Please read this if you think deficits don't matter and that spending doesn't drive deficits.

Or, Fun Facts About the Fiscal Cliff!

Columnist Ron Hart writes:

When Bill Clinton so famously "balanced the budget" with the Internet boom and all the taxes from those stock sales, the GOP and Newt Gingrich passed a budget (yes, Congress used to do that) of $1.7 trillion in expenditures. Adjusted for inflation, our federal government would be spending $2.3 trillion today and collecting $2.5 trillion in "revenues," resulting in a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a "revenue" problem instead of a "spending" problem, must also think they have a bartender problem, not a drinking problem.

Hart also slags Republicans, who continue to push for more military spending despite the grim fact that we are already spending close to half the planet's dollars on that score.

Do you need another indicator that spending - and not simply tax receipts weakened by a bad economy and carve-outs for the top 2 percent of earners - is the root cause of the federal deficit? Then take a look at this chart:

It's understandable why government spending trends separate from revenue during recessions. At the same time that more people are out of work and receipts go down, demand for various welfare programs (unemployment, food stamps, etc) increases.

What was different in many ways during the thick of the Bush years was that spending continued to increase during the good times, too. In 2001, Bush took the reins of a government that was spending 18.2 percent of the economy. By 2008, government spending equaled 20.8 percent of the economy. It then spiked to 25.2 percent of GDP in 2009 (a budget year for which some expenses were Obama's but most were Bush's). That sort of massive divergence is explainable in light of the fiscal crisis and the Bush and Obama administrations' responses to it. In my my view, those responses were both hysterical, counterproductive, and at least in regard to the auto bailout, illegal. Whether you agree with me on any of that, you should be worried about whether the boost in spending as a percentage of GDP is a temporary blip or the new normal.

Certainly, it should worry all of us that President Obama's budget proposal released earlier this year envisioned a decade in which the federal government on average spends 22.5 percent of GDP (Table S-1) and that the budget plan passed by the Republican House would have government spending average 20 percent over the same time period. In terms of paying for such levels of spending, each is well above the historical average of tax receipts since 1950. In fact, the GOP plan even estimates tax revenue over the next 10 years at just 18.3 percent of GDP, ensuring more debt and deficits (Table S-1). And the GOP is supposed to be the party of budget hawks, right?

Check out Table 1.3 of the Office of Management and Budget (OMB) historical tables to get a sense of several decades' worth of spending trends. From 1950 through the mid-1970s, it was rare to see the feds spending 20 percent or more of the economy. Now - with the exception of the final Clinton years and the start of Bush's presidency, that seems to be the rule. Given that tax receipts over the same period have averaged below 18 percent of GDP, there's no surprise that the nation's debt continues to grow. At more than $16 trillion, our debt is now equal to the size of the economy. That's not a good thing (for reasons I'll get to in a second).

Here's a different chart that also helps explain the role of government spending in deficits:

That's what the feds spend per person in inflation-adjusted dollars. It's gone from just north of $6,000 at the start of the Carter years to just shy of $12,000 at the end of Obama's first term. Something similar has been happening at the state level, too, so it's not as if the feds are picking up the slack from other levels of government.

Here's some awful info from a 2009 Reason story about state spending sprees during the good years in the Aughts:

In the five years between 2002 and 2007, combined state general-fund revenue increased twice as fast as the rate of inflation, producing an excess $600 billion. If legislatures had chosen to be responsible, they could have maintained all current state services, increased spending to compensate for inflation and population growth, and still enacted a $500 billion tax cut.

Instead, lawmakers spent the windfall. From 2002 to 2007, overall spending rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose almost twice as fast as inflation.

So the feds and the states increase spending during the bad times, to help people out. And they increase spending during the good times, to reward constituents and set themselves up for the next elections.

It's pretty easy to understand how massive amounts of debt screws up finances at the state level: They run out of people to tax (or taxes to hike), their ability to borrow gets downgraded, etc. Eventually, they start taxing their residents more for fewer services. Nobody's happy, people and businessess move. The feds, of course, can keep printing money or coordinating with the Federal Reserve to increase the money supply. So the string is a lot longer, especially if you're the biggest economy on the planet. Inflation may or may not happen quickly (or at all) and interest rates may or may not go up. There's a serious debate happening now as to whether inflation, predicted by virtually every conventional economic theory, is occurring or not. Interest rates, both for the government and for the diminishing number of consumers who can secure credit, are pretty damn low, in defiance of age-old fears about running large and persistent deficits. At least for the moment.

So what's the harm in the feds spending like there's no tomorrow, especially when people are still hurting in terms of jobs, wages, and the like? There are many harms - we're saddling future generations with debt squandered even before they were born, for instance. Imagine being stuck with your parents' credit card bills for vacations they took and cars they bought (and sold) back in 1970. Feh.

But for the sake of brevity, let me focus on just one serious problem with running perpetual deficits and racking up huge debts at the federal level: Countries whose governments that carry debt loads of 90 percent or more of their economies for prolonged periods squeeze down long-term economic growth, the one thing everyone agrees is central to improving living standards.

As Veronique de Rugy wrote in the October issue of Reason:

In a recent National Bureau of Economics working paper called “Debt Overhangs: Past and Present,” economists Carmen Reinhart, Vincent Reinhart, and Kenneth Rogoff show that in 11 of the 26 cases in their sample, countries in which debt exceeded 90 percent of GDP for at least five years did not experience an increase in interest rates.

But stable interest rates are not a sign that these countries are in good shape. Economic growth in the 26 cases was 1.2 percentage points lower than in other periods, “the average duration of debt-overhang episodes is 23 years, and it produces a ‘massive’ shortfall in output that is almost one-quarter less, on average, than in low-debt periods.” In other words, the fact that bond markets are blasé about high levels of debt in countries perceived as safe tells you very little about how well they are doing. It certainly should not be mistaken for a signal that the government can borrow more without risk.

How many of us will be consigned to live out our futures in that Phantom Zone of missing economic growth?

All to pay for, what, military adventures that have done precious little to reduce the world's supply of suffering? Or for expanded drug benefits for already-wealthy seniors? For a war against weed that has turned the Home of the Free into history's greatest jailer nation?

Back when he was running for president, Barack Obama used to talk about how "we have to break that cycle of debt":

We've lived through an era of easy money, in which we were allowed and even encouraged to spend without limits; to borrow instead of save....

Once we get past the present emergency, which requires immediate new investments, we have to break that cycle of debt.

That used to be part of his basic stump speech in fact. Now the president has gone from talking about cutting $2.50 in spending for every $1 of new revenue in September 2012 to pushing $4 in new taxes for every dollar of spending cuts. That's all part of his "balanced approach" to government finances.

But if the cause of growth-killing debt and deficits is increased spending - and it is - the solution is to cut spending. As the November 2010 issue of Reason detailed, we've done it before as a country (after World War II) and other advanced economies have done so are recently as the 1990s. Last year, De Rugy and I even laid out an easy way of doing it through small year-over-year cuts that amount to little more than holding spending constant in real terms.

