The federal government this year will run a budget deficit well in excess of $1 trillion for the fourth consecutive year, according to an Obama administration mid-year budget review, amid continued harsh economic times and strong partisan wrangling over spending policy. For fiscal year 2012 that will end on Sept. 30, the deficit is now projected to be $1.211 trillion, or $116 billion lower than the $1.327 trillion deficit projected in February, according to the Office of Management and Budget’s Fiscal Year 2013 Midsession Budget Review. That compares with deficits ranging from a high of $1.4 trillion in fiscal 2009, to $1.29 trillion in both fiscal 2010 and 2011. The mid-year report, which was quietly released Friday afternoon, also contains slightly revised economic forecasts projecting that the economic recovery that began in 2009 will continue at a moderate rate and that unemployment – currently 8.2 percent and holding -- will gradually decline. "This will put the country on a course to a level of deficits below 3 percent of GDP by the end of the decade, and will also allow us to stabilize the Federal debt relative to the size of the economy," Obama said. "To get there, this budget contains a number of steps to put us on a fiscally sustainable path." Last summer’s budget control legislation, enacted as part of an agreement between the White House and congressional Republicans to raise the national debt ceiling, imposed immediate deficit reduction totaling $1 trillion and called for an additional $1.2 trillion of deficit savings in the coming decade either approved by lawmakers or automatically imposed through a process called sequestration. http://www.thefiscaltimes.com/Artic...use-Projects-4th-Trillion-Dollar-Deficit.aspx
Remind me again why we're worried about the deficit when we can borrow at negative real interest rates?
Spending more than you take in only will lead to more economic problems for that money still has to be repaid even if there's no interest. Funny that when the Republicans are in the Presidential office they are lambasted about running a deficit but when Democrats are running the show no one has anything negative to say. It is just something I've come to see when trying to understand economics in the American system. Seems that the deficit can be even larger if they want to have more to spend in this manner so they don't care about being careful as to spending at all.
In the first place, "negative real interest rates" means that we pay back less than we borrow, in real terms. It's literally free money. People will pay us for the privilege of loaning us money. In the second place, you present no argument or reasoning whatsoever about why or how debt accumulation will cause "more economic problems," nor any reason to think that they'd be worse than the economic problems we already have, or would have if we slashed the budget during a fragile recovery. You're just taking "deficit = bad" as axiomatic, without the slightest attempt at substantiating it. Is that what you think? Well, thanks for outing yourself as a craven partisan who does not bear engaging seriously, at least. Saves me some time.
LOL Edward Prescott was in the news last week saying, in short, the US economy is f*cked, fractional reserve lending is no longer necessary and we should think good and hard about what kind of economic system we want to build once this once collapses - which he reckons will be relatively soon. Certainly before the end of the decade. So, maybe Obomney is right? Oh, he won the Nobel Memorial Prize in Economic Sciences in 2004.
That's probably because most of that debt is Republican debt, which Obama is finally putting on the books.
But we must repay the loan and that was my point and we must repay ALL of it not a part of it. Spending less is more important for the future than trying to throw good money after bad as we are doing with these deficits. Inflation occurs when you keep pouring new minted money into the system because all that new money has no real value for it is just "created" not part of the system that is already there. Adding more fuel to the fire of a down turned economy won't bring it back to life but only insure that our future generations will have a bigger debt load to carry on their backs and cause inflation to run amok. When you are adding more money into the economy you substantially reduce the value of what is already in the system.If you create a budget then exceed that budget because you don't have the money to pay for it then you create a bigger problem for those having to pay that money back down the road plus inflation . If you can't see that it is you with an inheriant economic problem , not I.
Actually the debt has RISEN over 5 TRILLION dollars since Obama has been in office in less than 4 years. Bush had only less than 4 trillion in his 8 years as President. That would seem to me that Obamas economic woes far outweigh that of Bush.
