Where the debt came from


By YesYNot   Follow   Sat, 10 Nov 2012, 7:57am   1,609 views   30 comments
In Reston VA 20194   Watch (1)   Share   Quote   Permalink   Like   Dislike  

Here's a reminder to help prevent amnesia related finger pointing at Obama regarding the debt.

http://www.youtube.com/watch?feature=player_embedded&v=LcvLHHMC4iI

What percentage of the debt is due to the economy, to Bush, and to Obama?
Economy - 26%
Bush - 60%
Obama (including extension of Bush tax cuts) - 14%

Keep that in mind as you watch Boehner try to claim some moral authority in the upcoming fiscal cliff show.

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  1. errc


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    1   8:05am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    It doesn't really matter where we came from, what's more important is where are we going

    I just hope they can find a solution that involves baby boomes avoiding their comeuppance, and putting the full burden on working class millenials.

    I remember when I filed chapter 7 bk. It was always some big crisis to figure out how to pay the interest payments this month just to buy a little time until next. By the time I actually realized my insolvency, I had actually been bankrupt for awhile, because there was no way I was ever going to repay my debts.

  2. KILLERJANE


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    2   8:18am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Seriously? Thank you for posting this. Maybe this medicine will help those suffering amnesia/brainwashing disorder. But probably not. You realize that a great portion of our population in US are less thoughfully intelligent as you. It amazes me all the time to see the ignorant lack of thought among the masses. It is weird.

  3. Bellingham Bill


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    3   8:25am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    yeah, those 2001-2003 tax cuts didn't pay for themselves. We need to let all of them expire.

    Then we need to add taxes to pay for the $4T in war expense thanks to the letting the neocons get us into two unnecessary wars.

    Then we need to add taxes to pay off the rising Medicare burden as the baby boom turns 65:

    http://research.stlouisfed.org/fred2/graph/?g=cGd

    shows Medicare cost is 8% of wages now, so that 2.9% isn't going to cut it.

    Medicaid costs are also going to skyrocket since PPACA puts 17 million people on the program, so we need more taxes for that too.

    Do people understand yet that we have to *double* taxes in this country?

    We can't have our cake and eat it too.

  4. marcus


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    4   8:54am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    But, but,...lowering taxes grows the economy and actually increases tax revenues. What, did you miss the 80s ? I've heard in fact, that if you lower taxes to zero, tax revenues to the government will increase to infinity.

    In case you don't understand, it's because the tax cuts give money to investors who know what to do with the money better than the government. We're talking the fucking job creators PEOPLE !!

    (where's my sarcasm font when I need it ?)

  5. bob2356


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    5   8:55am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    We can't have our cake and eat it too.

    We can't? Reagan, Rove, Romney, and Bush (pretty cool they almost all have names starting with R as in Republican, Bush is always odd man out) all said we could. Were is the problem? Cut taxes and tax revenue will soar. Then increase spending so all that extra money has some place to go. Perfectly logical :) About 49% of the country believed it on Nov 5th. You just have a bad attitude or are a democrat or something. (note for the dense and/or right wingnuts, the preceding message was all sarcasm, not an endorsement).

  6. PockyClipsNow


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    6   8:57am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    yeah, those 2001-2003 tax cuts didn't pay for themselves. We need to let all of them expire.

    Then we need to add taxes to pay for the $4T in war expense thanks to the letting the neocons get us into two unnecessary wars.

    Then we need to add taxes to pay off the rising Medicare burden as the baby boom turns 65:

    http://research.stlouisfed.org/fred2/graph/?g=cGd

    shows Medicare cost is 8% of wages now, so that 2.9% isn't going to cut it.

    Medicaid costs are also going to skyrocket since PPACA puts 17 million people on the program, so we need more taxes for that too.

    Do people understand yet that we have to *double* taxes in this country?

    We can't have our cake and eat it too.

    well we could double taxes OR cut govt spending in half. or keep printing/deficit spending. (obviously its the last one 4eva).

  7. thomaswong.1986


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    7   8:57am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    Then we need to add taxes to pay for the $4T in war expense thanks to the letting the neocons get us into two unnecessary wars.

    "two unnecessary wars ?"

    First off, we asked Afghanistan to hand over Bin Laden, but they said..

    "Over our dead bodies.." and we did go over their dead bodies.

    Or did you expect us to just sit there for years and decades out sitting as toothless pacifists.

    Whose side are you on ? Are you rewriting history now ?