It wouldn't even be particularly difficult. And surely it beats the alternative, which is slicing 25 percent off economic growth over the next couple of decades.

It's a standing joke that everything we do at every level is "for the children." Who among us wants to look at every fourth child walking the streets and tell them, "Sorry kid, it just wasn't your century?"

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Sevo||

    Any increase in revenues is a dead loss. That increase plus some further percentage of it will be spent.
    Any increase in revenue means an increase in the debt.

  • Tulpa Doom||

    Any increase in revenue means an increase in the debt.

    Does not follow. Politicians aren't paying attention to revenues when they decide on spending.

  • ||

    Huh?

  • ||

    Politicians aren't paying attention to revenues when they decide on spending.

    Holy fuck, is that statement out of touch with reality.

  • Paul.||

    You are incorrect. They pay no attention to debts when they decide on spending. However, there's a shitload of evidence that they do create new programs, give raises and spend confidently when they have a surplus.

  • Tulpa Doom||

    We're not going to run a surplus for many, many years if ever. So in the context of our current times my statement is correct.

  • Tulpa Doom||

    Any increase in revenue means an increase in the debt.

    Does not follow. Politicians aren't paying attention to revenues when they decide on spending.

  • ||

    Ah, gotcha.

  • Sevo||

    "Does not follow. Politicians aren't paying attention to revenues when they decide on spending."

    Disagreed.
    Congresscritter Fogghorn stands up and announces that the strong economy has increased revenues by X which means we can now afford Y!

  • VG Zaytsev||

    Exactly.

    Everyone's probably heard some version of the saying that "democracy will survive until the public learns that it can vote itself funds from the public treasury"

    Which isn't quite right. A more accurate phrasing would have politicians buy votes with spending from the public treasury.

  • C. Anacreon||

    If only those little chickenhawks could really take out Congresscritter Fogghorn Legghorn.

  • Almanian.||

    "Ah say...ah say...boy, let loose uh mah leg!"

    "But you're a chicken, and I'm a chickenhawk!"

    Yep - if only.

  • Palin's Buttplug||

    Pick your favorite idiot Cheney quote:

    "Deficits don't matter"

    "They will greet us with flowers"

    "So?" (when asked about Americans loss of confidence in the Iraq War"

    "Without question Iraq is a training ground for Al Qaeda"

    Cheney is easily the worst VP in US history.

  • Tulpa Doom||

    I don't know about that. Hannibal Hamlin was pretty bad.

    I would say that Biden is the best VP ever, at least as far as entertainment value goes.

  • Palin's Buttplug||

    I had to look him up. Other than being absent a lot and supporting the failure Hooker as Northern General what else?

    OK, it was a joke. No VP ever had the authority over a naive president that Cheney did and used it to harm the country as much.

  • C. Anacreon||

    Booooooooosh!

  • Tulpa Doom||

    I had to look him up.

    Kind of argues against your credentials as a "worst VP in history" evaluator when you don't even know about most of them. You just slid right into my trap, Buttplug.

  • Xenocles||

    Seriously, Hamlin's relatively well-known just because of the name.

  • EDG reppin' LBC||

    I liked Hamlin in Clash of the Titans.

  • C. Anacreon||

    H. Hamlin would have been perfect to play Jim Morrison if they had cast him at the right age.

    I think he also used to boff Laurie Partridge on LA Law.

  • Ice Nine||

    Hamlin would have been perfect - if Val Kilmer never existed.

  • Brutus||

    Henry Wallace.

  • Sevo||

    "Henry Wallace."
    And FDR, that screaming asshole, almost let Wallace become prez.
    There are many reasons to despise FDR and this is one of them.

  • Brutus||

    I notice it ignores the huge run-up in federal spending under Chocolate Jesus in favor of talking about Cheney.

  • Palin's Buttplug||

    Look at the chart attached above, you dumbass.

    "Federal outlays per capita" have remained constant under Choco-Jesus (just say nigger).

    (The notch for 2009 signifies the Bush turnover to Obama).

  • Brutus||

    Constant...at about 15% higher than that fellow who came before him. Is that how they do "net spending cuts" in Kenya?

    Oh, and here's my favorite VPOTUS quote: "You’re telling me we have to go spend money to keep from going bankrupt?’ The answer is yes, that’s what I’m telling you."

    So not only do deficits not matter to Joey Hairplugs, they're absolutely critical to our financial health. I await your denuciation.

  • Palin's Buttplug||

    Are you fucking daft? Look at the chart!

    Bush began at $8000 per capita outlays and left just shy of $12,000! A whopping 32% increase!

  • Brutus||

    Look again, bright boy. The first thing Obama did with Harry and Nan was jack per-capita spending up 15%, from about $10,000 to $11,500.

    Wanna talk about Joe Biden's take on deficits, given how interested you were a couple of posts about about Veep takes on them?

  • Palin's Buttplug||

    Bush left spending at $11,800 - you delirious redneck.

  • ||

    BOOOOOOSH! He's history, jerkoff. Focus on what's happening now, which is.... our Great Messiah doing jack shit to fix the problem. Great.

  • Brutus||

    He's done plenty...to make it worse. Next up will be a bailout of the student loans that Comrade Obama effectively nationalized, a $1 trillion bill added to the tab.

  • Palin's Buttplug||

    Nick agrees with me.

    It then spiked to 25.2 percent of GDP in 2009 (a budget year for which some expenses were Obama's but most were Bush's).

    2009 was completely on Bush as the CBO said while he was POTUS ($3.54 trillion in spending was left by Bush).

    Look at the entire chart. Spending is flat under every Dem and rises sharply under every GOPer.

  • Brutus||

    There were siginificant supplementary spending bills for 2009 that were passed after Obama's inauguration, not the least of which was the Stimulus and another $400B+ spending bill on its heels.

  • Tulpa Doom||

    Every Dem except Carter and Obama, and every GOPer except GHWB, you mean?

  • Palin's Buttplug||

    Spending is flat under Obama. He took over at $11,800 per capita WHERE IT REMAINS today.

    We have a split fiscal year. Bush left office with $11,800 spending per capita.

    READ THE FUCKING CHART!

  • Brutus||

    Untrue. The Stimulous was passed under Obama, as was a $400B+ supplementary spending bill for FY2009. You dishonestly attribute that to Bush, but the truth is that is Obama's.

  • Palin's Buttplug||

    Name the $400 billion bill Congress passed in 2009. (other than his stimulus)

    You can't. It is redneck AM radio bullshit.

  • Brutus||

    Name the $400 billion bill Congress passed in 2009. (other than his stimulus)

    You can't. It is redneck AM radio bullshit.

    I think it was HR1005. Here's a link to that redneck AM radio news source, Bloomberg:

    http://www.bloomberg.com/apps/.....uG0BtbSKsc

    Chocolate Jesus signed it on March of that year, just a few weeks after the pork-laden "stimulus."

  • Tulpa Doom||

    Only if you accept the fiction that nothing in 2009 was BO's responsibility. I don't remember him demanding that Congress roll back spending... indeed, I do remember him voting for all the spending Bush wanted from 2005-08.

  • Belgian||

    According to Shrike, nothing from 2009 to 2012 was BO's responsibility.

