Spending Increases

[Lefty]

In the State Of The Union Speech Bush proposed 13.6 billion in spending increases per year. According to the National Taxpayers Union this is the lowest in last 5 yrs. Clinton in 1999 proposed 305 billion in spending increases.
Wow.
Congrats Mr Pres. Lowest spending increases in 5 yrs and while at the same time rebuilding Iraq and continuing the war on terror.
Hats off for a great job!

[ljb]

And did the National Taxpayers union tell you how much of this additional DEFICIT the President will be passing on to our children?
Oh wait a minute we already know that. All of it!
Way to go Mr. President, mortgage your childrens future for your own selfish wants.

[Secretariat]

Forget it ljb, Lefty just doesn't get it.

[PaceAdvantage]

Are deficits really all they are cracked up to be? We were hearing how awful the deficit was years and years ago.....after Reagan etc....

Then we had that deficit clock in Manhattan showing us all what each of our share of the national debt was worth....

Then, lo and behold, Clinton comes along and wipes out the deficit, correct? Maybe I'm more stupid today than usual, but this is how I remember things....

This then begs the question: are deficits really all that bad, no matter how large they get (within reason of course)? After all, Clinton was able to wipe it out pretty darn quickly.

Is it more of a political issue than an economic issue?

If there are any impartial economic experts out there, I'm all ears (but please make your answers concise....as I told VetScratch, I'm extra dumb these days....)

[ljb]

PA,
Much as i'd like to say Clinton wiped out the deficit i can't. He did not do it alone. Both Reagan and Bush senior raised taxes, Reagan in his second term.
And deficits do matter! Somebody is going to have to pay these bills.

[ljb]

Secretariat,
I know Lefty doesn't get it but, I like to pull his chain. Sometimes i can get him to really fuss.

[Secretariat]

PA,

Yes, deficits are bad, for a number of reasons. Primarily, the massive interest we pay as a result buys us nothing (no military or no social programs). It's like you bought everything on a credit card, and then kept buying. It's like playing a negative percentage game, and the takeout just keeps getting bigger. No good gambler would invest in that. But there are additional problems, it begins to devalue the dollar, which means that the cost to Americans to buy things abroad (such as oil) forces the cost of those to go up for Americans (like the increasing price of gasoline).

It also weakens our strength abroad to reply to emergencies, and loses our economic state abroad.

Here's what the IMF (International Monetary Fund) and UN stated:

The UN report cited "the rapid rising weight of China in the world economy and its role in the present recovery," but it also warned that UN economists see a need for the US to reduce its government deficit. That echoed the very trenchant International Monetary Fund (IMF) report that described the deficit as "perilous" in the long run, posing "significant risks" to the rest of the world. IMF economists also cautioned that one should add to the short term a US$500 billion deficit that the US administration is running, a further US$47 trillion in unfunded long-term commitments for US Social Security and the federally funded Medicare health program for the elderly and indigent. And the IMF pointed out that there were additional liabilities from cash-strapped local governments, forced to borrow to compensate for federal cutbacks.

On the American trade deficit, the IMF also warned ominously, "The United States is on course to increase its net external liabilities to around 40 percent of its GDP within the next few years - an unprecedented level of external debt for a large industrial country." The report suggested that this situation would push the dollar even further down.

[Secretariat]

Pa,

One additional comment. Clinton did not wipe out the deficit but reduced it. Big difference. And his adminstration benefited by the expansion of various new technologies such as computer technolgy and the internet.

Guess what. We don't have that strong technoloy advantage anymore. Remember when no one had a computer and went out to buy one, and eveyone upgraded Windows on a regular basis. It's like when televisions were first introduced, and everyone bought new machines. Now we lack that new innovation to spur the economy. That is dangerous. Innovation is key to try to "grow" an economy. I see no new innovations to spur the economy. Now if somebody could design wings for us to fly manually, or cars that get 100 miles to the gallon and run on water, we'd be the world leader again in seconds. But right now we are in a quagmire, with no money to put into innovation. Knee jerk reactions like putting a man on the moon, or mars, or Star War experiments isn't going to get the job done. They just suck up money. We need innovation that affects the market place and is "unique" to America. Without that, I don't see how we get out of this without tremendous sacrifices. And that would include serious repercussions to US companies who offshore and use below minimum wage labor, serious cutbacks to Medicare and Medicaid, raising the Social Security qualifyng age, and yes, serious miltary cuts. Yes, those things are not pleasant to hear, but without innovation technology that transfers into marketable products, we will never grow out of this mess. We want to pretend it will happen if just "cut welfare" or some such nonsense. Solutions are not that simple, and it means every facet of government will have to be cut to reduce this mess. We can't keep spending our childrens money and calling it tax cuts. There is no tax to cut. The money has already been spent and we're paying interest on it.

[PaceAdvantage]

I didn't really mean to imply that deficits were harmless. What I meant to imply was that it's obvious that massive deficits don't take all that much TIME to reduce or wipe out, as evidenced by Clinton's reduction (I thought we had a surplus during the Clinton years, did we not?)

Anyway, people tend to associate the deficit with "doom and gloom" type rhetoric, when in reality, it didn't take all that much time to reduce or elimiate our last "huge" deficit (relatively speaking)

[ljb]

Pa,
You are getting closer to getting it here. A large deficit is like an individual maxing out their credit cards. They are going to spend the rest of their lives working to pay for past pleasures.

