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ratbastid, the data....the math.... confirm that <b>"a deliberate scheme to bankrupt the nation and force smaller government"</b>, is a fait accompli.

Two remarkable results, that the reversal of the downward trend in ederal borrowing and deficit spending was accomplished in such a short time, and that folks will continue to support this financial coup, with their rhetoric and at the ballot box, until the ballot is pried from their "cold dead hand".

The excuses for "why it happened", and the rationale to vote for "more of it", seem to be stunning denials of the intent of those who did it, and of the damage that it caused/is causing.

Dispute of the data and the math in the OP is not included in the posts that attempt to justify this treason against the treasury and the currency. This "tax cut" and massive borrowing and spending scheme required, in 2005, $1.15 in deficit "inputs" and MEW from home refinancing, for every 75 cents increment of GDP increase. The MEW source has dried up.

Let us see what happens to the economy, and the direction of the deficit, next:
There is now a second "force" working to destroy US financial prospects. It is the result of "low doc", "no doc" loans to unqualified mortgage applicants, interest rates driven down by Fed rate cuts, and then increased by Fed rate increaeses, 103 percent mortgage loans, initial zero interest rates on adjustable rate ARMS (mortgage applicants were approved only on the basis of their ability to make payments on the temporarily low, initial payment schedules on their loans...) and by the repackaging of multiple mortgage loans into "groups" that were sold by Wall Street to investors, as MBS's (Mortgage Backed Securities) that disguised the actual quality of the individual loans; the actual ability of each individual borrower to reliably make the monthly mortgage payments.

Appraisers co-operated by providing residential realty appraisals on the "high side", aided by "flippers" who invaded the market and pushed realty prices ever higher. Builders built for a rate of demand growth artificially stimulated by the flippers and second home buyers influenced by a "can't lose" mentality..."if we don't use the second home enough or if it turns out to be too expensive to own, we can always sell it....whenever we want to....for much more than we are paying now..."

The question now is....sell to whom? The folks who extracted money from their rapidly rising home values, and the builders who stimulated the GDP growth by seemingly building as many new housing units as possible, as quickly as possible, drove increases in GDP that actually validated the bullshit mantra that "tax cuts" create more federal revenues, not less....

If this was true, why did the party in power, stop at such comparatively modest levels of tax reduction? The truth is, that GDP and revenue collected from individual income taxes, did not rise because of tax cuts, at all. Now the "process" that "goosed" the GDP is in the infancy of a long period of unwinding, and this is a glimpse of what it will look like:

http://globaleconomicanalysis.blogsp...s_archive.html

Will there be any homebuilders, subcontractors, realtors, or banks still in business, who are now overexposed to this ridiculous speculative bubble after the scenario reported at the link above plays out, over and over....in every local market in the US?

Will any political party be able to lower the rate of increase of the treasury deficit, or increase taxes, without further extracting stimulus for GDP growth?

I don't see how....