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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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8629 clicks; posted to Main » on 13 Feb 2013 at 10:09 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-02-13 12:24:45 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.


http://en.wikipedia.org/wiki/2010_United_States_federal_budget Pass ed 7/22/09
http://en.wikipedia.org/wiki/2011_United_States_federal_budget Pass ed 4/15/2011
http://en.wikipedia.org/wiki/2012_United_States_federal_budget Pass ed 12/23/2011
Also, looks like Obama submitted his budget proposals today:http://money.cnn.com/2012/02/13/news/economy/obama_budget/index .htm
 
2013-02-13 12:25:05 PM

theknuckler_33: 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.


I think you can pin some small amount of responsibility on the White House.  They still have failed to get a budget than garners votes in the Senate.  Nor have they shown any desire to press the issue.  But the failure lies primarily on the Senate.
 
2013-02-13 12:25:16 PM
OnlyM3:
Guess how we know you don't understand how economics 101 works?

herpa derper derpa

1/10

/god I must be bored to have responded to this
 
2013-02-13 12:26:08 PM

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


In other news, the population of the United States is increasing too every year. I realize you don't know how that affects the situation, but I'll leave it for you to ponder.
 
2013-02-13 12:26:25 PM
This is pure accounting trickery.
Why are people so stupid?

This doesn't mean that our 16 TRILLION suddenly went away.
 
2013-02-13 12:26:26 PM

Lehk: currency collapse is less harmful to the people than austerity.


Those are generalizations that may or may not be true.  Inflation has much more of an impact on 'being able to dig out of personal debt'.  Do you realize what typical impact inflation has on interest rates?

To the same vein, austerity does not necessarily cause deflation.  There are many more factors that go into this than what your broad brush suggests.
 
2013-02-13 12:29:30 PM

chapman: They still have failed to get a budget than garners votes in the Senate. Nor have they shown any desire to press the issue.


Actually, as its been pointed out there has been a budget every year. Of course, the Federal budget has no legal effect--its a policy document. Its up to Congress to actually appropriate specific funds separately.
 
2013-02-13 12:31:46 PM

chapman: theknuckler_33: 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.

I think you can pin some small amount of responsibility on the White House.  They still have failed to get a budget than garners votes in the Senate.  Nor have they shown any desire to press the issue.  But the failure lies primarily on the Senate.


ORLY?  For not agreeing to pass the derpy budgets passed by the GOP in the House? No, the failure lies with the tea party lunatics in the House.
 
2013-02-13 12:32:41 PM

DamnYankees: 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.


Patrially true.  You point is glossing over the fact that spending has been very high for the last few years and we are now getting over that somewhat due to a wind down in both millitary spending overseas and stimulus spending.

static2.businessinsider.com

While projections have shown this drop in spending for several years, they also expect it to be a fleeting trend.  It will not likely be sustained for very long as these slowdowns in spending are temporary and will soon be offset by the increase in entitlement spending.  Both the CBO Baseine and Alternative Baseline Secanarios show this.
 
2013-02-13 12:34:43 PM

HeadLever: Patrially true.  You point is glossing over the fact that spending has been very high for the last few years and we are now getting over that somewhat due to a wind down in both millitary spending overseas and stimulus spending.


That chart is not the relevant metric. We're talking about spending, not spending relative to GDP. Of course spending spikes relative to GDP when the economy collapse and GDP shrinks. But that's not a spending problem, that's a GDP and tax revenue problem. If spending stays the same as it ever was, but revenues and growth collapse, it's insane to think the problem is the spending,
 
2013-02-13 12:35:25 PM

HeadLever: DamnYankees: 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.

Patrially true.  You point is glossing over the fact that spending has been very high for the last few years and we are now getting over that somewhat due to a wind down in both millitary spending overseas and stimulus spending.

[static2.businessinsider.com image 650x488]

While projections have shown this drop in spending for several years, they also expect it to be a fleeting trend.  It will not likely be sustained for very long as these slowdowns in spending are temporary and will soon be offset by the increase in entitlement spending.  Both the CBO Baseine and Alternative Baseline Secanarios show this.


