Running Up the Credit Card
We’re already on the path to bankrupting America and Obama is going to accelerate it.
The federal budget deficit will hit an unprecedented $1.2 trillion for the 2009 budget year, according to grim new Congressional Budget Office figures.
The eye-popping estimates reflect plummeting tax revenues because of the recession and about $400 billion to bail out the financial industry and take over Fannie Mae and Freddie Mac. Last year’s deficit was $455 billion.
The CBO estimate released Wednesday also sees the economy shrinking by 2.2 percent this year and recovering only slightly in 2010, and the unemployment rate eclipsing 9 percent early next year unless the Obama administration steps in.
[...]
CBO’s figures don’t account for the huge economic stimulus bill Obama is expected to propose soon to try to jolt the economy.
Good thing he’s hired that new “government spending watchdog.” I feel better already.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 1714 hrs
We’re just wrapping up 8 years of an admistration whose stated PNAC political philosophy considered the deficit to be a non-issue, so what kind of shape do you expect this country to be in?
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 1733 hrs
Ugh. Again with the “last eight years” mantra. I thought we were under strict orders to look forward, not back.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 1740 hrs
We’re already on the path to bankrupting America
This is news?
Baby we have arrived!
The only reason we are not shuttering the doors is because Treasury can print as much paper as it wants to.
You can’t blame the incoming for this mess unless you want to recognize the outgoing’s contributions.
$8.5 trillion and counting.
http://www.ritholtz.com/blog/2008/12/calculating-the-total-bailout-costs/
That was a month ago.
They still have 13 days left.
You will remember that over the next 4 years, right Owen.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 1941 hrs
A Republican complaining about deficits.
That’s like…
Bill Clinton complaining about morality?
George Steinbrenner complaining about player salaries?
Homer Simpson complaining about stupidity?
Aaron Spelling complaining about substandard quality television?
I don’t know. I mean, I agree with your point, Owen. But then I was agreeing with your point 6 years ago with my Republican buddies in D.C. and they scoffed at me. I complained about debt to you when arguing about the state budget and you supported the version that made the problem worse.After all these years, maybe I should give up. Maybe deficits as a problem are like your credibility on the issue: nonexistent.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2050 hrs
Pretty much the “conservative” Bush administration has made us numb to deficit spending.
What the hell. If you are going to run up the credit cards it might as well be for the future, not to bankrupt the future.
Infrastructure, education, potential industries; these are investments.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2051 hrs
potential industries
???
WTF
Since when is the government responsible for creating potential industries….
and btw - we already fund education and infrastructure. Too bad the money never actually gets to the bridges or kids because its stolen or siphoned off for other “necessities”.
Public Safety/National Defense
Infrastructure
EducationThose should be the priorities of the government through taxes. Everything else needs to be prioritized on a list. When you run out of money, start cutting the programs.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2056 hrs
And yet even many conservative economists will tell you that a recession is one of the few perfectly acceptable times to deficit spend. Our bigger problem is that we run deficits now (middle to late Reagan, most of Bush 41, early Clinton, nearly all of Bush 43) even when times are good, instead of balancing the budget or running modest surpluses to help us get through times like these without additional action.
If you were to ask me if it’s more forgivable for Obama to deficit spend in the middle of the worst recession in four generations or for Bush 43 to deficit spend while chasing his own tail in the Middle East, or for Reagan to do it while drawing pictures of pretend missile defense systems on napkins, I know who I’d pick.
And yes, I know that both Republican and Democratic Congresses helped to dig those holes, but there certainly wasn’t any leadership coming from the White House on those matters.
Posted by Recess Supervisor on January 07, 2009 at 2057 hrs
I was gonna jump in here, but the Recess Supervisor pretty much covered it. He was much more polite than I probably would have been.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2119 hrs
Owen,
Snark aside, given the comments so far, I think you’d have to agree that your party has absolutely no credibility on fiscal issues.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2128 hrs
atv - That’s why we call them RINOs.
And that’s why I call myself a conservative, not a republican.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2152 hrs
That’s why we call them RINOs.
So if the majority of Republican politicians(including our outgoing CIF) are RINO’s why have you guys keep electing them?
Or are RINOs the real Republicans and is it self identifying “conservatives” who are RINOs?
Or is it the Democratic voters who have been electing the Republican RINOs?
I personally think RINOs can only win elections when there is substantial voter fraud in play.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2209 hrs
Or is it the Democratic voters who have been electing the Republican RINOs?
