Are You Scared Yet? Read this!

[bigrebnc1775]

1. For seventy-two of the last hundred years, the government has spent more than it has taken in.
2. And over the last fifty years, the government has run deficits forty-four of those years: That’s 88%!
3. Over the last ten years, deficits in nine. historical tables | the white house

4. There seem to be only two ironclad rules of government: Rule no.1: Always try to expand;
rule no. 2: See rule no. 1. Beck, balfe, “broke,” p. 115

5. How does the obama fiscal policy impact our future? Well, debt is significant for several reasons..

A. “in 2010, these interest payments (net of some interest income) will claim $209 billion, or about 6 percent of the budget.” policy basics: Where do our federal tax dollars go? — center on budget and policy priorities

b. Based on future ability to pay its debts, each nation is give a rating. “the big three agencies are fitch, moody's and standard & poors. what they do is assess how likely a borrower is to be able to repay its debts and help those trading debt contracts in the secondary market.” debt crisis: How fitch, moody's and s&p rate each country's credit rating. Visualised - with a spreadsheet. Updated | world news | guardian.co.uk.

C. The costs of borrowing are contingent on the rating. Currently the us is listed as aaa, stable…and this keeps the interest costs of borrowing low. Recently, for example, greece was downgraded to bb+, negative, and the cost of its debt rose to over three time that of the us.

D. moody’s warned that if the u.s. Credit rating was at risk if economic growth was slower than the obama administration projects. us credit rating at risk, moody's warns - telegraph and this is an administration fraught with bogus calculations!

e. Jupiter, fl--(marketwire - may 10, 2010) - weiss ratings, an independent rating agency covering the nation's financial institutions, issued a challenge today to standard & poor's, moody's and fitch: To downgrade the long-term sovereign debt of the united states in order to help protect investors and prod washington to fix its finances. weiss ratings challenges s&p, moody's and fitch to downgrade long-term u.s. Debt

6. The international monetary fund, the imf, recent report on “gross financial needs,” figures out how much money each nation needs to raise each year based on deficit, and maturity length of existing bonds; i.e. dependent on issuing new debt. The us is second worst of all advanced economies, needing 32.2% of gdp just to keep everything going [table 6, page 23]! Compare to the nations we read about in trouble: Greece is 21.5%, portugal 21.8%, and spain 20.7%. http://www.imf.org/external/pubs/ft/fm/2010/fm1001.pdf


how about some 'hope and change'?

buuuuut but wait a minute didn't president clinton have a surplus?

 

[uscitizen]

National debt increase by president:
> Ronald Reagan’s First Term – $656 billion increase

> Ronald Reagan’s Second Term – $1.036 trillion increase

> George H.W. Bush’s Term – $1.587 trillion increase

> Bill Clinton’s First Term – $1.122 trillion increase

> Bill Clinton’s Second Term – $418 billion increase

> George W. Bush’s First Term – $1.885 trillion increase

> George W. Bush’s Second Term – $3.014 trillion increase

> Barack Obama’s First “Year” – $1.573 trillion increase

The National Debt by President The National Debt Crisis

What's your point?

You don't like Reagan?

You don't realize what he did for the world?

Both?

You are downplaying his increases to the debt by showing his spending increases by percentage. What matters is the debt. A spending increase matters little if it does not increase the debt. However if it increases the debt it is an issue.

 

[Toro]

So if we are all really scared of the deficit, we aren't for extending the Bush tax cuts permanently, right?

Extension of the Bush tax cuts may cost the Treasury up to $4 trillion over the next 10 years.

Slow down, Canuck...the prescription is this: cut spending and cut taxes. Both.

Sure. No problem. 75% spending cuts and 25% tax increases. Fine by me.

But we must raise taxes.

Anyone who says taxes can't go up is part of the problem.

 

[william the wie]

The reappointment of Bernancke and rewarding Geithner's perceived incompetence as NYC Fed president with the secretary of treasury slot is a major league pr problem. The growing consensus (which may be 180 out from reality) is as follows:

Rescuing the relatively small Bear Sterns while letting Lehman fail was bass-ackwards. (This could be true but I have no idea how it could be proven.)

That the housing boom was primarily a payoff to Democratic politicians. (I have trouble understanding this argument in particular. The Democratic take over of congress came after the boom and this part of the argument does not reach the level of good nonsense in my opinion but it is still widely held because the bust happened mostly in Democratic precincts.)

Until those concerns are addressed the budget deficit will keep causing greater problems.

You are saying the ratings agencies are responding to dissatisfaction with Benby and Geithner, as in a vote of no confidence in the form of a ratings downgrade?

It hasn't yet but yeah it is coming.

 

[hortysir]

To whom do we owe this money?
What happens if we default?

I repeat my question, PC.
I admit to being lousy at Econ. 101

 

[loosecannon]

surprisingly little happens if we default.

But either way we lose our world superpower status.

 

[loosecannon]

It hasn't yet but yeah it is coming.

It is coming, but fundamentals probably figure into the equation too. The fact that we won't rein in our debt seals our fate.

 

[hortysir]

surprisingly little happens if we default.

But either way we lose our world superpower status.

How so? It would seem we'd have more liquid capital at our disposal

 

[william the wie]

So if we are all really scared of the deficit, we aren't for extending the Bush tax cuts permanently, right?

Extension of the Bush tax cuts may cost the Treasury up to $4 trillion over the next 10 years.

Slow down, Canuck...the prescription is this: cut spending and cut taxes. Both.

Sure. No problem. 75% spending cuts and 25% tax increases. Fine by me.

But we must raise taxes.

Anyone who says taxes can't go up is part of the problem.

