The Significance of the Federal Debt Crisis

Discussion in 'Politics' started by Zoom-boing, Aug 22, 2011.

  1. Zoom-boing
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    Zoom-boing Gold Member

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    Power Line Blog held a prize competition for $100,000 for whoever can most effectively and creatively dramatize the significance of the federal debt crisis. Any creative product was eligible: videos, songs, paintings, screenplays, Power Point presentations, essays, performance art, or anything else.

    Several entries have gotten a lot of attention and a lot of views or listens. But unquestionably, the one that has most gone viral so far is Doorbell. If you haven’t yet seen the one minute video yet, you should.

    Doorbell
     
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  2. editec
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    editec Mr. Forgot-it-All

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    LOL.

    The voodoo of national debt.

    Its all billshit, but its billshit that is going to bury this nation.
     
  3. Douger
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    Douger BANNED

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    Some of us have understood for 40 years.
    [ame=http://www.youtube.com/watch?v=Vfkpi8Q_pVc&feature=related]Ron Paul - America where are you now? - YouTube[/ame]
     
  4. Bfgrn
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    Bfgrn Gold Member

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    [​IMG]
     
  5. California Girl
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    California Girl BANNED

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    Ahhhh, the resort of choice for the left wing - Denial. It ain't just de river in Eygpt.
     
  6. Bfgrn
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    Bfgrn Gold Member

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    Ahhhh, the resort of choice for the right wing...swallow...

    [​IMG]

    The level of our national debt is not actually high. In relation to GDP, it is only a bit over half of what it was in 1946. The relevant number is today below where it was in the mid-1950s, and comparable to the early 1990s.

    What I learned from hanging out with deficit hawks

    Everyone is entitled to his own opinion, but not his own facts.
    Daniel Patrick Moynihan
     
  7. California Girl
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    California Girl BANNED

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    Unlike you, I tend to review all the evidence, not just the shit that backs up my own side of the argument.

    Your blindly naive stance is dangerous.
     
  8. Bfgrn
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    Bfgrn Gold Member

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    Bluster is not an argument, it is an emotional outburst. Your ignorance is the danger.

    But even though our debt is not the immediate problem, it is a long term issue that needs to be addressed.

    SO...the CBO did a study on long term debt. They came up with 2 scenarios. For all practical purposes, you can call the Extended-Baseline Scenario the Democrat scenario and the Alternative Fiscal Scenario the Teapublican scenario.

    The Extended-Baseline Scenario is based on ending the Bush tax cuts in 2012, and enacting the cost savings in the Affordable Health Care Act.

    The Alternative Fiscal Scenario is based on extending the Bush tax cuts and repealing 'Obamacare'...

    The CBO lays it out perfectly clear...CRYSTAL.

    Federal Debt Held by the Public (Percentage of GDP)
    [​IMG]




    The Extended-Baseline Scenario adheres closely to current law. Under this scenario, the expiration of the tax cuts enacted since 2001 and most recently extended in 2010, the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth would result in steadily higher revenues relative to GDP.

    The Alternative Fiscal Scenario
    The budget outlook is much bleaker under the alternative fiscal scenario, which incorporates several changes to current law that are widely expected to occur or that would modify some provisions of law that might be difficult to sustain for a long period. Most important are the assumptions about revenues: that the tax cuts enacted since 2001 and extended most recently in 2010 will be extended; that the reach of the alternative minimum tax will be restrained to stay close to its historical extent; and that over the longer run, tax law will evolve further so that revenues remain near their historical average of 18 percent of GDP. This scenario also incorporates assumptions that Medicare’s payment rates for physicians will remain at current levels (rather than declining by about a third, as under current law) and that some policies enacted in the March 2010 health care legislation to restrain growth in federal health care spending will not continue in effect after 2021.
     
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    Last edited: Aug 23, 2011
  9. martybegan
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    martybegan Gold Member

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    You do realize that all the CBO does is crunch numbers, using ANY and ALL assumptions given to it by the party requesting the number crunch? So all those "savings" health reform are what the supporters say they are, even if the assumptions are fairy tales.
     
  10. Bfgrn
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    Bfgrn Gold Member

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    No, they are not 'fairy tales' They are increased revenues and concrete savings.

    The fairy tale is that the teapublicans austerity plan will create growth. It is akin to medieval doctors using blood letting to cure patients.

    Can you provide ONE historical example where austerity brought an industrialized nation out of a deep recession? There are historical facts where austerity caused a recession to turn back towards the depression.

    Repeating Our Mistakes: The “Roosevelt Recession” and the Danger of Austerity

    In 1937, after five years of sustained economic growth and a steadily declining unemployment rate, the Roosevelt Administration began to worry more about possible inflation and the size of the federal deficit than the ability of the economy to sustain the recovery. As a consequence, in the fall of 1937, FDR supported those in his administration who advocated a reduction in federal expenditures (i.e. stimulus spending) and a balanced budget. The results — which included a massive reduction in the number of people employed by such programs as the WPA — were catastrophic. From the fall of 1937 to the summer of 1938, industrial production declined by 33 percent; wages by 35 percent; national income by 13 percent; and not surprisingly, the unemployment rate rose by roughly 5 percentage points, with an estimated 4 million workers losing their jobs.

    The economic downturn caused by the decline in federal spending was commonly referred to as the “Roosevelt recession,” and to counter it, FDR asked Congress in April of 1938 to support a substantial increase in federal spending and lending. Unlike the current situation, Congress backed FDR’s request, and as a result, the recovery was soon underway again.

    Equally important, the lessons drawn from the 1937-38 recession convinced FDR that deficit spending and monetary expansion were critical to economic recovery. In essence, the Roosevelt Administration, through hard experience, finally endorsed Keynesian economics, and over the course of the next seven years, government spending on the economy — increasingly fueled by the demands of World War II — would grow to unprecedented levels, all but wiping out unemployment (which fell to below 2 percent by 1943) and turning the United States into a global super-power in the process.

    I never gave anybody hell. I just told the truth and they thought it was hell.
    Harry S. Truman
     

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