National Debt and Spending

[Ratickle]

What do you guys think of Samuelson at the Washington Post?


Obama's Risky Debt

By Robert J. Samuelson
Monday, May 18, 2009


Just how much government debt does a president have to endorse before he's labeled "irresponsible"? Well, apparently much more than the massive amounts envisioned by President Obama. The final version of his 2010 budget, released last week, is a case study in political expediency and economic gambling.

Let's see. From 2010 to 2019, Obama projects annual deficits totaling $7.1 trillion; that's atop the $1.8 trillion deficit for 2009. By 2019, the ratio of publicly held federal debt to gross domestic product (GDP, or the economy) would reach 70 percent, up from 41 percent in 2008. That would be the highest since 1950 (80 percent). The Congressional Budget Office, using less optimistic economic forecasts, raises these estimates. The 2010-19 deficits would total $9.3 trillion; the debt-to-GDP ratio in 2019 would be 82 percent.

But wait: Even these totals may be understated. By various estimates, Obama's health plan might cost $1.2 trillion over a decade; Obama has budgeted only $635 billion. Next, the huge deficits occur despite a pronounced squeeze of defense spending. From 2008 to 2019, total federal spending would rise 75 percent, but defense spending would increase only 17 percent. Unless foreign threats recede, military spending and deficits might both grow.

Except from crabby Republicans, these astonishing numbers have received little attention -- a tribute to Obama's Zen-like capacity to discourage serious criticism. Everyone's fixated on the present economic crisis, which explains and justifies big deficits (lost revenue, anti-recession spending) for a few years. Hardly anyone notes that huge deficits continue indefinitely.

One reason Obama is so popular is that he has promised almost everyone lower taxes and higher spending. Beyond the undeserving who make more than $250,000, 95 percent of "working families" receive a tax cut. Obama would double federal spending for basic research in "key agencies." He wants to build high-speed-rail networks that would require continuous subsidy. Obama can do all this and more by borrowing.

Consider the extra debt as a proxy for political evasion. The president doesn't want to confront Americans with choices

 

[cigdaze]

Here's another great moment in rocket surgery...

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.”

Spend money to keep from going bankrupt...brilliant.

 

[LaughingCat]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

 

[Ratickle]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

Okay, what makes you thinkwe will get back to a profitable, growing, manufacturing base??

 

[Ratickle]

And his approval rating has set the record for the fastest fall ever by Rasmussen.

 

[Offshoredrillin]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

We dont manufacture anything anymore except food. he got elected on people wanting out of iraq and the money we were spending there, his budget makes the iraq war look like kids playing army in a sand lot. Mark my word, these new taxes are going to hit everyone, he will pass a consumption tax to smack the poor, and then say he didnt raise their taxes. Omalley did it in MD. and the poor are even poorer now, they just have no clue who did it. I'm in saving mode now and eliminating personal debt.

 

[cigdaze]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

If, if, if, if...
God, I hope you're right, because I am all in favor of a prosperous economy for all of us, but let's face it man, this isn't the way to go about it. Time and time again, it's been proven that excessive taxes will undoubtedly reduce overall revenue. If the Obama's tax assault on the working class and small business continues, we're doomed. His spending is out of control with no way to cover it through taxation, and foreign governments are pretty much on the verge of ceasing their lending to us.

Oh, and by the way Obama's current approval rating is a negative number, achieved through a record-setting decline rate.

:dupe:

 

[sledge]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

Dude, you're a financial advisor and you think rapidly rising, perpetual deficits funded by foreign lenders are a good thing? And you profess to be a Libertarian which, in case you didn't read their motto, are supposed to stand for LESS government?

WE narrow minded Americans have little idea what's going on in the rest of the world. We hate China because everything we buy is made there. But what you should really fear is that since we send all our money over there, they're going out and buying up access to the rest of the world. China has over $2 TRILLION in foreign reserves, posts fiscal surpluses, and has a steadily strengthening currency.....everything that the US used to have as it grew to a superpower. Only now are they starting to feel the pains of a maturing society coupled with economic hardship. But since they have plenty of cash, they're doing just what they should be doing: DIVERSIFYING.

And what do we, the United States of America do? We stand there like teenagers with our hands out "can I borrow $20 to feed the homeless?" Useless government bureaucracy, growing by leaps and bounds...pretty soon everybody is going to work for the government and nothing will really get done in this country.

"But wait! The United States is still the smartest country and we still accel at technical innovation!" Yeah right. That's why we trail the world in math and science students, why all the students in grad/dr level science programs are FROM ANOTHER COUNTRY! WE're teaching them how to do it and they're taking it back to their homeland.

"The Government" needs to stop trying to help those who won't help themselves. Perpetual deficit spending will ruin this country. We will eventually tax ourselves into oblivion, or default on our debt.

