Reagan Insider: GOP Destroyed US Economy

[sallylou]

Give the Democratic party a little of the credit. After all, they helped with repealing the Glass-Steagall Act and giving us NAFTA and the China trade bill.

Who is responsible for the wacky accounting regulations? That fun off-book, marked to fantasy accounting? Probably both parties. We haven't marked to reality yet have we?

 

[netrox]

Here's a rational and pragmatic outlook on economics and government spending:

"Deficit fears do have a real foundation. But it is not, as some assume, simply that government spending is out of control. Our current deficits result from the recent financial crisis and recession, and they will recede as the economy recovers. But the federal government also faces a long-term, structural gap between its revenues and its spending commitments — a gap due to policies established decades ago. [uh oh... Reagan, Bush, Bush]

To see where our current deficits come from, we need only look at the budget office’s baseline projections. In January 2008, the budget office projected that total government debt in private hands — the best measure of what the government owes — would fall to $5.1 trillion by 2018 (23 percent of G.D.P.). As of January 2010, the budget office now projects that debt will rise to $13.7 trillion (more than 65 percent of G.D.P.) — a difference of $8.6 trillion. Of this change, 57 percent is due to decreased tax revenues resulting from the financial crisis and recession; 17 percent from increases in discretionary spending, much of it the stimulus package necessitated by the financial crisis; and another 14 percent to increased interest payments on the debt — because we now have more debt."

"Therefore, the coming battle over the Bush tax cuts is of real importance. According to the Congressional Budget Office, extending the Bush tax cuts would add $2.3 trillion to the total 2018 debt. The single biggest step our government could take this year to address the structural deficit would be to let the tax cuts expire.

If the goal is to encourage growth and employment immediately, it would be better to let the tax cuts expire and dedicate some of the increased revenue to real stimulus programs."

The Bush Tax Cuts and Fiscal Responsibility - Economix Blog - NYTimes.com

 

[jillio]

Here's a rational and pragmatic outlook on economics and government spending:

"Deficit fears do have a real foundation. But it is not, as some assume, simply that government spending is out of control. Our current deficits result from the recent financial crisis and recession, and they will recede as the economy recovers. But the federal government also faces a long-term, structural gap between its revenues and its spending commitments — a gap due to policies established decades ago. [uh oh... Reagan, Bush, Bush]

To see where our current deficits come from, we need only look at the budget office’s baseline projections. In January 2008, the budget office projected that total government debt in private hands — the best measure of what the government owes — would fall to $5.1 trillion by 2018 (23 percent of G.D.P.). As of January 2010, the budget office now projects that debt will rise to $13.7 trillion (more than 65 percent of G.D.P.) — a difference of $8.6 trillion. Of this change, 57 percent is due to decreased tax revenues resulting from the financial crisis and recession; 17 percent from increases in discretionary spending, much of it the stimulus package necessitated by the financial crisis; and another 14 percent to increased interest payments on the debt — because we now have more debt."

"Therefore, the coming battle over the Bush tax cuts is of real importance. According to the Congressional Budget Office, extending the Bush tax cuts would add $2.3 trillion to the total 2018 debt. The single biggest step our government could take this year to address the structural deficit would be to let the tax cuts expire.

If the goal is to encourage growth and employment immediately, it would be better to let the tax cuts expire and dedicate some of the increased revenue to real stimulus programs."

The Bush Tax Cuts and Fiscal Responsibility - Economix Blog - NYTimes.com

Of course it is more multi-layered than simply overspending. I think the majority understand that. It is only the one that attempts to lay everything at Obama's feet that seems to think the deficit has a cause as simple as he is.

 

[darkdog]

Um, what about Americans? They spent like there's no tomorrow too.

Do you know anyone for whom that turned out well? Why should it work better for us collectively than for individuals?

And what about taxes being too low? We don't pay enough taxes to match the services we demand. It's like demanding that M&M be 5 cents. It just can't operate like that.

There are some who demand more and more and more. Those are called liberals. The rest of us want to scale the federal government back to perform just its constitutional duties. I can't help but wonder if they might be less incompetent in their legitimate duties if they only focused on those and stopped trying to do everything in the world.

Cut spending and you'll hear plenty of angry voters demanding that they get their jobs back... like police, teachers, firemen, public officials, etc.

Since Democrats won Congress in 2006, federal spending in real dollars has increased 36%. I'd like to see it go back down to at least where it was before that. As I recall, police, teachers, and firemen were plentiful and living comfortably.

