Democrats & Liberals Archives

Spending to Reduce the Deficit

It sounds ridiculous: the more you spend the less you have and therefore spending increases the deficit. However, spending straightforwardly increases the deficit only if you do not consider related factors. If you do, you may find that under certain circumstances spending may reduce the deficit.

Republicans and Ben Nelson voted against the jobs bill because they did not want to spend money that would increase the deficit. As a result, 2 million workers will stop receiving unemployment benefits, thus reducing consumer spending, preventing economic growth and reducing tax payments.

An even bigger increase to the deficit will come about because, as the Center on Budget and Policy Priorities says, there will be increased unemployment in economically-suffering states:

If Congress does not extend the enhanced Medicaid matching funds in last year’s Recovery Act, most states will cut public services or raise taxes for the fiscal year that begins July 1 by even more than they are already planning – laying off tens of thousands more teachers and other public employees, cutting education funding more sharply, and further reducing payments to health care providers and other private firms. Without more federal aid, state budget-closing actions could cost the national economy 900,000 public- and private-sector jobs.

All these unemployed people will not pay income tax and the budget deficit will increase.

THE best way to decrease the deficit is to increase employment. THE best way to increase employment is through spending - if not private spending, then government spending. Increasing government spending today is THE best way to both get out of the depression and to decrease the deficit. Too bad the Republicans killed the jobs bill.

Posted by Paul Siegel at June 26, 2010 6:02 PM
Comments
Comment #302719

I am no stranger to unemployment and finally being cut off. To make ends meet I had to take jobs through spot labor untill I landed a perminent job. IMO the problem with some of the laid off workers is that they would rather be on unemployment rather then taking a job that pays less then what they were making prior to being laid off. One person posted here a couple of years ago that she was making 70,000 per year prior to being laid off. She said one company offered her 40,000 per year but she declined the job because it didn’t pay enough. How stupid is that? As far as paying income taxes what is it over 50% of the people don’t pay any taxes anyway most get refunds, by the way unemployment benefits are TAXABLE. The government dosen’t need to keep spending, IMO it is NOT working now.

Posted by: MAG at June 26, 2010 9:36 PM
Comment #302738

Mag,

We agree. It is stupid. I’ve never collected welfare or unemployment in my life. I’m old enough now that, in a time of hardship, I know I could need help. It is the basic role of government, in my opinion, to provide economic stability. Government creates economic conditions through issuing currency, and a court system to deal with contract disputes. The regulatory agencies failed to properly use the courts to create fair conditions, which in turn, caused massive fraud to occur. This caused a massive contraction in the economy. In a specialized economy where we train people to do one thing, and not to be self sufficient subsistence farmers, there is a special contract created to offer safety nets.

I have a friend who is struggling to pay his bills, yet refuses to do things to reduce some of his living expenses. He walked off a better paying job because of this kind of arrogance. He had to take a lower paying job after being unemployed for a couple of months. He now complains about being broke, but still resists several obvious things he could do to reduce his living expenses. He is learning slowly that the economy is not bouncing quickly back to normal levels. He had become dependent on OT pay. He is a hard worker, but refuses at times to accept reality.

He, of course, blames Obama for his woes.

Paul,

I don’t see the jobs bill as monetary policy or sufficient to unstall an economy. It is simply a duty to provide a safety net for those of us at the bottom of the rope.

Posted by: gergle at June 27, 2010 2:15 AM
Comment #302740

Economics is not intuitively grasped. Siegel, you are right that under the right circumstances, specific and targeted spending can increase revenues, counterbalancing that spending, both in the the near and more distant future. This same kind of non-intuitive economics applies to lowering taxes and increasing revenues, under a very specific set of circumstances, and with specific limits.

Spending which puts people to work or elevates their incomes can increase revenues equal to that spending or better, in the shorter run of 1 to 3 years. But, it is no easy trick, since government spending released into the private sector to stimulate job growth comes with no guarantees that the private sector will actually use those funds to create jobs. There has to be a consumer demand out there to mandate that the private sector hire people ot meet that demand. That has not been so much the case during this recession.

