The only question is: who’s gonna get crushed when this engine runs out of gas? You can be sure Obama’s betting it won’t be him, since he’s timed the cost of the health reform to hit in seven years – just as he’s hoping to be stepping out into a second career on the speaking circuit.
The ugly truth is that we can wind this down over time with spending discipline, or wind it down all at once with bankruptcy. We all know which is the better course, so why are we on the wrong one? Is this a mass hallucination, like the dot.com and real estate bubbles?
Stein’s Law.
There’s no political will to reign in spending without a massive financial collapse, therefore there will be a massive financial collapse.
Cheers!
The statement that “most of it is spending” makes no more sense than saying that the value of A – B is “mostly A”.
The CBO report that serves as de Rugy’s source offers facts that undercut her argument. De Rugy writes that $347 billion are mainly stimulus spending, but what the report actually says is:
CBO estimates that spending increases and revenue reductions stemming from the American Recovery and Reinvestment Act of 2009 (ARRA) totaled almost $200 billion this year
Emphasis mine. In fact, according to the CBO, there was only $120 billion in ARRA spending in fiscal 2009. That is less than half of the $347 billion that de Rugy is calling “mainly stimulus spending”, and less than 10% of the 2009 deficit.
Our budget problems are caused by the recession, not by our efforts to recover from that recession. Remember that in February the deficit was projected to exceed $1.5 trillion — and that was before ARRA was passed. Despite ARRA’s fiscal impact, Obama has brought the deficit in well under projections (which later rose to $1.8T).
No idea what such big sustained deficits will do to the economy?
You just need to look at what happened to Argentina, Brazil and Venezuela to get an idea.
The amount spent on interest on existing debt was $383,363,826,680.60 for 2009 and $451,154,049,950.63 for 2008. The reason for the reduced amount is that the interest rates are down.
The debt at the end of 2008 was $10,024,724,896,912.40 and at the end of 2007 was $9,007,653,372,262.48. With increases in the debt surpassing $1 trillion per year the amount of interest we pay on the debt will surely be climbing since rates are not going to reach zero.
Brock,
Our budget problems are caused by spending more than we are taking in. This has been true every year since 1957.
Despite ARRA’s fiscal impact, Obama has brought the deficit in well under projections (which later rose to $1.8T).
The projection was $1.2 trillion in January, 2009. Below that number would be “under projections”. Maybe it’d be difficult, but Obama could have halted spending of residual TARP funds, for example, and let GM and Chrysler drop into bankruptcy court where they belonged.
Therefore it won’t.
The only question is: who’s gonna get crushed when this engine runs out of gas? You can be sure Obama’s betting it won’t be him, since he’s timed the cost of the health reform to hit in seven years – just as he’s hoping to be stepping out into a second career on the speaking circuit.
The ugly truth is that we can wind this down over time with spending discipline, or wind it down all at once with bankruptcy. We all know which is the better course, so why are we on the wrong one? Is this a mass hallucination, like the dot.com and real estate bubbles?
Stein’s Law.
There’s no political will to reign in spending without a massive financial collapse, therefore there will be a massive financial collapse.
Cheers!
The statement that “most of it is spending” makes no more sense than saying that the value of A – B is “mostly A”.
The CBO report that serves as de Rugy’s source offers facts that undercut her argument. De Rugy writes that $347 billion are mainly stimulus spending, but what the report actually says is:
Emphasis mine. In fact, according to the CBO, there was only $120 billion in ARRA spending in fiscal 2009. That is less than half of the $347 billion that de Rugy is calling “mainly stimulus spending”, and less than 10% of the 2009 deficit.
Our budget problems are caused by the recession, not by our efforts to recover from that recession. Remember that in February the deficit was projected to exceed $1.5 trillion — and that was before ARRA was passed. Despite ARRA’s fiscal impact, Obama has brought the deficit in well under projections (which later rose to $1.8T).
No idea what such big sustained deficits will do to the economy?
You just need to look at what happened to Argentina, Brazil and Venezuela to get an idea.
The amount spent on interest on existing debt was $383,363,826,680.60 for 2009 and $451,154,049,950.63 for 2008. The reason for the reduced amount is that the interest rates are down.
The debt at the end of 2008 was $10,024,724,896,912.40 and at the end of 2007 was $9,007,653,372,262.48. With increases in the debt surpassing $1 trillion per year the amount of interest we pay on the debt will surely be climbing since rates are not going to reach zero.
Brock,
Our budget problems are caused by spending more than we are taking in. This has been true every year since 1957.
Despite ARRA’s fiscal impact, Obama has brought the deficit in well under projections (which later rose to $1.8T).
The projection was $1.2 trillion in January, 2009. Below that number would be “under projections”. Maybe it’d be difficult, but Obama could have halted spending of residual TARP funds, for example, and let GM and Chrysler drop into bankruptcy court where they belonged.