In addition, there is some question as to how much of the $87 billion should be a grant and how much should be loaned to Iraq. Eventually, their oil industry should be able to make a profit for Iraq, and I don't see why we should GIVE all that money to them. The military expenditures (about $1 billion per week) are going to be there regardless, but the questions remain about the rest of this project. On a side note, where is the money to rebuild Afghanistan? Are we going to abandon that country yet AGAIN?
The money to rebuild Afghanistan is included in the $87b. As far as making it a loan, on the one hand, Iraq is already saddled with something like $100 billion in debt. On the other hand, much of that should probably be ignored (like arms deals with Russia and China). They will eventually be able to pay it back, but to make it a grant would just spped their recovery, and I think speed is important here. I could go either way on that.
The easiest way to reduce the budget is to reduce the deficit and the debt. Currently 15% of our total budget goes to just paying inrest on our debt. Our debt has been climbing so that's not good. Reducing our national debt means not cutting programs and still reducing the overall spending.
Question for liberals: Where does this money that is paid towards interest on the debt ultimately go? Liberals' response: (thinking hard.... googling hard... googling some more....) It is flushed down the toilet. WRONG ANSWER The interest paid towards the government debt goes to the bond/note/bill holders which are overwhelmingly US CITIZENS. This money is then reinvested back into the economy. The liberals act as though this money magically vanishes into thin air! Do not believe their amateurish, uninformed lies. CLASS DISMISSED
On February 23rd 1996, the Outstanding Public Debt jumped almost $30 billion to $5,017,056,630,040.53. This was the first time in history the U.S. National Debt surpassed the $5 trillion mark. Almost exactly six years later, on February 26th, 2002, the Debt passed the $6 trillion dollar mark. I thought my credit card debt was bad, sheesh. I don't know about you but I do not want to even think about paying the interest on that bad boy.
As of Feb. 1998, 45.8% of US debt was held by foreign nationals. I believe it has increased since then, but I am not positive. At any rate, it is not "overwhelmingly" held by US citizens. Nobody is saying that paying down the interest is a bad thing. However, people are syaing that just paying the interest is not as good a thing as working to reduce the debt. I'm not even going to go into the basic reasons for that, but you can read about that in any basic book (or even a nuber of newspaper articles) There's no such thing as liberal economics or conservative economics. There is just plain economics. The name calling is silly and dilutes the point. Let's grow up a bit. from the New York Fed: http://216.239.41.104/search?q=cach...nationality+of+US+debt+holders&hl=en&ie=UTF-8
Vik, Read this passage from your very own link, then apologize to me: Why the Data Collected Do Not Identify the Ultimate Foreign Ownership of the Securities In addition to the Treasury’s obligation to ensure the confi-dentiality of data reported by individual respondents, the main impediment to identifying the ultimate owners of Treasury securities arises from the reporting guidelines on the BL-2 and S forms that specify who is considered foreign and how the nationality of a foreign holder is to be determined. For example, any individual, including a U.S. citizen, who lives outside the United States is considered foreign. Any partnership, association, corporation, orother organization created or organized under the laws of a foreign country is considered foreign—except the branches, agencies, and subsidiaries of these institutions located in the United States. Similarly, any foreign branch,subsidiary, or other affiliate of a U.S. organization is considered foreign. Thus, while a foreign bank’s U.S. branches, agencies, and subsidiaries are considered U.S. persons, its head offices and branches located outside theUnited States are considered foreign. Simply put, it is the location of an entity that determines whether that entity is considered domestic or foreign for reporting purposes. In providing information to the Treasury, U.S. reporting institutions are asked to list transactions with foreigners on the line opposite the name of the foreign countryor geographical area in which the foreigner resides. Transactions with foreign branches or agencies of foreign banks—excluding central banks—and other private institutions must be reported on the line opposite thecountry in which the foreign branch or agency is located. For example, a U.S. institution’s transaction with the Sydney, Australia, branch of a French firm is reported opposite Australia and not opposite France. Because liabilities to foreigners reported on the BL-2 form are listed opposite the country where the foreigner resides and transactions reported on the S form are typically listed opposite the country where the foreign institution undertakes the transaction—rather than opposite thecountry of the person or firm on whose behalf the foreign institution may be acting—it is not possible to know precisely who the ultimate holders of U.S. Treasury securities are. An example may help clarify this point.If a U.S. bank buys a long-term Treasury security from a Japanese resident’s account with Merrill Lynch in London, the transaction will be reported as a sale by a U.K.resident and not a Japanese resident. If the same transaction were to take place on behalf of a