample evidence to prove that this is not something we need to be worried about. Statistically speaking, it seemingly looks like we are in quite some trouble. From 2000 to 2008, the national debt almost doubled from $5.7 trillion to $10 trillion. This happened again in 2013 when the debt then jumped up to $19 trillion. The recession that the country has been in for quite some time hasn’t helped matters either. Interest rates and the pressure for higher taxes increased while investments, capital stock, and future wage growth declined. Despite the numbers and the consequences that come with them, however, economists are saying that we should not be worried about the national debt, and I would have to agree. When looking at these statistics, it would be easy to conclude that the debt will only increase from here and we are bound to collapse at some point. But when doing this, we don’t consider conditions changing in the future, which could adapt to a larger national debt. The stimulus package was able to improve conditions and as it turns out, the deficit has decreased, actually causing an increase in annual surpluses. The US government can’t necessarily go broke because it can always lend or spend money. And as it turns out, Congress doesn’t usually act upon every aspect its capable of when it comes to making economic decisions, so if something did take a turn for the worse, we would have more power than we realize. As a country, we have gone through extremely rough patches in our economy, for example, of course, the Great Depression. However, we were able to bounce back from that. Our resiliency has proven to be a key factor in our economy. The debt will not shut us down, but rather, provide incentives for us to work harder and get the federal budget back on track.
We should not worry about the national debt, but let the economy run its course. During the great depression we hit record low economic status and had increased levels of debt. The government however, was able to pull it together and leave us with a period of economic success. While it may seem scary to have our debt increase into the trillions, it is just a part of the cycle. As we have the ability to become more and more wealthy in modern times, it makes sense that we also have the ability to be deeper and deeper into debt. America has never not recovered from economic hardships. If we can have a strong leader that takes control of the situation and focuses most of his man power into paying off our debt, we can bounce back from our record deficits. There is no need to worry about the debt. After all, the nation can't actually go bankrupt anyways.
I believe we should be worried by the national debt for multiple reasons. The main we should be worried is because the more debt a country holds, the less money it's about put away in savings and reinvest in the nations economy. Also, because federal borrowing generally reduces nation saving, the capital stock and wages will be smaller than if the debt was lower. the most important however, is that the government debt is 37 percentage points above its pre crisis average,but government interest payments are relatively low because the short term economy is weak.
When it comes to the National Debt, I consider myself a non-worrier. Despite the extremely large number for the federal debt, the annual deficit is actually shrinking dramatically (Forbes). The government has made a great amount of money off of increased taxes, which help pay off the national debt. When you look at the history of this country, we have been here before. Around the 1980’s and 1990’s, the national debt was at a record high, but the government managed to decrease the number through tax increases and government spending cuts. This goes to show that minimizing the national debt is not impossible. Lastly, according to Keith Hennessy, the national debt is nowhere near as high as generally reported. This is due to some of the money owed actually being owed back to the U.S.
After reading various articles based on the National Debt, I have decided I am not a "worrier". Forbes says specifically there are greater things for us to worry about, like the global respect for the United States. Although the popular opinion may be that debt is a bad thing, the deficit we accumulate as the United States of America does not seem to be worrying economists. In just 2013 alone the government spent less than it was taking in from tax revenue, a 680.3 billion to 2.77 trillion gap. If this trend continues, we may have some angry tax payers, but it will definitely benefit our country in the long wrong. "The Invisible Hand" will prevail in the long run for consumers, this being a prime example of that. I believe that as long as investors have faith in our debt and continue to "park" their money in it as CBS described it as, we do not have much to worry about concerning the national debt. Our country still thrives.
DO NOT BE WORRIED, HOMIE:
- Deficit is shrinking
- United States will go through slow recovery
- Fiat currency helps - do *not* “end the fed”
- It is not an issue of “affording” things
WHY ARE YOU NOT WORRIED, HOMIE:
- Debt may get too high where the United States has to dip into social security programs in order curb the debt
- Debt seems to be doubling at an extremely high rate
- Debt may put future economic growth in harms way
- Interest rates going up
Although the national debt is around 19 trillion dollars and growing, Americans should not be worried. Normal fluctuations of the market predict and account for periods of economic growth and of economic recession, including those of high debt and low employment. It should, therefore, be considered a natural part of a continued economy. Also, “deficit spending can actually increase employment and our real output of goods and services.” (cbsnews.com). This benefit will help the economy return to a period of growth as expected in a market like the United States'.
