The US needs to borrow almost $300 billion this week

What are you blathering about? I didn't quote one word from Krugman.

Did you bother to read my post? The person quoted was REPUBLICAN Mike Oxley of Sarbannes-Oxley fame, then ranking REPUBLICAN majority member and chair of the House Financial Committee on Financial Services, and sponsor of the only bill to pass either chamber of the Republican controlled Congress, that Bush killed. REPUBLICAN Mike Oxley is the one who said that Bush gave them the one-fingered salute.

 

The discussion is about US borrowing, Silly!

It's claimed Democrats are BIG deficit hawks, but they disappeared when the Balanced Budget Amendment was put up for a vote!

They must be Deficit Chicken Hawks!

My goodness, find a calendar, Bush hasn't held office in nearly a decade, this vote was taken in the last month!

 

Obama inherited a recession, the biggest we have ever seen in fact. Trump did not. Comparing their first two years is just dumb.

The federal government doesn't typically come in under budget. I expect we will see a huge deficit again for 2018. Want to bet on it?

 

Trump beat his first year, and his last year.

Hopefully Trump beats his second year too.

 

Uh no, Trump didn't. In 2016 the deficit was 587 billion, in 2017 the deficit was 666 billion.

 

And 800 billion plus forecasted this year.

 

On Obama's last day the Federal Debt was $19,961B
One year earlier it was $18,941, for an increase of $1,020B

After Trump's first year, it was $20,493B, an increase of $532B

Trump didn't just beat Obama's first year handily, he beat his last year by a similar margin.

I suspect Trump will beat Obama's second year as well.

https://debttothepenny.com/

 

That's not correct. The fiscal year for the federal government runs Oct. 1st through Sept. 30th.

You can make things up to be right, but no one but you and your buddies is going to care.

https://www.usgovernmentspending.com/federal_deficit_chart.html
https://www.cbo.gov/publication/52408

 

Nice picture of the Lusitania.

Most Middle Class families know they can't cut income and increase spending without running into a problem. Why President Trump, a businessman, and the Republican party can't figure this out is a mystery.

 

They've all known this since Truman at least. They all just want to keep the party favors flowing a little longer, hoping some successor sometime in the future will grab it and own it; such peaceful bones and ash in the USA.

Summertime and the livin' is easy, but winter's coming.

 

Yes, even the US government has to pay its bills.

Another picture of the Lusitania. One thing that fascinated me about the sinking was that it was a 787' ship which went down by the bow in 300' of water. 300' is, of course, deep, but the bow struck the bottom while the stern was still above water similar to the drawing below. Most of the passengers died due to drowning and hypothermia.

 

That's because Trump is a clown, and knows very little about how this country runs.
He is a crude mobster who has released America's demons.
And conservatives will always be happy to double the Pentagon's
already grotesque budget, to project the American Empire overseas.

 

Here is the problem. Both parties spend money like a drunken sailor. Both parties vote for bloated spending bills loaded with pork. Why? Because they are corrupt self-serving traitors for the most part.

The average voter apparently is incapable of thinking in the long term and votes based on party label not issues - in particular not long term issues. Most of the debate I see on this forum reflects a love of our failing two party system.

So what is the outcome? It will not be good IMHO. Say by about 2030 or 2035. People living in areas like to experience a post Katrina situation in an economic meltdown should arm up now and cache weapons and ammunition.

 

Election Tuesday is like Fat Tuesday. Throw me something, Mister!

 

If you live in my State/District (which is doubtful) I will be happy to throw you something (my picks) for the upcoming May 8 primary.

 

What office are you running for? Throw me some thing tangible I can spend now while I'm still around down on the ground. Gime, man, gime. Got free Bernie income to throw?

 

The first thing to mention is that your numbers are slightly off. The Fiscal budget year for Bush ends in September 2009. The debt was closer to 12 Trillion at that point than 10.

The other problem is that Obama was handed a 1.4 Trillion dollar deficit. It is not like a President just pushes a button and wishes this deficit away. While I agree that Obama could have done much more ... blaming him for the entire debt during his tenure is misguided.

You also omit the biggest offender of them all - Ronald Reagan.

Looking at Total Debt (especially when not in constant dollars) does not tell us the whole story in relation to fiscal irresponsibility. Deficits tell that story much better.

By the time Clinton came into office the interest on our debt as a ratio of income was over 25%. For reference - alarm bells go off at the IMF when this ratio hits 30%. At this point the ship is taking on water faster than it can be bailed out and if nothing is done the ship sinks.

