The National Debt, and Why It Matters

Thursday, April 05, 2012

Simon Johnson explains the national debt—where it came from and what it means to you and to future generations. In White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You he and co-author James Kwak argue that if we persist on our current course, the national debt will reduce the number of jobs, lower living standards, increase inequality, and force a reduction in government services.


Simon Johnson

Comments [23]


"inbred hillbilly living south of the mason-dixon line"

Becky - I usually admire your points of view but I cringe when you show your ignorance and/or prejudices by general comments like that.

Really, Sheldon. Here Becky not only remarks on the stupidity of these people but advances a solid reason for it. It's not their fault, they can't help it. They were born that way. I would say she is being most charitable.

Apr. 12 2012 11:31 AM
Political Pop


Apr. 08 2012 09:29 PM
Chris Garvey from Ron Paul supporter

We need to stop giving welfare to the banks. We don't need more taxes.
Tax revenue is dwarfed by:
We need to stop giving welfare to the banks:
16.1 Trillion $ Federal Reserve since 2007 to:
Citigroup: $2.5 trillion($2,500,000,000,000)

Morgan Stanley: $2.04 trillion ($2,040,000,000,000)

Merrill Lynch: $1.949 trillion ($1,949,000,000,000)

Bank of America: $1.344 trillion ($1,344,000,000,000)

Barclays PLC (United Kingdom): $868 billion* ($868,000,000,000)

Bear Sterns: $853 billion ($853,000,000,000)

Goldman Sachs: $814 billion ($814,000,000,000)

Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)

JP Morgan Chase: $391 billion ($391,000,000,000)

Deutsche Bank (Germany): $354 billion ($354,000,000,000)

UBS (Switzerland): $287 billion ($287,000,000,000)

Credit Suisse (Switzerland): $262 billion ($262,000,000,000)

Lehman Brothers: $183 billion ($183,000,000,000)

Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)

BNP Paribas (France): $175 billion ($175,000,000,000)

Federal Reserve's nearly 100 year history was posted on Senator Sander's webpage.

Apr. 06 2012 12:28 AM
G Gershy from Tin Pan Alley NYC

You say K-wak and I say K-wok. K-wak, kwok, k-wak, k-wok - let's call the whole thing off!

Apr. 05 2012 07:58 PM
Dude from Manhattan

For p. from Bushwick, re: Clinton-era surplus: depending on who does the math, the last 3 years of Clinton and first year of Bush range from a nearly balanced budget on the low end to a 600-billion dollar surplus (from 1998-2001) on the high end. It's not so much a fallacy as an effect of changes in fiscal policy and the dot-com bubble. For example, the drop in the capital gains tax rate during Clinton temporarily doubled and then tripled the capital gains revenue from 1997 to 2000, alone accounting for a substantial portion of increased federal revenue during those years.

It's all relative. 600 billion over 4 years is great, but these days 600 billion in debt is added every 6 months.

Apr. 05 2012 01:06 PM

@The Truth from Becky:

Could it be, Becky Ole' Girl, that these pecka-woods are not understanding that government "x" insurance (where "x" is the swindle 'de jour', e.g., 'old age', 'health') is not an actuarial product, but a membership fee for a benefits club designed to create a claim against the general treasury funds that could not be approved if presented to the electorate in that form?
(i.e., "it's not a tax - it's a penalty" or vice versa when the need arises)

Apr. 05 2012 12:53 PM
jgarbuz from Queens

To John A

Yes, everyone owes everyone else down the road, and without credit, borrowing, and debt, most of us would have to live back on the land either hunting or growing food, and there isn't that much land for all of us to live on. The whole system is fueled by debt, but what keeps it going is INNOVATION and TECHNOLOGICAL improvements that increased productivity of the remaining workers and of the land, so that almost all of us live better than if we went back to hunting and farming again.

However, at some point, when the debt to productivity ratio gets too unbalanced, and people no longer believe you can keep up the interest payments at least on the debt, people or banks stop loaning you money! Your ability to grow in prosperity comes to a halt, and you go backwards down the slope to a lower standard of living. You can't afford as much house or as many cars, etc., or extensive health care as you had become accsustomed to over the good years! But otherwise, we all owe each other, but it is not a stagnant system as long as GLOBAL economic growth continues at a reasonable pace. If the whole globe starts producing less, then the whole world goes back into poverty and a new Dark AGes of war, robbery, invasions, etc. to steal what little others have. As with the collapse of the Roman Empire.

