Deficit Hawks Down: The Misconstrued “Facts” Behind Their Hype
Reposted from New Deal 2.0 with permission from author.
Deficit Hawks Down: The Misconstrued “Facts” Behind Their Hype
by James K. Galbraith
Economist James K. Galbraith attends a Pete Peterson-funded road show.
The Fiscal Solutions Tour is the latest Peter G. Peterson Foundation effort to rouse the public against deficits and the national debt — and in particular (though they manage to avoid saying so) to win support for measures that would impose drastic cuts on Social Security and Medicare. It features Robert Bixby of the Concord Coalition, former Comptroller General David Walker and the veteran economist Alice Rivlin, whose recent distinctions include serving on the Bowles-Simpson commission. They came to Austin on February 9 and (partly because Rivlin is an old friend) I went.
Mr. Bixby began by describing the public debt as “the defining issue of our time.” It is, he said, a question of “how big a debt we can have and what can we afford?” He did not explain why this is so. He did not, for instance, attempt to compare the debt to the financial crisis, to joblessness or foreclosures, nor to energy or climate change. Oddly none of those issues were actually mentioned by anyone, all evening long.
A notable feature of Bixby’s presentation were his charts. One of them showed clearly how the public deficit soared at the precise moment that the financial crisis struck in late 2008. The chart also shows how the Clinton surpluses had started to disappear in the recession of 2000. But Mr. Bixby seemed not to have noticed either event. Flashing this chart, he merely commented that “Congress took care” of the budget surplus. Still, the charts did show the facts — and in this respect they were the intellectual highpoint of the occasion.
A David Walker speech is always worth listening to with care, for Mr. Walker is a reliable and thorough enumerator of popular deficit-scare themes. Three of these in particular caught my attention on Wednesday.
To my surprise, Walker began on a disarming note: he acknowledged that the level of our national debt is not actually high. In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt, commonly seen in press reports and in comparisons with other countries. The relevant number is today below where it was in the mid-1950s, and comparable to the early 1990s.
But Mr. Walker countered that fact with another, which I’d never heard mentioned before: in real terms he said — that is, after adjusting for inflation — per capita national debt is now twice what it was back then.
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The problem is that real per capita national debt is a concept with no economic meaning or importance. (No government agency reports it, either.) Even in the private sector, debt levels matter only in relation to income and wealth: richer people can (and do) take on more debt. Real per capita national income is well over three times higher today than it was in 1946 — so how could it possibly matter that the “real per capita national debt” is twice as high?
Next, Mr. Walker made a comparison between the United States and Greece, with the implication being that this country might, some day soon, face that country’s interest costs. But of course this is nonsense. Greece is a small nation that has to borrow in a currency it cannot control. The United States is a large nation that pays up in a money it can print. There is no chance the markets will mistake the US for Greece, and of course they have not done so.
Finally, Mr. Walker warned that “foreign lenders… can’t dump their debt but can curb their appetite” for new US Treasury bonds. This was an oblique reference to the yellow peril. The idea, when you think about it, is that the Chinese central bank will acquire dollars — which it does when China runs an export surplus — and then fail to convert them into Treasury bonds, thereby choosing, voluntarily, to hold dollars in cash, which earns no interest, instead of as Treasury bills, which do. Mr. Walker did not try to explain why this would appeal to the Chinese.
Walker closed by calling for action tied to an increase in the debt ceiling; specifically for a hard cap on the debt-to-GDP ratio with “enforcement mechanisms,” which could include pro rata cuts in Social Security and Medicare benefits and tax surcharges. He did not specify whether the cap should apply to gross federal debt or only to that part of the debt held by the public (a number which the Federal Reserve can change, any time it wants, by buying or selling public debt). When pressed, in the question period, he would not even say what he thought the cap should be.
I waited for Ms. Rivlin to add something sensible. But she did not. Apart from some platitudes — she favors “serious tax reform” and “restructuring Medicare” — her interesting contribution was to restate Mr. Walker’s comment about “foreign lenders,” who might say “we’re not going to lend you any more money.” That this would amount to saying “we’re not going to sell you any more goods” seems — from a question-and-answer and brief exchange afterward — genuinely not to have crossed her mind.
The Fiscal Solutions Tour comes with a nice brochure, and even (in my case) with a flash drive containing Mr. Bixby’s powerpoints. But does Mr. Peterson think he’s getting his money’s worth? The President, in his State of the Union, mostly ignored him. The Bowles-Simpson effort (which he paid for in part) and the closely allied Rivlin-Domenici plan are fading from view. And as the House Republicans forge their own course, demanding radical spending cuts right now — for political rather than economic reasons, which they don’t even bother to explain — the tired and shabby arguments of these old deficit-worriers hardly seem connected, any more, to the battles at hand.
James K. Galbraith is a Vice President of Americans for Democratic Action. He is General Editor of “Galbraith: The Affluent Society and Other Writings, 1952-1967,” just published by Library of America. He teaches at the University of Texas at Austin.
the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt,
Funny how Walker excludes the $2.5T Special Treasuries from the debt. I thought it was a real debt that had to be paid.
the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt,
Funny how Walker excludes the $2.5T Special Treasuries from the debt. I thought it was a real debt that had to be paid.
Ok skip the hype. Lets go straight to the bottome line:
The budget for FY2008 was $2.9 trillion vs. Obama’s FY2012 $3.7 trillion.
The FY 2011 budget was $3.5 trillion – no cuts there.
FY 2012 budget = $3.7 Trillion, actual projected intake $2.2 T. For a whopping $1.5 Trillion PLANNED deficit.
Even if we went back to 2008 budget we would balance it.
And, according to Obama, not once in the next 10 years will the deficit not increase. His plan is to continually add on more to the deficit without end.
On the bright side, the SS $0.045T budget line item for redemption of SS treasuries is basically in-the-noise. coberly you should be happy!
But Mr. Galbraith doesn’t see a problem???? Reality can be a bitch when it comes knocking.
Islam wil change
It is always a pleasurable and enlightening experience to read what Jamie Galbraith has to say. It is very unfortunate that he is not more frequently seen and heard on national TV. One of the evening MSNBC shows would be most appropriate. There has to be some better effort made to publicize the information that Galbraith explains so clearly.
BTW, the vapid emptiness of Walker, Bixby and Rivlin should not be over looked, but should not be sneered at as just so much ignorance. We live in a society of sheep who are easily misled by “experts” and whose elected representatives are funded by others with agendas that are often distinctly different from their voter constituents.
Buff, by your tone I interpret that you are surprised, shocked or disapointed, by the reality versus the rhetoric, or are you just getting angry? Just remember there is a $.11T cut in there some where. Lessee, 2010 Obama budget was $3.552 trillion (estimated), and as you pointed out the FY 2012 budget = $3.7 Trillion (also estimated). ($3.7 minus $3.552 = +$.148t) Nope not there.
We told you guys this week was going to be interesting. And Galbraith wants us to believe we are wrong on emphasizing the debt/budget/deficit as a brewing problem?
Two previous threads, the Open Thread, Feb. 11 and Bruce’s Social Security and Pie thread, contain over 335 comments having mostly to do with the deficit. Buff, CoRev and Sammy have provided their point of view repeatedly and have rejected as inadequate virtually every one elses’ replys to their comments. Is that trend of repetition going to be allowed tocontinue? Neither of them is a professional economist. Galbraith has made his points briefly and adequately. I’d be happy to read critiques of his ppoints by a trained professional economist or someone with at least as good a fund of knowledge, but I, for one, am getting tired of the prepetitious bull shit being hung out on this web site in such a way as to interphere with reading what knowledgable people have to say. No, simply quoting the opinions of others is not adequate.
Jack,
Exactly where did I quote opinions of others? Do you disagree with any of my numbers?
Or do you agree with VP Cheney that “deficits don’t matter.” ? It sure looks like Mr. Galbraith does.
And BTW, please send me a list of professional economists who correctly predicted the dot-com bubble in 1997 or before? Or the housng bubble prior to 2003? The information was there in hindsight, so why did not these paradigms of professionalism see the coming economic troubles?
