US budget deficit edges higher in October.

The numbers have always been massaged, but under the current administration, the gap being boldly covered through manipulation has made the practice completely obvious and wrapped the metric in skepticism.

 

I am unaware of any examples. Where has this happened?

 

Those fiscal policies under Pres Bush Jr, ruined the US economy. there is nothing there to cheer about.

 

I cited it in my post.

 

The fiscal policies helped produce that 52 months of full employment, rising incomes, soar tax revenues and a final Republican deficit of a paltry $161B. What's not the cheer about?

Then the Democrats took control of the Congress and then the White House. What was there to cheer about?

And he isn't a Jr.

 

It was all on borrowed money, a super inflated housing bubble that started in 2002

 

so you are both wrong.

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nope. it isn't calculated any differently than it was 20 years ago.

 

More tired old cliche's. New home construction is the component that affects GDP and even at the height of the housing boom it was only 3.4% of GDP from compared to it's normal 2-2.5% growth and the growth was inline with historical growth. And sub-prime mortgages only represented about 6% of all mortgages. Tell me what economic expansions did not rely on borrowed money. The economic expansion was broad based. And the fact is that growth has even been exceeded the last three years so where is the economic boom?

See msg number 67.

 

Yeah right, that's why wall St had to be bailed out, because the economy was so robust.

 

I have not found an example of savings from cuts refunded to the American people. It has not happened.

The size and power of the US government has never been cut.

 

The financial collapse was the result of mortgage related policies and laws which encouraged, even mandated massive fraud. The Democrat Party was almost entirely responsible for all of it initially.

A few prominent Republicans did eventually step in it. Bond and Gingrich stand out, but they did not create the problem.

RECKLESS ENDANGERMENT, by Gretchen Morgenson and Joshua Rosner thoroughly documents most of the massive criminal fraud behind the collapse.

She leaves out the crucial role of the impact of ending the double short rule (GOP SEC head) combined with mark to market rule (Sarbanes/Oxley) that mandated that trillions of dollars of real estate backed assets be valued at $zero and made it possible for Morgan, Barclays etc. to take those assets for a song.

Bush regulators (Democrats BTW) warned Congress of the impending crisis and were denounced by Democrats - and Bond.
Bush issued a public warning and was ridiculed. SNL, did a piece pointing this out and mocking the Democrat leaders and opportunists for blaming the hapless Bush.

Bush was, alas, the perfect patsy. His Treasury Sec Paulson (Democrat) played him with ease.

 

I do not doubt the calculation is unchanged, but I pretty much think that downright manipulation of the numbers has been occurring.

 

well, unless you can provide evidence.............that is a baseless claim.

 

Your logic is self defeating. If, as you say - every dollar you spend in the economy would improve the economy even more, then that's an argument for MORE debt, not less. Let's say the US borrows 100 dollars. And lets say that it takes that 100 dollars and spends it in the economy. According to your logic, that causes the economy to grow. Let's say it grows by 5%. But the interrest on that $100 is only 2%. So by borrrowing that 100%, we have made $5 and lost only $2. So that's an argument for borrowing more, not less.

You're actually agreeing with me, silly!

 

well half of that 6% is debt we owe to ourselves, so doesn't really count. So it's more like 3%. Not bad.

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Actually, given that interest rates are quite low at the moment, our current cost of debt isn't that high.

 

If it is a liability, it counts. The function of potential future debt servicing costs is a polynomial sharply increasing with greater deficits.

 

low tax rates are low tax rates. the numbers speak for themselves. you'e just squirming, cause your whole world view is based on a myth - that tax rates are high, when they're actually at a historic low.

 

actually no
the "elected government" is not some single entity with a single purpose. Rather it is a jumbled mess of competing interests all vying for limited resources with dynamic power struggles occurring constantly under changing political dynamics.

If you think it's as simple as winning an election and getting what you want, just cause you won, you are completely naiive.

