# When Did We Cease Having a Government That Had Fiscal Responsibility? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [December 30, 2015, 6:29am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707 "2015-12-30T06:29:56Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 2, 2016, 4:02pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/61 "2016-01-02T16:02:16Z")
> [@botsgotme](#): > > Totally incorrect. Reagan did cut taxes, and tax revenue surged (as he predicted). Do you have a cite for this? [Here’s a graph](http://delong.typepad.com/sdj/rev_spen_exss3.jpg) which shows tax revenue (blue line) plummeting during the early Reagan years. Compare revenue as % of GDP in the 1960’s and late 1990’s – both times of record prosperity – with the present level. ---
**Author:** ![samclem](https://avatars.discourse-cdn.com/v4/letter/s/a9a28c/32.png) [@samclem](https://boards.straightdope.com/u/samclem)\ **Post date:** [January 3, 2016, 1:18am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/62 "2016-01-03T01:18:52Z")
> [@botsgotme](#): > > Agree completely…the “invisible hand” of the market works much better than the corrupt government we have. take energy-we have a wonderful system that delivers high quality gasoline to us, at a very low cost-imagine if the US Government supplied gasoline? It would be $200/gallon. If you would quit using hyperbole, people might take you more seriously. > [@botsgotme](#): > > As Dr. Milton Friedman once observed “if you put the Federal Government in charge of the Sahara Desert, in five years there would be a shortage of sand”. Actually, Milton Friedman(a conservative economist who I respect), **didn’t** say that in relation to the U.S. Government. Rather it was a quip about the 1980 government of Dubai. A scholarly cite rather than a facile internet attribution can be found at [Quote Investigator] ([Quote Origin: A Shortage of Sand in the Sahara – Quote Investigator®](http://quoteinvestigator.com/2014/12/09/sand/)) ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [January 3, 2016, 12:05pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/63 "2016-01-03T12:05:59Z")
The goldbugs and Illuminati conspiracy nuts need to find a different darling than Milton Friedman. [He was a staunch advocate of modern banking and Quantitative Easing.](http://www.theatlantic.com/business/archive/2013/08/rand-paul-loves-milton-friedman-but-milton-friedman-would-have-hated-rand-paul/278589/) ---
**Author:** ![Esox\_Lucius](https://avatars.discourse-cdn.com/v4/letter/e/848f3c/32.png) [@Esox\_Lucius](https://boards.straightdope.com/u/Esox_Lucius)\ **Post date:** [January 3, 2016, 10:24pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/64 "2016-01-03T22:24:56Z")
**When Did We Cease Having a Government That Had Fiscal Responsibility?** The correct answer is 2001 to 2009. > [@botsgotme](#): > > We now have a Federal Government that flings money around like water-deficits of hundreds of billions are the order of the day. what made the Government such a spendthrift? Last time I looked, the deficit has been shrinking steadily while Obama has been in office, as if he’s actually been doing something about it. Meanwhile, the Republicans wail and moan about his reckless spending.😕 If you’re getting your information from them, you might want to check your sources first. ---
**Author:** ![Annadroid](https://avatars.discourse-cdn.com/v4/letter/a/db5fbb/32.png) [@Annadroid](https://boards.straightdope.com/u/Annadroid)\ **Post date:** [January 3, 2016, 10:30pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/65 "2016-01-03T22:30:11Z")
“When Did We Cease Having a Government That Had Fiscal Responsibility?” Decades ago, if ever. When gov’t allows itself to be influenced more by business and corporate concerns more than the people it is supposed to be working for, it has become irresponsible and in more ways than simply fiscally. ---
**Author:** ![Horatio\_Hellpop](https://avatars.discourse-cdn.com/v4/letter/h/e5b9ba/32.png) [@Horatio\_Hellpop](https://boards.straightdope.com/u/Horatio_Hellpop)\ **Post date:** [January 4, 2016, 12:12am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/66 "2016-01-04T00:12:26Z")
1. George III waged a vanity war against France, both in Europe and America, made unsustainable claims for the habitable parts of the North American continent (like western borders for North Carolina, Georgia, Pennsylvania and Virginia that extended to the Pacific), and decided to pay for the whole thing on the backs of the American colonists. Two subsequent consequences: American colonists waged a revolution, and afterwards, their taxes actually went up. So yeah, I’m going with 1754. ---
**Author:** ![drewder](https://avatars.discourse-cdn.com/v4/letter/d/57b2e6/32.png) [@drewder](https://boards.straightdope.com/u/drewder)\ **Post date:** [January 4, 2016, 3:55pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/67 "2016-01-04T15:55:47Z")
Andrew Jackson ---