Islam will change
Well, Buff, you somehow overlooked the 2009 budget, which belonged to Bush, let’s remember.
You make the big jump look like it belongs to Obama. Don’t cherry pick the the data set, and maybe reread Mike’s rules to write by.
2009:
$3.5177 trillion budget, with a $1.4127 trillion deficit.
No so vastly different from 2012, is it?
Was there a great hue and cry from you guys back then? I don’t remember any.
Let’s look at reciepts
2007 $2568 Billions
2008 $2524
2009 $2105 (ooops – recession)
2010 $2165 (est)
Rcpts as % of GDP
Clinton avg 19.28%
2007 18.5
2008 17.5
2009 14.8
2009 GDP was 14.2 trillion. Capturing an additional 4% of that would have brought in another $56 billion.
and deficits
2007 $160.7 billions
2008 $458.6
2009 $1412.7
2010 $1556 (est)
So a reciept short fall of $300 to 400 million accounts for about 20 to 30% of recent annual deficits.
Policy solutions are obvious.
Repeal the Bush tax cuts
Stop fighting economically ruinous wars and save trillions
Stop being the world’s policeman and save trillions
Stimulate the economy to bring back growth in the tax base.
Unless you are willing to give serious consideration to these items, you’re not being serious at all.
Sources
http://www.presidency.ucsb.edu/data/budget.php
http://www.cbo.gov/budget/data/historical.pdf
Cheers!
JzB
Jazzbumpa,
Does the 2009 budget number include the funding for the 2 Wars? Are we still not counting the cost going forward?
His teaching position at UT makes me proud my tax dollars support that institution.
Very tough to publisize, becuase the message is not marketable. Most regualr citizens compare household budgets to the government budget. With household budgets as the metric, too much debt is bad, and it is very difficult to educate the masses otherwise – impossible really. When people hear Trillions in deficits the education job is even more difficult.
Either way looks like 3.5 trillion is the new budget baseline.
Here’s Krugman on the expense side of the ledger:
http://krugman.blogs.nytimes.com/2011/02/14/the-great-abdication/
Cheers!
JzB
Jazz, I think you forgot that the 09 budget included TARP, putting it higher than 08. You also imply that the stimulus Bill ~$.8T was Bush’s in the 09 budget.
Those two programs account for a large portion of the deficits for those budget years. One will cost considerably less than originally estimated when passed, and the other is still being paid off.
BTW, this list:
“Policy solutions are obvious.
Repeal the Bush tax cuts
Stop fighting economically ruinous wars and save trillions
Stop being the world’s policeman and save trillions
Stimulate the economy to bring back growth in the tax base.”
Should be taken up with Obama and his staff. There is little empirical evidence that Obama’s policies have actually addressed your list.
I’m assuming the bulk of your data is from the CBO site.
Buff
Admittedly I was lumping you in with the other two and that may not be totally fair. But life’s a bitch in that regard. You end up often being judged by the company you keep. Or, as in this case, by the ideologies that you share.
JzB,
Thanks for adding more data. I have been railing against the defict for years on AB. Bush spent like a drunken sailor, Obama is the drunken sailor on crack.
BTW, The 2009 budget is what came out of the Dem controled house (and Dem controlled Senate). It will be interesting to see how the Reps will handle the current one. My bet fold like a cheap suit. The last totally R budget was passed for 2007.
I did make a big jump, and I don’t blame it on Obama – I blame it on Bush passing the bloated Dem budget in 2008 instead of vetoing it. As for you policy ideas:
Policy solutions are obvious.
1) Repeal the Bush tax cuts (Obama had his chance as did the Dems who just had to do NOTHING and that would have happened. Now its the Obama tax cuts. R’s just as bad)
2) Stop fighting economically ruinous wars and save trillions (This has been an overwelmingly bi-partisan stance since 9/11 at every vote, continueing without pause with Obama. Anti-war folks abandoned the field upon election of a Dem)
3) Stop being the world’s policeman and save trillions (See #2)
4) Stimulate the economy to bring back growth in the tax base. (Obama stimulous has been a joke and expensive. Mostly bailed out Dem constiuencies (Gov employees) and delayed the day of reckoning for state govs. Housing is still a mess and we are are stagnating around 9-10% unemployment with an ever increasing amount of people no longer counted as unemployed)
Bottom line – any idea that the Dem party or Obama specifically are fiscally responsible has been blown out of the water these last two years. Worse, what little R deficit hawks seem to have been run-over during the Bush year (though they were slowly closing the gap until the housing bubble blew up in late 2008.) Now we seem to be stuck with overwelming deficits as far as the eye can see (or CBO predict).
And Obama and the current Dems are far worse than we saw during the Bush years. ANd its getting worse.
Islam will change
My understanding is that Obama dd put both wars on budget–something Dumbya never did. I doubt that Galbraith does not think deficits matter. What I take away is that it is all a partisan game. Deficits matter when one side or the other say they matter regardless of what the economics happen to be at the moment. Unfortunately, this stands in the way of sound economic policy.
Jack, there is a take away from the past threads and this repeat of Galbraith’s article. It is that one group considers: “Mr. Bixby began by describing the public debt as “the defining issue of our time.” It is, he said, a question of “how big a debt we can have and what can we afford?””
And now after the the many comments, it is clear the other group disagrees with the serionsness of the debt/deficit issue.
Galbraith, even though he extensively quotes from the tour members, he does not refute nor correct any of their presentation points. Instead, using ridicule, he makes no point at all. And you think that is: “It is always a pleasurable and enlightening experience…”
Your grasp of issues is seriously … well you know. So, let me make this perfectly clear we have a perception in the electorate that the debt/deficit is a serious problem. Yours and Galbraith’s kind of commentary does not help dispel that fear.
Stock Bubble, Robert Shiller, Robert Prechter.
Housing Bubble, Krugman, though perhaps not as early as ’03.
Cheers!
JzB
CoRev –
Two refs because one ended at ’07. They are in agreement.
You are right about B. Hoover Obama.
Tarp absolutey belongs to Bush. Is is a CY 2008 program. The stimulus package – something like 40% tax cuts – is Obama’s.
Check the Krugman link I posted somewhere in this thread for data on spending.
Cheers!
JzB
Buff –
Bottom line – any idea that the Dem party or Obama specifically are fiscally responsible has been blown out of the water these last two years.
That is correct. There is no longer a difference.
And Obama and the current Dems are far worse than we saw during the Bush years.
That is arguing by assertion.
JzB
I think Terry is right. Bush tried to conduct a stealth war. That’s why only about 3% of American families are directly effected by both put together. Mine is one of them. I’ve lost count of how many times my step son has been deplowed to the middle east – at least 6.
Obama is at least this tiny bit more honest than Bush.
JzB
Bush spent like a drunken sailor, Obama is the drunken sailor on crack.
Actually there is almost no difference in spending growth across the administrations. Again, see the Kruman post I linked.
JzB
Jazz, I read it. He’s getting disappointed as are others. I disagree with his analysis of the stimulus. If anything, it has shown that the Keynesian school may very well be wrong.
Jazz,
Just came back becuase I forgot something. Basically I agree with your four points and would add that the growth of the central Federal government needs to be reigned in also.
Secondly TARP was a bi-partisan excercise, supported by Bush, Obama and McCain plus congress. Looked like a panic-attack.
As for the bubbles, Shiller may have said something, but no one was listening, same with Precther and Krugman respectively (and I did not hear of anyone until 2004 and then on the just starting bubble-blogs). Defintely no one in either administration or congress was listening at all. I will admit no one wanted to rock the boat during either bubble but this shows just how useless econmics is to help predict proper response or policy.
Like I’ve said economics is closer to astrology than astronomy…
As for my last two assertions, especially this one, “Bush spent like a drunken sailor, Obama is the drunken sailor on crack.” I will post my now very dated, but still appropriate graph – not updated for the latest deficit monstrocity! But clearly backs my assertions…
You guys do know that every dollar spent on the wars was accounted for in the budgets- right? They just were not part of the annual DoD budgets, but as supplementals.
