How does the stimulus package add to the national debt?
sklemetti asked:
In other words, why do people say that our kids will pay for the debt? Pay whom?
In other words, why do people say that our kids will pay for the debt? Pay whom?
Tags: National Debt, Stimulus Package
April 22nd, 2010 at 4:28 pm
We will borrow the money, and it will have to be paid back with interest. America has no money - we are living on credit right now and that will eventually have to be paid back to the countries we are borrowing from.
April 23rd, 2010 at 4:59 am
The Government has not one dime. The money is ours. If there is a debt, it is ours the taxpayer.
Look at your paycheck. Where it says Federal taxes.
This comes out of every ones paycheck. The Government should use this money to benefit Americans.
Some always needs to go to debt. Some back to infrastructure. Some into our programs that help our public. Some goes into Education. It goes into so many things.
When the Government needs more money. They raise the taxes. Your taxes on your paycheck will increase. Both State and Federal taxes.
With the amounts being borrowed. We will never pay this off. Our grandchildren will be responsible for this debt.
We need to realize that there are many other Bills in Congress for Trillions of dollars more. This is the beginning of this presidents term. He will want a lot more money as time goes on. He has 4 full years to go.
We can not afford this kind of spending. We will never see the end of recession in our lifetimes again. We will be buried under to much debt.
I have tried not to be political (take sides) in this answer.
April 26th, 2010 at 5:32 am
What will this do to our economy in 2011? Uber-Keynesian Paul Krugman offered his explanation of what happened when President Roosevelt enacted the same policies in the middle of the Great Depression:
Roosevelt got the economy moving somewhat. By 1937 things were a lot better than they were in 1933. Then he was persuaded to balance the budget or try to and he raised taxes and cut spending and the economy went back down again and then it took a enormous public works program known as World War II to bring the economy out of the depression.
In other words, unless President Obama is planning to fight World War III, Obama’s own Keynesian supporters believe that his tax raising spending cutting budgets will only make our economy worse.
April 27th, 2010 at 11:37 am
The government is borrowing money to pay for the spending bill. The traditional method for doing this borrowing is a financial instrument called a ‘T-Bill’ (Treasury Bill). T-Bills pay a set amount of interest every year over their lifetime and the principal is due for payment in 20 years.
Thus, for the next 20 years we are going to be paying $48 billion in interest _every year_ for this spending bill. Then at the end of the 20 year period a lump-sum payment of the full $800 billion dollars.
As a result the people paying taxes 20 years from now are the ones who are going to be stuck with the bill.
April 29th, 2010 at 6:25 pm
The stimulus recovery package will naturally have a very negative effect on our national debt.
But the real question is whether or not we want to do what’s needed and bring back a more reasonable balance between private and public investment. And, yes; we do need a balance!
Public investment in the USA has taken an enormous beating since the 1980’s, and we see the results in our crumbling infrastructure; schools, public highways, hospitals and healthcare, and in the way we pretend to care for our elderly.
In our haste to cheer any and all tax cuts and put the thumbs down to any and all increases in government spending, we throw all logic, analysis, and plain old common sense out the window. This seems to me as very shoddy and irresponsible behavior.
There is a gross misconception that any and all government programs are wasteful, inefficient and unnecessary, and as such are detrimental to the public interest. This is a monumental stupidity.
Sure, there is wasteful spending. We also can point to rural electrification, the interstate highway system, peaceful applications of atomic energy, urban mass transit, NASA, medicare, and a long list of other beneficial successes.
We are called to create ‘A more perfect Union’, folks! There has never been a better time for us to reexamine our ideological biases and come up with bold , pragmatic solutions to perhaps the greatest crisis our nation has ever faced.
If there ever was a time to usher in an ‘Age of Reason’, maybe this would would be a good time to start?