I personally think RINOs can only win elections when there is substantial voter fraud in play.
Huh?
Its late here, but… Huh?
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2213 hrs
JJ,
Who has been electing all these RINOs including the sitting President?
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2229 hrs
pjr -
sorry, it was a long day today…..
But if you read the comments by most of those that identify themselves as conservatives (note, I don’t use the term Republican) there is a pretty good number of us that are downright pissed off at the lack of fiscal restraint by those with Rs behind their names. Most of the time they get the votes because they are considered the “lesser” of the two evils to choose from. Personally, I voted for GWB once, not twice. But Gore and Kerry would have been the same, if not worse fiscally.
I was one of those burning up the phone lines and crashing the e-mail system in the House and Senate telling them to vote against the bailouts. Not the first time, I’ve called or e-mailed btw. Anyone else?
I wish there was a viable third party, because for the most part, both the Ds and the Rs suck. Both are more interested in their own power and “party” and their pet interests than their constituents. Remember the 90-1 against statement by Feinstein on the bailout-palooza? They voted for it anyway. After all, the unwashed masses couldn’t possibly be smart enough to know that spending a bazillion dollars that we don’t have won’t get us out of debt.
The states are much the same on a smaller scale.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2242 hrs
So my point is these so called RINOs aren’t.
They represent the face-and the action- of the Republican party in American politics.
How can they be anything but plain old Republicans.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2251 hrs
Guess that means Reagan was a RINO too, since he loved deficit spending like nobody’s business. So who was the last non-RINO Republican president then? Herbert Hoover?
Posted by Recess Supervisor on January 07, 2009 at 2253 hrs
Deficit spending for a limited time for a purpose that is achieved can be justifiable. This is simply more pork on a massive scale with no possibility of a positive economic return.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2300 hrs
Hey guys - I was in high school when Reagan was pres…
All I really remember being cognizant of politically during those years was the drop in interest rates - because that seriously helped my folks out.
So I’m going off of recent history OK?
But if you remember Hoover…
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2301 hrs
Hey, I was in grade school when Reagan was president, and I’m only old enough to remember his second term. Hoover was a guy I learned about in social studies. Something about him sitting serenely with his hands in his pockets while the economy went to hell - which to some around here seems to be the preferred approach.
Posted by Recess Supervisor on January 07, 2009 at 2309 hrs
So that would make Nixon the last real genuine Republican president, BBB?
http://www.time.com/time/magazine/article/0,9171,975829,00.html
Whooda thunk.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2310 hrs
pjr - calling them RINOs points out their hypocrisy of claiming to be fiscally responsible - as the platform is supposed to by - but then spending like drunken sailors. There are some conservative Rs, certainly not as many as I would like to see. Kind of a “Hey buddy - get your *@&^! hands off my wallet until you can spend it like you think its yours” way of trying to remind them that we are watching.
If you want to see the complete disdain for RINOs - go look at the thread at Michelle Malkin on John McCain’s request for money for his new PAC.
Don’t liberals ever get mad at Democrats? Or is it too difficult to reprogram the coordinates on the missiles they have directed at conservatives, RINOs and Rs?
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2311 hrs
Yeah - my social studies class told me of the great savior FDR after the footnote about Hoover. Interesting to find out all these many years later that the FDR policies actually made things worse and it took WWII to pull the US out of the depression.
But hey - lets repeat history, but with a much bigger price tag.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2316 hrs
Being neither liberal or a Dem, I don’t know.
I heard about some fracas at the Dem convention in Chicago in the 60’s.
I don’t think it amounted to much.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2320 hrs
Hoover tried all sorts of intervention. Not only did he fail but he turned a downturn process that should have been over in less than a year into a 3-1/2 year debacle.
What succeeded was the economy finally reaching bottom in early 1933, after which growth was easy and natural. Recessions haven’t gotten better with the government intervention of the 20th century. They have gotten longer.
Somewhere along the line we decided that recessions are bad and that is just not the case. Recessions put some people out of work. That is easily treated with some unemployment compensation. Recessions, though, do a wonderful job of weeding out the unproductive allocation of our resources and when they are allowed to work their magic what is leftover are solid economic entities that can grow very rapidly with the weeds out of the way.
Plans like this maximize all the worst of recessions. We lengthen the time people are unemployed and we prevent the new growth.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2009 at 2322 hrs
What is with these lefties posting all of their false doctrines and versions of history.