They were supported overwelmingly and bi-partisanly (once 93-3 in the senate) every year when they came up for a vote. Support for the war never waivered in the least, not once. I actually like the way they did the budgeting since it made every congress-critter go on record yearly to support the war or not – and they overwelmingly supported it.
And we paid for every penny spent.
I only went over once right after 9/11 and have since retired.
Islam will chnage
Also this is the Krugman Chart to which Jack has been refering.
Jeez, I wish we could drop the “off-budget” BS. The wars’ spending was on budget, included in the totals and under separate appropriations. Choosing to address the bright lights of special/emergency spending has nothing to do with hiding or not tracking their costs.
As we are about to learn the “Budget” has little meaning with the exception of being the framework with which to start negotiations with Congress.
CoRev –
No. the Keynesian approach has not been tried.
JzB
Here are a couple relevant posts from Johnathan Bernstein.
http://plainblogaboutpolitics.blogspot.com/2011/02/yes-presidents-budget-matters.html
http://plainblogaboutpolitics.blogspot.com/2011/02/plea-for-plain-language-on-deficits.html
JzB
I don’t recall using the words, “off budget” in this thread.
Your use of “quotes” implies that I did. Tsk. I was talking about a stealth approach to war, whch is admittedly off topic. Mea culpa.
Gotta run. Off for the day.
JzB
I think you’re confusing the attribution. I haven’t referenced Krugman at any time in recent memory. Not that I don’t think that he would provide valid data. I’m just not the referer that you are refering to.
The only reference to an off-budget item that I can recall is that Social Security is not a part of the general budget and Medicare is only partially on that budget. I think that the interest paid to the Trust Fund is part of the general budget expenses, but retirement of the actual securities would be on budget only if additional new debt were issued to cover the cost.
well
it seems to me that Buff et al are paralyzed by “the debt.” they don’t seem to have any concept that spending might be the right thing to do at the time. sort of like borrowing to start a business or buy a house or even buy a car so you can get to work.
i don’t say that that IS the case now, or that it is being handled very well, but I see no evidence that Buff even considers it a possible case.
America is not going broke. A tax increase that we could easily afford would erase the debt in very short order. America is morally bankrupt. People don’t want to pay taxes, but they want to buy new nuclear submarines to protect them from Osama.
Meanwhile, Buff and CoRev are yelling about the deficit, swilling a six pack and saying the kids are going to have to stop drinking milk because the new car payments cost so much.
Sorry Jack,
I’ll try to be more aware if I’m being repetitious.
Coberly,
Ibid.
okay buff
skip the arguments lets get to Buff’s obsession right away. no. don’t stop to look at reasons why Buff Mt. might actually be a mole hill.
actually the kids bought their own milk from the money they earned on their paper routes, but dad says, hey, it’s all in the family. i brought you in to the world i can take you out…
and this is the morality that CoRev, Sammy, MG, and Buff are endorsing.
Sorry, Jack it was Jazz.
The 2012 budget cuts defense by $78B out of an unknown baseline. I will study it tonight, if I can find the tables.
The wars in 2011 cost $180B in ‘supplements’, so a reduction in DoD in 2012 is reducing the wars; but spending more on useless weapons for the socialized work programs minitruth calls national security spending.
And that is growing about 1% beyond inflation at the cost by reducing sustainment spending on the expensive useless stuff we already have that can be mothballed in place because there is no need for the weapons, just the jobs and profits, matter.
To buy new stuff they are also raising what buff and I pay for TRICARE (health insurance for dependents and retirees) and are cutting a few other people things in the military personnel part of the national security rip off.
Outside of the 5 sided wind tunnel one might remember the saying Napolean had: the moral is to the material as 3 is to 1. In the pentagon the material is to the soldier a 10 is to 1.
ilsm will not change
The US war machine will still spend 20 cents of every dollar expended by Uncle Sam.
While advanced nations spend less between 7% (UK) and 3.4% (Germany, Europe’s banker).
The priorities are war profits versus people.
Obama is not helping here!!
jazz,
The US is not world policeman, it is running an empire.
One whose military enforces nothing, and brings no treasure home.
An empire which is plundering the fatherland.
Policeman, is as correct as calling the owners of the war machine defense.
Goes back to Henry Luce and his writings when the Japanese empire wanted to push the US one aside in Asia.
Buff,
If the wars are so popular then people would really love paying taxes for them.
Wars are supported by everyone but the taxpayer……………………. Perpetual war is so popular among the war profiteers and the ones reaping the interest on the t bills for borrowed wars, perpetual wars funded by taxes would not be popular wars, or maybe so if they were WW II.
If there were a pay go to pay for the war machine it would equal both the OASDI taken from everyone’s pay check and the matching employer payment, that being around 12% of earned income less than 106K/annum.
Buff, the reason the congress spent the money was the pork and the money for the pork was borrowed rather than taxed.
Create a paygo for the war profiteers and they would need more than fearmongering to keep pillaging the US.
Jazxz, I didn’t say TARP wasn’t Bush’s, but being passed in Oct 08 makes it a FY09 budget item. I noticed the shift to CY. Why?
Jazz, I didn’t say TARP wasn’t Bush’s, but being passed in Oct 08 makes it a FY09 budget item. I noticed the shift to CY. Why?
Jazz, no one used the term “off budget” the used the opposite term and impled it:
“…Are we still not counting the cost going forward?
Today, 2:18:52 PM – Flag – Like – Reply – Delete – Edit – Moderate Terry
My understanding is that Obama dd put both wars on budget–something Dumbya never did….”
Then you came in with a stealth war comment. The sum of the comments tell an “off budget” story.
CoRev,
If these issues of debt (which we owe to either the foreigners who have too many dollars, rich who should be paying higher taxes or SSTF) and deficits, because the war mongers get their take with no one taxed for their pillaging, were so serious how come there are no serious contributors to a solution?
A tax increase here and there, with one less trillion dollar war there and a few trillion less in war over investments.
Pretty soon the serious issues would be solved.
But serious people are only serious about pillaging the SS trust fund and keeping the perpetual wars plundering the US. The problemm is serious people are not concerned about their country, unless it enriches serious people at the expense of the serf.
Be specific how do you disagree?
What are your assumptions against his (Krugman’s) arguments?
Got facts!
“The president proposes and the congress disposes……………..”
ilsm
You;re right.
JzB
Galbraith says:
“The United States is a large nation that pays up in a money it can print. There is no chance the markets will mistake the US for Greece.”
How stupid is this. The US has no problem as it can simply print money to solve problems. And you folks are listening to this drivel? Shame on you.
Within the next two years this theory will be tested. The US is printing money today at the rate of $100b a month via QE. My bet is that is will result in a blowup bigger than what we saw in 08.
While it is true that the US can print money and Greece can’t we will find out that the cost of printing money will make us poorer than Greece. When that happens guys like Mr. G are going to look very silly indeed.
And the morality of coberly, Jack, Mr Galbraith and ex VP Dick Cheney are endorsing:
“Defictis don’t matter!”
We can just print all the money we need. Do you realy beleive that and expect to be taken seriously?
Islam will change
From the Wall Street Journal, best line I’ve read lately for its humor (via Instapundit)
WALL STREET JOURNAL: “This was supposed to be the moment we were all waiting for. After three years of historic deficits that have added almost $4.5 trillion to the national debt, President Obama was finally going to get serious about fiscal discipline. Instead, what landed on Congress’s doorstep on Monday was a White House budget that increases deficits above the spending baseline for the next two years. Hosni Mubarak was more in touch with reality last Thursday night.”
But remember deficits don’t matter!! We can just print up all the money we need!
Islam will change
No Buff, not I, nor Coberly ever said that the Federal deficit does not matter, though I’ll allow that Jamie Galbraith knows a hell of a lot more than I’ll ever know about the issue. What I and Coberly have consistently said is that Social Security is not the conntributor to the deficit. I have added that the SS debasers seem to have their eyes on FICA revenues as a potential source of deficit reduction. At very least they want to cut SS benefits in order to reduce the program’s reliance on its Trust Fund to pay benefits. You know that the Trust Fund has been funded by FICA revenues over many years. You know that those revenues have been borrowed by the Treasury as required by law, and that that same law makes those revenues the source of supplementation of the current and future FICA revenues relative to benefits.
