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

Signed Binary FTW

[MBCook]

The largest bit became a one? It overflowed?

So now it's negative?

We're rich! So that's how we were going to pay for the bail-out, SS, medicare, medicaid...

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.

[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.

Re:Clock can run in reverse.

[seeker_1us]

it wasn't the war that ended the surplus, it was the .com bubble collapsing. And it was only a surplus if you include FICA contributions.

Bullshit.

The surplus was ended by Bush and cronies deciding to spend it all on a huge, unnecessary tax refund, most of which went to the extremely rich.

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

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.

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:As Feynman said ...

[cc_pirate]

Yeah, but Cheney was the one dumb enough to draw the "Reagan proved deficits don't matter" conclusion from Reagan's actions.

We need engineers in government, not politicians and lawyers. They don't have any respect for what happens when you ignore science and mathematical facts and press on as if they didn't matter.

The Logic of Failure....

Re:Analog it

[NFN_NLN]

Why don't they just make it an analog clock? The hands could simply spin around faster and faster as the situation worsens, which would be much more amusing. The numbers are fairly meaningless anyway.

George W. Bush is that you?

Math says it bad, but not quite AS bad

[Anonymous Coward]

First of all, 2.7 in 1989 are worth more than the same amount in 2007. Inflation calculator says 2.7 trillion in 1989 equal 4.6 trillion in 2008.

Secondly, what's really important is the debt-per-capita ratio, and the US population has increased. In 1989 the US population was 246 million; in 2008, it's 305 million.

That means, that in 2008 dollars equivalent, the per-capita debt in 1989 was $18,000, while in 2008, the per capita debt is $32,000.

Yes, we do owe more. But we "only", per capita and in equivalent monetary value, owe about 80% more, as opposed to 370% more, as the original numbers would make you believe.

Re:Math says it bad, but not quite AS bad

[clang_jangle]

The problem with applying math that way is that today, more than one in eight US citizens lives below the poverty line, jobs are vanishing at an alarming rate, and the number of parasitic, wealthy corporations and individuals has grown while the middle class has become a much smaller group. And that leaves a much smaller pool of available resources to tap in addressing today's vastly larger debt. Thus, the per capita comparison is ultimately meaningless. Neither the very poor nor the very rich are going to pay.

he supports the terrorists

[dirk]

Adds reader MarkusQ, "I know Dick Cheney has assured us that 'Deficits don't matter' [CC] but I can't help wondering if we should be fixing the problem rather than the sign."

Why does this guy hate America so much?

Re:Cheney is right....

[lysergic.acid]

that might be true if our society weren't so dependent on global trade. but if our trade partners suddenly cut all economic relations with us our domestic economy would collapse. we depend on other nations for manufacturing, investments, and imports/exports.

we might be able to raid other countries for their oil, but we can't use military coercion to force other countries to import our goods or manufacture our raw materials. and since our trade relations with other nations are generally good for us, bad for them, if we're no longer an economic superpower, i imagine most of the developing nations we exploit would cut their ties with us and just nationalize the resources we've hijacked from them like Venezuela has done.

i mean, if we don't have money to lend other nations, the IMF & World Bank would cease to be relevant. and without the power and influence of the IMF/World Bank, we wouldn't be able to dictate the domestic policies of other nations anymore. so 3rd world nations who've allowed us to privatize their industries and open up their markets to us would cease to allow themselves to be exploited.

and quite frankly, we need them more than they need us. many American-based corporate conglomerates would tank if our globalization policies were reversed. WalMart and other retailers wouldn't have cheap sweatshop made goods to sell. Monsanto would lose most of their profits made from selling developing nations GMO seeds every planting season. and 38% of Microsoft's annual revenue comes from sales outside of the U.S. heck, Hollywood makes more money from foreign ticket sales than from the domestic box office ($12 billion a year versus $9 billion).

if our money was certainly no good internationally, or if countries like China decided to collect on our debts, we would be royally screwed.

Another Republican "Victory"

[cc_pirate]

What "fiscal conservatives"!

But wait, the debt has grown insanely under every single Republican president in the last 40 years.

How could that be?

The Republicans aren't fiscally conservative at all. Every single republican president has spent like a drunken sailor and GWB is the worst of the lot.

The only thing more stupid than Tax and Spend is Spend and Spend.

Re:Another Republican "Victory"

[corsec67]

"Republican" faction of the American Party:
Borrow and Spend

"Democrat" faction of the American Party:
Tax and Spend

Re:Cheney is right....

[PachmanP]

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

Wondering if a Rottweiler can beat 100 angry weaner dogs?

Re:Analog it

[William Robinson]

George W. Bush is that you?

Must be. In the right part of his brain nothing is left and in the left part of his brain nothing is right!!!

Re:Cheney is right....

[im_thatoneguy]

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.

The US is integral to the world market. This is a classic shoot your face to spite your nose situation.

The debt did go down

[goombah99]

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

Re:Cheney is right....

[Rutulian]

To me it would be business as usual, with one less "customer".

Agree with your general point, but it's not quite that trivial...the US is a big customer.

