Now that this problem is solved we can grow the debt infinitely and get back to watching Wheel of Fortune.
Growing increasingly pessimistic about the prospects for a deal that would raise the debt ceiling, Democratic senators are revisiting a solution to the crisis that rests on a simple proposition: The debt ceiling itself is unconstitutional.
“The validity of the public debt of the United States, authorized by law… shall not be questioned,” reads the 14th Amendment.
“This is an issue that’s been raised in some private debate between senators as to whether in fact we can default, or whether that provision of the Constitution can be held up as preventing default,” Sen. Chris Coons (D-Del.), an attorney, told The Huffington Post Tuesday. “I don’t think, as of a couple weeks ago, when this was first raised, it was seen as a pressing option. But I’ll tell you that it’s going to get a pretty strong second look as a way of saying, ‘Is there some way to save us from ourselves?'”
By declaring the debt ceiling unconstitutional, the White House could continue to meet its financial obligations, leaving Tea Party-backed Republicans in the difficult position of arguing against the plain wording of the Constitution. Bipartisan negotiators are debating the size of the cuts, now in the trillions, that will come along with raising the debt ceiling.
Pedro: answer the question. Here it is directly the second time:
for emphasis–Pedro==are you saying the two parties are absolutely the same in every respect?
If not, how are they different?
#41–Pedro==Excellent. I’ll put you down as a paid shill because as you are not philosophically driven no one is otherwise that stupid. Are you paid by the Krotch Brothers directly or thru subsidiary contacts, aka “The Donkey?”
Ha, ha.
No difference at all between lets lower the corporate and individual tax rates and pay for this by cutting social safety net programs to all Americans vs lets keep the social safety net in the main, cut other wasteful government programs and return tax levels to where they where during Clinton–or dare we go as far back as Regan?
Balanced budget in 5 years.
No difference at all as in:
deficit = balanced
vouchers = defined benefit
old people = negotiating with Trans National Corps.
No difference at all……for “practical” purposes. Funny, I thought getting an education, eating, access to healthcare were all kinda practical.
The right wing informs us again.
Total fool.
#41
So you are also not going to address the substantive bits…
*the GOP is inconsistent on its treatment of their own favorite issue
*the GOP has failed to address events that disprove their most basic economic policy ideas
Could it be that there is no effective response to the points I raise?
Say Pedro, the Alfie of Political Analysts–can we draw you out just a little bit more?
Is the top 1% of taxpayers owning 8% of the wealth in America the same thing practically as the top 1% owning 25%?
Is Corporate taxes funding 35% of the Federal Budget the same thing practically as funding 8% of the Federal Budget?
Is claiming a tax repatriation process is good for America a believable position when the last time it was done 95% of the money repatriated was used to buy back shares at the same time that massive job layoffs were made===all the while the same US Corps are sitting on 2 Trillion in cash reserves?
Is it the same thing/credible?
Truth hurts like being kicked in the gonads by an upset House Donkey.
Where is that carrot?
Clinton prospered from the .com boom. He hailed in tons of new tax revenue through no action of his own. It’s like getting a 30% raise at your job. Those first couple of years you pay all your bills on time, until you eventually learn to spend past what you make again, like our government always does.
#46
It is arguable that Presidents are significantly removed from economic conditions and shouldn’t be judged on that basis.
Clinton did get extra revenues from multiple bubbles, but so did Bush II. The crucial difference between the two was Clinton’s willingness to tax the top earners more, as well as to keep his military actions smaller.
Reinstating the Clinton era rates, plus the lower troop commitments needed for the wars, would take out most of the increase in the debt. Wouldn’t pay off what we’ve run up but we’d be awfully close to a balanced budget.
Now I agree when you say:
“you eventually learn to spend past what you make again, like our government always does”
That’s true, but you’ve got to qualify it by who is controlling the political agenda at the time. Dems, Obama excepted, bring lower debt levels while the GOP brings explosive debt growth.
At the tax levels we have a few points lower is never going to generate offsetting revenues due to extra growth.
#34
Except that he did. Notice the word BUDGET in the #28 post I was referring to.
Except that you are totally wrong. You’ve been deluded. The budget includes ALL expenditures. If Clinton had a balanced budget, the national debt would have stayed the same or gone down. It didn’t. “Balanced” means Revenue >= Expenses. No one has done that since Eisenhower. The only way to weasel out of that fundamental fact is to play word games or try to sweep away expenses the government incurred.