[PaceAdvantage]

Again though, if we were able to reduce the deficit significantly during the Clinton years, why is everyone so concerned about it now? We've proven in the past that it really isn't as "doom and gloom" as those currently making it a big issue would like us to believe.

[Tom]

One of the big Lib books in the 60's was the Population Bomb-we would become extinct long befreo now by overpopulating the planet.
When I bought into my IRA 20 years ago, they told me I would have 1.5 million plus by now.
Yadda yadda yadda.
Most of these guys can't tell you who is going to win the next race at AQU, let alone what will happpen in years to come.
If the defict/devt is so dangerous, what is everyone willing to give up to pay it off?
Let's hear some specifics.

[JustRalph]

I heard all this stuff before..........with Reagan. Just like Reagan's people predicted.....the economy wiped out the deficit by bringing in such high tax collections. You can thank Reagan for that and maybe Bill Gates. Gates had a huge part in the economy of the 90's. The effects of the Reagan Tax cuts were very beneficial and some economists say that tax cuts take 5 years to show any real effect. So in about 4 more years.....things should be rolling pretty good. I used to read about this shit pretty deeply. But it is one boring subject......and still is..........

[Secretariat]

PA,

Refer to my earlier post on why we can't grow out of this economy as we did the deficits in the Reagan years. Those deficits cost GW sr. the election when he was finally forced to raise taxes (the read my lip statement reversal).

I agree completely with Just Raplh that Bill Gates had a helluva lot more to do with helping to grow the economy more than Clinton.

The problem is different now though. Industry is locating offshore and we have no new innovations to spur and grow the economy. We manufacture nothing here, and any tax advantages from existing US companies, are not going into "our" government coffers, but to nations abroad (see the IMF assessment above).

"Hoping for growth" and "hoping for innovation" because Gates and the Internet helped make it happen in the 90's is naive. It may happen with some fantastic innovation, but to assume it is going to happen is just wishful thinking.

[Lefty]

ljb, if you don't think it's better to spend 300 billion instead of 13 billion then it's you who doesn't get it.
Clinton didn't extinguish the deficit, the 94 congress did. Cinton finally had to sign on to the balanced budget because he knew the votes were there to override his veto. And he cut military spending drastically.
Would you rather have a deficit or be in a constant state of terror with more 9-11's?
Reagan raised taxes in his second term because the Dem's promised to cut $2 in spending for every $1 taxes raised. The lying bastards never did what they promised.
The credit card analogy doesn't work. Who owns the credit card debt? The banks. Who holds a bunch of the deficit? We do, through bond purchases.
Stay safe and quit fretting. Keep the Dems out of office and everything will be just dandy. ljb, thanks for pulling my chain. I do love to vent; great therapy.

[JustRalph]

Originally posted by Secretariat
I agree completely with Just Ralph that Bill Gates had a helluva lot more to do with helping to grow the economy more than Clinton.

I just saw this....interesting....huh?

Queen to give knighthood to Bill Gates

but you can blame it on Gordon Brown
By Robert Peston, City Editor
(Filed: 25/01/2004)


Bill Gates, the Microsoft founder and the world's wealthiest man, is to receive an honorary knighthood for "services to global enterprise".

The recommendation that he receive the honour was made by the Chancellor, Gordon Brown. Buckingham Palace is expected to announce it tomorrow, when Mr Gates will speak at a conference on "Advancing Enterprise" organised by Mr Brown.


Bill Gates, who is to receive an honorary knighthood
The controversial software company creator - whose commercial success has led to hatred of him among his competitors - is worth an estimated $40 billion (£22 billion). Microsoft is described as the "Evil Empire" by those who resent its grip on the computer industry.

Other Americans to have received the KBE include George Bush, the former president, Rudolph Giuliani, the former mayor of New York, Steven Spielberg, the film director, and Alan Greenspan, the chairman of the US Federal Reserve Bank.

Mr Greenspan is another speaker at tomorrow's conference. The event has prompted resentment in the Prime Minister's close circle, who knew nothing about it until a fortnight ago.

They are annoyed that the conference - which gathers together luminaries from the business and political worlds including Mervyn King, the governor of the Bank of England, Jean-Claude Trichet, president of the European Central Bank, Sir Terry Leahy, chief executive of Tesco, and Lord Browne, chief executive of BP - is taking place in Tony Blair's most difficult week since he became Prime Minister in 1997.

"On the eve of Hutton and the university fees vote, this is Brown saying, 'Look at all my powerful friends'," said a Downing Street adviser.

Mr Gates has been a notable donor to charities and good causes. The Bill and Melinda Gates Foundation was created in 2000 to improve "equity in global health and learning". He has donated nearly $26 billion to the foundation.

The foundation set up a £139 million scholarship scheme three years ago to attract the brightest students to Cambridge University. It has also invested millions of dollars in research for an Aids vaccine.

[Lefty]

Just about everybody(maybe everybody)that has gone into competition with Microsoft has become millionaires. Go figger.

[Tom]

Originally posted by Lefty
..... ljb, thanks for pulling my chain. I do love to vent; great therapy.

Kind of like making Popeye eat spinach to annoy him, eh?

[ljb]

Lefty,
Your welcome, I know you need venting.