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The Budget Deficit, And How It Grew Since 2001  
User currently offlineCasInterest From United States of America, joined Feb 2005, 4743 posts, RR: 3
Posted (5 years 5 months 2 weeks 1 day 5 hours ago) and read 1885 times:

http://www.nytimes.com/2009/06/10/bu...y/10leonhardt.html?no_interstitial

So many arguments are rampant about the budget and who is to blame, Bush, Obama, Clinton, the democrats, the republicans. The above article points out how we went from a budget surplus to deficit, through two recessions, wars, and new spending through the Bush and Obama administrations.

When will congress and the president do what it takes and stop spending more than it recieves in Revenue in order to pay down the deficit?

Does the deficit really matter when we print money, and countries like China treat it like gold?


Older than I just was ,and younger than I will soo be.
15 replies: All unread, jump to last
 
User currently offlineSv7887 From United States of America, joined May 2008, 1025 posts, RR: 0
Reply 1, posted (5 years 5 months 2 weeks 1 day 3 hours ago) and read 1856 times:



Quoting CasInterest (Thread starter):
So many arguments are rampant about the budget and who is to blame, Bush, Obama, Clinton, the democrats, the republicans. The above article points out how we went from a budget surplus to deficit, through two recessions, wars, and new spending through the Bush and Obama administrations.

Those so called surpluses are largely fiction, as they borrowed from the Social Security surplus to make it look like they had a balanced budget. Some present the figures in 2008 dollars or Debt to GDP but that's disingenuous as it only conveys debt load and not operating surplus or deficit.

More on this here:
http://www.craigsteiner.us/articles/16

And from the Wall Street Journal:

"But that is exactly what the federal government (which, unlike corporations, decides how to keep its own books) does with Social Security. In the late 1990s, the government was running what it -- and a largely unquestioning Washington press corps -- called budget "surpluses." But the national debt still increased in every single one of those years because the government was borrowing money to create the "surpluses."

http://online.wsj.com/article/SB124277530070436823.html

People can question the source if they like, but the analysis is backed up by the Treasury's own numbers:

http://www.treasurydirect.gov/NP/BPDLogin?application=np

You'll see National Debt never went down. Whenever public debt went down, it was countered by a rise in intergovernmental debt.

Also look at the CBO numbers:
http://www.cbo.gov/budget/data/historical.pdf

You'll see the Public Debt went down but this ignores intergovernmental debt. That's why the National Debt doesn't decline at the same rate as the "reported" surpluses.

To add to the projected surpluses argument: They assumed we would continue the dot.com boom which provided additional revenues, and flat spending. It didn't take into account the market crash (loss of revenues) and the necessary rise in government spending to fix everything from infrastructure to 9/11 and the Afghan war.

The deficit does matter. If we issue too much debt as we're doing, the bond market will demand a higher interest rate. We may also see our bond rating cut. And ultimately countries will stop buying it.

It's the same as a credit card. The fun continues so as long as you can make the monthly payments. But if your principal balance and interest rate continue to rise a day will come that you won't be able to pay it.


User currently offlineFlighty From United States of America, joined Apr 2007, 8696 posts, RR: 3
Reply 2, posted (5 years 5 months 2 weeks 1 day 3 hours ago) and read 1855 times:

Bush definitely spent too much money on Iraq. But Obama seems to disregard the concept entirely that we should live maturely and within our means. I guess these are "crisis" times in the wealthiest country ever known. Oh, the struggle of living in $45,000 per capita America. Life is so hard here!!  Yeah sure  Yeah sure  Yeah sure

User currently offlineMt99 From United States of America, joined May 1999, 6641 posts, RR: 6
Reply 3, posted (5 years 5 months 2 weeks 1 day 3 hours ago) and read 1852 times:
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Quoting Flighty (Reply 2):
Bush definitely spent too much money on Iraq. But Obama seems to disregard the concept entirely that we should live maturely and within our means.

Interesting.. How much debt has the US incurred because of the war in Iraq?



Step into my office, baby
User currently offlineSv7887 From United States of America, joined May 2008, 1025 posts, RR: 0
Reply 4, posted (5 years 5 months 2 weeks 1 day 3 hours ago) and read 1852 times:



Quoting Flighty (Reply 2):
Bush definitely spent too much money on Iraq. But Obama seems to disregard the concept entirely that we should live maturely and within our means. I guess these are "crisis" times in the wealthiest country ever known. Oh, the struggle of living in $45,000 per capita America. Life is so hard here!! Yeah sure Yeah sure Yeah sure

LOL I agree. The sad thing is that a supposedly fiscal conservative Republican Congress spend money like a drunken sailor. Say what you want about the Iraq War, but they should have found a way to pay for it instead of borrowing the damn money.

