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Back in 2001, the CBO projected a cumulative surplus of $6 trillion


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2012 Apr 6, 2:55pm   38,745 views  50 comments

by marcus   ➕follow (6)   💰tip   ignore  

The source for this is said to be the CBO.

http://imgur.com/QNI2F

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1   marcus   2012 Apr 6, 3:24pm  

One thing that this doesn't show is the extent to which GDP growth being
lower than projected affects the deficit, but I guess that would be too difficult to show in this 2d graph.

Maybe a second graph showing only that - that is how much less the deficit would be with GDP at projected levels, would be helpful for people to fully comprehend what happened. That would seem to account for the steepening of the lower deficit line as of 2008.

2   marcus   2012 Apr 7, 3:52am  

Bush said "It's our money, we know what to do with it better than the government", so he gave tax cut that went mostly to high income people.

But really the projected surplus was the social security surplus. Which was essentially redistributed to the rich. Remember Al Gore with his "lock box" idea. What a different world this would be.

And now after two wars and trillions of dollars in tax cuts, we are going to be told that we need cuts to social services.

Wtf ?

Why isn't this story being shouted from the roof tops ? ( I know the answer - we've swung so far to the right that even the left is to the right of what should be center )

4   Tenpoundbass   2012 Apr 7, 5:56am  

So in other words this crappiest economic time since the black plague isnb't really happening, right Marcus? I bet you crap candy cane stools in your world.

5   marcus   2012 Apr 7, 6:10am  

Yes, ummm.... that sums it up perfectly. Glad to see that as always you completely understand where I'm coming from.

6   Honest Abe   2012 Apr 8, 3:49am  

Here, try this. http://en.wikipedia.org/wiki/History_of_the_United_States_public_debt

Your messiah has spent more than virtually all past presidents combined. You people live in fantasyland.

7   marcus   2012 Apr 8, 4:39am  

Honest Abe says

Your messiah has spent more than virtually all past presidents combined. You people live in fantasyland.

Translation: This topic is far beyond Abe's comprehension.

Imagine a household that was already living way beyond its means
and then expenses stayed the same while income dropped drastically.

This same kind of scenario is what lead to the exploding deficits under Obama. The expenses of two wars, medicare part D, and the Bush tax cuts, all continued, along with the rest of federal govt, while GDP and tax revenues dropped, to levels way below what had been expected.

10   marcus   2012 Apr 8, 6:44am  

Honest Abe says

http://cnsnews.com/node/72404

And this from YOUR TRUSTED NETWORK NEWS SOURCE.

"In the first 19 months of the Obama administration, the federal debt held by the public increased by $2.5260 trillion, which is more than the cumulative total of the national debt held by the public that was amassed by all U.S. presidents from George Washington through Ronald Reagan."

Yes it took longer for Bush to accomplish the same, but he did it during decent economics growth with off the books spending on wars, I might add (a practice that Obama ended).

Yes, Obama added some minor spending, but that's not where the deficit came from. Bush's wars spending and tax cut spending and medicare part D spending all continued under Obama, except tax revenues decreased.

I don't argue with you because I expect you to comprehend any of this Abe. But I guess I can hope that one or two intelligent republicans read it and maybe get a new insight or two.

11   thomas.wong1986   2012 Apr 8, 8:24am  

Nomograph says

Why won't anyone address this?

As the chart shows... War, 2001 recession, just like back in 1940s plus global competition. Tax cut was made to spur investment capital spending into US industries.

12   marcus   2012 Apr 8, 3:28pm  

A quote:

The general trend has been downward since Ronald Reagan took office in 1981. This is just a wild guess, but I think that may help explain why federal deficits have been out of control for most of the time since then.

http://www.tnr.com/blog/timothy-noah/102447/back-1955

13   marcus   2012 Apr 8, 3:31pm  

I wonder how much has to do with people simply making less.

14   Bellingham Bill   2012 Apr 8, 8:03pm  

Honest Abe says

http://cnsnews.com/node/72404

And this from YOUR TRUSTED NETWORK NEWS SOURCE.

CNS is "our" trusted network news? Check your link again, you entirely silly person.

