"the budget deficit will shrink this year to $642 billion"

[Jack Hays]

LOL...let me get this....you are whining about MY use of language and logic....while you can't recognize the difference between "marginalizing" a human being and his theory.

Further, YOU already agreed that his theory is OBSCURE when YOU described it as having a "mixed bag" of results.

Not only have you utterly failed on every single point, you still cannot see that you have continued this environmental debate in a thread on the BUDGET.

Please, for your own sake, let it end.

Tsk tsk tsk. So desperate. So meaningless. "Obscure" does not mean "mixed bag" in any construction. But enough. The only thing I can think of to explain this behavior is that you're trying to achieve in this forum the success that has eluded you in life. I don't think you'll make it here either.:2wave:

 

[Gimmesometruth]

Tsk tsk tsk. So desperate. So meaningless. "Obscure" does not mean "mixed bag" in any construction. But enough. The only thing I can think of to explain this behavior is that you're trying to achieve in this forum the success that has eluded you in life. I don't think you'll make it here either.:2wave:

FFS... I thought I was on "ignore"?

But if you need more proof of failure, I'll provide:

ob·scure
əbˈskyo͝or
adjective
1.
not discovered or known about; uncertain.


mixed bag
noun
noun: mixed bag; noun: mixed bunch
1.
a diverse assortment of things

 

[Jack Hays]

FFS... I thought I was on "ignore"?

But if you need more proof of failure, I'll provide:

ob·scure
əbˈskyo͝or
adjective
1.
not discovered or known about; uncertain.


mixed bag
noun
noun: mixed bag; noun: mixed bunch
1.
a diverse assortment of things

Agreed. They don't mean the same thing.

 

[Gimmesometruth]

His theory is obscure (uncertain, doubtful, vague).

The results of his theory are a mixed bag ( a diverse assortment of positive and negative results).

But then again, you don't care about results.....obviously....or about your previous claims....including ignoring me.

 

[WhyNotWhyNot]

When there is a democrat POTUS, republicans in congress become the party of "No", make a huge deal about spending, and block most spending bills. When there is a Republican POTUS, republicans in congress seem to not care about restraining spending, so they become the party of "Yes", and join with dems to increase spending.

I suspect that this is because republicans politicians are more politically savy than dems. Republicans realize that increases in government spending is stimulative to our economy (at least temporarily stimulative), and they desire a good economy when we have a republican POTUS, because republican congressmen realize that elections are typically decided based on the economy. Republican congressmen realize that they can ride the coattails of Republican POTUS candidates, if we have a positive economy with a repub POTUS, and they realize that when we have a bad economy with a dem POTUS, republican congressmen will tend to win, even in off year elections.

In other words, republicans prefer a good economy when we have a republican prez, and prefer a bad economy when we have a dem prez.

I suspect that you give the parties far too much credit in their ability to turn good/bad economy on/off as a matter iof political strategy. Consider the following charts:





Comparing these two charts gives the following table

Comparison Of Recessions and Party In Power
Recession Pres.Party House Party Senate Party
1960 D D D
1970 R D D
1973-1974 R D D
1978-1980 D D D
1980-1982 R D D
1991 R D D
2001-2002 R R R
2008-2009 D D D

Overwhelmingly, recessions have occurred whle the Democratic Party controlled the Senate and the House, no matter which Party controlled the the Executive Branch. Four of the eight recessions occurred when one Party had total control. There does not appear to be a pattern where recession is linked to conflict between the party in the White House and the control of the legislative bodies.

I don’t think that we should read too much into this. ( I can just here Fenton saying, “See I told you all along – it’s the Dems that cause recessions”). Economic activity is really a measure of our nation’s collective psychological health. Recession arises from depression- periods of time when we doubt in ourselves, and booms reflect optimism / enthusiasm. The 1970 recession was casued by national depression regarding the Vietnam War. The1970’s and early 1980’s recessions were driven by OPEC agression (sharp energy price increases), Watergate aftermath, and the Iran mess. The 2001-2002 recession was clearly the aftermath of the 9/11 incident. I believe that the most recent recession really flowed from drag-out of the Iraq and Afghanistan situations coupled with entrenched fear of terrorism.

