Wouldn't this make the Left...

[Yonivore]

...piss in their Post Toasties?

April 4, 2008: Victory-for-Growth Day?

[EVAY]

When I was evaluating business plans for a multibillion dollar American company, we called trends like these "check plans"...meaning that the submitter promises wonderful things several years out...after the submitter is no longer in charge. So that you have a mild uptrend for history to the present, but as soon as the time period is "beyond the horizon" ( a few years out), there is a dramatic uptick.... This administration inherited a surplus and has created the largest deficit in history...some of us CONSERVATIVES think that we don't like saddling our grandchildren with W.'s war debts, just so he can continue to give us all tax cuts.

If fiscal responsibility is a "leftie" policy, it's new to me...and new to what Republicans ran against for about forty years. These promises are just that...promises. And like a lot of W.'s promises...they are empty.

This man is not a good president; he's not even a good republican.

[gtownspur]

When I was evaluating business plans for a multibillion dollar American company, we called trends like these "check plans"...meaning that the submitter promises wonderful things several years out...after the submitter is no longer in charge. So that you have a mild uptrend for history to the present, but as soon as the time period is "beyond the horizon" ( a few years out), there is a dramatic uptick.... This administration inherited a surplus and has created the largest deficit in history...some of us CONSERVATIVES think that we don't like saddling our grandchildren with W.'s war debts, just so he can continue to give us all tax cuts.

If fiscal responsibility is a "leftie" policy, it's new to me...and new to what Republicans ran against for about forty years. These promises are just that...promises. And like a lot of W.'s promises...they are empty.

This man is not a good president; he's not even a good republican.

First of all fiscal responsibility goes out the window during times of distress. Republicanism is not a straight and narrow dogma like you have been led to beilieve. We are in a time of war, and to say that we need to do away with this war spending, would be un republican seeing how reagan, himself threw those same prinicples in order to keep american supremacy intact and to shatter the soviet union.

Now on to tax cuts, what is you're problem. as a conservative i see no qualm with the tax cuts, the libertarian side of Republicanism approves the govt taking less of our money. That's right because tax cuts do not cost anything to us, that's our money. The reason we get deficits is because we do not eliminate govt spending like social programs, and pork.

IF you want to about W, a bout the prescription Drug plan. THat is pandering and fiscal irresponsibility. Don't do it on tax cuts.

[Guru of Nothing]

RepublicanISM - sounds to me like the tail is wagging the dog.

[EVAY]

First of all fiscal responsibility goes out the window during times of distress. Republicanism is not a straight and narrow dogma like you have been led to beilieve. We are in a time of war, and to say that we need to do away with this war spending, would be un republican seeing how reagan, himself threw those same prinicples in order to keep american supremacy intact and to shatter the soviet union.

Now on to tax cuts, what is you're problem. as a conservative i see no qualm with the tax cuts, the libertarian side of Republicanism approves the govt taking less of our money. That's right because tax cuts do not cost anything to us, that's our money. The reason we get deficits is because we do not eliminate govt spending like social programs, and pork.

IF you want to about W, a bout the prescription Drug plan. THat is pandering and fiscal irresponsibility. Don't do it on tax cuts.

I agree with your observation about the drug plan being pandering. My problem with W. (among a few other things) is primarily that he DOES pander to those he wants to pander to...but he doesn't do THAT very well, because he spends a LOT of money...just not enough to get the job done. I always thaought that was the big gripe with Dems...that they spend a lot of money and accomplish little or nothing in the process.

I disagree about the tax thing, though, because I think we are in a different space economically (globally) now than we have ever been before. I could understand Reagan's last ditch push to bankrupt the Soviet Union, but I think that he did that at the same time that he was shoving a lot of programs (and their attendant costs) back to the states....so that even though he was expanding the deficit (which I didn't like) he was also cutting the committment of the FEDERAL government to provide services for the future. That accomplished two things...it put the responsibility on states to offer and pay for the services their citizens wanted, (which most of us cons utional conservatives like), and it gave the nation a chance to recover from those deficits. Which we did.

This is different now because we can no longer shift the remaining federal expenditures down to the state levels, ( they are for the most part ins utionalized federal functions) and because our national debt is riskier now that was 20 some years ago. We need to remain as economically stong as we are militarily, and I think that means we accept a "pay as you go" mentality. It is not "our" money if we are borrowing from our children and grandchildren, or if we are becoming dependent on China. I just don't think that is a long range plan, and I fault W. For it.

[Yonivore]

Hey, I don't know anything about the guy. I just thought it was cool and that, if true, it would really piss off the left for a Republican administration to acheive a balanced budget through economic growth instead of taxation in a Presidential election year.

If you go to the guy's site, he claims the current numbers moved the "Victory" date from October 2008 (october surprise) to April, just in time for the election push.

