2009 Annual Budget Deficit Near $2 Trillion

While it is currently predicted to be $1.84 trillion, I bet we bust $2 trillion this year.

And for you budget deficit experts, does this figure also include all those "off budget" expenses like the money the government borrows form the Social Security surplus?

While Bush was running $500+ billion deficits, I guess the new standard is $2 trillion.

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The White House Monday pushed up its forecast for the U.S. budget deficit for this year by $89 billion, reflecting the recession, a raft of new unemployment claims and corporate bailouts.

A fresh estimate of the deficit showed it coming in at $1.84 trillion—representing a massive 12.9 percent of gross domestic product—in the current 2009 fiscal year that ends on Sept. 30.

A prior White House forecast released in February projected a deficit of $1.75 trillion, or 12.3 percent of GDP.

The report may add to the political challenges facing President Barack Obama as he seeks to push through a new healthcare plan and other big domestic initiatives.

A White House official said the gloomier deficit picture reflected weaker tax receipts as the economy declined and higher costs for social safety-net programs such as unemployment insurance.

Spending on the government rescues for the financial and automobile industries was also a factor in the higher deficit, said the official, who spoke to reporters on condition of anonymity.

While the Democratic-led Congress has given its approval to the broad outline of Obama's proposed budget for the 2010 fiscal year that includes initiatives on healthcare, education and other items, some moderate Democrats and a number of Republicans have expressed wariness about the deficit outlook.

Republicans contend that Obama's agenda would sharply increase the size of government and add to a mountain of debt but Democrat Obama counters that the enormous deficits are a legacy of President George W. Bush, a Republican.

White House Budget Director Peter Orszag blogged Monday, saying the high deficits are being driven by an economic crisis that President Barack Obama inherited.

Orszag also said that the administration's latest budget deficit estimates reflect the latest data on tax receipts, federal bailouts and other government costs.

The report from the White House Office of Management and Budget also revised the deficit higher for the 2010 fiscal year, forecasting it at $1.26 trillion, or 8.5 percent of GDP, and up $87 billion from the $1.17 trillion projection given in February.

After taking office in January, Obama released a bare-bones version of his budget in February that offered a spending plan for 2010 carrying a price tag of $3.55 trillion. The White House revised up the size of the spending plan to $3.59 trillion.

And Monday, the Obama administration will propose raising nearly $60 billion over 10 years through changes to the estate tax law and closing certain domestic tax loopholes, an administration official said.

Funds raised will go to beef up a health care reserve fund, a $634 billion pot of money President Barack Obama wants to use to revamp the health care system and expand insurance to tens of millions of Americans who lack it.

The White House wants to raise $24 billion over 10 years by tightening rules related to the estate tax, a levy on an inherited part of an estate if the value exceeds an exclusion limit set by law. Currently, the first $3.5 million for an individual, or $7 million for a couple, are exempted.

The changes to the estate tax are related to how assets are valued, said the official, who was not authorized to be quoted.

Other proposals include denying tax deductions for firms with punitive damage claims, the official said.

Later on Monday, the administration will provide details on a series of tax proposals unveiled last week, said to raise $210 billion over a decade, to tighten rules related to overseas investments.

It was only 1.7 trillion last month. What happened? How much bigger will it be next month?

Anyone?

I already heard that this congress and president will double the debt in 5 years and triple it in 10. Now that assumes that we don't have inflation!

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Originally Posted by Wild Cobra

I already heard that this congress and president will double the debt in 5 years and triple it in 10. Now that assumes that we don't have inflation!

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That's what you do in a recession.

I wonder if I will live to see the days when Quadrillion will be a common term in the American vernacular.

We'll probably adapt a global currency and deflate the value back down though.

That sucks.

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Originally Posted by ElNono

That's what you do in a recession.

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Nah, that's what this country does all the fucking time. We spend on credit to solve all of our problems. When we end up with stagflation can we finally write the epitaph on Keynesianism (which was originally devised to deal with jump starting an economy mired in depression, not to head off a recession or simply to enhance economic growth)?

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Originally Posted by FaithInOne

I wonder if I will live to see the days when Quadrillion will be a common term in the American vernacular.

We'll probably adapt a global currency and deflate the value back down though.

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The American Peso... coming to a bank near you real soon now!

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Originally Posted by ElNono

The American Peso... coming to a bank near you real soon now!

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But since we have a Socialis/Marxist/Fascist (you take your pick) president, maybe we should call it the American Mark. Look at what happened in Germany way back when...

I have this one hanging on my wall:

http://i181.photobucket.com/albums/x...ront150dpi.jpg

Social Security needs to be changed in a big way. Entitlement programs need to be put in check as well.

