Can Nobody Play this Game Correctly?
CBO:
At 9.2 percent of gross domestic product (GDP), that deficit would be slightly smaller than the shortfall of 9.9 percent of GDP ($1.4 trillion) posted in 2009. [emphasis mine]
A 7.1% decline in real GDP terms isn’t just “slightly smaller”; it’s a real improvement that is greater than any (mythical or not) “spending freeze” would produce.
Ken,
Further down in the same CBO document, this was stated:
“Those accumulating deficits will push federal debt held by the public to significantly higher levels. At the end of 2009, debt held by the public was $7.5 trillion, or 53 percent of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67 percent of GDP. With such a large increase in debt, plus an expected increase in interest rates as the economic recovery strengthens, interest payments on the debt are poised to skyrocket. CBO projects that the government’s annual spending on net interest will more than triple between 2010 and 2020 in nominal terms (from $207 billion to $723 billion) and will more than double as a share of GDP (from 1.4 percent to 3.2 percent).”
“Moreover, CBO’s baseline projections understate the budget deficits that would arise under many observers’ interpretation of current policy, as opposed to current law. In particular, the projections assume that major provisions of the tax cuts enacted in 2001, 2003, and 2009 will expire as scheduled and that temporary changes that have kept the alternative minimum tax (AMT) from affecting many more taxpayers will not be extended.”
Math is really really hard
signed:
malibu booby
That doesn’t seem to agree with this which has the ratio in 2010 at a bit under 100%. Perhaps the calcs are done differently. In any case the 2020 figures are pure guess work since we really have no idea what the GDP will be then or the debt either. I certainly would not trust projections out ten years from now. So many things can happen in 10 years. Remember that the government was in surplus when Bush too office and now it’s in the deficit-sh8t.
http://www.usgovernmentspending.com/federal_debt_chart.html
warprofittiers=warmongers
Debt held by the public is a subset of the total federal government debt. E.g., it excludes debt held by the Social Security trust fund.
So the government can forget about paying off the debt to SS? Gee, that makes it all so easy now. Our debt should cause no worries in the least.
Movie Guy,
Now is not the time to be worrying about the deficit. It ought to be a backburner issue right now. There is no question that we will have to address the deficit and the debt held by the public. But that is at least a medium range problem if we’re very lucky and a long range problem if we’re not lucky. The problem is that Obama’s stimulus was just way too small. It should have been much closer to $1.3T instead of $787B. And even at that, the actual stimulus was only a little over $700B because the difference was an AMT fix, which cannot really be counted as a stimulus. Obama’s problem is that he has to pursue two contradictory policies. He has to pursue a short run policy of increasing stimulus while at the same time he has to pursue a longer run policy of drawing down deficits. The likely gridlock in Washington, fueled by Democratic cowardice and Republican stupidity (along with a whiff of treason) means we’re probably looking at the worst of all possible worlds. As Krugman says, we need to start imagining the US as a banana republic.
And if people actually believe that the govt will cut SS benefits, then this should have the unwanted effect of increasing private savings (assuming all of the usual Euler conditions, blah, blah, blah). And that will depress economic activity and further increase the deficit. It’s completely insane.
slugs,
You don’t get it. The 2010 midterm elections will be controlled by independent voters. If they’re concerned about deficit growth, then the Democratic Party has to show some concern, however small. Otherwise, they’re out on the street. DOA.
The debt issue will stick in the minds of voters. That’s not going away. These are the numbers that matter – total debt, publicly held debt, and interest rates. Voters aren’t going to look at percentage of GDP.
You appear to politically clueless.
And, no, I don’t care what you think of Americans or voters in general. You’re a political rookie on what is unfolding. Try to catch up.
slugs,
You don’t get it. The 2010 midterm elections will be controlled by independent voters. If they’re concerned about deficit growth, then the Democratic Party has to show some concern, however small. Otherwise, they’re out on the street. DOA.
