Can Hillary reduce the debt?

[Kulindahr]

In the final debate (which happily actually resembled one) Hillary Clinton asserted that she "will not add one penny to the debt". While various fact-checkers agree that her policies would not increase the debt, several pointed out that even so, the standing obligations of the U.S. government will increase the national debt to something like $23 trillion during four years with her in office.

I find this unacceptable. For starters, it will just provide a political mudball to be flung around, continuing to assign blame wherever partisans like regardless of facts. The only way to avoid/escape that is to not merely not add to the debt with one's own policies, but to change existing policies sufficiently to not add to the debt at all, but to reduce it.

After reading articles from several pages of a web search about taxes and reducing the debt, I find that there is a definite consensus that the debt cannot be touched by spending cuts alone, that revenues have to be increased. So looking at what now seems the inevitability of a Clinton presidency, I am pressed to ask:

Can Hillary do what is needed to actually reduce the debt?



(I'm not going to mention any policies yet, just leave the question open).

 

[Alnitak]

I'm going to research this question, but so I'm not responding to a loaded question it must be asked first, what level of debt is bad? Debt can represent growth, i.e. the US economy and assets have grown more than the interest and principal required in many cases.

The main problem is attacking the political equilibrium that sets the federal income to liabilities ratio at about 60%. It would require some sacrifice on the president's part in return for increased revenue from the Republicans.

 

[Kulindahr]

I'm going to research this question, but so I'm not responding to a loaded question it must be asked first, what level of debt is bad? Debt can represent growth, i.e. the US economy and assets have grown more than the interest and principal required in many cases.

The main problem is attacking the political equilibrium that sets the federal income to liabilities ratio at about 60%. It would require some sacrifice on the president's part in return for increased revenue from the Republicans.

Heh -- the sacrifice part is easy: she should offer the Republicans that she will sign a national concealed-carry reciprocity bill and not support a universal background check, that if those are in the same bill as the tax increase aimed at reducing the deficit she will sign it.

But how much is too much? I'd say ANY debt is too much, because the interest payment is money we could be spending on accomplishing things. In fact, I'd be happy with an amendment requiring any debt to be paid within ten years of acquiring it, and no rollovers permitted, just honest accounting.

And servicing the debt shouldn't take more than 1% of the federal budget.

 

[hotatlboi]

Heh -- the sacrifice part is easy: she should offer the Republicans that she will sign a national concealed-carry reciprocity bill and not support a universal background check, that if those are in the same bill as the tax increase aimed at reducing the deficit she will sign it.

But how much is too much? I'd say ANY debt is too much, because the interest payment is money we could be spending on accomplishing things. In fact, I'd be happy with an amendment requiring any debt to be paid within ten years of acquiring it, and no rollovers permitted, just honest accounting.

And servicing the debt shouldn't take more than 1% of the federal budget.

Hillary did not phrase that well.

What she was trying to say is that her new policy proposals she has offered during the campaign include funding provisions so that if enacted they would not themselves add debt.

She was not trying to imply that we will not run a budget deficit any years during her presidency (thus adding to the debt), as we certainly will.

But really, whether her proposals would add debt is kind of a moot point anyway, since the House will almost certainly be staying GOP controlled which means few to none of her new proposals will be enacted.

 

[Alnitak]

But how much is too much? I'd say ANY debt is too much, because the interest payment is money we could be spending on accomplishing things. In fact, I'd be happy with an amendment requiring any debt to be paid within ten years of acquiring it, and no rollovers permitted, just honest accounting.

And servicing the debt shouldn't take more than 1% of the federal budget.

I think what you are missing is the growth potential in taking loans, which individuals and businesses do on a daily basis, and without which the economy could not grow. That capital can be used for an economic purpose that grows faster than the interest charged to borrow it. In such a case, the debt is a net gain and there would be no savings from not floating the debt, only lost opportunity.

 

[Benvolio]

I think what you are missing is the growth potential in taking loans, which individuals and businesses do on a daily basis, and without which the economy could not grow. That capital can be used for an economic purpose that grows faster than the interest charged to borrow it. In such a case, the debt is a net gain and there would be no savings from not floating the debt, only lost opportunity.

The converse is that an attempt to reduce the debt by taxing and cutting expenses will be a drag on the economy. But we are reaching the point at which investors and foreign countries are reluctant to carry more of our debt. For various reasons China and other have been reducing their holdings. And, the high interest obligation reduces the revenue available for other purposes. The high debt makes us vulnerable by impeding our ability to raise money for a major war.
We have been able to get away with it because the US dollar has been accepted by foreign countries as a medium of exchange among themselves--a result of the dominance of he American economy and our massive foreign buying in excess of sales. Russia and China would like to replace the dollar and may yet find a way.
Whatever Hillary says, she will be under enormous pressure to spend wildly. The Unions will demand trillions for infrastructure to reward them for their support. Obamacare is failing to the delight of the liberals who see it as necessitating all out socialized medicine euphemistically called single payer.
Raising taxes will not help because the democrats will just spend more. There is no good answer.

