Lol, yeah right.
Dems to lift debt ceiling by 1.8 trillion, fear 2010 backlash
“It is December. We don’t really have a choice,” Obey told POLITICO. “The bill’s already been run up; the credit card has already been used. When you get the bill in the mail you need to pay it.”
Though Treasury can buy itself time by moving assets around, it is already coming close to the current debt ceiling of $12.1 trillion. Last spring, the Democratic-backed budget proposed to raise this to about $13 trillion, but given the current pace of borrowing, no one now expects that will be sufficient to get through 2010."
Jesus fucking christ...
Periodically the tree of liberty must be watered with the blood of tyrants and patriots.
Thomas Jefferson
You know, the least they could do would be to use the money they're getting back from TARP to pay down the debt. Having $700+ billion less in debt would be nice. But nooo, they're going to spend that money too on a mythical "jobs" program. What ever happened to fiscal responsibility? It's more important now than ever before in the history of "these United States."
Political Atheists Blog
up is down
1) There is a difference between the deficit and the debt.
2) The vast majority of the current deficit is the result of a temporary reduction in tax revenues (due to the recession) and temporary increases in federal spending (to fight the recession and please don't say "oh but i can see the future and those spending increases won't be temporary").
Personally, I think that once the recession is over, the deficit will basically reduce itself. Add on the fact that we will likely be out of Iraq and Afganistan by the end of Obama's first term and *boom* we have some significant deficit reductions coming our way.
Ambition is a dream with a V8 engine - Elvis Presley
Add on the fact that we will likely be out of Iraq and Afganistan by the end of Obama's first term
..how you figure?
free paradigm blog ::: free paradigm on youtube
Student, what I'm saying is that we're not seeing any indicators of any kind of fiscal responsibility.
They give lip service to "deficit reduction" but I think this should show that they're not going to do anything of the sort.
They're going to tax, borrow, print and then spend the money. We're not going to see deficit reductions.
And no, I can't see into the future. But given everything the government is doing now, I see no indicators of increasing fiscal responsibility on the part of this administration.
krazy kaju: You know, the least they could do would be to use the money they're getting back from TARP to pay down the debt. Having $700+ billion less in debt would be nice. But nooo, they're going to spend that money too on a mythical "jobs" program. What ever happened to fiscal responsibility? It's more important now than ever before in the history of "these United States."
For them to do that, they'd have to admit that they can't actually fix every single problem that comes up. And that would run counter to the current message of "whatever you need we got it."
I don't see how this move shows that Dems are not serious about long-term deficit reduction. One can easily favor cyclical deficits, but oppose structural deficits (Milton Friedman himself held both views and I doubt he would be supporting Democratic economic policies right now). Running cyclical deficits means accumulating debt and we will not be able to run those deficits without moving the debt ceiling.
Personally, I see this move as an appropriate response to the cyclical deficits that were created by the onset of one of the greatest recessions we've seen in the past 70 years. Running cyclical deficits now makes sense. And is total consistent with Democratic goal of reducing structural deficits in the future.
Well personally, I think they should be cutting taxes and cutting spending.
Anything other than that is evidence to me that they have no intention of cutting back on the national debt and/or fiscal deficit.
And so, I will plan my investments with the prediction that the Fed will keep rates low for at least another six months and that we're going to see more spending programs as well as higher taxes. Not to mention greater regulations in both the financial and energy sectors. And I am interested to see what monstrosity they come up with for healthcare. Either way, someone will benefit from all these government actions, but most won't. I need to know who is going to benefit so I can invest wisely.
bloom,
Maybe, but I was not referring to my personal feelings about what should be done, but how I personally interrupt Democrats intentions for the deficit in light of the hike in the debt ceiling. Personally, I see the two as entirely consistent. I am not sure how one could see it other wise.That is without being able to see into the future.
PS* Cutting taxes and cutting spending could leave the deficit unaffected or even larger (it depends on how big the relative cuts are). Something tells me you are not actually concerned about the deficit.
