Doubling Down on the Deficit Disaster

Paul Krugman's commentary from 2003, when the deficit was $374 billion.

It has been obvious all along, if you were willing to see it, that the administration's claims to fiscal responsibility have rested on thoroughly cooked books. [...] There's no mystery about why the administration's budget projections have borne so little resemblance to reality: realistic budget numbers would have undermined the case for tax cuts [2009: spending increases & new programs]. So budget analysts were pressured to high-ball estimates of future revenues and low-ball estimates of future expenditures ...

Furthermore, this time huge deficits have emerged [2009: increased] just a few years before the baby boomers start retiring and placing huge demands on Social Security and Medicare. ...

But haven't administration officials said they'll cut the deficit in half by 2008 [2009: 2013]? Yeah, right. I could explain in detail why that claim is nonsense, but in any case, why bother with what these people say? ...

The last defense of the budget deficit is that it helps a depressed economy — to which the answer is "yes, but." ...  And yes, deficits are appropriate as a temporary measure when the economy is depressed — but these deficits aren't temporary ...

Still, do deficits matter? Some economists worry, with good reason, about their long-run effect on economic growth. But I worry most about America's fiscal credibility.

You see, a government that has a reputation for sound finance and honest budgets can get away with running temporary deficits; if it lacks such a reputation, it can't. Right now the U.S. government is running deficits bigger [2009: much, much bigger], as a share of G.D.P., than those that plunged Argentina into crisis. The reason we don't face a comparable crisis is that markets, extrapolating from our responsible past, trust us to get our house in order.

But Mr. Bush [2009: Mr. Obama] shows no inclination to deal with the budget deficit. On the contrary, his administration continues to fudge the numbers and push for ever more tax cuts [2009: spending increases & new programs]. Eventually, markets will notice. And tarnished credibility, along with a much-increased debt, is a problem that Mr. Bush [2009: Mr. Obama] will pass along to other Congresses, other presidents and other generations.

The 2009 deficit is estimated to be $1.7 trillion.  So take Krugman's 2003 criticisms and multiply them by 4.5.  And the long-run deficits are much, much worse, too.

Now, there are legitimate - if unproven - economic arguments that, in the absence of many monetary options, rapid and very temporary fiscal stimulus/deficit spending can be beneficial in reducing the deadweight loss of a potential output shortfall.  But these are not temporary deficits. 

  • They are structural - even under the administration's absurdly optimistic economic assumptions, the deficits remain very large. Under the CBO's economic assumptions (pdf), they never go below $658 billion.
  • They are permanent - CBO estimates the 2019 deficit at over $1 Trillion (pdf).
  • They are driven by entitlements - Entitlements currently amount to about 45% of the federal budget, and that percentage increases dramatically in coming decades.  Yet Obama wants to dramatically expand entitlement spending (e.g., health care).

Republicans irresponsibly ran up enormous deficits during the Bush administration.  Democrats are now doubling down on the disaster.   Republicans and Democrats have played a game of chicken with tax cuts and spending in recent decades.  That's been a major strategic mistake.  Democrats have the advantage, because the majority of long term spending is structural.  When the bill comes due, taxes or inflation will rise dramatically.  For everybody.  At all income levels. There's simply no way around it.

"There are some things we have to do at home to get our house in order. No. 1 is we shouldn't be running up budget deficits." - Barack Obama - May 2006

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Can you provide a link

Can you provide a link to the Republican plan for addressing the nation's massive problems without increasing taxes or  increasing the deficit?

It's under construction

They are working on the plan, it takes a long time to provide numbers.  

No

In case you haven't been paying attention, one of my main points has been that Republicans - the dominant policy people, anyway - don't have many ideas, either.  They have policy paralysis.  (I believe Paul Ryan has a plan that moves in a somewhat better direction, but I have not examined it) 

Is it not possible

that there is no alternative plan becasue...there is no alternative?

Bush's Out of Control Spending Was Stupid, BUT.....

....Doubling Down on Stupid is Smart because Democrats are doing it, is that your point?

What was insane before January 20th is now Smart Government because Democrats are doing it. That runs through your entire comment history here, NRN.

