David- again, there was no “Clinton surplus.” Every year he was in office the government spent more money than it collected, and every year the national debt went up. Sorry to burst your bubble, but get over it. ;-)

The Clinton surplus bashing bothers me. He showed it is possible. What he failed to do is cut spending.

I pick the military for being a situation normal. We will never win a war, or police action, or make the world safe for democracy. We don’t have the man power, and that’s why we have drones. You can take the hardest murdering Marine into battle, but you can’t make him kill at will. By the time you get him battle ready he’s either rotated out or discharged on a section 8.

We have toys and lots of them. What do you figure it cost to change out the M16 with an M4? How about those Stealth Bombers? What about the cost of counter intelligence? How many feet do we need to put onto foreign soil to influence enough people to give us information? In Pakistan today it $150,000,000 a day; a day.

It’s possible to wipe out the deficit in ten years. What we need is a lasting peace.

I don’t know about shutting it down completely, but I’m willing to look at making some changes. Seems to me we could come up with a more cost effective mix of technology and boots on the ground, doing more with less. It’s a very different world now than it was 50 years ago, yet we still rely on on a lot of the same weapons and thinking that were used in the past. I wonder what the best minds and a “clean sheet” approach would give us for a modern military?

Honestly, it surprises me that no one talks about our military.

Nuclear weapons that are produced to sit in case some one else has nuclear weapons. Computers, networks, equipment, arms, jets, air craft, people, buildings, and what ever else we need to have a bunch of kids sit in a jungle or desert waiting to be killed by the enemy who is a seasoned life long combatant on their own soil.

Deficit spending? Shut down the military.

http://www.youtube.com/watch?v=JxQgqqnpxo4

Scotsman @ 57 – Mexico? You serious? My friends buddy was kidnapped there, kept for 4 months with ransom demands. All over CNN. Thats gotta be lovely to spend some earned retirement funds there.

I’m sorry to hear about your friends friend and granted I don’t know the whole story, but avoiding the entire country because of crime issues doesn’t necessarily make a lot of sense. It’d be like avoiding California because Compton is somewhere in the state. Mexico is a big country and there are still plenty of safe places to travel there, you just need to be smart about it (i.e. avoid border cities, and travel smart).

That said, the “tourism fee” they tack on to plane tickets drives me crazy.

Ouch, sorry to hear about that!

I haven’t been there for a decade or more- from what I hear it’s much more corrupt and dangerous than it used to be. It’s probably not as cheap anymore either with our dollar headed into the tank. But it is sunny (lov’n the fall drizzle…) and I like the food.

He never addressed the military budget, no President has.

You’re forgetting the military industrial complex. Our economy used to be tied to the military before they started talking about consumer confidence, credit, and housing.

Had Clinton actually dismantled some programs there would have been a long delay in spending.

Dismantle the Federal Reserve!

Amen.

I’ve been an avid reader of SeattleBubble for two years, but I’ve never posted before. Mere mention of the Federal Reserve pushed me over that edge.

Does everyone know why the Federal Reserve was created in the first place?

Is there any coincidence that it was created the months after the 16th Amendment was ratified in 1913, giving the Federal government the power to tap into the wealth of this country and tax individual income.

Federal?? There’s nothing Federal about it. It’s a privately owned enterprise.

Who do you think really pulls the strings in our government???? It’s for that very reason that the Federal Reserve will not be dismantled. Those in power (that control the money) will never let it happen.

Central banking is not unique to the USA, either…..

We’ve simply delayed the problem. The economy will be bad for a very long time because we’ve moved away from Capitalism.

I think Obama screwed up. He did the right thing by saving the banks, but he should have nationalized them, and broken them up by selling assets to smaller more efficient banks. As it is, the “too big too fail” have become ‘way too big to fail’.

http://seekingalpha.com/instablog/239719-james-quinn/18242-national-debt-by-year

No Way! Can’t be! Tell me it ain’t so!