But we repay it with money that will be worth less than the money we borrow. And money later is always worth less than money now, even without inflation, due to opportunity cost effects. If people will give you free financing, or even pay you to loan you money, then why wouldn't you take advantage of that? Prove it. Explain exactly what spending you would cut to reduce the deficit, and demonstrate that doing so would leave us better off in the long run than keeping the spending and the deficit. Then explain why the deficit needs to be addressed entirely through spending cuts, as you demand, and not through raising taxes. As it is, all you've presented is a hollow assertion. Do you have any actual substantive reasoning to support your favored policies, or are you just uncritically repeating GOP talking points? If that's true, then where is all the inflation? We are seeing quite low inflation, and have been for some time. But, that's a separate issue from the deficit. You seem to be confusing monetary policy with deficit spending. We could perfectly well continue to run a loose monetary policy while slashing spending. Except we've been doing that for years now without seeing problematic inflation. Heck, in many of those years there hasn't been any inflation. Why should we be pursuing inflation-hawk policies when we have high unemployment, low inflation, and borrowing costs below inflation? Standard considerations of monetary policy indicate that such is exactly the wrong response. It's clear why the GOP favors such a response - it ensures high unemployment and so presents an electoral problem for Obama - but why do you? Why should the rest of us? You don't pay back loans "plus inflation" (except for TIPS), you pay them back "plus interest." And, as has just been explained to you, the interest we can currently get away with is less than inflation. I can agree with the statement that budgets need to be balanced in the long run. But the time to do that is when the economy is growing well and unemployment is low. When unemployment is high, inflation is low, and interest rates are at rock bottom, the appropriate response is deficit-financed stimulus. Come on man, you're just waving your hands here. You haven't presented any serious macroeconomic analysis or weighed the costs and benefits of different policy options. You're just mouthing GOP talking points as articles of faith. The irony, of course, being that the GOP has run huge deficits during boom times every time they got their hands on the wheel for the last 30 years, and there's no reason to think that they'd do any differently the next time around.
So you agree spending less would be a very good idea if the cutting was done in areas that need trimming. Why is it that every year since Obama has been in office we have had a deficit of over trillion dollars but no new tax increases to cover those deficits? I see only the rich getting richer and the middle class being stuck with having to pay down the debt and deficit. New multi million dollar projects are already in the pipeline and comming on line as I write that rich will be getting loans while middle class still are losing their homes through forclosures.Please Register or Log in to view the hidden image! You want facts and figures to back up what I say but the government hides so much of their waste I can't keep up with all of their shuffling of where all the money goes, can you? :shrug:
How you got to that strawman position from what I wrote is a mystery. It's because Obama's predecessors ran the economy into a fucking ditch, obviously. Do the rich not pay taxes or something? What a total cop-out.
I really hope the current government in power (Obama + Congress) take serious steps to bring the DoD budget in line. AFAIK, the DoD has never passed a clean audit (in its history?) Looks like they are moving in the right direction: http://www.federalnewsradio.com/?nid=440&sid=2976323
My point is that where did 5 trillion dollars go that was borrowed when the foreclosure rate isn't much different than it was 2 years ago, the unemployment rate is still over 8 percent and no one but the rich can get a loan today? I know that the banks and other businesses got a bulk of that money but it would seem to me they haven't given much of it out in any form. Looks like they are just sitting on the money and giving themselves raises, bonuses and higher salaries while the middle class just suffer with worse and worse economic conditions. True that the Wall Street thugs keep making higher profits but are those profits actually money being laundered by businesses that are getting the 5 trillion dollars washed so they can be paid off somehow?
Unlike individual debt sovereign debt is not constrained by the limitations of human mortality. Sovereign debt levels never need to be brought to zero. Sovereign debt can be replaced with new debt into infinity. You are confusing household finance with sovereign finance. They are not the same. This doesn't make any sense. What does the national debt have to do with foreclosure rates? How do you know that banks and businesses got the bulk of the national debt? What does that mean? Do you have any proof of your claims?
Actually, debt has risen 45% under Obama, while under Bush they rose 86%. But that's OK, because that can be accounted for as stimulus. We haven't returned to prosperity, but we have been adding jobs steadily. Under Bush we were losing jobs. Please Register or Log in to view the hidden image! http://www.factcheck.org/2012/02/dueling-debt-deceptions/
The foreclosure rates only went up during the Obama administration if you'll recall which is why the economic problem started because of bad bank loans and loans to people who couldn't afford them. That is why the government gave the banks over 2 trillion dollars to handle all of THEIR FUCKING BAD LOANS ...DO YOU SEE NOW ??
Oh my God, you are ignorant of the most elementary things. The housing bubble collapsed under Bush, that's when foreclosures started.