  8. thomaswong.1986


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    8   9:03am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    Do people understand yet that we have to *double* taxes in this country?

    as did the UK post WWI and they went through deep stagnation for 3 decades....

  9. Bellingham Bill


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    9   9:06am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    PockyClipsNow says

    OR cut govt spending in half.

    propose your cuts. Remember every $10B in cuts is going to devastate a city of 200,000 basically.

    Taxes, on the other hand, are just expropriating money from people who have way too much already.

    http://research.stlouisfed.org/fred2/series/CP

  10. KILLERJANE


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    10   9:07am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Umm yeah sure ok. If we didn't have a long war then how would halliburton and others have the time to lay pipeline and uh yeah you know protect us and the troops from all our money, err from all our enemies.

  11. Bellingham Bill


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    11   9:08am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    >as did the UK post WWI and they went through deep stagnation for 3 decades....

    they were also on the Gold Standard and making a lot of other mistakes (plus had that Luftwaffe problem for 3-4 years, LOL)

    how's that working for ya?

    http://research.stlouisfed.org/fred2/graph/?g=cGj

  12. thomaswong.1986


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    12   9:12am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    how's that working for ya?

    no it didnt work well for British citizens at all as their economy stagnated for decades..

    I ment post WW 2 not 1 ...

  13. Bellingham Bill


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    13   9:16am Sat 10 Nov 2012   Share   Quote   Permalink   Like (1)   Dislike  

    >no it didnt work well for British citizens at all as their economy stagnated for decades..

    they also lost their fucking empire and sterling area in the postwar, and had to suffer the US's intrusion if not outright takeover into their prior neocolonial holdings (Africa, S America, Persian Gulf).

    Funny how you avoid the fact that high-tax, high-service nations like Canada, Sweden, Norway, Germany, and Denmark are doing fucking fine right now.

    Much easier to dislodge some random bullshit from that Mountain of Rightwing Bullshit you're sitting on and toss it into the thread instead .

  14. thomaswong.1986


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    14   9:17am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    KILLERJANE says

    Umm yeah sure ok. If we didn't have a long war then how would halliburton and others have the time to lay pipeline and uh yeah you know protect us and the troops from all our money, err from all our enemies.

    you mean we had peaceful economic trade with many nations...

    N.Korea.. stop your nuke program and we will ship food aid...

  15. thomaswong.1986


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    15   9:19am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    Funny how you avoid the fact that high-tax, high-service nations like Canada, Sweden, Norway, Germany, and Denmark are doing fucking fine right now.

    that is their choice and Norway/canada/swed are all sitting on oil fields...
    not to mention.. Netherlands sitting on Nat gas.. 3rd largest in Europe.

  16. thomaswong.1986


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    16   9:25am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    they also lost their fucking empire and sterling area in the postwar, and had to suffer the US's intrusion if not outright takeover into their prior neocolonial holdings (Africa, S America, Persian Gulf).

    lost what? they decolonized in very peaceful manner ?

    and what take over are you now talkiing about..

    Samo Left wing crap we heard before.

  17. Bellingham Bill


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    17   9:27am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    >swed are all sitting on oil fields

    news to them!

    We've got tons of natural wealth here too, ya know.

    Norway does produce 170 bbl/yr per capita. It'd be hard to mess up that economy.

    Canada produces 34 bbl per person. At $100/bbl that's a $3400/capita tailwind for their economy. Significant but we've got those wealth flows too.

    The bottom line is that the US can in fact pay our way in the world. We just need to stop sucking the cocks of the 1% and get our fiscal house in order with higher taxes, massive defense cuts, and a total reordering of our grossly high-profit health sector.

    We're paying $5000 per-capita more for health care than Japan, $6000 more than Israel.

    Per-capita DOD is $3000, Japan is $400.

    We don't have to do battle with the whole world and we should stop spending like we do.

    We need to declare war on our $600B/yr trade deficit instead.

    http://research.stlouisfed.org/fred2/series/NETEXP

  18. thomaswong.1986


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    18   9:36am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    We need to declare war on our $600B/yr trade deficit instead.

    http://research.stlouisfed.org/fred2/series/NETEXP

    I can certainly agree with that.. but too many on the left have ignore given up on bread and butter jobs.

  19. Bellingham Bill


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    19   9:48am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    >but too many on the left have ignore given up on bread and butter jobs.

    well, that almost parses but I have no idea what you're trying to actually assert there.

    "The Left" -- and the country as a whole -- was sold a bill of goods with NAFTA for one.

