Economy Expands in 3Q, robust by all measures

[M14 Shooter]

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.

Facts are facts. SocSec money is part of the general revenue. You can count it seperately if you want to, but no one else does.

 

[RightinNYC]

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.

Even though the GDP grew during 2001-2003, the growth was less than it would have been without 9/11. Think about all the business that was halted or lost because of the attacks, the airline bankruptcies, the loss of income due to the tragedy. While it increased 3.2% the next year, if the attacks hadn't happened, the growth would have been more in line with the 5 percent of the years before or the 7% of years later on. That would have made up much of the difference.

The only bickering point is to determine what percent of the loss was due to tax rate cuts, and what percent was due to economic downturn from 9/11

I'm sure there's estimates out there, but frankly, their validity is suspect, and I'm exhausted.

 

[RightinNYC]

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.

Well, if you want to look at it that way, the government has had to borrow money EVERY year since 1969. Nothing new.

 

[Iriemon]

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?

Deficits = Revenue - Expenditures. It is not just spending that counts, if revenues decrease, like they dramatically did, that accounts for most of the other 80.5%.

Let's compare actual Govt revenues:

2000 2025.2
2001 1991.2
2002 1853.2
2003 1782.3
2004 1880.1

With what they would have been had revenues kept up with GDP growth. GDP growth:

GDP 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%

Revenues if they grew at the same % as GDP:

2000 2025.2
2001 2089.4
2002 2159.8
2003 2263.3
2004 2420.7

Now, compare actual Govt Revenues with Revenues had they kept up with GDP; the last figure is the difference.

2001 1991.2 2089.4 98.2
2002 1853.2 2159.8 306.6
2003 1782.3 2263.3 481.0
2004 1880.1 2420.7 540.6

The total cumualative difference FY2000-2004 is $1,426.4B

Compare that to the increase in total debt:

Total Debt: http://www.publicdebt.treas.gov/opd/opdpenny.htm

09/30/2004 $7,379,052,696,330.32
09/29/2000 $5,674,178,209,886.86

Total debt increase FY2000-FY2004: $1,705B.
Total loss of tax revenue: $1426B.

Tax revenue loss is 83% of total debt increase.

There's your answer.

 

[Iriemon]

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.

Sure. Let's just accept it and pretend they are general revenues so the deficit doesn't look so bad. That is the pro-debt line.

 

[RightinNYC]

Deficits = Revenue - Expenditures. It is not just spending that counts, if revenues decrease, like they dramatically did, that accounts for most of the other 80.5%.

Let's compare actual Govt revenues:

2000 2025.2
2001 1991.2
2002 1853.2
2003 1782.3
2004 1880.1

With what they would have been had revenues kept up with GDP growth. GDP growth:

GDP 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%

Revenues if they grew at the same % as GDP:

2000 2025.2
2001 2089.4
2002 2159.8
2003 2263.3
2004 2420.7

Now, compare actual Govt Revenues with Revenues had they kept up with GDP; the last figure is the difference.

2001 1991.2 2089.4 98.2
2002 1853.2 2159.8 306.6
2003 1782.3 2263.3 481.0
2004 1880.1 2420.7 540.6

The total cumualative difference FY2000-2004 is $1,426.4B

Compare that to the increase in total debt:

Total Debt: http://www.publicdebt.treas.gov/opd/opdpenny.htm

09/30/2004 $7,379,052,696,330.32
09/29/2000 $5,674,178,209,886.86

Total debt increase FY2000-FY2004: $1,705B.
Total loss of tax revenue: $1426B.

Tax revenue loss is 83% of total debt increase.

There's your answer.

Who says revenue grows at the same percentage as GDP?

 

[Iriemon]

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


% +/- 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.

Sure, we can use inflation adjusted numbers, but we are talking actual Govt revenues -- and you can't compare actual numbers with inflation adjusted numbers. I could convert all the numbers to inflation adjusted numbers, you'd get about the same result.

But even with inflation adjusted numbers, your figures indicate the economy grew 1.6% in 2002; which hardly explains why actual revenues fell $138 billion that year.

 

[Iriemon]

Who says revenue grows at the same percentage as GDP?

You were the one who was arguing revenues fell because the economy did poorly. GDP is a widely accepted general measure of economic performance.

Tax revenues obviously do not grow with GDP, when the taxes are slashed.

 

[Iriemon]

Even though the GDP grew during 2001-2003, the growth was less than it would have been without 9/11. Think about all the business that was halted or lost because of the attacks, the airline bankruptcies, the loss of income due to the tragedy. While it increased 3.2% the next year, if the attacks hadn't happened, the growth would have been more in line with the 5 percent of the years before or the 7% of years later on. That would have made up much of the difference.

The only bickering point is to determine what percent of the loss was due to tax rate cuts, and what percent was due to economic downturn from 9/11

I'm sure there's estimates out there, but frankly, their validity is suspect, and I'm exhausted.

I agree. Remeber how there were trillions of dollars of surpluses were projected?

We can meet our priorities, and we can fund them. And we can also pay down debt. I know a lot of folks around America are worried about national debt, as am I. We pay down $2 trillion of debt over the next 10 years. That's all the debt that's available to be retired without having to pay a premium for prepaying debt. That's a lot of debt retirement. It will be the biggest repayment of debt in the history of the world. And so we pay down debt. President Bush Mar 9 2001
http://www.whitehouse.gov/news/releases/2001/03/20010309.html


Because the eocnomy slowed down, those surpluses would not have materialized, at least to the extent projected, even had taxes not been slashed. But without the tax cuts, we wouldn't have deficits a fraction the size we do now, even with the Iraq war and all the other pork spending of the last 5 years.

