When Bush took office, federal spending was about 1.79 trillion dollars. Bush wanted to spend 2.77 trillion for 2007 and got that much. That's an increase of 55%!!! This even excludes spending on our 2 new wars. The economy didn't grow 54.7% during that period. A deficit still means we're borrowing money, and with that kind of increase in spending it's no wonder. I'm pretty sure that the Bush tax cuts helped the economy, but I'm(and almost all economist) pretty sure that economic growth is far more dependant on savings(look at communist China's 10-14% yearly growth). So as far as paying down the debt, IT'S THE SPENDING!!!, and on that issue, George Bush is one of the worst presidents in a while(if your opinion favors small government).

Did you know that if we where spending the same amount of money that we where in 2000, we could have abolished the income tax and the IRS!!! That should be a conservative wet dream.

I think that it was predicted by many people before Bush took office that we would be actually be paying off the debt by now, now we're happy that we're simply borrowing less than last year. Not that democrats would be any better, but I'm not sure why any "fiscal conservative" would be proud of Bush.

I must concur with Robert... In fact, I have a sneaking suspicion that, if the Wars in Iraq and Afghanistan were included in the annual budget, the deficit would be bigger, not smaller. Bush may talk the talk, but he sure doesn't walk the walk when it comes to fiscal responsibility.

robert,

Just a few logical leaps; savings is relative; I’m not aware of any economist that believes that growth is dependent of increasing savings, if by savings you mean sticking money in low yeild bank accounts.

You’d be more accurate if you specified that growth is dependent upon savings in the form of fixed investment. During the recession on 2000-2001 fixed investment (non-residential) slowed against GDP precipitously. As we pulled out of the recession; as money became more mobile fixed investment both residential and non-residential continued rising to new highs (around 7.5%). Your thesis implies that savings consisting of money held in passbook accounts is of greater value to the economy than investment which is not counted as “savings” dispite the fact that it is monies held in trust by an outside source until the capital is removed from that market, which is by definition savings.

The concept that money held in passbook accounts is of value is only true if we have no Fed; thus the purpose would be to increase a banks fungible assets for the purpose of lending; see: It's a Wonderful Life. Where I agree that as a group Americans save less, we also invest more and own more real property than other economies.

China’s growth is dependent upon capital investment growth. Being that the majority of China is still agrarian, the smart money is to put that investment capital in the US markets; which they did. A post monetary crisis in Asia (Ex-China) was partially precipitated by increased savings or what economists call an “investment drought”.

Now, to the Debt; the amount added to the Debt is predicated on the amount needed to service the debt; as revenues continue flowing to the public coffers, the payments to service the debt are direct flow-through and don’t require financing. This means that although we are still deficit spending we are accelerating the payments because there isn’t a cost only benefit to servicing the Debt; no pre-payment penalty

Matt, I have to agree with most of Robert's post. While I support president Bush to a large extent, I fault his allowing spending to increase dramatically. Unlike Reagan, he has mostly his own party to blame.

Did you know that if we where spending the same amount of money that we where in 2000, we could have abolished the income tax and the IRS!!! That should be a conservative wet dream.

I don't think keeping our spending to 2000 levels is possible, but I would have settled for keeping the yearly increase in spending down to about 4%. It got up to around 6% during the last year or two of Clinton (and a GOP congress, remember), and went higher still under Bush.

As for abolishing the IRS, I think that "wet dream" is an appropriate term. Or maybe "pipe dream".

Rana,

The deficit includes all expenditures; I know I've mentioned this before; just because it's not in the Budget doesn't mean it's not in the deficit; the deficit is dynamic, remember? But, your point that spending like a drunken Kennedy is fiscally irresponsible is valid; it is becoming hypercritical that we start the deceleration of spending now as we’re getting dangerously close to 2012 when the baby-boomers will bankrupt Social Security.

There was no surplus in 1998 or 1999 so there was no real chance of paying off the Debt as robert's conjecture implied. The so-called surplus was an accounting trick; I’ve explained this before.