15   freak80   2012 Apr 9, 12:39am  

Nomograph says

I hear crickets chirping.

Nomograph says

Where's all the Conservatives who insist that Obama created this massive national debt? Someone please set us straight.

Nomograph says

I'm still waiting for the Conservatives to weigh in here. Why all the silence?

Nomograph says

Why won't anyone address this?

But...Obama's a socialist! And he was influenced by Bill Ayers and Jeremiah Wright!

16   epinpb   2012 Apr 10, 1:14am  

I'm a contrarian, so here's my pass at shooting holes in your whole "us vs them", "Repubs vs Dems" budget battle BS that has taken over politics today. Remember, we are ALL in this together.

First, the CBO projections at the end of 2001 were based off of revenue that recently included an indefinite extension of the Internet Bubble. That was not realistic.

Second, this chart does not account for spending, which has grown from 1.9T in 2001 to 3.6T in 2011. This, obviously, is the real problem...regardless of where it was spent, or who spent it ... the issue is that BOTH parties are spending way beyond their means.

Third, all CBO projections are a point in time estimate based off of the current view of all the BS tax rules and laws from delayed temporary tax cuts, AMT's, and other such short term fixes that end up with long term complications that cloud the picture. For example, long term projections will include the ending of short term tax 'cuts'...and it never works out that way.

United we stand, divided we fall.

17   tdeloco   2012 Apr 10, 6:45am  

Nomograph says

Our great grandchildren will still be paying for the eight years of Conservative policies that lasted from 2000 to 2008

This mess will unravel within our lifetimes. Uncle Sam is earns approx $2.2T and spends $3.6T (including $480B to service our debt). Our debt seems to be accelerating as well. I also think a number of things will further accelerate our debt increase: the baby boomers retiring, Japanese defaulting, and EU countries defaulting.

I strongly urge everyone to educate themselves about what happens in the event of a default. Forewarned is forearmed. Things may happen differently as many things are unique to the U.S.

Look, I don't intend to be a fear monger, but this is what I truly believe.

Nomograph says

Why won't anyone address this?

Because they can't handle the truth! Hahaha.

The chart above shows that Republican policies enacted under Bush began blowing up just before Obama took office. Now, you have every Republican pointing at Obama, but he was simply the guy in office when Bush's policies were blowing up even bigger.

18   tdeloco   2012 Apr 10, 6:57am  

epinpb says

Remember, we are ALL in this together.

There's a reason the Republicans are called the Party of No! It's their way or the highway. Furthermore, Obama ain't got balls. He usually ends up bending over giving the Republicans 90% of what they wanted anyway.

19   socal2   2012 Apr 10, 8:50am  

epinpb says

First, the CBO projections at the end of 2001 were based off of revenue that recently included an indefinite extension of the Internet Bubble. That was not realistic.
Second, this chart does not account for spending, which has grown from 1.9T in 2001 to 3.6T in 2011. This, obviously, is the real problem...regardless of where it was spent, or who spent it ... the issue is that BOTH parties are spending way beyond their means.

Not to mention they are comparing 8 years of Bush's spending to 3 years of Obama's spending. Did Obama as a Senator vote against any of the spending programs?

Speaking of faulty CBO projections. Anyone see that the latest study on Obamacare says it will add $340 Billion to our deficit? If I was a Republican consultant, I would be running non-stop videos 24/7 of Obama saying that he would not sign a healthcare bill that would add one dollar to our deficit during the Fall election season.

http://www.washingtonpost.com/business/economy/health-care-law-will-add-340-billion-to-deficit-new-study-finds/2012/04/09/gIQAti1o6S_story.html

20   marcus   2012 Apr 10, 10:43am  

epinpb says

Second, this chart does not account for spending, which has grown from 1.9T in 2001 to 3.6T in 2011.

I'd love to know how much of those increases are attributable to increases in social security payments, medicare payment increases (part D?), and war spending(which these days is on the books).

Republicans will say yes, social security and medicare are going up so fast that we
have to cut them.

But to that I say, then how come we could afford the Bush Tax cuts, and two wars? That money should have been saved to cover these predictable increases.

