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(Huffington Post)   Amidst all the doom and gloom over "out-of-control" government spending, the Treasury Department notes that in January, the U.S. had a $3 billion surplus. No, that is not a typo   (huffingtonpost.com) divider line 326
    More: Spiffy, Treasury Department, Uncle Sam, government spending, Dean Baker, federal government, Inside the Beltway  
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8643 clicks; posted to Main » on 13 Feb 2013 at 10:09 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-02-13 11:35:02 AM  

DamnYankees: ManRay: I heard a lot about claims of lowering rates of spending increases in the future, but not a whole bunch about the government actually spending less money now

I don't know what you're arguing about. Actual spending fell. In reality. For the first time in 50 years. This isn't really something to debate.


He's bummed that Obummer wants to fix the roof, seal the leaky basement and do some landscaping....
 
2013-02-13 11:36:01 AM  

ManFromNowhere: Mr. Eugenides: Big Man On Campus: This is because every federal agency with a budget had no idea how much they could spend in the first quarter, so they cut back on overhead spending like it was going out of style.

Obama =/= Clinton

Clinton knew what to do when congress shirked its responsibility to pass a budget, he shut down the federal government. Obama is an idealistic weakling.

Actually no.  It's because farm income has to be reported and taxes paid by Jan 15th much like regular income has to be reported and taxes paid by April 15th.  What you are seeing is witheld income/taxes that are being sent in causing a bump in the revenue numbers just like every year.

The structural deficit is still there.

Thread over.


No it's not
 
2013-02-13 11:38:26 AM  

DamnYankees: I don't know what you're arguing about. Actual spending fell. In reality. For the first time in 50 years. This isn't really something to debate.


I'm not arguing. I am just wondering what actual things Obama was pushing for that caused less money to be spent. If outlays are down, they need to go down much more.
 
2013-02-13 11:39:36 AM  

ChuDogg: By 2020 the US government will have just enough revenue for 3 current programs: Social Security, Defense, and interest payments on the national debt.


And considering that SS isn't paid for out of general revenue, that leaves only defense and interest.

The solution is obvious. We need to cut Sesame Street.
 
2013-02-13 11:41:06 AM  
All my friends who are not self employed yet still working poor say they were seeing about $60.00 more in taxes taken out of their paycheck each time. Could this be why?
 
2013-02-13 11:41:54 AM  

Wendy's Chili: The solution is obvious. We need to cut Sesame Street.


So THAT'S what SS stands for....whocouldaknown
 
2013-02-13 11:44:38 AM  

DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.


Dude, seriously? Spending farking exploded between 1999 and 2010 and you're not concerned about it because there has been a little blip down since then? Even though the CBO is predicting that even with economic growth we'll return to trillion dollar deficits in ten years?

Are you that obtuse? We don't need to balance the budget right now, far from it. But how about we start reducing spending to long term averages as a percentage of GDP, and face the fact that entitlements are going to need reform, instead of sticking out heads in the sand and waiting for bad things to happen before we act?
 
2013-02-13 11:46:02 AM  

DamnYankees: I also don't put an arbitrary cap on spending. You go policy by policy - if its a good idea, fund it. If not, don't. Pretty simple.


More importantly, every time you decide something is worth it - you put in a tax to fund it.  Sure, condense the taxes, but each program approved increases the levy(and therefore the tax rate by a smidge).

ringersol: Wait wait wait... so you're saying that we can bring the deficit down just by *paying* for the shiat our legislators voted to create and sustain?
Who knew it could be so simple!


I'm nominally a libertarian, and even I think we need to increase taxes in order to pay for the stuff we do.  One of the things I've become more aware of as I grow older is 'false economies'.  IE a dollar paid into a school program NOW may prevent $2 from being spent on the police/court/prison systems within the next decade.  A dollar paid to run the poison control centers can save $10 in emergency room visits.  Remember, health care is tax deductible, so that $10 in extra health care can directly cost the government $2-3 in lost tax revenue.  Heck, running a prison properly so it actually reforms prisoners rather than just warehousing them can cost 50% more per prisoner year - but when you need to incarcerate them for less than half the time and have half the odds that they'll show back up, suddenly it saves money.

