National Debt Clock Overflowed, Extended By a Digit

hackingbear writes "The National Debt Counter, erected in 1989 when the US debt was 'merely' a tiny $2.7 trillion, has been moving so much that it recently ran out of digits to display the ballooning figure: $10,150,603,734,720, or roughly $10.2 trillion, as of Saturday afternoon. To accommodate the extra '1,' the clock was hacked: the '1' from "$10.2" has been moved left to the LCD square once occupied solely by the digital dollar sign. A non-digital, improvised dollar sign has been pasted next to the '1.' It will be replaced in 2009 with a new clock able to track debt up to a quadrillion dollars, which is a '1' followed by 15 zeros. That should be good enough for a few more months at least, I believe." Adds reader MarkusQ, "I know Dick Cheney has assured us that 'Deficits don't matter' but I can't help wondering if we should be fixing the problem rather than the sign."

Comments

Clock can run in reverse.

[Animats]

This is the second debt clock. The first version could only count upward, and when the budget had a surplus back in the Clinton years, and the debt began to decrease, the debt clock was shut down. After a year or so, it was then replaced with the current version, which has the ability to count both upward and downward. The downward capability has not been used during the Bush years.

Re:Clock can run in reverse.

[dachshund]

it was only a surplus if you include FICA contributions.

I already posted a reply to this, but it occurs to me that a lot of people may not be clear on what it means.

You see, most working Americans see two kinds of Federal tax on their paystub. The first is plain-old Income Tax, which is probably in the low 20% range for most people with a "decent" full time job. The second is "FICA", which rolls up your contribution to Social Security and Medicare. For most people that tax covers another 7.6% of your income (6.2% Social Security, 1.4% Medicare). However, this number is misleading since the government actually makes your employer pay an equal amount. This is money that could be going to you, so really 15.2% of your salary is going to the government. (If you happen to be self-employed you'll see this directly, since the government makes you pay both halves.)

An important thing to note, however: the Social Security portion of your paycheck only applies to the first $90k or so of your income. So if you make, say $1m/year, your effective Social Security tax will be only a fraction of a percent. Basically it's a tax on the working class.

Now clearly 15.2% of your income is a huge chunk. In fact, considering that most people are probably paying only 20-22% of their income in regular Income Tax, that means you're really giving the Federal government 35-37% of your income! So it's worth knowing where the tax came from and where the money is going.

A bit of history: in the mid 1980s, Ronald Reagan came into office with the idea to slash income taxes, particularly for people who were "important" to the economy, i.e., very wealthy. At the time there was some belief on the Republican side that cutting taxes would magically produce new economic activity that would pay for the reduced tax cuts. Unfortunately, that never really happened and the nation started to go deep into debt.

Coincidentally (or not), right around the same time, a Republican chairman of the Federal Reserve came up with the idea to massively increase the Social Security Payroll tax. Recall that this is a tax that only applies to the first $90k of your income (it was less then), so raising it isn't going to have a big impact on high earners. In theory the tax hike was designed to build up a big reserve of cash so that Social Security could operate in the 2020s when the baby boomers started to retire. However--- and this is the really important part of the story--- the same chairman insisted that all this cash should not be put away someplace safe, but should rather be made available as a kind of piggy bank for the government to borrow from.

You can probably figure out the rest of it. Free money. Tax cuts to give. Weapons systems to buy. Amazingly, even after eating up all of the Social Security funds, the government still had to borrow hundreds of billions from the outside throughout the Reagan and Bush years.

So far it's possible to cause this a bipartisan cheat, since Democrats were equally to blame. But then in 1992 a Democrat named Bill Clinton got elected and decided to get serious about reducing those deficits. And over his term he succeeded, through a combination of slightly higher taxes (mostly on the high end of the income scale) and reduced spending (particularly military). The economy also boomed--- many say as a direct result of all of this fiscal responsibility. And so balancing the checkbook begat revenue which meant an even more balanced checkbook.

By 2000, Clinton (and his VP Gore) had cut the deficit all the way back to a "surplus" which means we were still borrowing some from the SS funds, just not from the outside world anymore. Al Gore ran on a campaign of even further deficit reduction, basically saying: let's finish the job, take those SS taxes you're paying, and put them in a special fund ("lockbox") where the government can't spend them. Republicans scoffed, and promised an even bigger round of income tax cuts (focused at the very wea

The debt did go down

[goombah99]

Actually the debt realtive to the GDP went down which is all that matters.

Re:i give it two years

[squiggleslash]

Now for the current crisis, most of it can come to blame upon groups like the Acorn group and other liberals putting pressure on congress and banks to extend low income loans to people who could never afford one

No, it can't. The result of the efforts to make home ownership more widespread was a set of anti-discrimination laws placed in the CRA. However, CRA regulated loans had virtually nothing to do with the current crisis. Despite CRA-regulated banks doing the bulk of regular loans, 50% of sub-prime loans - which make up the bulk the "toxic mortgages" - were issued by banks entirely free of CRA regulation, and a further 20-25% were issued by departments of CRA-regulated banks that were free of CRA regulations. The remaining 25-30%, while performed by regulated banks, were almost certainly illegal given the strict nature of the CRA and the requirements for collateral it imposes.

The problem here are not mortgages given to people on low incomes, but sub-prime mortgages given to everyone. People were using the sub-prime market to make excessive gambles that fell apart when the housing market collapsed. These varied from overly stretched ARM HELOCs to people buying multiple houses with the intent of either flipping them or renting them out. You can probably imagine that the largest gambles were not taken by the poor, but by those on median or higher than average incomes.

BTW, thanks for being one of the few people making this argument that didn't directly blame ethnic minorities for this mess, but remember that the key laws Democrats are being blamed for are not laws directed at low incomes, but at ending discrimination against ethnic minorities. Those that are promoting this meme are treading on very dangerous ground. The CRA didn't force banks to give loans to people who couldn't afford them (quite the opposite in fact), and CRA regulated loans had little or nothing to do with this crisis, which affects sub-prime loans of the type the CRA prevents. It did require banks end discrimination, but a person from an ethnic minority who entered a branch of Wachovia and asked for a 110% mortgage to help them buy a $500,000 home which they expected to pay back using their Burger King salary would have been rejected just as a white person in the same circumstances would have been. The CRA wouldn't have forced them to give the loan anyway, the CRA would have done the opposite.