Back To $1 Trillion Dollar Deficits

[Cheerful Charlie]

https://www.axios.com/white-house-p...019-ee45c1b0-44d3-4c94-9f02-442e8fcf61dc.html

...
The White House Office of Management and Budget (OMB) projected in its midyear review Monday that the federal deficit would surpass $1 trillion this year.

Why it matters: It's the first time the U.S. deficit has exceeded the $1 trillion level since the 4-year period following the Great Recession. When President Trump was a presidential candidate, he promised to wipe out the deficit and also the entire federal debt, which has surpassed $22 trillion.
...

Obama managed to cut trillion dollar deficits in half and left us with a reasonably good debt situation that could have been built on to further decrease deficits. The Trump - GOP massive tax cuts have now boosted us back to massive deficits. None dare call is incompetence.

 

[James Brown]

Nice to see Republicans reclaim the mantle of the Party of Fiscal Responsibility.

 

[ZiprHead]

Nice to see Republicans reclaim the mantle of the Party of Fiscal Responsibility.

And family values.

 

[dismal]

Tax collections are at record highs, at least in nominal terms.

Spending keeps growing far faster than inflation, largely due to decisions that predate Trump.

For example, in 2007 revenues were 2,568 billion and spending was 2,729 billion. In 2018 revenues were 3,330 billion and spending was 4,109 billion.

That's a 29% increase in revenues and a 51% increase in spending. Cumulative inflation was about 21% over the period.

https://www.cbo.gov/about/products/budget-economic-data#1

 

[Jimmy Higgins]

I must have missed dismal making the same comments in 2016. All I can remember him saying was that the US survived on its budget in 2007, why can’t we just use that same budget.

 

[dismal]

I must have missed dismal making the same comments in 2016. All I can remember him saying was that the US survived on its budget in 2007, why can’t we just use that same budget.

Well, those of us old enough to remember the dark times of 2007 have no wish to go back there.*shudder*.

But if we did adjust 2007 numbers for inflation they'd be revenues of 3,107 billion and spending of 3,302 billion. So we'd need to cut taxes about 7% and cut spending about 24% to get there.

I'm sure those of you who came into the thread to rail against the current fiscal insanity are in support of this, but for me the horrors of 2007 are still too close.

Microsoft released Windows Vista, Barry Bonds hit his 756th home run, there was a 3 way tie on Jeopardy!, and an escaped tiger at the San Francisco zoo killed one person and injured two others on Christmas Day. Horrors those of us who survived 2007 do not wish to revisit.

https://en.wikipedia.org/wiki/2007_in_the_United_States

 

[ideologyhunter]

The Republicans will come to their senses and reclaim their values and sound the alarm on the national debt...on Day 1 of the next Democrat administration.

 

[dismal]

The Republicans will come to their senses and reclaim their values and sound the alarm on the national debt...on Day 1 of the next Democrat administration.

I'm up for a 24% spending cut and a 7% tax cut now. Glad to have your support.

 

[Jimmy Higgins]

The Republicans will come to their senses and reclaim their values and sound the alarm on the national debt...on Day 1 of the next Democrat administration.

What is funny is that under Obama, the exact same mechanisms that was causing deficit issues are causing them now... generally the mandated spending. Yet, the cries from the Republican Party and conservative over the trillions in deficits under Obama (much of was the recession causing revenue to plunge)... and the GOP held Obama to near static discretionary spending for nearly 8 years.

Let's let the numbers do the talking on discretionary spending.

 

[ZiprHead]

It's all the golfing.

 

[Jason Harvestdancer]

Actually I'm quite surprised the creditors of the United States are willing to fund deficits at this level. I expected "transaction declined" long before now.

 

[Jimmy Higgins]

Actually I'm quite surprised the creditors of the United States are willing to fund deficits at this level. I expected "transaction declined" long before now.

Trump is trying to fuck that up too.

 

[T.G.G. Moogly]

Actually I'm quite surprised the creditors of the United States are willing to fund deficits at this level. I expected "transaction declined" long before now.

Every republican administration since Reagan has stated that deficits don't matter. I think the motivation is that if there's money there, take it. If there isn't money there, borrow it and keep it. That sums up republican debt management.

Money that is borrowed is a deferred tax, but republicans don't believe that.