As I said, no one President has seen a balanced budget since Eisenhower.
#37
It’s funny that you try and argue a technicality from #28, but sidestep when I paint the GOP as entirely dishonest in how they play the debt issue politically in #27. Wasn’t that direct enough for you?
First, the words we use have to mean the same thing. The Federal budget for a given year encompasses all revenues less expenses. If R >= E, the budget is balanced. If E > R, the budget is not balanced and we have a deficit. So, to throw out statements like “Clinton balanced the budget” as if it is true is not a technicality; it’s bullshit. NEITHER party has balanced the budget, either as President or when they controlled Congress for almost 60 years.
Second, I DO think the taxes need to be raised at this stage specifically because of wasteful spending most recently by Obama and the Democrats or going back only a couple of years, by both parties.
Third, in all of the “stimulus” packages that have been passed, the one that actually made money was TARP. The one that helped people modify their loans or refinance their loans was a horrible money sink. The automotive bailout will likely be a wash or a moderate loss. So, arguing that big bad conservatives were wrong ignores history.
Fourth, I bet I could count the number of people in the Federal government that fiscally conservative on one hand with fingers left over. Neither the “conservatives” nor anyone else in Congress is fiscally conservative or they’d be wanting a balanced budget this year. I don’t care if the Republicans claim themselves to fiscally conservative. The reality is that they are not. (The true weasel response is that they are more conservative than Democrats which is like arguing that Britney Spears is more slutty than Lady Gaga).
The actual RIGHT path is to dramatically raise taxes on the top 1%, and corporate rates as well. The US gov is getting the smallest slice of GDP as taxes in decades.
At this stage, I agree as we have little choice BUT don’t be surprised if the current amount of money represented by the top 1% drops precipitously. Unlike say 60 years ago, the wealthy have far more locations they can move their money than they did in 1950.
#47
Clinton did get extra revenues from multiple bubbles, but so did Bush II. The crucial difference between the two was Clinton’s willingness to tax the top earners more, as well as to keep his military actions smaller.
Comparing the tech bubble to the housing bubble is disingenuous. The tech bubble represents a huge boom to the global economy. The housing bubble came at the outset of a recession (at the end of Clinton’s term), was more localized and while we had growth, we did not have equivalent booming growth as during the tech bubble. China had more growth during the housing boom than we did.
Reinstating the Clinton era rates, plus the lower troop commitments needed for the wars, would take out most of the increase in the debt.
No it wouldn’t. Increasing the upper tax rate by 4-5% isn’t going to cover $1400 B deficit. The combined amount spent on the Afghanistan and Iraq is $70 B. It will help, but let’s not go crazy and think that if we returned to 1992 tax rates with 2011 spending (even without the wars) that it will wipe out the deficit. Given that they couldn’t eliminate the deficit with 1992 tax rates and 1992 spending, you’ll understand my skepticism.
Dems, Obama excepted, bring lower debt levels while the GOP brings explosive debt growth.
Really. Who controlled Congress and Presidency when that stimulus bill was passed? BOTH parties are to blame here. Frankly, at this stage, I say that the members of Congress and the President are personally liable for any dollar they spend over revenue.
#49–Thomas==so what you are saying is raise taxes and increase the tax enforcement performance of the IRS rather than defund it?
Sounds reasonable to me. Sure looks like we need a bit more pain before reality will be accepted by our political leaders.
Its easy to forget what America is, still is: World’s Largest Economy, Highest Per Capita income (?–ok–top tier), 3rd largest population, access to natural resources of every type or ready substitutes, Best Higher Education, Highest Tech Military and Largest Around including all branches.
Trouble is – – – things change.
#51
I’d also add the elimination of tax loopholes but effectively yes. We have no choice at this stage but to raise taxes and cut spending and I’d start with anyone that was a member of Congress or President in the last 60 years.
Well Thomas–since you have the detail and are being non-partisan==do you think MediCare/Caid and Social Security should take some “major” restructuring in order to balance the budget/reduce the debt or are those programs “in fact” what American is minimally all about?
“Debt” should be a criminal offense. Government debt should be an executable offense.
#49
“First, the words we use have to mean the same thing.”
This is not semantics! Please note: http://factcheck.org/2008/02/the-budget-and-deficit-under-clinton/
“At this stage, I agree as we have little choice BUT don’t be surprised if the current amount of money represented by the top 1% drops precipitously. Unlike say 60 years ago, the wealthy have far more locations they can move their money than they did in 1950.”
