Republicans & Conservatives: Archives

The more I study the question, the more I think Cheney was right when he said that Reagan proved deficits don’t matter. It’s hard to get people to understand this, because they tend to equate the national economy with their own credit card debt, but it’s probably true. For the US at least, deficits DO NOT matter.

http://www.press.uchicago.edu/Misc/Chicago/751120.html

Given: Bush said he would not pass on our problems to the next generation.

Given: Our national debt is over 7 Trillion and will be over 10 Trillion by the end of this decade.

Given: The deficit is a measure of how much we are increasing the debt in a given year.

YES! THe deficit matters. The only way to live up to Bush’s promise is to change the deficit to a surplus, and that is not going to happen for the foreseeable future. The Deficit Matters a great deal to our children’s working lives - for they will have to pay the taxes the deficit now adds to their overhanging national debt.

Well, I shouldn’t say that it doesn’t matter at all—it does, but to say that “we’re passing on a debt to our children” could be a huge oversimplification. Sometimes running up a debt is what enables later economic growth and provides a means of avoiding economic stagnation. We don’t want to pass a stagnant broken economy on to our children either.

The best way to overcome a deficit is to outgrow it—and the US economy has done so many times in its history.

Think of it in smaller terms. A businessman might borrow money to expand or improve a business—he goes into debt temporarily, but in the long run, he recieves a much larger return on his investment. So it’s never as simple as saying “Debt bad, no debt good.” Sometimes the biggest risk is taking no risk at all.

To truly understand whether a deficit is worth it, you must balance the rates of interest on the loan (money lost) against future added revenue. Currently, the economy is growing like Andre the Giant on steroids, which offers the US a very real chance to outgrow the deficit—once again.

Even the conservative think tanks are saying we cannot grow our way out of this kind of debt, Martin. It is unprecedented since by the end of the decade, even if the economy breaks our way, the debt as percentage of GDP will be higher than ever before.

Sorry, but those are the facts as reported by conservative institutions like the Heritage Foundation, which is why Kerry is beginning to make the economy a cornerstone of his campaign and the Administration has backed off it as an issue. It is indefensible, even by conservative measures. That of course will not stop spin artists from trying to hide the facts on both sides.

We can support our debt with a strong economy or not with a weak one. What has our freedom loving, crony tax cutting, job offshoring, illegal immigrant friendly, war mongering, election fixing, white collar crime blind, resource wasting, PR savy, dry drunk White House done to jump start the economy? How does entitlement rich Europe maintain such a strong Euro, compared to the dollar? It is the economy stupid and only Paul Craig Roberts is telling it like it is.

Martin,

Deficits don’t matter, and yet Bush ran for president on a platform of eliminating the deficit. Was he lying, or did he just not understand economics?

I suspect that it was really Clinton who taught the GOP that deficits don’t matter. Any problem that Clinton solved can’t really be a problem… (I suppose someone is going to chime and “credit” the GOP for eliminating the deficit, which we just learned didn’t matter.)

Lets get a couple of things straight:

1. Bush is terrible on the deficit. I don’t care about the deficit as much as the fact that the SIZE of government is increasing under Bush- that is the major reason for fiscal conservativism- to keep the government small.

2. Clinton is not a fiscal conservative- he was forced to not overspending by a republican congress and the populous. More importantly, he was forced to his ways by the American people- who issued an unequivocal verdict against his big government socialized medicine program in 1994. Pre-1994, the ideological Bill Clinton thought government could solve all of the problems by big government. After 1994, seeing that the country was no longer willing to trust big government, he reversed course completely and announced that the era of big government was over. If nothing else, Clinton swung with the political breeze, and smaller government was the one he caught in the second half of his administration.

3. If you Democrats really care about getting rid of deficits, lets bring back the balanced budget amendment you guys so completely shot down a couple of years ago. I know we in the libertarian camp would embrace it, as well as many fiscal conservatives who are sick of Bush’s spending spree. Somehow, I doubt it will happen, as I doubt the left is willing to permanently change its stripes about spending. This is simply politics- Bush is bad on deficits, so the Democrats are now against deficits. Once we have Kerry or Hillary or whatever democrat as president, I am sure we will see a miraculous reversal- from both sides.

how about we reign in the interest on the public debt, which in fiscal year 2003 was $324 billion.

Bayviking, why do you think that China deliberately devalues their currency by keeping it pinned (probably illegally) to the dollar? Because a soft currency is a boon for a country’s export market. One factor does not make a strong or weak economy, and there are times when a weak currency is actually very good for a nation’s overall economy. There are a lot of factors working in unison, and it’s never as simple as just cutting deficits.

