patrick.net

MockingbirdKiller says

What planet did you dream that shit up? It's total nonsense.

What part of it don't you understand?
[US account deficit] = [trade deficit] + [capital account deficit] = [US private dissavings] + [US budget deficit]

This is basic arithmetic. What flows out is what is the overspending.

Any moderator can delete mockingbird insults please?

MockingbirdKiller says

So what? Two completely different things.

No, they are linked through the account deficit as I described.
If the US was a single person, the deficit for this person would be loss in trading with others + the loss in investments.
With many participants, it's just the sum of participants.
The government is the largest participant.

Stop assuming other people are idiots and think it through.

"Go learn some basic Econ 101" seems a bit personal to me, but maybe the mods can chime in on it. Because I'm certain a lot of comments from Bob or Aphroman that were much, much less personal than that have been censored.

MockingbirdKiller says

That is just a Keynesiantarded fictional construct anyway and

"Keynesiantarded" is what Trump is doing. This is why we reached 4% growth 2nd quarter.

What MockingbirdKiller writes is totally moronic.

MockingbirdKiller says

No, it isn't. Not that it is any of your business. It wasn't even directed at you.

Following the rules is everyone's business!

tatupu70 says

Following the rules is everyone's business!

Comment in a thread about the rules, or the flag feature. This thread is about the deficit, not your LeonDurham/tatupu70/JoeyJoeJoeJr trolling (five comments already, none of them about the OP).

As for the debate occurring regarding the deficit, i.e. the topic that is getting buried, this would be a good time to point out Warren Buffett's parable of Thriftville vs Squanderville. Deficit spending by whatever name ("stimulus" seems popular lately) produces deficits in Squanderville (where things are consumed) and surplus in Thriftville (where things are made).

The W and Trump tax shifts (mislabeled "cuts," but they were not really cuts because that would require cutting spending) had the effect of increasing the net income of people who had already high net incomes. Prospective Corvette buyers bought Ferraris. Prospective Cadillac buyers bought Bentleys. GM went BK.

As much as Trump and his supporters want to see him as different, when it comes to fiscal responsibility, he's like every other politician. They will always put the cost of their political agenda on the national deficit credit card. In the current political environment where neither Ds nor Rs are truly fiscal conservatives, there will be token resistance from Ds and whole hearted support for continuation of reckless spending.

HEYYOU says

http://www.usadebtclock.com/

That's why we need to lower cost of healthcare in our country. It'll drop that number by a factor of 1000.

I've been paying taxes all my life, and a lot. But man I know people who haven't worked a day in their life, been lifetime moochers, all Democrats.

MockingbirdKiller says

What does tax cuts have to do with trade deficits? Nothing. Your chart also has nothing to do with the tax cuts or proving that they are bad for the trade deficit.

If the $500B trade deficit was eliminated, that would be ~$100B in federal corporate and worker income taxes being paid, not to mention the property taxes, state income and sales taxes, etc. that would reduce the need for state block grants as well. Plus reduce the welfare rolls.

But in fairness, it's a secondary issue to overall spending. The Trade Deficit is probably 10-20% of the cause, however.

However, there is something between the declining standard of living for the 60% and Trade Deficits, the trade deficit tracks well with both deficit spending and the decline in standard of living increases for ~2/3 of Americans (and brutal for the bottom 20%)

This is crazy, everyone knows a bloated central government spending like there's no tomorrow is a sure sign of a healthy, stable, economy!

Aphroman says

which is why the Cult45 cucks get so triggered.

There was no cult around Obama, amirite?

ThreeBays says

Reagan
Started Presidency: $965 billion
Ended Presidency: $2.74 trillion
Increased 184% or 13.9% per year

36 yrs. debt increase 2056%. 8.7%/yrs.
Tells you something wrong with the economic strategy during that period.

ThreeBays says

We have over $200 trillion in unfunded liabilities.

$200 trillions lol...
Over how long?
What is expected cumulative GDP over that period assuming just 2% nominal growth?

