Obama's Deficit Preservation Plan - $1.5 Trillion Deficit + Spending Freeze

[chucky2]

I didn't say spending is always good. I specifically said that when the economy is doing well we should pay off the national debt.

But that means you'd cut government spending to pay off the debt you racked up when you raised government spending. By cutting the government spending to pay down the debt you racked up, you're hurting the economy. If you're hurting the economy, you'll get less revenues, and after some time period, more expenditures. But then, you'd have to increase government spending again...but did you pay down the debt? Doubtful. So exactly how would that work in reality again?

The correct analogy would be that you're unemployed and just got a job, but you have no car. So you take a loan so you can buy a car to drive to work. You either go into debt and pay it off when you're able to, or you don't take the job and your situation is even worse.

No, that is not the correct analogy at all. The correct analogy is:

1.) You have a variable hour per week job (marketing or something), which equates to the US's Unemployment number. Your salary is say $100k a year: High, but not really because of #2 below.

2.) You already have a house, car, are paying for medical for you family members, paying for your and your wife's parents retirement, which all equates to all the things the government has gotten itself involved in for the past 70 years.

3.) Because of #1, and not running a balanced budget year over year for the past 20 years, you're hundreds of thousands of dollars in debt and have maybe 10 years before you retire. The Fed equivalent of this is they're (really We're) multiple Trillions in debt, and it's only 3-4 decades before massive amounts of $$$$$$$$$$$$$$$ will start being sapped from the books because of Social Security, meaning, even more money the Fed will need but doesn't have.

4.) You now want to double down and get a Mercedes, Ferrari, triple your house payment on a new house, and the wife wants a nose job, boob job, ass job, etc. In Fed terms, that's HighSpeedRail (done by Unions of course), road projects (again, done by Unions), TrainwreckCare (I'd say Obamacare, but the reality is, the partisan politics in Congress and the Executive cannot deliver anything that tackles the most major of the issues of HC), funding states who by doing the same things the Fed has bankrupted themselves, etc. etc.

5.) In light of 1 -3, you're arguing that your #4 is a superior solution than being fiscally conservative and reigning your out of control spending and obligations in; afterall, you make $100k a year, your salary isn't your problem...and neither is the Fed's income either.

There you go...now you have a proper analogy.

Chuck

 

[rudder]

You must really be unwilling to understand basic economics. You cut spending and reign in the deficit when the economy is good, not when the economy is bad and doing so will make it worse. The time to cut spending was up until 2007, and that didn't happen did it?

Try to think about what will happen to the deficit if you Teabaggers get your wish and the government cuts all deficit spending, plunging the economy into a depression, and causing tax revenues to go way down. Just try. Please. Here's the answer: the deficit will go up, and will keep going up with spending following, causing deficit to increase in turn, in a self sustaining spiral. Then you'll finally get your wish of a third world America.

So where does this money for $1.5 trillion deficit spending come from? I wonder... could some of that money be used by investors to inject capital into businesses? That money for overspending takes money out of the economy. Filtering it through the beaurocratic nightmare called the Federal government does not help. I know you see that welfare payments, unemployment payments, etc are supposed to be spent thus stimulating the economy... but as I said.. that money for deficit spending does not magically appear.

How about instead of having to cut spending... don't pass the largest damn entitlement program in the history of the United States in the first place... even after the majority of your legislative branch voted it down.

 

[Patranus]

The only way to get rid of the deficit, is to abolish the federal reserve, congress take back control of printing our money, and only print what we have to back it up with.

http://trailblazersblog.dallasnews.com/archives/2011/01/cornyn-to-introduce-balanced-b.html

 

[MovingTarget]

Another economics fail from our local right wing clowns. What part of cutting spending during a recession being stupid don't you understand?

This is exactly when we need to invest in the future of this country, when it benefits the economy the most.

Apply your same hare-brained DEBT ALWAYS BAAADDDD logic to your own life and you'll never be able to start a business, buy a house, or send your kids to college.