You have to spend to invest. That's the way it works.

And look how well that turned out. Look, when they passed the $800 billion stimulus bill, they had to get the money from somewhere, so they got it from selling treasury bonds. That meant people out there were willing to invest $800 billion in something. If they didn't invest in government, they would have invested that $800 billion in the private sector. The real question is can the government direct resources more efficiently than the private sector. You seem to think the answer is yes. I think it's no. Government tends to put resources to places that are politically convenient but where no rational individual would want to invest his own money.

Our current deficits result from the recent financial crisis and recession, and they will recede as the economy recovers.

That's not what the current projections say. It's 13 figure deficits as far as the eye can see.

a gap due to policies established decades ago. [uh oh... Reagan, Bush, Bush]

The question is which policies and which decades? It's Social Security and Medicare that are going to kill us. The projections are off the chart. [uh oh... FDR, Johnson]

For me, I don't care about tax rates so much. The arguments about tax rates are really arguments about when we're going to pay for all the spending we're doing. It's the spending that bothers me. It's simply unsustainable. In theory, I wouldn't mind paying more taxes to pay down the deficits. In reality, I have two reasons to oppose it. Number 1- right now is a horrible time to raise taxes on businesses, especially small businesses. Number 2- As soon as taxes increase and the government starts to see more revenue, politicians are going to say "Look at all this new revenue! Let's start spending it on new programs and stuff!" I have zero trust they'll actually use it to pay down the debt, so I'm standing firm against any tax hikes. Cut the spending and reform the entitlement programs. That's the only thing I'll accept.

 

[kokonut]

There is no adding to a debt from tax cuts, Netrox. The spending is the root of this problem, not tax cuts. Like DD said, ever since Democrats took control of Congress after 2006 spending has increased 36%. There is no rhyme or reason to spend 6 times as much money in 2009 which is equivalent to Bush's last 6 years of spending. This simply puts us on a quicker path on unsustainability. Even in Bush's last term you had 3 years where the deficit spending dropped each year except for the last year with the market began to bust.

DD, love your analysis. I agree with your assessment and comment. You hit it squarely on the head of a nail.

Again, you don't spend money you don't have. It makes no sense to max out on 20 credit cards if you don't have the means to pay it off since you'd have mounting, combined interest rates piling up faster and faster. This is exactly where we are folks. The problem is spending. We need to see limited govt and not a forever expanding govt in every cranny and nook in our life.

 

[Beowulf]

There is no adding to a debt from tax cuts, Netrox. The spending is the root of this problem, not tax cuts. Like DD said, ever since Democrats took control of Congress after 2006 spending has increased 36%. There is no rhyme or reason to spend 6 times as much money in 2009 which is equivalent to Bush's last 6 years of spending. This simply puts us on a quicker path on unsustainability. Even in Bush's last term you had 3 years where the deficit spending dropped each year except for the last year with the market began to bust.

DD, love your analysis. I agree with your assessment and comment. You hit it squarely on the head of a nail.

Again, you don't spend money you don't have. It makes no sense to max out on 20 credit cards if you don't have the means to pay it off since you'd have mounting, combined interest rates piling up faster and faster. This is exactly where we are folks. The problem is spending. We need to see limited govt and not a forever expanding govt in every cranny and nook in our life.

So your position is to keep spending, but not so much? How much?

 

[kokonut]

I said, don't spend money you don't have, especially if you cannot pay it off in a timely manner. It's real simple. You have a budgeted amount allocated for the year. Just don't go beyond that budgeted amount. In other words, let's stop with the continual deficit spending. It makes no sense to spend the same amount of money in one year to equal that of Bush's deficit spending in the last 6 years...money we don't have and on top of that mounting interest owed into the several hundred billion dollars a year.

Maybe it's time for you to seriously take to heart CBO's recommendation and help avoid financial disaster within the next decade.

Under OMB’s new estimate of the President’s budget, the debt held by the public would grow continuously as a share of the economy, passing 60 percent this year, 70 percent in 2012, and 77 percent in 2020.

• These estimates paint a far better picture than CBO’s, which estimate debt held by the public reaching 90 percent of GDP under the President’s proposed policies. This is in large part because OMB’s economic growth assumptions are notably on the higher-end of
consensus ranges. Though we hope OMB’s projections are accurate, we should not rely on such assumptions.

