Good News/Bad News On Budget
The Congressional Budget Office (CBO) issued its long term budget outlook this week. William Gale summarized it so you don’t have to read all the details:
- The size of the budget deficit today isn’t a problem, and it’s not much of a problem for the next few years either. “If current laws governing taxes and spending stayed generally the same…the anticipated further strengthening of the economy and constraints on federal spending built into law would keep deficits between 2.5% and 3% of GDP from 2015 through 2018,” CBO said. But after that, CBO projects the deficit gets bigger again, reflecting an aging population and rising health costs even if Congress surprises outside analysts and sticks to the caps on annually appropriated spending it has written into law.
- The federal debt, measured as a percentage of GDP, is a historically high 74 percent today. It’ll rise to 106 percent of GDP over the next 25 years, which would be tied for the highest in U.S. history, the level attained as a result of World War II. Back then, the debt-to-GDP ratio fell steadily from the peak; this time, CBO projects it’ll keep climbing unless Congress does something.
The last time we had decreasing deficits (heck, we even had a surplus) we cut taxes and got into two wars. We have an opportunity over the next few years to deal with some of our long term issues. But we are going to have to make better choices this time. There might not be another chance.
Click here for reuse options!Copyright 2014 Liberaland
By: Stuart Shapiro
Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.
50 responses to Good News/Bad News On Budget
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alwaysthink July 19th, 2014 at 17:39
The fix for the debt is easy, we just need to elect Dems who will cut out the Corporate Welfare. The GOP has wallowed in Corporate tax cuts and subsidies for decades and it’s time to turn this around. It’s a big ship but we can do it.
fancypants July 19th, 2014 at 19:42
problem is Corporations are moving their HQs into other countries to avoid paying 35% or higher in taxes. They tell us the grass is greener @ 17% or lower in taxes elsewhere.
If you can convince a Dem in your state That’s going to work here ? I tip my hat to you !
alwaysthink July 19th, 2014 at 17:39
The fix for the debt is easy, we just need to elect Dems who will cut out the Corporate Welfare. The GOP has wallowed in Corporate tax cuts and subsidies for decades and it’s time to turn this around. It’s a big ship but we can do it.
fancypants July 19th, 2014 at 19:42
problem is Corporations are moving their HQs into other countries to avoid paying 35% or higher in taxes. They tell us the grass is greener @ 17% or lower in taxes elsewhere.
If you can convince a Dem in your state That’s going to work here ? I tip my hat to you !
NW10 July 19th, 2014 at 21:01
The strategy is this: promote and support the Democratic Party, get them majorities in governorships, statehouses/state legislatures, the House, Senate, WH, all those government bodies, and watch the economy flourish. The reason the economy has been doing so bad over the past 30 years is because Republicans have been effectively running the government.
Bob Waas July 19th, 2014 at 23:04
When the Republicans controlled Congress with Clinton they were able to have a surplus. Democrats had total control of Congress for Obama’s first two years and doubled the deficit, and blamed it on Bush.
arc99 July 19th, 2014 at 23:31
A Medicare drug benefit and a pointless war occurred during the administration of George W. Bush. How is it that the expense for those decisions are not the responsibility of the President in office when those policies were implemented?
Bob Waas July 19th, 2014 at 23:45
You failed to mention that Bush inherited a recession from Clinton. He just didn’t whine about it.
arc99 July 20th, 2014 at 00:17
no need to. GOP apologists more than make up for the whining deficit.
President Bush simply went to war AND cut taxes which had never been done in the history of our republic. Now right wingers whine whenever anyone points out the FACT that financial difficulties we have now are a result of the policies and politicians they voted for.
when you throw a brick through a plate glass window, your criticism of the performance of the people repairing the damage has zero credibility. .
Bob Waas July 20th, 2014 at 09:11
A couple of facts. The “USA” went to war. The USA was attacked, requiring us to go to war. Evidence proves policies of the Democrats, along with Frank and Dodd were mostly responsible for the financial collapse. 6 years into Obama’s presidency and he is now voted the worst president in 70 years. Things aren’t getting better, he divided Americans rather than united them, foreign governments laugh at US, our credit rating has been downgraded and yet, you and Obewon still want to blame others for his poor job performance. Face it, he is not a leader, never was, and never will be. He was an experiment that went badly.
