Kudos for the numbers work.
I dug up a MarketWatch article which ballparks the Iraq bonanza at +0.5% annual
Although the war has stimulated the defense industry, I think it’s safe to say that the 0.5% is mostly being poured into a bottomless hole, and in economic terms is mainly feeding the deficit.
No, that is not why. The public deficit is down because intragovernmental borrowing is up. The total deficit has been hovering around the same mark. While the public deficit went from $380 B to $290 B to $240 B, the total deficit went from $600 B to $550 B to $570 B. So, while borrowing has gone down a little bit, especially when you factor in inflation or GDP, it’s not going down at the pace the administration is claiming.
cite: http://www.publicdebt.treas.gov/opd/opdpdodt.htm
At the current pace, when Social Security starts calling back its loans, the government is going to be in big financial trouble.
The chart seems to hurt your arguments more than help them. Bush took the deficit up to WWII levels, and now it’s supposed to be good because he has them down to Reagan levels? And check out the years between 1992 and 2000. A $300 B deficit gradually gets taken town to nothing and then to a small surplus. Too bad we couldn’t have another administration like that.
Pelosi’s first 100 hours seem like a reasonable place to start.
Minimum wage increases are inflationary but the inflation is spread throughout society so its good for the people getting the minimum wage increase and not as so good for anyone who was making just above minimum wage right before the minimum wage increase. For anyone making much more than minimum wage (say twice minimum wage or better), the inflationary effect is probably going to be negligible.
The economy as a whole may be doing better but there have been recent reports that the vast majority of Americans are seeing a reduction in their inflation adjusted income and that the vast majority of the prosperity is being enjoyed by a small sliver of society. A much larger segment of society is temping or working part-time or working at marginal jobs. None of these people have medical benefits or retirement plans, they are living hand to mouth. Maybe that is just the result of a globalizing economy and the standard of living of the bulk of our nation is slowly being transferred from $40,000/year Americans to $4000/year Chinese. Maybe its just cyclical or maybe it was always this way and we have just forgotten. The fact remains that the bulk of America is not better of today (on an inflation adjusted basis) than they were in 2000. Sure there was a terrorist attack but that was 5 years ago and there has been over 3 trillion dollars of deficit spending since then. You’d think that 3 trillion dollars of deficit spending might be enough to take care of any lost economic activity from 9/11 and Katrina.
Cite, please?
Taxes went down for everyone they just went down more for the wealthy than the middle class at the expense of a higher national debt (it was under 6 trillion in 2000, its almost 9 trillion today, a trillion here a trillion there and pretty soon we’re talking about real money).
Regarding Medicare, I thought the problem was that Medicare (in its role as an insurer) was not allowed to use its market power to negotiate lower drug prices with phamaceutical companies like the national plans in Canada and other places with national health plans.
The economic effects of Katrina were larger than the effects of 9/11 (unless you include the costs of the Department of Homeland Security, additional costs of security to the private sector and the Iraq War, which doesn’t really seem fair). In all, if you carve out things like the cost of additional security at the airports (but not the cost of laid off airline workers), if you carve out the war in Iraq, the direct and indirect cost of Katrina and 9/11 put together do not equal 1 trillion dollars, it is only with the inclusion of the war in Iraq and the additional security costs that were prompted by 9/11 that would push us over 1 trillion. The way I think of it is like this. We get in a car accident with a big SUV and we have airbags installed on our car and we shoot some guy down the street I don’t like who happens to drive an SUV, the cost of repairing the car and loss of use of the car are all costs of the accident but getting the additional airbags and the cost of shooting some guy down the street I don’t like but who drives an SUV are not costs of the accident.
You know that the first round of Bush tax cuts were in June 2001, right? It affected all income earned from January 1 2001 forward.
There were additional tax cuts since then. Why pick the 2003 tax cuts as a starting point? I mean the 2001 cuts were the ones that reduced the tax rate and the estate tax. Why not start with the date when his first (and largest) tax cuts went into effect?
The top 1% receives about 40% of all tax savings under the combined Bush tax cuts and by 2010 they will be receiveing more than half of the tax savings.
I believe the cost of 9/11 is only 1 trillion dollars if you include the cost of the war in Iraq and the increased overhead costs that people are investing in security.
Well, I guess if you look at the economy from when Bush took office until when the speech was made, it seems like it did worse than the Carter administration as a whole. Of course some of this was due to 9/11 but lets not forget that there were a host of other economic factors (also out of bush’s control) that aggravated the situation: the dotcom bust, a bunch of large bankruptcies (Enron, Worldcom, etc.), just the plain old business cycle. I guess my point is that Bush is about as responsible for the economic growth today as he was for the economic crunch of yesteryear. What he may be responsible for (and even this is arguable), is the increasing disparity in income.
An analogy might be useful here: Let’s say that I borrowed $1000 off of each person’s credit card, gave most people $500 of it back in cash, except for the richest 2% who I gave $25500 back…and then I claimed that everyone had benefitted. That would be, roughly speaking, what has been done here.
(Okay, the reality is slightly more complicated since the tax reductions varied according to a lot of factors, the money wasn’t really borrowed from each person’s credit card but rather our collective credit card so that it is still somewhat ill-defined who will have to pay it off as it will depend on future tax policies, and some people believe that the lower tax revenues would restrain future government spending [although it is hard to see much evidence of this at least as of yet]…but you get the basic idea.)
The multiplier is certainly smaller when it is spent on FOREIGN infrastructure.
But it is even worse than that because one has to realize that most of these costs (namely, repairing the car, getting the additional airbags, and shooting the guy down the street) are going to show up as contributions to the GDP! The loss of the use of the car is not going to directly be counted against the GDP except to the extent that such loss of use reduces your economic output.
So, my point is that there are certainly some costs of 9/11, such as a (mainly temporary) reduction in air travel, that will lower the GDP but many of the other costs (such as rebuilding and launching useless wars against unrelated people) will actually raise it.
Don’t have one but there were several threads going a few weeks (months?) back about how per capita income of the middle class has actually dropped half a percent in inflation adjusted dollars sometime in the last few years despite increasing overall GDP.
All simplifications aside, you do cite a valid criticism of GDP, but the fact of the matter remains is that the calculation and use of GDP has remained consistent ever year since its inception and is as universally recognized a term as anyone can ask for.
Remember, these economic indicators are objective statistical values given for a very complex set of data. Therefore, making statements like, “Worst economy since HH” is as misguided a statement as “Bush tax cuts have created this prosperity.” Delving so deep into the numbers, to explain any type of rise or fall or miscalculation is nothing more than Monday morning armchair quartebacking. Trying to figure out the value of a tax cut (a non-economic indicator) and its impact on the economy is as arduous a fruitless exercise as trying to figure out military spending (a budgetary cost) effect on the net increase to GDP.
Back to the OP, compared to today’s numbers, John Kerry statement in 2004 means he is full of shit, both on a straight up comparrison as well as a relative valuation compared to the period before it (in the case of HH, that would be 1929-1932).
If I want to get in on the Monday morning fun, I would say that Kerry is even more full of shit than Bush saying his tax cuts created a propserous economy.
While that’s true, it doesn’t change the fact that partisans will include or exclude off-budget numbers as it fits their needs, so deficit as a percentage of the GDP (which has been trotted out here) can become next to worthless as a measuring tool.
Absolutely no disagreement from me on this one. Both are full of shit, but in this case, Kerry is more so.
Kerry really should have stuck to “Bush lied to us about Iraq but now that we are there, I am the man to get us out not the shitbag we have for president right now” noone cared about the economy in 2004.
GDP is a valid number it just means that we have to also keep an eye on deficits.