Ka-BOOM!

[Mavdog]

put this in perspective.

four of the top 5 deficits in our nation's history have occurred in the time period from 2003 to 2006. hmm, whose budgets were those?

they add up to a staggering $1.5 trillion in debt.

thats TRILLION. in just four years mind you!

the problem is there are now about 8 of these budgets, for a total increase in the national debt of over $2 Trillion.

so are you going to still boast about the reduction of the deficit this year to "only" $205 Billion?

do you have an idea of what the cost of carrying that debt is on an annual basis?

lt gov bonds are paying 5.040%.....

[dude1394]

Originally Posted by Mavdog

put this in perspective.

four of the top 5 deficits in our nation's history have occurred in the time period from 2003 to 2006. hmm, whose budgets were those?

they add up to a staggering $1.5 trillion in debt.

thats TRILLION. in just four years mind you!

the problem is there are now about 8 of these budgets, for a total increase in the national debt of over $2 Trillion.

so are you going to still boast about the reduction of the deficit this year to "only" $205 Billion?

do you have an idea of what the cost of carrying that debt is on an annual basis?

lt gov bonds are paying 5.040%.....

Total numbers are not relevant. Break those down into debt/load per GDP.

[Mavdog]

"not relevant"????

ok, we've had the deficit as a % of GDP as high as 5.9%, now it is closer to 3.5%.

I guess according to the party's playbook we should all jump up and rejoice that it's "only" 3.5% of our gdp. but I'm not too eager to laud our current administration, after all a few trillion dollars seems to be a lot of money. and it is...

guess what, even at "only" 3.5% the debt has still increased by over $2 Trillion during this presidency.

in another view, the national debt as a % of the GDP has gone from just under 58% when bush took office to over 70% today.

businesses routinely fire their ceo's for performances like this. seems the american public sees it the same.

a 20.7% increase....and the debt is increasing at a rate of about $85 Million each day.

[dude1394]

Well I just don't agree with your assessement mavdog. Here are the graphs since 1990 and with respect to the GDP which is the only way to compare deficits.
I don't think many CEOs would be fired after bringing their economy and their books back into control after a recession and the only terrorist attack on american soil.

You may have to go to the blog to get the details, having problems saving the image.


http://engram-backtalk.blogspot.com/...out-their.html

[mcsluggo]

well, I was just curious what had happened to median income, and wikipedia was the first source I found, (with Wiki's known flaws and bugs... which btw are MUCH BETTER controlled than the same bugs and flaws at blogs--- but that is a story for another day)


http://en.wikipedia.org/wiki/Persona...y_Race_.26_Sex


anyway, better sources are out there, I am sure, but in 2004 dollars US median personal income::

1990: 28,439
2000: 31,089
2004: 30,314

2006 data would be nice to see...

[dude1394]

Just so happens that the blogger I linked to has another post on the deficit.

New deficit figures for fiscal year 2007 (which ends in September) were just released, and the value comes to $205 billion:

Bush sees deficit falling to $205 billion

WASHINGTON (Reuters) - President George W. Bush will estimate that the U.S. budget deficit for fiscal year 2007 will come in at $205 billion, a drop from last year, U.S. administration officials said on Wednesday.


Is that big or small? You can't tell, and that's my point today. The absolute size of the deficit is simply not that informative. Same goes for an individual's credit card debt. Is a credit card bill of $10,000 big or small? The answer depends on whether you are Bill Gates or a hotel maid. For Bill Gates, it's a drop in the bucket. For a maid, it's huge.

So, back to the main question: is a federal deficit of $205 billion for 2007 big or small? The only way to tell is to look at the size of the deficit relative to the size of the economy. This is an elementary consideration, but mainstream media reporters very often focus only on the deficit's absolute size anyway. And that's why so many people mistakenly think our federal deficit is HUGE when it is actually pretty small. This is not a debatable issue. Reporters are just wrong to do this, and I don't know if they are being intentionally misleading or if they just don't understand the basics. Here are some stories from the past that are extremely misleading:

....more at the link.
http://engram-backtalk.blogspot.com/...igment-of.html

He's updated his graphs with 2007 numbers as well as having a graph from CNN. His point here is that even the graph that CNN shows, shows the deficit moving in the correct direction, however CNN's seems to engage in self-delusion when writing about it.