Regardless of the so called job numbers, according to the BLS, the job participation rate @ 62.8% is well below average because the true facts show a large percentage of the workforce is marginally attached and there are many working part-time because they are unable to find full-time work.
And yet, you and others continue to deny the facts and instead point to lame excuses for Obama’s failure as a president. In 6 years this man has never honestly accepted responsibility for anything that went wrong. Whenever he made a sound like an apology, he quickly followed with a string of excuses; which usually blamed someone else.
William July 20th, 2014 at 09:45
“And yet, you and others continue to deny the facts and instead point to lame excuses for Obama’s failure as a president”.
Ha,Ha,Ha,Ha,
Not satisfied having you ass handed to you by Obe’ you still continue to spew.
Unbelievable.
Obewon July 20th, 2014 at 12:55
Birther Bob lie #1: “The USA was attacked” But never by Iraq. Nobody was dumb enough to invade the wrong country for Halliburton Cheney’s $6 T+ faux oil war that skyrocketed Big Oil profits 10-fold from Clinton’s $12-14/brl to U.S. Record $147/brl $5 gas! And the CIA proved Iraq had no WMD to both GWB & Cheney 6 months before GOP’s $6 T+ Halliburton bailout.
Wass lie 2. USA’s AAA credit rating was restored long ago by the 1 of 3 credit ratings agencies that overreacted to TP losers in August, 2011 threatening to default on USA’s ‘full faith & credit’ Constitutionally ignorant of Congresses valid spending authorizations “the public debt shall not be questioned”-14th Amendment. S & P quickly dumped their CEO for teabagging.
3. All of the Sienna POTUS scholars polled annually since 1982 and 67% of these voters polled disagreed with birther Bob Wass’ cherry picked lie #2. And 28% picked President George W. Bush as worst POTUS since WW-II vs just 33% saying Obama was worse. “Obama has been a better president than George W. Bush, 39%”-LOL debunked by the same single Poll!
4. And what do the experts say about GWB’s 77% highest sitting POTUS Disapproval, and U.S. record lowest sitting 19% POTUS Approval? -238 presidential scholars polled annually since 1982: Bush worst president of modern era, fifth worst in US history!” “Obama ranked 15th best POTUS in U.S. History” http://www.rawstory.com/rs/2010/07/01/nations-leading-presidential-scholars-bush-worst-president-modern-era-5th-worst-history/
Obewon July 20th, 2014 at 06:22
Clinton’s $550 B realized consecutive surpluses were reversed by Bob Wass irresponsibly voting for a fool whose name sounded presidential and who looked like the then Worst Jobs creator in U.S. History! “GWB’s $17 Trillion dollar end of an error: “We went from a $5.6 trillion (continuing CBO forecast) surplus that G.W. Bush inherited to over $11-plus trillion debt when GWB left office.”-True! http://disq.us/8jc2vu
G.W. “Bush Worst on Jobs in U.S. History”-WSJ January 9, 2009 1.1 million private jobs created in ALL 8 years. 2nd Worst on Jobs GHWB’s 2.5 M jobs 4 year total. https://www.flickr.com/photos/speakerpelosi/13630053153/in/photostream/ <-BLS Private jobs 12/2007-3/2014
fahvel July 20th, 2014 at 04:24
use all of your fingers before you arrive at a conclusion.
NW10 July 20th, 2014 at 07:21
Democrats had total control of Congress for Obama’s first two years
A lie. Democrats had the House, but were prone to the filibuster in the Senate. The Democrats had 60 votes only by technicality, Al Franken was seated in July 2009, and after he was, the Senate went on vacation four weeks later. Ted Kennedy died in August 2009, and Robert Byrd was in the hospital. In total, Democrats had 60 votes for 28 session days, 15 of which were consecutive. You right wingers always omit context from the lies you tell.
Bob Waas July 20th, 2014 at 18:33
If they didn’t have control, please explain how ACA passed without one Republican vote? No context left out.
NW10 July 20th, 2014 at 19:01
The ACA had to be amended to pass reconciliation.
Obewon July 20th, 2014 at 19:19
Don’t forget (R) Specter dumped the GOP to vote fiscally responsibly for CBO’s $1.5 T federal deficit reducing ACA:)
In the 21st Century repubs have lost 3 Senators that Wass can’t remember… 1: Arlen Specter of Pennsylvania. Republican, 1981-April 29, 2009. Democrat, April 30, 2009-2011
2: Joseph I. Lieberman of Connecticut caucused with repubs.
