Talk:National debt of the United States/Archive 1

message: I'm looking for a reference to verify this claim in the text, which I challenge.
"The debt of United States is much lower than what it is in many other developed countries, such as Japan and many parts of the western Europe, where the debt is generally over 100% of GDP."
The EU limits its members to deficits of 3% of GDP.
**And the debt to 60% of GDP. - Jerryseinfeld 16:15, 20 Nov 2004 (UTC)
thread_title: Debt level

message: "There are different ways to lower, or pay off, the national debt. Though, if you consider social security as part of the national debt of the United States then the debt can never be totally paid off."
Is this true? Social Security is a pay-as-you-go program, so I don't see why it requires debt to operate, except in the sense that the government always owes a debt to its employees because paychecks are only issued twice a month. While it's true that the Social Security trust fund is running a surplus now, that won't always be the case. --Paul 20:16, 3 Feb 2005 (UTC)
replies: text: While part of the Social Security Trust Fund comprises a significant portion of the national debt (about $1.7 trillion as of May 2005), it can never be totally paid off.
Prestonp 01:31, 23 April 2006 (UTC)
thread_title: Social Security and debt

message: there are alot of normative statements in this article.  for example:
"The economy of Japan could be more worrisome" in the Calculating the debt section.
--GregLoutsenko 20:01, 3 September 2005 (UTC)
thread_title:  POV issues 

message: The following has been moved from the article itself. - RedWordSmith 00:22, 8 February 2006 (UTC)
thread_title:  Presidential Debt Table 

message: This article takes a very negative view on debt, and I understand the many reasons for doing so. However, I think that even a small mention of the benefits of having a debt would balance and improve this article well. Even economies (both public and private) which do well, often have debt (I hear that Norway doesn't but they're just lucky :)) -Samulili 11:57, 10 March 2006 (UTC)
thread_title:  Benefits of debt 

message: I rv the statement A recession began in 2001. to the prior statement A recession began in 2000. We'd prefer not to see this kind of arbitrary change made without some specific source cited. John Reid 23:31, 16 March 2006 (UTC)
thread_title:  Unsourced 

message: 207.87.144.77 keeps making the following edit.  He changes this:
"In 1998-2000 federal debt growth slowed to 1.4% annually (President Clinton’s surplus). A recession began in 2001. Then, President Bush cut taxes, debt growth rose, the recession ended, and the economy has continued to grow."
To this:
"In 1998-2000 federal debt growth slowed to 1.4% annually (President Clinton’s surplus). A recession began in 2001. Then, President Bush cut taxes and debt growth rose."
I reverted his edit, and then he changed it right back.  He had this to say about it:  "Economists are still debating whether or not the recession is "over", but it is clear that debt growth has continued."
1.  What economists are these?  Random Bush detractors?  I recommend you go read the definition of recession, and go do some research.  I suggest you read this page:  Early 2000s recession.  The National Bureau of Economic Research says the recession officially lasted from March 2001 to November 2001.  It can be argued that it lasted, at the very most, until 2003.  It is over now though.
2.  It's clear that the national debt has continued to grow?  Well no kidding.  It has increased every single year for the past 46 years.  King nothing 2 01:20, 20 March 2006 (UTC)
thread_title:  Is this not a POV-driven edit? 

