American National Debt

[Occhidiangela]

Thanks for the comprehensive response.  The only answer that raised more questions for me is the one on repayment of debt.  Surely there is a point where the interest rate required on debt reflects the risk of non-payment?  The risk of non-payment increases as debt levels increase, and decreases as economic growth increases.  With debt levels increasing, and economic growth stagnant to negative, shouldn't this increase the rate required on U.S. government paper?
At what level does default occur  (I'm thinking something like (longterm) GDP less than debt servicing costs)?  Is the U.S. anywhere close to this?  (I'm again guessing that it is far from it, but the occasional and probably highly biased reports that I keep seeing are harking on about the U.S. being close to breaking point)

Est. US National Debt ($USD):7.524T (http://www.brillig.com/debt_clock/ , http://www.publicdebt.treas.gov/opd/opdpenny.htm)

Est. US GDP ($USD):11.803T (http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm)

Not sure what the composition of the U.S. debt looks like (therefore can't calculate duration), but looking at the various rates there was a max of about 4.5% (http://forecasts.org/interest-rate/7-yea...-yield.htm) so at that estimate only 2.9% of GDP is spent on interest.  seems very little to be worried about, even if the interest rate doubled... have I messed something up, or am I missing something?
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The debt service represents an area of increasing concern to those who demand fiscal responsibility in government. One of the major accomplishments made in the 90's, a REpublican led but fundamentally bipartisan approach to fiscal responsibility, was putting more discipline into the budgeting process in order to get deficit spending under better control. It did not hurt that at the same time there were some economic booms (tech was one of them) that increased revenue.

So, what happened in the late 90's to early 2000 when it became clear that, for once, the fiscal belt tightening induced a "surplus" rather than a deficit?

Was any of the national debt "retired" to reduce the long term debt service?

Nope.

One wonders if any lawmakers have ever successfully managed a household budget, or if they always bet "the come line." "Next year, we'll sort out the debt issue."

I don't want to leave my kids in debt to the extent that their tax revenues pay bankers rather than for needed public services, such as roads, sewer lines, schools, etc. Sadly, no one in Washington seems to be listening, they just argue over what to spend on, not on getting a grip on the debt service that leaches effectiveness from the tax revenue base. Oh, what was that chanting I heard back there, the "tax cuts solve all problems" mantra?

What mystical Eastern book of wisdom and magic was that from: The I Bling?

Last I checked, local and state taxes are on the increase. <== That tells you that the total tax burden is increasing. How does that stimulate an economy? The same way smoke and mirrors do. :P

Occhi