As I’ve also said all along, if the Trust Fund Special Treasuries are subject, by Congressional fiat, to cancelation without repayment, or as you seem to have suggested, permanent sequestration and growth through continuously increasing the rate of the FICA payroll tax, then what reliance does any holder of Treasury debt have to reassure them that their own Treasury securities are not equally subject to legislative cancelation. In effect the cancelation of debt is tantamount to bankruptcy. In that case, all debt holders get in line.
The budget deficit was not created by the SS program and no amount of tinkering with that program is going to resolve the deficit problem, If it is indeed a problem. Assumiing that it is: let’s get the hell out of the middle east, let Isreal pay for its own hegemony, roll the tax rates back to the levels of the ’50s, ’60s or 70s and close the loopholes of those days, put unearned income on an equal rate plain as is earned income, ask the energy corporations to pay full value for the assets they extract from federal lands, ask timber companies to do the same, start collecting corporate taxes from corporate operations that take place in the US (note I didn’t say raise the rate, a useless exercise if the scam of corporate income transfer can be continued). There are many good starts to increasing revenue and reducing expenses. That’s the way the budget should be balanced. Stop being a shill for corporate America and their absurdly wealthy chieftans. Let them show their patriotism by starting to support their country.
These last two comments are typical of misconstruing facts. Jack insists: “What I and Coberly have consistently said is that Social Security is not the conntributor to the deficit.” Which via the many hundereds of comments over the past few weeks has been shown to them to be an inaccurate statement.
CBO, Kansas Fed., OMB, the President, the president’s Deficit Commission, hundreds of congress critters, liberal and conservative pundits, sevaral AB commenters, and a large portion of the voters know otherwise. But, Jack and Dale still insist they, all of them, are wrong, lying, idiots, ignorant, etc.
But the amazing part of Jack’s, and to a large extent Dale’s commenting here is an argument going on in their own heads and not in the real world.
Entitlements/mandatory spending is on the table for discussion over budget cuts. SS is part of the stable of entitlements, so due only to association it gets lumped into the discussions. But no one has proposed eliminating the SSTF Treasuries, has their eyes on FICA revenues to reduce the deficit anymore than they already are See the CBO Report), etc. Tinkering with SS benefits, usually very long range, is being discussed as an alternative to raising SS revenues.
No one is suggesting old folks will be eating dog/cat food because of these cuts, except for….
Jack, Dale I for one do not intend to continuing to argue points only in your own minds versus real world issues.
So Buff, where do we start the cutting, or from where do we seek new and additional tax revenue. Any good CEO will tell you that if you’re going to identify a problem you need to identify a possible solution. All you guys have been doing is saying that the deficit needs reduction. OK!!! We get it. The US government, (that includes the Executive branch and the Congress, including Republicans), is spending too much and/or taxing too little. So what are your specific suggestions to begin to resolve that problem? And don’t be finking out with vague innuendos about “entitlements,” on or off budget issues, the sanctity of the military budget, the supplements, etc, etc. Just spell it out. Where are the excess and unnecessary costs, and where is the potential additional funding? If you can come up with a FOX Fair & Balanced solution you may qualify for the Svengali Achievement Medal. I can’t wait to read your suggestions. Note that I have already made my own suggestions. Maybe you’d rather critique those, which appear above.
sammy
hate to say it, but i think you are right about this. you could help by giving us a citation to a good source for the breakdown of what the US owes and who it owes it to.
some prior experience with paying down large debts might be useful to hear about also.
but lets not give in to hysteria every time we hear “Trillions…”
no buff
can you keep repeating the same charge, nine times refuted, and be taken seriously?
for goddam’s sake, pay attention to the answers you get. write them down so you don’t keep saying the same damn thing no matter how many times you have been told:
we do take the deficit seriously. But hysterical running around and confusing yourself to death about the cause of the deficits doesn’t help. We are trying to get clear about some facts, which you don’t seem to want to be clear about.
After all, when the sky is falling and we’re all going to die is no time to think about what we are doing.
Jack said: “Note that I have already made my own suggestions. Maybe you’d rather critique those, which appear above.” Where?
CoRev
is at it again. lying and obfuscating.
the argument is not going on in or over our heads. we are telling you the argument is dishonest. that’s why we are arguing against it. the only AB commenters who agree with you are you and sammy and MG and buff… sort of. and alll of them have at one time or another agreed with me. but you want to come back in and smash all distinctions so you can say “the congress can cut Social Security” and we are then supposed to roll over and say “well, then, i guess there is nothing we can do but let them”. even though the cuts are based on lies.
Social Security does not contribute one dime to the deficits. And by current law never can.
Of course congress can change the law. that’s what we are arguing against.
CoRev keeps lying about not only the facts, but about his own position.
What’s on your mind…
Krasting
if Galbraith had said what you think he said, he could end up looking silly. But I think all he said was the the United Sates of America is not Greece and the dynamics of our debt are going to be different from the dynamics of the Greek debt.
What does the bond market say TODAY about the US debt. I heard they were still buying Treasuries. Or are you saying the bond traders can’t look ahead, like you can, and see that they will all become as worthless as a Continental?
Just a few comments up. Look for: Today, 10:08:16 AM–
As I have said: I do not intend to address arguments that are not real world. After you said: “What I and Coberly have consistently said is that Social Security is not the conntributor to the deficit.” I stopped reading as it was going doen the road of another rant, but I did respond to that comment.
If you want to add some specificity to your deficit reduction proposal we can discuss, otherwise it is too general.
I do find this comment interesting. “Just spell it out. Where are the excess and unnecessary costs, and where is the potential additional funding?” No one has made that claim. Moreover, those that do are completely unaware of or ignore the politics associated with cutting the budget and raising revenue.
Jack,
I’ll take a wack. Exclude SS from the cuts (its self-supporting) and off the table.
The rest: Eliminate the TSA. Eliminate the Dept of Education, Eliminate the Bureau of Indian Affairs (all reservation revert to their respective states and lose soveriegnty), Close all US bases except Rhienmain and Naples in Europe and remove all our troops. Same with NE Asia. Close all US bases/outposts south of GITMO in the America’s. Close all US bases/outposts in Africa except the Somali/Eithiopiia area. End all foriegn aid except disaster relief. Rebase all US Navy ships to the US/US territories. Fold all internal security organizations into the FBI. End all federal incarceration of non-violent drug felons. Everyone employed by the Federal government that is over 65 and retirement eligible are immediately retired – excepting political appointees. Everything left, including DoD, takes an immediate 10% budget cut from what they got in 2008. Let their respective managers figure out exactly where to cut (that would be the executive branch). This includes Medicare and Medicaid.
Two other items: Immediately revoke the Obama/Bush budget cuts that Obama got extended.
Increase the IRS enforcement arm’s budget by 10% from whatever its highest level was for the past decade.
Probably have enough savings right here to cut taxes for middle class and up the ETIC, plus pump billions into upgrading our current infastructure – especially the electrical, frieght rail, and road systems.
So what’s you plan?
But we don’t have a King or dictator and I don’t see any politican willing to sacrifice himself making the populance take their medicine. Obama has shown miniscule leadership so far – makes Bush Jr look good in that respect – and I don’t see anyone in Congress planning on stepping up either.
But right now we have revenues of $2.2 Trillion and then borrowed another $1.5 Trillion.
Is there anyone willing to stand up and say that’s sustainable?
