For all you folks that worry about your Grandchildren having to pay
for the deficit. Here is a short lesson about the deficit.
Is there a federal deficit?
By Walter E. Williams
Apr 19, 2006
Let's push back the frontiers of ignorance about the federal deficit. To simplify things, I'll use round numbers that are fairly close to the actual numbers.
The nation's 2005 gross domestic product (GDP), what the American people produced, totaled $13 trillion. The federal government consumed $2.4 trillion, but it only received $2 trillion in tax revenues, leaving us with what's said to be a $.4 trillion budget deficit.
By the way, it's sheer cons utional ignorance to say that President Bush spends or lowers taxes. Article I, Sections 7 and 8, of the U.S. Cons ution gives Congress authority to spend and tax. The president only has veto power that Congress can override.
Getting back to deficits, my question to you is this: Is there truly a deficit? The short answer is yes, but only in an accounting sense -- not in any meaningful economic sense. Let's look at it. If Congress spends $2.4 trillion but only takes in $2 trillion in taxes, who makes up that $.4 trillion shortfall that we call the budget deficit? Neither the Tooth Fairy, Santa nor the Easter Bunny makes up the difference between what's spent in 2005 and what's taxed in 2005.
Some might be tempted to answer that it's future generations who will pay. That's untrue. If the federal government consumes $2.4 trillion of what Americans produced in 2005, it must find ways to force us to spend $2.4 trillion less privately in 2005. In other words, the federal government can't spend today what's going to be produced in the future.
One method to force us to spend less privately is through taxation, but that's not the only way. Another way is to enter the bond market. Government borrowing drives the interest rate to a level that it otherwise wouldn't be without government borrowing. That higher interest puts the squeeze on private investment in homes and businesses, thereby forcing us to spend less privately.
Another way to force us to spend less privately is to inflate the currency. Theoretically, Congress can consume what we produce without enacting a single tax law; they could simply print money. The rising prices, which would curtail our real spending, would act as a tax. Of course, an important side effect of doing so would be economic havoc.
Some Americans have called for a balanced budget amendment to the Cons ution as a method to rein in a prolific Congress. A balanced budget is no panacea. For example, suppose Congress spent $6 trillion and taxed us $6 trillion. We'd have a balanced budget, but we'd be far freer with today's unbalanced budget. The fact of business is that the true measure of the impact of government on our lives is not the taxes we pay but the level of spending.
The founders of our nation would be horrified by today's level of American servitude to their government. From 1787 to the Roaring '20s, federal government spending, as a percentage of GDP, never exceeded 4 percent, except in wartime, compared to today's 20 percent.
The average taxpayer, depending on the state in which he lives, works from Jan. 1 to May 3 to pay federal, state and local taxes. That means someone else decides how four months' worth of the fruits of the average taxpayer's labor will be spent. The taxpayer is forcibly used to serve the purposes of others -- whether it's farm or business handouts, food stamps or other government programs where the earnings of one American are taken and given to another.
This situation differs only in degree, but not in kind, from slavery. After all, a working description of slavery is the process where one person is forcibly used to serve the purposes of another. The difference is a slave has no rights to what he produces each year, instead of just four months.
Dr. Williams serves on the faculty of George Mason University in Fairfax, VA as John M. Olin Distinguished Professor of Economics.
Copyright © 2006 Townhall.com
Find this story at: http://www.townhall.com/opinion/colu...19/193985.html
what's a lot? Are you vague because you don't know?
On the other hand the level of spending is out of control.
Present Value of America's debt equals $43 trillion. Total Assets for all American's including home equity equals $45 trillion. Now that's scarey.
So instead of "tax and spend" liberals, our government is now run by "spend and spend" conservatives?The founders of our nation would be horrified by today's level of American servitude to their government. From 1787 to the Roaring '20s, federal government spending, as a percentage of GDP, never exceeded 4 percent, except in wartime, compared to today's 20 percent.
Doesn't Professor Williams realize we are now engaged in the Global War on Terror?
43 trillion is PUBLIC not Private.i'm being deliberately vague because i can't keep up witht he amount because it grows every day
i believe that we owe japan 700 billion, china 200 billion, and great britain about 170 billion
that's just something i read in the newspaper awhile back
that's out of the 8.3 trillion federal debt
http://www.publicdebt.treas.gov/opd/opdpdodt.htm
i know that americans personally have much more private debt, which is where i think you got the 43 trillion dollar figure, bt i don't want to put words in your mouth
i also know that last year americans saved 0% of their pay, on average
which is down from 1% the year before
GO REAGANOMICSSSSSSS
Foreigners own a very small percentage of the national debt, somewhere in the 20% range.
take a visit to the GAO website and learn a little bit more about the budget and where money is spent. It will help your post if you don't mind logic.
