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The Government Runs Out of Money on Sunday

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celticlord

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The Government Runs Out of Money on Sunday - HUMAN EVENTS

Debt Day is the day – just about halfway through the fiscal year – when the government runs out of cash on hand and starts living on credit.
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Were it not for Dear Leader's obscene spending spree disingenuously termed "stimulus" and the equally grotesque earmark-laden omnibus spending bill, this day would be occurring much later in the summer.

Kudos to Dear Leader for making a bad deficit worse.
 

You act like it's a new thing. We've been having debt day every year for many years.

Furthermore, I like how that article completely ignores the Bush bailout spending that is one of the major causes. Let's just trust what the opposition says. Got anything from the CBO about exactly why?

And isn't that big omnibus spending for next year?
 

The conservatives/republicans are getting absolutely hilarious lately in their desperation to complain about anything and everything Obama and congress are doing, hoping to find anything at all that might actually resonate and hurt Obama's popularity. There are some real, legitimate things to complain about, but they are lost in the mass of things that is getting complained about. This complaint is a great example of that. It makes the complainers look foolish, and detract from reasonable complaints about Obama and congress in relation to the budget and spending.

It has taken the presidents and congress over a number of administrations to make things as bad as they are now. When was the last time the US was not in debt? Who was the last president to have a budget surplus not named Clinton? This deficit being run right now would not be a problem if all those administrations before, both democratic and republican, would have learned the lesson I was taught in Econ 101 in my one year of college(and the only class I really enjoyed), which is that during recessions, government should spend alot to help stimulate the economy(what Obama is doing), and then, when times are good, pay off that debt. If that had been done, not only would the deficit Obama is running be no problem, but he probably could have done more stimulus.

Don't get me wrong, Obama is not blameless, and is making more than one mistake in terms of budget, and I see no evidence that when the recession ends, he will have any ability to do the neccessary to start fixing the deficit/debt issue. But, to single out Obama in terms of debt day is just silly, and takes away from the real problems.
 

Bush is not blameless, either, but he is not the one who can do anything about it today. My focus is on Dear Leader for the simple reason that he is the one in office today. The fact that he hypocritically campaigned on the virtues of PAYGO, then spun up a mountain of deficit spending, and now is whistling the PAYGO tune--again hypocritically--is merely an addition to the reasons to excoriate him for his spending excesses.

Dear Leader is the one who piling new deficits on top of the ones we already have. Dear Leader is the one who wants to add $9.3Trillion in deficits over the next 10 years.

My point is simple: STOP DEFICIT SPENDING.

It was wrong when Dear Leader was a mere candidate and it is wrong today.
 
Celticlord, quick question for you: What is the usual, appropriate action of government to do when in a rescession? What can the government do to improve things?

What I have been taught, and as was discussed briefly in another thread, it's spend and cut taxes, both of which Obama has done. This will lead, inevitably, to deficits. The problem in this case is that the debt is so high, and the budget started at such a deficit, that to do what needs to be done, it makes insane levels of deficit. If things work, and in the next year or so we pull out of this recession, Obama must do some real, major things to address this deficit(and I doubt he will have the will to do so, but will not actually complain untill the time comes), but right now, his general idea is sound, though some of the implementation is pretty flawed.
 
Redress said:
Celticlord, quick question for you: What is the usual, appropriate action of government to do when in a rescession? What can the government do to improve things?
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Ultimately, to encourage economic growth. Sure, most of the time that requires spending, but not all the time, especially when this spending gets to the point that it discourages economic growth.
 
DarkWizard12 said:
Ultimately, to encourage economic growth. Sure, most of the time that requires spending, but not all the time, especially when this spending gets to the point that it discourages economic growth.
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How would you have handled things differently? What can be done without spending to encourage growth? Not looking for a fight with those questions, asking out of honest curiosity.
 
DarkWizard12 said:
especially when this spending gets to the point that it discourages economic growth.
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Do we actually know we've hit this?

Furthermore, it could be argued that all debt financed spending discourages economic growth in some way in the future at least before netting it with economic gains directly related.
 
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celticlord said:
My point is simple: STOP DEFICIT SPENDING.
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That's all nice in talk, but when your financial sector is on the brink of collapse, it's deficit spend or watch your economy go down the toliet with no promises it's going to come back. What so many people bashed Bush on was his deficit spending during good times. That's beyond irresponsible. Good government builds up surpluses for rainy days so that it does not have to go into debt to deficit spend and doesn't have the raise taxes to meet outflows.

The current administration has essentially inherited a giant mess, similar to how Bush H.W inherited Reagan's piles of poo. The problem now is that Obama doesn't have the luxury of massive military cuts like H.W. nor does he have a relatively stable financial system and balance sheet. In many ways, the current administration has a lot of poo to deal with and relatively few realistic clean up plans. Deficit spending helped H.W. bring the economy back even though Clinton was the real benefactor of the hard choices H.W. made.

In many ways, if Obama stopped thinking about reelection, he could make the hard decisions that need to be made. But whole hardly cutting deficit spending isn't one of them. We're going to need to deficit spend, the question is just how much.
 
Redress said:
Celticlord, quick question for you: What is the usual, appropriate action of government to do when in a rescession? What can the government do to improve things?
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Quick answer--not a blessed thing.
 


