T Nation

What to Do with the Deficit?

WASHINGTON ? President Barack Obama’s budget would generate unsustainably large deficits averaging almost $1 trillion a year over the next decade, according to new estimates released Friday.

The new Congressional Budget Office figures predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the administration predicted in its budget just last month.

http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget

I would say we are looking at MAJOR tax hikes. We are talking about a 30% growth in tax revenue. Considering that revenues will not increase incrementally with rate hikes, we will be looking at some of the highest rates ever.

All that money out of the economy and double digit inflation should be good for growth. I guess Obama can just leave it for the next guy to figure out.

Cut spending that’s what you do. Tax hikes don’t increase government revenue, they just suffocate the economy, which will in turn reduce government revenue. He needs to get his head out of his ass quickly. He’s a deluxe idiot.

[quote]pat wrote:
Cut spending that’s what you do. Tax hikes don’t increase government revenue, they just suffocate the economy, which will in turn reduce government revenue. He needs to get his head out of his ass quickly. He’s a deluxe idiot.[/quote]

We know that’s not going to happen for the next 4 years. Not by 30% anyway.

Those rosy economic predictions not panning out for him?

Who cares, though. By the time the shoe drops and the debt collectors come a knockin, most of us will be dead, surely. The suckers afterwards will have to pay it off! We got us something good going here folks.

[quote]dhickey wrote:
WASHINGTON ? President Barack Obama’s budget would generate unsustainably large deficits averaging almost $1 trillion a year over the next decade, according to new estimates released Friday.

The new Congressional Budget Office figures predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the administration predicted in its budget just last month.

http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget

I would say we are looking at MAJOR tax hikes. We are talking about a 30% growth in tax revenue. Considering that revenues will not increase incrementally with rate hikes, we will be looking at some of the highest rates ever.

All that money out of the economy and double digit inflation should be good for growth. I guess Obama can just leave it for the next guy to figure out.[/quote]

Since this president and congress show no reluctance to trample on the Constitution, they will simply declare draconian price controls and hire a lot of people to check/enforce those prices. They can then print any amount they need.

Nixon tried this in his first term, so there is a precedent.

[quote]Headhunter wrote:
dhickey wrote:
WASHINGTON ? President Barack Obama’s budget would generate unsustainably large deficits averaging almost $1 trillion a year over the next decade, according to new estimates released Friday.

The new Congressional Budget Office figures predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the administration predicted in its budget just last month.

http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget

I would say we are looking at MAJOR tax hikes. We are talking about a 30% growth in tax revenue. Considering that revenues will not increase incrementally with rate hikes, we will be looking at some of the highest rates ever.

All that money out of the economy and double digit inflation should be good for growth. I guess Obama can just leave it for the next guy to figure out.

Since this president and congress show no reluctance to trample on the Constitution, they will simply declare draconian price controls and hire a lot of people to check/enforce those prices. They can then print any amount they need.

Nixon tried this in his first term, so there is a precedent.

[/quote]

I can’t recall anything at quite this scale. We are in uncharted water here. The great depression could have been undone at pretty much anypoint with a short recovery following. This will not easily be undone.

Massive debt, inflation, or recession can be corrected with slight discomfort with the right policy. Two of these together can be quite painful. All three at a relitively massive level is bad news.

We are looking at a significant change in quality of life in this country. People are not going to be happy.

[quote]dhickey wrote:
Headhunter wrote:
dhickey wrote:
People are not going to be happy.[/quote]

A saddened population makes Washington anxious. That’s an old jungle-proverb.

[quote]archiewhittaker wrote:
dhickey wrote:
Headhunter wrote:
dhickey wrote:
People are not going to be happy.

A saddened population makes Washington anxious. That’s an old jungle-proverb.

[/quote]

It’s pretty obvious they are already getting anxious. I think they know what they are in for. We’ve seem how ugly people got towards GWB. He left people’s lives relatively untouched. Most could lead normal lives and hate Bush on the weekends or at cocktail parties.