As far as paying down the Debt, spending has to be curtailed, 5-7% reductions to current levels in non-military spending I believe can be done with no harm to the economy. Reductions; yes, on that I think everyone agreesexcept maybe the Keynesians. Oh, and robert one other thing; the Federal Reserve is not an example of Keynesian government spending, it’s an example of Friedman-esque monetary policy that makes capital available or restrictive depending on the market pressures.

Yea I really meant capital investment, but since so many people have bank acounts today, savings(non-consumption) tends to go into capital investments. But savings(non-consumption) are slightly different that fed created asset bubbles, which can be considered an increase in investment, but only create the temporary illusion of growth(see the current housing market).

As to your other point, this is why I personaly don't think that the budget should include interest payments(which are quite a large portion), it makes it susceptible to things like Bill Clinton changing from 30 year to shorter term bonds creating the illusion of reduced deficits, while actually probably costing us more in the long run.

robert,
vis-à-vis including the interest (servicing the debt) in the budge; Exactly! But I’m at a loss as to how else to show it, if the same formula were used in calculations we could trust the number (somewhat) but once the payment structure changes, like now with accelerated repayment, or in an economic slowdown (recession) where the capital is needed to assuage investor fears; the service numbers go right out the window. How does the average Joe know when the Notes are refinanced in shorter terms for reals and when it's just another accounting trick?

I would disagree that the current housing market is a “(F)ed created asset bubble” if anything this was caveat emptor of the purest kind, and the Fed did everything they could to discourage it, as in rate adjustments at the worst possible time in attempts to cool the housing market. Many bought into the housing market without reading the fine print and many others shouldn’t be homeowners at all. I know that sounds harsh, but home ownership is most likely the biggest investment you’ll ever make; everyone should be required to read and understand what they’re getting into.

I’m sorry; there are actually two asset investments at work in the Housing money crunch. 1) is those groups and investors that engaged in paper hanging sub-Prime investments thinking the golden goose was going to treat everyone the same, and 2) is the homebuyer that doesn’t qualify for a loan yet gets to purchase above their means then *surprise*surprise* can’t pay back; the value of the assets decline and the note holders are shuffling worthless paper.

I should have made that clear. Carry on …

um, thats great now if only Bush hadn't created one from the surplus he was left with...

Six years of tax cuts for the wealthy, six years of increase defecit spending, six years of defecits; only Republicans get excited about a 158 billon dollar defeict that does not include the $500 billion dollars spent on Iraqi infrastructure.

Democrats would prefer having a little in the bank for a rainy day, as they do with the family budget, like when a bridge collapses or a hurricane hits.

Awesome news!

Then we should have a surplus by the end of his term. Correct?

Also, one tiny insignificant fact:

The entire Iraq War is not figured into the deficit calculations.

Not that it has cost this Country anything worth calculating.

d i s g u s t i n g

The surplus, liberalTHC, was on paper, projected over 10 years. And you missed the boat, by about five years, on this talking point.

Class is over--go play on the monkey bars...

What's shrinking significantly is Bush's cohort of unindicted and convicted cronies and co-conspirators.

What's shrinking significantly is Bush's cohort of unindicted and convicted cronies and co-conspirators.

Lookie what the cat dragged in--another kook loser. What's the "S.W." stand for? I'm guessin' "Stupid Wanker." Or "Slurps Willies..."

"um, thats great now if only Bush hadn't created one from the surplus he was left with..." - liberalT

Since tax revenues have also risen faster than spending, I assume that you are criticizing Bush's more liberal spending policy over Clinton's more conservative one. Or is it just blind criticism?

no - i am fully aware of that Robert. I am critical of his inability this administration to balance a budget period.

no - i am fully aware of that Robert. I am critical of his inability this administration to balance a budget period.

I am critical of your inability to type one sentence without making second-grade errors. Oops, sorry; I forgot--you never made it to second grade.

Economics bores me--too many "experts."

Maybe if I had money, I'd be more interested...

I'm guessin'..."Slurps Willies..."

You mean like Mark Foley, Bob Allen, Glenn Murphy, and LARRY CRAIG? Golly, no post yet about the latest Republic latent homosexual?!?

