I know everything that’s currently wrong in the universe is Bush’s fault, from your mother’s hangnail to the suckness of the last Star Wars movie, but where have you been? Is the median age of Dopers so young that you don’t know about budget deficits?
The last President to have a Budget surplus was President Kennedy. For those of you keeping track, that was some forty five years ago. This is a NATIONAL PROBLEM, not a attached to one party or another one. Republican and Democrat Presidents and Republican and Democrat Congresses have all pushed this up. And Obama wants to ring up a Trillion dollar economic stimulus package. That’s not going to help. This is so big that every President has a bigger problem than his predecessor. Obama will be no different.
Bottom line is until the average American calls his Congressman and says that he is willing to sign up for less social security and other benefits and more taxes, we are never going to solve this thing. It’s been decades in the making, and we are all to blame.
Thinking this caused by Bush means you aren’t paying attention, have blinders riveted to your head due to your hatred of Bush, you’re just plain stupid or a combination of the three.
You are correct, I meant the last President to not have a federal debt. My bad.
And Bush ran up the deficit (partially) to help combat terrorism. That was his and our dire problem at that time. That’s at the heart of the issue. There is always a problem that takes more cash.
Bush cut taxes for everybody, the rich included. I bet you cashed your check.
What are you willing to give up Capt, to help our cause??
My point is you can continue to throw darts at your George Bush dart board for all the good it will do you.
He didn’t do this. He contributed to it. But it’s not his fault alone. Far from it. It’s been in the making for almost 50 YEARS.
And your guy isn’t even in office yet and he wants $1,000,000,000,000. And he wants to cut taxes! Are you complaining about that?? Or only when Bush does it?
My point is that me bitching about your trillion, or you bitching about Bush isn’t going to help. Pressuring Congress to act, and our collective willingness to live with less is the only way out.
You can signal your inability to understand this concept by once again venting about the Great Satan Bush.
Please. Now it’s Reagan’s fault. Don’t forget Eisenhower and Nixon.
You’re forgetting (or you’re too young to remember) that in those days, Republicans were know for being fiscal conservatives. The Democrat Congress was spending money hand over fist. BOTH parties got us into this. I honestly don’t see one worse than the other.
My point remains the same. Until we view this as our problem, and stop finger pointing, we’ll never get out of this mess.
I remember Nixon. To my shame, I campaigned for him in 68. 1980, when Reagan embraced the moral majority, and shortly thereafter the Laffer curve, was when the fiscal conservative branch of the GOP left the tracks. They’ve not been seen since,.
There were multiple arms to Reaganomics (and its equivalents worldwide). The running down of regulation was one - this tends to encourage a boom/bust cycle, where the clueless (and that includes those who don’t understand the economic situation and those who took bad bets and rode them too long) are going to cop it at the expense of those who know what they’re doing and/or can rort the system.
The current crises are being caused by this (and similar policies of successive governments), but if people didn’t learn after the S&L crisis that a certain level of regulation is required to keep markets free, they’re not going to learn now.
Arm two is the reduction of taxation, especially on the investing class (i.e. the rich), to encourage the long-term growth of economies. This was torn apart by three factors - one, it didn’t leave enough money to pay for the necessary activities of government, leading to deficits which will have to be repaid (but at the same time encouraging a low-tax mindset so that voters won’t stand for the eventual reckoning); two, globalisation meant that the investment dollars weren’t always going to stay in the country, reducing any benefit that was supposed to be gained; and three, that it started a global race to the bottom, requiring other governments to reduce taxes in order to remain “competitive” - the shit didn’t stay in the one pond.
Whether deficits are local, state or federal only matters if higher governments are willing to let the lower ones go bankrupt. I can’t honestly say that won’t eventually happen in a couple of decades’ time, but it won’t just yet - you might see a fire sale of the Detroit road network to a private administrator, but you won’t see the school system sold off to the highest bidder before the feds step in.
Yet, anyway.
Deficits matter, but the US is big and hairy enough that they only matter peripherally for the meantime. Eventually, though, there will be a reckoning and no-one really knows what that’s going to mean.
First off, the OP is a fucking tool bag. Second, there are so many red-herrings, so much misinformation, and so much bad history in this thread that I’m going to drop it and just work with this post. But, in general, for all of you partisan hacks out there that ignore fact, twist history, and pigeon hole events, in order to rationalize your decision in parties here comes a hearty fuck you right at cha’. Stop lying to yourselves.
That being said, the above cited post looks like the most rational thing here (and it is conveniently placed) so I’ll deal with that. First off, I would say that mistimed monetary policy in conjunction with the inevitable lags when implementing fiscal policy lead more toward the boom-bust cycle more than de-regulation. We can refer to the current situation for that.
You are correct, IF we are going to have a fed and this much government involvement in an economy as we do today (WE ARE NOT A FREE MARKET FOR CHRIST’S SAKE), regulation will be needed as the normal inhibitors inherent in theoretical capitalism will not apply. With this kind of government interference the normal paradigm used by laissez-faire capitalist will not hold. Regulation is needed in SOME aspects of the business world. You need the virus in order to justify making the vaccine.