3: James Jeffords of Vermont. Republican, 1989-2001
Independent, 2001-2007.
Bob Waas July 20th, 2014 at 21:37
And how many Republican votes did they need to pass the law? I’ll save you the time, ZERO. They had the control and wasted it on Obamacare. What makes you think they would make better decisions if given the power again?
NW10 July 20th, 2014 at 22:02
What makes you think they would make better decisions if given the power again?
The Progressive Era, from the 1930s-1960s. Democrats were a powerful political force, and many great things were accomplished during that time, among them: the New Deal, Social Security, Medicare, CRA, VRA. Since Republicans have been controlling our government, it’s all gone south.
Bob Waas July 21st, 2014 at 00:46
I was a registered Democrat in the 60’s, but the current Democratic party has been hijacked by the secular progressive liberal movement and no longer reflects the values and principles that were present back then. JFK was like today’s conservatives. His brother Teddy was nothing like him; but was rather the face of today’s party.
What has gone south under Republican control? You stated it, so provide proof; or is that what you’ve been told to believe?
SteveD July 23rd, 2014 at 23:05
Federal Deficits – Net Imports = Private Savings
The existence of the dollar depends on the laws created by the government, and the government created all those laws from nothing. Because the government never can run short of laws, the government never can unintentionally run short of dollars.
Even if all federal taxes fell to $0, the government would not run short of dollars.
FIVE fundamental equations:
1. Money = Debt
2. Federal Spending + Non-federal Spending + Net Exports = Gross Domestic Product (GDP)
3. Federal Deficits = Private Income
4. Demand/Supply = Value
5. Reward/Risk = Demand
Looking at equation 1., why would anyone want less federal debt?
Looking at equation 2., why would anyone want less federal spending (i.e “smaller government”)?
Looking at equation 3., why would anyone want smaller deficits (since the government cannot run short of dollars)
Looking at equation 4., what is the best way to avoid inflation (reduced value of the dollar)? No, not decrease Supply. Remember equations #1, #2 and #3. The answer is to increase Demand.
Looking at equation 5., what is the easiest way to increase Demand? Increase the Reward for owning dollars (interest).
And that’s it. Five simple equations. Everything else merely devolves to arguments and speculation about details and interpretations.
What you read and hear in the media are the arguments, speculations and interpretations, but you seldom are told the fundamentals.
By concealing the fundamentals, those with an agenda are able to offer confusing, contradictory and harmful hypotheses, involving such notions as “small government,” “austerity,” “unsustainable debt,” “return to gold” and “unsustainable spending” — all nonsense based on nonsense, packaged into the BIG LIE.
Bob Waas July 24th, 2014 at 00:17
Sounds like a lot of mumble jumble. Who is your source?
I tend to believe the latest report which warns. http://www.moneynews.com/mktnews/billionaire-yellen-market-collapse/2014/07/21/id/583962/
(((NW10,PATRIOT! ✓ᵛᵉʳᶦᶠᶦᵉᵈ))) July 19th, 2014 at 21:01
The strategy is this: promote and support the Democratic Party, get them majorities in governorships, statehouses/state legislatures, the House, Senate, WH, all those government bodies, and watch the economy flourish. The reason the economy has been doing so bad over the past 30 years is because Republicans have been effectively running the government.
Bob Waas July 19th, 2014 at 23:04
When the Republicans controlled Congress with Clinton they were able to have a surplus. Democrats had total control of Congress for Obama’s first two years and doubled the deficit, and blamed it on Bush.
arc99 July 19th, 2014 at 23:31
A Medicare drug benefit and a pointless war occurred during the administration of George W. Bush. Neither was paid for. How is it that the expenses for those decisions are not the responsibility of the President in office when those policies were implemented?
it is uncanny how you never blame Republicans for anything, not even the messes they create. all you do is whine about Democrats for essentially not fixing problems created by the politicians you and people like you vote for.
President Bush came into office with the federal ledger in excellent shape. He screwed it up completely and now you whine because President Obama has not repaired the damage that Republicans caused.
The party of personal responsibility, as usual blaming everyone but themselves for their screw-ups
http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/
Q: During the Clinton administration was the federal budget balanced? Was the federal deficit erased?
A: Yes to both questions, whether you count Social Security or not.