• The Administration has not put forward policies that would meet its fiscal goal of bringing the budget into primary balance by 2015 and achieving fiscal sustainability over the longer-term. Instead, the Administration is relying on the fiscal commission to come up with a
solution. While CRFB is hopeful that the fiscal commission will succeed, the Administration needs a Plan B in case the commission does succeed or Congress does not heed its recommendations.

• And our main conclusion? It is urgent that we develop a plan to change course soon! Policymakers have to get serious about making changes to the budget path. While we do not have to enact large spending cuts or tax increases immediately as the economy continues to limp along, a plan must be put in place as quickly as possible and
the policies can be phased in more gradually, or we risk very severe consequences from our fiscal procrastination.

The Mid-Session Review | Committee for a Responsible Federal Budget

Again, maxing out on your 20 credit cards and getting another credit card to help solve previous spending problem is not a solution here. It's spending money you don't have. It's simply irresponsible. Reckless. Foolish.

 

[Beowulf]

I said, don't spend money you don't have, especially if you cannot pay it off in a timely manner. It's real simple. You have a budgeted amount allocated for the year. Just don't go beyond that budgeted amount. In other words, let's stop with the continual deficit spending. It makes no sense to spend the same amount of money in one year to equal that of Bush's deficit spending in the last 6 years...money we don't have and on top of that mounting interest owed into the several hundred billion dollars a year.

Maybe it's time for you to seriously take to heart CBO's recommendation and help avoid financial disaster within the next decade.



The Mid-Session Review | Committee for a Responsible Federal Budget

Again, maxing out on your 20 credit cards and getting another credit card to help solve previous spending problem is not a solution here. It's spending money you don't have. It's simply irresponsible. Reckless. Foolish.

The reason I asked is because we have already passed the point of no return. Even if we do not spend a dime from now on, it will take several generations to pay off the debt. You want a limited government. That is by spending money we don't have.
I am not picking on you, kokonut. It is an interesting dilemna we are in, eh?

 

[kokonut]

The point of no return is a nuclear war. Here it's about making the hard and right choices.

I'd say just tap into our massive oil deposits for us to use and sell the excess to other countries that want it. Use the money to help pay down the debt along with better spending control, limit govt, and better investment in our businesses rather than let the govt do everything which has been proven to be a disaster.

 

[LinuxGold]

Did you comprehend it?

Do you comprehend it too? The complexity of it all? Can you break down for us, the tree of the fiscal system?

Thanks.

 

[Beowulf]

Do you comprehend it too? The complexity of it all? Can you break down for us, the tree of the fiscal system?

Thanks.

She was referring to the article itself, not the complexity of finances.
NO ONE can break it down to anyone's satisfaction.

 

[LinuxGold]

She was referring to the article itself, not the complexity of finances.
NO ONE can break it down to anyone's satisfaction.

Comprehension include the complete understanding of what article's main theme, how it apply to our current problem. That is what the argument is going on in this thread.

My main point is -- ALL of our opinions collide because our mindset of what things should be ALWAYS differ. I might comprehend this article differently than how Jilo think we should.

I need her COMPLETE interpretation of how she understood so we can redefine on how we can discuss and tangle on what issues need to be fixed and what need not to be. Who is ACTUALLY responsible OR is it inherited with multiple errors of different presidents that took office in the past?

 

[kokonut]

Doesn't matter. What matters is the need for fiscal restraint, fiscal responsibility and the ability stay within our budgeted means. The solution is not to keep expanding when our yearly tax revenues take in cannot supply our yearly spending spree. We all know that the continuing deficit spending is not sustainable. Just as the constant maxing out of your credits cannot go on indefinitely.

 

[TXgolfer]

The reason I asked is because we have already passed the point of no return. Even if we do not spend a dime from now on, it will take several generations to pay off the debt. You want a limited government. That is by spending money we don't have.
I am not picking on you, kokonut. It is an interesting dilemma we are in, eh?

I know you didn't ask me but I will offer anyway.....

it will take several generations to pay off the debt

I agree 100%.. Many families are facing that same dilemma. How do they get out of the situation???

Jr has to go to state college instead of private school, or community college....or join the ROTC

Vacations become staycations

Birthday parties are at home or Mc Donald's instead of Six Flags. (unless you are 9 and friends with obama, then you go to Spain for your birthday).

They clip coupons

They eat at home.

In other words....they cut back.

we have already passed the point of no return

Unfortunately some families take this attitude as well

They borrow from friends, family and whoever they can.

