US News
May 12, 2009, 9:23 GMT
US deficit widens as White House insists it is saving jobs
And Also
Similar articles
- Obama promises bigger push for US job growth ahead of Asia tour
- Stealth stimulus? Lawmakers weigh options to boost recovery
- Growing calls for interest-rate hike: 'C'mon, Ben!'
- Obama to slash executive pay as watchdog slams bail-out
- Obama: US economy has stepped 'back from the brink'
Latest Headlines in US
- 1. Tiger Woods' slightly injured in car mishap (Roundup)
- 2. It's official: Tiger Woods' injuries were slight (3rd Lead)
- 3. Tiger Woods treated after car accident (2nd Lead)
- 4. Tiger Woods seriously injured in car accident (1st Lead)
- 5. REPORT: Tiger Woods seriously injured in car accident
Older Talkback
Well I guess it is coming now when even the main stream media is starting to give the masses a clue. I new it and this is just one small part of what is coming in the next 6-12months get ready if you can it will get rough in the usa thank your rich and political leaders for this. I am outside the usa right now and I suppose there is a little bit of money gone but...... it is nothing like what is going on there. Wake up people its your lives being scuandered good luck!!!!
After running the biggest single deficit spending bill in history, and virtually buying the domestic auto makers we are now supposed to believe it is actually helping the economy, in some obtuse way. All of this in the face of glaring unemployment and GDP shrinkage that has not been seen since Carter was in office.
Now run along and trll your kids about the extra 3.4 trilliopn dollars Uncle Tom Obama has put on their backs, for the rest of their lives. Hell This makes Bush's budget look like they were running a dress shop or something.
The Audacity of Hope...boy!...HE wasn't kidding, eh?
Phew! First 'nexus.' Now 'obtuse.' What next? 'The nemesis of History' or 'concatenations of circumstance?' Please, SP. Put the dictionary back under the wobbly table.
SPfricking idiot is back at it. He can't think and he can't spell.
'3.4 trilliopn'
trilliopn??????
'trll'
trll???????
Have another toke, SP.
Yes, put away the dictionary, you can't read, let alone understand all those big words. Put your head back under that wobbly table. That's all it's good for.
Yes, it's about time for people to wake up and smell the stench. We don't need no stinking govmint. We can take care of ourselves with out the govmint. Now it is time for everyone to do your patriotic duty and leave the MSM biassed, commie oriented US of Atheists. Join us in the Republic of Texass, and we can bring back the good old days when us white folks weren't treated like trailor trash.
..none of the folks above really disagree with me? Your trophy boy Obama has out(deficit)spent Bush, adopted all of his anti-terror methods i.e. rendition, outsourced interrogations, Gitmo - east in Afghanistan and none of the folks above are really willing to wade into any arguments on behalf of the boy king.
Perhaps it has something to do with you all being so proud of Bill gates doing your spelling for you? Maybe he'll even come out with a program to do your thinking for you as well? Heck...whatever works!
Wow, makes us beg to have Bush back. Wasn't this one of the things Obama ran on?
are at it once more. Disagree with you SP? Everybody with a brain that isn't screwed up by drug abuse disagrees with you and every piece of inanity you spew. There is no point in disputing sh*t. But is is fun phoning the DEA on you. Knock, knock, SP.
By the way sh*t-for-brains, my spelling ability comes from having a education. You couldn't even find Bill Gates' spellcheck with all 3 of your step mommies and seven step daddies helping you. At least they get welfare for having you in their home. How does it feel to be a throw away child? Is the family dog (your ONLY friend) still having its way with your leg? Are you still enjoying it?
As Federal revenues contract, the deficit will grow. Doesn't this idiot understand income and expenses?
Obama began with $1.3 trillion of debt inherited from Bush in 2008. Contrast that with Clinton, who left Dumbya a surplus. That $1.3 trillion is charged to Bush; because it came about in 2008. Likewise the war spending that Bush always tacked on as a supplemental is now on-budget - and expenses related to Afghanistan and Pakistan are rising.
The debt rose under Bush, and massively.
That means that outgo was more than income. The tax cut (which even Bush designed to end in 2010) was a huge financial hit; just at the point when defense and homeland expenditures rose.
