Got that right. And Agnew almost looks better as VP, too.
Yeah, but at least we know he can post.
…
It’s so disheartening to watch this devolve into a partisan bitchslapfest. The focus on crass partisan politics instead of realistic solutions just exacerbates the underlying the underlying problems. Not that I think they’ll be fixed before something really bad happens.
Which philosopher was it who said that democracy would never work, because the electorate would always try to vote itself rich? Maybe I’m taking too local a view of the problem, but it seems to be happening. Both major parties spend like mad, and a campaign centered around financial sanity would be a disaster. You’d get “He’s going to raise your taxes!” on one side and “He’s going to cut money from education/the environment/national defense!” on the other, with a side order of “He doesn’t care about the right social issues!” just to make absolutely sure that such a candidate would have no support whatsoever.
It seems like the leaders of both parties need to simultaneously have an “Oh shit, we’re fucked!” moment, and agree to carry out a sane fiscal policy regardless of who’s in power. I think it’s pretty likely, myself. Also, when I look out the window, I see a purple sky.
I’m not trying to play devil’s advocate here, but can someone explain in a nutshell how serious this is? Obviously a trillion dollars is a huge amount, but how does that compare to the GDP or GNP, and the variations thereof?
I did say to my wife the other day that the Government’s bold new strategy of not taxing and spending is contributing to our currency being in the toilet, meaning that a trip to Germany being considered would make San Francisco look like Tijuana, pricewise.
I’ve actually (and I’m not bullshitting on this one) found myself wishing that we could “swap” Dick Nixon for George W.
Whilst a paranoid loon, Nixon was a shrewd & devious man, qualities we could surely use right now.
According to the National Debt Clock, the total federal debt is about $8.3 trillion. According to the CIA World Factbook, the US GDP is about $12.37 trillion. That puts the debt/gdp ratio at about 67% (it would actually be slightly lower, since that GDP stat is from last year and the debt stat is current - current gdp would be slightly higher resulting in a slightly lower ratio). That’s pretty bad, but not a sign of the End Times or anything. A dozen years ago Canada was getting to be in pretty rough shape in this regard, with Mulroney’s Tory government spending in much the same way that Bush Jr. Republicans are spending now. Our debt/gdp ratio peaked at 69% in 1995, two years after the Chretien Liberal government had initiated rather sweeping measures to get the deficit under control. They eliminated the deficit in 97, and Canada has had an unbroken string of federal surpluses since then, which has resulted in the debt shrinking to about 90% of its former size in absolute terms, but which due to the continually growing economy puts our debt/gdp ratio at the current time somewhere around 38%. Debt servicing has dropped from about 33% of the federal budget to under 20%. So it certainly is possible to pull yourselves out of the predicament, but it equally certainly won’t be easy. The good news is that if you once get it under control, it gets easier and easier to keep it under control so long as no one gets stupid or greedy or both.
Unclebeer’s advancement of ignorance has been fairly broad-based in this thread: I guess I’ll start with the most blatant case.
There’s nothing wrong with intragovernment debt: much of it consists of the social security trust fund. Current social security taxes exceed outlays, which is a Good Thing as it expands today’s national savings in anticipation of future liabilities.
The FDIC also accumulates a stockpile of savings, also a Good Thing: I strongly suspect that most of it is in the form of treasuries.
Roughly speaking, fiscally responsible governments maintain sinking funds. Sinking funds need assets. T-Bonds are appropriate for such purposes.
Huh. I thought Lyndon Johnson was the only president besides Clinton to balance the budget in modern times. But, if I recall, it was the last budget LBJ proposed, so maybe Nixon got credit for the final version.
Historical note: once upon a time, the federal government actually paid off all of its debt. And who was the paragon of fiscal conservatism who pulled it off? Why, none other that the grand icon of the Democratic Party, Andrew Jackson.
The present fiscal shitstrom is really no surprise. The Republicans (Whigs, Federalists, Cro-Magnons, whatever) have always worked in favor of the monied interests.
Also, please note that I did not predict a currency crisis over the next 0-6 years: I merely did not rule one out. A return to fiscal responsibility, where budget deficits are high, but falling as a share of GDP, could conceivably occur following regime change.
The big question mark occurs when the boomers retire en masse. Clinton planned for it: W undid his hard work.
1950 + 60 = 2010 = The clock starts, in my mind. [Hm. 1964+76=2040 might be an arbitrary endpoint.]