Your graph is not very helpful when the legend that says what the red and blue lines actually mean is blank/unreadable....
Look at these lines!! Aren't they pretty!
 
2013-02-13 12:42:34 PM

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.


By what criteria do you distinguish between a "good idea" from a "bad idea"?

Or is it arbitrary?
 
2013-02-13 12:43:31 PM
HeadLever:
While projections have shown this drop in spending for several years, they also expect it to be a fleeting trend.  It will not likely be sustained for very long as these slowdowns in spending are temporary and will soon be offset by the increase in entitlement spending.  Both the CBO Baseine and Alternative Baseline Secanarios show this.

If only the President would propose a budget designed to help cut the deficit over the next decade....

/oh wait
 
2013-02-13 12:43:50 PM

DamnYankees: That chart is not the relevant metric.


Sure it is.  It helps to understand both spending and reveues as a percentage of the economy.  The CBO typically shows thier projections in this manner.  Sure you will see some changes as the economy grows and contracts but that change also carries over to the reveune side.  The fact that these diverged so much during the recession is telling on how our trillion dollar deficits came about.

We also have to recognize that the GDP growth is likely going to be slow and stead on into the future as we need to continue to allow households to delverage and also get a handle on our government's fiscal well-being.

/oh and Red = Spending, Blue = Revenue, Elminst
 
2013-02-13 12:44:51 PM

DamnYankees: 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 image 800x492]


Just ignore that negative line that's 50% longer than any other line on the graph. And the one right next to it that is the 2nd-longest on the graph. After we added those huge deficits to the baseline, we were able to modestly outperform in the realm of spending cuts! That's fiscal responsibility, baby!
 
2013-02-13 12:49:31 PM

Voiceofreason01: If only the President would propose a budget designed to help cut the deficit over the next decade....


The proposal here is a good start and that is about it. Overall, much of it was going to happen anyway as evident by the CBO Alterative Baseline back in 2009 (See where revenues and total spending converge on one another?)

theeconomiccollapseblog.com


Overall I am not terribly upset on how things have gone so far.  We have reduced the deficit by a pretty good chunk.  However, I am warning all not to think that the job is finished.  It is a long way from finished and ultimatly, we have only scatched the easy part of the problems we currently face.
 
2013-02-13 12:52:30 PM
HeadLever:
Overall I am not terribly upset on how things have gone so far.  We have reduced the deficit by a pretty good chunk.  However, I am warning all not to think that the job is finished.  It is a long way from finished and ultimatly, we have only scatched the easy part of the problems we currently face.

yeah, I can agree with that. Ultimately managing the deficit will have to be a serious consideration when setting the budget for at least the next couple decades.
 
2013-02-13 12:52:54 PM

Somacandra: In other news, the population of the United States is increasing too every year. I realize you don't know how that affects the situation, but I'll leave it for you to ponder.


I realize that only has meaning relative to future spending, not net reductions from an absolute point. And that future cuts agreed on now don't mean shiat since any future Congress can alter them.
 
2013-02-13 12:59:27 PM

Phinn: 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.

By what criteria do you distinguish between a "good idea" from a "bad idea"?

Or is it arbitrary?


Would human happiness and utility be net improved or decreased by enacting the policy. Yes, its a broad standard, but it's really the only one you can apply across a broad spectrum of human activity, IMO.
 
2013-02-13 12:59:45 PM

DamnYankees: Fool_Marquis: Yankee, your chart shows that, since WWII, we have never reduced government spending.  Period.

Until Obama. Do you not see the drop at the end?


Sorry, let me amend my statement:

Previous to the collapse of the housing market, and subsequent it's-not-a-depression-if-we-don't-call-it-one, when tax revenue fell precipitously due to high unemployment, our government had never reduced spending.

Now, the not-depression?  Not a fault of our president.  More a fault of a combination of policies stretching back to Clinton (at the earliest, but it was actually given a buff during the subsequent Bush administration) combining with a terrible mass of greed and foolhardy spending combined with market manipulation.
 
