Ka-BOOM!

[Mavdog]

ok, let's take a look at the deficits...

from 2001 to 2005, the national debt has increased by $2.1 Trillion. that's an almost 30% increase in the national debt during the bush presidency.

currently the debt service on this debt is just over 20% of the budget. guess what happens as interest rates go up...

"ka-boom" might be correct. debt service will blow up federal finances.

[dude1394]

Ka-ka-boom.

US Treasury Sets New 1-Day Tax Receipt Record Of $85.8 Billion
Tuesday September 19th, 2006 / 0h04

WASHINGTON -(Dow Jones)- The U.S. government recorded record-high overall and corporate tax receipts on Sept. 15, which was a quarterly deadline for tax payments, the Treasury said Monday.
Total tax receipts were $85.8 billion on Friday, compared with the previous one-day record of $71 billion on Sept. 15 of last year, the Treasury said.
Within the overall figure, corporate tax receipts Friday were $71.8 billion, up from $63 billion in September of last year.
Treasury Undersecretary for Domestic Finance Randal Quarles said Friday's numbers provided a "continuing demonstration of the strength of the U.S. economy."
"In fact, Friday's gross receipts were the largest in a single day in the nation's history - 20% higher than receipts on the same quarterly tax payment date last year," Quarles said in a statement.
-By Benton Ives-Halperin, Dow Jones Newswires; 202-862-9255; Benton.Ives-Halperin@dowjones.com

Come on dems, we could use a little help here trying to cut some spending!

US House Passes $49.9 Billion in Spending Cuts
By Richard Cowan
Reuters

Friday 18 November 2005

Washington - The U.S. House of Representatives on Friday narrowly voted to trim social programs for the poor along with farm subsidies, student loans and other federal benefits as part of a $49.9-billion package of spending cuts.

The "deficit-reduction" plan passed the House by a cliff-hanger vote of 217-215, with all Democrats and 14 Republicans voting against the Republican-authored bill.

[dude1394]

Interesting discussion on CPI influence of wage measurements.

But Mr. Gordon’s adjustments show that men actually got a 27 percent raise in this period and women 65 percent. The gains are not as big as those of the 1950’s and 60’s, but they do sound far more realistic than the official numbers. Think about it: we live longer than people did in the 1970’s, we’re healthier while alive, we graduate from college in much greater numbers, we’re surrounded by new gadgets and we live in bigger houses. Is it really plausible, as some Democrats claim, that the middle class has made only marginal progress?

In recent years, the government’s economists have gotten much better at measuring inflation, introducing some new products, like Viagra, into the index within months. Of course, this means that incomes lately have not been understated by much and that their growth really has been miserly. (The recent reports showing healthy gains all refer to averages, which have been driven by huge gains at the top.) For all the sunny numbers that Republicans have offered up, the reality is that not a single piece of government data shows that most workers have gotten a significant wage increase since 2002.

So these are the facts. Americans are far better off than they were a generation ago, but the last few years haven’t been very good. It’s time for both parties to move on to the harder question: What are the policies — in education, health care and other parts of the economy — that will ensure tomorrow’s middle class can afford the next invention as worthy as the snow blower?

[dude1394]

Very,very interesting blogpost. It really is weird how dubya gets not credit for the great job he's done with the economy. Lot's and lot's of data.

http://engram-backtalk.blogspot.com/...isfaction.html

First the jobs and economy being one of the highest issues has dropped.



This one is really interesting.


So the folks who have more disposable income has gone up 9%.
But dubya still gets razzed on the economy. Doesn't compute and would be interesting to see why such irrationality occurs.

[dude1394]

Another quite interesting graph on the federal deficit versus GDP.

http://engram-backtalk.blogspot.com/...l-deficit.html

Over the years, we've gone from a record deficit of 6% of GDP (in 1983 under Reagan) to a record surplus of 2.4% (in 2000 under Clinton). In 2005, the year that had the attention of that hysterical Washington Post reporter, the deficit was historically typical (about 2.6% of GDP). But that's not what Jonathan Weisman told his readers. He said "Additional war spending this year will push the federal deficit to a record $427 billion for fiscal 2005." 2005 was not even close to a record in proper terms (i.e., in terms of the GDP), and 2006 is projected to come in even lower, at about 2.3%. Sheesh!

