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Surprise! Huge US Budget Surplus Shatters Record

Debt reduction means banks getting their money back. Which means banks will loan more money out, which stimulates the economy.

No it doesn't. It means a contraction in the money supply, which causes the economy to decline.

Bad economics on your part!
 
He made similar comments before, and credit markets fell to their lowest levels since 2011.

If deficit originated Treasury issuance declines, while credit easing policy is held constant, inflation must increase to ensure an increase in interest rates. Now.... It looks like Treasury issuance is surely going to decline, likely by more than 50%. Which means, interest rates must decline in order to ensure $45 billion in new securities is purchased each month.

Is it clear??? Supply down... Purchases constant... Inflation Constant... Bond price up...

The economic growth necessary to increase real interest rates is the only way, as long as the relationship above holds, for the nominal interest rate of Treasuries to increase.

Hopefully this clears things up....

Things were clear to me all along. This "headline" is meaningless to the economy. You seem to get that everything BUT this "news" has been affecting the economy and yet when I'm telling you flat out that this "surprise huge budget surplus" news had no positive affect at all - because it is not really positive news about the economy, you throw up your hands and plead "no comprende" and keep on waving your pom poms as though this "news" had some meaning aside from giving Obamaphiles a talking point that didn't have something to do with an administration scandal.

The economy is struggling. QE3 continues. And this isn't "economic news" of any significance at all.

Now go ahead and obfuscate and wave pom poms some more. Politics as usual.
 
That is actually based on classical economic doctrine. ;) We can observe the empirical implications using the Bush Tax Rebate programs as an example.

I am saying I seriously doubt they will take the surplus and use it against the principle on our debt.
 
Now go ahead and obfuscate and wave pom poms some more. Politics as usual.

You reply to financial analysis with low-brow partisan nonsense. I see you cannot refute my comment.
 
I am saying I seriously doubt they will take the surplus and use it against the principle on our debt.

Who?

I am talking about the private sector reaction to temporary tax cuts....
 
You reply to financial analysis with low-brow partisan nonsense. I see you cannot refute my comment.

I don't need or want to refute your "comment" because your comment was a non sequitur insomuch as your defense of this "surprise huge buget surplus" news being some sort of "sign" about the economy. I don't think you even know what you're arguing about any more.

Here... let me refresh your memory: http://www.debatepolitics.com/break...surplus-shatters-record-5.html#post1062043822

This "breaking news" isn't moving the market one bit except maybe down because it's not some sort of sign of economic strength - some surprise good fortune.... it's a big fat zero in terms of economic news. And you've been obfuscating for pages because you can't admit something so obvious. This news didn't affect "the market" because it's not an economic indicator. If you want to keep arguing that it is, go ahead. The DOW is down 31 points right now.
 
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I don't need or want to refute your "comment" because your comment was a non sequitur insomuch as your defense of this "surprise huge buget surplus" news being some sort of "sign" about the economy. I don't think you even know what you're arguing about any more.

You made a ridiculous claim about how equity markets were not impacted, which of course is a "so what" statement. However, you failed to understand how such news can impact credit markets, specifically treasury markets. If Bernanke's talk drove yields down, it would be across the board. However, private debt yields actually rose. It was the U.S. Treasury market that actually seen financial inflows.

Of course you don't want to discuss such topics.... Because you can't.
 
You made a ridiculous claim about how equity markets were not impacted, which of course is a "so what" statement. However, you failed to understand how such news can impact credit markets, specifically treasury markets. If Bernanke's talk drove yields down, it would be across the board. However, private debt yields actually rose. It was the U.S. Treasury market that actually seen financial inflows.

Of course you don't want to discuss such topics.... Because you can't.

This "news" about "budget surplus" hasn't moved any market. It's not good news. It's not bad news. It's just not news in any significant way about anything. Since this "news" has been released, there's been no noteworthy movement on ANYTHING that is related to it. The only real movement going on is you and your pom-poms.
 
Looks like good news. I can't wait for all the deficit hawks to come in here and also crow about how great this is for our economy. You guys will right? Or is the sky still falling?

Surprise! Huge US Budget Surplus Shatters Record

The U.S. government posted a budget surplus in June, the latest sign of rapidly improving public finances that could reduce the urgency in Congress to strike a deal to raise the nation's limit on borrowing.