Bob Waas July 19th, 2014 at 23:45
You failed to mention that Bush inherited a recession from Clinton. He just didn’t whine about it.
arc99 July 20th, 2014 at 00:17
no need to. GOP apologists more than make up for the whining deficit.
President Bush simply went to war AND cut taxes which had never been done in the history of our republic. Now right wingers whine whenever anyone points out the FACT that financial difficulties we have now are a result of the policies and politicians they voted for.
when you throw a brick through a plate glass window, your criticism of the performance of the people repairing the damage has zero credibility. .
Bob Waas July 20th, 2014 at 09:11
A couple of facts. The “USA” went to war. The USA was attacked, requiring us to go to war. Evidence proves policies of the Democrats, along with Frank and Dodd were mostly responsible for the financial collapse. 6 years into Obama’s presidency and he is now voted the worst president in 70 years. Things aren’t getting better, he divided Americans rather than united them, foreign governments laugh at US, our credit rating has been downgraded and yet, you and Obewon still want to blame others for his poor job performance. Face it, he is not a leader, never was, and never will be. He was an experiment that went badly.
Regardless of the so called job numbers, according to the BLS, the job participation rate @ 62.8% is well below average because the true facts show a large percentage of the workforce is marginally attached and there are many working part-time because they are unable to find full-time work.
And yet, you and others continue to deny the facts and instead point to lame excuses for Obama’s failure as a president. In 6 years this man has never honestly accepted responsibility for anything that went wrong. Whenever he made a sound like an apology, he quickly followed with a string of excuses; which usually blamed someone else.
William July 20th, 2014 at 09:45
“And yet, you and others continue to deny the facts and instead point to lame excuses for Obama’s failure as a president”.
Ha,Ha,Ha,Ha,
Not satisfied having you ass handed to you by Obe’ you still continue to spew.
Unbelievable.
Obewon July 20th, 2014 at 12:55
Birther Bob lie #1:”The USA was attacked” But never by Iraq. Nobody else but Big Oil W invaded the wrong country for Halliburton Cheney’s $6 T+ faux Oil War skyrocketing Big Oil profits 10-fold from Clinton’s $12-14/brl to U.S. Record $147/brl $5 gas! CIA proved Iraq had no WMD to both GWB & Cheney 6 months before GOP’s $6 T+ Halliburton bailout.
Wass lie 2. USA’s AAA credit rating was restored long ago by the 1 of 3 credit ratings agencies overreacting to TP losers in August, 2011 threatening to default on USA’s ‘full faith & credit’ Constitutionally ignorant of Congresses valid spending authorizations “the public debt shall not be questioned”-14th Amendment. S & P quickly dumped their CEO for teabagging.
3. All of the Sienna POTUS scholars polled annually since 1982 and 67% of these voters polled disagreed with birther Bob Wass’ cherry picked lie #2. And 28% picked President George W. Bush as worst POTUS since WW-II vs 33% saying Obama was worse &”39%-Obama has been a better president than GWB”-LOL debunked by the same single Poll!
4. What about GWB’s 77% highest sitting POTUS Disapproval & U.S. Record Lowest Sitting 19% POTUS Approval? -238 presidential scholars polled annually since 1982:”Bush worst president of modern era, 5th worst in US history!”&”Obama ranked 15th best POTUS in U.S. History” http://www.rawstory.com/rs/2010/07/01/nations-leading-presidential-scholars-bush-worst-president-modern-era-5th-worst-history/ Lie #5 Under age 18=23.3%+Over 65=14.1% Total 37.4% leaving 62.6% working age in 2013.
Obewon July 20th, 2014 at 06:22
GWB’s November 2001 recession:”The NBER’s Business Cycle Dating Committee determined that a peak in business activity occurred in the U.S. economy in March 2001″-Marking the end of an expansion and the beginning of a recession IF 3 quarters of Decline Follow = 9 months in 11/01. ‘The longest expansion in the NBER’s chronology began 3/91 ended in 3/01 Lasting exactly 10 years.’ http://www.nber.org/cycles/november2001/ Clinton’s $550 B realized consecutive surpluses were reversed by Bob Wass irresponsibly voting for a fool whose name sounded presidential and who looked like the then Worst Jobs creator in U.S. History! “GWB’s $17 Trillion dollar end of an error: “We went from a $5.6 trillion (continuing CBO forecast) surplus that G.W. Bush inherited to over $11-plus trillion debt when GWB left office.”-True! http://www.politifact.com/truth-o-meter/statements/2011/jun/02/steny-hoyer/steny-hoyer-says-george-w-bush-inherited-56-trilli/ G.W. “Bush Worst on Jobs in U.S. History”-WSJ 1/9/09 1.1 M private jobs created in ALL 8 years. 2nd Worst on Jobs GHWB’s 2.5 M jobs 4 year total. https://www.flickr.com/photos/speakerpelosi/13630053153/in/photostream/
fahvel July 20th, 2014 at 04:24
use all of your fingers before you arrive at a conclusion.
