Sick of the Budget Deficit? Read This

If you'd like to enjoy the rest of your day, keep your distance from the Congressional Budget Office's (CBO) website. There, you'll find a small mountain of nonpartisan information on our nation's finances, including 2010's now-infamous $1.3 trillion budget deficit. (If you listen to the Office of Management and Budget, it's an even higher $1.6 trillion.)

Depending on your sense of humor, these deficits are either hilarious or tear-jerking.

If you can grasp the absurdity of the numbers (tens of trillions in red ink over decades), it's hard to not laugh. At the same time, it's horrifying: We know what happened to Citigroup (NYSE: C  ) and AIG (NYSE: AIG  ) when their liabilities got out of control. More comparatively, no one takes Dubai or Greece seriously anymore, after their recent sovereign debt woes. This is scary stuff. How will we ever pull ourselves out? That's a question economists, politicians, and average Joes desperately want to know.

But here's a more important question: How did we get here? What exactly happened that pushed us from record surpluses in 2000, to moderately scary deficits in the mid-2000s, to horrific, mind-blowing deficits today?

To answer that, I pulled up three long-term CBO budget forecasts: one from 2000, one from 2006, and the most recent for 2010. By comparing the same-year differences of each report, we can see exactly where and why the budget fell off track.

This first table compares 2005 budget estimates made in the year 2000 with what actually happened:

Segment

2005: Actual vs. 2000 Estimate

Revenue

($142 billion)

Discretionary Spending

$266 billion

Mandatory Spending

($9 billion)

Source: Congressional Budget Office, author's calculations.

In English: The government collected $142 billion less revenue in 2005 than was projected in 2000. It also spent about $250 billion more than planned.

What happened? For one, there was a good round of tax cuts enacted under President Bush. And two wars. You know the story. Moreover, the economy didn't grow as fast as expected. Remember, 2000 was the peak of the dot-com boom. Companies like Microsoft (Nasdaq: MSFT  ) , Cisco (NYSE: CSCO  ) , and a then-infant Google (Nasdaq: GOOG  ) were fueling growth that made forecasters college-freshmen-drunk with optimism. Once the bubble burst and the post-9/11 recession hit, growth waned.

This second table is even more important. It shows the difference between the 2006 and 2010 CBO budget forecasts for the 2010-2013 period. These are the changes that pushed the current budget deficit off a cliff:  

Changes between 2006 and 2010 forecast (in billions)

Segment

2010

2011

2012

2013

Revenue

($708)

($468)

($414)

($328)

Social Security

$27

$17

$7

($2)

Medicare

($15)

($13)

($35)

($39)

Medicaid

$23

($10)

($31)

($42)

Other Mandatory*

$155

$191

$113

$82

Defense

$159

$153

$144

$135

Nondefense Discretionary

$153

$131

$99

$79

Total Deficit (includes changes in interest paid)

($1,127)

($866)

($687)

($578)

Source: Congressional Budget Office, author's calculations.
*Change in "other mandatory" largely from increased unemployment benefits.

This table is admittedly hard to interpret, but here are the major points:

  • Compared with 2006 projections, today's deficits overwhelmingly came from drops in revenue, not increases in discretionary spending. Of the $1.1 trillion increase in 2010's deficit over 2006's projections, $708 billion (63%) came from lost tax revenue.
  • Revenue fell because of unemployment, decreased corporate profitability, and tax cuts enabled by the $787 billion stimulus package.
  • Increases in nondefense discretionary spending (fodder for most shouting on cable news networks) is small potatoes compared with the plunge in revenue. 

Keep these facts in mind, because they're important when digesting today's acidic rhetoric. Current deficit explosions aren't due to earmarks, death panels, or bailouts. Overwhelmingly, they're due to cliff-diving drops in tax receipts, which came from a combination of tax cuts and (more importantly) income stolen by the Great Recession.

But that's just short-term. As I showed in a previous article, the long-term battle almost entirely surrounds entitlements -- Social Security, Medicaid, and Medicare. Medicare is the real biggie (a $37 trillion shortfall over 75 years). And since health-care reform now looks like it'll be symbolic at best, this problem isn't going away -- great news for UnitedHealth (NYSE: UNH  ) and WellPoint (NYSE: WLP  ) , but potential suicide for long-term budget deficits. As economist James Kwak from Baseline Scenario put it, "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate." That's far more factual than it is opinionated.

So if you're sincerely sick of budget deficits, you should have just two concerns: How to get government revenue back up, and how to keep entitlement spending down. Those two factors alone overwhelmingly explain why we're in a budgetary cesspool compared with 10 years ago. Before they're tackled, everything else is just noise.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. No Fox News employees were harmed in the making of this article. Microsoft, UnitedHealth Group, and WellPoint are Motley Fool Inside Value selections. UnitedHealth Group is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of UnitedHealth Group, and has a disclosure policy.


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  • Report this Comment On February 09, 2010, at 2:12 PM, Turfscape wrote:

    Morgan, excellent insight into budgetary matters. Good article, well written. It's too bad this kind of stuff gets lost in partisan shouting matches.

    At its most simple level, the U.S. budget needs to be run like any household budget. But, too often, we insist that there's some sort of magic that occurs at the level of trillions of dollars that allows us to reduce income and increase spending in order to grow wealth.

    Truly fixing the finances of the country will be painful, to say the least. But it's a pain I would rather take on now than later.

  • Report this Comment On February 09, 2010, at 4:55 PM, WyattJunker wrote:

    "James Kwak from Baseline Scenario put it, "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate." That's far more factual than it is opinionated."

    Wrong.

    If politicians were serious about deficits they would pass a health care reform bill that actually reduced the cost basis, targeting the reasons why its so costly(medicare) NOT ALLOW MORE PEOPLE INTO THE ENTITLEMENT SAFETY NET!!!

    B.O. wanted to buy votes, not fix the system. I'm glad this wasteful bill tanked. We don't need higher government service spending aka 'a new health bill'. We need real healthcare reform based on the tenets of free market competition.

  • Report this Comment On February 09, 2010, at 5:05 PM, WyattJunker wrote:

    FDR started this political patronage slavery with his 'New Deal' raping of the system.

    LBJ topped it off with his 'Great Society', draining trillions off the treasury to fight poverty that only went to institutionalizing it and creating permanent democrat votes. What's welfare, but ensuring that dad leaves the house so that mom can collect the check? It destroyed families.

    Carter? Do I really need to go into that? How about deballing our reputation both at home and abroad, which led to massive inflation with the oil shocks? A rookie burger flipper could do a better job than the yellow sweater wearing, neutered dillweed.

