Thread: They chose to fail.

Originally Posted by goober

No, if the government took in more money than it spent in a period, then it had a surplus for that period.
That's it, that's the definition of surplus.

And if you keep on spending but just "don't count it" then you're not done spending and you still have to pay that bill don't you?

Originally Posted by goober

It's a boundary problem, you draw a boundary around the government, and count the money that goes in, and the money that comes out, what happens inside the boundary is completely irrelevant.

What happens is always relevant.

Originally Posted by goober

It doesn't matter because borrowing or paying back isn't taxes or spending.

Borrowing is a liability, thus counts against your expenses. Never have actually used a balance sheet before have you?

The funds obtained from a loan are counted as what in a balance sheet? You want to count the income from the loan, but ignore the debt incurred at the same time.

Double entry accounting, apparently you've forgotten what that is.

Originally Posted by goober

Someday that debt will be redeemed and it will be used for Social Security payments and it will count as spending, for that year, but not for the year 2000.

You just acknowledged it's debt and accumulated at the time it was established which counts against the books in that year. In your own words you just shot yourself down.

Thanks for playing.

Originally Posted by goober

No, you never explained anything, you went off into something involving Canadian t-bills, and other stuff that definitely didn't happen, but you never explained how if the government takes in more in taxes than it spends, that it's not a surplus.

You can't understand what happened, and when I used a hypothetical example to help explain what happened, your response to the hypothetical example is, "that definitely didn't happen".



I used to believe that you understood the accounting gimmick of the phantom "surplus", and that your ideology wouldn't let you admit it.

Now I believe that you are just confused.

Originally Posted by dixon76710

Yeah, only if you assume we dont have to pay back SS. Excess SS collections arent for funding expenditures in this period, but instead intended for future periods.

That's not how accounting works.
A surplus or deficit is the difference between revenues and outlays for the fiscal year. Period.

In the long run, surpluses = deficits.
Running deficits means you will have to run surpluses in the future.

Originally Posted by Sadanie

it is clear that that divide between the right and the left, the ugliness of our politics, the partisanship coming first and foremost before our national interest and our reason is exactly what destroyed the world's confidence in our ability to pay our debts, to find BALANCED solutions to our deficit.

It is hilarious that you think it is our partisanship and not an objective assessment of our willingness to remain solvent that is driving this!

Originally Posted by Sadanie

Our deficit is not bigger as a percentage of our GDP than many other nations who have kept their AAA ratings. . .because they demonstrated the will to work together, across party lines, to fix their problems.

Demonstrated not a lack of partisanship but a demonstration of actually acting to remain solvent.

Originally Posted by Sadanie

So, there is a HUGE price to pay for all those mindless insults and canned propaganda.

The sad thing is you believe this. It is not the propaganda but the actual numbers that are driving the market - actual facts not propaganda of partisanship.

It is funny how the Left only expects the Right to abdicate their position to avoid being labeled partisan, as if the term only applies to the Right.

Originally Posted by 9aces

And if you keep on spending but just "don't count it" then you're not done spending and you still have to pay that bill don't you?


What happens is always relevant.


Borrowing is a liability, thus counts against your expenses. Never have actually used a balance sheet before have you?

The funds obtained from a loan are counted as what in a balance sheet? You want to count the income from the loan, but ignore the debt incurred at the same time.

Double entry accounting, apparently you've forgotten what that is.


You just acknowledged it's debt and accumulated at the time it was established which counts against the books in that year. In your own words you just shot yourself down.

Thanks for playing.

OK, you have just demonstrated that "Surplus" isn't the only accounting term you have a problem with.
There are no expenses on a Balance Sheet, no income either.
Income and expenses appear on an Operating Statement.
A loan is not income.
It is a liability for the entity receiving the cash, it is an asset for the entity holding the note.
Borrowing doesn't count as an expense.

To summarize FY 2000, for example, the government received more money in taxes, than it spent for the fiscal year.
It had a cash surplus, that it use to pay down Debt Held By the Public.
(check out the chart in the post before this one)

Originally Posted by goober

OK, you have just demonstrated that "Surplus" isn't the only accounting term you have a problem with.
There are no expenses on a Balance Sheet, no income either.
Income and expenses appear on an Operating Statement.
A loan is not income.
It is a liability for the entity receiving the cash, it is an asset for the entity holding the note.
Borrowing doesn't count as an expense.

To summarize FY 2000, for example, the government received more money in taxes, than it spent for the fiscal year.
It had a cash surplus, that it use to pay down Debt Held By the Public.
(check out the chart in the post before this one)

Read very carefully, because I am going to show you, in your own words, why the government did not run a surplus during the years in question.

Are you ready?

"A loan is not income".

The excess Social Security taxes are not income for the general fund. Before they are spent by the government, they are borrowed from the Social Security Trust Fund. This loan is evidenced by the creation of a bond. That bond pays interest. That bond counts as part of the statutory debt ceiling.

I know that hypothetical situations are a difficult concept for you to grasp, but if the Social Security Trust Fund had invested the excess into another investment, such as an S&P 500 index fund, or gold bullion, or (try not to get confused again) Canadian government bonds, then those funds that were borrowed by the U.S. Government (as evidenced by the bond, remember?) from the Social Security Trust Fund would not have been available to be spent.

Guess what would have happened then, goober? Can you figure out the answer?

