Debt spending vs. tax and spending

[Realitycheck]

Check this one out. It is pretty much a given that the Clinton years were an economic boon. Yes, taxes were raised but the debt increases plunged, and even more importantly, the economy flourished. That really blows this gigantic hole in the theory that higher taxes stifle economic activity. Of course, with all of these new potential debt increases on the table, things look somewhat daunting. I see it as kind of a going-out present by the Rep administration. What are your thoughts on this?

 

 

http://www.lafn.org/politics/gvdc/Natl_Debt_Chart.html

 

Edited September 22, 2008 by agentchange

[bombus]

That's very telling. How on earth do the Republicans manage to fool so many people all the time?

 

On a similar note:

U.S. Orgy of Debt

 

Americans borrowed to hilt, then housing bubble burst

 

By ERIC MARGOLIS

 

 

http://www.informationclearinghouse.info/article20837.htm

Edited September 22, 2008 by bombus

[ecoli]

I think the Republicans are getting a raw deal here. Maybe its just coincidence that the republicans are getting the bursting end of a bubble set up in the democrat years.

[Realitycheck]

It WILL be sad if Obama carries out his promise to raise capital gains taxes. This is one area where he is weak, because capital gains have been known to comprise as much as a third of all income taxes, and raising capital gains taxes simply drives people away from investing in the stock market. Talk about bursting bubbles.

 

Some interesting highlights from "U.S. Orgy of Debt".

 

The "free market" Republican administration has ended up nationalizing nearly $1 trillion worth of businesses, including the federal mortgage agencies Fannie Mae and Freddie Mac, Bear Stearns, and global insurer AIG. Welcome to Wall Street socialism.

 

All stock market gains of the past 10 years have been wiped out in the most dangerous crash since the 1930s.

All absorbed by government intervention.

 

Washington may no longer be able to spend half the globe's defence budgets.

Edited September 22, 2008 by agentchange
multiple post merged

[bombus]

I think the Republicans are getting a raw deal here. Maybe its just coincidence that the republicans are getting the bursting end of a bubble set up in the democrat years.

 

That's a good observation, and I would consider it if it wasn't for the republicans support of neocon economic policies that are very reliant on debt.

[Saryctos]

Simply put, Republicans spend money on building the house, then the Dems live in it without expanding...just paying it off without adding to it.

 

The more money you spend now the more money it can make you later on. Paying off the debt sounds like a reasonable idea until you think of what all that money can become if it's spent on creating more wealth.

 

I'm also pleased with that little quote at the bottom of the graph, because it's quite accurate. Democrats are the big spenders, Republicans the big investors

[Pangloss]

Why does this chart ignore the makeup of Congress? Could it be the chart-makers don't want people to notice that Congress was controlled predominantly by Democrats during the steep climbs under Reagan and the two Bush's, and controlled predominantly by Republicans during the steep decline under Clinton? Hello, is partisanship really THAT hard for people to spot? Gee maw, a web site says it's so, therefore it must be so! Gee maw!

 

You folks should be smart enough to know by now that it takes TWO parties to spend THAT kind of money. One to hold the teat and the other to cover up your eyes. They just swap the jobs back and forth, that's all.

 

(I think I'm gonna make that my new catch phrase whenever somebody posts something glaringly partisan. "Gee maw!")

[waitforufo]

Why does this chart ignore the makeup of Congress? Could it be the chart-makers don't want people to notice that Congress was controlled predominantly by Democrats during the steep climbs under Reagan and the two Bush's, and controlled predominantly by Republicans during the steep decline under Clinton? Hello, is partisanship really THAT hard for people to spot? Gee maw, a web site says it's so, therefore it must be so! Gee maw!

 

You folks should be smart enough to know by now that it takes TWO parties to spend THAT kind of money. One to hold the teat and the other to cover up your eyes. They just swap the jobs back and forth, that's all.

 

(I think I'm gonna make that my new catch phrase whenever somebody posts something glaringly partisan. "Gee maw!")

 

Interesting article on the subject, "Stubborn Ignorance" by Walter Williams.

 

http://www.gmu.edu/departments/economics/wew/articles/08/Stubborn%20Ignorance.htm

[Pangloss]

Well I appreciate the link, but Williams is a kind of intellectual partisan, somewhat the conservative equivalent of Paul Krugman at the New York Times. It's no mistake that he's a frequent guest host for Rush Limbaugh. He's right in pointing out congress's role, but he goes too far the other way, suggesting that the president is not responsible for fiscal policy.

[bascule]

Why does this chart ignore the makeup of Congress?

 

That's a good point, but...

 

...controlled predominantly by Republicans during the steep decline under Clinton?

 

Clinton certainly exercised his veto power quite healthily when President, something Bush did not do, and the predominantly Republican Congress under the first 6 years of Bush managed to completely undo what happened during the Clinton years.

 

Fortunately it's easy to blame 9/11, right?

 

You folks should be smart enough to know by now that it takes TWO parties to spend THAT kind of money.

 

Really? What about the first 6 years of Dubya?

[waitforufo]

Well I appreciate the link, but Williams is a kind of intellectual partisan, somewhat the conservative equivalent of Paul Krugman at the New York Times. It's no mistake that he's a frequent guest host for Rush Limbaugh. He's right in pointing out congress's role, but he goes too far the other way, suggesting that the president is not responsible for fiscal policy.