How large is the federal deficit relative to GDP (i.e., relative to the size of our economy)? That's the question that you'd like to have answered. For example, the federal deficit in 1968 was a mere $25 billion. If you are like a mainstream media reporter, you should react to this number in the following way:

"Wow! Those were the good 'ol days! Back then, the deficit was really low. But now, with George Bush in charge, we are celebrating a deficit of $205 billion, which is a whopping 8 times greater than it was in 1968. What a disaster!!"


This, of course, is ridiculous. The overall size of the economy was much smaller in 1968 than it is today. Because of that, the absolute deficit figures ($25 billion vs. $205 billion) get the story exactly backwards. Relative to GDP, the deficit today is about half of what it was in 1968 (2.9% of GDP back then, but 1.5% of GDP in 2007). Get the picture? The absolute value is not a relevant statistic. Even so, reporters focus on it all the time, and that makes you think our deficit picture is really bad. You are wrong to think like that.

In any story on this topic, the absolute size of the deficit should be reported as a secondary figure, not as the primary figure. Every once in a while, a story in the mainstream media presents the more useful statistic. Even then, it is presented as dire news. Here is an example of that:

The budget: worse than you think

Recent CBO estimates have made headlines, but they could be overly optimistic.
August 27, 2003: 5:15 PM EDT
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Congressional analysts say the federal budget deficit will soar to record levels in coming years, but some analysts said Wednesday they're probably being too optimistic -- deficits could be much worse than expected.


This story talks mostly about the irrelevant statistic -- the absolute size of the deficit -- but then shows this useful chart:

http://money.cnn.com/2003/08/27/news...t_deficits.gif

[dude1394]

I'm still sort of looking for the metrics that we can use to discuss how rotten the economy is. Haven't really found 'em yet, so the KA-BOOM must continue.

http://money.cnn.com/magazines/fortu...n=money_latest

The greatest economic boom ever
A lot could go wrong. And it may not feel like a day at the beach to most Americans. But for your average globetrotting Fortune 500 CEO, right now is about as good as it gets, says Fortune's Rik Kirkland.
FORTUNE Magazine
By Rik Kirkland, Fortune
July 12 2007: 9:46 AM EDT

(Fortune Magazine) -- Just how red-hot is the current worldwide expansion? "This is far and away the strongest global economy I've seen in my business lifetime," U.S. Treasury Secretary Hank Paulson declared on a recent visit to Fortune's offices.

That may come as news to many Americans, whose boom-time memories are stuck in the 1990s, when Silicon Valley was the epicenter of our growth fantasies. But the fellow now occupying Paulson's old office at 85 Broad Street in downtown Manhattan shares that upbeat view. Just returned from a ribbon-cutting ceremony in the Middle East, Goldman Sachs (Charts, Fortune 500) CEO Lloyd Blankfein waves out toward the East River as he explains how the rise of the "BRICs" has altered his strategy and his travel schedule. (BRIC is an acronym Goldman coined in 2001 reflecting the rising economic power of Brazil, Russia, India, and China.)

[Mavdog]

Originally Posted by dude1394

I'm still sort of looking for the metrics that we can use to discuss how rotten the economy is. Haven't really found 'em yet, so the KA-BOOM must continue.

the economy is a living, breathing organism. to attempt to simplify with a "rotten" or "good" doen't quite hit the mark.

job growth has been quite good, although the growth seems to be in a barbell type of spread, there is growth in the higher income fields and in the menial lower income jobs while the middle seems to be stagnant. this is reinforced by the stagnant to declining family income stats.

otoh, the ecomomy's expansion has been pushed by the federal spending, and the deficits have helped in the classic keynesian model.

the problem is the debt that this deficit policy has produced. there is about 20% of the federal spending currently devoted to paying the debt service (up from about .10 in the early 90's, and of course there were surpluses when the current administration came into office), this figure will increase to almost 35% in the next decade, and to over 40% if the deficits continue and/or the interest rates for treasury notes increase.

so, it's currently about .20 cents of each dollar spent, increasing to .35 cents of every dollar spent in about a decade, on its way to .40 cents of each dollar spent.