Imagine Bush derangement syndrom x100. Most of America is going to be dealing with Obama’s policies on daily basis. With no job to occupy your time and no money for leisure, we are going to have some pretty pissed off folks that will nothing to do other than wallow in their own misery and figure out who did this to them. At least the ones that don’t want to be on welfare.

Hand it over to the next generation and the next and so on. By then the country will be the 4th world power with the chinese eating our lunch and the Saudis so far up our ass they’ll be using us as hats. 5 or less and I’m out.

It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

[quote]facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?[/quote]

Because people will cling to the belief that they can have something for nothing no matter what?

[quote]orion wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Because people will cling to the belief that they can have something for nothing no matter what?[/quote]

In a sense yes…considering that is exactly what fractional reserve banking is. Making something out of nothing.

[quote]facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?[/quote]

Please enlighten all of us economic idiots.

[quote]dhickey wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Please enlighten all of us economic idiots.[/quote]

I’m sure there is no other way to take my original post as anything but degrading or down talk. However, I didn’t mean it in that sense. I actually am interested in your reasoning as well as the others on this board, in terms of the current state of our economic troubles, the ultimate reason or reasonS, and when they started.

For the amount of complaining on the proposed solutions to the economic crisis, I’d like to read what you feel the absolute problem is.

[quote]facko wrote:
dhickey wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Please enlighten all of us economic idiots.

I’m sure there is no other way to take my original post as anything but degrading or down talk. However, I didn’t mean it in that sense. I actually am interested in your reasoning as well as the others on this board, in terms of the current state of our economic troubles, the ultimate reason or reasonS, and when they started.

For the amount of complaining on the proposed solutions to the economic crisis, I’d like to read what you feel the absolute problem is. [/quote]

If you truly are interested there are several threads on this board that go into great detail on particular problems.

As for the “absolute” problem, don’t you think this is a bit simplistic? I could say gov’t intervension. What does that really tell us? You have to disect particular problems and identify specific policies that led to the particular problem. There are plenty of thread that do just that.

[quote]dhickey wrote:
facko wrote:
dhickey wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Please enlighten all of us economic idiots.

I’m sure there is no other way to take my original post as anything but degrading or down talk. However, I didn’t mean it in that sense. I actually am interested in your reasoning as well as the others on this board, in terms of the current state of our economic troubles, the ultimate reason or reasonS, and when they started.

For the amount of complaining on the proposed solutions to the economic crisis, I’d like to read what you feel the absolute problem is.

If you truly are interested there are several threads on this board that go into great detail on particular problems.

As for the “absolute” problem, don’t you think this is a bit simplistic? I could say gov’t intervension. What does that really tell us? You have to disect particular problems and identify specific policies that led to the particular problem. There are plenty of thread that do just that.
[/quote]

So you feel government intervention is the problem? Yet the Federal Reserve is not even part of the government.

Fractional Reserve banking, which has become so ridiculous due to the fact that government has NOT stepped in and said “Hey…don’t you think there should be a reasonable limit as to how much you can loan out based on how much you actually have?”, surely cannot be misconstrued with government intervention.

[quote]facko wrote:
dhickey wrote:
facko wrote:
dhickey wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Please enlighten all of us economic idiots.

I’m sure there is no other way to take my original post as anything but degrading or down talk. However, I didn’t mean it in that sense. I actually am interested in your reasoning as well as the others on this board, in terms of the current state of our economic troubles, the ultimate reason or reasonS, and when they started.

For the amount of complaining on the proposed solutions to the economic crisis, I’d like to read what you feel the absolute problem is.

If you truly are interested there are several threads on this board that go into great detail on particular problems.

As for the “absolute” problem, don’t you think this is a bit simplistic? I could say gov’t intervension. What does that really tell us? You have to disect particular problems and identify specific policies that led to the particular problem. There are plenty of thread that do just that.

So you feel government intervention is the problem? Yet the Federal Reserve is not even part of the government.

