Over 17 trillion - maybe we should have left the lid on the can

[carlfense]

I'm trying to figure out how that answers my questions.

Weren't you asking knapplc? You were the one who threw Reagan into the mix.

 

I'm just trying to understand the Reagan myth . . . you seem to admire him yet you dislike government spending/deficits/etc.

[BigRedBuster]

I'm trying to figure out how that answers my questions.

Weren't you asking knapplc? You were the one who threw Reagan into the mix.

 

I'm just trying to understand the Reagan myth . . . you seem to admire him yet you dislike government spending/deficits/etc.

 

 

I'm sorry, I thought you quoted me. And, I simply referenced the economic growth that started under Reagan. Are you claiming it didn't start under him? And, Reagan wasn't the main point of the question anyway. I pointed out that Clinton made reducing the deficit and government spending a corner stone in his Presidency. That has been referenced by some "experts" as how Clinton continued the economic growth (along with the .com boom) during the 90s.

 

I'm simply asking if there is a limit to what we can spend as it pertains to GDP?

[carlfense]

I'm sorry, I thought you quoted me.

I certainly did. I even placed the section that I was addressing in bold.

 

And, I simply referenced the economic growth that started under Reagan. Are you claiming it didn't start under him?

I'm not sure where you're seeing that. What conclusions do you draw from that economic growth occurring during massive increases in debt under Reagan?

 

I pointed out that Clinton made reducing the deficit and government spending a corner stone in his Presidency. That has been referenced by some "experts" as how Clinton continued the economic growth (along with the .com boom) during the 90s.

The two aren't synonymous. If you're embracing Clinton's method of deficit reduction you probably have a very different of opinion than the modern day GOP line.

 

I'm simply asking if there is a limit to what we can spend as it pertains to GDP?

Certainly. And, right now, our spending/GDP ratio is acceptable.

[knapplc]

Obviously by looking at the graph, spending as a percent of GDP has grown over time. In the early 1900s it was below 10%. Now, it is somewhere around 35% and over time the trend is to grow(although it has leveled off some since the 1980s.

 

So, my question is:

 

Is this healthy?

Does it matter?

Is there a limit to where you would say..."WHOA....that is way too high"?

 

 

I don't think any reasonable person would argue against the theory as our population grows, so will spending as measured in dollars. However, Zoogie's post talks about it as it is measured against GDP and I agree that is a more realistic and important measure.

 

So.....does that percentage matter? If it does, at what point does it matter? If it doesn't, then why did Clinton make spending such a big issue and was actually successful at it while the economy continued the growth started during the Reagan years?

 

We all know I'm no economist, nor will I even pretend to understand budgets and business nearly as well as you, BRB. The generic answer I would give to your questions is that it does matter, and it's only unhealthy if we can't pay our bills. And we can pay those bills.

 

I think we need to curb spending, that's for sure. I think we dole out far too much money in the name of "security" to foreign countries, none of whose loyalty we're buying with that money/aid. Saudi Arabia reevaluating their relationship with the U.S. is a great example, not 20 years after we defended their northern border from Saddam's army. I think engaging in the war in Iraq was disastrous for the economy, as well as the Afghanistan war, especially as they occurred concurrently. In general the U.S. spends FAR too much money on the military. So I'd be cutting way back on that front.

 

I would posit that comparing pre-war spending (pre-WWII) to today is a wasted exercise. We became a world power, both militarily and economically, in the aftermath of that war. So it's best to compare the situation from, at the latest, the 40s onward.

 

That's a rambling answer and probably not much of an answer.

[BigRedBuster]

 

BigRedBuster, on 23 October 2013 - 12:26 PM, said:

I'm simply asking if there is a limit to what we can spend as it pertains to GDP?

 

 

 

Certainly. And, right now, our spending/GDP ratio is acceptable.

 

Thanks for actually answering my question. Do you happen to have in mind what that limit is?

[carlfense]

Thanks for actually answering my question. Do you happen to have in mind what that limit is?

I doubt that there is any red line. Higher spending and deficits are more necessary at times (war, recessions, etc.) than others. In times of economic prosperity, the long term costs of the debt are more of a concern. It's a shifting target.

 

You? Any comments on the Reagan tangent or will Republican Jesus live to walk on water for another day?

[BigRedBuster]

 

BigRedBuster, on 23 October 2013 - 12:26 PM, said:

And, I simply referenced the economic growth that started under Reagan. Are you claiming it didn't start under him?

 

I'm not sure where you're seeing that. What conclusions do you draw from that economic growth occurring during massive increases in debt under Reagan?

 

 

Not sure how this pertains to the conversation when we are talking in terms of GDP? It appears to me from my graph that debt to GDP was fairly flat starting in the 80s.

[BigRedBuster]

 

You? Any comments on the Reagan tangent or will Republican Jesus live to walk on water for another day?

 

You've worked really hard on creating that tangent haven't you?

