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Volcker: Taxes likely to rise eventually to tame deficit

I agree.

I'm not faulting him, I think we should of applied the surplus to debt reduction.
That's why I don't like the President and Congress to be of the same party.

Debt reduction is going to be politically unpopular no matter who takes up the mantle. Especially in the rhetorical environment we have now.

We have to do it, but I don't know if we have the stomach for it.
 
He didn't cut the national debt, he just had a budget surplus.
Big difference.

If you have a budget surplus, only two things can happen: you cut the debt or you rebate/lower taxes. Clinton's surpluses were late in his term and he did reduce debt.
 
He didn't cut the national debt, he just had a budget surplus.
Big difference.

He did in fact cut deficits. Normally the deficit we care about is net debt as a percentage of GDP. In fact, you can have deficits and still cut debt because of increases in GDP and inflation.

If we look at the picture at the bottom, you will see that he cut deficits by 15% of GDP. Bush increased it by around 5%. Obama however is planning to increase it by 50% by 2015 and the deficits are not going back to Bush levels. (3.5% -1%) After HBO estimates, Obama will keep it above 5% and then it will increase after 2012.

USDebt.png
 
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Debt reduction is going to be politically unpopular no matter who takes up the mantle. Especially in the rhetorical environment we have now.

We have to do it, but I don't know if we have the stomach for it.

Yep both parties are out to give us the screw job.
With the full support of the majority.

If you have a budget surplus, only two things can happen: you cut the debt or you rebate/lower taxes. Clinton's surpluses were late in his term and he did reduce debt.

I stand corrected, it was applied to the public debt debt.

Some are arguing though that the decrease was a shell game of switching the money from SS to public debt.
Making it look like a surplus.
 
He did in fact cut deficits. Normally the deficit we care about is net debt as a percentage of GDP. In fact, you can have deficits and still cut debt because of increases in GDP and inflation.

If we look at the picture at the bottom, you will see that he cut deficits by 15% of GDP. Bush increased it by around 5%. Obama however is planning to increase it by 50% by 2015 and the deficits are not going back to Bush levels. (3.5% -1%) After HBO estimates, Obama will keep it above 5% and then it will increase after 2012.

"I will show we agree that at the beginning of the year we have exactly that figure, 5 trillion 478 billion 7-some-odd-million dollars. Now, referring to U.S. Treasury Report table, you will find, under the column Close of This Month, the figure $5,606,486,000,000. So the table itself, according to the figures issued yesterday, showed the Federal Government ran a surplus. Absolutely false. This reporter ought to do his work. This crowd never has asked for or kept up with or checked the facts. Eric Planin--all he has to do is not spread rumors or get into the political message. Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done."

"It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000."

"That is increasing the national debt. That is the deficit, $127 billion. I checked this with the Congressional Budget Office. They haven't done their interpolation of the various records. I had been reporting, as you will find on the table inserted, a $103 billion deficit for this fiscal year, as of the CBO June 30 figure. I said: Wait a minute, it is way more than what we thought, if it is 127 rather than 103. They said there were some unaccounted balances carried forward, some $16 billion."

That comes from Democrat Senator Fritz Hollings.

View Appearance | C-SPAN Congressional Chronicle, Created by Cable. Offered as a Public Service.
 
"I will show we agree that at the beginning of the year we have exactly that figure, 5 trillion 478 billion 7-some-odd-million dollars. Now, referring to U.S. Treasury Report table, you will find, under the column Close of This Month, the figure $5,606,486,000,000. So the table itself, according to the figures issued yesterday, showed the Federal Government ran a surplus. Absolutely false. This reporter ought to do his work. This crowd never has asked for or kept up with or checked the facts. Eric Planin--all he has to do is not spread rumors or get into the political message. Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done."

"It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000."