The last 6 points on the plot show the Bush years. Things were in free fall in years 2001, 2002 and 2003 after reaching a nice surplus in 2000 (Clinton's last year in office). As I noted before, these are the years that were affected by both the dot-com crash and the 9/11 attacks (not to mention the wars in Afghanistan and Iraq). As the economy has rebounded, the deficit numbers have returned to typical levels, and, as you can plainly see, they are nowhere near the record-setting deficits that reporters love to fret about.

It could be that the return of deficit spending, coupled with news reports that focus solely on the absolute size of the deficit (which leaves readers with the impression that the deficit is unprecedented) accounts for the sour mood. Is it too much ask that reporters who write about the federal deficit do so in a way that clarifies rather than misleads? Probably. But if they did, I suspect that the next Gallup poll on the economy would show Americans to be in a better mood.

[Mavdog]

"reasoned monetary stimulus"????

nobody should be surprised by what a couple $trillion of deficit spending will do to stimulate th economy.

who would've guessed that the current administration would be such a fan of keynes?

of course, these same bush boosters haven't had the guts to mention the huge amount of debt that has been taken on to supply this stimulus, or its undeniable future drag on the american economy.

interesting news out this last week, for the first time in over a century american receipts of investment income from the rest of the world was less than american payments to the rest of the world. that's bad. over a long term it's very bad.

but keep shouting about the tax cuts and how they produced the "ka-boom".....just know that you are not recognizing the true reason the economy has grown.

the "scoreboard" says the bush debt is about $2 TRILLION and growing as we write...

[dude1394]

Originally Posted by Mavdog

the "scoreboard" says the bush debt is about $2 TRILLION and growing as we write...

And this 2trillion I assume is due to promised SS/Medicare payments, which he tried to address.

[Mavdog]

Originally Posted by dude1394

And this 2trillion I assume is due to promised SS/Medicare payments, which he tried to address.

no, you are wrong, the $2 Trillion is NOT due to "off budget" costs such as ss.

try again....

[kg_veteran]

The federal debt, and to a lesser extent deficit spending, are the elephants in the room that nobody really wants to talk about. Sure, Democrats criticize Bush's free spending, but they hardly have clean hands in such a discussion, which is what makes the situation so disheartening.

Tax cuts coupled with reduction in spending would work marvelously. Tax cuts combined with increased spending results in "passing the buck" on to future generations.

[Mavdog]

yes kg, there is not any politico I know of, dem or repub, who has "clean hands" on the sorry state of our nations finances.

however, there is only one politico who has pushed through a tax cut AND proposed huge budget increases while not vetoing ANY spending bill that was placed on their desk.

guess who that may be?

[dude1394]

Full employment baby...
http://www.washingtonpost.com/wp-dyn...0600335_2.html

The unemployment rate fell to 4.6 percent in September from 4.7 percent in August, which was down from 4.8 percent in July. The jobless rate has varied from 4.6 to 4.8 percent all year. Considering that a few workers have such poor skills as to be nearly unemployable, many economists consider a rate below 5 percent to constitute full employment, meaning just about every worker with the skills and desire to work can find a job.

whooping good..

Labor analysts also released a preliminary finding that the economy may have added 810,000 more jobs than previously tallied in the 12 months that ended in March. If that estimate holds, it would mark a much bigger revision than usually occurs during a lengthy process of gathering information from unemployment insurance filings. And it would help explain why tax revenue surged so unexpectedly this spring and why consumer spending has held steady even as the cooling housing market has slowed the nation's economic growth.

[dude1394]

Kowabunga!! Let's elect some democrats and raise taxes!!!!

The federal budget estimate for the fiscal year just completed dropped to $250 billion, congressional estimators said Friday, as the economy continues to fuel impressive tax revenues.

The Congressional Budget Office's latest estimate is $10 billion below CBO predictions issued in August and well below a July White House prediction of $296 billion.

The improving deficit picture _ Bush predicted a $423 billion deficit in his February budget _ has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said

.....

Charles Rangel said: he, “could not think of one’ of President George W. Bush’s first-term tax cuts that merit renewal.”

