<p>FF, this document: <a href=“http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf[/url]”>http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf</a> puts the debt to GDP ratio for this year at 69.3%.</p>
<p>I asked, you know who about: If the feelings of other countries are against W’s War, then why do they keep funding this war by buying US debt? </p>
<p>ans: 1) because they want the USA’s debt obligations. 2) They need to keep their own economies going, 3) They have more leverage on the US Administrations as the debt to them gets larger. </p>
<p>I know that there was one other reason that the bankers did not foresee, 4) The Sovereign Funds can take more of an active role by owning strategic parts of banking system. OOPS. </p>
<p>Oh well, he’s 62 and meets pension and buyout criteria.
But I am only 58 and no pension.</p>
<p>kluge,</p>
<p>Do you really want to use FY06 numbers rather than FY08? Aren’t you the first one to call someone “disingenuous” if they do something like that?</p>
<p>The reality is that the OMB has been overstating the projected budget deficit each year, so each year the real deficit (and debt) has been coming in lower than the projections. Hence, to use numbers that were based on 4 years of projections is just a tad disingenuous.</p>
<p>Case in point: your old data projected the debt versus GDP figure for 2006 to be 67.5; the reality is that it was 64.7.</p>
<p>“If we default, we can give 'em New Jersey.”</p>
<p>I’m afraid not. After Corzine gets done with New Jersey, the US will have to pay someone to take this state.</p>
<p>Any talk about the budget and deficits is skewed by the fact that the idiocy in Iraq is “off the books” and funded by a stream of special appropriations. I think we’re supposed to not notice the cost this way. The laughable rationale is that that the ongoing expense is unknown due to too many variables.</p>
<p>Oh, we can get 'em to take New Jersey - that’s what skilled capitalists are all about.</p>
<p>(Maybe we’ll have to throw in Idaho, and an extra theme park or two. ;))</p>
<p>The “idiocy” in Iraq happens to be going quite well which is why the media is on to the “crisis” in the economy right now.</p>
<p>Sure debt declines when you 1)slash military spending, 2)enact the biggest tax increase in history, and then 3)follow that up with a conservative congress that holds spending in check (1995). Not to mention oil at $15/barrel. You give Clinton way too much credit. A good thing health care “reform” didn’t go through. He didn’t have a war going on, a military to re-build, anti-terrorism to pay for, a welcome tax decrease, and an earmark happy congress.</p>
<p>Inflation can be driven by scarce commodity price increases. The inflation of the 70’s was widely attributed to the jump in oil prices. Yes, it is commonly caused by monetary policy but the huge jump in energy is an exception I think. I know others disagree and say the higher energy costs will reduce demand for other things and not cause inflation as those go down in price but I do not think many goods can afford to reduce prices much. They will just go out of business and prices will stay high.</p>
<p>If I remember correctly they also reduced middle income tax rates and increased the standard and personal deductions. I seriously doubt that a 50,000/yr household paid more total tax even including SS taxes. Yes the higher brackets got more but they also pay a heck of a lot more. Anyway if you are counting on taxes or the lack of them to raise your middle income you are not focusing on the right ball. Maybe you need to get some new training and a better job. The 80’s was booming with jobs as that’s when I switched from the lower paying public sector to the higher paying private by going to school and switching careers. In two years I went from $30K a year to $100k and more fun. You can’t just sit there and wait for good things to happen.</p>
<p>FF - both numbers are estimates. My guess is, with the latest economic woes and the economic stimulus package, tax revenues and GNP will both be lower than the projections you cite. Which set of numbers ends up closer to the mark won’t be known for a few years yet, but whether the debt to GDP ratio under BushII exceeds the peak hit in the early 90’s, or fails to quite eliminate all of the reduction in debt achieved under Clinton and falls a percent short, the fact remains that the debt “achieved” under the last three Republican administrations represents the only time the national debt has increased, rather than decreased, since WWII – and they’ve taken it to levels last seen in the 1950’s. Under any set of projections your boys have more than doubled the ratio of debt to GDP. Are you proud of that?</p>