The proof is always in the tally at the end. The cost of the TARP and Bush's own deficit would have increased the ending Debt figure. Had Bush included 2009 war costs in the budget, it would have been higher yet.
www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
Bush the Idiot 2001-2008 = 73% increase in 8 years = $4.2 trillion
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/30/2001 5,807,463,412,200.06
Reagan 1981-1988 = 161% increase in 8 years = $1.6 trillion
09/30/1988 2,602,337,712,041.16
09/30/1987 2,350,276,890,953.00
09/30/1986 2,125,302,616,658.42
09/30/1985 1,823,103,000,000.00
09/30/1984 1,572,266,000,000.00
09/30/1983 1,377,210,000,000.00
09/30/1982 1,142,034,000,000.00
09/30/1981 997,855,000,000.00
Bush Sr. 1989-1992 = 42% increase in 4 years = $1.2 trillion
09/30/1992 4,064,620,655,521.66
09/30/1991 3,665,303,351,697.03
09/28/1990 3,233,313,451,777.25
09/29/1989 2,857,430,960,187.32
Clinton 1993-2000 = 28% increase in 8 years = $1.26 trillion
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32
09/30/1993 4,411,488,883,139.38
====================
09/30/1981 997,855,000,000.00
09/30/2008 10,024,724,896,912.49
Total 28-year increase = 9.026 trillion
subtract Clinton = 1.26 trillion
GOP debt hike = 7.77 trillion = 86 percent of total debt added (rounded)
SP4?
Is a dose of reality too much for you and you seek solice in your drug stash?
Obama is doing a fine job in many ways. Placing him as president at this time was one of the smartest moves of the American ruling elite for many reasons. It will help in playing down the fears of the local and global community about the increasing military aggression of the American aristocracy giving it time to plan even more military campaigns and open more fronts.
Also his position as commander in chief will help us to recruit more soldiers, and on that note:
Commander in chief brother OBAMA is doing his best to offer to the motherland.
You should do your part too, join the army, serve in the greatest mercenary army in the world, serve the motherland, do your part too and join the army young.
Brother Obama is proof that this nation is caring for its Black and Latino population, therefore all colored people should join the army now and fight and die gloriously, Florida homeless people seek no further, the army shall shelter you. Permanent residence guaranteed!
Puff Daddy also approves the above message.
Actually, your federal revenues have been fairly constant as a % of GDP for several decades. Obviously, if the economy contracts revenues will decrease too but the endogenous effect of this on your PSBR and therefore, National Debt is fairly limited. Even a shrinkage of 3% in nominal GDP would, on this basis, result in a reduction in revenues of certainly no more than about $90 billion. Not much compared to a deficit of $1.84 trillion. At 12.9% of a GDP of $14.264 trillion (IMF figure for 2008) this is up by 9.7% of GDP from the 2008 deficit figure: Which according to conventional thinking makes you an economic basket case. Your National Debt stood at around $11.3 trillion or about 79% of GDP at the end of '08; Far higher than almost any other developed economy. It now looks as though the new debt ceiling set in February will be consigned to history long before the end of the year.
Face it. This needs checking in the medium term or servicing the interest on this debt mountain will absorb an ever higher proportion of federal revenues, necessitating even more borrowing or draconian tax rises. A return to historic rates of growth will be insufficient to address the problem adequately.
Is big government Barack the man to take the difficult decisions needed? This guy's an instinctive spender, but so far without the honesty to spell out the tax implications. From here you go one of two ways: Eventual massively reduced real federal spending or a transition to a European style 'Social' Market economy with a large, economically intrusive public sector and a much higher tax burden. Statist governments usually prefer to up tax by the back door whenever they can, rather than just whack it on income taxes. Look out for hikes in VAT (purchase tax), discrete impositions like capital gains, capital transfer, and inheritance taxes, raised tax on investment income, and of course, big duties on things like booze, tobacco and gas, which a government always loves because it can claim they're prompted by concern about health or the environment. What does petrol cost in the US at the moment? In your currency it works out at around $6.30 a gallon over here.
Something to look forward to, eh?
Oh dear! SP's alter ego is back. I hope and pray that I am mistaken, but it may be that a clueless horror roams these pages. That in SP5 we are confronted with a terrible manifestation of the 'Undead.' Something was familiar about SP5's teeny offerings. The painful earnestness and monomaniacal adherence to the same line again and again and again, ad nauseam. The unfunny attempts at parody and satire, unshakeable adolescent self-righteousness, stilted and contrived literary style, occasional peculiar misspellings: The faintly unhinged and fanatical air of the entire oeuvre! Yet I couldn't quite place it before.
So back to the keyboard I turned, and with trembling fingers consulted the archives: And there, in an ancient, long forgotten post unread probably by any save myself since its article fell off the edge of topicality millennia ago in February lay the evidence.
It all fit! The sense of bored irritation produced by this antediluvian comment was the same as that induced by reading SP5's awful crap! Yet how could this be? The demon was exorcised an entire age of the world ago. I still hope that the omens are false. I have procured garlic, wild roses and crucifix. The stake is sharpened and ready. I hesitate to name the vampire lest a door to the otherworld be opened thereby, and it rise from its ghastly virtual tomb. Yet could it be true? Could these pages be blighted by the dull, hellish reanimated corpse of Lance?
Somebody who knows what they're talking about, here on M&C. Incredible.
Truebrit, you just went way over the heads of most posters. Sp4 just went to self-medicate himself, I bet, due to too much reality.
