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Some Deficit Perspective: It Might Be Awful, But at Least It's Also Unprecedented
From the Christian Science Monitor:
To put some context on a new estimate that puts this year’s federal deficit at $1.8 trillion, consider this: That amount had never been spent by the federal government in a single year until 2000, let alone borrowed.
That’s right. As the decade began, the US government spent $1.8 trillion in a year for the first time. Now it’s poised to spend that much in excess of its tax revenues.
The Treasury released the latest figures Wednesday, showing spending of about $3 trillion in the past 10 months, and revenues of only $1.74 trillion.....The fiscal position will remain difficult, since baby boomers are already starting to retire in a wave that will grow more costly in coming years.
But don't worry--they are only doing this because they have to. They'll stop soon. As soon as they can:
The soaring deficits have raised worries among foreign owners of US Treasury securities including the Chinese, the largest holder of such debt. President Barack Obama’s economic team sought to reassure the Chinese during high-level talks last month that the administration is committed to reducing the deficits once the current economic and financial crises have been resolved.
[Hat tip on link: the indispensable Rational Review.]
I, Kahn O\'Clast|8.13.09 @ 9:41AM|#
It is a shame that there isn't another Earth with the same initial conditions in say 2007 in which not spending and printing money could be tried. It would be great to be able to see if Libertopia erupted there or if they fell into the second Great Depression.
|8.13.09 @ 9:51AM|#
From Dr. Evil himself Karl Rove this morning. It is pretty
sobering.
"It's true that the deficit was $455 billion when Mr. Obama took
office, with $325.3 billion of that from the bank rescue bill Sen.
Obama supported.
But since Jan. 20, Mr. Obama has only added to the red ink. He has
signed into law a $787 billion stimulus package and a $33 billion
expansion of the State Child Health Insurance Program. He's
greenlighted spending another $330.4 billion in bank rescue money.
And he signed a $410 billion bill to fund discretionary spending
for the second half of the current fiscal year, an increase of 8%
on an annual basis. By supporting each spending initiative, he
robbed himself of the ability to credibly blame others for the size
of the deficit. "
http://online.wsj.com/article/SB10001424052970203863204574346512956227346.html
|8.13.09 @ 9:57AM|#
"the administration is committed to reducing the deficits once
the current economic and financial crises have been
resolved."
Yep, and next time Lucy is definitely going to let Charlie Brown
kick that football.
|8.13.09 @ 9:58AM|#
You know Republicans and Democrats are both driving this car
over the cliff. The Democrats just have the accelerator gunned,
while the Republicans are coasting.
Man, it would be nice to see someone not only brake, but turn the
car around.
Xeones|8.13.09 @ 9:58AM|#
Sal Paradise is a sexist, a fascist, and racist against Cartoon-Americans.
|8.13.09 @ 10:02AM|#
"sought to reassure the Chinese during high-level talks last
month that the administration is committed to reducing the deficits
once the current economic and financial crises have been
resolved."
Did the Chinese laugh?
|8.13.09 @ 10:03AM|#
I think those brakes are out...since it requires someone in DC
to actually know how to maintain them
someone tell Rove that his side lost...it's a huge disappointment
that WSJ gives him any print...but not a total surprise. I'll skip
anything that Texas troll has to say
This is America, damn it...we run deficits and run em BIG. China
can suck it...until they tell the UST to swallow
Alan Vanneman|8.13.09 @ 10:04AM|#
It's no wonder that the stock market is crashing into the cellar
and interest rates for long-term Treasuries are going through the
roof!
Oh, and over in Europe, you know, those guys are so stupid! But in
France and Germany, their economies are growing! Go figure!
Xeones|8.13.09 @ 10:05AM|#
China can suck it...until they tell the UST to
swallow
Wait, so is the US 69ing China, or are they just going to snowball
the Treasury? Your metaphor kind of goes off the rails there, you
fascist.
|8.13.09 @ 10:08AM|#
"the administration is committed to reducing the deficits
once the current economic and financial crises have been
resolved."
Is that before or after True Socialism is established?
I thought deficits, when run by Republicans, hurt the economy and
created economic crises.
|8.13.09 @ 10:09AM|#
"someone tell Rove that his side lost...it's a huge
disappointment that WSJ gives him any print...but not a total
surprise. I'll skip anything that Texas troll has to say"
That is right. And when his side wins again, they can tell your
side to fuck off and will stomp all over you just like you stomp
all over them. That is a fucking great idea. The last thing anyone
would ever want to do is be reasonable in defeat or victory.
