Because rather consistently while the US debt has grown, the GDP has grown at a faster rate.
Actually that isn't the case at all. The budget deficit is increasing faster than the GDP is growing.
The fact that it's currently not true has to do with (a) tax cuts, (b) off-the-books, now-on-the-books wars, and (c) the current economic crisis--the sort that seems to happen at least once a decade. It's precisely those chain of events that is why the debt looks so bad now.
Golly, it's almost as if you got so far in my post and just stopped reading.
This means that the debt keeps getting bigger and bigger, even adjusting for inflation.
And let me quote you a different, more usable graph. Us National Debt - Dollars Relative to GDP. You'll note that over the last decade, the relative percentage of debt to GDP was relatively stable until 2008, the start of the financial crisis. And it really spiked the next year when the off-the-books wars were added to the on-the-books reports by Obama (meaning the graph is spiritually wrong). Btw, you'll notice that coupled with your graph, my point stands. Debt kept getting bigger and bigger even adjusting for inflation, but apparently GDP was growing even faster (by value, not by percentage) which evened out. Of course if you included the wars earlier in the graph, there would have been a more steady rise the whole time and your point would be more valid...but then perhaps we'd have ended the wars earlier and the whole discussion would be a bit more moot.
When a company becomes heavily in debt, shows only the possibility of increasing debt, and its assets can't be liquidated to make up for that debt, the debtors begin to lose trust that this company will ever repay its assets and will stop lending.
The US government is doing exactly that. Sooner or later one of two things is going to happen. Either they print so much money that the dollar gets to a point where no foreign governments will accept it for trade (it has already done that in many places) that it eventually becomes worthless to the US citizens as well, so there would be no point in buying government bonds because you wouldn't gain anything by doing so, which results in the government having no more money to borrow, and government employees (soldiers, teachers, contractors, etc) no longer get paid, so the government basically just shuts down. Or, if they stop printing money, they'll default on their loans, and nobody buys bonds anyways.
Yea, I more or less went through those potential scenarios further into my post. I also pointed out Greece as an example.
Greece is what happens when governments go bankrupt. Now imagine that on a much larger scale.
Bigger riots? Or have you not noticed that Greece, no matter how discontent the population is, is still chugging along? Yeah, there's been a lack of growth in recent years--a predictable result when you cut a lot of jobs and the general growth effect from a big spender. But it's far from an economic collapse. An economic recession, yes. To imagine it on a larger scale, seriously, would just mean a bigger recession--but quite likely at the same percentage rate as Greece shows.
Taxing the shit out of the wealthy won't solve the problem either, for a multitude of reasons. Poor people don't hire other people. Making the rich poor is a bad idea for that reason.
"Poor" people hire other people all the time; be it small businesses or the multitude of service-based jobs which function predominantly on the backs of poor customers. Um...and again, looking back at my previous post, taxing the *higher income*--which don't equate to "rich"--at a progressive rate means stronger diminishing returns on that income. That doesn't mean making the "rich poor". It means slower growth for the "rich" becoming richer. Of course, to a person who expects a certain amount of growth year-over-year and to see inflation pass one's income growth for the year... Of course on the latter point, I point to Greece as well. That is, inflation still happens even if there's a lack of economic growth. So, whether you tax higher income earners more directly or they still effectively have losses through diminishing returns, it's pretty much the same outcome for those earners. The difference, of course is, (a) that government debt can be paid off with their taxes and (b) those income earners can switch to other countries on whom to invest during an economic crisis--which only makes the situation worse as well.
Also, if you even hint at doing so, they can and WILL leave. Look at France. A few years back they made tax increases designed to bring in an extra $120 billion in revenue, and the result was a net reduction of $50 billion in revenue below what they already had. Why? Because people just left, many of them bringing their businesses along with them, even people who lived in France over generations proudly spanning from time immemorial. Trying to fix that problem by preventing people from leaving is just asking for a civil war.
Well, first, [[:Citation Needed:]], as I'd like to actually see something resembling evidence of your claims on the dollar figures. Second,
from France’s 75% Income Tax on the Rich Overturned as Unconstitutional, "Only around 15,000 to 25,000 people in France are estimated to earn enough to qualify for the 75% tax bracket — and many of them had already found legal accounting ruses to bring their reported income under $1.28 million." which would undermine the whole idea that even if the tax law had been constitutional it'd have much effect on revenue either way or be the spark of any sort of "civil war"--although I guess there might be tons of people delusional enough to support high income earners with their life.
Ceasing assets will result in what is happening in Cyprus right now.
Ah, you mean how the Bank of Cyprus chose to "honor" its 100,000 Euro deposit protection by siphoning off money for over 100,000 Euro accounts to prevent bankruptcy--which presumably would have the same effect in restructuring? If the point is that with financial difficulty there is pain and those with higher assets suffer more financially..well, that's just stats and percentages for you. But, I guess, if by the stats a rich man becomes even slightly poorer--although still not remotely poor--through no fault his own, it's a grave injustice; let's just ignore that everyone intrinsically become poorer through inflation, inflation is part of the spark that drives investment, and *actual* poor suffer real *physical* effects from becoming even poorer. But, then, I guess a poor man who doesn't become richer has it coming, or something.
Go look at all of the nasty things that Johnny Depp had to say about America prior to permanently moving to France back in 2003 or so, how evil America is, and how France was this beautiful paradise. After realizing that they were basically taxing away basically everything he had, he RAN back to America as fast as he could.
If that's true, I'd say Johnny Depp needs to a higher a better accountant. Again, see above about "legal accounting ruses", which are applicable virtually everywhere. Beyond that, if all Johnny Depp focused on was money...well, there you have it.
Taxing your way out of a budget deficit is like trying to dig your way out of a hole.
To quote from Wikipedia (which includes a citation elsewhere), "Historically, the US public debt as a share of GDP increased during wars and recessions, and subsequently declined. For example, debt held by the public as a share of GDP peaked just after World War II (113% of GDP in 1945), but then fell over the following 30 years. In recent decades, however, large budget deficits and the resulting increases in debt have led to concern about the long-term sustainability of the federal government's fiscal policies" -- National debt of the United States. Put simply, yea, there's reason to be concerned about the federal government's *current* fiscal policies. That certainly is a reason to evaluate and genuinely consider change. That change may well include tax increases and almost certainly spending cuts as well. No doubt, there will be a painful period of adjustment as this happens--that sounds much tamer than actually living through it. But, that's far from equivalent to "economic collapse" unless one equates "economic collapse" with "sustained, unlimited economic growth". The latter of which is absurd.