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Where the Budget Deficit Actually Came From(good article to see coming collapse of our lifestyle)
american thinker ^ | 4/20/11 | g richards

Posted on 04/20/2011 10:22:20 AM PDT by bestintxas

I found that in thinking about the budget, I did not have a good mental picture of where, exactly, and when, exactly, things had gotten out of line. So I decided to do a quick analysis of the "big pieces" of the federal budget just to get a feel for the magnitude of our financial problems and where in the budget they were located. It occurred to me that others might be interested in this as well, and that thought is the provenance of this essay.

Just to begin at the beginning, this chart is a "50,000 foot view" of the battlefield. This is a chart of GDP at the top and federal budget expenditures at the bottom.

(see chart)

The orange vertical line is at 2008, the end of the Bush (43) Administration. All the numbers and all the charts in this essay are in current dollars. That means that they are in dollars not adjusted for inflation. The growth rate of GDP that one typically hears -- 4% or 3% or 2.5% -- is a real rate that has been adjusted for inflation. But since the budget in any year concerns dollars for that year, there is no point in adjusting a historic study like this for inflation. Inflation is a different issue and is not important here because everything -- receipts, GDP, expenditures -- are in dollars of the same year and thus of the same value for that year.

This issue comes up right away in the above chart.. You might ask, "Where are the recessions?" in the GDP data. The reason you don't see them is that in current dollar terms they are very small -- they are significant in real

(Excerpt) Read more at americanthinker.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: budget; dsj; economy
I wish that those we entitled over the years to watch the taxpayers' backside could be thrown in jail for what they have done to us and especially our kids.
1 posted on 04/20/2011 10:22:22 AM PDT by bestintxas
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To: bestintxas

bfl


2 posted on 04/20/2011 10:23:42 AM PDT by pigsmith
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To: bestintxas

ping for later.


3 posted on 04/20/2011 10:25:23 AM PDT by Beowulf9
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To: bestintxas

No to jail.... the gallows is what they deserve.


4 posted on 04/20/2011 10:32:28 AM PDT by Gator113 (GAME ON. I'll be voting for Sarah Palin, Liberty, our Constitution and American Exceptionalism.)
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To: bestintxas

bttt


5 posted on 04/20/2011 10:34:36 AM PDT by petercooper (2012 - Purge the RINO's.)
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To: bestintxas

read later


6 posted on 04/20/2011 10:35:14 AM PDT by massmike (DADT repeal: the Boy Scouts now have tougher membership requirements than the Army!)
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To: bestintxas

You mean “where it came from at”?


7 posted on 04/20/2011 10:40:09 AM PDT by AppyPappy (If you aren't part of the solution, there is good money to be made prolonging the problem.)
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To: massmike

Ditto


8 posted on 04/20/2011 10:40:46 AM PDT by arkady_renko
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To: Gator113

“No to jail.... the gallows is what they deserve.”

As long as the rope in made from hemp, have to be PC,don’t ya know.


9 posted on 04/20/2011 10:41:27 AM PDT by fella (... if sinners entice thee, consent thou not. Prov.1:10)
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To: bestintxas
Your "... and when, exactly, things had gotten out of line ..." is too limited.

Go back at least to the New Deal, then overlay that with the decades of total Democrat control of all of the Federal government, and then overlay that with the GOP's "go along to get along" decades. [Even today the GOP has yet to master "Power Politics".] Then refine the above by removing the "accounting smoke and mirrors - shifting sands of "off books" and debt and deficit, ...

How you have kinda' a starting point.

10 posted on 04/20/2011 10:42:20 AM PDT by jamaksin
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To: bestintxas

1960 looks like the problem.


11 posted on 04/20/2011 10:42:44 AM PDT by Paladin2
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To: bestintxas

The article is a careful dissection of the budget deficit. I think that 2007 would have been a better base year because the rats took control of Congress in 2007.

I think that the author has underestimated the impact of Social Security on the deficit. Social Security is now in a substantial cash flow deficit (about $55 billion). I think that the author is using the phony intergovernment interest transfer payments. Without these transfer payments, Social Security was in a cash flow deficit in 2010. With the reduced FICA rates for 2011, the cash flow deficit will grow.

The cash flow position of Social Security underscores the need to provide incentives for individuals to delay their Social Security benefits. I believe that individuals should be offered a payroll tax holiday in exchange for delaying benefits.


12 posted on 04/20/2011 10:44:45 AM PDT by businessprofessor
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To: fella

Guillotines, we need several sharp guillotines, then use the leftovers for compost so we can keep up with Euro-trash trends.


13 posted on 04/20/2011 10:48:00 AM PDT by MHGinTN (Some, believing they can't be deceived, it's nigh impossible to convince them when they're deceived.)
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To: businessprofessor

You are correct. Fiscal 2007 would be a better comparison year. The federal deficit that year was $161 billion.


14 posted on 04/20/2011 10:55:03 AM PDT by p. henry
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To: bestintxas
Sources of the difference in the federal budget deficit between 2008 and 2011

It's not a bad analysis.

