The so called "experts".
 

This is really squicky. Just for the record.

Slippery Slope to Legalization
 

I really need you to know, for your own good, that it is "reined in" not "reigned in." Like pulling a horse to a stop with reins. It has nothing to do with kings and queens and emperors and stuff.

The so called "experts".
 

2.

The so called "experts".
 

Iraq- once Cheney's oil profits trickle down it will all make sense!

The so called "experts".
 

Agreed. The GOP needs to start actually cutting govt, not creating new entitlements and departments into which to funnel money. I am not suggesting the current admin is better than Hillary on that score. I am advocating us finding a new candidate who is a true moderate Republican/Democrat who is actually committed to shrinking the govt and making it more efficient.

I guess, in sum, I'm looking for someone unlike Hill and W, whose spending habits appear to be equally ambitious.

The so called "experts".
 

Ty,

What exactly are we borrowing from future generations?

Are you suggesting there will come a day when we will have to raise taxes again? If so, I say "why?" Why can't we make the govt more efficient and keep tax rates at a minimum? Why must we spend later instead of continuing to starve the beast (for real, when a real fiscal conservative takes office) and developing a leaner govt that provides better core services?

Oh, thats right... because you want a govt that engages in social engineering.

Sorry, we can't afford it anymore,
SD

The so called "experts".
 

Good stuff that helps is in the eye of the beholder.

I think the first question ought to be what do we have to spend, and the second should be what good stuff do we spend it on.

While I'm perfectly willing to do some borrowing to spend, I would limit the borrowing as much as possible to spending on things with prolonged useful lives. I'd like to see a hard limit on government borrowing not secured by specific non-tax revenue streams, perhaps based on a percentage of the total economy or the like.

The so called "experts".
 

I am suspicious of "starving the beast" because the beast keeps eating until we hit the seed corn. If there is not political will to limit spending, it is irresponsible to borrow rather than tax. Easy, but irresponsible.

In this world, social engineering is a fact of life. Everyone cracked the champagne yesterday when the fed indicated that interest rate increases were nearing the end; the fed has no choice but to socially engineer. Sitting on the sidelines will please neither Milton Friedman nor John Kenneth Galbraith (both of whom I have chosen in the death pool, signifying the death of 20th century economics).

The so called "experts".
 

So we only have to wait another 25 years? Pathetic.

Good or Bad: Not so sure
 

2. And then there's the question that is probably making Dem strategists ooze -- how many women who would otherwise lean R, or otherwise would not vote, will vote Dem to see a woman President? (My bet: A lot fewer than they think.)

The so called "experts".
 

Ted Stevens.

So, Nixon and Ford never existed?

Perhaps because they were always useless?

S_A_M

The so called "experts".
 

While we're at it, let's all ask for a pony too. (And maybe for our soldiers to be greeted with flowers and sweets.)

The so called "experts".
 

Yes, but that is really not the problem. The problem is Bush, combined with a GOP Congress, who want to give away goodies through both tax cuts and spending increases.

Bush's spending puts every Dem president but one to shame. That one was LBJ, but at least he chose to pay for the stuff he spent money on. Bush's faith-based governing creates the fantasy that we don't have to choose between taxing more or spending less.




Hank is either a whole lot older than me (I doubt it), or from a very odd part of the country. Growing up in the burbs of NYC in the early 70s, the only thing we heard about duck-and-cover drills was our teachers joking about how they used to do them, in the 50s. The revised drill involved bending over and "kissing your ass goodbye".

On the other hand, the Reagan Admin did advance the notion that, "with enough shovels," we could all get through a nuclear war just fine and dandy. So maybe Hank has a point, but it's under his hat.

Slippery Slope to Legalization
 

Give it up. He's breigndead.

The so called "experts".
 

Yes, but those who holler "tax and spend" while voting for borrow and spend can't get their arms around this idea. Instead, they claim that the Dems are forcing the spending on them. Or they take Hank's tack, and claim that the stuff they are borrowing to pay for is "good stuff" -- which begs the obvious question of, if it's all good stuff, why aren't they willing to raise taxes to pay for it?