    I'm all for free trade, but it has to come with NO TRADE DEFICIT. Trade deficits are just disguised borrowing.

    Conservatives say the fiscal deficit is "borrowing from our children". That isn't entirely true since for the most part it's just money we owe each other and if we forgive it or soft-default on it nothing really changes -- for every child loser there will be a child winner (actually more like for every 1 loser there will be 9 winners since it's the 90% who owe the 10% that money).

    But the $5.4T we owe foreigners:

    http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

    yes, that's a debt "our children" are going to have to pay if we don't default on it.

    The reason our economy is screwed is that money is gushing up the economic pyramid, from the 95% to the 5%, and also our trade deficit.

    Real estate -- this site is crowded with people cackling how much money they're banking as parasitical speculators -- is a primary sector where this wealth transfer is occurring. Always has been, save for that time after the Black Death that depopulated Europe, and the 1840-1880 period when good land was still free for the taking in the American West (provided the natives didn't get ya).

  20. marcus


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    20   9:48am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    The bottom line is that the US can in fact pay our way in the world. We just need to stop sucking the cocks of the 1% and get our fiscal house in order with higher taxes, massive defense cuts, and a total reordering of our grossly high-profit health sector.

    Unfortunately the 1%, or at least the part of the 1% that is the power behind the right wing, has every other idiot in the country buying their BS anti socialist message, or otherwise backing them for their supposed "social agenda" (pro-life, gay marriage, guns ...whatever works).

    My brother and some pundits think this phenomenon has peaked (ie propaganda dominated polarization with right wing dominating), and that this election proves it won't work anymore. I don't know. I think it took a truly great politician to beat their guy, who was seemingly trying to lose.

  21. YesYNot


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    21   9:48am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    I agree with a lot of what you have to say Bellingham Bill. We need to cut spending on defense and health care and address the trade deficit. How we get there on health care is a bit of a mystery.

    We reached peak oil production in the US in 1971.
    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M

    Our trade deficit is equal to about what we spend on net oil imports. The generally Demomocratic plans to address this with alternative energy plans and conservation recognize the importance of oil production. The Republican mantra of drill baby, drill, does nothing for the long term health of the country.

    Doubling taxes is probably a non-starter at the moment. I'd be happy with Obama's suggestions for now (20% cap gains and increase in top rate from 36 to 39%).

  22. Bellingham Bill


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    22   9:58am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    YesYNot says

    Doubling taxes is probably a non-starter at the moment.

    yeah, I know. My thesis is every dollar of higher taxes notionally comes out of housing rents. And what mortgage payments we can get from the bank.

    So a $5000/yr tax rise on people would be a $400/mo cut in their housing budget (ideally). At 4% rates $400/mo pays on a $100,000 mortgage, so that's how much land values would fall if the middle class had that extra $400/mo burden to face.

    Thing is, not all home value have that much embedded land value (building a 21st century home ain't cheap), so the extra burden would bleed into outright demand destruction in other areas.

    But Corporate America could in fact pay $500B/yr without suffering one iota:

    http://research.stlouisfed.org/fred2/series/CP

    shows that would knock their after-tax profits back to 2005. The horror.

    Double the top 5% tax burden and we'd get another $500B.

    The problem is that last $500B . . . spending cuts hit the middle class hard, as do tax rises.

    Getting it from cost savings in health care and defense drawdown would be best.

    I have no idea how we can close the trade deficit though. Tariffs maybe. Trade war might do us some good -- we've got millions of Americans who need work, time to look after our own. We should replace our $300B/yr deficit in oil with solar/wind/nuclear etc. capital investment.

  23. thomaswong.1986


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    23   10:03am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    YesYNot says

    The Republican mantra of drill baby, drill, does nothing for the long term health of the country.

    it was an interim step... rechanneling money back to domestic sources instead of sending it overseas, reinvested into jobs and eventual more solid LT sources.

    Or wait until you can grow Solar/Wind which provides 1% to much higher %%%

    good luck waiting for that to happen...

  24. thomaswong.1986


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    24   10:08am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    Bellingham Bill says

    I have no idea how we can close the trade deficit though. Tariffs maybe. Trade war might do us some good -- we've got millions of Americans who need work, time to look after our own.

    how much does your former employer Apple contribute to exports...

    yes some would say billions.. but thats just a journal number for US exports, but the real number is more close to ZERO... actually represents exports from FoxComm China. Chinese Raw Materials and Labor benefit.. we dont.