If you consider a strong Euro a sign of a strong economies in Europe, then you need to look at other factors. France and Germany are practically flat-lined, with unemployment rates which dwarf our own, extremely stagnant growth and exports (infastructures in terrible decay, which points to very serious problems down the road) and debts of their own piling up. And other more robust European economies are getting fed up with their constant flaunting of EU rules. The EU, as the recent elections showed, is skating on very thin ice. Many are no longer wondering if, but when, the meltdown will occur.

also, the most frustrating part of the political parties’ reversals on deficit spending is that the party in power is the one that is always for deficits and the one that is out of power is against them. So there is always anti-deficit rhetoric by the minority party, but the size of government never decreases and spending always goes up (its just a question of by how much). Only a libertarian president would actually CUT spending, but there is about as much chance of that happening as me joining the NBA.

In any case, they have finally pushed this former loyal Republican voter over the edge, and I am likely casting my ballot for LP candidate Michael Badnarik. Even having said that, voting for Kerry because you are genuinely worried about deficits is pretty foolish.

I guess if Bush campaigned on deficit reduction, then abandoning that pledge just proves his pragmatism, flexibility, and refusal to wear ideological blinders in the face of practical necessity. :)

(I give you that smiley because I know how many of you will fall out of your chairs to read such a statement).

It is all about context as you well know, Martin. It is good to have a flexible manager who can adapt and adjust with the terrain in order to fulfill the general welfare of the country. The tax cuts in part were a very good idea, though they increased the deficit. But, Bush’s unwillingness to check Congress with his veto pen to manage the budget, is not flexible. It is simply adding fuel to the fire. Fact is Bush has been for everything Congress has passed including its pork for industry, locales, and corporations.

Martin,

The $1.35 billion/day deficit is a dangerous unambiguous trend. Cutting working class benefits would improve the balance sheet and so would reigning in elite legalized crime and tax dodging. What would an informed electorate in a real Democracy choose?

A weak dollar raises exports, but for us that’s now mostly agricultural goods, with a few airplanes and microprocessors still in the mix. But most new Boeing airplanes will be designed and pieces manufactured in Japan for assembly in the USA. For the most part hi-value products have fled offshore.

Middle class wages, stuck for 30 years, suffer directly from the low dollar, while insiders cook the books and steal profits. CEOs are not legally responsible, which O’Neill and Greenspan wanted to correct, but Bush (Cheney) refused. This country was on this self destructive path before, until monopoly busting, labor laws and unions turned things around.

Martin, historically, tax cuts have been poor stimulators to the economy. What stimulus they do give should be avoided. Taxes should be held at a fair level that balances public and private interests, but should not be the go-to mechanism for economic stimulus.

The first reason is that we should encourage businesses to make money the old fashioned way: earn it. Our moderate tax rates did nothing to stall growth in the nineties. By avoiding deficit spending we were able to keep absurdly low interest rates and not drive up inflation. If Business could prosper during that time, then it is evident that the rich need very little motivation to continue to make money. What killed this economy in the early 2000s is simple: a lot of people made money that shouldn’t have. A lot of people reaped economic benefits they didn’t earn to do not a hell of a lot of good.

There is an observation in the bible that the sabbath was made for man, not man for the sabbath. Well, in this case, we can say that the markets were created to serve the interests of the people out there, not the people to serve the interests of the market. There are real things the economy and our employers are supposed to do for us, and people have neglected that in the name of serving so-called “economic” interests.

The economy will run better if the average American gains more from the money they earn and the work they turn to. In the end our market is designed around consumers with disposable income, and those are the exact same denizens of the middle class that current policies in government and business have squeezed. If people want a better economy, and permanently so, look out for the interests of the average consumer. Don’t be so concerned about helping those who already have more than enough to spend. I mean, giving tax cuts to the rich is like running west to help the planet rotate.

Misha, we find ourselves in agreement again. Your assessment of Clinton’s stance is akin to mine. I also agree that Kerry is probably not an answer to smaller government or balanced budgets, but, then no one we could possibly elect, could achieve such a thing in the next 4 to 8 years as a result of the commitments and laws passed by this Congress and this President.

Kerry could be persuaded however by the electorate, to exercise his veto pen, and reign in tax cuts for the wealthy and corporations once the economy is robust again, especially if the electorate make it clear he hasn’t a chance at reelection if he doesn’t.

With Kerry there is the potential for downsizing government. With Bush, he has nothing to lose if reelected and therefore, the electorate’s needs or concerns will not be a paramount to fulfilling GOP lobbyist desires.

It is encouraging to me to see that you may not choose to vote for Bush’s reelection. I pray for the sake of our nation that millions of third party adherents who supported Bush in 2000, find themselves in a position of having nothing to lose by voting for their third party candidate in 2004. This country desperately needs a new competitive party who shun all that is wrong with the two major parties and compete on the basis of putting the general welfare ahead of special interests.

guy, good idea, but the only way to reign in the interest is to reign in the national debt. The only way to reign in the national debt is to end deficits and begin producing federal budget surpluses - taking in more taxes than we are spending in a given year.