This is not sustainable, and will bankrupt the country. Just because the House Republican Conference doesn't have an alternative right now, doesn't mean that doubling down on stupid is right.

Please don't call yourself principled when you're just cheerleading Weimar because your side is in power. It's childish and puerile. This is like reading a Kos thread. 

Once, there were principled Democrats. But Harry Truman is long dead. 

 

What is the purpose of the deficit?

It boils down to a simple question of what is the cause and purpose of the deficit?

If you borrow $100K and use it to support your mistress, back the Redskins to beat the spread or snort a large pile of cocaine - well, then, you are $100K in the hole without much to show for it.

If you borrow $100K and use it to get a college degree or start a business - well, then you are also $100K in the hole, but with something to show for it.

And that is why I support what the Democrats are doing.

Show me an alternative plan for fixing the country's serious problems.

 

Chinese aren't fooled.

Neither is the guy at the Printing press.

Deficits happen. But there is no sense of restraint here. Instead of a temporary surge, this is a complete deficit blowout so Obama can get his entire program through. The guys (that would be you people) who were complaing about the Bush Deficits and the Bush Spending last year were lying to us. You just wanted power so YOU could blow the doors off and pay off your friends. 

That's politics, of course. 

Not only can this not be paid back, the interest on the debt will go completely hog wild. Just in time for the Chinese to lead an attack on the dollar as a reserve currency.

They're not fooled by Obama's BS scam, and you shouldn't be either.  But you're a partisan, so I expect you to go with the talking points, 'cause as we head towards Obama's Weimar, it's all you've got. 

Got a wheelbarrow? That's what you'll need to pay for that loaf of bread you want. Your problem is that because Your Side is in power, you think it can't happen here.

Surprise!

Show me an alternative plan for fixing the country's problems

Show me an alternative plan for fixing the country's serious problems.

I blame your side buddy.  If

I blame your side buddy.  If the Republican's hadn't so thoroughly screwed the pooch maybe y\they'd still be in power.  Imagine the Giants being pissed 'cause the Steelers won the Superbowl.

Kinda pointless, dontcha think?

Is That the Best You Can Do? "I Blame Your Side?"

Especially when the people will blame Democrats for bankrupting the country.

Trust me, when the wheels begin to come off the Entitlement Bus, all the whining from the State Street Messiah about what Bush left him is going to fall on deaf ears. What are you going to do when people stop believing in BS and want results? Hold a rally and hope that Code Pink shows up?

Voters care about what you've done for them lately.

Too bad you Democratic partisans think that's what's good for the Democratic Party is good for the Country. You guys sound like the GM Board of Directors in 1965, just before the Toyotas started coming off the big freighters. 

Go ahead and blame "my side". See how much good it does you.

It sort of sucks for you people to finally realize that Bush is actually, you know, out of politics.

Without GW around for you guys to have your Minute of Hate, you guys are so screwed. 

but krugman is always wrong

so why listen to what he has to say about deficits? You can't ignore someone when you disagree with them and use their arguments to support your own view...I don't recall this blog citing krugman's work as a model towards what the government should achieve

as to your main point, Obama has said he wants to reduce spending and reform programs. We are 2 months in, amidst a crisis. If he goes 2 years without reforming social security or medicaid, or cutting wasteful spending, then he won't be re-elected. But arguing about it now is rather pointless...really this 24 hour newscycle thing is silly. I notice no more posts about the stock market now that it is up 2 weeks straight...

Research first....

If you'd done your research, you would have found that I have often quoted and agreed with Paul Krugman, both here and where I blogged previously (QandO).

ok

i have only been coming to this site for less than a year, and i didnt really get the impression that he would be someone you would look to for advice, maybe that was just the intensity of election year coverage? everyone can agree with someone here and there, but my point was made under the assumption that you agree with him less than 50% of the time.

anyway, my main point was that there is still time to reduce the deficit, and i think almost everyone (left and right) will question obama 2 years in if there is no reform in sight. now isnt the time...don't forget, krugman wanted an even bigger stimulus package

i didnt really get the

i didnt really get the impression that he would be someone you would look to for advice, maybe that was just the intensity of election year coverage?