But at least thy're disclosing the full costs and not hiding war spending in emergency funding bills like Bush did.

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Originally Posted by ElNono

That's what you do in a recession.

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I've read a bit on Keynesian economics, but I don't remember the part where the correct response to a recession is to bankrupt the entire country. Where can I find that?

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Originally Posted by Extra Stout

I've read a bit on Keynesian economics, but I don't remember the part where the correct response to a recession is to bankrupt the entire country. Where can I find that?

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I've read a bit the newspapers, but I don't remember reading that this country is bankrupt. Where I can find that?

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Originally Posted by jman3000

Social Security needs to be changed in a big way. Entitlement programs need to be put in check as well.

But at least thy're disclosing the full costs and not hiding war spending in emergency funding bills like Bush did.

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Social Security is not even a drop in the bucket compared to Medicare. Medicare, simply put, will cause the insolvency of the U.S. government in our lifetimes by itself.

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Originally Posted by Extra Stout

I've read a bit on Keynesian economics, but I don't remember the part where the correct response to a recession is to bankrupt the entire country. Where can I find that?

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Yes. I'd like to know too.

Wouldn't it have been far better to let all failing entities go bankrupt and extend unemployment until we recover?

I cannot get the idea of OCP from Robocop out of my mind when the government says a corporation is too large to fail. It can then only get bigger, and unstoppable.

Who here wants to live in Delta City?

http://upload.wikimedia.org/wikipedi...1/OCP_logo.jpg

Obama Consumer Products anyone?

... Anyone...

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Originally Posted by ElNono

I've read a bit the newspapers, but I don't remember reading that this country is bankrupt. Where I can find that?

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Look at Obama's ten-year budget. Then look at the CBO analysis of it.

And FWIW, I'm not a big fan of increased government spending either. But I haven't heard of any other economic theory that has been used in the real world to deal with recession/deflation). Certainly none that includes being fiscally conservative.

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Originally Posted by Extra Stout

Look at Obama's ten-year budget. Then look at the CBO analysis of it.

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Lot of things can happen in 10 years. Again, what's your proposition to deal with this recession? Any tested economic policy you want to suggest?

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Originally Posted by ElNono

And FWIW, I'm not a big fan of increased government spending either. But I haven't heard of any other economic theory that has been used in the real world to deal with recession/deflation). Certainly none that includes being fiscally conservative.

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One positive step would be to require anyone receiving government assistance to work, who can. Drug test them and make them earn their keep, or kick them off the programs. More productive citizens = more revenue and less spending.

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Originally Posted by ElNono

Lot of things can happen in 10 years. Again, what's your proposition to deal with this recession? Any tested economic policy you want to suggest?

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When has Keynesianism actually worked? Doing something simply because 'that's what has been done before' does not, in and of itself, provide justification for the continued practice.

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Originally Posted by ElNono

Lot of things can happen in 10 years. Again, what's your proposition to deal with this recession? Any tested economic policy you want to suggest?

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Let it play out. Government is not the solution, but the problem!

Not to mention, the left and right in this country worship at the altar of Keynes. Of course, he did give every politician the justification for ever increasing government spending while diminishing the concern for the use of debt financing.

We love tax cuts and government spending. At some point, something's got to give.

$2 trillion deficit? How about we agree to cutting spending by $1 trillion and increasing taxes by $1 trillion? Sound fair?

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Originally Posted by Marcus Bryant

When has Keynesianism actually worked?

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Japan during the Great Depression and again in the early '90s.

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Originally Posted by Marcus Bryant

Doing something simply because 'that's what has been done before' does not, in and of itself, provide justification for the continued practice.

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It has worked before, you just need to inform yourself better.

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Originally Posted by Marcus Bryant

Not to mention, the left and right in this country worship at the altar of Keynes. Of course, he did give every politician the justification for ever increasing government spending while diminishing the concern for the use of debt financing.

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I'm still waiting for your proposed economic policy that will get the country out of this recession. If it's a tested and sound policy, even better yet.

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Originally Posted by spurster

We love tax cuts and government spending. At some point, something's got to give.

$2 trillion deficit? How about we agree to cutting spending by $1 trillion and increasing taxes by $1 trillion? Sound fair?

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How about cutting the bailout and social spending by 2.5 trillion instead?

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Originally Posted by ElNono

Japan during the Great Depression and again in the early '90s.

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Japan?

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It has worked before, you just need to inform yourself better.

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ROFL. Please, oh great one, inform me of when it has worked here.

