National debt and U.S. foreign debt out of control under Bush Admin.

[philb]

U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 30 Mar 2006 at 1:00 PM GMT is:
$ 8,371,276,114,000 (over $ 8.3 trillion)
The estimated population of the United States is 298,918,000 so each citizen's share of this debt is $28,000.

For the average family of 4 the share is $112,000.
The average family’s annual interest on national debt is $5,500.
The National Debt has continued to increase an average of $ 2.42 billion per day since September 30, 2005!

Additionally the U.S. annual merchandise trade deficit for 2005 was over $782, 000,000,000 ($782 billion)
The major factor in this is the growing U.S. imports of energy(oil, coal, natural gas) and the price increases for these. This represents a massive outflow of capital from the U.S. economy,
making us collectively poorer, and according to the International Monetary Fund(IMF) threatening collapse of the world economy.
www.brillig.com/debt_clock/

[philb]

1. huge trade deficits driven by irresponsible energy use bankrupting U.S.

1952 the international reserve position of the U.S. has fallen from 50% of the world's total to a 2.4% ratio - - a 95% drop. The decline continues.

• Many other productive nations now have up to 23 times more foreign reserves backing up each of their children than we have backing ours, and their lead is increasing as the U.S. continues with massive trade deficits and record high internal private sector debt ratios, with nil savings. With 5% of the world's population, America consumes over 20% of world imports.

• The U.S. is the world's largest debtor, a long fall from being the world's largest creditor when I was a young worker.

• For the past 30 years the U.S. increasingly has been unable to adequately compete internationally to balance its trade with the rest of the world to export sufficient goods to balance and pay for its imports. Massive deficits soared. Even the information technology sector is in deficit, and for the first time food imports exceeded exports.
• The U.S. economy is less independent than prior generations yet one quarter of the economy depends on international trade in goods, 3 times more than before - and foreign entities own more and more of our assets than we do theirs - while our education quality suffers relative to others.
• The merchandise import ratio has soared five times, from 3% of national income in the mid-1960s to today's 16% ratio - - while the export ratio has failed to improve despite numerous devaluations of the dollar.
• As the U.S. manufacturing base declined 60% the economy realized significantly less capacity to produce goods needed domestically or desired internationally - - assisting import ratios to national income soaring 5 times.

• While the U.S. energy production base declined, energy consumption zoomed and the U.S. has become more dependent on imported foreign oil and natural gas than ever before, as graphically shown in the Energy Report. The oil consumption-production gap is a whopping 71%, as consumption soars and production and reserves continually decline. At the time of World War II the US produced all the oil it needed, even exporting to others. No longer.
• For most of the 20th century the U.S. 'wrote' most of the rules for world trade. No longer.
• For a long time the U.S. dollar was unchallenged as the world's reserve currency. No Longer !

• Year 2005 trade performance produced a $782 billion merchandise trade deficit, the largest negative trade balance in history.
• Cumulative trade deficits since 1985 total $5.7 Trillion - - producing a negative international net worth of $5 Trillion.
• And, these trade deficits are owed to non-Americans - - not to ourselves.
• Our annual international trade deficit is 35% larger than Social Security spending, 50% larger than all defense spending, and 2.5 times larger than Medicare. This International Trade Report, together with the chapter called America's Total Debt Report, proves we are living way beyond our means.

For decades Americans enjoyed the game of consuming more than we produce, borrowing from the future to make-up the shortfall with unprecedented ratios of domestic and foreign debt increasing much faster than national income. These are dramatic facts, with significant long-term implications for the currency, international economic power, relative standard of living, and possible national security of our nation's children into the future.
This lack of savings and over-borrowing from foreign interests cannot continue forever.

http://mwhodges.home.att.net/reserves.htm

[Oversea Visitor]

3. Rubbish

What blame the people for his screw up
Plain rubbish.

