The $106 Trillion deficit

[JJ Husker]

Well Carl, if you don't think the deficit adversely affects our economy, I would suggest some remedial economics classes might get you up to speed.

The condescension doesn't really work so well when you're just making claims up . . .

 

(Then again . . . when you say "did you read the article" when the article doesn't talk about what you're claiming . . . it's possible that you don't understand how condescension works. In that case, "I would suggest some remedial classes might get you up to speed.")

 

My point was that if a person is relying on the $4T figure or the ten year CBO projections, the reality is much worse for our deficit AND our economy.

Uh huh.

So, are saying that deficits have no adverse affect? Honest question cuz I have no clue as to your problems with this.

 

What claims have I made up?

 

And sorry for the condescension. It seemed well timed but now I'm thinking it might be a deeper issue.

[carlfense]

So, are saying that deficits have no adverse affect?

What? Where are you seeing this?

 

What claims have I made up?

First sentence.

http://www.huskerboard.com/index.php?/topic/65297-the-106-trillion-deficit/page__view__findpost__p__1170577

 

You seem to be arguing with statements that you've attributed to me that I haven't made.

[sd'sker]

Well Carl, if you don't think the deficit adversely affects our economy, I would suggest some remedial economics classes might get you up to speed.

The condescension doesn't really work so well when you're just making claims up . . .

 

(Then again . . . when you say "did you read the article" when the article doesn't talk about what you're claiming . . . it's possible that you don't understand how condescension works. In that case, "I would suggest some remedial classes might get you up to speed.")

 

My point was that if a person is relying on the $4T figure or the ten year CBO projections, the reality is much worse for our deficit AND our economy.

Uh huh.

So, are saying that deficits have no adverse affect? Honest question cuz I have no clue as to your problems with this.

 

What claims have I made up?

 

And sorry for the condescension. It seemed well timed but now I'm thinking it might be a deeper issue.

the deficit is reducing rather quickly:

and the debt does not seem likely to have an adverse effect on the economy:

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

 

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

 

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

 

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

 

But isn’t this time different? Not as much as you think.

 

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

[JJ Husker]

Based on this article, it would appear our economy is facing a much stiffer challenge in the future than has been indicated by some ten year CBO projections.

Huh?

So, are saying that deficits have no adverse affect?

What? Where are you seeing this?

 

What claims have I made up?

First sentence.

http://www.huskerboa...ost__p__1170577

 

You seem to be arguing with statements that you've attributed to me that I haven't made.

 

Ok, then what did you mean by replying "Huh?" to my statement that started this?

[carlfense]

Ok, then what did you mean by replying "Huh?" to my statement that started this?

I'm not sure that I can make it more clear for you than I did here:

http://www.huskerboard.com/index.php?/topic/65297-the-106-trillion-deficit/page__view__findpost__p__1170570

[JJ Husker]

 

and the debt does not seem likely to have an adverse effect on the economy:

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

 

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

 

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

 

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

 

But isn’t this time different? Not as much as you think.

 

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

 

I get that it is not as simple as equating it to a typical families mortgage. But, I don't care how you spin it or polish it, spending beyond your current means of payment cannot go on forever. It is bad financial planning. This "it isn't all doom and gloom" take on things assumes it is ok for us today to leave debt to those who follow because their growing economy will simply absorb it. I can accept that may be a necessary situation in dire circumstances such as when you have to pay for an unavoidable war but, I really don't think it is a responsible way to conduct day to day business. This kind of thinking is exactly like a pyramid scheme. Somebody at some point gets f'd. In the case of the US economy, it will be a whole bunch of people all at the same time.

[JJ Husker]

Ok, then what did you mean by replying "Huh?" to my statement that started this?

I'm not sure that I can make it more clear for you than I did here:

http://www.huskerboa...ost__p__1170570

 

Ok, I got it now.

 

I claimed that you were saying that "deficits have no adverse affect" when in reality you were saying that worse deficits than the CBO estimates wouldn't be a stiffer challenge for our economy. Or, maybe you feel the GOP's estimates of the deficit are totally overblown and feel the CBO's $4T is as bad as it can get. In that case

 

Either way I'm done. It's beerthirty and my brain hurts from this discussion. Have a good weekend.

[Someone]

When the original article wants to score political points instead of being truthful and factual, people sometime make false assumptions about what it is saying.

 

Here are some facts that are missing from the article.

 

The "president’s position that $4 trillion in deficit reduction would basically solve the problem for now" comment is refering proposed deficit reduction over the next 10 years.

10 years[/url], bringing total deficit reduction to $4.3 trillion.

 

The projected deficit over the next 10 years, according to the REPUBLICAN Senate numbers that the article links to, projects either a 6.3 trillion or 7.0 trillion deficit in the next 10 years.

 

If the article was fair and balanced it might read this way:

 

"$4 trillion? Try $6.65 trillion, the average of the 2 estimates. That’s $6,650,000,000,000. Even the lowest, extremely conservative estimate comes in at $6.3 trillion; the highest is over $7 trillion."

 

If the article overstates that GAP between WH and GOP estimated deficits by 4400% (that is 44 times more than the actual gap is) then the FACTUAL data should soften the statement below, since the challenge is 44 times less difficult that origninally assumed.

 

 

"Based on this article, it would appear our economy is facing a much stiffer challenge in the future than has been indicated by some ten year CBO projections."

 

 

UPDATE: Fiscal YTD number show a 26% reduction in the projected deficit this year. If those numbers hold, we would need a 4.X Trillion solution to stop the deficit.

[carlfense]

I claimed that you were saying that "deficits have no adverse affect" when in reality you were saying that worse deficits than the CBO estimates wouldn't be a stiffer challenge for our economy.