They would also be horrified by the NSA spying on American citizens by their government.
They would also be horrified by an American president engaging in an elective war without a formal declaration from Congress.
They would also be horrified by "signing statements" over riding the will of the Congress as outlined in the cons ution.
They would also be horrified by the Supreme Court deciding a presidential election and not allowing a state to conduct it's election as it see fit.
They would also be horrified that our government engaged in rendition and torture.
They would also be horrified at Ann Coulter.
Doc Williams seems to only reserve his outrage for things that pertain to taxes.
Oh, yeah. One other thing regarding the good doctor's comment that federal government spending did not exceed 4% up to the "Roaring '20s", let's see what happened at that point? Oh yeah, the wheels fell off the economy and it took over a decade to recover and for the most part, things have gone swimmingly since.
Quack, quack.
If there's a conservative publisher, Williams probably collects a check from them
This is interesting, Williams also advocates seccession
WikipediaWilliams has gone on record as advocating the Free State Project in at least two columns and once on television. The Williams endorsement correlated with the largest single membership jump in the first 5000 phase of the project, a jump even higher than the results of the project being Slashdotted. He also believes in the right of states to secede from the union as was done in the U.S. in the 1860s[1] and has supported or been sympathetic toward various secessionist ideas in his writings.[2]
If the government consumes more than it takes in, it competes for scarce funds with private borrowers, raising the costs of borrowing for all borrowers in the form of higher interest rates. Economics 101. Williams knows better.Some might be tempted to answer that it's future generations who will pay. That's untrue. If the federal government consumes $2.4 trillion of what Americans produced in 2005, it must find ways to force us to spend $2.4 trillion less privately in 2005. In other words, the federal government can't spend today what's going to be produced in the future.
He's a shill, willing to sell his credentials for the larger conservative cause. Logic be damned.
It's defense contractors who are the new U.S. welfare state:
Top contractor Lockheed got contracts larger than budget of Congress, Dept. of Interior
RawstoryWASHINGTON -- A new report claims that a "shadow government" of federal contractors has exploded in size over the last five years.
The do ent, compiled at the request of Rep. Henry Waxman (D-CA) and distributed to RAW STORY, indicates that procurement spending increased by over $175 billion between 2000 and 2005, making federal contracts the fastest growing component of federal discretionary spending.
snip ...
That spending increase -- an astonishing 86 percent -- puts total US federal procurement at $377.5 billion annually. The increase means spending on federal contracts has grown more than two times as fast as other forms of discretionary government spending.
Waxman claims that overcharging -- by mistake or outright fraud -- has been a frequent occurrance. In all, the report identifies 118 federal contracts worth $745.5 billion that have been found by government officials to include significant waste, fraud, abuse or mismanagement.
Each of the Bush Administration's three signature initiatives -- Homeland Security, the Iraq war and reconstruction in Iraq and Hurricane Katrina recovery -- has been linked to wasteful contract spending.
Spending is categorized in the report as highly concentrated on a few large contractors, with the five largest contractors receiving over 20 percent of contract dollars awarded in 2005. Last year, the largest federal contractor, Lockheed Martin, received contracts worth more than the total combined budgets of the Department of Commerce, the Department of the Interior, the Small Business Administration and the U.S. Congress.
But the fastest growing contractor under the Bush Administration has been Halliburton. Federal spending on Halliburton contracts shot up an astonishing 600% between 2000 and 2005.
Dan, did you bother to read the next paragraph in his column:
"One method to force us to spend less privately is through taxation, but that's not the only way. Another way is to enter the bond market. Government borrowing drives the interest rate to a level that it otherwise wouldn't be without government borrowing. That higher interest puts the squeeze on private investment in homes and businesses, thereby forcing us to spend less privately."
Your twin elpimpo4cc should take note also. Obviously you have
a reading problem.
...what do you guys think the odds are that xray would have started this post if there was a Democrat in the White House running up record deficits?
xray, we all know you are not a fan of academia. Stop importing experts to intellectualize the preconceived beliefs you are already anchored in.
You sir are a partisan hack.
If Crossfire ever came back on the air, you would be a good choice to be the guy who takes the GOP position 100% of the time.
I believe in a states right to seccede. The framers mind as revealed in the Declaration of Independence, combined with the 10th Amendment clearly illustrate that a State SHOULD have the right to leave the Union. Ever since Lincoln completely ignored that*, the 10th Amendment has become impotent and the entire structure of our government has become nearly intollerable.