.40 cents of each dollar spent is twice what is currently spent on defense. more than twice what is spent on social services.

that's a lot of the budget.

while it is easy and valid to make the claim that a deficit of only 2% of our country's gdp can be borne by the economy, that is a statement that looks at a year at a time. can an economy continually absorb deficits of 2% of its gdp? no, it must at some point in time pay off the debt.

are you aware the gross federal debt is over 63% of our gdp?

that our gross federal debt will surpass $9 Trillion this year?

that's the "ka boom", which is the blow up that will happen if we don't stop this poor fiscal planning.

[dude1394]

That "ka-boom" continues.

http://www.captainsquartersblog.com/...ves/011183.php

This probably won't get much attention in the media today, but new budget numbers show that George Bush's sunny deficit predictions were off the mark. It turns out that revenues are better and the deficit is smaller than predicted, and will likely balance much more quickly. That is, it would have until the Democrats decided to reverse the tax cuts that fueled the increased revenues:

The deficit would be even smaller than that, and it should be, given the record $2.12 trillion in tax revenues collected this year. However, we also set a record for spending, at $2.27 trillion. Thanks to the new Congress, we'll be spending even more next year, even adjusted for inflation -- and if the Democrats capture the White House, it may go even higher.

Revenues continue to rise dramatically -- and ahead of expectations -- because of the tax cuts that have fueled steady growth for four years. As the economy grows, so does revenue to the federal government. It comes from better income tax revenues as more jobs get created, federal excise taxes, corporate taxes, capital gains, and any number of other sources. The tax increases on which the Democrats based their budget projections will take capital out of the markets and cost jobs -- and the revenue will fall off, creating bigger deficits to go with their increased spending.

So where does the Washington Post place this great economic news? On the front page? Perhaps just a link on their main web page? Nope. If you didn't catch the RSS feed from their national news, you won't find this article easily on the Post's site, at least not at 10:50 am CT. You won't find it on the New York Times' front page, either, nor on the Chicago Tribune's main web page, either.

Gee ... wasn't the ballooning deficit a major issue in the last couple of elections?

[Mavdog]

revemues are up due to two sources increasing- corporate tax receipts and personal non-wage income.

so, corporations are making higher net profits, and individuals are realizing gains on investments.

personal wage income is not increasing..

with the swoon of wall street (whoops, the "ka-boom" is reverberating through the market in a very negative way) does anyone expect the non-wage income to remain high?

nope.

let me get this straight, the almost $2 TRILLION deficits of the past 7 years, which were passed by a republican congress and signed into law by the republican president (who btw NEVER vetoed a single federal expenditure) are the fault of the democrats?

THAT'S a partisan view if there ever was one....

[dude1394]

Originally Posted by Mavdog

let me get this straight, the almost $2 TRILLION deficits of the past 7 years, which were passed by a republican congress and signed into law by the republican president (who btw NEVER vetoed a single federal expenditure) are the fault of the democrats?

THAT'S a partisan view if there ever was one....

Yea that's pretty partisan. HOWEVER...do you think he will prove to be correct or not? History says he will, hope not, the dems could do a ton of good for themselves if they actually showed some restraint.

But their constituencies wouldn't give them credit for it so I expect that we'll not see a decrease in spending but more of an increase.

[dude1394]

Damn that dubya economy... KA-BOOM!!!!!

http://engram-backtalk.blogspot.com/...omic-news.html

No wonder everyone hates the Bush economy:

1. The latest on economic growth:

Economy Grows at Fastest Pace in a Year

WASHINGTON - The economy grew at its strongest pace in more than a year during the spring as solid improvements in international trade and business investment helped offset weakness in housing.

The gross domestic product, the broadest measure of economic health, expanded at an annual rate of 4 percent in the April-June quarter, significantly higher than the 3.4 percent rate the government had initially estimated a month ago, the Commerce Department reported Thursday.


