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More to it than just that....there are greater tax receipts than were projected, the savings from the sequester..and the lower borrowing rates on the federal deficit..
Then it's back up once the market corrects. Just like the "surplus" that Bush got from Clinton.
More to it than just that....there are greater tax receipts than were projected, the savings from the sequester..and the lower borrowing rates on the federal deficit..
Economics fail.
You right-wingers suck at understanding free markets sometimes.
Sure it is simplified but ultimately the reason is because of the stock market. All of the asian money that got poured into our markets.
So you think our government makes a return greater than the amount it spends?
I agree that a deficit is still a deficit. Evil is still evil. Don't say that to an Obama supporter because Obama can do no wrong.
What happens if carter II gives us double digit interest rates like Carter I did?
He probably does, but he will deny it.So you think our government makes a return greater than the amount it spends?
Not an answer to my question.So you think our government makes a return greater than the amount it spends?
But yes, governments can and do spend money that earns a return over time greater than their cost in capital to the economy as a whole.
If you like I could get our resident PhD in economics to point you in the right direction for the data and economic studies supporting that.
This particular bit of economic reality is contrary to a lot of dogma that contends "all goverment spending is wasteful", which is dumb. Some goverment spending is indeed stupid and wasteful. I won't argue with that. SOME is, but not ALL.
Are you going to try and argue that goverment spending is, by definition, bad for the economy?
I don't think that argument is framed right. If you set up your budget so that structurally you have to borrow a lot of money, and it is very, very difficult to change your budget structure because of a sclerotic political process, then things might seem great while you're borrowing at 2% and making a 5% return. But since you don't have firm control over what the interest rate is or what return you get, if interest rates go to 8% and you are getting a 2% return, and you can't change the structure of your budget, you can be wiped out very quickly. It's like piling up a bunch of dry tinder against the side of your house and scoffing when someone tells you it's unwise. After all, you've lived in that house 10 years and there's never been a fire!
Hmmm took me a re-read to two to get through.
When you have a large one-off stimulus, it doesn't become part of the budget.
I would also ponit out that we have a huge structural deficit in infrastructure spending right now. We have so much old legacy infrastructure from our mid 20th century success that developing countries will get to bypass us in a lot of ways, because they can use the 2nd and 3rd generation stuff that we can't.
Rates of return on such things often go with increases in economic activity, meaning your returns get indexed to inflation and rates.
I don't see it as like that at all.
Last edited by RandomGuy; 05-16-2013 at 12:21 PM.
^ truth^
RandomGuy a Al Gore voter.
^ truth^
RandomGuy a Al Gore voter.
NOt trying to excite you jackwagon.
You might not be trying, but you are succeeding in boring me to death...
If I'm $1500 in the red every month, then one month I'm an additional $2000 in the red because I had to fix the A/C, I'm probably not thinking, "gee, that's not a problem, it was just a one-off expense."
Yes, at the national level we are kind of like the guy in the ghetto whose house has rotting walls and a caved-in roof, because he'd rather spend the money he has, and max out his credit cards on top of it, on hookers, blow, spinner rims, and a 60" HDTV. Arguing about whether his house needs fixing is kind of beside the point.
Arguing about whether he can get a good rate on balance transfers is also beside the point.
Governments are not like individuals. The analogy is too flawed to be useful, unless the individual suddenly gets to print his own money.
Silly analogy. Are you arguing that the federal govt should spend 0 on infrastructure until there is a balanced budget?
I don't want to listen to your resident PhD in Economics. Those guys are generally failures. Not ALL government spending is wasteful, but it's obvious that in it's totality it doesn't result in a positive ROI.
You can print money but you can't print value. Value has to be created. Resources are still finite. The government can do a lot of things individuals can't do, and "balancing the budget" doesn't mean the same thing for a sovereign state as it does for an individual or even a corporation, but the general principle holds. When the financial markets start telling sovereign states that their structural deficits are out of control, sovereign states have to take corrective action or the terms of borrowing start getting worse. And when terms start getting worse, a state that is highly leveraged gets in trouble very, very quickly. This idea that government is just different somehow and the rules don't apply is far-too-common magical thinking on the left, and it's why when Obama has to do the unpleasant thing and trim spending, he has to do three times the work in political theater in convincing lefties that the Republicans made him do it.
Infrastructure is a necessity. If you defer maintenance on your house too long, you end up losing your most valuable asset because it gets just too far gone. If you defer maintenance on your facilities in your business too long, you endanger your ability to operate. I'm not arguing that infrastructure spending should go away, in fact I'd argue it needs to be a higher priority since so much is reaching the end of its useful life. "Higher priority" means "cut or defer other less important ," not "borrow, borrow, borrow some more."
BTW, reading back through, I never intended to defend Wild Cobra's argument that any deficit is bad, period. Wild Cobra is a complete ing idiot and has the economic literacy of an annelid. A sovereign state is going to have debt. A government that makes up 20% of the economy and runs a 5% deficit is going to break even with 1% GDP growth.
I say that once the U.S. has convinced the financial markets that it is acting in good faith to address its structural deficit, then have the discussion about infrastructure spending.
Obvious? lol
If it is that obvious, it should be easy to prove. Link?
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