Democrats & Liberals Archives

Where Did Our Deficits Come From?

Republicans scream “deficits.” Tea Partiers scream “deficits.” Fox anchors scream “deficits.” The hard-right that did most to bring us deficits scream the loudest about deficits. Before Obama became president, deficits did not matter. Now that Democrats are in charge, the biggest problem for the far-right is to “bring down the deficits.”

The deficits are a direct result of Republican policy. It began with Reagan, who blamed government for all our ills. He thought, What's the best way to reduce the power of the federal government? Cut taxes. Without taxes the government has no income and can't do all it wants to do. For a brief period, President Clinton restored the financial order. But when George W. Bush became president, he decided to reduce government power in a big way. He cut taxes as often as he could. He even decided to pay for the Iraq War by cutting taxes!!

Another Republican policy that is part of the Reagan "revolution," is deregulation. Deregulation allowed corporations to do as they pleased. They raised prices, reduced wages, forgot about safety, killed off unions, sold shoddy products, provided lousy service and combined into huge conglomerates and into "too-big-to-fail" monsters that produced the terrible depression we are faced with today.

Republicans want to solve our economic problems with the same approaches they used to bring about this economic mess. Suddenly, they realize that the same deficits they thought were good (when Republicans are in office), are terrible (when Democrats are in charge). Before they were going to reduce government by increasing deficits; now they want to reduce government by decreasing deficits.

How do they want to decrease deficits? Two ways: Tax cuts (a universal solution) and by stopping Obama from spending money. Obama, they claim is the big spender. He wasted money on the stimulus to revive the economy, on the TARP that bailed out financial institutions and on other ways to improve our economy. What should Obama have done instead? Why, of course, tax cuts.

Jonathan Chait presents a diagram showing clearly the expected future federal deficits due to the policies of both Bush and Obama:

The diagram presents the Congressional Budget Office estimate of the federal deficit for the ten year period of 2009 to 2019. It demonstrates the effect of 5 factors: the economic downturn, TARP, recovery measures, Bush tax cuts, and the Iraq and Afghanistan wars. The downturn at first increases the deficit and then decreases somewhat. TARP influences the deficit for about a year. Recovery measures boost the deficit considerably for a couple of years and then die out. Bush tax cuts are responsible for a considerable part of the deficit and the deficit due to them increases greatly with time. The deficit due to the wars don't change much.

It's remarkably obvious that Obama's contribution to the deficit is tiny (recovery and TARP measures) compared to the huge contributions by Bush (wars, downturn and especially tax cuts).

Larry Summers is suggesting that we need another stimulus to help produce jobs. I can see the Republican noise machine screaming about increasing the deficit. If we want to decrease the deficit we need to spend the stimulus money now in order to reduce the deficit in the future.

However, the easiest way to reduce our future deficit is to get rid of Bush's tax cuts for the rich.

Where did our deficits come from? They came from our fetish on deregulation and tax cuts. We must restore regulation of corporations so they do not drive us off a cliff again. Instead of tax cuts, we need tax increases to be paid by the corporations and billionaires to help us get out of this depression.

Posted by Paul Siegel at May 25, 2010 8:30 PM
Comments
Comment #301110

I don’t understand your chart. The Bush tax cuts expire and presumably the wars in Iraq and Afghanistan will end. Obama will be in charge and he will not be able to blame anybody else for what he is doing.

If Obama continues the Bush tax cuts, they will be the Obama tax cuts and if Obama continues the wars in Iraq and Afghanistan, they will be Obama’s wars. Democrats control everything. I guess that if they don’t make the changes, it is because they don’t think they should. But they cannot blame Bush.

Posted by: C&J at May 25, 2010 10:03 PM
Comment #301111
The Bush tax cuts expire

I’ve always been under the impression that the tax cuts for incomes less than a quarter-million dollars would remain.

In any case, as the economy finishes it’s recovery the Democratic party will have their day of reckoning. Deficits during a period of Keynesian stimulus are OK in my book, however the flip-side to Keynesianism is that one must slash spending during the economic booms that follow a recession. We will probably need to raise taxes too. When the FY 2012 budget is passed, I better see a balanced budget or Obama will not be getting my vote in November of 2012. Until then, Obama is getting a pass in my book, but only because of how terrible things were 18 months ago.

Posted by: Warped Reality at May 25, 2010 10:44 PM
Comment #301112

WR,

Even if Europe sends us into another tailspin? As much as I wish Larry Summers would resign, he may be right on this one.

Paul,

As sick as I am of hearing the wah, wah, wah of the Republican sound machine that ignores Bushes poor economic choices and then rants about economic moves that were not a choice, if you are sane, I have to say the chart is little more than masturbatory fantasy and speculation.

Posted by: gergle at May 25, 2010 11:14 PM
Comment #301116

Even though Bush’s tax cuts expire this year, the budget deficit from now until 2019 is still Bush’s fault.

All you have to do is look to Europe that did not have the Bush tax cuts. Europe is proof that America would have been far better without Bush. Just look to Greece!!

The Oil Spill and our country’s slow response is Bush’s fault as well, just ask Chris Dodd.