I can blame Obama for his election pay off Stimulus Bill drafted by the Apollo Alliance for his first trillion in new Obama debt! Add his next trillion for his Cap & Tax program onto the backs of the American public during the stiffest economic down turns in my 54 year life and Obama’s Economic Mess really is his. Now pile on a new triton dollar health care program during this deep recession because we all know tax money is flowing like honey. Tell me how Obama did not start the never ending new tax requirement for my grandchildren to pay off and I will not even start on the unfunded Social Security defect along with MEDACARE which was robbed to pay for this crappy health care program!

Also please thank Nancy Pelosi and the Democratic Majority Congress from 2005 to now for a major slice of that inherited Obama mess.

Blue Skies

David, you’re missing it. The whole point is that it’s bad for all of them- there hasn’t been a real surplus, defined as a decrease in the national debt, for decades. Given that history, what makes anyone think we can even hit zero, let alone a true surplus where the national debt is reduced? Here’s another quote from the same article that shows just how badly we’re being lied to:

“The reality is that the federal government and politicians use a form of accounting that would get most accountants thrown in jail. As USA Today wrote in 2007 , special rules used by the federal government allowed it to report a $248 billion deficit in 2006 rather than $1.3 trillion if it had used corporate-style accounting.”

Johnson, Kennedy, Nixon,Ford, Carter, Regan, Bush, Clinton, Bush, Obama, doesn’t matter who was there, or which party ruled this or that. The debt keeps going up. Now it’s at a breaking point where the country can’t generate enough new wealth each year to pay the interest and continue to function. We’re like horses being driven up a box canyon toward the headwall. Game over. We’re hosed, maybe this fall, maybe next decade, but the game is over, it’s only a question of when.

Mexico might be nice, good weed there too, at least in the old days…

My wife and I were taking a looky-see at the old family finances the other day, thinking maybe I would go back to full time work to help rebuild some of the retirement fund, etc. Bottom line- of the next $100K I made I would get to keep about $30K. Now, some aspects of my situation might be unusual, but in the end it really isn’t worth doing the work unless I’m going to earn well beyond another $100K, not that easy for me to do in this climate. And harsh though it may sound, I’m not willing to bust my butt to help pay for someone else’s life style choices. The really rich can probably afford to pay some more taxes, those who make millions a year. But here in the land of the upper/middle middle class, I’m up against the wall, saying enough is enough.

Gripe of the day: there’s a food bank run by a church in our neighborhood. I’ve volunteered some time/materials to get it up and running. What peeves me is that there are folks who drive to this food bank in nicer cars than either my wife or I have, I mean new, expensive, luxury cars and SUVs. I’m sure they are financed, all of mine were bought with cash. But still, at what point do people look to themselves first to make the needed changes instead of just looking for the next handout?

You should look at those numbers again. it looks bad for Bush, good for Clinton.

I agree with the peace dividend, think Reagan did a great thing by increasing military spending, but Bush the First flubbed the hand off by trying to be his own person.

Cinton had the good sense to capitalize on the peace dividend, could have cut military spending, and negotiated a lasting peace with Iraq.

I am SO tired of this myth. Angie,sorry, but there was no Clinton surplus- it was all math and accounting tricks. Regan ended the cold war with the USSR (remember the peace dividend?) and there was a one time revenue surge due to a change in the capital gains tax. That gave Clinton a nice one time hit his first year in office, but even it wasn’t truly a surplus. The rest is based on accounting myths, common in government where they can be found even today. War expense? Oh, that’s “off the books”, etc., etc., etc.

Here, you can do the math yourself- check out the national debt totals for each year, as provided by the treasury. Notice that while the public debt went down in each of those four years, the intergovernmental holdings went up each year by a far greater amount–and, in turn, the total national debt (which is public debt + intergovernmental holdings) went up. Therein lies the discrepancy. Clinton ran a surplus by raiding social security, etc. Whoopee!!

Math’s a biatch.

http://www.craigsteiner.us/articles/16

Well OK then if no one wants to cut spending, raise taxes and pay the debt, don’t break out the bong until you consider my backup plan. Even if we can’t hold all the Democrats, I think we can convince a couple of Senate Republicans to go for it. It will help solve the imported oil problem, help with balance of payments, provide cheap non-union American labor, solve much of the drug smuggling problem, and eliminate most of the illegal alien problems, all in a manner that has helped America recover from sever economic crisis before.