When we are enthusiastic our economy expands and we also tend to engage in “gold rush” mentality. We leverage too much, etc. When we turn negative the leverage bites us. We blame the recession on finance system mechanics which in turn we associate with government regulatory failure.

We look to the government to effect regulatory changes and take financial actions – invent a recession correction. But, these mechanics can only have limited effect because ultimately our national psychy must heal. That takes positive leadership attitude, exhortation to pursue the “American Dream”, and real belief that the American Dream is fundamentally good.

 

[Kushinator]

The1970’s and early 1980’s recessions were driven by OPEC agression (sharp energy price increases), Watergate aftermath, and the Iran mess.

The 1980's recession(s) were intentionally induced by the Federal Reserve in order to flatten long term inflation expectations. See the Volcker Fed chairmanship for additional information.

 

[WhyNotWhyNot]

ate

The 1980's recession(s) were intentionally induced by the Federal Reserve in order to flatten long term inflation expectations. See the Volcker Fed chairmanship for additional information.

Cause or effect? I remember the time well. I bought my first house in the middle of it. I got a great deal on an adjustable mortgage. It started at 12.5% !@! Fixed rate mortgages were a lot higher and I was pretty sure that the worst had passed so that all adjustments would be downward. I was right so the ARM worked out well. We got those rediculous interest rates because inflation was out of control. But it was not normal inflation - inflation driven by high economic activity so that demand exceeds supply. It was inflation driven by energy supply constriction outside of our control. It permeated into everything. We really learned how even our food prices are intertwined with the price of oil. We had inflation without any relationship to growing prosperity. We called it "stagflation" because it was inflation with declining prosperity. The fed took the conventional response to growing inflation - raising its lending rates and tightening the money supply. Lenders were raising rates - with or without the Fed - just to make enough money to stay ahead of teh cost of living. The Fed really just followed so that the commercial lending margin remained reasonable and the Fed also stayed ahead of the rising cost of living. In the end the Fed didn't do anything except follow the trend that was happening no matter what they did.

 

[Fenton]

ate


Cause or effect? I remember the time well. I bought my first house in the middle of it. I got a great deal on an adjustable mortgage. It started at 12.5% !@! Fixed rate mortgages were a lot higher and I was pretty sure that the worst had passed so that all adjustments would be downward. I was right so the ARM worked out well. We got those rediculous interest rates because inflation was out of control. But it was not normal inflation - inflation driven by high economic activity so that demand exceeds supply. It was inflation driven by energy supply constriction outside of our control. It permeated into everything. We really learned how even our food prices are intertwined with the price of oil. We had inflation without any relationship to growing prosperity. We called it "stagflation" because it was inflation with declining prosperity. The fed took the conventional response to growing inflation - raising its lending rates and tightening the money supply. Lenders were raising rates - with or without the Fed - just to make enough money to stay ahead of teh cost of living. The Fed really just followed so that the commercial lending margin remained reasonable and the Fed also stayed ahead of the rising cost of living. In the end the Fed didn't do anything except follow the trend that was happening no matter what they did.

In the Carter uears I was a kid, but I asked my Dad about the high level of inflation.

He said , " If the Company you worked for did'nt offer you a yearly double digit bump in pay increase every year then it was a good bet they didn't want you working their.

 

[Kushinator]

In the end the Fed didn't do anything except follow the trend that was happening no matter what they did.

The Fed bucked the trend by inducing recession in order to flatten long term inflation expectations. Their dual mandate is/was pro-growth, low-inflation. The stagflation that emerged in the early 1980's had very little to do with oil supply (contrary to 1973) and all to do with single greatest instance of contractionary monetary policy in Fed history.