**Author:** ![billfish678](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@billfish678](https://boards.straightdope.com/u/billfish678)\ **Post date:** [January 4, 2016, 4:00pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/68 "2016-01-04T16:00:11Z")
> [@septimus](#): > > The goldbugs and Illuminati conspiracy nuts need to find a different darling than Milton Friedman. [He was a staunch advocate of modern banking and Quantitative Easing.](http://www.theatlantic.com/business/archive/2013/08/rand-paul-loves-milton-friedman-but-milton-friedman-would-have-hated-rand-paul/278589/) That sounds dirty if you ask me. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [January 4, 2016, 4:16pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/69 "2016-01-04T16:16:25Z")
> [@botsgotme](#): > > Agree completely…the “invisible hand” of the market works much better than the corrupt government we have. You seem to have a understanding of the economics that is like a poor cartoon summary of market economics. as a economist this saddens me. ideologicsl slogans are not good market economics, not any more than the marxist slogans as a point of reality, in the proper analysis of government action and spending, the use of debt is not absence of fiscal responsibility, it is a tool like any other, and just like for companies, makes sense when the price is right. Also in this in real market economics, one does not analyze government action as automatically bad - this is ideology that is only the mirror image of the bolsheviks - or good. Becoming a mirror of the bolsheviks is not market economics it is creating a inverted marxism. ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [May 24, 2016, 1:09pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/70 "2016-05-24T13:09:26Z")
Bumped. An interesting essay from _Time_, warning of the current and future Federal debt: [James Grant: Can America Afford Its Debt? | Time](http://time.com/4293549/james-grant-united-states-debt/) I’m no economist, but it certainly gave me pause. What do you think? ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [May 24, 2016, 2:10pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/71 "2016-05-24T14:10:23Z")
Wacky. I see elements of Flat-Tax, anti-Fed and goldbug in his essay. He’s also a winner of the Hayek prize so we have some idea where he’s coming from. He also knows that he’s straddling that line because he also tries to disclaim while claiming. Good luck with that. OK, right, debt is bad. Can’t argue with that. But to equate it to a cost per American is to overlook some basic facts such as that we don’t have to pay it off immediately. So it’s not as if someone from the IRS is going to show up at my door with an invoice. The one thing in the essay that is solidly true - among a sea of opinions in masquerade - is that the idea of borrowing will continue until the lenders raise interest rates to the point where we can’t borrow cost-effectively anymore. For the moment, interest rates for the Department of the Treasury as so low it’s almost ludicrous. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [May 24, 2016, 2:54pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/72 "2016-05-24T14:54:45Z")
I found this site instructive: > **[US Government Finances: Spending, Deficit, Debt, Revenue since 1792](https://www.usgovernmentspending.com)** > > US federal spending for FY2023 is $6.37 trillion. Total spending, including federal, state, local, is estimated at $9.55 trillion. Source: OMB Historical Tables, Census Bureau. It didn’t seem too alarmist in either direction. I concluded from the data presented that the deficits and debt is not a short-term threat but it is a concern. The aftermath of the 2008-9 recession is the 3rd worst spike in deficits/debt after the 2 world wars. However, it was a distant 3rd. Anyone sounding alarms about the high deficits of recent years needs to explain why far larger deficits did not cause anything like the problems they are fearing. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [May 25, 2016, 7:04am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/73 "2016-05-25T07:04:05Z")