They string themselves along with tomorrow,tomorrow, tomorrow. Maybe the lottery. Maybe they will land a great job. Maybe a long lost uncle will pass away. Maybe Oprah will come a'knockin'

They continue eating out, going on vacations, buying stuff they don't need convincing themselves they "deserve it" for suffering through tough times. Or they "need it" for their sanity.

Sadly many of these families end in a family meeting with dad pulling the trigger.

Point? It is ridiculous to go forward in denial hoping that if we continue to spend, we will be able to afford it one day.

Now no one has to agree with me.....but here is what I see.

Our "leader" is a millionaire who spent 2008 espousing his compassion for the poor while giving less than 10% of his income to the poor. To me that is disgusting.

Our "leader" Spent $800 billion promising unemployment would not rise above 8%. It did......and the a large portion of that $800 billion went to college research grants which will never create jobs.

Our "leader" is a guy that knew how bad things were when he passed the stimulus and made his promises, yet fails to take responsibility for it's failure and instead uses measures like "jobs saved" and continues to blame his predecessor.

Our "leader" is a guy who just agreed to purchase helicopters from Russia while people at Bell helicopter are laid off.

So my take? Spending more than absolutely necessary now is a very bad idea. Trusting our "leader" to do that spending is idiotic and suicidal.

 

[Beowulf]

We need to get rid of the Federal Reserve Board first off. It is privately owned, for one thing, and the more you learn about it, the more shocked you get.

 

[kokonut]

I know you didn't ask me but I will offer anyway.....




I agree 100%.. Many families are facing that same dilemma. How do they get out of the situation???

Jr has to go to state college instead of private school, or community college....or join the ROTC

Vacations become staycations

Birthday parties are at home or Mc Donald's instead of Six Flags. (unless you are 9 and friends with obama, then you go to Spain for your birthday).

They clip coupons

They eat at home.

In other words....they cut back.



Unfortunately some families take this attitude as well

They borrow from friends, family and whoever they can.

They string themselves along with tomorrow,tomorrow, tomorrow. Maybe the lottery. Maybe they will land a great job. Maybe a long lost uncle will pass away. Maybe Oprah will come a'knockin'

They continue eating out, going on vacations, buying stuff they don't need convincing themselves they "deserve it" for suffering through tough times. Or they "need it" for their sanity.

Sadly many of these families end in a family meeting with dad pulling the trigger.

Point? It is ridiculous to go forward in denial hoping that if we continue to spend, we will be able to afford it one day.

Now no one has to agree with me.....but here is what I see.

Our "leader" is a millionaire who spent 2008 espousing his compassion for the poor while giving less than 10% of his income to the poor. To me that is disgusting.

Our "leader" Spent $800 billion promising unemployment would not rise above 8%. It did......and the a large portion of that $800 billion went to college research grants which will never create jobs.

Our "leader" is a guy that knew how bad things were when he passed the stimulus and made his promises, yet fails to take responsibility for it's failure and instead uses measures like "jobs saved" and continues to blame his predecessor.

Our "leader" is a guy who just agreed to purchase helicopters from Russia while people at Bell helicopter are laid off.

So my take? Spending more than absolutely necessary now is a very bad idea. Trusting our "leader" to do that spending is idiotic and suicidal.

 

[sallylou]

The Federal Reserve is not going to go without a major upheaval. The swinging door between investment firms, the presidential administration and the Federal Reserve will not be shut quietly.

 

[jillio]

The point of no return is a nuclear war. Here it's about making the hard and right choices.

I'd say just tap into our massive oil deposits for us to use and sell the excess to other countries that want it. Use the money to help pay down the debt along with better spending control, limit govt, and better investment in our businesses rather than let the govt do everything which has been proven to be a disaster.

It would still take zero spending. Ever hear the phrase have to spend a dollar to make a dollar?

Your supposed plan is completely unfeasable. The illogic alone makes it so.

 

[Beowulf]

It would still take zero spending. Ever hear the phrase have to spend a dollar to make a dollar?

Your supposed plan is completely unfeasable. The illogic alone makes it so.

Yeah, like selling pencils on street corners. Oh, the huge numbers just add up...

 

[TXgolfer]

It would still take zero spending. .

That's about as wrong as you can get....

Many families conquer their debt by cutting back...... they still pay the bills.
Uncle Sam can do that too...

Talk about scare tactics......


Spend a dollar to make a dollar??? Sounds like a waste of time, That being said, when will we see the $800 billion we spent last year?????

BTW..... Ever hear: A stitch in time saves nine???