My position has always been that Paul Krugman is a very good economist (albeit very poor at predictions, which he has acknowledged), but his punditry has become partisan.  It's not merely that he prefers Democratic policy, but that his arguments are often very selective rationalizations, rather than intellectually honest and nuanced.  When economic complexity conflicts with a good anti-Republican rant, the complexity loses.  Indeed, his post-2000 arguments often conflict with things he has said previously.  He said he was "radicalized" in 2000, and it has clearly shown since then. 

The Republican Plan

It's all cheap Luntz-style talking points and propaganda catchphrases.

http://www.gop.gov/solutions/budget/road-to-recovery-final

There's not a lick of serious analysis, graphs, charts, any projections, any estimates, or most important any details on how they pay for their "alternatives".

It's got "Drill, baby, drill" in it, opening up ANWR, no plan for healthcare other than "tax incentives", no plan for toxic asset management other than some kind of strange "industry self-insurance" scheme with no details, well, you get the idea.

It's like it was put together by junior staff at a pizza-and-pepsi-fueled all-nighter, and sent up in the early morning to Cantor's office on the Hill to relieve the embarrassment of him having to stand in front of people begging him for something, anything, every day; and him having to admit they so far only have a plan to obstruct, deny, and bring down approval ratings for the Democratic President and his Party.

Obama called them out on it last week, this week, and will continue to call out the amateur show of Ryan, Boehner, McConnell, and Cantor until they produce something worthwhile.

Then he will co-opt the good parts and send them packing, like all good Politicians do.

Life is tough for a minority Party bereft of ideas and leadership, and continuing to lose momentum as they fail to meet deadlines and capitalize on what few opportunities are presented.

They are making the Obama team, with all its problems, look like the LA Lakers playing on their  home court against a pick-up team.

What the Republicans face is

What the Republicans face is nothing less an existential crisis. Nothing that they believe will help get the country out of this ditch. Nothing. Anything this that works will come from a political philosophy diametrically opposed to their world view.

Either remake the Right into something altogether different under the Republican banner or form a new party but the current Republican is blocked. Period.

Republicans don't have a clue...

...other than Ron Paul because most, if not all, were put in office by the corporate wing of the Republican party. They have spent their formative years following the corporate line, "What's good for the corporate world is good for America" line. They are like TV commercials, trying to sell products that have proven to cause hair loss. In short, they are politically irrelevant.

ex animo

davidfarrar

 

More Details on the GOP's Plan

Boehner, Cantor, Ryan, and the rest of the usual suspects were lined up this morning for a presser and they all had the Blue Folio in their hands:

Here's Huffington's take:

GOP Budget Proposal: Massive Tax Cut For Wealthy

House Republican leaders called a press conference Thursday to unveil their "alternative budget." While it was thin on specifics, it does include one major policy proposal: a huge tax cut for the wealthy.

Under the Republican plan, the top marginal tax rate would be slashed from 35 to 25 percent, facilitating a dramatic transfer of wealth up the economic scale. Anyone making more than a $100,000 would pay the top rate; those under would pay 10 percent.

"Two nights ago, the president said, 'We haven't seen a budget yet out of Republicans.' Well, it's just not true, because here it is, Mr. President," said House Minority Leader John Boehner (R-Ohio), waving a blue document in the air.

"Today we're introducing a detailed road-to-recovery plan," he told the reporters. Other than the tax proposal, however, the plan was absent any details. Instead, it hammered the Democratic budget as too expensive.

Reporters -- mainstream, liberal and conservative -- greeted the Republican document with a collective scoff.

"Are you going to have any further details on this today?" the first asked.

"On what?" asked Boehner.

"There's no detail in here," noted the reporter.

Answered Boehner: "This is a blueprint for where we're going. Are you asking about some other document?"

A second reporter followed up: "What about some numbers? What about the out-year deficit? What about balancing the budget? How are you going to do it?"

"We'll have the alternative budget details next week," promised Boehner. Minority Whip Eric Cantor (R-Va.) had wisely departed the room after offering his opening remarks. ("Today's Republican road-to-recovery is the latest in a series of GOP initiatives, solutions and plans," he had offered.)

A third reporter asked Boehner about the Republican goal for deficit reduction, noting President Obama aimed to cut it in half in five years. "What's your goal?"

