tecoyah

Are we, as a country so blind as to be fooled by half truths? Are we simply so used to falsehoods, that we are trained to ignore deeper understanding?

I ask this because of the federal deficit. We will soon be told that the deficit has been cut in half again, and we will accept it as a very good thing. Unfortunately what reality tells us is a bit different. The Federal Deficit will be a little over $200 billion this year vs. $400 billion last year.

ITS STILL $200 BILLION IN THE RED

Added to this is another scary reality....most of the savings came from manipulation of the social security fund, and we have to pay it back...to ourselves.


Deficit Falls to $205 Billion
Jul 11 08:52 AM US/Eastern


http://www.breitbart.com/article.php...show_article=1

http://zfacts.com/p/519.html

Apparently, he dropped the "lets fix social security" part of his platform.

Mondak

Our government has been playing fast and loose with the US Dollar for a while now, but seems to have gotten pretty bold with it since 9/11. Regardless of tricks like the one you describe or simply how they have been forced to encourage inflation, the math WILL catch up with them. I just can't accurately describe when. Both sides of the aisle have been spending like drunken sailors for years and it has been getting worse.

The Decline and Fall of the Athenian Republic, published in 1776. Sir Alexander Tytler

. . . as far as being blind is concerned, cognitive dissonance is a powerful force. People would like to be "right" more than they want the truth. Helps with political parties, religions and all kinds of things including ignoring simple math. They want to absolve themselves from blame and after this thing blows up be able to tell themselves that they were lied to and it is not their fault. They can do this somehow despite the information they need being RIGHT IN FRONT OF THEM.

__________________
All truth passes through three stages:
First it is ridiculed
Second, it is violently opposed and
Third, it is accepted as self-evident.

ARTHUR SCHOPENHAUER (1788-1860)

robot_parade

And you don't even mention the fact that lots of spending (like nearly everything for the wars in Iraq and Afghanistan) isn't even *counted* in these figures.

It's an insane situation.

irateplatypus

i'm all for reduced spending (more than 99% of those reading this i'll bet) but the situation is not that scary... even at it's WORST in recent history (2004) the budget deficit was only 4% of GDP.

those stronger-than-expected revenues were only unexpected by those who voted against the president's tax cuts. a program that will soon be rescinded by house democrats despite its record performance.

it's not that he "dropped" social security from his platform, it's that the issue was greeted by crickets chirping in the halls of congress. the president was the only one pushing reform and it went nowhere.

it's going to be shock for many in 18 months when they realize a new president won't alleviate all the misery in the world.

__________________
If you will not fight when your victory will be sure and not too costly, you may come to the moment when you will have to fight with all the odds against you and only a precarious chance for survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.

~ Winston Churchill

dc_dux

Robot-parade is correct that over $400 billion in emergency supplementals primarly to fund the war since 2003 has been off-budget; with another $100 billion more to come as a result of the latest war funding bill that Bush signed last month. Every president cooks the deficit numbers...but Bush has been a master chef.

But more worrisome than the annual budget deficit is the total federal debt, which was beginning to be`slowly drawn down in the late 90s. Since Bush took office, the federal debt has increased over 50% from $5.6 trillion in 2001 to $8.7 trillion in 2006...with China being the 2nd largest foreign holder of US Treasury securities and OPEC the 4th largest..not our best friends.
http://www.treas.gov/tic/mfh.txt

irate: Congressional democrats dont have to rescind anything (that is another republican half truth). The 2001 and 2003 tax cut bills passed by the republican-majority Congress and signed by Bush had sunset provisions that end the cuts in 2010.

I dont think anyone is under the illusion that the next president will alleviate all the misery in the world. We can only hope that his/her administration will be less corrupt, more open, less confrontational, and in the context of this discussion, more fiscally responsible.

