No, RJ, it was down. Bbauska - see the three/four day gap in posts on the previous page? That was the outage.

Back on topic (sidenote: I took several days off of the site . . . the servers may not have known how to respond).

Will hits it on the head:

This state cannot be funded by taxing “the rich.” Or even by higher income taxes on the middle class. Income taxes cannot fund the government liberals want, and they dare not seek the consumption and energy taxes their entitlement architecture requires. Hence, although Republicans are complicit, Democrats are ardent in embracing decadent democracy. This consists not just of infantilism — refusing to will the means for the ends one has willed — but also of willing an immoral means: conscripting the wealth of future generations.

In my vernacular: if the mindless masses want a welfare state, fine; it's a democracy and they voted for it.

What is "immoral" is borrowing the money so that "we" can live as we please. Taxing the rich won't cut it. In fact, without impoverishing most of us, there is not enough money available.

That's why Obama's policies bother me so deeply. He is simply the most dishonest person in a city full of dishonest people. He actually called this deal a deficit reduction measure, even though the CBO said it increases the deficit.

He is Nero fiddling.

Reagan: Took office Jan 1981. Total debt 818billion Left office Jan1989 total debt 2.698 billion. increase of +218%
George HW Bush. Took office jan 1989. Total debt 2.698 billion. Left office Jan 1993. Total debt 4.188billion. increase of +55%
Bill Clinton. Took Office Jan 1993. Total debt 4.188billion. Left office jan 2001. Total debt 5.728billion. increase +37%
Geo W. Bush. Took office Jan 2001. Total debt 5.728 billion. Left office jan 2009. Total debt 10.627billion increase +86%
Barack Obama: Took office Jan 2009. Total debt 10.627 billion. as of end of April 2011; 14.288 billion increase to date +34%.

I don't disagree with Will that Americans seem unwilling to pay the taxes for the services and armed forces they want.... But I disagree that it is a new phenomenon.

Ricky, the weakness in your analysis is that by the time Obama leaves office, the debt is forecasted to be over $20 trillion. His increase will be 100% which is more than that of Bush; also, on a nominal basis, his $10 Trillion additional will dwarf Bush's sorry story by $5 trillion.

The magnitude of the debt and deficits is a new phenomenon.

rickyp wrote:Reagan: Took office Jan 1981. Total debt 818billion Left office Jan1989 total debt 2.698 billion. increase of +218%
George HW Bush. Took office jan 1989. Total debt 2.698 billion. Left office Jan 1993. Total debt 4.188billion. increase of +55%
Bill Clinton. Took Office Jan 1993. Total debt 4.188billion. Left office jan 2001. Total debt 5.728billion. increase +37%
Geo W. Bush. Took office Jan 2001. Total debt 5.728 billion. Left office jan 2009. Total debt 10.627billion increase +86%
Barack Obama: Took office Jan 2009. Total debt 10.627 billion. as of end of April 2011; 14.288 billion increase to date +34%.

I don't disagree with Will that Americans seem unwilling to pay the taxes for the services and armed forces they want.... But I disagree that it is a new phenomenon.

*Note: you meant to say "trillion," not "billion." In our dreams it's "billion."

Okay, that is a pretty cheesy way to compare them--based on percentage of debt? By that measure, the last guy, no matter how profligate, is going to come out pretty well.

We're now at $16.4T. So, Obama's at 54% . . . in four years! He's got a real shot at 100%! Don't give up the dream Barack!

Here's another measure: in 4 years, he's accumulated $1T+ more than GWB in 8 years!

I'm not saying it's "a new phenomenon." I'm saying it is growing and reaching a breaking point.

It's at this point that you want/demand with precision the moment we break.

I'll admit: I don't know.

However, the buzzards (known as credit rating companies) are circling. How many hits can our credit-worthiness take before we are no longer "safe?"

I don't know. You don't know.

I don't want to gamble. You have no particular problem with rolling the dice. Maybe that's because you're not American? We're talking about the viability of my country. I take that personally.

Ray Jay wrote:Ricky, the weakness in your analysis is that by the time Obama leaves office, the debt is forecasted to be over $20 trillion. His increase will be 100% which is more than that of Bush; also, on a nominal basis, his $10 Trillion additional will dwarf Bush's sorry story by $5 trillion.

The magnitude of the debt and deficits is a new phenomenon.

Cross-posted.

Again, I would respect the President (as a person and as a leader) so much more if he would just say, "Look America, you want to play you got to pay!" Stop with all the "rich people like me just need to pay a little more" nonsense and tell the truth. Taxes need to go up by what, 50% across the board? Tell the truth!

If Americans can't handle the truth, then they need to know that something has to give. Stop pretending to be an adult, Mr. President, if you're going to keep giving us more candy and promise us "the rich" are going to pay.