The debt issue will stick in the minds of voters. That’s not going away. These are the numbers that matter – total debt, publicly held debt, and interest rates. Voters aren’t going to look at percentage of GDP.
You appear to politically clueless.
And, no, I don’t care what you think of Americans or voters in general. You’re acting like a political rookie on what is unfolding. Try to catch up.
slugs,
You don’t get it. The 2010 midterm elections will be controlled by independent voters. If they’re concerned about deficit growth, then the Democratic Party has to show some concern, however small. Otherwise, they’re out on the street in large numbers. DOA.
The debt issue will stick in the minds of voters. That’s not going away. These are the numbers that matter – total debt, publicly held debt, and interest rates. Voters aren’t going to look at percentage of GDP. Most independent voters aren’t going to whine about the stimulus package.
You appear to politically clueless. Try to catch up.
And, no, I don’t care what you think of Americans or voters in general.
Movie Guy,
As you know, voters are clueless. Always have been and always will be.
Yes, I know that Team Obama is just trying to get out in front of the public. They are in political panic mode and they think that tough talk about the debt and deficit is what the public wants to hear. And maybe voters are that stupid because politicians continue to tell them what the lowest common denominator of the electorate keeps telling them. The voters will forget about the deficit if unemployment comes down. What Obama is doing now is essentially conceding that his stimulus package was not big enough, Krugman was right afterall, and it’s too late to affect unemployment before the Nov 2010 elections. So now Obama is going to hope that a little fake economics will calm teabagger rantings. It won’t. And the worse part is that this deficit talk will only make it harder for him down the line when he inevitably has to push through another, bigger stimulus package.
Slugs,
You don’t understand the thinking of independent voters.
Movie Guy,
You’re right. I don’t understand independent voters. Then again, I don’t think they understand themselves.
2slugs:
Exactly, They believe what they hear regardless if it is erroneously or not. Any Pew Report, Gallup poll, etc, is goiung to reflect the soylent green they have been fed. As Oliver Wight said, “Gabage in, garbage out” when it came to production planning.
Slugs,
Well, you have admitted that you don’t understand independent voters. That’s a start.
Independent voters understand very well why they are not affiliated with either major political party. They are not bound to a blind ideology that pretends to have all of the answers regardless of the issue concerned.
Run,
You’re clueless beyond belief. You’re trying to lump all independent voters in Republicans. You have no idea how stupid that is.
Like Slugs, you don’t begin to understand independent voters. It’s a good thing you’re not running the Democratic Party. You would get your butt kicked worse than it already will be during the 2010 midterms.
The only thing working to minimize the 2010 midterm election damage at this point is President Obama’s State of the Union address. His speech was on the money. Undoubtedly, arrogant Democrats ranting on blogs, in columns, and elsewhere will undermine the effectiveness of his message with independent voters. Typical stupidity.
Slugs,
Well, you have admitted that you don’t understand independent voters. That’s a start.
Independent voters understand very well why they are not affiliated with either major political party. They are not bound to a blind ideology that pretends to have all of the answers regardless of the issue concerned.
Run,
You’re clueless beyond belief. You’re trying to lump all independent voters in with Republicans. You have no idea how stupid that is.
Like Slugs, you don’t begin to understand independent voters. It’s a good thing you’re not running the Democratic Party. You would get your butt kicked worse than it already will be during the 2010 midterms.
The only thing working to minimize the 2010 midterm election damage at this point is President Obama’s State of the Union address. His speech was on the money. Undoubtedly, arrogant Democrats ranting on blogs, in columns, and elsewhere will undermine the effectiveness of his message with independent voters. Typical stupidity.
MG,
This is at least the second time in two days that you’ve insisted that somebody is wrong about the substance of a policy because they “don’t get” the politics of the policy. That’s a pretty silly position to take. Political courage is understanding that the two are different and coming down on the side of the right policy, regardless of politics. It’s all well and good to insist on talking about politics, but is simply wrong to claim the other guy “doesn’t get” the politics when the other guy was talking about correct policy.