The Dems can’t think of a single tax cut they’d want to keep in place. Remember that. It’s important, and no one wants you to know it.

[dude1394]

http://engram-backtalk.blogspot.com/...t-deficit.html

Budget Deficit Drops to $250 Billion
By ANDREW TAYLOR , 10.06.2006, 01:53 PM

The federal budget deficit estimate for the fiscal year just completed has dropped to $250 billion, congressional estimators said Friday, as the economy continued to fuel impressive tax revenues.
...
The improving deficit picture - Bush predicted a $423 billion deficit in his February budget - has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said.
...
At 1.9 percent of gross domestic product, the 2006 deficit registers far below those seen in the 1980s and early 1990s. The modern record of 6 percent of GDP came in 1983 and deficits greater than 4 percent in 1991 and 1992 drove Congress to embark on a 1993 deficit-cutting drive.

[Mavdog]

it's amazing how anyone could praise a president who beats their own dire budget forecasts.

"good news america, instead of increasing the federal debt by about 8%, we're only going to put our country 5% further in debt."

or "hey american public, you'll only have an additional $12 BILLION in debt service next year for the money we spent in 2006! yeah, it could've been closer to $23 Billion, so we feel real good about the job we've done!"

maybe "next year we'll only increase the portion of the federal budget going to pay interest on our national debt to about 32.5% of all the money spent, when it could easly have gone up to about 33%! don't you think we should be given another term?"

[dude1394]

It's amazing to me how someone can continue to gripe about an economy that is at full-employment and reving after a major terrorist attack.

If you are just griping about spending then fine, do it. But if you are griping about the economy, what's to bitch about?

And if you want someone to do something about future obligations how about asking some of your democrat friends to participate in actually doing something about social security and not demagoguing it to death.

[Mavdog]

"full employment" is a term that has varied meanings. traditionalist see it at 3%, others go as high as 7%. under the definition you've proposed the term could have easily been used for the majority of the past 30 years...

what's to bitch about on the economy?
1. the economy has grown, however real wage growth has not been spread across all economic strata.
2. the economic growth has come at a huge cost of debt. the growth you seem to believe is a result of supply side policies has been a result of the opposite, the huge increases in government spending.
3. the huge increases in government spending have not been devoted to areas that one can call investments in our people or infrastructure.

And if you want someone to do something about future obligations how about asking some of your democrat friends to participate in actually doing something about social security and not demagoguing it to death.

of course, this has NOTHING to do with the debacles of the current administation's budgets...

seems that you've forgooten the clinton proposals...of course, they were based on the idea (a lost one in the current administration) that the federal surpluses could be used, (along with expanded ira's and 401 limits). the clinton concept was that ss did not need to be dismantled, which the bush proposals surely would result in.

you see, the clinton budgets had surpluses.

[kg_veteran]

The reason that politicians don't want to talk about the federal debt is that it's not an issue that will get you elected.

The federal debt has become so large that it's surreal to the average person. Kind of like the size of the galaxy, people just can't comprehend exactly how much money the government owes. So, like an individual who's in debt beyond their capacity to repay, they just ignore it. Unfortunately, it can't be ignored forever, and unlike an individual, the country can't file for bankruptcy and just wipe the slate clean.

The reason that talking about the federal debt won't get you elected is that any realistic solution is going to require sacrifices from the general population. Substantial sacrifices.

[chumdawg]

Sacrifices like what?

[kg_veteran]

1. An increase in taxes.
2. A reduction in federal spending, up to and including the elimination of some entitlements.

[purplefrog]

All I know is that my electric bill is too damn much, I can't walk into the grocery store without dropping 100 bucks, and my health insurance premiums are going up faster than a rocket. It is not easy to keep up with all of that. Whatever happened to the "misery index" that was used during the Carter years? Do we still use that as an index for the economy?

[dude1394]

Originally Posted by purplefrog

All I know is that my electric bill is too damn much, I can't walk into the grocery store without dropping 100 bucks, and my health insurance premiums are going up faster than a rocket. It is not easy to keep up with all of that. Whatever happened to the "misery index" that was used during the Carter years? Do we still use that as an index for the economy?

Sure do it. Look up interest rates and inflation rates, see what you get.