I'm a 'practical minarchist'  If you gotta spend the money to save money, I'll dig out my wallet.  I'm fully aware that there needs to be MORE spending as we fix many of our problems before we can drop into a steady state of lower spending.
 
2013-02-13 11:46:41 AM  

X-boxershorts: Big Man On Campus: This is because every federal agency with a budget had no idea how much they could spend in the first quarter, so they cut back on overhead spending like it was going out of style.

Obama =/= Clinton

Clinton knew what to do when congress shirked its responsibility to pass a budget, he shut down the federal government. Obama is an idealistic weakling.

Actually, that was Gingrich....


...and it didn't have anything to do with whether or not a budget was passed...
 
2013-02-13 11:48:13 AM  

untaken_name: Arkanaut: untaken_name: Oh, good. I thought we had a 16 TRILLION dollar national debt. Good to know we paid that off.

Yeah, Obama is so irresponsible! I can't believe he would spend so much without paying off the debt, like all the presidents before him like... um... Andrew Jackson?

Feel free to bold the part of my post which, in your twisted imagination, blamed Obama.


Done.
 
2013-02-13 11:48:41 AM  

Firethorn: More importantly, every time you decide something is worth it - you put in a tax to fund it.


That's a bad idea. At the moment, borrowing makes a lot more sense than taxing.
 
2013-02-13 11:49:22 AM  

untaken_name: Englebert Slaptyback: DamnYankees

untaken_name: Oh, good. I thought we had a 16 TRILLION dollar national debt. Good to know we paid that off.

Is there a reason you put trillion in capital letters?


He wanted to be ABSOLUTELY sure everyone saw that he doesn't know the difference between DEBT and DEFICIT.

Right, because clearly I said deficit above. Oh wait, no I did not. I understand the difference. Do you understand that when you are so far in debt that the interest payments will shortly be the largest budget item, a short-term windfall of 3 BILLION dollars over the current quarter is functionally nothing? I could have mentioned the 290 BILLION dollars we are in deficit for 2013 alone, but the impact of the debt is larger than the impact of the deficit, and although they are not the same thing, it will be extremely difficult to pay off the insurmountable debt we owe when we continue to run a large deficit year after year. Every time we complete a year with a deficit, we increase the debt by not just the amount of that deficit, but the amount of interest on the loans required to run that deficit in the first place. You can't just forget about the previous year when the new year begins. Or are you trying to claim that there is no relationship at all between the constant deficits and the debt? HUH? MR SMARTY PANTS? HUH?
[blog.heritage.org image 600x528]


Your chart is already out of date.  Out of curiosity, I looked up the CBO report that it comes from; the chart shows the impact of "current policy" -- current as of June 2012.  Since then we've had the  American Taxpayer Relief Act of 2012, which:

-raised marginal rates on income above $400k
-raised long-term capital gains and dividend taxes
-ended the payroll tax break

All of which will affect future revenue and close the budget gap.

Furthermore, their interest rate assumption is based on historical averages, which leads them to a 3.0% rate past 2022; however, that is a full percentage point above the current market rate for 10-year Treasuries*, which as of 2/12/2012 was 2.02%.  (In fact, the market expectation for treasuries does not exceed 3% until sometime after 2033.)  And also, the 3.0% assumption is for the "real" interest rate, which adjusts for inflation; this is very likely much higher than even the implied 30-year rate -- if we base it on the current 2.5% Fed target, we're talking about 5.5%, or if we base it on a running 40-year average, it would be about 7.3%.

I think the CBO is doing its job in presenting as realistically bad of a situation as possible, but the bond market is usually pretty good at this sort of thing too.  A lot has to change in our economy (or our government, for that matter) for the gap between the market-based implied rate to close with historical averages that the CBO uses.