If Keynes were still alive, he'd smack these faux-deficit hawks with a wet trout. We should be running a large deficit now considering how bad the economy has been these past few years. When things are "good", then you are supposed to stop spending like drunken sailors, pay it down, and keep stuffing cash into reserve like it is going out of style. Did these deficit hawks even think about that when the DOW was 14k while the rest of us had seen stagnant/declining real wages for three decades? Probably didn't cross their "deficits don't matter" peabrains.

 

[nick1985]

We should be running a large deficit now considering how bad the economy has been these past few years.

Since throck didn't answer, I'll give you a shot.

What happens when the foreign lenders, namely China, decide to stop lending to us when our debt grows even more and the dollar weakens even further? What happens when nobody will buy US bonds? Print tons of money? Hyperinflation? You tell me. What happens?

 

[sandorski]

The speech did not say anything specific. It did not state any of the solutions to the problems.

...but it did mention: 1) Cuts/Reinvestment(Oil Subsidies>Green Tech); 2) Need to Cut Programs/Duplication/Inefficiencies; 3) The Spending Freeze; 4) A General willingness to discuss Cuts/Savings that meet a certain criteria(not on the backs of the most vulnerable).

Hardly just a "Spending Freeze".

 

[Zebo]

http://thehill.com/blogs/on-the-money/budget/140335-cbo-deficit-widened-to-15-trillion-this-year

Wait, so Obama wants to freeze spending at current levels for 5 years but the deficit is at record highs......

What am I missing?

No he only said freeze discretionary spending which is a mere 8% of budget...Did'nt you hear all those projects he wanted? That means rest is free to grow not to mention no touching of the entitlements, no touch on the military. It's all a joke I am preparing for worthless currency.

 

[sandorski]

No he only said freeze discretionary spending which is a mere 8% of budget...Did'nt you hear all those projects he wanted? That means rest is free to grow not to mention no touching of the entitlements, no touch on the military. It's all a joke I am preparing for worthless currency.

That's not what he said.

 

[Zebo]

Since throck didn't answer, I'll give you a shot.

What happens when the foreign lenders, namely China, decide to stop lending to us when our debt grows even more and the dollar weakens even further? What happens when nobody will buy US bonds? Print tons of money? Hyperinflation? You tell me. What happens?

Just a change in interest rates bond holders demand to historical levels we would end up paying 50% of taxes to bond holders instead of using it for now stuff. Doesn't take a mathematician to understand one day interest would consume 100% of tax money if borrowing continued. But bond holders won't let it get that far. The FED has already had to counterfeit currency with QE1 and QE2 to make up shortfalls and we are seeing inflation in commodities. Keynes theories are misinterpreted anyway by modern politicians and many posters..

Keynes made clear that in order to stimulate the economy with Government actions during recessions the Treasury had to run a primary surplus during boom times to prevent what we describe.

 

[Zebo]

That's not what he said.

My point was he said he would freeze discretionary spending and I included a couple examples of what is not discretionary which is most of the budger. I understand he said he would get with gates and the generals to see about cutting that too.

 

[Painman]

The usual Conservative answer to their leaders' failings on fiscal policy is that, "They failed Conservatism".

So, in other words, their "leadership" throughout 20 of the last 30 years has been an admitted failure. Reagan failed to control deficits and debt. So did Bush I, so did Bush II.

No one on the Conservative side is willing to embrace any accountability. They cop out by saying, "Well, in the end, they weren't really Conservative."

So, our nat'l debt currently stands at just over 14 trillion dollars. I don't see any "conservatives" making any courageous stands in order to insulate future generations of Americans from the Debt Slavery that they've largely created for them. Because they simply can't/won't see their own culpability.

The philosophy is understandable - Run an economy at a low rate of regulation and taxation, and it shall flourish. But, what happens when Shit Happens?

Shit still happens... that's why Keynesianism is still popular. I'm not convinced that it "failed" during the course of the current crisis. The stimulus may have been able to go further, if only... WE WEREN'T 14 TRILLION DOLLARS IN DEBT ALREADY.

And WHOSE fault is that, in large? Certainly not Obama's. He hasn't been president long enough to generate that entire 14 trillion in debt.