And yet your laser focus is on SS and the chance it may require $45B this year in funds from the general fund. Talk about worrying about a blade of grass while the forest burns down…
Islam will change
Jack,
I’ll take a wack at the challenge. First exempt SS from the below since its self supporting. Off the table
For the rest: Eliminate the TSA, Eliminate the Dept of Education, Same with HUD and Energy (fold them into the Dept of the Interior and DoD as appropriate, get rid of all duplicate staff and facilities). Combine all Federal internal security functions into the FBI (ATF, Dept of Homeland Security, etc). Close the Dept of Indian Affairs (reservations return to their respective states and lose sovereignty). Eliminate all redundant personnel and facilities. Retire all over 65 retirement eligible Fed Government employees except political appointee positions/elected positions/Judges. Except for Naples and Rhienmain close all US bases in Europe and bring all those troops home. Cut all NATO staff by 90% and hand over leadership to the EU. Repeat the process in NE Asia but saving nothing. Close all bases/Outposts in Africa. Close all bases/outpost South of GITMO in the America’s. Port all US Navy Ships in the US/US territories except the 5th Fleet. Cut all foreign aid except disaster relief. Release all Federal non-violent drug offenders and reduce fed prison system to reflect.
For everything else. Immediate 5% cut in the budget based on what they got in 2008. Includes the EVERYTHING, DoD, Medicare, Medicaid. Executive Branch provides the leadership and apportions the cuts.
Two other items:
1) Immediately revoke the Obama Tax cuts passed in late 2010.
2) Increase the IRS enforcement division by 10% over its highest baseline. Automatic audit of all filers with over $10M in income.
This should not only balance the budget but leave some room for increasing the EITC and some middle class tax relief, plus spend some money on electrical, freight rail, and road infrastructure.
So what’s your plan other than wait and hope?
But the US doesn’t have a king or dictator and there is no political will from anyone to actually make us take our medicine. Obama lacks the leadership chops to do anything; his laughable budget makes the case. So this is just another pipe dream at 3 am…
Reality is we took in $2.2 Trillion and borrowed $1.5 […]
Jack,
Congress does not have to renounce paying back the trust fund to avoid paying it back. As coberly has pointed out they just need to raise the FICA withhold a few cents/week and the inflow covers the outflow and SS is balanced. Forever. Without reducing the payouts by a penny.
And the $2.5T in Special Treasuries never gets redeemed nor ever gets canceled. They just sit accuring interest. Forever.
And unlike the Chinese or anyone else holding T-Bills, there is no one to come collecting.
I bet it could be done with just one paragraph in a budget bill.
As for the rest of the rant. Take it up with Obama. he’s running the show and the Dems had overwelming control these past two years. Heck they even set up a Democratic Led Obama Cat Food Commission. You voted for these guys not me.
Islam will change
coberly,
I have never once said that SS has anythig to do or caused the deficit. Not Once.
But every time the deficit is brought up you go crazy about SS. Even when its not part of the conversation.
But you obviously agree with VP Cheney that deficits don’t matter. I disagree.
Islam will change
coberly,
No one is lieing. And it was Obama, your guy remember, that just cut SS withholding.
A Democratic Congress signed into law by Dem President Obama just changed the law.
And no one is argueing that SS caused the deficit. No one. Only you.
But redeeming the Special Treasuries is just another line item in the general fund budget. Just like a new sub or a bridge to nowhere. A miniscule line for that matter.
And I learned all of that from you.
Islam will change
Buff, your plan looks interesting/good. I would add, instead of closing agencies, first review all agecies/departments for which functions need to be retained then eliminate all remaining. Then we can rack and stack facilities and organizations, but both these steps are only possible with another BRAC-like process.
Going back to 2008 is an automatic 21% cut and then you added an additional 5%, Using the 2012 budget ($1.65t deficit) as a baseline that gets us to a ~$.925T reduction. The Bush tax cuts are estimated to be ~$.277/Yr, so we are now at a ~$1.202T reduction. I’m not as sanguine as you and Mike on the IRS enforement issue, so I’ll let you guys work that out.
So the bottom line is with your proposal we still are at ~$.48T deficit. But at least Jack and Dale would be satisfied. But we haven’t yet tackled the other entitlement hole medicare/medicaid. (M&M)
I could live with that as a deficit with a growing economy and with a promise to seriously tackle M&M in the next two years.
Those changes, in my mind, are not quite draconian, but taking the next step certainly would be. However, I still think the best tax increase is a total reformation of the current system.
Buff,
Now you’re talking business. I like your approach and would support it all the way. There are only a few minor issues I’d have, but nothing that would stand in the way of nearly total implementation. I’d like a bit more focus on the general category of corporate welfare and a tightening up of the corporate tax loop holes having to do with what I think is called transfer pricing. But I’d be satisfied to start with the BuffPilot Road to Budgetary Responsibility, and I’m in no way being sarcastic. I like your ideas.
CoRev,
What do you have against old people and the poor? Given that decent medical coverage is upwards of $800-$1,000 monthly who on a pension, if they’re lucky enough to have that, can afford private medical insurance? Of course expanding Medicare to include the healthier sectors of the population (read that as simply a younger pool of insured) would take a lot of strain off of that system. Or maybe we should just stick with the ER system of health care that is costing the health care system so much money.
You see Buff I now find it difficult to see what we might have been arguing about. We have pretty much the same ideas about government activities. I’m more than happy to see less spending on a wide variety of discretionary programs if the military and para-military budgets are first on the chopping block. I do think that the government, and this is certainly true of Dems and Repubs alike, give too much advantage to corporations that enjoy the protection and services of the government. Some of the biggest companies pay no taxes at all yet they receive the same protections and services from the government, maybe a lot more, than do private citizens. We basically agree on the role of government as defined by your defunding plan.
Jack, arguing with yourself again.
Jack, you do realize you just signed on to the core of the Republican proposal(s)? They are just common sense.
Which republicans are proposing such a plan???
buff
you seem to be responding to what you think i said, not what i said. i only go crazy about SS when the deficit is blamed on SS, which is almost all of the time.
Buff
read the last sentence in the first paragraph in CoREvs comment. it is a lie.
“redeeming the Special Treasuries” is paying a debt. That is NOT “just another line.” unless you think welching on a debt is “just another way” to free up some money for what you want.
and if you think no one is arguing that SS caused the debt, you are deaf or can’t read.
buff
have you forgotten that it was dick cheney who said deficits don’t matter. a republican. and that was before there was a recession, in which times deficit spending does make some sense, if you haven’t already dug too deep a hole with deficit spending on wars and tax cuts.
Corev says,
“i do not intend to address arguments…”
Fine. Shut up, then.
Jack
adding “the young” to medical insurance is not just to “take the strain off the system.” it makes sense to pay for eventual medical care when you are still healthy and working and can afford it.
the trouble with Americans is that if they are healthy they think they will never get sick, so they don’t want to pay insurance. then when they get sick they want the government to take care of them.
intelligent people would recognize that this is what happens and simply collect the insurance by a “tax.” that’s the only way that you can hope to pay for the health care you will need.
of course if you are unlucky, you will stay healthy and all that money will have been wasted.
Rdan
you gotta watch the weasel words. to the republicans Social Security is “discretionary.”
Ryan for one, although he limits the cut to discretionary non-defense spending, as does Obama. http://www.weeklystandard.com/blogs/ryan-gop-propose-cut-non-security-discretionary-spending-2008-levels_547060.html
Both are negotiating positons.
Then we had the Republican House Resolution passed last week that didn’t have the defense strings: http://online.wsj.com/article/SB10001424052748703921504576094443294161826.html
Tax increases have been considered in many ways, including just eliminating the Bush tax cuts, but the more often referenced approach is a full reform.
What’s obvious is that the HC Bill has created such partisan animosity that it is nearly impossible to have a rational discussion of how best to fix Medicare going forward. It reminds me of the Budget/deficit discussions that evolve into SS debates.
Ryan for one, although he limits the cut to discretionary non-defense spending, as does Obama. http://www.weeklystandard.com/blogs/ryan-gop-propose-cut-non-security-discretionary-spending-2008-levels_547060.html
Both are negotiating positons.
Then we had the Republican House Resolution passed last week that didn’t have the defense strings: http://online.wsj.com/article/SB10001424052748703921504576094443294161826.html
Tax increases have been considered in many ways, including just eliminating the Bush tax cuts, but the more often referenced approach is a full reform.