    Clinton lived in a bubble economy of false e-ponzi. That's how he 'balanced the budget', which later became unbalanced once it crashed. But at least Gray Davis locked in record high pensions for CAL PERS agitators using that false growth, which would later bankrupt the state.

    Bush? A derelict by all measures. A big government moron who kept pushing for more federal entitlement spending.

    Obama? Bush to the power of Hugo Chavez.

    And this is where we're at now. Corruption and political slavery. The federal government is a cancer. It has its hands in everything, including your pockets and your kid's pockets and their kids, the ones not even born yet, pockets.

    Keep thinking things will get better. America is reaping what its sowed. Hopefully more and more businesses and multinationals will leave this country and go to where their efforts are rewarded where they don't have a parasite political class.

    TNSTAAFL.

  • Report this Comment On February 09, 2010, at 5:10 PM, TMFHousel wrote:

    wyattjunker,

    So ... you listed off how every president over the past half century has destroyed this nation. How about this: if you could pick a period of American history that you could take us back to, which would it be? Or, heck ... how about any country in the world? What's a good real-world model that we should strive for?

  • Report this Comment On February 09, 2010, at 5:18 PM, WyattJunker wrote:

    Note, I didn't mention Ronald Reagan in that laundry list now did I?

    I wonder why?

    The 80's were a wonderful time to be an American. No political correct bullcrap. No big government expectations. A return to nurturing small business. Okay, Reagan wasn't perfect, but so much better than the list I enumerated.

    Where should we put our money today? Wherever you find Reagan's spirit alive and well and what that means is in countries that protect and preserve capital and don't destroy it either through taxes or confiscation. I like Indonesia and Australia. I like some of the Nordic countries, at least their protection of private wealth. I like Brasil although the socialists there are getting scary. India has a lot of regulatory problems and paperwork that hinders market growth. I especially like China, Hong Kong in particular since it so resembles economic anarchy.

    I want government to get the hell out of the way and out of our lives. I want to live or to die in a state of freedom without the government's crutch or gun, since they are one in the same.

  • Report this Comment On February 09, 2010, at 5:27 PM, TMFHousel wrote:

    Hey, fair enough. Thanks for responding.

    To be fair: Would you be fine going back to the top marginal tax rates of 1980-1986? (50-70%)

  • Report this Comment On February 09, 2010, at 5:52 PM, WyattJunker wrote:

    To answer: absolutely not. I think what you'll notice is that as those rates came down in '87 and on into the early nineties as there was an explosion of investment as incentives began to motivate the top earners.

    A better solution would have been to reduce the size of government and extricate ourselves away from some of the safety nets. The longer they continue, the more they are viewed by the electorate as hard wired. The more they become the norm, the more the market skews away from true laizzez faire or flow economy.

    As a supply sider, Reagan at least started the process of directly injecting capital back into the market without it getting completely woodchipped by the government cubicle farms and the statehouse payrolls first as a vote scheme generator.

    Reagan wasn't perfect, but he was miles better than his predecessor. One only need look at his two liberal SCOTUS nominees to understand his sometimes general human weakness in drilling down to the details. But at least Reagan raised the idea of personal capital preservation over confiscation. I wish he'd been a bit better about reducing the size of the G's balance sheet.

    Not sure why government feels its its job to take money from its citizens, stealing it, then redirect it through unionized public employee agencies to things that have nothing to do with national defense, which is, truly, the only Constitutional mandate given to government. 'General welfare' has been bastardized by the Congress to mean anything and everything.

  • Report this Comment On February 09, 2010, at 6:01 PM, WyattJunker wrote:

    Absolutely not. I think what you will see, however, is that a process of lowering the rate began during Reagan's tenure even though incomes were also lowered in tandem to adjust to the shift. It was a middle class boon as it then affected more people on the Bell Curve overall.

    I like it even better in the nineties when it got lowered again. And today, it should be lowered even further. The more we can lower it, the better, save a third for the remainder to support national defense.

    Government should exit the broken social security immediately and grandfather back out what people have paid in over time over a payment schedule if possible and then completely stop current workers from paying in. Same with medicare. These are disasters. You want to reform healthcare? Kill medicare, watch premiums fall.

    Social security? I don't think anyone's feeling too secure these days. I think we're insecure about how we're getting robbed blind by politicians using Mr. Rogers/Orwell language to steal from us for programs like these. Instead we need a re-emergence of total freedom and that means as little of government as possible.

  • Report this Comment On February 09, 2010, at 6:26 PM, TMFHousel wrote:

    "I think what you'll notice is that as those rates came down in '87 and on into the early nineties as there was an explosion of investment as incentives began to motivate the top earners."

    I think what you'll notice is how dogmatic, praise-all-glory-to-the-textbook-without-looking-at-the-facts that attitude is.

    Play with these numbers, and point out this early '90s "explosion" for me.

    http://www.bea.gov/national/nipaweb/NIPA_Underlying/TableVie...

    There is no discernible explosion in the late '80s, and in fact investment *fell* in the early '90s (there was a recession).

  • Report this Comment On February 09, 2010, at 7:10 PM, WyattJunker wrote:

    I think what you'll notice is that markets are latent, especially when structural changes are introduced. Unless you think cause and effect are immediate?

    I think there absolutely without question was an explosion of capital infusion in the 90's, which was created by the mitigation of punitive taxation which are what marginal rates are and do.

    Strange that a Fool believes so much in the confiscatory practices of market interference.

    By the way, investment didn't crater in the '91 recession either. It was a blip and then major resumption of growth occurred.

  • Report this Comment On February 09, 2010, at 7:12 PM, TMFHousel wrote:

    .

  • Report this Comment On February 09, 2010, at 7:20 PM, TMFHousel wrote:

    "Strange that a Fool believes so much in the confiscatory practices of market interference."

    I believe in a tax system that accurately reflects what politicians choose to spend on their constituents (not the "I'll cut your taxes *and* shower you in cash" system) and I absolutely think there should be more regulation in the financial sector.

    We obviously won't agree there, but thanks for a good debate.

    -Morgan

  • Report this Comment On February 09, 2010, at 9:27 PM, georcole wrote:

    "As I showed in a previous article, the long-term battle almost entirely surrounds entitlements -- Social Security, Medicaid, and Medicare."

    I agree. I think we should find some way to END all three of those "entitlement" programs. We, as living humans, are "entitled" to breathe, that's all. It is up to each of us to provide the rest. I go to work and provide a service to others, who in turn go to work and provide me with service. It is up to me to put enough money away to provide for my later years. About 95% of all people are horrible at providing for their futures. That does not make it the government's job to do that for us. The government is not that good at providing much of anything at any level close to efficient.