  • iggy||

    You literally ignored what Brutus said because it contradicted your retarded fucking narrative that is oh so precious to you. Obama passed major spending bills after George Bush left office. He then made that the new baseline.

    We're talking hundreds of billions of dollars. How can you ignore hundreds of billions of dollars of additional spending and claim that spending didn't increase under Obama?

    Also, you realize that the president doesn't have complete control over the budget, right? That he actually has no real control? Because Obama would have increased spending further if he though he could get it through a Republican house. Reagan also passed a tax increase with the understanding that spending would be cut 3 dollars for every 1 dollar in increased spending. Guess what? That spending cut never happened and it's because of A DEMOCRATIC CONGRESS not Reagan. Clinton also had a Republican congress starting two years into his term, so it's not as if he just kept spending low by himself. It was a rare example of spending being low through bipartisan support.

  • iggy||

    In order for your narrative to work, you have to ignore hundreds of billions of dollars in additional spending passed by Obama after he became president and you have to ignore the fact that other branches of government exist. If the reality of our government were completely different, you might have a point.

  • Palin's Buttplug||

    You are lying, you dumb fucking hick.

    Clinton cut spending $500 billion (10 yrs) without a single GOP vote. (Omnibus Budget of 1993).

    The data shows that GOPers spend far more than Dems.

    LOOK AT THE FUCKING CHART (from Nick above).

  • General Butt Naked||

    You are not correct. Repeating "look at the chart" over and over again doesn't change that.

    Sorry.

  • Sevo||

    Dipshit and reality are not close acquaintances.

  • Brutus||

    You'll notice the sneering about stupid Veeps has evaporated, too, once Joe Biden's views on lunatic spending sprees came to light.

    Mendacity, thy name is Shriek.

  • Tulpa Doom||

    "Look at the bones!"

  • Cytotoxic||

    Look at how mendacious and retarded I am
    -Shriek

  • db||

    The Reason Foundation is really great to have supported the frequent lectures in this subject. I hear they are in the final phase of putting together an endowment for a Chair in Advanced Shriekonomics at a major university within the next six months.

  • Jim in Denver||

    Never mind that the Clinton Surplus never existed... Granted Clinton's deficits were markedly better than the current administration - the notion that there was a surplus is ridiculous ideological fantasy.

    Fiscal__Ending____National Debt_____Deficit
    Year____Year

    1993___09/30/93__4.41 T___________n/a
    1994___09/30/94__4.69 T___________281.26 B
    1995___09/30/95__4.97 T___________281.23 B
    1996___09/30/96__5.22 T___________250.83 B
    1997___09/30/97__5.41 T___________188.34 B
    1998___09/30/98__5.52 T___________113.08 B
    1999___09/30/99__5.65 T___________130.08 B
    2000___09/29/00__5.67 T___________17.91 B
    2001___09/28/01__5.80 T___________133.29 B

    Total debt added under Clinton: 1.39 Trillion

    http://www.craigsteiner.us/articles/16/ (change 16 to 30 and 32 for additional links)

  • Harun||

    "The final spending bills passed by the Reid/Pelosi led Congress (110th Congress) were not signed into law until March 11, 2009 by President Barack Obama, nearly five and a half months after the fiscal year began."

    http://en.wikipedia.org/wiki/2.....ral_budget

    The Democrats changed Bush's budget then held it until after Obama was inaugurated to sign.

    Obama signed it, not Bush.

    Mar. 11, 2009. Bush was no longer president.

    Obama presumably has free will, and had majorities in both houses of Congress. He could have NOT signed it.

    And the Democrats could have let Bush sign it, which they did not. Funny. Its as if they wanted to take responsibility and credit for it.

  • Xenocles||

    In a very short-sighted way, deficits don't matter. This is true for as long as we can borrow money in a currency we can print. The day that changes we will get what's coming to us.

  • Tulpa Doom||

    Yes. This disclaimer needs to be attached to every Krugman column where he says "we'll never run out of money because we can just print more!"

  • ThomasD||

    When confronted with this usual Krugmanity the reply should be: Then why tax at all? Just print whatever money the government needs.

  • hotsy totsy||

    They feel they need to tax in the name of fairness. As in "The Rich need to pay their Fair Share".

    Otherwise, yes, just print the money.

  • XM||

    Not only can we print money, there's no shortage of corporations who will turn in gobs of revenue to the federal government.

    No amount of recession or OWS style "we hate corporation" sentiment is going to stop the "takers" from spending money to see the next Hollywood Blockbuster or buy Iphones. And a Call of Duty game that's been rehashed 4,5 times. Those are 60 bucks. It's insane.

    Deficits are such a non issue for voters, it's not even funny. People who make noise on this issue are loud, but more isolated. I feel this everyday.
    I'm surrounded by fobs who are convinced that government must rise to the occasion in a bad economy. We're up against a GIANT wall of an opposition.

  • General Butt Naked||

    We're up against a GIANT wall of an opposition.

    Yerp. The wall is so high that the only thing that will bring it down will be a truly catastrophic series of events.

    I'm not a doomsayer, but it cannot last forever and extending this madness will only increase the pain when the bill needs paid.

    I don't even argue with people over it anymore. I'll just say that the process is finite in nature, and when it reaches its end politics won't even fucking matter any more; I buy ammo, good luck with yer fucking iphone.

  • PapayaSF||

    No frigging shit. Half the population thinks we just avoided The New Dark Ages because Romney was defeated, and has no idea of the catastrophe that looms. And when it does, I'm sure it will be blamed on Republicans, conservatives, the Tea Party, libertarians, and/or whatever remains of free markets and the Constitution.

  • epsilon given||

    I find your comment funny, but only because I voted for Romney thinking "He's probably going to do little, if anything to actually stop that looming catastrophe, but he's probably not going to stop it...at least, though, he's going to do SOMETHING to try to stop that catastrophe, maybe...at least, he's more likely to do something than Obama will."

    Perhaps it's just me, but I have the impression that this is why most Republicans voted for Romney, while most Democrats voted for Obama because they actually expect him to fix things...

  • epsilon given||

    Oh, and you are certainly right: whatever happens will be blamed on everyone but those who caused it. (Well, the Republicans to some degree participated, but to the degree that they actually try to stop things, they'll be blamed anyway.)

    I'm still amazed at all the things that the Tea Party and the Republicans and the Tea Party were blamed for "blocking", when Obama had the House and a filibuster-proof Senate his first year or so!

  • The Late P Brooks||

    Cheney is easily the worst VP in US history.

    And this is supposed to meaningful in some way?

  • ||

    Something something Bushpig!

  • Tulpa Doom||

    As meaningful as anything else the rectal blockage brings up.

    What's intrade predicting about the 2014 congressional elections? Oh, wait...

  • Palin's Buttplug||

    You could learn a lot from markets and Nate Silver.

    Try listening to experts for once in your life, pal.

  • np||

    yeah we could learn a lot from the prediction market if only the US didn't recently outlaw it.

  • Tulpa Doom||

    I wonder what the prediction market for "Intrade gets forced out of the US by the DOJ" looked like.