message: At 06:13, 29 March 2006, I posted additional information about six periods of debt reduction listed in the section titled "Paying the debt and arguments against doing so" in a new section titled "Replies to arguments against paying down the debt".  At 21:46, 29 March 2006, someone at IP 128.95.217.236 added an "original research or unverified claims" warning and at 22:46, 8 April 2006, someone at IP 24.127.189.67 totally removed my info and added info which, though it does have something to do with the arguments about paying down the debt, no longer addresses the six periods of debt reduction.  As I have no idea whether either of the edits to my info were done by an admin, I'll leave them be and let an admin deal with them.  The six periods of debt reduction remain unsourced though it appears to me that they likely come from past articles published by economist Frederick C. Thayer.  In any case, I'll repeat my original entry (with a few minor corrections) below:
The main argument given above for not paying down the debt is that "every depression in American history began with a surplus, and every recovery coincided with a deficit". The source of the numbers for the six depressions up through the Great Depression appears to be economist Frederick C. Thayer who published an article on the subject about a decade ago.  The article contains the exact same numbers and a version of it titled "Think big deficits cause recessions? Think again!" can be found at this link.
In order to evaluate Thayer's claim, one needs to look at all of the major changes in the debt during this period.  The following table attempts to do that:
     FEDERAL DEBT (in millions of dollars) AND PERCENT CHANGE
   High Debt     Low Debt
---------------------------- Prior Low    High  Prior Low
Year     Debt  Year     Debt   to High   to Low    to Low Events
---------------------------------------------------------------------------------
1804    86.43  1812    45.21             -47.69           War of 1812 (1812-14)
1816   127.33  1821    89.99    181.65   -29.33     99.04 Panic of 1819
1822    93.55  1836     0.04      3.96   -99.96    -99.96 Panic of 1837
1843    32.74  1846    15.55  87184.08   -52.51  41352.78 Mex-Amer War (1846-48)
1851    68.30  1857    28.70    339.25   -57.98     84.56 Panic of 1857
               1861    90.58                       215.61 Civil War (1961-65)
1866  2773.24  1873  2234.48   2961.61   -19.43   2366.84 Panic of 1873
1879  2349.57  1893  1545.99      5.15   -34.20    -30.81 Panic of 1893
               1915  3058.14                        97.81 World War I (1914-18)
1919 27390.97  1930 16185.31    795.68   -40.91    429.25 Great Depression
Source: Bureau of the Public Debt
Note: the first 4 columns come from the above source and are used to calculate the next 3 columns.
The first period that Thayer cites is the five years from 1816 to 1821, when the debt was reduced by 29 percent.  What Thayer fails to mention, however, is that in the four years from 1812 to 1816 (the War of 1812), the debt was increased by 182 percent.  Hence, the debt in 1821 was still nearly double it's level when the War of 1812 began.
The second period that Thayer cites is the 14 years from 1822 to 1836, when the debt was reduced by over 99 percent, to $38,000.  This is the one period that Thayer cites when a recently acquired debt was not simply being partially paid down.  In fact, the debt was paid down to its lowest level on record.
The third period that Thayer cites is the six years from 1851 to 1857, when the debt was reduced by 58 percent.  Once again, Thayer makes no mention of the fact that the debt had just increased 339 percent in the prior five years, driven largely by the Mexican-American War.  Even after the 58% decrease, the debt was still 85 percent above where it had been just 11 years earlier.
The fourth period that Thayer cites is the seven years from 1866 to 1873, when the debt was reduced by 27 percent (19 percent by the latest Treasury estimates). Thayer makes no mention that this immediately followed the Civil War during which the debt increased by nearly 3000 percent!  Even after the 19 percent decrease, the debt was still nearly 25 times its size at the beginning of the war.
The fifth period that Thayer cites is the 14 years from 1879 to 1893, during which the debt was reduced by 57 percent (34 percent by the latest Treasury estimates). In fact, this represented a further paying down of the tremendous debt run up during the Civil War.  Even after this 34 percent decrease, the debt was still about 17 times its size at the beginning of the Civil War.
The final period that Thayer cites is the 11 years from 1919 to 1930, during which the debt was reduced by 36 percent (41 percent by the latest Treasury estimates). This followed another war which Thayer saw no need to mention, World War I.  In the four years from 1915 to 1919, the debt had increased by 796 percent.  Even after the 41 percent decrease, the debt was still over 5 times its size at the beginning of World War I.
Hence, four of the six periods of surpluses that Thayer mentions followed wars during which the debt rose far more than it was paid down during those periods. Another of the periods (1879 to 1893) was just a further paying down of the tremendous debt run up during the Civil War.  Hence, only one of the periods represented a seemingly voluntary paydown of debt not recently acquired through war.
The above timeline suggests that the initial events that lead to financial crises are wars, not periods of paying down the resultant debt.  
[Are we really suggesting that wars, not paying down the debt, caused the depressions? An apt analogy would be to say that jumping out the window did not kill the man.  No, the man was killed by taking the elevator up to a high floor.  Paying down the debt was akin to jumping out the window.  Both were unnecessary and fatal.]
It is certainly possible that debt can be paid down too quickly.  However, it is also possible that the U.S. would now be buried in debt had it never paid down any of its war debts.  The best way to avoid the situation of paying down a debt too quickly is to avoid running up a huge debt to begin with.
[What does "buried in debt" mean?  Does it mean an inability to service the debt?  Does it mean bankruptcy?  The answer is "yes," for you, for me and for every indebted entity, save one: the federal government.  Alone among debtors, the federal government is able to service a debt of any size, as it proves every day.  There never has been, and never will be a time, when the federal government is unable to service its debts.  So we must assume that "buried" merely is a pejorative synonym for "having more than before." Unfortunately, the word "debt" has negative connotations.  Were it properly called "money," everyone would be in favor of it.]
[Or better yet, the government should refer to its debt as "deposits," as the banks do.  Everyone admires banks having large deposits, yet these deposits merely are debts to depositors (lenders).  Sadly, our entire economy is trapped by semantics.]
One final note, I have not been able to find any source that suggests that the five financial panics that Thayer mentions each marked the beginning of a depression and, along with the Great Depression, marked the beginning of this country's only depressions.  The Wikipedia's list of recessions includes the Panic of 1907, not mentioned by Thayer, and states that it "sets events in motion that will lead to a depression in the United States".  Also, that page (as well as other sources) suggest that the panics were largely caused by bank failures and lack of confidence in the paper currency (likely due to the fact that bank accounts were not insured as they are today) and speculation.
That is the end of the original info that I posted.  Following are additional comments:
Regarding sources for the table, the first four columns come directly from the Bureau of the Public Debt and the next three columns were calculated in a spreadsheet, directly from those numbers (specifically, the numbers in columns 2 and 4).  I can add a note about this below the source if that will help.
Another item of interest concerning the source is that the Bureau of the Public Debt numbers from 1866 through 1913 differ a bit from another often-used source, the Historical Statistics of the United States, Colonial Times to 1970.  Thayer was likely using this latter source (or a source close to it) as calculations using this source better approximate the numbers that he gave.  Thayer's numbers of 29, 99.7, 59, 27, 57, and 36 are calculated to be 29, 99.96, 58, 22, 58, and 36.  Only the 22 is significantly different.  The following table shows the same calculations using this latter source:
     FEDERAL DEBT (in millions of dollars) AND PERCENT CHANGE
   High Debt     Low Debt
---------------------------- Prior Low    High  Prior Low
Year     Debt  Year     Debt   to High   to Low    to Low Events
--------------------------------------------------------------------------------
1804    86.43  1812    45.21             -47.69           War of 1812 (1812-14)
1816   127.33  1821    89.99    181.65   -29.33     99.04 Panic of 1819
1822    93.55  1836     0.04      3.96   -99.96    -99.96 Panic of 1837
1843    32.74  1846    15.55  87184.08   -52.51  41352.78 Mex-Amer War (1846-48)
1851    68.30  1857    28.70    339.25   -57.98     84.57 Panic of 1857
               1861    90.58                       215.61 Civil War (1961-65)
1866  2755.76  1873  2151.21   2942.29   -21.94   2274.88 Panic of 1873
1879  2298.91  1893   961.43      6.87   -58.18    -55.31 Panic of 1893
               1915  1191.26                        23.91 World War I (1914-18)
1919 25484.51  1930 16185.31   2039.28   -36.49   1258.67 Great Depression
Source: Historical Statistics of the United States, Colonial Times to 1970, Part 2, Series Y 493, pages 1117-1118
As can be seen by comparing this table to the original table above, only the figures for 1893 and 1915 differ significantly and the same basic arguments hold despite the difference in numbers.  In any case, the Bureau of the Public Debt numbers seemed likely to be the more accurate since they are on the Treasury website and can be easily updated whereas I don't believe that the other source is being updated.  Until recently, I believe that it existed only in actual physical volumes and the online source simply contains copies of those volumes.
I well understand the value of sourcing and verifying all edits on Wikipedia.  However, I would note that the dates of surpluses and depressions in the prior section (Paying the debt and arguments against doing so) are totally unsourced.  It's only because I'm very familiar with Thayer's arguments that I deduced their source.  I have no reason to think that Thayer's original arguments are political but I have heard those arguments cited numerous times in a political context.  They seem to be a favorite argument on the Internet for excusing the debt.  In any case, Thayer's arguments seem flawed or, at least, incomplete.  He makes no mention of the wars during which the debt rocketed.  Also, he states that the six periods that he lists were followed by the only six depressions in U.S. history.  I have found no source that backs this up and several that seem to contradict it.  If his arguments are to be allowed, it would seem that there needs to be some allowable way to objectively counter them.  In any case, his arguments were added by someone with the IP 12.73.228.87 on 12 March 2006.  I believe that this is the paragraph that the above comment under "Paying the debt date edit" is calling "extremely POV". Lineman 09:11, 9 April 2006 (UTC)
thread_title:  Replies to arguments against paying down the debt 