__________________
"The perfect is the enemy of the good."
~ Voltaire

irateplatypus

that's the rub... federal debt.

the budget deficit is tame, debt is where the rubber hits the road. like dc_dux pointed out: foreign investment is the most worrisome part of that... should we continue to lower interest rates china may start dumping those dollars at wholesale prices causing uncheckable inflation.

__________________
If you will not fight when your victory will be sure and not too costly, you may come to the moment when you will have to fight with all the odds against you and only a precarious chance for survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.

~ Winston Churchill

shakran

$200 billion FURTHER in the red.

I don't get to tell my wife "Yeah, I spent too much money this month, but I only spent half as too much money as I did last month."

Why is it OK for the president to tell that to the country?

jorgelito

Then there is no way we could have a national health care system, it would put us further in the red.

aceventura3

There have been a few threads on this topic in the past.

I do think government spending is out of control, however, the better way (rather than in total dollars) to monitor the deficit and the debt is to look at how these numbers trend relative to GDP and our national wealth on a percentage basis. And since the government can deflate the currency at will (meaning they can theoretically print money to eliminate the debt and the deficit or at least adapt measures to do the same), it is good to look at the cost of dollars in terms of exchange rates and interest rates. There are many factors affecting exchange rates and interest rates and there are cycles, those factors have to be discounted in your analysis.

When I do my analysis, I am not overly concerned currently. The biggest problems we face are with Social Security and Medicare and the trending of government accounting for bigger share of GDP. We can not afford the future costs of these programs, and Washington is doing nothing to fix the problem.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

tecoyah

I suppose this is where we differ as I am quite concerned, perhaps its a matter of perspective. I also think Social Security, and healthcare are two of the biggest worries financially, but feel that tapping into SS to make budget numbers look better is likely to make it far worse for my kids (and myself) rather than improve the situation.

jorgelito

But by far our biggest spending is on defense. I'm not a big fan of social security of medicare but if I recall correctly, i think defense is really one of the biggest expenditures. But yet, somehow, we still can't afford to arm our troops properly in the field.

There is plenty of waste and Congress is not off the hook either. $250 million bridges in Alaska certainly do not help.

aceventura3

Here is a piechart showing the general distribution of the federal budget, the biggest category normally is - "heath, medicare, social security, etc."

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

The_Jazz

OK, what qualifies as "net interest"?

Ace, can you share where you got this chart? I'd love to see what they're putting where in more detail.

__________________
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin
"There ought to be limits to freedom." - George W. Bush
"We have met the enemy and he is us." - Pogo

jorgelito

Ace, thanks for the chart and clarification. It's a good start. I would like to see more of a breakdown too. Especially Human Resources - if we are spending that much on Healthcare and still getting lousy service then we need some serious overhauling. I also wonder if military personnel is slipped into Human Resources. Social Security is a wash. It will be a cold day in hell before we ever get to reform that debacle (thanks AARP!).

tecoyah

I recommend this link for more detail,and a bit of historical perspective.

http://services.alphaworks.ibm.com/m...Va6O_kEoi71E2-

I also recommend a good cold Ale while viewing.

jorgelito

Cool, thanks Tec. I will have to look at that when I get home though, because my work computer doesn't have a plug-in required.

Ale sounds good too. Unless you're talking about that other Ale from the other thread, hehe.

dc_dux

Two thirds of the budget is non-discretionary funding..that is programs that have specific funding sources`(taxes) rather than general revenue, like Social Security and Medicare, as well as interest on the national debt and Congress and the WH cant (or are not supposed to) mess with it.

Most of the 65% Human Resources in ace's chart is non-discretionary spending (it should be broken out between discretionary and non-discretionary)... along with the 11% net interest (interest on the debt).

That leaves about 1/3 of the total annual budget as discretionary, meaning Congress and the WH get to fight about how it is divided up.

Defense is the largest part of discretionary funding by far...generally about half of all discretionary funding... and the other half for all other other domestic programs, etc.