While Clinton was in power when the deficit was reduced (nearly to zero) ... it was both Congress and Clinton that took reduction measures ... by Force. Would the situation been different - being politicians - they would have spent everything they could.

It is interesting to note that the interest payments on our debt back then are nearly the same as now ! The reason for this is because interest rates on our debt back in the 1990's was above 7% So even though our debt has almost quadrupled ... the ave interest rate on the debt is now 2.25%.

Interest as a ratio of income is roughly 12.5% This is great right ? Not so fast.

The problem is that getting the ave interest rate this low took some major messing with the invisible hand. These actions are now coming home to roost.

Have a look at the 2yr treasury yield chart.
https://www.cnbc.com/quotes/?symbol=US2Y

You will see that in 2014 the interest rate was less than 0.5%. The 30 year bill in 2014 was nearly 4%. Financing new debt (and old debt that came due) at shorter terms was one factor than helped bring ave interest rates down.

As you will have noticed .. the 2yr (and the same is true for other shorter term notes) has skyrocketed and sits now at 2.5% While purchasing short term notes gave a short term reduction in ave interest rates .. this debt has to be refinanced when it comes due ..

If rates increase - like they have - this creates a nightmare scenario.

Increasing deficits in an increasing interest rate environment is the pinnacle of fiscal irresponsibility. We are going to add nearly 4 Trillion to the debt over Trumps tenure .. all which has to be floated on the open debt market. Interest rates are a function of supply/demand. Increase in supply puts upward pressure on interest rates.

In addition the Fed has 4 Trillion on its books (Quantitative easing which helped to reduce interest rates by taking supply off the table) which it has to float back into the market. It is estimated they will float at least 500 Billion this year. This has a double whammy effect by increasing supply.

In addition - all the short term debt that is coming due also has to be floated - increasing supply.

This is all happening at a time when demand for US debt is weakening. After the 2008 crash Europe in particular was a mess. Scared investors piled into US debt despite a zero return vs inflation. Europe is in a much better position. 10 years ago no one would have thought of being in Chinese financial instruments .. that has changed and there are other economies that are now investment worthy.

Then we have the huge game changer - competition to the US dollar as the world reserve currency.

This has created a "Perfect Storm" --- Massive increases in Supply in the face of weakening demand.

Annual interest on our debt is currently 450 Billion/yr (based on 20 Trillion). If ave interest rates rise just 1.125% our annual interest payments will rise to 675 Billion (that is just on 20 Trillion - calculated on 24 Trillion it will be higher).

As you can see form the 2yr chart .. the differential on the 2yr ... right here .. right now is 2%.

This is why the 10 yr hitting 3% the other day "spooked the markets". The flattening yield curve (when short term rates are little different than long term) is a result of weakening demand.

If we were to go back to the historical average ~ 6% ... were hooped. If average interest rates double to 4.5% - our payments would be 900 Billion/year.

This gets us back to 25% of income. Calculating on the basis of 24 Trillion .. we are at 30%.

Prior to hitting these numbers the Gov't will be forced to cut spending (like what happened during the Clinton Admin). Clinton was helped out by a "white swan event" which increased revenues - the computer/internet revolution.

God forbid we get a recession during the perfect storm event which is soon coming to a theater near you !

 

My numbers are dead balls on. Obama took the oath on January 19, as did every other living President.

Total Horse ****. Bush may have been the worst President in terms of the deficit, until Obama came along, but, he never once had a Trillion dollar deficit. Obama seldom, didn't have one.

More Horse ****, only Total Debt tells the whole story. You do make a great point on Constant dollars, in constant dollars, Obama compares even worse to Trump.

Continued Next Post...

 

Trump beat Obama's first year, and Obama's last year, and fingers crossed Trump beats the hell out of his second year. In fact, if Obama had any class, he too would be cheering for Trump to do much better than he did, but, Obama doesn't give a damn about the country and hates the US Electorate, just like the "progressive" Left and Hillary does.

Believe me, we heartily return your disdain. Everyone has about had it with the Left's sanctimonious lies, double dealing and refusal to accept the results of the election.

For the first time since 1860 we have failed to peacefully transition power, because the Left refused to accept the fact that after constantly insulting the US Electorate that the US Electorate lifted their middle fingers to them and sent them Trump.

Are you catching on that Trump isn't going anywhere?

 

It absolutely is correct. Every living President is sworn in on Jan 19th. The Clowns were so proud of Porkulus and Cash for Clunkers at the time. They were heralded as Obama's signature accomplishments, and now the limp SOB's are trying to dump them into Bush's column, not that Bush was any prize either!