Re:Cheney is right....

[renegadesx]

Considering the US are paying with IOU's at the moment, I dont think China would mind collecting. If China and the EU both decided to cut off the US at the moment and collect on their debts, if they get their money back their economies may bounce back and the US would be screwed.

I think alot of people on here (I am assuming americans) overestimate how big of an exporter they really are in actual goods. You guys seem to forget the manufacturing parts of american business have been outsourced overseas for years now with Wall St being (quote Ralph Nayder) nothing more than a gambling casino.

Re:Cheney is right....

[nedlohs]

You're in for a shock. The end result of the current financial problems is China waking up to the fact that it doesn't need to lend the Americans money so they buy its crap - its own consumers can instead of saving money to be loaned to Americans, buy crap themselves.

Yes, the Chinese economy is going to collapse along with the US economy.

However, they have the production base (that America shipped over there...) and a large population, and India is a big importer of Chinese goods already.

The US has consumer debt with no capital investment to show for it, crumbling infrastructure, and a production base smaller than it once was.

Also, when it comes to poor people rioting and killing the rich people and destroying yet more infrastructure - China has more experience with dealing with that (in a way one would hope America wouldn't deal with it).

So China will recover faster, and will be the new engine of the world economy - both production and consumption...

The US is a drain on the world economy (that's what a trade deficit is - historically you ran a trade deficit in order to invest in capital works, so you could pay the money back later, the US has instead invested in flat screen TVs and vacations), the sooner it is cut off the better for the rest of the world.

Yes, short term is will tank the whole world economy - but it has to be done at some point. And right now there's enough motivation to pull the trigger - it's pretty obvious that money loaned to the US isn't getting paid back with dollars worth anything close to what the ones loaned were worth.

Re:Cheney is right....

[nedlohs]

Which is why the Chinese economy is stronger.

What would the difference be if instead of shipping those goods to the US, China instead dumped them in the ocean?

The US wouldn't have those goods. And china wouldn't have yet more IOUs from the United States. We pay them with dollars, they exchange them for treasuries (or equities when we let them) in order keep the yuan artificially low.

I think the Chinese could do without essentially worthless IOUs (like the US can afford to pay its debts) a lot more than the US can do without imports (of clothes, food, etc, etc).

And of course China doesn't have to dump them in the ocean, they can sell them to their own people - who will be much richer than Americans once their currency stops being artificially surpressed.

Of course there's plenty of pain in the middle - but since the US is about to have a very severe recession these events might be forced on China anyway.

Surely you can see that the consumer half of the producer/consumer relation is the less important half. Anyone can buy and watch a TV, it takes actual industry to be able to make one. Chinese people can start consuming much more easily than American people can start producing - if that trade stops.

The national debt is completely inevitable

[Colin Smith]

If your money is created from nothing at the point of a loan and you want to inflate the money supply then you also have to increase the (exponentially growing) debt at the same time.

Now, if you want the "economy" to grow then clearly you have to increase the supply of money faster than the interest on the debt which is consuming credit, or you get a recession.

Whether the debt is public debt, private debt or corporate debt, is irrelevant. The debt must be created. Or at least, it will be until you run out of people willing or able to take on and service the debt, then the system collapses. Doesn't this requirement for perpetual growth sound like something else?

It is a predictable exponential function and therefore has a doubling time, so yes, you could create a "law" about it.

The national debt, the credit crunch, the stockmarket crisis are all the inevitable result of the way your money is created... Long may it continue.
 

Re:Cheney is right....

[TapeCutter]

"...they can sell them to their own people..."

Indeed, China's earnings from exporting goods and services stands at ~25% of GDP, the US accounts for less than half of that. This is good for the economy here in Australia, not so good for the economy in the US. As for China, if the US stopped importing from them tomorrow their growth rate of ~10% would make up for the loss in ~1yr.

It's also interesting to note that China lifted it's ban on buying and selling gold 2-3yrs ago (when oil & gold abruptly started climbing). For a while the government encoraged China's middle class to put some of their savings into the traditional 'rainy day' plan of hoarding gold in the form of trinkets. The middle class really didn't need much encouraging, China's new retail gold market drove the gold price up for the first 6-12 months of it's operation.

Disclaimer: Even though it was concieved by Newton I am not calling for a return to the gold standard.

Absolutely ridiculous

[garote]

That analogy is absolutely ridiculous. The rich man is not a goose who poops golden eggs and shares them out of kindness. The rich man's wealth is where everyone else's is: In the bar.

When ten men go to a bar, the first five clock in and start working. The next four buy their own drinks. And the tenth gets a free beer because he owns the place. If ANY of them stop going to the bar, the musical chairs just shuffle around, until there are too few people left to operate a bar. And then it closes. And no more rich man.

You talk as though the rich are the lynchpin of capitalism. They're not; they're a byproduct, and in many cases a sign of inefficiency or poor regulation. The middle class are the lynchpin of capitalism. And they have been slowly disappearing into WalMart, CostCo, and the military industrial complex for the last 25 years. Have you noticed that the steps are getting a bit narrow on your ivory tower?

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.