 

[Dave]

Tell yu what, if heis wrong we're all screwed. if Obama is right, the Republican party will cease to exist. Not starting any muck and I have no substantive data to back my up. But if he is able to bridge the economy through a recession, then start a new economy based on manufacturing, which will bring large taxes revenue from exports (like China does), and if his health care initiative doesn't add up to some wacky system, but works, Reps are doomed.

Or it could turn out like many are saying and we're all doomed. In that case, Reps take over the country again. I don't see the American public turning on O-man real quick. They feel like they got shafted too hard by the Reps recently and don't see much organization or purpose from them. Time to work on the message, not the new black-messiah (Steele).

Am I the only one that can see his tongue pushing out his cheek.

 

[LaughingCat]

First, i am an eternal optimist. We have to think way outside the norm. For the last 30+ years we have grown accustom to an economy focused on two items, dismantling the manufacturing sector and amplifying the debt consumtion. Think of what many have said here, "rule number one of business, never do anything with your own money."

Most people are sitting on the old economic train wondering how we are going to get it going again, using the same old techniques. others have noticed that that old train is at the end of its tracks. It's sitting at the train depot and there is a new train across the platform. The new train is an economy built on manufacturing, trade surplus and a weaker US dollar.

Now envision that platform as a stable structure that will allow the riders (US economy participants) to migrate to the new train. That stable structure is what was missing during the Great Depression. That platform is the foundation provided by government intervention and spending. it laughs in the face of traditional conservative (and libertarian) values, but is focused on a bigger, long term transition rather than a short term fix. in the long run, it can truly lead to reducing government deficits and, assuming we have statesmen and salesmen in office, smaller government.

now picture the economy, (which encompasses both the old train, new train and platform), as a human body. All the organs work fine. but while sprinting in a marathon, just suffered a heart attack.Immediately, people nearby begin CPR.

In this body, the arteries and veins represent the financial system. When the heart attack occured, our first instinct is to provide air to the lungs and pump the blood using the heart. But what good is CPR or any method to revive the system unless the veins and arteries can transmit the blood around the body. So while we await the ambulance or hospital which has the defribulator, the immediate rescuers are using CPR. What if we allowed the arteries and veins to die first. How will the blood and oxygen be spread through the body by CPR? Now imagine if the runner's coach shows up and yells, "stop pushing the runner into the ground, he has a race to finish." Those are the people who are saying, "just leave the body alone until the ambulance arrives." What happens to the body if oxygen is not circulated for 20 minutes? that's the lesson learned from the DG, Government got out of the way and let everything fail. Then there was nothing left of an infrastructure to circulate money.

See, we had to prop up the financial sector,.

Back to the train analogy, our economy is not going to get restarted on debt consumption again. we've milked that cow for all it's worth. instead, a longer term approach is to realize we need to infuse the necessary, emergency sustainance into the economy while a new system takes hold. China fears the new US. We are likely to be a huge manufacturing competitor IF, IF, IF we can get it going again. There are many hurdles to cross, but Americans are different than others.

Japan failed because their have this pesky thing called Honor. When they got excessive in the 80's, then crashed, they all swore not to get excessive again. Even when their economy got good, everyone saved too much. Americans, when they suffer a crash have no honor. We simply gobble some vodka and say, let's get it going again. all these idled workers will take any job they can get right now.

one items to be dealt with, whether we like it or not, is health care. forget the argument of private versus public. think about the competition. You could have an identical facotry in MS, same workers, product, contracts, suppliers, etc. the Japanese company will make better profit. why? The government subsidizes the health costs. it's not a bottom line item ont he profit/loss statement. so something has to be done.

Like it or not, this is what has to happen. we have to cross the platform and get on the other economy. It's not socialism, it's government transitionism. i could be dead wrong. Or I might be too optimistic. but if I'm wrong, we're all doomed anyway. but if I'm right, we stand to make a huge amount and kick some global a$$ in the process. See, i'm not a turn-coat that moved from Rep to Lib to Dem. I'm a conservative who is thinking far beyond today and looking at where "the puck is going."

50 years ago, democrats were conservative and republicans were liberal. Then there was a paradym shift. i don't know what's happening today. but i do not plan to sit blindly in support of a certain party. i plan to find my place in the future of profit or go down fighting, not simply ride along with the public pessimism about short-term policy.

(Once again, I typed fast and did not spell check.)

 

[2112]

The chance of this becoming a reality is dependant on the tremendous devaluation of the dollar...which is exactly what happens when you print money like they are doing.

The argument that the government will somehow reign in their growth once everything settles is where you loose me. I can't see that happening because, it has never happened before. Once the government is in there, they are there for good. (or worse)
.

 

[LaughingCat]

lots of variables. lots of uncertainties. and like i said, i'm an optimist. but then again, while I never supported the Iraq invasion, i did say, maybe we will go in and find WMDs laying everywhere.

