Deficit Lower - Now Dump the Earmarks.

Our Federal deficit is dropping like a stone, thanks to surging tax revenue. The government ran a $27.48 billion in surplus in June, 34% better than last year. The total deficit through the first nine months of FY-07 is down 41% from the same period a year ago. Now we just have to control waste. To help watch for dishonest or wasteful spending, you can go to earmarks & expectmore.gov.

Politicians and lobbyists prefer earmarks since they can rip us off “legally” and reward supporters while appearing to fight for the public good. Sometimes merely exposing their nefarious machinations to the light of day stops them. Shine the light on them and they scatter like cockroaches. These sites, earmarks & expectmore.gov can help.

We have been doing very well in the last four years. The deficit has been dropping faster than anticipated and the total Federal debt has been dropping as % of our GDP (as growth has exeeded deficits). But all this success is thanks to the strong economy and surging tax revenue. Congress has been promising too much and spending way too much. They have not been doing their part. Now we have the tools to hold them accountable. Let’s use them. Let’s identify the crooks and, as David says, vote them out.

Posted by Jack at July 15, 2007 3:27 PM
Comments
Comment #226467

Deficit lower, deficit higher, deficit lower, deficit higher, and on and on. There SHOULD NOT BE ANY DEFICIT AT ALL given 9 Trillion dollar national debt and near 2 billion a day interest payments out of working Americans pockets, for that debt.

Neither Democrats nor Republicans have ANY credibility WHATSOEVER by announcing the deficits are lower. Any deficit of ANY SIZE, increases are already record national debt, which will bear heavy on our children in terms of opportunity costs (what they won’t be able to afford because of that enormous debt), and the higher interest on it they will have to shoulder.

Go after earmarks. Absolutely. BUT DO NOT contemplate violating our Constitution with a Presidential line item veto. That would result in all out warfare between the White House and Congress, and the two screw up major parties. America doesn’t have the luxury of time or money for those kinds of wasteful political struggles.

We are only 113 billion dollars from hitting the 9 trillion dollar national debt mark.

Posted by: David R. Remer at July 15, 2007 6:17 PM
Comment #226469

P.S. the only way to address earmarks is to remove the wealthy special interest lobbying (i.e. legal bribery and blackmail) and wealthy campaign funders from our election process. As long as we have wealthy special interests twisting Congress person’s arms, earmarks will be here to stay.

Earmarks are only one of many symptoms of a corrupt and debased political and governmental system. Go to the root of the problem, money influence in government and politics. Take care of that, and a myriad of America’s problems will improve or be solved in the ensuing 10 years.

Posted by: David R. Remer at July 15, 2007 6:22 PM
Comment #226475

What an odd post coming from a Bushie republican!

First you elect the most corrupt and financially irresponsible president in American HISTORY and then you argue that things are looking better because (now this is the part that is REALLY funny from a republican…) …

TAX REVENUES ARE UP ????!!!!????!!!!

We are still spending a mind blowing amount of money on this rediculous and evil waste of human life in Iraq…
We are still being subjected to corrupt fiasco after corupt fiasco from the Haliburton overcharges-frauds to the all the expense associated with investigating the U.S. attorney firings, the Valerie Plame Wilson case, the constitutionality of the illegal detentions in the Guantanamo and Abu Ghraib scandals as well as the overstepping of the Bush administration in the warrantless wiretapping and telephone industry information scandals.

So, in short…
We are spending every bit as hugely, foolishly, irresponsibly as before…

But since TAX REVENUE IS UP, it must be a good thing? Is that not what you are trying to say?

That’s it! I am utterly convinced!
Republicans don’t believe in ANYTHING AT ALL!
It’s only about labels with you guys.

Fiscal conservatism must have died with Reagan.

Posted by: RGF at July 15, 2007 7:57 PM
Comment #226477

I must correct myself -

Your post is odd for a republican in the sense of the family I grew up in (in Texas).

Your post makes sense as the voice of a Bushie.

Bush himself makes no sense at all. neither do any of his supporters or administration allies.

In fact, they seem only capable of losing us dollars, sense and most sadly, LIVES!

If we don’t impeach this bastard, we send a message to the world that rule of law, morality and our constitution mean less to us than the Monica Lewinski thing.

Have we become so twisted in our sense of morality that we allow ourselves to think that as well?

God help us!

Posted by: RGF at July 15, 2007 8:06 PM
Comment #226483

RGF, I think you’ve misunderstood a couple of things.

I don’t know any Republicans who believe that there should be NO taxes at all. Maybe there are Republicans like that out there somewhere, but your idea of a Republican sounds more like a pretty extreme Libertarian.

Republicans like myself want lower TAX RATES, not lower tax revenue. In fact, we believe that lower tax rates can ultimately lead to MORE tax revenue being because it results in a larger and more vibrant economy.

Democrats and liberals often want to raise tax rates to satisfy some sense of justice while paying no mind to the fact that their schemes actually result in less available revenue for all of their pet social programs—which, incidentally, they want only to grow and grow.

One of the things that fiscal conservatives find so irritating about Bush is that while he’s done a good job of growing the economy with tax cuts, he’s done an absolutely terrible job of reigning in spending.

Posted by: Loyal Opposition at July 15, 2007 9:00 PM
Comment #226487

LO et al
Tax reciepts also increased under Clinton when tax rates for the wealthy were higher and we were actually starting to pay down the debt. It is good tom see progress,even if it a long time comming.
I have a concern that this anti earmark stuff is just another political ambush. If Bush defines earmarks as anything outside his control then when he cuts programs most Dems feel are vital he can attack them as earmarks.
Another problem with the definition of earmarks is its relationship with “pork barrel”. I expect my reps to bring home the bacon as it were. Funding for highway projects,waste treatment facilities,schools etc. That is their job. Are these things earmarks? Tip O’Neal once said”Pork barrel is infrastructure spelled backwards.”
There is a climate of fear that is preventing a closer look at defense spending. Even a cursory glance should be enough to show we are not getting as much value as we should.We are spending 47% of what the entire world spends on defense,some 552 billion a year. China 63 billion,Russia 62 billion.Those 800$ hammer now cost 1500$.I wish congress could take a realistic look at this without being attacked as soft on defense.More courage that I should expect I guess.

Posted by: BillS at July 15, 2007 9:22 PM
Comment #226488

RGF

Yes, the state of our government is at best dismal. The republican party has lived off pandering to the wealthy and religious right. They have preached a righteous road in order to gain the vote of the supposedly morally superior while often living a lifestyle in direct opposition to that message. It is my understanding that they have spent more than any other republican or democrat government ever. Is this in keeping with republican values? The american people are now struggling with coming to terms with what appears to be an amoral and corrupt government. It will be interesting to see if the people will hold fast and demand reform in government. Or will apathy set in and allow sleaze and corruption to continue to grow as usual? It is my opinion that most voters simply accept a degree of sleaze and corruption in government. To me this is telling of the biggest problem facing our country. How can we possibly make any headway when it is understood that the people who write our laws and run our government are not expected to live by them. I understand your frustration and also realize the futility in trying to deal with a government which is more interested in preserving the party than tackling the needs of its people.

Posted by: ILdem at July 15, 2007 9:31 PM
Comment #226489

Loyal Opp, and a terrible job of reining in deficits. $3.2 Trillion worth of deficits since he took office, and for part of that time the biggest deficits were recorded while he had a Republican majority in both Houses of Congress.