 

[WhyNotWhyNot]

In the Carter uears I was a kid, but I asked my Dad about the high level of inflation.

He said , " If the Company you worked for did'nt offer you a yearly double digit bump in pay increase every year then it was a good bet they didn't want you working their.

Yup.

It was a strange economic time. It really ended when the economy rallied around the emergence of the microelectronics industry so that there was enough prosperity to pay the higher price of energy (which stabilized for a very long time). Funny - greater economic activity resulted in lower inflation and lower interest rates. I remember being at a party in 1978 when one of my graduate school acquaintences told me that he was accepting a job with Ford - he was going to work on computer control for automobile engines. I thought he was crazy - every computer I had worked with filled a cabinet as big as a car engine. But of course he was right and that pursuit revolutionized automobile engines, increased fuel efficiency, extended the lifetime of a car ....

 

[imagep]

I suspect that you give the parties far too much credit in their ability to turn good/bad economy on/off as a matter iof political strategy.

Probably right about that. There can be time lags.

Comparing these two charts gives the following table

Comparison Of Recessions and Party In Power
Recession Pres.Party House Party Senate Party
1960 D D D
1970 R D D
1973-1974 R D D
1978-1980 D D D
1980-1982 R D D
1991 R D D
2001-2002 R R R
2008-2009 D D D

I'm not so sure that this chart is correct. If I remember right, that last recession started in December of 2007, when we had a republican in the whitehouse. Matter of fact, about 2rds of that recession was under a Republican POTUS. Now was it republicans or dems in control of the house and senate (I don't know).

 

[WhyNotWhyNot]

Probably right about that. There can be time lags.



I'm not so sure that this chart is correct. If I remember right, that last recession started in December of 2007, when we had a republican in the whitehouse. Matter of fact, about 2rds of that recession was under a Republican POTUS. Now was it republicans or dems in control of the house and senate (I don't know).

So I just looked it up. The official start date of the great recession was Dec, 2007 so that would be in the Bush regime and then carried over into the O'Bama regime. Both the house and Senate had Dem majority throughout the period. So I probably should have listed this like the I did the Carter into Reagan recession. A line that reads R,D,D should be added to the table as the next to last line.

 

[head of joaquin]

So I just looked it up. The official start date of the great recession was Dec, 2007 so that would be in the Bush regime and then carried over into the O'Bama regime. Both the house and Senate had Dem majority throughout the period. So I probably should have listed this like the I did the Carter into Reagan recession. A line that reads R,D,D should be added to the table as the next to last line.

It's probably more productive to evaluate the legislation coming out of the Congress and signed by the president, than to worry too much about the party labels, since both party tend to have to lurch in one or another direction due to complex political forces and the circumstances of the time (like 9-11 and the Iraqi fiasco).

The legislation that went into effect during the 8 years of the Bush administration was classic conservatism and predictably failed miserably (as it always does): tax cuts for the rich, deregulation or underregulation, expensive wars and insane military spending.

The result of this conservative agenda was the largest income gap in generations, which inevitably led to the largest recession in generations. So it hardly matters that the Democrats had a slim majority in 2008 in Congress (especially since most of the Bush catastrophe was cooked up in his first term when he had the House until 2007). The fact is the economic policy that issued from Washington until Obama came into office was the usual strange brew of conservative trickle down.

 

[WhyNotWhyNot]

It's probably more productive to evaluate the legislation coming out of the Congress and signed by the president, than to worry too much about the party labels, since both party tend to have to lurch in one or another direction due to complex political forces and the circumstances of the time (like 9-11 and the Iraqi fiasco).

The legislation that went into effect during the 8 years of the Bush administration was classic conservatism and predictably failed miserably (as it always does): tax cuts for the rich, deregulation or underregulation, expensive wars and insane military spending.