We have never had worse back to back Presidents than Obama and Bush.

 

That's not how a budget works. Looking at it in January only gives a snapshot. It doesn't include everything. You have to look at the entire fiscal year. FY2016 was lower than FY2017. It's not up for debate. You can claim that you think it's going to go down for 2018, but given that we had a huge tax cut and continued increase in military spending I think that is highly unlikely.

 

Judging by the debt explosion, the budget didn't work at all.

Looking at it from January 19 to January 19 looks at it for an entire year.

I've made no such claim. When 2018 is over, we will compare Trump's second year with Obama's second year, and I hope for the sake of this country that Trump beats Obama's second year, just like Trump beat Obama's first and last year.

 

Sorry dude but - if you know anything about how our budget process works - the spending for 2009 is set in place in October 2008.

Now you can listen to the Cato Institute (hardly a bastion of Liberal thought) but I would be more than happy to trot out the numbers for you.
https://www.cato.org/blog/dont-blame-obama-bushs-2009-deficit

So where does the 1.4 Trillion dollars come from ? 450 Billion was already baked into the cake prior to Obama setting foot in office (as per above).

This was based on spending of 3.15 Trillion and expected Revenue of 2.7 Trillion.

Due to the 2008 Crash - Not Obama's fault - revenue for 2009 dropped to 2.1 Trillion ( This accounts for 600 Billion)

So we are left with roughly 400 Billion. 250 of this was TARP - enacted by Bush and the other 150 was stimulus spending enacted by Obama (again as a result of the crash and completely bipartisan)

So at most you can attribute 150 Billion to Obama but even this is a stretch.

The idea that "Total Debt" tells the whole story in relation to fiscal irresponsibility is compete and utter abject nonsense.

You can not compare spending by someone who walks into a 1.4 Trillion dollar deficit to someone who walks into a balanced budget. It is idiocy to claim the two are comparable.

Not only did Obama walk into a 1.4 Trillion dollar deficit

1) the housing market had crashed
2) Revenue had dropped from 2.7 Trillion down to 2.1 Trillion and took years to recover
3) The financial market was on the verge of collapse - commercial paper markets had shut down. You probably do not know what this means so I will explain. If you are GE and get a 5 Billion dollar contract to build a nuclear power plant - you do not have the money to carry the project in the bank. You borrow it from the commercial paper markets. If these markets are closed ... the job does not get done and someone else (like Russia or China gets the contract)

The whole system shuts down .. we are talking 1930's style depression.

It took years for the economy to recover and revenue to return to normal - even with massive stimulus from all sides including the Fed giving money at near zero interest rates.

Reagan did not face this - what was his excuse for running massive deficits and spending money like a princess with a credit card.
Bush Sr did not fact this.. nor did Baby Bush and nor does Trump.

Obama did not increase the deficit. He reduced it from 1.4 Trillion down to 500 Billion. Almost all of this was due to revenue coming back to normal rather than and serious fiscal restraint but ... the fact remains that he did keep spending relatively in check. He did not increase the deficit.

It is the relative increase or decrease in the deficit that is a main measure of fiscal responsibility. There are other factors - as alluded to above and in my previous post .. such as interest on debt as a ration of income.

 

As a Senator, Obama voted for the 2009 appropriations and then colluded with Pelosi and Reid to hold many of the appropriation bills back so that Obama could sign them into law. And he did, along with the Trillion dollar Porkulus and Cash for Clunkers, amid much crowing about how this was going to result in "Recovery Summer!" Google it. Now the clowns are trying to put this in Bush's column? BAHAHAHAHAHHAHAHAHA! Well, there isn't much I can add to that would better make the point of how foolish these actions were by Obama and the Democrats than that! Google it.

Not that Bush was any prize either. Bush and Obama were two of the worst back to back presidents in US history.

 

As said previously - the CATO institute is hardly a bastion of Liberals. They are Libertarian to the core.

The Budget that Bush tabled in Feb 2018 called for a 400 Billion dollar deficit.

So 400 Billion was already baked into the cake.

The Trillion dollar stimulus was not just for 2009 ... get a grip. You are quoting a figure that was to be spent over 10 years .. as if it all applied to 2009.

As stated in the previous post .. Obama did add 150 Billion in Stimulus spending to the deficit. The rest is not attributable to him.

And do not tell me to "Google it" - do your research for you. Note that I post links that support my claims. You should do the same.