"That is increasing the national debt. That is the deficit, $127 billion. I checked this with the Congressional Budget Office. They haven't done their interpolation of the various records. I had been reporting, as you will find on the table inserted, a $103 billion deficit for this fiscal year, as of the CBO June 30 figure. I said: Wait a minute, it is way more than what we thought, if it is 127 rather than 103. They said there were some unaccounted balances carried forward, some $16 billion."

That comes from Democrat Senator Fritz Hollings.

View Appearance | C-SPAN Congressional Chronicle, Created by Cable. Offered as a Public Service.

I don't get your point. Actually Obama is planning to borrow 1700 billions, then down to 650 billions in 2012 because then the crisis is over. After that he plans to increase it to 1200 billions in 2019. However these numbers doesn't make sense for any of us.

To get some sense in the numbers we need to look at net debt as a percentage of GDP.
 
I don't get your point. Actually Obama is planning to borrow 1700 billions, then down to 650 billions in 2012 because then the crisis is over. After that he plans to increase it to 1200 billions in 2019. However these numbers doesn't make sense for any of us.

To get some sense in the numbers we need to look at net debt as a percentage of GDP.

Well there was a surplus per se and they did pay down the national debt but they used the off budget trust fund surpluses to do that.
The trust fund money is for future obligations.

So they borrowed from the trust funds to show the appearance of surplus.
I'm not smacking Clinton around because I'm trying to learn about this.
 
The economic crash of 2008 had NOTHING to do with the New Deal or Great Society,

really> so if the New Deal and Great SOciety had been struck down for being in violation of the tenth amendment-as they most surely were-we would still have the massive bloated government interfering in areas it had no business in today? Such as forcing banks to make mortgage loans to underqualified home buyers?
 
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All this "we should raise it" and "we shouldn't raise it" is missing the point to me that bothers me about this.

Almost everyone in the "We should raise it" crowd seems to act like this is obvious, that we knew this was going to be the case, that its not surprising. Fine. Then either Obama is a complete ****ing idiot OR is an absolute liar.

If it was so obvious and unquestionable that we needed to raise taxes then he should've never gone about promising that no taxes would be raised for those that aren't "rich" in hopes of tapping populism and "appearing bipartisan". To do so either means he was too ****ing dumb to realize something so "obvious and unquestionable" or so disingenuous an slimey that he boldly and flatly lied to the face of the American people time and time again for nothing but political expediency. Change from Politics as Usual indeed.
 
Now that is BS. Since the New Deal and Great Society the US has become the most powerful and prosperous nation on earth with one of the highest standards of living on the planet. The spiral downward started when we became the world police and first stuck our nose into the civil war in Vietnam.

Nothing in the history of this country has DAMAGED us more than the New Deal and The Great Society.

And they had nothing to do with the prosperity of this country. In fact, the New Deal extended the Great Depression far longer than it should have been.
 
really> so if the New Deal and Great SOciety had been struck down for being in violation of the tenth amendment-as they most surely were-we would still have the massive bloated government interfering in areas it had no business in today? Such as forcing banks to make mortgage loans to underqualified home buyers?

You're kidding right?
Forcing banks to make loans? No bank was ever forced to make a loan. Derivatives? Credit default swaps? Record low mortgage rates? FED easy money policy? Hear of them? Lack of regulation led to the financial meltdown.

Greed and speculation in the financial sector fueled the housing bubble and it's eventual collapse.
You really should learn the facts instead of relying on GOP spin. It's funny how you guys hear something and then keep repeating it as fact.
 
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You're kidding right?
Forcing banks to make loans? No bank was ever forced to make a loan. Derivatives? Credit default swaps? Hear of them? Lack of regulation led to the financial meltdown.

Greed and speculation fueled the housing bubble and it's eventual collapse.
You really should learn the facts instead of relying on GOP spin.

You wouldn't know a fact if it bit you on the ass.

Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory Illinois
Case Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctiverelief, actual damages, and punitive damages.

U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).

The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000

Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog

We'll wait while you find a way to claim that the lawsuit didn't actually force the bank to do anything.
 