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Originally Posted by ElNono

I'm still waiting for your proposed economic policy that will get the country out of this recession. If it's a tested and sound policy, even better yet.

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How about not replacing the last collapsed house of cards with another?

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Originally Posted by Wild Cobra

How about cutting the bailout and social spending by 2.5 trillion instead?

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The Republicans didn't have the balls to cut social spending, and actually spearheaded the bailouts. What makes you think a democrat government will undo all that?

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Originally Posted by ElNono

Japan during the Great Depression and again in the early '90s.

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So you want the USA to be like the Empire of Japan was? How else can you make it work?

I can see it now... Emperor Obama... Has kinda a nice ring, huh?

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Originally Posted by spurster

We love tax cuts and government spending. At some point, something's got to give.

$2 trillion deficit? How about we agree to cutting spending by $1 trillion and increasing taxes by $1 trillion? Sound fair?

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Neither side will give in to that, though sensible. Much like a real compromise on the social insurance programs which institutes means testing and provides assistance to those who need it, as opposed to everyone, will never fly politically.

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Originally Posted by ElNono

The Republicans didn't have the balls to cut social spending, and actually spearheaded the bailouts. What makes you think a democrat government will undo all that?

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Spearheaded the bailout? Am I remembering that wrong?

Correct me if I'm wrong. The October bailout almost didn't happen because the democrats had enough votes, but they wanted to get some republicans to vote with them!

Am I right or wrong?

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Originally Posted by Wild Cobra

Spearheaded the bailout? Am I remembering that wrong?

Correct me if I'm wrong. The October bailout almost didn't happen because the democrats had enough votes, but they wanted to get some republicans to vote with them!

Am I right or wrong?

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Eh, that was a bipartisan effort, at least in name. But really an unipartisan effort of the DC party.

Remind me again whose Treasury secretary ran to the Congress screaming for a $700 billion blank check.

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Originally Posted by Marcus Bryant

Japan?

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Japan
The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. However, Japan's Finance Minister Takahashi Korekiyo was the first to implement what have come to be identified as Keynesian economic policies: first, by large fiscal stimulus involving deficit spending; and second, by devaluing the currency. Takahashi used the Bank of Japan to sterilize the deficit spending and minimize resulting inflationary pressures. Econometric studies have identified the fiscal stimulus as especially effective.[48]
The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending, however proved to be most profound. The deficit spending went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934 Takahashi realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the Army, culminating in his assassination in the course of the February 26 Incident. This had a chilling effect on all civilian bureaucrats in the Japanese government. From 1934, the military's dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which would remain a problem until the end of World War II.
The deficit spending had a transformative effect on Japan. Japan's industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japan's automakers, like Toyota, have their roots in the textile industry). By 1940 light industry had been displaced by heavy industry as the largest firms inside the Japanese economy.

LINK

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Originally Posted by Marcus Bryant

ROFL. Please, oh great one, inform me of when it has worked here.

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They were never applied completely in the US. Roosevelt tried to do it while keeping the budget balanced, and he failed miserably. Hence, the attempt to apply these rules while being fiscally conservative has already been proven to FAIL.

There's one more historical tidbit we can learn from:
The crisis had many political consequences, among which was the abandonment of classic economic liberal approaches, which Roosevelt replaced in the United States with Keynesian policies. These policies magnified the role of the federal government in the national economy. Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a socialist state.

Sounds familiar?

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Originally Posted by Marcus Bryant

Remind me again whose Treasury secretary ran to the Congress screaming for a $700 billion blank check.

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Yep, he was a lame piece of shit. A very poor appointment. President Bush should have never listened to him.

Also... the conflict of interest...

ElNono, borrowing and deficit spending is fine when used properly. The problem is, we always have deficit spending. When there is no control to pay it back in peacetime and a growing economy, there is only certain doom.

Remember the 70s?

As for the Great Depression, that eventually ended thanks to WWII and the federal government spending more than the nation's GDP at times.

Of course, I guess we should forget about the recent Japanese experience and the implications for increasing debt financed government expenditure after the collapse of an asset bubble. Not to mention, easing monetary policy to go along with that.

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Originally Posted by Wild Cobra

Spearheaded the bailout? Am I remembering that wrong?

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Excuse me? You were the first in line bitching at Bush and all the Republican cronies for even proposing the bailout. Or are you going to deny that the TARP program was invented by a republican and implemented by a Republican administration?

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Originally Posted by Wild Cobra

Correct me if I'm wrong. The October bailout almost didn't happen because the democrats had enough votes, but they wanted to get some republicans to vote with them!

Am I right or wrong?

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Are you telling me the democrats you abhor were about to save the day from a Republican bailout?

