Early Defining Test for Tea Party and Associated Republicans

[longfisher]

From the outset let me say that, quite unlike Bush who spent money wildly, I'm a fiscal conservative. I hate debt in my personal life and in my country's budget.

So, I don't advocate the Federal Government getting ever-deeper in debt. In that vein, I appreciate the statements of the Tea Partiers that they too will oppose any increased government spending.

Interestingly however, there's going to be a very early test of the Tea Party's resilience on this issue. Almost immediately after seating the new representatives in the House the government will run out of money if the nationl debt ceiling is not raised. It'll be a very interesting debate in the House and the resulting vote will be a clear indicator of whether or not the Tea Party is all hot air or if they're serious.

I'm hoping they're serious. But I think the Republicans and most of the Tea Partiers will vote for raising the national debt ceiling, even if after some small amount of rancorous debate.

LF

[marine4003]

Yea Bush spent ,but obama splurging....

A Visual History Of US Government Deficits
Megan McArdle, The Atlantic | Nov. 1, 2010, 4:31 PM | 954 |







These figures are in constant dollars, so they're unaffected by inflation/deflation, or the collapse in GDP; they're simply an assessment of the absolute increase in spending compared to taxes. As you can see, there's a huge increase under Obama--that huge upslope is the change between 2008 and 2009 spending levels.
To be sure, some of that is attributable to Bush. But most of TARP is turning a profit, funneling money back into the treasury; the actual net cost of TARP in FY2009 was $154 billion, but $108 billion is expected to be returned to the treasury in FY2010. If treasury ultimately loses money on the program, that will be mostly due to Obama's innovations like the auto bailouts. Then there's the $800 billion stimulus package, and assorted emergency spending.

Of course, you can argue that this spending was necessary, and at least in some cases, I agree. But I don't think that you can argue that the deficit is mostly just a result of collapsing tax revenues. That dotted green line I've drawn represents the growth rate of revenue in the final year before the financial crisis; had revenue continued growing at that rate (a not-too-shabby 4%), Obama would still be running a huge deficit.

But of course, "tax revenue growing more slowly" is not the same thing as "tax revenue collapsing". So really, to figure out how much of the deficit is due to tax revenues collapsing, we'd want to know how much of the deficit is due to an actual decline in tax revenue--that is, what would the deficit have been if tax revenue had stayed flat, at $2.4 trillion?

The answer is, it would have been about $900 billion. If you assume that "tax revenue collapse" refers only to an actual decline in revenue, then the breakdown is as follows:
$150 billion 2007 Bush deficit
$485 billion decline from 2007 revenues
$750 billion spending growth

This should not be taken as an argument that Obama has increased spending by $750 billion, however. Obama has spent a lot of money, but a lot of that extra spending simply comes from the fact that government spending is designed to grow. It grows in good times, and it especially grows in bad times, as entitlements add beneficiaries who have been hurt by the economic setbacks.

The point, rather, is that the belief that the deficit is "mostly" due to collapsing tax revenues is only technically true in that, if you assume robust revenue growth had otherwise continued, the deficit would "only" be a colossal $600 billion, instead of a sickening $1.4 trillion. If you use different assumptions, then spending emerges as the major culprit. And either way, I don't think you can ignore the huge leap in government spending that has taken place during the first two years of Obama's term.


Read more: http://www.businessinsider.com/a-vis...#ixzz14L9rApWj

[longfisher]

Yea Bush spent ,but obama splurging....

A Visual History Of US Government Deficits
Megan McArdle, The Atlantic | Nov. 1, 2010, 4:31 PM | 954 |







These figures are in constant dollars, so they're unaffected by inflation/deflation, or the collapse in GDP; they're simply an assessment of the absolute increase in spending compared to taxes. As you can see, there's a huge increase under Obama--that huge upslope is the change between 2008 and 2009 spending levels.
To be sure, some of that is attributable to Bush. But most of TARP is turning a profit, funneling money back into the treasury; the actual net cost of TARP in FY2009 was $154 billion, but $108 billion is expected to be returned to the treasury in FY2010. If treasury ultimately loses money on the program, that will be mostly due to Obama's innovations like the auto bailouts. Then there's the $800 billion stimulus package, and assorted emergency spending.

Of course, you can argue that this spending was necessary, and at least in some cases, I agree. But I don't think that you can argue that the deficit is mostly just a result of collapsing tax revenues. That dotted green line I've drawn represents the growth rate of revenue in the final year before the financial crisis; had revenue continued growing at that rate (a not-too-shabby 4%), Obama would still be running a huge deficit.

But of course, "tax revenue growing more slowly" is not the same thing as "tax revenue collapsing". So really, to figure out how much of the deficit is due to tax revenues collapsing, we'd want to know how much of the deficit is due to an actual decline in tax revenue--that is, what would the deficit have been if tax revenue had stayed flat, at $2.4 trillion?