SWA - Thanks man. I was afraid there wouldn't be any unsubstantiated innuendo and hate speech in the string. Really, thanks. Can you attack someones gay family member next? Or maybe question someones judgment for being religious?

Man - I wish I could hate with the clarity, the purity that you do. It's like almost zen-like! You would have been a good VC assassin man. Really.

Hate makes viscous behavior OK.

Liberals - the vast bulk of the budget is entitlements.

Please outline for us; what would YOU cut? Military (OK during war - I can understand that)? Intelligence (well yah, of course)? But what else?

Please - really. Tell us what YOU think we should cut. Or....... is it all about taxing more? It's not is it?!?! Tell us you think we can spend less money on something?

"unsubstantiated innuendo and hate speech"!?!

Kahn, you must be referring to ted nugent '08 when he took someone's initials and turned them into gay slurs, right?

sorry 19K - what department are those programs in?

But no. I was thinking of the speech put out there by the real power in your party. You know, actual public officials and media outlets. But whatever. I'm jus' a stooopid ole Republican. Don't seem like much like a fair fight up against your enormous intellect.

Couldn't think of ANY programs to cut? Not ANY? Looks like we're in for higher taxes then. Thanks.

Nice attack back though. Way easier than actual helpful ideas or meaningful debate. 19K your salary then?

Most of the deficit decrease has come from an increase in Social Security taxes revenue, which will eventually have to be repaid, rather than increased income tax revenue.

http://zfacts.com/p/519.html

Kahn,

I would start with cutting the fraud out of the contracts in Iraq. We have lost billions of dollars, and the Bush administration doesn't seem to care. In fact, they have stopped people from being prosecuted. Billions of dollars: how many kids could we send to college with that, train teachers, build hospitals for veterans.

Planejane,

That $500 billion was not spent on Iraqi infrastructure, only about $25-30 Billion was. One of the reasons why the US has not been fairing too well in the battle for hearts and minds. Although, I believe this is what you meant.

DL,

You make some very good and educated points. Thank you for your imput. I don't know this for sure, but you may. In 2003, much of the deficit reduction was projected in 2008-11. This was because of an accounting trick where many of the tax breaks were going to be rolled back on the middle class, bringing in more tax revenue and reducing the deficit. At the same time, the tax breaks for the rich remainded the same. Is this still true?

Also, I would like to point out that about $20 out of every $100 collected in taxes goes to pay the interest on the national debt, without ever making a dent in the principle.

Despite whether Clinton's surplus was real or on paper only, Bush has greatly increased the national debt. He is not a conservative or small government. We spend more on the military than every other country on earth, COMBINED! I belive in having the best military on earth, but the waste and corruption from contracts needs to stop.

He is a link to a great article from Rolling Stone about contract fraud in Iraq. Whether you are Democrat, Republican or Independent, this should piss you off.

http://www.informationclearinghouse.info/article18261.htm

Peace, Gaijin

Perhaps because of being off some kind of medicine he needs, Kahn wrote:

SWA - Thanks man. I was afraid there wouldn't be any unsubstantiated innuendo and hate speech in the string.

I defy you to find an example of "unsubstantiated innuendo" or of "hate speech" in my comment. Not that I'm unaccustomed to people at Blogs for Bush just making things up , but your statement is outstandingly ridiculous even for this place.

What does any of this have to do with anything if you are a middle class America who bought a house and in October your mortgage is going to double due to an ARM? I am not talking about subprime people either I am talking about people who got more house than they could afford in a rational market with good credit. Deficits and taxation are esoteric. Being able to buy toys, which do not have lead in them, and gifts at the Holiday shopping season is another. The only way these house poor positive credit people will be able to maintain their lifestyles are to become a deficit spender through the use of credit cards; a slippery slope indeed.