Are you just going to leave me hanging on why you think the US military is going to be out of Iraqistan by the end of Obama's first term? :(
Student: bloom, Maybe, but I was not referring to my personal feelings about what should be done, but how I personally interrupt Democrats intentions for the deficit in light of the hike in the debt ceiling. Personally, I see the two as entirely consistent.
Maybe, but I was not referring to my personal feelings about what should be done, but how I personally interrupt Democrats intentions for the deficit in light of the hike in the debt ceiling. Personally, I see the two as entirely consistent.
I dunno, they've got social security, medicare and medicaid to deal with. They've got this stimulus agenda, and we're probably going to see a second stimulus. They've got the problem that their political platform is the party who can't say no. They're talking about increasing entitlements and adding new ones. They're talking about increasing regulations in multiple sectors. They've got the wars in the Middle East. They've got the loose monetary policy of the Fed. All signs point to spending. I think we're going to see an increase in cyclical deficits as well as structural deficits. I think we're going to see an even more profligate state than before with W but this time Obama will actually have to take responsibility for his actions as opposed to the old line of "well, this is all the work of my predecessor."
Nothing the government has done at any level makes me think otherwise. The problem is that foreign governments have been following a similar Keynesian model so it's hard to say that emerging/foreign markets are necessarily safer places to buy equities. Gold still seems like a strong bet but there may be some bubbliness (yes, I made that word up) going on there.
This is a tough market to play, these institutions have become totally unreliable. The government has totally undermined the stability of the market.
You're right, the spending cuts would have to be enormous to be able to make significant tax cuts. Otherwise, the deficit could get bigger. But I'm willing to bet we see just the opposite. Taxes will go up and so will spending.
demosthenes: Are you just going to leave me hanging on why you think the US military is going to be out of Iraqistan by the end of Obama's first term? :(
I'm willing to bet they won't be out of the Middle East within the next 8 years.
Ultimately, I think this all is going to hit the dollar very hard at some point. I mean we've already seen the dollar losing value but this is still a slow economy. When the velocity of money picks up, the Fed will have to raise rates. But there's always a lag. And the fiscal side of this is so bad that I just can't see how the dollar isn't going to get murdered here. Do you?
And if they are out before Obama's first term, the reason I can come up with is because the impending economic collapse will have happened sooner and will have hit us way harder than expected. I definitely don't see us leaving because Obama decided it was time for the troops to come home. The military won't be out of the Middle East until economic forces beyond the control of the administration forces its hand.
demosthenes: And if they are out before Obama's first term, the reason I can come up with is because the impending economic collapse will have happened sooner and will have hit us way harder than expected. I definitely don't see us leaving because Obama decided it was time for the troops to come home. The military won't be out of the Middle East until economic forces beyond the control of the administration forces its hand.
Exactly. If they can find the money, they'll keep the troops over there. Because they're afraid of what happens if they pull out.
The reality is that the US government will default. Whether they do it honestly by saying they can't pay or print the shortfall is up for debate. The unfunded liabilities for entitlements are atronomical, there is no way to fix this aside from completely abolishing entitlements (which the government will never do). The interest payments on the national debt are already over $400 billion annually on top of the $12 trillion in total. It's ludicrious to believe the US government will ever pay this off. In 1980 Volcker raised the Fed funds rate to what, 21.5% and the US was the largest creditor country on earth. Now that we are the largest debtor nation, take a guess where rates are going. The dollar is going through the floor, rates are going through the roof, and the US economy is going to be down the drain for an extended period of time.
Student: Add on the fact that we will likely be out of Iraq and Afganistan by the end of Obama's first term and *boom* we have some significant deficit reductions coming our way.
Add on the fact that we will likely be out of Iraq and Afganistan by the end of Obama's first term and *boom* we have some significant deficit reductions coming our way.
Yeah, there will be no need for US troops in the ME once there is "peace". Just like they left Germany, and South Korea, and Japan, and Saudi Arabia and.. and.. and...