Let’s start with the myth that Reagan loved to deficit spend. That is the old liberal saw given to us by the left. The Democrats refused to cut spending. It is true that Reagan did call for large increases in military spending thanks to the huge cuts during the Carter administration.
The left usually follows that claim with the completely discredited claim that Reagan’s tax cuts caused the deficits. Not true. Federal revenue dropped before the tax cuts became effective. The 1981-1983 revenue declines had more to do with the recession.
But, the fact is that Tip O’Neill loved to spend money and the Democrat’s controlled both houses until 1984 - although the Republican Majority wasn’t large enough to get much done in the way of spending cuts.
Clinton made spending cuts and solving the budget deficit a priority after the Gingrich Revolution swept in majorities and scared the hell out of Clinton and the incumbent Democrats who remained. It was a sea-changed. Short-lived, but it did produce results.
Prior to the 1994, every budget that Clinton submitted and every OMB budget projection showed deficits continuing for 20 years. Amazingly - that ended under Clinton, with a Republican congress, despite his administrations earlier claims that it wouldn’t happen until 2014.
Another bogus notion is that economists generally agree that deficit spending is good during an economic downturn.
That would be as simplistic as saying that putting out forest fires often requires intentionally setting other fires.
The statement is true, but it does not mean that you burn down every forest within one-thousand miles, nor would you burn a forest in Montana to put out a fire in California. Yet, that has been the Bush approach and Obama is preparing for a massive expansion of these bad ideas. It will not provide an economic recovery. Far from it.
Deficit spending is probably (not always) necessary to keep current government commitments during a period of declining revenue or to support the loss of revenue from changes in tax policies that are intended to spur economic activity, but that does not mean $500 checks to people who didn’t have jobs. It means cutting taxes on investment and reducing the income tax burden. These tax changes would provide a degree of rationality and confidence into the capital markets. That’s what is needed most.
Not bridges and trains to nowhere.
What is about to happen will make the bad ideas FDR and Hoover look like the work of boorish amateurs.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 0055 hrs
@Jimmy John: First, note how happy I was to blame Congress in addition to Reagan. Reagan’s leadership on budget issues was completely empty, and he was all too happy to sign those bloated appropriations bills through his eight year stay so long as they contained the goodies he was looking for. The Reagan that exists today is built around conservative mythology and Reagan’s own natural knack for a sound bite.
I’m certainly not standing here arguing that tax cuts aren’t beneficial. They do, however, tend to be more beneficial when times are good then when times are bad. I thought last year’s stimulus checks were stupid, but I seriously doubt that a big old round of tax cuts would’ve done any better. When times are bad, many people pocket the money and wait to see what happens.
When government says it’s going to spend $100 billion, it spends $100 billion. But you pass $100 billion in tax cuts right now, and how much of that is going to get spent versus saved? My rebate check went straight into my savings account. I’ll do the same with whatever Obama throws at me. I can assure you that I’m not alone. And while saving money is a good thing, it’s certainly not helping the economy right now.
@JJ: Our government ran deficits of unheard of proportions during World War II. Our budget deficit in 1943 was over 30% of GDP. Even with the proposals currently on the table, we won’t exceed 8-9%. Again, I’m not excusing wasteful or excessive spending that might be included in those stimulus bills. I’m only pointing out these figures for historical reference.
It was precisely the enormous amounts of deficit spending on the war in the late 30’s and 40’s that pulled us out of that enormous recession (and probably allowed us to win the war at the same time). You can’t slam deficit spending on one hand and salute WWII for getting us out of the Depression without recognizing there is some degree of contradiction in your positions. We paid for WWII with a bunch of money we didn’t have!
@BVBigBro: Amen to recessions. Nobody likes them, but they are sort of like the wildfires that burn out all the brush and leave the trees behind. I fully believe that part of the reason this one is so bad is how hard the Bush administration and the Feds handled the economic distress earlier this decade. Free money, free houses, and lackluster oversight only postponed a lot of the problems from the dot-com bust. Now, it’s like we get two recessions in one.
So what should a stimulus bill look like? I’d say heavy on spending for capital improvements and some targeted tax cuts that are aimed at stimulating vital sectors of the economy - tax cuts that come with strings which allow them to be revoked if the money isn’t actually spent on stimulus-generating activity. And I’d definitely stay away from broad-based tax cuts and stimulus checks. Not because they’re bad in principle, but because the likelihood that people will bury that money in their mattress right now means that they’re not very effective dollar-for-dollar.
