But the debt needs to be be considered as a percentage of GDP. The red line is the US national debt as a percentage of GDP since 1940:
This is entirely manageable, especially considering how bad this recession is. Do people still not understand how unique this recession is? And Obama's level of debt is NOTHING compared to Japan:
Paul Krugman put it best:
"The projected debt/GDP ratio will be high by US historical standards, but within a range that a number of advanced countries have entered without catastrophe in the past."
Deficit spending appears to have been more worthy of criticism by you a year ago. What's changed?
ReplyDeleteUh, perhaps the worst recession since the Great Depression? News flash: the entire world banking system was at the verge of collapse. Lehman Brothers collapsed and no one bought it. GM and Chrysler went bankrupt. Have you watched the news for the past year?
ReplyDeleteBut if, as you assert, the recession is pretty much over, then there's no reason to be adding nine fucking trillion dollars in debt over the next decade, is there? Why isn't the Keynesian sploogefest being limited to FY2009?
ReplyDelete1 - The recession has left us with a massive shortfall in tax income which is causing the budget deficit that doesn't go away overnight.
ReplyDelete2 - Without the bailouts and stimulus, the recession would last a lot longer. In Thailand in the late 90s, their recession lasted five years. The Great Depression, over 10. I know libertarians long for the US to have a 10-year recession, but most people don't want that.
3 - During decent economic times of the last 8 years when we could have been reducing the deficit, the country frittered it away nearly $2 trillion dollars in tax cuts for the super-rich and another trillion for a pointless war. Now that we REALLY need to run deficits and use the money for Keynesian purposes, we are not in the best position to do so. No serious economist would recommend trying to balance the budget during a recession.
even with the tax break the rich dstill pay the most taxes of any group. just because they made choices and earned more money wehy should we pay for others missteps.
ReplyDeleteHard Work Cures All,
ReplyDeleteWell, I agree with Warren Buffet on this issue: the super-wealthy don't need any more tax breaks.
The financial crisis and near economic collapse were not caused by too many taxes on the super-rich; the financial crisis and near economic collapse was caused by the super-rich gambling with other people's money and losing big time while people of moderate means bailed them out with tax dollars.
I do agree that the rich should pay more of a portion of their income than poorer people. However, I think no one should be taxed more than 45% of their income. That seems wrong to me.
HWCA is that by percent income or overall paid money? I am not so sure about that fact?
ReplyDeleteHWCA: "other people's missteps" like starting a preemptive war and failing to regulate the financial industry? Somebody's got to pay for the mistakes of the worst president in U.S. history, and poor and middle-class people can't afford to. I don't think rich people should be punished for their wealth, but if the money has to come from somewhere, I'd rather see it come from somebody with multiple vacation homes and a private jet, than somebody who is working their ass off for minimum wage and still can't afford health insurance.
ReplyDelete-Katie
Why should anyone STFU about the debt levels? I am mad as hell about what's going on right now, and I won't be quiet! Keep in mind that a good portion of republicans are pissed about how things were ran over the last decade, myself included. The current administration accidentally FORGOT 2 trillion in deficit spending when planning its budget, all while they have full knowledge of the programs they want to pass. They failed with the CARS program (thousands of dealers aren't getting paid), and now they want to get their hands in health care. It isn't all about how much they are spending, but how they are spending it. I don't want any money going to a half-assed government-run program that won't provide the basic services initially intended. They need to cut-cut-cut and see where they are.
ReplyDeleteAnon,
ReplyDeleteWell, fair enough on the STFU comment.
The CARS program certainly has not failed. They will get paid but it may take longer than initially thought. There are plenty of government services that work fine -- fire, police, justice system, medicare, VA hospitals, NOAA, etc etc. It's far from perfect but it's not as bad as Republicans seem to think.
Do you think that the recent financial crisis did not warrant a serious response?
On one hand, I believe that a poorly ran company should be allowed to fail. This country is coddling the under-performing, which only serves to punish those that are hard-working and successful. I am no economist, and maybe the banks were "too big to fail," but why not give them one lump some and force a bankruptcy-type re-org? Bankruptcy requires fresh blood in the executive levels and while it ruins stock prices, the likelyhood of a true rebound is increased. What we did was throw money at them while devaluing the dollar...even further... There is NO MONEY to give.
ReplyDeleteThe government is only accountable to itself. If I were in a bind and needed $5k and had no other option than to borrow against a credit card, I am accountable for some god-forsaken APR, and the bank can come after me.