The answer is that the U.S. Government would have borrowed the money from some other entity, and the total debt would have still increased. The only difference would be to whom the government owes the money, not that it owes the money. Remember, goober, "a loan is not income".

Thus endeth the lesson.

Originally Posted by smurf

Read very carefully, because I am going to show you, in your own words, why the government did not run a surplus during the years in question.

Are you ready?

"A loan is not income".

The excess Social Security taxes are not income for the general fund. Before they are spent by the government, they are borrowed from the Social Security Trust Fund. This loan is evidenced by the creation of a bond. That bond pays interest. That bond counts as part of the statutory debt ceiling.

I know that hypothetical situations are a difficult concept for you to grasp, but if the Social Security Trust Fund had invested the excess into another investment, such as an S&P 500 index fund, or gold bullion, or (try not to get confused again) Canadian government bonds, then those funds that were borrowed by the U.S. Government (as evidenced by the bond, remember?) from the Social Security Trust Fund would not have been available to be spent.

Guess what would have happened then, goober? Can you figure out the answer?

The answer is that the U.S. Government would have borrowed the money from some other entity, and the total debt would have still increased. The only difference would be to whom the government owes the money, not that it owes the money. Remember, goober, "a loan is not income".

Thus endeth the lesson.

It's a boundary problem, and you are drawing the boundary in the wrong place, that's why it's so difficult for you to understand.

The boundary goes around the whole federal government, what happens inside the boundary is irrelevant.

More Revenue went in than spending came out, and the surplus that came out of the boundary, left less debt outside the boundary.

Originally Posted by goober

OK, you have just demonstrated that "Surplus" isn't the only accounting term you have a problem with.
There are no expenses on a Balance Sheet, no income either.

Good lord. http://www.accounting-management.net...ance-Sheet.jpg

Originally Posted by goober

Income and expenses appear on an Operating Statement.

Which you then translate into what? Assets and liabilities. See above Balance sheet.

Originally Posted by goober

A loan is not income.

That's what you've called it.

Originally Posted by goober

It is a liability for the entity receiving the cash, it is an asset for the entity holding the note.

And in this case, both are the same entity.

Originally Posted by goober

Borrowing doesn't count as an expense.

It's a liability. Expenses are also liabilities, unless of course they're pre-paid expenses. Which of course is not the case here.

Originally Posted by goober

To summarize FY 2000, for example, the government received more money in taxes, than it spent for the fiscal year.
It had a cash surplus, that it use to pay down Debt Held By the Public.
(check out the chart in the post before this one)

Treasury department says.....Nope. Hence the words "Total Public Debt Outstanding"

ftp://ftp.publicdebt.treas.gov/opd/opds092000.pdf

Hint: When the debt goes up, you didn't pay it down.

Originally Posted by goober

It's a boundary problem, and you are drawing the boundary in the wrong place, that's why it's so difficult for you to understand.

The boundary goes around the whole federal government, what happens inside the boundary is irrelevant.

More Revenue went in than spending came out, and the surplus that came out of the boundary, left less debt outside the boundary.

Not according to the treasury dept. Apparently they seem to disagree with your math. Not surprising really, math that doesn't add up most people disagree with.

ftp://ftp.publicdebt.treas.gov/opd/opds092000.pdf

Originally Posted by 9aces

Not according to the treasury dept. Apparently they seem to disagree with your math. Not surprising really, math that doesn't add up most people disagree with.

ftp://ftp.publicdebt.treas.gov/opd/opds092000.pdf

You're still looking at the wrong number

You want "Debt Held by the Public".....

A simple mistake....

http://www.census.gov/compendia/stat...es/11s0467.pdf
bottom half of the page, 4th column

Originally Posted by goober

It's a boundary problem, and you are drawing the boundary in the wrong place, that's why it's so difficult for you to understand.

The boundary goes around the whole federal government, what happens inside the boundary is irrelevant.

More Revenue went in than spending came out, and the surplus that came out of the boundary, left less debt outside the boundary.

I understand perfectly. I just am smart enough to see through the smoke and mirrors and accounting gimmickry.

Regardless, if what you say were true (not that it is), then Social Security is insolvent. No assets, and current benefits now exceed current tax receipts.

How can you be so hypocritical as to stick to the surplus meme, and argue at the same time that Social Security is financially sound?

Originally Posted by smurf

I understand perfectly. I just am smart enough to see through the smoke and mirrors and accounting gimmickry.

Regardless, if what you say were true (not that it is), then Social Security is insolvent. No assets, and current benefits now exceed current tax receipts.

How can you be so hypocritical as to stick to the surplus meme, and argue at the same time that Social Security is financially sound?

Because both things happen to be true.

There was a surplus, and Social Security checks will go out.
Because the US government has the power to tax the wealthiest nation on earth to meet it's obligations, so I don't foresee social security being unable to meet it's obligations. Because in the end it's a political question, and I don't see congress ending Social Security, not even Paul Ryan proposed cutting social security for the baby boomers.
And the boomers are the pig in the python, once we're all taking dirt naps, the system works fine, there are no demographic issues after that.

Originally Posted by goober

the US government has the power to tax the wealthiest nation on earth to meet it's obligations,

typical liberal brain power . Even with the power to tax the liberals got us $14 trillion in debt heading to $30 trillion because they could not tax enough!

THe liberal imagines we can meet our obligations because he lacks the brains to understand what's happening. Sadly its as simple as that!