"Most of the deficit decrease has come from an increase in Social Security taxes revenue, which will eventually have to be repaid, rather than increased income tax revenue." - Brian

Not really, the 9 trillion dollar debt is calculated simply money-in - money-out + old-debt. If you count the revenue shortfall of what we potentialy owe in social security, that debt number is alot closer 70 trillion, the deficit that guys talking about is on that debt, and no politician use that debt number(except I hear Ron Paul always use it).

Anyways the debt isn't a republican or democrat problem, it the same debt we've had since WWII adjusted for inflation. Clinton only supposedly reduced it by investing social security in T-Bills(who sells T-Bills??) and by switching from 30 year bonds to shorter term bonds against the advice of the treasury dept.(think fixed rate vs. adjustable rate). Bush has continued the policy of investing social security into T-Bills.

But don't liberals consider government spending, investing??

I have a question for the liberals here.

I don't even understand liberal aversion to the debt. The debt is mostly owed by Americans to Americans, it's held mostly by insurance companies, pension funds and banks, but since T-Bills are equal oppurtunity expliotation(sold on the open market), it's the consumers that get the benifit. Now the lenders aren't nessicarily the benifiters, but I though liberals where gereraly collectivist, and because of the progressive income tax, rich people are the ones that get screwed from high debt.

Now liberals are mostly keynesians, so I would think they would want to subsidize bank interest?
Liberal want mandatory pensions, so what's the aversion to subsidizing them?
Liberals want universal health care, so what's the aversion to subsidizing insurance?

The debt is a way that the government can steal even more money by creating a giant wealth redistribution racket that funds mostly bank account owners, pension funds and insurance(middle class goods), funded mostly by the rich. Is this not a positive liberal goal??

"The surplus, liberalTHC, was on paper, projected over 10 years. And you missed the boat, by about five years, on this talking point.

Class is over--go play on the monkey bars..."

No. I'm afraid you don't get to use CBO numbers to say the deficit is decreasing and then say that CBO numbers from 2000 showing a surplus aren't real.

http://www.cbo.gov/

I hope we get a conservative president someday...

robert has a good grasp on the facts; although a bit of a firebrand he nonetheless understands the reality of the Debt and Deficit. I think he gives too much credit to the Executive Branch and therefore too much blame. I’ll take exception to one statement; Clinton never submitted a balanced budget and his deficits went on to the horizon; the Congress sent back to Clinton a balanced budget twice and he reluctantly signed them.

Where would I cut? Easy, the financing of the Debt. Right robert? Defer increases in Social Spending; privatize most of social Security and use the increased revenue stream we currently enjoy to invest in Debt reduction through financing options. I wouldn’t accelerate the payments; but I would find alternate ways of making payments to the interest. The Federal Reserve is a good place to start.

Gaijin,
The OMB projects revenue stream over a period of time based on what they belive will be the prevailing economy at the time; rightly or wrongly they have to use the current situation as the baseline in those projections. In 2003 the country was coming out of a recession and the first of the tax breaks was affecting the economy. The recovery of 1993-1995 was uses as the example in the calculations. Because the recession in 1991-1992 was shallow by comparison the recovery in 2003-2005 was sluggish and not as dynamic as previous recoveries. Nevertheless, the recovery from the 2000-2001 recession was significant and strong; much stronger than the dotcom recovery in the late 1990’s.

The recovery analysis was predicated on the increased revenue stream that the tax rate revaluation should have given the economy. And OMB wasn’t disappointed, even though the recovery itself wasn’t as dynamic as hoped, the revenue was. From where did the revenue come; Rich or middle-class? I believe that was the question, does it matter? If it is the contention of the left that Bush cut taxes then those paying a lot would be paying less than a lot. And those paying moderately would be paying less than moderate. Neither is the case as the wealthy and the middle class are paying more in raw numbers and less in percentage of income. Feel better? I know I do. Now, if they’ll just put that revenue to work.

Robert,
By law the Social Security money cannot be invested in Treasury Notes, nor can it be used to “pay down” the Debt.

But, you and I both know that the “Social Security Trust fund” is an empty balloon and the actual $$ from the fund was used to pay for the Budget deficit all the while showing it on the books as a $$ balance. This is the “surplus” that CBO showed during the Clinton years. That's why the Algore "lockbox" meme was so hysterical to us Government Accountant types.