<strike>strike through</strike|8.13.09 @ 10:09AM|#
once the current economic and financial crises have been
resolved
Tightrope-walking time. The regime wants to take credit for the
recovery, but not too much credit, or some pesky
right-wing teabagging fascist might inconveniently ask why they
don't take back the remainder of the $800 billion stimulus, thus
reducing the current deficit by about $750 billion
instantly. But no, the regime replies, we've just
begun to emerge from The Great Recession! We must spend every
penny of the stimulus, even if it takes us seven years!
|8.13.09 @ 10:11AM|#
It's the 'spaghetti on the wall' approach...typing well-thought
gibberish that makes less sense having read it. A poor attempt at
lowest level humor...it's why I post as an unpaid
non-professional
"$33 billion expansion of the State Child Health Insurance
Program"
next thing you know these darn kids will want to be educated
too
Xeones|8.13.09 @ 10:13AM|#
Griff, you gotta tighten up your posts if you want to make a living at it.
|8.13.09 @ 10:14AM|#
Hard to blame anyone but ourselves for this mess. Well, at least the majority of the American public who thinks that voting for politicians who cannot balance a budget or constrain spending to a rate of inflation is how a country should operate.
|8.13.09 @ 10:15AM|#
Since everyone with half a brain knows that we'll come out of
the recession without the government really having had anything to
do with it (as always), why do we all (meaning America in general,
and especially the media) sit around pretending otherwise?
This level of spending will mess us up. Acting like we can just
increase it and increase it without any consequences is insane. If
taxes are raised to try to deal with it, we'll promptly switch
parties, so that option isn't really on the table, is it?
|8.13.09 @ 10:21AM|#
The passengers, having finally removed the drunken, babbling
pilot from the controls, were dismayed to discover that his
successor, to whom they had entrusted their lives and hopes, had
barricaded himself in the cockpit with two stewardesses and the
drink cart, and, having wedged the yoke in position with his shoe,
had pushed the throttles to full power.
The plane hurtled earthward.
|8.13.09 @ 10:32AM|#
X, duly noted. Or as Ty Webb instructed a young Dan noonan..."danny, see your future, be your future"
|8.13.09 @ 10:35AM|#
don't worry. Health care reform will help bring our spending
under control as we start to lower the cost of health care....and
once a good carbon tax is implemented we will have tens of millions
of new green jobs. We just have to work through the problems causd
by free-market fundamentalism and then we will be prosperous
again.
As for china funding our debt, they have little choice beause there
is a still a huge savings glut. Besides they really need us to buy
their goods or else they would have a revolution. There is no other
possible way for them to sell enough goods without the american
consumers.
|8.13.09 @ 10:38AM|#
Did the Chinese laugh?
Not out loud. They're too polite.
The Chinese right now are busy getting rid of their dollars, buying
natural resources around the world. They are also shortening up
their Treasuries. Anyone who thinks we have the Chinese "trapped"
in the dollar is a damn fool. Yeah, I'm looking at you, Geithner.
And your buddy, Bernanke.
|8.13.09 @ 10:39AM|#
"Since everyone with half a brain knows that we'll come out of
the recession without the government really having had anything to
do with it (as always), why do we all (meaning America in general,
and especially the media) sit around pretending otherwise?"
Most of the media doesn't have half a brain. Ezra Klein is the
typical media. He is someone who went to high end colleges where he
was indoctrinated by leftist professors. And then he went
immediately out into the world and started pontificating. Most
media members are not economists and have little or know working
knowledge of economics beyond a few leftist fairy tails and
conventional wisdom that they were fed in college. Since college,
they have only known other people who think exactly the same way,
which did nothing but reinforce their ignorance. Worse still, they
don't even understand that they are ignorance. They think anyone
who doesn't think exactly like them is a nut or a fundie or a
hillbilly.
creech|8.13.09 @ 10:44AM|#
My first thought was that the Chinese should be hedging their bets by pouring, say, $100 million into the Libertarian Party's campaign to elect 218 congressmen in 2010. LOL
<strike>strike through</strike|8.13.09 @ 10:51AM|#
R C Dean | August 13, 2009, 10:38am | #
"Did the Chinese laugh?"
Not out loud. They're too polite.
You're confusing them with the Japanese, RC. I've
seen those Chinese propaganda posters. They're a nation of
supermen! Supermen who will bugger you if you're late with a
payment!
|8.13.09 @ 10:59AM|#
The Chinese right now are busy getting rid of their dollars,
buying natural resources around the world.
The Chinese are going to do more for Africa in the coming years
than decades of western empathy and aid
Welfare-for-Dictators.
|8.13.09 @ 11:00AM|#
China's not hooked on the dollar, but it is hooked on America's economy. In fact, China's up to ten pipes of American consumption a day. Gonna crash big if the U.S. doesn't continue to pull out of the recession.
|8.13.09 @ 11:05AM|#
China's not hooked on the dollar, but it is hooked on
America's economy.
I wouldn't be too sure, PL. The EU is their biggest trading
partner. The US accounts for around 12 - 13% of China's foreign
trade.
|8.13.09 @ 11:06AM|#
President Barack Obama's economic team sought to reassure the Chinese during high-level talks last month that the administration is committed to reducing the deficits once the current economic and financial crises have been resolved.