"To do better," said Boehner.

"How? How much?"

"You'll see next week."

"Wait. Why not today? Because he asked you to present a budget."

"Now, hold on," said Boehner. "The president came to Capitol Hill and laid out his blueprint for his budget during the State of the Union. He didn't offer his details until days later."

"In general, where do you see cuts coming?" the Huffington Post asked.

"We'll wait and see next week," he said.

Another reporter reminded Boehner that he has "criticized Democrats for throwing together a stimulus quickly and nobody knew what they were voting on. Are you saying that your budget will be unveiled on the same day that the House is expected to vote on it?"

"No, I expect it'll be out next week," he said, though the House is expected to vote on the budget next week. "But understand that a budget really is a one-page document. It's just a bunch of numbers."

Though not today, of course.

As Boehner left, a reporter attempted to pin him down on whether the party would oppose all bailouts in the future.

"Mmm," he said, pausing at the door. "We'll see."

OK - so Jon, what is your take?

What is cutting the top marginal tax rate from 35 to 25 percent going to do the "deficit disaster"?

What will it do?

Increase revenues by spurring growth as always. Duh! Problem is that they spend more and faster than it comes in, which causes the deficit.

There is a reason why the Laffer Curve is called a CURVE

Following your reasoning, Joe C, why stop at 25%? Why not 15%? Or 5%? Then we'll all have so much growth that we won't be able to keep up!!!

Allow me to make an elementary point - there is a reason why the Laffer Curve is called a CURVE.

I knew someone'd be dumb enough to make that argument...

...and it is no surprise that it's you. IT'S A CURVE!!! Read about the Laffer Curve to answer your own question. Hint: The same reason you don't raise taxes to 60%, 80%, 95%.

So your contention is that the point of diminishing returns is..

...what? Obviously,to you, it is less than 35% - where do you put it? What basis do you have for your assessment? What do have to say to Nobel prize winning economists who think the whole thing is completely bogus, no matter where you declare the inflection to be?

Sigh...

My estimate is that it is at 18% because that is the historical effective tax rate of the top 1% of earners. To the Nobel Prize winners that disagree, I say, "Give your prize back." It has been proven over and over since the 1920's.

Please define

effective tax rate

nominal tax rate

actual tax rate

marginal tax rate

 

They are not interchangeable.

Beards may be important, too

By your reasoning we should also have the captains of industry go back to wearing to beards and starched shirts, becasue that is, historically, what they did in the good old days.

Why don't you supply some references to the proof that the Laffer Curve works, and that 18% would be the optimal rate?

Of course Laffer works

Always has, always will. When you lower marginal tax rates, economic activity increases and tax returns come back into the government. This happened during Bush II, for example.

What did not happen during Bush II was any restraint on spending. Laffer only works if you have any sense of spending restraint in Government. The problem with Laffer, and Republicans NEVER, EVER GOT THIS, was that Laffer was poisonous in an atmosphere of unreformed Entitlement programs. In this respect, Obama will almost certainly raise taxes instead of attempting serious Entitlement reform.  But he won't attempt serious spending restraint.

Bush didn't, and Obama won't. For example, the notion that Obama will restrain health care costs is a complete and utter lie. Nothing government does costs less that its equivalent in the private industry because government doesn't have to compete.

The man even lied about going through the budget line by line, and you mokes bought his dog and pony show so easily that you easy marks are over here trying to sell us on Obama like a bunch of freaking Jehovah's Witnesses going door-to-door, afraid that we might not accept that Barack is not the Risen Christ after all. 

If it is obvious that Laffer works

If it is obvious that the Laffer curve is real, then please explain why tax receipts went up in the Clinton years when the top rate of tax also went up?

15% of our GDP goes towards health care

6% of that is administrative costs.

NO OTHER COUNTRY in the civilized world spends this much, and yet we still rate middling at best.

It's plain that other countries do provide better services in the health care regime, when profit is not the pure and hidden motive for everything.

that's because it's cheaper to actually provide services, than to array a huge mass of lawyers to resist having to pay any claims....

When did I say anything about that?