What’s obvious is that the HC Bill has created such partisan animosity that it is nearly impossible for Congress to have a rational discussion of how best to fix Medicare going forward. It reminds me of the Budget/deficit discussions that evolve into SS debates.
So to outline the GOP plan as I understand it. 1) Cut to FY 2008 levels, then cut again to FY 2006 levels. Strings (defense and enitilements) are included or not depending on which version/day it is referenced. Revenue increases usually includes a total reform, but a number of conservative commenters here (me and MG IIRC) have endorsed Buffs views. We may not be congressmen, but we do count as conservatives if not all republicans (MG).
Dan, let me first define the core of the GOP plan. It is to cut spending to 2008 and/or 2006 levels, and raise revenues, most often referenced is a total tax reform.
Buff proposed a cut to 2008 levels plus an additional 5% which essentially puts us at 2006. He then proposes revenue increase by repealing the Obama late 2010 tax cuts.
To answer your question who: Ryan for one, although he limits the cut to discretionary non-defense spending, as does Obama. http://www.weeklystandard.com/blogs/ryan-gop-propose-cut-non-security-discretionary-spending-2008-levels_547060.html
Both Ryan’s and Obama’s are negotiating positons.
Then we had the Republican House Resolution passed last week that didn’t have the defense strings: http://online.wsj.com/article/SB10001424052748703921504576094443294161826.html
Tax increases have been considered in many ways, including just eliminating the Bush tax cuts, but the more often referenced approach is a full reform.
What’s obvious is that the HC Bill has created such partisan animosity that it is nearly impossible for Congress to have a rational discussion of how best to fix Medicare going forward. It reminds me of the Budget/deficit discussions that evolve into SS debates.
A number of conservative commenters here (me and MG IIRC) have endorsed Buffs repeal the Bush tax cut views. We may not be congressmen, but we do count as conservatives if not all republicans (MG).
CoRev,
At least buffpilot has made concrete suggestions without veiled innuendos. Nothing that you have offered is any more than bull shit. I’ll tip my hat to buff for doing an honest job. I don’t have to agree with every detail of his proposal. You offer nothing more than empty proposals and off target critiques. As noted, you’re comments are a waste of band width.
It’s interesting that no one has referenced nor challenged the slide presentations available from the Concord Coalition that are used in the Fiscal Solutions Tour. Similarly, no one has challenged the State of the Union’s Finances – A Citizen’s Guide which is available at the first link embedded in Jamie Galbraith’s article. Perhaps none of the readers who are so violently opposed to any discussions whatsoever of the Federal Budget or the fiscal year deficits have bothered to review any of the slide presentations or the Citizen’s Guide. In this example, I think some are bitching about something of which they have no direct knowledge. That’s typical, though.
Similarly, I doubt that some if not most participants on this comment thread have reviewed Galbraith’s overall position on the recession and his recommended solutions. Jamie is not only opposed to any limits on running the U.S. Treasury’s printing presses, but he wants a 20 year plus recovery plan put in place and wants more people put into retirement support status. But, of course, Galbraith hasn’t put a price tag on his recommendations. He put all those thoughts together in his ‘No Return to Normal’ article published in September 2009. While I like Jamie Galbraith personally, there is no way in hell I could support an open federal checkbook for a huge 20 year plus recovery program. Besides, he has already stated elsewhere that he expects the recovery effort underway will drive the debt to GDP ratio to 100%.
Galbraith was careful not to attack the Fiscal Tour slide briefing. That’s because it is filled with well documented hard facts and projections. That makes his article title a bit of a joke. The only attack he would likely launch on the slide pack are those which include CBO projections. You see, he believes that the CBO model is too optimistic. Jamie and I are in agreement on that point. That’s the same problem that I have with the proposed Federal Budget. But according to Jack we shouldn’t be discussing the Federal Budget, fiscal year deficits, and by implication national economic performance on this thread of all threads. What a joke. I can guarantee all of you that I will be continuing that worthy discussion on Open threads in the future if no where else. The issue is too important. Stay tuned, Jack. You haven’t seen anything yet.
Ease up please coberly. Lets get some real documents. I see no one in office tackling the deficit except as pure politics.
But I have not seen any significant offers by elected officials on budgets….I agree it is political negotiation, but is it budgetary?
I have seen no elected republican offer to let the tax extension go either as a deficit mending proposal.
Jack,
If I were king I would also change a rather wide variety of laws and administrative practices that would basically reduce the reach and effect of the Federal government also. Such as: Total IRS overall with the stated goal to be revenue neutral and eliminiate the need of 75% (or more) of filers to need help – basically try to build tax law to eliminate to the greatest possible extent the legal tax law industry. Also reduce/streamline the tax/record keeping required for a new business. 7 year max limit for all patants ( for drugs the 7 years starts at FDA approval). Reversing the effects of the Kelo decision. Greatly curbing the commerce clause. Probably additional resources to combat medicare/medicaid fraud. Repeal ObamaCare in total as an unworkable morass. Eliminate all the Czars and their staffs. Start moving fed agencies away from DC – for example, move the FAA to Kansas City. Hand over the city Washington to Maryland, if for no other reason I won’t have to here complaints that they are not represented.
I could go on. But I’m not King and I expect nothing to change until a serious crises hits (9/11, the dot-com bust, the housing/bank implosion all haven’t stressed the system to the brink yet – capitalist liberal democracies are both rich and flexible so we can take a lot).
But we can’t go along at 9-10% unemplyment and $1.5T/year debt for ever.
But who knows the ‘D’ fairy may come along and get us back to Bush Jr’s horrible economy of 5% unemployment and 1-2% GDP growth. Who knows.
And no R or D would propose such a plan either. Gore’s too many sacred cows. To be honest its pretty obvious that Obama is totally unserious about his budget proposal. If I was the R’s I would really consider passing it unaltered as a bi-partisan gesture and let Obama take the heat…
Islam will change
Jack,
About the Bush tax cuts. Bush, way back, pushed through a tax cut early in 2001 (before 9/11 and the dot-com bust really got going). I thought it was a good idea becuase it basically started to return the expected budget surplus to the people – more importantly out of the hands of the Federal government.
Then the floor dropped out. I thought the second Bush tax cuts were just plain dumb. We were at war and I (and my fellow officers deployed overseas) expected us to swing into Iraq without pause after the Taliban folded in December 2001. Heck, I told my wife not to expect me to come home on the announced rotation dates and be prepared that I might be gone a year. Well I was wrong, and we took another year to hit Iraq.
Now I understood the idea behind the tax cuts, but the Fed needed money to prosecute the wars and replace equipment that would invariably get chewed up even in the almost effortless overrun of Iraq.
I thought the deficits were bad then, but Obama makes Bush’s deficits look tame in comparison.
And its quite obvious that the Dems were not serious about being anti-war or serious about the budget. Both issues were just a cudgel to beat the R’s over the head with. Its also quite obvious Obama & the Dems failed to get the message of the 2010 election (and I wonder if the Rs did either).
So the next two years will be interesting.
Islam will change
Rdan,
Neither side wants to be the first to deal with the problem and Obama is not a FDR or Reagan that could possibly get us to take our medicine (or at least some of it). That’s why your not seeing either side take the first step – becuase both fear a repeat of the FDR/Dem supremacy for 50 years for the other party if they start. They all fear being the next Hoover. Its all about avoiding blame – its that simple.
Never forget that Obama and the Dems just had to do nothing to let the tax cuts go away. Absolutely nothing. So now its the Obama tax cuts. Heck I’m not even sure we call them cuts anymore. Its been policy for what, 8 years?
Islam will change
MG,
So Galbraith not only beleives deficits don’t matter but thinks we can just print our way out of this.
And you want me to take him seriously? BWahahahah!
Islam will change
Jack, I just don’t understand the anger. My very first plan offered here was to eliminate the Bush tax cuts and cut the overall budget by IIRC 15 or 20%. Which I predicted would balance the budget with 3-4 years.
Then in direct response to one of your misrepresentations I proposed cutting the budget to the level of spending in 2008 with some level of revenue increase that at this point I no longer remember.