The answer is, it would have been about $900 billion. If you assume that "tax revenue collapse" refers only to an actual decline in revenue, then the breakdown is as follows:
$150 billion 2007 Bush deficit
$485 billion decline from 2007 revenues
$750 billion spending growth

This should not be taken as an argument that Obama has increased spending by $750 billion, however. Obama has spent a lot of money, but a lot of that extra spending simply comes from the fact that government spending is designed to grow. It grows in good times, and it especially grows in bad times, as entitlements add beneficiaries who have been hurt by the economic setbacks.

The point, rather, is that the belief that the deficit is "mostly" due to collapsing tax revenues is only technically true in that, if you assume robust revenue growth had otherwise continued, the deficit would "only" be a colossal $600 billion, instead of a sickening $1.4 trillion. If you use different assumptions, then spending emerges as the major culprit. And either way, I don't think you can ignore the huge leap in government spending that has taken place during the first two years of Obama's term.


Read more: http://www.businessinsider.com/a-vis...#ixzz14L9rApWj

...Obama spent massively. He even has the dishonor to have outspent Bush, quite an accomplishment on it's own.

In one of my earliest posts on this board and on the first occassion I was called a liberal on this board, I pointed out Bush's incredible spending and also added that criticism of Obama so early in his tenure for projected spending needed to be balanced with the knowledge of Bush's less than spendthrift ways (he added something like 12 trillion to the national debt, almost half of it by bailing out the banks and taking on their toxic assets.)

I also added that Obama may turn out to be worse as he has to unf*ck what Bush did and get us out of a recession, government spending being really the only tool he had, really, to create jobs and get the economy off rock bottom. There are still those who believe the stimulus failed because it wasn't big enough.

Personally, I'm uncomfortable with debt both in my personal life and for my local, state and Federal governments. So, I was always on the side of letting the GD banks fail. But Bush saw it diffently and then Obama followed suit.

Maybe we'd be in a depression now had those two not bailed out Wall Street. But I'd still preferred them to fail as that the system of capitalism we have.

Thanks for the nice article, Moron.

LF

[longfisher]

Rand Paul has said (and is has not backed off it yet) that he'll fillibuster the bill that might raise the debt ceiling should that bill come to the Senate. With the recent gains by the Republicans they might not have the votes to shut down that fillibuster.

So, what would be the results if Paul actually does this? Well, essentially, the government would run out of money to spend. Perhaps some things would get paid but many, many other things would not get paid. Most importantly, interest payments on the national debt would likely not be paid, particularly if those payments were to foreign powers.

Essentially, the U.S. would default on it's debt obligations like some 3rd world country. When we did that most foreigners would dump their U.S. interests and certainly would not purchase any more U.S. debt.

The dollar would become essentially worthless anywhere but here. International trade between the U.S. and the rest of the world would likely come to a screeching halt. Jobs would absolutely dissappear from the U.S. landscape altogether, especially in manufacturing (sell your Catapillar stock NOW). And, a worldwide recession could ensue.

All because a single strategically-placed Tea Partier fillibustered a bill. The stakes are surely high if this scenario were to play out. Talk about cold turkey and horrible withdrawal.

My bet is that the Tea Party folds on this issue once the stakes are made plain to them.

LF

[hubris 1]

When I was little I used to hear my dad say.......Boy, I would like to go back to school and understand what they are thinking with this economic plan. It makes no sense to me.
I think I finally get it. Govt grows by everything going one way.....UP, just not too fast, or they call that inflation, not growth. The price of fuel, needs to keep going up, the price of raw materials needs to keep going up. If you run a large business or a govt, growth is all about more revenue any way you can generate it, its fine. That is growth.
I think the real problem in the system now is the Baby boomers. There are just too many of them all at the same time wanting Health care, Social Security, and retirement......contribuating absolutely nothing to the growth curve. There arent enough new people paying taxes with sustainable growth to take care of alll of them. Govt cant figure out how to do it either. Raising the ceiling is fine when a herd of younger people are going to pay the bill in the future.......That future is now however, and there aint enough people.
Ill give another example. Watch a Hospital in your home town grow.......Building additions that make the former hospital not even recognizable. The best at this, the best at that, for a bunch of old people who will be dead in 3 months. Yet, Main Line Health systems just laid off 98 employes despite the fact every one of their hospitals is building a hugh addition to serve you better. Thats the new economic way of thinking.......Its worked for govt in the past, its worked for large institutions like hospitals, Its worked on wall street, It works for colleges charging tuition,it doesnt work for the regular american family. Hence, frustration.
I agree with the idea we are working towards more problems for american families. All these institutions want to grow and can force hikes on us, we have no choice but to pay while Americans slowly go broke......one dollar at a time.
I think govt needs to shrink, and cut taxes, they think they need to spend more to show signs of growth.