In any case the best way of closing the budget gap is to get the slack resources in our economy (for the most part, our unemployed workers and returning veterans) back to work, ideally in the short run.  We should be focusing on that first -- either through education, training, or direct hiring -- that will make future cuts much more practical and realistic.

*This implies the rate at which the market anticipates that the US government can borrow in 10 years, i.e. February 2023.
 
2013-02-13 11:49:45 AM  

No Such Agency: successful businessmen


When did we have one run for president?   I don't ever remember having one ever run since Forbes.   I am not sure that would have been good for the country.   We still have a ways to go in cutting.   Having a military base in every country still doesn't sound like a good idea to me.   I would start there.
 
2013-02-13 11:50:33 AM  

Voiceofreason01: Mr. Eugenides: It's because farm income has to be reported and taxes paid by Jan 15th much like regular income has to be reported and taxes paid by April 15th.  What you are seeing is witheld income/taxes that are being sent in causing a bump in the revenue numbers just like every year.

Bam. Happens every year, followed shortly by a clone of the linked article.


Really?  Can you find said clones of the linked article that says January revenues posted a surplus?

/Difficulty: Don't just limit yourself to the Obama administration...
 
2013-02-13 11:50:33 AM  

Debeo Summa Credo: Dude, seriously? Spending farking exploded between 1999 and 2010 and you're not concerned about it because there has been a little blip down since then? Even though the CBO is predicting that even with economic growth we'll return to trillion dollar deficits in ten years?

Are you that obtuse? We don't need to balance the budget right now, far from it. But how about we start reducing spending to long term averages as a percentage of GDP, and face the fact that entitlements are going to need reform, instead of sticking out heads in the sand and waiting for bad things to happen before we act?


This is all fine. Perhaps I should have not says "concerned", but "terrified". Worried about long term deficits is a good thing to be concerned with. Being panicked about our fiscal future is not.

What I was getting that is that anyone who claims that Obama is somehow responsible for, or even exacerbating, our fiscal scenario like never before seen in American history is simply not someone who deserves to be listened to. And there are a lot of people who espouse that view.
 
2013-02-13 11:53:40 AM  

Debeo Summa Credo: DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.

Dude, seriously? Spending farking exploded between 1999 and 2010 and you're not concerned about it because there has been a little blip down since then? Even though the CBO is predicting that even with economic growth we'll return to trillion dollar deficits in ten years?

Are you that obtuse? We don't need to balance the budget right now, far from it. But how about we start reducing spending to long term averages as a percentage of GDP, and face the fact that entitlements are going to need reform, instead of sticking out heads in the sand and waiting for bad things to happen before we act?


You are so right....but Congress has done all it could to prevent the disastrous policies of the Bush administration from being rescinded, corrected or adjusted. yet, somehow, it's all the blah guy's fault...and soushullizm
 
2013-02-13 11:56:59 AM  

untaken_name: DamnYankees: untaken_name: Because of joint and several liability. Why are you not?

In what way are you jointly and severally liable for the debt. Are you under the impression that if the US government goes bankrupt, China can take you to court for $4 trillion?

http://definitions.uslegal.com/j/joint-and-several-liability/

http://legal-dictionary.thefreedictionary.com/public

Either you don't know what "Public" means, or you don't know what "joint and several liability" means. Here you go.

/note: regarding the definition of "public": you want to pay attention to the legal definition. That's the one they use in court.


Great, so now we understand that if something were legally a public debt that the public would have joint and several liability for it.

What is missing from that is anything showing that the US National Debt is legally a public debt.

Also, you never answered his question. Who could get that money from you and how?
 
2013-02-13 11:58:37 AM  

miss diminutive: So, that's enough to by a single B-2 stealth bomber?

/or 429 million slinkies


I think I love you. If I were capable of the emotion.

/really though, a bulk slinky reference gives me a warm fuzzy nerd feeling
 
2013-02-13 11:59:19 AM  
We only need 5,500 more months like this to pay off the principle of the national debt.
 