Any problem you can mention is bush’s fault. This is the new era of responsibility.

Posted by: Craig Holmes at May 25, 2010 11:36 PM
Comment #301118


GEORGE BUSH AND REPUBLICAN POLICY

The Economic Growth and Tax Relief Reconciliation Act of 2001

The Jobs Creation and Work Assistance Act of 2002

The Jobs and Growth Tax Relief Reconciliation Act of 2003


Job growth during the eight years of the Bush Administration was 2 percent. The worst job growth for any administration in the seven decades that statistics have been kept.

The only presidency in which the incomes of the American People grew less was G.H.W. Bush.

Nearly all economists, including those who worked for the Bush Administration now agree that nearly all growth during the Bush Administration came from the housing equity market, The financial market and consumer spending.

I think we all know what happened to the housing equity market (the Bush ‘Ownership Society’) and the financial market.

It makes you wonder how on earth this country managed to survive before R.R., the Bush family and Republican economic philosophy.

Posted by: jlw at May 26, 2010 12:11 AM
Comment #301121

Paul Siegel concluded writing: “we need tax increases to be paid by the corporations and billionaires to help us get out of this depression.”

Taxing corporations only results in consumers picking up the tab. Taxing wealthy incomes don’t get passed on to consumers, and incent greater productivity and efficiency warranting higher incomes to compensate. It is a simple truth which neither Democrats nor Republicans are willing to acknowledge, but for differing reasons.

We need to stop taxing American corporations on profitability, and raise taxes to a balance point that maximizes tax revenues from wealthy personal income without impinging upon the investment and capital liquidity needs of American business to maintain and grow employment opportunities.

If you want tax to corporations, do it in a way that makes sense. I.E., tax them on the costs of their industry which get passed on to the taxpayers at large, as in the Toxic Superfund clean up, nuclear waste security and long term storage, and of course, oil spills. That will turn self-regulation into self-motivating practices to do no harm in the first place.

Posted by: David R. Remer at May 26, 2010 1:30 AM
Comment #301123
WR,

Even if Europe sends us into another tailspin? As much as I wish Larry Summers would resign, he may be right on this one.

Now that the Democrats control our government, they have the responsibility to prepare, act and react according to external factors such as Europe. I’m sorry, but my version of partisanship doesn’t absolve Obama & the Democrats in Congress from any ill things that may happen during their time in control.
In any case, I don’t think Europe will put us into such a tailspin. They are going through a few growing pains as they attempt to merge a variety of diverse economies. Prosperous countries such as France & Germany will have to learn that they are in the same boat as Greece now, and they now need to bail Greece out or dissolve the EU.

Posted by: Warped Reality at May 26, 2010 2:03 AM
Comment #301136

C&J
Take a look at the federal budget under the treasury department, and you’ll see one of the biggest categories of spending is the servicing of our country’s debt, paying off interest and principle.

Your people added a ****load of principle, basically, so the costs of all that debt financing you guys did last decade is added to the budget.

Did you seriously think that there wasn’t a cost to all that deficit spending you did? If it weren’t for all that debt Bush piled up, Obama’s budget deficit would have actually headed down to sustainable levels. But with all that debt he piled up, Obama’s forced in the latter part of this decade to start paying down Bush’s debt, raising the budget spending.

Those tax cuts were not giving people their money back, they were taking money from the next generation to line the pockets of this generation. Same thing with not paying for the war. You succeeded in forcing the next generation to pay for the wars you folks started, just like LBJ!

LBJ, too, was too chicken**** to pay for his new entitlements, just as Bush was. We could have footed the bill, but then that would have brought greater political scrutiny on the worth of both his entitlement programs and the war. Both Bush and LBJ did not want people doing a cost/benefit analysis on their wars. Both made the mistake of ****ing up the finances of the country in order to avoid that accountability.

And now the Republicans who fully backed the President, without question, on all these initiatives try to rewrite history, and part of how they do so is by trying to dump the fiscal legacy of their spending, their economic downturn on Obama.

Obama needs to do something, of course, to deal with the deficit, but he needs to do it right, and look at the economy as a whole. We need to be out of the deflationary period before we try austerity measures for the simple reason that austerity measures can only reduce the budget deficit when there is private money to replace taxpayer dollars. Otherwise, the economic conditions, the extra unemployment and poverty will swallow up gains on the fiscal front in savings on spendings and raised revenues.

And don’t say it can’t happen: it did happen during the great Depression.

The question is whether your fiscal policy is based on the lessons of theory or the lessons of practice. All too much of what the Republicans suggest is based on their theories about how the economy should work.

So far, they have not successfully field tested their theories, and refuse to accept evidence that contradicts their pre-existing notions about their own success.

Posted by: Stephen Daugherty at May 26, 2010 2:11 PM
Comment #301137

Nobody seems to bringing up the fact that the cost of the wars we are fighting are now a part of the budget, and therefore a part of the deficit.

Rocky

Posted by: Rocky Marks at May 26, 2010 2:53 PM
Comment #301143

Rocky Marks-
Primary Republican blind spot. They fail to consider that even if they deem spending or revenue drops necessary, that doesn’t change the fiscal effect. You still need to pay for it or or stop paying for something else.

