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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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8620 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 02:08:04 PM
Quick, find a Job Creator to give it to!
 
2013-02-13 02:10:12 PM

Voiceofreason01: 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.


Hmm, depends.  How much of our total tax revenue do you want to go toward Interest Expense instead of SS, Medicare, Social Programs, the Environment, R&D, PBS, Infrastrucutre, etc.?  Right now that number is about 450 billion.  The anticipated interest cost in 2021 is atcually projected to surpass Millitary Spending.

I do agree that we don't want any drastic cuts or tax increases as this can damage the economic footing we currently have.  However, I will disagree with you and suggest that a slow (but steady) economic growth is probably a good thing at this point as it will keep interest rates low and allow more households to deleverage.
 
2013-02-13 02:10:18 PM

royone: If the only means we have for paying one debt is to issue even more debt, eventually, we run out of funding.


How do we 'run out of funding' when our debt is denominated in US dollars, and we can print US dollars? Are you predicting the printing machines will break and not be replace-able?

royone: At that point, we can either declare bankruptcy, or we can substantially devalue our currency.


What amount of devaluation would be necessary for us to make our debt sustainable?

royone: What is the foundation for your suggestion that debt can grow without bounds without serious ramifications?


The empirical evidence shows that there's basically no circumstance where a large, industrialized country issuing debt in their own currency has ever had a problem with inflation or rising interest rates as a result of their debt load. That's my foundation.
 
2013-02-13 02:11:55 PM

Firethorn: 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.


They did that. 1999 I think. But congress threw some wrenches into that, sorta like legislative time bombs that blew up in 2007.
Of course, this only blew up after Clinton's successor kinda undid all that fiscal responsibility we had in 2000
 
2013-02-13 02:17:47 PM

DamnYankees: But there's no evidence this is happening.


You are correct for right now as interest rates are at rock bottom.  This really does help our current situation.  The issue becomes evident when interest rates normalize and you start to see this interest obligation increase.  As I mentioned above, the CBO (which projects a steady climb of interest rates) belives that interest costs will actually be higher than Millitary Spending in about 8 years.  Will it happen?  Who knows.  With a debt load that we are looking at now, just a minor uptick in interest rates will have huge consequences.

And while deficits are falling, they are still about 6.5% of GDP and are still unsustinable in the long term.  Like you mention, if we could get that down to about 3%, we could likely live with that.  IMO, 5% would still be pushing it.
 
2013-02-13 02:19:57 PM

HeadLever: The issue becomes evident when interest rates normalize and you start to see this interest obligation increase.


This is where you lose me. What the story where this happens? Interest rates won't go up until we choose to raise them. And we won't do that until the economy is improving (i.e. the deficit would be smaller). That's a good thing. I'm missing the story of how its possible for us to still be mired in a terrible economic situation, running massive deficits, and interest rates rise.
 
2013-02-13 02:23:35 PM

DamnYankees: Interest rates won't go up until we choose to raise them.


You act like you have complete control over these rates.  Newsflahst - you don't.

There are many more variables that set interest rates than us simply 'choosing'
 
2013-02-13 02:25:09 PM

DamnYankees: And we won't do that until the economy is improving (i.e. the deficit would be smaller).


The interest obligation is not based upon the defict, but the total debt principal.  You could have a surplus and still have a huge interest obligations if interest rates spiked.
 
2013-02-13 02:25:16 PM

DamnYankees: 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.


I'm not opposed to that as long as the spending is actually geared towards moving us to full(er) employment.

Once principle that I'd use is that you can figure on getting about 15-20% of a person's wage back each year as income taxes.  If it costs $100k to generate a $20k/year job, that's a 25 year payoff.  Might be worth it as long as the 'job' that $100k generates lasts 40 years on average.

If spending $10k gets you another young adult with a degree earning an extra $20k/year, that's a very easy 'worth it'.