Yes, but the US GOV watches global money transfers comprehensively. The big difference between the top 1% and everyone else is in financial assets. They don’t keep warehouses of liquid assets so it can’t just disappear.
There are also significant dangers and costs in moving money offshore for individuals.
“So, arguing that big bad conservatives were wrong ignores history.”
Deregulation of the financial industry created the bubbles. The innovation of the GOP to use tax policy and bellicose foreign adventures as their primary branding tools has created the bulk of the debt.
The fraudulent idea that lower rates, at our level, will replace lost revenues through growth on a 1-to-1 basis has been discarded. Now we just need to shut things down until it evens out. That is where the the real bullshit is!
I blame the Dems for being disorganized since the ’70s. The party establishment would get together only to piss on an outsider who managed to sneak into the White House(Carter, Clinton) or unify around an utter flop. If the GOP faced a capable interlocutor their BS wouldn’t have gone so far.
Sure there is plenty of dirty to go around, but that is always the case. Voluntarily cutting the Government’s income in advance of an entirely predictable demographic change is criminal stupidity.
That is all on the GOP.
#50
“Comparing the tech bubble to the housing bubble is disingenuous.”
Maybe, but the housing bubble was actually way bigger. That would seem to indicate more tax revenues. In an otherwise flagging economy it packed an even bigger punch.
“The tech bubble represents a huge boom to the global economy. The housing bubble … was more localized”
I’m not too sure. People cashed out a lot of that phony value and bought a whole bunch of expensive stuff. The housing bubble would seem to be more severe because the tech bubble losses were mostly financial instruments.
#50
“The combined amount spent on the Afghanistan and Iraq is $70 B.”
Not convincing. We’ve spent just over one trillion on Afghanistan and Iraq wars from 2001 to 2010. Regular mil spending, in constant dollars, was also $200B/year over the historical norm over the same period.
That looks like ~3 trillion in a decade in extra mil costs. Sure we couldn’t have avoided all of those costs, but then we’ll never know how much better we could have done.
#50 “Increasing the upper tax rate by 4-5%”
And return make capital gains rates to the same as the general income rate. That’s big.
Spending in many things will fall, and revenues increase, as the economy improves. It narrows from both ends.
“China had more growth during the housing boom than we did.”
Yes of course, they are still a developing economy. As their GDP-per-capita rises their growth rate is going to slow to something much closer to ours. That’s still a few decades off.
#52 Agree totally that loopholes are a major issue. Also some areas that are notorious boondoggles like agricultural subsidies, grants or breaks for special businesses(where the criteria to get the status is really loose), creative sharing of profits between different units of multi-nationals and runaway medical costs.
There is also a great deal of waste and bad contracting/provisioning decisions. Lots of people should be cut, but many agencies are non-functional or complicit with the orgs they are supposed to regulate. Making those things work properly would generate all kinds of savings.
Here is a good breakdown of the budget: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg
Notice that what we think of as the government, alphabet soup of agencies, actually don’t account for that much of the total. Also notice that interest on the debt is 5% of the pie.
#55
RE: Fact Check
FactCheck is frankly wrong or intentionally being deceptive. Why? It does not include intergovernmental debt; only public debt. Look at the links they provide from the CBO and you’ll note that it refers only to Debt held by the Public. It is a perfect example of figures that are deluding you into thinking we actually ran surpluses when we did not.
Go here:
http://treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
http://treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
These are the national debt figures for the years in which Clinton was President (it won’t matter if you include 2001 or 1991, the results are the same).
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32
09/30/1993 4,411,488,883,139.38
09/30/1992 4,064,620,655,521.66
If we had actually run a surplus, you should find a pair of years where the value from the earlier year is less than the later year. Be my guest and find it.
Clinton took the surpluses that were generated by Social Security during the boom and spent it. Some of it he spent on lower the public debt (robbing Peter to pay Paul) and some of it he spent. What he did not do is spend less than he made. The closest he got was an 18B deficit. Again, no President since Eisenhower has run a surplus.
#55
Yes, but the US GOV watches global money transfers comprehensively. The big difference between the top 1% and everyone else is in financial assets. They don’t keep warehouses of liquid assets so it can’t just disappear.