Fractional Reserve banking, which has become so ridiculous due to the fact that government has NOT stepped in and said “Hey…don’t you think there should be a reasonable limit as to how much you can loan out based on how much you actually have?”, surely cannot be misconstrued with government intervention. [/quote]

That’s a pretty shallow arguement. Fractional reserve banking is one of many issues and not nearly the most important.

First off gov’t intervention in the economy is the only reason the fed exists. The fed is powerless without the federal gov’t protecting it.

You think the gold standard would solve all of our economic whoes? If so, you are severly out classed on this board economically speaking, making your original post laughable.

No federal gov’t involvement in the economy, no federal reserve. Not in any harmful capacity anyway. Again, this is overly simplistic and doesn’t attempt to disect individual issues, but this seems to the conversation you are looking for.

[quote]dhickey wrote:
facko wrote:
dhickey wrote:
facko wrote:
dhickey wrote:
facko wrote:
It’s alarming how many of you post on here in terms of economic issues, yet have little understanding of economics. And don’t misconstrue that statement as me saying Barrack Obama does. In fact…do any of you really understand why our economy is collapsing? I mean REALLY?

Please enlighten all of us economic idiots.

I’m sure there is no other way to take my original post as anything but degrading or down talk. However, I didn’t mean it in that sense. I actually am interested in your reasoning as well as the others on this board, in terms of the current state of our economic troubles, the ultimate reason or reasonS, and when they started.

For the amount of complaining on the proposed solutions to the economic crisis, I’d like to read what you feel the absolute problem is.

If you truly are interested there are several threads on this board that go into great detail on particular problems.

As for the “absolute” problem, don’t you think this is a bit simplistic? I could say gov’t intervension. What does that really tell us? You have to disect particular problems and identify specific policies that led to the particular problem. There are plenty of thread that do just that.

So you feel government intervention is the problem? Yet the Federal Reserve is not even part of the government.

Fractional Reserve banking, which has become so ridiculous due to the fact that government has NOT stepped in and said “Hey…don’t you think there should be a reasonable limit as to how much you can loan out based on how much you actually have?”, surely cannot be misconstrued with government intervention.

That’s a pretty shallow arguement. Fractional reserve banking is one of many issues and not nearly the most important.

First off gov’t intervention in the economy is the only reason the fed exists. The fed is powerless without the federal gov’t protecting it.

You think the gold standard would solve all of our economic whoes? If so, you are severly out classed on this board economically speaking, making your original post laughable.

No federal gov’t involvement in the economy, no federal reserve. Not in any harmful capacity anyway. Again, this is overly simplistic and doesn’t attempt to disect individual issues, but this seems to the conversation you are looking for.[/quote]

I’m sorry, but you happen to misunderstand the role of the federal reserve. The government does not protect the federal reserve…the federal reserve protects the government. Fractional reserve banking is the MAIN issue…this is a crisis of credit. This whole situation is a crisis of inflation due to ridiculous amounts of created money being poured into the economy. I don’t understand how you can’t see that?

[quote]facko wrote:

I’m sorry, but you happen to misunderstand the role of the federal reserve. The government does not protect the federal reserve…the federal reserve protects the government. Fractional reserve banking is the MAIN issue…this is a crisis of credit. This whole situation is a crisis of inflation due to ridiculous amounts of created money being poured into the economy. I don’t understand how you can’t see that?
[/quote]

I don’t misunderstand the role of the fed. Fractional reserve banking and other inflationary policy are a fraction of issues that impact the overall health of our economy. The Fed is only allowed to do this by the actions of the federal gov’t.

What would happen if the federal gov’t allowed competing currencies?

You do realize we had recessions and depressions before fiat currency, don’t you?

Well it sounds like you just read some great article on fractional reserve banking and inflationary policy. You are now are quite convinced that these two things alone are the root of all that ails us.

I would encourage you to keep reading. What you’ll find is that there are many other issues hampering economic growth in this country. You will also find that fractional reserve banking and especially other inflationary policy are symtoms, not root causes.

You sounded like a real jackass in your first post on this thread. There are very sharp people on this board. You should make sure you really know what you are talking about before calling others out in the way you did.