2013-02-13 12:01:42 PM  
Notice how a surplus happens mostly between mid-January to mid-April every year, almost as if it is related to taxes in some way.

//Hint,hint.
 
2013-02-13 12:01:53 PM  
What the hell is a slurpus?
 
2013-02-13 12:02:42 PM  
3.bp.blogspot.com

Gives address to congress about being responsible. Proves it.
 
2013-02-13 12:04:15 PM  

DamnYankees: Debeo Summa Credo: Dude, seriously? Spending farking exploded between 1999 and 2010 and you're not concerned about it because there has been a little blip down since then? Even though the CBO is predicting that even with economic growth we'll return to trillion dollar deficits in ten years?

Are you that obtuse? We don't need to balance the budget right now, far from it. But how about we start reducing spending to long term averages as a percentage of GDP, and face the fact that entitlements are going to need reform, instead of sticking out heads in the sand and waiting for bad things to happen before we act?

This is all fine. Perhaps I should have not says "concerned", but "terrified". Worried about long term deficits is a good thing to be concerned with. Being panicked about our fiscal future is not.

What I was getting that is that anyone who claims that Obama is somehow responsible for, or even exacerbating, our fiscal scenario like never before seen in American history is simply not someone who deserves to be listened to. And there are a lot of people who espouse that view.


Well, I'll admit that I have been extremely disappointed with Obama re the deficit in recent months. When I voted for him (1st time enthusiastically, 2nd time grudgingly), I'd hoped he would be the one to be responsible enough to make the tough decisions to fix the budget so that I and my children wouldnt be as adversely affected when the reckoning comes. But his recent inaction on spending and entitlements, and his permanently extending 85-90 percent of the bush tax cuts have made it clear he's not that guy. He's just another pandering clown pushing an ideological agenda with no regard for the long term fiscal health of the country. He had a golden opportunity with the expiration of the tax cuts to force through spending cuts and higher taxes, even on a phased in approach, and he let it go.

I'll agree that Bush and the GOP were just as egregious in their fiscal decisions, if not worse, with irresponsible tax cuts, wars funded by debt, Medicare part D and other spending increases. In fact, Obama is lucky that Bush set the bar so low. He'd have to really stink up the place for the next several years to be worse than his predecessor.
 
2013-02-13 12:06:40 PM  

Debeo Summa Credo: He's just another pandering clown pushing an ideological agenda with no regard for the long term fiscal health of the country. He had a golden opportunity with the expiration of the tax cuts to force through spending cuts and higher taxes, even on a phased in approach, and he let it go.


Why is he a 'pandering clown'? He's keeping promises to his base about not cutting entitlements he promised not to cut. Is it a pander when he does something someone else likes, but a laudable choice when he does something you like?
 
2013-02-13 12:07:03 PM  
IlGreven:
Really?  Can you find said clones of the linked article that says January revenues posted a surplus?

/Difficulty: Don't just limit yourself to the Obama administration...


This is not about Obama and I'm not trying to make some grand political point or bash on any political party. Farmers have taxes due in January, this often means that there's a decrease in the budget deficit or even a surplus around the same time. This is an anomaly created by the US tax structure. It is not a good indicator of the health of the economy but pretty much every January we hear about it anyway. Article is a non-story.
 
2013-02-13 12:11:00 PM  
OBAMA!

gifs.gifbin.com
 
2013-02-13 12:12:48 PM  
3 billion? Not even a piss hole in the snow when we are talking about trillions in debit.
 
2013-02-13 12:13:00 PM  
Wow, with that kind of surplus every month we could pay off the national debt in only 458 years!
 
2013-02-13 12:13:00 PM  

X-boxershorts: Debeo Summa Credo: DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.

Dude, seriously? Spending farking exploded between 1999 and 2010 and you're not concerned about it because there has been a little blip down since then? Even though the CBO is predicting that even with economic growth we'll return to trillion dollar deficits in ten years?