21   msilenus   2012 Apr 10, 11:36am  

socal2 says

Speaking of faulty CBO projections. Anyone see that the latest study on Obamacare says it will add $340 Billion to our deficit

Klein points out that under Blahous' methodology, there's no deficit problem:

http://www.washingtonpost.com/blogs/ezra-klein/post/the-weird-baseline-obamacares-opponents-are-using/2012/04/10/gIQAu3de8S_blog.html#pagebreak

22   tts   2012 Apr 10, 12:50pm  

marcus says

I'd love to know how much of those increases are attributable to increases in social security payments, medicare payment increases (part D?), and war spending(which these days is on the books).

These help any?

I must say that the few comments we've been getting from this boards' Repubs have been surprisingly terrible if not flat out facetious, it may have been educational for a few fence sitters but I doubt its changed any R's minds.

23   marcus   2012 Apr 10, 1:10pm  

tts says

I doubt its changed any R's minds

True. At least maybe independents will weigh out the facts.

Nice graphs. The biggest factors appear to be, the wars, the tax cuts and the revenue decreases (rust color). Medicare D pretty small in comparison.

24   tdeloco   2012 Apr 10, 2:02pm  

socal2 says

Not to mention they are comparing 8 years of Bush's spending to 3 years of Obama's spending

Once again! You guys keep addressing what got spent under who's office? Not about who's responsible for how much, as the original picture addressed.

26   tts   2012 Apr 11, 6:56am  

socal2 says

I seem to remember that Bush "inherited" the dot.com recession and then we got struck with our nation's biggest attack since Pearl Harbor on 9/11. Do you think those little events had any impact on our economy and spending priorities?

The .com bust mostly killed NASDAQ stocks and effected Wall St. to some extent too but was very minor as far as most recessions go. 9/11 didn't have much of an economic impact either, it was Bush's reactions to that event (ie. wars + major deficit spending + blowing the credit/housing bubble) that had the major effect.

As of course you can easily see above in the chart I posted.

27   socal2   2012 Apr 11, 7:11am  

tts says

As of course you can easily see above in the chart I posted.

The chart you posted shows virtually every category of debt expanding since Obama was elected in 2008.

At what point does Obama and the Democrats get to share some responsibility for our economic condition?

Do you blame Bush and Republicans for the economic basket cases in California, Illinois and New York and the pension bombs we have no prayer of covering? If only Guv Moonbeam could print money!

28   freak80   2012 Apr 11, 10:41am  

Relatively speaking, the Democrats are more fiscally responsible than Republicans.

1) Democrats = tax and spend
2) Republicans = borrow and spend

Option 1 is relatively responsible compared to option 2.

29   marcus   2012 Apr 11, 10:55am  

wthrfrk80 says

Relatively speaking, the Democrats are more fiscally responsible than Republicans.

1) Democrats = tax and spend

2) Republicans = borrow and spend

Option 1 is relatively responsible compared to option 2.

It's totally responsible versus totally irresponsible. The right wing Machiavellian starve the beast idea is close to working.

Step 1) Do huge deficit spending on tax breaks to the rich, wars for the military industrial complex, and subsidies to your corporate pals.

Step 2) When the resulting deficit crisis explodes, say oh, look at the projections for social security and medicare, and "safety net" spending. "We have to do the responsible thing and cut all of those."

Morality is in the eyes of the beholder.

30   freak80   2012 Apr 11, 1:57pm  

marcus says

Morality is in the eyes of the beholder.

Well then how can anyone say, for example, "the right wing 'starve the beast' strategy is immoral"? If all morality is relative, then everyone simply does what is in their best interest regardless of who is hurt in the process.

31   marcus   2012 Apr 11, 2:46pm  

That's not what I meant. What I meant is, interesting that many right wingers have what once was called the "moral majority" view, later it was called family values, when in fact I think that stealing from the people and fucking them over intentionally is immoral.

32   tts   2012 Apr 11, 11:29pm  

socal2 says

The chart you posted shows virtually every category of debt expanding since Obama was elected in 2008.

