Another day older and deeper in debt

[6thGen]

Unfortunately, "starving the beast" sounds great on paper, but doesn't work with our government in practice - they just spend anyway and borrow from social security, us, and other governments.

There is an old adage that the difference between present day conservatives and liberals is that the former worries about taxes and spending, but the latter only worries about the difference between the two. During the 50s, 60s and 70s, conservatives were obsessed with balancing the budget, and supported higher taxes for that reason. However, deficits continued so long as liberals spent up to the point that was politically tolerable so deficits and debt continued to increase at a faster pace. The only proven way to cut spending is to operate in a deficit, so as to push the politically tolerable lower and lower. There is no downside to a deficit so long as it results from lower taxes rather than higher spending. To quote Friedman, ?I would far rather have total federal spending at $200 billion with a deficit of $100 billion than a balanced budget at $500 billion.?

It's just sad. They both suck in my book. I thought things were going to change in this election but I get the sense that was a pipe dream.

As most students of history know, presidential elections do not offer significant change. I am equally frustrated with both candidates.

 

[30ashopper]

Not necessarily overtaxed. It could mean that the economy is booming and citizens and corporations are earning more taxable income. Yes more tax revenue is generated, but I don't think that in itself qualifies as being overtaxed. I will gladly trade today's environment for the years of the booming stock market, large capital gains, and yes capital gains taxes, which by the way were lowered during the Clinton administration. If that's the price to be paid for a budget surplus, sign me up, count me in, whatever.

I tend to lean right, but I agree here. I'd re-elect Bill Clinton in a heart beat. Bush was a disaster on fiscal policy. In the primary I held out hope for Hillary because I felt below all the populist spew she really was a moderate like her husband. I do not have high hopes for Obama. Maybe we should start a "write in's for Hillary" campaign?

edit: "I'd re-elect Bill Clinton in a heart beat" ... if he promised to fix this mess.

 

[30ashopper]

There is no downside to a deficit so long as it results from lower taxes rather than higher spending. To quote Friedman, ?I would far rather have total federal spending at $200 billion with a deficit of $100 billion than a balanced budget at $500 billion.?

I honestly feel we have reached a tipping point, deficits have grown too large and it's seriously affecting the value of the dollar. We can't keep heading down this road, it's a road to financial ruin. SS going into the red is less than ten years away, we must pay down our debt.

(Man I loved Friedman, wish he was still around. )

 

[TooFarTampa]

I tend to lean right, but I agree here. I'd re-elect Bill Clinton in a heart beat. Bush was a disaster on fiscal policy. In the primary I held out hope for Hillary because I felt below all the populist spew she really was a moderate like her husband. I do not have high hopes for Obama. Maybe we should start a "write in's for Hillary" campaign?

I am rooting for Obama to come around on this; but I have my doubts that he will. In the meantime, I am hoping McCain has come around to Romney and they can join forces, with Romney's area of expertise in finance and business. At the moment, I agree that neither candidate has the cajones to tell the American people the truth. Obama's refusal to pander re: a gas tax holiday gave me a little bit of hope, but the big picture is so scary I can't imagine that either are really going to face it.

 

[traderx]

I tend to lean right, but I agree here. I'd re-elect Bill Clinton in a heart beat. Bush was a disaster on fiscal policy. In the primary I held out hope for Hillary because I felt below all the populist spew she really was a moderate like her husband. I do not have high hopes for Obama. Maybe we should start a "write in's for Hillary" campaign?

I agree that Hillary would probably have gravitated toward the center much like Bill. I don't get the same feel with Obama. He seems like an idealist and wants to do a lot of good. Such were the intentions of lawmakers who wrote Title VII and Title IX. This year, we will spend $300 billion on Medicaid alone. As best I can tell (finding, reading and understanding government data is a blistering chore), there are 8.1 million households who receive Medicaid. That works out to $37,000 per household. Do you think poor folks receive the benefit of this much money in medical services? Ready for "free" healthcare? There are 105 million households in the US. If you multiply that number by the $37,000 Medicaid number, it totals $3.9 trillion dollars, almost a trillion more than our current total budget. Let's fold in baby boomers who will soon overrun the Social Security trust fund, cash payments to means tested families and insane defense spending (it is insane when we pay $85 for a screwdriver) our budget and economy are attached to a lit fuse. I used to be optimistic, that the Congress and whoever occupied the White House at the time would awaken to the thunderous demand of the masses. But nah, we are holding both hands out, palms up, demanding more from the government. We are gradually trading liberty for security and the government, with our best wishes, is slowly turning the screw into our pocketbooks and our country.

