Tea Party Wins

[a_majoor]

I will agree to any cuts after you get annualized growth to 1.5% real. If the stats could actually be trusted I could even deal with 1%.

The economic growth rate of the United States was updated to 1.6% for the last four quarters (seehere for the full report).

Time to get out the shears...

 

[cupper]

The economic growth rate of the United States was updated to 1.6% for the last four quarters (seehere for the full report).

Time to get out the shears...

Actually, first quarter growth was only 0.4%, and second quarter was recently downgrade to 1.3%

 

[cupper]

>The Dems forced the war expenditure onto the books when they took Congress in 2006

So what?  There was no mystery attached to the special appropriations; and, being special, they were more obvious than if they were hidden in the baseline.

Actually, by going the route of special appropriations, it allowed the Bush Administration to keep the expenditures out of the budget, and were not counted against the budget deficit until Obama put them on the books (although it still increased the actual debt). Which is one reason why the deficit numbers ballooned in Obama's first budget.

 

[Nemo888]

And this does not count the cost of Vets on the system. Our math put Veterans benefits at more than actually prosecuting the war. Hence Canada's Screw Veterans Charter. 2007 to 2010 GDP is now negative 0.3% per year in the updated stats. Mostly from State and local cuts and some defense cuts which are just getting started. Those ate the small amounts of growth even with the stimulus. The BEA was lying so as not to undercut consumer confidence. Watching unemployment stats, which are also fiddled with, is more accurate. If unemployment stays high there is no growth.

Since the stimulus has ended and BEA are lying again I'll watch unemployment. Which incidentally is rising again.

 

[cupper]

The root of the US debt explosion does not lie in presidential administrations, let alone presidential administrations of a particular party.  The root lies in entitlements and birth rates.

Not so. The Boomers are only starting to draw on Social Security and Medicare. The effects of the lower birth rate will begin to show up in the short term, around 2017. Between 2017 and 2025 the shortfall will be made by drawing from the Social Security Trust Fund, with the Trust Fund still growing until 2025. After 2025, at current levels, the fund will begin to draw down as funds are taken faster than interest and excess FICA payments are returned. By 2042 the fund may be depleted (depending on who's numbers are used), but Social Security benefit payments can still be sustained, albeit at lower than promised levels, as it is a pay as you go system. Projected levels during the 2040's are 75% of promised, 2080's at 70%.

Part of the problem is that the government is borrowing from the trust fund as part of the budget funding process, in return for treasury bonds, which the Social Security program can recall when necessary to make up deficits in available funds dedicated to Social Security benefits.

 

[cupper]

Businesses cut their way to solvency all the time.  The usual technique is to divest the money-losing parts (ie. the parts that some other business already does more effectively).  If nothing is separable, the business is unlikely to succeed because it has been outcompeted in all aspects.

Not sure where you are going with this analogy.

If businesses cut to regain solvency, they do so at the expense of the taxpayer. Reductions in tax revenues from business taxes and payroll taxes  result in increased government deficit as that money is no longer available, and the unemployed workers begin to rely on government programs for support while looking for new employment.

This actually is a better explanation of the overall economic problem than your previous post about entitlements and low birth rates.

 

[cupper]

And those problems, curiously enough, originate with untrustworthy politicians

I'll definitely agree with you on this point.

 

[Bruce Monkhouse]

Like the teabaggers who screamed that and tax hikes would kill the economy?  Well, no tax hikes, and yet look at the markets.

Watch the slurs lad, if you have an argument then use it.
Bruce

 

[cupper]

And this does not count the cost of Vets on the system. Our math put Veterans benefits at more than actually prosecuting the war. Hence Canada's Screw Veterans Charter.

I think the way both Canada and the US governments are treating Veterans is borderline criminal.

I've heard stories about what both returning US Troops and Vets have to go through that make my my stomach heave.