*not that Lincoln was wrong for freeing slaves, just bad side effects.
That's like saying, we could slow your buying by simply making you pay your credit card debt, but instead we're gonna issue you an even higher-limit credit card at a higher rate and your higher payments will bury you."One method to force us to spend less privately is through taxation, but that's not the only way. Another way is to enter the bond market. Government borrowing drives the interest rate to a level that it otherwise wouldn't be without government borrowing. That higher interest puts the squeeze on private investment in homes and businesses, thereby forcing us to spend less privately."
If the Democrats controlled Congress and the White House and we had this sort of deficit, Williams would be a deficit hawk.
^^He would? I didn't know that.
"^^He would? I didn't know that."--XRayZebra
Maybe he would maybe he wouldnt, but there is a 100% chance that you would be ing about the deficit if a Dem was in the White House running up a record deficit.
What did you say when Clinton spent? You wrote him off as a "tax and spend liberal," didnt you?
Relative to Bush it is clear that he was more fiscally conservative, but your loyalty isnt to conservative principal (such as limited government and controlled government spending) but rather to the GOP.
This is the sort of pretzel you find yourself twisted into when you are a partisan hack. Someday, I hope that you free your mind of its self-imposed schakles.
The world could make do with one less zombie who responds to the inconsistencies, contradictions, and imperfections of their political party with about as much independent thought as Pavlov's dog.
Last edited by pussyface; 06-20-2006 at 11:42 AM.
Here you go my man straight from the Comptroller General's Mouth.
http://www.gao.gov/cghome/rotary61206/index.html
Click on the composition of government spending and the other links.
Last edited by 2centsworth; 06-20-2006 at 12:01 PM.
Is this post you were referring to? What am I suppose to reply to?
The deficit never went down under Clinton. Look it up. It grew every
year. I have pointed this out to Dan several times.
I have a problem with any Congress spending as much as they have in
recent years. I have never said I agree with what they have done. It
is dumb. But the dimm-o-craps have said we have cut spending on
domestic programs, which is an out and out lie. No federal programs have
been cut dollar wise. I have a problem with the government supporting
all the crap they do.
What I am trying to do is make people understand when you talk about
deficit it is not like you having a debt. Government can satisfy any
debt by printing more money, raising taxes or other ways. None of them
are good, as far as I am concerned. The problem is that politicians and
people are the problem. They think government can fund any and all
projects. We have forgotten what government was create for. It is
not the end all of end all. Prime example in San Antonio the Gays and
Lesbians sued the City about funding and the courts sided with them,
the gays and Lisbon's. Think government was created to fund that
sort of thing? I don't.
That is what Williams was talking about.
Hey, I don't know you age, but the Old Time Democrats practice lots of
conservative ways many years ago. It is the Liberals once they got
control that did all the damage. Actually the dimm-o-craps should change
their name to Liberal party. The regressive party.
Wow. That post of yours was very telling. Let me explain.
First of all, any points about specifics are irrelevent to my argument. What I accuse you of is being a partisan robot. My overall point here is not to convince you that Bill Clinton was a great president or any other such nonsense. If you want me to take pot shots at Democrats all day, I will do so with great justification. I am no Democrat. I am an independent. I have principal and I think on my own. You should try it some time.
Your posts offer ample evidence that you start with your allegiance to the Republican party and work backwards from there. You are partisan at every turn. Your world view is rooted in allegiance to a party rather than any particular principal. Its sad. George Carlin would suggest that you are an idiot.
My ruthless indictment on your charachter is what I hoped you'd respond to. I think its telling you chose to repsond with stats about Clinton, when that was so clearly not the important part of my message to you.
You will find that you will not be able to predict my thoughts at every turn, as I will with you. This is because my beliefs are not predetermined by a governing body. I stand consistently for principles such as limited government and freedom for consenting adults to make whatever choices they wish so long as they do not infringde on others. Thats what im loyal to. Not a political party. That would be pathetic.
You can spare me the political rhetoric. If you want your intellectual dignity back, this is the place you might try to reclaim it.
Last edited by pussyface; 06-20-2006 at 03:36 PM.
xray has no response because he can offer no evidence to contradict that he is indeed a partisan hack.
you sir have been exposed.
any future messages I write in response to you will be in the form of computer/robot code until you respond with something relevent.
pussyface is ON FIRE!!!!!! You can't expect followers to branch off and think on their own. Their conversations will only blossom with someone who is rowing within the same boat.
Debating xray is like popping a zit.
It's an easy win that you quickly forget.
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