It'd be cool and I'm going to follow the site to see how it pans out.

[danyel]

I dont get it, in order to achieve a balanced budget you have to get through a deficit and then get back to a balanced budget?

Cant there be more than one answer to the same question? isn't it a false dicotomy economic growth or taxation?

[gtownspur]

Leave it to the argentinean to give the definition of a good economy.

[Nbadan]

I disagree about the tax thing, though, because I think we are in a different space economically (globally) now than we have ever been before. I could understand Reagan's last ditch push to bankrupt the Soviet Union, but I think that he did that at the same time that he was shoving a lot of programs (and their attendant costs) back to the states....so that even though he was expanding the deficit (which I didn't like) he was also cutting the committment of the FEDERAL government to provide services for the future. That accomplished two things...it put the responsibility on states to offer and pay for the services their citizens wanted, (which most of us cons utional conservatives like), and it gave the nation a chance to recover from those deficits. Which we did.

Nice assessment, but we have never really recovered from Reagan's debt, in fact, it still lingers today - $2 trillion dollars worth. Also, if you've been reading the headlines lately, you'd of probably change your mind about the arms-race with Russia being over. It seems that now that Russia has all this new oil revenue, they want to restart what the U.S. thought Reagan had once shattered.

[Nbadan]

I dont get it, in order to achieve a balanced budget you have to get through a deficit and then get back to a balanced budget?

Cant there be more than one answer to the same question? isn't it a false dicotomy economic growth or taxation?

Traditionally, to fight unemployment and a recession, the Fed expands the money supply. This creates more spending in the economy, which creates more jobs and more taxes.

But what happens if the Fed expands the money supply too much? For example, let's suppose the Treasury printed so much money that it made every American a millionaire. After everyone retired, they would notice there would be no more workers or servants left to do their bidding… so they would attract them by raising their wages, sky-high if necessary. This, of course, is the essence of inflation. Eventually, prices would rise so much that it would no longer mean anything to be a millionaire. Soon, everyone would be back working at their same old jobs.

To fight inflation, then, the Fed contracts the money supply.

The Federal Reserve thus has an important role in balancing the economy. Too little money in the economy means crushing unemployment; too much money means runaway inflation. Finding the right balance is the job of the Federal Reserve Board, a job which calls for considerable discretion -- hence the term discretionary monetary policy. Making the correct decisions depends on reading the economy correctly, and some Boards have been better at it than others. In the early days especially, the Fed had a tendency to overreact to developments, sometimes causing more harm than good. But the art of discretionary policy has improved over time. And the effects of monetary policy, even when handled poorly, are immediate, profound and easily measurable. No serious economist claims otherwise -- supply-siders aside.

In a normal economy, there is a high level of employment, and everyone is spending their earnings as usual. This means there is a circular flow of money in the economy, as my spending becomes part of your earnings, and your spending becomes part of my earnings. But suppose something happens to shake consumer confidence in the economy. Worried consumers may then try to weather the coming economic hardship by saving their money. But because my spending is part of your earnings, my decision to hoard money makes things worse for you. And you, responding to your own difficult times, will start hoarding money too, making things even worse for me. So there's a vicious circle at work here: people hoard money in difficult times, but times become more difficult when people hoard money.

Under Keynesian Theory, which has made a resurgence this time supported by Conservatives, the solution to slow economic growth was for the central bank to expand the money supply. By putting more bills in people's hands, consumer confidence would return, people would spend, and the circular flow of money would be reestablished.

What the NeoCons have done is expand use the use of the Keynesian theory to include the use of deficit spending when the economy is supposedly already growing. I think even Keyes would agree that this is inflationary, so to hide the effects of this inflation the government underestimates yearly inflation by leaving off the sharp rice home mortagage prices and the added costs of expensive fuel, two of the most inflationary goods in the last decade. They have also stopped reporting the level of M3 money, the only real way to measure inflation in the economy.

Business meanwhile are not perfect creatures, most do not like raising prices on consumers. The costs of raising prices is costly for most businesses, some are engage in price wars with compe ors. So there is a lag time between when the government start printing too much money and when businesses raise prices to match the pattern of inflation in the economy. This is called New Keynesian theory.

[RandomGuy]

Hmm interesting.

I just wonder what happens when all that crushing debt starts racking up serious interest payments because of high interest rates.

[scott]

It's a fun chart but...

Technical notes:

I’ve received several emails asking how I’m generating the trends in the graphic above. It’s really pretty simple—and that’s by design, because I figured I’d probably get some questions about it. Each data point on the receipts and outlays lines is a 12-month total from the Monthly Treasury Statement; in other words, each point is a rolling fiscal year total. That deseasonalizes the data, which is critical for this kind of forecasting. After that, all I do is throw a straight-line trend off of the most recent twelve of those points on each line, then I figure out when the lines would cross. That identifies VG-Day, and this month’s trend lines point to April 4, 2008.