And I've seen the situation my father has gone and is still going through dealing with Veteran's Affairs for disabilities directly attributable to his 22 years of service in the Navy, which included serving on the Kootenay in 1969 when her gearbox blew up.

 

[cupper]

Interesting side point: Latest poll numbers give the US Congress a satisfaction rating of just 14%.

Pundits are now considering the possibility that the 2012 elections could turn everything upside down due to voter dissatisfaction with both sides.

Both GOP and Dem incumbents could be turfed, resulting the the GOP winning the Senate, but losing the House.  :brickwall:


F@#$ IT! I give up. I'm gonna go crawl into my bunker and seal the door behind me. Wake me when the Zombie Apocalypse starts.

 

[Redeye]

If one wishes to criticize the Iraq war, it should be possible to do so without creating strawmen and citing absolutes where there were none.  It is so hard to find a "justifiable" war (meaning, justly initiated), that the charge is a nearly universal criticism of wars.  The Iraq war wasn't pointless - not worth the cost after the first 3 months, but certainly not pointless.  Knowledge of lack of WMD is known only with hindsight and was believed otherwise in the run-up; that anyone would use it to criticize the "justification" reveals a lack of ability to separate causality and knowledge across time.  What was well-known prior to the outset is that the "containment" was unravelling.  The US worry was that the WMD nearly all countries _believed_ Iraq had _might_ find their way into the hands of a third party, not that Iraq was already responsible.

Nearly all countries believed they might have them because evidence of them was fabricated.  I cannot have been the only person completely unsurprised when no WMDs were discovered - given that the UN had inspectors running all over the country who couldn't find any trace fo them and had said so for months, if not years.  I also could not have been the only person who correctly guessed that the removal of a strongman in the region would touch off a wave of sectarian violence.  I don't think it was completely hindsight.

I agree that there's really few justifiable wars - in the case of Afghanistan, I see some justification for it for the fact that the country actually harboured an organization that planned and executed the mass murder of almost 4000 people - and removing that safe haven has some merit.

>The Dems forced the war expenditure onto the books when they took Congress in 2006

So what?  There was no mystery attached to the special appropriations; and, being special, they were more obvious than if they were hidden in the baseline.

But they don't reflect in those spending as a proportion of GDP as a result, that's the reason I highlighted that - it masks the impact on the US national debt and deficit.

 

[Redeye]

Second: How much has the current Fed policy of near zero interest rates over the past few years, and prior years on relatively low interest rates contributed to the poor economic performance since the collapse in 2008?

Not at all - lowering interest rates is a monetary policy stimulant - the problem is that the Fed's "run out of bullets", they can't drop things lower.  Lower interest rates, theoretically, spur more consumption and investment as capital is cheaper.  Raising rates does the opposite - it encourages saving vice consuming or investing, which is why when inflation becomes a concern, central banks will usually raise rates.

 

[Redeye]

Businesses cut their way to solvency all the time.  The usual technique is to divest the money-losing parts (ie. the parts that some other business already does more effectively).  If nothing is separable, the business is unlikely to succeed because it has been outcompeted in all aspects.

A government, however, isn't a business.  It doesn't, and cannot be run like a business.

 

[cupper]

Not at all - lowering interest rates is a monetary policy stimulant - the problem is that the Fed's "run out of bullets", they can't drop things lower.  Lower interest rates, theoretically, spur more consumption and investment as capital is cheaper.  Raising rates does the opposite - it encourages saving vice consuming or investing, which is why when inflation becomes a concern, central banks will usually raise rates.

Yes, I agree, but isn't the fact that they can't drop rates any lower and therefore out of bullets actually contributing by the fact that they have lost one tool which would have otherwise been available? Also, it was a key factor in creation of the the housing bubble which was the cause of the crisis that sparked the recession of 2008, which had a direct effect on the reduction in tax revenues available regardless of the additional effect of the Bush tax cuts.

I would have to say that it had a very significant contribution, in several different ways.