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Originally Posted by Wild Cobra

Yep, he was a lame piece of shit. A very poor appointment. President Bush should have never listened to him.

Also... the conflict of interest...

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Yet, Bush did and a rather large contingent of congressional Republicans went along with it (a majority, if I am not mistaken). There's no way to claim that these bailouts are somehow merely a Democratic effort.

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Originally Posted by Wild Cobra

ElNono, borrowing and deficit spending is fine when used properly. The problem is, we always have deficit spending. When there is no control to pay it back in peacetime and a growing economy, there is only certain doom.

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We had a balanced budget merely 8 years ago. Even a projected surplus.

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Originally Posted by Marcus Bryant

As for the Great Depression, that eventually ended thanks to WWII and the federal government spending more than the nation's GDP at times.

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Sounds like an argument that keynesianism worked -- military keynesianism.

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Originally Posted by ElNono

Excuse me? You were the first in line bitching at Bush and all the Republican cronies for even proposing the bailout.

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Yes, and as the democrats created the legislation, and more facts came out, it lost republican support.

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Originally Posted by ElNono

Or are you going to deny that the TARP program was invented by a republican and implemented by a Republican administration?

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This was a serious mistake by president Bush. I never said otherwise. However, the democrats really twisted it when they got a hold of it. Even in it's untwisted form, I was firmly against it.

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Originally Posted by ElNono

Are you telling me the democrats you abhor were about to save the day from a Republican bailout?

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There was that threat. I recall them stalling the final vote and making changes to get the republicans go along with them that didn't at first.

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Originally Posted by Marcus Bryant

Yet, Bush did and a rather large contingent of congressional Republicans went along with it (a majority, if I am not mistaken). There's no way to claim that these bailouts are somehow merely a Democratic effort.

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I don't remember the numbers. Have them handy by chance? I think it was about 1/3rd of the republicans, wasn't it?

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Originally Posted by ElNono

We had a balanced budget merely 8 years ago. Even a projected surplus.

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Then why was there a deficit?

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Originally Posted by Winehole23

Sounds like an argument that keynesianism worked -- military keynesianism.

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Perhaps. If we are prepared to move to a command economy with the government spending $15 trillion+ a year (forget about this piker of a $3.5 trillion annual federal budget). Of course, some argue that the depression really didn't end until the late 40s as the federal government started to ramp down public expenditure and the federal government finally ended its almost two decade long massive intervention in the economy.

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Originally Posted by Wild Cobra

Yes, and as the democrats created the legislation, and more facts came out, it lost republican support.

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Excuse me? The bill was introduced by a Democrat, but it had 274 cosponsors, including many Republicans. Not to mention this was entirely a Bush creation.

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Originally Posted by Wild Cobra

This was a serious mistake by president Bush. I never said otherwise. However, the democrats really twisted it when they got a hold of it. Even in it's untwisted form, I was firmly against it.

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I know you were. I think pretty much everyone was. You don't really need to be a republican or democrat to know that was some bullshit legislation.

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Originally Posted by Wild Cobra

There was that threat. I recall them stalling the final vote and making changes to get the republicans go along with them that didn't at first.

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They didn't want to take sole responsibility for passing such a measure. Understandable considering the presidential election was looming.

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Originally Posted by Wild Cobra

I don't remember the numbers. Have them handy by chance? I think it was about 1/3rd of the republicans, wasn't it?

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Here's the senate count: LINK

Way more than 1/3...

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Originally Posted by Wild Cobra

I don't remember the numbers. Have them handy by chance? I think it was about 1/3rd of the republicans, wasn't it?

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House GOP: 91 Yeas, 108 Nays

Senate GOP: 33 Yeas, 15 Nays

Executive GOP: 1 Yea

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Originally Posted by ElNono

They were never applied completely in the US. Roosevelt tried to do it while keeping the budget balanced, and he failed miserably. Hence, the attempt to apply these rules while being fiscally conservative has already been proven to FAIL.

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While we're on the subject of Japan, take a look at how Keynesian policies DIDN'T work there in the 1990's, and what the resultant effect was on their national debt.

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Originally Posted by Wild Cobra

Then why was there a deficit?

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What deficit? LINK

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Originally Posted by Marcus Bryant

Perhaps. If we are prepared to move to a command economy with the government spending $15 trillion+ a year (forget about this piker of a $3.5 trillion annual federal budget). Of course, some argue that the depression really didn't end until the late 40s as the federal government started to ramp down public expenditure and the federal government finally ended its almost two decade long massive intervention in the economy.

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The numbers seem to back you up. Who's your source for this. MB?

