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CBO estimates 2013 deficit at $642 billion [W:383]

Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
Why? Calling it the "Great Recession" accentuates that it was a far deeper recession than most recessions. Just as the Great Depression was a far deeper depression than most depressions.
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We'll never have another depression because the government will never define another downturn as a depression. No matter how bad it gets, it will always be a recession.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
You're right. The 12% pales in comparison to the 25% and the 17% drop pales in comparison to 46%. No argument there. The pertinent question is why the difference? The onset of both depressions were dire, so why did the one in 1920 end quickly and the one in 1929 drag on for far longer? You said there was a reason and I agree. There is a definitive reason. Every depression, every depression, prior to 1929 ended fairly quickly. Only in 1929 did government get into the fix-it business, and the Great Depression was the result.

Look at the link you provided for the years 1920 to 1941. In the first column, GDP (though GDP didn't arrive until around 1932, it was GNP before then) started falling but had recovered past the 1920 level by 1923. Compare that to 1929. We didn't surpass the 1929 level again until 1941. Again, why the difference in speed of recovery. The answer is the same. Government tried to fix it after the 1929 crash.
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Between 1930 and 1942, the national debt was TRIPLED.

Government - Historical Debt Outstanding - Annual 1900 - 1949

And what did America get for all this new debt?

The DOW never got to more then 51% of it's pre-crash level.

And the unemployment rate in 1939 was still FIVE times higher then it was before the crash.

Dow Jones Industrial Average (1920 - 1940 Daily) - Charting Tools - StockCharts.com

The Great Depression Statistics



Now compare it to the 1920/21 Depression.

The Wilson/Harding administrations slashed spending (much of it war spending, granted). But between 1920 and 1923, they cut spending in half AND cut tax rates.

http://www.gpo.gov/fdsys/pkg/BUDGET-2011-TAB/pdf/BUDGET-2011-TAB.pdf page 21

What was the result?

The unemployment rate was apparently 1.4% before the crash, 11.7% in 1921 and down to 2.4% by 1923.

And the DOW went from a pre-crash peak of 119, down to 63 by 1921 and up to about 105 by 1923. Within 2 more years, it was back above it's pre-crash high (it took the DOW 25 years to do that after 1929).

Depression of 1920

All while running a surplus every year.


In short - Hoover/FDR handling of Great Depression roughly ten years after the crash...national debt triples, DOW barely reaches 1/2 of it's pre-crash level and unemployment is 5 times worse (in 1939) then it's pre-crash level.

Wilson/Harding handling of 1920/21 Depression...national debt is cut by roughly 20%, the unemployment rate is back to near pre-crash levels in 3 1/2 years and the DOW surpasses it's pre-crash level within 5 years.
 
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Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
You're right. The 12% pales in comparison to the 25% and the 17% drop pales in comparison to 46%. No argument there. The pertinent question is why the difference? The onset of both depressions were dire, so why did the one in 1920 end quickly and the one in 1929 drag on for far longer? You said there was a reason and I agree. There is a definitive reason. Every depression, every depression, prior to 1929 ended fairly quickly. Only in 1929 did government get into the fix-it business, and the Great Depression was the result.

Look at the link you provided for the years 1920 to 1941. In the first column, GDP (though GDP didn't arrive until around 1932, it was GNP before then) started falling but had recovered past the 1920 level by 1923. Compare that to 1929. We didn't surpass the 1929 level again until 1941. Again, why the difference in speed of recovery. The answer is the same. Government tried to fix it after the 1929 crash.
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In nominal terms, yes, but in real figures, GDP by the end of 1936 was back to 1929 levels. The following year, the federal government made big cuts to spending and we had another recession later that year.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
We'll never have another depression because the government will never define another downturn as a depression. No matter how bad it gets, it will always be a recession.
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I don't know about that. If the economy got that bad, I don't see how the government could keep it from being called a depression.
 
Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
In nominal terms, yes, but in real figures, GDP by the end of 1936 was back to 1929 levels. The following year, the federal government made big cuts to spending and we had another recession later that year.
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That's the official story, but it's not the whole story. The deficit of 1937 was indeed smaller than the 1936 deficit when outlays decreased from $8.2B to $7.6B. Consider, however, 1935. That year was considered a year of recovery, yet outlays were even less than 1936 or 1937 coming in at $6.4B. So while spending did indeed decrease between 1936 and 1937, total spending was still greater than all the years prior to 1936. If less spending led to the "depression within a depression" in 1937, how did even less spending cause recovery a few years earlier? Your explanation doesn't hold water.

Even ignoring that, and I'll take your figures at face value, it took 7 years for GDP to recover. That's longer than any previous depression. Again, why?
 