I personally believe the only thing keeping other countries in toe with the American fiscal delusion is this "pax Americana"...
bloomj31: You're right, the spending cuts would have to be enormous to be able to make significant tax cuts. Otherwise, the deficit could get bigger. But I'm willing to bet we see just the opposite. Taxes will go up and so will spending.
Not necessarily. The more we deregulate, the more tax revenues the government will gain. Eliminating a few small agencies and freeing up a few markets (health care being one) would basically act as a HUGE tax cut on individuals and businesses, thereby speeding up capital accumulation, economic growth, and increasing tax revenues.
The thing about health care is that health care waste is estimated to be between $500bn and $800bn. Imagine that for a second: if the government deregulated the health care industry, it would be equivalent of cutting income or payroll taxes by half, and it would be better than completely eliminating corporate taxes, estate taxes, excise taxes, AND capital gains taxes. If the $800bn number were true, then real health care reform would be basically as large a tax cut as completely eliminating payroll taxes.
Now think what would happen if we deregulated in other industries: the effects probably wouldn't be as large, but the boost to the economy would be huge. Think, for example, what would happen if we eliminated the Department of Energy, allowed nuke power plants to use/reuse more of their fuel, allowed more energy extraction in the US, etc. Energy prices would fall almost immediately, while energy profits would rise, creating a huge boost for the US economy.
So if the government really wanted to balance the budget, it would have to cut spending, but not by as much as some would expect. If it simply cut the most harmful (in terms of regulation) areas of government, it would provide a huge boost to the economy, which would in turn benefit the government with higher tax revenues.
bloomj31: a second stimulus
The Democrats' approach to addressing the annual budget deficit is to raise taxes, not reduce spending. They've already chosen the path to greater short term and long term Government spending, and they want to double-up on that. There's a built-in tax increase by simply not renewing the existing tax reductions from the Bush administration. They'll use existing regulations to squeeze as much out of the populace - this CO2 ruling and threat by the EPA is just one such example. They will avoid direct tax increases in legislation, unless they can pair it up with some obvious benefit (obvious to their targeted electorate) - for example, massive taxation embedded in the Health Care Bill. They will raise taxes on the "rich" in a variety of ways, and may even pass legislation on the most rich - whatever they can get away with without impacting their chances for re-election both in 2010 and 2012. They think they have their bases covered, but there are other factors and unintended consequences that make the math extremely fuzzy if not absolutely wrong.
As for long term debt, they are playing a Keynesian gambit. Just as this play didn't work in the 70s stagflation period, it won't work for the upcoming storm of what I'll just call hyper-stagflation (you could even call it economic collapse or the Bust, but there is a remote chance we come out of the current crisis and delay the bust to a later date). Some predict this storm to hit as early as the 2nd Quarter of 2010. We may see it earlier if other countries or one or more of the States has a default. I can see this thing snowballing very rapidly.
The Democrats are doing exactly the opposite of what they should be doing to get out of the mess they created (with help from Republicans). Some conspiracy theorists might say this was their plan all along - cripple the economy to present the opportunity to seize power, and then save the economy while creating a nearly invicible political structure (immune from democratic elections since the majority is dependent upon the state, and therefore dependent on Democratic control over the Government). Big problem there is that they've used Keynes as the model for saving the economy, and thus are doomed.
Snowflake: bloomj31: a second stimulus Third. You forgot bush's 700 billion one that no one remembers.
True. Third stimulus.
Kaju, I'm not disagreeing with you. Deregulation would be a good way to go about fixing the fiscal situation. But we're seeing the Dems move in the opposite direction. More regulation. Lots more regulation. Increases in entitlement spending. New entitlement programs.
I just don't see a new wave of deregulation coming any time soon. I actually think they're going to give more power to the Fed too.
K.C. Farmer: The Democrats are doing exactly the opposite of what they should be doing to get out of the mess they created (with help from Republicans). Some conspiracy theorists might say this was their plan all along - cripple the economy to present the opportunity to seize power, and then save the economy while creating a nearly invicible political structure (immune from democratic elections since the majority is dependent upon the state, and therefore dependent on Democratic control over the Government). Big problem there is that they've used Keynes as the model for saving the economy, and thus are doomed.