The interest paid on the debt is subject to the global marketplace. I just read or heard this morning that the wealthy are now taking much larger risks with their portfolios moving their money out of traditional safe havens like treasury certificates and fixed rate instruments and moving into the stock market. These kinds of moves by investors force the U.S. government to pay higher interest rates to draw that money back into the treasury debt instruments.

So, bringing down the debt is the only option for the foreseeable future of reining in the interest on our debt.

bayviking, your last comment is very astute. I see now where some conservatives are moving to end Medicare, Social Security, and other social programs prior to their expense moving into baby boom generated deficits.

This is very clever. You see, back in the 1980’s, under Reagan I believe, the government increased Soc. Security payroll deductions in order to meet the baby boom obligation when the time came. However, during all these years, the federal government has spent that additional revenue on all sorts of other things from pork to foreign aid. If these conservatives have their way, they will allow the government to take all that extra money collected from us and run.

It amounts to something like 2 trillion dollars if I recall correctly, which means our government has an obligation to allow Soc. Security to run 2 trillion dollars worth of deficits before it becomes necessary to either increase payroll deductions or decrease benefits. It has this obligation because it took the money from workers these last two decades on the promise that it would help keep S.S. solvent over the baby boom hump.

But these conservatives I speak of like the Bush appointee to the CBO who supervised the development and release of a report recently on the state of Soc. Security, are now talking about avoiding Soc. Security every being allowed to enter deficit spending by radically altering the program or eliminating it before 2019 when it will begin to enter the red.

What they are reluctant to mention is that we are entering another baby boom, which will bring a whole lot more workers into the Soc. Security funding pool right around the time it begins to run deficits under the old projections of zero gain in workforce payrolls. If we did nothing but manage the economy well and keep employment with good wages up, Soc. Security could well be solvent out to 2060 and beyond.

So there is a real idealogical smoke and mirrors game going on here, and the goal is to convince the public to give up what it has contributed under the false guise that the system cannot be sustained, which is starting to look from the facts and figures to be patently false.

David-

Social Security has always been and will always be a Ponzi scheme, so please don’t limit your blame of stealing away our money to conservatives.

bayviking-

Although middle class wages might be stagnant, one factor you are excluding is the growth in wealth of all Americans. Upward mobility is available to Americans like no where else in this world. Last I checked our GDP per capita was still rising, even adjusted for inflation.

Misha-

Once again you are dead on in regards to the Democrats and their new breed of “budget hawks.” Their tatic seems to be run right, left, or center of anything GWB says if it gives them a chance at the White House. If we were not at war I would certainly join you in supporting a third party candidate.

Hi Dave & George:

Social Security was held separately until Johnson used it for the Vietnam War. Bush and Johnson both enjoyed a partisan monopoly in the White House, Congress, and Supreme Court.

Funny thing, both betrayed public interest with wreckless spending. Funnier thing, elite insiders pocket the profits while conveying ALL risks to a gullible middle class. Private media ownership and astronomical advertising costs control what can be said. Every Republocrate knows he needs the crooks to get reelected. The crooks don’t much care which politician they use, but they give more to Republicans.

Clinton provided taxpayer backed loan guarantees to Ken Lay and Cheney organized contract enforcement (bribery) parties in India, Africa and Dominican Republic which quadrupled electrical rates. Police shot protestors dead, as in Bolivia for a Bechtel water project. Enron, Bechtel or Haliburton are only out of pocket, sales team travel costs etc. Higher utility rates and taxpayer loan guarantees follow all the “glorious privatization”. Haliburton is now under investigation for $180 million in Nigerian bribes, because the French complained. If the deal goes sour, taxpayers will foot the bill. If the deal makes money Haliburton will pocket all the profits. Many allege this to be capitalism. These crooks will claim to make us safer by locking up John Walker Lindh for 20 years and capturing Hussien, but don’t expect the bribery investigation to stop any scams or recover more money than they cost.

Iraq $200 billion costs do not include homeland security or overall defense spending whereas WWII total cost was $304 billion against two industrial superpowers. The White House is spending all this money to take out 10,000 fanatics living in tents and caves. During Watergate, Deep Throat’s persistent advise was “follow the money”. Who sold American and United Airlines stock short just before 9-11? Was it the Iranians, Saudis or the Carlyle Group?
The murder investigation trumps the right to privacy and the answer to this question should be made public.