I have repeatedly asked you for estimates associated with your budget proposals and have yet to get any.
But you continue to question my plans, while I was able to provide the numbers associated with Buff’s plan. Do you dispute those numbers, or my understanding of my own budget approaches and their savings?
The math is simple, the politics are not!
Dan, the House budget resolution is more than just a proposal. It was an attempt to legislate. Futile with the Dem lock on the Senate.
As far as the Bush tax cuts, the dialog was lost after the vote to extend.
Rdan
yes, i’ve been thinking about it. probably i am wasting my time here, and definitely lowering my own tone.
but it’s also true that CoRev is here only to lower the tone of the thread and put so much BS on the table that it becomes impossible to have a grown up discussion.
I asked sammy, I’ll ask you, put up a summary of the Deficit, who owes what to whom. break out all the off budget on budget flim flam, and try to avoid the …. but paying BACK SS will increase the deficit lie. or stupidity.
when you borrow money from your brother in law and he asks you to pay him back, he is not increasing your deficit… even if you have to borrow the money from someone else to pay him back.
did i say that already: paying the money back does not increase the deficit.
CoRev
if you don’t understand the anger, get a trusted professional to help you go through your comments and identify which are just “cute” and which are intended to “annoy” and which persist in confounding what a normal person would understand are separate matters.
and no, this is not snark.
CoRev
then one would wonder why when i show that repealing the Bush tax cuts will pay the debt owed TO the SSTF trust fund in a timely manner… that is over the ten years that SS will need the money… you and MG and Buff regularly come in and try to obscure the point.
IT is also true that over time, repealing the Bush tax cuts will pay down the rest of the debt to a point where it is “sustainable.”
If you agree that the cuts need to be repealed then you should be agreeing with me, not trying to bury my numbers in BS.
buff,
Where in my first comment post on this thread did I say or suggest that you or anyone else should take Jamie Galbraith seriously on his opinions about how to deal with the economic recovery?
I take Galbraith seriously whenever he speaks or writes. That doesn’t mean that I agree with him. He is a smart guy, but his approach to the recovery is so far over the top that it will never sell. But, implied in his 20 year plus approach is Galbraith’s concern that the latest economic hit is very significant and recovery in the area of employment will take many years, perhaps one or two decades. I expect that it will take at least a decade to recover on the employment front unless key economic policies are changed. I am surprised that Galbraith believes that we need a 20 year plus recovey plan. That concerns me, but the U.S. Government isn’t going to fund such a project right now.
Galbraith doesn’t have any concerns about the growth in fiscal year deficits or the national debt. In that regard, I think he is crazy. He is correct that deficit spending during a recession is when the government should do it. His limitless approach to deficit spending is where we part company.
A well informed opinion of James Galbraith’s economic views should require some research and review of his communications. That would be my approach.
MG
the fiscal responsibility tour, as presented by David Walker in Portland a few years ago, was filled with “facts” designed to mislead.
If you want to bring them out one at a time, I’ll be glad to explain them to you.
No one references the Concord Coalition here, because lies are not useful to understanding the situation. We do try to refute the lies when they are brought up.
buff
if you want me to take you seriously you’ll give up the bwhaha. I don’t know what Galbraith’s overall opinions are, but he did not say here that deficits don’t matter or that we can print our way out of this. those are conclusions you drew based on the structures in your own mind which need to be examined more carefully, but won’t be, because you are too happy with the way you see things.
btw
glad that you know “jamie” and like him personally.
This is actually one of the most reasonable conversations I’ve seen on this blog in a while.
coberly,
We agree with you. The general fund budget line item for SS redemptions is not that large. I’m pretty sure Obama and company can print up the funds to cover it just like they will to pay for another submarine.
Our point is there seems to be no political will on capital hill or by Obama to actually allow SS to redeem the treasuries. They plan to find some gimmick or raise FICA taxes to cover the SS inflow/outflow difference. Then let the $2.5 T of special traesuries just sit there on the boooks. Forever unredeemed. And then move on to the next problem – like how to fund a monument to gay rights in San Francisco.
Also, my point is these redemptions are just a minor point in a $3.5 Trillion budget. What you should really be worried about is a wholesale change in the law that will effectively change what SS is. You’ve mentioned a few of these, like removing the SS income Cap or means testing. They other threat is to legally just roll the entire program into the general fund. Where SS no longer is a ‘off-budget’ entity, but truely becomes just another line item.
There is no obscuring the point. Its trivial. No one is going to stop the SS checks. The question is, and always has been, how to cover those checks and that is a purely political question. To highlight my point – we just saw Obama and the Dems change the program during the lame-duck session. Is this the start of the gutting of the greatest legislative achievement of the FDR administration’s New Deal? Don’t know. But its Obama and the Dems who led the charge.
Islam will change
MG,
My comment was not directed at you even though I wrote it that way. Sorry. I understood your point and am in violent agreement with it. My spite was aimed at numerous others who suddenly think a PhD behind someone’s name means he has any intelligence (credentialed not educated).
I agree he is nuts.
Islam will change
coberly,
Read what MG posted again. Unless MG is lieing (which I sincerely doubt) Galbraith really does belive you can print your way out of this and that deficits don’t matter.
Come back when you can learn to read.
Islam will change
Buff
I agree with your analysis whole heartedly. Neither Republicans nor Democrats can be trusted. The solution then is to vote the Jacobin line from now on. Robespierre, we mourn your untimely passing.
buff,
That is exactly right. Galbraith viewpoints are well known by those who follow his interviews and commentary. He has no concern about the deficits and national debt. None at all.
coberly, I do know Jamie Galbraith. We have some good conversations.
Dale asks: “then one would wonder why when i show that repealing the Bush tax cuts will pay the debt owed TO the SSTF trust fund in a timely manner…”
I answer, because that is not what you have said. What you claimed was a 3% income tax increase would pay for the deficit. A 3% increase of part of the whole does not solve a 40% deficit of that whole. As Sammy so clearly stated.
“But according to Jack we shouldn’t be discussing the Federal Budget, fiscal year deficits, and by implication national economic performance on this thread of all threads.” MG
That’s a rather gross simplification that does not accurately reflect the totality of my comments on the several threads on which the deficit has been brought up. I did comment on once early in this thread regarding the repetitious nature of the deficit discussion and that they were occurring off topic on threads focused on Social Security. The primary criticism there being that it was not being made clear that Social Security benefits do not add to the deficit. Pay back’s a bitch. FICA revenues borrowed in the past are not deficit producers when put back into the benefit stream.
“My spite was aimed at numerous others who suddenly think a PhD behind someone’s name means he has any intelligence (credentialed not educated)” buff
If you’re referring to Galbraith I’d have to question your ability to evaluate an individual’s competence and contribution to an argument. I’ll not hold his PhD status against him, and he has clearly noted in his various publications that professional economists are often wrong and wrong headed. His discussion is cogent and comprehensible. That goes a long way in establishing the validity of his ideas. Here is a very interesting article he wrote as a response to a Krugman piece.
http://www.nea.org/assets/docs/HE/TA09EconomistGalbraith.pdf
At least in tone! Eh?
WJL
Uh oh. If that’s true could you please point out what’s I’ve failed to say.
coberly, I have cited Concord Coalition and GAO budget materials at AB, so that’s your first false statement. In truth, you don’t know enough about the Federal Budget, the fiscal year deficits, and national debt or any of the researched projections to explain most of the materials provided by the Concord Coalition to the public. You’re not that well read. I expect that is obvious to most readers of Angry Bear.
coberly, I do know Jamie Galbraith. We have had some good conversations. He’s a smart guy. There is plenty on which we disagree, but that doesn’t detract from my liking him.
Jack – 2 days ago, 1:38:44 PM – this thread – “Two previous threads, the Open Thread, Feb. 11 and Bruce’s Social Security and Pie thread, contain over 335 comments having mostly to do with the deficit. Buff, CoRev and Sammy have provided their point of view repeatedly and have rejected as inadequate virtually every one elses’ replys to their comments. Is that trend of repetition going to be allowed tocontinue? Neither of them is a professional economist. Galbraith has made his points briefly and adequately. I’d be happy to read critiques of his ppoints by a trained professional economist or someone with at least as good a fund of knowledge, but I, for one, am getting tired of the prepetitious bull shit being hung out on this web site in such a way as to interphere with reading what knowledgable people have to say. No, simply quoting the opinions of others is not adequate.”