It's reasonably clear that you aren't following.

 

Or, maybe you feel the GOP's estimates of the deficit are totally overblown and feel the CBO's $4T is as bad as it can get.

It's a lot easier/simpler to stick with the words that have been said instead of this sort of . . . creativity?

 

Either way I'm done. It's beerthirty and my brain hurts from this discussion. Have a good weekend.

[JJ Husker]

When the original article wants to score political points instead of being truthful and factual, people sometime make false assumptions about what it is saying.

 

Here are some facts that are missing from the article.

 

The "president’s position that $4 trillion in deficit reduction would basically solve the problem for now" comment is refering proposed deficit reduction over the next 10 years.

10 years[/url], bringing total deficit reduction to $4.3 trillion.

 

The projected deficit over the next 10 years, according to the REPUBLICAN Senate numbers that the article links to, projects either a 6.3 trillion or 7.0 trillion deficit in the next 10 years.

 

If the article was fair and balanced it might read this way:

 

"$4 trillion? Try $6.65 trillion, the average of the 2 estimates. That’s $6,650,000,000,000. Even the lowest, extremely conservative estimate comes in at $6.3 trillion; the highest is over $7 trillion."

 

If the article overstates that GAP between WH and GOP estimated deficits by 4400% (that is 44 times more than the actual gap is) then the FACTUAL data should soften the statement below, since the challenge is 44 times less difficult that origninally assumed.

 

 

"Based on this article, it would appear our economy is facing a much stiffer challenge in the future than has been indicated by some ten year CBO projections."

 

 

UPDATE: Fiscal YTD number show a 26% reduction in the projected deficit this year. If those numbers hold, we would need a 4.X Trillion solution to stop the deficit.

 

Yes, if you only look at the first ten year period of the GOP deficit projection, the apples to apples numbers are about $4T to $6T or $7T. the way the article presented the information is a little dishonest in that regard. However, I will stick by the statement that we face a stiffer challenge than what the CBO is predicting and what the Obama WH seems to be relying on. $4T up to $6.5T is still a huge increase and large difference. 163% or $2,500,000,000.00 machts nicht, I don't think those figures are anything to poo poo under the rug. I also still stand by the thought that these bozos in DC should be using a longer timeline than ten years. The anticipated Medicare increases and large numbers of new retirees will have a detrimental effect on the deficit and much of this starts being realized after that initial ten year window. If we know it's coming, why cut off projections at only ten years and use that partial information as a basis for spending more money than we have?

 

A trillion dollars is almost impossible to comprehend. When you are looking at having to cut $4T or $7T or $100T, I do not believe you can start on that process soon enough. Those are just unfathomable numbers.

[knapplc]

When you are looking at having to cut $4T or $7T or $100T, I do not believe you can start on that process soon enough.

 

It's not that you're not right, it's just that this come-to-Jesus moment about the deficit for Conservatives conveniently happens during a Democrat's administration. Where was this call to arms when the deficit was exploding under Bush?

 

It's all about politics, and that makes this hard to stomach.

[JJ Husker]

When you are looking at having to cut $4T or $7T or $100T, I do not believe you can start on that process soon enough.

 

It's not that you're not right, it's just that this come-to-Jesus moment about the deficit for Conservatives conveniently happens during a Democrat's administration. Where was this call to arms when the deficit was exploding under Bush?

 

It's all about politics, and that makes this hard to stomach.

 

Fair enough. But, that doesn't change the facts of the basic problem we have. I won't claim to not be somewhat partisan although it really doesn't feel like a party issue anymore to me. Both sides suck and we have a deficit/debt/entitlement problem that needs to be fixed. Neither dems nor repubs are near as concerned about fixing that as they are about 1) hindering anything the other side wants to do and 2) getting elected and staying in power. The real issues of governing are completely foreign to all of them.

 

Personally, I did not sense or feel economic problems until very late in Bush's term. I guess you could say I was fat, dumb, and happy until about years 2-3-4 of the Obama administration. That is when I began to get squeezed by the economy. Those were the worst 2-3 years my business has ever had. So, I guess you can claim it's just convenient to complain now with a different administration but, I really had nothing to complain about before so It's not just as simple as a party issue. I will say things started to straighten out for us last year and this year is looking really good. And yes, while Obama and the dems are in charge. Still doesn't change the fact that we have some stuff coming up in the future that could bite us all.

[carlfense]

When you are looking at having to cut $4T or $7T or $100T, I do not believe you can start on that process soon enough.

 

It's not that you're not right, it's just that this come-to-Jesus moment about the deficit for Conservatives conveniently happens during a Democrat's administration. Where was this call to arms when the deficit was exploding under Bush?

 

It's all about politics, and that makes this hard to stomach.

+1

[BigRedBuster]

When you are looking at having to cut $4T or $7T or $100T, I do not believe you can start on that process soon enough.

 

It's not that you're not right, it's just that this come-to-Jesus moment about the deficit for Conservatives conveniently happens during a Democrat's administration. Where was this call to arms when the deficit was exploding under Bush?

 

It's all about politics, and that makes this hard to stomach.

 

 

Most conservatives I know did not like Bush because of his spending.

 

Now, if you are talking about the "come to Jesus" moment for the Republicans in Washington, then I agree.

[carlfense]

Most conservatives I know did not like Bush because of his spending.

Which conservatives did you know?

 

George W. Bush remains popular among conservative Republicans (72% approve of him) despite his low overall approval rating. Meanwhile, moderate and liberal Republicans are as likely to disapprove as to approve of the job he is doing, and Democrats of all political orientations hold Bush in low regard. [December 2008]

http://www.gallup.com/poll/113083/conservative-republicans-still-widely-support-bush.aspx