2. The latest on consumer spending and income:

Consumer Spending Rebounds in July

Consumer Spending Rebounds in July, Helped by Strong Income Growth

WASHINGTON (AP) -- Consumers returned to the malls in July after taking a breather in June, although worries about the future could make the rebound short-lived.

The Commerce Department reported Friday that consumer spending rose by 0.4 percent in July, double the June increase. The spending was supported by a solid 0.5 percent rise in incomes, the best showing in this area in four months.
...
The personal savings rate edged up to 0.7 percent in July, slightly above the 0.5 percent savings rate of June.
...
The Fed got good news in advance of Bernanke's speech in the spending report, which showed that a key inflation gauge tied to consumer spending which excludes food and energy rose by just 0.1 percent in July. This measure of core inflation had been up 0.2 percent in June. For the year ending in July, core inflation by this measure is up just 1.9 percent -- within the Fed's preferred 1 percent to 2 percent comfort zone and well below the 2.5 percent year-over-year increase seen in February.


3. The latest on the federal budget deficit:

CBO Sees U.S. '07 Budget Gap Falling to $158 Billion

Aug. 23 (Bloomberg) -- The U.S. budget deficit will narrow this year to a five-year low of $158 billion, less than previously estimated, as economic growth bolsters tax revenue, the Congressional Budget Office said.

Take a look at the size of the federal budget deficit as a percentage of GDP placed into historical context (data here and here, but updated by me to reflect this news):

http://bp2.blogger.com/_2-oDfgGpQKg/...et+Deficit.jpg

Now look back at the earlier years and don't be too distracted by the surplus that occurred largely as a result of a stock market bubble that began to pop in Clinton's last year in office. What you can see is that our current budget deficit is, in historical terms, very small. I know that you believe otherwise, and it's one reason why you are so down on Bush's economy, but you are simply wrong. The federal budget deficit is low, not high.

Don't worry, though. As has been true for every single story on our fabulous economy throughout the Bush administration, the future is clearly bleak. It always is, and it always will be (until, that is, the Bush administration finally ends). That's why I like to focus on where we have been. People can always imagine the worst about the future, but their negative impression of the past is easily shown to be wrong by the facts. During the Bush years, our economy has been simply fabulous (and, yes, your incomes have been rising as well, which you don't realize only because you read the New York Times).

[mcsluggo]

I just have to assume that this is you poking some fun, posting this right now!

[dude1394]

Originally Posted by mcsluggo

I just have to assume that this is you poking some fun, posting this right now!

Why's that? I had a hard time following your reasoned arguments.

[mcsluggo]

reasoned arguments are neccesary whn you are trying to make a subtle or contested point. THe fact that the economy is in fairly scary waters right now is easily confirmed by one glance at anyon'es 401-k over the past month, or the fact that the fed abruptly dropped the interest rate 2 notches afer a hastily scheduled off-cycle meeting, or any other number of quite obvious and common indicators.

fact is, I really don't blame bush et al much for any of this bad economic news... it is what it is... but it is ALSO an interesting time to choose to crowe about bush's economic achievements.

my post was intending to be neither deep, nor subtle.

[dude1394]

In general I don't take my economic news in 2 month increments. It's the trends that seem to be important to me.

And the trends that I highlighted were quite good. Certainly 1 and 3 stand on their own without recent volatility in the financial sector.

[mcsluggo]

point 1 says that growth figures from two months ago were marginally above what they had been for the last year... not saying much.

point 3 looked tried to look at deficits in a historical context by comparing this administration's record to the Reagan administration. Fine, we know that the Reagan administration was the most fiscally irresponsible in the history of the country (and it required some painful and under appreciated belt tightneng by Bush Sr. (followed up by Clinton) to get the budget back into managable territory. In THAT context perhaps the Bush Jr. deficits look downright responsible.

