[Solace]

Originally Posted by MeoTwister5

So yeah justinstrife is right. As long as a government spends money every time it has anything in its wallet, it's always going to create a deficit.

This will always be true. The government could not spend a dime starting tomorrow, pay off the national debt (although that is mathematically impossible, because there isn't enough money to service the debt even if you forced every person and company in the country to give the government all of their money), and then resume services....and it would immediately go into debt. Why?

Because every dollar the government spends is loaned to it by the Federal Reserve. This means that every dollar printed has interest attached to it. Fractional reserve banking. It's a beautiful scheme.

Of course what most people don't realize is that the country has always been in debt even without central banks. We're still paying off the debt from the Revolutionary War. The other thing most people don't realize is that deficit spending is what has enabled nations to progress as fast as they have. Spending beyond your means to pay is as old as the idea of currency. You can thank deficit spending for every expansion of national growth. Conversely you can damn it for every retraction too. Capitalism's boom/bust cycle at work.

Either way, no matter how you slice it, every government on the planet is in debt. It's how the system works. We can debate the ethics/morality of the system, but it's just how it is.

The real question is not about US debt, but how serious it is about stimulating the economy and improving the social state of its people. This is where the ideological debate has stalled the government, and why people are wary of the direction of nation. Some believe that tax cuts and deregulation are the primary solutions. Others believe stimulus spending and tax increases are the primary solutions. Still others are a mix, and there's even some who have completely different ideas.

Ignoring corruption charges, lobby influence, or political power scheming, the reality is that you have at least two radically different philosophies in government and getting hundreds of people to agree on any single piece of legislation, especially considering the interests at work, is an incredibly difficult undertaking.

What I can say is this. Social Security has not contributed one dime to the deficit. But it has created a great wedge issue for politicians. By rephrasing the debate by calling social safety programs like Social Security "Entitlement Programs", they have constructed a narrative that implies that people who benefit from these programs are sucking from the government tit and don't really need help. In short, if only they went out and got "real jobs" from the private sector, such programs could be cut and tax payers wouldn't be "forced" to spend their money on something they don't "need" or "want".

This same notion is extended to things like Medicare and Medicaid. If these people would just go buy insurance, we wouldn't need these programs. Never mind the reason social safety net programs exist, they cost tax payer money and when people are hurting, it is easier to convince them that anything that puts more money in their pocket now is a good thing, regardless of the costs down the road.

This extends to governments too. When your state is hurting for cash, and a company comes along offering jobs if you'll just look the other way on a few things, it's awfully tempting to make a deal to boost the short term even though the long term damage will haunt you. Just ask any country you might consider "third world".

Anyway, much of the grandstanding on the debt is simply Starving the Beast at work.