 

I agree with your analysis of Williams. I posted it more for his comments on congress's role. I have been quite disappointed in Republican presidents that in effect tell congress "give me what I want and I'll let you spend like drunken sailors on shore leave."

[Realitycheck]

Simply put, Republicans spend money on building the house, then the Dems live in it without expanding...just paying it off without adding to it.

 

The more money you spend now the more money it can make you later on. Paying off the debt sounds like a reasonable idea until you think of what all that money can become if it's spent on creating more wealth.

 

I'm also pleased with that little quote at the bottom of the graph, because it's quite accurate. Democrats are the big spenders, Republicans the big investors

 

Given the dynamics of the past, it would appear that neither parties spend or tax any more or less relative to their motives. Dems collect more to spread more benefit on ourselves, Reps claim to collect less to benefit the rich and somehow think that that creates equilibrium in the economy of mankind, but have still borrowed more and not displayed any real efficiency. I see no investment here for ourselves to reap benefit from. Investing on ourselves means doing that, none of which Republican economic policies have established as proven. Educated mechanics function better in society than shadetree mechanics. This is proven.

[Pangloss]

Clinton certainly exercised his veto power quite healthily when President, something Bush did not do, and the predominantly Republican Congress under the first 6 years of Bush managed to completely undo what happened during the Clinton years.

 

The veto pen was a factor in cutting defense spending, but when it comes to social spending (the far greater budget item) his veto pen actually increased spending that Republicans were trying to cut, such as with the Personal Responsibility act. They did manage, however, to find common ground eventually and end the decades-long tradition of endless welfare checks in this country. It's unfortunate that entitlement spending has actually gone up since then.

 

I could be wrong, but I don't know of any social programs proposed by Republicans during that era that would have increased spending but which were vetoed by Clinton. That would seem counter-intuitive as well. But by all means, if you know of any, please pass it along.

 

 

Really? What about the first 6 years of Dubya?

 

You're right, Republicans did have a majority for most of that time. I apologize for the misleading post.

 

The important point I wanted to make was that Congress plays a strong, equally-primary role in the budget, not to let Bush off the hook. I'm glad we agree on this.

[Realitycheck]

What this means is forget about "economic stimulus" lies. LMFAO

[Realitycheck]

What this really means, has meant all along, is that the budget deficit is not 1-500 billion dollars, as has been the case for a while now, but is actually way up in the trillions. It's not even shady accounting. It's not accounting. It's ignorance. This is a disgrace for what we supposedly stand for. Is this ever going to get paid back? Yes, debt gets retired, somehow, but with all of these increases and increases and increasing balances and increasing demands and increasing thresholds and increasing ceilings and increasing responsibilities to "help send a signal to markets around the world that America's financial system is back on track", it seems that the sky is the only limit.

 

Does everything look all hunky dory to YOU? If someone can explain to me how this giant package solves the problems that I have laid out (housing depression, loss of jobs, etc.), please enlighten me. All I have heard talked about is BS about banking funds availability, etc., etc. Yeah sure, the country takes over the loans and gets paid back on most of them. Maybe what the fine print will be is that they will give relaxed treatment to those in distress. Hmmm.

 

http://finance.yahoo.com/banking-budgeting/article/105840/Bush-Lays-Burden-on-Congress

 

Kind of the wrong thread I guess, but you get the picture.

Edited September 25, 2008 by agentchange

[Realitycheck]

Kind of looks like the stock market, in a way.

 

[pioneer]

What needs to be added to the chart is taxes. If you give a tax break to the tax payers, there is less revenue, so to run government, the debt might go up faster. If you raise taxes, the government has more money to spend without borrowing so the debt goes up less.

 

For example, if it cost 100 to run the government and the tax load is only 80 the debt will be 20. If the tax load is 90, then the debt only goes up 10.

 

One must realize that whatever the government spends someone gains. If they buy paper or red tape by the train load, the paper and red tape companies make money, this provides jobs, etc. All that debt has names attached to it, that the tax payer went into debt for. As far a paying the debt back, maybe those who got more from the debt, can pay more. Lobbyist know how to run a tab, you pay for.

 

For example, if one person gets 50 that goes into the debt and another gets 100 that goes into the debt, if you tax both the same amount, say 100 to pay their average share of the debt, only one actually has to pay a net amount. The less you contributed to the debt, by receiving the least benefit, the more you are required to pay. Theoretically, if you got zero added on the tab, you still got to pay. If you got more than your calculated share (by the weird standard), you can actually make money with this national debt game.

 

Here is the analogy. Five people go to dinner. One orders the salad bar, the second orders a burger, the third gets the steak, the fourth has the fisherman's platter, the last orders the twin lobster with the 20 oz sirloin. The tab comes up to $200. It is put on a credit card but not itemized. Then they split the debt evenly. If we itemized the tab and each paid the value they added to the tab, you would never see a national debt again, since it would be called a national loan.

[Realitycheck]

What is missing is the erosion of capital gains tax revenue when the tech sector stock market bubble dried up. Still says something about fiscal responsibility. None of this "no new taxes" crap. You're supposed to roll with the punches and cover your a**.