Tuesday, March 8, 2011

A New Record in Deficit Spending

It would seem that the federal government has achieved another history-breaking record.  For February 2011 the federal government posted the largest monthly deficit in the entire history of the United States.  Indeed, this $223 Billion deficit for the month of February alone dwarfs the $161 Billion deficit that the government posted for the ENTIRE YEAR in 2007.  In other words, Barack Obama's government is running up larger deficits in one MONTH than the government posted in an entire YEAR only a few short years ago.

Meanwhile, Democrats in congress are screaming about the Republican's still-anemic attempts to cut the deficit for this current year's budget.  According to the Washington times, "a top Senate Democrat said his party can accept no more than $6 billion in domestic cuts."  We just posted $223 Billion in deficit spending last month alone, and the Democrats claim that the most they can cut in spending for the remainder of the fiscal year is $6 Billion dollars!  They truly are clueless as to the peril our economy and indeed our nation is in with this unsustainable spending.

March 18th will be the next vote over the continuing resolution to try and fund the government for the remainder of the year.  Currently the Democrats are threatening to reject the House GOP plan to cut $57 billion in spending for the rest of this fiscal year. They say those cuts are too much.  Instead of being serious about the need to cut all but the most vital CONSTITUTIONALLY authorized governmental functions, President Obama put forth a budget that was full of additional spending that we simply do not have the money for right now.  As he stated in his State of the Union Speech, he wants to spend our taxpayer dollars to fund such extra unnecessary items like high speed rail despite the fact that a vast majority of Americans don't want it and won't use it.

Further, if union agitators succeed in bullying governors like Scott Walker and John Kasich and do manage to impose their statist agenda at any price so that tax payers will continue to have to fund public union pensions and health care to degrees that exceed those of even private employers, then we are bound to collapse under the weight of our own fiscal malfeasance very soon. Things are quickly coming to a head.  The Republicans in congress absolutely must hold the line and insist that their cuts be implemented. 

Those cuts alone are pathetically impotent when it comes to the monthly deficits we are now seeing and indeed they need to be even bolder in the GOP's plans to balance our budget. Unfortunately, when you have Democrats that seemingly don't even acknowledge that we are in a dire situation and refuse to even exceed $6 Billion in cuts for the remainder of this year, it will make the battle an exceptionally difficult one.  Take note which Democrats (or Republicans for that matter) are not taking this seriously, send them an email or call, and make damned sure to vote them out of office come November 2012, assuming we still have a functioning government and nation by then.

14 comments:

John Myste said...

Obama only stopped one of Bush’s wars. Obama spent a ton of money to try to salvage the economy Bush wrecked, and by the way, Republican presidents have a record of setting new highs for deficit spending themselves.

Let’s see if the partisan complaint is merited:

Here are the deficits in relation to GDP for each recent president. I was born in 1969, so in my humble opinion, that is the date of the founding of the universe. I will start there:

Nixon --
1969 984.4 -0.33 a
1970 1038.3 0.27 a
1971 1126.8 2.04 a
1972 1237.9 1.89 a
1973 1382.3 1.08 a
1974 1499.5 0.41 a

Ford --
1975 1637.7 3.25 a
1976 1824.6 4.04 a

Carter --
1977 2030.1 2.64 a
1978 2293.8 2.58 a
1979 2562.2 1.59 a
1980 2788.1 2.65 a

Reagan
1981 3126.8 2.53 a
1982 3253.2 3.93 a
1983 3534.6 5.88 a
1984 3930.9 4.72 a
1985 4217.5 5.04 a
1986 4460.1 4.96 a
1987 4736.4 3.16 a
1988 5100.4 3.04 a

Bush Sr.
1989 5482.1 2.79 a
1990 5800.5 3.81 a
1991 5992.1 4.49 a
1992 6342.3 4.58 a

Clinton
1993 6667.4 3.83 a
1994 7085.2 2.87 a
1995 7414.7 2.21 a
1996 7838.5 1.37 a
1997 8332.4 0.26 a
1998 8793.5 -0.79 a
1999 9353.5 -1.34 a
2000 9951.5 -2.37 a

Bush Jr.
2001 10286.2 -1.24 a
2002 10642.3 1.48 a
2003 11142.1 3.39 a
2004 11867.8 3.48 a
2005 12638.4 2.52 a
2006 13398.9 1.86 a
2007 14077.6 1.14 a
2008 14441.4 3.18 a

Obama trying to fix a Bush Wrecked Economy
2009 14258.2 9.91 a
2010 14508.2 8.92 a

See a pattern? If you want to judge Obama, you must judge him based on two terms to undo the damage of long-term republican fiscal policy. Notice that it took that long to fix things after a 12 year republican reign. I do freely acknowledge that the damage in the front of Obama’s term looks pretty damning. I do not acknowledge that it is rational to attribute that damage to Obama. I would accept these following rational answers:

1. The economy has suffered globally, not just in America, and no American president could have stopped it, so Bush is not to blame.