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Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
I don't know about that. If the economy got that bad, I don't see how the government could keep it from being called a depression.
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Government defines the terms. They can call it whatever they want to call it.
 
Re: CBO estimates 2013 deficit at $642 billion

This is a severely dishonest post ...

DA60 said:
Between 1930 and 1942, the national debt was TRIPLED.

Government - Historical Debt Outstanding - Annual 1900 - 1949

And what did America get for all this new debt?
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2/3rds of that debt was due to WWII. That's what we got out of it. If that's how you want to look at it, Reagan tripled the debt in just 8 years ... what did we get for it?

DA60 said:
The DOW never got to more then 51% of it's pre-crash level.
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It's like you don't even realize that the Dow lost 90% of its valuation?? The worst crash in my lifetime was the 2008-09 crash; and that was "only" a 55% drop. 90% is unfathomable. Add an insanely deep depression and I'm not sure how long you think it should have taken for the market to recover?

DA60 said:
And the unemployment rate in 1939 was still FIVE times higher then it was before the crash.

Dow Jones Industrial Average (1920 - 1940 Daily) - Charting Tools - StockCharts.com
The Great Depression Statistics
Click to expand...
Also dishonest as it ignores the fact that the unemployment rate fell every year under FDR until the 1937 recession, which came after the government cut spending.

DA60 said:
Now compare it to the 1920/21 Depression.

The Wilson/Harding administrations slashed spending (much of it war spending, granted). But between 1920 and 1923, they cut spending in half AND cut tax rates.

http://www.gpo.gov/fdsys/pkg/BUDGET-2011-TAB/pdf/BUDGET-2011-TAB.pdf page 21

What was the result?
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The result was the 1923 recession.

And the spending cuts began in 1919. We had a depression in 1920.

DA60 said:
And the DOW went from a pre-crash peak of 119, down to 63 by 1921 and up to about 105 by 1923. Within 2 more years, it was back above it's pre-crash high (it took the DOW 25 years to do that after 1929).

Depression of 1920

All while running a surplus every year.

In short - Hoover/FDR handling of Great Depression roughly ten years after the crash...national debt triples, DOW barely reaches 1/2 of it's pre-crash level and unemployment is 5 times worse (in 1939) then it's pre-crash level.

Wilson/Harding handling of 1920/21 Depression...national debt is cut by roughly 20%, the unemployment rate is back to near pre-crash levels in 3 1/2 years and the DOW surpasses it's pre-crash level within 5 years.
Click to expand...
Since you're under the impression that the Dow is such an indicator of the economy, you must think Obama is an economic genius as the DJIA nearly doubled in just two years after it bottomed out in March, 2009?
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Government defines the terms. They can call it whatever they want to call it.
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Don't be silly. It doesn't matter if the government tries to not call it a depression, if the economy is that bad, they can't hide it. Just like in 2008 before they announced we were in a recession -- many economists were already saying we were in one.
 
Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
Don't be silly. It doesn't matter if the government tries to not call it a depression, if the economy is that bad, they can't hide it. Just like in 2008 before they announced we were in a recession -- many economists were already saying we were in one.
Click to expand...

Just remember what I said. Time will tell if I'm right. ;)
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
That's the official story, but it's not the whole story. The deficit of 1937 was indeed smaller than the 1936 deficit when outlays decreased from $8.2B to $7.6B. Consider, however, 1935. That year was considered a year of recovery, yet outlays were even less than 1936 or 1937 coming in at $6.4B. So while spending did indeed decrease between 1936 and 1937, total spending was still greater than all the years prior to 1936. If less spending led to the "depression within a depression" in 1937, how did even less spending cause recovery a few years earlier? Your explanation doesn't hold water.
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It doesn't work that way. It's the cut that hurts. Spending was cut in 1920, we had a recession that year. Spending was cut in 1922 and 1923, we had a recession that year. Spending was cut in 1926, we had a recession that year. Spending was cut in 1937, we had a recession that year. Spending was cut in 1948, we had a recession that year.

Of course, there have been many years where spending increased and recessions followed. But they're have only been a couple of times when a spending cut was not followed by one.

froggigger said:
Even ignoring that, and I'll take your figures at face value, it took 7 years for GDP to recover. That's longer than any previous depression. Again, why?
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Well, no, it took 4 years for GDP to recover. by the end of 1933, real GDP was back to 1929 levels.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Just remember what I said. Time will tell if I'm right. ;)
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Be sure to remind me if you're ever right about that.
 
Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
It doesn't work that way. It's the cut that hurts. Spending was cut in 1920, we had a recession that year. Spending was cut in 1922 and 1923, we had a recession that year. Spending was cut in 1926, we had a recession that year. Spending was cut in 1937, we had a recession that year. Spending was cut in 1948, we had a recession that year.

