• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

US Budget Deficit Shrinks 35 Pct. From Last Year - ABC News

US Budget Deficit Shrinks 35 Pct. From Last Year - ABC News

Now can someone explain why we supposedly need more government spending cuts?

I have been discussing this development since the beginning of summer 2013. Apparently, we need more spending cuts to ensure a recession occurs at just the right time to push deficits back into 10% of GDP territory. That way, the opposition party does not look like a bunch of buffoons for their doom and gloom predictions.

Hyperinflation didn't happen.

Dollar crisis never occurred.

China/Russia/ME did not drop all their bond holdings on the market.

The government is still able to borrow at historically low rates of interest.
 
We can borrow from future generations just like Detriot did, no problem at all. ;)

Detroit is not monetarily sovereign.... I swear, sometimes i really wonder.
 
It might be 35% less of a deficit but, it's still a deficit...
 
Why would we need more taxes on the wealthy?

Who has been the main beneficiary of government policy the past five years?

Hint: Vanguard total stock market index

file.gif


MSCI world index:

file.gif
 
Then, by all means, let's borrow/print our way to prosperity. ;)

Who said anything about borrowing and printing our way to prosperity? That is just your lame strawman. By next year, federal deficits are projected under $400 billion.
 
Who has been the main beneficiary of government policy the past five years?

Hint: Vanguard total stock market index

file.gif


MSCI world index:

file.gif

So there is no need to raise taxes since the deficit is shrinking then other than penis envy?
 
So there is no need to raise taxes since the deficit is shrinking then other than penis envy?

We can also look to the fact that wealth inequality is at levels last seen during the roaring 20's. Fiscal policy is an effective tool at combating both wealth inequality and wealth immobility.

real-income-growth.jpg
 
We can also look to the fact that wealth inequality is at levels last seen during the roaring 20's. Fiscal policy is an effective tool at combating both wealth inequality and wealth immobility.

real-income-growth.jpg

Yep. Like I thought--penis envy
 
I have been discussing this development since the beginning of summer 2013. Apparently, we need more spending cuts to ensure a recession occurs at just the right time to push deficits back into 10% of GDP territory. That way, the opposition party does not look like a bunch of buffoons for their doom and gloom predictions.

Hyperinflation didn't happen.

Dollar crisis never occurred.

China/Russia/ME did not drop all their bond holdings on the market.

The government is still able to borrow at historically low rates of interest.

Who has been the main beneficiary of government policy the past five years?

Hint: Vanguard total stock market index

file.gif


MSCI world index:

file.gif

I don't know that we need lower government spending. We probably just need wiser government spending.

I too have been following this and here are my conclusions (opinions):

The USG created trillions of dollars to finance the past deficits. Had this money circulated, we would indeed have had inflation.

So, where is this money? You answered the question. The stock market which represents the wealthy. So, very few people have become fabulously wealthy. Banker pay virtually no interest for the money they use to puff up stocks while the citizens are still paying 20% or more interest on their borrowings. Income

It seems it goes to the poorest and the richest and the middle, most of us, have seen our incomes drop. I have friends that haven't had raises in years, whose companies no longer match 401Ks and whose other benefits have been cut.

The trickling process is not working and to my amazement, these very same people argue that the billionaires pay "too much in taxes".

So, I'm not too impressed.
 
Yep. Like I thought--penis envy

High concentrations of wealth among the few leads to continued rent-seeking. It is in these environments where the casino mentality takes hold of asset markets. The rest is... well history.
 
High concentrations of wealth among the few leads to continued rent-seeking. It is in these environments where the casino mentality takes hold of asset markets. The rest is... well history.

Does not matter. As long as poor people are willing to buy $200 shoes and $500 telephones, you are not going to change to trend by redistributing taxable income. There is a difference between capital income and labor income. Discourage capital investment and you will destroy labor income. It is that simple.
 
I don't know that we need lower government spending. We probably just need wiser government spending.

Agreed. However, it is impossible to get a wise consensus. I believe the war on drugs is a terrible waste of both resources and humanity as a whole (not even considering the terrible externalities that result, e.g. black market cartels).

The USG created trillions of dollars to finance the past deficits. Had this money circulated, we would indeed have had inflation.

Nope! Increasing bank reserves all but eliminates the risk of insolvency. The type of monetary velocity necessary to invoke a general rise in prices could not exist in an environment where credit easing is a necessity. The problem is, money is not circulating and hence we need to put a floor under asset prices. The relationship between deflation and default is well established, e.g. repaying loans with with specie whose purchasing power increases.