Nothing in the history of this country has DAMAGED us more than the New Deal and The Great Society.

And they had nothing to do with the prosperity of this country. In fact, the New Deal extended the Great Depression far longer than it should have been.

That is an opinion unsupported by reality.
 
That is an opinion unsupported by reality.

No, it is an accepted fact by anyone who's bothered to research it.

World War II, and the massive transfer of wealth to the United States during the reconstruction of Europe, is what made us the most powerful nation in the world.
 
No, it is an accepted fact by anyone who's bothered to research it.

Which you clearly have not.

World War II, and the massive transfer of wealth to the United States during the reconstruction of Europe, is what made us the most powerful nation in the world.

Yea not having your cities bombed to rubble tends to do that..
 
You're kidding right?
Forcing banks to make loans? No bank was ever forced to make a loan. Derivatives? Credit default swaps? Record low mortgage rates? FED easy money policy? Hear of them? Lack of regulation led to the financial meltdown.

.

You totally want to ignore the Community Reinvestment Act, don't you. The Democrats are responsible for this one.

[ame=http://en.wikipedia.org/wiki/Community_Reinvestment_Act]Community Reinvestment Act - Wikipedia, the free encyclopedia[/ame]
 
Yea not having your cities bombed to rubble tends to do that..

Especially, when American firms receive the contracts to rebuild Europe.

Only the blindest of partisans would credit FDR's New Deal for bringing us out of the Depression. That's utter BS.
 
You totally want to ignore the Community Reinvestment Act, don't you. The Democrats are responsible for this one.

Community Reinvestment Act - Wikipedia, the free encyclopedia

The CRA had absolutely nothing to do with the financial collapse.

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”
 
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Especially, when American firms receive the contracts to rebuild Europe.

Only the blindest of partisans would credit FDR's New Deal for bringing us out of the Depression. That's utter BS.

First off I have never said that the New Deal was the sole reason for the US and world getting out of the great depression. It was a big part of a larger picture.

And only the most idiotic person would dismiss FDRs contribution to getting the US and the world out of the Great Depression.

The US and the world was in such a deep hole thanks to right wing policies put in place before FDR came to power that it took many years to just get back to the same state as before the crash. Like it or not the US economy was improving year after year pretty much up to the out break of war. Once in the war then all bets are off, since production is switched from consumer goods to war production and deficits be damned.

When the war was over, these policies by FDR put the US at the for front of the world economy since the US was the only nation with a large intact production infrastructure. And of course the spoils of war did help also.. I mean just think if the US did not "acquire" jet technology and rocket technology from its allies and enemies during and after the war..

Like it or not, downplaying FDRs New Deal contribution is as stupid as denying that the US did not benefit hugely from WW2 or that the earth is round.
 
The CRA had absolutely nothing to do with the financial collapse.

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Why can't people acknowledge that a lot of things came together which caused this mess. CRA is certainly ONE of them. Look at the balance sheet of fannie and freddie. They balooned during this period which caused people to get loans they should not have qualified for. This extra demand caused a further heating up of the housing bubble. Which caused prices to come down not by a traditional amount but by an amoung never experienced before looking at total national housing.

Some of the discussion becomes so partisan it seems people would be willing to say day is night to be able to blame their opponents.
 
Why can't people acknowledge that a lot of things came together which caused this mess. CRA is certainly ONE of them. Look at the balance sheet of fannie and freddie. They balooned during this period which caused people to get loans they should not have qualified for. This extra demand caused a further heating up of the housing bubble. Which caused prices to come down not by a traditional amount but by an amoung never experienced before looking at total national housing.

Some of the discussion becomes so partisan it seems people would be willing to say day is night to be able to blame their opponents.


Fannie Mae and Freddie Mac were victims, not culprits - BusinessWeek

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

The number don't lie unless you like to spin.

Low interest rates, greed and speculation and easy money from the FED led to the housing bubble.
 
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