Deficit spending (as a percentage of GDP) didn't pick up again until the mid 1970's, spiked under Reagan and GHWB, and again under GWB.

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Originally Posted by Winehole23

The numbers seem to back you up. Who's your source for this. MB?

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My memory, not that I was there though. Will find the source.

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Deficit spending (as a percentage of GDP) didn't pick up again until the mid 1970's, spiked under Reagan and GHWB, and again under GWB.

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I was reminded of Nixon's "we're all Keynesians now" quote.

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Originally Posted by ElNono

What deficit? LINK

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OK, play that stupid game.

Did they follow the budget...

If they did, why was the a larger debt each year afterward?

I can make a household budget that shows I save $2,000 a month. Doesn't mean shit if I spend that money anyway.

I budgeted to save the $2,000, but didn't follow through.

Bottom line and what's important. can you show me those years that the debt was reduced?

Was there a larger or smaller debt at the end of those budgeted.

I don't know about you, but I look at the reconciled numbers. Not the bullshit they lay out for lemmings.

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Originally Posted by Wild Cobra

I don't know about you, but I look at the reconciled numbers. Not the bullshit they lay out for lemmings.

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Ok, let's play that stupid game. Let's see your numbers, WC.

Here are the GDP stats (from the BEA).

As for spending as a % of GDP, it looks like it was around 50% at its peak towards the end of WWII. So that would translate to about $7 trillion per annum today.

Per the BEA, US GDP is at $14 trillion in current $. So 50% of that is $7 trillion. I guess we're ready to double the current $3.5 trillion monstrosity to whip the ol' recession monster.

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Originally Posted by Marcus Bryant

Per the BEA, US GDP is at $14 trillion in current $. So 50% of that is $7 trillion. I guess we're ready to double the current $3.5 trillion monstrosity to whip the ol' recession monster.

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Hopefully, the banks we're keeping on life support won't hinder the recovery like they did in Japan in the 1990's. An L-shaped recession is still a possibility.

Gross Federal Debt by year:

1960 290,525
1961 292,648
1962 302,928
1963 310,324
1964 316,059
1965 322,318
1966 328,498
1967 340,445
1968 368,685
1969 365,769 Last reduction in debt... Nixon's administration!
1970 380,921
1971 408,176
1972 435,936
1973 466,291
1974 483,893
1975 541,925
1976 628,970
TQ 643,561
1977 706,398
1978 776,602
1979 829,467
1980 909,041
1981 994,828
1982 1,137,315
1983 1,371,660
1984 1,564,586
1985 1,817,423
1986 2,120,501
1987 2,345,956
1988 2,601,104
1989 2,867,800
1990 3,206,290
1991 3,598,178
1992 4,001,787
1993 4,351,044
1994 4,643,307 up by 6.72%
1995 4,920,586 up by 5.97%
1996 5,181,465 up by 5.3%
1997 5,369,206 up by 3.62%
1998 5,478,189 up by 2.03%
1999 5,605,523 up by 2.32%
2000 5,628,700 up by 0.41%
2001 5,769,881 up by 2.51%
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744

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Originally Posted by winehole23

ok, let's play that stupid game. Let's see your numbers, wc.

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+1

Yeeeeeeeeeeaaaaaaaaaahhhhhhhhhhh!!!!

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1981 994,828
1982 1,137,315
1983 1,371,660
1984 1,564,586
1985 1,817,423
1986 2,120,501
1987 2,345,956
1988 2,601,104
1989 2,867,800
1990 3,206,290
1991 3,598,178
1992 4,001,787

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What's the CAGR for that period?

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2001 5,769,881 up by 2.51%
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744

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And you can't use the 'Dems controlled the Congress' line for most of that last series.

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Originally Posted by Marcus Bryant

What's the CAGR for that period?

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That's real nasty numbers. Remember though, president Reagan inherited double-digit inflation! Borrowing with bonds anyone could buy were paying double in 5-years.

Any clue what Obama's spending will become with double digit inflation that can occur?

Neither party can be trusted with the national purse at this point. The problem, of course, is that the people essentially don't care. Politicians give the people ultimately what they want, and the people want low taxes and all kinds of government expenditure.

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Originally Posted by Wild Cobra

That's real nasty numbers. Remember though, president Reagan inherited double-digit inflation!

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Your point? That deficit spending made it better?:lol

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Originally Posted by Extra Stout

While we're on the subject of Japan, take a look at how Keynesian policies DIDN'T work there in the 1990's, and what the resultant effect was on their national debt.