Like I said, fiscal conservatives have no control of the Republican Party whatsoever. That was the great sham and duping of American voters that the Republican Party was about fiscal conservative values. And nothing has changed. Republican politicians are still talking fiscal responsibility but, when they had the power to act on those words, they chose not to, choosing instead to subsidize the largest oil and pharmaceutical industry profits ever with even more citizen tax dollars. Then there were the billions absconded in the military industrial complex by the likes of Haliburton (who is now skipping out of the USA entirely to become corporate citizens of Dubai in the United Arab Emirates).

If fiscal conservatives want representatives, they need to look to the Libertarian Party, because Republican politicians have been exclusively about power, domestic and foreign, and there is no room in their agenda for controlling tax spending in that agenda. Ruling the world via the military and private war machines like Blackwater is an enormously expensive undertaking. Republicans concept of controlling spending differs from Democrats only in where they intend to spend, not in observing limits on that spending. One cannot argue with the facts and history, and those were and are the facts of the Republican Party’s political office holders with extremely few exceptions.

Why a Republican voter would trust the Republican Party is beyond me. But, then, I would have to ask the same of Democrat voters after the OUTRIGHT lie of an amnesty bill they tried to sell to the American public.

Posted by: David R. Remer at July 15, 2007 9:36 PM
Comment #226491

This is like saying a kid with tremendous debt is doing well, because he just bought a car on his credit card.

Posted by: Max at July 15, 2007 9:48 PM
Comment #226494
This is like saying a kid with tremendous debt is doing well, because he just bought a car on his credit card.

Well, that depends, doesn’t it? Is the kid going into debt to buy a car because it’s a choice between getting a job and driving there or going on welfare? If going into debt increases instead of decreases your opportunities for economic growth, then it’s not necessarily a bad thing. It’s just as true for a nation as it is this imaginary kid.

Or put it this way: is the kid buying the car to go to work at a company’s place of business because tax cuts have allowed the company to expand its workforce in order to seek more profits, which will lead them to pay more taxes?

Or would it be better for the kid to stay at home playing video games and living on public assistance bankrolled by a shrinking tax base because liberals have gotten their way and forced those they call the “rich” to pay what they call “their fair share.”

Posted by: Loyal Opposition at July 15, 2007 10:07 PM
Comment #226497

All

I think the nature of the problem is clear. It is spending. Tax revenues are at an all time high. If we keep spending under control, our troubles are managable. BUT that is not easy.

The debt is a problem. It is less a problem than it was last year or four years ago. It is dropping as % GDP. We have a clear task. That is to control spending. Certainly we all agree on that.

LO is right when he says that Bush did an excellent job of growing tax revenues but a terrible job of controlling spending. The good news is that DESPITE this failing, we are on track. We just need to control spending. Does anybody disagree?

Keeping track of earmarks and wasteful spending is a good thing. That is how the webpages I linked will help.

To sum up, we got part of the equation right. We have record high revenues. We have to get the other part right - control spending. I ask the question again - who disagrees?

Posted by: Jack at July 15, 2007 11:04 PM
Comment #226508

“I ask the question again - who disagrees?”

Anyone who wins a political office… Jack it’s just not going to happen with the kind of politicians who make it into government - ie the ones prepositioned to win with wealthy campaign donors and sponsors from within the already corrupted Biparty system.

It’s a no-brainer anyway. If I didn’t control my domestic budget at home, I wouldn’t have a home. Ordinary folks like us don’t have the luxury of infinite money (newly printed) or infinite time to BS our problems onto an entire future generation.

Posted by: wtc7 at July 16, 2007 6:27 AM
Comment #226509

LO,

… or the kid uses his credit card to buy a gun to shoot a local gang leader. Only he triggers a gang war, so he needs more guns and some body armor…

(Sorry, I’m a hopeless wiseacre.)

Posted by: Woody Mena at July 16, 2007 7:20 AM
Comment #226510

Here’s a way to cut some spending, end farm subsidies:

http://www.realclearpolitics.com/articles/2007/07/the_farm_bill_cometh.html

Posted by: Woody Mena at July 16, 2007 7:22 AM
Comment #226515

Woody

A great link. Every word rings true. I live in the midst of some of the best farmland in our nation. I grew up here and many of my friends belonged to what once a true small family farm. However very few of these exist today. Those who still farm are no longer small because they often lease hundreds or thousands of acres which once was farmed by the small family farmer. Much of the land has been bought up by the likes of Bill Gates and in turn is maintained by farmers who have always lived here but are now compensated by these land grabbing conglomerates for farming what was once their own land. Agriculture is still a thriving business it just is no longer a family owned affair per say. And yes most of those now profiting from the subsidies are generally the huge corporations who own the bulk of the properties.

Posted by: ILdem at July 16, 2007 8:46 AM
Comment #226522

Try telling a Democrat this: government actually generates MORE revenue when the people are taxed LESS. With more money in their pockets, the people will live a better life and spend more or pay off debts, so the government receives that money anyways. Low or no taxes are a win-win situation.

Voting out crooked pork spenders isn’t enough. The politicians have a lot of money. They simply slip in a few dollars for the media to make them look good. So after deciding to vote them out, we must tell others the truth.

Posted by: stubborn conservative at July 16, 2007 10:37 AM
Comment #226525

Honestly, stubborn conservative, I’m not sure the claim that tax cuts generate tax revenue is true. Over the years I’ve heard that claim many times and have looked into it. Some studies support what you claim, some dispute it, some say only certain types of cuts generate revenue, etc.

Anyway, here’s another study that says they don’t. Note that it mentions that the administration own figures say they don’t. The Treasury Department itself says increased growth through tax cuts generate only enough revenue to recoup 10 percent of their cost.

Thus common sense seems to be true. As a SF writer I used to love as a kid says, “There ain’t no such thing as a free lunch.”

Posted by: Gerrold at July 16, 2007 11:02 AM
Comment #226531

Jack,

I would add this opposite “spin” to the equation:

#1. “in terms of the accumulated national debt, we haven’t cut anything except its rate of increase (that’s better, but the debt is still headed the wrong way)”

#2. “Bush’s deficit, call it deficit ‘lite’, counts borrowing from the ‘public’ (financial markets) but does not count borrowing from Social Security—which is huge. This ignores the fact that like public debt, Social Security contributions are actually an obligation that must be repaid. Most importantly, those funds should be helping to increase savings and investment in order to provide for the coming retirement of the large “baby-boom” generation. They should not be used for current government expenses”

Only “If one counts Social Security contributions as offsetting the deficit, then the deficit lite has gone down by almost half, from $413B to $248B.”

Considering that Social Security contributions are collected ONLY on income up to $90,000.00 (note that’s a 2005 number but I don’t believe it’s changed) using the SS trust fund to reduce the debt has to have been one of the slickest ways to shift America’s tax burden to the middle class ever devised.

My thanks to zfacts for their research:
http://zfacts.com/p/519.html

Regarding pork I’d love to see a “One bill / one purpose” law passed. As much as I supported an increase in minimum wage it should have remained a “stand alone” bill rather than being tacked onto the defense appropriation.

Don’t hold your breath though.

Posted by: KansasDem at July 16, 2007 11:20 AM
Comment #226544

Jack said: “I think the nature of the problem is clear. It is spending. Tax revenues are at an all time high.”

Once again, your comment displays a Republican wive’s tale prejudice. Saying its spending only is like saying the problem in Iraq is the Sunni’s only, (or, Shia only). They are integral to each other, Jack just as taxes and spending are integral to the nation’s ability to avoid debt or drown in it.

Republican’s have lost this rhetoric with working Americans who themselves know EXACTLY what the equation of income less spending equals, and what harm too much debt can cause. Working families have put wives and mothers to work to increase revenues to afford the spending they believe is necessary to sustain a quality of life for their children and themselves.