 

[Stardreamer]

Vox has a wonderful illustrated comparison discussion of Trump and Hillary's budget plans. The story was a major factor in my decision to vote for Hillary. Her plan doesn't quite balance but it gets within spitting distance. His is a disaster.

Donald Trump's tax plan makes impossible promises. This cartoon explains.

The bottom line to the question posed is, balancing the budget, until we have a positive cash flow we can't really pay down the debt.

 

[TX-Beau]

In the final debate (which happily actually resembled one) Hillary Clinton asserted that she "will not add one penny to the debt". While various fact-checkers agree that her policies would not increase the debt, several pointed out that even so, the standing obligations of the U.S. government will increase the national debt to something like $23 trillion during four years with her in office.

I find this unacceptable. For starters, it will just provide a political mudball to be flung around, continuing to assign blame wherever partisans like regardless of facts. The only way to avoid/escape that is to not merely not add to the debt with one's own policies, but to change existing policies sufficiently to not add to the debt at all, but to reduce it.

After reading articles from several pages of a web search about taxes and reducing the debt, I find that there is a definite consensus that the debt cannot be touched by spending cuts alone, that revenues have to be increased. So looking at what now seems the inevitability of a Clinton presidency, I am pressed to ask:

Can Hillary do what is needed to actually reduce the debt?



(I'm not going to mention any policies yet, just leave the question open).

No, but congress can.

- - - Updated - - -

I find it odd that we spend so much time discussing White House budgets when they can't spend a penny - or save one without the consent of Congress.

 

[gsdx]

Her plan doesn't quite balance but it gets within spitting distance. His is a disaster.

Donald Trump's tax plan makes impossible promises. This cartoon explains.

Wow. Perspective is everything, isn't it? Indeed, a picture is worth a thousand words.

 

[Benvolio]

Wow. Perspective is everything, isn't it? Indeed, a picture is worth a thousand words.

The Republican house will not give her the class warfare tax increase upon which her plan is predicated. They my give Trump what he needs.

 

[gsdx]

^ Did you look at the page? Did you see what would have to be eliminated just to balance Trump's budget?

How can you trample Clinton's $200 billion and defend Trump's $5.3 TRILLION?

If Trump somehow manages to get elected, you deserve everything he gives you in exchange for the massive tax cuts he gives himself.

 

[Benvolio]

^ Did you look at the page? Did you see what would have to be eliminated just to balance Trump's budget?

How can you trample Clinton's $200 billion and defend Trump's $5.3 TRILLION?

If Trump somehow manages to get elected, you deserve everything he gives you in exchange for the massive tax cuts he gives himself.

If Obama can spend a 9 trillion deficit, perhaps Trump can spend 5.3 less. Clinton has no chance and will not try. She will try to impose socialized medicine if the Chinese will loan us enough.

 

[Stardreamer]

If Obama can spend a 9 trillion deficit, perhaps Trump can spend 5.3 less. Clinton has no chance and will not try. She will try to impose socialized medicine if the Chinese will loan us enough.

Totally clueless about the difference between deficit and debt are you? In both cases the debt goes up, so much for caring about the debt. Hillary's is the only plan that comes anywhere close to reducing the debt or is even achievable. Trump's is not possible.

 

[peeonme]

It's beyond my pay grade, but, it seems that the GDP to debt ratio has to change:
https://en.wikipedia.org/wiki/Debt-to-GDP_ratio

 

[Kulindahr]

I think what you are missing is the growth potential in taking loans, which individuals and businesses do on a daily basis, and without which the economy could not grow. That capital can be used for an economic purpose that grows faster than the interest charged to borrow it. In such a case, the debt is a net gain and there would be no savings from not floating the debt, only lost opportunity.

But businesses pay off their loans. Besides that, a country is not a business.

If the U.S needs to borrow money, it should do so from a Bank of the United States, in which every citizen would have one share (received upon completion of high school or GED), and so the interest paid on borrowing would got to all the people. We could start it by funneling in all the money collected as fines by all levels of government (thus ending the corruption of departments using fines to expand their little bureaucratic empires), and having the president order twenty trillion-dollar coins minted to use for buying up the existing debt. That way, instead of the country's debt siphoning money off to the wealthy, it would feed money into the economy.

With that system, last year every qualified citizen would have gotten a check for about $800, if I did my math right. Almost all those checks would have gone right to buy something, pay a bill, whatever, thus boosting the economy.

If we're going to have debt, we should make it work for the country instead of dragging us down.

 

[Alnitak]

But businesses pay off their loans.

No they don't. All businesses carry both liabilities and assets. The US pays off old debts as it floats new debt.