(As a side not... there has been alot of discussion lately of W's position in history and how his presidency will be rated/viewed after the fact... I think that Bush SR is going to look a helluva lot better in retrospect than most people (myself included) gave him credit for at the time. He took over some difficult problems, and quietly did what it took to manuever some improvement. He will be viewed as a big success from both a fiscal and foreign policy standpoint... even if he DID seem like an uninspiring weenie at the time.)

[dude1394]

Read my lips, no new taxes.

[dude1394]

Five Saudia Arabias. Holy Mackeral. And a big finger to bin laden as well! Economy hasn't been so good for that cave maggot.

http://instapundit.com/archives2/009220.php

BIN LADEN'S MISERABLE FAILURE:

Six years ago, Osama bin Laden and al Qaeda weren't just attempting to bring down the twin towers of the World Trade Center. They were trying to smash the American economy as well. Here is what bin Laden himself said about his goals and motivations back in December 2001: "If their economy is destroyed, they will be busy with their own affairs rather than enslaving the weak peoples. It is very important to concentrate on hitting the U.S. economy through all possible means." And here is what al Qaeda second-in-command Ayman al-Zawahiri said in September 2002: "We will also aim to continue, by the permission of Allah, the destruction of the American economy."

No luck so far, despite bin Laden's recent videotape ravings about our taxes and mortgage debt. Although the towers came down, the resilient American economy didn't. Since September 11, the economy hasn't suffered a single down quarter. In fact, it has notched 23 straight quarters of economic growth. (And despite the subprime mortgage crisis, this is likely to be the 24th straight quarter of growth.) Those numbers are especially amazing when you consider that when the terrorist attacks happened, the Internet stock bubble was in full implosion mode. The economy dipped in the third quarter of 2001 and was slightly negative in two of the previous four quarters. But it's been nothing but growth since then. Overall, the American economy is, adjusting for inflation, $1.65 trillion bigger than it was six years ago. To put that gigantic number in some perspective, the U.S. economy has added the equivalent of five Saudi Arabias, eight Irans, 13 Pakistans, or 15 Egypts, depending on your preference. And while 9/11 did cause the stock market to plunge, the Dow is 37 percent higher than it was on Sept. 10, 2001, creating trillions of dollars of new wealth for Americans. What's more, the unemployment rate is 4.6 percent today vs. 5.7 percent back then. Not bad at all.

Nope. But that really does put things in perspective. And special thanks to the Retail Support Brigade for its work in those dark days after 9/11. I credit Scott Norvell!

[Usually Lurkin]

Originally Posted by dude1394

Five Saudia Arabias. Holy Mackeral. And a big finger to bin laden as well! Economy hasn't been so good for that cave maggot.

http://instapundit.com/archives2/009220.php

I'd just read that. Democrat or Republican, congress or president, free market or socialist, we've made sure Osama has failed where he wanted to win most.

[Arne]

The national debt has increased by 3 trillion dollars since 9/11 and Bush's stupid policies...

The government, of course, has inested much of their military budget into American companies... Pivate military companies, companies that produce weapons, companies who are responsible for logistics and stuff. - 1,1 trillion dollars since 9/11...

So my simple understanding of the issue is like that: The government takes the taxpayers money and the trillions of dollars that they have borought all over the world and invests them into their very own war industry... That's a good way to do it, because a) it makes the whole American economy look better and b) companies like KBR/Halliburton profit in a big way, which is a good thing for Cheney and his former friends...

[Darth Ape]

nothing wrong with debt if it's funding growth. AS far as I can tell, the US is far outgrowing all of its western rivals... thanks mostly to Bush's tax policy. Another good point to make is that the US's debt ratio is still far lower than that of almost all European nations.

Take a look at the stability of government t-bills. Apparently the investment community still views the US government as the most secure of all investments. Nobody thinks the government will default on it's loans.