<p>“The “idiocy” in Iraq happens to be going quite well which is why the media is on to the “crisis” in the economy right now.”</p>
<p>Economic crisis is because of idiocy in Iraq.</p>
<p>Yes the mortgage meltdown and home crash had lots to do with Iraq–if you were buying houses in Iraq.</p>
<p>Again, where’s the huge problem caused by the debt ratio?</p>
<p>“Yes the mortgage meltdown and home crash had lots to do with Iraq–if you were buying houses in Iraq.”</p>
<p>What has the war in Iraq cost? Lots more than mortgage meltdown.</p>
<p>Barrons, right about the time I’m due to retire, the social security system will be upside down for the first time. We’ve been “borrowing” the excess income generated by the FICA tax - and more - to pay regular budget items. We won’t be able to do that anymore, because there won’t be a FICA surplus, but a current deficit instead. It should be a non-permanent problem, caused by the glut of baby boomers retiring at the same time. If we’d been prudent, and set non-FICA tax rates at a level sufficient to meet current expenses, we could have used the FICA surplus to pay the entire pre-existing national debt off - which would have meant that in 2016 we could borrow enough to paper over the social security funding shortfall - particularly because we wouldn’t have the existing debt service expense on our backs.</p>
<p>But we can’t. We already spent the FICA surplus, and borrowed trillions more, to ensure that Leona Helsmley’s dog would get its full $12 million inheritance. So when time comes for you and I to retire, there’s going to be a social security “crisis” - which was caused by the diversion of the FICA tax we paid, and can’t be solved by means other than increasing the worker’s tax on our kids or shortchanging us out of the SS benefits we were promised.</p>
<p>There’s no free lunch, Barrons. To put it in the terms you prefer: continually borrowing to pay for ordinary living expenses is a mistake for a nation just as it is for a family. We have some big bills coming due and we’ve already tapped out our LOC. Is that clear enough?</p>
<p>If you think the “idiocy” in Iraq is going quite well, please point out to me where the Mahdi Army has been disarmed or otherwise neutralized, ditto the Badr Corps. Point out where the Iraqi military units reflect and respond to the national government (okay, so Maliki makes you want to ask <em>what</em> national government?) instead of political factions, how the Sunni Awakening units being used by the US to fight AQ in Anbar is being embraced by the national government and is giving the national government support in return instead of being another piece on the chessboard for a future civil war, and how the status of Kirkuk is being reconciled between the Kurds who will not rest if they dont’ get it and the Turkmen and Arabs who will not rest if they do…and that’s just for starters. Shoot, and I forgot to mention the Shiite-on-Shiite violence in the south. </p>
<p>Of course, I must concede that many ill-informed Americans equate “lack of American casualties” with “progress.” It’s wonderful that people can talk about “progress” without being able to define something as simple as “victory” in terms of who controls Iraq and under what circumstances.</p>
<p>The Iraqi political institutions are so weak, corrupt, and faction-ridden that if by some miracle the Iraqi army achieved any sort of stable coherence the likely result would be a military coup and a strongman to make things work. Let’s see…the last time that was tried we got…Saddam Hussein.</p>
<p>Unfortunately, there isn’t a lack of casualties. They just aren’t dead in the ordinary sense.</p>
<p>There are a huge amount of maimed and blown apart veterans who have lived, due to the marvels of modern medicine. </p>
<p>They are casualties, even if alive.</p>
<p>Estimates of Cost of Iraq War
1.275 million/day
2.$4100/household
3.4000 killed
4.60,000 wounded
5.700,000 Iraquis killed
6.4 million refugees</p>
<p>Estimates of Subprime Crisis Cost
1.300 billion</p>
<p>Barrons, you answered the inflation issue. </p>
<p>How much did the US money supply go up between 2002 and 2006?</p>
<p>As for the debt issue, it’s simple arithmetic.</p>
<p>Economic problems don’t always just happen. They take years and years to develop.</p>
<p>THe housing bubble problem did not start in 2006. It started in 2001 or 2002.</p>
<p>I am having a lot of trouble getting on and posting on CC.</p>
<p>I keep getting messages like this…</p>
<p>Fatal error: Call to undefined function sanitize<em>maxposts() in /home/admin/public</em>html/includes/functions_forumdisplay.php on line 66</p>