Not all debt is created equal

[Peter1469]

Not all debt is created equal.

Debt in an investment that can pay off can be good. Debt in an expense is silly and harmful.

Debt does have its purposes, but they are much more specific than many people think. Borrowing to buy a productive asset (like a factory or an education) that will generate sufficient income to repay the loan is fine. However, using debt to pay for current consumption, to live above your means, is counterproductive and forces a future decline in consumption in order to pay off that debt. In other words, that type of borrowing is simply stealing from the future.

[Redrose]

In my experience that has been true. Borrowing money to purchase a principle residence always paid off, as well as borrowing from the equity to purchase a second home to rent, which produced income. Borrowing start up money for a new business can be a risky decision, most new businesses fail.

I cringe when my sister tells me she has $30k on store credit cards for clothing. She's a college English prof and needs to dress well, but debt like that is just foolish. Her earning potential is good but considering what she has in student loans, the return on her investment is not that great. If you do borrow for education, make sure the career you chose is one that pays well, also, you could have the best degree possible but if you look like a schlub, with zero personality and communication skills, your degree is just an expensive piece of paper.

[PolWatch]

If we have voters who think it is sensible charge daily expense (gas, food) and carry a balance for these forward each month, how can we expect them to understand that their government is just as irresponsible? Our entire nation operates on the principle of instant gratification...just because I can't afford it, doesn't mean I can't get it.

[Redrose]

If we have voters who think it is sensible charge daily expense (gas, food) and carry a balance for these forward each month, how can we expect them to understand that their government is just as irresponsible? Our entire nation operates on the principle of instant gratification...just because I can't afford it, doesn't mean I can't get it.

Bingo!

[waltky]

Drownin' in a sea of debt...

Obama’s Tax Collections Surpass $20,000,000,000,000; Still Runs Up Debt by $8,878,290,996,028
September 13, 2016 – With the additional $231,327,000,000 in taxes that the U.S. Treasury collected in August, according to the Monthly Treasury Statement released today, President Barack Obama has now presided over more than $20,000,000,000,000 in federal tax collections during the 91 full months he has served in the Oval Office.

From February 2009 through August 2016, the Treasury collected approximately $20,197,437,000,000 in tax revenues (in non-inflation-adjusted dollars), according to the Monthly Treasury Statements. During those same 91 months, the federal debt rose from $10,632,005,246,736.97 to $19,510,296,242,765.66—an increase of $8,878,290,996,028.69. In August, according to the Monthly Treasury Statement released today, the federal government took in $231,327,000,000 in taxes and spent $338,438,000,000—running a one-month deficit of $107,112,000,000.

So far in fiscal 2016, according the Treasury statement, the federal government has collected approximately $2,910,151,000,000 in taxes and spent approximately $3,530,922,000,000—running a deficit of $620,771,000,000 for the first eleven months of the fiscal year. Given that the Bureau of Labor Statistics has reported that there were 151,614,000 people employed in the United States in July, the $20,197,437,000,000 in taxes the Treasury has collected during Obama’s first 91 full months in office equals approximately $133,216 per worker. The $8,878,290,996,028.69 in additional debt the federal government incurred during Obama’s first 91 full months in office equals approximately $58,559 per worker.

During the first 91 full months George W. Bush was president (February 2001 through August 2008), according to the Monthly Treasury Statements, the Treasury collected approximately $16,205,198,000,000 in taxes. During those same 91 months, the debt rose from $5,716,070,587,057.36 to $9,645,725,555,640.02—an increase of $3,929,654,968,582.66. From February 2001 (the first full month of George W. Bush’s presidency) through January 2009 (the month that Bush left office and Obama was inaugurated), the Treasury collected $17,251,191,000,000 in taxes.

Here, according to the numbers published in the Monthly Treasury Statements, are the total receipts the Treasury has brought during the 91 full months President Barack Obama has completed in office:

Feb. 2009-Sept. 2009: $1,330,887,000,000

Fiscal 2010: $2,161,728,000,000

Fiscal 2011: $2,302,495,000,000

Fiscal 2012: $2,449,093,000,000

Fiscal 2013: $2,774,011,000,000

Fiscal 2014: $3,020,371,000,000

Fiscal 2015: $3,248,701,000,000

Oct. 2015- August 2016: $2,910,151,000,000

91 Month Total: $20,197,437,000,000

http://www.cnsnews.com/news/article/...0-still-incurs

[FindersKeepers]

Your chart shows a reduction in the gap between collected revenue and debt.

Was that what you intended to show?

[waltky]

Granny says, "Dat's right - we can't afford it - let some o' dem anti-American countries pay fer it...

$2.4 Billion for Peacekeeping? Trump Administration Mulls UN Funding Cuts
March 14, 2017 – With the Trump administration looking at ways to reduce U.S. contributions to the United Nations, the approximately $2.4 billion of taxpayers’ money that goes towards peacekeeping missions each year is in the spotlight. The U.S. is liable for 28.57 percent of the total budget for global peacekeeping missions. The Obama administration’s request for FY2017 was $2.394 billion. The FY2016 U.S. funding estimate was $2.460 billion.

