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[bigb]

Only three minutes but it will blow you away. 

Sit  down and fasten your safety belt.  You will not believe this.

http://www.youtube.com/embed/VtVbUmcQSuk

[EWSoccer64]

Which is why some people are standing up right now and demanding that the deficit and future debt be addressed.

[plentyofgames]

Which is why some people are standing up right now and demanding that the deficit and future debt be addressed.

Unfortunately they're not very serious people since they're the same ones who ran up the deficit by increasing spending (wars, medicare part D etc) and cutting taxes at the same time. Remember just 10 short years ago the federal budget was in surplus and the deficit was being paid down. We had to cut taxes because without a deficit the government would be competing with business for private capital. Remember those days? I do. In other words, don't put a lot of stock in what's going to happen in 2021 or 2046 because things change.

[EWSoccer64]

Actually Plenty -

1)  Take a look at history.  Cuts in tax rates yield increased revenues within two years.   Even liberal hero JFK was a champion of lower tax rates to bring about economic growth and higher government revenues.
2)   Ten years ago, the budget was not in surplus.   Prior to that, it had been for about 4 years, thanks to a congress that passed rationale budgets and welfare reform, plus the utilization of the "Peace Dividend" through the 1990s. 
3)  Things do change as you say, and usually for the worse.   The current budget deficit forcasts and debt forcasts are very optimistic, as they relie on a lack of inflation and the dollar remaining relatively strong, with the combined result being rather low interest rates.  Many people believe that the projected rate of growth in the US economy is terribly optimistic as well.   A return of inflation (ala Jimmy Carter) would see the dollar plummet, and the willingness of foreigners to buy US debt evaporate.   The result?  Higher interest rates both to curtail inflation and to attract foreign lending.     Which would cause the interest payments on the debt to rise by a great deal.   Further wracking the US budget.

You view that video as alarmist.  I view it as you looking at the glass "half full" instead of broken, leaking and almost empty.

[naughtysporty]

It is so messed up - an 8 trillion surplus 10 years ago was inherited by Mr Bush.

On a different note we were down at a showcase in one of the southern states a couple of weeks ago.  Nothing has changed stateside.

Beautiful fields - like golf greens.  Best grass fields that we have ever played upon.  A dozen immaculate fields - yet the state has an infant mortality of 8.9 per thousand - that is higher than Costa Rica.  Priorities in spending are not just a federal problem !

The State we visited has a 24% Afro-American population, but every team had 16 - 18 players that all looked like older mini-clones of the WPS player of the year.  Perfect straight teeth, blond pony tail etc etc ..............  Not a single Afro-American player.

So many problems...................

[plentyofgames]

Actually Plenty -

1)  Take a look at history.  Cuts in tax rates yield increased revenues within two years.   Even liberal hero JFK was a champion of lower tax rates to bring about economic growth and higher government revenues.
2)   Ten years ago, the budget was not in surplus.   Prior to that, it had been for about 4 years, thanks to a congress that passed rationale budgets and welfare reform, plus the utilization of the "Peace Dividend" through the 1990s. 
3)  Things do change as you say, and usually for the worse.   The current budget deficit forcasts and debt forcasts are very optimistic, as they relie on a lack of inflation and the dollar remaining relatively strong, with the combined result being rather low interest rates.  Many people believe that the projected rate of growth in the US economy is terribly optimistic as well.   A return of inflation (ala Jimmy Carter) would see the dollar plummet, and the willingness of foreigners to buy US debt evaporate.   The result?  Higher interest rates both to curtail inflation and to attract foreign lending.     Which would cause the interest payments on the debt to rise by a great deal.   Further wracking the US budget.

You view that video as alarmist.  I view it as you looking at the glass "half full" instead of broken, leaking and almost empty.

Actually EW, I do know what I'm talking about. If you think that Republican economic ideas have benefited you and the country, that's fine. Reality says otherwise--loudly. Kennedy cut marginal rates that were over 70%, that's a far different thing than the tax rates that are being talked about now. The idea that cutting rates increases tax revenues is not really worth debating anymore. Stockman, Darman, none of those guys believe it. We just had two great big experiments about the effect of tax rates on economic growth. 1993 tax rates raised, followed by unprecedented economic expansion. Remember the economic calamity that was predicted by Gingrich et al. when Clinton's plan didn't receive a single republican vote? 2001, tax cuts followed by not much growth. I did better, but hey, it's not all about me. I actually looked at the video as someone calling to raise taxes. Think about your business, at least in ours, it's much more productive to grow revenue than the slash and burn on the expense side. That's usually counterproductive because there's only so much you can cut.

[El Matarife]

Actually Plenty -

1)  Take a look at history.  Cuts in tax rates yield increased revenues within two years.   Even liberal hero JFK was a champion of lower tax rates to bring about economic growth and higher government revenues.
2)   Ten years ago, the budget was not in surplus.   Prior to that, it had been for about 4 years, thanks to a congress that passed rationale budgets and welfare reform, plus the utilization of the "Peace Dividend" through the 1990s. 
3)  Things do change as you say, and usually for the worse.   The current budget deficit forcasts and debt forcasts are very optimistic, as they relie on a lack of inflation and the dollar remaining relatively strong, with the combined result being rather low interest rates.  Many people believe that the projected rate of growth in the US economy is terribly optimistic as well.   A return of inflation (ala Jimmy Carter) would see the dollar plummet, and the willingness of foreigners to buy US debt evaporate.   The result?  Higher interest rates both to curtail inflation and to attract foreign lending.     Which would cause the interest payments on the debt to rise by a great deal.   Further wracking the US budget.