> [@Horatio\_Hellpop](#): > > 1. George III waged a vanity war against France, both in Europe and America, … • George III did not become king until 1760; • his grandfather, George II, presided over the Seven Years’ War, but it was William Pitt, the Prime Minister, who actually waged the war. • calling it a “vanity war” is rather dubious, since amongst other things, the end result was complete British control of the eastern colonies in North America, including Nova Scotia and Quebec, formerly French. > [@Horatio\_Hellpop](#): > > …made unsustainable claims for the habitable parts of the North American continent (like western borders for North Carolina, Georgia, Pennsylvania and Virginia that extended to the Pacific), … • the claims of the colonies on the eastern seabord were based on the original grants establishing each colony, [made in the late 17th and early 18th centuries](https://en.wikipedia.org/wiki/State_cessions#Background), long before George III was on the throne, and pre-dating the Hanoverian dynasty itself. > [@Horatio\_Hellpop](#): > > …and decided to pay for the whole thing on the backs of the American colonists. … • the exact cost of the Seven Years War is difficult to calculate, but a rough estimate can be found in the increase in the British national debt, which went from [£75 million in 1754 to £133 million in 1763…](http://www.taxhistory.org/www/website.nsf/Web/THM1756?OpenDocument). • there was no attempt to tax the British colonies during the Seven Years War, other than routine customs duties which amounted to approximately £2,000 annually during the 1750s. • the British did not try to raise revenue from colonial taxes until the Revenue Act of 1762, which increased the revenue from duties to more than £30,000 a year in duties. • while this was a substantial increase from the colonial perspective, it was a drop in the bucket in trying to pay down the British national debt, which fell primarily on the British themselves. • The Revenue Act was never an attempt to pay off the whole war on the backs of the colonists, but rather to pay for the current British garrisons in the colonies. > [@Horatio\_Hellpop](#): > > … Two subsequent consequences: American colonists waged a revolution, and afterwards, their taxes actually went up. So yeah, I’m going with 1754. For the reasons given above, I disagree that 1754 was in any way a decisive point in British North American fiscal responsibilities. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [May 25, 2016, 7:10am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/74 "2016-05-25T07:10:39Z")
With respect to the Time article, anytime I see the US dollar, one of the soundest if not the soundest currency in the world, described as “Monopoly money” I stop reading. As well, this line: “You may struggle to pay that midteens rate on your outstanding credit-card balance. The Treasury gets by paying an average of just 1.8% on that portion of the debt, held by savers and investors both here and abroad.” Yes, citizens struggle with credit interest rates in the mid-teens, while the federal government gets by with paying 1.8% interest. Why would that be? Could it be that sophisticaed investors, both in the US and abroad, have made the assessment that US treasuries are the safest investment going, compared to loaning money to Jane and John Doe in Anytown USA, who on average are such bad risks that they have to pay interest in the mid-teens? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [May 25, 2016, 8:52am UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/75 "2016-05-25T08:52:52Z")
As a radical centrist, I think shrill voices on the right (“The sky is falling! Turn off the SocSec spigots before we’re forced to default!”) and on the left (“Sovereign debt is no problem. The more the merrier!”) are both wrong. _ **In good times we need to reduce the federal debt.** _ Unfortunately the good times aren’t here. Recovery from the Great Recession is still anemic in many countries. Solution, of course, is not to cut crippled government programs even further. Conservatives lose sight of the fact that transfer programs like SocSec and Medicare don’t redirect productive wealth to an inefficient government, but simply provide for needy people from the pockets of those who have more than they need. Instead we need to restore tax rates to the saner levels of the 1980’s and 90’s. > [@Annadroid](#): > > When gov’t allows itself to be influenced more by business and corporate concerns more than the people it is supposed to be working for, it has become irresponsible and in more ways than simply fiscally. Much of the cry for lower individual taxes comes _not_ from corporations, but from middle-class voters brainwashed into thinking the Democrats are out to steal their money. Answering OP’s question: As recently as the 1990’s the Clinton Administration made great progress in debt reduction. Rational centrists and liberals were then dismayed to see GWB waste the prudent savings on a nonsensical campaign of “War for everyone! To be financed with Tax Cuts!!!” ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [May 25, 2016, 2:14pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/76 "2016-05-25T14:14:16Z")
All good to know. Thanks. I am reassured. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [May 25, 2016, 2:39pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/77 "2016-05-25T14:39:34Z")
