As soon as Karl Rove popped up to tell us how wonderful 'the deal' is, I knew that it wasn't a good deal.
Just to put it in perspective:
The federal government spent $142.3 billion on Thursday alone, according to the Daily Treasury Statement released at 4:00 pm on Friday afternoon.
A chunk of that spending was debt-repayment--but then, there was debt-issuance to offset.
After all was said and done, the Feds spent $6.1BN more on Thursday than they took in on Thursday.
....and Boehner gets $38Bn in annual cuts. The Babykilling Machine--Planned Parenthood--gets more tax dollars as does Condescension Central (Public Broadcasting.) EPA continues on its quest to completely eradicate industry and commerce from US soil, and ObamaCare funding was untouched.
Some "deal."
Not to sound contrarian, but.... we knew in November that when we took a squishy House of Representatives that what we really were getting was gridlock. This was but a minor skirmish in a very big, long-term war. We came out even a little bit ahead. Now we push for a big one with the debt ceiling, and then the Ryan budget outline as we prep for 2012 and try to retire several more politicians.
ReplyDelete....and the budget cuts knock off another .25-.5% of GDP growth over the last half of the 2011 which should put another 400,000 or so Americans out of work by early 2012. That's if you believe Moody's and/or Goldman.
ReplyDeleteBut who really cares about the economy. Let's talk about the deficit.
So Strupp... when will the deficit and debt actually concern you? We already are borrowing 43% of the spending. We are already at 80% debt to GDP.
ReplyDeleteDoes that work in your family? It doesn't in mine.
Face it. Keynes is dead. We have tried it for decades and it got us... here. Time to try something else now.
It's always useful to remember that Keynes was a homosexual. He didn't worry about what debt his children and grandchildren would pay.
ReplyDeleteGiven that, however, only half of Keynes' theory is applied in the US: the spending half.
He DID postulate that the Gummint should retire debt in good times.
My family isn't the largest economy in the world and doesn't print the world's reserve currency. You're mixing micro and macro again.
ReplyDeleteUntil the output gap and high unemployment rate are resolved, we shouldn't be wasting our time cutting short run debt levels. Actually, we should be increasing them substantially. Keynes was a HUGE advocate of deficit reduction in normal times. We aren't in normal times. The "Keynes" you are familiar with should only be utilized in a liquidity trap. Other than the 1940's, we've never actually applied this Keynesian approach. Certainly not now either.
Any attempts to cut AD in time periods of mass unemployment and undercapacity undermines growth which is directly related to reducing unemployment which undermines growth even further. This isn't just a Keynesian idea. This is a basic economics equation.
If you do not fix the output gap you don't grow enough to put people back to work OR reduce the deficit as debt is a function of GDP.
If you want a case study of how fiscal austerity leads to default during a liquidity trap, keep an eye on England. You'll get to watch first hand how debt reduction during time periods of high unemployment and low growth destroy an economy and results in higher, not lower, debt.
Did you ever stop to think that maybe, just maybe, the high debt is a cause of the high unemployment and low growth? Coupled with the increased central planning with the Gov't picking the winning businesses and regulating the others to death?
ReplyDeleteThe more the government prints money, the more that people hold on to what they have. We are actively reducing our own debts. Inflation is coming - we all know it. We are already seeing it, even if you don't want to see it yourself.
IOW - The majority of the proletariat are not as stupid as the political class and the bourgeois in the IMF and Fed believe they are.
Like I said earlier. Its time to look at the Austrians for a change.
Two wars, irresponsible tax cuts, and the Part D fiasco turned a budget surplus in 2001 into red ink as far as the eye can see. You can try pinning it all on Obama but no one is taking you seriously, especially after extending those tax cuts last December.
ReplyDeleteI do wish you Lefties would back up your assertions with - you know - numbers and facts and stuff. I just had to do this for Foust a couple of days ago...
ReplyDeleteFY2001 spending (last year of Clinton budget) was $1.9T
So Republicans/Compassionate Conservatives increased spending by $700B over 6 years (to FY2007 where spending was $2.6T - the last year of the Republican House - they write the budgets you know). They sucked.
Democrats/Progressives increased spending by $900B (to $3.6T in FY2010) over 3 years when Nancy took over the big gavel.
They suck more.
Obambi campaigned on cutting the deficit in half by the end of his first term. He also said that iff'n we spend all that stimulus money, unemployment would never get above 8%.
Epic.Fail.
So yeah. Its about time the D's and Obama start owning up to their contribution.
Have a lovely day.
Two wars
ReplyDeleteOh, yah. Didn't Obozo say we'd be outta The 'stan by now?
And Iraq?
And what's that $250 million or so he spent in ...where......Libya?
Actually, Anony, there are PLENTY of people who take all this very seriously. They're called "voters." Check the polls, bozo.
"Did you ever stop to think that maybe, just maybe, the high debt is a cause of the high unemployment and low growth?"
ReplyDeleteNo. Because it's not. Lack of sales has been the single most overwhelming headwind facing business owners for the last 3 years. That's lack of demand. The NFIB comes out with a survey every month showing this. U.S. debt levels hardly makes the list. TIPS spreads would blow out if public sector debt was at crissi levels. They haven't. Again, it's the data.
"The more the government prints money, the more that people hold on to what they have."
So the more the government prints money, the more people want to hold on to currency that will be worth less tommorrow. Think about that for a couple of seconds and let me know if you'd like to amend that statement.
"We are actively reducing our own debts."
Slightly yes. So what?
"Inflation is coming - we all know it."
I'll answer this one with your statement, "I do wish you Righties would back up your assertions with - you know - numbers and facts and stuff." The 10 year treasury yield is 3.5% (below historical avg.). TIPS have moved up a bit but are still low historically. Again, that's the data. You're making things up.
TIPS spreads would blow out if public sector debt was at crissi levels. They haven't.
ReplyDeleteYah, well, the Fed's buying T-securities. That DOES have an impact on rates.
So the more the government prints money, the more people want to hold on to currency that will be worth less tommorrow.
Actually, that DOES happen. Here's the reason: essentials (food, fuel) require more 'hoarding' of free cash to purchase as prices rise.
So what happens is a REDUCTION in spending on 'non-essentials'--the goods like furniture, fixtures, appliances--as an offset to the anticipated increase in food/fuel.
You can look at the dump in consumer revolving (and non-revolving) to confirm that. The only non-revolver going up is college loans.