[purplefrog]

The US Misery Index by President
1948 to 2005

Misery Index = Unemployment rate + Inflation rate

President
Time Period
Average Misery Index

Jimmy Carter
1977 - 1980
16.27

Gerald Ford
1974 - 1976
15.93

Ronald Reagan
1981 - 1988
12.19

George H.W. Bush
1989 - 1992
10.68

Richard Nixon
1969 - 1973
9.98

George W. Bush
2001 - 2005
7.98

Harry Truman
1948 - 1952
7.87

William J. Clinton
1993 - 2000
7.80

John F. Kennedy
1961 - 1962
7.27

Lyndon Johnson
1963 - 1968
6.78

Dwight Eisenhower
1953 - 1960
6.26

Dude, is this the right calculation??? If so, then I guess I am only a little more miserable now than when Clinton was President..... Just kidding!

[dude1394]

Looks about right.

[Drbio]

purplefrog - Best 0.18 you ever suffered.

[dude1394]

pfrog...Curious if you were surprised at the numbers? Did you think the misery index would be higher because you are miserable and the economy (per mavie) is in the toilet?

[purplefrog]

I was not really surprised by the numbers, but that does not mean that I am happy with the economy either. I believe the things that are hitting alot of us are the high utility bills and health insurance. I am guessing that these two things are not part of most equations when we look at economic indicators. I am concerned that the expanding deficit will eventually catch up to us and inflation will start to be a more serious factor. I have been predicting that we are in for some tough economic times mainly because of the deficit. But I will take it as it comes. I am hoping that I am wrong and will be happy if I am.

[dude1394]

Dangit dubya. How can the dems and mavie talk down the economy when the dow keeps getting to record highs!!

NEW YORK (Reuters) - U.S. stocks ended slightly higher on Tuesday, with the Dow reaching a record close and intraday high after a seesaw session, as investors anticipated a strong start to the third-quarter earnings season.

[dude1394]

The truth just keeps pushing it's way into the the dream.

http://www.breitbart.com/news/2006/10/11/D8KMJBT81.html

Federal Deficit Now Lowest in 4 Years
Oct 11 2:20 PM US/Eastern

By MARTIN CRUTSINGER
AP Economics Writer

WASHINGTON
The federal deficit in the budget year that just ended fell to a four- year low of $247.7 billion _ a figure President Bush touted Wednesday as "proof that pro-growth policies work."

The deficit for the budget year that ended Sept. 30 was 22.3 percent lower than the $318.7 billion imbalance for 2005, handing Bush a welcome economic talking point as Republicans battle to hold onto control of Congress in the midterm elections.

Bush called the outcome for Fiscal 2006 a "dramatic reduction" that redeemed his 2004 campaign pledge to halve the deficit earlier than his original 2009 target date.

"These numbers show that we have now achieved our goal of cutting the federal deficit in half and we've done it three years ahead of schedule," Bush told reporters at a Rose Garden news conference.

The pledge to cut the deficit in half was based on the administration's forecast that the 2004 deficit would hit $521 billion, a figure that proved to be too pessimistic by more than $100 billion. However, the administration has continued to use the forecast number as its benchmark for deficit reduction.

Bush said he would continue to urge Congress to make permanent his first-term tax cuts, all of which are due to expire by the end of 2010.

[Mavdog]

first, it is not impossible to decrease discretionary spending, clinton managed to pull it off.

second, it is facinating that the FACT the economy has been juiced by historic federal spending deficits isn't acknowledged by you or by the current administration.

third, it is only due to the use of cheap costs of labor in (primarily) asian countries that the inflationary affect of this huge amount of spending isn't biting us in the ass.

last, what will the fans of the current administration crow about next year when the tax receipts decline (this is predicted) and the deficit increases again? how will the budget fare when the debt service is approaching $500 BILLION a year? answer: not well.

there is no 1-800-debt-free for governments...