I did not mean transferring money illegally. I mean moving money into non-taxable investments or offsetting income with expenses in such a way as to report less income. For example, if Bill gates put all his income into municipal bonds, his tax rate would be zero. In addition, the wealthy can legally create shell corporations which buy stuff that the wealthy use offshore. There are hosts of ways of legally moving money around as to avoid taxes.
The innovation of the GOP to use tax policy and bellicose foreign adventures as their primary branding tools has created the bulk of the debt.
Except that the Democrats are equally guilty for much of that deregulation. Bush warned about problems with Fannie Mae and Freddie Mac on multiple occasions and the Democrat controlled Congress did not act. Both parties are equally culpable.
#50
“The combined amount spent on the Afghanistan and Iraq is $70 B.”
Not convincing. We’ve spent just over one trillion on Afghanistan and Iraq wars from 2001 to 2010. Regular mil spending, in constant dollars, was also $200B/year over the historical norm over the same period.
That 70 B is per year. The deficit is per year. Thus apples and apples. The money spent since 2003 until this budget year has already been pissed away. There’s nothing we can do about that. Actually, the military spends about $600 B/year and yes that can be trimmed too.
Well the solution is obvious to everyone who doesn’t currently reside in the USA. For those few of you who do, sell the land, resources and inhabitants of all states with Z, K and X in their names to Venezuela.
Btw, in case anyone is curious, the last time we actually ran a surplus from the previous year? 1956 (from 1955). 55 years ago.
Thomas,
#50, The tech bubble represents a huge boom to the global economy
I laugh whenever I hear this. The “Tech Bubble” was bullpoop. There was no wealth created, everything was a money transfer. People invested their portfolios and savings. They didn’t take out huge loans that were defaulted on. Thus, any tax revenue was minimal. (NOTE: it took several years before even Google and Amazon showed a profit)
Where too many people make their mistake is the “tech bubble” was actually a continuation of a technological paradigm that had been going on for several years. It was finally filtering down to the consumer level. Banks and governments had been using wire transfers and communications for years. E-mail was a standard business tool already.
The only actual jobs created were in the building of PCs and network equipment. This was very temporary and went overseas before becoming very employment intensive.
…
#60, FactCheck is frankly wrong or intentionally being deceptive
Or you didn’t read the article. Clinton brought in a surplus budget.
…
#61, Bush warned about problems with Fannie Mae and Freddie Mac on multiple occasions and the Democrat controlled Congress did not act.
Bullpoop !!! In 2003 Bush tried to move the GSEs (Fanny and Freddie) from Congressional and OCC oversight to the Dept. of Treasury oversight. This would have put the GSEs directly under the control of the White House. Even the Republican Chairmen of the Congressional committees saw this for what it was and dropped the White House legislation.
In March and again in April of 2008 Henry Paulson was telling Congress there was no problem with the economy. Behind the scenes he and Ben Bernanke were putting band aids on all the financial hemorrhaging.
Thomas,
#50
Comparing the tech bubble to the housing bubble is disingenuous. The tech bubble represents a huge boom to the global economy. The housing bubble came at the outset of a recession (at the end of Clinton’s term), was more localized and while we had growth, we did not have equivalent booming growth as during the tech bubble. China had more growth during the housing boom than we did.
The “Tech Bubble” was miniscule compared to the housing market in the 2000s. Home ownership had been pushed by Presidents since Carter and included Reagan, Bush I, and Clinton.
What is important though is that during the Clinton years most sectors of the American (and international economies) were booming. After the Bush II tax cuts America experienced the slowest growth since before WWII.
Let me rephrase that for you:
Clinton = tax hike + booming economy.
Bush II = tax cut + faltering economy.
Why did the housing market slump? Because of one factor. Illegal immigration. Contractors hired cheap immigrants for a fraction of what they paid American tradesmen. That ended up depressing wages elsewhere. When Americans lost their jobs they found the new jobs were paying less than previous jobs or were already filled with “undocumented” workers.
Yes, policies can be a huge influence on the economy. I shudder to think where this country would be without TARP and the Stimulus money that made it into the economy.
#47,
Chris,
Reinstating the Clinton era rates[…]
Will make things worse.
Here is a historical chart showing the Effective Tax Rate vs % of the GDP the Budget consumed from 1993 through 2007. I can’t get effective tax rates after that (tax extensions and things like that prevent a final number from being calculated).
This comes from the government itself so if you want to argue with these numbers, take it up with them.
