U.S. Deficit Shrinking At Fastest Pace Since WWII

[BigRedChief]

http://news.investors.com/blogs-capi...rld-war-ii.htm



Believe it or not, the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II.

In fact, outside of that post-WWII era, the only time the deficit has fallen faster was when the economy relapsed in 1937, turning the Great Depression into a decade-long affair.

If U.S. history offers any guide, we are already testing the speed limits of a fiscal consolidation that doesn't risk backfiring. That's why the best way to address the fiscal cliff likely is to postpone it.

While long-term deficit reduction is important and deficits remain very large by historical standards, the reality is that the government already has its foot on the brakes.

In this sense, the "fiscal cliff" metaphor is especially poor. The government doesn't need to apply the brakes with more force to avoid disaster. Rather the "cliff" is an artificial one that has sprung up because the two parties are able to agree on so little.

Hopefully, they will agree, as they did at the end of 2010, to embrace their disagreement for a bit longer. That seems a reasonably likely outcome of negotiations because the most likely alternative to a punt is a compromise (expiration of the Bush tax cuts for the top and the payroll tax cut, along with modest spending cuts) that could still push the economy into recession.

Rather than applying additional fiscal restraint now, the government needs to make sure it sets the course for steady restraint once the economy emerges further from the deep employment hole that remains. In fact, a number of so-called deficit hawks are calling for short-term tax cuts to spur growth, rather than immediate austerity.

From fiscal 2009 to fiscal 2012, the deficit shrank 3.1 percentage points, from 10.1% to 7.0% of GDP.

That's just a bit faster than the 3.0 percentage point deficit improvement from 1995 to '98, but at that point, the economy had everything going for it.

Other occasions when the federal deficit contracted by much more than 1 percentage point a year have coincided with recession. Some examples include 1937, 1960 and 1969.

President Obama hasn't gotten much credit for reining in the deficit, probably because a big part of the deficit progress has come from the unwinding of extraordinary government supports that he helped put in place. Stimulus programs have come and mostly gone; the end of stimulus to states led them to enact Medicaid curbs; jobless benefits in recent months have fallen by 50% since early 2010 (due to both job gains and extended benefits being exhausted).

TARP and the bailouts of Fannie Mae and Freddie Mac also make the deficit improvement look better, boosting the fiscal '09 deficit by about $200 billion more than in fiscal '12 (though the initial cost of TARP was overstated).

Still, military spending is now on the decline due to fewer troops in Iraq and Afghanistan; Medicare costs rose 3% last year vs. the average 7% growth in recent years; and after the last year's Budget Control Act, excluding the automatic cuts set to take effect in January, nondefense discretionary spending is already on a path to shrink to 2.7% of GDP, well below the 3.9% average, notes the Center on Budget and Policy Priorities.

[Direckshun]

IMF, but yeah.

[Brainiac]

I hate it when people absolutely refuse to admit they are ever wrong about anything, no matter how much evidence is placed in front of them.

That's not the kind of person I want to be, so I am going to take my lumps and concede that the deficit inherited by Obama was a lot bigger than I said it was.

I began to doubt my position when Dirk Digler pointed out that the fiscal year runs from October 1st to September 30th. When Direckshun posted 7 different sources supporting his position, I was forced to question it even more.

Don't get me wrong: I still think Obama is doing a horrible job and insists upon focusing on the wrong things, I still believe Romney would have been a much better choice to be President, and I think we're all going to pay the price for Obama's anti-business policies.

But on the specific point regarding the size of the deficit Obama inherited from Bush, it appears that I was wrong mistaken not completely correct.

[Dick Bull]

Originally Posted by Brainiac

I hate it when people absolutely refuse to admit they are ever wrong about anything, no matter how much evidence is placed in front of them.

That's not the kind of person I want to be, so I am going to take my lumps and concede that the deficit inherited by Obama was a lot bigger than I said it was.

I began to doubt my position when Dirk Digler pointed out that the fiscal year runs from October 1st to September 30th. When Direckshun posted 7 different sources supporting his position, I was forced to question it even more.

Don't get me wrong: I still think Obama is doing a horrible job and insists upon focusing on the wrong things, I still believe Romney would have been a much better choice to be President, and I think we're all going to pay the price for Obama's anti-business policies.

But on the specific point regarding the size of the deficit Obama inherited from Bush, it appears that I was wrong mistaken not completely correct.

What criteria would satisfy the conditions for Obama doing a good job in your eyes?

[Brainiac]

Originally Posted by J Diddy

What criteria would satisfy the conditions for Obama doing a good job in your eyes?