2. Bush’s priorities were on wars over economic concerns and so Bush did nothing to resist the bubbles and global turbulence until it was too late (and then Obama came in and behaved the same way, so Bush is no more to blame than Obama at this point).

3. The factors that truly drive an economy are something we cannot settle because they are too complex, which is precisely why no one agrees. We don’t know if the Clinton economy was good due to global fortune, or was the result of bubbles that were growing and would burst later or were the result of the latent success of Reaganomics. We don’t know how far-reaching prior actions are and we don’t know when our actions actually make a bad problem worse for the future instead of simply not fixing the immediate problem as soon as we would like. In reality, we know less than we would like and we fill in the blanks with raw partisan option. You do it, I do it, we all do it, because we don’t know, but we have a sense of things. This sense comes from our partisan faith.

And finally, I agree that the deficit needs to be addressed and Obama seems to be doing a poor job doing it. I think a compromise is in order. I think the Republican Party should agree to accept whatever reasonable cuts Obama proposes, and in turn Obama should propose them, but not just slash social programs.

Obama is in a bad situation politically. If he does the cuts needed, he probably will not be re-elected because he slashed needed programs and if he does not, he may not be re-elected because of the deficits. In his mind, I suspect he cannot justify not getting re-elected because that may result in one more ultra conservative judge on the Supreme Court, which would restructure America as we know it.

John Myste said...

I have considered the whole deficit thing, and I think there is about a 50% chance that Obama's approach will have devestating consquences. Therefore, I am going to have to move my position to "economics is just very confusing." Final answer.

John Myste said...

I just keep coming back to this. Both the republican the democratic proposals only contain token cuts. Hmmm.

T. Paine said...

John, each deficit of which you listed needs to be looked at in the context of what was going on at the time.

While some of the deficits can be attributed to everything from the Viet Nam war, to the final battles of the Cold War during Reagan's tenure, to the relative "peace" dividend provided during the Clinton years, to the necessity of restoring the economy and fighting terrorism after 9/11, to the financial meltdown today, they each have their reasons, albeit some more justified than others.

Bush Jr. started off with tax cuts to try and spur the economy after the economic down-turn after 9/11. Unfortunately, he thought it necessary to add additional expenditures like the hugely expensive prescription drug benefit that we could ill afford even if we weren't in the midst of two wars.

Obama came in and followed the same play book. While he effectively stopped most of the military operations in Iraq, thus saving money there, his policies from health care to bailing out private companies has proven to be monumental fiscal disasters in my opinion.

Now that we are hemorrhaging red ink and the only way we seem to be able to make up the difference as China is no longer a resource for loans is to print money and resort to quantitative easing. These are always the final resort prior to the collapse of third world banana republics and yet we are charging into the maw doing these exact same asinine things.

Instead of reviewing where we can cut money federally and abolish unneeded departments and programs, Obama has expanded the federal government and the number of employees on the tax-payer funded payroll. He then proposes wildly expensive and highly-dubious and financially reckless programs like his green jobs initiative and high speed rail.

Bush was foolish, but started out via necessity. An argument can be made that Obama did the bailouts out of necessity too, but his continued desire to spend is absolutely ruinous for us if not stopped immediately. Keynesian economics will not save us, but will make the dollar go the way of the ruble.

The Heathen Republican said...

I'm going to keep beating this drum... you can't look at national debt only in terms of president. The reason debt goes up during Republican administrations is because of Democratic-run chambers of congress.

I think I documented this pretty clearly. Paine, give me a reality check here... is my argument just not that convincing?

I know we all like to think our president is all-powerful, but he can't spend money without the approval of two houses of congress.

T. Paine said...

Mr. Heathen, you are absolutely correct. Congress has the power of the purse ultimately. A president can propose a budget and guide congress with an agenda, but congress doesn't have to follow it.

A case in point, when Reagan first cut taxes and the economy began to take off, revenue streamed into the national coffers in unprecedented margins.

While Reagan absolutely was for spending money on defense and building up a 600 ship navy and an anti-missile defense system in order to win the Cold War, the Democratic congress under Tip O'Neil's leadership as speaker were the ones that ended up spending $1.57 for every new dollar of revenue received.

I vividly recall a press conference where Reagan was going over some of congress' recently arrived budget and shaking his head to the press. I think that was the first time I recall the words "line item veto" being mentioned, and his longing for such a device to cut ridiculous spending.

John Myste said...

The House cannot originate a bill that the president does not find acceptable unless than have a two thirds majority. The president can get a bill originated and he only requires a flat majority. To say that the executive does not have far more influence than the legislature in budgetary matters is inaccurate. To suggest that the president’s hands are tied merely because he cannot officially originate law is also absurd, since he can effectively originate law, just not officially.