U.K. resident’s account with Merrill Lynch in London, the sale would be recorded opposite the United Kingdom, and a U.K. resi-dent would in fact be the foreign seller of the security. It is not difficult to see from this example that theTreasury data—whether made available to the public or not—do not necessarily reflect the nationality of the ultimate owner of, or transactor in, the security. Manyforeign holders of Treasury securities, private as well as official, may decide to hold their Treasury assets in accounts outside their own countries precisely because they wish to avoid public or official scrutiny of their hold-ings or their buying and selling activity. There is, of course, nothing illegal about these decisions. Moreover,these decisions undoubtedly account for the particularly large holdings of Treasury securities that are reported for countries such as the United Kingdom, which is a major world financial center, and the Netherlands Antilles,which is a major offshore financial center. Vik, I suggest you read your googled links closer so that you can better support your little 'theories'. thanks VIKTORY
TJ - I apologize for the fact that the figure was larger due to potential overocunting of expatriate debt. However, I encourage you to take a look at a recent Dept. of Treasury report: http://www.treas.gov/tic/mfh.txt where debt held by foreign nationals comes to roughly 34% of the US debt. Here's a quick glance that the House of Reps. made up: http://www.house.gov/tanner/foreignholdings.htm 34% is still a sizeable number. You may want to rethink what "overwhelming" means before you throw your shoulder from patting yourself on the back. And I'm also interested in hearing your thoughts on why just paying down the interest on the debt is preferable to paying down the interest AND part of the debt.
No problem, people make flagrant mistakes all the time. Vik, I will refer you back to Finance 101 and state that money should at all times be allocated to its highest return on capital investment. If that highest return is the pathetically low interest rate on government securities, then by all means, pay down principal.
That is true in the short run. That is NOT necessarily true in the medium or long run. Think about it for a minute (or a few hours, or a day) and look into some of the literature. There are a lot of really smart people that have examined this problem. I'm not going to waste any more time arguing with somebody who refuses to open his eyes to the possibility that he doesn't know something, and furthermore is incredibly rude.
You're right in that you wouldn't have to; you don't make anywhere near enough to have benefitted significantly from the last round of tax cuts.
The point isn't who holds the bonds. The point is who has to pay the intrest and eventually the debt. The answer is all taxpayers. Conservatives talk about reducing spending. Paying off the debt would reduce govt. spending, and it wouldn't have to cut any programs to do it.
Back to the issue at hand... Does Congress really need to appropriate this funding on an emergency basis? This congressional report states that there is enough funding to last until April 2004. If that's the case, doesn't Congress have more time to study this proposal? Memorandum October 15, 2003 SUBJECT: Availability of Army funds without immediate supplemental appropriations FROM: Stephen Daggett Specialist in National Defense Foreign Affairs, Defense, and Trade Division This memo is in response to multiple congressional requests for an assessment of how long the Department of Defense will be able to finance ongoing operations in Iraq, Afghanistan, and elsewhere, along with regular day-to-day operations, in the absence of immediate supplemental appropriations from Congress. The service most affected by the pace of operations in Iraq and elsewhere is the Army. Of the $65,560.0 million that the Administration requested in FY2004 supplemental appropriations on September 17, $39,199.9 million is for the Army, $13,686.0 million for the Air Force, $7,041.0 million for Defense-Wide activities, $3,209.8 million for the Navy, and $2,423.3 million for the Marine Corps. In the absence of supplemental appropriations, the Army, which has the greatest need, would run out of available money first. A rough way to calculate how soon the Army will run out of money is (1) to determine how much the Army needs per month both from regular FY2004 appropriations and from FY2004 supplemental appropriations; and (2) to determine how many months of operations at that pace the Army can finance with available regular FY2004 funding. The attached table calculates how many months regular FY2004 appropriations for Military Personnel, Army and for Operation and Maintenance, Army should suffice. Available military personnel funding should last roughly through the end of May and into the beginning of June. Available operation and maintenance funding should last roughly through the end of March and into the beginning of April. This assumes that Army funding requirements will be roughly stable over the course of fiscal year. Also, it does not take account of additional unobligated funds that remain available from FY2003 supplemental appropriations. To finance operations without supplemental appropriations, the Army would have to be exempted from normal apportionment requirements, in which the Office of Management and Budget allocates funds to agencies over time to ensure that adequate funds remain available through the fiscal year. Link to pdf
Since when does rate of return equate to a short-run phenomenon? Are you even familiar with the concept? Sigh...
