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

As Feynman said ...

[richg74]

The late Richard Feynman had an appropriate comment for this, I think:

There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.

Perhaps they can get a new model that displays the debt in scientific notation -- it could be named the "Cheney Memorial Clock".

Re:Cheney is right....

[bsDaemon]

Yeah, but when the debters include China, where does that rule lead you?

Re:Clock can run in reverse.

[falcon5768]

Thats really sad isnt it, that we at one point WHERE paying down the debt. And the sad thing is Bush cant even blame the war... he got rid of ALL of Clintons budget concessions not long after becoming president. If he had kept them, even with the war, we would have had the debt paid off by 2011., as of now without serious cuts in spending and raising taxes in some form (which could be as easy as repealing the Bush tax cuts) it could be 2070 by the time we get out of debt. And these are people who sold themselves as fiscal conservatives.

You're wrong to think it linear

[EmbeddedJanitor]

Your ability to repay debt is not linear but depends on the amount as a ratio to your disposable income.

Consider repaying $1000/month on your credit card. For many people that might be hardship. For most people, repaying $2000/month is not 2 times as hard, butmuch harder.

Similarly, repaying $18k per person is a lot easier than repaying $32k, by much more than a factor of 2.

Of course that's all academic since nobody seems to be planning on repaying this debt.

Re:Absolute number tells us nothing

[larry bagina]

by borrowing more money, of course.

Wrong

[Kludge]

The debt clock gives a per family portion. ~$86k. Compare that with the median income. Whoo!

Cheney's strategy was "starve the beast"

[Kligat]

If you spend a lot on your administration, to win over voters or do whatever it is you want, then when the Democrat gets into office, he or she will be forced to cut spending so as to create a surplus while keeping the Republican's low taxes, lest they get "tax hike" backlash. At the same time, whenever "starve the beast" fails, deficits don't matter, or deficits are the grease that keeps the gears of the economy going.

Republican politicians like McCain say we're supposed to reduce spending, (in order to reduce national debt, though this step on the flowchart may be skipped depending on the audience), and we also should reduce taxes further, but then how will we get rid of the national debt?

Furthermore, if the Republicans are to perpetually starve the beast and fail, clearly their strategy needs to change. They need to raise deficits so much that the interest itself is as burdensome as the current deficit levels by themselves. That, and if the Republicans are perpetually starving the beast, maybe they should at least be doing so with programs like national healthc----oh, wait.

The preferred method of starving the beast is through increases in the national defense budget, it would seem. John McCain has expressed need for a spending freeze in all areas but that, which would cut off funding for new NASA projects (which aren't entitlements, including Orion, which was approved in a separate bill), while his close colleague Lindsey Graham wants to cut the budget by 5% in all areas but national defense.

Re:Cheney's strategy was "starve the beast"

[Martin Blank]

It's the Laffer curve. Lower taxes allow the economy to flourish, and tax receipts go up. It worked in the 1980s -- taxes collected ran well ahead of inflation. The catch is that it only works to a point.

There's a range where you can lower taxes and increase revenues. At the same time, there's a range where you can increase taxes and increase revenues. The real problem is that it's very hard to accurately determine which part of the curve you're on. We could be right on the perfect spot right now, which means that both candidates' plans will result in lower tax revenues than would otherwise happen.

There are other problems as well. You can't just raise taxes and have more income. The economy is a lot more complex than that. Raise taxes too much, and either those able to will hide them or the economy will sour, and then capital gains tax collections go down. There are other ways that the rich can mess with the numbers, including the use of trusts, charitable contributions, and overseas investments. None of these are inherently bad (the first is becoming increasingly common in middle class families), but they can be used to mask the true income.

Re:Conservative government?

[pthisis]

Just because Bush claims to be a conservative doesn't mean he actually is one!

The US has an incredibly interventionist foreign policy, and Americans haven't experienced a free market for almost a century.

Historically, that _is_ conservative. Free markets are a hallmark of classical liberalism. Around much of the world outside the US, politics, that's still what those words mean.

http://en.wikipedia.org/wiki/Classical_liberalism

The "normative core" of classical liberalism is the idea that laissez-faire economics will bring about a spontaneous order or invisible hand that benefits the society, though it does not necessarily oppose the state's provision of a few basic public goods...Several liberals, including Adam Smith, and Richard Cobden, argued that the free exchange of goods between nations could lead to world peace.

Bush has a lot more historical standing in claiming to be a conservative than a laissez-faire National Review follower would, and certainly he's been socially conservative (an area where, as opposed to economics, there isn't a huge difference of opinions over what's liberal and what's conservative).

Re:Cheney is right....

[sortius_nod]

Actually, no it wouldn't. China's economy is a lot stronger than you think. Unlike the US, they have a massive manufacturing base that can ship to anywhere in the world. The US is just a "customer" - a bad one at that.

They have the rest of the world (Europe, Asia, Africa, Russia, the list goes on). To me it would be business as usual, with one less "customer".

Re:Cheney is right....

