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US Debt Could Double in 25 Years With Current Policies

Hmm, what has it done for us...? It's provided a national security, killed OBL and Qaddafi, provided food and sustenance to the unemployed and elderly, maintained our highways, kept the planes in the air, lowered unemployment, increased GDP....

Or was that a rhetorical question?

And he fed his dog too ...........

Greece dug an uber-deep hole. Their party is over. They have to fix their system, and suck it up.

If you want to see an example of austerity success, look to Warren G. Harding.

Harding appointed Charlie Dawes, known for being an effective financier, as the first director of the Bureau of the Budget. Dawes reduced government spending by $1.5 billion his first year as director, a 25% reduction, along with another 25% reduction the following year. In effect, the Government budget was nearly cut in ½ in just two years.[115] Harding believed the federal government should be fiscally managed similar to the private sector having campaigned "Less government in business and more business in government."[116] "Harding was true to his word, carrying on budget cuts that had begun under a debilitated Woodrow Wilson. Federal spending declined from $6.3 billion in 1920 to $5 billion in 1921 and $3.3 billion in 1922. Tax rates, meanwhile, were slashed—for every income group. And over the course of the 1920s, the national debt was reduced by one third."


On March 4, President Harding assumed office while the nation was in the midst of a postwar economic decline, known as the Depression of 1920–21. By summer of his first year in office, an economic recovery began.

President Harding convened the Conference of Unemployment in 1921, headed by Secretary of Commerce Herbert Hoover, that proactively advocated stimulating the economy with local public work projects and encouraged businesses to apply shared work programs.[120]

Harding's Treasury Secretary, Andrew Mellon, ordered a study that claimed to demonstrate that as income tax rates were increased, money was driven underground or abroad. Mellon concluded that lower rates would increase tax revenues. Based on this advice, Harding cut taxes, starting in 1922. The top marginal rate was reduced annually in four stages from 73% in 1921 to 25% in 1925. Taxes were cut for lower incomes starting in 1923.[121]

Revenues to the treasury increased substantially. Unemployment also continued to fall. Libertarian historian Thomas Woods contends that the tax cuts ended the Depression of 1920–1921 — even though economic growth had begun before the cuts—and were responsible for creating a decade-long expansion.[117] Historians Schweikart and Allen attribute these changes to the tax cuts.[122] Schweikart and Allen also argue that Harding's tax and economic policies in part "... produced the most vibrant eight year burst of manufacturing and innovation in the nation's history."[123] The combined declines in unemployment and inflation (later known as the Misery Index) were among the sharpest in U.S. history. Wages, profits, and productivity all made substantial gains during the 1920s.

Warren G. Harding - Wikipedia, the free encyclopedia

I do not believe that any here are advocating cutting the budget by 25%. But what the liberals are fighting against is a policy such as limiting its growth to 1% per year for a decade. That will get private investment, and expansion, back into the economy. Trillions of dollars of such. Spent far more wisely than such as Obama has demonstrated. Adn yes, Bush was a lousy steward of the economy as well.
 
The most idiotic part of the argument - and purely political - is that if we increase tax rates on the 3 percent of Americans that make over $200,000 a year, that will make a big dent.

It would be like spitting in the ocean. It would do nothing.

Half of Americans pay no federal taxes at all. Entitlements paid to buy votes from that half of people eat up billions of dollars a year. Some of the most influential states (California, Illinois, and New York) are run entirely based on those principles because their citizenry is addicted to it.

What Scott Walker did is the first step to what the real problem is. Whether we have the stomach to elect the right people to fix the problem is doubtful at best.

America is fast-tracking the way of California, which is bankrupt beyond repair.
 
And he fed his dog too ...........

Greece dug an uber-deep hole. Their party is over. They have to fix their system, and suck it up.

If you want to see an example of austerity success, look to Warren G. Harding.



I do not believe that any here are advocating cutting the budget by 25%. But what the liberals are fighting against is a policy such as limiting its growth to 1% per year for a decade. That will get private investment, and expansion, back into the economy. Trillions of dollars of such. Spent far more wisely than such as Obama has demonstrated. Adn yes, Bush was a lousy steward of the economy as well.

Excellent link to Harding.

But I am DEFINITELY advocating cutting the U.S. federal budget by 25% - at least.

I say balance the budget in two years; not by raising taxes, but by cutting expenditures.
 
And he fed his dog too ...........

Greece dug an uber-deep hole. Their party is over. They have to fix their system, and suck it up.