[dude1394]

Originally Posted by Mavdog

first, it is not impossible to decrease discretionary spending, clinton managed to pull it off.

second, it is facinating that the FACT the economy has been juiced by historic federal spending deficits isn't acknowledged by you or by the current administration.

third, it is only due to the use of cheap costs of labor in (primarily) asian countries that the inflationary affect of this huge amount of spending isn't biting us in the ass.

last, what will the fans of the current administration crow about next year when the tax receipts decline (this is predicted) and the deficit increases again? how will the budget fare when the debt service is approaching $500 BILLION a year? answer: not well.

there is no 1-800-debt-free for governments...

I agree that if dubya had been able to spend the defense windfall then possibly he'd have cut discreationary spending. It seems that bubba did it once. And then at the end of his term it was 3.6%, 7.5%, 5.6% increases. After he'd been able to absorb the defense buy down.
http://www.factcheck.org/article139.html

I'd like to see your link for the receipts projection, I couldn't find it. Only thing I could find was this heritage report griping that the dubya's tax cuts are too small.
http://www.heritage.org/Research/Tax...es/9318128.gif

But the bottom line here is that I dispute your assertion that any president will cut the budget because I don't think anyone wants him to. Even the one factcheck article talking about dubya cutting some discretionary spending had a jab that he was cutting someones milk money.

[purplefrog]

My issue with celebrating the new deficit numbers is that one, or even two data points do not give us enough information to declare a positive trend has emerged. That does not mean one will not emerge somewhere down the line, but rather such celebration is premature. Here is why I think premature celebration is potentially costly to Bush and the Republican party politically. First the benchmark deficit number (521 billion) stated by Bush in 2004 was overly pessimistic (by about 100 billion according to the article posted by Dude ... "The pledge to cut the deficit in half was based on the administration's forecast that the 2004 deficit would hit $521 billion, a figure that proved to be too pessimistic by more than $100 billion. However, the administration has continued to use the forecast number as its benchmark for deficit reduction."). So cutting the deficit in half has not really happened like Bush has suggested. This gives the appearance of this administration being a little sloppy with their economic assessments. Second, IF, as Mavdog suggests, the numbers start going in the opposite direction next year (an increase in the deficit), then you (Bush administration) again lose credibility as an economic forecaster. The last thing the Republican party needs is another tidbit for the media to grab a hold of and use to bash them over their heads in the '06 and '08 election cycles. Why not be a bit more cautious with your language and give a more accurate representation of what these numbers might mean at this point in time. There is some positive news here, just not as dramatic as the President seems to be suggesting.

[dude1394]

I can't recall a link but I would be that when dubya talked about halving the deficit he was probably pretty well lambasted by his oppostion.

All you can do is see the trend and the projections.

If you think that raising taxes is the way to increase prosperity then vote democrat, that's really all he's saying here.

As I said:

http://www.washingtonpost.com/wp-dyn...-2004Nov4.html

Analysts Call Outlook for Bush Plan Bleak
Too Much Deficit, Not Enough Revenue

By Jonathan Weisman
Washington Post Staff Writer
Friday, November 5, 2004; Page A08

President Bush signaled yesterday that he would add personal investment accounts to the Social Security system, simplify the tax code without raising taxes and cut the budget deficit in half, all before he leaves office in 2009.

Ambitious as those promises are, they may be mathematically impossible, budget and policy analysts say.

And it seems that when dubya made that claim the only reason it was smaller was the same unexpected boom in the economy.

Chad Kolton, a spokesman for the White House budget office, said the president can and will cut the deficit in half by 2009. But, he said, the deficit in 2009 would be half what the White House first projected it to be for 2004: $521 billion. That projection, made in January, proved to be inflated by $108 billion, in part because faster economic growth produced $82 billion in additional tax revenue and in part because spending was $27 billion less than anticipated.

[dude1394]

George Will on the "Herbert Hoover" economy.

http://www.washingtonpost.com/wp-dyn...pinion/columns

Worst economy since Herbert Hoover," John Kerry said in 2004, while that year's growth (3.9 percent) was adding to America's gross domestic product the equivalent of the GDP of Taiwan (the 19th-largest economy). Nancy Pelosi vows that if Democrats capture Congress they will "jump-start our economy." A "jump-start " is administered to a stalled vehicle. But since the Bush tax cuts went into effect in 2003, the economy's growth rate (3.5 percent) has been better than the average for the 1980s (3.1) and 1990s (3.3). Today's unemployment rate (4.6 percent) is lower than the average for the 1990s (5.8) -- lower, in fact, than the average for the past 40 years (6.0). Some stall.