[Telvin_3d]

Yes and no. China does have the world's largest standing army and citizens with a tradition of taking their orders from the government. If it comes down to a question of which county can suppress the riots for longer, my money is on China. They do a LOT of business with the EU and other nations, even if their single biggest trade partner is the US.

My guess is that if trade between the US and China was cut off, China could hold back the riots for as long as it took to retool their production and markets. If Walmart ran out of stock, there would be rioting in the US within the week.

Re:The debt did go down

[GaryPatterson]

10 trillion in debt, and where did the money to bail out banks come from? Borrowed! Genius!

Oddly enough, this reminded me of SimCity.

When I first started playing the game, I'd borrow heavily to fund agressive growth, thinking that if I cuold grow fast enough, I'd make the money back fairly quickly.

After a while I realised that the borrowing was hurting me far more than any other factor, so I started trying slow, organic growth. My cities were a bit of a hodge-podge at first, but I stayed in positive cash flow every game-month.

Although it's too simplistic to be completely realistic, I've often wondered where we'd be if politicians had to show competence in even simplistic games like this. I suspect that it'd be revealing to see how different politicians play the game.

Re:Another Republican "Victory"

[GaryPatterson]

Well, the democrat part is far better - you're spending your own money, after all. The other model leaves you with a debt.

Re:Clock can run in reverse.

[Clanked]

Time to get rid of my karma.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

Re:Absolute number tells us nothing

[Michael Wardle]

Clinton left us with a debt of about 60% of GDP

Someone else said that Clinton paid off the national debt. Can you explain how you came up with the 60% figure?

Re:Cheney is right....

[Kjella]

If China got pissed and cut off all exports to us... their economy would implode. And the people would hold the communist party accountable--revolution would be in the streets and China would become be under new management by the end of the month.

They wouldn't get their IOUs, the US wouldn't get their goods. I wonder who'd implode first because of that, I'd go with the country with the Soviet Russia style queues at the store. They could easily still import what they need and not run into any serious problems with the people, while repurposing them to other markets. As long as China keeps supporting most of their own internal consumption from inside China, it's not like the trade balance has that much immidiate impact.

Re:Clock can run in reverse.

[Anonymous Coward]

But of course the tax system doesn't actually work that way. That tax code can not be explained in an analogy, nor can the ideal tax code. Its like you're stating categorically that any adjustment what-so-ever in the tax code will have dire consequences if it results in higher taxes being paid by the super wealthy. Historically speaking, the tax burden on the rich was actually much much higher, with the result being both a lower burden on the middle and lower classes as well as higher rate of philanthropy amongst the wealthy.

Attempting to deceive people by the means of an analogy and a degree is a vile act of the highest order. You sir, should be ashamed.

I am a rat jumping ship

[philspear]

Is anyone else, like me, making plans to move out of the US? Frankly I didn't get us into this mess and I'm not willing to do my part to bail out all those who did. I'm a liberal, not a libertarian, so I don't think taxes are always bad, but when I hear about what they're going to be going to, well I'd rather be paying taxes someplace where they're going to do some good. I hear european countries have high taxes, but they're not sending it all to Wall street, Iraq, and the world's largest military. I'd rather pay twice the taxes I am now if I knew it was going to more worthwhile things, like studying bear DNA.

I have no skill when it comes to convincing people of anything, especially not the average voter. I come across as arrogant, elitist, and condescending, because I am arrogant, elitist, and condescending, and that doesn't convince them of anything other than they don't like me. I give money to different causes to do that, but I myself am not helping my fellow citizen make the right choices.

While I like the place and the people, we've really painted ourselves into a corner. Every other country on earth makes stupid moves, because every person on earth is occasionally stupid, but the US keeps making such BIG mistakes. I feel selfish, or rather, I realize I'm selfish, but I'm not doing any good here, country is going to hell in a handbasket no matter what I do. I'm here for several more years in any event, so I guess there is time for us to shape up, but I'm making new plans anyway. Anyone else?

Re:I am a rat jumping ship

[OriginalArlen]

You do realise our taxes are actually lower in Europe that yours in USA, right? I earn about $70K (depending what the exchange rate is today) and I pay about 30% on that, including National Insurance (equiv to your FICA.) See this comment for more detail...

Re:Clock can run in reverse.

[gnud]

Not sure whether to laugh or to cry. I always kinda assumed that US citizens paid significantly lower taxes than we do here in scandinavia, I mean, since you get no job security, no real unemployment benefits and no real healthcare. But you still pay 35%? And the republican nominee still has a significant percentage of the votes? I think I'll go back to bed.

Your history is wrong

[DesScorp]

"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."

The wealthy are important to the economy. The wealthy and the upper-Middle class business owners are the engine of American prosperity. How many poor people ever offered you a job?

So let's cut this bullshit right now that wealthy = villain.

"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."

Except that increased economic activity did "pay for" the tax cuts. The problem is that Congress increased spending by huge amounts, negating any savings, especially increases in entitlements which, by law cannot be touched during budget cuts. To this day, the biggest item in our budget is not defense (which is one of the few things the Constitution explicitly says should be paid for by taxation), but those damned entitlements. And when the Baby boomers start their retirement peak, we're going to be in a world of crap that makes the current crisis look tame.