So, where is this money? You answered the question. The stock market which represents the wealthy. So, very few people have become fabulously wealthy.

People are just now recouping (in nominal terms) the wealth they lost between 2007 and 2009.

Banker pay virtually no interest for the money they use to puff up stocks while the citizens are still paying 20% or more interest on their borrowings. Income

What??? Regarding your link:

inigo_montoya.jpg
 
Does not matter. As long as poor people are willing to buy $200 shoes and $500 telephones, you are not going to change to trend by redistributing taxable income. There is a difference between capital income and labor income. Discourage capital investment and you will destroy labor income. It is that simple.

Of course it matters! It is why we are even having this discussion. An economy that depends on rent seeking will soon fall into financial crisis. Capital investment is at it's most "encouraged" levels EVER!!!!!!!!!!! And yet, we are still at levels of private domestic investment last seen in 2006.

Capital investment ≠ rent speculation
 
Agreed. However, it is impossible to get a wise consensus. I believe the war on drugs is a terrible waste of both resources and humanity as a whole (not even considering the terrible externalities that result, e.g. black market cartels).

Nope! Increasing bank reserves all but eliminates the risk of insolvency. The type of monetary velocity necessary to invoke a general rise in prices could not exist in an environment where credit easing is a necessity. The problem is, money is not circulating and hence we need to put a floor under asset prices. The relationship between deflation and default is well established, e.g. repaying loans with with specie whose purchasing power increases.

People are just now recouping (in nominal terms) the wealth they lost between 2007 and 2009.

What??? Regarding your link:

inigo_montoya.jpg

What about my link? All the link is for is to illustrate that the money is not circulating adequately in the center. As for the 20%, that's an approximation of credit card debt interest.

We seem to be mostly in agreement so if I'm wrong about something, please just explain.
 
We can borrow from future generations just like Detriot did, no problem at all. ;)

Since the future generation gets the benefits of infrastructure, better education, and higher productivity (not to mention their parents getting jobs), this is a dishonest conservative claim.

Future generations may get a burden, but they also get a benefit. Given the low interest rates on T-bills, it's clear in fact that the benefit will vastly outweigh the burdens.
 
Then, by all means, let's borrow/print our way to prosperity. ;)

Well, we're borrowing our way out of a depressed economy that was the result of failed conservative economic policies and two vanity wars proffered by Bush.

Sorry that there are consequences to failed conservative policies but there are. In this case, the biggest recession in 70 years. I'd rather borrow my way out of it than let millions of Americans suffer the consequences.
 
Because there is still a deficit? And a huge debt to repay?

That's the burden. What were the benefits?

1. Avoidance of a complete economic collapse cooked up by Bush's failed economic policies.
2. A shortening of the recession so more people could go back to a productive life than would have without deficit spending.
3. Investment in infrastructure, education and health care that will increase productivity in the future (or at least avoid the huge erosion of productivity if we had not borrowed).
4. All at extremely low interest rates.

That's the funny thing about conservatives: they only look at the burden of deficits, not the benefits. It's not funny, actually; more like stupid and disingenuous.
 
That's the burden. What were the benefits?

1. Avoidance of a complete economic collapse cooked up by Bush's failed economic policies.
2. A shortening of the recession so more people could go back to a productive life than would have without deficit spending.
3. Investment in infrastructure, education and health care that will increase productivity in the future (or at least avoid the huge erosion of productivity if we had not borrowed).
4. All at extremely low interest rates.

That's the funny thing about conservatives: they only look at the burden of deficits, not the benefits. It's not funny, actually; more like stupid and disingenuous.

Not nearly as stupid as believing government spending can fix an economy.
 
US Budget Deficit Shrinks 35 Pct. From Last Year - ABC News

Now can someone explain why we supposedly need more government spending cuts?

our national debt is approaching 17 trillion dollars, when obama took office it was about 10.5 trillion.

this is becuase our nation keeps running deficits every year.

with the tax increases which have been passed by congress, this has added over 248 billion dollars of government revenue, which has lowered the deficit amount downward.

however we still are over spending and adding to the national debt.

the obama administration and Harry Reid, want to increase taxes again, and add another 1 trillion dollars of revenue over the next 10 years.

if our government keeps on track with its spending, we will be over 20 trillion by the time a new president is elected.

as out national debt grows the u.s. has to pay interest on that debt, if interest rates were to ever rise, to 4. 5 .6 % on the national debt, the u.s. would fall deeper into debt not having the ability to pay it, but by borrowing more....and putting the u.s. in a deeper downward spiraling of endless debt and destroying the u.s. dollar
 
Back
Top Bottom