Rising tax revenues, public spending cuts and big payments to the Treasury from state-backed mortgage firms helped the government take in $117 billion more last month than it paid out, the U.S. Treasury said on Thursday.

Analysts polled by Reuters had expected a smaller surplus of $39.5 billion.

June's surplus was the largest for that month on record.​

See? The Sequester isn't so bad after all ;)
 
This "news" about "budget surplus" hasn't moved any market. It's not good news. It's not bad news. It's just not news in any significant way about anything. Since this "news" has been released, there's been no noteworthy movement on ANYTHING that is related to it. The only real movement going on is you and your pom-poms.

As already displayed, U.S. Treasury markets increased. Must i do everything for you?

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Debt vs. income ratio is as important to countries as it is to the average Joe. A nation's credit depends on them keeping a reasonable debt to income ratio. Ours keeps growing the wrong direction. That's not a good thing for us any more than it would be for a household. Of course, with a household, it's actually the debt to ASSET ratio that's truly critical. Having a debt to income ration of 2:1 isn't a big deal if we're talking about a house and car.

LOL yes it is a big deal. Your assets can be huge, but if it is based on debt.. which most households are, then when you loose your income you loose your assets, and if your debt is higher than your assets, then you are reallllly screwed. That was and is the problem in the US today for many. They got loans to buy assets at inflated prices and now the value of those assets have gone massively down and they still have the debts and no jobs and no ability what so ever to pay off the debt.

It's a HUGE deal if it's just debt with no assets to show for it and that's what our government's deficit spending is like.

Governments have plenty of assets, not to mention (as you already stated) the ability to print money. They also have a constant income. It might fluctuate but it is there, so they will always have the ability to pay interest and even pay off some of the debt if need be.. granted it will come at the cost of other things, but the ability is there.

We can't just sell the asset behind that debt and BAM, we're all squeaky clean again. No, it's more like credit card debt except the interest rate is a lot beter.

Actually you can, but dont need too. Yes there are 16 trillion in assets in the US. Hell sell off Alaska and you can pay off all your debts. But as I have stated, a countries finances is not the same as a household..
 
Hell sell off Alaska and you can pay off all your debts.

All those in favor of selling off Alaska to pay off the national debt, how much do you think we could fetch?
 
All those in favor of selling off Alaska to pay off the national debt, how much do you think we could fetch?

While i wouldn't support selling Alaska, it has to be worth at least... $20 trillion?
 
As already displayed, U.S. Treasury markets increased. Must i do everything for you?

View attachment 67150229

a) there was nothing abnormal about that fluctuation. Normal ups and downs.

b) there is no indication that ANY market considered this "breaking news" to be some sort of economic indicator. The markets shrugged their shoulders. The treasury market shrugged it's shoulders. Today, treasuries dropped.

You've got nothing.
 
All those in favor of selling off Alaska to pay off the national debt, how much do you think we could fetch?

California. Sell California to the French. Win/win for everyone. The French could say they make the best wine again. We'd cut our illegal immigration problem in half. Liberals could flock to a socialist state without having to go through airport security. All good except that if the French moved in, any country that invaded California would be able to march to Nevada in 6 hours.
 
Report was released last night.



Oh the irony.

Yeah. This news was released last night. Today treasuries and equities are both down. And you think that means you're right about how this really was good economic news. What a double-face-palm moment.
 
California. Sell California to the French. Win/win for everyone. The French could say they make the best wine again. We'd cut our illegal immigration problem in half. Liberals could flock to a socialist state without having to go through airport security. All good except that if the French moved in, any country that invaded California would be able to march to Nevada in 6 hours.

The worst idea i had ever seen. The economy of California is larger than that of India! Without it, the federal government would be at a serious shortfall in terms of net disbursements to Republican states.
 
Yeah. This news was released last night. Today treasuries and equities are both down. And you think that means you're right about how this really was good economic news. What a double-face-palm moment.

Now it is.... really good economic news. Partisan rhetoric gets you nowhere.
 
Now it is.... really good economic news. Partisan rhetoric gets you nowhere.

Oh, brother..... so much for today's exercise in talking to brick walls. Cheers!
 
Oh, brother..... so much for today's exercise in talking to brick walls. Cheers!

I have already explained my position:

The U.S. deficit projects to have a Jan-Dec decline of roughly 60%.

That.... is good news no matter how much you hate the current administration.
 
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