BULLETIN >> U.S. FEDERAL DEFICIT SHRINKS TO $53 BLN IN JULY

Dow Jones Big Charts.MarketWatch.com ^ | 8/10/05 | Rex Nutting, MarketWatch

[SierraWasp]

BULLETIN >> U.S. FEDERAL DEFICIT SHRINKS TO $53 BLN IN JULY

[Tolerance Sucks Rocks]

Party of smaller government my fat ass!

[Tolerance Sucks Rocks]

You can try and shift blame all you want, but so far, George W. Bush has not vetoed a single bill, as far as I know. Those sociopathic fat b@st@rds in Congress have every reason to send him fat, pork-laden spending bills because they deduce, that in the end, Bush will sign them. And time after time, they're right.

[expat_panama]

So what we disagree on is whether it's still true that "governments are instituted among men, deriving their just powers from the consent of the governed."

[inquest]

The key word there is "just".

[Huck]

The grass roots right here on FR are going merrily along for the ride.

[curiosity]

We ought to set up a fiscal responsibility caucus on FR.

[expat_panama]

The key word there is "just".

I thought there was lot's of key words there, and I think they're all still true.  I even still agree with the next part (from here):

"That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness."

It never matters much to me if the "reality is that politicians have every reason to want to accumulate power to themselves, and they've made a science out of doing so." That just means that controlling the government is difficult.   I do difficult things all the time.   I can even do impossible things but that takes longer.

[expat_panama]

do I want balanced budgets? Yes.

OK  Do you want only balanced budgets or are you in favor of surpluses or occasional borrowing.   Also, let me know when you've figured out what you want done about the $8trillion debt.  You've obviously been thinking and feel strongly about this.  Skip the stuff you don't like, I already got a long list of things I don't like. 

[inquest]

It never matters much to me if the "reality is that politicians have every reason to want to accumulate power to themselves, and they've made a science out of doing so." That just means that controlling the government is difficult.

What it means is what I said earlier, namely that government is a separate entity from the people, and therefore that power to the government is not the same as power to the people. I trust you don't disagree with that now.

[Huck]

Check out this mp3 of Newt on the subject:

http://newt.accrisoft.com/media/051605_3iNewt.mp3

[remember]

That chart also shows that receipts were higher under Clinton, even tho the supply sider/tax cut ideology predicted the opposite. And now they say the Bush cuts are working because the deficit is less than projected this month, but the chart shows that receipts are down under Bush. I am not shilling for Clinton. I didn't like the guy and didn't vote for him. I'm just trying to understand what is real and true and what isn't. Seems to me the Clinton economic policy was better than either Bush economic policy. Maybe I'm nuts. And maybe they did it at the expense of military preparedness or something else, but I'd like to see that shown with charts and tables and explained by someone credible like 'remember.'

You're in luck! I took a close look at supply-side claims about the Reagan tax cuts and posted the results at http://home.att.net/~rdavis2/taxcuts.html. It does refer to various online charts and tables. I have asked every supply-sider that I have run across to take a look at it and tell me any problems that they find. Like you, I'm just trying to understand what is real and would listen to any constructive criticisms. Thus far, I have received none. Anyhow, let me know if you run into any problems or have any questions or suggestions about the analysis.

[remember]

By the way, some of the numbers posted in these threads are utterly fabricated. They always say they are from historical statistics, but only after they've been jimmied a lot with some phoney calculations. If you want to see the size of Reagan's debt per GNP, go to Historical Statistics of the United States. It's a very simple calculation.

'remember's numbers look legit.

Not according to the numbers I got from historical statistics. Gotta account for things in real dollars, which the U.S. government usually does.

Huck,

Pay no attention to LS. He may know something about history but he's severely challenged when it comes to math. My numbers come directly from Table 1.3 of the Historical Tables of the most recent U.S. Budget. You can see it on page 25 of the PDF version of the Historical Table at http://a255.g.akamaitech.net/7/255/2422/23feb20050900/www.gpoaccess.gov/usbudget/fy06/pdf/hist.pdf or in the XLS version of the table at http://www.gpoaccess.gov/usbudget/fy06/sheets/hist01z3.xls. If you do a comparison, you'll see that my numbers are identical to those in the table.