Spending on infrastructure that will create new industries and services within the economy, or significantly lower the cost of living freeing up money from paycheck earnings to consume more, can have positive effects on government revenues in the longer term of 5 to 20 years or more. The Tennessee Valley Authority was a case in point, creating an enormous and diverse economic foundation for an entire region of the country, which has generated federal revenues for decades well beyond what was invested in the 1930’s and 1940’s. The same can be said of the interstate highway system and geometric boom to consumption and distribution it created over the decades.

Lowering taxes to increase revenues can only occur in the circumstance in which consumer demand is being frustrated by lack of supply due to a lack of capital by the private sector to expand production and services. We have not seen such a scenario since the oil embargo years of the 1970’s and early 1980’s. Which nullifies all Republican petitions to lower taxes now to increase revenues down the road. The consumer demand is more than being met, and cutting taxes on capital (loss of revenue to the government) will not increase government revenues one dime today.

Anyone who attempts to make an economic scenario into a one size fits all circumstances ideology is a fool, and ignorant of economics. What makes economics a Ph.D. subject is its nearly infinite number of variables in constant flux to greater or lesser degrees, and its all encompassing breadth of variables from all areas of human society playing a role in the makeup of the current economic situation. Economics is not just about money. It is about culture, psychology, and history as well, among other disciplines like math, statistical probability, and the ethos of human behavior.

Most folks in the world do not fathom this complexity of the study of economics which makes them prey to politicians proffering ideological platitudes, masquerading as economic principles. There is NOTHING exact about the field of economics, but, there are economists and economicians who are ideologically neutral, and those in government will succeed or fail to manage a positive economy on the basis of their ability to recognize these economists and seek their counsel as opposed to the ideological charlatans in the field.

Posted by: David R. Remer at June 27, 2010 7:42 AM
Comment #302744

Paul

You are talking about a kind of reverse Laffer curve. I don’t thing anybody disagrees that the best way to decrease the deficit would be to increase tax paying employment. The question is only whether increased spending will do that.

But the idea that government created or maintained government jobs are net payers makes no sense. If you pay $100 to get back $20 you will end up poor right quick.

You could argue that government jobs are necessary to maintain conditions by which private firms can create productive jobs. But that is not what you did and it is not what Obama is doing.

BTW - why do states and municipalities always seem to lay off teachers, firefighters and cops first? Surely there are at least a few bureaucrats doing less important jobs that can go first. Or maybe there is some waste and inefficiency that could be cut. I have trouble believing that every municipality is working so efficiently that the cop is the first guy to go.

I am really sick of the “cops, firefighters and teachers” meme. I am just going to discount it from now on and call it “CFT again”.

Posted by: C&J at June 27, 2010 10:19 AM
Comment #302749

“why do states and municipalities always seem to lay off teachers, firefighters and cops first?”

They don’t. Its just that other professions within state and local government don’t have the same level of public support and don’t receive the same level of media coverage. It is also the fact that teachers, firefighters and police officers generally have strong unions or benevolent associatons to assist in their budgetary battles.

Posted by: Rich at June 27, 2010 4:52 PM
Comment #302752

I might also add the obvious ploy of local political officials by leading with unpopular budget cuts (police, fire, education) to generate support for additional taxes.

Posted by: Rich at June 27, 2010 5:49 PM
Comment #302759

Rich

Agreed. It is just BS to claim that the teachers and firemen are the first to go. That is why I am just discounting it from now on.

Posted by: C&J at June 27, 2010 8:17 PM
Comment #302766


Where I live, it has to get rather bad before the police, firemen or teachers are laid off. Some in the service dept. and perhaps a janitor or two go first, that happened here two weeks ago.

Perhaps it is the case in many communities that some of those workers have already been laid off and things are bad enough that the police, etc. are getting their turn.

Posted by: jlw at June 27, 2010 9:23 PM
Comment #302775

When teachers, fire and police personnel are laid off, it simply means the revenues of that government have reached the end of their reach and rope. In other words, the politicians controlling the budgetary process to manage the tough times have utterly failed in their responsibility to the tax payer public. That is what it means.

Political meaning cannot be found in the headlines. An educated and critically thinking human brain is required to derive the meaning of such headlines and news events. America’s political system is broken and has been failing the American tax paying public for decades, thanks to the bedfellow relationship between politicians and wealthy business lobbyists and special interests pulling their strings. When times were good, taxes should have been raised and rainy day funds established.