Social Security $225 billion 20%
Medicare $100 billion 9%
Medicaid $100 billion 9%
Unemployment Insurance $200 billion 18%
Defense $150 billion 14%
Other $170 billion 15%
Lost Recession Revenue $300 billion 27%
Total $1,245 billion 113%

Easily fixable items

That leaves social security $200B, Medicare $100B and Medicaid $100B which are harder.

Inflation adjusted charts would have been helpful. And claiming politicians have lied about social security is not generally true and not helpful, where else would you put the funds except to invest in government securities? And like any company that issues bonds, governments spend the money they borrow, or they wouldn't borrow it in the first place. Duh!

15 posted on 04/20/2011 10:55:58 AM PDT by DannyTN
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To: businessprofessor
I think that the author has underestimated the impact of Social Security on the deficit. Social Security is now in a substantial cash flow deficit (about $55 billion).

$ 55 Billion is chump change.

In order to get a mental picture of just how large our $14.3 Trillion Dollar debt is, consider this:

If you had a Trillion dollars and started to spend a MILLION DOLLARS PER SECOND it would take 32,000 YEARS, YEARS, YEARS, YEARS to spend Trillion Dollars.

Try and multiply the 32,000 by 14.3 and your head will explode, and that is the grave situation we are in.

16 posted on 04/20/2011 10:57:12 AM PDT by USS Alaska (Nuke the terrorist savages.)
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To: businessprofessor

In writing the same article in a year or two, the massive increases in interest payments caused by short-term borrowing decisions started by Clinton in the present of rising interest rates, will take over to be #1 in his list.

We are looking at another reason to jail/hang em.


17 posted on 04/20/2011 10:58:21 AM PDT by bestintxas (Somewhere in Kenya, a Village is missing its Idiot.)
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To: bestintxas; All
We have a President that does not love America.

There are powers that are locked on to the idea of One World Government, One currency, and thus somewhere there is one power in control of it all. We are seeing complete loss of America's control of America in just over 2 years. Who would have believed it could happen so quickly? It did, it has, it is.

The process has been rather long, but suddenly on warp drive to accomplish it. The redistribution of wealth has been happening in ways for years. Foreign aid, The World bank (meaning America) the United Nations, they are weak, yet they have stolen millions of dollars over many years. We do nothing. We provide the place, the monies, and mainly the power. There is a traitor among us. One that has power, and is in a hurry!

Perhaps there is time to halt this process and work our way back: IF We get back to our Constitution and stop this tyranny of the minority, political correctness, and all such socialistic, communistic, Marxist policies and government. Pray to God for the return of a Christian America, built on Christian principles. in Jesus name and in repentance for our turning away from God. Nothing is impossible for God. Amen.

18 posted on 04/20/2011 11:09:05 AM PDT by geologist (King James Bible only answer to the troubles of this life is Jesus. A decision we all must make.)
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To: bestintxas
At some point, total revenues will equal the interest payment on the debt, and we'll have not a penny for anything else (defense, Social Security, Medicare, etc.). What are we going to do then?
19 posted on 04/20/2011 11:12:33 AM PDT by Deo volente (God willing, America will survive this Obamination.)
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To: geologist

am pleased to hear of a scientist with religious values.


20 posted on 04/20/2011 11:40:47 AM PDT by bestintxas (Somewhere in Kenya, a Village is missing its Idiot.)
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To: USS Alaska

“$ 55 Billion is chump change.”

I agree that $55 billion is a rather small part of the budget picture. However, $55 billion represents a very large problem because SS was supposed to run a surplus until 2017. In addition, SS expenditures have been moderated for several years due to no COLA. SS expenditures will soon become a major driver of government spending especially as inflation accelerates. SS and federal pension COLAs will explode spending in these two areas.

My head is exploding over the enormous amount of government spending. I just wish that the majority would see the light.


21 posted on 04/20/2011 11:45:33 AM PDT by businessprofessor
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To: Beowulf9
Ping for later...?

This piece is such a detailed analysis that it will take a week with no sleep, and straight out rereading, to absorb and understand.

22 posted on 04/20/2011 11:45:46 AM PDT by mmercier
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To: bestintxas

Bookmark.


23 posted on 04/20/2011 12:07:38 PM PDT by Sergio (An object at rest cannot be stopped! - The Evil Midnight Bomber What Bombs at Midnight)
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To: mmercier

Actually very easy to understand.

Quote from a business radio show. Paraphrased.

“When your expenses outstrip your income, your upkeep becomes your downfall.”


24 posted on 04/20/2011 12:22:16 PM PDT by Texas resident (Hunkered Down)
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To: mmercier

“piece is such a detailed analysis that it will take a week with no sleep, and straight out rereading, to absorb and understand.”

I did read some of it, got a headache, but was interested in the fact that it points to Obama as the point of entry when the debt became heightened to unmanageable, as some out there are saying Bush caused the deficit...no surprise. Want to go over it more thoroughly at my leisure, in between headaches from it, of course;)


25 posted on 04/20/2011 12:34:19 PM PDT by Beowulf9
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