Taken alone, I would say reducing the marginal rate from 35% to 25% would clearly worsen the problem.  I think we need a lot of reforms, and they should take the shape of both increases and cuts.  For instance, I think we ought to look at eliminating the corporate tax (it doesn't bring in all that much, anyway), and treating income the same whether it comes from labor or capital by instituting a flat tax (with a significant exemption that maintains effective progressivity).  And no, that doesn't "favor the wealthy"; it would shift the collection of the corporate tax revenues over to collection of capital gains tax revenues - one collection point, rather than two.  The effect should be to reduce complexity and loopholes, while maintaining progressivity and reducing the distortions introduced by the tax code.

sad

as someone who is young and moderate, i was really looking forward to hearing an alternative plan. granted, they can provide more details next week, but after all the whining and complaining, i expected a lot more. i have heard the 25%,10% tax plan before, I thought maybe at least they could come up with something new!  24%? 26%? goodness.

Don't expect Original Thinking out of the Hill Republicans

 It's like watching a bunch of people audition for a new George Romero film.  The House Republican Conference needs a top-to-bottom blood purge of the Spenders from the Gingrich/DeLay days. 

Obama Could Care Less How Big the Deficit Is... He's Lying

Obama is instead engaging in reckless economic brinkmanship to deploy the spending side of his new socialist America- so when inflation hits double-digits and the dollar is in the toilet, he can sock-it-to the (job-creating) "rich" by cranking-up their taxes to eye-watering Swedish levels... the lifelong dream of him and his wacked-out Marxist-professor mentors.

You knew any talk of restraining deficits was only a propaganda smokescreen back when he portrayed himself as some sort of deficit hawk... just three days after signing the largest spending bill in US history.  This is akin to Josef Stalin giving a speech deploring conditions in the Siberian gulag. 

And The New Deal of the 1930s that Obama so proudly emulates was, in-fact, a colossal economic failure. FDR never achieved an unemployment level under 14%… and averaged 17% over his presidency. Contrast this with the Reagan Recovery of the 1980s, which brought us back from 11% unemployment (50% worse than today), plus double-digit inflation AND interest rates.He accomplished this with an adherence to Milton Friedman's philosophy- with spending cuts and tax cuts, in addition to deregulation and incentives for small businesses and entrepreneurs.    Reagan created over 20M jobs…growing the country’s real GDP by almost 30% in the process. Those kind of results makes one wonder why Obama’s trillion-dollar spending plan would impress anybody, with his pledged 3.5M new and “saved” jobs (whatever those are)… a paltry figure 16.5M jobs shy of The Gipper’s towering accomplishment.  

 

http://reaganiterepublicanresistance.blogspot.com

 

 

The only difference from 1980

The only difference from 1980 to today is that you had inflation (government spending) and today we have deficits and debt. We had never cut back on government spending. Even Reagan had deficits and Bush 41 raised taxes to keep the Reagan legacy. I think each party has a run of 30 years or so, and then it is failure for some reason.

The unemployment rate in Ohio is 9.4% and one county is at 18%. As factories close, due to free trade, it will get worse.

Each recession/depression is different. Paul Volcker under Reagan's term raised interest rates to beat inflation, he was successful and ever since then we had inflation come down, interest rates come down, and unemployment come down. We seem to be reversing the direction on unemployment for the long term. We have too much in deficits and debt, we have not invested in the future, our money is going to Iraq-needed capital for our country, and we are losing middle class jobs due to globalization. This recession is more complicated (add the banking crisis) than what Reagan had. Reagan had one problem (inflation) and one solution (raise interest rates to beat inflation). We have a multitude of problems today. A country in total neglect. 

Have you got anything - anything? - to back up your claims

There is so much wrong with what you've written that I hardly no where to start, so this is as good as any:

The New Deal of the 1930s that Obama so proudly emulates was, in-fact, a colossal economic failure. FDR never achieved an unemployment level under 14%… and averaged 17% over his presidency.

Here is an overview of unemployment rates 1920 - 1940. Recall that The Crash happened in 1929; FDR took office to clean up Hoover's mess in March, 1932. Then what happened? The unemployment rate started dropping.