Of course - I'm a very weird libertarian.  I support replacing 'welfare' with a 'workfare' program I tend to call 'the fedjobs program'.  Basically, universal voluntary employment.  They're required to hire you.  The minimum standard is 40 hours a week and worse paid than a military E-1*.  Still, it provides healthcare, food(in a dining facility), and I waver between provided housing and simply providing a housing allowance**.  The work would preferably be on 'non-commercial infrastructure', which I vaguely describe as  'anything expected to last more than 20 years that will help the productivity or standard of living of the US population'.  Oddly enough - education fits that standard. ;)  Other projects include fixing/building new roads, schools, government buildings(make them more energy efficient while you're at it), installing/building equipment for cooperative/public utilities(not for-profit private!), etc...  That would include fiber to the home for a cooperative phone/internet service, for example.

*Because an E-1 is a premium worker at this point.  HS diploma, negligible criminal background, negligible drug use, no disqualifying health conditions, in decent shape, etc...
**I'd go with the overseas version where they pay only your rent/utilities cost, vs the stateside of just giving you a set allowance for your area.  If your house payment is equal to or less than the average rental cost for your family size; they'll cover that.  Otherwise you'll have to move to cheaper housing or subsidize from your (low) pay.
 
2013-02-13 02:28:08 PM
Accurate headline:

Obama middle class tax increase causes over $9B drop in take home pay for January.
 
2013-02-13 02:28:09 PM

Agent Smiths Laugh: 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


Life just gets a little bit sweeter if you convert everything into slinky currency.
 
2013-02-13 02:29:27 PM

HeadLever: DamnYankees: Interest rates won't go up until we choose to raise them.

You act like you have complete control over these rates.  Newsflahst - you don't.

There are many more variables that set interest rates than us simply 'choosing'


The only variable is whether there's demand for the rate we've chosen. And given the conditions of the world today I just don't see any reason to think there won't be. Not to mention we can just buy the debt ourselves by printing new money if we really needed to.

HeadLever: The interest obligation is not based upon the defict, but the total debt principal.  You could have a surplus and still have a huge interest obligations if interest rates spiked.


No you can't. Interest rates are not variable. If we've locked in low rates, those rates don't go up if we raise rates in the future. The new rates only apply to new debt which would be a small amount (since the deficit would be a lot smaller).
 
2013-02-13 02:29:55 PM

Arkanaut: 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


It's really a question of wording.  Just because Wikipedia calls them budgets doesn't make it true according to normal Federal definition of budget (which is a plan) and appropriations (which is basically a 'here is some money for this' resolution). The "budgets" for the last few years have really been continuing appropriations, similar but according to the process not technically budgets in that there is no policy plan.

http://www.politifact.com/tennessee/statements/2012/sep/28/bob-corke r/ bob-corker-says-senate-has-not-passed-budget-more-/

Both lead to the same end (the government keeps operating) though, which is why it isn't a bigger deal. It's happened in the past as well.  It just leads to some agencies having less flexibility from what they planned, and what the CA says.

/Technically correct - the best kind of correct!
 
2013-02-13 02:31:25 PM
i.imgur.com
 
2013-02-13 02:36:01 PM

DamnYankees: royone: If the only means we have for paying one debt is to issue even more debt, eventually, we run out of funding.

How do we 'run out of funding' when our debt is denominated in US dollars, and we can print US dollars? Are you predicting the printing machines will break and not be replace-able?


We run out of funding for debt when there's no one who wants to buy it. That's what funds debt.

royone: At that point, we can either declare bankruptcy, or we can substantially devalue our currency.

What amount of devaluation would be necessary for us to make our debt sustainable?


Our debt would be "sustainable" automatically: when you can't issue new debt, you don't have to "sustain" it. We'd actually pay it off. It's just the spending, then, that you have to sustain. And the devaluation, like the spending, grows without bound. But somehow not like Zimbabwe.

royone: What is the foundation for your suggestion that debt can grow without bounds without serious ramifications?