message: The belief that debt should be reduced is responsible for intermittent periods of federal surplus. It is not widely understood that every depression in American history began with a surplus, and every recovery coincided with a deficit:
In 1817-21 the federal debt was reduced 25% A depression began in 1891,many died a horrible depressiony death
In 1823-36 the federal debt was reduced 9.7% A depression began in 1892
In 1852-56 the federal debt was reduced 59% A depression began in 1836
How do those dates have anything to do with the federal debt reduction. [You have messed up the dates]  I know this is wrong but don't know what is required to fix it. Oh yeah, what the hell does "depressiony death" mean? J Shultz 21:33, 5 April 2006 (UTC)
thread_title:  what is this section trying to suggest? 

message: I just read the "United States public debt" article for the first time.  It is very biased and political in nature, much more so than most Wikipedia articles.  The section on foreign holdings of US debt is a particularly egregious example.  There is absolutely no discussion of the benefits of foreign holdings of dollar assets, including government debt, or of the unlikelihood that foreign investors would dump their dollar assets.  Does anybody else agree that this article needs a major rewrite?
--Bond Head 16:15, 7 June 2006 (UTC)
thread_title:  Extremely biased article 

message: Hey, everyone, I revised the "Risks" category (adding some sub-categories) and added a new paragraph asking "Can the U.S. go bankrupt?" The paragraph has a source from a Federal Reserve Bank of St. Louis official (via the London Telegraph).  The source is here: 
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cnusa14.xml&menuId=242&sSheet=/money/2006/07/14/ixcity.html
I also added this source to the "External links" section. Keep up the good work. ProfessorPaul 17:43, 15 July 2006 (UTC)
thread_title: Can the U.S. go bankrupt?