They're not.

Neither are we.

Instead, we're jogging toward insolvency--or at least forced restructuring of a massive scale.

I don't get what the angst is about. We avoided massive cuts and massive tax increases, two things that (particularly spending cuts) that would not be great for the recovery. The deal allows breathing room for the economy to get going. Forbes does not seem to think the budget forecast looks too bad. http://www.forbes.com/sites/beltway/201 ... -spending/

The reaction from Wall Street was pretty telling, don't you think?

Our real problem is what to do about health care costs...that will be fixed with single-payer when it will be realized that will be the only possible solution.

Conservatives got us into this mess (you think Bush II was the architect behind all those tax cuts and huge military spending...) and we're not going to gut the safety net so that their "starve the beast" theory comes true. All we really have to do is get spending under control and we have--deficits hit their peak in 2009 and 2010 and have come down.

Obama has not been a spend-thrift. Look at the budget deficits. Bush came in with a surplus and essentially left Obama with a trillion dollar deficit. That is about where it is right now. It is a far, far worse thing to take a budget surplus and turn into a trillion dollar deficit then it is to keep the deficit at that same trillion dollar level once you get there. Now, if our budget deficit levels were at 2 or 3 trilllion dollars a year then critics of Obama would have a point. Since they're not, they don't. It takes a lot of nerve for the Republicans to be budget hawks when Obama is president but were responsible for the budget catastrophe in the first place after Clinton had gone in and fixed the budgetary excesses of another Republican president--Reagan.

Ray

The magnitude of the debt and deficits is a new phenomenon

.

Not really.
In 1945 the accumulated debt of the US was 145 % of GDP... It was enormous.
It took very high tax rates and a roaring economy (notice that the one didn't preclude the other) to drive it down to where is was about 40% in 1980... It took a very mature response by government of all levels to deal with the eradication of the debt.
What happened in 1980 is abandonment of conservative principles of financing government. Period.

I agree with Fate that there needs to be a sober presentation of the facts of life regarding spending and taxation levels. A return to true conservative principles.
However, in an environment where a large number of members of one party have sworn never to raise taxes .... and deny the reality that taxation is at the lowest level it has been since the 30's ... and won't consider cutting military expenditures...
it isn't just the President who is failing.
Its every person who can add and subtract. and who can't deal with cuts to expenditures in areas that affect their constituents... or their specific interests....
If You can't raise taxes on the handful of people who a) have all the money b) haven't created jobs since they got their big tax breaks c) can afford to pay some more tax .... then how do you deal with the rest of the problem?
One small step, raising taxes on the wealthy a little bit .... and there's a battle Royal. There's little hope that the required discussion will be sober or honest.

rickyp wrote:Ray

The magnitude of the debt and deficits is a new phenomenon

.

Not really.
In 1945 the accumulated debt of the US was 145 % of GDP... It was enormous.
It took very high tax rates and a roaring economy (notice that the one didn't preclude the other) to drive it down to where is was about 40% in 1980... It took a very mature response by government of all levels to deal with the eradication of the debt.

I think you are drawing the wrong lessons from history for a few different reasons.

First, the deficits and debt incurred during WWII were incurred to fight the greatest evil the world has ever known. We are now incurring debt to build race tracks and make movies and build wind mills and deliever mail on saturday even though most of the important stuff comes electronically the same day, and make sure that the elderly can have every medical procedure needed or not needed. We are incurring debt to maintain and strengthen a bureaucracy that is gargantuan relative to the domestic bureaucracy during WWII.

Second, when WWII ended, the US massively reduced its government spending. We brought most of the soldiers home. There was some government spending (GI Bill) but for the most part we let the private sector take over. Many on the left feared that moment and warned of another depression. But the opposite happened as the private sector absorbed the government spending and then some.

Here's an interesting table on deficits as a % of GDP
http://www.multpl.com/u-s-federal-deficit-percent/table
Yes, our deficits were larger during the war years (but maybe not our debt if we did a full accounting right now of our back end obligations) , but see how we shrunk it in 1946 are eliminatd it in 1947. We only had deficits for 4 years, not the 12 years and many more that are now planned. And we didn't raise taxes to end the deficits. As you can see from this chart, taxes went down for the wealthy:

http://en.wikipedia.org/wiki/File:Effec ... income.png

as there was an income tax rate reduction in 1946 and again in 1948.
http://top-federal-tax-rates.findthedata.org/

We didn't raise taxes to get out of it.

So, if you want to follow the WWII model, the answer is to reduce government spending.