(((NW10,PATRIOT! ✓ᵛᵉʳᶦᶠᶦᵉᵈ))) July 20th, 2014 at 07:21
Democrats had total control of Congress for Obama’s first two years
A lie. Democrats had the House, but were prone to the filibuster in the Senate. The Democrats had 60 votes only by technicality, Al Franken was seated in July 2009, and after he was, the Senate went on vacation four weeks later. Ted Kennedy died in August 2009, and Robert Byrd was in the hospital. In total, Democrats had 60 votes for 28 session days, 15 of which were consecutive. You right wingers always omit context from the lies you tell.
Bob Waas July 20th, 2014 at 18:33
If they didn’t have control, please explain how ACA passed without one Republican vote? No context left out.
(((NW10,PATRIOT! ✓ᵛᵉʳᶦᶠᶦᵉᵈ))) July 20th, 2014 at 19:01
The ACA had to be amended to pass reconciliation.
Obewon July 20th, 2014 at 19:19
Don’t forget Sen. (R) Arlen Specter dumped the GOP to vote fiscally conservatively for CBO’s $1.5 T federal deficit reducing ACA:) That’s 2 GOP caucusing Senators that voted for the ACA. Another Wass talking point flames out with a boom!
In the 21st Century repubs have lost 3 GOP caucusing Senators switching to caucusing/voting Dem that Wass can’t remember…
1: Arlen Specter of Pennsylvania. Republican, 1981-April 29, 2009. Democrat, April 30, 2009-2011
2: Joseph I. Lieberman of Connecticut caucused & voted with repubs-but voted for the ACA!
3: James Jeffords of Vermont. Republican, 1989-2001 Dumped repubs becoming a Dem caucusing Independent, 2001-2007.
Sen. (I-Vt) Bernie Sanders is another Non-Repub voting for the ACA too. Sen. (I-Me) Angus King caucuses with Dems, replacing Sen. (R-Me) Olympia Snowe in 2013.
Bob Waas July 20th, 2014 at 21:37
And how many Republican votes did they need to pass the law? I’ll save you the time, ZERO. They had the control and wasted it on Obamacare. What makes you think they would make better decisions if given the power again?
(((NW10,PATRIOT! ✓ᵛᵉʳᶦᶠᶦᵉᵈ))) July 20th, 2014 at 22:02
What makes you think they would make better decisions if given the power again?
The Progressive Era, from the 1930s-1960s. Democrats were a powerful political force, and many great things were accomplished during that time, among them: the New Deal, Social Security, Medicare, CRA, VRA. Since Republicans have been controlling our government, it’s all gone south.
Bob Waas July 21st, 2014 at 00:46
I was a registered Democrat in the 60’s, but the current Democratic party has been hijacked by the secular progressive liberal movement and no longer reflects the values and principles that were present back then. JFK was like today’s conservatives. His brother Teddy was nothing like him; but was rather the face of today’s party.
What has gone south under Republican control? You stated it, so provide proof; or is that what you’ve been told to believe?
SteveD July 23rd, 2014 at 23:05
Federal Deficits – Net Imports = Private Savings
The existence of the dollar depends on the laws created by the government, and the government created all those laws from nothing. Because the government never can run short of laws, the government never can unintentionally run short of dollars.
Even if all federal taxes fell to $0, the government would not run short of dollars.
FIVE fundamental equations:
1. Money = Debt
2. Federal Spending + Non-federal Spending + Net Exports = Gross Domestic Product (GDP)
3. Federal Deficits = Private Income
4. Demand/Supply = Value
5. Reward/Risk = Demand
Looking at equation 1., why would anyone want less federal debt?
Looking at equation 2., why would anyone want less federal spending (i.e “smaller government”)?
