Beldar

Ya think?

OMB director warns growing deficit a threat to American economy - TheHill.com

BigG

An interesting link;


India Shows Hedge-Fund Savvy With Huge Gold Buy: William Pesek

FarmDad

I have an idea. Ditch the health care bill.

Lergnom

The health bill is projected to decrease the deficit.

There are only a handful of ways to make the deficit go down:

1. Cut defense spending. Take out Medicare and its tagalong Medicaid and defense is the bulk of the rest. I think total "discretionary" spending is like 17% and thus we could eliminate all road, all education, all other spending and not hit the number because of defense.
2. Since 1 above makes no sense, we need to decrease unemployment and achieve higher growth rates. The GOP mantra has been that tax cuts is the way to create growth. Look at the history, which I've posted many times: it's not true. The GOP mantra has been that tax cuts not only create growth but are fiscally responsible. Totally not true; the deficit doubled under GWBush before the crisis and the trends under Reagan were lousy too (even with him raising taxes in 7 straight years).

I don't claim to know the magic formula for higher growth, but I know what has not worked.

As to arguments, we currently have a massive "output gap," meaning the country is working at much less than capacity. Unemployment even with 3+% growth won't come down to pre-crisis levels for years. This argues for more debt to stir growth but that's politically untenable and no one knows if it will work.

My belief is that having universal health coverage will boost the economy by at least partially removing a major impediment to worker freedom of movement. Workers are bound to jobs by their benefits. They fear moving because they worry about coverage. If workers could take any job anywhere in the country without worrying about health coverage, then we might see more competition and that would be good.

Mr Payne

You must be angry at Obama's deficit spending then.

BigG

What are the limits on the Federal Reserve's ability to say; "KAZAM, you got 500 billion dollars!!!"?

India seems to be catching on to the scam. Can China and the other BRIC nations be far behind?

rds248

House health care bill exceeds $1 trillion - Health care reform- msnbc.com

If the final fill that passes is anything close to this, it will go down in history as the straw that broke the camel's back.

Doesn't anyone see how absurd it is to pass a bill during the worst recession in 70 years, with unemployment above 10%, that will cost us an additional $1 TRILLION dollars over the next 10 years?
This is just madness.

This will doom us economically for a generation. Pelosi and Reid will go down in history as the two figures that were instrumental in the final destruction of the US economy. And if Obama signs it, he will get much of the credit for that as well. Rather than improving health care for the next generation, this bill will insure a lower standard of living for all of us and our children for a long time to come. The entitlements in this bill will necessitate very big increases in taxes over the next 10 years that will affect every American.

higgins

The House healthcare bill - It's a Zimbabwean stimulus package

coureur

Where was all this deficit alarm from the right when the Bushies were turning the Clinton era revenue surpluses that extended for as far as the eye could see into the biggest deficits in history? You'd have a lot more credibility now if you had been hammering Bush back in the day. But now it just looks like simple craven partisanship.

collegeinusa

coureur:

Tom Delay/Bush/Chenny/Rummsfield spent the money in the war that we could not afford. That was wrong then and wrong now. Since we can not chnage what happened in past. We need to focus on not repeating the mistakes of past.

collegeinusa

I was hoping Obama bring the troop back from Iraq and ask other countries to share the cost of operation in Afganistan war. India. China, Russia must pay for this cost also for keeping the terroist in afganistan in control. Otherwise we will keep spendind the money we do not have. On other hand if there is another attack once we leave Afganistan, then president will be blamed. Obama ran on this platform that he can solve major problems. Thus like Bush electrorate will blame him if things do not go right and will priase him if he can solve it. Future will only tell what is the real story.

coureur

>>Tom Delay/Bush/Chenny/Rummsfield spent the money in the war that we could not afford. That was wrong then and wrong now. Since we can not chnage what happened in past. We need to focus on not repeating the mistakes of past.<<

Yeah, that stupid war was a huge waste, but it wasn't the only thing that ran up the deficit. For years Bush's answer for everything was tax cuts that favored the rich - with resultant big increases in the deficit. But the right was comfy with those deficits because Bush was their man. Now that someone on the left is running up the tab suddenly it's a big issue. Hard to take the right's new-found dedication to deficit reduction seriously.

rds248

Nice try, but patently untrue. The cost of the Iraq war since 2001 totals about $700 Billion. Obama spent that in less that 3 months with his hand out "non stimulus" package.
He is spending like a drunken sailor, no offense to drunken sailors.
And it's just going to get worse....

