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Absent a trade surplus or radical and drastic cuts to US military spending, paying down the debt is impossible. This sort of deleveraging would suck too much m

Absent a trade surplus or radical and drastic cuts to US military spending, paying down the debt is impossible. This sort of deleveraging would suck too much money out of the economy. We are barely hanging on borrowing a trillion dollars a year. The most likely scenario: minimal economic growth and near-zero interest rates for the foreseeable future.

AnthonyMouse 14y ago
When has a major country ever really paid down its debt? The debt never gets smaller. At best the economy grows faster than the debt so that the debt to GDP ratio improves. The problem right now is that we're spending too much money on the wrong things (military spending and entitlements) and it's crowding the things out of the budget that actually help the economy, like basic research and education. Imagine for one second where we would be if we swapped the budget lines for the DoD and scientific research.
- meric 14y ago
  If you visit http://www.budget.gov.au/2012-13/content/bp1/html/bp1_bst10-04.htm http://www.budget.gov.au/2012-13/content/bp1/html/bp1_bst10-... and scroll down to Table 3, you will see that in the year 2008-2009, the Australian Federal Government had a net debt amounting to -0.1% of GDP. Net debt being negative means the government had net assets - any debt could have been paid off with cash on hand. Of course, you can try to argue Australia isn't a major country...
  - AnthonyMouse 14y ago
    You're talking about the deficit, not the debt. You can hardly read what I wrote as saying that no major country has ever run a budget surplus for a year or two. Australia continues to have some AU$200+B in outstanding treasury securities. (http://www.aofm.gov.au/content/borrowing/commonwealth/Monthly_Changes_CGS/2012/08_august.asp http://www.aofm.gov.au/content/borrowing/commonwealth/Monthl...)
    - meric 14y ago
      It's debt. "Table 3: Australian Government general government sector net debt and net interest payments(a)" Net debt in 2008 was -16 billion dollars. The 200 billion debt was made since 2009. I stand corrected though, it was -1.3% of GDP worth of net debt, not -0.1%; you were right I read the wrong column.
- icebraining 14y ago
  When has a major country ever really paid down its debt? The US. Of course, that was in 1835: http://www.npr.org/blogs/money/2011/04/15/135423586/when-the-u-s-paid-off-the-entire-national-debt-and-why-it-didnt-last http://www.npr.org/blogs/money/2011/04/15/135423586/when-the...

AnthonyMouse 14y ago

When has a major country ever really paid down its debt? The debt never gets smaller. At best the economy grows faster than the debt so that the debt to GDP ratio improves. The problem right now is that we're spending too much money on the wrong things (military spending and entitlements) and it's crowding the things out of the budget that actually help the economy, like basic research and education. Imagine for one second where we would be if we swapped the budget lines for the DoD and scientific research.

meric 14y ago
If you visit http://www.budget.gov.au/2012-13/content/bp1/html/bp1_bst10-04.htm http://www.budget.gov.au/2012-13/content/bp1/html/bp1_bst10-... and scroll down to Table 3, you will see that in the year 2008-2009, the Australian Federal Government had a net debt amounting to -0.1% of GDP. Net debt being negative means the government had net assets - any debt could have been paid off with cash on hand. Of course, you can try to argue Australia isn't a major country...
- AnthonyMouse 14y ago
  You're talking about the deficit, not the debt. You can hardly read what I wrote as saying that no major country has ever run a budget surplus for a year or two. Australia continues to have some AU$200+B in outstanding treasury securities. (http://www.aofm.gov.au/content/borrowing/commonwealth/Monthly_Changes_CGS/2012/08_august.asp http://www.aofm.gov.au/content/borrowing/commonwealth/Monthl...)
  - meric 14y ago
    It's debt. "Table 3: Australian Government general government sector net debt and net interest payments(a)" Net debt in 2008 was -16 billion dollars. The 200 billion debt was made since 2009. I stand corrected though, it was -1.3% of GDP worth of net debt, not -0.1%; you were right I read the wrong column.
icebraining 14y ago
When has a major country ever really paid down its debt? The US. Of course, that was in 1835: http://www.npr.org/blogs/money/2011/04/15/135423586/when-the-u-s-paid-off-the-entire-national-debt-and-why-it-didnt-last http://www.npr.org/blogs/money/2011/04/15/135423586/when-the...