The empirical evidence shows that there's basically no circumstance where a large, industrialized country issuing debt in their own currency has ever had a problem with inflation or rising interest rates as a result of their debt load. That's my foundation.


It will never happen until it does. So you have no actual principles, no notion of how things would work, just the observation that it hasn't happened before. Things that haven't happened before happen all the time. Particularly when they're inevitable.

The inflation rate in Greece is quite low. Does that mean they don't have a debt crisis? Oh, wait, they're insolvent. That's the other choice I gave, isn't it? But you insist there's a third way. What's the third way?  Are they just not large enough? Not industrialized enough? In what way does being large and industrialize exempt a nation from the rules of math and markets?
 
2013-02-13 02:37:55 PM

DamnYankees: And given the conditions of the world today I just don't see any reason to think there won't be.


I easily could - the dumbasses in government not being able to get our fiscal house in order and us becoming a country where our debt becomes a fiscal drain on the economy.   Remember, or credit rating has already been downgraded by several entitites.  I seee no reason for this trend to continue as we refuse to change our path.

No you can't. Interest rates are not variable. If we've locked in low rates, those rates don't go up if we raise rates in the future. The new rates only apply to new debt which would be a small amount (since the deficit would be a lot smaller).

While you are right on the fact that interest rates for a certain bond is not varriable you are wrong that only new debt from the current year defict is applied to current interest rates.  It is also applied to any existing debt that matures and is rolled over.  Remember, we almost never pay the debt off when it matures.  We simply roll it over which resets the interest rate to the current value.
 
2013-02-13 02:38:36 PM

royone: We run out of funding for debt when there's no one who wants to buy it. That's what funds debt.


1) No one has ever refused to buy our debt.
2) The Fed can always buy more debt if we need to. It's the functional way we print money.

You're just wrong.

royone: It will never happen until it does.


Ok, well, I predict you'll get anal warts because your user name has 6 lower case letters. I mean, there's no reason to think it'll happen, and my logic has never shown to be accurate before, but it won't ever happen until it does, right? I'd see a doctor.
 
2013-02-13 02:39:50 PM

HeadLever: Remember, or credit rating has already been downgraded by several entitites.


Yes, and it had zero impact on the demand for our debt. This is one of the reasons why I tend to ignore people who scream about deficits and debts and sustainability - they have been consistently, completely wrong.
 
2013-02-13 02:40:39 PM

DamnYankees: 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.


You are relying on us getting to "full employment" that corresponds to previous definitions of full employment. The last two instances of full employment were based solely on bubbles (tech and housing). Assuming we don't want another transitory bust/boom cycle, we're going to have to come to terms with the fact that we aren't as rich as we thought we were, and therefore cannot afford as much as we thought we c
 
2013-02-13 02:42:03 PM

Debeo Summa Credo: You are relying on us getting to "full employment" that corresponds to previous definitions of full employment. The last two instances of full employment were based solely on bubbles (tech and housing). Assuming we don't want another transitory bust/boom cycle, we're going to have to come to terms with the fact that we aren't as rich as we thought we were, and therefore cannot afford as much as we thought we c


I don't really have any response to this other than to reject it as lacking evidence. The immiseration of people is not something we should be accepting without exceptionally great reason.
 
2013-02-13 02:43:55 PM

royone: DamnYankees: royone: If the only means we have for paying one debt is to issue even more debt, eventually, we run out of funding.

How do we 'run out of funding' when our debt is denominated in US dollars, and we can print US dollars? Are you predicting the printing machines will break and not be replace-able?

We run out of funding for debt when there's no one who wants to buy it. That's what funds debt.

royone: At that point, we can either declare bankruptcy, or we can substantially devalue our currency.

What amount of devaluation would be necessary for us to make our debt sustainable?

