Debt Debate in Congress

[nathanm]

Ringing a bell yet?  I believe that was your way of proving that Obama has been so much more fiscally responsible since his spending is lower than his predecessor except on entitlement spending which has exploded because President Obama in his utopian world has no clue how jobs are created.

I see, Unemployment Insurance, Medicaid, SNAP, and the rest are all Obama's programs.  Talk about gymnastics! 

Explain how deficits would paradoxically increase if government is cut.  That's some serious economic gymnastics there.   If the government spends less money as the economy ramps back up and revenues increase due to increased productivity and GDP I fail to see how this is possible.  You and others like you keep trying to compare what is happening here with economies like Greece, Germany, Ireland, or Japan without considering many variables which do not apply to the U.S. economy or monetary system.  You need to spend less time with your head in Google and reading Krugman and get out into the real world from time-to-time.

Um, the contemplated action is not cutting government once the economy ramps up. Obama and the Republicans are both proposing to cut the deficit right now. All that will do is put more people out of work, which will reduce tax receipts, which will increase the budget deficit. It's blindingly simple if you aren't approaching the problem ideologically. Not only is it logically easy to comprehend, but history bears this out. It happened three times in Japan between 1995 and 2005. It has already happened in Greece. It even happened in the US during the Depression. On what planet does putting people out of work not reduce tax receipts?

We all agree that both businesses and individuals are primarily in debt paying mode right now. Money that goes to pay debt is useless for employing people unless it is being lent back out by the banks, which it is largely not right now. They're too busy investing in commodities on their own book to lend money. Deficit spending by the government increases the rate at which business recovers by increasing its income.

[Conan71]

I see, Unemployment Insurance, Medicaid, SNAP, and the rest are all Obama's programs.  Talk about gymnastics!  
Um, the contemplated action is not cutting government once the economy ramps up. Obama and the Republicans are both proposing to cut the deficit right now. All that will do is put more people out of work, which will reduce tax receipts, which will increase the budget deficit. It's blindingly simple if you aren't approaching the problem ideologically. Not only is it logically easy to comprehend, but history bears this out. It happened three times in Japan between 1995 and 2005. It has already happened in Greece. It even happened in the US during the Depression. On what planet does putting people out of work not reduce tax receipts?

We all agree that both businesses and individuals are primarily in debt paying mode right now. Money that goes to pay debt is useless for employing people unless it is being lent back out by the banks, which it is largely not right now. They're too busy investing in commodities on their own book to lend money. Deficit spending by the government increases the rate at which business recovers by increasing its income.

What gymnastics?  You provided a graph showing the drastic increase in income security which Obama has repeatedly extended.  Sheesh, are you arguing with data YOU provided now?

Since you are so brilliant on matters of economics, why are you not consulting with Congress or the President or people much more learned on the subject of deficits than yourself?  There's plenty of waste to trim without creating mass unemployment, if they would simply start incrementally and keep going incrementally.  Aside from that, if government jobs are lost, ultimately the cost of unemployment benefits are less costly than salaries and pension contributions as well as other bennies they receive.  As well if it's a service the government really needs, they can contract with a private entrepreneur to still receive said services which helps employ people in the private sector.

[Gaspar]

Since you are so brilliant on matters of economics, why are you not consulting with Congress or the President or people much more learned on the subject of deficits than yourself? 

Wouldn't amount to anything.  The president brushes aside such advice.  He's running a one man band.

[Conan71]

Wouldn't amount to anything.  The president brushes aside such advice.  He's running a one man band.

[guido911]

What gymnastics?  You provided a graph showing the drastic increase in income security which Obama has repeatedly extended.  Sheesh, are you arguing with data YOU provided now?

Since you are so brilliant on matters of economics, why are you not consulting with Congress or the President or people much more learned on the subject of deficits than yourself?  There's plenty of waste to trim without creating mass unemployment, if they would simply start incrementally and keep going incrementally.  Aside from that, if government jobs are lost, ultimately the cost of unemployment benefits are less costly than salaries and pension contributions as well as other bennies they receive.  As well if it's a service the government really needs, they can contract with a private entrepreneur to still receive said services which helps employ people in the private sector.