The political reality is, Republicans have no idea how to avoid the political backlash from the kind of austerity they’re advocating for, and not having that idea, they’ll always be half-hearted spending cutters. Those who aren’t, quickly go the way of hoover, even if they are successful.

But one thing they’ll never be half-hearted about, is taxes. Even when the tax burden is at a historic low for the last half century, even when the scale of the deficits ensures that taxes WILL have to go up sooner or later, they’re still clinging to Club For Growth ideology so rigidly that they won’t budge on the issue. Ironically, their stance, all along, help put us in this fiscal crisis in the first place. They’ll insist otherwise, blame spending, but that spending mainly became deficit spending when they refused to pay for it, either by actively cutting taxes when they knew these charges were on the books, or by failing to add additional taxes when it became clear that the costs were high.

The crappy part of this is that in the name of political consistency, they’ve put us in what is a consistently ****ier position fiscally, than if they had just flip-flopped a little. Political judgment has overruled practical judgment and left this country with little room to combat one of history’s worst economic collapses.

Political consistency and principle matters for nothing when it yields crappy results.

Posted by: Stephen Daugherty at May 26, 2010 3:54 PM
Comment #301151

Warped

My point is that the BUSH tax cuts expire soon. If they are extended by President Obama and the Democratic Congress, they can no longer be blamed on Bush.

IMO - Obama and the Democrats have no intention whatsoever in balancing the budget. They are growing the government. Eventually much higher taxes will follow to pay for it, but they NEED deficits for a couple of years to provide “emergency” justification for their discontinuous tax rises.

Paul is telling the truth about the Democratic desire to raise taxes. He is mistaken in that he thinks that the government can raise enough from “the rich”. We will all be paying these bills.

jlw

Let’s see what the Obama record looks like in 2012.

David

You make a good point. America’s corporate tax is already among the highest in the world.

Stephen

Go ahead and add the interest on the debt on the day Bush left office. You are still left with an enormous rise under Obama, with no end in sight.

The Democrats are the party of debt and they plan to remain the party of debt until they can panic us all into massive tax increases, when they will become again the party of taxes. And when they pump up the money supply, the party of inflation.

So the progression for Democrats will be higher debts to higher taxes to higher inflation to permanently bigger government with Continental European levels of taxes, growth and unemployment. It is not a terrible thing, but it is not an American thing. If you liked the way it was in France and Germany over the past two decades, you will like Obama’s America. Before recent tourists to those places rejoice, check the levels of growth and unemployment over the past 20 years.

Posted by: C&J at May 26, 2010 7:47 PM
Comment #301154

C&J-
Republicans stoke inflation fears.

Consumer prices haven’t risen more anemically since LBJ was in office.

Republicans soke tax fears, call the taxes the average person pays draconian.

Income Taxes for the average person haven’t been so low for half a century.

Republicans claim that Obama has overseen a huge rise in the budget.

The budget, but not spending. Obama’s showing people what the government was spending on certain things, rather than hiding them like the Bush administration was.

Since the National debt and what we pay on it are a function of what we spend, not what we say we’re spending, Obama’s actual contribution to increased spending is small. We were heading in this direction anyways, the Republican leadership were just not being honest with you about that, and you weren’t being honest enough with yourselves to factcheck their claims.

As for your other accusations? Listen, you’re just making me tired. If this were a movie, you’d have us tying old ladies to the railroad tracks. You think we wanted this paralyzing fiscal situation? You’re to busy fighting partisan battles to realize that your policies, your tax cuts, all those fiscal tricks you believed in, are part of problem, rather the solution.

It’s your people who have put us at risk of this. But you listen to media sources that flatter you with soothing rhetoric that places the blame on somebody else. The sooner Republican face their reckoning on this issue, the sooner Republicans will be able to help the economy and do something construction about the fiscal situation. For now, Republicans remain wrapped in their own illusions.

I had thought that the last two elections would have been enough of a shock to the system for Republicans to realize that they were wrong. But it seems like not even the worst electoral results are sufficient, given the flattery of the Conservative media, to get most Republicans to actually rethink their politics. They are instead engaging in a dangerous game of confirmation biases, which clouds their ability to understand the situation.

That’s why most Republicans remain unaware that their taxes are the lowest they’ve been in half a century, and why they still don’t understand the real nature of the economic crisis we are in. Republicans are hemmed in by peer pressure and years of pounded-in assumptions about the economy and the budget that prevent them from being flexible enough to acknowledge the truth.

Posted by: Stephen Daugherty at May 26, 2010 9:38 PM
Comment #301155


I think the American people would rather check the levels of growth and unemployment that the Republicans and their philosophy have given us over the last decade. Of course, Republicans rather have us look at Europe or anywhere else except at them and their policies.

Posted by: jlw at May 26, 2010 9:48 PM
Comment #301156

Stephen

I anticipate inflation because that is how the Democrats will address the deficit… after the big tax increases don’t work. Currently the WORLD economy is slow and the money we pump in is not having the inflationary effect. Wait for it. It might be a good idea to invest in hard assets. Real estate is probably a good thing now. Prices are low and inflation will push everything up.