    We can all do a lot better than the government if we all tried. Go out and get a job or a better job. If you need a certain level of education to improve your life, go get it. Read books on ways to save money, how to invest in whatever type of investment sparks your interest. Visit fool.com as it is a great resource for finding ways to improve your life, especially your financial life. Relying on the government to take care of you is not smart. I know it takes work, and a lot of it, to accomplish the things you want in life, but it is so much more rewarding to do it for yourself instead of being dependent on the government. You can have a lot more in life by taking care of yourself.

    If the government would stop providing the crutch of those three programs, and a few others, and instead focused on doing what they are supposed to do, they would be able to survive on less revenue than they are currently taking in.

    At this moment, I would like to suggest a book to read. It is "The 5000 Year Leap" by W. Cleon Skousen. It is an excellent book about our government as set up by our founding fathers and how we have/are deviating away from the way this great country was set up. Happy reading.

    Fool on!

    George

  • Report this Comment On February 09, 2010, at 9:37 PM, ynotc wrote:

    When you weed through everything the bottom line is that congress can't be trusted to create and execute a real budget. Real budgets take into account unexpected problems and drops in revenue by creating savings accounts and cutting spending to match income. Since variances are to be expected so should actual spending be adjusted to reflect said variances. Congress never does this. They live in a fantasy world spending money we don't have on things we don't need.

  • Report this Comment On February 09, 2010, at 10:22 PM, stills999 wrote:

    Whyatt Junker -- do you realize that the debt exploded b/c of Reagan's policies. Of course the 80's were great! It's not the borrowing but the paying back of the debt that sucks...

  • Report this Comment On February 09, 2010, at 10:26 PM, stills999 wrote:

    Whyatt -- do you know how much the defecit grew under Reagan?

  • Report this Comment On February 09, 2010, at 10:44 PM, xetn wrote:

    The real truth about Social Security is: it is already bankrupt. Please read the following for a detailed analysis:

    http://www.lewrockwell.com/north/north790.html

  • Report this Comment On February 10, 2010, at 1:29 AM, WyattJunker wrote:

    "Whyatt Junker -- do you realize that the debt exploded b/c of Reagan's policies. Of course the 80's were great! It's not the borrowing but the paying back of the debt that sucks..."

    Let's not overlook the massive amount of disinflation which lowered tax receipts. The GNP cratered after Volcker interest rates contracted the entire credit markets, which were necessary due to the previously inflationary environment. Ah yes, context is everything is it not?

    The debt did not explode because of Reagan's policies. With half the budget going to SS payments and bloated union pension contracts, another fifth of it wasted just to service the debt alone, I would think that military spending would at least get enough consideration at the table among our lovely federal thieves.

    You know, national defense, the only thing a federal government should be involved in from a spending and Constitutional perspective? Or do you run on flower power and good vibrations? Unfortunately, communism at the time did not.

  • Report this Comment On February 10, 2010, at 1:46 AM, njdo wrote:

    This article is BS. Government spending is in the conrol of the nomenklatura and we are entering (have entered) a perod of state capitalism. If a state sponsored economy was beneficial then both medicare and medicaid would be profitable. The government is a bureaucratic leach sucking the economic life out of the private economy and destroying scarce resources fighting wars to subsidize the transnational operations of the world's most profitable corporations. Has anyone's heating bills gone down this year? Oh, that's right. We invaded Iraq and Afghanistan to bring DEMOCRACY to the middle east. Sleep tight, suckers!

  • Report this Comment On February 10, 2010, at 9:20 AM, dcflipflop wrote:

    Our government is like an idiot family that's already swimming in credit card debt but has to go out and buy another new car anyway. Only it's worse because for the congressmen it's not their money or their credit score that gets affected by it.

    As long as the government is struggling with debt and the interest we're paying on it, we as a country will never be able to make meaningful investments in our future (eg. energy independence). Think about that at the next election.

  • Report this Comment On February 10, 2010, at 9:39 AM, fromthinair wrote:

    This writer gives the impression that taxpayers have seen a net reduction in taxes paid. Nothing could be further from the truth.Certain income segments have enjoyed lower tax rates, but most people pay more in taxes. It seems there is an attempt here to leave us with the impression that we need to give even more to feed Leviathan, and I consider it deliberately deceptive.

  • Report this Comment On February 10, 2010, at 10:04 AM, TMFHousel wrote:

    "This writer gives the impression that taxpayers have seen a net reduction in taxes paid. Nothing could be further from the truth"

    No that's exactly what happened. The federal government collected $2.54 trillion in receipts in 2007, and $2.11 trillion in 2009. $288 billion of the drop is attributable to tax cuts from the '09 stimulus package.

    You write "but most people pay more in taxes." Who, and over what period?

    I'm not being "deliberately deceptive" or a shill for either party. I'm using facts to make an argument.

  • Report this Comment On February 10, 2010, at 10:56 AM, milleniumfalcon wrote:

    After reading the post and reading the replies I need to ask: What's with the bloody political slants people? It is a very simple problem with some very simple solutions.

    1. Create jobs. More jobs = more tax revenue. The question is how to create them. Well for one, how about truly funding and streamlining the SBA loan process, since small business creates most of the jobs.

    2. Invest in new technology. Eventually (and we all know this) oil prices will rise to the point that using it is not economically viable. The time to start this process is now. Turn those old Saturn plants into wind turbine factories. Turn the closed Chrysler plants into solar panel R&D and manufacturing factories. Get into the business of partnering with business, much like large corporations do when they "incubate" a business before spinning it off. Not takeovers, but investments. Part of what an intelligent government does is invest in the items of the future that don't have an immediate payoff. (Like stem cell research, for example.)

    3. Invest in education. I am a college professor. Let me tell you, I see the pablum that comes from our educational system and it is not pretty. MOST OF YOUR CHILDREN have pathetic reading skills, sickening math skills, and the creative resources of your average fruit fly. They can't think outside the box, because they haven't learned a bloody thing INSIDE the box. Kill the U.S. Department of Education. Keep that money local, the way ti is supposed to be. Get rid of NCLB: Teaching students to take a test is not actually teaching student. (Besides this has become a racket - states keep lowering standards so students can 'pass.' If we don't get back to basics, your kids will have exciting careers asking, "Would you like some vanilla in your latte?" (Ok...rant over.)