Year Rate
1920 5.2 %
1928 4.2
1930 8.7
1932 23.6
1934 21.7
1936 16.9
1938 19.0
1940 14.6

 Contrast this with the Reagan Recovery of the 1980s, which brought us back from 11% unemployment (50% worse than today), plus double-digit inflation AND interest rates.He accomplished this with an adherence to Milton Friedman's philosophy- with spending cuts and tax cuts, in addition to deregulation and incentives for small businesses and entrepreneurs. 

The "Reagan Recovery" had as much to do with monetary policy as it did with the Laffer Curve. And, know what, dude? Interest rates are already a ZERO. The Fed has no way to ride to the rescue. Get it? ZERO.

However, the tax cuts did have a massive impact on the deficit. In January 1981 Reagan declared the federal budget to be "out of control" - at that time the deficit was $74 billion, the federal debt $930 billion. Within two years, the deficit was $208 billion. The debt by 1988 totaled $2.6 trillion. In those eight years, the United States moved from being the world's largest international creditor to the largest debtor nation.

Reagan created over 20M jobs…growing the country’s real GDP by almost 30% in the process.

Reagan is among the worst recent Presidents in terms of job creation:Job Growth Per Year Under Most Recent Presidents 

Johnson 3.8%

Carter

3.1
Clinton 2.4
Kennedy 2.3
Nixon 2.3
Reagan 2.1
Bush 0.6

 

So enough about "the Gipper" and his "towerin acheivements", OK? It isn't 1980, the situation is completely different, and, quite frankly, he wasn't that great.

Now then - have you got a SHRED of evidence to back up your claim that Obama is lying? 

once again, Next Right takes

once again, Next Right takes it to the hole!

He's here all-night ladies and gentlemen.  Be sure to tip your waiters on the way out . . .

We Fought and Won the Cold War, Nando

Jesus.

Deficits don't exist in vacuums. Unlike, say, giving 2 billion dollars to ACORN so Jimmy Hoffa can vote, Reagan rebuilt the navy, the air force, and built up the Army to force the Soviet Union into a stalement. His arms buildup forced the Soviet Union to go out of business.

During this period, Democrats were whining for appeasement of Soviet Power.

Those were high-tech jobs. Oh, and Reagan pretty much kept us out of war. That Johnson prosperity? Steroids, built on the back of Johnson's Guns and Butter policy in Vietnam.

"Nice Going, Lyndon!"

Real smart, Nando, to come around here and praise the guy who got us  bogged down in IndoChina in an unwinnable war that liberals started. Which, by the way, your guy is doing again in Afghanistan.

Pretty piss poor when it was Milhouse who had to come in and bat cleanup.  

Very amusing

Firstly, did I say a peep about foreign policy? Secondly - are you now praising government spending as the path to economic recovery?

that's exactly what he's

that's exactly what he's doing.

The Reagan Recovery

"...He accomplished this with an adherence to Milton Friedman's philosophy- with spending cuts and tax cuts, in addition to deregulation and incentives for small businesses and entrepreneurs.  Reagan created over 20M jobs…growing the country’s real GDP by almost 30% in the process..."

 

No, he didn't. 

http://www.fas.org/man/docs/fy00/historical/index.html#h1

Reagan's real legacy was the shifting of Federal money away from infrastructure spending and needed social programs to Defense and Military Contractors, and to huge tax cuts for Corporations and the rich. 

Reagan accumulated deficits every year he was in office, and ended up tripling the National Debt under his Reaganomics, from 900 Billion to 2700 Billion. 

Reagan quadrupled our trade deficits, by adding protectionism and tariffs.

Reagan actually RAISED taxes on the middle class:  With Greenspan's help, he raised middle-class payroll taxes, and his tax act of 1986 did the same.

In constant year 2000 dollars, revenues started at 1.02 T in 1980, and dropped to .961T in 1983 before they slowly began to creep up again to 1.23T in 1988, when the outlays also grew to 1.44T and produced Reagan's largest deficit.

 

http://www.bea.gov/national/index.htm#gdp

AS to GDP, when you measure it in 2000 Dollars,  an overall growth of 30% in 8 years is not extraordinary.  Six of Bill Clinton's 8 years were 3.7% or above, and he never had a negative year.  Reagan had only 4 years above 3.7%, and two negative years.  Most of Reagan's GDP success was fueled by a strong 1984, when his GDP came in at 7.4%

The Reagan growth in GDP came about mostly because the Government was pouring hundreds of billions of borrowed dollars into the Economy.