If you want to see an example of austerity success, look to Warren G. Harding.



I do not believe that any here are advocating cutting the budget by 25%. But what the liberals are fighting against is a policy such as limiting its growth to 1% per year for a decade. That will get private investment, and expansion, back into the economy. Trillions of dollars of such. Spent far more wisely than such as Obama has demonstrated. Adn yes, Bush was a lousy steward of the economy as well.

Ironically, Obama has limited spending growth to about 1% per year. I think that is a good policy, but not now. Not when the economy is in danger of backsliding into recession.

Harding, of course, oversaw a period of immense income inequality, and helped set the stage for the Great Depression.
 
The most idiotic part of the argument - and purely political - is that if we increase tax rates on the 3 percent of Americans that make over $200,000 a year, that will make a big dent.

It would be like spitting in the ocean. It would do nothing.

Half of Americans pay no federal taxes at all. Entitlements paid to buy votes from that half of people eat up billions of dollars a year. Some of the most influential states (California, Illinois, and New York) are run entirely based on those principles because their citizenry is addicted to it.

What Scott Walker did is the first step to what the real problem is. Whether we have the stomach to elect the right people to fix the problem is doubtful at best.

America is fast-tracking the way of California, which is bankrupt beyond repair.

Simply not true. Eliminating the top tax cuts alone isn't enough, but it would reduce deficits by about a trillion dollars over 10 years, which is hardly inconsequential.

When the economy is sound we should at minimum eliminate all of the Bush tax cuts. By itself that would halt the growth of the debt. Then, of course, we should reform entitlements and cut military spending.
 
It's the classic penny wise, pound foolish philosophy. We think we're being smart by pinching pennies now, but we are actually blowing a huge opportunity that will cost future generations more in the long run. See Herbert Hoover.

These are not guaranteed opportunities. They have risks associated with them and could lose more than they gain. The Federal government needs to stop its spending. We are already costing are future generations unbelievable amounts of money.

To be frank, when we die, we will have left this country worse off than when we inherited it.
 
Simply not true. Eliminating the top tax cuts alone isn't enough, but it would reduce deficits by about a trillion dollars over 10 years, which is hardly inconsequential.

When the economy is sound we should at minimum eliminate all of the Bush tax cuts. By itself that would halt the growth of the debt. Then, of course, we should reform entitlements and cut military spending.

So when people finally start to see the light, we should tax the piss out of them.

Now there's some sound thinking.
 
These are not guaranteed opportunities. They have risks associated with them and could lose more than they gain. The Federal government needs to stop its spending. We are already costing are future generations unbelievable amounts of money.

To be frank, when we die, we will have left this country worse off than when we inherited it.

There is very little risk in repairing or replacing infrastructure that needs repair or replacement. We're pissing away a historic opportunity.
 
There is very little risk in repairing or replacing infrastructure that needs repair or replacement. We're pissing away a historic opportunity.

I agree. Infrastructure needs repair...repair it. I understand the need, I am all for the spending of money to repair infrastucture. It is when the money isn't used for that very reason I have issues. Corporate Welfare and such.
 
Ironically, Obama has limited spending growth to about 1% per year. I think that is a good policy, but not now. Not when the economy is in danger of backsliding into recession.

Harding, of course, oversaw a period of immense income inequality, and helped set the stage for the Great Depression.

Hey. I'm not buying that rubbish about Obama. That debate has been had. Those statistics phoney as Hell. Passing off Obama spending on Bush is hilariously stupid.

The Depression was a stock bubble burst. And a Recession. FDR made it a Depression.
 
Hey. I'm not buying that rubbish about Obama. That debate has been had. Those statistics phoney as Hell. Passing off Obama spending on Bush is hilariously stupid.

The Depression was a stock bubble burst. And a Recession. FDR made it a Depression.

This is exactly right, but it sure wasn't taught that way in school, was it?

We got out of the Depression by rebuilding Europe after WWII. That war was the largest transfer of money in world history. (Now, we seem determined to give it all to China.)
 
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This is exactly right, but it sure wasn't taught that way in school, was it?

It isn't taught that way because it isn't true. :roll:
 
Hey. I'm not buying that rubbish about Obama. That debate has been had. Those statistics phoney as Hell. Passing off Obama spending on Bush is hilariously stupid.

The Depression was a stock bubble burst. And a Recession. FDR made it a Depression.