I hate the fact that he jammed Obamacare down our throats. I hate the fact that Obamacare contains so many hidden tax increases and fees, and that the only thing it really accomplishes is providing health insurance to a lot of people who other wouldn't have it, yet it completely ignores the things that have been driving up health care costs over the last several decades. I hate the fact that Obamacare is going to cost over a trillion dollars all by itself, and I hate the fact that he decided that delivering Obamacare was much more important than delivering jobs.

I hate the fact that Obama is hell-bent upon implementing Cap & Trade, and has promised to do it by executive order even though it was rejected by Congress. I hate the fact that Obama concedes that his energy policies will cause energy prices to skyrocket (that's a direct quote from him), but he is determined to implement those policies anyway, because he knows what is best.

He strikes me as an autocrat, not a collaborator. I fear that in his second term he will be much more of an autocrat. When he said "Elections have consequences", it struck me that he was saying "**** you, I'm President, and I'm going to do whatever the hell I want".

In order for him to be doing a good job in my eyes, he would have to reverse his positions on the things listed above. He would have to say "Maybe we rushed thing a little with Obamacare. Maybe we should take a look at it and see if we can make it a little less expensive. Maybe we shouldn't rush to implement Cap & Trade, and maybe I should try to reach across the aisle and work with the Republicans instead of vilifying them and blaming them for everything".

[suzzer99]

Every other developed nation on earth has had universal healthcare since the early 90s - most of them since long before that. Many underdeveloped nations are starting to get it. How much longer is the US supposed to wait? 20 more years?

The republican plan on healthcare is to do nothing for as long as possible. Well to be fair they had a plan (mandates) that they were promoting right up until the moment Obama adopted it because he couldn't get the Blue Dog dems to go for single-payer or a public option. Republicans got everything they supposedly wanted, and have never stopped whining about it.

Maybe if Republicans had actually worked with Obama on UHC, instead of sitting in the corner throwing a temper tantrum, we could have that much better bill that you want. Tort reform was on the table if the republicans would have ever actually come to the table.

Also do you have a cite for Obama threatening to implement cap and trade by executive order? I could be wrong, but I put the odds of any kind of significant economy-damaging cap & trade policy being implemented at roughly 0%. It's just a political non-starter.

[Ace Gunner]

this thread was lacking the one pic until now

[Dick Bull]

Originally Posted by Brainiac

I hate the fact that he jammed Obamacare down our throats. I hate the fact that Obamacare contains so many hidden tax increases and fees, and that the only thing it really accomplishes is providing health insurance to a lot of people who other wouldn't have it, yet it completely ignores the things that have been driving up health care costs over the last several decades. I hate the fact that Obamacare is going to cost over a trillion dollars all by itself, and I hate the fact that he decided that delivering Obamacare was much more important than delivering jobs.

I hate the fact that Obama is hell-bent upon implementing Cap & Trade, and has promised to do it by executive order even though it was rejected by Congress. I hate the fact that Obama concedes that his energy policies will cause energy prices to skyrocket (that's a direct quote from him), but he is determined to implement those policies anyway, because he knows what is best.

He strikes me as an autocrat, not a collaborator. I fear that in his second term he will be much more of an autocrat. When he said "Elections have consequences", it struck me that he was saying "**** you, I'm President, and I'm going to do whatever the hell I want".

In order for him to be doing a good job in my eyes, he would have to reverse his positions on the things listed above. He would have to say "Maybe we rushed thing a little with Obamacare. Maybe we should take a look at it and see if we can make it a little less expensive. Maybe we shouldn't rush to implement Cap & Trade, and maybe I should try to reach across the aisle and work with the Republicans instead of vilifying them and blaming them for everything".

I would disagree that it doesn't lower health care costs, because the nature of it will lower costs by keeping people in better condition. It is a lot less expensive for prevention and maintenance then it is for a hospital stay. However, I would say that I wish that it did more in terms of costs of health care . I also think that it would have been better if both parties could have had some input on the bill, however, like anything it probably would have just been dealt with by party politics and nothing accomplished and used as campaign fodder in the next election. It isn't perfect and I expect to see changes to it after it is implemented, but I think it is necessary to do something and make changes rather than talk about it like we have for the last 20 years.

I, like you, would like to see more collaboration and both parties need to lose the my way or nothing at all approach.

[Xanathol]

Originally Posted by Brainiac

I hate it when people absolutely refuse to admit they are ever wrong about anything, no matter how much evidence is placed in front of them.

That's not the kind of person I want to be, so I am going to take my lumps and concede that the deficit inherited by Obama was a lot bigger than I said it was.