This should be obvious to anyone who did not die before 1928, but sadly it isn't. The number of people who claim to be "anti-government" on this board, and even make goofy claims like "government doesn't help me make a living", is sometimes laughable, sometimes shocking, always absurd. Particularly given that this is a board of lawyers, none of whom would have jobs if their pseudo-libertarian fantasies were to become real.

The so called "experts".
 

The "borrowing from future generations" is just political hotair. It is a way to dramatize a situation and make it personal to get votes but has no basis in reality.

As long as the econony grows todays deficits will be chump change for the next generation. The deficits from 1985 are puny compared to todays deficits and todays deficits will seem puny twenty years from now, let alone forty or sixty years from now.

The reasons why deficits are bad is because they crowd out investment for private use. This in turn reduces growth. So deficits reduce growth. But if you just balance the budget for twenty years running any national debt will become insignificant for "future generations".

The so called "experts".
 

Are you looking at growth or inflation? Even with growth, if we enter a deflationary cycle (such as the one that last about 40 years at the end of the 19th century), deficits can be devastating. I believe you are assuming both growth and inflation.

And in terms of "just balancing the budget" - how likely is that to happen?

The so called "experts".
 

Exactly. We've had a surplus, what, for a couple years of the last 40? And that's because of an overheated stock market bubble.

It's nice to say in theory that we can grow our way out of deficits, but Congress's habit has been to spend on that assumption, and then some. Sebby's wife keeps asking for bigger diamonds, because, hell, in a few years he'll get a partnership draw. If she took a look at Hank, she'd realize that plan isn't so good.

The so called "experts".
 

Having a free economy, in no way implies no government involvement just as a free society (or political freedom) does not imply no government. Without government we would have no political freedom just as without government we would have no economic freedom.

In a country were the government is oppressing peoples political freedoms you could be "anti-government" without believing in anarchy.

I can think our government is too large, or involves itself too much in our economic life, or even believe that free markets are preferrable without being an anarchist.

I believe that our government interfers too much in our economic life and our government has grown to large, but that does not mean I want to end government, or even come close to ending government.

The so called "experts".
 

This is such bullshit. Interest on the debt is one of the biggest line items in the budget. Clinton would have balanced the federal budget much more quickly, had the gov't not still needed to pay so much interest on the Reagan debt.

The deficit in 1985 was $221 billion. In 1985 dollars. That is hardly insignificant, and while it is dwarfed (in nominal dollars only) by the Bush II deficits, that is not a good thing.

Moreover, we are not just paying interest on the 1985 deficit. Year after year (under Rep presidents), those 9-figure deficits mount up. The interest on my credit card debt from last January may not be killing me, but if I ran up an even higher unpaid balance every month after that, it starts to get pretty punishing. Just as the interest on the current federal debt is punishing.

And if the debt is not a problem, then just what was Bush crowing about on Social Security? No trust, no fund? Just a bunch of IOUs?

That is one reason, but the reality is more complicated. Deficit spending reduces growth. But raising taxes to prevent deficits also reduces growth. And cutting spending, too, can reduce growth (look how various industries and various parts of the country panicked when the USSR fell and the military budget was potentially to be cut). So, the issue is finding the right balance. Everyone (well, Republicans) claimed that the tax increases under Clinton would destroy growth. But they didn't, at least in part because they helped eliminate the deficit.



True. And if it starts raining $100 bills tomorrow (without any inflationary effect), that will solve the problem too. And if only the Iraqis really had greeted us with sweets and flowers, we wouldn't have spend $300 billion there, either. Also, I'd like a pony.

The so called "experts".
 

Yes, but you are rational (on this issue, anyway). I would not characterize you as an "anti-government" type, or as a pseudo-libertarian fantasist, and I was not referring to you in my post to Captain.

The so called "experts".
 

When was the last time we had deflation? 1930s? At the end of the 19th century we had deflation because we were on the silver standard and the value of money was not controlled by the Fed but tied to a limited resource.