However, just because there should not be a panic does not mean Americans shouldn’t do their part to prevent it from escalating. An increased debt could result in a longer recession or a period of depression. Currently, interest rates are at a low price level which allows for debts to be paid off without as high a cost. Although the debt is still growing, the annual deficit is shrinking, giving another reason as to why Americans should not panic about the national debt.
Although people like to downplay the fact that the USA has a $17000000000000 debt by saying that the wrongdoing banks and corporations are being punished, the fact that there is still a huge debt exists.
“First things first: The U.S. government can’t “go broke.” Ever. The government doesn’t face the same fiscal pressures as you or me. The U.S. fiat currency isn’t pegged to gold or other currencies, and there’s no hard cap on dollars in the world. Hence, there’s no inherent affordability issue. It's common to ask Washington to "balance its checkbook," but although the government faces constraints like inflation, it can always lend or spend money into existence. Congress can only “default” voluntarily — for example, by not raising the debt ceiling.”
This is a pretty careless thing to say. For one, if the government can “always lend or spend money into existence,” then why doesn’t it just lend and spend all of the money it owes and pay it back? As the debt accumulates, the interest accumulates exponentially, and the debt just gets greater and greater. And if the US doesn’t actually “owe” any other countries anything because “Foreign businesspeople sell us goods in exchange for dollars. They swap the dollars for high-yield savings assets,” then why is there still a debt? If foreign nations have assets in our country, then what is there exactly to pay back? The government still has to pay back the money it owes. It is true that Obama’s $1.44 trillion policies did help improve the economy and Republicans should probably stop foaming at the mouths over Obama because most of the $5 trillion increase in debt was actually from the recession, which occurred under Bush. However, even though the US economy is indeed doing well, there’s no telling when it will collapse from increased interest rates, reduced investment, and slowed economic growth in the future.
Personally, I am not a worrier of the increasing U.S. National dept. It may seem counter intuitive but many economists argue that in times of weak economic growth, debt is actually a good thing. The government employs more people, creating 100 billion dollars of new income, and these employees would then save part of it and spend part of it, and the money keeps running around the system until there's enough savings created to offset the government borrowing. In addition, the large debt is not something that we have not seen before. For example, in the 1980s and early 1990s, government debt reached then record levels, and for similar reasons as today. The huge government spending efforts worked back then, even though at the time the popular opinion was also that there would be no way to escape the consequences. Overall, I know that the debt is not exactly a light issue but I personally am not too worried about it and will be able to rest easy every night.
There are legitimate short term worries regarding government debt, however, the long term worries should be “filed away”. It is so hard to predict the inevitably unpredictable future, therefore, all one can do is improve the present. Improving the current problems pertaining to government debt by not spending greater than our individual means is the more productive approach. This action of spending greater than our individual means results in nervous lenders demanding higher interest rates. These higher interest rates result in tremendous government debt. According to Mark Thoma, the “long term worry” is, “if the debt continues to escalate as projected, we could surpass the critical threshold.” This long term worry could be prevented by demolishing the current escalation and improving the “now”.
There are legitimate short term worries regarding government debt, however, the long term worries should be “filed away”. It is so hard to predict the inevitably unpredictable future, therefore, all one can do is improve the present. Improving the current problems pertaining to government debt by not spending greater than our individual means is the more productive approach. This action of spending greater than our individual means results in nervous lenders demanding higher interest rates. These higher interest rates result in tremendous government debt. According to Mark Thoma, the “long term worry” is, “if the debt continues to escalate as projected, we could surpass the critical threshold.” This long term worry could be prevented by demolishing the current escalation and improving the “now”.
I had always assumed that the enormous debt looming over our heads was a disastrous thing, and that with each penny added to the trillions of dollars that we owed as a nation, we approached the end of the world. Conceptualization of $17,000,000,000,000 is a daunting enough task, but actually slashing the debt?—Well, that sounds near impossible. After reading these articles, however, I now feel that I have a broader view of the issue and a better understanding of the implications of our debt. I am not as worried as I was, but I hold that we should make an effort to reduce the debt. The “end of the world” may not be as close as I expected, but that doesn’t mean we can’t start to discuss the issue now; I still think that we should be worrying a little. As was said in CBS News article, we are not close enough to the point at which lenders get nervous about our ability to repay their money and thus begin to raise interest rates as a “risk premium”; nevertheless, that point is possible to reach—just look at Greece—and it is perhaps inevitable. We need only to begin to slowly change our spending patterns and decrease the deficit annually, as has been done in the past.
