The 44th president’s $4 trillion headache
Do you trust any candidates not to raise taxes on the middle class or not fix AMT?
The candidates want to do things like reduce taxes and fix health care. But they’ll have to deal with the cold realities of the federal budget.
CNN-The presidential candidates all have big plans for their time in the White House. Reform health care. Reduce taxes. Close corporate loopholes. Encourage savings. The list goes on.
Like college graduates whose career choices may be limited by their student loan debt, however, the next president could be constrained by the federal budget.
According to the Congressional Budget Office (CBO), the annual budget deficit will improve during the next president’s four-year term and end in a surplus of $61 billion by 2013.
quote:
Even with the tax cuts and AMT relief in 2007, the government still collected a higher-than-average amount of tax revenue
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This is not what it seems. What they don’t say is that due to inflation, those tax dollars, even though more in number, won’t buy what they did the previous year.
Inflation is so much higher than what the government reports, that government spending, esp. in Health care is rising much faster than tax revenues.
This weekend, the call for more spending on infrastructure was rising. States are getting desperate as are cities, all of which are losing tax revenues. They want massive federal spending on infrastructure projects that would last for years to keep people employed and money flowing to cities and states from them.
One estimate I heard was it would take $800 billion deficits for this year and the next few years to meet this demand. We need $2 trillion just for bridge upgrades.
The problem is that deficit spending depends on continuing to get loans from foreign nations.
Economist John Williams says real unemployment and inflation numbers — figured the old-fashioned way — may be two or three times what the government admits. Heres why, and what it means for Social Security.
Contrarian Chronicles
The numbers behind the lies
Mr Konop,
How do you expect to pay down this decades massive Republican’t fiscal deficit? Last decade, Democrats had to raise taxes and slow the increase in spending to pay for the Reagan-Bush fiasco. What’s your solution this time around?
The problem is, David, that they also headed us into another recession thanks to the factors that started slowing growth in 1998 or so when all of government job growth peaked. While job numbers grew, the rate of growth kept falling and was in a ski-slope down in 2000 before Bush was elected.
People forget that lag factors on policies take a couple years or so to take full effect. Other nations were beginning to cut taxes and provide more incentives for business to leave the U.S. and go to their nations. So while the “number of businesses” in creased the rate of growth was and still is falling. Now we are even seeing R&D and Financial services leave.
Quote:
Escape from New York
By Peter J. Wallison Wednesday, February 20, 2008
U.S. public securities markets are losing their competitive edge,
Another striking fact in the Committee’s new report is the growing number of American companies that have chosen to offer their stock in initial public offerings outside the United States. The number has grown from an annual average of one-tenth of 1 percent between 1996 and 2005, to 1.1 percent in 2006 and 4.3 percent in 2007. This indicates that even U.S companies are beginning to abandon their home market for the lower-cost and lower-risk markets abroad.
The Committee’s initial report placed the blame for the loss of public securities transactions on onerous regulation and relatively high litigation risks. This is certainly plausible. The decline seemed to begin after the Sarbanes-Oxley Act was passed in 2002. The London Stock Exchange advertises itself as a SOX-free zone and has experienced a boom in listings during the post-SOX era.
The American
Six years and we’re just now getting the full impact of that Bush signed piece of legislation.
It takes years for businesses to realize the full impact, downsize, close or move to another country after a policy that affects taxes, compliance costs, production expenses, transportation of goods, raw material supplies, etc. is enacted.
I think the democrats will use some of the same things Clinton used but that won’t solve any long term problems. Only a change in thinking by voters will do that.
In 2001, the slogan was “Another Bush, another recession.”
In 2008 . . . “Drunken sailors’ orgy is over; time to bring in the clean-up crew!”
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Job growth reality check:
April 1992 – July 2001: 111 months in a row of positive year-on-year job growth, averaging 2.2% p.a.
Previous record: August 1961 – July 1970 (108 months; +3.1% p.a.)
The “ski slope” you describe was more of a chair lift, rising, rising, rising, rising, rising.
The “skiing” started in August 2001, while Dubious was on vacation.
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January 20, 2009:
The End of an Error.
Nope. here is the chart
http://tinyurl.com/yrttmr
Quote:
Nondurable manufacturing employment peaked at 7.9 million workers in January 1995. Components that peaked under Clinton included: food and kindred products (October 1995); textile mill products (November 1994); printing and publishing (May 1998); and rubber and miscellaneous plastics (February 2000). Many of these jobs were once concentrated in the South.
Durable manufacturing peaked at 11.2 million workers in April 1998. Components that peaked under Clinton included: lumber and wood (February 2000); furniture and fixtures (July 2000); primary metals (January 1998); fabricated metals (July 2000); industrial machinery and equipment (March 1998); electronic and other electrical equipment (November 2000); transportation equipment (October 1998); instruments and related products (March 1998); and miscellaneous manufacturing (April 1998). Some of the largest durables goods employment is in the upper Midwest.
Source
Again, if you go by the data that is put out “publicly,” you get a picture created with smoke and mirrors.