  • Tulpa Doom||

    Nate Silver just got lucky in the 4-5 states that were legitimately in play. The few specifics he gave about his methods were totally wrong. His claim that the margin of error doesn't matter if you average polls together sounded like something we have to beat out of freshman in statistics classes to make sure they don't embarrass us upon graduation.

    Maybe he was just lying, and really has some super-secret method of prediction that really is valid.

  • Sevo||

    "Maybe he was just lying, and really has some super-secret method of prediction that really is valid."

    If he did, he wouldn't bother with anything other than making an easy fortune.
    Anyone who claims to be able to reliably predict the future is lying; they'd never tell anyone.

  • General Butt Naked||

    Agreed. He basically said that the election would follow the polls, which it usually does in the aggregate, i.e. averaging the results. Doesn't take some Ramanujanian genius to pull something like that off.

    The reality-deficient right were making squaking noises about the polls being wrong and the Bradley effect finally being right for them, therefore, giving Silver's childish methods more press than they deserved.

    When he posted his response to the naysayers in the Times, I googled the last few election aggregate polling and guess what, the shit went down exactly as was predicted in the days before the election.

    Nate Silver wasn't made on the ingenuity of his methods but by the idiocy of his detractors.

  • Tulpa Doom||

    Dude, I'm out of PGH next year. You too?

  • General Butt Naked||

    I'm trying to.

    I'm supposed to graduate in the summer, but I'm gradually pissing away my top something-laude status and may not even graduate. If I have to retake a class I'll quit and get the fuck out of here.

    Where you goin? Gotta new job?

  • Tulpa Doom||

    Yep, back to the private sector. I'm getting out before the bubble bursts. Somebody backed up the truck for my quant skillz.

  • General Butt Naked||

    Smart move.

    I used to think that I would want to go into academia or at least get a doctorate, but I hate, with every fiber of my being, the university world.

    I may just take a break for a while and restore antiques, open a greenhouse, or something weird like that.

    Though, I'd like to put my skill to use somehow. Been thinking of cheaper and more efficient industrial method to produce ammo, and also the chemicals involved. Maybe I'll start a company.

    Do you know which state you'll be in?

  • Tulpa Doom||

    I had a choice between CA and VA. Guess which one I took?

  • General Butt Naked||

    I'd guess VA. It's a beautiful state, lived there as a kid.

    Okay firearm laws, shitty traffic laws. They are nazis when it comes to traffic laws. Are you outside of DeeCee, or somewhere good?

  • Paul.||

    I had a choice between CA and VA. Guess which one I took?

    MT?

  • robc||

    You should check out how far Nate Silver was in the big Romney lead states.

    He said states like KY and TN where McCain won big would go about 3 points better for Obama. In almost all those states, it was the opposite.

    Now, to be fair to Nate, he made that prediction in last Sept/early Oct and never updated it the last 4-6 weeks. But so fucking what? I judge on the last prediction.

  • Mike M.||

    We've already gone over this before: the biggest reason why Silver did so well in both of Obama's elections was because his team was providing Silver with all of their extensive internal polling data, which was available to hardly anyone outside of their team. In most of the other cases where Silver hasn't been privy to reams of inside data, he has been way off.

  • Tulpa Doom||

    That's crazy, even for conspiracy theories. Why would BO's campaign want to do that? Why would his campaign's data be so much better than Romney's or any other pollsters'?

  • Mike M.||

    It's not a conspiracy theory, it's a fact. It was reported back four years ago that Silver signed a confidentiality agreement and team Obama provided him with all their data. They like their fellow lefty from Chicago and apparently want to help make him look much better than he really is.

    By the way, the media keeps going on and on about Silver's great and mysterious "magic formula". All it is is a Monte Carlo simulation which anyone can run with the proper software plugin and good data. This guy is more of a slick con artist than a real genius.

  • The Late P Brooks||

    We need to embrace our inner Empiricism, and stop pussyfooting around. Take the oil. Take the rare earth metals. Take the rubber. Dispossess the farmers and make them grow wheat and rice for us, using modern methods and genetically enhanced seeds. Force them to buy our Fords and Chevrolets, and John Deere tractors and Caterpillar earth movers.

    Let's run this fucking operation as a profitable business endeavor.

  • injanear||

    That requires commitment and fortitude. Two things essential to true business success that are in short supply.

  • ||

    A government that spends trillions is so mind-bendingly far from anything that could possibly be considered anything even fractionally resembling reasonable or moral governance that I'm not sure there's much to do beyond drinking yourself into a week-long stupor and send it all to Hell.

  • ||

    I am just going to stand back, aghast, and watch it all collapse.

    Ok, yeah, I am drinking too.

  • EDG reppin' LBC||

    Jim Beam here.

  • Almanian.||

    Wild Turkey "Russell Reserve" from our trip this spring. Some fine sippin' whiskey, that Wild Turkey.

    GOBBLE GOBBLE GOBBLE!

  • EDG reppin' LBC||

    You, sir, are a man of impeccable taste. Even if you are from that state up north.

  • General Butt Naked||

    PBR (non-ironically) here.

    I am going to try this WT reserve stuff, sounds yummy.

    I'm a fan of the Kickn' Chickn' from way back.

    @suthenboy

    I'm with you. Just wanna have some kicks while the whole shithouse goes up in flames, to paraphrase Jim Morrison.

  • np||

    There's a serious debate happening now as to whether inflation, predicted by virtually every conventional economic theory, is occurring or not.

    Traditionally the definition of inflation has been monetary inflation, which certainly is happening. The problem is that it does not translate into an immediate nor equal price inflation across all sectors. A good chunk of the money from MBS buying for QE-infinity is still sitting in bank reserves. Some real estate is beginning to be re-inflated, which is their intention, but not too much of that new money hasn't flooded the general market yet. Well, I guess stocks are being pumped up too as a result... It's hard to trace new dollars coming out of the Fed into banks and bonds and see what projects and asset classes they go into, and the secondary spenders of that new money before it looses purchasing power. Foreign exchange can provide indicator of debasement but not predict price inflation exactly when and where

    I think the term inflation is a bit of a misnomer in its connotation. If the stereotype of "helicopter Ben" spreading dollars everywhere for everyone to pick up were actually true, then it would not matter. If all prices across the board went up buy 200% tomorrow, but so did everyone's bank account and the cash in their wallets; basically anywhere there is $n, if inflation translated into 2 x $n, then it would not matter. But that would completely defeat the purpose of inflating in the first place.

  • Tulpa Doom||

    A good chunk of the money from MBS buying for QE-infinity is still sitting in bank reserves.

    That in itself should cause some price inflation, since it lowers the interest rates banks are willing to pay for savings accounts, CDs, etc, and thus encourages people to spend.

  • Sevo||

    "That in itself should cause some price inflation, since it lowers the interest rates banks are willing to pay for savings accounts, CDs, etc, and thus encourages people to spend."

    It's sort of M-1/2; I'm not sure how to figure the stuff.
    the banks are paid interest for holding it, so it definitely will lower interest paid on deposits.