MG – It’s interesting that no one has referenced nor challenged the slide presentations available from the Concord Coalition that are used in the Fiscal Solutions Tour. Similarly, no one has challenged the State of the Union’s Finances – A Citizen’s Guide which is available at the first link embedded in Jamie Galbraith’s article. Perhaps none of the readers who are so violently opposed to any discussions whatsoever of the Federal Budget or the fiscal year deficits have bothered to review any of the slide presentations or the Citizen’s Guide. In this example, I think some are bitching about something of which they have no direct knowledge. That’s typical, though.
…But according to Jack we shouldn’t be discussing the Federal Budget, fiscal year deficits, and by implication national economic performance on this thread of all threads. What a joke. I can guarantee all of you that I will be continuing that worthy discussion on Open threads in the future if no where else. The issue is too important. Stay tuned, Jack. You haven’t seen anything yet.
Jack – That’s a rather gross simplification that does not accurately reflect the totality of my comments on the several threads on which the deficit has been brought up. I did comment on once early in this thread regarding the repetitious nature of the deficit discussion and that they were occurring off topic on threads focused on Social Security. The primary criticism there being that it was not being made clear that Social Security benefits do not add to the deficit. Pay back’s a bitch. FICA revenues borrowed in the past are not deficit producers when put back into the benefit stream.
Jack, you’re way out of line. The purpose of an open thread not identified for a particular discussion is to provide for discussion of anything the readers decide to discuss. No one needs your “permission” to say anything on an Open thread. So, that eliminates those 181 comments from your personal attack. The other thread that you focused on has 131 comments and less than half of those comments discussed the federal budget and fiscal year deficits. Sammy raised a valid point on that thread which was tied to a years old news article. Your assault is without merit, considering the constant bleed over of SS comments in nonrelated comment threads. A pushback is warranted, particularly when there is a factual relationship between SS combined trust funds cashflow surpluses and shortfalls, the General Fund, and the U.S. Treasury’s public borrowing operations. Pretending that the SS cashflow surpluses and shortfalls do not impact the General Fund is absurd. Readers of this blog have endured an […]
Jack – 2 days ago, 1:38:44 PM – this thread – “Two previous threads, the Open Thread, Feb. 11 and Bruce’s Social Security and Pie thread, contain over 335 comments having mostly to do with the deficit. Buff, CoRev and Sammy have provided their point of view repeatedly and have rejected as inadequate virtually every one elses’ replys to their comments. Is that trend of repetition going to be allowed tocontinue? Neither of them is a professional economist. Galbraith has made his points briefly and adequately. I’d be happy to read critiques of his ppoints by a trained professional economist or someone with at least as good a fund of knowledge, but I, for one, am getting tired of the prepetitious bull shit being hung out on this web site in such a way as to interphere with reading what knowledgable people have to say. No, simply quoting the opinions of others is not adequate.”
MG – Today, 12:57:00 AM – “It’s interesting that no one has referenced nor challenged the slide presentations available from the Concord Coalition that are used in the Fiscal Solutions Tour. Similarly, no one has challenged the State of the Union’s Finances – A Citizen’s Guide which is available at the first link embedded in Jamie Galbraith’s article. Perhaps none of the readers who are so violently opposed to any discussions whatsoever of the Federal Budget or the fiscal year deficits have bothered to review any of the slide presentations or the Citizen’s Guide. In this example, I think some are bitching about something of which they have no direct knowledge. That’s typical, though.”
“…But according to Jack we shouldn’t be discussing the Federal Budget, fiscal year deficits, and by implication national economic performance on this thread of all threads. What a joke. I can guarantee all of you that I will be continuing that worthy discussion on Open threads in the future if no where else. The issue is too important. Stay tuned, Jack. You haven’t seen anything yet.”
Jack – Today, 2:35:02 PM – “That’s a rather gross simplification that does not accurately reflect the totality of my comments on the several threads on which the deficit has been brought up. I did comment on once early in this thread regarding the repetitious nature of the deficit discussion and that they were occurring off topic on threads focused on Social Security. The primary criticism there being that it was not being made clear that Social Security benefits do not add to the deficit. Pay back’s a bitch. FICA revenues borrowed in the past are not deficit producers when put back into the benefit stream.”
Jack, I like you but you’re out of line.
The purpose of an open thread not identified for a particular discussion is to provide for discussion of anything the readers decide to discuss. No one needs your “permission” to discuss anything on an Open thread. So, that eliminates about 181 comments from your personal attack. You can forget about trying to control Open threads. It’s none of your business what readers elect to discuss.
The other thread that you focused on had 131 comments yesterday and less than half of those comments discussed the federal budget and fiscal year deficits. Sammy raised a valid point on that thread which was tied to a years old news article. He offered very few subsequent comments on that thread. Your personal demonstrated hatred of CoRev, Republicans and conservatives is the real issue here as demonstrated in your remarks to bullpilot upthread. You have shown […]
Jack – 2 days ago, 1:38:44 PM – this thread – “Two previous threads, the Open Thread, Feb. 11 and Bruce’s Social Security and Pie thread, contain over 335 comments having mostly to do with the deficit. Buff, CoRev and Sammy have provided their point of view repeatedly and have rejected as inadequate virtually every one elses’ replys to their comments. Is that trend of repetition going to be allowed tocontinue? Neither of them is a professional economist. Galbraith has made his points briefly and adequately. I’d be happy to read critiques of his ppoints by a trained professional economist or someone with at least as good a fund of knowledge, but I, for one, am getting tired of the prepetitious bull shit being hung out on this web site in such a way as to interphere with reading what knowledgable people have to say. No, simply quoting the opinions of others is not adequate.”
MG – Today, 12:57:00 AM – “It’s interesting that no one has referenced nor challenged the slide presentations available from the Concord Coalition that are used in the Fiscal Solutions Tour. Similarly, no one has challenged the State of the Union’s Finances – A Citizen’s Guide which is available at the first link embedded in Jamie Galbraith’s article. Perhaps none of the readers who are so violently opposed to any discussions whatsoever of the Federal Budget or the fiscal year deficits have bothered to review any of the slide presentations or the Citizen’s Guide. In this example, I think some are bitching about something of which they have no direct knowledge. That’s typical, though.”
“…But according to Jack we shouldn’t be discussing the Federal Budget, fiscal year deficits, and by implication national economic performance on this thread of all threads. What a joke. I can guarantee all of you that I will be continuing that worthy discussion on Open threads in the future if no where else. The issue is too important. Stay tuned, Jack. You haven’t seen anything yet.”
Jack – Today, 2:35:02 PM – “That’s a rather gross simplification that does not accurately reflect the totality of my comments on the several threads on which the deficit has been brought up. I did comment on once early in this thread regarding the repetitious nature of the deficit discussion and that they were occurring off topic on threads focused on Social Security. The primary criticism there being that it was not being made clear that Social Security benefits do not add to the deficit. Pay back’s a bitch. FICA revenues borrowed in the past are not deficit producers when put back into the benefit stream.”
Jack, I like you but you’re out of line.
The purpose of an open thread not identified for a particular discussion is to provide for discussion of anything the readers decide to discuss. No one needs your “permission” to say anything on an Open thread. So, that eliminates those 181 comments from your personal attack. You can forget about trying to control Open threads. It’s none of your business what readers elect to discuss.
The other thread that you focused on has 131 comments and less than half of those comments discussed the federal budget and fiscal year deficits. Sammy raised a valid point on that thread which was tied to a years old news article. He offered very few subsequent comments on that thread. Your personal demonstrated hatred of CoRev, Republicans and conservatives is the real issue here as demonstrated in your remarks to buffpilot upthread when you stated, “Admittedly I was lumping you in […]