 

my argument doesn't defeat itself, your inability to understand what I am saying defeats it...

every dollar taxed, takes money out of the economy, correct? so we take tax dollars out, to pay the debt... to service it... instead of that money being put back INTO the economy, its being taken out and permanently removed... since that dollar taken out goes to foreign countries... debt has a cost, creating more debt doesn't create more money in the economy, it creates LESS long-term money for short-term money... there is a finite supply, until they print more, then it devalues the currency... as they remove that printed money it increases the value of the currency... so they can't just print more and more and more and more... because its worth less and less and less...

you used the example "lets say it grows 5% and only costs us 2%"... can you show me where our economy is growing 5% and only costing us 2% currently? I can't find an example in the real world for us where that is happening... isn't it amazing how we can make numbers up and things work out great, but then we can't actually get that scenario to occur in the real world? I mean using your logic, the USA should have grown at 5% every single year since we started spending trillions? thats your logic right? don't let me put words in your mouth, thats a direcy summary of what you JUST stated above to prove it works... clearly america has NOT grown at that rate... your example is flawed...

see we borrow $100... and we have to pay interest... and that interest is $10 a year... if we just keep paying back $10 a year we will ALWAYS have that debt... thats the scenario we're in right now... we're only paying the interest, we're not paying off the debt, in fact we're growing the debt... so we are ALWAYS removing money from our economy to service that debt... every single year we're pumping out almost 1 trillion dollars from taxpayers, and giving it away to foreign nations... it has ZERO impact on our local economy, so we're not recapturing those dollars we paid to service the loan... its just LOST money...

clearly you don't comprehend my point, the interest is wasted money, not going back to our economy... and instead we're funding foreign nations... do you comprehend that... do you comprehend we're literally funneling our wealth out of our country... do you understand the impact that has on our economy as that money is no longer in it... this isn't a magical world of lets make up some numbers to prove a theory, and then when we apply that theory to reality it'll magically work... because your own numbers prove it doesn't match reality, and we're not actually achieving what you claim we should be achieving...

$1 trillion is leaving this country to service INTEREST ONLY... thats not being recirculated in our economy... so the debt DOES harm us... because if that trillion dollars was put back into our economy, only THEN would we see the benefits you suggest we receive... instead we're giving the money away and lowering our economic potential... why is this so difficult for you to grasp...

I think you're failing to grasp, we aren't "spending" that $1 trillion in interest payments on our economy, to create the scenario I used an example of... instead of creating all those jobs, instead of creating all that spending, instead of creating all that economic impact, we're instead simply removing that money we COULD have spent doing all that... do you grasp that? we're NOT spending the money on ourselves, we're giving it away to people who don't spend it on us... we could have spent that money on us... but we're not, we're giving it away... that has a direct impact on our society since we're not spending it on us, creating more jobs and wealth among us... it goes to others...

do you not get this? more debt won't solve this issue... it will amplify and harm us more... so don't tell me this proved debt is good, it proves debt is bad...

my logic says that $100 example you like, could have been $110 if we weren't forced to spend that $10 on interest payments... do you not get it... we're spending less on us and giving it away to others... that harms us, that proved debt is not good, it causes us to spend less of OUR money on US, and we instead give that money away to someone else who does not spend it on us...

P.S. had we a roaring economy right now, that was growing hand over fist successfully, then you could claim we're getting more economic benefit than cost... however that is NOT the case in reality, our economy is trickling along and we're not growing faster than the cost it took to achieve that trickle along effect we're living in... do you not understand this critical difference of theory vs reality... if we actually had 5% growth you could argue the debt was well worth it, however we do NOT have that growth... its now costing us more than we benefited... thats the sad reality of why the debt is harmful now more than ever... because we didn't get the growth, and now we're paying for us at a rate we can't sustain should interest rates increase... it will compound our program and suck money our of our economy slowing us down even more...

I'm betting you only understand pictures...



you can see the quarterly growth rates of our economy... you can average them out... then compare that averaged out number, to the averaged out cost of the debt...

https://www.treasurydirect.gov/govt/rates/pd/avg/avg.htm

once you average out both of those numbers for each period... you'll see we're not "growing from debt"... we're actually LOSING once you factor inflation into the picture... we're paying more to service the debt, than we're receiving economic benefit... hence why debt is bad, we're not boosting our economy with this debt, we're losing money... which means its a drain on our economy which means your example is completely blown out of the water since we're not growing faster than the cost of the debt being serviced... and thats just the INTEREST we're paying, we STILL have to pay back the (*)(*)(*)(*)ing debt itself... that will be a tremendous drain on our society...