[MrMonk]

4. Someone needs to read more of M.W. Hodges site

He does not attribute the decline of the US economy to "irresponsible energy use". Unsurprisingly, he blames all of our present problems on "socialism" (social spending), "collectivization" (including unions) and "internationalism" (in the sense that the U.S. no longer sets the rules for the rest of the world). Read through some of his site, and you will discover that the money that government spends disappears into thin air, that social programs destroy morality, that all of our education problems arise solely from teacher unions (which allow teachers to get away without doing jobs such as correcting text books), and that social spending is way too high, but military spending is less than half of what it should be. He also believes, apparently at the same time, that a national health plan will drive health care costs sky-high and ruin the private sector, while at the same time complaining that health care costs in the U.S. (which has a predominately private health care system) are far, far higher than costs in other Western countries (which have national health care plans). And, of course, everything else that is wrong with America is due to trial lawyers.

Yeah, this guy is a trustworthy source.

BTW: I've seen this guy's site on and off since it was first pointed out to me in 1998. Before Bush was elected EVERYTHING could be tied directly to Carter and Clinton. Reagan was (and is) touted as a hero and a revolutionary. Now, most of the references to Carter and Clinton (and to HW) have been removed, though you can still find some. But where is W? Nowhere. It's all due to a nameless "they" and the weakness of the American people. This guy *may* have his numbers straight, but his analysis of cause and effect is fucked-up.

[philb]

9. The trade deficit's deep bite- trend is accelerating

The trade deficit's deep bite
A $225 billion U.S. trade deficit in the forth quarter of 2005 means we're deeper in the red than 20 years ago and sinking fast. Among the impacts: A lower standard of living for all of us in the years ahead. In the fourth quarter, the income flow actually turned against the U.S. We sent $2.4 billion more in income overseas than we received. That was a shift from the $4.9 billion income surplus in favor of the United States in the third quarter of 2005, and only the second time EVER (or at least since there have been decent records) that income from investments has been in deficit for the United States. In 2004, the surplus from income was more than $30 billion. From 1980 to 1985, the annual average was above $30 billion, and from 1980 to 2004, the smallest annual surplus was $4.3 billion in 1998.

So the shift from surplus to deficit in the fourth quarter is a big deal. It quite probably marks the end of a long period when flows of income into the United States from U.S.-owned assets helped offset deficits in years when U.S. imports exceeded U.S. exports.

Trend is accelerating
A turning point like this is just the beginning of an accelerating trend. It's extremely likely that the income deficit will continue to grow for years to come, because foreign investors are increasing their ownership of U.S. assets -- an increase of $278 billion in the fourth quarter -- faster than U.S. investors are buying overseas assets -- an increase of $43 billion for the quarter.
http://moneycentral.msn.com/content/P146110.asp

[MadisonProgressive]

2. But our President said the economy is "roaring"...

:shrug:

[fasttense]

5. Greenspan started this.

He pumped out the dollars while at the same time he knew we had a trade deficit. So what happened? All those dollars went to the foreign countries we had the trade deficit with. So now we are creating our own lenders. Why is there a saving glut in poorer nations? Because we have a trade deficit with them. So we borrow back the money we trade with. And the world goes around and around.

[ArmHayseed]

6. It could be worse

As far as the national debt goes Bush isn’t really doing that badly for a Republican.

I haven’t had time to convert the foreign debt yet but I converted the national debt to 2000 dollars for the January beginning and ending the Presidencies since Truman including January of this year.

Bush falls right in the middle of the last five Republican Presidents.

Some on the right like to compare Bush to Reagan. In reality Bush’s 4.8% annual compounded growth of the debt looks amateurish next to Reagan’s 9.1%. So far Bush The Lessor can’t even come close to Bush The Smarter’s 6.8% annual compound rate of increase.

It’s only when you start comparing Bush to Democrats does he not look so good. The national debt increased faster under Clinton than the other 3 Democrats but so far Bush has increased the debt at a rate that is 3.4 times as fast as Clinton.