The money is, by law a flow-through of expenses and the “held in trust” is not really there. Because the Social Security fund will never be reimbursed (because technically it was never there in the first place) the Debt doesn’t include the balance owed to Social Security. Cute trick, huh?

For the rest who don’t understand the difference between the Budget Deficit and the operating deficit; when the Budget is prepared the “off Budget” items like … oh … the war(!) are not included. However, when the Deficit is calculated to determine payments to service the debt, and money is borrowed to make the payments all expenses including the war are included.

Vis-à-vis the Debt; more than half ($4.9T) is Public Debt; Held by the Public. A Debt we owe ourselves; Less than half ($4.4T) is intergovernmental debt, which includes Social Security. Almost half of the Debt held by foreign investors is held by private investors, not foreign governments.

Finally, the US ranks 35th in the world in Public Indebtedness; behind France, Germany, Singapore, Israel, Belgium, India, Japan and many others. (CIA World Factbook)

Thanks for the informative post, DL--it blows a lot of the Donkaroach talking points out of the water...

Federal debt continues to climb exponentially. Much to the Democrats' displeasure, and the Republicans' embarassment.

Also, do you think that the deficit shrinkage might have one tiny bit to do with our new congress?

Huh?

Do you?

Of course not. Anything good gets attributed to Bush.

Also, just out of curiosity, the thing at the bottom of this page: Join My GOP, how long has it been stuck at 1333 dollars? Seems like it's been quite a while...but maybe that's just me.

ThELefTYFoOL

Gaijin - I thought I immunized Iraq. But, well anything else besides the war you're already against? Dolt.

And SWA - you are a dolt. I was responding to someone’s post far past yours. Dolt.

Cavalor -subprime rant? Sub-prime loans are a tiny percentage of the loans, and have no bearing on this discussion. OK,,,, what does that have to do with programs to cut? Dolt. I mean like super mega-dolt.

Robert - good explanation. Not a dolt.

CBR - denies the premise. No programs to cut though. D....olt.

Dasdeine makes several suggestions. Some might be cause for argument. But he does make suggestions. Read that dolts? You have no plan. Only arguments. Its like the Monty Python argument sketch talking to you.

Ted makes a passive congratulatory post. OK Not a Dolt.

That $500 billion was not spent on Iraqi infrastructure, only about $25-30 Billion was.

Peace, Gaijin

Posted by: Gaijin at August 28, 2007 02:19 AM

--------------------------------------------------------------------------------

Thanks for the correction. I should have said we have spent $470 billion dollars blowing up Iraqi infrastructure while looking for terrorists that were not there in these numbers 5 years ago and $30 billion replacing the bombed out infrastructure.

” Federal debt continues to climb exponentially. Much to the Democrats' displeasure, and the Republicans' embarassment. – Fool”

Exponentially? Nothing like a bit of exaggeration.

Things are so much to the Dems displeasure that quite a number of them actually voted for the budgets that caused that debt in the first place. I’m sure it really bothers them. Is that why they’re always harping about adding additional entitlement programs with all of their associated cost to improve that bottom line? That’s a sure way to reduce the debt. Oh wait, guess they’ll have to “exponentially” raise taxes too.

”Also, do you think that the deficit shrinkage might have one tiny bit to do with our new congress?”

HAHAHAHA. Has the current congress enacted even one piece of legislation that would affect the budget in a downward direction? Didn’t think so. Perhaps you’re mistaking the residual effect of the tax cuts made years ago to the coincidence that congress recently gained a Democratic majority. Or maybe the fact that the Democrats currently enjoy a congressional majority is the reason the world is in such disarray. Do you see how absurd your statement is yet? I’m not holding my breath.

Now maybe you can answers Kahn’s question? What programs would YOU cut?

"Exponentially? Nothing like a bit of exaggeration." - DM

The debt rises does exponentially. We pay interest on the interest, that makes an exponential function. If not we would just pay it off by our exponential economic growth and exponential inflation.