I did notice in post 219 that LS said "look at the real dollars, as a share of GNP". As you can see from Table 1.3, such figures are usually shown in current dollars, real (inflation-adjusted) dollars, OR as a percentage of GDP. However, LS seems to be suggesting that you should correct the dollars for inflation AND compare them to the GNP. In fact, this is comparing apples to oranges. You would be comparing dollars that HAVE been adjusted for inflation to GNP numbers that HAVE NOT been adjusted for inflation.

In any case, this is easily settled. Ask LS to post his numbers and a source for those numbers (he isn't speaking to me). In fact, I doubt that he can even produce a table where real (inflation-adjusted) dollars are compared to nominal (non-adjusted) GNP. In any case, don't hold your breath waiting for him to provide a verifiable source.

[remember]

This is a pretty active thread and I'm having a hard time keeping up. You'd be doing me a great favor by letting me know when you're posting new stuff-- I am interested. In the mean time I'll just skip through rebuttals from other threads that I've already studied.

I'll ping you if I post something especially new. Also, you can occasionally check my web page at http://home.att.net/~rdavis2/recent.html where I list any new pages (usually data pages containing graphs and tables) that I've posted. The most recent page that I added was Balance Sheet of Households and Nonprofit Organizations: 1993-2005.

I'd bet that there's no way in hell you'd interested in re-reading my recycled counter arguments, so I'll desist.

You're correct that I didn't want to reread the discussion. Hence, in the future I'll just post an intro and a link to such discussions for anyone who's interested. This particular thread is at http://www.freerepublic.com/focus/f-news/1438193/posts and the discussion between us starts at post #29.

[remember]

Aw hell Rem, you never let anyone get away with nothing around here.;-) Personally, I've never been a member of the "never a borrower or lender be" crowd. For me, a deficit about six percent gdp and a debt around 60 % shouldn't stand in the way of increasing real wages and wealth.

I must protest, I'm really very easy-going. For example, I will not make too big a deal about the double-negative in your first sentence! (I suspect that you were setting me up with that since you italicized the second negative.) Anyhow, I'm sure that, like me, you actually like having people to keep you honest.

Regarding the debt, I'm not as worried about the current 60 percent of GDP debt as I am about the fact that we are increasing it at a time that we should be preparing for the Boomer retirement. The following graph shows the projected debt, receipts, and outlays over the next 70 years, as given in the most recent U.S. Budget:

The sources and actual numbers can be seen at http://home.att.net/~rdavis2/pro2006.html. As can be seen, the debt is projected to reach 249 percent of GDP in 2075.

[remember]

The numbers on post #250 show receipts going DOWN every year since GW took office.

The chart in post 250 has this header:

DEBT, DEFICIT, RECEIPTS, AND OUTLAYS (percent of GDP)

You're right, my bad. Good lord, our debt is 60% of GDP.

You may have been looking at the wrong numbers but your original statement was almost correct. If you look at post #249, you'll see that receipts went down each year from 2000 to 2003. In 2004, they went back to slightly above their 2002 level. This is in current dollars. Adjusted for inflation, the drop would be even worse.

RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS(-)
            (billions of dollars)
                               
        Total    Total  Unified
Year Receipts  Outlays  Deficit
---- --------  -------  -------
2000   2025.2   1789.1    236.2
2001   1991.2   1863.0    128.2
2002   1853.2   2011.0   -157.8
2003   1782.3   2159.9   -377.6
2004   1880.1   2292.2   -412.1

Source: Budget of the United States Government, FY 2006,
        Historical Table 1.3

[expat_panama]

...I'm not as worried about the current 60 percent of GDP debt as I am about the fact that we are increasing it...

We may have different understandings of what's going on.  I checked public debt (from here) and gdp (from here) and calculated it (here) and I don't see a problem.   Sure, we're up from the dip that ended 9/11, but we're no where near the peak in '96.  What I got is that the economy recovered, and the debt % made a lower peak and is now tapering off.   I honestly can't see what you're worried about.

Even the long range projections you shared in post 314 has debt under control for a decade until the Social Security tax scam is no longer able to continue cheating the public.  Which is why phasing it out starting now is the only serious way to correct those projections. 