[nathanm]

What gymnastics?  You provided a graph showing the drastic increase in income security which Obama has repeatedly extended.  Sheesh, are you arguing with data YOU provided now?

Since you are so brilliant on matters of economics, why are you not consulting with Congress or the President or people much more learned on the subject of deficits than yourself?  There's plenty of waste to trim without creating mass unemployment, if they would simply start incrementally and keep going incrementally.  Aside from that, if government jobs are lost, ultimately the cost of unemployment benefits are less costly than salaries and pension contributions as well as other bennies they receive.  As well if it's a service the government really needs, they can contract with a private entrepreneur to still receive said services which helps employ people in the private sector.

Once again, I was disputing your characterization of increasing expenditures on automatic social programs as something that Obama (or even the current or previous Congress) is specifically responsible for. Spending has increased on income security, as well it should have when millions are out of work.

The entire point of the chart was to dispute someone's earlier assertion that Obama and the previous Congress caused the massive budget deficits we presently face. Not that it matters, but if we can't even remember how we got where we are, how can we possibly expect to get out?

I really like the passive-aggressive snark, though. It was absolutely delightful. Moving on, you're only considering first order effects when you say that it's cheaper to let people go. Those people will indeed be eligible for unemployment, which you rightly consider. However, we should delve deeper. Not only will they be unemployed, thus find themselves on the dole and costing us yet more in UI outlays (or whatever system the Feds use, I don't actually know), but they will also pay less income tax, thus reducing revenue, although we're still not at a net loss on letting them go, so let's continue. Those newly unemployed workers will have to cut back, which reduces the amount of money being paid to others that would then be taxed. And those people have to cut back, and so on down the line. With each foregone transaction GDP shrinks, taxes that would have been collected are not, and we end up spending that much more on social programs.

It's tantamount to a voluntary deflationary spiral.

And if that isn't enough of a slap in the face, we're doing this at a time when we can get paid for borrowing money. (real interest rates were negative out to 5 years on Treasuries last I looked) Are we so out of ideas that we can't think of anything to do with free money? Increase the growth rate only slightly and we'll have trillions more in the pot to pay off the debt by the end of the decade.

I don't know why I'm even bothering to discuss this with you, though. If you refuse to believe that this sort of thing has happened in the past despite records clearly indicating that it has, nothing I can say will change your mind.

One more thing, though: Why on Earth would you propose spending more money to provide services than we already do. Private enterprise doesn't magically make employees less expensive, especially where private enterprise and government intersect. The employee, certainly, isn't better off getting paid indirectly. I don't think I'd be better off, either, what with adding a middle man where there was none before.

[Conan71]

Once again, I was disputing your characterization of increasing expenditures on automatic social programs as something that Obama (or even the current or previous Congress) is specifically responsible for. Spending has increased on income security, as well it should have when millions are out of work.

The entire point of the chart was to dispute someone's earlier assertion that Obama and the previous Congress caused the massive budget deficits we presently face. Not that it matters, but if we can't even remember how we got where we are, how can we possibly expect to get out?

I really like the passive-aggressive snark, though. It was absolutely delightful. Moving on, you're only considering first order effects when you say that it's cheaper to let people go. Those people will indeed be eligible for unemployment, which you rightly consider. However, we should delve deeper. Not only will they be unemployed, thus find themselves on the dole and costing us yet more in UI outlays (or whatever system the Feds use, I don't actually know), but they will also pay less income tax, thus reducing revenue, although we're still not at a net loss on letting them go, so let's continue. Those newly unemployed workers will have to cut back, which reduces the amount of money being paid to others that would then be taxed. And those people have to cut back, and so on down the line. With each foregone transaction GDP shrinks, taxes that would have been collected are not, and we end up spending that much more on social programs.

It's tantamount to a voluntary deflationary spiral.