  • np||

    well, it was pretty low before, not sure how much difference it makes to most people below 1%. Plus it might encourage some to look for some other means of saving and investing rather than consumption spending. Although I'd guess they would consider it just as well to push people into treasuries, government bonds or stocks (but probably not gold)

  • Russell||

  • C. Anacreon||

    "the science has only gotten clearer" on the need for consumer-friendly fees

    OTOH, it is only a letter-to-the-editor, and newspapers love publishing the most ridiculous ones to generate interest and responses

  • Another Phil||

    I agree about it only being a letter to the editor. However, it's the Boston Globe. I'm certain that wasn't among the most ridiculous letters they received.

  • Sevo||

    "it's the Boston Globe. I'm certain that wasn't among the most ridiculous letters they received."

    Hey! Leave Fauxcohantas outta this!

  • VG Zaytsev||

    New economic reseach suggests that countries like the United States that carry high debt levels for sustained periods massively reduce future economic growth for decades to come.

    How many of the countries in that study controlled the world's reserve currency?

  • Jpbarri||

    Exactly! The US is an Empire. We control the world's reserve currency and every other country knows it and goes along...for now. Every oil contract on the planet is settled in dollars. (Thank you Henry Kissinger). Rich people , sovereign wealth funds and institutions want to loan the US money at historically low interest rates because, for all our flaws, we're (by far) the best house on a bad street

  • ||

    Finest horse in the glue factory may be a more apt metaphor.

  • Tulpa Doom||

    That may not be so for very long.

  • VG Zaytsev||

    Yes, it will end and at that point, and only at that point, the US government will be truly fucked. My guess that we're about 10 years away, give or take a couple of years, but no one knows for sure. Could end in a couple of years or could last another fifty.

    The thing though is that the cake is already baked. Even if the republicans were successful beyond their wildest dreams it would only delay the end point by a couple of years.

    So I say, do as little damage as possible in the meantime and don't even try to prevent the inevitable dollar crash.

  • VG Zaytsev||

    Economic growth in the 26 cases was 1.2 percentage points lower than in other periods, “the average duration of debt-overhang episodes is 23 years, and it produces a ‘massive’ shortfall in output that is almost one-quarter less, on average, than in low-debt periods.”

    Did the increased periods of high debt in the study coincide with periods of high government spending and activity? I bet the did.

    It's my contention that it is the government spending and economic intervention that causes slower economic growth. Not the debt per se.

    Meaning that keeping spending and activity at the current level, but raising taxes to a level sufficient to fund all of that spending and activity would be every bit as economically destructive as funding some portion of it with debt.

    IOW the debt and deficit is an irrelevant distraction from what really matters which is the level of spending and intervention.

  • Drake||

    Yes. The word you are looking for is DRAG.

    The drag effect the federal government has on the economy is the Net Present Value of expenditures. Whether the spending is financed through taxes, debt, or currency printing is important only in the way it changed behavior.

    So - the more the government spends, the slower the economy moves. It's pretty well stopped now.

  • Almanian.||

    Aaaaaand....'bama. Roll Tide. Like I care. But it was an entertaining game. BACK TO CHRISTMAS DECORATING AND DRINKING WHISKEY!

  • Ted S.||

    The SEC may have physically gifted athletes, but they don't seem to be smart enough to know how to run a two-minute offense properly.

  • sloopyinca||

    Speaking of college football...you all know what time of year it is.

    That's right. It's time for the Reason Hit & Run College Bowl Pick-Em. Same rules as last year: the overall winner gets to marry the single member of their choosing, but has to move to their city.

    Come one. Come all. (And do it quickly, because once this baby comes, I don't know how many times I'll be around to repost this until everyone finds out and signs up.)

    Password: reason

  • Voros McCracken||

    Crap, if Wisconsin would have beaten Oregon, I could have married STEVE SMITH.

  • Cytotoxic||

    They were playing against New England Biolabs I saw it on the TV. NEB makes really good biochemistry products but damn they suck at football. Which doesn't matter because only slack-jawed faggots watch football.

  • robc||

    My defenseless jackets somehow held FSU to 0 points in the 2nd half. Not sure how that happened.

    We had the ball back with 2 minutes to go 90 yards and win. Of course, thats just silly, we cant do that.

  • injanear||

    It's not over til a Tech QB throws a game ending interception! The soul of Reggie Ball will haunt this program for decades.

  • Palin's Buttplug||

    The Manning brothers are SEC. Detroit drafted a UGA QB #1 a couple of years ago.

    Cam Newton is great. I think the SEC just beats up its own too much.

  • Belgian||

    So you know as little about football as you seem to about everything else.

  • Drake||

    The SEC is hype. Georgia played a joke schedule this year. The top half of the conference didn't schedule one decent non-conference game.

    It's like raving about the Houston Texans if they beat all the AFC South Teams. Then played 5 games against CFL and Arena League teams.

  • CBear||

    Nick Gillespie, it's not the just the kiddies, the 18-29 demographic has gotten, is getting, and will continue to get, slaughtered. I believe unemployment is about 25%, but underemployment...50.9%. It's a full blown lost generation. And it may be lost generations. So when do we get mad about the generational inequity we all already live. How many junior college credits could you self-finance with your part-time job if the boomers weren't demanding you pay for their medicare in a country they drove into the ground.

  • General Butt Naked||

    Nick Gillespie, it's not the just the kiddies, the 18-29 demographic has gotten, is getting, and will continue to get, slaughtered.

    Polls show that they welcome the slaughter. They beat every age group in their allegiance to dear leader last election. Fuck 'em.

  • Cytotoxic||

    This. If it gets bad they are the most able to emigrate.

  • General Butt Naked||

    Yeah, but it's not like they'll have anywhere to go. Their beloved Europe will have turned into the inevitable hell hole that socialist policies lead to* well before we'll get there.

    *and everybody will blame 'austerity'

  • Cytotoxic||

    CANADA

  • Redmanfms||

    Still socialist and only a matter of time before pendulum swings back in favor of the FREE!!!! SHIT!!!! army.

    Besides, the guns laws are even more idiotic than the most idiotic American Leftopia regions. And let's not forget freedom of speech, or the utter and complete lack thereof.

    Canada may temporarily have better economic policies, but it is still an unfree progressive shithole.

  • Cytotoxic||

    Canada has spent most of its existence as freer than America. Our gun laws are teh suck but they are slowly improving at the federal level...extremely slowly. We are also improving freedom of speech...slowly.

    It's the provinces that are most fucked up. At the federal level, we have one of those conservative governments that likes to bail out auto companies and run deficits.

  • Redmanfms||

    Freer how exactly?

    You moved from sorta free (like the U.S.) to less free sooner and far more rapidly than did the United States. We took (and continue to take) a lot of our progressivist cues from you fellows "up North."

    Your gun laws may be improving slowly, as in imperceptibly (like I see literally zero evidence for that statement at all, I encourage you to prove me wrong), same for your freedom of speech. Both have been shifting rapidly in the positive in the States.

    I've got nothing against Canada or Canadians, but to argue that at any point the nation was more free than the U.S. is laughable.