Federal debt: I wouldn’t say, “Fuhgeddaboudit!” but we also don’t need to freak out.
Many people are worrying about the national debt, for good reason. Firstly, the debt is over $17 trillion and is still growing. Not only does the country have a long way to go to fix the situation, interest rates will continue to rise, which disallow us to pay the debt off. Now, this wouldn't be so bad if the government had a good plan to pay off the debt, but it seems that it can't agree on a budget. If the government can't do this eventually, the country may not recover for an extended period of time. Finally, the debt held by the public is projected to increase over the next few years, although some say that conditions can reverse themselves like the doomsday predictions of 2000 and 2012 and that the projections are only the continuation of current, changeable trends.
I am a worrier of the national debt because of the unpredictable and frightening implications it might have on our economy in the future. According to Economic and Budget outlook, there are four main costs to an increasing national debt:
1) “Federal spending on interest payments will increase substantially as interest rates rise to more typical levels;”
2) “Because federal borrowing generally reduces national saving, the capital stock and wages will be smaller than if debt was lower;”
3) “Lawmakers would have less flexibility … to respond to unanticipated challenges;”
4) “A large debt poses a greater risk of precipitating a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.”
These consequences bring a level of uncertainty to the economy that will not contribute to consumer trust and increased spending. If wages could easily be cut or raised at any time, consumers will not have the confidence to spend money and stimulate the economy. They will be too worried about keeping a consistent flow of income that will allow for the purchase of necessities. Once interest rates spike, the mortgage crisis, housing market, and student loan crisis will all continue to progress and become a larger problem for more Americans. The National Debt is not something to be scoffed at. It is imperative that we lower that $16 trillion price tag.
I am not a worrier about the national debt. Based on the articles it seems that people overreact about the large amount of debt. Yes the debt is large, and yes it is scary to see on paper, but it is being turned around. Officials say that it is not unprecedented that the economic harm will decrease in the furtue. The only reason for fright is because people don't think that America will change its direction about the affair. But most economists believe that its nothing to worry about and that precautions are being made to stop the grow of debt. Compared to Bush, Obama only accumulated 1.4 trillion in debt while bush accumulated 5 trillion. That is a huge deacrese. The economy is on a recover, a slow one but a sure one and I don't believe that it is nessasary to worry about the debt.
The National Debt is definitely a problem, that we as Americans, must worry about. The more the government waits to pay off its debt, the higher the amount will rise. The government will continue to pay more on more money on interest payments because of higher and higher interest rates. The only way to really lower the National Debt, is to pay it off fully, but currently, that is not possible. We can't keep putting off our debt though, we have to increase the percentage that our federal budget allows for paying off our debt so that it doesn't get too much higher than it already is.
The more the government borrows, the higher the interest rates become. So as the government borrows more and more money, it creates a large uncertainty in how stable our economy can be.
The debt can lead to a lot larger problems for the average American though. The reduced amount in national saving leads to a smaller capital stock. The smaller capital stock leads to less productivity, and therefore, smaller wages. In the government would save more, and be able to pay off more debt instead of spending it on random things that don't benefit most people, higher wages would rise ion the future, helping almost every American person.
When it comes to the national debt, the government has its fair share of critics and people who worry endlessly about it. I, however, am not a worrier. If we look at the past actions of the government, most people see nothing but catastrophes in the future. According to Sy Harding, the massive bailout seemed like a lose-lose situation, and that the government would never receive the money that was borrowed back. However, "they came back stronger than ever, paid back the loans(plus interest)." Another main concern of the critics is that the national debt has doubled from the year 2000 to 2008, and it has almost doubled again to $19 trillion in 2013. Those who have major concerns about the nations national debt, see these patterns continuing in the future. However, the annual deficit of spending is decreasing dramatically. Sy Harding also states that in the late 1980's the government had a very large national debt, but then fully recovered and actually was on the positive side in the late 1990's. His point is that government spending does work and has proved to work in the past. As you can see their are valid concerns regarding the national debt, but I am not worried after doing my research. In conclusion, the facts are that the government is starting to bounce back from the year of 2008, and I truly believe that the national debt will not be a problem.
