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The Sound of Ideas

Underwater Nation

Posted Wednesday, February 3, 2010

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The National debt is one of those aspects of American life that loom so large that some people are afraid to talk about it, some don't want to talk about anything else and some are just plain dumbfounded by the staggering numbers. The President's proposed budget for next year will add $1.56 trillon to the more than $12 trillion currently owed on the national credit card. We're on pace to nearly double the total national debt in just four years. Wednesday morning at 9 join host Dan Moulthrop to take a moment to wrap our heads around just what that means, how it affects us here in Northeast Ohio and how we pay it off.

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Economy, Government/Politics

Guests

John Ydstie, Economics Correspondent, NPR
Dr. Ken Mayland, President, ClearView Economics
Craig Thomas, Vice President, Senior Economist, The PNC Financial Services Group

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M. Meschkat 10:31 AM 2/3/10

Fiscal responsibility does not mean dollar for dollar spending—No one cried when Bush ravaged the budget—The strategy of reducing taxes and increasing spending has been a recipe for diaster.  A solid tax basis (without loopholes) is part of the situation.  Why isn’t this discussion.

Ben Morgenstein 10:41 AM 2/3/10

Balancing the budget is a noble ideal, but expecting Obama to do this given what he inherited in terms of debt and deficit seems ludicrous.  Here’s an analogy: a family has gone tremendously into debt over the last eight years, buying non-refundable merchandise (i.e. two unfunded wars and tax cuts).  To balance their budget, the family would have to stop paying the mortgage and car payment--which would leave the maily homeless and immobile. 

Obama could perhaps work on lowering his deficit, but the idea of balancing it seems like it would devastate the country.

Chris Gravius 10:42 AM 2/3/10

I have concerns that you are continuing to propogate the idea that the idea that the government should not run up debt because “families and households live within their means”. Every dollar that you owe on your mortgage is DEBT. Even for those of us that are not in trouble with our mortgages, this debt exceeds our annual income. Isn’t this akin to the national debt being a percentage of GDT. Please don’t allow individuals that cannot live within their means to score political points with tired commentary about spending only what you take in.

kim 10:46 AM 2/3/10

This conversation is infuriating. It is very one sided. The commentators noted that this level of debt hasn’t been seen since WW2. It should be noted that this followed the depression and preceded the greatest expansion in this country’s history. I think this hysteria is a ploy by the party that gave us this gift in the beginning of deficit spending through tax cuts and unpaid for wars to now cut social services and further bankrupt our investment in our future. We are continuing to grow in population (tax revenue) which will help to pay for these services. Lets not become truely like Russia and China with no safety net for the less fortunate in our society.

Raymond Ku 10:49 AM 2/3/10

The problem is not the accountability of our elected officials, but our own accountability.  Politicians will not balance budgets by either cutting benefits or raising taxes if doing so is political suicide.  Consider the fate of both NJ Governor Florio and President George HW Bush both of whom raised taxes when the financial circumstances required, but were soundly in their next elections.  We need to stop pointing the finger at others and point it to ourselves.

Cynthia 10:49 AM 2/3/10

How do we get the law passed that states that if we can’t afford, we don’t buy it.  Wasn’t this in effect during the Clinton era.  When Pres. Bush came to office, these measures were allowed to expire and thus record spending w/o the $ to pay for it.

thom kelty 10:52 AM 2/3/10

Dwight Eisenhower said it: Beware the Power of the Military Industrial Complex! During the early fifties to the mid sixties was WAR FREE!

Why does our economy spend half its’ wealth on weapons and wars of choice?

By the way Connecticut paid its’ revolutary war debt by giving land grands. Where? In the Connecticut Western Reserve!

M. Meschkat 10:52 AM 2/3/10

Sure a proper tax base is necessary, and no one wants to pay excessive taxes, but the amount paid by the higher levels of wealth and business is not equitable. This needs to be adjusted. When people realize what is provided, then they would be better able to acknowledge the tax basis.

To put our “trust” in the business and wealther sections of the economy - is actually the root of the problem that we have today. 

Where is the well-rounded discussion here?

Kim 11:22 AM 2/3/10

This conversation is infuriating. It is very one sided. I think this hysteria is a ploy by the party that gave us this gift in the beginning of deficit spending through tax cuts and unpaid for wars to now cut social services and further. The commentators noted that this level of debt hasn’t been seen since WW2. It should be noted that this followed the depression and preceded the greatest expansion in this country’s history. We are continuing to grow in population (tax revenue) which will help to pay for these services. Lets not become truely like Russia and China with no safety net for the less fortunate in our society. The countries in Europe in the most trouble are the one’s that followed our lead such as Spain and Ireland; those doing the best are like Germany and the Scandanavian countries with good social services and infrastucture and relatively low debt.

Joe Olecki 11:24 AM 2/3/10

I thought today’s program did an extreme diservice to the discussion of the economy.  It is singularly unhelpful to compare the federal government’s role in the economy to a household’s budget. The federal government has a macroeconomic role that cannot be analogized to a household.  The federal debt is a problem and has the potential to become more of a problem, but it is not our economy’s most pressing problem.  The percentage of government debt relative to GDP, the only meaningful measurement, is not the highest it has ever been, that would have been in the mid-40’s, and is lower than many other developed economies. We have a large economy and it does no good, in fact it is counter productive, to scare people with “trillion dollar” figures without placing them in context.  The economy is in the second-worst economic crises this country has ever seen.  No one had money. No one was spending money.  No one was lending money.  Effective interest rates were almost zero.  If the government did not spend money, and unfortunately, because of discussions like that today it did not and will not spend enough to truly address the problem, we likely would have been in the worst financial crises ever.  When no one is spending money, the government has to.  While one can debate what the money is spent on, the fact is government spending was the only avenue to avert even more of a catastrophe than we are already in.
The single most pressing problem facing the federal government budget is healthcare spending on medicare.  But we see how that discussion is going.  If those same people who complain about the deficit were to focus their attention on healthcare in a positive way, then serious headway could be made on the budget deficit.  Please stop promoting discussions in the guise of intelligent talk that over-simplfy and distort reasoned analysis.  The program today did nothing to add to the discussion, and if fact was misleading enough to hinder that discussion.

Whitney Bergendahl 12:33 PM 2/3/10

One of the statements made, I believe by Craig Thomas, comparing the governments continued debt and borrowing to a person or business taking out a line of credit in order to cover operating costs struck a chord with me.  This may provide some perspective for relating real life to the connundrum that is our massive national debt, but the issue is that many businesses and families who relied on these lines of credit found themselves victim of a system in which credit dried up.  The question is when will this happen to the United States?

I think unfortunately, we as Americans believe that the United States will forever be in the power position.  While we are propping up our military with state of the art defenses and weapons, we are side-stepping the greater issue of financial stability and viability as a nation.  Right now, our country is little different than the banks and financial institutions that we saved during the start of the crisis in that we feel we are “too big to fail.” If not for the vested interests of those who lent us the credit to create this debt, we might have already collapsed.  We are taking out payday loans from China and only paying back the interest while we take out a new loan.  This cycle is deadly.

Bob 5:01 PM 2/3/10

What a pathetic, one-sided presentation.  Probably played very well downstate on your Ohio Channel simulcast.  With dozens of articulate academic economists available in Greater Cleveland, you should be ashamed of yourselves!  -FORMER listener

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