Ever since Jimmy Carters stagflation of the late 1970s the Fed keeps the inflation rate at the rate of growth. That seems to work and there is no reason to think that will change. I can't even think of a modern industrialize economy that has had deflation over the past fifty years. Japan and Germany have come close to zero inflation but never deflation.

The economy has grown consistently with occasional problems since the founding of this nation. So as long as the nation grows and and even if the Fed keeps a strict monetary policy (which we have had since the 1980s) todays huge deficits will be tomorrows chump change.

We don't need to pay the money back. We just need to balance the budget and everything will be fine. In fact, paying off the national debt could be a disaster. The entire world economy is dependent on the interest our government provides on our debt. The number our government uses to determine our interest payments sets all sorts of different numbers for the economy, and without the US government setting that number no one knows what will happen.

The so called "experts".
 

Govt doesn't help me make a living doing anything but being an unproductive paper pusher. Are you really suggesting we're better off with mountains of absurd regulations and laws and govt interference - nearly all of it totally inefficient and wasteful - than with a much smaller, less ambitious, less invasive govt? Are you suggesting the armies of tax specialists and lawyers and buraeucrats are a good thing?

You're just advocating maintenance of a flawed, wasteful system to protect your paycheck.

The so called "experts".
 

All that hand-wringing about that issue a few years back is not irrelevant. But I don't remember any good justification for having no debt. There are plenty of private debts people are willing to assume. And we can still have bonds even with virtually no debt--Anyone without a mortgage can do that--it's a savings account. OR a mattress.

(BTW, there's no reason to connect inflation rate and growth rate. Monetary theory says that the money supply should grow at the same rate as GDP, which will mean an inflation-less environment.)

The so called "experts".
 

Significant components of our economy are structurally deflationary right now. Technology and retail are two examples. There are demographic shifts that could turn large portions of the real estate market deflationary - deflation in the past has been linked with shrinking populations, and many regions have been experiencing loss of population.

I am not saying there will be deflation, merely saying that our planning should not rule it out. Some cycles are very long, and the inflationary/deflationary economy is one of them. But there has never been an inflationary economy that did not ultimately turn deflationary. In 2001, I remember hearing about the end of boom/bust cycles. We had it under control; the stock market and the economy could expand forever. What happened?

The so called "experts".
 

I never had a "duck and cover" but we did go sit along the wall in the hallway, as a "tornado-civil defense" drill. To the extent it was for the nuclear bomb, I suppose it's purpose would be to make cleaning up the corpes easier.

The so called "experts".
 

So did Reagan find a way to prevent tornados, too? Now that would be something worth paying (or borrowing) for.

The so called "experts".
 

Spanky, you need to check your facts.

The deficit in 1985 was $221 billion (including money borrowed from Social Security). That was 5.3% of GDP then.

The present value of that amount, using the CPI to adjust, is $388 billion. That would be 3.7% of today's GDP.

The current deficit is certainly higher -- 2004 was $521 billion, or 4.9% of GDP -- but to suggest that $388 billion in today's money is "puny" or "chump change" is simply absurd.

Or do you mean to suggest that, 20 years from now, the annual deficit will be a trillion dollars or so, and 8% of GDP, and that today's deficits will seem small by comparison? If so, then I guess your work for the party has been really successful.



Huh?

Yes, and some manna from heaven will help too. Is there some deficit reduction plan in existence that I'm unaware of? Even Bush's campaign platform was only to reduce the deficit by half in his second term (and even that required some extremely silly accounting tricks).


If we were to pay off the national debt in a year or five years, this would be true. But there is no danger of that happening.

Personally, I am far more scared of the way our mounting debt increases our dependence on China. Not that we should have anything against a Communist dictatorship, but....

The so called "experts".
 

How is that going to happen?

The so called "experts".
 

One of the few good things about the North's victory in the War of Northern Agression was that we never had to pay back anything we borrowed. Yes, I believe I still have some of the fine Yankee artwork I "obtained" during our forays north of the Mason-Dixon line.

Perhaps we can find a similar way to avoid paying these debts.

The so called "experts".
 

We'll take care of you with some of that there tort reform.

Yankee.