We'll still respect them in the morning too.
|8.13.09 @ 11:20AM|#
J sub D,
When liberals ask "why does the world hate us", I now have answer;
because we fucked them out of ten trillion dollars. At what point
do we become a failed state and end up a ward of the World
Bank?
Gray Ghost|8.13.09 @ 11:32AM|#
From Gabe: As for china funding our debt, they have little
choice beause there is a still a huge savings glut. Besides they
really need us to buy their goods or else they would have a
revolution. There is no other possible way for them to sell enough
goods without the american consumers.
Why can't China grow its own middle class to generate demand for
its products? Or, cross sell with India? I realize that China's a
dictatorship and that dictators traditionally hate growing an
internal merchant/consumer class (for often very good reasons), but
in a country with a billion people, they can't generate enough
internal demand to meet some of the need?
Same thing for India, except that its problems are due to being a
basket-case rather than a dictatorship. Two billion people, with
more and more excess (coal-fired) energy, better and better
educations, and merchant cultures, can't generate enough demand to
compete with our 300 million consumers?
What scares me is not so much the debt load, as the debt load
coupled with a spike in energy prices. Think we could easily handle
it if oil went back above $140/bb?
Joe M|8.13.09 @ 11:44AM|#
Minor thread jack for the "shocking" news of the day:
"A Commerce Department report on Thursday showed total retail sales
edged down 0.1 percent after increasing 0.8 percent in June,
compared with market forecasts for a 0.7 percent gain.
Analysts had expected a boost in retail sales from the government's
"cash for clunkers" program...
'Consumers have cut spending every month. The big surprise is that
we thought "cash-for-clunkers" was going to add to GDP but instead
it took away spending elsewhere,' said Christopher Low, chief
economist, at FTN Financial in New York."
Wow! Who would've thought?
Tomcat1066|8.13.09 @ 12:09PM|#
'Consumers have cut spending every month. The big surprise
is that we thought "cash-for-clunkers" was going to add to GDP but
instead it took away spending elsewhere,' said Christopher Low,
chief economist, at FTN Financial in New York."
How much of a fucking retard do you have to be not to expect people
to pay for a car with money they would have used for something
else?
Did this turdnugget eat paint chips as a kid?
robc|8.13.09 @ 12:10PM|#
It would be great to be able to see if Libertopia erupted
there or if they fell into the second Great Depression.
Why cant it be both?
|8.13.09 @ 12:19PM|#
Tried to reassure China....
I'm sure the Chinese were impressed as Hell. RC Dean is right. The
Chinese, not being stupid, are slowly lowering exposure. Sure, U.S.
consumer are nice and all, but not if you're getting paid in
worthless money. The debt problem is going to escalate until no
other economy on the planet can support the lack of fiscal
discipline in the U.S.... and then it's, "Hello, Argentina." The
U.S. government will just let hyperinflation screw every U.S. debt
holder, foreign and domestic.
|8.13.09 @ 1:03PM|#
Oh, and over in Europe, you know, those guys are so stupid! But in France and Germany, their economies are growing! Go figure!
Although you ought to note that France and Germany didn't have big
economic "stimulus packages," though they did have their version of
C4C. Not that our stimulus package matters, since it hasn't been
spent yet.
|8.13.09 @ 1:20PM|#
"someone tell Rove that his side lost...it's a huge
disappointment that WSJ gives him any print...but not a total
surprise. I'll skip anything that Texas troll has to say"
That is right. And when his side wins again, they can tell your
side to fuck off and will stomp all over you just like you stomp
all over them. That is a fucking great idea. The last thing anyone
would ever want to do is be reasonable in defeat or victory.
Karl Rove's side was previously my side as well...until my brain
began to function more properly & recognize the manipulation.
Which is largely why I am here & off the WSJ boards
Space Fiend|8.13.09 @ 5:01PM|#
I just want to say commenters here continually impress me. It
was not reported here (or anywhere readily accessible) that China
has been on an intense Africa and South Asia buying spree for a
while, but everyone here seemed to already know about it.
Now if only we could get people outside of the few dozen who
comment here to educate themselves.
|8.14.09 @ 11:13AM|#
For the record, my post was parody. I find it hard to believe
that some people really think China is that dependent on us to
"consume" as if we were really doign the china peasants a favor by
buying their wal mart stuff and then giving them mortgage back
securities and 30 year bonds that we have no intention of
paying.
Yes, if you read the right websites you have been reading about
china's investments in natural resource rich countries for the last
several years. This trend was accelerated once the US congress
fought off Chinas attempt to buy Unocal back in 2005. They really
started to realize that the US wasn't planning on letting China
protect itself. They are positioning their portfolio to do quite
well when they finally decide to pull the rug out from under our
currency or at least be ready to execute the threat if our UK/US
political establishment tries to strong arm them.
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