 

 

Reagan's presidency was not a "Golden Age" of Economics for this country:  At best it was mediocre, and at worst, it set this country back for years.

As to jobs, Clinton created more and better jobs while RAISING taxes!

Once again, I feel like Panasonic

Just slightly ahead of my time.

Like I recall calling out Paul Krugman and discussing deficits "to infinity and beyond"

And JD, if you want some budget responsibility, you ought to be praying the Democrats get walloped as thoroughly in the '10 midterms as they were in '94.

Market was up again today, Ironman

What is your interpretation this time? They liked the on-line presser this morning? The Republican blue folder this afternoon? Or was the rally driven by Alaska volcano monitor stocks and North Dakota sandbag futures?

Obama is a trickle downer

The Obama plan is trickle down economics, but instead of giving money to the productive class - corporations and business, Obama is giving money to the non-productive class the Government sector in hopes that that boost in money will trickle down and help the average worker and American. 

So Obama believes in trickle down economics he just thinks that fixing potholes and giving regional hospitals a few million will spur economic growth. 

Freaking genuis plan - no idea why a Republican didn't think of making Government bigger to make the economy grow.... it makes perfect sense....

ONE REPUBLICAN DID. Ike.

Oh, and Hoover too -- for all his stubbornness, Hoover was a damn fine engineer.

You apparently havent' read any economic theory on how the Clinton Boom actually occurred -- it's because of Government Investment in Infrastructure!

Yes, Virginia, there really is a Mexican Santa Claus who fights Satan. (and, no, I'm not making this up. they really did make that movie!)

The Clinton Boom

The Clinton Boom occured because of Gov. investment in infrastructure.. oh my goodness.  I guess it had nothing to do with a antire new industry sector being created from nothing - the internet, it has nothing to do with companies like Microsoft and Dell making personal computer products that were much more affordable and allowed people to create companies from their basement, and allowed a whole new world of commerce to start.. a global business based in your living room. 

No it had nothing to do with no major foreign conflicts during his tenure. 

I'm sure it had nothign to do with a abundance of cheap credit. 

Listen, I"m not down on the Clinton years, but some of it goes to luck and some goes to good planning and I applaud his good planning. 

But please, please don't be telling me that infrastructure was the reason for the boom.  IF you want to say that the Govt built the infrastructure for the internet, well that's stupid because it was Comcast and Verizon and the telecoms... maybe with the help of tax breaks they were able to afford to do those things... shocking. 

Listen, Obama has been spending about $1 Billion dollars an hour since being president, that spending is unsustainable.  I like building roads and bridges and fixing potholes, heck that's what the Govt is supposed to do, but don't tell me that's what's going to get us out of this mess, don't tell me we can spend our way out of a hole. 

I'll tell you what we're doing,

It's going pedal to the metal on the gas, while driving downhill.

Unlike you, I'm perfectly capable of discussing the critiques of my philosophy (it comes from reading too much calculated risk. hoopajoops has a positive gift for humorous critiques).

Comcast and Verizon and the telecoms? Excuse me? Verizon ain't the fucking reason I've had nuclear weapons pointed at my state my entire fucking life.

Meh, I'm reporting on the recent research that I've read, that suggests that it wasn't the deficit reduction that got the Clinton boom.

It wasn't tax breaks either.

I'm all for nationalizing the banks, yeah, I don't like how Obama has been spending our taxpayer money to create new enrons. but I haven't seen any respectable republicans bitching about that.

When robots make better conservative critiques than Republicans do -- does that mean they've passed the turing test?

 

plus, on the infrastructure-- with the high price of gas, and plummeting demand, much of the needed construction is LAST YEAR's work, not next year or the following year's worth.

I'm all inf avor of America buying smartly, and in the middle of a recession is the best time to buy construction workers.

Whoa easy there

First who said I couldn't discuss the critiques of my philosophy?

    Unlike you, I'm perfectly capable of discussing the critiques of my philosophy I kinda thought that's what we were doing, hence a discussion.  And how did you go from Verizon to nuclear weapons

    Verizon ain't the fucking reason I've had nuclear weapons pointed at my state my entire fucking life.