Just like the State Municipal pension crisis - there is no tax scheme or Bull Market that can ever pay this off.

We are going to have to cut back spending.

Government workers making 6 figure pensions will have to cough something up, and we are going to have to do some long overdue reform to our entitlement and welfare systems.

Expect the Democrats to fight against this government reform every step of the way. Republicans can no longer ignore it and will have to take on this unpleasant task head on.

ThreeBays says

US treasuries are an IOU from the government, and we count those as the federal deficit. SS, Medicare, government and veteran benefits, and all other commitments it has made are also IOUs. However the government fails to add those liabilities to the so called "deficit".

You seem to confuse deficit, debt, and future liabilities.

rdm says

What happens when the economy slows or goes to recession?

Interest rates get lowered. But "we" disappeared the banks' bad debts, please recall.

Senate Majority Leader Mitch McConnell on Tuesday called the ballooning budget deficit “very disturbing” but said large federal spending programs were to blame, dismissing criticism that last year’s GOP tax cuts are saddling the country with more debt.

https://www.washingtonpost.com/business/economy/mcconnell-calls-deficit-very-disturbing-blames-federal-spending-dismisses-criticism-of-tax-cut/2018/10/16/a5b93da0-d15c-11e8-8c22-fa2ef74bd6d6_story.html?noredirect=on&utm_term=.a36028de30b2

Putrefied turtle and Republican leader McCornhole is now "disturbed" by what everyone, except every Republican in the Senate and most of the Republican House predicted, that cutting taxes and increasing spending increased the deficit. The solution, that everyone knew would be forth coming, is to make up the difference from seniors and poors.

socal2 says

We are going to have to cut back spending.

Government workers making 6 figure pensions will have to cough something up, and we are going to have to do some long overdue reform to our entitlement and welfare systems.

Expect the Democrats to fight against this government reform every step of the way. Republicans can no longer ignore it and will have to take on this unpleasant task head on.

If the Rs go after government workers, welfare, etc. without making similar cuts to defense, farm subsidies, etc. of course the Ds will fight it. Depending what happens in the mid term elections, the Rs should be able to push through whatever cuts they want if they have the political will to do so.

I'm not inclined to believe either party will make a serious effort to cut spending. Cutting spending tends to reduce receipts, which can lead to a deflationary spiral. Not something that a politician wants on their watch. Kicking the can down the road is expedient.

MegaForce says

??? trade is not a deficit. Never is. I trade you a goat for 10 chickens, where's the deficit? In order for that trade to occur, you agreed to the deal as did I. I might not like that you only gave me 10 chickens instead of 15, but I found it acceptable enough to conclude the trade, yes?

We're not a barter economy and these transactions are financial, not swaps for goods. Ricardo's famous wool and wine example fails because the goods involved are manufactured goods, not agricultural products that have a far tighter limit of scale (you can only raise so many sheep in Portugal or England).

Eventually if you outsource your profit-generating industries overseas, you won't have any profit to import with, and no domestic industry to produce for you. There no guarantee the money that goes abroad won't come back as buyouts of IP and Profitable Companies, to further be outsourced to China.

Everyone talks about how smart China is, one thing they are not doing is Outsourcing high valued added manufacturing, nor replacing Chinese employees with imported Somalians or anybody else.

There's also no IP involved in chicken and goats - at least nowhere the same degree of high tech, high value added manufacturing which has nothing but disadvantages to outsource - especially to a strategic rival.

Obama didn't build no Roads... uh-uh-uh You know? Trump did! Trump is building roads that You and I can use to create commerce and jobs.
You're Welcome!

MegaForce says

The US government has consistently been only able to retrieve about 18% - 21% of GDP from the income tax. Didn't matter when the top rates were 91% or 25%, that range has held solid. It's called Hauser's law, after the guy who discovered it.

Hauser's law is bullshit. We're in the midst of proving it this year. Revenue is down 19%.

http://egnorance.blogspot.com/2012/08/hausers-law.html