> [@Elendil\_s\_Heir](#): > > Bumped. > > An interesting essay from _Time_, warning of the current and future Federal debt: [James Grant: Can America Afford Its Debt? | TIME](http://time.com/4293549/james-grant-united-states-debt/) > > I’m no economist, but it certainly gave me pause. What do you think? I read that when it came out. When he got to the part about how the tax code is too complicated, and we should consider a flat tax instead, I knew he was talking out of his ass. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [May 26, 2016, 2:42pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/78 "2016-05-26T14:42:32Z")
In my experience, the advocates for a flat tax are not, shall we say, intellectually rigourous. They argue that it will be simpler and revenue neutral, eliminating the higher tax brackets. Right, that means you just gave Bill Gates and Warren Buffet a tax cut, by lowering their tax rate. That means less money flowing into the federal treasury from Warren and Bill. But if the flat tax is revenue neutral, that means there has to be an increase in tax revenue from someone else. Who will that be? Seems to me that there are only two options: 1. the flat tax will increase the taxes paid by middle and lower income folks, to offset the loss of revenue from the Bills and Warrens, or, 2. the flat tax will not increase the taxes on lower and middle income folks, in which case it is not revenue neutral. So which is it, and why do the flat tax advocates not address this point? (Some do, by saying lowering income taxes on Warren and Bill will increase productivity long run, and therefore tax revenue will stay the same, but that’s pretty speculative, and even if it occurs over the long term, doesn’t explain how the flat tax is revenue neutral from the moment it is implemented). PS - I’ve got no grudge against Warren and Bill; both very smart guys who’ve worked hard for their money. They’re simply good examples of mega-wealthy, who would get a tax cut from the flat tax. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [May 26, 2016, 2:52pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/79 "2016-05-26T14:52:08Z")
One final comment on the Time article. It’s got the sub-heading “Make America Solvent Again.” That’s a misuse of the term solvent. The classic definition of insolvency is that either: 1. The debtor’s debts exceed assets, or 2. that the the debtor is unable to meet its financial obligations as they come due. Neither of those is the case in the United States. The US has high debt, yes. But on the first test, what are its assets (i.e. its revenue stream)? Not the national parks and federal land and so on - the “assets” of a government are the taxpayers, who are funding it. And the US has one of the wealthiest tax bases in the world. Test 1 for insolvency is not met. Test 2 is obviously not met. The US has never defaulted on its debts (except for one relatively minor glitch over a particular bond issue in the late seventies, if I recall correctly, and even then the money was paid in full, just late). That’s why Treasuries are at 1.8%: creditors know that the US has one of the best debt-repayment records in the world.\* So the US is not insolvent, and TIME is scare-mongering. \*And that is why Ted Cruz should never be anywhere near the White House, because he is prepared to sacrifice the soundest sovereign credit rating in the world, painstakingly built up over **two centuries** , for short-term political gain. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [May 26, 2016, 4:37pm UTC](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707/80 "2016-05-26T16:37:04Z")
> [@botsgotme](#): > > Agree completely…the “invisible hand” of the market works much better than the corrupt government we have. take energy-we have a wonderful system that delivers high quality gasoline to us, at a very low cost-imagine if the US Government supplied gasoline? It would be $200/gallon. As Dr. Milton Friedman once observed “if you put the Federal Government in charge of the Sahara Desert, in five years there would be a shortage of sand”. Foolishness. The “invisible hand” doesn’t care if it dumps toxic waste in the ground, poisoning everyone. It doesn’t care if your meat will kill you, or your water is full of lead and the above toxic waste as long as they make a profit. The invisible hand looks at disasters and shortages and sees only profit making opportunities. The “Invisible Hand” is fucking amoral. It is the government that forces morality upon it. And the Government is us. Not some bizarro foreign entity forced upon us. [Previous page](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707.md?page=3) [Next page](https://boards.straightdope.com/t/when-did-we-cease-having-a-government-that-had-fiscal-responsibility/741707.md?page=5)