2013-02-13 01:00:48 PM

Voiceofreason01: yeah, I can agree with that. Ultimately managing the deficit will have to be a serious consideration when setting the budget for at least the next couple decades.


We don't have decades to contiue to rack up trillion dollar deficits.  We need to get this under control much sooner than that or you will start to see the debt spiral that is embodied in that exponentially growing interest obligation in that above graph.

As you can see, the revenues under this scanario were anticipated to become high enough to cover all non-interest spending by about 2015.  We are going to likley miss that by quite a long ways.
 
2013-02-13 01:03:41 PM

HeadLever: We don't have decades to contiue to rack up trillion dollar deficits.


Sure we do. Where's the evidence we don't? Obviously we should work to make the deficits smaller if possible, but I don't see any reason to make it an incredibly high priority.
 
2013-02-13 01:10:40 PM

DamnYankees: HeadLever: Patrially true.  You point is glossing over the fact that spending has been very high for the last few years and we are now getting over that somewhat due to a wind down in both millitary spending overseas and stimulus spending.

That chart is not the relevant metric. We're talking about spending, not spending relative to GDP. Of course spending spikes relative to GDP when the economy collapse and GDP shrinks. But that's not a spending problem, that's a GDP and tax revenue problem. If spending stays the same as it ever was, but revenues and growth collapse, it's insane to think the problem is the spending,


Look at your chart from earlier. Spending has about doubled since 2000 per that chart, of I'm reading it right. Has GDP doubled since then? Has population doubled? Not even close.
 
2013-02-13 01:12:18 PM
Somacandra:
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.


i.imgur.com
 
2013-02-13 01:12:57 PM
on a semi related note, I was wondering why there isn;t a SOTU thread last evening... either I'm blind or this is first time in the last 10 years where there isn;t one on Fark's main page.
 
2013-02-13 01:13:02 PM

Debeo Summa Credo: Look at your chart from earlier. Spending has about doubled since 2000 per that chart, of I'm reading it right. Has GDP doubled since then? Has population doubled? Not even close.


I didn't say the spending hasn't grown. I've said its grown in what's pretty close to a straight line. It's more obvious if you use a log scale:

www.slate.com
 
2013-02-13 01:17:34 PM

SuperNinjaToad


on a semi related note, I was wondering why there isn;t a SOTU thread last evening... either I'm blind or this is first time in the last 10 years where there isn;t one on Fark's main page.


*goes to main page*

*ctrl-f union*

Here ya go:

Linky.
 
2013-02-13 01:32:56 PM

Big Man On Campus: his 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.


So the Republican strategy of obstruction is working, you say.
 
2013-02-13 01:35:15 PM

DamnYankees: HeadLever: We don't have decades to contiue to rack up greenhouse gases in the atmosphere.

Sure we do. Where's the evidence we don't? Obviously we should work to make the greenhouse effect smaller if possible, but I don't see any reason to make it an incredibly high priority.


We've secretly replaced the regular topic with Folger's Global Warming. Let's see if anybody notices.
 
2013-02-13 01:37:05 PM

DamnYankees: Debeo Summa Credo: Look at your chart from earlier. Spending has about doubled since 2000 per that chart, of I'm reading it right. Has GDP doubled since then? Has population doubled? Not even close.

I didn't say the spending hasn't grown. I've said its grown in what's pretty close to a straight line. It's more obvious if you use a log scale:


You specifically mentioned population. I'll agree that federal spending has been increasing very quickly since the 1960s. In fact, it's grown much faster than the population has.
 
2013-02-13 01:38:22 PM

royone: We've secretly replaced the regular topic with Folger's Global Warming. Let's see if anybody notices.


That analogy doesn't work - oddly enough, this exact issue was discussed on Morning Joe with Paul Krugman. Basically, the difference is that every day we don't do anything about climate change, we do actual damage to the planet which is either impossible or much, much more more difficult to undo down the line. The same is in no way true about the debt.
 