I am not too worried about the national debt. Not to say that the national debt isn't a problem but not as big as people may portray it as. Though the debt may drive up interest rates, it will not affect them as much as some people believe. Though the deficit is still rising, and the nation has to pay interest on the money borrowed, the country isn't producing at full capacity and we can pay back money borrowed. First of all the deficit is shrinking and it is at the lowest level in the past 5 years. So the debt really isn't as much of a problem as people believe it to be.
Based on the articles, I consider myself a non-worrier about the national debt. Even though the United States is 17.9 trillion dollars, Americans own 11 trillion dollars of that debt. Debt for the government is not the same as debt for an individual. The government simply cannot “go bankrupt” like an individual can. There is always a way to transfer or create more money at the cost of inflation. Many people seem to visualize the national debt as being similar to their own debt however personal debt and government debt are radically different. The United States government is a trusted area of investment and much of our debt exists in intragovernmental bonds. Furthermore, increasing national debt means that there is government spending and money transferring occurring which is generally good for the economy Good debt is debt that will eventually reward the owner such as bonds and investments. Bad debt is money invested in something that will quickly diminish in value.
I am not a worrier about the nation debt problem. One reason I believe this is because when everyone thought the banks were going to fail. they came back stronger than they were before. They paid back all the loans and are beginning to take in millions of dollars. In addition, the deficit for the 2013 fiscal year is the lowest its been in 5 years. Also, one the economy gets out of the recession tax revenues will increase and income increases and will decrease the debt. Lastly, investors view the united states as a safe place to keep their money which shows that our government is a reliable source. that is why I am not a worrier of the national debt.
After reading these articles and weighing out the effects that the current national debt has on the U.S., it seems to me that the national debt is in fact something to worry about. As of now, the national debt has reached nearly $17 trillion, which is a whole lot of money to be owed. Luckily much of the money is owed to ourselves, such as agencies and other government owned properties. Paying off the debt isn't necessarily the problem however. The problem is what the future will hold, specifically what will happen to interest rates. As a result of excessive borrowing by the U.S. Treasury, interest rates for loans will continue to climb as a way of making sure that we will actually pay back the money we borrowed. This cycle has been continuing for many years, where interest although low now, will continue to rise and force us to spend a large portion of the U.S. budget paying off these interest rates. At some point, the debt will become so large that investors will have little to no confidence in the nation paying back what they owe that they will either stop lending all together or put interest rates so high that it will cripple our economy as we are forced to spend lucrative amounts on interest payments rates, leaving us with a still huge national debt and the problem of constant credit payments. Now, this situation hopefully is not likely and never should happen, as interest rates have fallen greatly since the recession of 2009, but there is still a chance that with current trends of government borrowing there will be large problem in the future when it comes to this topic. While many people feel that this won't happen because of their confidence that the future economy will fix itself out, I believe that we should make it so this problem should never arise in the first place and begin cutting some expenditures to lower the national debt. This would make it easier for the country to use money for unanticipated expenditures, increase wages and capital stock, and keep interest rates low for the government itself and for the rest of the general population. Although we do have time to prevent and fix this potential threat to economic security, it is imperative that we devise this very realistic situation from occurring.
Based on the articles, I have decided that I am not a worrier. Although our debt is increasing, it is increasing slowly. From a long term perspective, things aren't really that bad. The government is spending less and taxes are higher, therefore, the debt can't be increasing at this rate for much longer. I believe many people are worrying much more than they should be, and we should listen to the big economists who say we need not worry.
