Presidential address last night

[JeffreyS]

The grand deal was on the table SS / Medicare reform + defense and discretionary spending =4.7 tril in cuts with reasonable tax increases and reforms. Leading to a strong stable America.  The President and Speaker agreed and then they found out that the Tea Party and to a lesser extent the far Left are not interested in what is best for America.

[Dashing Dan]

If we weren't at war and if the tax cuts had been allowed to expire, then we could invest in education and infrastructure. 

If these investments are successful, then we could lower our tax rate without cutting too deeply into our revenue.

In the meantime my priorities are as follows

1-raise the debt ceiling
2-raise taxes or
3-cut spending

[Garden guy]

Jimmy, I suppose then that I would need your definition of "big business" and "wealthiest workers" before I could respond.  My point stands (actually DD's) that this ball rests squarely with congress.  The house has passed legislation, why doesn't the senate vote on it?  Where is the Democrat legislation?  What the Republicans (at least some of them) are trying to do is not increase the size of the federal government and stop this crazy deficit spending. 

Without rehashing the last twenty years, let's just agree that the current way of doing business is not workable.

GG, with all due respect, your numbers are just...wrong.  Try reading up.  Ranting is not debating, but if that is what you want to do...OK.

[NotNow]

Here is a link to a table that shows control of congress as well as control of the Presidency:

http://en.wikipedia.org/wiki/File:US_Federal_Debt_as_Percent_of_GDP_Color_Coded_Congress_Control_and_Presidents_Highlighted.png

If anyone can help me out and post it, I would appreciate it.  In reality, responsibility for the debt is much more complicated than even this chart shows.  World economic conditions, world conflicts, and many other factors affect our budgets as much as which party controls congress or the Presidency.  What we ALL have to do is decide not to ruin the countries economy.   Wars?  Yes, we fought the Taliban in Afghanistan because they harbored and protected the people who attacked our country in 2001.  We fought the Iraqis when they invaded Kuwait, and when they failed to live up to the surrender agreement they signed.  Both of those conflicts were approved by large majorities in both houses of congress.  We will see how the Libyan affair pans out, whether you approve of it or not.  And we face other armed adversaries around the world even now.  Bad decisions?   Between us all, we can rattle off probably hundreds of mistakes by both parties and all of the Presidents. 

We are at a time for decision.  Do we continue to grow federal government?  Or do we reduce the size of what many see as a bloated empire of political favors?  Me?  I don't want to emulate France...or Sweden, or any other European government.  I want the American experiment.  The one from 1776.  I think those men are just as right now as they were then.  That we all are children of God, and that we can govern ourselves with minimum interference from ANY government. 

[NotNow]

Thanks, Stephendare!.

[avonjax]

The problem I have will all of this is, "Entitlements," did not put the country into this incredible debt. Anyone who believes that is deluded. Rebates, a "supposed," 10 year tax cut and outrageously expensive wars are the leading culprits. (While I'm standing on my soap box let me add GREED!) So what is the solution? Cut programs for the poorest and the oldest. Show me one Republican politician who doesn't contribute to the debt and I will call you a liar. The tea party and the Republicans want  you to believe the Democrats only want to spend money. That too is a lie. They like to throw around the "trickle down effect," but it has never and will never work. Cutting taxes is stupid. Even sane Republicans know that, but they would rather bankrupt the country than break with the ideology of their side.  Greedy corporations will take their jobs to Chinese sweat shops for cheap wages either way. Let's just elect Michele Bachman. She wants to eliminate minimum wage. That would help. More people on Medicaid. Another thing. Never, ever complain about the 47 or so percent who don't pay taxes each year, until GE, BP and other monster corporations start paying taxes. (and stop getting refunds.) Keep in mind that even the lower income people who may not pay income tax, pay into SS, Medicare and sales tax that benefit everyone. NO ONE pays nothing. This whole thing is about getting the black man out of the White House. They have been talking about his for months. They openly admit it. They held us hostage in December, now they are doing it again. You can blame the Democrats for not having a plan, but you can be sure NO reasonably plan will make it out of the house. The Republican majority house just wants to kiss the butts of the tea party at the expense of the poor and the elderly.

[FayeforCure]

This monstrous debt wouldn't be so bad if we had something to show for it. Instead we have nothing. All the Trillions spent on war in the middle east could have been invested here. It could have transformed us again into the worlds leading manufacturer of solar and wind powered devices, we could have repaired our crumbling infrastructure, we could have educated our citizens.....