At least the Dems are known for big government, so what Obama is proposing is nothing new, although it's a financial quagmire.


User currently offlineSv7887 From United States of America, joined May 2008, 1025 posts, RR: 0
Reply 5, posted (5 years 5 months 2 weeks 1 day 3 hours ago) and read 1848 times:



Quoting Mt99 (Reply 3):
Interesting.. How much debt has the US incurred because of the war in Iraq?

About $700 Billion. But add Afghanistan, Medicare Drug Benefit, Homeland Security, and other programs and you get to the core of the fiscal mess he created.

Bush was anything BUT a fiscal conservative. The GOP has no excuse either because they did nothing to rein him in. People tend to forget Congress ultimately controls the purse strings not the President.


User currently offlineCasInterest From United States of America, joined Feb 2005, 4743 posts, RR: 3
Reply 6, posted (5 years 5 months 2 weeks 9 hours ago) and read 1807 times:



Quoting Sv7887 (Reply 1):
You'll see National Debt never went down. Whenever public debt went down, it was countered by a rise in intergovernmental debt.

Very good site.

Quoting Sv7887 (Reply 1):
http://www.craigsteiner.us/articles/16

The following almost made me want to throw up.

Quoting Flighty (Reply 2):
http://www.treasurydirect.gov/NP/BPDLogin?application=np

06/09/2009

Current Debt Held by the Public 7,109,972,049,499.36
Intragovernmental Holdings 4,281,487,205,929.59
Total Public Debt Outstanding 11,391,459,255,428.95


So when Bush's first budget started

09/28/2001
Current Debt Held by the Public 3,339,310,176,094.74
Intragovernmental Holdings 2,468,153,236,105.32
Total Public Debt Outstanding 5,807,463,412,200.06

Until 9/28/09 The Total debth is still technically Bush's and will possibly reach 11.5-12 trillion. The Public Debt will be 7.1 to 7.3 Trillion.


With the government still overspending, how do we reign it in? It would seem the governemnt will just try to print it's way out of it?

Quoting Sv7887 (Reply 1):
The deficit does matter. If we issue too much debt as we're doing, the bond market will demand a higher interest rate. We may also see our bond rating cut. And ultimately countries will stop buying it.

Would this really be an issue? We would then have to go on and become self sufficient again. We have the resources.

I do beleive free trade will eventually work, but currently the US is held to a disadvantage in the world market as countries support our currency in order to keep us purchasing instead of producing. Wouldn't it be better for our dollar to just devalue so that this country can go back to producing?



Older than I just was ,and younger than I will soo be.
User currently offlineMir From United States of America, joined Jan 2004, 21791 posts, RR: 55
Reply 7, posted (5 years 5 months 2 weeks 9 hours ago) and read 1800 times:



Quoting Flighty (Reply 2):
Bush definitely spent too much money on Iraq.

I wouldn't say he spent too much money on it - I think you'll find a lot of people think that he should have spent more on it, at least in the early going, in order to have the troop strength to get the job done right.

The problem was that he didn't pay for it. He had this plan of tax cuts coming into office, which was ok, because he was going to cut spending. But when he found himself spending more, he chose to push the problem down the line instead of worrying about either reducing some of the tax cuts or cutting spending further.

That's what you get when you have a compliant Congress - the president has carte blanche to implement whatever policies he sees fit. Basically, there is no check on his power, and that sort of thing is bound to lead to some bad decisions. We saw it with Bush, and we're seeing it now with Obama. It almost makes you wish for a constitutional amendment that would require that the executive and legislative branches cannot be controlled by the same party.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineAaron747 From Japan, joined Aug 2003, 8218 posts, RR: 26
Reply 8, posted (5 years 5 months 2 weeks 9 hours ago) and read 1801 times:



Quoting Mir (Reply 7):
It almost makes you wish for a constitutional amendment that would require that the executive and legislative branches cannot be controlled by the same party.

It almost makes you wish for two or three viable alternatives to the two see-sawing parties that have long since lost their way. A coalition government before it's too late, anyone?



