GAO Chief Warns of Economic Disaster - Long Article

[Bono]

Abolish all benefits for those born before 1980. Voila no social security crisis.

Great idea.  Do they still have to pay the taxes?  If the answer is yes, that could be a problem.

He said before. As for mine born after proposition. yes. According to Flemming vs. Lucas, social security taxes don't represent any entitlement.

[Beet]

Just for the record the surpluses they mentioned in the article are the result of a little accounting "creativity". Money that was slated for the social security trust fund was stolen (borrowed in politician speak) to balance the budget. But in reality the national debt has increased every single year since the Eisenhower era. Only in Washington can you claim to have balanced the budget while going deeper into debt. In the corporate world that kind of creativity would get you sent to jail.

"Just for the record," the government has a fiscal tool that no private entity has-- the ability to legislate. The social security 'trust fund' is not a liability in the true private accounting, corporate sense because the government- as dazzleman has pointed out in this thread- has the ability to legally revoke its promises at any time. It would not necessarily be popular if it did that, but it could. The only legal liabilities the government cannot escape are contractual ones- payments for services, treasury bonds, etc. which get counted on the liabilites side of the government's budget register. (Although the government could default on its bonds, that would be technically illegal. Passing new legislation would not be.) Bottom line: the government took in more than it spent or promised contractually in the late 90s. The whole idea that a surplus didn't exist in then is a conservative talking point.

How does one explain the the fact that the national debt grew every single year since 1960?

In short, in the national debt, money which the government owes to itself (such as the social security trust fund) is counted additively, while in the budget, it is counted on both sides of the "ledger." Bottom line, when the government takes in more money than it spends in a given year, there is a surplus.

Actually, the national debt did begin to shrink in the year 2000, after which the famous national debt clock in New York's Time Square was taken down, only to be put back up a few years later. Ironically, the clock is projected to be taken down again in a few years-- but for a different reason: the debt will be too large to fit on the digits of the clock.

[David S]

Just for the record the surpluses they mentioned in the article are the result of a little accounting "creativity". Money that was slated for the social security trust fund was stolen (borrowed in politician speak) to balance the budget. But in reality the national debt has increased every single year since the Eisenhower era. Only in Washington can you claim to have balanced the budget while going deeper into debt. In the corporate world that kind of creativity would get you sent to jail.

"Just for the record," the government has a fiscal tool that no private entity has-- the ability to legislate. The social security 'trust fund' is not a liability in the true private accounting, corporate sense because the government- as dazzleman has pointed out in this thread- has the ability to legally revoke its promises at any time. It would not necessarily be popular if it did that, but it could. The only legal liabilities the government cannot escape are contractual ones- payments for services, treasury bonds, etc. which get counted on the liabilites side of the government's budget register. (Although the government could default on its bonds, that would be technically illegal. Passing new legislation would not be.) Bottom line: the government took in more than it spent or promised contractually in the late 90s. The whole idea that a surplus didn't exist in then is a conservative talking point.

How does one explain the the fact that the national debt grew every single year since 1960?

In short, in the national debt, money which the government owes to itself (such as the social security trust fund) is counted additively, while in the budget, it is counted on both sides of the "ledger." Bottom line, when the government takes in more money than it spends in a given year, there is a surplus.

Actually, the national debt did begin to shrink in the year 2000, after which the famous national debt clock in New York's Time Square was taken down, only to be put back up a few years later. Ironically, the clock is projected to be taken down again in a few years-- but for a different reason: the debt will be too large to fit on the digits of the clock.

This is the Bureau of the Public Debt web page : http://www.publicdebt.treas.gov/opd/opdhisto4.htm

Show me the year that the debt went down.

With regard to the SS trust fund, yes you can say that the government spent less then they took in, but they are using money that is supposed to be put away for future use by SS. When that money is needed in the future it won't be there and government will have to raise taxes to replace it. Your argument is like saying you balanced your personal budget by stealing $100 bucks from your kid's college fund. That's not honest.

[○∙◄☻¥tπ[╪AV┼cVê└]

Show me the year that the debt went down.