If they haven't sort of intended this all along, it certainly looks like they have. But I tend to think it's not one man or group that planned this but in fact all the variables working together based on the rules of the game. The rules of the game have determined the way the players have played this game. But the game may be over soon.
Student:Personally, I think that once the recession is over, the deficit will basically reduce itself. Add on the fact that we will likely be out of Iraq and Afganistan by the end of Obama's first term and *boom* we have some significant deficit reductions coming our way.
Yeeaaaaaaaaaannooooooooooooooooo.
The United States is coming to a significant turning point, the interest payments on the debt are going to go up and up, the dollar is tanking, the baby boomers are retiring, healthcare is going to be taken over, the entire market is being absolutly stifled and filled up with toxic assets and investments, companies aren't responding to the ressession in actually helpful ways which is going to doom the markets structure of production, taxes are going to have to be increased further hampering the market, the afghan war is being escalated and isn't going anywhere, and the will to cut spending doesn't seem to exist.
The mere existance of social security and medicare/medicade NOW is going to doom us, and that's not considering what the state is going to do in future.
And Bloomj, you do know that there's a way to edit your posts so you don't have to post 4 messages at once right?
Yeah, but I like to separate things.
This is how I know we'll be involved in the Middle East for a while.
"As a head of state sworn to protect and defend my nation, I cannot be guided by their examples alone. I face the world as it is and cannot stand idle in the face of threats to the American people. For make no mistake: Evil does exist in the world. A nonviolent movement could not have halted Hitler’s armies. Negotiations cannot convince al Qaeda’s leaders to lay down their arms. To say that force is sometimes necessary is not a call to cynicism — it is a recognition of history; the imperfections of man and the limits of reason. So let us reach for the world that OUGHT to be — that spark of the divine that still stirs within each of our souls. [APPLAUSE] ... We can acknowledge that oppression will always be with us, and still strive for justice. We can admit the intractability of depravation, and still strive for dignity. We can understand that there will be war, and still strive for peace. We can do that — for that is the story of human progress; that is the hope of all the world; and at this moment of challenge, that must be our work here on Earth."
"Hamid Karzai told reporters yesterday that Afghanistan won't be able to pay for its own security until 2024! That's 15 years, for the mathematically challenged. Gen. Petraeus says the U.S. could get stuck with $10 billion in security costs annually. So, timetable or not, the U.S. could be on the hook for a $150 billion security force, 7,000 miles away. "
Such pretty language, but they know they're gonna be there for a while. And even if the troops aren't over there en force, we'll have to back then financially. You think security is all they'll need help with? I doubt it.
bloomj31: A nonviolent movement could not have halted Hitler’s armies.
bloomj31: Negotiations cannot convince al Qaeda’s leaders to lay down their arms
bloomj31:it is a recognition of history;
You know these were Obama's words right?
By the way, I don't agree with you on the letting the Jews die in death camps. I also think we should support Israel. But this is a convo for another time. The point is that we're not going to see movement out of the Middle East for some time.
Well, with Iraq the explicit time table given to us is that combat troops will be out by the end of next year and that 50,000 marines would remain in Iraq until the end of 2011. All of this is before the end of Obama's first term in 2013. Considering the Iraq War to date has cost over $100 billion per year, that alone would make for a significant deficit reduction.
http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War#cite_note-0
With Afganistan it is less certain, but the President has said that we would begin transferring troops out of Afghanistan in July of 2011. It is unclear now how quickly the draw down will move after that. But I don't think it would be impossible for the vast majority of troops to be out of Afghanistan in January 2013.