 

[ZiprHead]

https://en.wikipedia.org/wiki/Jude_Wanniski#The_Two_Santa_Claus_Theory

The Two Santa Claus Theory is a political theory and strategy published by Wanniski in 1976, which he promoted within the United States Republican Party.[14][15] The theory states that in democratic elections, if Democrats appeal to voters by proposing programs to help people, then the Republicans cannot gain broader appeal by proposing less spending. The first "Santa Claus" of the theory title refers to the Democrats who promise programs to help the disadvantaged. The "Two Santa Claus Theory" recommends that the Republicans must assume the role of a second Santa Claus by not arguing to cut spending but offering the option of cutting taxes.[citation needed]

According to Wanniski, the theory is simple. In 1976, he wrote that the Two-Santa Claus Theory suggests that "the Republicans should concentrate on tax-rate reduction. As they succeed in expanding incentives to produce, they will move the economy back to full employment and thereby reduce social pressures for public spending. Just as an increase in Government spending inevitably means taxes must be raised, a cut in tax rates—by expanding the private sector—will diminish the relative size of the public sector."[15] Wanniski suggested this position, as Thom Hartmann has clarified, so that the Democrats would "have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections."[16]

 

[dismal]

I used to hang out at a forum a few years back where everyone was all "ZMFOG these deficits are super awesome"?

Some of those threads may still be in the archives here.

 

[James Brown]

Deficit spending is a useful tool during recessions. It can keep people employed and fed until the economy recovers.

Deficit spending during growth periods is asking your kids to pay for your current lifestyle.

 

[dismal]

Deficit spending is a useful tool during recessions. It can keep people employed and fed until the economy recovers.

Deficit spending during growth periods is asking your kids to pay for your current lifestyle.

So, you're in on my 24% spending cut to get us back to 2007 levels I take it.

 

[Cheerful Charlie]

Actually I'm quite surprised the creditors of the United States are willing to fund deficits at this level. I expected "transaction declined" long before now.

Every republican administration since Reagan has stated that deficits don't matter. I think the motivation is that if there's money there, take it. If there isn't money there, borrow it and keep it. That sums up republican debt management.

Money that is borrowed is a deferred tax, but republicans don't believe that.

Mitch McConnell has stated that the way to balance the budget (after getting Trump's massive tax cuts passed) is to slash social security, medicare, medicaid, defund ACA, education funding and mush more. It is called starve the beast.

https://en.wikipedia.org/wiki/Starve_the_beast

"Starving the beast" is a political strategy used by budget hawks to limit government spending^[1][2][3] by cutting taxes.
The term "the beast", in this context, refers to the United States Federal Government, which funds numerous programs and government agencies using mainly American taxpayer dollars.^[4] These programs include: Defense, education, welfare, Social Security, Medicare, Medicaid.^[3]
...
On July 14, 1978, economist Alan Greenspan testified to the U.S. Finance Committee: "Let us remember that the basic purpose of any tax cut program in today's environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending."
...
Lobbyist Grover Norquist is a well-known proponent of the strategy and has famously said, "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."...

 

[dismal]

Actually I'm quite surprised the creditors of the United States are willing to fund deficits at this level. I expected "transaction declined" long before now.

Every republican administration since Reagan has stated that deficits don't matter. I think the motivation is that if there's money there, take it. If there isn't money there, borrow it and keep it. That sums up republican debt management.

Money that is borrowed is a deferred tax, but republicans don't believe that.

Mitch McConnell has stated that the way to balance the budget (after getting Trump's massive tax cuts passed) is to slash social security, medicare, medicaid, defund ACA, education funding and mush more. It is called starve the beast.

https://en.wikipedia.org/wiki/Starve_the_beast

"Starving the beast" is a political strategy used by budget hawks to limit government spending^[1][2][3] by cutting taxes.
The term "the beast", in this context, refers to the United States Federal Government, which funds numerous programs and government agencies using mainly American taxpayer dollars.^[4] These programs include: Defense, education, welfare, Social Security, Medicare, Medicaid.^[3]
...
On July 14, 1978, economist Alan Greenspan testified to the U.S. Finance Committee: "Let us remember that the basic purpose of any tax cut program in today's environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending."
...
Lobbyist Grover Norquist is a well-known proponent of the strategy and has famously said, "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."...

See, this is why I like to pepper these conversations with facts taken from this place called *reality*.

Taxes are up. Spending is up even more. You would struggle to find any point in American history and compare it to today, and not be able to make those same two statements.

 

[Cheerful Charlie]

Spending is up? Massive increase in military spending. Cost of wars Bush II lied us into. Rise in population. tax cuts are the problem in large part. Starting with Bush II's stupid ta cuts to the rich.

https://en.wikipedia.org/wiki/Economists'_statement_opposing_the_Bush_tax_cuts

The Economists' statement opposing the Bush tax cuts was a statement signed by roughly 450 economists, including ten of the twenty-four American Nobel Prize laureates alive at the time, in February 2003 who urged the U.S. President George W. Bush not to enact the 2003 tax cuts; seeking and sought to gather public support for the position. The statement was printed as a full-page ad in The New York Times and released to the public through the Economic Policy Institute. According to the statement, the 450 plus economists who signed the statement believe that the 2003 Bush tax cuts will increase inequality and the budget deficit, decreasing the ability of the U.S. government to fund essential services, while failing to produce economic growth.<sup>[1][2]

...

But Bush and the GOP went ahead anyway and ignored the experts. And trump is following in Bush's foot steps.</sup>