This is precisely the same scenario with government. There is of course, one huge difference between working families and politicians. Working families don’t buy bridges to nowhere, or pick fights with families in China and use that as a defense for cutting back on spending for education for their children, or health insurance premiums. Working families are willing to raise their revenues with an extra part time job if expenses can’t be met. Not so with government politicians who borrow from our children’s future working wages to pay for the right to crow they are providing what we need today. American families are not selling their kids out the way government is.

That’s why, Jack, voters aren’t going to trust Republicans on fiscal management again for decades, regardless of how much they spend to advertise their old refrain, “We want to lower taxes”. American voters have recognized what that code means, higher debt for our children in the future or less education for them today (cut spending).

When Republican politicians STOP voting for tax subsidies to corporate America (ethanol subsidies to corporate corn farmers or to oil refineries to convert corn to fuel), and stop calling for free trade agreements that send American higher paying jobs overseas, then, perhaps, they will regain some credence with the American public majority. But, that is a very long way off in the future, if ever.

Republicans have never accepted or understood that Americans don’t mind paying taxes, never have. What they mind is when those taxes are not used for the nation’s and the public’s benefit. What they mind is when their taxes are spent for the benefit of the Republican party’s reciprocal relationship with wealthy profiteering corporations who underwrite their campaigns.

This is why voters returned to the corrupt Democrats. Not because they will balance the budget or lower taxes, but, because the nation and the working middle class people will at least get more education, more medical care, better oversight of wealthy corporations with hands out at appropriations hearings, and a healthier environment for their children to play and grow up in.

It should be noted however, that many former Democrats are now Independent voters, who are demanding not just the above of Democrats, but, also saving Social Security and Medicare concepts of safety net against financial adversity which may occur through no fault of the family.

And that of course requires our government to greatly reduce the national debt, so that it can borrow in the future without serious adverse effects, when the time comes to provide massive assistance to the economy or nation in times of serious jeopardy. A concept abandoned by Republicans during their raid on future generation’s treasury and borrowing capacity.

The duopoly party that first, and significantly, appeals to the majority of the Independent voters will be the duopoly party that will win in future elections. The irony of this statement is, that party will have to open the election process to some degree to Independent candidates appealing to the majority of Independent voters. Looks like a grand game of ‘chicken’ in the making on our future political 2 lane highway.

Posted by: David R. Remer at July 16, 2007 1:04 PM
Comment #226545

Dear Loyal Opposition:
Are you really a fiscal conservative? I can’t remember the last time I saw one. I thought I had laid eyes on one in the swamps of Louisiana but, then, I noticed a red mark under its wing. Wow, this is momentous! Perhaps you’ll breed and bring about more of your kind but I truly doubt that fiscal conservatives will ever again survive in the numbers that once gave them control of the Neo-con party. It’s too bad I miss hearing your call.

Posted by: Scott at July 16, 2007 1:11 PM
Comment #226547

Cut social funding, spend billions on war…yup, that’ll erase the deficit…

Oh, wait…the Iraq War funding isn’t even part of the budget…so that deficit is HUGE!!!!!

Posted by: Rachel at July 16, 2007 1:17 PM
Comment #226590

I should bring up profligate defense spending again. We spend about 552 billion a year. Next is China at 63 bil,Russia at 62. We spend nearly what the rest the world does at 47% of all military spending.The MIC is out of control. Sure it a dangerious world and we need a top notch military but throwing money at defense contractors makes no more sense that throwing money at public schools to improve education. Its what the money goes to that matters and we are not getting a good deal. We spend 37 times what the “rogue” states(Iran,Cuba,Libya,N.Korea,Sudan)spend. Maybe we could get by with only spending 20 times what they do. It is no coincidence that Cuningham was convicted of accepting bribe money from a defense contractor. They are out of control and are actually makeing us weaker not stronger.

Posted by: BillS at July 16, 2007 7:43 PM
Comment #226603

All

Revenues are at all time highs. The Republican congress did a poor job of controlling spending. I hope the Dems can do better and I hope that the president makes sure they do. Sometimes it helps to have different parties in charge of the different branches.

The reason I mention earmarks is that they are often just robbery of the treasury, a politician buying votes with the voter’s money. Dems claimed to be against them too. So let’s hold all the politicians at least to this promise.

BillS

Defense spending is low by post-WWII standards. We can cut it some, but it is not the big drain.

Woody

Yes. Cut those subsidies, starting with corn ethanol, as I have argued. Farm subsidies are excellent examples of why you cannot trust the government to plan the economy. All those guys who call for the government to search for the Holy Grail of energy should keep this debacle in mind.

Take a look at this article “How Corporate Welfare Won” and read it through before you look at the date.

The solution is less, not more, but that sure is hard.

Posted by: Jack at July 16, 2007 8:50 PM
Comment #226623

Jack
Post ww2 standards are extrordinarily high so your compareson is meaningless.We could cut it more than a little without sacrificing security. Revamping the procurement policy would be a good start.552 billion a year is not chump change by any standard.Many of the most expensive program have little relevance to the conflict we are in or are likely to get in. Wish you Reps would take Eike’s warning to heart.

Posted by: BillS at July 16, 2007 10:58 PM
Comment #226624

Excuse please

Ike’s

Posted by: Bills at July 16, 2007 10:59 PM
Comment #226633

Jack:

Revenues are at an all time high, but not in a relative sense. When I look at them they are about average. Actually the deficit is about average (below average) as well. (As measured by percentage of GDP).

That makes it hard for the left to keep up their argument. Now it is just empty words wanting to raise taxes in order to spend more.

As you have said so many times, the issue isn’t taxes but spending.

As for financial accountability etc. If one looks at the record, it is recessions that cause a spike in deficits. Notice that no one firing ammo at Bush makes the point that deficits have increased no matter who was in office in times of recession. Check out Nixon-Ford (1974) and 1976, Carter 1980 Reagan 1982, Bush the first 1990 and Bush two 2001. Basically if you have a recession in your term you are financially irresponsible.

The real scoundrel we want to hang in FDR. He was the one who by and far away borrowed the most money as a percentage of GDP, all before WWII!! By logic here at Watchblog it doesn’t matter that he inherited a depression. He is still accountable for fiscal mismanagement.

When you look at history and federal spending patterns during recessions and wars, Bush looks fine. History will judge him so.

Craig

Posted by: Craig Holmes at July 17, 2007 12:05 AM
Comment #226642

Yeah Craig, but it took Republicans to create the largest deficit in history after the Recesssion was over. You see, during economic non-recessionary periods, fiscal conservative philosophy dictates either increasing revenues sufficiently, or reducing spending, or both, to pay off the deficits required to end the recession.

That is how the Republican Party of the last many years has proved it is not governed by conservative fiscal values. Democrats at least don’t lie about being spenders, and tend to increase the services the public receives for their tax dollar, a considerably lesser evil than the lying Republicans who punish our children with their deficits and debt in good and bad times, all the while lying about being fiscally responsible.

The chasm between their campaign rhetoric since 1994 and their performance in power, is as wide as the Grand Canyon. Republicans grew the size of government every year they promised voters to reduce the size of government. It made Democrats envious how large Republicans grew our federal government, programs, bureaucracy, employees, and oh Yes, spending!!!.

Posted by: David R. Remer at July 17, 2007 2:27 AM
Comment #226643

Jack said: “Revenues are at all time highs.”

Yes, and the GDP output is the highest of all time, as it was in the 1960’s over the 1970’s and 80’s over the 70’s, etc. etc.