Nonsense. Nearly half of all banks in the U.S. failed before 1933, when FDR was sworn into office. One of his firsts initiatives, known as the Banking Act of 1933 actually put in place a regulatory framework that increased confidence in a (at that time) failing banking sector. The kool-aid might have tasted great on the way down, but it's awful on the way up.
 
Hey. I'm not buying that rubbish about Obama. That debate has been had. Those statistics phoney as Hell. Passing off Obama spending on Bush is hilariously stupid.

The Depression was a stock bubble burst. And a Recession. FDR made it a Depression.

Although I am almost TOTALLY against the New Deal and Keynesian economics...I am afraid your statement is not true.

By the time FDR took over - the U.S. was definitely in a depression.

For one thing, the GDP had dropped from $103.7 billion in '29 to only $58.7 billion in '32 (FDR entered office in March '33) - as shown at the top of the link provided below.

That definitely constitutes a depression.

http://www.shmoop.com/great-depression/statistics.html
 
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Greece dug an uber-deep hole. Their party is over. They have to fix their system, and suck it up.

Any comparing Greece to the US situation is beyond .... stupid frankly. At best the US is Greece mega ultra light and only on some points.

There are sooooo many differences between the US and Greece.. for one, American's actually pay taxes!.. Greeks dont! (relatively speaking). The problem in the US is the taxes are lopsided (rich get relatively off easy while the middle class take the relatively bigger burden) and too low.... yes you heard me.. Your taxes are too low, especially for the well off. Deal with it. And yes the poor dont pay federal income taxes.. hello... there is a reason!.. They are POOR! Cut your deductions and all that crap, and capital gains.. make all capital gains income as normal "income".. yes it will mean the rich actually will have to pay the same % as the rest of the population.. I dont think Paris Hilton and Romney will starve or have to cut their spending spree in luxury goods, homes, cars and drugs (Paris Hiltion). Point is, you will never ever ever fix your problem with cutting of costs only..

Also the level of corruption in the US is much lower than Greece.. where corruption is a national sport that effects all parts of government. In the US it is only the leading parts.. Congress and such.,.. but of course the corruption is on an epic scale considering the money involved. Bi-Partisan my ass.. you need transparency and accountability first, then you can talk about bi-partisanship. Problem is that will never happen as long as being a politician in Washington is a get rich fast scheme.

On top of that there is of course spending... which has to come down across the board, but without throwing the elderly under the bus and telling poor people to die in the ally next to the ER because they got no insurance. Means test social security. There is no reason for Romney to receive a cent when hits retirement. Even Warren Buffet gets Social Security as far as I know. And the only way you can tackle Medicaid and Care.. is to tackle the private healthcare sector as they are the ones dictating the far far far higher than inflation rises in costs. I read a story about a guy who's insurance was about to cut him off from his prescription because his yearly 1500 dollar limit had been reached. Now, that limit was the same as he got 10+ years ago, but the price of his insurance has tripped since that. That is a microcosm of the huge problem with your private driven for greed medical system.

You could also easily cut 1/3 of military spending if you wanted too. There is no reason for half the bases you have in the middle of no where, plus you have too much waste in procurement and administration. Cutting one of the branches of the military would go far... other countries have done it, so why not the US? Oversea bases .. dump them. No reason to have bases in the UK or Germany any more. Point is, there is plenty of money to be saved in the military.. but as usual local interests of politicians get priority over common sense.... like forcing the military to have weapons systems they dont want, just because they will be built at inflated prices in the state of one of the top senators.. pathetic method of governance.

But will any of this actually happen .. of course not, because the GOP are ... and the Dems are .... self censoring because of the new posting rules... but lets just say, they are more interested in fighting each other and gaining more and more power and money for them and their "friends" than actually helping the rest of the 99% of the population that struggle each day and are getting poorer and poorer. For example.. the wage of a server in the US.. you know the guy who serves you dinner in the fancy restaurant.. has not gone up the last 20 years according to a recent study. Prices have of course... thank god for tips I guess.

The sad part.. even if one party wins a majority in all parts of elective government.. they wont do jack **** .. after they did not do jack **** last time it happened and the time before that.. and before that.. Same old story.
 
This is exactly right, but it sure wasn't taught that way in school, was it?

We got out of the Depression by rebuilding Europe after WWII. That war was the largest transfer of money in world history. (Now, we seem determined to give it all to China.)

Yes, World War II got the United States out of the Depression. No, FDR did not cause the Depression. That is just false.
 
Nonsense. Nearly half of all banks in the U.S. failed before 1933, when FDR was sworn into office. One of his firsts initiatives, known as the Banking Act of 1933 actually put in place a regulatory framework that increased confidence in a (at that time) failing banking sector. The kool-aid might have tasted great on the way down, but it's awful on the way up.