[Mavdog]

Originally Posted by Darth Ape

nothing wrong with debt if it's funding growth. AS far as I can tell, the US is far outgrowing all of its western rivals...

not ireland, finland, sweden, greece or spain. the us is at 143 in the list for 2006, with a 3.3% growth. eu is at 2.9%, not "far outgrowing" by any means.

the problem with saying "nothing wrong with debt" is the comment may be valid on a short term basis, but to have continually increasing debt on a long term basis (such as the past 7 years straight) there eventually comes a time when the debt burden takes too much of the revenues, making it very, very difficult to retire any of the debt.

for instance, the debt service on the $5.1 TRILLION in public debt totaled over $406 BILLION in 2006. that is just the debt service, that does nothing to retire any of the debt.

say that a few times....over $400 Billion a year goes to paying the interest, and the majority of that goes outside the country.

thanks mostly to Bush's tax policy. Another good point to make is that the US's debt ratio is still far lower than that of almost all European nations.

Take a look at the stability of government t-bills. Apparently the investment community still views the US government as the most secure of all investments. Nobody thinks the government will default on it's loans.

the usa has public debt that equates to about 65% of its annual gdp, right there with france, germany and canada, and higher than almost all of the eu economies except for italy, greece and belgium.

nobody is in any way suggesting that the us government is going to default on its debt, it's ridiculous to even mention it.

look at the yield advatage on our debt, it is now gone. historically we had a positive yield advantage.

looked at our currency? we're at historic lows vs the pound and the euro, even the candian dollar is almost on par.

the candian dollar worth as much as the american dollar? yikes.

we MUST get our federal budget back into balance. the amount of debt rung up by the current administration will be its second worse legacy behind its foreign policy mistakes, both of which will place a very heavy burden for all of us going forward.

[alexamenos]

Originally Posted by Mavdog

nobody is in any way suggesting that the us government is going to default on its debt, it's ridiculous to even mention it.

of course it's ridiculous to suggest that the us government will default on it's debt, or it's unfunded Social Security liabilities....all the us government has to do is print dollars to repay the debt.

look at the yield advatage on our debt, it is now gone. historically we had a positive yield advantage.

looked at our currency? we're at historic lows vs the pound and the euro, even the candian dollar is almost on par.

the candian dollar worth as much as the american dollar? yikes.

we MUST get our federal budget back into balance. the amount of debt rung up by the current administration will be its second worse legacy behind its foreign policy mistakes, both of which will place a very heavy burden for all of us going forward.

saying that we must get our federal budget back into balance is like saying that an alcoholic with a lifetime supply of vodka simply must get more fruit in his diet....i mean you've got a point, but you're not really addressing the problem.

cheers

[mcsluggo]

so... what would you say is the analogous "alchoholism" to the US-Govt's "low fruit diet" deficit/debt problems?

[Mavdog]

Originally Posted by alexamenos

of course it's ridiculous to suggest that the us government will default on it's debt, or it's unfunded Social Security liabilities....all the us government has to do is print dollars to repay the debt.

saying that we must get our federal budget back into balance is like saying that an alcoholic with a lifetime supply of vodka simply must get more fruit in his diet....i mean you've got a point, but you're not really addressing the problem.

cheers

you're not going to launch into a gold standard speech are you?

[dude1394]

good thing we have the new dem congress to slow all of that spending down.

http://www.captainsquartersblog.com/...ves/013024.php

Remember when people acted outraged after the collapse of the St. Anthony Bridge in Minneapolis because of the neglect of American infrastructure? We don't spend enough on maintaining what our grandparents bequeathed us, as some poetically put it. Others offered more prosaic and predictable rants aimed at people who oppose tax increases; one Minneapolis crank blamed the Taxpayers League for the thirteen deaths. Had we taken more money from the people, they claimed, the bridge would have received proper maintenance and never would have collapsed, even though no one knows to this day what initiated the disaster.

Before we start blaming a lack of money, though, let's take a look at the amount of wasted funds that this Congress approved even after the bridge collapsed:

Roll Call

UPDATE: Here's the list of Senators who voted in support of Dr. Coburn's amendment to suspend all earmarks until deficient bridges are repaired, or didn't cast a vote:

NAYs ---14
Barrasso (R-WY)
Burr (R-NC)
Chambliss (R-GA)
Coburn (R-OK)
Corker (R-TN)
Cornyn (R-TX)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Feingold (D-WI)
Grassley (R-IA)
Isakson (R-GA)
Kyl (R-AZ)
McCaskill (D-MO)

Not Voting - 4
Craig (R-ID)
Dodd (D-CT)
McCain (R-AZ)
Obama (D-IL)

[alexamenos]

Originally Posted by Mavdog

you're not going to launch into a gold standard speech are you?

tempting, very tempting.....