RE: Even a shrinkage of 3% in nominal GDP would, on this basis, result in a reduction in revenues of certainly no more than about $90 billion. Not much compared to a deficit of $1.84 trillion.
=============
That's like playing a single note on the piano. It does not make for a song.
Revenues also come from capital and short-term gains, and there are none right now. The corporate revenue sources derive from profits; not GDP per se. A company with large sales, and losses on currency and other factors, pays no taxes. They can accumulate carry-forwards, as well. They can keep revenues overseas untaxed, or re-patriate them. They can incorporate overseas and avoid taxes.
www.bloomberg.com/apps/news?pid=20601087&sid=a1Yev5V7WGko&refer=home
'Corporate tax receipts totaled $70.8 billion for the year to date versus $171.1 billion, a decrease of 58.6 percent, Treasury said. Individual income tax collections were down 24.2 percent so far this fiscal year to $566.4 billion compared with $747.6 billion in the year-earlier period.'
(In what way does that directly align with your GDP percentage prediction?)
Layouts for unemployment insurance and other 'social spending' rises - and in fact, unemployment benefit periods are being extended. This is not 'voluntary' or 'social' spending, but rather legal obligations.
The notion that what Obama is doing is some sneaky form of 'social' spending (health, education, environment) is more right-wing crap. Health care is a cost to society - and having a doctor visit is less burden on the economy than an emergency room visit. In a competitive world, our college students have to do better; and the school year is being cut in public education. Ironically, foreign-born students come to the U.S., get a great education, and are forced to return home ..... instead of staying here and starting a business. We need more Intels and Andy Groves (Hungarian) - and many tech firms were founded by people from the Far East.
blogs.wsj.com/economics/2009/04/27/h-1b-j-1-immigrants-more-productive- than-americans-study-says/
' ... Hunt concludes, “Firms, universities and teaching hospitals are successful in attracting and selecting immigrants who remain in the United States to outperform natives, thereby likely increasing U.S. total factor productivity. ..... Besides earnings, Hunt primarily attributes the performance advantage to the immigrants’ higher education and tendency toward more lucrative fields of study.'
------
Environment is a longer-term problem; but we may actually be past the brink of reversing the global warming trend. In this area, some on the right are complete imbeciles. You can include Sarah Palin in that.
The worse problem is at the State and local revenue - they get revenue from everything from parking tickets to specific taxes such as tobacco. The interest cost on debt (assuming that they could issue any) is rising.
Due to potential crowding-out, the U.S. Treasury will need to raise interest rates. Interest on the debt is an unavoidable expense.
“In what way does that directly align with your GDP percentage prediction?”
It doesn’t, does it. I concede the point. I was simply extrapolating from the limited info I bothered to glance at concerning long term consistency of federal revenues as a proportion of GDP. Lazy of me. Of course, over extended periods of stable, moderate growth this would be likely in any case, assuming no dramatic fiscal policy changes. In a deep recession a far more than proportionate reduction in revenues, as you illustrate, could easily occur given the premise on which direct taxes are levied.
Even so, a reduction in revenues of even $250 billion must still be placed within the context of a deficit of $1.84 trillion, which is as yet only a forecast. Would you be surprised if the final figure was even closer to $2 trillion?
I note your point that “Layouts for unemployment insurance and other 'social spending' rises - and in fact, unemployment benefit periods are being extended.”
Yes, I’m aware that this is mandatory expenditure. It is rising anyway. Like us, you have an aging population, and of course increased, though hopefully relatively short term unemployment will add to it further. I did not imply any “sneaky form of 'social' spending”. I did not specify any area of spend. In fact I assume that much of the immediate shortfall is accounted for by the stimulus package referred to in the article.
Yet I deduce that you are as well aware as I (probably better aware) of the projections concerning the ever increasing proportion of federal revenue consumed by mandatory items, which include debt interest: And Health finance in particular is a bottomless pit, however provision is made. Via Medicare like you do it, or direct universal provision on the UK model
What I am saying is that if you wish to keep making social provision on the same, or an improved scale, taxes will have to rise, and your leaders, like all politicians, are ducking informing you of the choice you face. Obama is a big government man whose instinct is to involve the state in the economy. Like all politicians though, he would rather achieve his aims by stealth. I am as concerned about Health and the Environment as anyone. My point was merely that politicians frequently use these issues as excuses for tax hikes. The punitive duties themselves are largely ineffective in achieving the stated aims: But, boy, do they rake the moolah in!
You’re ducking the problem yourself, as your digression about immigrants and higher factor productivity implies. You are not going to grow your way out of this one. If you think a horde of entrepreneurial incomers are going to deliver you the levels of year on year economic growth required to avoid making some hard decisions in a decade or so, you’re in cloud-cuckoo land.