With regard to the SS trust fund, yes you can say that the government spent less then they took in, but they are using money that is supposed to be put away for future use by SS. When that money is needed in the future it won't be there and government will have to raise taxes to replace it. Your argument is like saying you balanced your personal budget by stealing $100 bucks from your kid's college fund. That's not honest.

Their accounting is weird. There were surpluses in 1999 and 2000, even though the national debt still went up.

Note that the 2000 fiscal year had an increase of only $18 billion compared to $574 billion for the 2006 fiscal year (which just ended).

http://www.publicdebt.treas.gov/opd/opdpenny.htm

[Beet]

Just for the record the surpluses they mentioned in the article are the result of a little accounting "creativity". Money that was slated for the social security trust fund was stolen (borrowed in politician speak) to balance the budget. But in reality the national debt has increased every single year since the Eisenhower era. Only in Washington can you claim to have balanced the budget while going deeper into debt. In the corporate world that kind of creativity would get you sent to jail.

"Just for the record," the government has a fiscal tool that no private entity has-- the ability to legislate. The social security 'trust fund' is not a liability in the true private accounting, corporate sense because the government- as dazzleman has pointed out in this thread- has the ability to legally revoke its promises at any time. It would not necessarily be popular if it did that, but it could. The only legal liabilities the government cannot escape are contractual ones- payments for services, treasury bonds, etc. which get counted on the liabilites side of the government's budget register. (Although the government could default on its bonds, that would be technically illegal. Passing new legislation would not be.) Bottom line: the government took in more than it spent or promised contractually in the late 90s. The whole idea that a surplus didn't exist in then is a conservative talking point.

How does one explain the the fact that the national debt grew every single year since 1960?

In short, in the national debt, money which the government owes to itself (such as the social security trust fund) is counted additively, while in the budget, it is counted on both sides of the "ledger." Bottom line, when the government takes in more money than it spends in a given year, there is a surplus.

Actually, the national debt did begin to shrink in the year 2000, after which the famous national debt clock in New York's Time Square was taken down, only to be put back up a few years later. Ironically, the clock is projected to be taken down again in a few years-- but for a different reason: the debt will be too large to fit on the digits of the clock.

This is the Bureau of the Public Debt web page : http://www.publicdebt.treas.gov/opd/opdhisto4.htm

Show me the year that the debt went down.

That chart's not corrected for inflation.



http://www.brillig.com/debt_clock/faq.html

You must be logged in to read this quote.

What's dishonest is twisting standard accounting measures agreed upon by both parties for decades, including over the period in question, throwing those out for political purposes years after the fact, and then attempting to use statistical trickery to make revisionist claims about how there was no surplus, when by all standards of common sense there was a surplus. The revisionist claims are basically that the government didn't save as much as it should have, but that's not the definition of a deficit. A deficit is when the government spends what it doesn't have, not just when it doesn't put away as much money as some think it should.

[bullmoose88]

Show me the year that the debt went down.

With regard to the SS trust fund, yes you can say that the government spent less then they took in, but they are using money that is supposed to be put away for future use by SS. When that money is needed in the future it won't be there and government will have to raise taxes to replace it. Your argument is like saying you balanced your personal budget by stealing $100 bucks from your kid's college fund. That's not honest.

Their accounting is weird. There were surpluses in 1999 and 2000, even though the national debt still went up.

Note that the 2000 fiscal year had an increase of only $18 billion compared to $574 billion for the 2006 fiscal year (which just ended).

http://www.publicdebt.treas.gov/opd/opdpenny.htm

Any chance those numbers don't deal with the fact that the government borrows from social security? (rather uses the proceeds from the special SS treasury bills to cover for what income tax receipts don't give it?) I know it "dampened" Bush's defcit numbers...wondering if this could be the same thing

[Beet]

Intragovernmental debt, debt which the government "owes to itself", such as the SS treasury bills, are included in the national debt figure but not in the year to year budget figure. In the corporate or private world, failing to meet some self-imposed savings barometer may not be a smart thing, but it's not exactly the same as spending beyond one's means.