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Anyone Notice Deficits Don't Matter Again?

jonny5 said:
The data says theyre right. Economic growth is slow, interest is putting pressure on the rest of the budget, inflation is high, and deficits are a political problem leading to shutdowns, sequestors, cuts in defense spending. Every decision now requires a long debate. The fed will be raising interest rates this year and next which means our interest costs are going to skyrocket. That means more taxes being sent to foreign countries instead of left in the pockets of americans who created it.
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Critter is right about all of this stuff. And while debt and deficits are certainly political problems, that doesn't mean they are actual economic problems. Politicians are idiots when it comes to economics.

You won't find many economists that think balancing the budget wouldn't be a disaster, let alone a good or necessary thing to do. But there is plenty of political momentum behind a BBA, because there are plenty of economically ignorant voters who - with zero education or expertise on the subject - would nonetheless argue for balanced budgets to the death. Gomer's vote counts for as much as Krugman's vote, and that's the only math that politicians are interested in.

This shouldn't be that hard to understand. If debt and deficits were harmful, then wars would be bad for our economy, when in fact they are obvious boosts.
 
JohnfrmClevelan said:
Critter is right about all of this stuff. And while debt and deficits are certainly political problems, that doesn't mean they are actual economic problems. Politicians are idiots when it comes to economics.

You won't find many economists that think balancing the budget wouldn't be a disaster, let alone a good or necessary thing to do. But there is plenty of political momentum behind a BBA, because there are plenty of economically ignorant voters who - with zero education or expertise on the subject - would nonetheless argue for balanced budgets to the death. Gomer's vote counts for as much as Krugman's vote, and that's the only math that politicians are interested in.

This shouldn't be that hard to understand. If debt and deficits were harmful, then wars would be bad for our economy, when in fact they are obvious boosts.
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Or perhaps youre wrong and theyre right. Simply saying people are ignorant or appealing to authority is not an argument.
 
jonny5 said:
Or perhaps youre wrong and theyre right. Simply saying people are ignorant or appealing to authority is not an argument.
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So, your argument is that politicians that think that we will have a disaster if we don't balance the budget, are right? The fact is, that we haven't had a balanced budget since 1835 and we seemed to have prospered after that year.

A balanced-budget amendment that would cripple the economy in a recession but that doesn't stop politicians from proposing them. As I've said on these pages many times, there is no debt problem if a nation keeps its deficit below annual GDP growth. Under that condition, debt will grow but become irrelevant as a p% of GDP.
 
FieldTheorist said:
Deficits have never mattered to Republicans. "Stealing" their money and giving money to the poor always has.
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Deficits have only been important to republicans in those years their party does not control the White House. We learned that lesson during Obamas terms.
 
MTAtech said:
So, your argument is that politicians that think that we will have a disaster if we don't balance the budget, are right? The fact is, that we haven't had a balanced budget since 1835 and we seemed to have prospered after that year.

A balanced-budget amendment that would cripple the economy in a recession but that doesn't stop politicians from proposing them. As I've said on these pages many times, there is no debt problem if a nation keeps its deficit below annual GDP growth. Under that condition, debt will grow but become irrelevant as a p% of GDP.
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Actually, there is a theoretical optimum rate of debt change. It can be poitive or negative depending on circumstances such as growth, employment, investment, relatve level of debt ans other variables.
 
joG said:
Actually, there is a theoretical optimum rate of debt change. It can be positive or negative depending on circumstances such as growth, employment, investment, relatve level of debt ans other variables.
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That make sense and is consistent with Keynes.
 
MTAtech said:
So, your argument is that politicians that think that we will have a disaster if we don't balance the budget, are right? The fact is, that we haven't had a balanced budget since 1835 and we seemed to have prospered after that year.

A balanced-budget amendment that would cripple the economy in a recession but that doesn't stop politicians from proposing them. As I've said on these pages many times, there is no debt problem if a nation keeps its deficit below annual GDP growth. Under that condition, debt will grow but become irrelevant as a p% of GDP.
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Then you admit there can be a debt problem. And maybe its those of concerned keeping it from spiraling out of your tolerance threshhold. Maybe 3% deficit is ok, 30% debt is ok. What about when its 30% deficit, or 300% debt? What about 3000% debt? Its tripled since 1970, why wouldnt it triple again?
 