The result of this conservative agenda was the largest income gap in generations, which inevitably led to the largest recession in generations. So it hardly matters that the Democrats had a slim majority in 2008 in Congress (especially since most of the Bush catastrophe was cooked up in his first term when he had the House until 2007). The fact is the economic policy that issued from Washington until Obama came into office was the usual strange brew of conservative trickle down.

The "income gap" began growing in the early 1980's. I have previously posted charts from the IRS website showing this. It has grown surely and steadily through Republican and Democratic regimes, through the Clinton tax increase and the Bush decrease, through booming economic periods and recessions. Something other than Federal Gov't financial policy is driving it. I do agree that it is a trend that must be reversed. Otherwise we will have a return to something like the "robber baron" era. But, we really need to understand the social drivers if we are to address the condition effectively. Conservative / liberal banter or legislation isn't going to succeed.

 

[Objective Voice]

“If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion”

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf

wait! what?!? 642 billion? That is less than half of Bush's 1.4 trillion dollar budget deficit. So the pubs are threatening to destroy the economy with default not to reduce the deficit but to reduce it faster? But deficit reduction was their back up excuse to destroy the economy with default. Their first excuse to destroy the economy with default was to defund Obamacare. Well I guess Obamacare cant be that bad if they had to go to their back up excuse.

So, President Obama has reduced the deficit every year and maintained positive GDP and pubs are not happy? mmmm, that just doesn't make any sense. Lets look at Bush's last budget with President Obama's first four as a % of GDP.

Fiscal year_______2009___2010___2011___2012___ 2013(est)
Total Revenues___ 15.1____15.1___ 15.4___ 15.8___16.9
Total Outlays_____ 25.2____24.1___ 24.1___ 22.8___22.2

Can someone explain why those numbers are worth pubs threatening to destroy the economy with default? remembering of course that President Obama maintained positive GDP which greatly helped with reducing the Bush Deficits.

Estimates were close per this brief article from MSN.com, US budget deficit down to $680B, lowest in 5 years: Associated Press - MSN Money.

For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.

The deficit is the gap between the government's tax revenue and its spending. It narrowed for the budget year that ended on Sept. 30 because revenue rose while spending fell.

Revenue jumped 13.3 percent to $2.77 trillion, reflecting a slightly better economy and higher tax rates. And government spending declined 2.4 percent to $3.45 trillion, in part because of across-the-board spending cuts that took effect in March.

A balanced approach indeed.

 

[Objective Voice]

The "income gap" began growing in the early 1980's. I have previously posted charts from the IRS website showing this. It has grown surely and steadily through Republican and Democratic regimes, through the Clinton tax increase and the Bush decrease, through booming economic periods and recessions. Something other than Federal Gov't financial policy is driving it. I do agree that it is a trend that must be reversed. Otherwise we will have a return to something like the "robber baron" era. But, we really need to understand the social drivers if we are to address the condition effectively. Conservative / liberal banter or legislation isn't going to succeed.

Actually, you're both right. It's a combination of federal economic policy, tax policy and the corporate mind-set.

Current U.S. economic policy relies on short-term debt (e.g., the sell of short-term Treasury bonds) to fulfill consumer consumption (e.g., trade imbalance...more U.S. imports than exports). Outsourcing and low capital gains tax fuels investments and helps to keep labor cost low specifically within corporate manufacturing. Add it all together and you have this stagnant growth in earnings specifically within the middle-class. The only way many people have been able to "get by" has been through home refinance and/or putting purchases on their credit card. But the 2008 housing bubble and subsequent economic collapse put a halt to all that.

So, what's the solution to this problem?