I began to doubt my position when Dirk Digler pointed out that the fiscal year runs from October 1st to September 30th. When Direckshun posted 7 different sources supporting his position, I was forced to question it even more.

Don't get me wrong: I still think Obama is doing a horrible job and insists upon focusing on the wrong things, I still believe Romney would have been a much better choice to be President, and I think we're all going to pay the price for Obama's anti-business policies.

But on the specific point regarding the size of the deficit Obama inherited from Bush, it appears that I was wrong mistaken not completely correct.

Keep in mind that part of 'what Obama inherited' was from the bailout money, which was not part of Bush's budget, though the jackass did sign the first wave that the democratic house & senate had passed - ya know, the money for all the golden parachutes and such... and yet people still think the dems are for regular folk and not the rich...

But back on topic, Obama's budgets have increased our deficit by astronomically more; anyone even trying to to say he's improved it needs serious mental help. He's the worst POTUS in the history of the US, hands down, and its not even a debate. The fact he was re-elected is the most troubling sign of the state of the country as a whole.

[Dick Bull]

Originally Posted by Xanathol

Keep in mind that part of 'what Obama inherited' was from the bailout money, which was not part of Bush's budget, though the jackass did sign the first wave that the democratic house & senate had passed - ya know, the money for all the golden parachutes and such... and yet people still think the dems are for regular folk and not the rich...

But back on topic, Obama's budgets have increased our deficit by astronomically more; anyone even trying to to say he's improved it needs serious mental help. He's the worst POTUS in the history of the US, hands down, and its not even a debate. The fact he was re-elected is the most troubling sign of the state of the country as a whole.

Apparently it is us up for debate as 53% of America just said otherwise.

[patteeu]

Originally Posted by J Diddy

Apparently it is us up for debate as 53% of America just said otherwise.

If you're impressed by that, you should see the winning majorities Saddam Hussein commanded.

[ROYC75]

President Obama hasn't gotten much credit for reining in the deficit, probably because a big part of the deficit progress has come from the unwinding of extraordinary government supports that he helped put in place. Stimulus programs have come and mostly gone; the end of stimulus to states led them to enact Medicaid curbs; jobless benefits in recent months have fallen by 50% since early 2010 (due to both job gains and extended benefits being exhausted).

TARP and the bailouts of Fannie Mae and Freddie Mac also make the deficit improvement look better, boosting the fiscal '09 deficit by about $200 billion more than in fiscal '12 (though the initial cost of TARP was overstated).

Still, military spending is now on the decline due to fewer troops in Iraq and Afghanistan; Medicare costs rose 3% last year vs. the average 7% growth in recent years; and after the last year's Budget Control Act, excluding the automatic cuts set to take effect in January, nondefense discretionary spending is already on a path to shrink to 2.7% of GDP, well below the 3.9% average, notes the Center on Budget and Policy Priorities.

This is the telling part of it.

[RNR]

Originally Posted by suzzer99

Every other developed nation on earth has had universal healthcare since the early 90s - most of them since long before that. Many underdeveloped nations are starting to get it. How much longer is the US supposed to wait? 20 more years?

The republican plan on healthcare is to do nothing for as long as possible. Well to be fair they had a plan (mandates) that they were promoting right up until the moment Obama adopted it because he couldn't get the Blue Dog dems to go for single-payer or a public option. Republicans got everything they supposedly wanted, and have never stopped whining about it.

Maybe if Republicans had actually worked with Obama on UHC, instead of sitting in the corner throwing a temper tantrum, we could have that much better bill that you want. Tort reform was on the table if the republicans would have ever actually come to the table.

Also do you have a cite for Obama threatening to implement cap and trade by executive order? I could be wrong, but I put the odds of any kind of significant economy-damaging cap & trade policy being implemented at roughly 0%. It's just a political non-starter.

Your precious leader doesn't have to be worried about being elected anymore. Cap and trade has been in the conversation of him and his party, so yeah some of us are nervous~

[Direckshun]

Originally Posted by Xanathol

But back on topic, Obama's budgets have increased our deficit by astronomically more.

Link?

That's fundamentally wrong.

Fundamentally wrong.

[mlyonsd]

Originally Posted by Direckshun

Link?

That's fundamentally wrong.

Fundamentally wrong.

lol

[Pawnmower]

Originally Posted by Direckshun

Otter,

From fiscal 2009 to fiscal 2012, the deficit shrank 3.1 percentage points, from 10.1% to 7.0% of GDP.

That's the math.

What "numbers" are you looking at? Because I'm calling bullshit.

He probably doesn't understand the difference between the total deficit, and the deficit as a % of GDP.

It gets pretty hard to wade through the flock of total idiots in this place sometimes.