The so called "experts".
 

None have hit my house since he was President.

The so called "experts".
 

I was responding to the future generations B.S. Our grandchildren will have no problem paying off todays debt. It is only the recent debt that hurts.

221 Billion is not that much money compared to the two trillion dollars in revenue we receive every year.

It is just the interest that in the last twenty years is pretty punishing. The interest on the debt accumulated more than twenty years ago (a generation) is insignificant. The difference between you and the federal government is that the federal government salary is guranteed to grow every year by at least three percent and you never have to retire. That income will come in forever and will increase forever.

It didn't say the debt is not a problem. It just doesn't have to be "paid back" as long as the budget is balanced. Social Security is a whole different issue. The past debt is a fixed cost. Social Security is an unfunded mandate (pretty much an entitlement) that keeps growing every year. Medicare and Social Security are like the national Salary in that these are costs that continue to grow every year forever. So if these costs exceed your annual revenue you are screwed because the costs continue indefinitely. That is the problem we are facing.



You are missing my point. Deficits are a problem. I never said they were not. Crowding out by deficits reallly hamper growth. So deficits should only occur in recession years. However, this stuff about future generations have to pay it back is B.S. I was just pointing out that if we balance the budget then future generations won't have to pay back the debt. You don't ever need a surplus.

The so called "experts".
 

I Guess I thought you were confusing your position with Tys. Ty seems to think that since the government is necessary to allow free markets, then there is really no such thing as a free market. Which is similar to saying that since governments are necessary to create political freedom, there really is not such thing as political freedom.

If I set up a law that says you can not scream fire in a crowded theater, that law does not eradicate the right of free speech, just as requiring disclosures when you list a stock on the NYSE makes does not make the New York stock Exchange not a free market.

The so called "experts".
 

Wow, you really are a Bush Republican, aren't you?

You cannot be unfamiliar with the notion that a dollar in 1985 is worth more than a dollar today. And yet, you compare the 1985 deficit in nominal dollars to today's government revenues to make a "point".

So, where do I start? First, as I pointed out (and you gleefully ignored), 221 billion in 1985 dollars is about $388 billion today.

Second, 2004 revenues weren't two trillion. You're only off by six percent -- it was 1.88 trillion -- but 120 billion is a pretty big error, no? Between that error and ignoring inflation, you reduce the problem by two-thirds. Faith-based budgeting, indeed.

Third, even using your (false) numbers, you are talking about 11% of revenues. Using the real numbers, it's 21% of revenues. In my book, that hardly qualifies as "chump change".

As for your other points -- yes, if somehow we miraculously balance the budget for the next 20 years, all will be well. Now, how exactly is that going to happen -- particularly when people like you are spouting the "it just doesn't matter" garbage?

And, by the way, some of us see those "future generations", that you consider as a distant hypothesis, every day. They are our children, and for many of us on this board they will be adults in a decade or so, or even less. How much will interest on the national debt be then?

The so called "experts".
 

No, I think you were confusing my position with your idea of Ty's position.

Yes, thank you. Similarly, "Don't Walk" signals do not mean that I have no legal freedom of movement.

The so called "experts".
 

My solution to prevent the problem from being passed to future generations is this: set the estate tax based on the outstanding national debt. So if Bill Gates dies and his estate includes 2% of the total national wealth, his estate would owe a tax equal to 2% of the total national debt.

We would have to determine on an annual basis total wealth in the country and total debt, but that is not difficult to do.

I suspect we would see many more Republicans become true fiscal conservatives under this approach, and stop pouring our money into Iraq.

The so called "experts".
 

Yes.

The so called "experts".
 

You need to look at this in context. Even $388 billion can't buy you a half-way decent war.

Originally posted by Sidd Finch
So, where do I start? First, as I pointed out (and you gleefully ignored), 221 billion in 1985 dollars is about $388 billion today.

1985 dollars? 221 Billion dollars today may not buy as much as it did in 1985 but it still pays off a debt of 221 Billion even if it was incurred in 1985. You have to pay the 221 Billion plus interest. Is that what you mean by 1985 dollars?