[longfisher]

When I was little I used to hear my dad say.......Boy, I would like to go back to school and understand what they are thinking with this economic plan. It makes no sense to me.
I think I finally get it. Govt grows by everything going one way.....UP, just not too fast, or they call that inflation, not growth. The price of fuel, needs to keep going up, the price of raw materials needs to keep going up. If you run a large business or a govt, growth is all about more revenue any way you can generate it, its fine. That is growth.
I think the real problem in the system now is the Baby boomers. There are just too many of them all at the same time wanting Health care, Social Security, and retirement......contribuating absolutely nothing to the growth curve. There arent enough new people paying taxes with sustainable growth to take care of alll of them. Govt cant figure out how to do it either. Raising the ceiling is fine when a herd of younger people are going to pay the bill in the future.......That future is now however, and there aint enough people.
Ill give another example. Watch a Hospital in your home town grow.......Building additions that make the former hospital not even recognizable. The best at this, the best at that, for a bunch of old people who will be dead in 3 months. Yet, Main Line Health systems just laid off 98 employes despite the fact every one of their hospitals is building a hugh addition to serve you better. Thats the new economic way of thinking.......Its worked for govt in the past, its worked for large institutions like hospitals, Its worked on wall street, It works for colleges charging tuition,it doesnt work for the regular american family. Hence, frustration.
I agree with the idea we are working towards more problems for american families. All these institutions want to grow and can force hikes on us, we have no choice but to pay while Americans slowly go broke......one dollar at a time.
I think govt needs to shrink, and cut taxes, they think they need to spend more to show signs of growth.

...but I'll recongnize explicitly the connundrum you cite H, as being an age old one that few, not even Republicans, have solved. Does American budget like a household should or does it act imperially and forsake budgets.

My position is clear. No debt whatsoever.

LF

[longfisher]

...and they're not even seated yet.

An old-style Republican representative named Bachus is, apparently, a favorite to replace Rep. Frank as the chairman of the House finance committee and he's gunning for the Financial Reforms laws recently enacted. In specific, he's warned regulators who are currently working to generate the regulations to enforce the Dodd-Frank regulatory reform bill to NOT ENFORCE THE LAW AS IT STANDS ON RESTRICTING PROPRIETARY TRADING BY THE BIG BANKS, PRECISELY THE SORT OF TRADING THAT BLEW UP THE ECONOMY.

This is sure to raise the hackles of Rand Paul and other Tea Partiers who have openly criticized the big banks for their role in the financial crisis and have declared war on the bailouts. You can expect the Tea Partiers to have a voice in the selection of the chairman of the House Finance Committee and they may frown on Bachus' hutzpuh and arrogance in making declaratory statments against their interests when he's not even the chairman yet.

Maybe this is the beginning of the war that's widely expected to transpire between the old-school GOP and the Tea Partiers, instead of the debt ceiling.

By the way, Eric Cantor who's likely to be a high-ranking official in the GOP House majority has recently been talking about allowing the debt ceiling to rise beyond it's current value. Again, a festering sore with the Tea Partiers.

So, it appears the old-style GOP is trying to be pre-emptive by discussing these things which they know will be contentious long before the Tea Partiers are seated.

It's sure going to be fun to watch and it's unlikely to be pretty at all. That is, it's unlikely to be pretty at all unless the Tea Party proves to be easily coopted by the GOP. That's a pretty high probability as much fo the campaign cash that got the Tea Partiers elected came from Wall Street and was funneled through the RNC.

Maybe the TPer's will forego their principles for convenience, like Hubris and most insubstantive GOPers do so readily.

LF

[longfisher]

It seems Rand Paul now likes earmarks for KY as long as they're done at the committee level rather than by individual vitually annonymous congressmen. That's quite a departure from his campaign pledges to press for a total ban on earmarks.

Contrarywise, Jim DeMint, another TPer, is collecting signatures of Republican congressmen who would vote for a total ban of earmarks.

So, Rand Paul is in the process of morphing into a "tax and spend" Republican and he's not even been seated yet. DeMint, so far at least, is being true to his campaign promises regarding earmarks.

Wow, how they change (all politicians) when they get elected, huh?

[Curmudgeon]

Nice debate you're having with yourself, LF ...

[longfisher]

Nice debate you're having with yourself, LF ...

...important developing story. It's just like the thread on how the banksters might get their due comeuppance in the foreclosure mess.

Besides, I don't go badly with debates. But the last time I heard you and others weren't too very inspired to debate me, again.

LF