2013-02-13 01:39:05 PM

Debeo Summa Credo: You specifically mentioned population. I'll agree that federal spending has been increasing very quickly since the 1960s. In fact, it's grown much faster than the population has.


I said that it has grown in roughly a straight line when you account for population. I didn't say it *didn't* grow if you account for population. Read what I wrote.
 
2013-02-13 01:40:27 PM

master_dman: This is pure accounting trickery.
Why are people so stupid?

This doesn't mean that our 16 TRILLION suddenly went away.


I don't think anyone actually made this claim...where did you find it?

/don't answer that, it was rhetorical. I already know where you found it.
 
2013-02-13 01:43:22 PM
No Such Agency:

If a business was run the way the government is run - constantly failing to generate a profit, acquiring operating funds by continually borrowing money from its competitors - its shareholders would be able to sue the directorship into the ground for incompetence.  Unfortunately the US government can simply force its "shareholders" to buy more "shares" at gunpoint, with their taxes, and can declare itself immune from legal action by fiat.   This is what happens when the lowest 46% of this country decide to elect lawyers to be President, instead of successful businessmen.  We get "lawyer-style" government where cleverly worded legislation trumps the bottom line.

Free schools?  Free highways? Food stamps for the hungry?

That's no way to run a business!

You know what, if a fire department were run like a softball league, it would be completely different, too.

Amazing there are people that still push this derp.
 
2013-02-13 01:44:35 PM

HeadLever: Voiceofreason01: yeah, I can agree with that. Ultimately managing the deficit will have to be a serious consideration when setting the budget for at least the next couple decades.

We don't have decades to contiue to rack up trillion dollar deficits.  We need to get this under control much sooner than that or you will start to see the debt spiral that is embodied in that exponentially growing interest obligation in that above graph.


The US can still do a lot of borrowing before we're really in trouble. But if you cut government spending too much or too fast or raise taxes too much you end up slowing economic growth and end up worse than if you did nothing.
 
2013-02-13 01:47:01 PM

DamnYankees: royone: We've secretly replaced the regular topic with Folger's Global Warming. Let's see if anybody notices.

That analogy doesn't work - oddly enough, this exact issue was discussed on Morning Joe with Paul Krugman. Basically, the difference is that every day we don't do anything about climate change, we do actual damage to the planet which is either impossible or much, much more more difficult to undo down the line. The same is in no way true about the debt.


Ah. So we're not closer to insolvency when we continue to rack up trillion dollar deficits? Good to know.
 
2013-02-13 01:48:57 PM

royone: Ah. So we're not closer to insolvency when we continue to rack up trillion dollar deficits? Good to know.


The United States can never go insolvent unless it does so voluntarily. So no, racking up more deficits gets us exactly no closer to insolvency.
 
2013-02-13 01:49:33 PM

Voiceofreason01: But if you cut government spending too much [...] you end up slowing economic growth and end up worse than if you did nothing.


That implies that all government spending contributes similarly to economic growth.
 
2013-02-13 01:51:50 PM
Big Man On Campus:

And Obama had how big of a majority in congress during his first term when he could have taken care of this problem? He's weak and his priorities are screwed up.

If only Obama had insisted on deep spending cuts when the economy was shrinking and losing jobs, imagine what the economy and federal revenue would look like today.

If only my doctor hadn't gone in to debt to pay for medical school, he could be debt free and working as a clerk at the local S-Mart.

Weak, I tell you, weak!
 
2013-02-13 01:52:41 PM

DamnYankees: royone: Ah. So we're not closer to insolvency when we continue to rack up trillion dollar deficits? Good to know.

The United States can never go insolvent unless it does so voluntarily. So no, racking up more deficits gets us exactly no closer to insolvency.


True, we can choose to be Zimbabwe. And that's in no way catastrophic.
 
2013-02-13 01:54:01 PM

royone: True, we can choose to be Zimbabwe. And that's in no way catastrophic.


Where is your evidence that rising debt issued in a country's own currency leads to hyperinflation?
 