Posted by Recess Supervisor on January 08, 2009 at 0453 hrs
JimmyJohn, first of all your posts are so fast we all freak.
Maybe you are not old enough, but I remember that every single budget Reagan submitted to Congress had a deficit. Tip O’Neil and company actually cut it back.
Remember 5th grade civics? The president proposes and the Congress disposes.
As far as bridges to nowhere, Obama is ready to put the oversight in place to make sure that doesn’t happen. Don’t worry, you’ll all be watching.
Oversight. What a novel concept.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 0828 hrs
JimmyJohn:
Before you start going off on the left’s “false doctrines and versions of history,” please note:1. Carter increased defense spending —though obviously not as much as the right wanted (and recall that Reagan wasn’t bellicose enough for Irving Kristol).
2. The GOP held the Senate from 1980 to 1986.
And that’s for starters.
Posted by Brew City Brawler on January 08, 2009 at 0842 hrs
The 1930’s weren’t all bad times and World War 2 didn’t pull us out of the depression. The period from the start of 1933 until the recession of 1937 were good times; one of the strongest periods of economic growth of the last century. It occurred because the economy was allowed to bottom out.
Deficit spending isn’t going to help us in the slightest now. Nor are government expenditures on bridges, roads, etc..
Our problem is an excess of consumption relative to production. None of the proposals being put forth would increase production, and they are all aimed at increasing consumption, the supposed stimulus. Politicians right now don’t want to face the truth, namely that all levels of government have to get significantly smaller. Until they face that reality all we will get is more harm.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 0935 hrs
RS - as crazy as it sounds, the deficit spending during WWII was completely different, and far more beneficial, than what is happening today.
Building trains and bridges and roads today do not stimulate growth to the economy. This isn’t like the 30s when we were building roads and giving electricity and indoor plumbing to large parts of the country for the first time. Now, these are, or should have been, considered maintenance projects for the roads and bridges. Think of your house. It certainly doesn’t help you financially to put a new roof on, but it sure saves more later. Regarding trains. With the exception of additional freight capacity, trains are nothing but a continuous money pit. Passenger train service is a duplication of existing methods of transportation, only not as convenient and more expensive. Amtrak, the CTA, etc. are always in the hole and requiring additional government monies just to break even. So, no, I’m not a big fan of these types of stimuli. Basically, there is nothing new at the end of the projects except more spending. And if the transportation funds - federal and state - hadn’t been continuously raided to pay for other goodies, these “projects” would be completely unnecessary right now, because most of them would have been done already.
What happened with WWII was that an entire manufacturing industry was being built up for the war machine. You could even consider the bombs and planes and ships as consumables due to the rate that they were being replaced. After the war, all of that manufacturing infrastructure was still in place and was converted into manufacturing for consumer goods and services. That made it sustainable and stimulated more growth.
BBB - Carter’s defense spending was anemic at best. The crash in the desert on the Iran hostage rescue was due to equipment failure because maintenance and replacement parts were hard to come by.
My spouse joined the Navy in 1982 when they were still very much suffering the lack of funding from Carter. The squadron he worked in only had one plane that was flyable. They salvaged parts from the planes that couldn’t fly to keep it going. The defense capability of the US was severely compromised by Carter. Suffice it to say, that situation was far different by 1986.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 0940 hrs
The crash in the desert on the Iran hostage rescue was due to equipment failure because maintenance and replacement parts were hard to come by.
That would be incorrect JJ.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 1056 hrs
Pardon my shortcut on the longer message above. There were several equipment failures - like cracked rotors and problems with hydraulics, not being able to start in the cold etc. In fact the plans for the rescue included extra helicoptors because they expected equipment failures.
Add on top of that inadequate training causing the crash of one helicoptor into a C130, and the abandonment of 5 good helicoptors to the Iranians along with the plans and CIA intelligence on targets.
All in all, a fabulous plan and execution with great equipment. Dontcha think?
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 1111 hrs
I love the whole he’s a RINO, okay he’s a Republican but not a conservative, okay he’s a conservative but not a “real” conservative, spin after every “conservative” leader turns out to be a self-interested scumbag. Has there ever, in the history of the United States, been a “conseravtive” leader who fit this imaginary, unatainable ideal?
That’s why I can’t take this stuff seriously. It’s not an ideology, it’s an excuse.
Posted by .(JavaScript must be enabled to view this email address) on January 08, 2009 at 1152 hrs
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