I believe you're either being facetious or trolling at this point but on the off chance I'm wrong:

The congress/president that forms and passes the bills gets to take the credit/blame for said bills cost/impact.

There are lots of reasons to dislike Obama but the deficit or the recession aren't valid ones. Those are things he inherited from Bush.

socal2 says

Do you blame Bush and Republicans for the economic basket cases in California, Illinois and New York and the pension bombs we have no prayer of covering? If only Guv Moonbeam could print money!

I blame Repubs and Dems for that since those are problems that were allowed to develop over decades, both parties and several presidents played a role in causing that mess. Instead of playing the "politics as football" game where you blindly support your side no matter what you should learn to focus on issues that you support rather than "teams", the issues are what really matter in the end.

33   Bellingham Bill   2012 Apr 12, 6:06am  

socal2 says

At what point does Obama and the Democrats get to share some responsibility for our economic condition?

The critical economic mistakes were made 1995-2006.

The Republicans were in control of everything but the WH (1995-2000) and Senate (2001-2002).

However (as TTS says immediately above) framing this as a Team Red vs Team Blue issue is muddying things. This is really a Conservative vs Liberal issue.

The mistakes that were made were driven by conservative ideologies -- free trade with China (MFN) & Mexico (NAFTA), "Drill baby Drill" as our sole national energy policy, Deregulation of the FIRE sector (Gramm–Leach–Bliley, eliminating regulatory oversight of lending 2001-2005), "Reagan Proved Deficits Don't Matter" (Cheney), refusing to reform private medical services but just subsidize them with Federal spending (Medicare C & D), and the wars of course.

Now, all of this was active policy-making by Republicans, and they were able to find enough red-state / "centrist" Democrats to go along with these hare-brained ideas.

As a result of these policies, our cumulative trade deficit with China is over $3T, foreigners now hold over $5T of our sovereign debt (100 million man-years of labor @ $25/hr), we're still over-reliant on $120+ oil, we're still in the hangover period from the 1999-2006 consumer credit bubble:

http://research.stlouisfed.org/fred2/graph/?g=6q1

and we're still paying 2-3X the OECD per-capita on medical costs, $8000 per capita when everybody else is in the $3000 range.

You guys fucked everything up 1995-2006, and if you were intellectually honest with yourself you'd be able to see it.

And what's even worse is that the Republicans want to double-down on all these past mistakes. More war spending, more tax cuts, more trade deficits (the two Republican debates I checked didn't talk about our $700B+/yr trade deficit at all), no attempt to reform our wasteful $2.5T/yr medical sector, heckling shit like Solyndra instead of proposing their own R&D initiatives.

The Republicans (remaining in control of the House and at least in a blocking position in the Senate) are going to continue driving this country straight into the ground economically. Things are going to start getting brutal later this decade. I don't plan on being here, fwiw, I think events are just dialed in now and there is no escape other than a) being independently wealthy to afford living in a 'Fortress' or b) GTFO.

34   freak80   2012 Apr 12, 6:42am  

Delurking says

The mistakes that were made were driven by conservative ideologies -- free trade with China (MFN) & Mexico (NAFTA), "Drill baby Drill" as our sole national energy policy, Deregulation of the FIRE sector (Gramm–Leach–Bliley, eliminating regulatory oversight of lending 2001-2005), "Reagan Proved Deficits Don't Matter" (Cheney), refusing to reform private medical services but just subsidize them with Federal spending (Medicare C & D), and the wars of course.

I think you're correct on all that, except for the "drill baby drill" assertion. It wasn't until after prices spiked that domestric drilling activity spiked. It's hard to blame anyone for using oil when it was $15-20/bbl in the late 90's and early 2000s.

35   Bellingham Bill   2012 Apr 12, 6:57am  

wthrfrk80 says

It's hard to blame anyone for using oil when it was $15-20/bbl in the late 90's and early 2000s.

sure, but we're paying for that national lassitude now. When I came back to the states in mid-2000 I bought a Miata, partially for the decent gas mileage and partially with an eye for EV conversion later, since I understood the sub-$2 price regime was coming to an end.

