U.S. Deficit Shrinking At Fastest Pace Since WWII, Before Fiscal Cliff

[Middleoftheroad]

The deficit was going down even though Bush cut taxes and was fighting two wars using credit cards?

Yes. Of course the deficits never went to zero even at the height of the housing bubble, when the economy was at its peak.

And those deficits happened instead of trillions of dollars in surpluses that were projected when Bush took the office. So his tax cuts and wars did cost us many trillions in additional debt.

My problem with that is the way they borrow money from Social Security and claim they aren't increasing the deficit at the same time.

What? No one is claiming that. Intra-government bond holdings are counted as part of the total debt, otherwise the debt would be only around 11T. In fact, we are one of the only countries that DO count it.

 

[auditor0007]

The percentage is based on the decrease from a high point of borrowing. There actually is a valid point to this, but there is also a problem. The valid point is that we are growing the economy at a faster pace than we are borrowing. The reasoning can be seen in the simple fact that federal outlays the past three years have barely increased. In fact, I believe that 2011 may have actually seen a decrease in spending from 2010. This would be wonderful if spending was not estimated to increase substantially in the coming years, because that would mean with spending put in a holding pattern, the economy would continue to grow, and borrowing would become a much smaller percentage of GDP, especially if tax revenues increase once the economy starts growing at an even healthier clip.

What is not taken into account is the fact that SS and Medicare spending is going to escalate substantially in the very near future and that will continue for an extended period of time. While short term borrowing may be reduced, we still have a very big long term problem. The bottom line is that the things that caused the massive borrowing over the past four to twelve years are not that big of an issue. That borrowing we can recover from. All the extra spending on stimulus packages, ever the wars in Iraq and Afghanistan, and all the extra unemployment benefits, extra social spending due to so many being unemployed, all of those we can recover from by getting the economy growing at just a decent pace of 3.5 to 4.0 percent. But our long term problem with Medicare specifically is not going away. If all we did at this point was to reign in future spending on SS and Medicare, everything else would work itself out. The easiest way to do that is to raise the retirement age. The problem is that nobody really wants to address what the real problems are, because it is much more politically advantageous to scare people about too much spending on food stamps.

Or....the cap could be raised.

Sure we can raise the cap, but that does not address our long term shortage of revenue when it comes to paying for SS and Medicare. We cannot borrow all that would be required to cover both of those programs over the next fifty to seventy-five years. While nobody likes it, something will have to give. Either we tax the shit out of everyone to pay for these programs as they are now, or we make some changes. Since these programs were never meant to cover people for nearly 15 years, I think raising the retirement age makes the most sense. I do realize there would have to be exceptions for those who truly are not physically capable of working past 65. We have a number of different forms of disability for those people and that could be continued.

Raising the retirement age does two things; first it shortens the total number of years that recipient receive benefits, thereby reducing the overall cost. Secondly, it increases revenues as people who are forced to work a few more years continue to put more money into the system from their payroll taxes.

 

[RetiredGySgt]

I read this and my head almost imploded from the sudden loss of intelligence.

Believe it or not, http://www.whitehouse.gov/omb/budget/Historicals/the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II.
In fact, outside of that post-WWII era, the only time the deficit has fallen faster was when the economy relapsed in 1937, turning the Great Depression into a decade-long affair.

He even has a chart to prove it.

http://news.investors.com/blogs-cap...-fastest-since-world-war-ii.htm#ixzz2D0jJnBML

This is so stupid that it almost doesn't merit laughing at, but it turns out that there are actually people that buy into this claptrap. Can anyone look at the chart and tell me what is wrong with it? The first one to get it right wins The Internets.

yes, we know how much more you know than investors.com.

but then again, it's not like you ever let reality get in your way.

Explain how the deficit is going down when every year we had record breaking DEFICIT spending? When every year the deficit GOES UP?

 

[ilia25]

I read this and my head almost imploded from the sudden loss of intelligence.



He even has a chart to prove it.

http://news.investors.com/blogs-cap...-fastest-since-world-war-ii.htm#ixzz2D0jJnBML

This is so stupid that it almost doesn't merit laughing at, but it turns out that there are actually people that buy into this claptrap. Can anyone look at the chart and tell me what is wrong with it? The first one to get it right wins The Internets.

yes, we know how much more you know than investors.com.

but then again, it's not like you ever let reality get in your way.

Explain how the deficit is going down when every year we had record breaking DEFICIT spending? When every year the deficit GOES UP?

THAT IS SIMPLY HILARIOUS!

And a perfect showcase of how Republican brain works. If their faith or ideology dictates that something must be true -- then they KNOW it is true!

Earth cannot be billions of years old. Global warming cannot be caused by humans.

And sure as hell the deficits could only grow under Obama!

And if the facts on the ground tell otherwise -- facts be damned! Evidence be damned!

Again, this is fascinating stuff. I would never believe human beings could behave that way until I saw it myself.

 

[Care4all]

I read this and my head almost imploded from the sudden loss of intelligence.



He even has a chart to prove it.

U.S. Deficit Shrinking At Fastest Pace Since WWII, Before Fiscal Cliff - Investors.com

This is so stupid that it almost doesn't merit laughing at, but it turns out that there are actually people that buy into this claptrap. Can anyone look at the chart and tell me what is wrong with it? The first one to get it right wins The Internets.

yes, we know how much more you know than investors.com.

but then again, it's not like you ever let reality get in your way.

Explain how the deficit is going down when every year we had record breaking DEFICIT spending? When every year the deficit GOES UP?

When every year the DEBT goes up? national debt is NOT budget deficits RGS....FYI-debt and deficits have different meanings...

 

[LoneLaugher]

The percentage is based on the decrease from a high point of borrowing. There actually is a valid point to this, but there is also a problem. The valid point is that we are growing the economy at a faster pace than we are borrowing. The reasoning can be seen in the simple fact that federal outlays the past three years have barely increased. In fact, I believe that 2011 may have actually seen a decrease in spending from 2010. This would be wonderful if spending was not estimated to increase substantially in the coming years, because that would mean with spending put in a holding pattern, the economy would continue to grow, and borrowing would become a much smaller percentage of GDP, especially if tax revenues increase once the economy starts growing at an even healthier clip.

What is not taken into account is the fact that SS and Medicare spending is going to escalate substantially in the very near future and that will continue for an extended period of time. While short term borrowing may be reduced, we still have a very big long term problem. The bottom line is that the things that caused the massive borrowing over the past four to twelve years are not that big of an issue. That borrowing we can recover from. All the extra spending on stimulus packages, ever the wars in Iraq and Afghanistan, and all the extra unemployment benefits, extra social spending due to so many being unemployed, all of those we can recover from by getting the economy growing at just a decent pace of 3.5 to 4.0 percent. But our long term problem with Medicare specifically is not going away. If all we did at this point was to reign in future spending on SS and Medicare, everything else would work itself out. The easiest way to do that is to raise the retirement age. The problem is that nobody really wants to address what the real problems are, because it is much more politically advantageous to scare people about too much spending on food stamps.

Or....the cap could be raised.

Sure we can raise the cap, but that does not address our long term shortage of revenue when it comes to paying for SS and Medicare. We cannot borrow all that would be required to cover both of those programs over the next fifty to seventy-five years. While nobody likes it, something will have to give. Either we tax the shit out of everyone to pay for these programs as they are now, or we make some changes. Since these programs were never meant to cover people for nearly 15 years, I think raising the retirement age makes the most sense. I do realize there would have to be exceptions for those who truly are not physically capable of working past 65. We have a number of different forms of disability for those people and that could be continued.

Raising the retirement age does two things; first it shortens the total number of years that recipient receive benefits, thereby reducing the overall cost. Secondly, it increases revenues as people who are forced to work a few more years continue to put more money into the system from their payroll taxes.

Address the negatives of raising the retirement age, please.

 

[auditor0007]

Or....the cap could be raised.

Sure we can raise the cap, but that does not address our long term shortage of revenue when it comes to paying for SS and Medicare. We cannot borrow all that would be required to cover both of those programs over the next fifty to seventy-five years. While nobody likes it, something will have to give. Either we tax the shit out of everyone to pay for these programs as they are now, or we make some changes. Since these programs were never meant to cover people for nearly 15 years, I think raising the retirement age makes the most sense. I do realize there would have to be exceptions for those who truly are not physically capable of working past 65. We have a number of different forms of disability for those people and that could be continued.