Our debt would be "sustainable" automatically: when you can't issue new debt, you don't have to "sustain" it. We'd actually pay it off. It's just the spending, then, that you have to sustain. And the devaluation, like the spending, grows without bound. But somehow not like Zimbabwe.

royone: What is the foundation for your suggestion that debt can grow without bounds without serious ramifications?

The empirical evidence shows that there's basically no circumstance where a large, industrialized country issuing debt in their own currency has ever had a problem with inflation or rising interest rates as a result of their debt load. That's my foundation.

It will never happen until it does. So you have no actual principles, no notion of how things would work, just the observation that it hasn't happened before. Things that haven't happened before happen all the time. Particularly when they're inevitable.

The inflation rate in Greece is quite low. Does that mean they don't have a debt crisis? Oh, wait, they're insolvent. That's the other choice I gave, isn't it? But you insist there's a third way. What's the third way?  Are they just not large enough? Not industrialized enough? In what way does being large and industrialize exempt a nation from the rules of math and markets?


It helps that the entire world buys our currency for purposes of international trade.
Also, too...Greece has an even worse corruption problem than we do....A greater % of Greek high rollers pay no taxes and hide money off shore.
And don't forget, by joining the EU, Greece chose to not be able to mint their own currency.

Reserve Currency...look it up.

Also, any one who compares America's economic situation to that of Greece in order to promote austerity is only demonstrating how ignorant they are in regards to economics.
 
2013-02-13 02:46:53 PM

royone: The inflation rate in Greece is quite low. Does that mean they don't have a debt crisis? Oh, wait, they're insolvent. That's the other choice I gave, isn't it? But you insist there's a third way. What's the third way?  Are they just not large enough? Not industrialized enough? In what way does being large and industrialize exempt a nation from the rules of math and markets?


Greece doesn't control its own currency. Did you not notice that?
 
2013-02-13 02:49:21 PM
That's a drop in the ocean.
 
2013-02-13 02:50:08 PM

DamnYankees: 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.


You are relying on us getting to "full employment" that corresponds to previous definitions of full employment. The last two instances of full employment were based solely on bubbles (tech and housing). Assuming we don't want another transitory bust/boom cycle, we're going to have to come to terms with the fact that we aren't as rich as we thought we were, and therefore cannot afford as much as we thought we could.

Also, rates will not stay this low forever, particularly if the economy starts growing and the fed stops buying half the debt issued by the treasury. Even at an additional 2.5%, not unreasonable from historical perspective (10-year never dipped below 5% from late '60s to late '90s), in interest rates, it will cost an additional $500b more per year to finance a $20b debt, which we'll have by the close of the decade.

That's bad enough by itself, but If we get meaningful inflation, which we easily could, it would be much worse.
 
2013-02-13 02:54:56 PM

DamnYankees: royone: We run out of funding for debt when there's no one who wants to buy it. That's what funds debt.

1) No one has ever refused to buy our debt.
2) The Fed can always buy more debt if we need to. It's the functional way we print money.

You're just wrong.


Great, you've rehashed what we already covered, slapped a "You're just wrong" on it, and called it a post. Troll much?
 
2013-02-13 02:57:44 PM

royone: Great, you've rehashed what we already covered, slapped a "You're just wrong" on it, and called it a post. Troll much?


True or false - the United States government has the ability to print U.S. dollars?

If you admit that's true, you are already admitting you are wrong that we can run out of funding for debt. It's literally impossible. That's why they coined the word "wrong".
 
2013-02-13 02:59:46 PM

Lehk: 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%


I'm actually thinking along the lines of a total US currency collapse and a transition to an international currency.

But yeah, the people who have no personal wealth have nothing to lose.
 
2013-02-13 03:00:41 PM

X-boxershorts: It helps that the entire world buys our currency for purposes of international trade.


Yes that does help. And it could change.

X-boxershorts: Also, too...Greece has an even worse corruption problem than we do....A greater % of Greek high rollers pay no taxes and hide money off shore.