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It has been argued that the Japanese tried to get out of the Keynesian economics too early, thinking the worst had passed by.
As they tried to cut spending their economy plummeted again. It took another round of big spending to finally get out of the hole then.

Really WC, you have Paul Volcker's tight money policy to thank for keeping inflation in check under Reagan.

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Originally Posted by Marcus Bryant

Neither party can be trusted with the national purse at this point. The problem, of course, is that the people essentially don't care. Politicians give the people ultimately what they want, and the people want low taxes and all kinds of government expenditure.

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This much is true. Plus the Keynes model implicitly states that as the economy recovers, the extra spending should be cut, and you need to use the economic boom times that always follow recession to balance the economy again.
Due to our political system, this part of the bargain is the one that never happens.

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Originally Posted by Winehole23

Your point? That deficit spending made it better?:lol

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We've been over this before. Why do you beat a dead horse?

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Originally Posted by ElNono

It has been argued that the Japanese tried to get out of the Keynesian economics too early, thinking the worst had passed by.
As they tried to cut spending their economy plummeted again. It took another round of big spending to finally get out of the hole then.

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Krugman's argument now is that Japan didn't fix the banks, even though Japan more or less followed his prescription for massive stimulus.

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Originally Posted by Wild Cobra

We've been over this before. Why do you beat a dead horse?

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What dead horse? You haven't even made a point yet.

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Originally Posted by Winehole23

Really WC, you have Paul Volcker's tight money policy to thank for keeping inflation in check under Reagan.

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Meanwhile, Bubble Ben keeps the Fed's lights on at night...

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Originally Posted by Winehole23

Krugman's argument now is that Japan didn't fix the banks, even though Japan more or less followed his prescription for massive stimulus.

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Is there even an arguable example of Keynesianism working since Bretton Woods was no more?

One more thing. As far as philosophies go, you either have to go with Keynes or Friedman. But Friedman type of policies is what got us here in the first place (unfettered freedom to the free markets, etc).
That's the only reason we're going with Keynes, as far as I understand the conundrum.

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Originally Posted by Winehole23

What dead horse? You haven't even made a point yet.

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Please stop being Chump the 2nd.

This thread is not about the Reagan era. We have been over that in previous threads. You want to discuss that, start a new thread please.

My point is that there was no real surplus under president Clinton. Now that I made it, you are changing the subject. Cannot tolerate the truth?

Hmm. If Obama's rosy scenario pans out, I guess we can point to us.

Answered in next post..

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Originally Posted by Wild Cobra

Gross Federal Debt by year:

1960 290,525
1961 292,648
1962 302,928
1963 310,324
1964 316,059
1965 322,318
1966 328,498
1967 340,445
1968 368,685
1969 365,769 Last reduction in debt... Nixon's administration!
1970 380,921
1971 408,176
1972 435,936
1973 466,291
1974 483,893
1975 541,925
1976 628,970
TQ 643,561
1977 706,398
1978 776,602
1979 829,467
1980 909,041
1981 994,828
1982 1,137,315
1983 1,371,660
1984 1,564,586
1985 1,817,423
1986 2,120,501
1987 2,345,956
1988 2,601,104
1989 2,867,800
1990 3,206,290
1991 3,598,178
1992 4,001,787
1993 4,351,044
1994 4,643,307 up by 6.72%
1995 4,920,586 up by 5.97%
1996 5,181,465 up by 5.3%
1997 5,369,206 up by 3.62%
1998 5,478,189 up by 2.03%
1999 5,605,523 up by 2.32%
2000 5,628,700 up by 0.41%
2001 5,769,881 up by 2.51%
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744

---

Are those numbers adjusted for inflation? Because here's a graph with the adjustment applied:

http://i42.tinypic.com/2v84py8.png

I can readily tell where the Clinton period was.

From here: http://en.wikipedia.org/wiki/United_States_public_debt

Quote:

---

Originally Posted by ElNono

One more thing. As far as philosophies go, you either have to go with Keynes or Friedman. But Friedman type of policies is what got us here in the first place (unfettered freedom to the free markets, etc).
That's the only reason we're going with Keynes, as far as I understand the conundrum.

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eh? Friedman was for no limits on the growth in the money supply and excessive government spending?

Naturally, when Clinton was in the White House, the GOP controlled Congress actually cared about fiscal discipline.

Quote:

---

Originally Posted by ElNono

One more thing. As far as philosophies go, you either have to go with Keynes or Friedman.

---

I see no reason why this should be true. What about the Austrians?

The theory of credit cycles does seem to explain the biggest busts of the last century. Isn't there a danger that keynesian spending just inflates the next bubble?

And Keynes' prescription was for an economy that had been mired in depression for years. Nowadays it's used as justification for various policies even when the economy is actually growing.

Lest we bother to think about the asymmetric monetary policy prescriptions used by our central bank.

Quote:

---

Originally Posted by Wild Cobra

My point is that there was no real surplus under president Clinton. Now that I made it, you are changing the subject.

---

You were the one who brought up inflation in 1980. I don't really take issue with your take on the Clinton surplus, except that, if it were possible to return to the *phony* situation of surplus under him, I would do it in a heartbeat.

Quote:

---

Originally Posted by ElNono

Are those numbers adjusted for inflation? Because here's a graph with the adjustment applied:

http://i42.tinypic.com/2v84py8.png

I can readily tell where the Clinton period was.

From here: http://en.wikipedia.org/wiki/United_States_public_debt

---

Changing the argument now, are we?

The reason the percentage decreased is because we had a growing economy. Had democrats been in charge of congress, I'm sure they would have found ways to keep the percentages high as well!

You should ask, with a growing economy, why did we still have deficit spending? We were not at war either. Congress and the president should have paid down the debt. Not increase it farther.

Back to our original argument.

Did the debt ever decrease under president Clinton?

Debt and deficit, though related, are not the same thing. You're derailing the conversation, WC.

Please focus.

Quote:

---

Originally Posted by Winehole23

You were the one who brought up inflation in 1980. I don't really take issue with your take on the Clinton surplus, except that, if it were possible to return to the *phony* situation of surplus under him, I would do it in a heartbeat.

---

The Clinton administration of 1995-2001 was more conservative than the Bush one of, oh, 2001-2009.

I too, share your nostalgia for that time period, for at least then Republican conservatism did include a concern for fiscal discipline and avoiding foreign entanglements.

Quote:

---

Originally Posted by Winehole23

You were the one who brought up inflation in 1980. I don't really take issue with your take on the Clinton surplus, except that, if it were possible to return to the *phony* situation of surplus under him, I would do it in a heartbeat.

---

I only brought that up for a short response to Marcus' posting the quadrupling of debt over 12 years during the Reagan/Bush years, in case he didn't know the truth. It has nothing to do with the current administration, or the argument concerning president Clinton. It responded to show what can happen of we get high inflation again.

Quote:

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Originally Posted by Winehole23

Hmm. If Obama's rosy scenario pans out, I guess we can point to us.

---

If not, it'll go down the collective memory hole as we try it again.

Quote:

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Originally Posted by Marcus Bryant

The Clinton administration of 1995-2001 was more conservative than the Bush one of, oh, 2001-2009.

I too, share your nostalgia for that time period, for at least then Republican conservatism did include a concern for fiscal discipline and avoiding foreign entanglements.

---

1) President Clinton had republicans in control of congress for six of his eight years.

2) We were at peace and had a growing economy as everyone prepared for Y2K.

3) 9/11 occured during president Bush's first year. It stalled the economy momentarily, we prepared for war, and we went to war.

I would say we can safely assume president Clinton was in the right place at the right time. President Bush was unlucky.

You blame the growth of debt on Carter and high inflation, rather than the growth of spending, government and debt under Reagan. How telling.

Quote:

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Originally Posted by Marcus Bryant

eh? Friedman was for no limits on the growth in the money supply and excessive government spending?

---

He was a Keynesian until the 50's, when he then changed his mind and proposed the word you used earlier (stagflation) to depict the use of the Keynes consumption function. He claimed the Great Depression could have been avoided entirely by applying monetary policy.
He was against government regulation of pretty much any kind.

Quote:

---

Originally Posted by Wild Cobra

Changing the argument now, are we?

The reason the percentage decreased is because we had a growing economy. Had democrats been in charge of congress, I'm sure they would have found ways to keep the percentages high as well!

You should ask, with a growing economy, why did we still have deficit spending? We were not at war either. Congress and the president should have paid down the debt. Not increase it farther.

Back to our original argument.

Did the debt ever decrease under president Clinton?

---

The reason it declined is because you had a Congress who cared enough about fiscal discipline as well as an opportunistic president ready to sell out his own party.

Of course, it was derailed once you had a new 'conservative' president who was ready to sell out his own party and force the Congress to forget about fiscal discipline.

Quote:

---

Originally Posted by ElNono

He was a Keynesian until the 50's, when he then changed his mind and proposed the word you used earlier (stagflation) to depict the use of the Keynes consumption function. He claimed the Great Depression could have been avoided entirely by applying monetary policy.
He was against government regulation of pretty much any kind.