  • Redmanfms||

    but to argue that at any point the nation was more free than the U.S. is laughable.

    But you got me with Prohibition and perhaps drug laws.

    Overall though, as a libertarian I'll take the U.S. for the foreseeable future, even with a flagging economy and the possibility of monetary collapse.

  • CBear||

    yeah, but it's all about what you're most into. if you're into speaking and shit, stay home. if you're into potentially living semi-off-the-grid among the moon-eyed hippies who smoke their grass legally, then maybe yes. gun laws are a problem; which is why one has to break gun laws. outlaws were always the humanitarians though - the rugged individualist is the only just man.

  • Cytotoxic||

    Lots of wrong here. First, Canada's government has always been smaller as %GDP except the Trudeau era. Our commitment to federalism is much deeper with provinces accounting for most spending. Second, all of our real statist shibboleths came from you guys. Medicare, central banking, drug prohibition, all from you. Third, our gun laws suck but we did just abolish the Long Gun Registry. The federal government also abolished Section 13 of the Canadian Human Rights Act which was a pernicious hate-speech thing.

    The Fraser Institute is clear that Canada is much more economically free than America.

  • Rufus J. Firefly||

    Cytotoxic, The Economist publishes its "freedom index" and Canada ranks ahead of USA.

    Which frigtens me, really. How far left have we gone in the West?

    I agree with us having smaller governments until Trudeau.

    The CHRC should be abolished outright as should the CRTC.

  • DEG||

    Your gun laws may be improving slowly, as in imperceptibly (like I see literally zero evidence for that statement at all, I encourage you to prove me wrong)

    Didn't Canada just repeal the federal long gun registry?

  • Rufus J. Firefly||

    DEG: Yes, we did. Thankfully. $2 billion wasted. Harper is getting all sorts of hate from the left as a result.

    Which means he did the right thing.

  • Rufus J. Firefly||

    Actually, it's the opposite. We imported our socialist impulses from Americant thinkers. Canada doesn't have its own philosophical heritage. We borrow.

    I don't know. Massachuesetts, Vermont and New York are pretty up there with their asinine leftist-moonbat laws. Not even Quebec or Ontario rival them on some levels.

    Nonetheless, I agree overall. I own a business in Quebec and know plenty of go-getting owners from around the world who think Quebec is one small town in its mentality.

  • coma44||

    I don't know. Massachuesetts, Vermont and New York are pretty up there with their asinine leftist-moonbat laws. Not even Quebec or Ontario rival them on some levels.

    Actually Vermont has the best gun laws in the country.....none. Also the "castle" law you dont even have to wait until the dirtbag get through the window to shoot m.

    Other than that they are all left green hippies.

  • Rufus J. Firefly||

    We're terrible on transparency, our health system is rigid to the point of insanity, our education is so-so, and Quebec is a parochial, corrupt, Northern-Southern state where its idiotic students are clamoring for "free post-secondary" education in a have-not province racked with heavy debts.

    Opportunities are limited here. Alas, we're told we're "balanced."

    It's not a shithole. Nice place to live. We're just mediocre is all.

  • CBear||

    if those greeks are as lazy as everyone says and *assuming* one has opportunity if one is not lazy (and they leave the fucking Euro - triune hell gods from brussels) I'll go. Golden Dawn might let me in - gotta get the olive toned mystic tan, and pretend to be retarded...slip right in.

  • CBear||

    but europe's the only place they'll look good against the background on their refurbished craigslist roadbikes for their instagram photos. so, they'll have to go, even if nationalist fervor takes off and they start killing americans. gotta go.

  • PapayaSF||

    Sadly probably true, but we might change a few minds with a good, clear explanation of what is happening and why. But it's hard to overcome the economic ignorance and b.s. coming for the Democrats and the media and academia (but I repeat myself).

  • CBear||

    Yeah, only I'm one of them and so far as I can tell my trolling the internet, my hatred of Obama is unparalleled.

    I came from shit; I mean really bad, and to watch 30-40% of my productivity - me, the poor -without a dime, bootstrapping it - go to fund my stereotypical, druggie welfare neighbors. The day I started hating this country was the day I graduated college (huge scholarship and expensive school) with only 17k in debt because I worked a serious job the whole time...then when I graduated the Social Security Admin started sending out statements showing total contributions to date...you guessed it, 17k. I'm done. This country doesn't have a glass ceiling and manipulated markets everywhere you look, it's fucking vacuum sealed: wages slaves produces the most tax revenue because the marginal utility of their dollars is so high. And there is nowhere to go.

  • Sevo||

    "I believe unemployment is about 25%, but underemployment...50.9%"

    This "underemployment"; what mean?

  • General Butt Naked||

    It's people with gender studies degrees waiting tables for 20 hours a week.

  • Sevo||

    I was hoping the definition wasn't so depressing, but it isn't likely to be better:
    "I WANT MORE MONEY!" probably covers it.

  • Tulpa Doom||

    People who think they should have a better job, probably.

  • Sevo||

    "should"
    Nuff said.

  • General Butt Naked||

    I thought "think" was the operative word.

  • CBear||

    It means people working part-time because they cannot find full-time work, but want/ need full-time. So, yeah, like he said, sociology majors now getting paid for their poverty tourism by scrubbing toilets in the black part of town...or so i like to think.

  • Ken Shultz||

    Barack Obama doesn't care about growth. The Democrats in the Senate Don't care about growth. John Boehner doesn't care either.

    There isn't anyone who has a real say in the budget that cares whether overspending cuts 25% off of our growth over the next ten years.

    I think it's great that this kind of message gets out to the voters, but even the voters are going to have to hold that thought for at least another two years--probably four.

    ...because there isn't anyone who has a real say in the budget that cares what the voters think about spending.

    Barack Obama doesn't care what the voters think about his overspending. The Democrats in the Senate don't care what the voters think about overspending. John Boehner doesn't care what the voters think about overspending either.

  • Cytotoxic||

    Not that the voters are gonna stand in the way of overspending so it's moot.

  • Ken Shultz||

    Exactly.

    And even if the voters would stand in the way, it wouldn't be for another two to four years.

    The boat's done sailed. We're in for the duration. We can laugh and point fingers, but nobody that matters cares what us fiscal conservatives say.

    Why would they care? They already have the votes they need to screw us. And they don't care about the economy, once they have the votes. The economy only matters if it effects the votes--and the economy didn't effect the votes.

    It just didn't.

    Hell, Barack Obama spent $350 billion bailing out Wall Street investors and the UAW--and the voters didn't care. They didn't care about the lack of economic growth. They didn't care about the level of unemployment. They just bent over and made like Bacon.

    http://www.youtube.com/watch?v=qdFLPn30dvQ

  • General Butt Naked||

    The mindset has be cast, Ken.

    For some reason our math impaired nation believes we have a revenue problem. And not revenue from the big chunk of the nation not paying taxes, it's the rich we must soak. Those making more than the arbitrary amount of $250k a year.

    Last week I sat down and made some quick calculations and figured that by letting the Bush tax cuts for the "wealthy" expire (the panacea for our budget woes according to Dear Leader) we could make up next years deficit for a whopping 26 days. That's not running the government for 26 days, that's only the red for 26 days.