 

[Vern]

Estimates were close per this brief article from MSN.com,

Thanks for the link, let me update my % of GDP chart (using 16 T as GDP)

Fiscal year_______2009___2010___2011___2012___ 2013 (w/ estimated GDP)
Total Revenues___ 15.1____15.1___ 15.4___ 15.8___17.3
Total Outlays_____ 25.2____24.1___ 24.1___ 22.8___21.6

More good news. Seriously, who can complain about President Obama reducing the deficit every year while maintaining positive GDP? I guess the people who think we have to balance the budget now or have to pay back the debt can complain. But those are the same people who ignore that Bush started with a surplus and doubled the debt.

 

[WhyNotWhyNot]

Actually, you're both right. It's a combination of federal economic policy, tax policy and the corporate mind-set.

Current U.S. economic policy relies on short-term debt (e.g., the sell of short-term Treasury bonds) to fulfill consumer consumption (e.g., trade imbalance...more U.S. imports than exports). Outsourcing and low capital gains tax fuels investments and helps to keep labor cost low specifically within corporate manufacturing. Add it all together and you have this stagnant growth in earnings specifically within the middle-class. The only way many people have been able to "get by" has been through home refinance and/or putting purchases on their credit card. But the 2008 housing bubble and subsequent economic collapse put a halt to all that.

So, what's the solution to this problem?

I do agree that short term debt is a contributor. I am reminded of something that Dave Ramsey says in his Financial Peace University. It goes something like, " If you want to be rich, the first thing you must do is behave like you are rich. Do you see any Payday Loan shops in rich neighborhoods? Of course not, they locate where there are customers - poor neighborhoods" Short term debt, credit cards, even automobile loans transfer wealth to the rich. Policies that encourage the use of short term debt do favor the trend.

But I don't think that it is as big a contributor as some national and international social and busines trends that started to emerge subtly in the late 1970's / early 1980's. It is a situation of "Who Moved My Cheese" and failure to adjust (including failure of gov't policy to adjust). My thoughts / oppinions about that will take an essay that I have only begun to think through. I'll write it and look forward to debating it.

 

[head of joaquin]

The "income gap" began growing in the early 1980's. I have previously posted charts from the IRS website showing this. It has grown surely and steadily through Republican and Democratic regimes, through the Clinton tax increase and the Bush decrease, through booming economic periods and recessions. Something other than Federal Gov't financial policy is driving it. I do agree that it is a trend that must be reversed. Otherwise we will have a return to something like the "robber baron" era. But, we really need to understand the social drivers if we are to address the condition effectively. Conservative / liberal banter or legislation isn't going to succeed.

A lot of policies have combined to increase the income gap. But the Bush tax cut and the conservative deregulation of financial industry are the major recent culprits.

Conservative economic policies tend to be designed to increase the income gap as a goal, on the dubious assumption (or rationalization) that a small class of the superwealthy drives growth (it doesn't)

Globalization has been a systematic driver of the gap, since it tends to benefit the owners of capital in our country to the detriment of unskilled labor (even though in the aggregate we are better off due to comparative advantage).

What we can say is that spikes in the income gap correlate almost perfectly with recessions, and the bigger the gap, the bigger the recession. Right now, the gap is the largest it's been in 100 years. Not an auspicious sign.

 

[WhyNotWhyNot]

What we can say is that spikes in the income gap correlate almost perfectly with recessions, and the bigger the gap, the bigger the recession.

Assuming this is true. Cause / effect? Effect / cause? In general, dramatic economic activity change, up or down, benefits those who are a) isolated from it or b) take anticipatory actions (like buying when prices are depressed and selling when they are high). The rich have assets (like gold for example) that don't fluctuate as fast as the GDP and they hold jobs (doctor, lawyer, President, etc.) that are "core" jobs that don't get cut in a recession - that is isolation from economic fluctuation that the majority who live a cash flow existence don't have. The rich have reserves that can be used to acquire things like rental property when real estate is depressed. In the extreme they can buy futures. The majority doesn't have the reserves to do these things. The fact that there is a correlation doesn't mean that spiking income gap causes recessions - it could be nothing more than an indicator much like the stock market has indicators.