Investing classes do not represent the ever ambiguous and demagoguery of “the rich.” In 2002, in the middle of a recession (yes, we were in a RECCESION when “Bush’s” tax cuts were passed), about 50% of American households had stock portfolios. A quick Google shows that this trend continued into 2005. I’m not really sure where we are at right now. But, to be sure, just because you invest does not mean you are the uber-super-elite-helicopter-to-work-everyday rich. So, the ever so vaunted middle class does gain from policy designed to increase investment (i.e. capital gains tax), as well as everyone else I may add.
“Necessary activities of government.” You’re kidding right? You’re telling me all the pork-barrel bloating shit that was enacted in the 2000’s qualifies as necessary? Fact is idiotic government expansion, by both goddamn parties, combined with Keynesian economic policies designed for recessionary times continuing into expansionary times is, PARTIALLY TO BLAME (as mentioned by an earlier poster it is never one identifiable policy that leads to a recession) for what fucked us. This is why centralization does not work, but that is an aside.
I’m just going to stay away from globalization to avoid the inevitable de-rail it will cause. I don’t really get what you are going for in the third part. Clarify please. I will address it if necessary.
“Deficits matter, but the US is big and hairy enough that they only matter peripherally for the meantime. Eventually, though, there will be a reckoning and no-one really knows what that’s going to mean.” This is quoted for truth. Deficits do suck, just not in the present, and the dollar is respected enough, for the moment, that we may be able to get away with it. It will not be paid down anywhere in the future though. The barrage of social programs that will inevitably arise once the economy starts to pull up will eat up any money that will be generated from future tax hikes. Fact is we need to STOP government growth and raise taxes in order to pay down the debt, shore up the dollar, and ensure long term growth. This is true expansionary Keynesian policy, the other side of the coin if you will, that people forget about when the going is good. This is when we get into trouble. This is my problem with Keynesian style solutions during down periods. We never pay for them during the up-swing. It is politically unviable to do so. This creates the issues that we have today.
P.S. They do know what’s going to happen in the future due to debt. Google “economic hard landing.” Essentially, from my examination of it, it is what will happen when people stop buying government debt and abandon the dollar. It’s a pretty terrible scenario. Real doomsday type shit.
I’ll let the rest of this post sit for others to have a swing at first - I’ve been trying not to get into the partisanism - but to clear up a few factual points:
Actually, they do. That’s the whole point of trickle-down theory. The point is to give lots of money to people who are sufficiently rich that they won’t spend any of it.
If the government gave a person on the breadline $10,000, they’d spend it. Probably on necessities or some such. They do that sort of thing.
If the government gave someone in the middle class $10,000 they’d probably spend most of it, and save a bit - by paying off a bit of the mortgage and credit cards, or by sticking it in a fund.
If the government gives someone earning $250,000 a year $10,000 they’re likely to spend very little (if any) of it, and invest everything. This investment enables economic growth, and while it pays off the bulk off directly by re-rewarding those who’ve invested the cash, the idea is that the multiplier effect enables the creation of new jobs and so forth.
I’m not talking about shares, or using share ownership as a measurement of the investing classes. The problem is that this hasn’t worked over the last thirty years.
Please re-read. I said “necessary activities of government”. You parsed it in a way that isn’t in either the text or the sub-text. Think of something that the government does because it’s not economically or otherwise appropriate for someone else to do - maintaining a police force, for example. Then think about how they do it when 100% or more of their tax revenue is needed to pay interest on past debt.
That economic policies can oblige a case of mutual- rather than self-destruction. Hypothetical example - the U.S. cuts corporate tax and allows car makers to pollute heavily. What do Germany and Japan do in response? Watch their car-makers relocate (and therefore lose tax revenues and jobs) or also cut tax rates and environmental regulations? And now that everyone’s got lower tax rates and looser restriction, what does the US do again? This cycle of all players racing to the bottom means that everyone gets hurt, and it happens across all industries.
I know full-well what the textbook response is, but compare the results of the North Korean, Argentinian and Russian debt defaults over the past 20 years. What’s going to happen when a country that’s as large as the U.S., as tied-in to the global economy, and as well-armed and militarily aggressive, is unwilling to pay its bills? Are other countries going to seize their offshore assets the way that the UK recently did to Iceland? Will the US make a good-faith effort to repay its creditors or will it stand for its citizens first, obliging other countries’ nationals to shoulder a large part of the burden? What will be the flow-through effects on corporate credit? How well will the credit system that’s at the foundation of modern economics survive?
The results won’t be pretty for the US, I grant you, but surely the greater question will be how well the concepts of credit and money itself survive.
Right. And obviously your list of federal spending on roads and bridges is for infrastructure that has seen maintenance. The gripe is about undermaintained & unimproved* infrastructure.
So, in order to prove there’s been a lack of federal spending for infrastructure maintenance and improvements, you’ve given me a list of . . . federal spending for infrastructure maintenance and improvements?
Nowhere in that list does it say that the amount of fed spending on infrastructure is sufficient to keep all the bridges from falling down.
In other words some is not necessarily enough.
That’s true, but the sheer size of the US budget deficit is in itself an issue.
Plus, it’s not like France’s deficit isn’t a problem, either. Though since the current right-wing president assured us that tax cuts would be the solution, I can’t see what could go wrong.
I guess you’re gonna get your wish then. The Dems have just unveiled a “stimulus” plan to repair infrastructure. Here comes another trillion dollars in deficit spending.