    26 fucking days, Ken. Jesus.

    ...and we have a revenue problem.

  • Dweebston||

    You're forgetting that repealing tax cuts on the upper crust is merely the first step in the long slog back to the mythical 90% top marginal rate, at which point deficits will be rolled back while at the same time spending will increase, entitlements will never again be threatened with cuts, and puppy dogs and rainbows. . .

  • Ken Shultz||

    Yeah, they're unlikely to get all the money they're expecting after they raise taxes. ...not even the first year.

    If raising taxes were the answer, then McDonalds should just triple the prices on their dollar menu, and make three times as much money next quarter.

    It doesn't work like that. That's why they always have to raise taxes more--because raising taxes almost never generates as much revenue as projected. People make fun of the Laffer Curve, but somebody should tell the scoffers that, seriously, soaking the rich really has been tried before.

    There isn't anything new or innovative about Barack Obama's plan to soak the rich.

  • Ken Shultz||

    I think it's worse than that.

    I don't think people care about the problem. They don't care about what the problem is. They just want to do whatever Obama says.

    There's no question we've got a spending problem, and I think everybody understands that on some level. They just don't care. They voted for Obama to keep spending.

    They want more spending.

    Barack Obama is pushing for a new stimulus bill, and he wants the power to raise the debt limit himself without interference from Congress. And a lot of people think that's great becasue they want the government to spend more money.

    And they know that's a problem.

    I don't think the issue is getting people to see what the problem is; the issue is getting them to care about the problem.

    And our politicians don't care. They don't care if the problem is spending; they're going to keep spending anyway.

    It would be great if we could show people the problem, and then they would want to solve it. But becasue people don't care about the problem, our showing it to them is like trying to sell them Easter eggs for Christmas.

  • Dweebston||

    Better yet, like trying to sell the idea of filling the deck with more lifeboats prior to hitting the iceberg. In a little while it will all make sense, but for now it's just so much clutter.

  • WhatAboutBob||

  • General Butt Naked||

    Watching the Ron Paul interview now.

    He, at times, can be so well-spoken and persuasive that I am surprised that he isn't more popular.

  • mad libertarian guy||

    He, at times, can be so well-spoken and persuasive that I am surprised that he isn't more popular.

    Because those who control what popularity is, and the means to become popular, won't have it.

  • General Butt Naked||

    'Cause he's a "kook", right?

    I have been following Ron Paul for a long time, and though I'm no Paultard, I am constantly amazed how someone could be so right about so many things and at the same time so marginalized and ridiculed.

    I can't think of anyone else who has been on the right side of so many issues. Even if you don't agree with him, you must admit his predictions are correct on a lot of things; like the wars, executive power grabbing, the economic state of this country, etc.

  • Redmanfms||

    Humans prefer magical thinking.

  • ||

    very awesome videos

    airport thug administrator trying to stop some people from exercising their rights at the airport.

    deputy sheriff mediates, protects the filmer's rights (as we so often do fortunately), and basically the airport guy is told to pound sand

    great law enforcement

    props to the guy from infowars for not being dick. be respectful to everybody, including police. good policy.

    OPT OUT of TSA bodyscanners!

    http://blutube.policeone.com/p.....mendment-/

  • ||

    A government that spends trillions is so mind-bendingly far from anything that could possibly be considered anything even fractionally resembling reasonable or moral governance

    A government -- ANY government -- is a criminal gang that loots people and takes away their freedom. There's no such thing as a "reasonable or moral" government, any more than there's such a thing as a "reasonable or moral" mafia. Some are much worse than others, is all.

  • Cytotoxic||

    Wrong. America has had moral governance: a government that respects and protects individuals rights. Somalia isn't a worthy goal. Bitching about how governments are always bad is like bitching that life always leads to death.

  • Dweebston||

    Besides which, the "criminal gang, writ large" schtick is tiresome and not altogether compelling. Much better to give the public choice summary: government is comprised of people, most of whom are self-serving and none above reproach. The institutions they create will reflect their self-interested myopia.

  • PapayaSF||

    ^ This. Plus, you'll never convince enough people that "government are always bad" to win an election.

  • CBear||

    Okay, excellent. A possible candidate. Do you have a commune?

  • Harun||

    Cheney's infamous remark on deficits was actually true, as long as you add the caveat "as long as they are lower than the economic growth rate."

    That is key.

    And if the government used deficit spending to actually invest in things that add to growth, you could even go beyond that. (Imagine a country with zero roads that borrowed money to build said roads...)

    But we are far from such low-hanging fruit such as connecting cities with roads. Now investment means hiring more bureaucrats to waste money or keeping said bureaucrats from taking any pay cuts.

  • Apostate Jew||

    Now that's a decent chart by de Rugy. It can stand alone as a an argument.

    Krayewski's chart is still useless crap. Why was it included?

  • db||

    Who among us wants to look at every fourth child walking the streets and tell them, "Sorry kid, it just wasn't your century?"

    "Oh, and hasten polishing my monocle. I have an engagement in scant 1 hour to attend."

  • NorEastern||

    "A government -- ANY government -- is a criminal gang that loots people and takes away their freedom."

    Remarkable statement. I can think of a few places on earth without a government. To live totally free, you live with an AK-47 on your back. You should move to Somalia guy.

  • np||

    I'm surprised you didn't mention roadz. His statement still stands though. However Somilia still very much has a government(s). If the US were divided into several territories because one faction could not conquer the rest, and those factions settled for controlling various states--if Texas became our Somaliland--would you still say the US was without government?

    Now, Antarctica might actually be a good place to start libertopia...

  • db||

    Wow, what an insightful statement. Never thought of SOMALIA, geez! My whole perspective is changed.


    In other news, your box of "Talking Point Crackerjack" is woefully stale.

  • Harun||

    What's funny about the whole Somalia thing is that in reality, Somalia has done much, much better without a government.

    Comparing Somalia under socialism vs. without a government, you will find interesting facts like:

    They now have more airlines and flights without government than when they had a strong centralized socialist government.

    Power, cell phones, etc. all better - an innovative too.

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

    I was used to the usual North Korea/Somalia argument being valid, until I read that.

    Yes, Somalia is a poor and dangerous country, but you would much rather live there under anarchy than under the strong, protective embrace of a centralized state.

  • Cytotoxic||

    Which is a worthless comparison given that Somalia's former government was socialist and so are its neighbours, which include Eritrea, aka Africa's North Korea. The one part of Somalia that has stable governance is called Somaliland and it is by far the best part.

  • hotsy totsy||

    Somalia is infinitely preferable to North Korea. In fact, Somalia is preferable to Zimbabwe.

  • waaminn||

    Dude seems to be talking a LOT of smack over there. Wow.

    www.WebAnon.tk

  • Reason-Able||

    Nick,
    Based on the chart of inflation adjusted outlays, it appears that republicans are definitely big spenders and democrats are mostly big spenders and Bill Clinton was the only one who kept the outlay constant! This tells me that if are to control federal spending, we should never have a republican president...ever! But of course that is misleading, there a lot of other factors such as congress (which actually has the spending authority) that plays a significant role. So, let's analyze the problem deeper and propose a Reason-Able path forward.