Will the number of troops remaining be 0? Maybe not. But considering the War in Afghanistan currently costs us $3.6 billion per month now, even modest reductions from current levels would likely result in significant deficit reduction.
http://thehill.com/blogs/blog-briefing-room/news/63121-crs-calculates-cost-of-us-troop-presence-in-afghanistan
Of course, none of us can see the future. So there may be some unforeseen reason that would keep us there longer. But I think the Obama administration has given pretty clear signs that they don't want to be involved any longer than they have to be. And I think that is good news for people concerned about the deficit.
We shall see, Student, we shall see.
Because the Obaminator is at the helm.
Student: 2) The vast majority of the current deficit is the result of a temporary reduction in tax revenues (due to the recession) and temporary increases in federal spending (to fight the recession and please don't say "oh but i can see the future and those spending increases won't be temporary").
No need for a crystal ball to observe that history is repeating itself.
What makes you think the "recession" (depression?) is over or will be over so soon? Taking the massive amount of money the Fed has "loaned" out to banks (yet to be loaned out, I believe), the absurd amount of "stimulus" spending, medicare expansion and "health care reform", coupled with the fact that many New Deal programs are still here (and will be self-destructing soon-- Social Security etc) along with much, much more regulation than we had during the 15 year (into WWII) depression...
And all that is assuming some real economic disruption doesn't occur like a Chinese revolution or a staggering oil production problem, etc.
Is there any reason to be so optimistic? The recent reports coming out to claim "the recession is ending" seem to be riddled with lies and fabrications.
Student: Of course, none of us can see the future. So there may be some unforeseen reason that would keep us there longer. But I think the Obama administration has given pretty clear signs that they don't want to be involved any longer than they have to be. And I think that is good news for people concerned about the deficit.
Didn't the Bush admin tell us similar fairy tales? They didn't want to be in there "any longer than they have to be" either. (I'm sure you recall what it did to their approval ratings...) There's no change in policy at all. Possibly some changes in strategy but for all we know it could be worse than the previous strategy.
Ansury:What makes you think the "recession" (depression?) is over or will be over so soon?
Because Obama said it was so. He's stirring animal spirits into good times...
He's making Jimmy Carter look like an effective statesman.
Ansury: Student: Of course, none of us can see the future. So there may be some unforeseen reason that would keep us there longer. But I think the Obama administration has given pretty clear signs that they don't want to be involved any longer than they have to be. And I think that is good news for people concerned about the deficit. Didn't the Bush admin tell us similar fairy tales? They didn't want to be in there "any longer than they have to be" either. (I'm sure you recall what it did to their approval ratings...) There's no change in policy at all. Possibly some changes in strategy but for all we know it could be worse than the previous strategy.
Afghanistan has some significant issues. First, it's not really even a nation. It's a collection of tribes living on a moon-like environment where the best thing they have going is the opium trade (guess that won't help the War on Drugs, another miserable failure). The U.S. under Bush went in to destroy Al-Queda's operations and overthrow the Taliban. Given that most of these guys fled to Pakistan, one of the nations the U.S. used to launch it's attack, I'd say the operation was pretty ineffective. The next step was an attempt to democratize the country, in the belief that this would either earn us sympathy or better the lives of the people who live there. In some respects this was successful, but it's also unsustainable. You can declare that women have rights, you can build schools, you can modernize the infrastructure, but if the people do not choose to do this themselves, then it will never last. The most recent elections have demonstrated a high level of corruption. Which is better, a corrupt state led by Democracy or a corrupt state led by religious fanatics. I don't really see that much of a difference.
Now Obama comes along, who has said that the real war is in Afghanistan. He's taken over 10 months to make up his mind on what to do, and has finally decided to sent in tens of thousands of troops without a mission or achievable goals, and promises that they'll come home when the job is done. It appears to me that they've gone from a misguided policy under Bush to no real policy at all under Obama. Perhaps as the casualties mount Obama will explain why he sent people to die and/or kill for no reason.
Both sides say we must win in Afghanistan, but no one has really defined what that means. If you go by Obama's Nobel Peace Prize speech, then the U.S. won't win in Afghanistan until everyone there has achieved equality of results (which to me suggests that everyone is either a slave or dead; the only human conditions where equality of results are guaranteed).