All we need to do is declare war on Mexico and annex it into the United States. If Cheney were president, he’d do it. If we can get Canada to join, then we could form the NAU and our new currency could displace the euro as the new world reserve. Besides, I hate having to get a passport and I’d feel better about getting a vacation home there if our laws applied.;-)

There are a lot of very wealthy people who DO NOT WANT the US to get out of debt. Watch what people do rather than what they say, indeed–hard to believe anyone who claims to be fiscally responsible would vote Republican.

Reset, through the form of GD2 is the only way out. But there is hope- Obama has decided to let the states set the rules on marijuana, and since the states are broke and won’t want to enforce any more laws than necessary, pot will be readily available. (As if it isn’t now..) I’m going to the country, gonna grow some good weed, and let y’all swirl down the bowl of political waste while I, as advised by “Trigger,” “hike more, boat more, and worry less.”

I’m enough of a Keynesian that I agree with you Kary. But the debt to GDP ratio is currently at about 90% and quickly approaching the post WWII high of about 120%. With the potential for increasing interest rates, I’d hate to see the percentage go higher and I do think the government can bring down the ratio if they try. The conclusion that we can probably work our way down from the current debt to GDP ratio without a second GD is supported by the following two links.

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

http://www.measuringworth.org/datasets/usgdp/graph.php

I don’t know if people want to emulate the economic policies of Truman and Eisenhower, but they brought us down from a debt to GDP ratio of 120% to about 60% in less than 15 years while still growing the economy (with the exception of a couple of years in the 1940’s.) The first link below shows the national debt as a percentage of GDP. WWII raised the debt to 120% of GDP, but we were able to recover with some contraction to GDP in 1946 and 1947. You’d probably expect that in the transition from a war time to peace time economy anyway. It’s true that the above doesn’t take into consideration the deleveraging of private debt and arguably that creates additional economic considerations. Our economy arguably also structurally different now with less manufacturing and more dependence on foreign oil, etc.

The second link just shows the slump in real GDP in the late 1940’s and the steady increase in GDP starting in about 1948. As I recall, those were also some of the years during which we had the highest top marginal income tax rates that everyone is so afraid of. No one likes taxes, but sometimes you have to suck it up and pay the bill. We’re in the top marginal rate bracket, but if I move out of the country, it wouldn’t be because top marginal rates went into the low 40’s for a period of time to get the debt under control. If they went over 50%, I might think differently.

Until the debt of this country is addressed and the bleeding stopped, conditions for working Americans will continue to deterioriate.

The only ones who profit from increasing debt are lenders/banks. And since they effectively run the country, there is ZERO incentive from the top to do anything except keep spending more while the dollar is eroded.

The biggest problem is that almost all debate is constrained to the “pen” into which the collective thinking has been “herded”. The real problems and root causes remain out of sight and hence, never addressed.

Congress, treasury and the fed have already diminished the integrity of the $ as a reserve currency. Even today, nobody really believes the USA is capable of repaying it’s debt. In fact, Obama plans to double our total debt by 2015. The only way out of the hole is to slowly inflate our way out without tipping off the world. So what does guaranteed by the USA really mean? Unfortunately, I believe the $ is nowhere close to losing its reserve currency status. But we can hope.

Yes, he could have pushed different priorities, set a different tone, vetoed spending bills, appointed and directed those in positions of power to act differently. How about asking for Bernanke’s resignation and appointing Volker to the Fed? Instead, he was deaf, dumb, and blind as the bankers and their lobbyists bent us over.

…..We could have most of this behind us if individuals and businesses had been forced to take the medicine of financial consequences instead of coddling everyone along with false hopes of another bubble or some other magic (non reality based) “cure.” There is one cure- clear the debt and start over responsibly with a sustainable model. Do it now, or do it later, but the longer we wait, the higher the cost. Suck it up people, and put the fantasy to rest.
.
Do you really think the president, acting alone, can force individuals and businesses to do something they do not want to do? If you do, I think you are way overestimating the influence of the office of the President. Integrating change into a democracy is a messy and time consuming process. The problem seems to be all of those differing opinions out there.
.

But then I also don’t expect him to be as big of an agent of change as so many others do. I voted for him, but with the expectation that he would be a moderate and I think he’s living up to that.

