The problem is that the second part almost never happens.
I voted no because the measure didn’t address sequestration, but I’d have voted for it versus nothing.
No.
We needed deep, deep, deep cuts in government spending and we didn’t get them. The Republicans caved and let the Democrats continue to run amok with a blank checkbook.
Maybe it was better than nothing, but we are going to be back in the same place in about two months when we deal with sequestration and the debt ceiling.
Yeah, because the last time we had a surplus, Bush and the Republicans couldn’t stand it. “The surplus belongs to us,” remember?
Our debt-to-GDP ratio went down for thirty years before Reagan took office. In the thirty years since then, the debt-to-GDP ratio went up except during most of Clinton’s term. So, out of the last sixty years, the amount of debt we’ve had as a portion of our national wealth has declined in a majority of those years.
I know you’re going to argue that the national debt was $x dollars in 1947, and greater than $x today, therefore the debt has always gone up. That’s the wrong way to look at things. You need to look at debt as how affordable it is.
Let’s take an extreme example to illustrate this point: if you have $10,000 in debt, and your income is $20,000, you are in trouble. If your income increases to $150,000, and your debt increases to $15,000, the fact that your debt has increased by 50% should not be a concern to anyone. Of course, if your debt then increases to $75,000 (or more), then you’re back in trouble again. Or if debt stays constant at $15,000, but income drops to $40,000, that’s trouble too. But measuring increases in debt without any regard to whether the debt is affordable or not is simply foolish.
Great Strawman. I was referring to paying off the debt during good times instead of increasing spending even more.
So you’re saying that we DO pay off debt during surpluses instead of running up more debt?
How is that a strawman? The party that doesn’t want to cut spending now wasn’t trying to increase it then; the Democrats wanted to keep things as they were (especially since we didn’t exactly have a surplus), while the Republicans wanted to cut taxes.
Apparently if it points out Republican shortcomings, it’s a strawman. Even if you don’t believe the surplus existed during the Clinton years, there was no structural deficit and no push to ramp up spending. Enter Bush, and spending goes up (Two wars put on the credit card + the Medicare drug plan) and revenues were gutted. But that’s a strawman to some.
Read what I wrote. Over the the last 60 years, the aggregate total of debt has increased every year (with a possible exception of one or two). However, for the majority of those last sixty years, our national wealth expanded faster than the debt grew, meaning that the debt as a percentage of our wealth went down in most of those years.
To state it another way, at the end of World War II, the national debt was 120% of our economy. By 1980, the debt was 40% of our economy. During almost all of those years, the dollar total of the debt went up. During those years, the debt as a percentage of our national wealth was reduced by 65%, even though we only ran a surplus like three or four times during those years.
Are you following me?
Refer back to the example where your personal debt is $10k, and your income is $20k: you are in trouble. If your debt is $15k and your income is $150k, would you say you are in trouble because your debt has increased by 50%? I contend no reasonable person would think that.
Or, to put it in the ever-present (but fundamentally flawed) terminology of a household budget - it’s not a problem to have a lot of debt (say a mortgage) or even an ever-increasing amount of debt as long as your overall wealth is going up faster than your debt.
Debt/GDP is all that really matters, and by those measures we were improving until 1980, then got worse until the mid-90’s, improved again until 2000, muddled along until the mid-2000’s and then got dramatically worse during this recession.
There’s an easy-to-grasp picture of it here: The Long Story of U.S. Debt, From 1790 to 2011, in 1 Little Chart - The Atlantic
Those are just the federal numbers. When you look at the entire tax burden we’re already at 25%.
http://www.oecd-ilibrary.org/taxation/total-tax-revenue_20758510-table2
Just letting the entitlements expand would put us around 40% of GDP in total tax revenue in 2050. Or a bit more than Germany and a bit less than that of the France and the Scandinavian nations. So yes, a revenue only approach is completely feasible and the people saying that we ABSOLUTELY MUST HAVE REVENUE CUTS are just plain wrong. Now obviously that’s not likely to happen. We are going to reduce entitlement spending it’s just a matter or how and when. I’m not saying that we shouldn’t do so. I just think that people should have the actual facts in mind when those decisions are being made.
You probably mean to say as long as your income, not wealth, is going up faster than your debt. GDP would be more closely related to annual income of the country and not wealth. This would of course be the difference between looking at debt from a balance sheet leverage standpoint to more of an ability to service debt standpoint.
I would say that there is no single metric that can be used to judge the ability of a government (or company or individual) to take on debt. Therefore, I disagree with your statement that debt/GDP is all that really matters. There are a host of other factors, which is why Japan, for example, has been able to survive having a very high debt to GDP for a long time while Greece is on the verge of collapse.
It’s a really bad bill. Too much tax for too little spending cuts. Like it or not the Dem’s will have to approve more cuts. Imho they blew an opportunity to do that now and get it over with. Why prolong the inevitable?
I read an article last night questioning why the traditional committee system failed us this time. This should have been worked on hard right after the election. Get it pass in the House and Senate. Then see if Obama would dare veto it and take the blame for the recession.
I’ll be surprised if Boehner survives as Majority Leader. It’s his leadership failure. WTF did he think would happen by dicking around and letting a last minute deal get cut by the Senate? Of course the bill would favor the Democrats. The failure to negotiate and pass a House bill a few weeks after the elections is just unforgivable.
Everything was done backwards. They should have never allowed the President to force this process. That only happened because of the failure to pass a bipartisan bill in the House. Send it to the Senate. Perhaps Amended it. But eventually get something to the President. Now Congress is leading and the pressure is on the President to accept it or veto. I’m fed up with this do nothing Congress allowing the President to shove them around.
Everyone knew taxes had to go up. Everyone knew there will be spending cuts. That’s the only solution. We still haven’t raised taxes enough and we sure as hell haven’t cut spending enough.
Is that really another factor? Isn’t the difference between Japan and Greece with respect to the impact of their national debts just a difference in the bond market’s prediction about the future GDP of each nation?
I actually meant something in between (hence the caveat about the silliness of comparing household budgeting with government budgeting). But yes, GDP is more accurately compared to household income.
Of course. “All that really matters” was poor phrasing - instead I’ll just say that it matters a hell of a lot more than just the raw debt number (which really matters very little at all unless you know the size and growth rate of the economy as well as things like the robustness of the tax enforcement system and the rate of tax avoidance).
It seems to me that another very good indicator for just how “dangerous” our level of debt is would be the rate we have to pay to borrow money. Which, last I’ve seen, is extremely low. Obviously that could change very quickly, and is something to keep a close eye on, but I see far more similarity between the US and Japan right now than the US and Greece.
Just to be clear though, you are talking absolutely massive tax increases. Massive to the point that they are truly politically impossible and would likely incite a civil uprising if attempted. I’ve done quick math, so excuse me if I screw something up here. In today’s dollars, you are talking about needing something like an additional $2.25 trillion per year in tax revenue. The fiscal cliff proposal just passed raises something like $0.06 trillion per year in additional tax revenue.
Now, you say that is completely feasible. I guess I would say that depends on what definition of feasible you are using.
There’s been a big to-do that Republicans did not violate their pledge not to raise taxes because they didn’t actually hold the vote until after midnight when taxes had technically already gone up. This seems very strange to me since regardless of when the vote occurred the bill was about after taxes would have gone up in any case. But given that this is apparently Norquist’s own argument, what does he say about the 30 odd Republican Senators who did vote before 1/1/13?
Not so much a prediction of GDP as it is a prediction of how collectable the debt is.