imagine what happens when interest rates dramatically rise, and are well above our economic growth... you know like pretty much throughout the majority of our history... I mean home loans were lucky to get a 6% rate before the collapse... imagine when we go back to having interest rates at 6% and our economy is still only tricling along at a couple percent... how does THAT work into your theory that spending debt is a good for our economy... do not comprehend how the (*)(*)(*)(*)ing real world works dude?!?!

gheezus it pisses me off when people who have probably never taken even first year economics, attempt to tell others how economics works... put down google, and pickup a book... you'll find the book doesn't tell you what you want to think like google does, instead it tells you what really happens... without biased search words to prove whatever theory you want... I'm so sick of people pretending they are economic professors when they probably can't balance a checkbook...

maybe you'll understand the words of someone else...

do you understand? get it? more debt is not good, debt doesn't create economic growth, the opposite of that is true...

see how the amount of our gdp required increases the longer we wait, you get it, understand?

 

not really. Part of the debt is just what one part of the government owes to another part of the government. So it's not really a liability. It's just a way to keep track of money flows within the government itself. Only about 1/3 of the debt is foreign--that's the part that counts. The rest of the debt is money within the United States. And so repaying that "debt" is actually just a transfer of funds, and not an actual liability.

 

It's simple
Long run US GDP growth is around 4%
If you don't believe me, here it is:

So every dollar spent in the US economy gives back 4% return.
So let's say you borrow $100 dollars. Spending that $100 dollars in the US economy gives us $104.

And let's say that the interest is 2%.
If you look at historical treasury rates, it's around 2-3%.
So you get $104, you pay back $2 in interest, and you've made a profit of $2. That's why borrowing is good!

 

Frankly, you have not contradicted anything from my post. The elected government is the instrument of power.

Of course it can be bribed, coerced, and influenced by any number of factors.

 

perfect lets run with this... long-term growth is 4% however clearly we can argue its on a slow and steady downward decline to 3% being the new "high" so lets not try to take the best of the chart from 50 years ago, lets use the last 20 years as a good indicator shall we, thats fair right?... and you already acknowledge the historical treasury rate is 3% and currently is slightly just below that... so we're not gaining ANY benefit from all this debt... so you just proved my point... thanks...

so we spend $100 and we now owe $103... but all we can afford to pay is $3 so we're still left with $100 on our loan... so do we raise taxes or cut spending... and what do you think happens when we raise taxes or cut spending...

thanks for proving my point with your own words...

see how making up numbers isn't a good idea when it doesn't reflect the current economy... and its only a cherry picking of the roaring economy and costs we had back in the day of our grandparents?

P.S. we still have to pay back the debt... you know why... because if we didn't every year have to pay that $3 of interest, we could spend it on our economy instead, imagine how much better our economy would be, if we weren't giving that money away to someone else... wouldn't you like to spend your money on yourself? rather than china?

P.S.S. not to get too mean, but americas GDP hasn't been above 3% on average under Obama... so we're spending MORE than we're getting out of the current debt... don't you agree, or do you want to use an example from 50 years ago to prove it works? when in reality its failing currently...



see, we're not averaging above 3% now... we're basically growing at the same rate our interest rate is... and we're not paying off the debt, just the interest... and we're still adding more debt, which means we'll be paying more and more and more and more... harming our economy since we're not spending our money on us... we're instead spending our money on foreign nations...

P.S.S.S. some of that debt is also for social security... what happens when we can't afford to repay those securities taken out for social security... we'll just extend the retirement age or lower the benefits? so we'll be double dipping and double harming all americans pretty soon since the promised money, is actually promised debt...

 

Ummm...no. The real world which is the world I live in has a ridiculously complicated tax code which requires additional expensive human resources in order to meet ask the loopholes imposed to control some aspects of business and to give privilege to some specific businesses. The tax code has become a way to gain competitive advantage. Some pay the actual tax, some pay zero. The effective tax rate is an overly simplified description of a competition killer.

 

From the evident effects of Reagan-Bush1-Bush2 on debt by tax reductions for the wealthy.

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Your apology accepted.