Taxes are low this year. Wait for that too.

We will see what happens. I hope you are right that Obama policies will work. I could stand the political embarrassment if we all were more prosperous. But I don’t think it can work. We are heading into a general downswing. This recovery will be anemic and delayed in coming because we have front loaded debt. As I say, I hope that I am wrong, but I will invest (and bet) as though I am right.

Posted by: C&J at May 26, 2010 9:52 PM
Comment #301157

Stephen and Jlw

From a recent NYT article

“Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.

“With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes.”

Is this the system we want to emulate? It was fun while it lasted, but the party is over just about the time we want to come in.

Posted by: C&J at May 26, 2010 10:00 PM
Comment #301159

C&J, stop making crap up, which you did out of thin air when you said: “Go ahead and add the interest on the debt on the day Bush left office. You are still left with an enormous rise under Obama, with no end in sight.”

The total interest on federal debt was as follows:

For FY 2008, it was 451 billion, which was Bush’s last budget year.

For 2009, Obama’s first budget year: it was 383 billion.

Source: US Treasury

Stop pedaling lies and/or misinformation.

Do your research. The Debt went up, but the interest went down due to the lower interest rate environment.

Posted by: David R. Remer at May 26, 2010 10:29 PM
Comment #301161

C&J-
What you don’t realize is that because your people have forced a timid government response, inflation may not go up any time soon.

Look at Japan. Their economy has long remained stagnant, fight deflationary pressures. That could be us for the time being, if we haven’t busted the problem of deflation.

Let’s deal with the problem at hand, and then plan for what we do when the economy makes the transition. Then all the austerity makes sense, and hurts the economy less because private dollars will be there to replace the federal ones

As for Europe? Their problem is the same as our problem, actually, and for the same reasons: they, too, invested in those derivatives, and played the market on Real Estate.

What happened here is that an economic collapse has brought on conditions not foreseen by the people who designed our respective systems. Nobody ever anticipated that all the banks would simultaneously be on the verge of collapse, nor did people anticipate in Europe that they’d face the same sort of crisis, only when a heavier load of social programs. Neither system has worked well under these circumstances, so what’s the point of your critique?

Any system designed to adjust to a collapse of this magnitude would be overly pessimistic in the boom times.

This shouldn’t have happened, but both Europe and America valued the appearance of growth over it’s reality with the average person. Numbers cannot keep an economy growing. The economy has to set up a certain level of circulation to function properly, and Conservative/ Pro-business policies on both sides of the Atlantic have put the emphasis on the business growing, not necessarily the employment.

Posted by: Stephen Daugherty at May 26, 2010 11:19 PM
Comment #301190

It’s fashionable right now to call every one and every corporation corrupt and tax evaders. When was the last time a poor person on welfare created a job?????? When was the last time you worked more then 40 hrs a week and put money up to invest in the company??????? When was the last time you had sleepless nights because of problems in the company?????? When was the last time you did not look for more deductions on your tax return??????? If you agree with the current administration on creative accounting and creating hidden taxes,(VAT), so they can spend more but not reduce the deficit then go ahead and keep them in office.

Posted by: Lizzie at May 27, 2010 12:17 PM
Comment #301200


C&J, what I get from your argument is: Lets deregulate the markets, allow institutions and individuals to take huge risks speculating and when it all goes to hell, driving the world economy into a very bad recession, we will blame the socialists.

Do we want to emulate Western Europe? No.

Do we want to emulate Republican Economic philosophy? No.

IMO, we should not want to emulate any rigid structure. We should want to pick and choose, experiment, find out what works well and what doesn’t; then utilize what works best while recognizing that what we choose to do may need reevaluation in the future.

Workers in Europe are recalcitrant, they don’t want to yield on the gains that they have fought long and hard to achieve.

In America, Republicans are determinate. They want to define capitalism within a rigid set of parameters that cannot be challenged by workers or government.

Posted by: jlw at May 27, 2010 4:59 PM
Comment #301204

Lizzie-
I’ve got three words for you: “Outsourcing.” “Economic Collapse”

The fact of the matter is, unless people can pay for products, Businesses can’t pay to employ people. When the average person, even somebody on assistance, can’t pay for something, the person who makes or does that something can’t get paid for its purchase.

It helps to think of the economy dynamically, as in, where do the rich get their money? Well, supposedly they get it by investing in business. Well, that’s a losing proposition unless that business can make money. So, even the rich need the middle class and the poor to make them money. Problem is, the rich in this country have not merely responded to, but recklessly accelerated the pace of export of both jobs and manufacturing. The question is, what are people left with to make the money to drive the consumer markets?

Well, the Business’s solution was to make easy credit freely available, and by doing this alleviate the need both for good paying jobs and the observation of the lack of same’s limit on what people can pay. Eventually, greedy folks on Wall Street exploited that easy credit market to create ever more inflated profits from trumped up claims of what people were going to pay. This lasted until reality caught up with the housing market, and people realized that nobody understood the average person’s ability to repay just about any debt.

