The Deficit

[WillMagic]

You actually weren't making a bad argument until right here...

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If interest rates were to rise to the level of the late 70's and early 80's, our government would likely go bankrupt

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I'm sorry. That's patently ridiculous. First off, in World War II we had a national debt in the neighborhood of 120% of GDP. Did a financial crisis occur? Not quite. Rather, one of the greatest periods growth in the history of our country followed.

Right now, the debt is about 60-70% of GDP. We are nowhere near the level of borrowing we were at in WWII. And even if we hit that level of borrowing, we have the Federal Reserve to prevent hyperinflation.

But even beyond that...saying that the government will go bankrupt is just flat out...wrong. I could see recession, I could see periods of inflation...but saying we will go bankrupt? The empirical evidence is dead-set against that. And comparing the U.S. economic situation to post-war Germany's economic situation is also patently ridiculous....we have a Federal Reserve and an infrastructure that isn't bombed to hell along with a consistently strong economy.

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Our government no longer has the borrowing capacity to handle any kind of major crisis brought apon us. A global conflict like WWII would sink us in a heartbeat. The Iraq war, small peanuts compared to WWII or even Vietnam, is already straining our finances. On the domestic front, a major recession can no longer be combated with government spending either. No more "new deal" or public works programs to get the masses back to work.

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First off, you have it the wrong way around. RELATIVE TO OUR GDP, Iraq/Vietnam were small peanuts in comparison to WWII. Again, debt in terms of dollars is simply not relevant...it is only relevant as a percentage of GDP. The costs of WWII in comparison to GDP were MASSIVE in comparison to the Iraq war. And on what exactly are you basing this idea that we can't borrow anymore?

Oh, and by the way, I'm sure you are a big FDR fan, but the New Deal wasn't exactly great at getting us out of the depression. The Social Security Act probably extended the depression by a good 3-4 years. "Gee, unemployment is at a record high! I guess we should increase the tax on employers to make them even less inclined to hire people!"

[Dead]

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Back around 2000, Donald Trump (of all people) was campaigining to impose a one-time luxury tax of 14.25% on all assessed wealth over $10,000,000(?) to directly pay off all our debt (at the time).

I wouldn't vote him to his local Board of Education, but I did like this idea.

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That's a stupid and unfair idea.

The wealth has already been taxed once. Taxing it again is wrong. If the money generates interest, then you can tax that, but taxing the principal is wrong.

[lehighguy]

Why is taxing wealth generation right but not taxing wealth that is just sitting there wrong. Your basically just penalizing people that create wealth.

[natedogg]

He's saying that to tax BOTH the generation of the wealth AND the mere possession of the already-taxed-generated wealth would be wrong.

natedogg

[Dead]

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He's saying that to tax BOTH the generation of the wealth AND the mere possession of the already-taxed-generated wealth would be wrong.

natedogg

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Bingo. Maybe it's my libertarian streak showing, but I just have a problem with taxing money that has already been taxed.

[Hoi Polloi]

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And if your going to talk about the tax cuts, check out the trend in job growth since the tax cuts were enacted.

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And your point is that the economy has not come anywhere near the predictions coming out of the White House concerning how many jobs would result from the tax cuts--short at least 5 million now? Or are you referring to the fact that month after month the economy is rarely creating enough jobs to keep up with new workers entering the workforce (~150k per month). Or are you referring to the relative steadiness of the unemployment figures which does not count folks who give up looking for work? Or are you looking at the income gap that measures the difference between the income of the jobs lost versus the income of the jobs being created--it's a negative number? Or are you pointing to the ever growing period of unemployment, that is, how long it takes a laid off worker to find a new job? Or are you referring to the fact that Mr. Bush was the first President since Herbert Hoover to preside over 4 years of negative job growth--less jobs in 1/2005 than in 1/2005.

Or are you just looking at the GOP talking points? Not our fault. Never make mistakes. 9/11, WOT, gays want your guns and bibles, the tax cuts are working, Clinton's fault. What were we talking about?