Something to remember too, and I think it was mentioned above, but depending on the healthcare bill that ends up being implemented, Obama & Co. could very likely end up creating a lot of jobs and benefits (har har, that was a bad pun) for the country, hopefully in a good way (imo not an additional “public” option).

We don’t need the secondary markets for worthless paper and I’m sure that’s what you are getting at.

Obama is pushing health care reform along with banking regulation; those are the things we need.

We need to get insurance companies and banks out of our lives.

Large financial institutions in charge of our economy didn’t work.

“I suspect that people who bash Bernanke have never read any of his works”

There is no need to read anything, his actions speaks for themselves. The guy has lost control of the dollar, was asleep when the bubble exploded, is lining the pockets of banksters through low interest rates and most likely illegally robbed the share holders of BoA by forcing the Merrill deal. Absolutely no need to read anything, the man is an absolute disaster and one of the major architects of our mess.

http://www.marketwatch.com/story/kbw-says-fannie-freddie-shares-worthless-2009-10-19?siteid=yhoof

RE: TJ_98370 @ 23
We could have most of this behind us if individuals and businesses had been forced to take the medicine of financial consequences instead of coddling everyone along with false hopes of another bubble or some other magic (non reality based) “cure.” There is one cure- clear the debt and start over responsibly with a sustainable model. Do it now, or do it later, but the longer we wait, the higher the cost. Suck it up people, and put the fantasy to rest.

Exactly! But of course this assumes Americans are capable of acting as adults, rather than “I want it, I want it”, temper tantrum throwing children.

You sir, hate America!!!!

Hello, ten months repeat ten months not even a year yet, gimme a break.

I agree with One Eye it has been borrow and spend for decades. Does anyone remember that when George took office that there were these things called surpluses? The war costs were not even included in the budget they were supplementals. Remember when those people who protested IRAQ were called unpatriotic. Now years later so many people have the all too convenient memory loss.

I voted “Approve”, and feel pretty strongly about my vote. I think one of Obama’s strong sides is surrounding himself with smart people. Paul Volcker (the father of modern monetary policy), Lawrence Summers (you can argue about his personal qualities, but he’s a great economist), and reappointment of Ben Bernanke, (I suspect that people who bash Bernanke have never read any of his works and perhaps have very little understanding of how the Fed and monetary policy works) – just to name a few.

You can argue against many economic implementations – the housing credit, banks bailout and subsequent stimulus package, health care overhaul, – and non is perfect, but I strongly believe that benefits of each outweigh the costs.

Some of you may not like government’s intrusion into the housing price-making mechanism, but I think it was a necessary step to not completely stop, but slow down the depreciation process. Financial markets were stunned, and could not keep up with things as they were unfolding, and let me remind you that it was the housing bust that triggered financial crisis. Tax credit will give the world some extra time to assess the situation and adjust to the new environment, plus it will put 8000 dollars in the hands of consumers – another positive short term effect.
Some are angry at the bank bailouts. Let me remind you that initially it is the banks who bear the loss of home value, since it is so easy to walk away from a depreciation house. In addition, financial system’s failure would in fact bring about another Great Depression. Lastly, bank bailouts are loans, and are paid back with interest accrued as we speak.

The stimulus package is my personal favorite, and the benefits are two-fold. In the short term, in light of Keynesian theory it compensates for loss in consumer spending and stimulates short-term demand. But the real beauty of it is the investment in the future – infrastructure, education, science, renewables and environment. I am a strong believer that the long term benefits of the stimulus will far outpace the interest costs. As far as fear of out-of-proportion deficit that, according to some, will raise interest rates and make our currency value plunge, bringing about profound domestic economic depression and correction, I would just like to reference a work by Bertaut, Kamin, and Thomas (2008) that elegantly disproves the bases for the above fear.

As far as health care, it may not be a perfect (and may be far from it) policy, but it’s just something that needs to be done now. Tweaked later. Period.

These are just my opinions and you don’t have to agree with me. I didn’t give him ’strongly approve’, since his economic policies had room for improvement. Can’t readily give you an answer to how they might be improved, but hey, that’s why I’m not on his economic team :)