Looking at equation 3., why would anyone want smaller deficits (since the government cannot run short of dollars)
Looking at equation 4., what is the best way to avoid inflation (reduced value of the dollar)? No, not decrease Supply. Remember equations #1, #2 and #3. The answer is to increase Demand.
Looking at equation 5., what is the easiest way to increase Demand? Increase the Reward for owning dollars (interest).
And that’s it. Five simple equations. Everything else merely devolves to arguments and speculation about details and interpretations.
What you read and hear in the media are the arguments, speculations and interpretations, but you seldom are told the fundamentals.
By concealing the fundamentals, those with an agenda are able to offer confusing, contradictory and harmful hypotheses, involving such notions as “small government,” “austerity,” “unsustainable debt,” “return to gold” and “unsustainable spending” — all nonsense based on nonsense, packaged into the BIG LIE.
Bob Waas July 24th, 2014 at 00:17
Sounds like a lot of mumble jumble. Who is your source?
I tend to believe the latest report which warns. http://www.moneynews.com/mktnews/billionaire-yellen-market-collapse/2014/07/21/id/583962/
fahvel July 20th, 2014 at 04:23
scary when ones future is based on the manoeuvrings of a small bunch of gluttons at the top who have no awareness of the folks who actually produce something while at work.
fahvel July 20th, 2014 at 04:23
scary when ones future is based on the manoeuvrings of a small bunch of gluttons at the top who have no awareness of the folks who actually produce something while at work.
Obewon July 20th, 2014 at 06:10
GWB’s $17 Trillion dollar end of an error: “We went from a $5.6 trillion (continuing CBO forecast) surplus that George W. Bush inherited to over … $11-plus trillion debt when George Bush left office.”-True! http://www.politifact.com/truth-o-meter/statements/2011/jun/02/steny-hoyer/steny-hoyer-says-george-w-bush-inherited-56-trilli/
SteveD July 23rd, 2014 at 22:57
Obewon = austerity-nomics
Fact: U.S. depressions tend to come on the heels of federal surpluses.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2000: U. S. Federal Debt reduced 12%. Recession began 2001.
Fact: Recessions tend to come on the heels of reductions in federal debt/money growth, while debt/money growth has increased when recessions were resolving. Taxes reduce debt/money growth. No government can tax itself into prosperity, but many government’s tax themselves into recession.
You might find it interesting to see facts, rather than to rely on intuition and the BIG LIE.
Of the 22 recessions since 1819, nine were introduced by federal surpluses and eight others were introduced by deficit cuts. Only five came when deficits were increasing. (While simultaneously bank lending/credit creation was DECREASING.)
SteveD July 23rd, 2014 at 23:53
http://i794.photobucket.com/albums/yy223/JPHochbaum/Economics%20Photos/sectoral_balances1.png
Obewon July 20th, 2014 at 06:10
GWB’s $17 Trillion dollar end of an error: “We went from a $5.6 trillion (continuing CBO forecast) surplus that George W. Bush inherited to over … $11-plus trillion debt when George Bush left office.”-True! http://www.politifact.com/truth-o-meter/statements/2011/jun/02/steny-hoyer/steny-hoyer-says-george-w-bush-inherited-56-trilli/
SteveD July 23rd, 2014 at 22:57
Obewon = austerity-nomics
Fact: U.S. depressions tend to come on the heels of federal surpluses.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 12%. Recession began 2002.
Fact: Recessions tend to come on the heels of reductions in federal debt/money growth, while debt/money growth has increased when recessions were resolving. Taxes reduce debt/money growth. No government can tax itself into prosperity, but many government’s tax themselves into recession.
Of the 22 recessions since 1819, nine were introduced by federal surpluses and eight others were introduced by deficit cuts. (Five came when federal deficits were increasing and private credit creation was decreasing.)
SteveD July 23rd, 2014 at 23:53
http://i794.photobucket.com/albums/yy223/JPHochbaum/Economics%20Photos/sectoral_balances1.png
“Only one sector, the public sector, can run deficits forever and always be able to pay it back.
The government can print currency to pay off any of its debts, the private sector can’t. Yet all the media and political outrage is focused on the government debt, at nearly $18 trillion, and the total private sector debt, still hovering near $40 trillion, is completely ignored. It appears our media and politicians have their concerns confused, and they completely misunderstand which sectors total debt is news worthy.
I still consider myself a libertarian but as a libertarian I pride myself on economic freedom as well, and a burdensome private sector debt is not economic freedom in any sense of the word.”