    4. Level the taxes playing field. Under the current tax code, people who labor (you know, work for a living) have a higher tax rate than those who make most of their money through investments. Raise the rates and make them equitable. Let's go back to the 90's tax rates. Let's get rid of the $90,000 "cap" on taxable salary for social security.

    5. Take the idea of a flat tax or a value-added tax seriously. It works in other countries, so why not here? It solves a couple of problems. There's no use for an enormous IRS. There are fewer ways to cheat. Make exemptions for the necessities of life only: food clothing shelter.

    6. Really reform healthcare! As it stands 50% of healthcare costs are covered by the gov't, between the Feds and the States. What we need to do is cut the costs of healthcare, before adding anyone else to the rolls. How do we do that? There must be downward pressure. Repeal the part of the 'drug bill' that does not allow Medicare and Medicaid to negotiate lower prices. Allow the importation of cheaper drugs from countries with good regulatory systems (Canada, Germany, etc.) Allow competition across state lines. (Here in MO, one company has a lock on 87% of healthcare coverage.) Tort reform. And for God's sake, get the fat people on a diet. We lowered smoking rates in this country from 45% in the '60s to 21%. And most of that was done via peer and cultural pressure, not laws. If we can do that with smoking (an addictive habit - I know - I was one of them) why can't we do the same thing regarding the fat b*stards in our populace. Dropping weight=dropping costs. (I know this too, because I was over 50 pounds overweight. I lost a lot of it and my BP dropped, my cholesterol went down and I'm generally in better shape. All that and more with no drugs.)

    6. Really dice up the defense budget. Bring our men and women in uniform home from Iraq. Seriously. Do we need more tanks? Really? Really? Must we have troops in Germany? Really and truly? Let's stop playing cop and let most of the rest of the world learn some responsibility. (And let the National Guard do its real job to boot. Helping people here after a disaster. We need no more Katrinas.)

    7. Rebuild. New Orleans.

    I'll shut up now.

  • Report this Comment On February 10, 2010, at 1:09 PM, Brill0 wrote:

    Morgan, Wyatt, et al:

    Thanks for the civil discussion. There is too much to talk about in one post. Regarding federal revenues and tax rates, the Laffer curve is worth pondering--the notion that there is a "sweet spot" where revenue is maximized, and that sweet spot is at lower marginal income tax rates than it seems we ever have, because low tax rates spawn individual initiative to produce.

    Regardless, it is difficult to imagine a downside of a shrinking government.

  • Report this Comment On February 10, 2010, at 1:09 PM, ChatmanGlobal wrote:

    You are right on with your views, I have spent over 5 years developing proposals to fix all you mentioned above and then some...This is what I have sent to all the US Governors (for a start), with 4 replies, pathetic, since they are asking for answers right?

    My proposals address the last paragraph of the article.

    To whom this may concern:

    Please excuse the layout of this email; I don’t quite know how to mention the difficulties I'm experiencing with obtaining the required attention needed to review my company, business plan, and (Government) proposals.

    I have collaborating documentation from different federal agencies that our country can benefit from my proposals. My company fits the niche our government has been seeking. My company provides those innovative ways to help relieve our dependencies, foster employment growth, stimulate/stabilized the economy, and provides the required healthcare services needed today; however my company has fallen subject to the pitfalls also recognized by our government.

    The link to getting my information into the right hands, via the programs provided, is flawed. I need help placing my information in the right hands for a true review of its simple yet practical application into our U.S. and global infrastructure.

    I have tried numerous outlets, and being a disabled military war veteran, I used the proper chain for contacting those who I was informed to contact for implementing my proposals, to no avail. So I’m forced to contact all who have a voice to be heard, and the Governer has that voice.

    With all of what our nation is going through my company has an answer. I would like to be forwarded the opportunity set up a telecom to discuss with any representative exactly what my company has to offer our nation.

    This individual should have the means by which to relay our discussion and my company materials to and through the appropriate channels, so that the right persons are privileged to this vital information ASAP. Time is of the upmost importance, this may very well be the answer we have all been waiting to hear!

    Sincerely,

    Brandon L. Chatman Sr.

    4 replies...lol!

  • Report this Comment On February 10, 2010, at 2:39 PM, thidmark wrote:

    "No Fox News employees were harmed in the making of this article."

    What the hell does Fox News have to do with this report?

  • Report this Comment On February 11, 2010, at 12:57 AM, burrowsx wrote:

    Your statement that the revenue fall came from the stimulus package tax cuts is ridiculous. They came from George Bush's completely unjustified tax cuts in 2000 -- tax cuts which were supposed to pay for themselves and never came close.

    In addition, cost savings from outsourcing the military to cost-plus do-nothings like Blackwater never materialized either. Such outsourcing simply created a new revolving door, where taxpayers paid to train military personnel in the services, and then had to pay double or triple their military pay, when they "retired" and were rehired by contractors.

  • Report this Comment On February 11, 2010, at 2:03 AM, Viking70 wrote:

    milleniumfalcon is correct on all points. Too bad the government will probably do the opposite of what he recommends.

    I don't hold out much hope for us. Despite having many great folks who are willing to do what it takes to make the country better, they are outnumbered by the number of people that are living off the government. These folks will never vote into office the types of people that will repair the damage. Instead, they will vote for folks that continue to increase the flow of government dollars into their pockets--the cycle repeats/spirals downwad until the US becomes a solcialized country asking China's persmission to do anything. If you don't think China is the next world leader replacing the US, you are truly living in a fantasy land.

  • Report this Comment On February 11, 2010, at 9:24 AM, TMFHousel wrote:

    "Your statement that the revenue fall came from the stimulus package tax cuts is ridiculous."

    How is it ridiculous? Because it's different from what you'd like to believe? The stimulus package included $288 billion in tax cuts, which accounted for about half of the plunge in estimated revenue.

    Factually yours,

    Morgan

  • Report this Comment On February 12, 2010, at 2:17 AM, frbtcmi wrote:

    This was a very good article. I hope to see more like it.

    To make better decisions and form our opinions, we should ask ourselves "what are the facts". That is what this article goes to.

  • Report this Comment On February 12, 2010, at 4:47 AM, ET69 wrote:

    Want to think outside the box? O.K. How about anybody for SOCIALISM?

  • Report this Comment On February 12, 2010, at 12:06 PM, snapperreef wrote:

    I hate to see someone writing for an organization that espouses capitalism saying our short falls in income came from or partially from tax cuts. I think it has been shown too many times from Harding, JFK,Reagan,to Bush that cutting marginal tax rates increases the net inflow to the treasury all other things being kept equal.