(I hope my tables work this time)
Year ETR %GDP Def $T Revenue GDP $T
1993 22.0 36.31 3.83 2.42 6.6674
1994 22.3 35.38 2.87 2.51 7.0852
1995 22.6 35.54 2.21 2.64 7.4147
1996 22.7 34.69 1.37 2.72 7.8385
1997 22.9 33.77 0.26 2.81 8.3324
1998 22.6 33.24 -0.79 2.92 8.7935
1999 22.9 32.65 -1.34 3.05 9.3535
2000 23.0 32.56 -2.37 3.24 9.9515
2001 21.4 33.38 -1.24 3.43 10.2862
2002 20.7 34.75 1.48 3.70 10.6423
2003 19.8 35.28 3.39 3.93 11.1421
2004 20.1 34.82 3.48 4.13 11.8678
2005 20.6 34.79 2.52 4.40 12.6384
2006 20.7 35.06 1.86 4.70 13.3989
2007 20.4 34.98 1.14 4.92 14.0776
2008 ukn 36.94 3.19 5.33 14.4414
2009 ukn 41.76 10.01 5.90 14.119
2010 ukn 39.97 8.92 5.80 14.5082
2011 ukn ukn 10.91 ukn ukn
Clinton Bush II
Average %GDP for Budget 34.3 34.5
Total Revenue as %GDP 34.1 34.9
As can be seen, during the Bush years, we were bringing in MORE than we did in the Clinton years as a percentage of GDP.
If we drop back to 1993 levels, we’ll take in less, percentage-wise (inflation affects the value of the dollar), then we are now.
It is hard to admit, I know, but Tax revenues increased under Bush more than they did under Clinton.
What made Clinton look good was he spent way less than Bush.
One thing people don’t realize is that the federal government has historically taken in ~21% of GDP for its operation since the income tax was implemented. It only varies a couple of percent every year or so. Blaming the deficit and the debt on tax cuts is easy. Admitting that we have over-spent on what we do bring in is hard.
#48,
Thomas, look at the numbers above. You’ll see that under Clinton, there was a surplus in 98-01.
Then we had 9/11 and everything went to shit. Bush II was bringing it under control. You can see that his deficit each year was less and less, too. Then the housing market busted.
Once Congress agrees on the $2M Planned Parenthood abortion spending crisis , everything will come together.
#65
A deficit occurs when the government takes in less money than it spends in a given year.
You don’t get it. If we had run a surplus, the debt, by definition must go down. Your total debt cannot go up while running a surplus. That is simply is not possible. It means you are not including something in your calculation. Clinton could not possibly run a surplus because the debt increased every year of his Presidency.
The debt the government owes TO THE PUBLIC decreased for a while under Clinton, but the debt was by no means erased.
He robbed Peter to pay Paul. He simply moved money around. This has nothing to do with whether the debt was erased. It has to do with whether OVERALL revenue was greater than ALL expenses. If in a given year, the government spends less than it makes, the national debt must drop. Using money from Social Security selling its surplus as T-Bills is not revenue.
#65
#61, Bush warned about problems with Fannie Mae and Freddie Mac on multiple occasions and the Democrat controlled Congress did not act.
Bullpoop !!! In 2003 Bush tried to move the GSEs (Fanny and Freddie) from Congressional and OCC oversight to the Dept. of Treasury oversight.
That is specifically because the Congressional oversight committee wasn’t doing anything. Btw, how did that Congressional oversight work out for us? Bush did warn about Fannie Mae and Freddie Mac multiple times.
Paulsen, along with many others, did not see the cascading problem caused by insuring dodgy MBS. That there was a serious issue a Fannie and Freddie was pointed out many times. They are two different issues.
#66
My point is that there was far more growth with the tech bubble but a far bigger drop with the housing bubble.
Clinton = tax hike + booming economy.
Bush II = tax cut + faltering economy.
Grunge music was also popular during that time.
Grunge music = booming economic
Hip hop crap we have now = failing economy.
Correlation != Causation. Again, the tech boom was the primary factor in that economic boom not the tax hike.
Why did the housing market slump? Because of one factor. Illegal immigration.
ROFL. He’s here all week folks. Try the veal. Really? It had nothing to with packaging dodgy mortgages into a security that was insured with a AAA rating? Nah. It had nothing to do with credit default swaps. Nah. It had nothing to do with predatory loan practices that put people in houses they could not afford. Nah. It was the illegals coming across the border.