 

[6thGen]

It takes a serious tipping point for Congress to cut spending (or a president who isn't afraid to use his veto pen). The value of the dollar has more to do with a poorly run Fed than the federal deficit.

TFT,
Agree on the gas tax holiday, but, in my opinion, Romney's disastrous healthcare plan is enough to take him out of VP consideration. McCain needs to do the right thing and pick Newt, but he won't because he doesn't understand that the GOP wins when they run right.

 

[30ashopper]

I am rooting for Obama to come around on this; but I have my doubts that he will. In the meantime, I am hoping McCain has come around to Romney and they can join forces, with Romney's area of expertise in finance and business. At the moment, I agree that neither candidate has the cajones to tell the American people the truth. Obama's refusal to pander re: a gas tax holiday gave me a little bit of hope, but the big picture is so scary I can't imagine that either are really going to face it.

I was actually happy to hear McCain brought HP's Carly Fiorina on board. I saw her on CNN - she is one smart woman who understands the numbers. Unfortunately, she hasn't seemd to have had any effect on McCain's policy positions.

 

[TooFarTampa]

BTW, Crist is doing something a little bit different. He announced yesterday that he is cutting the state budget by 4 percent, and by the comments and reaction I've seen, I don't think the people want to hear any of it!

If Crist is "driving the state into the ground" by cutting the budget, and Bush & co are driving the country into the ground by not cutting it, then where does that leave us?

We need serious numbers people in power. ASAP.

http://www.tampabay.com/news/politics/state/article622061.ece

TALLAHASSEE ? Gov. Charlie Crist ordered all state agencies Thursday to reduce spending by 4 percent in the coming fiscal year, just a day after signing an already pared down state budget.

State economists say the action ? the second holdback in less than 12 months ? is necessary because high food and gas prices are prompting consumers to spend less. They now project lower sales tax collections in the coming fiscal year.

If Crist's order stands all year, agencies will have cut spending by roughly $1-billion out of the $25-billion operating budget.

"I believe it (this move) says that this administration believes in being prudent," Crist said Thursday night before a speech before the state Republican Party near Orlando.

The holdback means public schools, universities, community colleges, judges, prosecutors, public defenders and others ? already bracing for the smallest state budget in three years ? will have to get by with less.

 

[TooFarTampa]

TFT,
Agree on the gas tax holiday, but, in my opinion, Romney's disastrous healthcare plan is enough to take him out of VP consideration. McCain needs to do the right thing and pick Newt, but he won't because he doesn't understand that the GOP wins when they run right.

What was disastrous about it? Serious question. It's been four months and my mind is fuzzy.

 

[traderx]

It takes a serious tipping point for Congress to cut spending (or a president who isn't afraid to use his veto pen). The value of the dollar has more to do with a poorly run Fed than the federal deficit.

The value of the dollar is keyed to several factors including the budget deficit, trade deficit and interest rates. Greenspan did nothing to defend the dollar when it began its fall. A strong dollar is not necessarily good; a weak dollar is not necessarily bad. Depends on which factors you favor more. With the weak dollar, our exports have increased nicely. Alas, so has the price of oil. The Fed recently stated that it will defend the dollar as did the Treasury Secretary. It appears to have put in a bottom but we will have higher confidence if and when it crosses its won 50 day moving average. If you look at a three year weekly dollar graph, it is when the dollar fell below its 50 day SMA that the dam broke.

I was talking to a friend the other day who remarked that no wonder prices of everything are so high, look how much the dollar has fallen. For citizens, and others, living in the US and buying US goods and services, the value of the dollar only has context versus other world currencies.