Of course, there have been many years where spending increased and recessions followed. But they're have only been a couple of times when a spending cut was not followed by one.


Well, no, it took 4 years for GDP to recover. by the end of 1933, real GDP was back to 1929 levels.
Click to expand...

Spending was cut in 1920, and 1921, and 1922, and 1923, and 1924, and 1925, and 1926, and 1927. According to you, the 1920s were a decade of recession since "it's the cut that hurts". I guess the Roaring '20s refers to roaring recession. Of course, spending did increase in 1928 and 1929 so, according to your theory, the economy should have improved, but we all know what happened next.

Spending was indeed cut in 1937 from its 1936 level, but in both years spending was still higher than earlier years, some of which were years that were claimed to be recovery years. Only when government is keeping the books and controlling the narrative can you have it both ways.

You originally said: "...in real figures, GDP by the end of 1936 was back to 1929 levels". That's 7 years. Now you say: "by the end of 1933, real GDP was back to 1929 levels". That's 4 years. My next question to you should be obvious.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Government defines the terms. They can call it whatever they want to call it.
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Really? The NBER defines recessions (and they are a private non-profit), there is no govt defined, legal or otherwise, term.

This is basic knowledge, you should know this.
 
Re: CBO estimates 2013 deficit at $642 billion

Gimmesometruth said:
Really? The NBER defines recessions (and they are a private non-profit), there is no govt defined, legal or otherwise, term.

This is basic knowledge, you should know this.
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Define was probably the wrong word. Sure, it's defined that two consecutive quarters of negative GDP growth in real GDP is a recession. All I'm saying is that no matter how bad it gets after the first two consecutive quarters, it will forevermore be called a recession. The politicians in power don't want a depression on their watch, so we won't have one. According to rhetoric, of course, not reality.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Define was probably the wrong word.
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It is not just that, it is the fact that you thought a govt entity was responsible for the defining.

Sure, it's defined that two consecutive quarters of negative GDP growth in real GDP is a recession.
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OK, but the term under discussion was "depression", and again, govt did not define either term.


All I'm saying is that no matter how bad it gets after the first two consecutive quarters, it will forevermore be called a recession.
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Uh....yeah, that is how it works...duh.


The politicians in power don't want a depression on their watch, so we won't have one. According to rhetoric, of course, not reality.
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Which has nothing to do with my point.
 
Re: CBO estimates 2013 deficit at $642 billion

Sheik Yerbuti said:
COLOR]


2/3rds of that debt was due to WWII. That's what we got out of it. If that's how you want to look at it, Reagan tripled the debt in just 8 years ... what did we get for it?
Click to expand...


25% GDP growth, unemployemnt under 5% and a 300% increase in stock market value?
 
Re: CBO estimates 2013 deficit at $642 billion

2/3rds of that debt was due to WWII. That's what we got out of it. If that's how you want to look at it, Reagan tripled the debt in just 8 years ... what did we get for it?
Click to expand...

Yet dollar for dollar Obama increased the debt by the same amount in just over one year vs Reagan's 8 years.
 
Re: CBO estimates 2013 deficit at $642 billion

Gimmesometruth said:
It is not just that, it is the fact that you thought a govt entity was responsible for the defining.
Click to expand...

I readily admitted that define was not the right word so, quite obviously, you corrected interpreted a poorly chosen word that did not convey what I meant. Since I admitted my use of the word was incorrect, and explained what I really meant, why dwell on the mistake?

OK, but the term under discussion was "depression", and again, govt did not define either term.
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Once again, define was a poorly chosen word.

Uh....yeah, that is how it works...duh.

Which has nothing to do with my point.
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And you miss MY point, that being no matter how bad the downturn, no matter how it's defined or who does the defining, it will be referred to as a recession, mild recession, severe recession, crippling recession, anything but a depression by the politicians in power.
 
Re: CBO estimates 2013 deficit at $642 billion

OpportunityCost said:
25% GDP growth, unemployemnt under 5% and a 300% increase in stock market value?
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Hell, we didn't need to triple the debt for that.

We had 35% GDP growth and 5% unemployment rate and a 300% increase in the stocket market; but unlike Reagan who increased the debt by 180%, Clinton raised it by only 37%.

So what did we get for Reagan tripling the debt that we could get with raising only 37%?

Oh, and by the way, your numbers on Reagan are waaaaay off ...

Average unemployment rate under Reagan: 7.5% (not under 5%, as you wronly claimed)

increase in stock market value:

DJIA (+131%):
1/20/1981: 971
1/20/1989: 2,239

NASDAQ (+97%):
1/20/1981: 199
1/20/1989: 391

S&P500 (+114%):
1/20/1981: 134
1/20/1989: 287

No index was anywhere near your claim of a 300% increase.