 

[Iriemon]

Well, if you want to look at it that way, the government has had to borrow money EVERY year since 1969. Nothing new.

True for fiscal years, tho' the amount vary widely of course. The Govt borrowed 20 billion in FY2000, compared to $554 billion last year.

And not true if you look at calendar years, in calendar year 2000 the total debt actually decrease $116 billion.

 

[Pacridge]

Deficits = Revenue - Expenditures. It is not just spending that counts, if revenues decrease, like they dramatically did, that accounts for most of the other 80.5%.

Let's compare actual Govt revenues:

2000 2025.2
2001 1991.2
2002 1853.2
2003 1782.3
2004 1880.1

With what they would have been had revenues kept up with GDP growth. GDP growth:

GDP 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%

Revenues if they grew at the same % as GDP:

2000 2025.2
2001 2089.4
2002 2159.8
2003 2263.3
2004 2420.7

Now, compare actual Govt Revenues with Revenues had they kept up with GDP; the last figure is the difference.

2001 1991.2 2089.4 98.2
2002 1853.2 2159.8 306.6
2003 1782.3 2263.3 481.0
2004 1880.1 2420.7 540.6

The total cumualative difference FY2000-2004 is $1,426.4B

Compare that to the increase in total debt:

Total Debt: http://www.publicdebt.treas.gov/opd/opdpenny.htm

09/30/2004 $7,379,052,696,330.32
09/29/2000 $5,674,178,209,886.86

Total debt increase FY2000-FY2004: $1,705B.
Total loss of tax revenue: $1426B.

Tax revenue loss is 83% of total debt increase.

There's your answer.

Are you trying to say that taking in less money and then spending more money leads to a larger deficit? That just doesn't sound right. I'm sure there's some answer such as the amount of or % of GDP or inflation...or something makes this ok. I mean something has to make this a good idea.

Surely nothing bad can come from spending more money then you take in. We've been doing it for years, so it must be a good idea.

 

[Iriemon]

Are you trying to say that taking in less money and then spending more money leads to a larger deficit? That just doesn't sound right. I'm sure there's some answer such as the amount of or % of GDP or inflation...or something makes this ok. I mean something has to make this a good idea.

Surely nothing bad can come from spending more money then you take in. We've been doing it for years, so it must be a good idea.

That sounds about what you hear from the pass-the-buck gang nowdays. I think the Gipper had the correct idea in theory, even if he botched it in practice.

 

[RightinNYC]

You were the one who was arguing revenues fell because the economy did poorly. GDP is a widely accepted general measure of economic performance.

Tax revenues obviously do not grow with GDP, when the taxes are slashed.

I know, the two are obviously related, but I don't know if they're directly tied to each other. If they're not, which it doesn't seem like they can be, then they're only partly responsible, so your 83% figure is much more of an estimate. I'd actually be interesting in finding out a real conclusive figure for what percentage of the deficit is due to the tax cuts, if such a figure is calculable.

 

[RightinNYC]

I agree. Remeber how there were trillions of dollars of surpluses were projected?

We can meet our priorities, and we can fund them. And we can also pay down debt. I know a lot of folks around America are worried about national debt, as am I. We pay down $2 trillion of debt over the next 10 years. That's all the debt that's available to be retired without having to pay a premium for prepaying debt. That's a lot of debt retirement. It will be the biggest repayment of debt in the history of the world. And so we pay down debt. President Bush Mar 9 2001
http://www.whitehouse.gov/news/releases/2001/03/20010309.html


Because the eocnomy slowed down, those surpluses would not have materialized, at least to the extent projected, even had taxes not been slashed. But without the tax cuts, we wouldn't have deficits a fraction the size we do now, even with the Iraq war and all the other pork spending of the last 5 years.

Agreed. And the 200b for Katrina? oy.

 

[Iriemon]

I know, the two are obviously related, but I don't know if they're directly tied to each other. If they're not, which it doesn't seem like they can be, then they're only partly responsible, so your 83% figure is much more of an estimate. I'd actually be interesting in finding out a real conclusive figure for what percentage of the deficit is due to the tax cuts, if such a figure is calculable.

No, they are not perfectly correlated, but pretty close. Tax revenues are based mostly on income. Gross National Income does correlate pretty well over time with GDP, but not perfectly year by year. But using GDP is a not a bad estimate. Both GDP and national incomes grew in actual terms every years since 2000 -- the point is that negative economic performace does not explain the drop in tax revenues.

I could pull gross national income figures and run the same analysis, but I think I've counted enough beans for tonight.

 

[FireUltra 98]

[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]

Don't get your panties in a twist Moon. Thanks for the overkill answer, the first paragrah was plenty . . . again for the second straight forum. I guess you don't like the economic results.

 

[RightinNYC]

Don't get your panties in a twist Moon. Thanks for the overkill answer, the first paragrah was plenty . . . again for the second straight forum. I guess you don't like the economic results.

It's not about having "panties in a twist," it's about your refusal to read and follow the rules of the forum. The reason copyright works are not allowed on here is because it opens the forum up to lawsuits. After the first time he warned you, you should have got the picture and stopped.

You might want to follow this rule too:

"Publicly disrespectful behavior from a member toward a moderator regarding moderator actions or decisions may result in a summary suspension of that member's posting privileges."

This is your only warning.

 

[FireUltra 98]

I posted the threads back to back, otherwise I wouldn't have "offended" twice. I read the policy its clear, I'm not going to argue that . .though I've done the same on other threads since I joined this forum and today must have been my lucky day.

Thanks for the warning, feel better?