If you need someone to blame / throw a rock in the air / you'll hit someone guilty
User currently offlineSeb146 From United States of America, joined Nov 1999, 11759 posts, RR: 15
Reply 9, posted (5 years 5 months 2 weeks 9 hours ago) and read 1796 times:

Ah.... another "Democrats are devil terrorists; let's bash them as much as possible to make Republicans look the best possible" article. Like we have never seen this before....

Quoting Flighty (Reply 2):
Bush definitely spent too much money on Iraq.

If that is such an issue, where were the cries of outrage when there was talk of invading? Oh, that's right: the left was told to shut up and that they were all terrorists and working for al-Qaida if they did not support the invasion and occupation.

Quoting Flighty (Reply 2):
But Obama seems to disregard the concept entirely that we should live maturely and within our means.

All the while, the masses are calling for bailouts/handouts for corporations that are too big to fail. But, it is all Obama's fault for letting all this happen. No one ever sees that Bush got the ball rolling. How could he? He was clearing brush in Texas most of the time.

So, what the blog is telling me (and we all know how the right feels about blogs) is that it is better to borrow trillions of dollars from overseas than to borrow billions of dollars from itself.



Life in the wall is a drag.
User currently offlineEA772LR From United States of America, joined Mar 2007, 2836 posts, RR: 10
Reply 10, posted (5 years 5 months 2 weeks 9 hours ago) and read 1796 times:



Quoting CasInterest (Reply 6):
With the government still overspending, how do we reign it in? It would seem the governemnt will just try to print it's way out of it?

Which will create MASSIVE inflation, how else can we get out of this mess.

Quoting Sv7887 (Reply 5):

Bush was anything BUT a fiscal conservative. The GOP has no excuse either because they did nothing to rein him in.

 checkmark   checkmark  And to add fuel to the fire Obama wants to borrow and spend harder more than Bush did to get us out of this mess, and he expects to cut the deficit in half  rotfl 



We often judge others by their actions, but ourselves by our intentions.
User currently offlineMir From United States of America, joined Jan 2004, 21791 posts, RR: 55
Reply 11, posted (5 years 5 months 2 weeks 9 hours ago) and read 1787 times:



Quoting Aaron747 (Reply 8):
It almost makes you wish for two or three viable alternatives to the two see-sawing parties that have long since lost their way. A coalition government before it's too late, anyone?

That would work too.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6694 posts, RR: 24
Reply 12, posted (5 years 5 months 2 weeks 8 hours ago) and read 1777 times:



Quoting Mir (Reply 7):
It almost makes you wish for a constitutional amendment that would require that the executive and legislative branches cannot be controlled by the same party.

I would prefer a balanced budget amendment.

You want an elective war in Iraq, then Congress has to find a way to pay for it.
You want national healthcare, then Congress has to find a way to pay for it.

Oh, and no stealing from Medicare or Social Security to balance the budget either. Those two funds should never be used for anything but what they were intended.


User currently offlineElite From Hong Kong, joined Jun 2006, 2872 posts, RR: 10
Reply 13, posted (5 years 5 months 2 weeks 7 hours ago) and read 1768 times:

http://www.youtube.com/watch?v=P5yxFtTwDcc

Great video - worth watching.


User currently offlineMir From United States of America, joined Jan 2004, 21791 posts, RR: 55
Reply 14, posted (5 years 5 months 2 weeks 7 hours ago) and read 1766 times:



Quoting FlyPNS1 (Reply 12):
I would prefer a balanced budget amendment.

It sounds good, but there are times when sensible deficit spending is the right thing to do. It's like a war (perhaps ironically, since that's part of what got us into the mess we're in now) - you try to avoid it, but you never want to take the option off the table.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineEA772LR From United States of America, joined Mar 2007, 2836 posts, RR: 10
Reply 15, posted (5 years 5 months 2 weeks 7 hours ago) and read 1761 times:



Quoting Mir (Reply 14):

Quoting FlyPNS1 (Reply 12):
I would prefer a balanced budget amendment.

It sounds good, but there are times when sensible deficit spending is the right thing to do. It's like a war (perhaps ironically, since that's part of what got us into the mess we're in now) - you try to avoid it, but you never want to take the option off the table.

 checkmark  You should never opt to spend like we are now with the kind of deficit we've built in the last several years, and expect to get out of debt...let me see here, you borrow borrow borrow and spend spend spend to get out of a deficit created by borrowing borrowing borrowing and spending spending spending. That's preposterous!



We often judge others by their actions, but ourselves by our intentions.
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