Which is irrelevant to the issue of deficits and debt, which continue to grow during economic boom and bust. Republicans want to have it both ways, to say they don’t have to balance the budget during the good times and have to buy deficits during the recessions to stimulate the economy. Any damned fool can see where that leads. And in 2006, voters told Republicans they CAN’T have it both ways.

Good for them. Now they have to hold the Democrats to the same standard, buy down the debt in the good times, or their rhetoric about a better tomorrow for our children is meaningless lies built on political expediency for their incumbents and party’s grab at power.

Posted by: David R. Remer at July 17, 2007 2:33 AM
Comment #226652

David

You have a technical point out of perspective. The deficit has been shrinking both in real terms and % terms since 2003. Since the deficit has been below growth in the economy, the debt has been shrinking as a % of GDP.

If we had kept spending growing only at the rate of inflation since 2000, we would have a great surplus today. This indicates that the revenue part of the equation is not the main problem. Spending is the problem. If we keep spending under control, we will be in surplus again in a few years. So far we can credit the Dems AND the divided government with slowing spending.

There is another important point. We should not have a big deficit, but we should not have a big surplus. Government should be near balance. A surplus represents an overcharge. We need a surplus for a short time to pay down some of the debt - maybe. But the government needs some debt (as Hamilton said). If deficits are lower than economic growth, the debt shrinks in % terms and that is what matters. I have a much bigger debt now than I did when I graduated from HS, but that is not a problem. In fact it is a symptom of prosperity.

Debt is a tool, a dangerous on like fire. It can be misused, but it does good if properly employed.

Posted by: Jack at July 17, 2007 7:54 AM
Comment #226694

Jack, your last comment is unacceptable as it cherry picks the relationships to support an unsupportable position.

Debt shrinking as percent of GDP? For how many quarters? And the more than 60% increase in the national debt in 6 years is to be ignored? Preposterous, Jack. Your argument is trying to deceive who?

Fact, interest rates cannot remain this low. The cost of servicing the national debt eats up any percentage decline as a result of GDP. But, the elephant your argument overlooks is the rise of national debt from 5.65 trillion to 8.86 Trillion in just 6 years Jack. Sorry, cherry picking a few quarters and trying to obfuscate this elephant of a fact is like trying to put out a forest fire with squirt gun.

Deficits add to the national debt. Small deficits, medium deficits, large deficits, matters not, they all increase the national debt. You can cut the deficit in half every year for infinity and still never eliminate the deficit, Jack.

Deficits in any given year since Bush took office were either higher or lower than the previous year. The fact that deficits are down this year in no way portends they won’t be larger next year. Another Katrina could hit. Bush could bomb Iran. Iran could could lob a few at Israel. Politicians will never run out of reasons for deficits, Jack. You said as much yourself.

Our national debt size today seriously limits how much further we can go into debt should the need arise, like another recession or Hello!, the entitlement shortfalls which are coming without any doubt whatsoever. Our national debt is a 9 trillion dollar OPPORTUNITY COST, meaning there are 9 Trillion dollars of other needs our country has that cannot and will not be met.

Do not try to diminish the import or costs of our national debt nor our deficits regardless of size. The logic of such arguments simply don’t hold up on the level of economic discussion and debate.

Economics: the management of limited resources in the face of infinite demands. And to the extent one carries debt, that debt amount is not in play to meet an equal amount of demands or needs going forward. And there is a double whammy.

Since debt is itself a limited resource, current debt has to be subtracted from one’s potential debt limit, reducing the amount of debt one can incur in the future to meet emergencies and unexpected demands or needs.

Hence the wisdom of financial advisers to not carry daily basic needs and living style as a debt balance. It seriously compromises one’s ability to draw upon debt in the event of a real emergency. It limits one’s future options to stay afloat financially in adverse circumstances.

There, you now have a more complete and balanced picture of the future economic impact of debt and deficits grown today. Throw in the entitlement shortfalls, and it ain’t a pretty picture if politicians continue to dodge that political and economic issue, post haste.

Posted by: David R. Remer at July 17, 2007 7:03 PM
Comment #226768

LO,

I never said anything about NO TAXES AT ALL being good for anything!

Why are republicans so good at putting words in other people’s mouths? Is it the tendency to build a straw man argument to replace the argument you cannot win?

I was commenting on the deficit dropping due to surging tax revenue and pointing out the utter hypocrisy of hearing such blather from a republican!

Fiscal conservatism isn’t dead…it just no longer has a home in the republican party.

After all, look what Clinton did!
Fiscal conservatism is now a Democratic virtue and battle cry.

Posted by: RGF at July 18, 2007 6:17 PM
Comment #226774

Stubborn Conservative,

That old formula is nothing new and you have more people on the left who understand it than you think.

The issue is that a precious few are actually robbing the whole system while the rst of pay through the nose. It is becoming such a burdon that foreign investment dollars, a former strength for us, are now pulling out and re-investing in other markets like Europe and Asia.

The vibrant economy that is not over burdoned by taxes also requires a vibrant and commercially active middle class to pump the whole system. We are diminishing ours for the first time in our history.

The republican party is more than just failing the fiscal conservative ideals it once counted as a strength, it is now proving itslef far more fiscally irresponsible than anything the fiscal conservative movement ever opposed…

And yet there are still shallow thinking mindless label-junkies who cling to the appellation, ‘republican,’ like some kind of desparation-employed, deflating life-raft!

The sharks are approaching…and they should know! The sharks are the ones you voted for! They are also the ones who threw you that rapidly deflating life-raft!

Now they are laughing as they put YOUR meat on THEIR bones.

Posted by: RGF at July 18, 2007 6:34 PM
Comment #226800

With the U.S. dollar hitting new lows, middle class and poor Americans are going to see the costs of imports rise even further. What do you buy that isn’t imported today? Not much. Wasn’t it insult enough to watch good paying jobs shipped overseas, but, now our government is making consumers pay more for the products those foreign workers make for us?

Inflation: it is still the Fed’s chief concern, and this falling dollar/rising import prices doesn’t help investors calculate the direction of the equity markets, sensitive to Fed rate hikes to fight inflation.

Posted by: David R. Remer at July 18, 2007 9:50 PM
Comment #226802

David

You have identified a kind of Zeno’s paradox on debt. Like the paradox, it is practically untrue that the effective debt does not go down if we consistently run deficits that are lower than growth.

Most of us use debt to make money. If I can borrow money at 6% and get a return of 8% I should take the deal. The situation of growth v deficit is similar in the result. If deficits are 2% and growth is 3% our situation is improving.

I am not saying the debt is not a problem. I advocate in this posting that we control spending, reduce the deficit and reduce the debt faster. I am only pointing out that the problem is managable and that in reducing debt, the keys are economic growth and controlling spending.

Posted by: Jack at July 18, 2007 10:15 PM
Comment #226900

Fairtax.org learn it live it. The IRS is a bunch of jack booted thugs. The income tax causes wealth envy and is used to redistribute wealth and keep politicians in power. That includes both parties. I would say vote libertarian, but I don’t agree with their border policies.

Posted by: ed at July 19, 2007 5:34 PM
Comment #226916

David:

Can you give us an economy in the world that is run by your standards?

Craig

Posted by: Craig Holmes at July 19, 2007 11:29 PM
Comment #226920

David:

Yeah Craig, but it took Republicans to create the largest deficit in history after the Recesssion was over. You see, during economic non-recessionary periods, fiscal conservative philosophy dictates either increasing revenues sufficiently, or reducing spending, or both, to pay off the deficits required to end the recession.