As Deficit Increases, Democrats Plan More Spending - WSJ.com

.

There was plenty of criticism of Republican spending during the Bush era. But that was "Bush league" compared to what we have now. This is a new level of irresponsibility, possibly never before seen in the entire history of the United States. And the results are going to be disastrous.

BigG

The costs of the health care bill are projected over the next ten years. 100 billion a year is not that much in Federal terms.

If the costs of caring for the wounded in the Iraq war are projected, then that is well over a trillion dollar war. The cost of that "quick, cheap, and virtueous "war will run over 1.5 trillion by the time we are done.

I really think we would get more from our federal dollars if we spent them on health care rather than the personal vendettas of the sitting president.

Lergnom

My issue was this and I know that some people here have reading comprehension issue so I'll type slowly and in big letters:

OUR CHOICES SUCK

Let's say we go with the two phrases I'm hearing now from GOP candidates, that we reduce taxes and cut spending. What happens?

1. The much-derided stimulus added about 3 points to GDP in the 3rd quarter and yet unemployment is now 10% - and btw it's not lower in GOP run states which presumably pursue those pro-growth policies. Our economy has massive slack and it appears that companies are trying to produce more with less, if the productivity numbers are correct, and that means less hope of reducing unemployment.

2. So we cut spending. What do we cut? Roads? Education? Medicare? Defense? The first two don't make much of a pile if you put them together. Think the GOP will cut Medicare? Think they'll cut defense? My guess is that we'll hear lots of bull about fraud and that will cut a billion or two in total because the only way you actually cut is to put a real rein on costs and that the GOP adamantly will not do because they will not expand healthcare so meaningful cost control can happen. So tell me what we'd cut. I listen to the talk and have never heard a sensible outline beyond the petty chip shots that don't make a dent.

3. So we reduce taxes. That increases the deficit dramatically. The GWBush tax cuts cost already $1.5T, which is more than the projected cost of healthcare reform, and that generated next to zero job growth and doubled the national debt.

4. So we reduce taxes. The dollar then does what? Falls through the floor? Declines by 30%? What holds up the dollar? In part it's China pegging the yuan to the dollar and accumulating massive stocks (over $2T now) but the other main reason is the dollar is the safest currency, the world's de facto reserve currency, and that requires a general belief that the US will pay back its debts. Right now - something the comprehension challenged don't get - borrowing costs are negligible for the Treasury, but if taxes are cut then that contributes to pushing up rates which makes the debt unaffordable faster.

5. And if the dollar falls, then all our costs go up. The price of oil in dollars goes up and that crushes the economy again. Home heating and cooling costs more, which restrains consumption further. In the bluntest terms, if you want a depression and if you want the US to become 2nd rate faster, then pursue a policy of lowering tax revenues.

6. Can we raise interest rates? That requires understanding what raising rates does and doesn't do. Raising interest rates doesn't pay back the deficit or the debt but makes it more expensive to finance. Raising rates makes borrowing more expensive and reduces economic growth. The reason people talk about raising rates is worry about the dollar losing value but that has stupidly become tangled up with the weird notion that the budget problems would be better if the Fed tightened. The Fed is trying to balance the value of the dollar versus economic recovery because we don't want the dollar to lose too much value and we don't want to kill the economy. (Note that the dollar losing too much value also kills the economy and I think that's where the confusion comes in.)

So to repeat in big letters, typed slowly: OUR CHOICES SUCK.

Our choices suck because the GOP freaking blew it. They absolutely blew it. The GWBush tax cuts and the "do not regulate" mantra put our country in this mess. (And don't blame Iraq because even with the money wasted there, we'd be able to afford this crisis if not for Bush doubling the debt - and don't say that hurt growth because war spending is stimulus.)