Economy Expands in 3Q, robust by all measures (1 Viewer)

[FireUltra 98]

http://www.abcnews.go.com/Business/wireStory?id=1358523

Very good news. Economy has been strong since 2002 when started to recovery from 9/11. Keep on truckn!

Economy Grows at Robust Pace Despite Storms

Economy Grows at Robust 4.3 Percent Pace in Third Quarter Despite Gulf Coast Hurricanes
By JEANNINE AVERSA
The Associated Press
WASHINGTON - The economy grew at a lively 4.3 percent pace in the third quarter, the best showing in more than a year. The performance offered fresh testimony that the country's overall economic health managed to improve despite the destructive force of Gulf Coast hurricanes.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

 

[M14 Shooter]

Dont worry. Someone will tell you how badly the Bush economy sucks,.

 

[Cremaster77]

Dont worry. Someone will tell you how badly the Bush economy sucks,.

That would be me. Bush's policies have spurred the economy...in the short term. The question is, what is is the cost? Record trade deficits, record budget deficits, ballooning budget deficits, failure to stem increasing health care costs, $8 trillion in national debt...We will pay for this in the future. The Bush economic plan drastically increased costs by expanding the government and cut revenue so that in the short term we can high-five each other about how strong the economy is this month or this quarter while ignoring the inevitable costs in the future. That's why the Bush economy sucks. It fails to have a vision of the future and sells out our children and grandchildren for an extra $1000 in our pocket now.

 

[M14 Shooter]

The question is, what is is the cost? Record trade deficits, record budget deficits, ballooning budget deficits, failure to stem increasing health care costs, $8 trillion in national debt...We will pay for this in the future.

You're confusing economic policy with fiscal policy.

The Bush economic plan drastically increased costs by expanding the government...

The Bush -economic- plan did not have anything to do with expanding the government.

and cut revenue so that in the short term

And increased it in the long term, through economic growth.
These increased revenues, through growth, will negate all your concerns, so long as spendng increases (again, a seperate issue) don't exceed inceases in revenue.

It fails to have a vision of the future and sells out our children and grandchildren for an extra $1000 in our pocket now.

Again - seperate issues. You're arguing that increasing spending was part of the plan to grow the ecomomy when in fact it was not.

 

[Iriemon]

The fact that the Govt is borrowing about 25% of what it is spending helps the economy. Lower taxes (remember Bush arguing this as a reason why we needed tax cuts?) and increase spending both can boost economic performance.

With the economy doing well, it is even more inexcusable the Govt is piling on huge additions of debt. When thing are going well is the time to be running surpluses and pay down the debt.

 

[Cremaster77]

The Bush -economic- plan did not have anything to do with expanding the government.

A poor use of words on my part. However, his rampant spending directly affects the nation's economy. You can't separate them. He can say he's cutting taxes to stimulate the economy, but if at the same time he adds on a bloated Medicare prescription drug coverage plan, in the long run, that hurts the economy. Fiscal policy of the federal government and the nation's economy are intertwined.

And increased it in the long term, through economic growth.
These increased revenues, through growth, will negate all your concerns, so long as spendng increases (again, a seperate issue) don't exceed inceases in revenue.

Where is the evidence that revenue is increased long-term by tax cuts? It's a mantra of neo-conservatives that I've never seen supported. If we eliminated taxes all together, it would be a boon to economic development, but it would decrease revenue to zero. At some point decreasing taxes results in decreased revenue in the long term despite economic growth. Where that point is has never been firmly established, despite what the Republicans keep saying.

Again - seperate issues. You're arguing that increasing spending was part of the plan to grow the ecomomy when in fact it was not.

Again, they are intertwined. The federal government accounts for 20% of GDP, and with rising health care costs and rising interest on the debt, that number is projected to increase to as high as 40% before the end of the century. You can't say your economic policy is one thing, then act in ways that undermine that policy. Bush's economic policy is demonstrated by his actions, not the soundbites about what he says his policy is.

 

[Simon W. Moon]

[MOD MODE]
FireUltra98,
Per Forum Rules, please do not post entire articles. Proper format is to paraphrase the contents of an article and/or post relevant excerpts and then link to the rest.

8. Copyrighted Material - All material posted from copyrighted material MUST contain a link to the original work.
Please do not post entire articles. Proper format is to paraphrase the contents of an article and/or post relevant excerpts and then link to the rest. Best bet is to always reference the original source.
Title 17, Chapter 1, Section 107 http://www4.law.cornell.edu/uscode/17/107.html
[/MOD MODE]

 

[RightinNYC]

The fact that the Govt is borrowing about 25% of what it is spending helps the economy.

Can you provide a source for this?

 

[Iriemon]

Can you provide a source for this?

http://cbo.gov/showdoc.cfm?index=1821&sequence=0

[2004 figures]

Total expenditures: 2.3 trillion.
Deficit: $567 billion.

About 25%.

 

[Deegan]

http://cbo.gov/showdoc.cfm?index=1821&sequence=0

[2004 figures]

Total expenditures: 2.3 trillion.
Deficit: $567 billion.

About 25%.

Err......but this is 2005?

 

[Iriemon]

Err......but this is 2005?

FY05 (which ended 9/30/05) figures haven't been reported in the summary tables yet. They sould be out in a month or two. The Govt spent a little more money (up 6%) and borrowed a little less, so the figure probably dropped a point or two.

 

[Deegan]

FY05 (which ended 9/30/05) figures haven't been reported in the summary tables yet. They sould be out in a month or two. The Govt spent a little more money (up 6%) and borrowed a little less, so the figure probably dropped a point or two.

Well I believe you will see much improvement, it appears that way in my business anyway, but I am hopeful. I am sure once the war winds down, we can get back on track, nothing is more costly then this action in Iraq, and elsewhere.

 

[RightinNYC]

http://cbo.gov/showdoc.cfm?index=1821&sequence=0

[2004 figures]

Total expenditures: 2.3 trillion.
Deficit: $567 billion.

About 25%.

The deficit, as it is normally referred to in the media and in most budgetary figures, is the sum of the on budget deficits and the social security surpluses.

That would put the number at 413 billion, roughly 1/6th of expenditures. That's a better ratio than a few years in the 70's, and most of the 80's and early 90's.

Still absurd, I'm agreeing with you there, but I just wanted to point that out.

 

[RightinNYC]

And if you look at it as a percent of GDP, which is a more telling number, the percent is 3.6%. That's comparable with the past 30 years. Hell, in 2001, Bush pulled a surplus of 1.3%, which beat every year of Clinton's except for 2.

Outlays as a % of GDP has been slowly trending downwards since the 70's as well. That's interesting, I expected it to be the other way...

 

[Iriemon]

Well I believe you will see much improvement, it appears that way in my business anyway, but I am hopeful. I am sure once the war winds down, we can get back on track, nothing is more costly then this action in Iraq, and elsewhere.

The Iraq war is a major part of the debt. But since 2000, the Bush admin has borrowed $2.3 trillion -- resulting in a 40% increase in the debt overall.

The Iraq war has cost what, about $250 billion? So, even if you are of the view that the Iraq was was a necessary expenditure, it only accounts for just over 10% of the debt increase. Tax cuts have been the big driver (Govt revenues fell dramatically after the tax cuts) and other Govt spending increase makes up the rest.

 

[RightinNYC]

The Iraq war is a major part of the debt. But since 2000, the Bush admin has borrowed $2.3 trillion -- resulting in a 40% increase in the debt overall.

The Iraq war has cost what, about $250 billion? So, even if you are of the view that the Iraq was was a necessary expenditure, it only accounts for just over 10% of the debt increase. Tax cuts have been the big driver (Govt revenues fell dramatically after the tax cuts) and other Govt spending increase makes up the rest.

Actually, that's not completely true.

Revenues only fell by 140 billion the year after the tax cuts, in no small part due to 9/11. They dropped another 130 the next year, but climbed 100 last year.

The culprit is the spending, which has increased roughly 150 billion each year.

Remember, 9/11 had an estimated long term economic impact of over 1 Trillion dollars...that can't be covered in 4 years.

 

[M14 Shooter]

The fact that the Govt is borrowing about 25% of what it is spending helps the economy. Lower taxes (remember Bush arguing this as a reason why we needed tax cuts?) and increase spending both can boost economic performance.

FY2004
Total spending : $2292.2B
Total Deficit: $412.1B
The FY2004 deficit was 17.9% of the budget, and 3.6% of the GDP.
http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0
I'll give you the benifit of the doubt and assume you were...exaggerating.

With the economy doing well, it is even more inexcusable the Govt is piling on huge additions of debt. When thing are going well is the time to be running surpluses and pay down the debt.

The only way to do that is cut spending.
We can start with my list, and then if we need to, we can move to yours.

 

[Iriemon]

The deficit, as it is normally referred to in the media and in most budgetary figures, is the sum of the on budget deficits and the social security surpluses.

That would put the number at 413 billion, roughly 1/6th of expenditures. That's a better ratio than a few years in the 70's, and most of the 80's and early 90's.

Still absurd, I'm agreeing with you there, but I just wanted to point that out.

That is true, the deficit was "only" $413 billion only if you count SS surplus tax revenues as general tax revenues. They are not supposed to be used for that of course, they are supposed to be being saved in a trust fund for the boomers' retirements. But because they are not -- because they are being stolen and used as general revenues, we have a "crisis" with SS.

Regardless of how the Govt and media (which usually just parrot what the Govt says) portray it, take out the SS surplus taxes and you get the true picture of how the Govt is really managing its budget -- a $567 billion deficit in '04. That is also more in line with the the amount of total Govt debt increase in '04 - $598 billion.

 

[M14 Shooter]

The Iraq war is a major part of the debt...
But since 2000, the Bush admin has borrowed $2.3 trillion

Lets generously assume that every penny of the ~$450B we've spent on the war in Iraq and Afghanistan was "borrowed".
Thats only 19.5% of the debt number you cite.
What caused the other 80.5%, and why arent you complaining about that 5x as must as you are about spending on the war?

 

[M14 Shooter]

That is true, the deficit was "only" $413 billion only if you count SS surplus tax revenues as general tax revenues

You might as well get used to the idea that SocSec funds are sent to and SocSec benifits are spoend from general revenues -- its been like that for more than 50 years and it will remain that way until SocSec collapses. Complaining about it -now- just to make a political point against the current adminstration is pretty sad.

 

[Iriemon]

And if you look at it as a percent of GDP, which is a more telling number, the percent is 3.6%. That's comparable with the past 30 years. Hell, in 2001, Bush pulled a surplus of 1.3%, which beat every year of Clinton's except for 2.

Outlays as a % of GDP has been slowly trending downwards since the 70's as well. That's interesting, I expected it to be the other way...

Bush's best year, 2001 -- the year after he inherited a surplus budget from Clinton, compares favorable to Clinton's last few years only because Clinton had the good fortune to inherit a $340 billion deficit from Bush1 and the legacy of the Reagan budget policies.

The deficits as a % of GDP are "comparable to the last 30 years" only if you use the worst years under the Reagan/Bush I administrations. Which sucked then too. We had a $350 billion interest expense last year thanks to those defecits.

The numbers are year, deficit (CBO), GDP (BEA) and the percentage.

1975 -55.3 1638.3 -3.4%
1976 -70.5 1825.3 -3.9%
1977 -49.8 2030.9 -2.5%
1978 -54.9 2294.7 -2.4%
1979 -38.7 2563.3 -1.5%
1980 -72.7 2789.5 -2.6%
1981 -73.9 3128.4 -2.4%
1982 -120.0 3255.0 -3.7%
1983 -208.0 3536.7 -5.9%
1984 -185.6 3933.2 -4.7%
1985 -221.7 4220.3 -5.3%
1986 -237.9 4462.8 -5.3%
1987 -169.3 4739.5 -3.6%
1988 -194.0 5103.8 -3.8%
1989 -205.2 5484.4 -3.7%
1990 -277.8 5803.1 -4.8%
1991 -321.5 5995.9 -5.4%
1992 -340.5 6337.7 -5.4%
1993 -300.4 6657.4 -4.5%
1994 -258.9 7072.2 -3.7%
1995 -226.4 7397.7 -3.1%
1996 -174.1 7816.9 -2.2%
1997 -103.3 8304.3 -1.2%
1998 -30.0 8747.0 -0.3%
1999 1.9 9268.4 0.0%
2000 86.6 9817.0 0.9%
2001 -33.3 10128.0 -0.3%
2002 -317.5 10469.6 -3.0%
2003 -536.1 10971.2 -4.9%
2004 -567.4 11734.3 -4.8%

 

[M14 Shooter]

Bush's best year, 2001 -- the year after he inherited a surplus budget from Clinton, compares favorable to Clinton's last few years only because Clinton had the good fortune to inherit a $340 billion deficit from Bush1 and the legacy of the Reagan budget policies.

