Tag Archives: national debt

Debt good. But, dear Elvis, don’t tell the American people

Here’s a year end roundup (aka The Wonky Awards) from Ezra Klein’s Wonkblog at The Washington Post. While wonky indeed, he’s presented it all in such a way that even we economically illiterate get the drift. It’s a terrific piece of work and challenges much of  the conventional narrative, but don’t expect any corrections in the media script – plain facts aren’t sexy.

This one strikes me as the most revealing example of media failure – every time a politician or partisan warns we’re going to become Greece!!!, the punditocracy ought to use this information to inform any discussion.

wonky

As we endlessly debated deficits and debts this year, every so often it was worth surfing over to the neglected corner of the Treasury.Gov Web site where they track the inflation-adjusted yield on government debt. Those quick jaunts were always a good reminder that everyone in politics was completely insane.

The thing you worry about when you have high deficits is that the market will lose its confidence in your ability to repay your debts. The place you’d see the market losing its confidence is in high interest rates on government debt — that would be a signal that the market is pricing in some risk of default. But all this year, the real yield on three- , five- , seven- and, occasionally, even 20-year government debt has been negative. Negative! The world is so dangerous that the market will literally pay us to keep their money safe.

If any corporation could borrow for less than nothing, they’d see that as the opportunity of a lifetime. We can borrow for less than nothing at a moment when our infrastructure is crumbling and millions are out of work. But instead of taking advantage of this amazing opportunity, we’re actually cutting our support to the economy and arguing exclusively about how to reduce our deficits. It’s embarrassing.

My people might do the right thing for the wrong reason

FOX News reports (yeah, I know) that Pelosi has said she might let all the Bush tax cuts expire if the House Republicans don’t agree to the Obama plan. They say that in the Senate, Democrat Patty Murphy has suggested the same thing.

Obama’s Democratic allies in Congress only want to pass that partial, one-year extension. Republicans only want to pass an extension that continues those rates for everyone. Each side is accusing the other of threatening to trigger tax hikes in 2013.

Right now, both parties want to do the wrong thing. So let’s allow the tick-tocking clock to make the decision for us. Let the damn things expire.

I dearly hope this happens. Letting those cuts expire for everyone – even us little guys – is the best way to bring the deficit under control. We can deal with the tax code and the social security cap later, but for now, letting the taxes revert to 2001 levels might be the least painful way to address our debt.

Now, just to be annoying, Let me add that I actually also believe we should be investing right now in infrastructure – borrowing for that is as cheap as it will ever be.

Let the economists explain if that’s contradictory or not. Borrowing cheaper money today and paying off yesterday’s more expensive debt, which continues compounding at a higher rate, seems to be a good idea.

Meanwhile, let the tax cuts expire. Please.

It wasn’t us (updated below. Drat.)

There are dozens of excellent sources and charts available from very credible sources that reinforce the truth of the debt. Reagan and Bush II did the dirty. Clinton and Obama were left to clean up the ‘messes’.

This chart has been graphically sexed up, but the data is right out the US Treasury Dept. (h/t friend Ed)

UPDATE: Okay, this hurts. Links in the comment thread for this post, challenge this chart. The links are to Politifact and WaPo and taken together are persuasive that this info is not entirely honest. I think it is still very fair to say Reagan and Dubya were the worst offenders . . . while the challengers both put Obama at the top based on an assumption that the growth over the next five years will stay at the same rate as the last three. That assumption is, I think, preposterous and somewhat sullies their conclusions.

Nevertheless, I am eating a bit of crow here. And as much as it hurts, I’ve acknowledged as much in the comment thread to the man who provided the links – Alan Scott. How ’bout that.

Not unbloggy, busy . . .

. . . and Orhan has it covered, which is a good thing.

Meet US Debt Clock dot org:  I was directed to this site today. Lots of candy, so use caution if you go there – it’s a time hog. Be sure to check the tabs at the bottom of the home page or click for the World Debt Clock or a State Debt Clock.

Plus ca change, plus c’est le meme chose: 1939 edition

In 1939, John Ford (more below), the iconic director of the Hollywood western, made Stagecoach. It was a big hit and is still considered a classic. It also made John Wayne a star.

The plot was stereotypical: a good guy/bad guy story with cowboys, Indians, a few pretty ladies and a banker. In the film, Henry Gatewood, the banker, sayeth [whilst clutching the bag containing money he’s embezzled]:

I don’t know what the government is coming to. Instead of protecting businessmen, it pokes its nose into business! Why, they’re even talking now about having *bank* examiners. As if we bankers don’t know how to run our own banks! Why, at home I have a letter from a popinjay official saying they were going to inspect my books.