---

He said the Great Depression could have been avoided had the Fed actually acted as the lender of last resort. Sure, he opposed regulation in most other areas, but he certainly did not approve of excessive monetary growth and deficit spending as you so attached to him.

Quote:

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Originally Posted by Winehole23

You blame the growth of debt on Carter and high inflation, rather than the growth of spending, government and debt under Reagan. How telling.

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Not true. There is no one thing. Are you single minded? Cannot see there are generally multiple causes?

This deserves it's own thread. I'm done talking about president Reagan here. Besides, I'm getting off for now. Have to wait for any farther responses later today, or tomorrow.

But... I will ignore it if it's in this thread!

Quote:

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Originally Posted by Marcus Bryant

The reason it declined is because you had a Congress who cared enough about fiscal discipline as well as an opportunistic president ready to sell out his own party.

Of course, it was derailed once you had a new 'conservative' president who was ready to sell out his own party and force the Congress to forget about fiscal discipline.

---

Back to my question:

Did the debt ever decrease under president Clinton?

Quote:

---

Originally Posted by Wild Cobra

Changing the argument now, are we?

The reason the percentage decreased is because we had a growing economy. Had democrats been in charge of congress, I'm sure they would have found ways to keep the percentages high as well!

You should ask, with a growing economy, why did we still have deficit spending? We were not at war either. Congress and the president should have paid down the debt. Not increase it farther.

Back to our original argument.

Did the debt ever decrease under president Clinton?

---

What part of the graph you don't understand? I see it clearly shaping down during the Clinton years. That effectively means he did paid down debt, otherwise it wouldn't go down.

Quote:

---

But... I will ignore it if it's in this thread!

---

By all means, suit yourself, WC.

Quote:

---

Originally Posted by Marcus Bryant

He said the Great Depression could have been avoided had the Fed actually acted as the lender of last resort. Sure, he opposed regulation in most other areas, but he certainly did not approve of excessive monetary growth and deficit spending as you so attached to him.

---

Where did I claim that? I pointed that his unregulated free market policies is what brought us here in the first place. That's all.

Quote:

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Originally Posted by Wild Cobra

1) President Clinton had republicans in control of congress for six of his eight years.

---

Yeah. Actual Republicans who wanted to reduce the scale and scope of the federal government and who weren't for preventative wars.

Quote:

---

2) We were at peace and had a growing economy as everyone prepared for Y2K.

---

Yet the GOP found time to oppose Clinton's Balkan adventure.

Quote:

---

3) 9/11 occured during president Bush's first year. It stalled the economy momentarily, we prepared for war, and we went to war.

I would say we can safely assume president Clinton was in the right place at the right time. President Bush was unlucky.

---

ROFL. Bush doubled down on his unlucky hand and now conservatives will be paying the price for a while. Not to mention that Bush not just diverged from conservatism, he doused it with gasoline and lit it.

Rove decided that economic and fiscal conservatism did not sell. He though the path to a permanent GOP majority was to roll with the social conservatives and the neo-progressive militarist 'national security conservatives'. That permanent majority lasted all of about 3 years.

Quote:

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Originally Posted by ElNono

What part of the graph you don't understand? I see it clearly shaping down during the Clinton years. That effectively means he did paid down debt, otherwise it wouldn't go down.

---

WTF...

I never said it didn't decrease as a percentage.

I would go into more detail about how fucking stupid you are becoming, but I don't have time.

My argument was about the increasing debt, period. Real dollars. That even though a budget said we had a surplus we didn't.

Did the debt, in dollars, ever decrease under president Clinton?

If that answer is NO, then there was no real surplus! Get it?

Quote:

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Originally Posted by Wild Cobra

WTF...

I never said it didn't decrease as a percentage.

I would go into more detail about how fucking stupid you are becoming, but I don't have time.

My argument was about the increasing debt, period. Real dollars. That even tough a budget said we g=had a surplus we didn't.

Did the debt, in dollars, ever decrease under president Clinton?

If that answer is NO, then there was no real surplus! Get it?

---

I'm talking about raw millions of dollars adjusted for inflation. There's no percentage there. Again, can you read a graph?

Quote:

---

Originally Posted by ElNono

Where did I claim that? I pointed that his unregulated free market policies is what brought us here in the first place. That's all.

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The problem is, that's not what caused the current problem.

Quote:

---

Originally Posted by Wild Cobra

Back to my question:

Did the debt ever decrease under president Clinton?

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Who cares? Did it grow at a rate anywhere close to what it did from 2001-2006?

Quote:

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Originally Posted by Marcus Bryant

The problem is, that's not what caused the current problem.

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Let's see your revisionist history of what caused this recession. I'm all ears.