Are you that obtuse? We don't need to balance the budget right now, far from it. But how about we start reducing spending to long term averages as a percentage of GDP, and face the fact that entitlements are going to need reform, instead of sticking out heads in the sand and waiting for bad things to happen before we act?

You are so right....but Congress has done all it could to prevent the disastrous policies of the Bush administration from being rescinded, corrected or adjusted. yet, somehow, it's all the blah guy's fault...and soushullizm


For me, it would be nice for someone to put forth a damn budget.  The fact that they cannot even bring themselves to issue one for the fear of them (righfully) being held to account is very telling.
 
2013-02-13 12:13:28 PM  

untaken_name: Englebert Slaptyback: DamnYankees

untaken_name: Oh, good. I thought we had a 16 TRILLION dollar national debt. Good to know we paid that off.

Is there a reason you put trillion in capital letters?


He wanted to be ABSOLUTELY sure everyone saw that he doesn't know the difference between DEBT and DEFICIT.

Right, because clearly I said deficit above. Oh wait, no I did not. I understand the difference. Do you understand that when you are so far in debt that the interest payments will shortly be the largest budget item, a short-term windfall of 3 BILLION dollars over the current quarter is functionally nothing? I could have mentioned the 290 BILLION dollars we are in deficit for 2013 alone, but the impact of the debt is larger than the impact of the deficit, and although they are not the same thing, it will be extremely difficult to pay off the insurmountable debt we owe when we continue to run a large deficit year after year. Every time we complete a year with a deficit, we increase the debt by not just the amount of that deficit, but the amount of interest on the loans required to run that deficit in the first place. You can't just forget about the previous year when the new year begins. Or are you trying to claim that there is no relationship at all between the constant deficits and the debt? HUH? MR SMARTY PANTS? HUH?
[blog.heritage.org image 600x528]


Any chart created by hertiage foundation is pants on head retarded.  At least you recognized pants were involved here, so you aren't a complete moron.
 
2013-02-13 12:14:06 PM  

Debeo Summa Credo: I'll agree that Bush and the GOP were just as egregious in their fiscal decisions


Yes, we're pretty much in the fourth term of George W. Bush.
 
2013-02-13 12:14:09 PM  

HeadLever: The fact that they cannot even bring themselves to issue one for the fear of them (righfully) being held to account is very telling.


What is it telling of? What's the point of writing a budget which you know will never pass when you can just pass CR's and the government keeps running?
 
2013-02-13 12:15:06 PM  

Voiceofreason01: This is an anomaly created by the US tax structure. It is not a good indicator of the health of the economy but pretty much every January we hear about it anyway. Article is a non-story.


This and the  projectedCalifornia  surplus are such insignificant data points, it demonstrates how desperate some people are in looking for good economic news.
 
2013-02-13 12:15:51 PM  

HeadLever: For me, it would be nice for someone to put forth a damn budget.  The fact that they cannot even bring themselves to issue one for the fear of them (righfully) being held to account is very telling.


My understanding is that right now, the White House is waiting for Congress to decide what to do about the sequestration, because once they vote on that it pretty much changes the playing field.
 
2013-02-13 12:16:02 PM  

DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.

[www.slate.com image 568x346]



Point of diminishing returns has been reached. Time to milk somewhere else.
 
2013-02-13 12:17:27 PM  

Arkanaut: All of which will affect future revenue and close the budget gap.


Not really.  It is part of getting revenues back to that 18.5% of GDP.  Right now it is about 15.9% of GDP.  And don't forget that these spending projections (outside interest) are pretty much independent of the buget gap.
 
2013-02-13 12:17:35 PM  

Arkanaut: My understanding is that right now, the White House is waiting for Congress to decide what to do about the sequestration, because once they vote on that it pretty much changes the playing field.


Waiting for 4 years?  The failure to pass a budget has nothing to do with sequestration.
 