You view that video as alarmist.  I view it as you looking at the glass "half full" instead of broken, leaking and almost empty.

Actually EW, I do know what I'm talking about. If you think that Republican economic ideas have benefited you and the country, that's fine. Reality says otherwise--loudly. Kennedy cut marginal rates that were over 70%, that's a far different thing than the tax rates that are being talked about now. The idea that cutting rates increases tax revenues is not really worth debating anymore. Stockman, Darman, none of those guys believe it. We just had two great big experiments about the effect of tax rates on economic growth. 1993 tax rates raised, followed by unprecedented economic expansion. Remember the economic calamity that was predicted by Gingrich et al. when Clinton's plan didn't receive a single republican vote? 2001, tax cuts followed by not much growth. I did better, but hey, it's not all about me. I actually looked at the video as someone calling to raise taxes. Think about your business, at least in ours, it's much more productive to grow revenue than the slash and burn on the expense side. That's usually counterproductive because there's only so much you can cut.

Plenty is right.  Blame the Dems all you want, this country needs to seriously reform its tax code and loopholes, not just reducing government.

[EWSoccer64]

Actually, Plenty is not right, El Matarfe.
Let's look at his latest example.   When Bush came into office, the country was in a recession.   Despite the recesssion, and then the shocks of 9/11, the country came out of the recession and started adding jobs and businesses.   And, within 2 years, revenues were higher than before the Bush Tax Cuts.

But I certainly agree with about closing tax loopholes.  And reforming the tax code.  And probably about revamping trade as well.

[plentyofgames]

EW, you shouldn't have got me going. But you did.

Here's a link to an article from October 2001. In the article you can see (a) the budget was in surplus for the FY ended 9/30/01, and (2) the public debt was being paid down. That was ten years ago. 

http://money.cnn.com/2001/10/29/economy/budget/

With respect to tax revenue, I don't know if this chart will show up, but it's from the OMB and shows that total income tax revenue didn't recover to 2000 levels until 2006 and is below that now. That's a problem.

File:U.S.-income-taxes-out-of-total-taxes.JPG

With respect to job employment, job growth in the 2000s didn't keep pace with the increase in population. From 2001-2005 there was no increase in US employment at all; from 2005 to 2009 there was very little. There's a chart for that too.

U.S. president?    Party?    Term years?    Start jobs*?    End jobs*?    created (in millions)?    Average annual increase?

Jimmy Carter    D    1977–1981    80,692    91,031    +10.3    +3.2%
Ronald Reagan    R    1981–1985    91,031    96,353    +5.3    +1.5%
Ronald Reagan    R    1985–1989    96,353    107,133    +10.8    +2.7%
George H. W. Bush    R    1989–1993    107,133    109,725    +2.6    +0.6%
Bill Clinton    D    1993–1997    109,725    121,231    +11.5    +2.6%
Bill Clinton    D    1997–2001    121,231    132,469    +11.2    +2.3%
George W. Bush    R    2001–2005    132,469    132,453    +0.0    -0.0%
George W. Bush    R    2005–2009    132,453    133,563    +1.1    +0.1%
Barack Obama    D    2009–2013    133,563    135,373 (May 2011)    +1.81 (May 2011)    +0.54% (May. 2011/Roughly 2.5 Years)

Just for fun I included another one describing some of the causes of the current financial trouble. I haven't read the Pew study and flyer is from a federal employee union, so you can take with a grain of salt. I'd add Medicare Part D as I said in my earlier post but the primary drivers of the deficit are the lack of tax revenue and the costs of the wars that were off budget.

http://www.afge.org/Index.cfm/Fed%20Workers%20Didn%27t%20Create%20the%20Deficit%20Flyer%20%283%29.pdf?Fuse=document&documentID=2798

Bottom line: Cutting revenue isn't going to solve the deficit problem, nor is slashing government spending. It will take a combination of both increased revenue and decreased spending. Eliminating subsidies and tax breaks (loopholes) to politically favored or powerful constituencies would obviously help, but to make a real difference, you've got to cut where the money is: defense -- really hard to cut (Ike warned us about that). Medicaid -- we're not going to let poor people die (at least not if they show up at the emergency room). Medicare -- good luck with that. Social Security -- good luck there too. Interest on the debt -- got to pay that. Once you get past those things, it's really pennies on the dollar. On the revenue side, it isn't as if the top earners haven't fared well over a long period of time. They've got the money--more of it in fact than in nearly any time in our history. The problem is that too much of that money, both at the personal and corporate level, is just sitting there and not being spent. Without spending to drive the economy we're all in trouble.

[EWSoccer64]

EW, you shouldn't have got me going. But you did.

Here's a link to an article from October 2001. In the article you can see (a) the budget was in surplus for the FY ended 9/30/01, and (2) the public debt was being paid down. That was ten years ago. 

http://money.cnn.com/2001/10/29/economy/budget/

That does not count the accounting for the enttitlement program of Social Security.   The government took in less than it spent.  The government was not in surplus.

Hopefully, tomorrow I will have time to discuss your other points.

[plentyofgames]

I look forward to your comments, but I'll stand by mine. Straight from the article:

"The Treasury Department reported a budget surplus for the fiscal year, which ended on Sept. 30, of $127 billion, compared with $237 billion a year ago."

We have to rely on someone's report and I'll stick with the US Treasury. I do, however, agree that government was spending money that should have been "set aside" for social security. I think that's been happening since 1983 when we all started overpaying to make sure the baby boomers would be covered. It was commonly used then and now as political cover to mask the size of the budget deficits.

I'll be in Boise watching US Club Nationals and cheering for Oregon teams the next several days, so I'll be focused on them and not political economics.