    When people in a free society get to keep more of their earnings, they are willing to work more to earn more and thus pay more taxes. Higher taxes have always caused people to look for loopholes, move away, work less, or even cheat on taxes.

    We need to realize that with the demographic makeup of our huge population we cannot offer the niceties of free homes, free food, free healthcare and such any longer. All of our standards of living will have to decrease to pay for a past lifestyle that was unsustainable.

    We have reached that stage of a Democracy that De Toqueville writes about where the non-producers have realized that they can use their vote to take from the producers, and politicians are willing to help them do it.

    Think about what is happening in our states. Unemployment and property devaluation is reducing tax income which cuts programs which lead to less spending and causes some to want tax increases on those left which exacerbates the whole problem ad infinitum.

    Invest against inflation!

  • Report this Comment On February 12, 2010, at 12:09 PM, verdure wrote:

    Thanks for the excellent article. As far as I can tell, a religious belief in laissez faire capitalism is likely to thwart reasonable solutions.

  • Report this Comment On February 12, 2010, at 12:29 PM, Turfscape wrote:

    snapperreef wrote:

    "When people in a free society get to keep more of their earnings, they are willing to work more to earn more and thus pay more taxes"

    Well, if there's any data showing a causal relationship to those to things, feel free to present it. Otherwise, your's is the same fallacious argument that has been repeatedly espoused in response to the types of facts presented in the article.

  • Report this Comment On February 12, 2010, at 12:31 PM, fool425 wrote:

    If Reagan's laissez-faire, trickle down free market economy was the answer to successful capitalism, where did it go wrong? Congress and the Executive Branch have trashed regulation of our banking system over the past 3 decades with what I think were predictable results; the shadow banking industry, creative/corrupt products, leverage, cronyism, and greed. Where is John Galt when we need him?

    No, I have to agree with David Stockman, Reagan's Revolution was a ponzi scheme built on false assumptions like Dr. Laffer's Curve. He called it voodoo economics and so did President G.W. Bush who had to clean up the mess Reagan's budget left. Even Greenspan admitted as much a year ago when he said that his World view of the way financial markets worked was wrong. He was talking about the false notion that they were self-regulating.

  • Report this Comment On February 12, 2010, at 12:33 PM, langco1 wrote:

    some more news on the recovery in the US. 1 in 8 americans are now on food stamps.thats a real sign of how well the country is doing..the american people need to end this disgrace and they can start by putting obama and his family on food stamps. it is time to demand a midterm election and bring in someone less interested in being a small time celebrity than running the country...

  • Report this Comment On February 12, 2010, at 12:49 PM, dgagen1 wrote:

    No question about it. The rising cost of actually delivering healthcare is a critical problem. The problem is not health insurance which simply spreads the total cost of delivering healthcare to those who are insured. If millions of people with high healthcare costs are added to the pool of people who are insured, there will be more cost to be spread to all those who are insured, and insurance premiums will go up for everyone. So how do the President and Congress propose to deal with the problem? They want to set up a huge government bureauocracy to enforce price controls on health insurance premiums. If less money is paid into insurance pools, less money is available to pay the actual providers of health care. So less actual health care will be provided and, in some form, the government wants to make the decisions about what kinds of healthcare are provided and to whom. The primary example of this last point is the proposed $500 billion reduction in medicare funding. This is the genisis of the charges of "rationing" and "death panels" that are leveled against the legisltation being considered in Washington.

  • Report this Comment On February 12, 2010, at 1:32 PM, fool425 wrote:

    georcole sez, "I think we should find some way to END all three of those "entitlement" programs. We, as living humans, are "entitled" to breathe, that's all. It is up to each of us to provide the rest. I go to work and provide a service to others, who in turn go to work and provide me with service. It is up to me to put enough money away to provide for my later years. About 95% of all people are horrible at providing for their futures. That does not make it the government's job to do that for us. The government is not that good at providing much of anything at any level close to efficient."

    I'm all for ending these programs as well. Please return all of the money I was forced to contribute to the system to finance my retirement plus interest over the last 50 years. Thank you. What is interesting to note is that the Republican solutions to replace SS and Medicare with "personal accounts" and tax credits don't add up. First, I believe the CBO calculated that it would cost something like 1 Trillion dollars to continue paying beneficiaries while younger workers transitioned into personal accounts. That's not in the budget. Moreover, while the long term return on equities is favorable on paper, I think you've identified the problem; most individuals couldn't beat an index fund it they tried. No, we simply need to tweek (delay or reduce benes and raise taxes to cover them) the existing SS and Medicare programs. These so-called "socialist" programs work quite well as they do for most of the free World. I have spoken with many people throughout the World in the past 40 years and almost never hear them desire the medical program we have here in the United States. Duh! By the way, how has privatization of the military worked out for the taxpayer in your opinion?

  • Report this Comment On February 12, 2010, at 1:36 PM, Aphexwolf wrote:

    I agree we're definitely in a big mess and it's just going to get bigger over time. I'm not an economist, but the only way I see the gov being able to reverse the direction of the budget is either to raise taxes or cut spending. It's like having mounting credit card debt. You've got to either start sending in larger monthly payments or start cutting back how much you are purchasing with the card. Otherwise interest owed will eventually suprass the amount you can pay per month and you will never be able to catch up. Since neither side of the political spectrum can seem to agree on any course of action I suppose our debt will continue to rise to a point where we will never be able to pay it off.

  • Report this Comment On February 12, 2010, at 1:43 PM, fool425 wrote:

    dgagen1- I agree with much of your observation, but if left to the private, for profit healthcare monopoly; how can we expect costs to come down going forward? Government admin costs are very small compared to the 30 percent plus that is wasted by private insurers. That is why we pay more than twice as much for coverage as the rest of the free World and get such pitiful coverage. The goal of private healthcare insurers is in direct opposition to patient outcomes. The same can be said for the physician and lawyers' lobbies. The only way to control costs is for the federal government to either regulate the healthcare industry or remove the monopoly, eliminate entitlement contributions and let the free market work it's magic. As the old saying goes, be careful what you wish for. It is not as simple as you think to make this transition.

  • Report this Comment On February 12, 2010, at 1:49 PM, Turfscape wrote:

    Aphexwolf wrote:

    "the only way I see the gov being able to reverse the direction of the budget is either to raise taxes or cut spending"

    Really, we'll need to do both.

  • Report this Comment On February 12, 2010, at 3:55 PM, john795806 wrote:

    America is in serious trouble, and we deserve to be. We spent more than we made, pure and simple.

