After the president’s debt reduction group, headed by Vice President Joe Biden, met Thursday, there were no breakthroughs, according to Politico. The White House wants to have tax increases, or at least the expiration of tax cuts, on the table. Republicans claim that’s a nonstarter. With the deadline to increase the debt limit looming, action will have to be taken soon.
When we hear about the national debt, we can get conflicting information. Following are quick facts gathered to help inform.
* The debt rises every second of every day. To see how fast it is growing, and other interesting information that is changing constantly, go to usdebtclock.org.
* The claim that the Chinese hold most of our national debt is false. As of the fall of 2010, China held 9.5 percent. That makes the country the largest foreign holder, but the majority (42.1 percent) is held by U.S. individuals and institutions in the form of Treasury Bills, according to the Treasury Department.
* In 1981, President Ronald Reagan declared the deficit was $74 billion and the national debt $930 billion. Within two years, the deficit ballooned to $208 billion. According to the Washington Post, in 1988, the national debt was $2.6 trillion.
* In his term in office, Reagan took America from the world’s largest creditor to its largest debtor nation.
* Although Reagan cut taxes to the wealthy, he raised business taxes in 1982, doubled the payroll tax on working people in 1983, and raised energy taxes in 1984. In spite of all that, his deficit record was dismal.
* Raising the payroll tax did ensure the Social Security Trust Fund would be solvent well into the future. The myth of Social Security insolvency is a false crisis, according to AlterNet. When the trust fund is projected to be tapped out in 2037, many of the baby boomers it was designed to cover will have passed through the system already. The Trust Fund would have accomplished its task. With just minor tweaking, Social Security will be fine indefinitely.
* The rich pay a larger percentage of the tax burden than the poor. Well, consider this – the top 1 percent of Americans hold 33.8 percent of the wealth, the top 10 percent 71.5 percent. It goes to figure, if we tax wealth and income, they should actually be paying a bigger percentage than they are.
* Over the past two decades, CEO pay has increased almost 300 percent, while pay for production workers has risen 4.3 percent.
* The very wealthy are actually able to shift a great deal of their wealth out of reach of the IRS, further reducing tax revenues. The debt crisis is as much a result of revenue loss as it is about spending.
* If we don’t raise the debt ceiling, the economic fallout could prove catastrophic to world economic recoveries. While revenues and spending need to be addressed, that conversation needs to take place with the debt rating of America still intact.