About a quarter of the State governments actually fulfilled that public duty during the good years and are weathering this recession in far better shape than the other 3/4’s of the country. To reject raising taxes and creating rainy day funds during the good times is to reject the reality that floods will happen in the future.

Noah took the appropriate action in the face of knowing what the future would eventually bring. That story is in the Bible for the most pragmatic and pedagogic of reasons. 5,000 years later, people still demonstrate a refusal to accept the lesson.

Posted by: David R. Remer at June 28, 2010 1:06 AM
Comment #302788

Let’s get some things straight:

1) The Federal government is funded by way of our economy.

2) Economic problems translate to fiscal problems, especially in our current situation.

3) Long term structural unemployment is one of the worst problems we face.

4) Private investment is crippled by the consequences of the financial sector’s failure. It will be years before they can stimulate the economy through robust investment.

5) Interest rates are already at basically zero. The alternative to this is monetizing of our economic problem- essentially printing more money, and we can all agree that’s a fairly dumb idea long term, if you don’t want to be taking wheelbarrows of currency to the store.

6) Long term structural unemployment will mean both economic problems and fiscal problems will continue for the forseeable future, at great cost to America’s prosperity and ability to pay off its debts.

7) So it comes down to this: If the government doesn spend to maintain state budgets, spend to create jobs, spend to create economic stimulus, it will be spending to deal with poverty, spending to deal with debt brought over the long term by a deflationary economy that keeps revenues low.

Republicans want austerity to work in spite of the crippled economy. They’re working off of assumptions that are no longer valid, namely that the tax dollars being spent represent money being taken out of the economy, out of the useful circulation of it among private businesses. But with the investment firms tightening credit, the banks crippled, the Federal Reserve doing as much as it can, about the only institution left that can put the pedal to the metal is the Federal Government.

The longer we wait, the more fiscal and economic harm gets done by the long term downturn. Fixing the fiscal situation without fixing the economy is like replacing the spark plugs when your car has a dead battery.

Posted by: Stephen Daugherty at June 28, 2010 1:49 PM
Comment #302789

Stephen, This economy has an almost dead battery, not hitting on all cylinders, and almost out of gas. So how are we supposed to pay for the debt we already have? By adding more to it? You said you hope to have kids some day, the way this government is spending now their great grandchildren will be straped with the debt.

Posted by: MAG at June 28, 2010 2:25 PM
Comment #302793

MAG-
As Doc Brown in Back to the Future said, you’re not thinking fourth-dimensionally!

Think about it this way: A deflationary trap, like the one we’re in, is like a long term downwards sucking force on the economy, preventing growth. Worse, if you try to be austere, your fiscal troubles get worse with your economic troubles. If you want to know how bad that can get, read this article.

If we don’t get out of the deflationary trap, we’re not paying for anything, anyhow, anyways. The idea is, jumpstart the economy.

You know how a jumpstart works, right? The car battery is actually there just to start the car. Normally, once the engine is running, it runs the alternator, which generates the power in turn to keep the spark plugs sparking. All that is irrelevant though, if the engine doesn’t get started first.

Similarly, here, the economy would have better capacity to absorb the debt, including the cost of stimulus, if it were growing, rather than stagnating under the deflationary pressures. So what we need is to increase debt in the short term, to better enable us to take care of it in the long term, and to get the economy healthy again so we’re not suffering from those effects either.

By narrowly focusing on debt and fiscal spending, the Republicans forget that in order to power the austerity, the harsh spending cuts and tax hikes necessary to shrink the debt, you need the economic werewithal for the economy to endure cuts in programs and increases in revenue collection. If the economy doesn’t have those reserves, then the austerity measures cancel themselves out through bad economic effects.