Mr. Heathen, I have read your article before and I think it is very insightful and a good read, but ignores the truth of my statement, which I make with no pie chart in hand. However, if you need a chart to show a supporting stat, scroll up, and imagine one, or even better, look here and cringe in panic:

http://zfacts.com/p/318.html

The simple fact is that there are patterns that tend to follow presidential philosophy. Congress can initiate any bill they want if their goal is to impress the masses, but they cannot do very much without the president’s consent. Not always, but often, the reverse is true. Definitely not always, though.

I do not believe a deficit proves a bad economy. However, if you think that, the numbers above are actually damning, and so is the link I doubt you will read posted above.

As you know, I am hostile to the process used in that link, but I must sometimes play the game.

As for the current deficit situation, I am very worried about it. The token cuts proposed by Obama were nothing short of hypocrisy, much like the slightly larger token cuts proposed on the other side of the aisle. The reality of the situation is, I do not know if hunkering down and balancing the budget would finish the nation off or save it. I do know one thing for certain, and that is, you don’t know either.

The Heathen Republican said...

Thanks John, good link and wonderful charts. You've convinced me that Republican presidents have been in the White House as our debt skyrocketed. I love when we can agree.

What I think is regularly overlooked by Dems who blame Republicans is that the president has a veto, as does the Senate and House (so to speak). All three must agree to pass any budget or authorize any spending. If any one stands in the way, everything grinds to a halt.

Let's hold our entire government accountable, not just the White House.

John Myste said...

Mr. Heathen,

Accountable yes, but not equally. A majority vote is common and all else equal as likley as not to happen.

Only when congress is horribly unbalanced is overriding a veto possible. In practice, congress often cannot override the will of the president and in practice the president can usually override the will of congress. It is absurd to equate a majority of congress with the 2/3 vote needed to override a presidentially veto. In a government that is often pretty evenly split, 2/3 is often a fantasy.

I respectfully disagree, sir.

If you need me to, I can make a pie chart. Hopefully you will just envision one pie cut into two pieces, and another cut into three pieces, and nation that is roughly half democrat, half republican.

John Myste said...

Heathen,

And one more thing, for those who place faith in charts. The link provided does not indicated that Republicans have been in the Whitehouse as the debt skyrocketed. The show that it is when republicans are in the Whitehouse that the debt skyrockets.

However, they are just charts. It’s the magic of statistics that proves this beyond a reasonable doubt.

I am not blaming the republicans. Maybe it is the democrats’ fault. Either way, if you believe the charts, one thing is clear: the debt skyrockets when republicans are in the Whitehouse. Regardless of why, vote them out and keep them out until the national debt is paid off.

I say that to you, as my vote cannot be purchased with free charts placed on public sites.

Respectfully,
J

T. Paine said...

John, I am in agreement and indeed heartened by your acknowledgement that Obama's proposed cuts were hypocritical and the GOP's were little better. Congress and our executive branch need to get serious on cuts immediately, in my opinion. (I am working on an article on this topic for future publication showing many specifics.)

Next, the power of an aroused and angry voter base can often times get a president and/or congress to pass and sign legislation that they might otherwise not want to do.

I give you Clinton and the whole welfare reform bill as an example. He vetoed congress' bill on the measure the first two times. On receiving the bill a third time, Dick Morris warned Clinton that polling indicated he might be in trouble politically if he were to veto it a third time.

Clinton caved and signed the bill. It turned out to be quite successful and one of the better pieces of legislation during his administration. Clinton won re-election after this, despite his ideological inclinations to veto it a third time.

Moral of the story is that if the public exerts enough pressure, they can typically get congress and the president to sign legislation they want enacted.

If refused, they can vote them out of office and run candidates that will do the will of the people... like the Tea Party folks in the last mid-term elections.

John Myste said...

I will not even try to drudge up the details of which you speak, for as you know, showing something to have happened in no way shows it to be the common scenario. That Congress can influence law is an obvious truth. That the president does not have dictatorial authority is also an obvious truth. Showing examples of where Congress made a difference against the will of the president is pointless, since it obviously happens every day.

I believe the suggestion is that the president has more authority to affect budgetary matters than congress does unless the congress is way out of balance, which is not always the case.

The fact that an evenly split congress cannot override a presidential veto should be obvious. The fact that a president can veto majority decision, that is to say consensus, should also be obvious. Mentioning cases where the president’s will is partially overridden does nothing to vanquish this truth. The president is not a dictator in this system of checks and balances. He is, however, the most powerful player in Washington.

free0352 said...

Here's a rational answer- WE'RE IN TOO MUCH FUCKING DEBT NOW BY ABOUT 14 TRILLION AND WE NEED AUSTERITY CUTS IN EXCESS OF 2 TRILLION OUT OF THE YEARLY BUDGET STARTING THIS YEAR FOR THE NEXT 35 YEARS TO PAY THIS OFF.

I don't care who DOES it, just so they do it.

T. Paine said...

Free, I absolutely agree. I also know that it will not be done by this congress, and even if it were, Barack Lenin Obama would not sign that budget bill anyway. In other words, we are screwed because people that know better are still too cowardly to do what they know must be done.