Floridafan said:
Deficits have only been important to republicans in those years their party does not control the White House. We learned that lesson during Obamas terms.
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Yeah, people already posted that 8 times in this thread alone.
 
jonny5 said:
Then you admit there can be a debt problem. And maybe its those of concerned keeping it from spiraling out of your tolerance threshhold. Maybe 3% deficit is ok, 30% debt is ok. What about when its 30% deficit, or 300% debt? What about 3000% debt? Its tripled since 1970, why wouldnt it triple again?
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If we keep trying to pass tax-cuts financed via borrowing, it may get that way. What I see is Congressional leaders who just ten months ago were deficit hawks, now not worried at all about deficits -- because they fraudulently claim that tax-cuts will result in massive growth, which isn't going to happen.
 
jonny5 said:
Then you admit there can be a debt problem. And maybe its those of concerned keeping it from spiraling out of your tolerance threshhold. Maybe 3% deficit is ok, 30% debt is ok. What about when its 30% deficit, or 300% debt? What about 3000% debt? Its tripled since 1970, why wouldnt it triple again?
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GDP has octdecupled (18x) since 1970. A doubling (2x) of debt isn't going to kill us.
 
Critter7r said:
GDP has octdecupled (18x) since 1970. A doubling (2x) of debt isn't going to kill us.
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True but that isn't what the Republicans have been parroting for over 8 years!
 
jonny5 said:
Again, not sure what this has to do with what I posted or the topic.
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It is relevant because you claim to be libertarian, and libertarianism strongly supports minimalism in government, very low taxes, and a "hands-off" approach when it comes to government regulations. As I have already demonstrated, MOST libertarians vote Republican...and the Republican Party is becoming - at least when it comes to dogma and talking points - more and more libertarian as time goes on. But in reality, no matter how much the GOP tries to adhere to libertarian-supported principles such as slashing taxes and cutting regulations and letting loose the dogs of capitalism, they're finding out that they can't pay for America's first-world status without the tax revenue that a first-world status requires.
 
MTAtech said:
If we keep trying to pass tax-cuts financed via borrowing, it may get that way. What I see is Congressional leaders who just ten months ago were deficit hawks, now not worried at all about deficits -- because they fraudulently claim that tax-cuts will result in massive growth, which isn't going to happen.
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And I see that its happened before, so regardless if theyre hypocrites, theyre on the right side at the moment.
 
Critter7r said:
GDP has octdecupled (18x) since 1970. A doubling (2x) of debt isn't going to kill us.
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Its actually 4x and 10x adjusted for inflation.

1970 GDP - 4.7 trillion, Debt 2.5 trillion
2017 GDP - 20 trillion, Debt 20 trillion

Will that kill us?
 
Glen Contrarian said:
It is relevant because you claim to be libertarian, and libertarianism strongly supports minimalism in government, very low taxes, and a "hands-off" approach when it comes to government regulations. As I have already demonstrated, MOST libertarians vote Republican...and the Republican Party is becoming - at least when it comes to dogma and talking points - more and more libertarian as time goes on. But in reality, no matter how much the GOP tries to adhere to libertarian-supported principles such as slashing taxes and cutting regulations and letting loose the dogs of capitalism, they're finding out that they can't pay for America's first-world status without the tax revenue that a first-world status requires.
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No, still not seeing how my political leaning is relevant to what I posted about why liberals should care about debt.
 
jonny5 said:
No, still not seeing how my political leaning is relevant to what I posted about why liberals should care about debt.
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What you posted was:

Large and growing federal debt over the coming decades
would hurt the economy and constrain future budget
policy. The amount of debt that is projected under the
extended baseline would reduce national saving and
income in the long term; increase the government’s interest
costs, putting more pressure on the rest of the budget;
limit lawmakers’ ability to respond to unforeseen events;
and increase the likelihood of a fiscal crisis, an occurrence
in which investors become unwilling to finance a government’s
borrowing unless they are compensated with very
high interest rates.

First off, liberals DO care about debt. LBJ and Clinton had budget surpluses, and Obama cut the deficit in half...whereas the last Republican who had a surplus was Eisenhower, and the last Republican who significantly cut the deficit was, well, Eisenhower.

Deeds, not words, y'know? The Right claims to be so doggone fiscally responsible, but the hard numbers show something else entirely.