[alexamenos]

Originally Posted by mcsluggo

so... what would you say is the analogous "alchoholism" to the US-Govt's "low fruit diet" deficit/debt problems?

i was thinking monetary policy, but now that I think a tad more this metaphor infringes upon my preferred metaphor where the drug is power and our monetary policy is a key enabler of the habit.

at any rate....

We've seen first hand and recently what happens when budget gets balanced....we get a whole host of politicians who spend more and tax less. this is no surprise what with human natue being human nature and all....

the promise "i'll take more of your money and give you less goodies" is never as palatable as the promise to "take less money and give you more stuff". hence, deficit spending will always win out. (keynes, bless his little socialist heart, must have thought too highly of politicians and voters)

anyhoo....i guess i'd be a fiscal conservative (in the balanced budget sense) if being one wasn't a complete waste of time.

[dude1394]

And the deficit just keeps on coming down.
http://biz.yahoo.com/ap/071011/budge...cit.html?.v=17

WASHINGTON (AP) -- The Bush administration reported Thursday that the federal budget deficit fell to $162.8 billion in the just-completed budget year, the lowest amount of red ink in five years.

The administration credited the president's tax cuts for helping generate record-breaking revenues but warned of an approaching "fiscal train wreck" unless Congress deals with unsustainable growth in Social Security, Medicare and Medicaid.

President Bush, appearing with his economic team to trumpet the news, noted that the deficit turned out to be $81 billion lower than it was projected to be in February. He said the deficit represents 1.2 percent of gross domestic product -- less than the average of the last 40 years.

"By keeping taxes low we can grow the economy, and by working with Congress to set priorities we can be fiscally responsible and we can head toward balance," Bush said after the meeting across the street from the White House. "And that's exactly where we're headed."

The deficit for the 2007 budget year that ended on Sept. 30 was 34.4 percent lower than the $248.2 billion deficit recorded in 2006, reflecting faster growth in revenues than in government spending.

[chumdawg]

Geez, why would they lose 160 billion?

[dude1394]

Badda-bing, badda-BOOM..

http://engram-backtalk.blogspot.com/...dent-ever.html

Economy grew briskly in third quarter

GDP advance of 3.9 percent was largest in 18 months

WASHINGTON - The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1½ years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil.
...
The increase in third quarter gross domestic product exceeded analysts’ forecasts for a 3.1 percent growth rate for the period. Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country’s economic fitness.
...
Consumers, whose spending is an important ingredient for the economy’s good health, actually rediscovered their appetite to spend in the third quarter. Their spending rose at a 3 percent pace, a considerable improvement from the second quarter’s rather weak 1.4 percent growth rate.

One of the reasons why people are continuing to spend is because the nation’s employment climate has managed to stay fairly sturdy through all the problems.

Wage and job gains have served as shock absorbers for some of the negative forces of an ailing housing market, weaker home prices and more restrictive credit.
...
An inflation gauge closely watched by the Federal Reserve showed “core” prices — excluding food and energy — rose at a rate of 1.8 percent in the third quarter. Although that was up from a 1.4 percent pace in the second quarter, it was still within the Fed’s “comfort zone.”

So much for the strong-export dollar scare-mongers.

Strong sales of U.S. exports to foreign buyers was another big factor in the good third-quarter showing. Exports of goods and services grew by 16.2 percent, on an annualized basis, during the quarter. That was the biggest increase since the final quarter of 2003.

[dude1394]

Keep it coming dubya, keep it coming. Ka-BOOM!!
I may start to like that export-enhancing dollar some.

The Commerce Department released its final report on gross domestic product in the third quarter on Thursday, showing that the pace of GDP growth for the quarter was unrevised compared to the preliminary estimate.