    1976-1980 Carter inreased per capita outlay by 8%
    1980-1984 Reagan inreased per capita outlay by 11%
    1984-1988 Reagan inreased per capita outlay by 7%
    1988-1992 G. Bush Sr. inreased per capita outlay by 3%
    1992-1996 Bill Clinton inreased per capita outlay by -3%
    1996-2000 Bill Clinton inreased per capita outlay by 0%
    2000-2004 GW Bush inreased per capita outlay by 13%
    2004-2008 GW Bush inreased per capita outlay by 11%
    2008-2012(p) B Obama inreased per capita outlay by 13%

  • Harun||

    Is there anything more simplistic than thinking the president of the USA is in charge of everything.

    "Bill Clinton was the only one who kept the outlay constant!"

    Seriously, for one, he had a GOP congress for parts of his term in office, which might have affected some of the spending "under his watch" and there was also a tech boom, which grew faster than the Feds could spend. (California was able to keep pace and exceed the tech booms fiscal boon.)

  • Whahappan?||

    Also, don't forget the "peace dividend" from the collapse of the Soviet Union and the end of the cold war.

  • Drake||

    It should say: "Clinton / Gingrich chopped the Cold War military in half and replaced it all with civilian spending."

  • VG Zaytsev||

    So the only real cuts in per capita spending happened while Newt Gingrich was running the HoR and effectively national policy.

    But he's a scary statist nut, or something.

  • Cytotoxic||

    Well, he is.

  • Newt Gingrich||

    Have I told you about my moon base?

  • nikea||

    Instead, lawmakers spent the windfall. From 2002 to 2007, overall spending http://www.cheapfootballcleatsairs.com/ rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose http://www.nikefootballcleatstrade.com/ almost twice as fast as inflation.

  • Karl F||

    Both charts are inaccurate. Federal spending went DOWN in nominal dollars in FY 2012 for the second time in three years (http://www.treasury.gov/press-center/ press-releases/Pages/tg1734.aspx). Prior to President Obama, the last time that had happened was FY 1965. So FY 2012 spending definitely went down in real dollars and as a % of GDP, contrary to the inaccurate data in the graphics.

    Also, the second graph is misleading. As the author correctly stated in the text ("It then spiked to 25.2 percent of GDP in 2009 (a budget year for which some expenses were Obama's but most were Bush's)"), FY 2009 (10/1/08-9/30/09) was President Bush's last budget year, not President Obama's first. FY 2009 was 30% in the history books when President Obama took office. About $100 billion of ARRA stimulus moneys were spent in FY 2009. The rest of the spending was President Bush's.

    Spending as a % of GDP:
    FY 2009 = 25.2% (Bush's last budget year)
    FY 2010 = 24.1% (Obama first budget year)
    FY 2011 = 24.1%
    FY 2012 = 22.7%

    Spending has been trending down under President Obama.

  • Red Rocks Rockin||

    Federal spending went DOWN in nominal dollars in FY 2012 for the second time in three years

    No, it did not.
    FY 2009: $3.517 trillion
    FY 2010: $3.456 trillion
    FY 2011: $3.603 trillion
    FY 2012: $3.795 trillion
    http://www.whitehouse.gov/site.....s/hist.pdf

    http://www.gpo.gov/fdsys/pkg/B.....-1-6-1.pdf

    FY 2009 (10/1/08-9/30/09) was President Bush's last budget year, not President Obama's first.

    Except that Bush's budget was never passed until March of 2009, which included an additional $400 billion in spending put in by the Democrats. So this point: About $100 billion of ARRA stimulus moneys were spent in FY 2009. The rest of the spending was President Bush's. is also inaccurate.

    Spending has been trending down under President Obama.

    Not by much, and certainly not in total dollars.

    Spending as a % of GDP:
    FY 2009: 25.2%
    FY 2010: 24.1%
    FY 2011: 24.1%
    FY 2012: 24.0%

    Furthermore, during the period between the end of FY 2009 to FY 2012, GDP grew $1.86 trillion, while the debt grew $4.14 trillion, meaning that, minus the deficit spending, GDP was actually negative $2.28 trillion.

    Oh, and bringing in revenues at 19% of GDP, which has only happened 11 times since 1948, still yields a $600 billion deficit.

  • Tulpa Doom||

    Plus the "percentage of GDP" is misleading, since govt spending is part of GDP.

  • Red Rocks Rockin||

    It still means the same thing, but you're right that not a lot of people know that fact.

  • Tulpa Doom||

    About $100 billion of ARRA stimulus moneys were spent in FY 2009. The rest of the spending was President Bush's.

    Really?

    updated 3/11/2009 7:57:29 PM ET

    WASHINGTON — Calling it an "imperfect" bill, President Barack Obama signed a $410 billion spending package Wednesday that includes billions in earmarks like those he promised to curb in last year's campaign. He insisted the bill must signal an "end to the old way of doing business."

    I also don't recall BO demanding that Congress cut the spending during 2009. I do recall BO voting for all of Bush's spending in the Senate, though.

  • SIV||

    The othering of Grover Norquist continues...

    "Grover Norquist....Who is he?!"

    Seems to be the words of the week. I expect some of my fb "friends", who couldn't name their own congressman or the 3 branches of government, will post meme posters asking the same thing.

  • Tulpa Doom||

    Norquist is the successor of Rush Limbaugh, the Koch brothers, and Sarah Palin as the official punching bag of the left. It's hard to have a two minutes hate without someone to hate.

  • PapayaSF||

    No kidding. Suddenly he's the Villain of the Week to my Facebook friends. "If only we could raise taxes, all will be well!"

  • Cameiros||

    Politics 101

    Neither party ever cuts spending. They talk about it a good deal, but understand, all politicians know that actually cutting spending is political suicide.

    The difference between the parties then, is this:

    Dems tax and spend.

    Repubs borrow and spend.

    And there is only one reason we are at 17 trillion dollars in debt...

  • Sevo||

    "Repubs borrow and spend."
    When did Obozo change parties?

  • PapayaSF||

    There's another difference: Democrats enact huge spending programs like Social Security and Medicare, take credit for them as their proudest achievements, and then when they bust the budget it's the fault of Republicans for not raising taxes enough.

  • buybuydandavis||

    You forgot "print money" as one of your options.

  • joey89924||

    If the US were divided into several territories because one faction could not conquer the rest.
    MAX232

  • Newt Gingrich||

    It would be nice if that highlighted word lead to something else, maybe another web page that contained some further explanation...

  • buybuydandavis||

    I wish you guys would stick with per capita inflation adjusted dollars for all the charts and comparisons. That seems like the right statistic to me, and you just look dishonest when you use other statistics.

  • Moogle||

    Doesn't Congress spend the money? Thought I read that in a comic book or somewhere.

  • attractions guide||

    I think that spending doesn't drive deficits, but why this appear?

  • attractions guide||

    I think deficits are really matter althought it is none of my business.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement