And since that date we have accumulated $21 Trillion in deficit spending above tax collections.
Yes. Since that date. Not since Washington was sworn in. :-)
We have had a debt for over 180 years, but it has only become an issue fairly recently.
It became top of mind in the 1980’s.
It’s pretty straight forward logic to say that any currency in circulation, paper, coin or digital, is the product of Congress spending more than it taxes since there is no longer an offsetting reserve of gold.
It’s straightfoward logic, but it ignores the entire notion of what fiat money is and why it works.
Fiat money is essentially a share of stock in the United States of America. If the market (in this case, FOREX) looks at the financial data of the US and decides that the financials are becoming more grim, the value of the dollar declines relative to other currencies. And vice versa.
Therefore, the “balance sheet” of the USA (it’s more complicated than that, of course; actually, the current and projected long term financial environment of the US) has taken the place of gold as the backing for the currency.
it’s important ot point out that the taxpayers are very definitely paying the interest on these notes, and people who try to say they’re not paying that debt tend to end up in jail for tax evasion, which is the only way you can not-pay.
Taxes don’t even fund current spending, much less the Treasury bonds that mature in a fiscal accounting year. Since spending must operationally precede both taxing and borrowing (or there’s no currency to collect or borrow) it would be more accurate to say spending funds both, not the other way around.
Whatever. The point is that the need to pay interest and return principle on a bond to a very real holder of that bond is a reality that mugs the philosophical discussion regarding the nature of currency. The government collects taxes so it can, in part use those taxes to pay the bondholders. The % of each interest payment which is collected taxes vs the % which is rolled over into a new bond is highly germane to FOREX as it values the dollar, and to the bond markets as the buyers decide what intererest rates to demand on new government debt.
We’ve only sustained a balanced budget for any time a total of seven times in our history, and all were followed by serious recessions or depressions.
I think we’re using two different definitions of “serious”. The recession of 2008 was serious and not related to any balanced budget event in a reasonable time horizon; the Clintonian balanced budget was followed by a shorter but very serious recession that was unrelated to a decrease in government spending into the economy, but more importantly, was not an event that affected the events of 2008.
I can’t imagine why we would not accept that we “need” deficits for a healthy economy.
Because (1) your case for causation is weak, (2) deficits have the potential to force taxation rates up in the future, which is offensive to everyone outside of an insane asylum because that affects the standard of living of one’s children, and (3) the situation of (2) forces money out of the private sector into the public sector, where it is not as efficiently used, and thus lowers GDP and the prospects for job creation.
Hope that helps.