[carlfense]

You've worked really hard on creating that tangent haven't you?

You brought it up . . . which is probably a good thing. It'd be hard to talk about the national debt/deficit without discussing one of the driving forces.

[carlfense]

 

BigRedBuster, on 23 October 2013 - 12:26 PM, said:

And, I simply referenced the economic growth that started under Reagan. Are you claiming it didn't start under him?

 

I'm not sure where you're seeing that. What conclusions do you draw from that economic growth occurring during massive increases in debt under Reagan?

 

 

Not sure how this pertains to the conversation when we are talking in terms of GDP? It appears to me from my graph that debt to GDP was fairly flat starting in the 80s.

And it looks like it has dropped/is dropping to roughly that level again.

 

So are you saying that the deficit wasn't a problem in the 80s and isn't a problem now?

[BigRedBuster]

Obviously by looking at the graph, spending as a percent of GDP has grown over time. In the early 1900s it was below 10%. Now, it is somewhere around 35% and over time the trend is to grow(although it has leveled off some since the 1980s.

 

So, my question is:

 

Is this healthy?

Does it matter?

Is there a limit to where you would say..."WHOA....that is way too high"?

 

 

I don't think any reasonable person would argue against the theory as our population grows, so will spending as measured in dollars. However, Zoogie's post talks about it as it is measured against GDP and I agree that is a more realistic and important measure.

 

So.....does that percentage matter? If it does, at what point does it matter? If it doesn't, then why did Clinton make spending such a big issue and was actually successful at it while the economy continued the growth started during the Reagan years?

 

We all know I'm no economist, nor will I even pretend to understand budgets and business nearly as well as you, BRB. The generic answer I would give to your questions is that it does matter, and it's only unhealthy if we can't pay our bills. And we can pay those bills.

 

I think we need to curb spending, that's for sure. I think we dole out far too much money in the name of "security" to foreign countries, none of whose loyalty we're buying with that money/aid. Saudi Arabia reevaluating their relationship with the U.S. is a great example, not 20 years after we defended their northern border from Saddam's army. I think engaging in the war in Iraq was disastrous for the economy, as well as the Afghanistan war, especially as they occurred concurrently. In general the U.S. spends FAR too much money on the military. So I'd be cutting way back on that front.

 

I would posit that comparing pre-war spending (pre-WWII) to today is a wasted exercise. We became a world power, both militarily and economically, in the aftermath of that war. So it's best to compare the situation from, at the latest, the 40s onward.

 

That's a rambling answer and probably not much of an answer.

 

 

I would agree with a lot of that and thanks for sticking to the topic.

 

As we look at it short term, "as long as we can pay our bills" seems reasonable. However, if you look at it long term (let's say another 50 -75 years down the road), what would have to happen for us to not be able to pay our bills? I honestly don't have an answer to that in mind that I have learned from somewhere else. I'm interested in other's ideas.

 

To me, it makes sense that the higher we get in percent of GDP, the harder it would be to pay our bills if the economy tanks and GDP falls. I'm open to a correction on that because I'm going off of just what makes sense to me.

 

So, let's say decisions we make now, put debt to GDP at 75% 50 years from now. Hey.....we can still pay our bills. But, does that put those people living then in more risk than we are today?

[BigRedBuster]

 

BigRedBuster, on 23 October 2013 - 12:26 PM, said:

And, I simply referenced the economic growth that started under Reagan. Are you claiming it didn't start under him?

 

I'm not sure where you're seeing that. What conclusions do you draw from that economic growth occurring during massive increases in debt under Reagan?

 

 

Not sure how this pertains to the conversation when we are talking in terms of GDP? It appears to me from my graph that debt to GDP was fairly flat starting in the 80s.

And it looks like it has dropped/is dropping to roughly that level again.

 

So are you saying that the deficit wasn't a problem in the 80s and isn't a problem now?

 

 

You really are looking for an argument instead of a discussion aren't you? You were the one that said "you asked Knapp". If you haven't noticed, he and I are in a nice conversation about the subject.

[knapplc]

I would say, generally speaking, that the lower your debt is as a percentage of GDP is a good thing. But I bow to those with greater fiscal knowledge to correct that.

 

In general I'd like to see the government spend less on the military, less on foreign aid, and more on domestic needs like infrastructure, education and healthcare.

[rawhide]

 

And revamping the whole public assistance including farm subsidy's to eliminate some of the waste, fraud and corruption. Been going on far too long. Ain't nobody got time for that.

[BigRedBuster]

I would say, generally speaking, that the lower your debt is as a percentage of GDP is a good thing. But I bow to those with greater fiscal knowledge to correct that.

 

In general I'd like to see the government spend less on the military, less on foreign aid, and more on domestic needs like infrastructure, education and healthcare.

 

 

I would agree with that. Another graph I find interesting is defense spending per GDP.

 

 

Generally speaking, it appears that defense spending has decreased per GDP since around the 1950s.