Your numbers are correct only if you accept the idea that money spent from the SocSec trust fund should be added to the actual deficit figures.

No one else accepts this idea, and hasn't even since the SocSec surplus has been spent from the general fund.

There is no SocSec trust fund, there never has been and there never will be.

 

[Iriemon]

Actually, that's not completely true.

Revenues only fell by 140 billion the year after the tax cuts, in no small part due to 9/11. They dropped another 130 the next year, but climbed 100 last year.

The culprit is the spending, which has increased roughly 150 billion each year.

Remember, 9/11 had an estimated long term economic impact of over 1 Trillion dollars...that can't be covered in 4 years.

The true fact is that GDP did not go down after 9/11, which happened at the very end of FY2001:

Year, GDP (BEA), percent increase from prior year.

2000 9817.0 5.9%
2001 10128.0 3.2%
2002 10469.6 3.4%
2003 10971.2 4.8%
2004 11734.3 7.0%
2005 12378.0 5.5%

GDP increase in FY 2002 by 3.4%. That is not an explanation for why revenues fell.

Revenues fell $35 billion in 2001, $138 billion in 2002, and another $71 billion in 2003, for a totall $244 billion decrease in just three years.

Year; Total revenues.

2000 2025.2
2001 1991.2
2002 1853.2
2003 1782.3
2004 1880.1

During that same time frame, GDP grew by 12%. Had revenues kept up with GDP growth, they would have been $2,268B in 2003, $486 billion more than the $1792.3 achieved. *That* is why the deficits have exploded, though I agree the reckless spending have contributed.

 

[Iriemon]

FY2004
Total spending : $2292.2B
Total Deficit: $412.1B
The FY2004 deficit was 17.9% of the budget, and 3.6% of the GDP.
http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0
I'll give you the benifit of the doubt and assume you were...exaggerating.

The only way to do that is cut spending.
We can start with my list, and then if we need to, we can move to yours.

FY2004
Total spending : $2292.2B
Total Deficit: $567.4B - on budget.
The FY2004 deficit was 24.8% of the budget, and 4.8% of the GDP.
http://cbo.gov/showdoc.cfm?index=1821&sequence=0

I know you pro-debt pass-the-buckers like to pretend SS tax revenues are general tax revenues, but they are not supposed to be. Expect when you site statistics showing who pays taxes, then for some reason SS taxes are never counted.

But if the defict was "only" $412B in '04, why did the Govt debt increase by $596B?

Total US Govt debt:
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
http://www.publicdebt.treas.gov/opd/opdpenny.htm

I'll assume you were just .... misinformed.


I know you would like to eliminate SS, government pensions, medicare, and everything else the govt spends money except the lard filled defense industry. But what would be your politically viable proposal to cut the $554 billion the Govt borrowed last year (FY05)?

 

[M14 Shooter]

The true fact is that GDP did not go down after 9/11, which happened at the very end of FY2001:
2000 9817.0 5.9%
2001 10128.0 3.2%
2002 10469.6 3.4%
2003 10971.2 4.8%
2004 11734.3 7.0%
2005 12378.0 5.5%

Hmm. What recession? +3.2% growth in a recession year is phenomenal; one can only wonder hwo anyone could have bought the "worst economy in 50 years" bull.

The proiblem here is you numbers are raw dollars, and do not reflect inflation.
2000: +3.7% (from 1999)
2001: +0.8%
2002: +1.6%
2003: +2.7%
2004: +4.2%
http://www.bea.gov/bea/dn/nipaweb/TableView.asp#Mid

Revenues fell $35 billion in 2001, $138 billion in 2002, and another $71 billion in 2003, for a totall $244 billion decrease in just three years.

% +/- GDP never directly corrleates to % +/- revenue.
That's because there's alot more to the flow of revenue than GDP growth.
your argument, based on the idea that revenue growh should mimic GDP growth is hopelessly flawed.