I have a slogan that should be blazoned on every newspaper in this country: America for the Americans! The government must not interfere with business! Reduce taxes! Our national debt is something shocking. Over one billion dollars a year! What this country needs is a businessman for president!

More about the film here and more about John Ford:

Ford was well-known as a lifelong Republican and political conservative. But he was the kind of libertarian conservative who places great value on individualism and has the populist’s faith in the ability of ordinary people to detect corruption and power-mongering in their leaders. That his favorite presidents reportedly were Abraham Lincoln, Franklin Roosevelt, and John Kennedy shows perhaps that he was more impressed with strength of character and the ability to respond forcefully to crisis than with adherence to political dogma. So it’s not surprising that in Stagecoach the great humanist movie maker who was able to find both noble and not-so-noble personal qualities in his characters reserves his most negative feelings for the banker, a thorough hypocrite willing to cheat and rob while condemning the morality of others.

Was this character the first Tea Party Republican?

They seem to have confused the U.S. Constitution with the Articles of Confederation

Don’t tell the Tea Party caucus who, along with Grover Norquist and a cabal (yes, cabal) of soulless financiers who crave power and hate taxes, that when they dream of a balanced budget and  call for a return to our ‘founding principles’, they only reveal ignorance of American history. In Salon, William Hogeland points out that The Founding Fathers would have hated the debt ceiling.

The Constitution came about precisely to enable a newly large government — a national one — to tax all Americans for the specific purpose of funding a large public debt. Neither Alexander Hamilton nor his mentor the financier Robert Morris made any bones about that purpose; James Madison was among their closest allies; and Edmund Randolph of Virginia opened the Constitutional Convention by charging the delegates to redress the country’s failure to fund — not pay off, fund — the public debt, by creating a national government.

Beginning during the War of Independence, and continuing throughout the 1780s, American nationalists committed themselves to a small class of upscale high financiers (largely identical with the American nationalists), who had bought bonds from the confederation Congress in hopes of earning regular, tax-free, 6 percent interest payments — not in the Congress’s crashing paper currency but in hard, cold metal or its equivalent, stable bills of exchange. Morris, Hamilton, Madison and others believed that swelling the debt to immense proportions would make a coherent nation out of 13 squabbling states and make that nation a player on the world economic stage. Their plan to do so depended partly on making military-officer pay a pension, thus turning the entire officer class into public bondholders — and giving Congress new power to tax all Americans to support that debt.

But they are certain of their righteousness (as defined by right-wing Christian Evangelicals and FOX News) and will fight on, financed by those whose allegiance is not to any nation, much less our own.

Dear Senator, would you please move your eyes away from the TV camera and look at this? There. That wasn’t hard now, was it?

John Mauldin is a guest right now on The Dylan Ratigan show. He’s new to me; has a new book called Endgame about the present and future economy of the U.S. (The subtitle is: The End of the Debt SuperCycle and How It Changes Everything.)

Ratigan asked how do you solve the housing problem with so many properties draining the banks and the tax revenues in communities.

Mauldin said “oh that’s easy – I’d just offer a quarter million people a Green Card if they came here and bought a house.”

I love that idea. Clean. Simple. And it could happen i n a heartbeat.

Thinkers. They are there. They are a-thinkin’. And they are not in the government.

But those didn’t count, see?

Just picked this up at The Conservative Lie, where interesting things are often found. He has more link rich info.

These are the 8 straight budgets with tremendous 50% spending hikes that Paul Ryan voted for.

FY 2000, H CON RES 68, 3/25/99,

FY 2001, H CON RES 290, 3/24/00,

FY 2002, H CON RES 83, 3/28/01,

FY 2003, H CON RES 353, 3/20/02,

FY 2004, H CON RES 95, 3/21/03,

FY 2005, H CON RES 393, 3/25/04,

FY 2006, H CON RES 95, 3/17/05,

FY 2007, H CON RES 376, 5/18/06

Wars are easy

Ben reminds me this morning that “the price is now estimated at some three trillion dollars for the two wars. Not only that, we’ve had to borrow that money from Russia, China, Saudi Arabia, and other Middle Eastern countries so we could have our tax cuts.”

Oh, shame, shame on us.

And meanwhile, today is the 64th day of the tenth year of the War in Afghanistan.

