Running in the red: How the U.S., on the road to surplus, detoured to massive debt

[spanone]

The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.

In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.

Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history, wage two wars solely with borrowed funds. “In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.

Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year. The national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.

http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_print.html

[Sherman A1]

1. Read it earlier today,

it was a very good piece.

[originalpckelly]

3. The article is based upon the LYING Enron accounting of the Federal Government..

They falsely counted deficits as surpluses. They were basically taking out loans from the tax payers (we call these debt in the real world) and they lied to everyone and made everything seem wonderful, when in fact we still had deficits.

They only had surpluses if they never plan to pay the tax payers back for the money they steal (and stole during that time) from Social Security.

[originalpckelly]

2. LIES, LIES, AND MORE LIES!

We had no surplus, it was only a "surplus" because federal law states the surpluses from Social Security have to be given to the Federal Government. Without those, there would not have been a surplus. And now there is a real question whether or not the people of the USA will be paid back.

[slipslidingaway]

4. SS Trust Fund Data - surplus at the end of Clinton's term - around 1 Trillion

http://www.ssa.gov/oact/progdata/funds.html

[jmowreader]

5. This is how it happened...

Things like this:

http://www.mediaresearch.org/medianomics/2000/mn20000717b.asp

"By equating spending programs and tax cuts, reporters contribute to the misperception that tax cuts 'cost' money. The free market loses every dollar that is collected by the government, so programs like the proposed prescription drug coverage really do 'cost' money. But tax cuts restore those dollars to the private economy, where the taxpayers who earned them in the first place can save, invest or spend them as they please."

This is the problem: Right wingers apparently believe that a dollar taken in tax just evaporates. Okay, some of it does, like the dollars spent to repay all the loans Republican overspending forced us to take out. But a greater percentage of dollars taken in tax are spent at private businesses who use them to hire Americans and purchase goods and services from other American companies.