Here are the last 9 Presidents and their annualized rate of increase in the national debt in descending order:

9.1% _ Reagan
6.8% _ Bush 41
4.8% _ Bush 43
1.4% _ Clinton
1.3% _ Nixon/Ford
0.7% _ Kennedy/Johnson
(-0.3)% _ Carter
(-0.4)% _ Eisenhower
(-05.)% _ Truman

The bad news is: There is a Republican in the White House.
The good news is: It’s not Reagan.

[philb]

7. But this Bush also has largest trade deficit in history, by a lot

and has made the U.S. the biggest debtor nation in the world, by a lot

and is making us collectively poorer, rapidly

[ticktockman]

8. Judging by the change in the deficit, Bush is the worst

Here are the last 9 Presidents and their annualized rate of increase in the national debt in descending order:

9.1% _ Reagan
6.8% _ Bush 41
4.8% _ Bush 43
1.4% _ Clinton
1.3% _ Nixon/Ford
0.7% _ Kennedy/Johnson
(-0.3)% _ Carter
(-0.4)% _ Eisenhower
(-05.)% _ Truman

The bad news is: There is a Republican in the White House.
The good news is: It’s not Reagan.


Actually, there are some problems with simply looking at the annualized rate of increase in the national debt. The following graph may help clarify these problems:



The actual numbers and sources are at http://home.att.net/~rdavis2/def07.html . The red line is the gross federal debt, the annual change in the national debt. As can be seen, Bush 41 was handed a 4.9% of GDP deficit in 1989, Reagan's last budget. Under Bush, it did increase to 6.6% of GDP but was back down to 5.3% of GDP by 1993, Bush's last budget. Bush 43, on the other hand, was handed a relatively small 1.4% of GDP deficit in 2001, Clinton's last budget. By 2005, it had ballooned to 4.5% of GDP.

The point is, it takes a great deal of effort to cut a deficit, however responsible a president might be. Hence, a president who is handed a large deficit will have a much tougher time controlling the national debt, however responsible he might be. A better measure might be to look at how much they are able to cut the deficit. The following table looks at the same Presidential terms as the table above but looks at the average annual drop in the gross deficit during those terms:

      AVERAGE ANNUAL CHANGE IN GROSS FEDERAL DEFICIT
                     (billions of dollars)
                                        Average
               Gross Gross Deficit       Annual Composite
First  Last     Debt ------------------  Change    Outlay
 Year  Year   Curr $   Curr $   2000 $   2000 $  Deflator President
--------------------------------------------------------------------------
       1945    260.1    -56.0   -538.4             0.1041
 1945  1953    266.0     -6.9    -50.2     61.0    0.1368 Truman
 1953  1961    292.6     -2.1    -11.8      4.8    0.1795 Eisenhower
 1961  1969    365.8      2.9     13.1      3.1    0.2230 Kennedy/Johnson
 1969  1977    706.4    -77.4   -196.8    -26.2    0.3934 Nixon/Ford
 1977  1981    994.8    -85.8   -154.2     10.6    0.5562 Carter
 1981  1989   2867.8   -266.7   -349.5    -24.4    0.7631 Reagan
 1989  1993   4351.0   -349.3   -400.3    -12.7    0.8725 Bush 41
 1993  2001   5769.9   -141.2   -138.0     32.8    1.0233 Clinton
 2001  2005   7905.3   -550.6   -485.3    -86.8    1.1346 Bush 43

As can be seen, Bush 43 comes up as the worst president by far under this measure. Of course, this measure is imperfect as well. Some of the increase in the deficit was due to the implosion of the tech bubble and 9-11. However, even some of Bush's budget documents have admitted that the tax cuts have been a factor as well. In addition, increases in spending, such as the expensive new Medicare prescription benefit, have been a factor. Some have suggested that this was largely intended to buy the votes of seniors in the last election.

[Warpy]

10. The combination of reduced revenues, profligate war spending

and a hugely increasing negative balance of trade largely fueled by all the offshoring that greedy corporations are doing is creating a perfect storm for this country and I'm afraid your rose colored glasses will have the dust knocked off them very soon unless something changes rapidly and for the better.