Such short memories

While commenters here and pundits everywhere bluster about how Obama’s policies are to blame for today’s unemployment and debt – not to mention the world wide financial crisis that was well under way by the time he took office, I feel compelled to re-post a few old favorites.

Here’s a little history lesson re the debt. Periods of debt (as a percentage of GDP) increases are seen in grey.

This chart from the Bureau of Labor Statistics is number of jobs lost, which of course – cumulatively – is the basis for unemployment figures. (Jan ’08 to Nov ’09)

Cutting NPR should take care of this

From David Michael Green at the Smirking Chimp today via Political Irony: The Seven Ironies of the Tea Party. Here’s one:

“What would it look like if Obama didn’t have to pay for Bush’s wars . . .didn’t have to pay for Bush’s prescription drug plan, didn’t have to pay for Bush’s tax cuts, didn’t have to pay for stimulus funds to rescue the country from Bush’s Great Recession, and didn’t have to pay interest (one of the biggest items in the federal budget) on the money that Bush and Reagan borrowed previously? Most likely, it would look like it did on January 20, 2001, the day that Bush came to office, and the United States was running the greatest surplus ever in its history.”

Most distressing to us should be that of those interest payments, 50% go to China. In earliler years that money stayed in the country with American citizens holding the debt in the form of bonds.

Have we no eyes to see?

JOBS LOST (Bureau of Labor Statistics)

A letter to the editor in my local paper this morning gave a very concise rundown on one of my favorite subjects, one I’ve blogged about often: the difference between perception and reality in how Democrats do with the economy and overall financial health of the country. The fact is that Dems do very well, much better than Republicans, and yet the perception is the opposite.

Part of that is a lazy media of course (another favorite target of mine), but I blame most of it on ourselves and our inability to create a narrative that resonates and takes hold.

It’s really time for Democrats to bite the bullet and start talking in soundbites and bumper stickers. It’s worked phenomenally well for conservatives. And it’s time for Democrats to ask themselves why most Americans can easily articulate the conservative message but not the liberal one.

Anyway, to that letter:

From an independent voter’s perspective, I find the following findings about this election’s hot-button issues to be thought-provoking and worth sharing:

Jobs: 8.5 million jobs have been lost since January 2008. Of this, 3.6 million jobs were lost by December 2008 and 7.5 million jobs were lost by June 2009, before the stimulus bill took effect. More than 860,000 private-sector jobs were created in 2010 — exceeding the total created in eight years under Bush II. By contrast, 22 million jobs were created under Clinton. (Source: U.S. Dept. of Labor)

Government Spending: Federal government spending grew by 100 percent from $500 billion to $1 trillion under Reagan, by 22 percent under Clinton, and by 76 percent from $1.7 trillion to $3 trillion under Bush II. It is estimated to grow 25 percent by 2012. (Source: usgovernmentspending.com)

National Debt: Since World War II, Republican presidents have increased the national debt by an average of 9.2 percent per year, compared with 3.2 percent for the Democratic presidents. National debt as a percentage of GDP went up from 33 percent to 65 percent under Reagan-Bush I, down to 58 percent under Clinton and back up to 65 percent by 2006 under Bush II and a Republican Congress. More than $9 trillion was added to the debt during the Reagan and Bush I and II presidencies — a bulk of the current total of about $13 trillion. By January 2009, the debt was already at $11 trillion. (Source: Wikipedia)

Eighty three point four

While the nation once again settles in for another day of blaming the current president for the wars we’ve been engaged in for (respectively) nine years and seven and a half years,  for the perfectly fine economy he mucked up and for his failure as prophet (he promised unemployment wouldn’t go over 7%, 8%, 9%, take-your-pick) . . . here is something I know. I know that Iraq is Obama’s fault because he’s a Democrat and Iraq was their fault – or so said Dan Senor on Chris Mathews‘ tonight – and he got away with it. (Senor was the PR flack for Paul Bremmer when he was emperor of Iraq).

But about that economy thing. This is a chart that I created some time ago for another post in which I was referring to the far right column, a percentage increase in debt – by president. As I said then, taking any one of these line items alone would mean nothing. But over this period of nearly 70 years, the pattern is clear. And damning.

This time, I ask that you look at the number in the first column after Barack Obama’s name. Just look at it. It is the number he gets to start with. So look again at that number. The starting number. And weep. Obama’s economy my ass.

UPDATE: A commenter thinks the chart above explains nothing and asks ‘where are the jobs?’.  So maybe these graphs will help him see where the jobs went. GOP loses jobs, DEMS have to get them back. Old story.