That anarchy created paralyzing panic, and that’s what’s got us here. The overcomplication did more damage, really, than the failure of some poor people to live up to the unwise obligations they got themselves into.

Posted by: Stephen Daugherty at May 27, 2010 5:34 PM
Comment #301205

“Paul is telling the truth about the Democratic desire to raise taxes.”

C&J I am just not seeing where Paul made that statement. What are you referring to? It seems to me that most of us whether we are repub, dem or independent have a desire to not burden our children and grandchildren with debt. After all it was our generation who had the audacity to get ourselves involved in unfunded wars while simultaneously enjoying the tax cuts of the Bush administration, It was our generation that chose to pile on national debt during economic good times. So it seems only fair that we shoulder the burden of the debt from our follies.


The desire I see in the people of this country is to do what it takes to pay down the national debt we have accumulated, not a desire to raise taxes but a responsibility to future generations.

What do you, as someone who has backed the failed policies of the Bush administration, see as the responsible approach to solving this problem without taxing those that benefited most from the previous tax cuts and those that profited most from the excesses of the economic delusion we were suffering during the Bush administration years. Do we really believe that putting the elderly, disabled and infirmed in the streets to beg for subsistence will work for the people of this country? \
It would seem to me that those on the right that backed the policies of ruination of the repub led Congress and Bush administration at the turn of this century would be the first to stand up and do the morally responsible thing and demand that taxes for the wealthy be increased to fund the unpaid wars and the economic policies disasters (that have added so much to the national debt)they benefited from. Instead they complain about taxes being high and us taxes as you did in the quoted comment as a political tool. And you wonder why our elected leaders are so screwed up.

Posted by: j2t2 at May 27, 2010 6:11 PM
Comment #301215

C&J sorry
“Instead they complain about taxes being high and us taxes as you did in the quoted comment as a political tool.”

Should read
“Instead they complain about taxes being high and use taxes as you did in the quoted comment as a political tool.”

Posted by: j2t2 at May 27, 2010 9:04 PM
Comment #301217

j2t2

In the last sentence, Paul advocates raising taxes. He seems to think that he can raise enough money from billionaires and that corporations will not pass along costs.Maybe you believe that too. The numbers don’t add up.

Revenues reached record heights in 2006. Unfortunately, spending had grown faster. And that was in the days when spending was just appalling, not outrageous as now with Obama.

The problem is spending. I would not oppose raising some taxes, but spending will just outrun it under the present leadership.

David

As I read my sentence, I can see how it may have been confusing. I was complaining that the INTEREST on the Bush debt was being considered a big deal for Obama. As you point out, it is not. What I am talking about rising is the whole indebtedness, which is has done massively under Obama.

And you are also supporting my argument that the interest on the “Bush” debt is just not that big a deal compared to the TOTAL Obama debt. Thanks for the numbers.

Stephen

Countries like Germany and France have for many years followed the kinds of bigger government intervention that I thought you advocated. They don’t work. You seem to be advocating government interventions with the stipulations that they actually work. This would be great, but it is not among your options.

The simple bottom line is that the world economy is in some trouble. Germany and France, which are economies similar to ours but with significantly larger state controlled sectors, are doing worse than we are. That means that the option of even bigger state sector in the U.S. is something we should at least worry about.

You are annoyed at “pro=business” policies. What is the alternative? If you have anti-business policies like they do in Venezuela, Iran or Zimbabwe, things are even worse. The history of anti-business regimes is quite simply tyrannical

Help me out here. You reject Europe and America as too “pro-business.” Which countries should we use as models? Or is yours a strictly hypothetical arrangement?

BTW – I don’t really think things are so bad. I became an adult in the late 1970s. Back then is when things were bad. If you put your hand into Lake Michigan it came out greasy (now it is clean), the air was acrid with smoke. The economy sucked. The Soviet Union was in expansion mode. Our president (Carter) told us that our best days were behind us and we would have to get used to it. There were long lines for gasoline. Our inner cities were falling apart and crime was rising.

All these things are better now. If it has been only an illusion, they did a pretty good job. A person could live a lifetime in that illusion.

Now we have had some serious setbacks. Americans’ standards of living have dropped back a few years. But we are still much better off than we used to be and much better off than most experts predicted when I graduated from college. If it is the “pro-business” policies that changed the world from that of 1980 to the one we have today, I say let’s have more of those things.

Posted by: C&J at May 27, 2010 9:15 PM
Comment #301220


C&J, I guess we should be thankful for those pro-business policies that cleaned up Lake Michigan. The economy sucked because OPEC forced us to start paying up. If some one would have suggested to a Republican in 1980, that the Republican Party would sanction sending millions of Americans jobs to a communist country, how many Republicans would have believed that? Who did you say was in love with dictators, business? Or, would that be pro-American business dictators?

I did quite well in the 70’s. The 80’s really sucked, 82 was worse than 81, 83 was worse that 82, etc., for the entire decade. I did quite well in the 90’s. And, then it changed again.

Isn’t pro-business a code word for bubble-business?