This is just bad statistical analysis.

[Yonivore]

It's a fun chart but...
This is just bad statistical analysis.

Let's follow it, shall we?

[scott]

One thing I would like to mention, in response to Dan... "New Keynesian" theory is not the prevelant school of monetary economic - the New Neo-Classical Synthesis ( a whopper of a name, I know) is.

It is easy to lump some controversial economic practices with a particular school - but doing so is generally in fallacy. Just because Gregory Mankiw (a New Keynesian) believes something doens't necessarily make it a staple of New Keynesian theory. In the end, the IS-LM model for understanding the way the economic works still dominates. New schools of thought such as Neo-Classical, New Keynesian, and the New Neo-Classical synthesis try to bridge the logical gap between the schools of thought in a Hegalian Synthesis manner. It is worth noting that Bernanke is a New Neo-Classicist.

[Yonivore]

One thing I would like to mention, in response to Dan... "New Keynesian" theory is not the prevelant school of monetary economic - the New Neo-Classical Synthesis ( a whopper of a name, I know) is.

It is easy to lump some controversial economic practices with a particular school - but doing so is generally in fallacy. Just because Gregory Mankiw (a New Keynesian) believes something doens't necessarily make it a staple of New Keynesian theory. In the end, the IS-LM model for understanding the way the economic works still dominates. New schools of thought such as Neo-Classical, New Keynesian, and the New Neo-Classical synthesis try to bridge the logical gap between the schools of thought in a Hegalian Synthesis manner. It is worth noting that Bernanke is a New Neo-Classicist.

What's the matter with "Supply Side Economics?" And, what kind of name begins with the words - "new, new, and classical?" Kind of redundant and paradoxical at the same time, if you ask me.

[Nbadan]

Hmm interesting.

I just wonder what happens when all that crushing debt starts racking up serious interest payments because of high interest rates.

That's when things fall apart. This is why the US must use it's military to defend any serious threats to the dollar. Iran opening a oil boarse and trading in Euros is in fact declaring de-facto war on the U.S.. So we have 70,000 troops poised on Iran's border ready to start WW3 over the dollar, not over any bogus nuclear program.

[Yonivore]

That's when things fall apart. This is why the US must use it's military to defend any serious threats to the dollar. Iran opening a oil boarse and trading in Euros is in fact declaring de-facto war on the U.S.. So we have 70,000 troops poised on Iran's border ready to start WW3 over the dollar, not over any bogus nuclear program.

Yeah, and I'm guessing that crazy 12th Imam now running Iran is complicit with all his not-so-veiled threats to make Israel disappear and such.

[xrayzebra]

That's when things fall apart. This is why the US must use it's military to defend any serious threats to the dollar. Iran opening a oil boarse and trading in Euros is in fact declaring de-facto war on the U.S.. So we have 70,000 troops poised on Iran's border ready to start WW3 over the dollar, not over any bogus nuclear program.

dan you seem awful anxious for us to invade Iran. That seems to really
occupy your mind. I wonder why?

[scott]

What's the matter with "Supply Side Economics?"

There are a lot of things "the matter" with a lot of different economic schools of thought. "Supply Side Economics" is antiquated, and the field has moved on. Some aspects of Supply Side Economics are incorporated into newer theories, but there is a mountain of academic literature about the shortcomings of pure Supply Side theory.

And, what kind of name begins with the words - "new, new, and classical?" Kind of redundant and paradoxical at the same time, if you ask me.

It's a funny name if you are unfamiliar why it has that name, no doubt. There was classical economics, which an hesis is Keynesian economics... then came a theoretical "update" to Classical theory, Neo-Classical theory. That was responded to by "New-Keynesian" theory, now we have the NEW Neo-Classical synthesis. At some point economics need to get more creative in their names...

[SPARKY]

Conservatism has nothing to do with fiscal policy today. Rove, et al would nationalize the nation's health care industry if it would pick up a few more votes.

[gtownspur]

There are a lot of things "the matter" with a lot of different economic schools of thought. "Supply Side Economics" is antiquated, and the field has moved on. Some aspects of Supply Side Economics are incorporated into newer theories, but there is a mountain of academic literature about the shortcomings of pure Supply Side theory.



It's a funny name if you are unfamiliar why it has that name, no doubt. There was classical economics, which an hesis is Keynesian economics... then came a theoretical "update" to Classical theory, Neo-Classical theory. That was responded to by "New-Keynesian" theory, now we have the NEW Neo-Classical synthesis. At some point economics need to get more creative in their names...

I want you to tell us why supply side didnt work. If it's just a bunch of "reagan and his high deficits" rhetoric, dont even bother.