Raising the retirement age does two things; first it shortens the total number of years that recipient receive benefits, thereby reducing the overall cost. Secondly, it increases revenues as people who are forced to work a few more years continue to put more money into the system from their payroll taxes.

Address the negatives of raising the retirement age, please.

It makes people work longer who don't want to work longer. It will be a problem initially because employers are not always thrilled about keeping older employees as they may not be as productive as younger employees. There are many negatives, but the fact remains that there is no way that we will be able to pay for this unless we have a massive increase in payroll taxes. In the end, at some point, I imagine we will be forced into a one payer system, but I'm sure it won't happen until we are on the brink of bankruptcy.

 

[Quantum Windbag]

Your problem is that you keep looking at the chart. Look at the numbers. They're there in black and white with no interpretation needed.

You have two problems here. One is that, it you are going to insist the deficit went down in 2009 then, it must have been because of Bush. (Come to think of it, the repayment of TARP, and the fact that the total cost of TARP was overestimated, is the primary reason the deficit in 2009 wasn't higher, so I guess Bush did a much better job than you like to pretend.) The second is that Obama signed a $800 billion stimulus package in 2009 that more than doubled the deficit from 2008.

FYI-
the deficit in FISCAL 2009 was nearly 1.4 trillion....due to TARP, several bailouts of goldman sachs, fannie, freddie, auto industry, etc etc etc and because we collected 600 billion less in revenues than President Bush estimated in his fiscal 2009 budget....which was estimated to have a $500-$600 billion dollar deficit BEFORE the wall street, housing crash and those bailouts....and drawing less revenues.

ONLY $150- $200 billion of the fiscal 2009 budget can be attributed to what Obama signed/passed INCLUDING THE STIMULUS....which was spread out over 2 years....so your last ''line'' of the previous post is absolutely incorrect as well...

We are in fiscal 2013 right now, in case you didn't know....and Obama's FIRST fiscal budget as president was for fiscal 2010.

How does any of that contradict anything I just said? If you go back and look you will see that I have been saying the deficit increased in 2009.

 

[Quantum Windbag]

Yes. Of course the deficits never went to zero even at the height of the housing bubble, when the economy was at its peak.

And those deficits happened instead of trillions of dollars in surpluses that were projected when Bush took the office. So his tax cuts and wars did cost us many trillions in additional debt.

My problem with that is the way they borrow money from Social Security and claim they aren't increasing the deficit at the same time.

What? No one is claiming that. Intra-government bond holdings are counted as part of the total debt, otherwise the debt would be only around 11T. In fact, we are one of the only countries that DO count it.

They are not counted as part of the deficit, are they?

 

[LoneLaugher]

Sure we can raise the cap, but that does not address our long term shortage of revenue when it comes to paying for SS and Medicare. We cannot borrow all that would be required to cover both of those programs over the next fifty to seventy-five years. While nobody likes it, something will have to give. Either we tax the shit out of everyone to pay for these programs as they are now, or we make some changes. Since these programs were never meant to cover people for nearly 15 years, I think raising the retirement age makes the most sense. I do realize there would have to be exceptions for those who truly are not physically capable of working past 65. We have a number of different forms of disability for those people and that could be continued.

Raising the retirement age does two things; first it shortens the total number of years that recipient receive benefits, thereby reducing the overall cost. Secondly, it increases revenues as people who are forced to work a few more years continue to put more money into the system from their payroll taxes.

Address the negatives of raising the retirement age, please.

It makes people work longer who don't want to work longer. It will be a problem initially because employers are not always thrilled about keeping older employees as they may not be as productive as younger employees. There are many negatives, but the fact remains that there is no way that we will be able to pay for this unless we have a massive increase in payroll taxes. In the end, at some point, I imagine we will be forced into a one payer system, but I'm sure it won't happen until we are on the brink of bankruptcy.

Are those many negatives too many? Maybe enough to seek out alternatives?

http://strengthensocialsecurity.org/sites/default/files/Final Retirement Age Fact Sheet.pdf