Besides that, a country is not a business.

The US operates exactly like a business. It facilitates growth just like business does. Even if it did not, the same principle applies. It needs to float debt in order to fund that growth. Taxes can do the same thing, but may do more harm than good, just like debts. The point is to discriminate and strike a balance.

If we're going to have debt, we should make it work for the country instead of dragging us down.

I think you are stuck in a prejudiced mindset against debt, when actually good debts lift the country up by funding economic growth and other things we cannot do without, i.e. defense and the care of the elderly. A more constructive exercise would be to prioritize paying off debts that are not working in the public interest.

 

[Kulindahr]

The converse is that an attempt to reduce the debt by taxing and cutting expenses will be a drag on the economy. But we are reaching the point at which investors and foreign countries are reluctant to carry more of our debt. For various reasons China and other have been reducing their holdings. And, the high interest obligation reduces the revenue available for other purposes. The high debt makes us vulnerable by impeding our ability to raise money for a major war.
We have been able to get away with it because the US dollar has been accepted by foreign countries as a medium of exchange among themselves--a result of the dominance of he American economy and our massive foreign buying in excess of sales. Russia and China would like to replace the dollar and may yet find a way.
Whatever Hillary says, she will be under enormous pressure to spend wildly. The Unions will demand trillions for infrastructure to reward them for their support. Obamacare is failing to the delight of the liberals who see it as necessitating all out socialized medicine euphemistically called single payer.
Raising taxes will not help because the democrats will just spend more. There is no good answer.

Please pull your head from your fantasy sand.

Raising taxes by 5%, 10%, and 20% on the top brackets wouldn't even be noticed by the people earning those amounts, so it wouldn't bother the economy at all.

And "the democrats" wouldn't be able to "just spend more", because the money wouldn't go into the general budget, it would go straight to the debt (writing the law that way would be a good time to pull Social Security out of the budget figures, and back where it ought to be, all on its own [recall that it was merged with the rest of the budget by a Democrat trying to hide the expense of a war]).

Were I writing the bill for this, it would also include an immediate reduction by half of corporate taxes, and exempting the first half million in profits altogether (and eliminating a lot of corporate subsidies, such as the massive ones for agribusinesses), while requiring companies doing business across state lines to pay their employees enough that they didn't need government aid for housing or, eventually, food stamps.

One of the best idea is a 0.1% tax on all electronic transactions greater than $500 (the approximate equivalent of $20 when the Constitution was written). It would supposedly raise enough to pay down the debt by something close to half a trillion a year.

 

[Kulindahr]

Vox has a wonderful illustrated comparison discussion of Trump and Hillary's budget plans. The story was a major factor in my decision to vote for Hillary. Her plan doesn't quite balance but it gets within spitting distance. His is a disaster.

Donald Trump's tax plan makes impossible promises. This cartoon explains.

The bottom line to the question posed is, balancing the budget, until we have a positive cash flow we can't really pay down the debt.

I illustrated it for my mom using pennies, with each penny representing a hundred billion dollars. Hillary would cost us two pennies a year, while Trump would cost us 530 pennies (I ran out of pennies at 314 so I finished off with nickels; it was still impressive, because Trumps pennies and nickels started spilling off her footstool). Thanks to that illustration, Trump is now a member of a very small club in my mom's world: people she describes as "idiot shit-heads" (he's the third, the other two have spent time in prison).

 

[Kulindahr]

No, but congress can.

- - - Updated - - -

I find it odd that we spend so much time discussing White House budgets when they can't spend a penny - or save one without the consent of Congress.

It's because what the president wants is usually the starting point for any budget introduced by that party, and a president's proposals tend to get introduced by members of the same party. This is why while I'd rather have the GOP in control of the Senate I badly want the House to fall to the Dems: while Dems may like to add social program spending, they are also willing to take the conservative step of being responsible and reducing the debt.

And it wouldn't be hard to do a national campaign comparing carrying a huge national debt with running a family with a huge debt -- if we have the right president.

 

[Kulindahr]

Wow. Perspective is everything, isn't it? Indeed, a picture is worth a thousand words.

Definitely.

I got a chuckle from the "I make great deals. There are no great deals in outer space" bit since Trump may actually be an investor in one of the asteroid-exploitation companies which between them and the E.U. have demonstrated the feasibility of intercepting and landing a package on one (the next step is to land an ion engine as a package, and demonstrate how a robot engine can alter the orbit of an asteroid and bring it into earth orbit). Since the values of asteroids that come close enough to earth to be good candidates range from $1.5tn to $20tn, there actually are "great deals in outer space", since the cost of such a capture is estimated at under 2% of the lower figure.

Maybe Hillary should get NASA to capture an asteroid or five and auction them to companies, and use the money to pay down the debt (though it would take longer than one presidential term to achieve a capture even if the robot engine package were set to go now).