 

[a_majoor]

I'm not sure what's funny.  It's true.  California pays more into the federal pot than they take out - and that money tends to flow into red states - rather like Canada's "equalization" scheme, though not an actual explicit, formulaic program.  That's reality.

The LA Times (of all people) explode the California myth:

http://www.latimes.com/news/local/la-me-cap-money-20110804,0,7585023,print.column

Capitol Journal: U.S. budget ax hangs over California
Much of California's funds come from Washington, D.C. Now, that's shaky ground.
George Skelton

August 4, 2011

From Sacramento

It's a seldom discussed fact how heavily dependent Sacramento is on Washington's borrowed money.

The same goes for California schools and local governments.

They're all huge targets as Congress takes aim at federal debt.

It's unlikely the Obama administration would have defaulted on U.S. Treasury bonds even if Congress had remained gridlocked on debt ceiling legislation. Stiffing bondholders would have irreparably tarnished the nation's image abroad. Instead, Washington would have slammed it to the states and federal contractors.

That's the sort of thing Sacramento habitually has done after failing to pass a budget on time. It has stuck it to local governments, schools, nursing homes, vendors — almost anyone except bondholders.

There's a lot of federal money for Washington to retrieve in state capitols, especially California's.

The dirty little secret is that California's current state budget is not $85.9 billion, the size of the much-debated, deficit-plagued general fund. You've got to add in the special funds ($34.2 billion) — much of them fed by fees dedicated for specific purposes — plus bond money ($9.4 billion). That totals $129.5 billion, but it still ignores federal dollars.

The real state budget includes an additional $79.2 billion in federal largesse, representing 38% of total state spending. This brings the grand total to $208.7 billion.[/yellow]

So the state of California is getting a nearly $209-billion spending program while putting up less than $130 billion itself.

"It's extremely significant," notes state Assembly Budget Committee Chairman Bob Blumenfield (D-Woodland Hills). "If it were not for federal spending and the stimulus package, the recession in California would have been dramatically worse. The impact on schools and state services would have been devastating."

Most of the federal funds come with strict rules attached. Much of it is what's known in government lingo as "pass through" money — it's automatically passed on by Sacramento to local entities. The state does take a 2.5% administrative fee.

There's little opportunity for games-playing — and much less than there used to be — although Capitol politicians try their best.

"They've done plenty of very creative things to get the benefit out of federal money, like with the stimulus funds," says Mike Genest, state finance director for former Gov. Arnold Schwarzenegger. "Sometimes the federal government has rules that can be exploited and they don't mind…

"In the '80s and '90s, we were among the most creative states in making federal costs go up."

Where does the federal money go? You have to dig deep into state budget documents, looking hard at the fine print, to find out.

Currently, nearly $41 billion is spent on health and human services. Of that, about $29 billion —almost twice what the state puts up — goes for Medi-Cal, California's version of Medicaid healthcare for the poor.

Medicaid is exempt from initial federal spending cuts. But who knows what might be on the chopping block if Congress really gets serious about controlling spending.

Another $3.2 billion in federal money goes to the state CalWorks welfare program. That's $1.1 billion more than Sacramento kicks in.

The state Employment Development Department takes in $19.7 billion from Washington, practically all of it for unemployment insurance benefits.

The Department of Education receives $6.9 billion for K-12. Of that, $2.2 billion pays for poor kids' lunches, $1.7 billion provides other services for low-income students and $1.2 billion helps fund special education. There's also $700 million for child care and after-school programs. And there's money to lend to new charter schools.

The University of California pulls in $3.5 billion and the state universities $1 billion, mostly in research grants.

Caltrans rakes in about $4.3 billion from Washington, much of it for highway construction. The feds generally pay 88% of an interstate project.

The state Emergency Management Agency gets nearly $1.1 billion. Virtually all of it is shuffled out to local entities for disaster aid, homeland security, hazard mitigation, public safety and victim services.

All programs are in jeopardy. It's a good bet much of their federal funding will be trimmed or terminated in the future.