I wasn't saying that we're Greece. We don't have to be Greece to have a debt crisis. Corruption is not a necessary ingredient in a debt crisis. A debt crisis is about math.

X-boxershorts: And don't forget, by joining the EU, Greece chose to not be able to mint their own currency.


I love the notion that handling a debt crisis by printing money means there's no debt crisis.

X-boxershorts: Reserve Currency...look it up.


How about you make a cogent point about it?

X-boxershorts: Also, any one who compares America's economic situation to that of Greece in order to promote austerity


At what point did I do any of that? Please do not conflate me with others you may be sparring with.
 
2013-02-13 03:00:43 PM

DamnYankees: Yes, and it had zero impact on the demand for our debt.


Mostly because the majority of out current deficits are currently being purchased by the Federal Reserve which is bypassing the standard route of selling it on the marketplace.  This is another practice that is likely going to hit a limit sometime in the not-so-far future.  There is a limit as to how much you can monetize the debt.  This is the main reason why I am supportive of slow and steady growth.  With these artificial manipulations being currently utilized by our government, a large upswing could bring about some very nasy repercussions.

- they have been consistently, completely wrong.

I have had to set you right on a few points today.  While I'll agree that some of the arguments employed by the deficit hawks do miss the mark, having you generalize that a certain position is wrong because someone employs a bad argument is not exactly going to be taken to the bank.
 
2013-02-13 03:00:53 PM

ChuDogg: I'm actually thinking along the lines of a total US currency collapse and a transition to an international currency.


:quizzicaldog:
 
2013-02-13 03:01:12 PM
Sweet, $3B should purchase about 200 new votes, I mean Government jobs.  Finally some good news out of DC...
 
2013-02-13 03:01:46 PM

HeadLever: This is another practice that is likely going to hit a limit sometime in the not-so-far future.  There is a limit as to how much you can monetize the debt.


What's the limit? People keep saying this but they don't ever explain what they mean.
 
2013-02-13 03:03:17 PM

DamnYankees: royone: Great, you've rehashed what we already covered, slapped a "You're just wrong" on it, and called it a post. Troll much?

True or false - the United States government has the ability to print U.S. dollars?

If you admit that's true, you are already admitting you are wrong that we can run out of funding for debt. It's literally impossible. That's why they coined the word "wrong".


Yes, we can Zimbabwe ourselves. That doesn't make me wrong. I actually said we can do that.
 
2013-02-13 03:05:05 PM

Wendy's Chili: 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.


This is part of the problem is how government hides revenue sources and it's own debt obligations. Social Security is dependent on it's holdings in US treasury bonds/bills/notes. Right now it is paying out more than it receives in FICA taxes, but it held on to the interest they accrued from government bonds. When the interest runs out, SSA will begin selling back it's holdings to the US Government, meaning the US Treasury simply issues new bonds, likely at higher interest rates, to replace the old ones that mature.  Which is added to the national "public" debt since they don't count government holdings, and the interest payments there of will further increase the portion of the US budget designated for interest payments.
 
2013-02-13 03:05:11 PM

DamnYankees: No one has ever refused to buy our debt.


Sure they have.  I have refused to buy this debt.  I am sure that I am not the only one.  Now if your point is that we have never had a shortage of sellers, that is the function of the market place that sets interest rates on the risk-reward paradigm.

Right now that process is put aside as the Federal Reserve is currently buying nearly all of our new debt as a part of QE3.
 
2013-02-13 03:05:16 PM

royone: Yes, we can Zimbabwe ourselves. That doesn't make me wrong. I actually said we can do that.


It makes you wrong that we will "run out of funding". You are 100% wrong about that.

And you're an innumerate idiot if you think anything we are doing right now will lead to hyperinflation. I don't know how to say it any nicer.
 
2013-02-13 03:05:40 PM
is that math you do as a Democrat to make yourself feel better?
 