    Don't thin Reaganomics is the answer. I remember Lloyd Benson's famous quote in the presidential debates: something about how anyone could make the economy look good by writing a few billion dollars in hot checks. Reagan began the era of tax cuts and the big deficits that went with them.

    What we should be asking ourselves is, why do other nations not have our problems? Well--take a look. They have much lower health costs, which translates into less entitlement spending, because they have functional health care system. Why didn't I read anything about "defense spending"? That's huge huge HUGE and we treat it like it's a necessity! Remember that the tables above show only the DIFFERENCE in projected vs. actual. In terms of actual amounts, defense is off the charts as a percentage of total spending. In other words, it's big, and we still out-spend it.

    This article was an eye-opener for me. In my lifetime, I won't see good economic times again--particularly in this age of political devisiveness. Time to button down the hatches. Bin Laden said his objective was to bankrupt America. He will succeeed.

  • Report this Comment On February 12, 2010, at 4:37 PM, langco1 wrote:

    some more news on the recovery in the US. 1 in 8 americans are now on food stamps.thats a real sign of how well the country is doing..the american people need to end this disgrace and they can start by putting obama and his family on food stamps. it is time to demand a midterm election and bring in someone less interested in being a small time celebrity than running the country...

  • Report this Comment On February 12, 2010, at 4:49 PM, zonadude wrote:

    For anyone who views government entitlement programs designed to promote social security for their fellow citizens as excessive government interference and spending, I propose the following:

    Embrace the free market spirit of America, let the weak suffer and fade into destitute oblivion. And further, open the borders to let in the hungrier, more motivated workers from elsewhere in the world. If they can and will do something better and cheaper than people here, then by all means let them in. Steel sharpens steel. This is why we have a competitive system, for it makes us all better.

  • Report this Comment On February 12, 2010, at 4:50 PM, zonadude wrote:

    @langco1, Obama eats cheeseburgers when he's out and about, grows food in the garden at home. That doesn't strike me as the decadent type.

  • Report this Comment On February 12, 2010, at 4:58 PM, clrodrick wrote:

    john795806 wrote:

    "What we should be asking ourselves is, why do other nations not have our problems?"

    Ummm.....are you not reading news story after news story about all the debt problems all of Europe is struggling with? They have out of control entitlement spending also. What they don't have is our crushing military expenditures on top of every other debt.

  • Report this Comment On February 12, 2010, at 5:01 PM, Turfscape wrote:

    zonadude wrote:

    "Embrace the free market spirit of America, let the weak suffer and fade into destitute oblivion."

    As though that has no impact on the rest of us? I want social programs so that I don't have my sidewalks lined with homeless families begging for change and food. I want social programs so that I don't have destitute people trying to break into my home for whatever they can steal.

    Yeah, yeah...just buy a gun and shoot 'em all. I know. I've heard it many times. Your's is a fantasy world if you think that's a solution.

  • Report this Comment On February 12, 2010, at 5:24 PM, NoOracleHere wrote:

    I agree that it was a very good article. Also, I've noticed that much of the debate following has been good. What concerns me most about the current plan for recovery is that we've answered a short term liquidity crisis with a long term stimulus program. If it was painfully necessary to inject money to "save the financial system", I think it can be amply demonstrated that that crisis has passed. Now we are left with an economy that is determined more by the federal debt, our horrible balance of trade, our continuing loss of manufacturing, and our demographic problems. The rest of the world has moved on, and we are still justifying foolish economics based on the recession that we just can't let go, based on the same "voodoo economics" theory that has been discredited in the past. So let's encourage our congress to return to responsible economics, responsible spending, balancing the budget, and pay as you go programs.

  • Report this Comment On February 12, 2010, at 5:43 PM, etdiii wrote:

    Let see, revenue down, entitlements up, deficit up, not much new here, just about the same in each recession. It is clear that non-discretionary spending is not the bad actor, it is just easy to blame. Equally difficult to believe is the solution to the problem is medical reform that will create an entirely new entitlement. So the way to sole a problem drive by entitlements is to create a new entitlement. Get serious!

  • Report this Comment On February 12, 2010, at 11:10 PM, dejayajay wrote:

    The entire problem stems from the fact that The Fed Reserve (and the people even further up the money tree) loan money to the government, and charge interest that can never be repaid.

    Lend out $100 dollars, and demand $105 back? Simply impossible. Try this: Lend out $100 each to persons A and B. Assume that A is smarter/harder working than B, and is soon able to pay back his $105. Out of the loaned pool of $200, there is only $95 left in circulation. How can B EVER pay back his loan. Now... as A has emptied his pocket to clear his debt, he (she?) now borrows $100 again, and the process repeats. He works hard/smart, and when he repays this loan, there will only be $90 left in the pool.

    Multiply this out by many millions of loans/workers/businesses, and again by many years/loan cycles, and you can soon see why the world owes infinitely more than it can EVER REPAY.

    The resulting defaults in turn give us the situation we have today. Numerous people/ enterprises/ countries, over time, default on their debts. This causes some loss to the source lenders, but largely most importantly, it transfers to them the assets offered as security on the loans.

    Thus, the rich get richer, and the poor, poorer.

  • Report this Comment On February 12, 2010, at 11:47 PM, dave665 wrote:

    "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate."

    Well its too bad they haven't actually been offered any health care reform.... only bigger entitlements and more government waste. And during the current administration, its clear that they won't be offered any real reform. Also, the current government projections of high growth and low inflation over the next 10 years are probably just as far off as those from 2006. So in my view, our debt situation is now unsalvageable.... its only a matter of how quickly it all goes down.

  • Report this Comment On February 13, 2010, at 12:53 PM, Turfscape wrote:

    dejayajay wrote:

    "Out of the loaned pool of $200, there is only $95 left in circulation."

    Thanks for sharing your lack of understanding of monetary supply.

  • Report this Comment On February 14, 2010, at 2:07 AM, mgm5685 wrote:

    dejayajay:

    You are forgetting where that loaned money comes from originally: depositors, creditors, and the printing of money. The latter results in steady inflation, and the first two only cause issues if a overwhelming majority grab for their money back at the same time.

  • Report this Comment On February 14, 2010, at 12:19 PM, langco1 wrote:

    the depression in the US is so bad that kids need to eat at school.1 in 8 americans are now collecting food stamps.this is how the foolish people who voted for obama have been paid back and its only the begining...

  • Report this Comment On February 14, 2010, at 12:24 PM, TMFAleph1 wrote:

    As economist James Kwak from Baseline Scenario put it, "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate." That's far more factual than it is opinionated.

    That depends on the nature of the "reform" in question.