Instead we got lots of great kids shipped home in body bags and the middle east remains a hell hole. Oh Yeah, and an unbelievably wealthy top 2%.

P.S. The Bush tax cuts added about 2 Trillion $$ to the debt: when do we get the return on that investment?
       The Bush wars added another 2 TRillion $$.  When we will get the return on that investment???

This totally sums it up for even the simplest amongst us. Just want to add that the supply side economic ideaology also did tremendous damage to our economy: cut taxes for the wealthiest and "hope" for trickle down?!?!

This is the most ludicrous idea ever!!!!

America has turned into a third world country..........there is little demand in our economy due to an ever shrinking middle class that is continued to be squeezed while the wealthiest Americans are being protected. THAT is soooo third world and so far removed from the age old American ideal of "equal opportunity and prosperity for all."

It is hard to understand that the Republican electorate still buys into the failed concept of tax cuts for the wealthy and corporations, while the rest of us suffers greatly. Supply side economics doesn't work..........it's a failed experiment.

Only Demand side economics will help us out of this mess as happened after WW II.

[BridgeTroll]

Holey Smokes!!    The few scant years republicans controlled congress... and the purse strings... they reduced or held steady on the debt??  Democrat controlled and split control congresses increased the debt??

I for one am shocked!!

[RiversideLoki]

[FayeforCure]

Look at beautiful demand side economics helping reduce our national debt after the highest national debt as a percentage of GDP in the early 1940s occurred!!! Just LOOK at the very STEEP downward slope in the graph below proving how well Demand side economics works!!



Compared to those days we shouldn't even be in crisis mode today!

All we need to do is close out the wars and bring back the growth creating higher tax rates for the wealthy, and invest in our own economy!!

[FayeforCure]

And guess what.........Demand side economics requires government spending!

The best government spending is the one that creates the greatest multiplier effect.

Wise investment in infrastructure has one of the greatest multiplier effects of any government spending.( see bar graph below)

Tax cuts for the wealthy (which really can be seen as a form of "government spending" since it reduces our revenue) doesn't create any additional demand and thus, there is absolutely no multiplier effect from that measure at all. (see bar graph below)

Now tax cuts for the middle class on the other hand DO create additional demand and therefor DO have a multiplier effect.

The multiplier effect is how much a dollar spent by the government increases GDP. It also measures how much a tax decrease, or increase, increases or decreases GDP.

Here is one example of stimulus spending with a very high multiplier effect:

Increased unemployment benefits have the largest multiplier effects â€" cash-strapped families spend every cent given â€" and meet vital social needs. It is imperative to provide health insurance to the unemployed: without that, a single serious incident can push a family into bankruptcy. Helping the unemployed meet house payments reduces foreclosures, addressing one of the underlying causes of the crisis. There are thus triple benefits.

http://economistsview.typepad.com/economistsview/2009/01/stiglitz-just-say-no-to-tax-cuts.html

Here is the comparison of the multiplier effects of various government spending programs:

[BridgeTroll]

[FayeforCure]

Ah, BT doesn't want us to know that our debt as a percentage of GDP was highest following WW II, and that Demand side economics was super effective at remedying that very high debt by bringing it down in no time at all!!

Please see my previous posts.

Just some inconvenient facts for BT. Short-sighted vision to suit one's ideology.

As an economist I know we need to look long-range for effective solutions and not be caught up by the moment for purely political reasons.

[Clem1029]

You know...I honestly thought that after the epic fail that was the stimulus, that ideas like "high government spending multipliers" would be banished back to the hell they came from. So much for that hope...

[BridgeTroll]

Ah, BT doesn't want us to know that our debt as a percentage of GDP was highest following WW II, and that Demand side economics was super effective at remedying that very high debt by bringing it down in no time at all!!

Please see my previous posts.

Just some inconvenient facts for BT. Short-sighted vision to suit one's ideology.

As an economist I know we need to look long-range for effective solutions and not be caught up by the moment for purely political reasons.

Oh... well... your an economist??  Then you should understand about living within your means.  I hope you are not encouraging families to increase the use of the credit card to stimulate family income... or maybe you do...

Pretty sure there as many varying economic theories as there are... well... economists...