The report showed that GDP increased at an annual rate of 4.9 percent in the third quarter compared to the 3.8 percent growth seen in the second quarter. Economists had expected GDP growth to remain unchanged at 4.9 percent.

The GDP growth in the third quarter marked the fastest pace of growth since the third quarter of 2003, when GDP surged up 7.5 percent.

The acceleration in the pace of GDP growth compared to the previous quarter primarily reflected accelerations in exports, consumer spending, and private inventory investment.

[mcsluggo]

holy $%i+ ... are you actually trying to BRAG on the current economc conditions...?

really? right NOW?

[dude1394]

Originally Posted by mcsluggo

holy $%i+ ... are you actually trying to BRAG on the current economc conditions...?

really? right NOW?

Educate me. Exactly what numbers are bad?

Unemployment?
Deficit trend?
Productivity?
GDP?
Export Trend?

What?

[purplefrog]

I'd like to hear some responses to the article below. It resonates with my regular tracking of grocery prices. They are increasing and household budgets are being tested imo.
_________________________________________________
High cost of food hard to swallow
Cox News Service

WASHINGTON -- Time and again this year, economists have assured consumers that the "core" inflation rate is tame, running at roughly 2 percent this year. President Bush agreed in September, saying, "inflation is low."

But millions of Americans shopping for holiday meals will pay significantly more than in 2006.

The government says food prices are up 4.4 percent compared with last year.
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That's about double the core rate, which excludes volatile food and energy prices. And experts think the trend will get worse.

Economists don't like to consider monthly costs for fuel and food because those prices can rise and fall dramatically if a hurricane knocks out refineries or an early freeze kills crops.
Focusing only on the core rate is fine for people who will be spending the holidays studying economic statistics.

But for Americans whose celebrations include a drive to grandma's house and a meal, inflation could have a big impact.

Gasoline is up 23 percent from last year. Christmas brunch may be an expensive treat too, given that bread is up 16 percent and coffee up nearly 10 percent. Better skip the orange juice; it's up almost 28 percent.

And all those jumps, as measured by the BLS in October, are mild compared with eggs.
The wholesale price of a dozen grade A eggs was $1.35 in mid-November, up from about 89 cents last year, according to the U.S. Department of Agriculture.

"I keep looking for things I can buy with my discount card" from Giant Food Inc., said Mary Beth Thomas, a Rockville, Md., resident shopping for groceries on her income as a second-year teacher.

[mcsluggo]

Greenspan focused on "core inflation", Bernanke has given clear indication that he does not. THat was why he only lowered rates 25 bps, when the market expected him to lower it a full half.

[mcsluggo]

http://www.ft.com/cms/s/0/b56079a8-9...nclick_check=1

Larry Summers was clinton's second treasury secretary, but is widely regarded as fairly conservative (remember, he was the ex president of Harvard that got sacked from the position for asking the question whether women held fewer leadership roles in the sciences and engineering because of innate skills and preferences).

[dude1394]

Originally Posted by mcsluggo

http://www.ft.com/cms/s/0/b56079a8-9...nclick_check=1

Larry Summers was clinton's second treasury secretary, but is widely regarded as fairly conservative (remember, he was the ex president of Harvard that got sacked from the position for asking the question whether women held fewer leadership roles in the sciences and engineering because of innate skills and preferences).

Tough to get much hardcore data out of these paragraphs.

Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability.

Even if necessary changes in policy are implemented, the odds now favour a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.

Recessions are inevitable for one thing, recall clinton had one at the end of his presidency (or it was right at the beginning of dubya's).

I'm still looking for all the numbers showing how rotten the economy is doing.

[dude1394]

Oh maybe this is where you got your data McSluggo?

....according to DNC chair Howard Dean:

"The economy is really alarming a lot of Americans," he says, noting that people are afraid of losing their homes and their jobs. In a year-end interview with U.S. News, he added that the party of an incumbent president usually pays a severe price when the economy goes bad—and that's what will happen to the Republicans in next year's election.

So they will now try to convince us that an economy that showed an unrevised growth rate last quarter of 4.9% is sick and collapsing. Yes, folks, the "good news" Dems are back.