Posted by: Stephen Daugherty at June 28, 2010 4:32 PM
Comment #302794

Stephen, Sometimes if the car battery is to far gone not even a jump will work. Our economy is getting to that point. Like I said in the example of the women earning 70,000 a year prior to layoff and declining a job for 40,000 a year, to much of that stupidity is going on. If people really want to work they will take what they can get and with that the economy will start growing again little by little. This thing with constant government handouts has got to have a limit to it or else we will never improve. If you want the economy to improve give tax credits to the private sector employers so that they might start hiring people again it will take time. Stephen I know what collecting unemployment is like and the getting used to a check every two weeks without really doing anything, You get spoiled, especially when the government keeps extending the benefits. Thank God it finally ran out. Maybe I had to work spot labor for awhile but I did finally get a decent paying job.

Posted by: MAG at June 28, 2010 5:00 PM
Comment #302795

As I understand it, the dems weren’t willing to pay for extending the benefits by cutting somewhere else. Whatever happened to PayGO?

Posted by: Royal Flush at June 28, 2010 6:32 PM
Comment #302796

Does anyone believe that in the entire federal government budget the dems couldn’t find the money to pay for extending unemployment benefits? Talk about uncaring and callous, they take the cake.

Some have written about raising taxes in the good times to save for a rainly day. Never happens and won’t happen either with the Feds or the liberal controlled state legislatures. Give a politician a dollar and they will spend three.

The boondogle in the Gulf is really getting worse every day under the current leadership. Barry and company believe doing nothing is the correct policy. There will be a price to pay at the polls.

Posted by: Royal Flush at June 28, 2010 7:55 PM
Comment #302797

MAG-
You’d better hope the battery’s not permanently dead, because then this cold last for the next quarter century or longer.

With your policies, it would just get worse. You look at things merely in terms of moral hazards. Tell me then, what are the moral hazards of chronic, long term poverty and unemployment?

The point of policy should not be Sunday School moralizing. It should be to confront the issues at hand facing the country. You talk about that woman accepting a lesser paying position. Maybe you’re right, and she’s a bit stuck up. But when millions experience the same thing? When millions see their buying power reduced suddenly?

That, friends and neighbors is deflation. It’s what drives prices down. And in turn, the drastic driving down of prices puts more people out of work, worsens the situation. That’s the deflationary trap. Because people are already straining to pay for things they used to have no trouble with, when you take money away from them by either laying off federal and state employees, or by cutting off various forms of compensation and income insurance, like Unemployment payments, you’re making the problem that much more worse. They irony, too, is that such payments have a stimulative effect that gets you back more tax dollars for the ones you spend. By not having people completely destitute, you avoid the economic consequences of them just being a drain on society.

This is all the consequence of a breakdown, not a correction in our financial system. The economy is not functioning as well as it’s capable of. What folks like you want is for us to wait for this problem to organically pass. But the nature of the problem is very pernicious. The Japanese have been suffering the effects of such a downturn for about twenty years now, and have been plagued by constant instability, even when growth was better elsewhere.

That’s what you would consign us to.

This is something we need to turn the corner on fast, or we’ll be paying the price in lost productivity and high deficits for years to come.

Royal Flush-
Whatever happened to Paygo? We’ve had a bit of an emergency, in case you haven’t noticed. But a better question is, what happened to Paygo under the Republicans?

Where were the marvellous concerned Tea Partisans, when the Republicans went on the spending spree that marked the last Decade? When they refused to pay for all that wonderful government they ordered up. The Republicans can talk about how much more responsible they are, but most of the deficit belongs to them.

As for Callousness? There again, you’ve got things backwards. You see, You’re calling us callous because we won’t use paygo rules, in this emergency, in order to pay for this unemployment from somewhere else.

But in the end, it is you and your party who are blocking the various fixes and payments, you and your party who are telling everybody on unemployment that’s about to run out “tough ****”. I think that’s actual callousness.

As for the boondoggle in the Gulf? Barack Obama has done all he can. The government doesn’t have the technology to operate at that depth in that way. He can’t dive to the bottom and crimp it shut himself. So, the big business is doing it.

If you want to believe that this shows the powerlessness of the Federal government, go ahead, it does. But when people ask why the Feds were so powerless to prevent this, who do you think will actually end up with everybody looking at them? This is what comes of your kind of energy policy!

Republicans have done wonderfully presenting Democrats with all kinds of nice neat little warning signs, as to why Republicans don’t deserve to be in charge.

You are hoping in vain that people will simply settle down to be cynical, and just accept how bad things are, without wanting to rock the boat by changing things. But really, you’re just setting people up to go off when finally one outrage too many just shocks the conscience.