I’m sorry David, but you are so paraniod because you are trying to rest your economics on a one legged stool. (debt) Fortunately the rest of the world recognizes assets and income as a part of economic.

Every president since hoover has left their presidency with higher debt.

Fact, interest rates cannot remain this low. The cost of servicing the national debt eats up any percentage decline as a result of GDP. But, the elephant your argument overlooks is the rise of national debt from 5.65 trillion to 8.86 Trillion in just 6 years Jack

Who cares? You totally ignore the fact that the American economy has increased it’s assets under Bush by $20 Trillion. (Total networth increase after debts paid of $14 Trillion).

In addition you ignore that fact that our national income has grown by over $3 Trillion.

So if we get off the wobbly one legged stool, the truer broader picture is,

3 Trillion more in debt $14 Trillion more in household networth (after private debts are paid) and $3 Trillion more in national income.

If we were to put those numbers in to numbers an american family could understand. In the year 2000 the “family” had an income of $100,000. We owed $57 dollars in government debt. We had personal assets of about $400,000. Now in the year 2007 our income has risen to $130,000, our public debt has risen to $87,000, but our personal net worth after debts have been paid has risen to $540,000. Since interest rates are lower now than in 2000, the debt actually has less of a drag on us now than it did in back then. Over all we are doing fine.

We do however have some problems in the future as we have promised ourselves more than we can deliver. Those promises will need to be looked at if we are to continue this remarkable economy. If we don’t address them we will most likely become like old Europe with growth rates half of our current rates, and 40% of GDP going to taxes!!

Craig

Posted by: Craig Holmes at July 20, 2007 12:24 AM
Comment #226926

Craig, don’t you bother to ask what those numbers mean? Multinational holdings? Are you really buying into those Bush stats?

And it is quite likely that our American assets have increased, just ask Exxon/Mobil, Bill Gates, or Trump. But, then ask the majority of Americans if they are where they hoped they would be financially at this point in their lives? Saddam Hussein and his brethren had enormous wealth too defined as a major part of Iraq’s wealth. Hasn’t done the Iraqi people much good. Sure we are better off here in America, now.

But are we better off than our parents were in quality of family life, and leisure time? A majority of Americans have answered that, and the answer is NO! Why is that do you think? Today we have better, safer cars, bigger better homes, and cleaner streets and neighborhoods. Don’t you stop to ponder the meaning of the word wealth, and how it relates to the classes of the governed and governing?

Debt forfeits future borrowing by the same amount. Contrary to your implication, credit to borrow upon is also a finite resource. Is America prepared to salvage the entitlement programs financially? Answer: NO. If they are not salvaged, will not millions and millions of Americans suffer? Answer: yes. The opportunity costs of a 9 trillion dollar national debt are enormous. But, what if another Katrina, 9/11, or war front breaks out? Something of that order will. It always does.

The sub-prime debacle of Republican’s penchant for deregulation and non-regulation has Bernanke saying yesterday that it could cost America as much as 100 billion dollars. Iraq is costing what, 10 billion a month, so another 120 billion per year? That alone is close to 1/4 trillion dollars.
Then add service on our national debt: for 2006 it was an all time record of 405 billion dollars. The opportunity costs in education, job creation, health care, oil independence of that 405 billion in one year is enormous.

But combined America and Americans are losing 3/4 of a trillion dollars this last year on these items alone. More than 800 billion lost on trade the deficit: dollars flowing out and not returning except, as interest bearing loans to float our ever growing debt.

You give me immense credit Craig, and I can show you immense asset wealth. But if my assets are increasingly going overseas, and my debts are rising here at home, I can make my balance sheet look OK on the figures alone. But, it doesn’t change the fact that my borrowing is finite, and my preparedness to handle economic adversity is seriously compromised by my debt.

Craig, please provide your source for the following statement:

“You totally ignore the fact that the American economy has increased it’s assets under Bush by $20 Trillion.”

Let’s also not forget that America has dramatically increased its population under Bush, as well, and that translates into greater demands upon the government. If Republicans had their way, assets would be useless to the government revenues, as they want to do away with inheritance taxation for those with 5 million or more assets.

There is no direct relationship either between private wealth which is the measure of nations assets in large part, and the national debt, which is a cash obligation by taxpayers. Unless you propose that our government seize Microsoft and sell it to the Chinese if becomes strapped.

This really wasn’t one of your best counter-arguments. Lower taxes, while engaged in spending that is out of control, and argue the national debt is of no consequence because the private sector has all that asset wealth here and overseas?

The implication seems to be coming directly from the Democrats, that debt is no problem when the private sector has so much to take. Nope, not a sound conservative argument at all, Craig.

Posted by: David R. Remer at July 20, 2007 1:50 AM
Comment #226927

Jack said: “Like the paradox, it is practically untrue that the effective debt does not go down if we consistently run deficits that are lower than growth.”

No, Jack, your comment is wrong. Because your other position is to reduce taxes. It does not matter how much private sector wealth increases, if you lower taxes and add deficits, the national debt WILL grow. You seem to be making the same flaw in argument as Craig. Private sector asset wealth does not equate to increased government revenues, especially if reducing tax rates or eliminating estate taxes is in the mix.

Are you trying to argue our government can sell our national park system to the Chinese to offset deficit additions to the national debt? Or, if really cash strapped, that our government can confiscate Microsoft and sell it to the EU to pay for the next Katrina, recession, or entitlement deficits? Of course not.

This is the inherent illogical flaw in Republican thinking about the rising debt and deficits and lowering taxation. Dropping taxes may yield a short term economic stimulus if other conditions are right, but adds to the deficits and debt if maintained. With increased economic activity comes increased demands upon government spending, immigration and population longevity, and disparity of wealth distribution amongst that increasing population all of which translates to more spending.

And just for a moment, let’s be honest and accept the reality that cutting spending is not in the cards. With regard to spending, all that is in the cards is reshuffling the deck as to where current spending levels are to be spent next year and beyond. The greatest opportunity to cut spending and hold the line on growth of government came and went with the Republicans in control of government. That window of opportunity is closed for the foreseeable future, thanks to the Republicans that were in power, failed to do so, and lost the power as a result, in part.

The Heritage Foundation reports in 2006: “Today, 6.9 percent of federal income taxes go towards the two programs. Dr. Thomas Saving of Texas A & M University, a public trustee of the Medicare and Social Security trust funds, estimates that, in 2020, 26.6 percent of all federal income taxes will go to paying for Medicare and Social Security.”

Additionally, “Medicare presents the greatest challenge to Congress and taxpayers. The Hospital Insurance Trust fund is projected to be exhausted by 2018, a change from the previous date of 2020”

Cutting net spending is not in this deck of cards, Jack. And if cutting net spending is not in the cards, then increasing tax revenues becomes the stacked deck. And this comes at a time when our competitors internationally are gaining on our advantage quite quickly.

The EU would never be a competitor for the U.S. in the global marketplace, conservatives argued for decades. I wrote years ago here on WB that the day is coming. Well, it’s here. The Organisation for Economic Development (OECD) says that world economic growth is being led by Europe and Japan this year and with other countries they are overtaking the U.S.

Then there are the other dragons in the East, China, Malaysia and India. Economic growth can no longer be counted upon as a sure bet to soften America’s public cash flow needs going forward. And despite the stern warnings by respected Republicans like Greenspan and Bernanke to the contrary, Republican politicians still argue we can grow our economy to solve our national debt problems, present and future. It just isn’t so. The numbers don’t add up nor do the economic growth trends.