  • Report this Comment On February 14, 2010, at 2:41 PM, milleniumfalcon wrote:

    "1 in 8 Americans are now collecting food stamps."

    Instead of railing about it, and blaming Obama, why don't you feed a couple of them?

    Unemployment has slowed over the last six months or so. That is a good sign. However, unemployment is a lagging indicator of economic crisis and recovery. Stocks my drop day to day, businesses go belly-up with frequency, but unemployment takes a while to run through the system. Why?

    First, the person fired needs to get over the shock of being fired. Sometimes that takes up to a month. Then they have to go and claim. That takes a bit of time. Eventually and hopefully they get rehired. That takes some time as well, because people don't get hired until companies become profitable again. There's a great graph here: http://www.calculatedriskblog.com/2010/01/employment-report-...

    Unemployment in the recession was deeper and longer than just about anytime since WWII. It will take some time to work our way out of this. And despite the bull about this recession being over, from the ground level, I do not believe it is over. Not for most people. Not for me.

    My job will end come May. That has nothing to do with Obama, and more to do with the lack of tax revenue collected by the state of Missouri.

    I still say: we need a jobs bill. One that fast and effective. You know like cash for clunkers was.

  • Report this Comment On February 14, 2010, at 3:06 PM, Superdrol wrote:

    America is bankrupt. Just not 'officially'. There is no meaningful method of reeling in any of the deficit.

  • Report this Comment On February 14, 2010, at 3:08 PM, AvianFlu wrote:

    Millenium:

    Correct me if I'm wrong, but wasn't the 787 billion "stimulus" bill supposed to be a jobs bill? Remember millions of jobs saved or created, etc? How long must we torture ourselves with pursuing expensive policies that do not work time and time again. The easy answer is to return to the policies of free enterprise that turned a small group of colonies into the most powerful, rich, and benevolent country in the world. Return to the successful policies of the past. The polices that do not take away your individual freedoms and punish hard work and success.

  • Report this Comment On February 14, 2010, at 3:57 PM, ozzfan1317 wrote:

    Millenium is right I agree with rewarding hard work and success but please explain to me how paying millions to people who nearly collapsed our financial system makes any sense? Goldman Sachs can pay there bills so let them pay their employees whatever they wish. We need to rebuild our infrastructure and our Schools and invest in education. Just wait till I finish college is all I ask..lol..:)

  • Report this Comment On February 14, 2010, at 11:45 PM, Bloefeld wrote:

    Spending is spending is spending. The problem with governments in the west is that we have somehow concluded that no matter what some spending cannot be changed.

    The big iron chain has to be dropped and all spending has to be open to alteration as revenue streams are altered.

    The reality however will follow all historical precedent; we will debase the currency until it is without value and then default on our debt.

    The result will be big changes, with a lot of people being financially ruined, and political upheaval.

    It will not be pretty, but it is coming and sooner rather than later.

    Cheers,

    Bloefeld

  • Report this Comment On February 15, 2010, at 3:18 AM, milleniumfalcon wrote:

    Avian -

    Not sure what 'old days' you are referring to.

    The largest item in the STIM--a total of $288 billion--went to tax cuts for 95% of the public. Sure, its only $60 to $80 bucks a month, but that money just didn't show up via the use of black magic or fairy dust. That's giving hard working people their money back.

    Another $275 billion went to states in the form of grants and loans. States would actually be suffering worse crises then they are now. Your state and local taxes would have undoubtedly have gone up (or even more if they have). More educators would have been fired. More cops laid off. Bigger classes and dumber children. More crime.

    Tax relief and money for the states totals $563 billion.

    That leaves $224 billion for public projects, aka 'jobs.' So no, the STIM was not a jobs bill. And to believe so, is to believe the misconceptions certain political players are using to score political points.

  • Report this Comment On February 15, 2010, at 9:23 AM, Turfscape wrote:

    AvianFlu wrote:

    "wasn't the 787 billion "stimulus" bill supposed to be a jobs bill?"

    No. It was a stimulus bill. It was setup under the general principles of "trickle down" economics, thinking that that would be the fastest way to get money to where it would be best spent. The stimulus gave money to States and municipalities. It gave money to businesses. It did not directly create jobs. That's one reason why it had such limited impact. It was not designed for the creation of jobs, putting individuals to work.

    Government figured that if you just give businesses money, surely they'll go out and hire people. If you give States money, surely they'll start major projects that need thousands of workers. Oops. The businesses and States said "thanks, now we can pay off some of our debts". Trickle down policies don't work. Never have and never will. This "jobs bill" will most likely suffer the same fate.

  • Report this Comment On February 15, 2010, at 10:02 PM, travelpm wrote:

    Here are the good old days for those who have forgotten them. In the 60's, a middle class family was lucky to have 1 black and white TV. Children shared rooms and having 2 bathrooms in a house meant you were rich. Mothers stayed home and made clothes for the family. Most families had just one car if you lived outside of the city, and the children got a paper route as soon as they were old enough, or did babysitting jobs, or anything else they could do to make a little extra money. It was not assumed you would go to college, but if you didn't, you could still find a decent job where if you worked hard you could support your family, earn a pension and buy a little house nearby. This is how most of America lived. It was a simple life, but people didn't expect much. American corporations have grown fat and rich by boosting our consumer habits far beyond anything imaginable back then, and convincing us we really need all this stuff. We have so much now, what is left to buy? New things need to be developed constantly so we can have a way to spend our money. Maybe continuing growth at this rate just isn't realistic. We are at the point where there isn't enough room to grow economically in America without starving someone else to get more for ourselves, and the government is no different. The government needs to learn to live on less, and so do all of us. And that means corporations do too. In the end, how much is really enough? It is a question no one in this country, from it's citizens to it's politicians, to it's heads of corporations wants to face up to or answer.

  • Report this Comment On February 15, 2010, at 10:38 PM, majestik wrote:

    Glad Great Leader's healthcare proposal ist kaputt!! Greatest ponzi scheme in the history of the universe if you ask me. Better to design a plan to provide for catastrophic net for extreme circumstances than to face taxpayer with asset confiscation and redistribution for government supplication of minor aches and pains as exitsts in socialized Europe .

  • Report this Comment On February 15, 2010, at 10:40 PM, majestik wrote:

    Don't care for Obunga healthcare plan. Too much smoke and mirrors!!

  • Report this Comment On February 16, 2010, at 10:18 AM, Turfscape wrote:

    travelpm wrote:

    "Here are the good old days for those who have forgotten them. In the 60's,..."

    I read that book, too. Found it in the Fiction section of my library.