Yes.

The Banking Act did stabilize the banking sector - and also caused the DOW to boom (temporarily).

BUT...

his Keynesian policies were (imo) an overall failure.

From mid '33 (after the boom from the Banking Act ended) until mid '42...the DOW actually went down.

And from '33 until '42 - the unemployment rate averaged over 17%. And it was still over 17% in 1939...despite years of MASSIVE government spending (and skyrocketing national debt).

Dow Jones Industrial Average (1900 - Present Monthly) - Charting Tools - StockCharts.com

The Great Depression Statistics



Note - the 1920/21 Depression was handled by the government massively cutting spending, balancing the budget and basically letting the economy right itself.

The result was both the DOW and the unemployment rate were back to near pre-Depression levels within 3 1/2 years and the national debt actually went down.

http://en.wikipedia.org/wiki/Depression_of_1920–21
 
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Yes.
his Keynesian policies were (imo) an overall failure.

What Keynesian policies?

fredgraph.png
 
What Keynesian policies?

fredgraph.png

If you look at the chart you provided - there were surpluses before 1930. There were none again until after WW2.

Classic Keynesian government (attempted) stimulation of the economy through deficit spending.

Here is a more detailed description:

Federal Budget Receipts and Outlays

From 1931 until 1947 - every single year a deficit (though the gigantic WW2 deficits are obviously understandable).
 
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If you look at the chart you provided - there were surpluses before 1930. There were none until after WW2.

Classic Keynesian government (attempted) stimulation of the economy through deficit spending.

Here is a more detailed description:

Federal Budget Receipts and Outlays

You did not answer my question. Until the massive deficit spending for WWII, the U.S. did not actually engage in Keynesian policies.
 
You did not answer my question. Until the massive deficit spending for WWII, the U.S. did not actually engage in Keynesian policies.

I figured the information answered it for me.

I guess not.


'Definition of 'Keynesian Economics'
An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.'

Read more: Keynesian Economics Definition | Investopedia


So, you are seriously suggesting that the New Deal was not an example of 'active government intervention in the marketplace and monetary policy'?

So a government increase in spending from 1930 until 1936 of roughly 150%, despite the fact that government revenues actually were lower in 1936 then in 1930...and you say that is not engaging in Keynesian policies?

Okaaaaaaay.
 
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I figured the information answered it for me.

I guess not.

'Definition of 'Keynesian Economics'
An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.'

Read more: Keynesian Economics Definition | Investopedia


So, you are seriously suggesting that the New Deal was not an example of 'active government intervention in the marketplace and monetary policy'?

Okaaaaaaay.

Deficit spending up until WWII was minimal at best, and can be mostly attributed to a deteriorating tax base as aggregate income was nearly cut in half by 1933. There is not a cookie cutter definition of Keynesian macro policy. Yes, deficit spending is essential, but closer observations must be made in order to dissect how income dynamics impact the tax base. Simply pointing to the existence of deficits (in and of themselves) does not support your argument.
 
Nonsense. Nearly half of all banks in the U.S. failed before 1933, when FDR was sworn into office. One of his firsts initiatives, known as the Banking Act of 1933 actually put in place a regulatory framework that increased confidence in a (at that time) failing banking sector. The kool-aid might have tasted great on the way down, but it's awful on the way up.

His actions with the banks when he first took office undermined confidence in them. However, some seem caught up in semantics. My argument is that FDR made things worse. Whether we would still call it the Great Depression had someone else been in charge, and pursued other policies, I do not know. But very good arguments can be had that FDR's policies took a bad situation, and made it worse, extending it for years beyond what should have been its normal course.

There are arguments both ways. Here is one:

How FDR Made the Depression Worse
The Free Market: How FDR Made the Depression Worse

And then we have the words of his own Treasury Secretary, testifying before Congress in 1939"

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises…I say after eight years of this administration we have just as much unemployment as when we started…And an enormous debt to boot!”
Henry Morganthau

My argument is that it is a good argument ;)
 
And then we have the words of his own Treasury Secretary, testifying before Congress in 1939"



My argument is that it is a good argument ;)

That is a great point (imo) and very informative to me.

I never knew a member of his administration said that about FDR's policies.

VERY interesting.
 
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My argument is that it is a good argument ;)

No, you do not have a coherent argument, as it is riddled with misconceptions at every plausible turn.
 
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