From your perspective,things may have been very good since 1980. Many millions of Americans have seen their incomes and standard of living drop because of pro-business policies. Most of them think that the Bush Administration was the worst. It certain has been the worst I have seen.

Posted by: jlw at May 27, 2010 10:45 PM
Comment #301223

C&J;

I think DRR is losing it; he has now included you on the list of liars and misinformers, and you also need to do better research. Next he be telling you to use logic. These are some of the favorite words: spreading lies, misinformation, research, logic, education, ignorant, and last but not least bull crap. I think they are key words for “I’m smarter than you”, or “if you don’t believe like me, you’re a dummy.

He’s been telling me these things ever since I started writing on WB.

Posted by: Beretta9 at May 27, 2010 11:30 PM
Comment #301238

C&J, ahh, yes, comparing Bush’s debt to Obama’s debt, is indeed an entirely different story.

You see, Bush’s debt, after you remove what was spent for Katrina, Afghanistan and 9/11 costs, amount to more than 3 trillion dollars with nothing to show the American people or tax payers for. Entirely unnecessary and unneeded deficit spending.

Obama’s deficit spending to date, includes something in the neighborhood of 150 to 200 billion in unnecessary and unneeded spending, which includes Pork spending in Congress’ 2009 budget appropriation.

I just read yesterday that as many as 100,000 teachers jobs are threatened by the bankrupt condition of about 75% of the States. And that only about 252 billion of the Stimulus spending has actually been spent so far.

For me, there is no comparison between them at this point. Obama’s deficits which include continuation of economic rescue measures initiated by the Bush administration, and preventing vastly more job losses from occurring than otherwise would have occurred, (stimulus and auto manufacturer rescue for example) were needed and necessary.

Of course, if one erroneously assumes that the 1 plus trillion dollars added to the debt under Obama will continue at the same rate throughout his presidency for the next 6.5 years, then Obama’s national debt additions will exceed Bush’s and our economy will fail under the weight of it. But, that would be an entirely erroneous assumption and unwarranted speculation.

I hear Republicans and Libertarians now crying that Obama is not spending enough on jobs and the Gulf Oil Leak consequences (Jindal for example). But, such folks cannot have it both ways, logically. They cannot criticize Obama for not spending enough and berate his deficits and debt at the same time.

Obama understands the liabilities that attend the growing national debt. Getting the economy back on its feet, and preventing the financial destruction of 10’s of millions of Americans have been his superordinate priorities since taking office. Just as Jindal has his top priority of stemming the potential enormous job and economic losses to come from the oil spill, Obama has been deficit spending to arrest the economic and financial suffering of Americans.

When the economy is back on a sound footing, there is nothing in Obama’s agenda to date, to indicate that debt and deficits will not become his top priority issues to address. And getting the economy back on a sound footing partially addresses those deficits and debt, in and of itself, by insuring ramped up federal revenues.

One legitimate criticism which can be logically levied against Obama at this point, is his absence of a long term plan to address deficits and debt growth. I suspect however, that such a plan will be made public by the Spring of 2011. As you well know, a president must manage the immediate needs of the nation as well as the long-term welfare of the nation. A Great Recession must trump all other priorities, in terms of spending and debt. That is a political reality that only an extremist ideologue like Ron Paul would ignore and reject.

I have seen nothing yet from Obama to indicate that he has a plan for effectively arresting deficits and debt to come as a result of entitlement obligations. And that of course, is the challenge and mandate facing him and every president to follow him. It may well be the case that America is entering a time when one term presidents become the rule regardless of which party they are affiliated with, due to this nearly impossible political challenge set before them, of preserving the nation’s safety nets, and driving down the unfunded entitlement obligations. I have yet to hear of a single Republican with such a plan, either.

Posted by: David R. Remer at May 28, 2010 8:01 AM
Comment #301239

Your comments are getting quite humorous, now Baretta9. Thanks for the chuckle.

Posted by: David R. Remer at May 28, 2010 8:05 AM
Comment #301245

“In the last sentence, Paul advocates raising taxes.”

C7J this is what Paul said:

“we need tax increases to be paid by the corporations and billionaires to help us get out of this depression.”

I don’t see the word desire as in a wish or a longing, instead I see the word need as in of necessity. I would ask again do those billionaires that benefited from the tax cuts while carding the war effort not feel as if they should have any responsibility towards the security of this nation and future generations?

Posted by: j2t2 at May 28, 2010 10:06 AM
Comment #301250


Those billionaires are world citizens who’s responsibility is to make more billions, not pay taxes. The security of this nation and future generations is not their responsibility. Well, possibly Wall Streets security.

They have a responsibility towards their own children and those future generations, to train them to carry on making billions, but no responsibility for other peoples children and future generations. That is those peoples responsibility and they would do a much better job of it if they weren’t all made so lazy by gaming the Welfare State.

The Welfare State is the cause of all our problems. It has caused the billionaires and their supporters, other investors, to seek alternative sources of inexpensive labor.

Investment and patriotism are two separate issues with no connection. Investment is for the wise, patriotism is for the unwise.