Any other bull**** you care to try to pass off as relevant?
 
Re: CBO estimates 2013 deficit at $642 billion

blaxshep said:
Yet dollar for dollar Obama increased the debt by the same amount in just over one year vs Reagan's 8 years.
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:doh Holy ****! :doh

Please tell me you're not comparing 1980's dollars to 2010's dollars, dollar for dollar???
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Spending was cut in 1920, and 1921, and 1922, and 1923, and 1924, and 1925, and 1926, and 1927. According to you, the 1920s were a decade of recession since "it's the cut that hurts". I guess the Roaring '20s refers to roaring recession. Of course, spending did increase in 1928 and 1929 so, according to your theory, the economy should have improved, but we all know what happened next.
Click to expand...
Not according to me -- according to the nationally recognized organization which tracks recessions -- the National Bureau of Economic Research.

They are the ones to point out there was a recession in 1920, 1923, and 1927. You don't have to like it.

National Bureau of Economic Research


froggigger said:
Spending was indeed cut in 1937 from its 1936 level, but in both years spending was still higher than earlier years, some of which were years that were claimed to be recovery years. Only when government is keeping the books and controlling the narrative can you have it both ways.

You originally said: "...in real figures, GDP by the end of 1936 was back to 1929 levels". That's 7 years. Now you say: "by the end of 1933, real GDP was back to 1929 levels". That's 4 years. My next question to you should be obvious.
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You're right, my mistake. It was 7 years. I was thinking of just the FDR years when I said 4 years.

As far as why it took longer, again, it was a much deeper depression.

In the first year of the 1920 depression, real GDP fell less than 1%; compared to the Great Depression where it fell 8½%.

Two years after the 1920 depression started, GDP was down 3%. Two years after the Gret Depression started, it was down 16%.

There is simply no rational way to compare them.
 
Re: CBO estimates 2013 deficit at $642 billion

froggigger said:
Spending was cut in 1920, and 1921, and 1922, and 1923, and 1924, and 1925, and 1926, and 1927. According to you, the 1920s were a decade of recession since "it's the cut that hurts". I guess the Roaring '20s refers to roaring recession. Of course, spending did increase in 1928 and 1929 so, according to your theory, the economy should have improved, but we all know what happened next.
Click to expand...
Not according to me -- according to the nationally recognized organization which tracks recessions -- the National Bureau of Economic Research.

They are the ones to point out there was a recession in 1920, 1923, and 1927. You don't have to like it.

National Bureau of Economic Research


froggigger said:
Spending was indeed cut in 1937 from its 1936 level, but in both years spending was still higher than earlier years, some of which were years that were claimed to be recovery years. Only when government is keeping the books and controlling the narrative can you have it both ways.

You originally said: "...in real figures, GDP by the end of 1936 was back to 1929 levels". That's 7 years. Now you say: "by the end of 1933, real GDP was back to 1929 levels". That's 4 years. My next question to you should be obvious.
Click to expand...
You're right, my mistake. It was 7 years. I was thinking of just the FDR years when I said 4 years.

As far as why it took longer, again, it was a much deeper depression.

In the first year of the 1920 depression, real GDP fell less than 1%; compared to the Great Depression where it fell 8½%.

Two years after the 1920 depression started, GDP was down 3%. Two years after the Gret Depression started, it was down 16%.

There is simply no rational way to compare them.
 
Re: CBO estimates 2013 deficit at $642 billion

blaxshep said:
Yet dollar for dollar Obama increased the debt by the same amount in just over one year vs Reagan's 8 years.
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Except that dollar for dollar is a ridiculous comparison as 1980's dollars are not the same as 2008 dollars.... and, just because the debt increased during a particular President's tenure does it mean that the President was responsible. Revenue and spending infrastructure, which increases/decreases debts, is often defined well before a particular president assumes office.
 
Re: CBO estimates 2013 deficit at $642 billion

upsideguy said:
Except that dollar for dollar is a ridiculous comparison as 1980's dollars are not the same as 2008 dollars.... and, just because the debt increased during a particular President's tenure does it mean that the President was responsible. Revenue and spending infrastructure, which increases/decreases debts, is often defined well before a particular president assumes office.
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Actually, according to the link; adjusted for inflation, Obama spent way more in his first 3 FY's then Reagan did in his entire 8 FY's (not that I am a fan of either).

History of Deficits and Surpluses In The United States


And as for spending responsibilities?

Imo, if a POTUS signs/agrees with the spending in a budget - it's thereafter his responsibility.

He is in charge, the buck stops with him.

If he does not agree with a budget, he should not sign it.
 
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