 

[Offshoredrillin]

intersting but where do you see the US manufacturing anything? Bethlehem steel here in Balt is a ghost town, I'll take a pic as I go by it today on the boat. Americas biggest resource now is food, most of our corn is going for that waste product ethenal, what do we have to sell to other countries to make money, that they cant make themselves?. any country that was considered 3rd world, now has the ability to make most if not all products, then they come back to american companies and sell them the same product cheaper than they can manufacture it, and greed killed the industry.

 

[LaughingCat]

I dont have the specific answers of what and how long until it's in full gear. more like a revolution that takes time. but even as progress starts, consumer confidence and optimism rises. It's a journey not a race to the destination.

 

[LaughingCat]

and i could be totally wrong, but it's seems the only viable way out of this.

 

[Offshoredrillin]

I dont have the specific answers of what and how long until it's in full gear. more like a revolution that takes time. but even as progress starts, consumer confidence and optimism rises. It's a journey not a race to the destination.

i understand, but here is the problem with the government being big buisness, they will continue to grow and feed on themselves, with us footing the bills, they wont diminish the size only grow it. unlike a private company that will shut down a sector that isn't profitable, they would only divert funds or take more from us. I do see the theory of your post, but in all probability it wont work. the revolution, yes I think that is on the horizon. However I see a need to go back to basics for funding, no more greed programs that take peoples secure money on risky profits, we need to invest in ourselves for a good decade and need an administration that will exemplify that. Not spend to avoid bankruptcy. Our debt and credit to other countries is a house of cards that is teetering. we need to stop giving and keep some of it at home, otherwise we wont have a future, like it or not, if the USA collapses so does the world, we use most of the resources.

 

[Ratickle]

intersting but where do you see the US manufacturing anything? Bethlehem steel here in Balt is a ghost town, I'll take a pic as I go by it today on the boat. Americas biggest resource now is food, most of our corn is going for that waste product ethenal, what do we have to sell to other countries to make money, that they cant make themselves?. any country that was considered 3rd world, now has the ability to make most if not all products, then they come back to american companies and sell them the same product cheaper than they can manufacture it, and greed killed the industry.

This is where I disagree that greed (unless you are talking about government greed) killed the industry.

Manufacturing was killed by our government taking away any control to keep a LEVEL playing field on the expenses of manufacturing......ie: mandates. (And now they want to add more. I've never seen a bigger bunch of morons in my life:boxing_smiley


Manufacture in the US ?

Must have air pollution control
Must have water pollution control
Must pay matching payroll taxes
Must pay SSI insurance
Must pay unemployment insurance
etc, etc

Manufacture overseas ?

Must pay 2% excise tax
Must pay , Wait, that's it...... Unless you are stupid and show a profit on your US operations with no offsetting deductions.


And then these idiots have the audacity to complain that US manufacturers take jobs overseas.....morons, do they think they all want to go bankrupt?

Sometime pick a company who has major operations in both domestic and overseas branches and check their statements for both.

We have the highest corporation taxes in the world. And they want to raise them.....

If I were GM or Ford or Exon etc, my headquarters would have been put in another country.

Why do you think BP bought Chevron etc (?) and every beer manufacturing business in the country is now owned by overseas corps? Because they kept enough of their profits to be able to take over these companies.

Anyway....:boxing_smiley:

 

[Offshoredrillin]

but even with a 2% excise tax, they are still making money and killing the industry. look at the automotive, gm's made in canada and mexico. Steel is another, an American company can buy Chinese steel and sell it here and make more profit... because they cut back on the workforce here and it substantiates it more, American jobs lost because of corporate greed. I'm all for making money, but look at what it has done. At what expense is enough enough?

 

[Ratickle]

but even with a 2% excise tax, they are still making money and killing the industry. look at the automotive, gm's made in canada and mexico. Steel is another, an American company can buy Chinese steel and sell it here and make more profit... because they cut back on the workforce here and it substantiates it more, American jobs lost because of corporate greed. I'm all for making money, but look at what it has done. At what expense is enough enough?

What I'm saying is, it wasn't and isn't corporate greed. That's just something the politicians make up to put the spotlight somewhere else instead of on themselves where it belongs.

Corporations, anywhere, have two choices;

1. Be as good or better than their competition
2. Cease to exist.

If politicians allow foreign competition to sell an identical product to your current customers without having the same government mandated expenses, you can move your operations to that more favorable manufacturing climate to compete. Or, you can cease to exist.....

There are no other options.

I am one of the very few who will pay more for an inferior product made in the USA. Most won't, tough to blame them....

ANd the 2% excise tax is nothing compared to the taxes paid by a US corp.

 

[Offshoredrillin]

i disagree, corporate america did it and then the gov wanted their share, seeing the profits rise, an excise tax was invented to make it seem like the gov was "penalizing" them for exporting labor.