Other presidents may have been extended the luxury of increasing the nat'l debt as a way of staving off nat'l meltdown, but the way it sounds, right now, it's almost as if Obama is responsible for every single dollar of our nat'l debt.

I wanna hear Sarah Palin talk about how she, as Prez, would institute a pay-off plan so Piper doesn't have to pay for our indulgences.

 

[Zebo]

Nothing wrong with Keynesian economics if it's applied but it's not, only stimulus side of it is, not collection side in good times to pay bad. Neither is classical economics practiced by conservatives e.g. balanced all the time. We instead have a debt death spiral of deficit spend all the time and cut taxes all the time. And they all know it's unsustainable I must have heard it 10 times between the speeches but it won't change - too much pain. Pain will be cataclysmic though when math catches up.

 

[Engineer]

Nothing wrong with Keynesian economics if it's applied but it's not, only stimulus side of it is, not collection side in good times to pay bad. Neither is classical economics practiced by conservatives e.g. balanced all the time. We instead have a debt death spiral of deficit spend all the time and cut taxes all the time. And they all know it's unsustainable I must have heard it 10 times between the speeches but it won't change - too much pain. Pain will be cataclysmic though when math catches up.

This. I know that we need to cut but it will be interesting to see what happens when we actually cut $500 billion per year out. $500 billion goes into the economy that is now gone and that equals someone losing their jobs....more unemployment going out and less tax revenue (as these people are now not working). Damned if you do...damned if you don't....and all because we decided that Made in America is too damned expensive. Fail.

 

[Zebo]

Indeed how many walmarts are open to cash and spend SS checks?

How many businesses are squatted around .mil bases we need to cut?

1/2 of GDP is gov't spending so even a 15% reduction in gov spending would be a 7.5% reduction in GDP makes no difference what you cut.

Cheap Credit does no one any favors, especially taking away ability to pay it back, that's called default. America will default and we will learn cheap was more expensive.

 

[PeshakJang]

If Keynes were still alive, he'd smack these faux-deficit hawks with a wet trout. We should be running a large deficit now considering how bad the economy has been these past few years. When things are "good", then you are supposed to stop spending like drunken sailors, pay it down, and keep stuffing cash into reserve like it is going out of style. Did these deficit hawks even think about that when the DOW was 14k while the rest of us had seen stagnant/declining real wages for three decades? Probably didn't cross their "deficits don't matter" peabrains.

And the argument you are making, like your type always makes, is that deficit spending, going into debt, borrowing money... NO MATTER HOW IT IS SPENT, MUST be good during a recession. You make your entire argument with the implied argument that these massive debts we are running up are all the cause of money well-spent, and that money must have a disproportionately positive effect on the economy as compared to whatever negative impact it may have due to it being borrowed/taxed.

Case in point - goddamn high-speed trains. This has got to be the most ridiculously idiotic crusade ever undertaken by the left, as recognized by just about every reasonable person with a GED, yet the left continues to insist that if we spend hundreds of billions of dollars to build a government train between a few moderately sized cities somewhere, we'll be catapulted into the 23rd century and money will flow in like water. It doesn't matter to them that we need to A) borrow the money to build it, and then B) subsidize operations to keep it running (borrow more money). No rational explanation exists as to how you get positive cash flow out of an operation like that, yet the left will put their hand on a Bible and call you a racist if you think it's a bad idea. Rigoddamndiculous.

 

[Ausm]

Yup, so pretty much Obama has no real ideas to fix the budget.
He and the Democrats have not done anything and they still are not putting up any new ideas besides more government spendi...I mean "investment" and freezing some parts of the budget. oh and increasing tax r...I mean "getting rid of handouts for the wealthy".

Sorry, but this is just not good enough, it would be laughable but this shit is just not even funny anymore, its dangerous. Its time to actually do something about it.

Only thing I liked is lowering corporate tax rates, closing loopholes and simplifying the tax code.

At least I give the republicans some credit now for actually putting up some ideas to cut. Doubtful people to agree on cutting though.

We are so effed.