2013-02-13 03:05:52 PM

HeadLever: Now if your point is that we have never had a shortage of sellers, that is the function of the market place that sets interest rates on the risk-reward paradigm.


I think you mean buyers, not sellers. But yes that's what I mean.
 
2013-02-13 03:07:20 PM

DamnYankees: HeadLever: This is another practice that is likely going to hit a limit sometime in the not-so-far future.  There is a limit as to how much you can monetize the debt.

What's the limit? People keep saying this but they don't ever explain what they mean.


Ultimatly, the limit will be when the public and other debt holders lose faith in the system.
 
2013-02-13 03:08:20 PM
More people on the government titty, more Democratic voters. Obama is getting exactly what he and you guys want.

Too bad it will lead to ruin. Can't hide from math.
 
2013-02-13 03:08:24 PM

DamnYankees: I think you mean buyers, not sellers.


D'oh.  Your right.
 
2013-02-13 03:08:38 PM
Firethorn:
Of course - I'm a very weird libertarian.

You ARE a weird libertarian; you virtually admit to the existence of a "common good", which seems anathema to most standard libertarians who believe you should have to pay the fire department to come to your house.
 
2013-02-13 03:11:34 PM

DamnYankees: royone: Yes, we can Zimbabwe ourselves. That doesn't make me wrong. I actually said we can do that.

It makes you wrong that we will "run out of funding". You are 100% wrong about that.


We run out of funding in the sense that nobody is actually buying our debt.

Let's review: I said we can become insolvent or we can be Zimbabwe. You say we can only become insolvent by choice, because we can always Zimbabwe ourselves. I agree.

You also insist that there's a magical third way, wherein we can act like Zimbabwe (devaluing our currency without bound) without causing hyperinflation. I am on tenterhooks awaiting your exposition of this exciting economic discovery.

And you're an innumerate idiot if you think anything we are doing right now will lead to hyperinflation. I don't know how to say it any nicer.

That's among the least significant of the things you don't know.
 
2013-02-13 03:11:38 PM

HeadLever: DamnYankees: I think you mean buyers, not sellers.

D'oh.  You're right.


Sheesh.  I need a beer.
 
2013-02-13 03:13:45 PM

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.



You are VERY very wrong....
 
2013-02-13 03:22:29 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]


That really should either be on a log scale, or in constant dollars.
 
2013-02-13 03:23:11 PM

DamnYankees: royone: It will never happen until it does.

Ok, well, I predict you'll get anal warts because your user name has 6 lower case letters. I mean, there's no reason to think it'll happen, and my logic has never shown to be accurate before, but it won't ever happen until it does, right? I'd see a doctor.


I think you could get many people here to agree with that.
 
2013-02-13 03:25:34 PM

DamnYankees: royone: We run out of funding for debt when there's no one who wants to buy it. That's what funds debt.

1) No one has ever refused to buy our debt.
2) The Fed can always buy more debt if we need to. It's the functional way we print money.


The Fed can only buy Treasuries from the secondary market by law. Technically, if the bottom should fall out of the primary market (which is not likely at this point) there's isn't anything the Fed could do, except to buy other kinds of sought after securities (morgtages, for instance) to put downard pressure on those interest rates and drive demand back to Treasuries.

They'd have to change that law for the Fed to buy US debt on the primary market as I believe that crosses the line of direct monetization of debt, which can in turn lead to a currency crisis. What the Fed is currently doing/does is 'quantitative easing,' buying on the secondary market, is seen by the bond market (and as formal declaration) as intent to improve economic conditions and credit markets, or keeping within a target interest rate, whichever you prefer.
 
2013-02-13 04:30:49 PM
I'm no constitutional scholar or nothing, but I'm pretty sure the House makes the budget, not the President.
 
2013-02-13 04:31:35 PM

Thunderpipes: More people on the government titty, more Democratic voters. Obama is getting exactly what he and you guys want.

Too bad it will lead to ruin. Can't hide from math.


so you're saying study it out?
 
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