It is like the phony job growth stats Bush put out this last couple of years. Most was “created” using the “birth/death model” and by hiring thousands in government jobs, or jobs tied to government spending while jobs in many of private sectors were falling.
Jobs were rising right up to the recession but that was not growth that was keeping up with population growth. As you know “Between 1980 and 2005, the nation’s population grew by 70 million people—a 31 percent increase.” Thus, more jobs added that weren’t keeping up with that rate of growth in population especially in lower wage and middle class jobs, is deceptive.
Bush uses the same methods Clinton uses. Those manipulations of numbers are nothing new. You have to use private data sources if you want a true picture of our government and nation’s economy and fiscal health.
Bush’s term has been a disaster as will the next one and the one after regardless of which party is in power. I do believe we may see a short term bounce if the Democrats get in but that only means delaying and making the problem even worse when it does happen.
I would eliminate tax breaks for companies that off-shore jobs, I would than give the breaks for companies creating jobs. I would focus the tax breaks toward energy. I would eliminate U.S. subsides and tariffs against countries that have real laws standards and laws that protect human rights. I would raise tariffs on countries that do the opposite.
I would eliminate pork federal failed programs like NO Child Left Behind. I would require 0 based budgeting. I would phase out of Iraq saving 12 billion a month.
This is just a start
John,
You are plagiarizing Obama who said exactly the same thing during the latest debate/dem lovefest…will you soon become Georgia Chairman of Obamanation?
Bart
I am lost what you are saying! If anything Obama and you are tight on immigration policy.
I will say Obama looks better than McCain.
Why would you vote for McCain?
Why would you vote for Obama?
He is a socialist.
While the cost savings from leaving Iraq would help, the problem is far deeper than what those savings would amount to.
You have to reform social security, medicare, pay down the debt, and stop using the federal government for social engineering.
$1.8 trillion is just for social security, health and humans services and interest on debt. Our infrastructure needs $2-3 trillion in spending just to get it up to par. We plan on adding 1/3 to the population over the next 20 years. So, not only do you need to spend $2-3 trillion to get what we have up to par, you need to add 1/3 more.
If you don’t end federal spending on social programs like social security and health care, you can’t afford to do what government is really supposed to do. Now, since the voters aren’t going to support ending that social spending, how do you get spending under control with inflation driving the costs of social spending up 10% and more when health care costs are included due to an aging population?
While your suggestions would make the “budget better” it will still require more borrowing if we do the infrastructure spending they are talking about doing. We are probably going to add a Trillion a year to the debt even if the Democrats are elected and “raise taxes” if we start fixing our decaying infrastructure and bail out home owners and increase spending to “stimulate” the economy.
If we do that, demand for food and energy world wide will stay high and go even higher. Yet, wages here will be be less than needed to maintain buying power because we under report inflation that pay increases are tied to.
John,
Obviously I am not voting for McCain as discussed on this site.
Obamageddon said exactly the same thing as you posted in #7 during the most recent debate….you regurgitate it accurately.
Obama will surrender in Iraq…JK agrees.
Obama will go after those evil corporations forced by our onerous tax system to seek offshore alternatives…JK agrees.
Obama would force Americans into a government controlled healthcare system…JK agrees.
Obama would work to end trade relations with global trading partners…JK agrees.
Obama would punish employers for hiring illegals before securing the border…JK agrees.
Obama would end NCLB…JK agrees.
What is the difference between Barack Hussein Obama and John Konop?
I mentioned the other day that I thought states were making demands on the Federal Gov. for infrastructure spending. This came out today
quote:
Governors Turn to Fed Cash for Infrastructure Support
Monday, Feb. 25, 2008
WASHINGTON — Governors are debating priorities if Congress takes up a second stimulus package, with some state leaders pushing for federal money to repair roads, water systems and bridges.
Governors hoped to raise the issue of infrastructure on Monday with President Bush at the White House.
“There are a lot of projects in every state where the architectural design has been done, where literally they’re ready to tap into the ground and begin construction,” said Democratic Gov. Ed Rendell of Pennsylvania.
Rendell and a bipartisan group of governors are pushing public works as part of a potential second stimulus package. Democrat Eliot Spitzer of New York and Republican Arnold Schwarzenegger of California are among the governors demanding federal action.
Money News
Many states are in deep trouble and are demanding a bailout.
Mr Konop,
I don’t have the stats to make this more obvious, but from my tally you don’t have enough money to even begin to reduce the debt, let alone pay it down.
Trading one tax break for another ? No reduction there.
Cutting tariffs on some countries and raising them on others ? No reduction there.
Your anti-children and anti-war items might save some money, but not hundreds of billions of dollar a year.
.
Try again, sir.
David
They use to teach when we did not have a massive trade debt the concept of circulation of money. Now all we do is send the money to China and bower it back. I am just a business guy not an economist like you but the investment looks like a bad one for Americans!
Bart
Why do you support No Child Left Behind?
Correct John, it is a bad deal for America. So why are you focused on trade, a symptom instead of reforming our government, the real problem?
John,
I have stated many times my opposition to NCLB…I oppose government education no matter how it is justified.
Why do you support government being in control of the educational development of your children?