That's because you learned Keynesian economics, which is the predominate economic thought in this country, for both Dems and Repubs. It's not a very good one either. The problem with government spending is that the only way for the government to get money is to 1.) tax the people, 2.) borrow it, or 3.) print it. The problem with taxing is that you get tea parties and mass protest across the country like we saw last week. The problem with borrowing it is that it's the reason that got us into this mess in the first place. We borrowed too much, and spent too much, both personally and governmentally. The problem with printing it is that when we liquidate the debt in cash we saturate the market with dollar bills reducing the buying power of every dollar, creating a currency crisis. Unfortunately our government is using a nice mixture of the three that really doesn't look good for the country. If we devalue the dollar to a certain point and foreign debtors stop accepting it, we're done. There's no coming back from a currency crisis. This is obviously a gross oversimplification of the problems with our economy, but this is a general overview of what Bush did wrong and what Obama continues to do wrong. That's why people are complaining.
 
Redress said:
How would you have handled things differently? What can be done without spending to encourage growth? Not looking for a fight with those questions, asking out of honest curiosity.
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The FIRST thing you DONT do is spend this nation into a $1.8 trillion dollar deficit.

The SECOND thing you DONT do is fear monger the recession for purely partisan purposes which is intended to promote a Liberal Leftist agenda intended to create a monstrous bureaucracy and guarantee political majorities into the future based on a dependent class of citizens.

The THIRD thing you do not do is demagogue the economy for purely partisan purposes suggesting that the ONLY way to save it is to allow Government to expand to such a degree it touches almost everything in our lives and causes the fiscal collapse of the Federal Government in trillions of debt and deficits and exacerbates the specter of runaway inflation.

What you DO is you communicate to the American people what caused the decline in economic activity honestly and with the FACTS and then share with the people the actions Government is taking to prevent future events that were caused and an effect of, Government actions.

What you DO is maintain the Bush tax cuts and provide and incentive for Capital formation by reducing their tax burdens.

What you DO is you promote stability by guaranteeing bank deposits and by allowing businesses who made really POOR business decisions to fail; thus permitting more efficient businesses to take over their businesses or expand their own.

What you DO is BALANCE the Federal Budget by controlling spending; honestly deal with the funding issues of Medicare and REFORM it; honestly deal with the funding issues of Social Security and REFORM it.

The notion that by expanding Government and propping up failed businesses with taxpayer money you don't have as being the basis of sound fiscal policy requires willful ignorance.

After all the billions and trillions being spent, jobs continue to disappear, GM and Chrysler most likely will file bankruptcy, albeit later and with more of our money, and we still have not had an HONEST discussion of how much tax money it will take to pay for all the largess.

Sometimes, Government doing NOTHING is far better than an activist Community Organizing version that treats deficits as if they were funny money and creates a dependent class of citizens that will continue to see their futures erode into a mediocrity that can only be created by activist Liberal Governance.
 
Redress said:
How would you have handled things differently? What can be done without spending to encourage growth? Not looking for a fight with those questions, asking out of honest curiosity.
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First thing to do would to have been to not have pissed away the Clinton surplus(Clinton never really had a surplus but, I di gress) with the war in Iraq. Then, to stimulate growth, 10 billion in tax cuts would be issued every year for 4 years(You want the economy to grow, but not too fast. A slow decrease in taxes is best). Finally, the Community reinvestment act would have been repealed, therefore freeing banks to refuse sub prime mortgage loans to irresponsible individuals.

that's what I would've done. The only thing that would have cost money is the tax cuts, and even then, because the IRaq war would not have happened, there would still be a sizable amount left of the surplus, not to mention the extra revenue from the growing economy.
 
DarkWizard12 said:
First thing to do would to have been to not have pissed away the Clinton surplus(Clinton never really had a surplus but, I di gress) with the war in Iraq.
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Agreed. Even when you recalculate the actual 'surplus' and put back off balance sheet financing the actual deficit was a drop in the bucket compared to previous deficits and future ones.

Then, to stimulate growth, 10 billion in tax cuts would be issued every year for 4 years(You want the economy to grow, but not too fast. A slow decrease in taxes is best).
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Maybe. I'd rather use that money to pay down the debt. Remember that many US individuals hold T-bills. Essentially by using $40 billion, you could reduce our debt and future interest payments at the same time putting money back into the hands of Americans.

Finally, the Community reinvestment act would have been repealed, therefore freeing banks to refuse sub prime mortgage loans to irresponsible individuals.
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Minor at absolute best. CRA loans never exceeded more than $20 billion at any one time and they were profitable for decades. Abet less profitable than normal loans but hardly the cause of today's mess. Even if all $20 billion went bad, it wouldn't have materially affected the market.

Remember the key problem that turned a normally 3% of the economy into a financial weapons of destruction was securitization of mortgages and purchasing of them with debt. Remove the leverage issue and I guarantee you we'd not be in this mess. What we should have done is reenact the GSA that was repealed by the Republicans and signed by Clinton.
 
I did forget to say, clinton had 200 billion in surplus, however, only 40 billion of the surplus would go into tax cuts, the rest would have gone to pay down the debt.

As to the banks themselves, I say if they were stupid enough to loan subprime mortgages, then they needed to fail. In our capitalist economy, nothing is too big to fail. Sure, it would hurt the overall economy, but it would not be a "crises" and the market would have fixed itself.

but, we can't always have our way, can we.
 
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DarkWizard12 said:
I did forget to say, clinton had 200 billion in surplus, however, only 40 billion of the surplus would go into tax cuts, the rest would have gone to pay down the debt.
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Too bad those days are gone.


Maybe, but the better question is too intertwined to fail.
 
obvious Child said:
The current administration has essentially inherited... giant... piles of poo.... In many ways, the current administration has a lot of poo to deal with and relatively few realistic clean up plans.
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He is adding lots more crap to the pile... and quickly, as businesses lop off sections in government reviewed restructuring plans, have CEO's replaced by Obaa-ma and his sheep.

Across the pond Parliament has "Question time", and today on this side of the pond the new administration introduces PLAY TIME....


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