[jaxmike]

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That's a stupid and unfair idea.

The wealth has already been taxed once. Taxing it again is wrong. If the money generates interest, then you can tax that, but taxing the principal is wrong.

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Wow. I am proud of you Dead. Keep talking like that, and they will kick you out of the club.

[Scuba Chuck]

Re: Rep Carolyn Maloney's comments:

Her comments regarding the economy are dead on. Unfortuantely, she squarely lays the blame on republicans for two reasons. One, she is partly correct (although I view the real problem as the total body politic, not just one party) in blaming the republicans, as GW has far different views on budget balancing figures than the previous democratic president. Two, she obviously has a political agenda, which is why I despise politics so much.

The quote from the Gale and Orszag paper:

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“ The United States has never before experienced such large long-term fiscal imbalances. Sustained chronic deficits will gradually reduce national income and living standards, and carry with them the risk of a fiscal crisis.”

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...this comment carries a lot of weight with many of the respected economists of the world, as it likely carries the truth.

Unfortunately, dear OP, the problem is so entrenched in our political system, that there's nothing that will be done to prevent any sort of disasters, they can only be fixed once they occur. F.ing politics. If you follow the breadcrumbs, perhaps you'll begin to notice that a lot of these problems stem from campaign financing concerns. But, alas, most Americans fail to see how these two items can be related, nor willing to discuss a REAL problem.

[adios]

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And if your going to talk about the tax cuts, check out the trend in job growth since the tax cuts were enacted.

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And your point is that the economy has not come anywhere near the predictions coming out of the White House concerning how many jobs would result from the tax cuts--short at least 5 million now?

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My goodness why don't you post something that actually has some data in it instead of pulling numbers out of your ass.

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Or are you referring to the fact that month after month the economy is rarely creating enough jobs to keep up with new workers entering the workforce (~150k per month).

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Over the past year job growth in the economy has been greater than this 150,000 number and what you've brought up is a non sequiter. The usual tactic around here. I stated that check the trend in job growth since the tax cuts. You haven't offered one piece of evidence to refute what I stated.

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Or are you referring to the relative steadiness of the unemployment figures which does not count folks who give up looking for work?

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People who aren't looking for work shouldn't be counted in determining the unemployment rate.

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Or are you looking at the income gap that measures the difference between the income of the jobs lost versus the income of the jobs being created--it's a negative number?

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Again a non sequiter to what I posted about. To comment intelligently about this you need to post the data you're referring to. How much labor is paid is a function of how much they're worth to their employers. The tax cuts implemented spurred employment growth by increasing the amount of disposable income that tax payers have as well as providing businesses incentives to make more investments.

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Or are you pointing to the ever growing period of unemployment, that is, how long it takes a laid off worker to find a new job?

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Yet another non sequiter to what I posted. Again this is a function of what the skills an employer needs vs. what a laid off worker has. Please post your numbers and a source to discuss this further.

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Or are you referring to the fact that Mr. Bush was the first President since Herbert Hoover to preside over 4 years of negative job growth--less jobs in 1/2005 than in 1/2005.

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Actually this is patently false.


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Or are you just looking at the GOP talking points?

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No.

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Not our fault. Never make mistakes. 9/11, WOT, gays want your guns and bibles, the tax cuts are working, Clinton's fault. What were we talking about?

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Yet another incoherent, ignorant tirade. I haven't read the other responses to my posts in this thread as I'll do that later. These days I'm reluctant to point out the silly crap people post but somethings I just can't ignore them.

[adios]

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I should have been more clear and named it private domestic consumption.

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Yep you should have been. It may seem like I'm nit picking but I read so much silly crap on this forum that I wanted to make sure that it was understood that your original statement needed clarification. Now that I understand you simply made a poor choice of words (I'm guitly at times as well) I understand that you're making a legitimate, consistent argument. Not one that I necessarily agree with but one that holds together more or less.