Apr. 05 2012 12:36 PM

I'd go $1M or more in income as the cut-off for restoration of the tax cuts with the recognition that taxes - the revenue needed to run the government need to go higher for everyone. I'd raise rates for income over $5M to 50% or more if I could get it through Congress. We raise the rates or close the deductions and credits for EVERYONE.

Apr. 05 2012 12:35 PM
Amy from Manhattan

Hugh, I agree on Social Security--& not only what you said, but the fund has been raided for the general budget even though the law forbids its use for anything else.

Apr. 05 2012 12:31 PM
Smokey from LES

Why not eliminate the $107K cap on Social Security and take that one off the list?

Apr. 05 2012 12:30 PM
Sheldon from Brooklyn

Debt is not always a bad thing but routine deficits are. Both REPUBLICANS AND DEMOCRATS must stop routine deficit spending.

Get rid of 99% of all tax deductions, lower tax rates for all, introduce a National VAT.

Apr. 05 2012 12:29 PM
p. from Bushwick

Can you talk about the Clinton era "surplus?" Is it a fallacy?

Apr. 05 2012 12:29 PM
John A.

Ha Ha Buzz,
98% of the Globe is in debt. That means where there should be credit - debt = 0, instead No-One actually has the money (credit).

Apr. 05 2012 12:27 PM
Amy from Manhattan

How come so many US politicians say gov't. should be run like a business but then compare the country's budget to a families? A business would find ways to raise revenue, but many of the politicians elected in 2010 refuse to raise not only taxes but any kind of revenue.

Apr. 05 2012 12:27 PM
The Truth from Becky

$250k seems like a good place to start to me...very reasonable.

Apr. 05 2012 12:26 PM
Sheldon from Brooklyn

"inbred hillbilly living south of the mason-dixon line"

Becky - I usually admire your points of view but I cringe when you show your ignorance and/or prejudices by general comments like that.

Apr. 05 2012 12:26 PM
The Truth from Becky

Hmmm wonder why the increasing national debt wasn't addressed during the 8 years when bush was un-doing what Clinton did during his presidency....NOW there's a huge spotlight on the specifics! yeah right

Apr. 05 2012 12:24 PM
jgarbuz from Queens

See Wikipedia

List of COuntries Ranked by External Debt to see where the US stands versus other countries in the amount of debt PER person owed to foreigners.

Britain, France, GErmany and others have a much greater foreign debt PER capita than we do. HOwever, the question is, who has the BEST ability to pay back the debt, and what are the factors the IMF and others take into consideration to guesstimate that ability into the future.

Apr. 05 2012 12:23 PM
The Truth from Becky

If after all of these years the inbred hillbilly living south of the mason-dixon line does not know that medicare is a government run program then they don't deserve to collect, they should not be contacted when they become of age and they would be to stupid to apply.

Apr. 05 2012 12:21 PM
John A.

I am unfortunately good at math.
$10 trillion across 100 million US families is
$100,000.00 in the hole for Each and every family.
Even if i'm off by a good fraction in this quick calculation, this is a horrendous amount.

Apr. 05 2012 12:17 PM
Hugh Sansom

Ireland has just seen an _enormous_ surge in non-payment of taxes. Something like 50% of Irish taxpayers did not pay a new flat rate property tax.

Apr. 05 2012 12:17 PM
jgarbuz from Queens

Wow, yet ANOTHER guy with a British accent, who undoubtedly came here from Merrie Ole England for the "American Dream," e.g, the Big Houses and the Big Cars, commenting on our economic malaise!

Incidentally, according the WIkipedia List of Countries by External Debt

United States 15,570,789,000,000 22 March 2012 47,568 99
European Union 13,720,000,000,000 30 June 2010 27,864 85
United Kingdom 8,981,000,000,000 30 June 2010 143,009 360

Britain's external debt-per-capita is MUCH higher than ours!

Apr. 05 2012 12:14 PM
Hugh Sansom

Mr. Johnson left out one massive component of government spending — defense. And that is the one area where Democrats and Republicans won't even broach cuts.

Republicans want to cut social security, as do many Democrats, even though it is funded out of its own trust fund.

Apr. 05 2012 12:12 PM

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