Your last point is well made, but only serves to underline what I’m saying. “Due to potential crowding-out, the U.S. Treasury will need to raise interest rates. Interest on the debt is an unavoidable expense.” Not a small one either, is it?
If rates do have to rise, and we both know they will in the foreseeable future, tell me how that will help investment. If we were already in a period of significant growth, OK, yes: An immediate spur to invest now. But We’re not in growth, yet your need to finance this deficit will still place a too early upward pressure on interest rates and do nothing to help liquidity and credit availability. Monetary policy has its limits. Fiscal measures mean mentioning the dreaded “T” word. My contention remains that if you opt for continued or enhanced social provision on a meaningful scale you will have to embrace inevitably, a European style social market system and pay more TAX!
Make your choice, but present the facts to people fairly.
RE: You are not going to grow your way out of this one.
======================
..... and we never could have. That was established by Bush from 2001 onwards, when the book-surplus disappeared, and an endless string of deficits appeared. One trigger was the miserably planned Iraq exercise, which in Haass' new book he says Dr. Rice said that Bush had already decided on Iraq in mid-2002.
www.newsweek.com/id/195667/
'I was about to follow up with other questions when Condi cut me off. 'You can save your breath, Richard. The president has already made up his mind on Iraq.' The way she said it made clear he had decided to go to war.
I was taken aback. Policy had gone much further than I had realized—and feared. But, for several reasons, I did not argue just then. As in previous conversations when I'd voiced my views on Iraq, Condi's response made it clear that any more conversation at that point would be a waste of time.'
-----------
That was the first of many bad decisions which will continue to cost the U.S. in terms of reconstruction projects, homeland defense, and future veterans' health care. Obama at least has identified a number of problem areas - some of which require investment to maintain U.S. competitiveness (i.e. education), or control of health care spending as well as putting a lid on entitlements (the classic third-rail of American politics) - and of course foreign policy.
The problem is that Congress (both parties) is torn by local and partisan interests. We are lucky that at least it's just a 2-party system. Imagine if it looked like Israel; where each party must concede to the others to get temporary unity.
In the meanwhile, the British Parliament seems strangled by their own expenditure scandal - and each week in PMQ David Cameron offers NOTHING but another castigation of PM Brown; in lieu of actual ideas. Last week each member of the Tories who stood did the same thing - an attempt to feed on the public's unhappiness to win an election. David Cameron is smarter than this; but behaves like the classic party hack, looking to bring back the economic miseries and lack of investment that ended in 1997 with Blair and Labour.
We'll need higher tax revenues (not the same as higher taxes), spending cuts (which get blocked by Congress to keep themselves electable by locals), and a sudden shift towards actually stabilizing the U.S. banking system. Obama is our best chance to get there - McCain is a fossil, and Limbaugh is in it for the glory and money. Palin has a book deal; and sales will be boosted by the GOP buying up the remainders and sending them to contributors in a mass mailing.
The GOP's problem is themselves; just as Cameron's diatribes cover over a lack of capability to do anything useful, aside from saying 'NO'. The MP's expense scandals just make the public more disgusted.
Democracy (actually, capitalism) is a noble experiment run by greedy idiots. Blame them; not the concept.
...in the three months since he took office, Obama has done more deficit spending than any other president. He ran on fiscal repsonsiblity. He will be the first president to propose a budget with 1 out of every two dollars as deficit spending...and all for what?
Change you can(not f--king)believe in.
The Audacity of Hope...boy, he wasn't kidding!
SP4 is a hopeless schmuck; and obviously a rectal delivery.
$1.3 trillion debt came from Bush's TARP and deficit.
Clinton left a surplus
86 percent of the National Debt was amassed under Reagan, Bush and Bush
Cheney is unable to understand the damage that he caused, and sees Limbaugh as a more appropriate spokesperson for the GOP than General Powell (or Secretary Powell). He will drive the GOP down to an angry and ignorant base of yahoos like SP4, who likely get paid to even type anything.
Bush decided to go into Iraq in 2002, because Cheney convinced him that it was a war he could WIN. Afghanistan is likely hopeless - the Taliban should have been soundly defeated the first time.
Pakistan was propped up for years; and now we pay their miltary and ISI to support US, instead of their native insurgents.
Katrina not rebuilt
The bubble economy in tatters in large part due to lack of regulation - both parties responsible ..... but BUSH was President (when Cheney let him be).
SP4 excuses failure
SP4 condones failure
SP4 refuses to understand WHO failed, and why.
Obama is the surgeon who tries to save your worthless life after 8 years of malpractice. His reward? The patient blames him for the prior 8 years.
=============
If SP4 can actually reply to any of that, instead of dumping one more load of Cheney-branded fertilizer into the forum, here's his chance.
Or he can just shut the hell up; and take Cheney with him.
Your Talkback on this Story