I got busy yesterday and forgot to bring up and link to an Associated Press story in the Saturday Journal Gazette that irritated the hell out of me. It was basically a soft-pedaling of the country's growing debt and an aplogy for all the people who have contributed to it. Oh, and along the way, the writer made sure to get in a few digs at the Republican presidential candidates and their simple-minded math that makes them a-skeert of our itty-bitty government borrowing:
The number at the heart of the battle cry of the Republicans and their tea party allies — that federal spending has risen to an alarming 25 percent of the economy — is skewed by recession dynamics.
In recessions, federal spending always goes up and tax revenues go down. And the economy contracts in recessions, shrinking the gross domestic product, which is the total output of goods and services and the broadest measure of the economy's health.
[. . .]
While spending's share of the GDP might be at a post-World War II high, tax revenues have fallen to 14.4 percent of the index, the lowest since 1950.
This disparity between what comes in and what goes out plays into the Republican argument about runaway spending.
But it also reflects the mathematical reality that during recessions, tax revenues go down sharply because people and companies make less money and so pay less in taxes. Federal spending goes up, even before stimulus programs, with an increasing demand for government help from food stamps and unemployment compensation and other safety-net programs.
At the same time, the negative economic growth associated with recessions lowers the GDP number on the bottom of the equation, further boosting the ratio of spending to GDP.
Nothing to see here, tea party panic-mongers; move it along, move it along.
Things slow down in a recession? People need more but govenment has less? Well, golllllleeeee, who'd have guessed? Is it OK if I look at the raw numbers and remain just a little alarmed that the national debt has increased $4 trillion under President Obama, the most rapid increase under any president, and that the debt is growing about $3 million a minute -- that's debt increase, not just spending increase.
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Dick Cheney taught me that President Reagan proved that deficits don't matter.
Yeah, debts are getting out of control. Think that tax cut for the rich and two unfunded wars might have something to do with that? Nah.
It could also be the increase in the FICA taxes two fund two ponzi schemes. As the FICA tax went up starting right around 1957 with SS-DI, Medicare in 1965, workers saw less take home pay. By 1970 the dramatic increase in FICA taxes was causing workers to complain to their elected officials.
To help the lower wage earners who paid a higher percentage of their take home pay in FICA, congress passed the Earned Income Tax Credit which basically offset the higher FICA taxes using General revenue taxes. Since its inception, it has cost nearly $1 Trillion.
Then the Big 1983 Fix to save Social Security increased FICA taxes a lot. Congress responded with general revenue tax cuts: increased dependent exemptions, higher standard deductions, tax brackets changed with CPI, Child Tax Credit, College Tax Credit, Energy Tax Credit, First Time home buyers credit and more.
Tax cut for the rich was far smaller than the tax credits (refundable) to the middle class and poor.
The problem is that both parties are irresponsible. The voters are responsible for voting for irresponsible people. You get what you vote for.
I absolutely love this quote from above:
"that federal spending has risen to an alarming 25 percent of the economy
Be careful quoting the CBS report- it has some flaws. "the deficits projected under CBO's economic forecast in January 2009 and the assumption of no change in policies in place when Obama took office account for about 2/3 of the increase in debt. And a substantial part of the increase above what CBO projected in January 2009 is due to the economic downturn being significantly worse than CBO projected in January 2009 (although CBO has estimated that the policies that were adopted after January 2009 - [the stimulus bill, etc.] - actually improved the economy relative to what would have happened without any change in policies)."
http://tpmdc.talkingpointsmemo.com/2011/08/economists-gop-cites-deeply-flawed-cbs-report-to-blame-debt-on-obama.php?ref=fpb
"[the stimulus bill, etc.] - actually improved the economy relative to what would have happened without any change in policies).
What I find most humorous about this debt/deficit debacle from a political standpoint is how the argument on both sides ends up being presented as an enormously complex problem only remedied by grand, complicated economic formulas and intricate accounting schemes.
What will come as a shock to most politicians and pundits in 2012 is that an enormous number of the voters (dems/repubs/independents alike) realize now it really is a simple math problem and our 535 elected representatives have been (for lack of a better description) "cooking the books" for decades.
What the politicians and the pundits refuse to acknowledge is that the electorate (even the liberal ones) really do understand the simple math of spending more than you make.
It ain't rocket science, you can borrow and survive for a while but you can't do it forever and we've just reached that point.
Here's a palate cleanser for you Obama fans, a truly ironic "pot-kettle-black" moment from the campaign trail in 2007:
http://www.youtube.com/watch?feature=player_embedded&v=1kuTG19Cu_Q
All of this is a bit hypothetical. Let's look at it in objective terms. The only real economic boom in recent decades occurred during the time our deficits were reduced and eventually eliminated.
That was the 1990's, when President Clinton slightly increased federal income taxes, eliminated federal welfare and reduced military spending. It worked.
I assume Tim would oppose it because the president at the time was a Democrat.
But it worked. Tax cuts under Reagan and Dubya caused recessions. I don't care that they were Republicans. Their economic theories simply didn't work.
Would you object to returning to the taxing and spending patterns of the 90's, which gave us a surplus and lots of jobs, simply because the president at the time happened to be a Democrat?
If so, you care more about politics than you do about your country.
"The only real economic boom in recent decades occurred during the time our deficits were reduced and eventually eliminated.
That was the 1990
Littlejohn- Well said!
Littlejohn: 0
Larsen: 1
Knuth: N/A
You'll note Mr. Larsen provides documented facts & figures (as always) as opposed to emotional talking points provided by Littlejohn (as always).
Here is a link to the US Treasury. On this site you can obtain the historical debt back to 1791.
Since we were looking at the debt and alleged surpluses, let me show you the debt a the end of each year. Did it increase each and every year? If the national debt increased every year, how do you get a surplus? Where did the surplus go? Did the surplus get hidden in some ones desk drawer? If there were a surplus, why would the national debt not decline?
6/30/1975 $533,189,000,000
6/30/1976 $620,433,000,000
9/30/1977 $698,840,000,000
9/30/1978 $771,544,000,000
9/30/1979 $826,519,000,000
9/30/1980 $907,701,000,000
9/30/1981 $997,855,000,000
9/30/1982 $1,142,034,000,000
9/30/1983 $1,377,210,000,000
9/30/1984 $1,572,266,000,000
9/30/1985 $1,823,103,000,000
9/30/1986 $2,125,302,616,658
9/30/1987 $2,350,276,890,953
9/30/1988 $2,602,337,712,041
9/29/1989 $2,857,430,960,187
9/28/1990 $3,233,313,451,777
9/30/1991 $3,665,303,351,697
9/30/1992 $4,064,620,655,522
9/30/1993 $4,411,488,883,139 Clinton
9/30/1994 $4,692,749,910,013 Clinton
9/29/1995 $4,973,982,900,709 Clinton
9/30/1996 $5,224,810,939,136 Clinton
9/30/1997 $5,413,146,011,397 Clinton
9/30/1998 $5,526,193,008,898 Clinton
9/30/1999 $5,656,270,901,615 Clinton
9/30/2000 $5,674,178,209,887 Clinton
9/30/2001 $5,807,463,412,200
9/30/2002 $6,228,235,965,597
9/30/2003 $6,783,231,062,744
9/30/2004 $7,379,052,696,330
9/30/2005 $7,932,709,661,724
9/30/2006 $8,506,973,899,215
9/30/2007 $9,007,653,372,262
9/30/2008 $10,024,724,896,912
9/30/2009 $11,909,829,003,512
9/30/2010 $13,561,623,030,891
8/24/2011 $14,649,289,670,347.85
Larsen:2
LittleJohn:0