Your party is digging its own grave, and confronted by criticism for doing it, are digging it even faster, just to show people.

Posted by: Stephen Daugherty at June 28, 2010 9:00 PM
Comment #302798

Royal Flush,

Blaming the Democrats for not extending unemployment benefits is truly bizarre. At least you haven’t joined other conservatives arguing that it is in the unemployed best interests that benefits be terminated. After all, unemployment benefits make people lazy. There are plenty of jobs despite the greatest economic downturn since the Great Depression. The truth of the matter is that people are unemployed because there are not enough jobs not because they have been made lazy by unemployment insurance. Consider, for a moment, that we are in a major recession. Consider also that preceding this recession was a period of virtually no growth in job creation despite an apparent robust economy. In fact, job creation during the Bush administrations was the lowest since Herbert Hoover. So, how the h**l are people going to find work and feed their families without jobs? In the absence of jobs, are we going to let these workers starve?


Posted by: Rich at June 28, 2010 9:09 PM
Comment #302802

Stephen and Rich You two act like the government has an endless supply of funds. Rich so how the H—L ARE PEOPLE GOING TO FEED THEIR FAMILIES IF THE GOVERNMENT GOES BROKE. Hell ya I got lazy collecting unemployment and I had to take what I could get to make ends meet when I got cut off. Maybe you two ought to try it sometime, then maybe your liberal/socialist/progressive attitudes would change. Taking a s—t job to feed yourself or family never killed nobody. You take what you can get and cut back on non essencials. I always see people at the spot labor offices, there is nothing wrong in working through one. Maybe your buying power is limited but at least you are working. A NANNY STATE is NOT the answer. Why don’t you go down to your local government housing location and you will see generations of government controlled poverty Stephen. What ever did happen to PAY GO, the last time was an emergency to.

Posted by: MAG at June 28, 2010 10:46 PM
Comment #302814

MAG,

“What ever did happen to PAY GO, the last time was an emergency to.”

The last time was the 2001 recession. Apparently Bush and the Republican Congress forgot about PAYGO, because they cut taxes and increased the deficit. After a jobless recovery, they continued to step on the gas, doubling the national debt. Now, the same party that gave us a legacy of debt, economic disaster and financial elite bailouts, lectures the unemployed on work ethic and frugality. What hypocrisy.

Posted by: Rich at June 29, 2010 6:37 AM
Comment #302817

No Rich the last time was the last emergency unemployment legislation before this one. Now that you Democrats have control you don’t want to practice the thing you fought to get PAY GO. And you say republican hypocrisy? What is it Rich Pay Go is only for Republicans? Democrats don’t have to use the Law they wanted? You copmplain when the Republicans increase the deficit but it’s ok for Democrats to increase the deficit to record levels by trying to spend your way into prosperity. When are you guys going to figure it out that it ain’t working.

Posted by: MAG at June 29, 2010 8:24 AM
Comment #302820

MAG,

The bottom line is that we have bailed out the financial elites to the tune of literally trillions of dollars but can’t find a fraction of that amount to assist those victimized by their failed policies. To add insult to injury, some now blame the victimized unemployed for their plight. If only they would take a pay cut and accept one of the many available jobs, everything would be fine. Except that there are not any lowering paying jobs. “Oh, what a tangled web we weave.”

Posted by: Rich at June 29, 2010 9:37 AM
Comment #302821

Rich Lower paying jobs are there but to many are letting pride get in the way of reality as I stated in the case of the women in post #302719. WE CANNOT KEEP BAILING PEOPLE OUT somewhere we have to draw a line and say enough is enough. It’s time to reward those who refuse a job because of lower pay with cancelation of unemployment benefits. I had a good paying job before being layed off benefits ran out and had to take what I could. I had to adjust and if I could do it others can. Some of those so called victimized unemployed did cause their own plight, case point Auto industry, steel industry and other Union Jobs.