QED

ray
1) Debt is debt. Whether I accumulate debt through spending on wine women and song, or unwise business investments or a house ...debt is debt.
I agree with you that much of the US debt since 1980 has been on unwise spending. Some has been on out sized military. Some on unwise long term subsidization of agriculture or industries... Some has been directly as a result of the conflicts in Iraq and Afghanistan. (By your reasoning does this debt for Afghanistan and Iraq get a pass, because they were `necessary wars`?). But however it was accumulated, it still exists.It still has to be dealt with the same way. There`s no magical difference between the billions spent on the Iraq war and the billions spent on domestic programs.

2) Yes. Most of that reduced spending was a cut in military expenditures... But yes, spending was reduced.
And yes, deficits were eliminated by 47. And stayed that way until Reagan came into office. It was by prematurely reducing taxation to where surpluses became deficits that the whole process of eliminating the debt was reversed.
And you say that "we didn't reduce taxes" to get out of debt.... Please compare the actual taxation rates from 48 through to 1981.... Surely you aren't saying that the small incremental decreases in tax rates you note refute the argument that high taxation both resulted in debt reduction AND did not affect general economic growth negatively. Without the high absolute tax rates, the revenues would not have been achieved that paid the debt down.

I grant you that The problem is more complex today than 46, because the economy is global... However, today the US Federal government collects 15.5% of GDP in taxes. That's a historical low. (Well, since the 30s) And spends 25% of GDP.
Growing the economy can reduce the second and reduce the gap between the two numbers. However an adjustment has to be made to both taxation rates AND spending.
You cannot balance the budget or bring a surplus into being by cutting Federal Spending by 40% (to get it to 15% of GDP.) That would crash the economy.
And you won`t damage the economy if taxation is increased to drive it close to 18 to 20% of GDP That is if its done in areas that don`t affect consumer spending ....
I`m, not saying this is easy. What I`m saying is that a difficult problem is made worse by `magical thinkers`who refuse to raise taxes, and somehow believe more tax dollars result from lower tax rates... The fallacy of applying the theory of the Laffer curve (which can work within a small performance range) to a misguided general principle .
If, in considering the cuts to spending, conservatives were as courageous as Fate would like Obama to be .... and they detailed how cuts to spending would work that would contribute greatly. However, Americans like their entitlements, and the special interests like their subsidies and grants... And everyone treats the military like a sacred cow. (Unlike 1946 and 47)
Moreover, the political process is moribund and stuck in an intractable loop. (Not unlike the Japanese system for the last 20 years).
Unless someone gains a majority in both houses I can`t see how the courage necessary to make a grand design is possible.
Which leaves, muddling through. Which is what Obama seems to be comfortable with....
By the way, both Canada and Sweden over came similar fiscal problems to the US in the 90s , eliminating deficits and paying down debt to manageable percentages... So it can be done now, and isn`t some accident of ancient history (from the 40`s).

freeman2 wrote:I don't get what the angst is about. We avoided massive cuts and massive tax increases, two things that (particularly spending cuts) that would not be great for the recovery. The deal allows breathing room for the economy to get going. Forbes does not seem to think the budget forecast looks too bad. http://www.forbes.com/sites/beltway/201 ... -spending/

The reaction from Wall Street was pretty telling, don't you think?

Nope. One or two days does not a trend make.

There is no "breathing room." With Obamacare taxes kicking in, rating agencies putting us on notice, and the President all but promising to raise taxes "on the rich" again, there's no breathing room. Plus, we've got the debt ceiling debate looming.

We did have "massive tax increases." All working people just saw their FICA go up. Again, it's about as regressive a tax as we have.

What did the CBO say? Answer: the deal adds trillions to the Debt over ten years.

Our real problem is what to do about health care costs...that will be fixed with single-payer when it will be realized that will be the only possible solution.

So, the answer, in your opinion, is more government? Interesting.

Conservatives got us into this mess (you think Bush II was the architect behind all those tax cuts and huge military spending...) and we're not going to gut the safety net so that their "starve the beast" theory comes true. All we really have to do is get spending under control and we have--deficits hit their peak in 2009 and 2010 and have come down.

It wasn't "less government" that got us into this mess--that is what you fail to grasp. Stop fixing the blame and look for solutions.

If we implement single-payer medical insurance, will that solve our deficit problem?

If "yes," then prove it.

Obama has not been a spend-thrift. Look at the budget deficits. Bush came in with a surplus and essentially left Obama with a trillion dollar deficit.

"Essentially" has just officially been abused.

It was the Democrats who delayed many bills until Obama was sworn in so they could spend at will. It was Obama who signed the $800B Stimulus plan. It was Obama who said he would cut the deficit in half in his first term.

What are the bold, significant fiscal moves Obama has made? What are the politically brave moves he's made in terms of fiscal policy?

Blaming Bush is lazy.