That being said, as I've demonstrated, libertarians strongly tend to vote Republican...even though - as I have demonstrated - the Democratic presidents tend to be a LOT more sensible when it comes to deficits and debt. Remember, Clinton's surplus was projected to pay off our ENTIRE federal debt by 2012...but then Bush 43 pissed the surplus away.

Look, I used to be a conservative up until the early 1990's. I know how it feels to realize that one's own side is not doing what's right. You need to ask yourself is sticking up for the team is somehow more important than first determining whether that's the right team to be on to begin with.
 
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jonny5 said:
Its actually 4x and 10x adjusted for inflation.

1970 GDP - 4.7 trillion, Debt 2.5 trillion
2017 GDP - 20 trillion, Debt 20 trillion

Will that kill us?
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Not as long as our deficit doesn't outgrow our GDP growth by too much.
 
chuckiechan said:
100 % of taxes are derived from the private sector so the better the private sector does, the more taxes they pay. Sometime you have to "front load" your plans to get the results you need down the line.
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Kindly furnish a credible economic study supporting this notion... that cutting taxes will result in more tax revenue.
 
jonny5 said:
Then you admit there can be a debt problem. And maybe its those of concerned keeping it from spiraling out of your tolerance threshhold. Maybe 3% deficit is ok, 30% debt is ok. What about when its 30% deficit, or 300% debt? What about 3000% debt? Its tripled since 1970, why wouldnt it triple again?
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So your argument rests on the assumption that there's some magical tipping point where all hell breaks loose?

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Why didn't WW2 debt hurt us? What is the mechanism by which debt, itself, hurts us (hint: it doesn't)?
 
Glen Contrarian said:
What you posted was:

Large and growing federal debt over the coming decades
would hurt the economy and constrain future budget
policy. The amount of debt that is projected under the
extended baseline would reduce national saving and
income in the long term; increase the government’s interest
costs, putting more pressure on the rest of the budget;
limit lawmakers’ ability to respond to unforeseen events;
and increase the likelihood of a fiscal crisis, an occurrence
in which investors become unwilling to finance a government’s
borrowing unless they are compensated with very
high interest rates.

First off, liberals DO care about debt. LBJ and Clinton had budget surpluses, and Obama cut the deficit in half...whereas the last Republican who had a surplus was Eisenhower, and the last Republican who significantly cut the deficit was, well, Eisenhower.

Deeds, not words, y'know? The Right claims to be so doggone fiscally responsible, but the hard numbers show something else entirely.

That being said, as I've demonstrated, libertarians strongly tend to vote Republican...even though - as I have demonstrated - the Democratic presidents tend to be a LOT more sensible when it comes to deficits and debt. Remember, Clinton's surplus was projected to pay off our ENTIRE federal debt by 2012...but then Bush 43 pissed the surplus away.

Look, I used to be a conservative up until the early 1990's. I know how it feels to realize that one's own side is not doing what's right. You need to ask yourself is sticking up for the team is somehow more important than first determining whether that's the right team to be on to begin with.
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Im not a conservative. I dont vote Republican. Still not sure what your point is here.
 
jonny5 said:
Or perhaps youre wrong and theyre right. Simply saying people are ignorant or appealing to authority is not an argument.
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I made my argument previously, against your appeal to authority (the CBO). If you look at the data and the history, none of those arguments can be supported - even though you insisted that the data supported the CBO's arguments. I used reasoning, and I used data, and I pointed out the historical lack of data that would support the CBO's arguments.

You insisted that inflation was high, against any rational interpretation of inflation data.

Interest rates are not "exploding," and they haven't "exploded" in the past due to market forces, nor is there any logic or reason to argue that the way the Fed does business will change.

Since deficits and debt don't have any negative effect on inflation or interest rates, it's pretty hard to make the case that they are still hurting growth somehow. For instance, no sound argument was ever made that lower deficits project to higher growth rates.

The other points are purely political, and even those arguments are belied by the fact that the government can always come up with money for wars and defense. Congress isn't truly constrained in their spending, and every war we have ever paid for demonstrates that.
 
jonny5 said:
Im not a conservative. I dont vote Republican. Still not sure what your point is here.
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And as I pointed out before, you may say you don't vote Republican...but if that is true, then you're very much the exception to the rule when it comes to the documented voting habits of libertarians.
 
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