America needs a Congress and President who will tackle these trends in a highly realistic and rational manner, putting theory aside and implementing known functional remedies. For that to happen, most of the incumbents in Congress need to go, as they go in greater percentages each election, the newcomers will recognize the people are demanding results, and kicking out those who won’t or can’t produce them.

Posted by: David R. Remer at July 20, 2007 2:33 AM
Comment #226949

David R. Remer,

I applaud your response and the thoroughness of your reasoning, David. Very informative and thought out.

Thank you.

Posted by: RGF at July 20, 2007 1:51 PM
Comment #226984

Thanks, RGF. But, it feels like a lonely call in the wilderness with few but the owls and beaver hearing the call.

Posted by: David R. Remer at July 20, 2007 9:27 PM
Comment #227049

David:

Craig, please provide your source for the following statement:

“You totally ignore the fact that the Americaneconomy has increased it’s assets under Bush by $20 Trillion.”

Private sector asset wealth does not equate to increased government revenues, especially if reducing tax rates or eliminating estate taxes is in the mix.


Are you trying to argue our government can sell our national park system to the Chinese to offset deficit additions to the national debt?

I’m not going to debate you on these points because household net worth is obviously a new term to you.

http://www.federalreserve.gov/Releases/Z1/current/z1r-5.pdf

Here is a chart from the Federal Reserve that shows the household networth of citizens of the united states. When I speak of household net worth, I am referring to this chart. It has nothing to do with parks and lakes. It’s all about our homes and our investments etc etc, minus our debts.

Owning these assets directly influences the ability of our government to tax. If we have more money in CD’s for instance we get a 1099 at the end of the year to put with our taxes.

On the other hand if our real estate assets go up they are appraised by our county governments and our property taxes go up.

Also, if these assets are high enough, when we die we pay inheritance taxes.

When we sell many of our stocks or bonds if we have a profit we pay either short term or long term capital gains.

When I look at the issue of the federal deficit and new debt, and I see $20 trillion of asset growth under George Bush, I see $20 trillion of wealth that can be taxes in some form or another.

When I see our national GDP growing by $3 trillion under Bush I see a source for government to tax through income taxes.

Your are very correct that federal obligations have risen under Bush. However where your argument is weak is that you fail to account for the fact that the foundation for taxation (Asset growth and National income) have also increased.

Another area that you give weak acknowledgment of is interest rates. You strongly imply that we are in a much weaker economic position that we were before George Bush. Your burden proof then is to explain why interest rates are in fact lower now than in previous years. Interest rates are a combination of several things. Inflation expectations, credit worthiness of the borrower, and demand for money among other things.

With a strong economy and low interest rates, The world is giving a strong thumbs down to your thesis. In fact the world is stating that America is in excellent fiscal shape. My proof is low interest rates. You have a long burden of proof to prove otherwise.

Craig

Posted by: Craig Holmes at July 21, 2007 8:09 PM
Comment #227050

David:

The EU would never be a competitor for the U.S. in the global marketplace, conservatives argued for decades. I wrote years ago here on WB that the day is coming. Well, it’s here. The Organisation for Economic Development (OECD) says that world economic growth is being led by Europe and Japan this year and with other countries they are overtaking the U.S.

This statement is very misleading. EU growth is greatly divided between old and new Europe. Old Europe has growth rates much lower than ours. New European governments are conservative. If you drill into the data, you make the conservative’s point. Smaller governments produce greater GDP.

Old Europe is liberal and is falling behind the rest of the world.

Craig

Posted by: Craig Holmes at July 21, 2007 8:14 PM
Comment #227053

David:

I think you are very incorrect when you argue that America is in much worse shape now fiscally than when Bush took over. America is in great shape currently on a broad scale.

Where I think the left and you are correct is in the unequal distribution of this recovery. It is a very solid truth that there is a growing and troubling gap between the wealthy and the rest of us.

In addition of course you are correct that there is a problem facing the industrialized world of an aging work force. I recently read a paper prepared for Congress that clearly demonstrated that the only way to attack the problem was through spending cuts. It basically said that if current growth rates continue, tax rates would need to go over 90% of income.

I disagree with you that Congress cannot cut spending. For instance, the current age of a congressman is about 56 years old. The average longevity is 10 years. This means that the average congressperson begins their career at age 46. The youngest baby boomer turns 43 this year. That means that zenith of babyboomer power in congress should be in about three years ie 2010. It also means that in 13 years from now the next generation will be in power.

I would like you to calculate the odds for me that this younger next generation will vote themselves into bankruptcy when they control congress in 13 years. I can, the odds are zero.

Babyboomer congress right now is taking care of themselves. They can pass anything they want for the future. It really doesn’t matter. The next generation will not vote themselves to pay for it.

Watch the year 2020. Should congress sill be 56 years old the average congress person will have been born AFTER 1964. They will have no memory of the moon landings. They will have no memory of the Vietnam war and Lyndon Johnson’s war on poverty. They will however have clear memories of Ronald Reagan.

Babyboomer Congress peaks in three years. We had better check out these younger folks because they are not going to bankrupt themselves to take care of us. Isn’t gonna happen.

Craig

Posted by: Craig Holmes at July 21, 2007 9:38 PM
Comment #227058

Craig, I respect your opinion, but, can’t agree with it. 5.65 Trillion debt vs. 9 Trillion? 7 years closer to the entitlement crisis with no leadership to resolve it in a democratic way? A horrendous loss in respect and friendliness toward America in the international world? 836 billion U.S. dollars lost to foreign nations through trade deficits last year? And averaging 3/4 of a trillion each and every year?

Economics is not a snapshot or corporate and worker wealth. That is a financial condition, not an economic condition. Economics takes into account past debts and assets, current cash flow and expenditures, and future obligations and anticipated resources. Economically, Bush has made our nation far worse. Education quality is not improving, a major future resource to take into account. Our borders are not secured, a major liability. And Constitutional crises brought about by this administration which carry the opportunity cost of focusing resources on them instead of the many other challenges demanding immediate action.

I must agree to disagree with you on this Craig.

Posted by: David R. Remer at July 22, 2007 12:24 AM
Comment #227059

David:

Again I would say that in order to look at any entities financial situation you cannot look at one measure (debt). You have to look at assets and income among other things.

When a broader picture is looked at we are in actually about the same shape as we were six years ago. We are in excellent shape when compared to our trading partners.

By the way, did you find a country that you believe is doing a better job?

Craig

Posted by: Craig Holmes at July 22, 2007 12:30 AM
Comment #227062

As for your view of the sociology of the next generation, MAN, are you in for a huge surprise. The next generation is about egalitarianism, equality, and equal access and opportunity. Guess you aren’t hanging around many high school and college students these days. They are acutely aware of the greed that is compromising their futures. And greed and power are going to be dealt with by this next generation in way boomers never could, because they were too busy living the good life. The good life for the next generation is just trying to keep even with what their parents enjoyed. They are a more realistic and practical lot on whole, and much less idealistic.

Hoping for a resurgence of trickle down economics or the reverence for unbridled greed and power, and trickery of marketing and advertising is a pipe dream. It’s not in this next generation. They are concerned about their planet, their jobs in an international marketplace, their safety on our streets and public places, and above all, being treated fairly, and treating others fairly. Sociologically speaking, the next generation is not going to be a happy one, but, they have little choice but to become a far more practical and responsible generation.

And that does not bode well for idealism or extremism for the left or the right. The rapidly growing Independent voters group, now greater than either Democrats or Republicans, is the harbinger of things to come with the next generation.