Posted by: jlw at May 28, 2010 1:01 PM
Comment #301265

David

Spending spiked under Obama. Debt spiked under Obama. Obama told us his big spending would keep unemployment under 8%. He was wrong, indicating either he lied or he doesn’t understand the economy any better than anybody else, since the test of any understanding is its predictive ability.

Let’s see how all this spending works out. Supposedly, these are temporary spending increases to bail out the economy. Let’s see if Obama is telling the truth and let’s see if spending declines when/if we recover because of this spending.

So far, we are not encouraged. A normal recovery would make it about now.

I am afraid that Obama’s understanding of the economy is about what we would expect of a guy who studied law, worked only for non-profits, political action organizations and universities and never ran a real business.

j2t2

I think we need to cut spending. I think we needed to be engaged in Iraq. I had no longing or desire for these things. We generally apply the “want to” phrase to policies we advocate. It is running away from the consequences of your ideas if you play games with words.

You assume that you CAN tax billionaires in ways that will raise significantly more revenue and that you CAN tax corporations in ways that will not raise general prices. And that we can balance the budget by raising these taxes while still spending like we are now. I don’t think we can.

Remember that revenues reached an all time high in 2006, this was with the tax cuts. If spending had remained at 2000 levels or grown only at the rate of inflation, we would have achieved a balanced budget in that year. We have to control spending. We cannot tax our way to balance.

you know that almost all the Federal income tax is paid by the top 1/5 and that the lower 50% of taxpayers pays almost NO net Federal tax and the lower 20% actually makes money off the tax system. You are not really asking “the rich” to pay a bigger share. The poor already pay nothing. You are asking to expand government and get the rich to pay for it. Bigger government is a problem no matter who pays for it.

Posted by: C&J at May 28, 2010 9:04 PM
Comment #301266

Beretta9

These kinds of arguments are like playing tennis. All that matters is if the ball goes back over the net. All the yelling and carrying on means nothing if the ball goes over the net and lands in the other guy’s court.

Posted by: C&J at May 28, 2010 9:07 PM
Comment #301267

jlw no one has the responsibility to make more billions. They may have a desire to make more, perhaps a need to make more but a responsibility to make more is a stretch,IMHO.

“I think we need to cut spending. I think we needed to be engaged in Iraq.”

Beretta if you felt the need to invade Iraq and to occupy the country for what is it 7 years now on the taxpayers dime, did you think it was necessary to do so to confiscate the WMD’s, to “fight them there so we won’t have to fight them here” or to capture Bin Laden? Because we have spent around 700 billion on this failed effort to date and with interest by 2017 it is estimated the cost of this unfunded war will be 2.4 trillion. So when you complain about cutting spending and target OASID and putting teachers out of work as a means to reduce spending I have to say you were wrong to support unfunded wars then and you are wrong now to try to save money on the backs of the teachers, elderly and infirmed. Taxes should be raised on the wealthy to pay off the 2.4 trillion now. Cutting spending on the aforementioned programs is morally wrong when conservatives intentionally try to bankrupt our country with unfunded wars.

http://en.wikipedia.org/wiki/Starve_the_beast

Posted by: j2t2 at May 28, 2010 9:45 PM
Comment #301268

j2t2

I didn’t talk about Iraq to justify it. I think that history will judge it more generously than we do now, but that is another post.

I explained that the word “need” doesn’t allow one to avoid the consequences. You fell into the trap, BTW. You made such a point that Paul didn’t say have the desire or the longing for taxes, but merely thought they were needed. I also do/did not have a desire or longing for the things I mentioned. So apply the same standard to both of us.

Posted by: C&J at May 28, 2010 10:15 PM
Comment #301273


J2t2, I was making one of my feeble attempts at satire.

Republicans say, reduce the taxes on the wealthy and they will invest in creating jobs. The billionaire invests in jobs with the expectation of getting a return on the investment, ergo, the billionaires have a responsibility to make more billions.

The three major Bush tax cuts all had the word jobs in their titles but, they produced no jobs unless you count a few million jobs in China and India.

Posted by: jlw at May 28, 2010 10:29 PM
Comment #301285

C&J said: “Obama told us his big spending would keep unemployment under 8%.”

Give me a quote, C&J. No one can predict the unemployment rate during the onset of a recession. They can only guess and hope and work for max. limit. You know that.

Tarp spending spiked under Bush, and followed through by Obama. Justified and warranted, and successful, I might add, in preventing a global banking and liquidity collapse, sending the world into a depression.

C&J said: “Let’s see if Obama is telling the truth and let’s see if spending declines when/if we recover because of this spending.”

Yes, let’s do be patient and see, and not prejudge this man who has worked hard at changing what was a horrible state for America and Americans into this current state where consumer confidence is back up in the mid-70’s again, where 30 million Americans will now have access to health care insurance, and where the majority of tax payers are enjoying the lowest tax deductions from their pay checks in decades. All this, with Republicans fighting the man every inch of the way. Pretty stellar performance as far as I can, my serious objections to some of his actions notwithstanding.