As far as the growing national debt, I am not a worrier. It may seem scary to think that this crippling debt is growing more and more each year. However, one has to account for the fact that the rate at which the debt is increasing is dropping dramatically. We also have to keep in mind that the yearly federal deficit is decreasing year to year and that the removal of $15 trillion of debt is not going to show results overnight. We have seen improvements over the past few years if we focus on the federal deficit and tax revenue. However, “Big Picture” results will take much longer to see, especially considering the tremendous numbers we are talking about. I believe the CBS article when it says that the policies, although not showing dramatic decrease in overall debt, have made progress in preventing the damage to get worse, which would be completely and tragically possible without these policies. This provides hope to Americans that government reforms are proving successful in targeting the problem of this large debt. Another very strong argument made by the articles is that since the federal currency is n9ot backed by gold or silver….or anything, it can never go bankrupt or broke. Although the national debt is certainly not a good thing, it is assuring to know that this debt will not be the downfall of the Unites States. The arguments made by these arguments were very successful in persuading me not to worry about the very intimidating and frightening national debt our country faces.
After reading the article, i would say that i am not a worrier about the national debt. I think that most americans worry about the national debt because the number is so high and because it seems almost impossible to get rid of. I have some concern because the number is so high, but as an individual im not that worrried because its not like i have to pay it back myself. It doesnt seem like there is a big debt to my parents and individuals. One reason I believe this is because when everyone thought the banks were going to fail. they came back stronger than they were before. They paid back all the loans and are beginning to take in millions of dollars. Investors said that they will begin to invest even more money as the economy is rising out of the recession. When the recession is finally over, the government will be able to collect even more taxes and other government programs so that they can slowly decrease their national debt. As long as the US doesnt continue to borrow large amounts of money, hopefully the US debt will get better
I am not a worrier on national debt. While we do have a large debt I feel it is exaggerated by the media. Even though we are have trillions in debt it does not seem to impact us as badly as people are making it out to be. The country is able is to function with the debt we are in right now. Even if the debt increases the government itself can not go broke. Another aspect is that having deficit is not entirely bad. Deficit spending can actually help with unemployment. Also the way the country has been doing recently it looks the country will not dip drastically and that actually the annual deficit will continue to shrink.
No I am not worried about the national debt. Although the amout of money tat the government owes is a lot, tere really isn't much worry about. The deficit is shrinking and the us government cannot go bro
I first thought that everybody would be a worrier because our country is about 17 trillion dollars in debt. That is a crazy number to owe. But, after reading many articles I found myself to not be a worrier of national debt. It may be a big issue but it does not have any affect on me. As time goes on, it will always be a problem. We can't be worriers forever. The part of the economy we experience does not include the national debt. It does not pertain to our lives so we should not worry. We have responsibilities of our own. The national debt should only be worried by government employees, not us American citizens. The government can not go bankrupt and the debt will always be a problem.
For what you've provided here, I am not a "worrier" about the debt. As stated in the articles, the US debt is largely "internal" in that the money is owed to US corporations, banks and other government agencies. Another interesting component to the debt (that I researched separately) are bailouts and nationalization of some parts of the economy. As one article stated, the US bailing out banks and auto makers has met great success as these two industries still recover and repay the US government. Nationalized systems, (in particular, Amtrak) can be either a burden or an advantage for the government. Amtrak in particular was a money-losing operation from its inception in 1972, and as of 2012, Amtrak contributes $404 million in revenue loss. Albeit small in comparison to other debts, Amtrak is one of many government agencies that contribute debt. Some (like myself) opt for the privatization or deconstruction of Amtrak, partly for its debt it causes.
There is one worry I have about debt and it is how the government reacts to it. The "outdated fiscal framework" tends to cause governments to slash programs and raise taxes and that directly affects the working class. Will one government raise my income tax and raise the SSI age to pay for the debt? I hope not.
Based on the articles, i am not worried about the national debt. The debt for the beginning of the 2013 fiscal year is the lowest it had been in 5 years. The government can not be broke like a human can. Therefore, the government can never go bankrupt. 17 trillion dollars sounds like an unbelievable amount of money to payback, but the government is raising taxes and spending less. This is similar to when everyone thought the banks were going to fail, but they got stronger and proved everyone wrong.
Addressing the national debt is not something we should really be concerned it. It may be true that if it gets out of hand it is a problem, but it is important to remember that debt now is an invest for the future of the economy. It stimulates growth, so in most cases there should be a return on investment. That being said, I don't think that the national debt should be allowed to reach an extreme level. Maintaining debt costs money in the form of interest payments. If significant portion of the federal budget is spent on paying interest payments, money is wasted because it could be going to more programs. The key is to find a good balance of debt. What that balance is, I cannot say.
Post a Comment