From where I see it, we're in good shape and getting better.   This runs against the Religion of Doom preached by the disciples of misery, but I can't find any way around this good news.   I don't even think the regime change everyone here seems to want can 'help' us.

[atlanta67]

sorry what I meant to write was profits repiatriate by foreigners back to their country are not counted in GDP, they are subtracted out as part for the current account deficit

[remember]

We may have different understandings of what's going on. I checked public debt (from here) and gdp (from here) and calculated it (here) and I don't see a problem. Sure, we're up from the dip that ended 9/11, but we're no where near the peak in '96. What I got is that the economy recovered, and the debt % made a lower peak and is now tapering off. I honestly can't see what you're worried about.

Actually, I took a look at your sources and found a problem with several of your numbers. Following are your figures from your third link:

PUBLIC DEBT AS PERCENT OF GDP - EXPAT'S NUMBERS

       Public            % of
Year     Debt     GDP     GDP
----   ------  ------  ------
1993    4,411   6,657   66.3%
1994    4,693   7,072   66.4%
1995    4,974   7,398   67.2%
1996    5,225   7,817   66.8%
1997    5,413   8,304   65.2%
1998    5,526   8,747   63.2%
1999    5,656   9,268   61.0%
2000    5,674   9,817   57.8%
2001    5,807  10,101   57.5%
2002    6,228  10,481   59.4%
2003    6,783  10,736   63.2%
2004    7,123  11,107   64.1%
2005    7,880  12,376   63.7%

Looking at your first link, all of your debt numbers are correct except for 2004. You have 7,123 but your source has 7,379. Looking at Table 3A in your second link, it appears that your numbers for 2001 through 2004 are incorrect. I could not find the GDP numbers for 1993 through 2000 at that link but it is possible to check all of the annual numbers from 1993 through 2004 at this link. This source verifies your numbers for 1993 through 2000 and verifies the numbers from Table 3A for 2001 through 2004. In any case, the following table shows all of the corrected numbers, along with the corrected percentages of GDP:

PUBLIC DEBT AS PERCENT OF GDP - CORRECTED

       Public            % of
Year     Debt     GDP     GDP 
----   ------  ------  ------ 
1993    4,411   6,657    66.3 
1994    4,693   7,072    66.4 
1995    4,974   7,398    67.2 
1996    5,225   7,817    66.8 
1997    5,413   8,304    65.2 
1998    5,526   8,747    63.2 
1999    5,656   9,268    61.0 
2000    5,674   9,817    57.8 
2001    5,807  10,128*   57.3*
2002    6,228  10,470*   59.5*
2003    6,783  10,971*   61.8*
2004    7,379* 11,734*   62.9*
2005    7,880  12,376    63.7 

* corrected

By the way, the 2005 number is a little bit suspect since the debt number is for 8/10/05 and the GDP number is the annualized figure for the second quarter of 2005. The second quarter numbers tend to be slightly below the annual figures so your figure may be a decent rough estimate. Still, it isn't a precise measurement. In any case, the corrected numbers show that, as a percentage of GDP, the debt is continuing to rise through 2005.

[expat_panama]

...a problem with several of your numbers...  

The Debt To the Penny Current Amount 08/10/2005 $7,880,078,708,086.37 Current Month 08/09/2005 $7,883,572,311,422.86 08/08/2005 $7,882,577,243,511.10 08/05/2005 $7,880,012,385,205.52 08/04/2005 $7,878,734,742,338.35 08/03/2005 $7,869,304,285,712.51 08/02/2005 $7,877,501,670,822.86 08/01/2005 $7,869,521,621,947.05 Prior Months 07/29/2005 $7,887,617,581,195.58

Thanks for the heads up on my data problem.  While I was trying to figure out how my data got corrupted, I got so turned around that I redid the calc's (new figures).  

In fact, I went over my annual figures and compared the end of FY debt totals to third quarter gdp, so now my '93-05 plot shows an up tick worse than yours.  So I'll agree that we can't get fired for saying to the boss that "the debt is continuing to rise through 2005".  