Economic hypochondria, a derangement associated with affluence, is a byproduct of the welfare state: An entitlement mentality gives Americans a low pain threshold -- witness their recurring hysteria about nominal rather than real gasoline prices -- and a sense of being entitled to economic dynamism without the frictions and "creative destruction" that must accompany dynamism. Economic hypochondria is also bred by news media that consider the phrase "good news" an oxymoron, even as the U.S. economy, which has performed better than any other major industrial economy since 2001, drives the Dow to record highs. ...

President Bush's tax cuts were supposed to cause a cataract of red ink. In fiscal 2006, however, federal revenue as a share of GDP was 18.4 percent, slightly above the post-1962 average of 18.2. And the federal budget deficit was $247.7 billion, just 1.9 percent of the $13.1 trillion GDP. That is below the average for the 1970s (2.1), 1980s (3.0) and 1990s (2.2).

[Poindexter Einstein]

Polls tell us that when asked pointedly, respondents say that they are doing well, but they feel the economy is not. In other words, when they say the economy is bad, it's their perception, not their experience. In politics, perception equals reality.

In this case, "blame it on the media" is clearly a merited approach.

[Mavdog]

there was an eco prof who liked to say "get 3 economists in a room and ask them their opinion on data and you'll get 4 answers..."

economics isn't black and white.

as for the public's perception, imho they see their costs increasing for goods (gas, food)and services, and their net income isn't keeping pace.

[Poindexter Einstein]

Mavdog, no that is NOT the case. The respondents net income IS keeping pace. They feel they ARE doing well. But they base their feelings on the economy on what they are being told, not on their own experience. The economy is indeed doing well, but hearing repeatedly that things are bad, in time they begin to think they must somehow be the lucky exception. It's an odd situation - akin to mass brainwashing - but true.

[Mavdog]

Originally Posted by Poindexter Einstein

Mavdog, no that is NOT the case. The respondents net income IS keeping pace. They feel they ARE doing well. But they base their feelings on the economy on what they are being told, not on their own experience. The economy is indeed doing well, but hearing repeatedly that things are bad, in time they begin to think they must somehow be the lucky exception. It's an odd situation - akin to mass brainwashing - but true.

I recall that real personal income peaked in 1999 and has not yet returned to that amount, so NO net income is not keeping pace for the average american.

if you believe that people do not know the difference between having extra money to spend and not having disposable income, and they are "being told" if they are doing well rather than basing it on their personal experiences, yes I do know who has been "brainwashed".

[dude1394]

We should raise their taxes...that would make them feel better and get the economy booming.

[Usually Lurkin]

sigh. The biggest mistake made by the Republicans in the last year or so was not publishing this thread in as many places as possible. The biggest (most connivingly vital) victory by the Democrats was convincing so many folks that a good economy is bad.


Now the Dems are in a position to really try to tank the economy, and already having control of this portion of the public debate, might successfully blame republicans for any downturn.

The biggest upcoming challenge for Repubs is to link any downturns to the change in congressional leadership.

[dude1394]

Must be the dems.

American paychecks are rising again at a pace not seen since the 1990s.

The pay increase amounts to 4 percent on average over the past 12 months, and it comes at a very helpful time for millions of households.

For three years, pay increases haven't kept pace with the rising cost of living. Then came this year's housing slowdown, which has further squeezed family finances.

Those setbacks, however, are now being offset by rising income. Four percent may not sound like much, but you have to look back to 1997 to find a calendar year with a gain that big.

Equally significant, tamer energy prices mean that the "real" wage gains, after inflation, are above 3 percent for the past 12 months. That, too, hasn't happened since the 1990s, even though the economy has been expanding over the past five years.

"The striking feature of this expansion has been that ... real wages for the typical worker haven't risen that much," says Richard Berner, US economist at the investment bank Morgan Stanley in New York. But with real incomes rising, he says, "you get a picture of an economy that can weather this housing storm."

The risk of recession hasn't disappeared, he and other economists say. But with a fairly tight job market and low unemployment, many expect that paychecks will keep rising solidly in 2007.