Non-discretionary (mandatory) spending is out of control and needs a serious fix; but part of the blip in red in the last 6 years is due to much higher interest payments as a result of the national debt doubling in those six years.

The blue shows how discretionary spending was reasonably stable, with the blip coming in fy 2002 - fy 2007`when Bush and the "fiscal" conservative Congress starting spending more.

__________________
"The perfect is the enemy of the good."
~ Voltaire

aceventura3

I found the chart on a GOOGLE search.

http://www.google.com/search?q=U.S.+...ient=firefox-a

I generally look at OMB's website:

http://www.whitehouse.gov/omb/

And the Congressional Budget Office website:

http://www.cbo.gov/

I don't know how to get data from PDF files posted on this board.

The OMB has a chart (chart 4) that shows defense discretionary at 20.1% and nondefense discretionary at 18.5%, for 2007.

http://www.whitehouse.gov/omb/budget.../pdf/08msr.pdf

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

pan6467

If we had a growing middle class, that can afford to save and invest money; a strong economy and a manufacturing sector, I wouldn't worry about the debt.

However, as we lose good paying jobs overseas, as we see a shrinking middle class that cannot afford to have a savings account, let alone invest, a manufacturing sector that is dying.... I worry.

If we have a strong and growing economy the debt is growth and as the country grows and less investment is needed the government can back down a little. We are far from that.


Short of just saying fuck it and forgiving the debt .... I don't know how we can maintain it and survive.... how much of our taxes go to pay a year on it now, I know it's a God awful amount.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

dc_dux

There is a very cool poster, "Death and Taxes: A Visual Guide to Your Federal Taxes, where you can navigate around by each agency to see the discretionary funding:

http://www.thebudgetgraph.com/about/

Moving around the poster is a little tricky, but very informative.

__________________
"The perfect is the enemy of the good."
~ Voltaire

aceventura3

If you look at tax receipts, they are growing faster than the growth of GDP for now. If more taxes are being paid, it supports the fact that the economy is growing and is strong. Our economy doesn't grow without a strong "middle class."

http://www.whitehouse.gov/omb/budget.../pdf/08msr.pdf
page 4.

To me the issue goes back to controlling spending in Washington.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

dc_dux

Pan....your share of the debt is $30,787 today...but growing

http://www.house.gov/lincolndavis/debtclock.htm

__________________
"The perfect is the enemy of the good."
~ Voltaire

host

ace..... tax receipts have increased less than 25 percent, since 2000....that's seven years:

$2.574 trillion now.....

<a href="http://72.14.209.104/search?q=cache:LK4mcAFfc4cJ:www.cbo.gov/budget/historical.pdf+2005+revenue+tax+revenue&hl=en&gl=us&ct=clnk&cd=7#2">$2,025.5 trillion in 2000.....</a>

How much has federal spending increased in that same time span? Hence, a $3 trillion increase in total US Federal Treasury debt.....

aceventura3

Pan,

What is your share of our national net worth? There are differing ways to measure it, this gentleman used the sum total of household net worth (again that is "net" or assets minus debt) and then deducted federal government public debt to come up with a national net worth of $44.2 trillion in 2005. If you divide that by the population number of your choice you then can compare that number to the $30,787 number.

http://www.businessweek.com/the_thre..._so_scary.html
That number does not factor in the assets held by the federal state and local governments.

I agreed spending is out of control. Government spending at some point has to slow down or it will eventually account for more and more of our national economy, it will starve and eventually kill it.

One way to look at the increases in taxes collected is compare that to what we were told about the tax rate cuts, what we were told about the Bush recession, what we were about a jobless growth economy, what we were told about supply side economics.

{added}

FYI, look at this report:

http://www.gsa.gov/gsa/cm_attachment...DZ-i34K-pR.pdf

One thing it shows is that the government owns 2.9 trillion square feet of building assets, with a replacement cost of about $1.3 trillion dollars and about 54 million acres of land.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."