Posted by: MAG at June 29, 2010 9:59 AM
Comment #302825

MAG,

The most significant factor in the loss of decent jobs in the US is international wage arbitrage. US corporations are exporting their manufacturing to China and other low wage countries. Outsourcing, even in the service industry has accelerated in recent years. You can blame unions if you want, but there is undeniably a reduction of good paying jobs for the average American. The loss of those jobs and wage stagnation has been a prime culprit in fueling rising household debt in the US. In my opinion, it is time for both parties to put aside their petty tribal politics and focus their efforts at re-establishing a domestic economy capable of providing jobs paying a decent wage. Otherwise, the middle class in this country is toast.

Posted by: Rich at June 29, 2010 10:53 AM
Comment #302828

Something not to be overlooked is the fact that a very significant number of the structurally unemployed are not really unemployed. They have gone to the underground and black market economy, which doesn’t show up on federal employment rolls. It is estimated by the Wall Street Journal to be at 1 Trillion dollars or 10% of the total, accounted for, U.S. economy. That is a very large number of employed unemployed.

And that represents in the neighborhood of 20 to 40 billion dollars in taxes not being collected. Talk about your free-loaders. To rub salt into the wound, some of these employed unemployed actually collect government benefits for being quote: Poor, unquote.

Obama has taken some initial steps to address the issue, but, they are baby steps, to be sure.

Posted by: David R. Remer at June 29, 2010 11:10 AM
Comment #302837

Mr. Daugherty wrote; “As for the boondoggle in the Gulf? Barack Obama has done all he can.”

I would make a slight correction to your statement. Barry has done all he is willing to do. I am certain you read newspapers and listen to TV and radio. It has been pointed out by many on both political sides and neutrals what more Barry Boop could have done.

As for PayGo, rather than hold the dems responsible for finding cuts to pay for extending unemployment benefits you merely blame REps for past sins. I though you were a realist and fact-facer Mr. Daugherty. From your comments, that apparently is only true when you are properly motivated.

Posted by: Royal Flush at June 29, 2010 2:00 PM
Comment #302838

Rich wrote; “Blaming the Democrats for not extending unemployment benefits is truly bizarre.”

He then goes on to state why these unemployed are the result of Rep policies. Rich, could you answer my question? Why wouldn’t the Dems find money to cut from our huge federal budget to extend those benefits for the unemployed? Do you honestly believe there is no unnecessary spending in the entire federal budget. How about all those scientific studies about why cows fart and how it affects global warming. There are many others as well.

The truth is, the congressional dems don’t have compassion for those folks. Perhaps the unemployed aren’t contributing enough to their campaign coffers.

Posted by: Royal Flush at June 29, 2010 2:05 PM
Comment #302842

Royal Flush-
I am a realist and a fact-facer. We are facing high deflationary pressures. That means that the austerity we attempt will get nowhere. People won’t have the money to make the tax hikes work, nor the dollars to spare to replace what you take from them in assistance, in jobs, in funds and contracts.

You make this nice little analogical point that the government should be tightening its belt just like the average American.

You forget to ask why these people are tightening their belts: because this economy is cash starved. You’re asking the government to starve it of some more cash. Now if government could fund itself independently of the economy, this might work, but the government is entirely dependent on the economy, just like spark plugs are dependent on the battery, in order to work.

The question here is whether we are prepared to surrender ourselves to decades worth of economic instability and chronic bouts of recession.

The economy must recover for our fiscal situation to have a decent chance of recovery. When we last instituted PayGo, we had a strong economy to make it work, and Clinton’s tax hike as well. We had both the economy to power the fiscal recovery, and the sufficient tax rates to get that money to fill in the gaps in the budget.

You? You’re expecting it to work in a weak economy, with tax rates effectively lower than they have been in over half a century, with the chance of a tax hike being effective compromised by the deflation afflicting the whole economy.

Like Emerson once said, a foolish consistency is the hobgoblin of small minds. Folks on the Right are treating the tax policies as if they work the same no matter what the conditions are.

They think tax cuts are as effective when the top rate is up like 60 percent, as when it’s down around 35 percent. It’s not.

They think that fiscal policy will deliver similar results, regardless of whether the economy is in deflation or inflation. They’re wrong. History proves them wrong.

They think tax cuts can create higher revenues on the backside. It’s never really happened as they’d hope.

Austerity will not work without an economy that’s recovered from Wall Street’s collapse. It will hurt the middle class and poor, the folks who have to worry about work.