And it's not like Sacramento already hasn't been whacking away. This year's general fund is down roughly 6% from $91.5 billion last year. It's about 17% lower than three years ago.

Genest, a longtime numbers cruncher for Republican politicians, says that future federal cuts would have a huge impact on state services, and he adds: "Personally, I say so what?

"We're going to have to cut these services. It's not that we can afford everything that people want. I'm a 'tea party' guy. I think they should have cut a lot more than they did. We're spending a lot more than is coming in, and that's got to stop."

On the other side, state Senate Budget Committee Chairman Mark Leno (D-San Francisco) says: "My greatest concern is that [the cutting] may have a recessionary impact on the overall economy and cause more damage. The result could be double-digit unemployment in California for years.

"Many economists look back at 1937 when the Great Depression had a second dip and Congress did just what it's doing now. It retrenched on government spending."

It took Nazi Germany and Imperial Japan to end America's depression by forcing us into war.

Unlike former President George W. Bush, however, FDR did not cut taxes for the wealthy while financing a war. But that's for another day.

What Californians — all Americans — need is an honest debate over which services we want to pay for and how do we go about it. And the answer is not mindless borrowing.

george.skelton@latimes.com

 

[Redeye]

The LA Times (of all people) explode the California myth:

http://www.latimes.com/news/local/la-me-cap-money-20110804,0,7585023,print.column

Maybe I missed something, but nothing in there actually counters the information I posted.

No, on reading it again.  I didn't miss anything.  Indeed, nothing in here counters the fact that California provides more in federal revenue than they receive.  Moving right along, then...

 

[cupper]

Maybe I missed something, but nothing in there actually counters the information I posted.

No, on reading it again.  I didn't miss anything.  Indeed, nothing in here counters the fact that California provides more in federal revenue than they receive.  Moving right along, then...

I believe this is what you are looking for.

http://www.taxfoundation.org/press/show/22659.html

California ranks 43rd out of the 50 states (2007 figures) at an outlay to tax ratio of 0.78. So for every $1.00 in tax taken by the Feds, California gets back $0.78.

Worst offender is New Mexico at $2.03.

 

[cupper]

Standard & Poor's down grades the US credit rating from AAA to AA+.

http://www.cbc.ca/news/world/story/2011/08/05/standard-poors-us-credit-rating.html

In its statement, S&P said that it had changed its view "of the difficulties of bridging the gulf between the political parties" over a credible deficit reduction plan.

S&P said it was now "pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics anytime soon."

 

[Fishbone Jones]

Nearly all countries believed they might have them because evidence of them was fabricated.  I cannot have been the only person completely unsurprised when no WMDs were discovered - given that the UN had inspectors running all over the country who couldn't find any trace fo them and had said so for months, if not years.  I also could not have been the only person who correctly guessed that the removal of a strongman in the region would touch off a wave of sectarian violence.  I don't think it was completely hindsight.

Of course. Once again your left wing, head in the sand, opinion is the only logical and dependable solution that is right and righteous. Everyone else is some sort of gomer not privy to your superior intellectual capacity.

It doesn't matter that the same madman said he had those weapons, proved that he had them, used them before and threatened to use them again, didn't matter, did it? What mattered to the conspiracy theorists and left wing ideologs is that, after he moved them, we couldn't find them. So, simplistically, they didn't exist and Bush was a dolt.

Of course, there are all kinds of idiots in the world, that would rather call the bluff of terrorists like this. People that think like you. People that would not bat an eye when hundreds, if not thousands, of Kurds were killed by the same WEAPONS OF MASS DESTRUCTION that Saddam used and has been proven, but deny it because they are not connected. People like you that still profess he didn't have them. : Guess all those Kurds, etc are right wing conspirators and liars too.

 

[Infanteer]

On WMDs in Iraq, I'll forgive myself for believing, like many, in Colin Powell's word.  I probably felt the same way he did when Matt Damon couldn't locate the things.