That depends heavily on which tax goes up. Substituting a predatory value added tax for the corporate tax with the usual rebates for exports would give more bang for the buck. Adding more tax brackets at the top would be a much easier sale and less damaging to the economy. I would renew Bush and add a 10% surcharge for each odometer rollover: 10% more for over 1M, another 10% more for over 10 M and so on. Really broadening the wash sale rules should accompany that change.

 

[loosecannon]

surprisingly little happens if we default.

But either way we lose our world superpower status.

How so? It would seem we'd have more liquid capital at our disposal

Mr hortysir, meet Mr Weimar:

Weimar Republic - Wikipedia, the free encyclopedia

 

[william the wie]

surprisingly little happens if we default.

But either way we lose our world superpower status.

How so? It would seem we'd have more liquid capital at our disposal

Mr hortysir, meet Mr Weimar:

Weimar Republic - Wikipedia, the free encyclopedia

Given all of the other defaults in the past and expected in the future I doubt your consequence especially given your example of 1920s Germany.

 

[loosecannon]

I sort of agree, but we have yet to find out what happens when half the world defaults at once.

 

[william the wie]

Judging from Iceland, Ireland and Russia there is very little downside.

 

[PoliticalChic]

National debt increase by president:
> Ronald Reagan’s First Term – $656 billion increase

> Ronald Reagan’s Second Term – $1.036 trillion increase

> George H.W. Bush’s Term – $1.587 trillion increase

> Bill Clinton’s First Term – $1.122 trillion increase

> Bill Clinton’s Second Term – $418 billion increase

> George W. Bush’s First Term – $1.885 trillion increase

> George W. Bush’s Second Term – $3.014 trillion increase

> Barack Obama’s First “Year” – $1.573 trillion increase

The National Debt by President The National Debt Crisis

What's your point?

You don't like Reagan?

You don't realize what he did for the world?

Both?

You are downplaying his increases to the debt by showing his spending increases by percentage. What matters is the debt. A spending increase matters little if it does not increase the debt. However if it increases the debt it is an issue.

No, friend, what matters is what he bought with the increased military and defense build-up.
He defeated the Evil Empire, freed million so people under the heel of communist dictators, ended the threat of a nuclear holocaust, and the threat of the totalitarians and their fellow travelers finally taking over the last best hope of mankind.

Sad that you have those blinders on.

 

[PoliticalChic]

So if we are all really scared of the deficit, we aren't for extending the Bush tax cuts permanently, right?

Extension of the Bush tax cuts may cost the Treasury up to $4 trillion over the next 10 years.

Slow down, Canuck...the prescription is this: cut spending and cut taxes. Both.

Sure. No problem. 75% spending cuts and 25% tax increases. Fine by me.

But we must raise taxes.

Anyone who says taxes can't go up is part of the problem.

And that, in a nutshell, is the difference between liberals and conservatives: the size of government.

 

[PoliticalChic]

To whom do we owe this money?
What happens if we default?

I repeat my question, PC.
I admit to being lousy at Econ. 101

There are so many answers to this that it becomes difficult to respond in less than book length.

Weimar Republic valuations.

The nations and private investors who maintain our debt will no longer support it.

Income security support programs, such as aid to the elderly, indigent, EITC's, etc, all gone.

But, the logic is on the side President Reagan championed:
“You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation? We must act today in order to preserve tomorrow.”
Ronald Reagan’s first inaugural address.

 

[editec]

Does it EVER strike any of us as strange that we can go from happy ecionomic days to unhappy economic days when

1. Everything still works!

2. The soil still produces, the factory machines still operate and there is no shortage of people willing to man them?

And yet suddenly, and mysteriously, the economy is in the crapper?

And STILL we have people right on this very board who want to blame the people, rather than our leaders.

I don't get it.

 

[Toro]

Slow down, Canuck...the prescription is this: cut spending and cut taxes. Both.

Sure. No problem. 75% spending cuts and 25% tax increases. Fine by me.

But we must raise taxes.

Anyone who says taxes can't go up is part of the problem.

And that, in a nutshell, is the difference between liberals and conservatives: the size of government.

Uncompromising ideologues on both the right and the left would rather choose their own ideology over the fiscal health of this nation. The ideologues would rather let the nation default rather than raise taxes or cut spending. Those who proclaim "Not one more dollar in tax increases!" or "Not one dollar in spending cuts" risk economic chaos that would make the recent Financial Crisis look like a fun picnic. They are part of the problem.

 

[PoliticalChic]

Sure. No problem. 75% spending cuts and 25% tax increases. Fine by me.

But we must raise taxes.

Anyone who says taxes can't go up is part of the problem.

And that, in a nutshell, is the difference between liberals and conservatives: the size of government.

Uncompromising ideologues on both the right and the left would rather choose their own ideology over the fiscal health of this nation. The ideologues would rather let the nation default rather than raise taxes or cut spending. Those who proclaim "Not one more dollar in tax increases!" or "Not one dollar in spending cuts" risk economic chaos that would make the recent Financial Crisis look like a fun picnic. They are part of the problem.

Toro, if only you had the gift of irony...

By making your statement in the absence of any attempt to institute said economy- you know, to ascertain whether or not it would be the answer, would pretty much be the definition of an ideologue.

 

[PoliticalChic]

Does it EVER strike any of us as strange that we can go from happy ecionomic days to unhappy economic days when

1. Everything still works!

2. The soil still produces, the factory machines still operate and there is no shortage of people willing to man them?

And yet suddenly, and mysteriously, the economy is in the crapper?

And STILL we have people right on this very board who want to blame the people, rather than our leaders.

I don't get it.

"And yet suddenly, and mysteriously, the economy is in the crapper..."

This statement fits one of the two scenarios...

If one voted for the current administration, it is self-serving.

If one has followed the debate from the start, re: tarp and stimulus, it is th winner in the category of unintentional humor.