Posted by: David R. Remer at July 22, 2007 12:39 AM
Comment #227070

David:

My simple point is that the power of our generation is cresting. In about 13 years or so, the next generation could control congress. I believe the odds of them voting policy that bankrupts themselves is zero.

I do by the way disagree (shock) with how you state conservativism. I believe it’s about smaller federal government. The plain truth is that when the federal government takes a smaller share of the pie the economic growth rate if higher. It’s very obvious from reviewing growth rates around the world. Of course Communists were the very extreme as they took 100% of profit, and had almost zero economic growth.

Take a look at old Europe where the federal government takes 40% of the GDP verses our 20%. Their growth rates are far lower than ours.

Lower government spending increases economic growth. That is a conservative principle that you can count on.

Craig

Posted by: Craig Holmes at July 22, 2007 1:08 AM
Comment #227071

Craig, denying the existence of European Union as an economic entity, and trying to break it down into its component parts and evaluate the parts, is clever, but, it is still a denial of reality. The EU exists. And their synergistic trade efforts have catapulted them into the international marketplace in a huge way vastly increasing their exports and placing them in direct competition with American companies, Airbus, for example. Our trade deficits continue to grow.

Quality of life is improving for Europeans when terrorism is excluded, according to polls. Quite the contrary in the U.S. where the numbers who feel less well off, are growing. OECD evidence aside, there is a lot other evidence that their conclusions are not misleading, at all.

Posted by: David R. Remer at July 22, 2007 1:15 AM
Comment #227111

Craig,

To the extent you believe conservatism is about smaller government, you are wrong. Perhaps you are either fooling yourself or allowing yourself to be fooled. Perhaps, I should merely point out that the only administration to shrink the size and expense of the Federal Government was Bill Clinton’s.

Bush, on the other hand, has grown the size, expense, deficits and Fed Debt of our country more than ALL THE PREVIOUS HISTORY OF THIS COUNTRY COMBINED!!!!!
…as well as having extended the authority of the governemtn until our own Constitution no longer protects our rights!

Perhaps, it is merely time to realize that conservatism no longer has a home in the republican party. The Democrats are better stewards of our government, it’s authority and our economy.

Posted by: RGF at July 22, 2007 4:28 PM
Comment #227113

David:

According to this article:

http://www.timbro.com/euvsusa/pdf/EU_vs_USA_English.pdf

If America were to stand still it would take Europe 15 years to catch us.

RGF:

Conservatism is about smaller federal government. We in America have had great success because of our conservative government. One need only look at socialist Europe to see what happens when government is expanded. Growth rates plummet. Many European countries governments are close to twice the size of the USA. 50% verses in the twenties here.

As for large size of government ours peaked in the Reagan years, and has been fairly stable since. I’m for keeping it around 20% of GDP.

Craig

Posted by: Craig Holmes at July 22, 2007 4:38 PM
Comment #227133

Craig,

That old axe about conservatives wanting smaller government doesn’t hold water anymore.

Those you voted for broke every record for growth of government - and the bank I might add!

It is the Democrats who have actually been successful in reducing the size and expense of government.

If you don’t like that, TOUGH!
The truth hurts.

Posted by: RGF at July 22, 2007 6:43 PM
Comment #227140

RGF:

You are confusing ideology with party affiliation. Liberals are generally for a more expansive government. We haven’t had a liberal president in a generation. We have had moderates!!

You really have to go to Europe to see what an economy is like under liberal leadership. Basically government spending about double what ours is here.

Craig

Posted by: Craig Holmes at July 22, 2007 8:52 PM
Comment #227144

Craig, you are confusing what it is western style governments do with ideology. Liberals are NOT for bigger government. It is not one of their goals nor one of their platform ideals. Liberals hold that government, by virtue of its power of taxation, is obligated to represent the needs and benefit of the people and the nation.

Conservatives are for smaller government, in America. It is every touted as a goal and has been part of their platform. Smaller government regardless of the welfare or benefit of the taxpayers is a goal. It is why conservatives over time find themselves mostly the minority party. Useful as a check and balance against spending growth that threatens the welfare and benefit of the people. And once that balance is restored, conservatives are forced back to the minority party and view.

The rationale for the existence of government is not fundamentally different between conservatives and liberals. The huge difference is in their views of what constitutes the cutoff point wherein government must assume responsibility for the consequences born by its people as a result of government’s decisions.

Conservatives assume government’s role is to protect and defend the nation regardless of the consequences for members of the society, and those members are responsible for overcoming those consequences on their own.

Liberals assume government’s role is to both protect and defend the nation and act responsibly for the consequences of its actions upon the members of the society.

This difference is highlighted greatest in the economic theories each group subscribes to. Liberals for example, subscribe to the belief that if government must legislate favorably for business and corporations to protect the nation’s economic health, the government must also champion legislation that favors labor and their dependents in roughly equal measure.

Conservatives on the other hand subscribe to the belief that legislating favorably for business and corporations for the national welfare is where government’s responsibility ends. Business and corporations will insure laborers and their dependents have what is necessary to sustain the health and wealth of the business and corporations.

A very fundamental difference, which can be viewed in stark contrast between Reagan and Clinton for example. Clinton was and is a liberal, but, he was a practical liberal who effectively worked with a conservative Congress on economic issues, rather than fighting it outright or caving in to it entirely.

Posted by: David R. Remer at July 22, 2007 10:28 PM
Comment #227145

Craig, as for your link, Timbro is a think-tank devoted to innovating economic and social policies founded on free-market principles.

Hardly a non-partisan nor objective resource. They begin their study with the assumption that trickle down economics resulting from unregulated free-market principles is without question the lens through which all study must be geared. Hence, cherry picking the results on which to base the study is intentional and purposeful.

Posted by: David R. Remer at July 22, 2007 10:36 PM
Comment #227147

David:

That may be all true. In the end, large government economies like Europe with a more liberal bias grow slower than the American economy with a more conservative bias.

In the end a government that takes 50% of GDP grows slower than one that takes 25% of GDP.

Craig

Posted by: Craig Holmes at July 22, 2007 11:41 PM
Comment #227148

David:

A very fundamental difference, which can be viewed in stark contrast between Reagan and Clinton for example. Clinton was and is a liberal, but, he was a practical liberal who effectively worked with a conservative Congress on economic issues, rather than fighting it outright or caving in to it entirely.

Clinton a liberal? That is why he was for nafta and welfare reform. On Welfare reform he got nearly 100 percent of the republican vote and about half of the democratic vote. Clinton was a moderate and a master at triangulation.

Craig

Posted by: Craig Holmes at July 23, 2007 12:00 AM
Comment #227196

Now, it is you Craig confusing Democrat with liberal. Liberal can be very practical and evidence based. Clinton on welfare reform acknowledged what was known by sociologists for decades, that access and motivation to work with benefits that exceed those of welfare, is healthier for those on welfare.

I knew that being raised in the inner city of Detroit. Those in the high rise slums, were unemployed, and their children were hostile and angry. I was a social liberal then and still am today. Liberals seek solutions, and welfare had become a trap, not a solution. Clinton recognized that and led his party toward a different view. The proof of this is that Democrats now regard Clinton as the best President since FDR. They learned that what appeared to be his capitulation to the other side, turned out to be a great benefit and opportunity for the poor, especially the children of the poor.

But, remember, that Clinton created opportunities to become employed and didn’t resign to Republicans who argued the poor simply lacked motivation. They lacked both motivation and opportunity, and the reason the policy worked is because both were made available to both Clinton’s and Republican’s credit.