And what hurts those masses of people will hurt the economy in turn. What hurts the economy in turn will hurt the fiscal picture in turn, because people out of jobs and businesses that fail or see falls in revenue pay less taxes.

The Republican plan is to bring back the economy on the backs of those already hard hit on it, to force more belt-tightening so that the interests they’re beholden to can make more money.

We need to remember that the old gilded age, for the longest time, was a period of economic instability, where almost half of the time was spent in economic contraction, where currency deflation made getting out of debt more difficult for the average person. We have to quit with the all-American, Sepia-tone notions of what that time was like.

The government needs to focus on stimulating the economy first. Otherwise, there’s no point to austerity.

Posted by: Stephen Daugherty at June 29, 2010 3:15 PM
Comment #302844

Royal Flush-
What you would have us cut would be government jobs and government assistance. It would be harmful to the economy.

I am a realist, and I do face facts. I know it’s neither politically popular nor easy to push for additional stimulus, because what I see in front of me is decades of economic stagnation for the average American.

Folks can whine about paygo, but without the economy to make it work, PayGo, and any other kind of Austerity measure are just jokes. They’ll cut into the money available for people to buy goods and services. That will cut into the economy. And what’s bad for the economy is bad for the fiscal situation.

Got it?

You’re still fighting the last recession, still worried about inflation at a time when all the signs point in the opposite direction. Yes, I’m a fact-facer. What are you? what are you if you’re still fighting rising prices when the prices are falling?

Yes, I’m a realist. That means I recognize problems, instead of trying to rationalize my way out of their threat to my belief system.

The economy must be led to recover, or the fiscal problems will persist. Your people pontificate about what legacy we will hand to our children. We may leave them a little more debt, but we’ll leave them a hell of a lot more economic growth to pay it off with.

Posted by: Stephen Daugherty at June 29, 2010 3:28 PM
Comment #302845


Royal Flush is exactly right. We have accomplished all we can in Afghanistan. If you think not, ask the Russians. It is time to end that conflict and to start considering the average working class Americans rather than wealth.

For decades now, all three branches of our government have done very little except cater to wealth. Even social spending must now be funneled through the the hands of wealth to insure that it will produce much profit.

IMO, what we are seeing is a new modus operandi for social spending. One that will affect future social spending but will also be the filter used to reevaluate and re-legislate current social programs. In the future, the middle class workers will not only be taxed to provide for those less fortunate, but they will also be required to do so in a manner that will provide profit for those most fortunate.

Posted by: jlw at June 29, 2010 3:32 PM
Comment #302853

jlw, you are right, that we have accomplished nearly all we can in Afghanistan, which is to say, we have stopped Afghanistan from being host to attacks upon the U.S. Homeland. The issue now is, whether we relinquish those gains by complete withdrawal, or secure a maintenance position in Afghanistan which insures it will not become home to attacks upon the U.S. homeland in the future. I am with Obama on this one. Accomplish all we can by next year, and then draw down to a maintenance position, and cross our fingers that sometime in the future, the Afghanis join the 21st century economically, culturally, and politically, for their own better future. Karzai will not be in power forever, and there is a limit to people’s tolerance for suffering and deprivation, even in Afghanistan, though no one at this point in time, can say when that limit will be reached.

Posted by: David R. Remer at June 29, 2010 6:09 PM
Comment #302955


David, we are unwilling or possibly financially unable to do what it will take to bring Afghanistan into the modern world. That would require a Marshall Plan, and since we and the rest of our allies are unwilling or unable to provide such an investment, we are going to fake it and hope for the best.

IMO, the primary objective of any maintenance contingent in Afghanistan will be the protection of corporate interests.

We have driven the Taliban from power and disrupted Al Qaeda, destroying their bases and capturing some of them. We have not prevented Afghanistan from hosting new attacks on the U.S. because we don’t have enough troops to secure more than a small portion of that nation. Falling back to a maintenance position will make that mission even harder without the full cooperation of the Afghan people.

Then, there is Waziristan.

IMO, the smaller our contingent of troops, the more those troops will be reliant on high tech solutions such as drone aircraft carrying bombs and the more innocent bystanders are going to be caught in the crossfire.

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