Clinton did start the:

http://en.wikipedia.org/wiki/Partnership_for_a_New_Generation_of_Vehicles

dunno what happened with that other than the Bush Administration shit-canning it.

There was some other Clinton-era R&D effort too that was more of an industry boondoggle. Might have been that one, I forget now. Part of the problem of the 1990s was the electorate putting Republicans back in power in 1994 just stopped the move to the left cold. The resulting gridlock was good for limiting expansion of government at least, which was partially responsible for the brief surplus of 1999-2000.

36   freak80   2012 Apr 12, 7:09am  

Delurking says

sure, but we're paying for that national lassitude now.

Agree, but it's hard to convince voters that we desperately need high-MPG vehicles when gasoline is $1.20/gallon. People were even trading up to massive SUVs during that time. We're incredibly short-sighted creatures aren't we? So I can't really blame politicians (of either party) for not restricting gasoline use. Heck, we're the nation that invented "car culture." Remember those old songs by the Beach Boys? "And we'll have fun fun fun until daddy takes the T-Bird away..."

37   finehoe   2012 Apr 13, 12:55am  

socal2 says

I seem to remember that Bush "inherited" the dot.com recession

You "remember" wrong: The NBER's Business Cycle Dating Committee has determined that a peak in business activity occurred in the U.S. economy in March 2001. That's after Bush took office, so all he inherited was a $237 billion surplus.

38   socal2   2012 Apr 13, 5:35am  

tts says

The congress/president that forms and passes the bills gets to take the credit/blame for said bills cost/impact.

And Democrats got total control of Congress in 2006.

Look, I am not denying that Bush and the Republicans spent irresponsibly during the Bush years. Why do you think the Teaparty wing of the Republicans sprung up in recent years?

I am just pointing out that the Democrats were also a big part of the spending binge - and they had a chance to undo all the "Bush Tax Cuts" when Obama had majorities in 2009, but he pussed out and wasted our country's time on Obamacare for 3 years.

Again, at least the Republicans are now paying lip-service to the idea of getting our deficits in order. Whereas the Democrats are still acting like there is no big problem (as evident of their lack of budgets or courage to raise taxes or cut spending). If Romney wins in November and the Republicans take back the Senate and its business as usual in terms of spending, I will be ready for a 3rd party.

39   socal2   2012 Apr 13, 5:44am  

tts says

I blame Repubs and Dems for that since those are problems that were allowed to develop over decades, both parties and several presidents played a role in causing that mess.

Come on man. Its not Republican or Conservative policies in California, Illinois or New York that has ruined these big states.

Its totally the failed Blue State model of big expensive, unionized government and high taxes.

Granted California has had some pathetic RINO Governors (Arnold), but the California executive position is one of the weakest in the nation and the California Legislature has been dominated by FAR LEFT liberals forever. FFS - the Libs in California's legislature won't even approve Guv Moonbeams modest budget reforms he proposed this year.

I assume you are aware of the terrible pension bomb facing California municipal and State workers? No amount of increased taxes is going to square that circle. Are you really going to blame both parties for these unsustainable union policies and benefits?

40   socal2   2012 Apr 13, 5:59am  

Delurking says

The Republicans were in control of everything but the WH (1995-2000) and Senate (2001-2002).
However (as TTS says immediately above) framing this as a Team Red vs Team Blue issue is muddying things. This is really a Conservative vs Liberal issue.
The mistakes that were made were driven by conservative ideologies -- free trade with China (MFN) & Mexico (NAFTA),

Love it. Republicans were in control of EVERYTHING, except the Presidency, the Senate, Governorships, State Legislatures, Media, Academia, Hollywood, Education, Unions........but its all their fault.

It's never the Democrats fault. Ever. Even when Democrats hold total majorities.

BTW - are you really against free trade agreements? Do you think we don't live in a globalized world and we can really keep 20th century manufacturing jobs going in America so we can all buy $5,000 IPods and $70,000 GM cars to support expensive union manufacturing?

Both Left and Right better get through their heads that we no longer hold our post WWII monopolies on industry and that we are going to have to scrape, claw and compete with the rest of the planet.

Stop living in the past. We need to forge a new future and it is going to be hard and competitive.

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