So I guess we first need to talk about what infrastructure we are talking about.  There is infrastructure for roads, bridges, tracks, sea ports, then there is tech infrastruture- cable - electricity - 'the internets' - boring stuff that's important - water mains, power grids, dams and dykes and stuff like that.  How you go from Verizon to nuclear bombs I don't know. 

My main point isn't that investing in infrastructure is bad, in fact I think some of it might be a good idea.  But I don't see it as a major economic driver, mainly because many of those construction jobs are temporary and that typically I don't trust the federal government to make smart decisions about where to spend that money on infrustructure.  Fixing roads and bridges is a good thing, but having a plan to help small businesses to me is a better plan out of this financial mess.   And no, I"m not just talking about tax cuts as the only panacea - though the traditional demons of the right, red tape, confusing and expensive tax codes are still issues there is more that we can do to help small business.  Credits for workforce training so if someone wants to switch jobs to a small business they can, allow health care premiums to be a tax write off (they aren't currently) and will allow small business to give health insurance (or better insurance) to more employees (as a small business owner this one is especially bad),  expand options for startup companies for capital.  Allow more writeoff options for startups.

If the federal government is going to expand - then expand the SBA so they can hire more accountants and tax experts to help small businesses get free accounting and tax advice.

In the end I think that to help the economy all sectors need to work together and I honestly think that this administration has left small business at the wayside.  I know there is stuff in the budget for the SBA and credit stuff, but most small businesses will tell you that doesn't do much due to the restrictions.

 

you were talking about internet backbones.

so was I. The internet is a prime reason that I've had nuclear weapons pointed at me -- a lot of it runs through this here town (and Penn State). ;-) There's no cottonpicking reason verizon would have chosen to make pittsburgh the 19th biggest hub on the american net. It's there because of colleges and the decisions made by the government, who fund the colleges.

Rural Electrification is what we got out of the last depression. I can only hope we'll get something similar out of this one (rural broadband?) -- an economic dynamo that continues to produce improvements for sixty years!

I don't like the idea of tying insurance to a job, never have. It speaks of economic blackmail. I'm all for giving small businesses a decent break though -- I think universal health care will probably get the job done cheaply enough. I don't see how a 20% tax writeoff (pulling this totally out of my ass -- the numbers may differ) will be functional in the longterm -- with the cost of health care rising at 8+%.... something radical is needed.

The best training for running a small business is some general financial literacy/frugality courses. If you can run a surplus of 20k in a year, you'll do fine with a small business.

It's those fiscal responsibility notions that most people lack, not creativity nor drive.

I'm all for stabbing a knife through partnership law -- if you're smart you stay the HELL away from it, as it hasn't been updated in way too long.

hmm... how about a tax credit for inventory? I know that won't help every small business, but ti will give many of them an edge over wallmart.

and yeah, I hear you on SBA -- there are parts of the gov't that actually work and need to be nourished. I'd rather hear Republicans talking about "no unemployment benefits" -- "entrepreneurship classes required", than just saying "no unemployment benefits".

double

for some reason my post was posted twice - so I'm editing this one to prevent that

Walloped?

No, Ironman.   No.

The absolutely criminal lack of any sort of foundation beyond supply-side, Laffer-curve crackpot AEI-Reaganomics theories that represents the extent of the Economics savvy of both the leadership and the rank-and-file of the GOP and Conservatives today makes me pray that they never, ever regain power.

I swear I've heard Congresscritters say things that make it clear they cannot even tell the difference between a budget deficit and the National Debt.

What it comes down to is very simple, and it was exquisitely articulated by the President several times at his Press Conference.

Both sdes believe the only way out of systemic deficits is Economic growth. 

Except the Democratic Party believes in Economic Growth through investing in the future via leadership and empowering and funding new ideas in Energy reform, Education reform, rebuilding and modernizing infrastructure, and removing the huge expense of healthcare from the backs of Americans and American businesses.

The GOP believes in Economic Growth by lowering taxes on the top 5% and on Corporations, lowering Government regulation of businesses, and drilling for oil in protected areas.