  • Report this Comment On February 16, 2010, at 11:47 AM, PositiveMojo wrote:

    I would propose that the problem is deeper than what is stated in this article or in these discussions.

    For example. In a tribe of hunters, one person is particularly effective at making bows and arrows. He can make them more quickly and better than anyone else. He discovers that he can exchange them for deer and cattle, and get more, than if he hunted for them himself. So, he focuses on making bows and arrows.

    America stopped making bows and arrows and China started. Go into any store and pick up any item. How many say "Made in the USA"?

    We used to be the greatest bow and arrow makers in the world. We taught Japan, Germany and even China how to make them. Then we said, why should we make them any more when we can buy them cheaply and resell them and make a profit?

    This worked for a little while but now that it's not working anymore and everyone is pointing fingers at one another -- rather than going back to making bows and arrows.

    They say the unions cause our prices to go up and we can't sell our bows and arrows because they cost too much. The government taxes us too much and we can't sell our bows and arrows because they cost too much. Health care for our bow and arrow makers cost too much and we can't sell out bows and arrows because they cost too much. They are all right.

    This is the heart of the problem. Until America gets out of the way of business and allows itself to compete with the rest of the world and you begin to see "Made in America" on the shelves of WalMart, this problem will never be solved. No amount of budget revision and forecasting will change this.

  • Report this Comment On February 16, 2010, at 12:19 PM, milleniumfalcon wrote:

    The fundamental problem with the “bows and arrows” analogy of free trade is that in a "flat world" everybody is not only able to compete with everybody else freely, but should be required to. Indeed, that sounds nice, doesn’t it? America trades with - and competes with trade with and for - the European Union. France against Germany. England against Australia.

    That’s not how things work at all. There are two glaringly obvious flaws in the "free trade" theories expounded by neoliberal philosophers.

    First, "infant" economies - countries that are only beginning to get on their feet - cannot "compete" with "mature" economies. They really only have two choices - lose to their more industrialized competitors and suffer hungry and cold (as we see with much of Africa), or be colonized and exploited by the dominant corporate forces within the mature economies.

    Second, the way "infant" economies become "mature" economies is not via free trade. It never has been and never will be. Whether it be the mature economies of Britain, America, or Japan - in every single case – the economic strength and maturity of a nation comes about as a result not of governments "standing aside" or "getting out of the way" but instead of direct government participation in and protection of the "infant" industries and economy.

    In 1933 a company that made clothing got the government of Japan to throw out the US automobile companies. Why? It decided to try its hand at making cars. Well that company was The Toyoda Automatic Loom Company. Yes, Toyota. The auto industry in Japan sprung up because of government intervention, not in spite of it.

    That’s the way economies go from being anemic and uncompetitive to becoming developed, strong, and competitive is simple and straightforward. The government steps in.

    The free trade rhetoric of the past 30 or so years has lead to what amounts to a disaster here. Our industries now stand essentially naked and defenseless against those of other fully developed nations, most of which are still holding in place high tariffs, huge R&D supports, and passionate support of the commons infrastructure – from highways to education to health care.

    The result is just what Alexander Hamilton feared - the rapid unraveling of the American middle class as the nation bled its industrial base into the gutter of cheap labor countries. While today both China and India have import tariffs that average between 20% and 30% on manufactured goods (to protect their domestic industries and markets), we've dropped our average tariffs from a 1973 average of 12% to today's average of around 2 percent.

    In other words, there is no such thing as free trade.

  • Report this Comment On February 16, 2010, at 12:28 PM, PositiveMojo wrote:

    @milleniumfalcon.

    With all due respect, I think you missed the point.

    The example was one of production, not free trade. The goal is to improve productivity. The role of the government must be to remove the constraints to productivity and enhance our ability to compete with the world in making our bows and arrows.

  • Report this Comment On February 16, 2010, at 12:47 PM, milleniumfalcon wrote:

    Graybear1951 -

    I get ya. I just believe that for government to get out of the way, it needs to simultaneously get in the way. It's not an either/or proposition, but rather a both/and one. More freedom for our corporations and equal - rather than 'free' - trade with our competitors. If we have a 2% tariff rate and China has a 20% tariff rate, we are automatically 18% behind the 8-ball. That's neither free, nor fair, trade.

  • Report this Comment On February 16, 2010, at 1:32 PM, PositiveMojo wrote:

    @milleniumfalcon.

    I think we are on the same page. I believe the fear over raising tariff rates is the potential of inflation AND we still want a plentiful supply of cheap bows and arrows. The pain of a 10% unemployment rate has not done much to change this policy.

    There are so many opportunities for our government to improve our productivity that it is amazing! They are clearly lost in the weeds. You might say that it is a target rich environment. Take your pick. Business taxes, tariffs, health care costs (without that 2,000 page plus monstrosity - btw the original Social Security bill was 64 pages), unions, etc.

    Maybe even sitting down with the folks at WalMart, Target, Macy's, etc and asking "What can we do to get you guys to buy American made products?" Hmmmm... it's not that complicated - and it will put Americans to work and strengthen our economy.

  • Report this Comment On February 18, 2010, at 9:12 AM, MATZOID wrote:

    Much easier to see in graphic format:

    http://user.mc.net/~bpentprs/lifezatrip/chartsonly.htm

  • Report this Comment On February 18, 2010, at 6:34 PM, actuary99 wrote:

    "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate."

    Is this implying the current health care reform bills would have DECREASED healthcare costs? Ha!

    I think the intent of the current bills are aimed at improving access and reforming health insurance. Seems like they're not even pretending to care about dropping costs. Ask an actuary in the healthcare industry if government mandates reduce healthcare cost. Dare ya.

  • Report this Comment On February 21, 2010, at 9:34 PM, yahsure2 wrote:

    I agree actuary99.

    But how about this for one side of the healthcare solution. Stop allowing insurance company's to be publicly traded and make them actually do what people are paying them to do, like pay for their healthcare?

    Just a thought.

  • Report this Comment On January 17, 2012, at 8:20 AM, noobystok wrote:

    Counter cyclical policy requires that you adjust taxation and governmental investment spending based on the current state of the economy. You invest money in the down turn to stimulate the economy and you save the surplus that you end up with to pay off the debts from previous years. The problem is that we aren't a business or household with a CEO or breadwinner who is able to make the best informed decision. We are a nation of people without a memory that complain when they spend more than they have, then vote for the idiot offering tax cuts to give away the surplus instead of paying off the debt. We have a system that is too slow, run by people who are too greedy that are elected by those who are too ignorant to make an informed decision about mostly anything.

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