U.S. taxpayers accounted for 28.57 percent of the total U.N. peacekeeping budget in 2016. The next highest contributors were China at 10.29 percent and Japan at 9.68 percent. (Graph: CNSNews.com)

The next biggest contributors in 2016 were China (10.29 percent), Japan (9.68 percent) and Germany (6.39 percent). At the other end of the scale, more than 70 U.N. member-states contributed 0.001 percent or less. Some of the current 16 missions around the world, comprising more than 125,000 personnel today, have been in existence for well over half a century, while the newest – in the Central African Republic – is just three years old. Nine of the 16 missions are in Africa, three are in the Middle East, two are in Europe, with Asia and the Western Hemisphere accounting for one each.

A State Department map shows current U.N. peacekeeping missions around the world. (Two entries – the standing police capacity in Brindisi, Italy and UNSOM in Somalia, are not current peacekeeping missions.) (Map: State Department)

Three of them – a 13-year-old mission in Haiti; a 14-year-old mission in Liberia; and a 13-year-old mission in Côte d’Ivoire – are in the process of winding down. But others offer little sign of following suit. U.S. taxpayers in FY 2016 accounted for $440.6 million for a seven-year-old mission in the Democratic Republic of Congo; $368.2 million for a decade-old mission in Darfur, Sudan; $342 million for a six-year-old mission in South Sudan; $286.7 million for a three-year-old mission in Central African Republic; $267.6 million for a four-year-old mission in Mali; and $147.8 million for a 39-year-old mission in southern Lebanon.

The 193 U.N. member-states’ contributions to the U.N. peacekeeping budget (like the regular U.N. budget) are assessed according to their relative “capacity to pay,” a formula based on factors including population size and gross national income. The U.S. assessment of 28.57 percent is more than three percent higher than allowed by legislation signed by President Clinton in 1994, which set a 25 percent cap on the U.S. contribution to U.N. peacekeeping. The discrepancy between that cap and the U.N. assessment led to arrears mounting up, but under Helms-Biden legislation negotiated in 1999, the U.S. agreed to settle the arrears in return for a U.N. pledge to gradually reduce the assessment, then above 30 percent, to 25 percent.

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See also:

Feds Hit Debt Limit—Again; Debt Now Exceeds Limit Set in 2008 by $8,550,505,000,000
March 15, 2017 | With the close of business today, the period in which Congress suspended any legal limit on the federal debt expires and as of tomorrow the limit on the federal debt will be set at whatever the level of debt happens to be.

Since President Barack Obama signed the “Bipartisan Budget Act” on Nov. 2, 2015 there had been no legal limit on the amount of money the federal government could borrow until now. That law included a section entitled “Temporary Extension of Public Debt Limit.” It said that the law imposing a limit on the federal debt “shall not apply for the period beginning on the date of the enactment of this Act and ending on March 15, 2017.” As of Nov. 2, 2015, the federal debt subject to the legal limit stood at $18,452,108,000,000. As of the close of business on Tuesday, the latest day reported, it stood at $19,865,505,000,000.

That means the federal debt increased by $1,414,397,000,000 during the approximately 16 and a half months that Congress removed any legal limit on it. “Congress has modified the debt limit 14 times since 2001,” the Congressional Research Service reported in October 2015—a month before Congress modified the debt limit for a 15th time since 2001 by including the language in the Bipartisan Budget Act suspending it. By suspending the debt limit from Nov. 2, 2015 through March 15, 2017, Congress and President Obama gave the Treasury the authority to borrow an unlimited amount of money from Nov. 2, 2015 until after the 2016 election.

On Oct. 3, 2008, President George W. Bush signed “The Emergency Economic Stabilization Act,” creating the Troubled Asset Relief Program that authorized the Treasury Secretary to purchase up to $700 billion in assets from troubled financial institutions. That law also increased the debt limit from $10,615,000,000,000 to $11,315,000,000,000. That was the last debt limit increase before the 2008 presidential election. Since then, borrowing by the federal government has increased the federal debt subject to the legal limit to the current $19,865,505,000,000—which exceeds the October 2008 limit by $8,550,505,000,000.

Treasury Secretary Steven Mnuchin sent a letter to House Speaker Paul Ryan last Wednesday reminding him that the suspension of the debt limit would end today. “As you know,” Mnuchin wrote, “the Bipartisan Budget Act of 2015 suspended the statutory debt limit through Wednesday, March 15, 2017. Beginning on Thursday, March 16, 2017, the outstanding debt of the United States will be at the statutory limit. When the debt hits the limit and Congress and the president do not immediately enact new legislation to increase it or suspend it, the Treasury typically engages in what it calls “extraordinary measures” to keep the debt at a constant level just below the debt ceiling.

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[Peter1469]

And that chart only includes UN peacekeeping operations. There is more.

Granny says, "Dat's right - we can't afford it - let some o' dem anti-American countries pay fer it...

$2.4 Billion for Peacekeeping? Trump Administration Mulls UN Funding Cuts
March 14, 2017 – With the Trump administration looking at ways to reduce U.S. contributions to the United Nations, the approximately $2.4 billion of taxpayers’ money that goes towards peacekeeping missions each year is in the spotlight. The U.S. is liable for 28.57 percent of the total budget for global peacekeeping missions. The Obama administration’s request for FY2017 was $2.394 billion. The FY2016 U.S. funding estimate was $2.460 billion.


See also:

Feds Hit Debt Limit—Again; Debt Now Exceeds Limit Set in 2008 by $8,550,505,000,000
March 15, 2017 | With the close of business today, the period in which Congress suspended any legal limit on the federal debt expires and as of tomorrow the limit on the federal debt will be set at whatever the level of debt happens to be.