And if that isn't enough of a slap in the face, we're doing this at a time when we can get paid for borrowing money. (real interest rates were negative out to 5 years on Treasuries last I looked) Are we so out of ideas that we can't think of anything to do with free money? Increase the growth rate only slightly and we'll have trillions more in the pot to pay off the debt by the end of the decade.

I don't know why I'm even bothering to discuss this with you, though. If you refuse to believe that this sort of thing has happened in the past despite records clearly indicating that it has, nothing I can say will change your mind.

One more thing, though: Why on Earth would you propose spending more money to provide services than we already do. Private enterprise doesn't magically make employees less expensive, especially where private enterprise and government intersect. The employee, certainly, isn't better off getting paid indirectly. I don't think I'd be better off, either, what with adding a middle man where there was none before.

It's quite simple Nate, private sector jobs don't carry high benefit costs such as pensions and there are higher stakes for better productivity.  Private sector employees are typically remunerated based on skill and merit which generally rewards productivity and efficiency unlike tenure-based compensation schemes which can protect inefficient, jaded employees who are doing nothing more than sucking a paycheck.  Also, the employee is taxed, that is a percent of revenue which comes back to the government in addition to a percent of profit the employer pays as taxes.  As well, when the government contracts with a private sector contractor, they may actually be splitting a salary with one or several other of the companies clients.

i.e. Let's say the government has an annual payroll cost of $130,000 per year for a staff accountant who ends up doing 20 hours a week of actual productivity.  They can outsource that position to a company which only makes money when it's billing for it's time, so that accountant in the private sector can actually be billed at 40 hours, doing 20 hours of work on government projects and the other 1/2 doing work for other clients.

Certainly that is not the case in every instance, but illustrates how this principal works and why the cost does not necessarily have to increase on the part of the government when they seek outsourcing opportunities.

And honestly, I still cannot fathom how you can present a chart showing skyrocketing deficit spending then pretending it does not exist.  OAS on full display.

[guido911]

Cut, cap and balance passes in the house. Boren (D-OK) voted yes.

http://www.google.com/hostednews/ap/article/ALeqM5h0WqoG4KXlrV2NIPgBPBAxc574zw?docId=47d94ea2cdce411c9046ba064549f27d

Now, on to the Senate where the measure will probably fail.

[Hoss]

Cut, cap and balance passes in the house. Boren (D-OK) voted yes.

http://www.google.com/hostednews/ap/article/ALeqM5h0WqoG4KXlrV2NIPgBPBAxc574zw?docId=47d94ea2cdce411c9046ba064549f27d

Now, on to the Senate where the measure will probably fail.

Ya think?  This is just the Tea Partiers getting on record what they want done.  Wasting time.

[nathanm]

And honestly, I still cannot fathom how you can present a chart showing skyrocketing deficit spending then pretending it does not exist.  OAS on full display.

What. The. love? Do you even read my posts? I know they're long, but if you have trouble with that, say something and I'll try to be more concise. At no point have I denied that we do in fact have a large budget deficit.

[Conan71]

What. The. love? Do you even read my posts? I know they're long, but if you have trouble with that, say something and I'll try to be more concise. At no point have I denied that we do in fact have a large budget deficit.

You completely deny Obama's culpability on the issue when it's plainly obvious.  So he's not increased discretionary spending on "everything else".  Give him a cookie.

[nathanm]

You completely deny Obama's culpability on the issue when it's plainly obvious.  So he's not increased discretionary spending on "everything else".  Give him a cookie.

Income security programs and Medicaid aren't discretionary spending.

[bokworker]

In my mind Nathan they become discretionary when decisions are made to change the rules and extend time frames...at least when it comes to income security.

[Conan71]

In my mind Nathan they become discretionary when decisions are made to change the rules and extend time frames...at least when it comes to income security.

Don't bother.  He's a master at creating his own reality.

Either that or he's trying to be a literalist.

[nathanm]

Either that or he's trying to be a literalist.

Either words have meaning or they don't. If they don't, what the hell are we all doing here?