    Thats the problem that can be fixed easily.

  25. marcus


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    25   10:21am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    YesYNot says

    Doubling taxes is probably a non-starter at the moment

    IF only we could be in a space where taxes were double what they are now, and the political divide was over what to cut in spending in order to be able to lower taxes.

    That is, I still say what would work, but won't happen, is if we said, hence forth we pay our bills, and taxes only can be cut when spending is cut.

    But that can not happen, because the rich and powerful feel that they pay the lions share of taxes, and yet they know that in a democracy, we all get to decide how our government spends it's money (at least indirectly).

    So instead we are here. We spend way beyond what we are taxed, with the right wingers signing an oath not to raise taxes from levels that are too low, and with them saying "America can fuck off and die for all we care, that's all the taxes we are paying. You decide how to cut spending (but not from our cherished military industrial complex, old line energy complex, or from other corporate welfare)."

  26. YesYNot


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    26   11:25am Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    marcus says

    IF only we could be in a space where taxes were double what they are now, and the political divide was over what to cut in spending in order to be able to lower taxes.

    That's an interesting thought experiment. People often think in terms of changing from where we are now, and that is very limiting.

    I think that the issue is not so much that we need to pay all of our bills in tough times. The issue is that we need to run a surplus when times are good. States have to severely limit deficit spending, and it creates an unstable situation locally. The US gov't has more leeway and ought to use it.

    Clinton was lucky enough to be president in good times, and he ran a surplus.
    Bush came into office and gave the surplus and then some back during good times. Now, we are in bad times, and we are told that raising taxes will put us over a cliff.

    The republican line is to cut taxes when revenue is too high and cut taxes when revenue is too low. This sounds a lot like a Realtor saying it's a great time to buy.

  27. Bellingham Bill


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    27   12:05pm Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    YesYNot says

    Clinton was lucky enough to be president in good times, and he ran a surplus.

    yes, this was the surplus:

    http://research.stlouisfed.org/fred2/graph/?g=cGv

    problem was it was partially OTHER debt:

    http://research.stlouisfed.org/fred2/graph/?g=cGw

    (red line) that was giving us that tailwind

    (the higher tax regime and declining footprint of defense spending certainly helped, and once those two debt-killers were removed by Bush and the neocons it took even more debt pile-on 2003-2006 to attenuate growth of the fiscal deficit.)

  28. YesYNot


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    28   12:20pm Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    If you add the red and blue lines, it looks like a pretty even 700 to 800 billion from 1992 to 2000. That is significantly greater than the total US trade deficit during that period. I'm not sure how to interpret that.

    So, this shift to federal surplus was a transfer of debt from the government to the private sector. That chart makes it seem like it should have been pretty obvious that the gov't should have been using that surplus to pay down federal debt instead of giving it back to a private sector that was already taking on lots of debt.

  29. Bellingham Bill


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    29   12:39pm Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    The core problem is that the bottom 95% of the country is collecting only ~70% of the income.

    IOW, the top 5% enjoy parasitical rent taps on the 95% enabling one out of twenty people to capture one third of the money flow of the economy.

    This is of course unsustainable without redistribution of some kind.

    The current method of redistribution is the 5% loaning this money back into the paycheck economy via the deficit -- 2004-2007 it was being accomplished via the consumer credit expansion of the suicide lending bubble (2002-2003 was the new housing boom kicked off by falling interest rates).

    China was recycling its trade surplus dollars right back into our economy via purchase of agency debt (Fanny & Freddie debt issues that funded home purchases).

    The line "The Arabs have taken billions of dollars out of this country and now they must PUT IT BACK" from the movie Network is simply the most education thing I've ever heard. It really makes so much sense thinking of economics as money flows.

    Instead of redistribution back from the 5% to the 95% (via confiscatory taxes on the 5% or them lending us the money back) we can also just print more money to keep the system going.

    That's what we're doing now! $40B/month of new money funding mortgages is a semi-decent money input into the paycheck economy.

    I fully expect the Fed will have to monetize $2T of the social security trust fund this way, as needed.

    Just print it up and send out the checks. No new taxes needed.

  30. bob2356


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    30   1:39pm Sat 10 Nov 2012   Share   Quote   Permalink   Like   Dislike  

    YesYNot says

    The US gov't has more leeway and ought to use it.

    The gov't did use it's leeway, that's why there is such a huge problem now.

    Giving money to government is like giving whiskey and car keys to teen age boys. PJ O'rourke.

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