[Vashner]

Our economy is smoking hot right now. Liberals just looking for ways to cry...

Can't chop wood then they cry about a bubble.. that still has not happened

Can't drill. .then they cry about oil price

They can't build there stupid ing Crusader pieces of tank and now there generals cry like little stupid ass babies while troops are in combat. You think at war college even dumb ing democrat generals would learn civilians are in charge in USA.
Ever heard of Korean war dumbasses?

You know these liberals.. they cry about the economy but want to slow it down...

But you these mother ers will tap that in Alaska after Hillary wins just to get some oil...

That's how they are..... backstabbers.. on economy, security everything.

[scott]

I want you to tell us why supply side didnt work. If it's just a bunch of "reagan and his high deficits" rhetoric, dont even bother.

Why don't you tell me why Supply Side Economics does "work", in your opinion? I'm not here to be your Economics professor. If you are really interested, there is plenty of Academic literature out there.

What is the definition of "working", anyway? Like I said, there are many aspects of Supply Side economics that are revised, updated, improved, etc. with subsequent theories. Economics is a living, breathing, science. The goal of economics isn't to just find a "working" theory for things, but rather to find the optimal one. Supply Side theory just didn't fit the bill.

[xrayzebra]

Want some real eye opening figures. Read Scott Burns on SOC and Medicare versus
the National Debt, which everyone is so worried about. Think maybe Bush may have
a point after all about working on things, maybe just a little bit.


SCOTT BURNS

New numbers on Social Security and Medicare could cause nightmares

12:00 AM CDT on Sunday, May 14, 2006

Scott Burns

A major supply of bedtime reading became available on May 1 – the annual trustees' reports on Social Security and Medicare. Clocking in at 226 and 219 pages, respectively, the reports guarantee sleep for the innumerate. The reports may also cause nightmares among those who dare to think about what they read.

The figures in the reports are so beyond everyday experience that few will grasp their meaning. The trustees tell a nation that lives month to month on just-in-time financing that program costs will exceed revenue in 2017, some 132 credit card payments from now.

They also tell us that the fabled Social Security trust fund will be exhausted in 2040. That may be a year earlier than last year's report, but face it: It's 34 television seasons from now.

The numbers, page after page, are nearly inconceivable.

So let's start with a warm-up exercise, Exxon Mobil Corp.

The largest and most valuable corporation in America, it also tends to measure things in billions.

Exxon Mobil has, yes, 6.05 billion shares outstanding.

Multiply that by the recent $63.41 price, and the company has a market capitalization of $383.6 billion. It also has sales of $337 billion and, last year, had a profit of $35 billion.

See what I mean? Big numbers. All, however, are smaller than the basic numbers for Social Security. It, for instance, had revenue of $702 billion in 2005 and made benefit payments of $521 billion.

Perhaps the only way to understand the size of Social Security and Medicare is to compare them to other government numbers. But in fact, that doesn't work either.

The federal deficit is estimated to be about $423 billion this year, up from $318 billion last year. We worry about a number that size because (1) it is very, very large, (2) we have to borrow most of it from strangers, and (3) it will bring gross federal debt to over $8 trillion.

Well, guess what?

Those numbers are small relative to what you'll find in the Social Security and Medicare trustees' reports. The 2006 reports say the unfunded liabilities of Social Security increased by $600 billion. Medicare's unfunded liabilities ballooned a stunning $2.4 trillion.

Mind you, that's the increase for the year. It isn't the total.

The total unfunded liabilities of Social Security now amount to $4.6 trillion. The unfunded liabilities of Medicare now amount to $32.1 trillion.

In 2005, the combined unfunded liabilities of Social Security and Medicare increased by $2.3 trillion, seven times larger than the official $318 billion federal deficit. In 2006, the combined unfunded liabilities of the two programs increased by $3 trillion. Again, the increase was seven times larger than the estimated $423 billion federal deficit.

Over the last two years, while politicians argued over spending on Iraq, the cost of gasoline and elimination of the estate tax, the unfunded liabilities of our two most important social programs have risen by $5.3 trillion. That's more than the $5 trillion of federal debt that is publicly held and traded. In two years.

At the moment, these two worlds of big numbers – official U.S. government debt and growing obligations of Social Security and Medicare – seem unrelated to each other.

In fact, those worlds will collide.

And it will happen long before 2040.

Tuesday: What to expect

Scott Burns answers questions of general interest in his Thursday columns. Write Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas, Texas 75265, or send an e-mail.

E-mail [email protected]

{WebDesk}Links: Read the new trustees' reports and Scott Burns' column from last year on "The Overlooked $2.3 Trillion Deficit."

DallasNews.com/extra

Online at: http://www.dallasnews.com/sharedcont...1.8ffec78.html

[Opinionater]

IMHO, no.