I feel the same way if there was a GOP majority...In fact about 10X more

 

[matt0611]

I feel the same way if there was a GOP majority...In fact about 10X more

Don't get me wrong, I think the republicans were a huge part of the problem. The only reason they actually are starting to care is because I believe the american people are genuinely starting to get concerned about it. We need to put pressure on both parties to do something about it if theres any hope.

 

[EagleKeeper]

If you have to spend $$, spend them on the most productive way that will get the money recirculating through out the economy - not push it into storage paper.

Rebuild the interstates/primary roads for one - that reduces wear/tear on vehicles and improves efficiency of the trucking industry.

Replace quick make work / feel good projects with long term infrastructure that will assist the public.

If a 3 lane road has traffic crawling along at 45 mph during rush hour; improve/expand that road to be four lanes. This results in a benefit to the public and is not a quick project.

Push technology prototypes that reduce waste, etc.

 

[MovingTarget]

And the argument you are making, like your type always makes, is that deficit spending, going into debt, borrowing money... NO MATTER HOW IT IS SPENT, MUST be good during a recession. You make your entire argument with the implied argument that these massive debts we are running up are all the cause of money well-spent, and that money must have a disproportionately positive effect on the economy as compared to whatever negative impact it may have due to it being borrowed/taxed.

Case in point - goddamn high-speed trains. This has got to be the most ridiculously idiotic crusade ever undertaken by the left, as recognized by just about every reasonable person with a GED, yet the left continues to insist that if we spend hundreds of billions of dollars to build a government train between a few moderately sized cities somewhere, we'll be catapulted into the 23rd century and money will flow in like water. It doesn't matter to them that we need to A) borrow the money to build it, and then B) subsidize operations to keep it running (borrow more money). No rational explanation exists as to how you get positive cash flow out of an operation like that, yet the left will put their hand on a Bible and call you a racist if you think it's a bad idea. Rigoddamndiculous.

No. Nowhere did I say that all current spending is a good idea. We should be spending on things/programs that a) have a high economic multiplier effect or b) serve as the physical foundations for future growth. Foreign military expeditions and a huge military industrial complex fit neither of those categories. If you and your cohorts have a better idea of how to spend, I'm all ears. Austerity at this point can do more harm than good. Bitching about deficits for deficits' sake alone without regard to what the spending entails is equally as stupid as assuming that all current spending is optimal as opposed to their alternatives. Open your eyes.

The same argument about high-speed rail can be made for earlier forms of air travel, but look where that got us. You also neglect to consider that there are areas in the US with the population density to make them economically viable NOW. Take the Eastern Seaboard for example. These models have already been proven in Europe and Asia. But for other places, just like rural electricity, some investments don't always provide that positive return immediately.

You know why people in moderately-sized cities don't ride public transit, especially in the South? It isn't because they wouldn't like to use it altogether, but because the implementation is completely half-assed. Nobody will use a transportation system that can't get them from point A to a reasonable walking distance to point B. I for example can walk to an Amtrak station in Tuscaloosa and ride to visit my relatives in Birmingham, but there aren't any light rail (at all) or bus routes to anything outside the inner city. So, I must drive. We need light rail in these smaller cities first. The ridership will appear when we truly get a comprehensive public transit in place. High speed rail is but one component.

 

[MovingTarget]

Nothing wrong with Keynesian economics if it's applied but it's not, only stimulus side of it is, not collection side in good times to pay bad. Neither is classical economics practiced by conservatives e.g. balanced all the time. We instead have a debt death spiral of deficit spend all the time and cut taxes all the time. And they all know it's unsustainable I must have heard it 10 times between the speeches but it won't change - too much pain. Pain will be cataclysmic though when math catches up.

Indeed. This is the problem. It is easy enough to apply stimulus, but when the time comes, Keynesians have problem convincing politicians and the electorate alike that raising taxes and promoting austerity is a good idea. You always run into the other side that says that the gov is trying to take your money(tm) when times are good. Taxes should have gone up more drastically during Clinton's term and to a lesser extent during Bush's first term when the DOW was approaching 14k.