2013-02-13 12:20:02 PM  

ChuDogg: There will be austerity. The only question and opinion a person may have is when. You can be in favor of it now, or you can be in favor of it a little later after spending some more money. The other alternative is currency collapse.


currency collapse is less harmful to the people than austerity.

currency collapse = inflation = personal debts much easier to dig out of

austerity = deflation = more of the country ends up in the hands of the 1%
 
2013-02-13 12:20:03 PM  
Has anyone made a joke about how long it would take to pay off the national debt if we had 3 billion dollar surpluses every month?  Because that would be hilarious.
 
2013-02-13 12:21:17 PM  
"WASHINGTON - The federal government reported a rare surplus for January and is on track to run the lowest annual deficit since President Barack Obama took office. "

Wow, the lowest deficit of his presidency.  That's a feather in his cap.
 
2013-02-13 12:21:18 PM  

DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.

[www.slate.com image 568x346]


Why are they basically an idiot? Spending has been out of control for decades, so why worry now?  Is that your logic?
 
2013-02-13 12:21:30 PM  

chapman: Arkanaut: My understanding is that right now, the White House is waiting for Congress to decide what to do about the sequestration, because once they vote on that it pretty much changes the playing field.

Waiting for 4 years?   The failure to pass a budget has nothing to do with sequestration.


Or the White House, for that matter.
 
2013-02-13 12:21:50 PM  

MadHatter500: Any chart created by hertiage foundation is pants on head retarded


Sadly, far too few people in the world realize this. Heritage economics is all about ending the American Social Safety net....meager as it is.

royone: Debeo Summa Credo: I'll agree that Bush and the GOP were just as egregious in their fiscal decisions

Yes, we're pretty much in the fourth term of George W. Bush.


Mid term elections of 2010 pretty much guaranteed that....
 
2013-02-13 12:21:53 PM  

No Such Agency: If a business was run the way the government is run


And if The Legend of Zelda was played the way Scrabtble is played it would be a very different game. Thankfully, Zelda is not like Scrabble and businesses are not like governments. There is no reason why a (presumably for-profit) "business" should be the standard model for some sort of collective unit of human action.
 
2013-02-13 12:21:56 PM  
It's always amusing to watch obamopologists stumble around trying to excuse their hero's failings.

Guess how we know you don't understand how economics 101 works?
 
2013-02-13 12:22:11 PM  

immrlizard: No Such Agency: successful businessmen

When did we have one run for president?   I don't ever remember having one ever run since Forbes.
   I am not sure that would have been good for the country.   We still have a ways to go in cutting.   Having a military base in every country still doesn't sound like a good idea to me.   I would start there.


Remember Ross Perot? He may have been a nut-job but he was a successful business man. Once upon a time ago.
 
2013-02-13 12:22:24 PM  

DamnYankees: What is it telling of?


That they are so beholden to the various special interest that they cannot put together a budget that signifiantly helps our fiscal situation.  They are stuck between pissing off special interest and driving this country further into the ground.  You may see some tolken items here an there, but nothing significant from the CBO baseline.
 
2013-02-13 12:23:55 PM  

jjwars1: Why are they basically an idiot? Spending has been out of control for decades, so why worry now?  Is that your logic?


Spending has not been out of control. It's been basically a straight line for the last 50 years when you take into account population, progressing in a very predictable manner, until Obama took office and for the first time in forever it started dropping.

www.washingtonpost.com
 
2013-02-13 12:24:18 PM  

jjwars1: DamnYankees: Anybody concerned with out of control spending is basically an idiot. Since WII we have literally never reduced government spending as much as we have in the last couple years.

[www.slate.com image 568x346]

Why are they basically an idiot? Spending has been out of control for decades, so why worry now?  Is that your logic?


Because the economy crashed towards the end of 2007 and has not yet recovered?

Fix it when the economy is healthy, not when we have 8% "official" unemployment THAT's the logic.....
 
2013-02-13 12:24:33 PM  

HeadLever: That they are so beholden to the various special interest that they cannot put together a budget that signifiantly helps our fiscal situation.


The budget won't pass. Why would they put it together if its nothing more than a exercise in PR?
 
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