2013-02-13 01:55:34 PM

X-boxershorts: master_dman: This is pure accounting trickery.
Why are people so stupid?

This doesn't mean that our 16 TRILLION suddenly went away.

I don't think anyone actually made this claim...where did you find it?

/don't answer that, it was rhetorical. I already know where you found it.


The idiots that think Obama is god will certainly think this story means we are free and clear as a nation.
 
2013-02-13 01:59:09 PM

master_dman: The idiots that think Obama is god will certainly think this story means we are free and clear as a nation.


Republicans? I mean, jeebus, just look at all the crap they're blaming him for, They MUST think he's some kind of God...
 
2013-02-13 01:59:33 PM

DamnYankees: Sure we do. Where's the evidence we don't?


The evidence that we don't comes from the debt spiral that you see as a part of this scenario.  When our debt obligation eats up an ever-increasing portion of our tax reveneue to the point where we can no longer fund our manditory spending, let alone the discretionary spending, you are going to see this country start to slide even further from the World's economic forefront.

I'll agree that it is not THE #1 priority, but it should be top 3 as or future really depends upon us not screwing this up.
 
2013-02-13 02:00:44 PM

DamnYankees: 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.


Something of a separate issue, I'll admit.  While they're letting us borrow money for less than inflation, at the same time I consider borrowing riskier than paying up front.  As such I'm not sure that the percentage difference is big enough to justify borrowing.

Still, they should at least have a plan to pay back the money.  Even if said plan is 'borrow a shiatload today; use it to fund programs ABCD to fix problems XYZ and set up our country for even greater tax revenues in the future due to increased earnings/lower expenses'.  The plan should be realistic, of course.
 
2013-02-13 02:01:23 PM

HeadLever: The evidence that we don't comes from the debt spiral that you see as a part of this scenario.  When our debt obligation eats up an ever-increasing portion of our tax reveneue to the point where we can no longer fund our manditory spending, let alone the discretionary spending, you are going to see this country start to slide even further from the World's economic forefront.


But there's no evidence this is happening. Deficits are falling, and would fall a lot more if we got to full employment. There's no reason we can't, for example, add another 3-5% to our debt (as a percentage of GDP) for the foreseeable future.
 
2013-02-13 02:02:03 PM

Firethorn: Still, they should at least have a plan to pay back the money.  Even if said plan is 'borrow a shiatload today; use it to fund programs ABCD to fix problems XYZ and set up our country for even greater tax revenues in the future due to increased earnings/lower expenses'.  The plan should be realistic, of course.


That would work.
 
2013-02-13 02:04:54 PM

DamnYankees: royone: True, we can choose to be Zimbabwe. And that's in no way catastrophic.

Where is your evidence that rising debt issued in a country's own currency leads to hyperinflation?


People buy US debt because they expect it to be paid off. If the only means we have for paying one debt is to issue even more debt, eventually, we run out of funding. It's the Ponzi Principle. At that point, we can either declare bankruptcy, or we can substantially devalue our currency.

What is the foundation for your suggestion that debt can grow without bounds without serious ramifications? Why don't credit card companies understand it?
 
2013-02-13 02:05:24 PM

master_dman: This is pure accounting trickery.
Why are people so stupid?

This doesn't mean that our 16 TRILLION suddenly went away.


Whatever.  I prefer the math where I can pretend my car loan and mortgage don't exist and I get to go by new toys this payday with the surplus in my checking account. lalalalalalala, I can't hear you....going to Gander Mountain on Friday....
 
2013-02-13 02:06:29 PM

Big_Fat_Liar: master_dman: This is pure accounting trickery.
Why are people so stupid?

This doesn't mean that our 16 TRILLION suddenly went away.

Whatever.  I prefer the math where I can pretend my car loan and mortgage don't exist and I get to go by new toys this payday with the surplus in my checking account. lalalalalalala, I can't hear you....going to Gander Mountain on Friday....


WTF - I cna't write for shiat lately.  I am not going by new toys, I am going to buy new toys....
 
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