As I've said, the 1998 Federal spending was $1.7T. Blame Bush as much as you want, it is now over $3.8T. Even adjusting for inflation, that's a lot of growth. Obama's solution? Keep "investing."

That is about where it is right now. It is a far, far worse thing to take a budget surplus and turn into a trillion dollar deficit then it is to keep the deficit at that same trillion dollar level once you get there.

Except you're not telling the truth.

Even if you blame the initial Obama spending on Bush, it was supposed to be "emergency" spending, not "the new normal."

This deal raised revenues . . . where are the cuts? What is Obama's plan to reduce the deficit and put us on a sustainable path?

Now, if our budget deficit levels were at 2 or 3 trilllion dollars a year then critics of Obama would have a point. Since they're not, they don't.

Let's blame Bush for a moment (although you are factually incorrect).

How many years did he run trillion dollar deficits?

The truth is "zero." If you want to fudge and blame him for Obama's decisions, the answer is "one."

That gives Obama license to do it for his entire term?

Lame.

rickyp wrote:Unless someone gains a majority in both houses I can`t see how the courage necessary to make a grand design is possible.

Obama can't run for reelection.

If he wants to make a mark on history, here's his chance.

Ricky, we've now raised taxes on the wealthy. I guess the total governmen tax will go from 15.5% to 17%, or something like that. Tax rates are now more or less the same as they were in the Clinton years; we've raised taxes on the wealthy to past those levels. The current cap gains rates are basically the same as they were in the 40's. If you are a megga earner now, your effective federal rate on interest and STCG is 39.6% plus 3.9% from the ACA tax plus about 1.5% more from phase out of deductions. That's more than in the Clinton years.

WE HAVE TO CUT SPENDING! It's at 25% whereas in the past it has been at 20 to 22%. The lesson from WWII is that when you cut spending on un-productive activity (whether military or domestic) is that the growth in the private sector will pick up the slack.

We can't get there by raising taxes on the wealthy -- look what's happening to France. And no one wants to raise taxes on the middle class whose taxes are lower than during the Clinton years.

ray

I guess the total governmen tax will go from 15.5% to 17%, or something like that

Based on what? I think it is more like 16% but we're both guessing.... so if you have a source for your guess, i'll go with it.

Ray

Tax rates are now more or less the same as they were in the Clinton years; we've raised taxes on the wealthy to past those levels. The current cap gains rates are basically the same as they were in the 40's. If you are a megga earner now, your effective federal rate on interest and STCG is 39.6% plus 3.9% from the ACA tax plus about 1.5% more from phase out of deductions. That's more than in the Clinton years

.

Tax rates on those below $400,00 are still lower than Clintons years ...New Rules on capital gains and carried interest shield plenty of wealthy peoples incomes from taxation over 15% .... I don't think we're really at the same level yet. Especially regarding taxes on financial institutions or trading houses...

I agree with you on spending cuts generally. Just the timing and type are important to select. Because the US is dependent upon the consumer economy, its important to select those areas that will have no effect, if possible, on middle class or working class spending until the economy moves forward. I suspect the military and a lot of subsidization programs that have been around longer than 5 years would also be easy targets...
More importantly, faster changes to medicare bargaining rules could probably save a great deal of money in health care. Probably this is the area where economies are most easily gained. There doesn't seem to be genuine difference in care, or results for an appendectomy done in Windsor over one done in Detroit. But the Windsor appendectomy costs about $8,0000 and the Michigan procedure $20,000. Even if those cost savings don't all accrue to the government, they accrue to middle class paying health insurance....which takes a phenomenal amount of money out of other areas of the economy and is largely responsible for the economic stress of many American families.

By the way, if spending remains the same, but the economy moves ahead 4% the share of GDP that the spending represents diminishes by almost a full point.... And that additional 4% in economic activity would increase overall tax revenues, even if the % of GDP that the tax represents is the same... So growth is vital......
And which cuts to make, must be judicious.

[quote= "RickyP"] ray
1) Debt is debt. Whether I accumulate debt through spending on wine women and song, or unwise business investments or a house ...debt is debt.
I agree with you that much of the US debt since 1980 has been on unwise spending. Some has been on out sized military. Some on unwise long term subsidization of agriculture or industries... Some has been directly as a result of the conflicts in Iraq and Afghanistan. (By your reasoning does this debt for Afghanistan and Iraq get a pass, because they were `necessary wars`?). But however it was accumulated, it still exists.It still has to be dealt with the same way. There`s no magical difference between the billions spent on the Iraq war and the billions spent on domestic programs.[/quote]

Weren't you the one saying that public debt is different and it is difficult to compare the need for government debt and the family debt?

I think I agree with this part of what you are saying. I really don't care what the reason for the debt is. We cannot continue this way, and (I think we can agree on this as well) politicians are so polarized that little can get done.