The problem is that Obama gave the FUCKING BANKS and MORTAGE companies money that they never should have been given fotr doing the WRONG FUCKING THING by making all of those BAD LOANS . I hope you understand better but perhaps you are the one who needs educating about giving money away to bad companies that still retain the same FUCKING PEOPLE after they went down the drain.The banks then gave HUGE FUCKING BONUSES to those who made all of the bad decisions again as I said, the government was THROWING GOOD MONEY AFTER BAD. Then other companies were also bailed out for creating their own errors like GM, who because of BAD MANAGEMENT couldn't sell its crappy cars so it to was given BILLIONS for doing the FUCKING WRONG THING! You don't get it do you and you never will. All that was needed was to let the bad banks fail and the good banks take over, then help those banks if they needed it. But alas people like yourself believe that throwing more money into a FUCKING PIECE OF SHIT with somehow make it smell like a rose.
Let’s stay in the real world and use real facts. First, Obama did not give money to fucking or nonfucking banks for that matter and mortgage companies. It was George W. Bush (AKA George Jr., a Republican) who proposed TARP (aka “the giveaway to the banks) otherwise known as The Troubled Asset Relief Program to Congress and signed that program into law. It was not President Obama as you and those like you have alleged, because President Obama did not assume the office of president until January 19 of the following year. “The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President George W. Bush on October 3, 2008. It was a component of the government's measures in 2008 to address the subprime mortgage crisis. The TARP program originally authorized expenditures of $700 billion. The Dodd–Frank Wall Street Reform and Consumer Protection Act reduced the amount authorized to $475 billion. By March 28, 2012, the Congressional Budget Office (CBO) stated that total disbursements would be $431 billion and estimated the total cost, including grants for mortgage programs that have not yet been made, would be $32 billion.[1] This is significantly less than the taxpayers' cost of the savings and loan crisis of the late 1980s but does not include the cost of other "bailout" programs (such as the Federal Reserve's Maiden Lane Transactions and the Federal takeover of Fannie Mae and Freddie Mac). The cost of the former crisis amounted to 3.2 percent of GDP during the Reagan/Bush era, while the GDP percentage of the latter crisis' cost is estimated at less than 1 percent.[2] While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.[2] Of the $245 billion handed to U.S. and foreign banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered "on track" to pay back $51 billion from divestitures of two units and another $32 billion in securities.[2]” – Wikipedia http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program Actually it was President Obama and his Democrats who reduced the size of TARP (AKA the bank bailouts by 225 billion dollars) with the Dodd-Frank banking reregulation law, a law that was sponsored and signed into law by President Obama and his fellow Democrats and fiercely opposed by guess who? By your good buddies the Republicans. So if you are going to blame people, make sure you blame the right people. http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program And what would you have had President Obama do when banks were fulfilling their contractual obligations by paying those bonuses? Are you advocating that he should have installed himself dictator and ruled by decree rather than by law? Because that is the only way he could have prevented the bonus payments, not to mention he had Republicans in Congress defending the bonuses. President Obama did install a bank executive pay czar to prevent banks from paying excessive bonuses while banks participated in the TARP program. But he did it under the law. So again you are blaming the wrong party. You are being used as a pawn and a dope by some unsavory people. You are being duped. http://www.huffingtonpost.com/2009/10/15/czar-blocks-bank-of-ameri_n_323137.html All the major banks needed help. All the major banks participated in TARP along with many of the midsize and smaller banks. So just which banks do you suggest should have taken over the banks that participated in TARP? And what would you have done to prevent the bank runs that would have occurred in the interim while you were trying to sell those banks? And how much do you think it would have cost the government to take over and resell all of those banks?
Let’s go back and get the facts again. First, foreclosure rates were soaring long before President Obama became president. So your claim is factually incorrect. http://www.realtytrac.com/foreclosure/foreclosure-rates.html And foreclosure rates have been falling for 22 straight months now – under the Obama presidency. http://www.reuters.com/article/2012/08/09/usa-foreclosures-realtytrac-idUSL2E8J8EW720120809 Additionally, the recession of 2007 - 2009 began with the deregulation of the banking industry. And the problem/cause was far more complicated than simply bad loans. Because bad loans or low grade loans if identified as such can be properly priced and present no systemic threat to the nation or to the banks holding the notes. The problem that caused the crisis and threatened the collapse of the world economic system was due to derivate securities associated with mortgages that had been bundled, misrepresented and traded globally between banks, insurance companies, and others. It had nothing to do with foreclosures. It had everything to do with industry deregulation. If congress had not repealed Glass-Stegall and passed the Commodity Futures Modernization Act of 2000, none of this mess would have occurred. Because, the derivative trading and the practices that caused the economic collapse would have been illegal. http://en.wikipedia.org/wiki/Glass–Steagall_Act http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000