Just my opinion, but, I think it is foolish to the extreme for anyone to think that this president is not going to seriously address deficits and debt before the end of his first term. No one can convince me that if McCain had been elected, we would not be far worse off than we are today as a people and economically. I am thankful the best candidate won, despite Obama’s mistakes and weaknesses. No president is without those. And that includes Reagan.

This was not a normal recession. Normal recovery does not apply.

As for his expertise in economics, may I suggest that NO OTHER president before him was an expert in economics either, and that is precisely why every president has a cabinet of experts and civil servants with such expertise to advise him/her. This economic recovery has been stellar considering the depths to which it went, and the abyss that was avoided, thanks to both Paulson and Geithner and Bernanke. Bush Jr. was no math whiz and new even less about economics. Didn’t stop Paulson and Bernanke from making the right moves. That is how it works, C&J. Obama does not need to be an economics Ph.D. to make the right economic moves for this country.

Obama has increased the national debt slightly over 1 trillion. Bush increased it 5 trillion. I think Obama understands economics far better than Bush Jr. did. Bush Jr. spent future tax payer dollars like there was no tomorrow, and there almost wasn’t one. Bush Jr. pushed this nation and Wall St. toward the abyss with the help of Greenspan with Bush’s ownership society which promoted making everyone and their brother a homeowner. That is economic policy without ANY understanding of economics. Greenspan was a duped fool for buying into Bush’s ownership society and keeping the interest rates that low for that long just to promote that Ownership Society ideology.


Posted by: David R. Remer at May 29, 2010 12:24 AM
Comment #301290

David

I didn’t think he could keep it under 8%. But he said he could. I suppose if you want to be precise, you can say that his advisers claimed the the stimulus would keep it low.

I think you are right that Obama will not address the deficit in his first term. I don’t think he wants to address it ever. Actually, I think he wants to enlarge government permanently and raise taxes and fees to pay for it. His vision is a bigger government along the lines of what the French used to be before they started their reforms.

Posted by: C&J at May 29, 2010 12:41 AM
Comment #301314

C&J said: “I don’t think he wants to address it ever.”

Of course he does. What president would NOT want to address it and become the hero of a generation? Obama will. The only question is how far Congress will let him go in getting it effectively addressed? Presidents propose budgets, but, don’t pass laws, they only approve or disapprove of budgets sent to him/her by Congress.

In fact, I can almost guarantee that if the Republicans take back the House in November, Obama will definitely address it in order to demonstrate Republican’s lack of will to actually cut Medicare and Soc. Sec. in a presidential election cycle. The costs of growing entitlement commitments is the ONLY way to effectively address debt and deficits going forward, though other measures in conjunction can help, like collecting taxes from dodgers and raising taxes on the very wealthy. Will Republicans go along? NO!, in a word, near and dear to their toolbox of political behavior.

After all, most of the Republicans responsible for doubling the national debt from 2001 to 2009 will still be in Congress. Their behavior pattern regarding debt and deficits is well established. They will fight raising taxes and that will kill the initiative. Simple as pie.

Posted by: David R. Remer at May 29, 2010 12:55 PM
Comment #301326

David

A president who wants to expand the size and scope of government does not want to address the deficit, until and unless he can get tax revenues to meet the bigger size. I believe that President Obama’s goal is to grow government. I see that as a valid position, but one I disagree with.

re Congress and deficits, you say “Presidents propose budgets, but, don’t pass laws, they only approve or disapprove of budgets sent to him/her by Congress.” Right.

You should recall that Democrats won complete control of both the House and the Senate in 2006. In 2006 the deficit was shrinking.

It is also true that the Democrats Controlled the Senate from 2001-3 after the defection of Jim Jeffords.

So most of the Democrats responsible for doubling the debt are also still in office. In fact, most are still in their leadership positions.

We balanced the budget when we had a strong Republican congress and a Democratic president to discipline each other. I still think it is a long shot for Republicans to win both the House and the Senate, but that is our only hope for financial discipline in the near term. Even that is a slim hope, but believing Nancy Pelosi and her ilk will do anything but push up spending is a zero chance hope.

Posted by: C&J at May 29, 2010 2:51 PM
Comment #301328


Pelosi says no to extension of unemployment benefits.

What effect will that have on the unemployment statistics and the deficit between now and November?

Posted by: jlw at May 29, 2010 3:31 PM
Comment #301335

C&J,
First of all my apologies for being so careless as to think I was responding to Beretta.

Secondly I don’t think I assumed you had a desire as I took you at your word and in fact used the word need not desire in my response. I agree that because one feels the need to spend 7 years in Iraq at a cost to taxpayers of $2.4 billion they also should not think they can avoid the consequences.

You see C&J originally I thought you suggested that Paul and the dems had a desire for taxes as a bit of Luntz propaganda and felt the need to clarify the situation a bit. It seems disingenuous to run up a huge tab on unfunded wars and tax cuts then blame the other party for wanting to pay the bill.

Posted by: j2t2 at May 29, 2010 5:19 PM
Comment #301336

jlw I took your post as a bit of satire with a dose of sarcasm not feeble satire. My response was a brief demonstration of desire, want and need as I was discussing the subject previously.

Posted by: j2t2 at May 29, 2010 5:26 PM
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