American car companies should have been left alone. No one that can afford to chose between domestic and foreign choses domestic. Something like 70% of the cars purchased during CARS were foreign. That really made my stomach turn.
...I lost me "on the other hand" comment somewhere in there. I am trying not to be too wordy.
ReplyDeleteAnon:
ReplyDeleteThere's no reason to think that bailing out the banks and car companies results in punishing those that are hard-working and successful. On the contrary, NOT bailing them out would've punished the hard-working, the lazy, the poor, the rich, and everyone else in between.
There's also no real reason to think that devaluing the dollar is a bad thing. On the one hand, people are upset that we don't export enough (despite the fact that we're the #3 exporter in the world) and then complain about a low dollar. Trust me, a cheaper dollar can only serve to help our exports.
You said: "The government is only accountable to itself." No it's not. It's accountable to the voters who get rid of politicians who make them mad!
You said: "Something like 70% of the cars purchased during CARS were foreign." Well, that's the free market. Buying imported goods is not a bad thing. Many foreign companies employ lots of American workers, not to mention the dealers who make profits by selling any car -- foreign or domestic. It's not always that one side wins at the other side's loss.
My derision towards the result of CARS is not just that Americans chose foreign over domestic, but that the government didn't require, or at least encourage, the purchase of domestic vehicles. That surely would have helped Detroit. It is definitely the case of Detroit opposed to foreign car makers. Detroit has an inferior product and has for years, but due to tremendous mismanagement, the cost of Detroit products creeps close to that of their quality counterparts. The government made the poor choice of bailing out domestic cars for the sake of saving union jobs and stemming the blood flow in the stock market. What they did was bolster sales of companies that were never having an issue. Epic fail.
ReplyDeleteWhat isn't wrong with devaluing the dollar, and the resulting inflation, especially when many companies aren't giving salary increases (namely mine)? Why would you not be opposed to what results in the abuse of the middle class? We feel the pain the most.
It’s quite a rosy view of politics when you believe that politicians are accountable to the public. There is so much corruption that you and I will never truly know what, when, why, or how any federal-level politician made it into office. So much money is required to run a campaign that you have to believe politicians are beholden to their contributors. What did Clinton have before Obama took over? Something like $50 million? They don't give a shit what we think.
Anon:
ReplyDeleteIt is weird that you acknowledge the inferior products that Detroit makes and say that Americans should be forced to buy their products. I don't know what to say.
There is no inflation right now. Paul Krugman had a good piece on this recently.
I don't have a rosy view of politics. While there is money that influences elections, it is an overly cynical view that you seem to have about "corruption". If it's all money, then why have elections in the first place? Go to any country that has REAL corruption, and you'll learn the true meaning of that word.
Not forced to buy domestic, but incented to do so. I said "...the government didn't require, or at least encourage, the purchase of domestic vehicles." That doesn't imply that the government is forcing anyone to buy a car of they don't want to. If Joe Schmoe decides he wants to take advantage of CARS, then he has to buy from the "Big 3" to do it.
ReplyDeleteWe have elections because that is our system. We are handed the candidates to vote for from only 2 parties, because that's where the money is. I understand that American political corruption can't hold a candle to some of the places you've been in the world, but we aren't talking about them. Money changes hands, promises are made, pork barrel projects are passed (and God knows what else), and we all lose.
I am cynical - you have that right!
Be interesting to see a citation on those charts, because a couple of things seem suspicious. First, they appear to only go to 2008, which would make them totally irrelevant to your point if true, and second because they appear to be comparing the debt to GDP, whereas Obama's trillion dollar shortfall is a deficit. I could have this completely wrong, but it's impossible to tell without more info.
ReplyDeleteCurious George,
ReplyDeleteI got one of the graphs from Paul Krugman's blog and another from wikipedia. I can't remember the links right now.
The budget is what the Congressional Budget Office projects as a percentage of GDP. That's my first graph and it goes through the present -- finaly year being 2010. Also, remember that we are still in the Bush budget because the fiscal year ends at the end of this month.
The second graph does in end in 2008. I supports my point that there have been other advanced countries that have taken on total public debt as a percentage of GDP FAR FAR higher than ours is projected to me. For example, Japan's public debt was 180% of GDP at one point.
What determines a "foreign" vs "domestic" car? There are GMs and Fords made in Canada and South America; and there are Toyotas and Hondas assembled in the US.
ReplyDelete