Posted by: David R. Remer at July 23, 2007 5:37 PM
Comment #227198

Craig, it is not most European nations facing an economic calamity due to entitlement spending. It is the U.S. We provide less entitlement, and face a far more dire downturn in economic activity as a result beginning in less than 12 years.

If we diminish entitlements, a dramatic consumption drop off occurs. If we fully fund those entitlements, we strangle consumption through high taxation. This is an American scenario, not European. They have been making small adjustments to their systems as the future warrants. America has been dodging the whole damned issue calling it the 3rd rail of politics.

Is it any wonder, we face such a crisis after decades of inaction and denial of the future crisis in the making, and Europeans don’t? The problem is not entitlements. The problem is managing them appropriately and within the means of the nation according to a set of priorities that prevent reaching for a 10, 11, or 12 Trillion dollar national debt BEFORE the entitlement crisis even hits.

America has very poor government management and absolutely disastrous perspective on debt. European nations have a sense of living within their means. They are not prone to playing world cop beyond their means, or signing trade agreements that permanently send their currency overseas to be loaned back to them. They are not prone to allow corporations and wealthy capitalists to design and coerce public policy and national legislation.

Posted by: David R. Remer at July 23, 2007 5:51 PM
Comment #227222

David:

Hmmm.

There is good news in Europe to be sure. They are bringing their deficit spending down to about 3% of gdp.

http://www.euractiv.com/en/euro/eu-countries-track-meet-deficit-target/article-158676

Europe is far old that we are. They have a huge entitlement crisis. Some countries (Italy for sure) are declining in population. The problem Europe has is stagnant growth. America has basically ran away from Europe for the last thirty years or so economically.

I would like to see your sources that say Europe doesn’t have an age wave problem. I think they are further along than we are demographically. They retire earlier. They have a huge pension crisis.

Source please!!


By the way, what country do you like that governs according to your standards?

Craig

Posted by: Craig Holmes at July 23, 2007 10:34 PM
Comment #227230

Craig, the demographic problem is shared by all economies with older middle classes retiring. But, like you said, they already spend twice as much on entitlements as we do, and therefore have some pad to trim. But, they also have a growing international export trade, strengthening Euro, and incredibly less per capita debt to hinder their addressing of the entitlement problem. Italy may falter under their entitlement/demographic problem, but, Italy is not the EU, anymore than the Louisiana is the United States.

Pointing to one or a couple of European states and saying the EU is in trouble is like pointing to Louisiana and Mississippi and saying America is a disaster. The exceptions don’t make the rule, Craig. Our trade, personal, and national debt/deficit status combined with our entitlement and demographic problem is a definite train wreck down the line if our government doesn’t change tracks in very big hurry. And not just any other tracks, a track without some other train coming this way. Our track options are growing more limited with each passing year.

The EU and most of its member countries are addressing their problem. Our government isn’t and hasn’t despite all warnings for over a decade now. It is a salient difference Craig.

I have already answered your last question, previously. You are under no obligation to accept it, but, reiterating the question will not produce different results.

Posted by: David R. Remer at July 23, 2007 11:29 PM
Comment #227307

David:

I understand why you can’t answer the question.

Craig, the demographic problem is shared by all economies with older middle classes retiring. But, like you said, they already spend twice as much on entitlements as we do, and therefore have some pad to trim.

Yes but EU has some issues we do not have in the states.

1 Their fertility is such that their population should start to decline fairly soon.

2. Expectations of early retirement. The old axiom that Americans work hard at work, while Europeans work hard at leisure has it’s points!!

3. They have their own defict spending issues.

4. A horrible record of economic growth.

5. Their largest economies are older than we are already.

Would you trade places with EU on this issue? Wow, I wouldn’t in a heart beat.

First of all, we have taxation power. If nothing else we could simply tax ourselves higher and pay for the works. (not the prefered solution).

So where is Europe going to cut? With our population set to continue increasing because of immigration and higher fertility, and theirs set to decline, they are no match economically for the US. The best they can hope for is economic growth by adding countries. Their system is too cumbersome.

I do see your point on a trade deficit. Europeans have little money left over after paying taxes to spend on imports.

Craig

Posted by: Craig Holmes at July 24, 2007 6:59 PM
Comment #227333

Sorry, Craig, but your comment is clueless as to the costs of increasing population growth, especially as a method of meeting the demographic challenge of retiring baby boomers. It is obvious you are following the Chinese model of dealing with the problem. Using population growth or decline as a government instrument for economic policy.

Wouldn’t be my first choice, or last. But, hopefully, with Republicans now out of the way, Independents can work on Democrats to prevent them from trying to grow our population to answer the problems of a population already too large to manage effectively and efficiently. I trust I have not put too fine a point on it. :-)

Posted by: David R. Remer at July 24, 2007 9:16 PM
Comment #227341

David:

The fertility rate is not about economic policy it’s the other way around. Demographics have a great deal to do with economic policy. It has a great deal to do with your criticisms of our government “too many people retiring”. The simple fact is that the fertility rate is much lower in Europe than in America and that has a direct effect on what social programs may be needed and how to pay for them.

Can I assume from your comment that there is an anti immigrant policy with Democrats and Independents?


Too many people want to live here!! The relevant point is that USA is predicted to get larger and EU smaller because of birth rates and immigration numbers. These facts need to be taken into account when looking at the Age wave issue. It makes Europe’s issues tougher to overcome.

Craig

Posted by: Craig Holmes at July 24, 2007 10:59 PM
Comment #227361

Craig said: “The fertility rate is not about economic policy it’s the other way around.”

Craig, don’t imply your words are mine. I never said fertility rate is about economics. Those are your words and interpretation of what I said. I said fertility rate was China’s answer to a huge set of economic problems, like how to feed 1.2 billion people.

Craig asked: “Can I assume from your comment that there is an anti immigrant policy with Democrats and Independents?”

I have no control over your assumptions. Just don’t try to attribute your assumptions to anything I said, or you think I said. I don’t recall saying anything in this thread about Independents and Democrats having a position on immigration policy.

Craig said: “The relevant point is that USA is predicted to get larger and EU smaller because of birth rates and immigration numbers.”

Cite your source. In case you hadn’t noticed, Europe has a lot of issues centering on their immigration of Middle Easterners, Indians, and increasingly Africans. (France I believe has put a halt to it, but, then the French rarely represent anyone but the French.)

Posted by: David R. Remer at July 25, 2007 3:40 AM
Comment #227388

David:

There are many sources. Just google “EU Population decline 2007” and take your pick. Basically population is expected to increase to 2025 and then start to slide.

Europe has a much tougher issue with the agewave than we do because of a lower birth rate and older population. For America this is ironically a good thing. We can watch Europe and Japan and learn from their mistakes. They are just further along than we are.

It would be much worse for Europe except for immigration.

Europe looks to me to be left behind going forward economically. This is no time to be stagnant.

Craig

Posted by: Craig Holmes at July 25, 2007 5:27 PM
Comment #227997

Who are you trying to fool?

Our total debt far exceeds 9 trillion.
We have a massive state debt as well.

Forbes estimated 2020 total US debt to exceed $28 trillion.

Keep dreaming on making it look like things are going great.

We’re spending our future.

40+ thousand IRAQ wounded - Estimated cost over next 50 years for their medical care - $600,000,000,000

And that’s just one thing…

Posted by: jrjr at July 31, 2007 8:59 PM
Comment #230221

Funny that the GOP NOW talks about earmarks when they do not control Congress. The GOP record with the economy and deficits is sickening. Tax cuts for the very wealthy, deficit payments for the middle class.

Posted by: glen morangie at August 22, 2007 2:26 AM
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