Then again, I'd go on to say that the boss might loose his job if he left it at that.  Right now (8/10 compared to 8/9 or to 7/29) Public Debt is decreasing --even in current numbers.  A closer look at this years up tick month by month (interpolating gdp) shows we're not at a '05 peak and (IMHO) the trend is benign.  I get the same impression looking at the 20 year trend.

We're totally in agreement that "it isn't a precise measurement", and that public debt is only important in how it affects more proximate indexes of economic well-being (wealth, income, employment).   I keep finding that those indexes are up now from 10 years ago, which were up from the previous decade and the one before.   You said you're worried about the dept%gdp and I said I wasn't worried.   Maybe we can meet half way at 'mindful'.

 

[remember]

Thanks for the heads up on my data problem. While I was trying to figure out how my data got corrupted, I got so turned around that I redid the calc's (new figures).

In fact, I went over my annual figures and compared the end of FY debt totals to third quarter gdp, so now my '93-05 plot shows an up tick worse than yours. So I'll agree that we can't get fired for saying to the boss that "the debt is continuing to rise through 2005".

I've likewise run into that problem of comparing fiscal year numbers to calendar numbers. In fact, I usually try to grab my numbers from as few sources as possible in order to minimize the chance that I unintentionally combine data that is not strictly comparable.

Then again, I'd go on to say that the boss might loose his job if he left it at that. Right now (8/10 compared to 8/9 or to 7/29) Public Debt is decreasing --even in current numbers. A closer look at this years up tick month by month (interpolating gdp) shows we're not at a '05 peak and (IMHO) the trend is benign. I get the same impression looking at the 20 year trend.

I think that a few days or weeks is too short a period to look at the debt, at least without understanding the precise manner in which the debt goes up or down over such a short period. It's likely that 8/10 compares well to 8/9 and 7/29 simply because of certain revenue payments that are credited to the balance between those dates... just as your bank balance goes up when your periodic work checks are deposited.

Regarding the graph of longer-term projections that I posted in post #314, you have to be careful in reading too much into the 20 year trend. The graph shows the debt held by the public, not the gross federal debt. That's why it shows about 40% of GDP for 2005 instead of the 63.7% of GDP that you calculated. That also means that it is not showing the increasing debt to Social Security and other trust funds that will be growing for the next decade or two. As Social Security and other trust funds start to redeem their bonds, however, these two debts will become much closer. Hence, the graph gives a better view of the gross federal debt over the longer term.

For the shorter term, it may be better to look at the projections from the 2006 Mid-Session Review, released by the Bush Administration about a month ago. Following are those numbers:

PUBLIC DEBT AS PERCENT OF GDP - PROJECTED

      Public            % of
Year    Debt     GDP     GDP
-----------------------------
2004   7,355  11,554    63.7
2005   7,942  12,271    64.7
2006   8,587  12,966    66.2
2007   9,165  13,681    67.0
2008   9,689  14,429    67.1
2009  10,204  15,198    67.1
2010  10,713  16,001    67.0

Source: Fiscal Year 2006, Mid-Session Review, Tables S-1 and S-16,
        online at this link

As can be seen, the review projects that the gross federal debt or public debt (as opposed to the debt held by the public) will stabilize at about 67% of GDP from 2007 through 2010. That is close to the prior peak in 1995. It's unclear exactly what will happen in the years immediately after 2010. In any case, the long-run projections have the debt rising sharply over the longer term.

We're totally in agreement that "it isn't a precise measurement", and that public debt is only important in how it affects more proximate indexes of economic well-being (wealth, income, employment). I keep finding that those indexes are up now from 10 years ago, which were up from the previous decade and the one before. You said you're worried about the dept%gdp and I said I wasn't worried. Maybe we can meet half way at 'mindful'.

I agree that the truth lies somewhere between the beliefs of the "Religion of Doom" and the beliefs of the "Religion of Happy-Happy-Joy-Joy". I believe that it would have been better if we could have paid down the debt a bit in preparation for the Boomer retirement (when we would likely run in back up). However, that's water under the bridge. At this point, I think we need to hold the Administration to its Mid-Session projections to cut the deficit in half and stabilize the debt and begin the work on a serious long-term solution to the budget problems that we are projected to face with the Boomer retirement.