When Warren Buffet walks into a McDonalds the average wealth in the joint goes up 5,000 percent. Most averages are misleading and used frequently to back crooks lies. For those who own the means of production, total wealth can bounce up and down with little or no consequence. For homeowners and lower workers the economic cycles wipe out wealth, in homes or retirement plans. Rising interest rates and falling incomes produce many home loan defaults, ready for cherry picking by the Savings & Loan Crooks. Profits are for elite crooks, risks are for stupid workers.

bayviking-

O.K. I will resort to anecdotal evidence in lieu of statistics and say that, as one who lives in one of the poorest States in the Union, there are many people here who are doing much better standard of living wise than their previous generation. Again, and only my observations, fewer people are staying poor, and many people who were born to the middle class are considered wealthy today. This is because, IMHO, we very much live in the land of opportunity.

As for Social Security, this from socialsecurityreform.org:

Congress designed Social Security to operate as a pay-as-you-go system. That means no money is actually set aside by the government to pay benefits in the future. When workers pay taxes into the Social Security “trust fund,” most of the money is immediately paid out as benefits to today’s retirees. The leftovers go straight to the Treasury in exchange for federal IOUs and are used to finance the national budget.

It’s a Ponzi scheme and would be illegal under the UCC.

This is an interesting discussion, but it looks to me like most opinions are based on a worst-case scenario.

I’m sort of an advance scout for the boomers, having retired this year. Forty years ago I told anyone who would listen that I never expected Social Security to be there when I was ready to start drawing it. I mean, how could this FDR free-candy program possibly hold together? Who’s going to pull the wagon when everybody wants to ride? The sky is falling and we’re all…DOOMED!

Well, it didn’t quite happen that way, and despite the massive expansion of Social Security and the addition of governmental goliaths like Medicare, Medicaid, etc., etc., we’re still having the same discussion forty years later.

But that’s not to say we should just let it continue as it is. There is one very important step that should be taken, in my opinion: Establish a process of means-testing for anyone on the receiving end of these programs.

If someone has a million or two squirreled away at retirement, why should they receive a monthly check from the government simply because they’ve decided to stop working? Today it isn’t possible for anyone to opt out of Medicare or Social Security. That’s right, you can’t just say no. It’s crazy.

Now as a practical matter, you couldn’t spring something like this on those who are at or near retirement (and of course those of us who don’t have a million or two squirreled away), but you could “grandfather” these changes so that those who are twenty years or so away from senior citizen discounts would have time to prepare themselves.

I’m also in full agreement with Bush’s idea to establish private retirement accounts but, as he has made clear, there would have to be a lengthy lead time to make it practical. Even so, it would be a pretty bright light at the end of the economic tunnel.

Neither of these would solve the deficit issue, but they would sure put a big dent in it. Of course it’s not likely to happen because no politician in his right mind is willing to even whisper about anything so drastic.

NOTOTH

George:

I can’t argue the Social Security issue without a little more research. I do know that SS “Trust Fund” has been doctored by Congress a half dozen times since 1935 and more than one President has raided the “Trust Fund” for their pet projects, including wars. If a Banker did this to a “Trust Fund” he would be jailed.

Dr Edward Wolf of Income Studies Project in New York has shown that from 1983 to 1997 “average” income rocketed, of which the bottom 80% received (0%) nothing. The guilded top 1% own $2.9 trillion in US Stocks and Bonds of their $3.5 trillion net worth (1997).

Nototh is right, the top 1% and maybe the top 10% should be ineligible for Social Security.

bayviking, I agree. Means testing for benefits, not deductions, is the single largest step I can think of to add many many years of solvency to the Soc. Sec. plan. (Well, besides encouraging another baby boom whose consequent costs to society would be enormously devastating).

Boy….. I feel like Davy C. going to Wash-(not Warsh)ington to act like a politician. I was raised in Nebr., S.D., San Diego,Ca, and now living in Sacramento, Ca. Yeah, a baby boomer with a high draft number that kept me wondering ” why not me Lord to fight in this conflict”. Oh, yeah the deficit! It’s not popular to get A.D.D. when writing a B. S. email to the world. Once I was a Democrat in the mid-west( because? My daddy was.)Now I’m supporting The GOP! Since we don’t get taxed in Calif. anymore( because we get fee’s to compensate for the lack of money that can’t begin to pay for the programs coming out of Rich millionaires leading us self-employed, less than middle class, aging entrepingnure’s into accepting ill-legals ( decent humans trying to keep their families alive and healthy, like us) and now we’re talking about giving a priviledge away ( no not the right to drive in America, but the right to vote when they pass their drivers test. ) Darn, darn, darn! I hate this A.D.D. The deficit isn’t the problem guys. If it was, the government would send us a bill every month to take care of our share of this debt. Half a billion divided into 7 trillion is what? I’ll pay my share, just tell what it is! I keep telling my wife, in three more months we’re going to be financially stable. I hope I’m not lying. The point? We choose to be where we are. I could move my teacher wife and my demolition business to Phoenix,AZ., buy a nice house with a pool for under 140,000.00 and then get used to the cost of living in Az. I might never be able to move back to homes going for 400 to 600,000.00 though.