I will, however, stick my neck out and say that 30 year T-Bond rates will exceed 5% in 2007 assuming (reasonably) that no recession occurs before (say) Apr 2007.
That is good news! All we need are some politicians that are neither stupid nor greedy!
As for who is more fiscally responsible, the clear answer is “Democratic Presidential Administrations”.
The measure of fiscal responsibility is the change in the budget deficit. Nobody sane would immediately switch from W-level profligacy to Clinton level responsibility in one year.
I’ll repost some of my remarks from July 2004:
__________________________________________________________ [Start Jul 2004]
This ignorance dissemination is embarrassing.
Clinton produced budget surpluses in 1998, 1999 and 2000. In case you don’t remember, he was a Democrat.
Nixon produced a small surplus in one year.
Furthermore, both Ron Reagan and GWB have made budget deficits larger as a share of GDP.
Let’s look at the numbers.
Date def/gdp ch def/gdp Ave Deficit
1977 -2.6% Democrat
1978 -2.6% 0.1% Democrat
1979 -1.6% 1.0% Democrat
1980 -2.6% -1.1% Democrat
1981 -2.5% 0.1% Republican
1982 -3.9% -1.4% Republican
1983 -5.9% -2.0% Republican
1984 -4.7% 1.2% Republican
1985 -5.0% -0.3% Republican
1986 -5.0% 0.1% Republican
1987 -3.2% 1.8% Republican
1988 -3.0% 0.1% Republican -4.2%
1989 -2.8% 0.3% Republican
1990 -3.8% -1.0% Republican
1991 -4.5% -0.7% Republican
1992 -4.6% -0.1% Republican -3.9%
1993 -3.8% 0.8% Democrat
1994 -2.9% 1.0% Democrat
1995 -2.2% 0.7% Democrat
1996 -1.4% 0.8% Democrat
1997 -0.3% 1.1% Democrat
1998 0.8% 1.1% Democrat
1999 1.4% 0.6% Democrat
2000 2.4% 1.1% Democrat -0.8%
2001 1.3% -1.1% Republican
2002e -1.0% -2.3% Republican
Ronald Reagan’s deficits averaged at 4.2% of GDP. Bush Sr.'s deficits averaged at 3.9%. Note that their average is worse than Carter’s largest deficit. Pathetic. Including his surpluses Clinton had an average deficit of 0.8%. Quite a bit smaller.
The Economist’s estimate of the current US budget deficit is 4.6% of GDP [UPDATE FEB 2006: 3.7% for 2005].
The Democratic Party is clearly the party of Greater Fiscal Responsibility. Oh, for the days of Dwight Eisenhower.
(Caveat: Deficits are good during a recession. The problem is having a long-term or even medium term chronic deficits).
[/END Jul 2004]
Taking a tough-minded look at outlays, one sees that the Federal government is basically a large pension program that happens to have an army. Social security and medicare are for old age and a huge chunk of medicaid goes into nursing homes and long term care.
When the Republican Party has a de facto platform of higher military spending and tax cuts forever, it stands to reason that budget deficits will be the outcome. The only conceivable alternative would be top-down health care reform, but Republicans are ideologically averse to the sorts of cheaper systems that produce healthier outcomes abroad.
Faced with these grim fundamentals, what is the fiscally responsible Republican to do?
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Join The Concord Coalition.
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There are a fair number of decent Republicans at the state and local level. In Congress though, there really is only one fiscally responsible Republican who is a military hawk and traditional conservative but will hold the line at budget busting tax cuts: Joe Lieberman.
Ha, trick question! There is no such thing as a fiscally responsible Republican!
Suckers.
Yeah. If he wins the thing every time for the next 1,800,000 weeks (more than 34,000 years) we can pretty much get back in the black.
Or maybe all of America’s billionaires will chip in $2 or 3 billion each and we can cut the thing down to $8.9 trillion or so. Rejoice!
But seriously… don’t worry about it. We are never going to have to repay **any ** of it. And neither will our children.
Rapture ensues.
Ah, but it was not always thus.
Part of the problem is just shrugging your shoulders and saying “Both parties are to blame.” This just is not the case. Look at the data and stop repeating the mantra. Republican ideologies really do yield poorer economic results. Failing to recognize this and wallowing in bipartisan false equivalency is the real morass. It’s a bit like crying “Global warming is terrible, but fossil fuel burning and energy conservation are both to blame! We’ve tried both ways, and nothing works, so stop your partisan bickering!”
Every whore was once a virgin.