What's the solution?

[inKubus]

It really irks me that people keep mentioning the same facts over and over again. Everyone knows how FRB works. Everyone knows they printed money. Everyone who is going to know knows. So why are you wasting brain power trying to educate people when you could be coming up with solutions.

I saw I story today about Iceland. You may or may not know that Iceland is a sort of banking haven for Europe. Anyway, they bought up a lot of these bad securities based on loans that may or may not currently be bad. Anyway, the story mentioned that the depositors from England and Germany and Europe are coming and wanting their money from the Icelandic banks and they don't have any. And it ended with "poor Iceland, what will they do now that their economy has collapsed"?

It's this type of stupid story that the media JUST LOVE to splatter about. They don't understand that they are CAUSING the mess. Guess what? NOTHING HAS CHANGED IN ICELAND. The farmer still grows his stuff. The geothermal energy is still coming from the ground. The snow is still white and cold. Nothing is different except the assumed value of a few sheets of paper.

Likewise, in America and world-wide, nothing REAL has changed. Yes, there are shysters who make money off confidence, and they are suffering right now. Oh, who's this guy Henry Paulson? The FORMER CEO of Goldman Sachs you idiots! But in reality, we are all still going to work, still producing the little amount of stuff we produce in this country. But we produce everything we need to exist, food, housing, medicine. So, again, I ask, what's the problem? If I'm hungry, can I get food? Yes. If I need a place to stay, is there one? Yes. If I'm sick is there a hospital mandated by law to provide care for me? Yes. So, what's the problem?

Buy local and DO NOT buy gold, since you can't buy food with gold. You can, in very bad times, buy gold with food :) So yes, if they weren't already speculated to record highs by people who saw this whole thing coming 18 months ago, buy commodities. Hell, REAL ESTATE is a great investment right now. If you have cash.. Some lucky asshole is going to swipe all those houses up from the banks. It might even be the U.S. government. And you know, they overpay for EVERYTHING, so if you buy some now, you will see an immediate appreciation. Anyway, these are not bad times if you are smart and not stupid and buy into their stupid panic stories. If you are seriously worried about feeding your family you shouldn't have GAMBLED IT AWAY on stocks.

Re:What's the solution?

[Anonymous Coward]

Everyone knows how FRB works. Everyone knows they printed money. Everyone who is going to know knows. So why are you wasting brain power trying to educate people when you could be coming up with solutions.

No, most people don't understand fractional reserve banking. Most Americans don't realize that the creature from Jekyll island is a privately owned central bank. Most Americans don't know there's no federal statute requiring them to pay income tax, monies used purely to service interest on loans from the fed to the government.

Back to fractional (or fraudulent) reserve banking, we know the solution to the tyranny. Unfortunately, corporate media is complicit and any leader who dared threaten the international banking cartel would be risking assasination (JFK, Lincoln, Garfield). The only way to affect change is through dissemination of knowledge.

Re:What's the solution?

[complete loony]

What's the problem? The *average* American spends $1.30 for every $1.00 they earn. The average house has a loan on it for 60% of its market value, while the market value is falling fast. And everyone is still hoping and praying for a quick fix wonder cure that will wipe all the trouble away and allow the fairy tale to continue.

And now everyone is turning to their governments to bail out this mess. This will only result in bankrupt governments as well.

There's only one way to fix this. Widespread bankruptcy.

All the people who have gambled with or spent their future earnings and thrown them away need to be cleaned out of the economy. It's going to hurt and there's nothing we can do about it. We might have been able to fix this 15 years ago during the last recession, but it's too late now.

I thought with the panic last week, the bubble would finally burst and we can start the healing and re-building process. But it seems there is still far too much optimism.

Oh, and that job you have? Once we stop borrowing more money, 30% of the economy (and therefore 30% of the jobs) disappear overnight. I hope for your sake you don't become redundant.

Re:Clock can run in reverse.

[Zironic]

Swedish Taxes:
Your employer pays 30% of your salary ontop as an employer fee
Everyone pays 33% of their income to their kommun (you could call it the swedish version of a state, it's the local goverment that takes care of everything within an area such as school, healthcare etc)
You pay 20% of everything you earn above 340 900kr(48,571 USD) to the state and an additional 5% for above 507,100(72,251 USD)
then you pay 7% of your income to your pension fund but that is tax reductible.

So in total if you earn 100 units you pay the state 63, or 63/130 = 48,5% and that's if you're a low income earner.
With a high income you can end up paying 83 units for 83/130 = 64%

So yes, the US still has significantly lower taxes then sweden : P

Re:Exccept....

[electrictroy]

The citizens of Eastern Europe rose-up against their governments. These citizens didn't even own guns. By your reckoning they should have been squashed, but that didn't happen. Most of the soldiers refused to fire on their own neighbors, and the governments collapsed under the sheer weight of numbers.