Skip to comments.Why We Should Stop Obsessing About The Federal Budget Deficit
Posted on 11/18/2012 9:29:56 PM PST by Beowulf9
wish President Obama and the Democrats would explain to the nation that the federal budget deficit isnt the nations major economic problem and deficit reduction shouldnt be our major goal. Our problem is lack of good jobs and sufficient growth, and our goal must be to revive both.
Deficit reduction leads us in the opposite direction away from jobs and growth. The reason the fiscal cliff is dangerous (and, yes, I know its not really a cliff but more like a hill) is because its too much deficit reduction, too quickly. It would suck too much demand out of the economy.
(Excerpt) Read more at robertreich.org ...
The best way to generate jobs and growth is for the government to spend more, not less. And for taxes to stay low or become even lower on the middle class.
From Clinton’s economist. Tax less, spend more. Oh boy, is THIS going to be a long 4 years.
These guys are so brilliant. /sarc
Can’t say I’ve been following Europe closely, but is it a fair comparison? Their economies have been so dependent on government for so long, most of their countries don’t have a strong private sector left. There isn’t much left for government to get out of the way of.
Different here. Obama has just been getting started on crippling the private sector. If the private sector here got a clear signal that the government would be getting out of the way, like with a repeal of Obamacare or a big reduction in the deficit, easing fear of tax hikes in the future, then the private sector would be unleashed at full strength.
Sounds like an alcoholic. He is starting to feel sick. Time for another drink.
The liberals have been saying ‘jobs and growth’ are the problem while the debt skyrockets. The problem? Jobs and growth aren’t coming while it skyrockets.
“Their deficits are ballooning because their austerity policies have caused their economies to sink.”
Is this your sentence? If so, you have zero credibility.
Redistribution Communism File.
Their deficits are ballooning because their austerity policies have caused their economies to sink.
Is this your sentence? If so, you have zero credibility.
No, that’s all Reich’s.
” - - - The liberals have been saying jobs and growth are - - - “ code names for “more taxes” and “more spending,” respectively.
It’s impossible - IMPOSSIBLE - for the government to create growth. The government doesn’t PRODUCE anything.
I’m not being hyperbolic. This is the defining distinction between business and government. Business CREATES. Government REGULATES.
Missing barf alert. Then again, the source ought to be enough warning . . .
Government spending doesn’t help the economy grow because it’s usually just wasted. Just like Obama’s programs to patch roads that didn’t need patching. It didn’t work for FDR. It won’t work now.
Government spending increases the deficit, which creates inflation as the government struggles to paper over its interest payments on its debts. Runaway inflation will create fiscal uncertainty and we’ll see prime rates back at 18%. Jimmy Carter anyone?
With the states’ and Obama’s taxing and regulatory attacks on business, the 1990’s can’t be repeated. Too many barriers.
What needs to happen is to get rid of the taxes and regulations on businesses all the way back to Clinton’s presidency. Can’t happen with Obama in office.
So he wants to increase the deficit so that he can reduce the deficit. Probably makes perfect sense to a progresso.
completely wrong and idiotic as shown by the luxury tax fiasco of the early 1990's
They situation will be no different when we have been coralled by other means and are standing around waiting for government arranged doctor appointments.
Robert “Third” Reich....the scorched earth econodwarf of the Clinton Administration.
bump, great point
That is he most idiotic thing I have ever read
We are $16 trillion in debt, officially, this country must be a Garden of Eden!!
The new math, apparently.
Can’t take much more of it.
Reich is a total moron. There’s no help for him.
For you young'uns who don't get it, here's a clip from his TV show: https://www.youtube.com/watch?v=t1iSjl3ukro
So what can go wrong?
The best way to generate jobs is to reign in the trial lawyers, fire most of the regulators, and stop importing most of our consumer goods.
Next: Why Households Should Stop Obsessing About Their Budget Deficits. (Why Spending More Than You Can Afford is Good).
In reality, there is no government deficit, since the bills are paid, the only question is HOW does the Gov't pay for it.
All gov't spending is a drain on the economy,not a plus.
Yes, the Government has done a bang-up job of creating jobs through tax-and-spend over the past four years, hasn’t it?
Are you serious, or are you trolling?
Oh, sorry, I thought *you* were saying that idiotic stuff. Maybe you should have put it in quotes.
$16 Trillion just isn’t enough. If only we owed $20 Trillion this country would be paradise on earth.
“It would suck too much demand out of the economy.”
Suck the $ from socialists - big birds and little turds like Reich. The economy thrives. DEFUND socialist collectives, foreign and domestic.
Socialism Is Legal Plunder - Bastiat
Socialism put us in this hole...
Stop the clock. DEFUND. Prepare. Persevere.
live - free - republic
Utter lunacy. We cannot "grow" our way out of this much debt. Not by keeping taxes/regulations high that prevent market expansion and wipe out profits via arbitrary mandates.
Reduce the size and scope of the FedGov by 80%... The economy will explode like nothing we've ever seen to date.
“All gov’t spending is a drain on the economy,not a plus.”
Only private sector workers actually raises money for the govt. Govt workers do not. Here is the analogy I use to explain this to my lib aquaintances. Your family needs more income so you hire your son to mow your lawn for $500 dollars a week. In return he will give you $200 a week as “a family tax”. Are you making any money on this deal? Obviously not. Reich would say that this has created a job and is increasing the family’s income by $200 a week. In reality, to get that $200 a week you have to pay $500/week. This is essentially what happens with all govt employees. You cant tax them enough to make a profit.
Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected bringing in more tax revenues than anyone had forecast.Arrrrrrgh!!!. I can't take these STOO-PID™ democrat morons and their "Clinton Growth" meme any longer! Every single one of these JERKS seems to be forgetting about a certain thing that happened during the 90s that created that 'growth' and tax revenue.
The Internet, Personal Computers and Software!That was it in a nutshell. THAT is where that "Clinton Growth" came from, nowhere else. And every industry and company that started using all that new fangled stuff created the Wealth and Tax Money that filled Fedzilla's coffers during said "Tech Boom" (scores of Millionaires were created overnight).
So all this 'let's return to the Clinton Tax Rates because they worked' is utter bullsh__. Unless there's some new Bill Gates, Steve Jobs or Michael Dell hiding in some weeds somewhere just waiting to create a whole new industry -- and a new way of living -- a growth like we all saw when Billy-Jeff was POTUS will never happen again. Period, end.
an aside: But Billy-Jeff, being the vindictive pr**k he is, couldn't leave any of that success for Dubya to also capitalize on, hell no. So what'd he do? ... sic the DOJ on Microsoft. Then the 'Tech Boom' went 'Bust', NASDAQ crashed, and Dubya took office with the start of a recession on his hands!
Benghazi-Coward Obama: - - - I dont think anybody is under any illusion that - - -
..My Oval Empty Chair is empty again.
...I always run away whenever there is a major problem that Americans expect me to work on.
....My invention of the smoke and mirrors Fiscal Cliff was just a gimmick to extract a Bipartisan Cave-In from the RINOs, so that I can keep on spending beyond the means of their ability to generate Federal Income.
.....I really, Really, REALLY enjoy riding around in my private Corporate Jet.
......Running away from problems is the ONLY way that I am able to keep from laughing out loud in public at how much fun Im having destroying America!
.......This is so EASY!
........Americans are the most gullible people that the World has ever known!
.........Although all folks are not equal today, my Obamanation Communism policies in the next four years will exceed the wildest dreams of me or my Father, whoever he really was.
..........At last! America will FINALLY become a Third World Country!
LONG LIVE THE TRUE EQUALITY THAT ONLY COMES FROM OBAMANATION COMMUNISM!
This little story is for anyone not familiar with the software industry.
I was working with this software during the 90’s.
They had competitors: SAP, Oracle enterprise software, to a lesser extent JD Edwards.
In the 1980’s, corporate backoffice software ran on mainframes or mid-range computers.
Unix servers were starting to be thought of as an alternative in the late 80’s, but one needed to run a SQL database to store data in, since they did not have a built-in indexed, or even record-oriented file system (files are like PC files, simply a stream of bytes).
Also, PCs were becoming commonplace and had software users preferred - PC’s now had color screens and M$ operating systems were slowly getting to the point of enablingi users to run multiple programs at once. By the early 90’s, the mouse had been invented and PCs were graphical.
A new paradigm was envisioned in the late 80’s, client-server, where the presentation code of software would run on a PC and the data storage was run on a server; application logic could run on either. In mainframe and mid-range, the user was using a terminal, or PC terminal emulator software, which gave them only a login session on the big computer: every user’s entire session, presentation, application logic and data storage, was running on the big computer.
Internal IT departments and software companies were hesitent to take on the job of porting (rewriting for a new platform) their old software so it’s data would be stored in SQL databases instead of the “legacy” mainframe and mid-range file systems. It would involve risk, since the logic had to be separated into 2 or 3 layers (presentation, application, storage) thus it was not a straightforward rewrite.
In steps the entrepreneur. PeopleSoft wrote their own toolset that was client-server in the early 90’s, then wrote software applictions using their toolset. They advertised that their software used date fields with 4 digits for the year and their code was designed to work with that format, so the changeover from 1999 to 2000 would not be a problem. SAP, Oracle, JDE and other smaller firms jumped into the fray. Tons of old software used only the last 2 digits of the year (MMDDYY instead of MMDDYYYY), making it set up to fail any time it compared two dates in different centuries (it would always think dates 2000 and beyond CAME BEFORE dates prior to 2000).
All these new software applications stored their data in SQL databases.
So buying new applications fixed ALL problems. Even then, IT shops were afraid to take on the risk of all these new technologies.
The entrepreneurs mostly had a great plan for this: instead of sending out their own staff to install and configure the software applications, they would start a “gold rush” by HANDING that work to just about anyone who started a consulting firm. They realized a) they could not hire these “implementation” guys fast enough and it would restrain their ability to grow sales of their software, but more importantly - b) the outside consulting firms would be hired by companies to help them decide which company’s software to buy. They designed their software implementation process to be a big project that would take 6 months to even several years for large multi-phase projects. This represented a lot of potential consulting sales - so consultants would HELP THEM SELL as well, often steering clients to the packages most costly to implement.
By the mid-90’s, basically every company discovered that it was going to have a Y2K problem.
Basically, every company in the world was in a race against time to get their essential software replaced with these new packages - and since hitting Y2K unprepared would destroy their record-keeping and ability to do business, this was an emergency which justified just about any expense to fix.
Every company in the world was buying new software, hiring consultants, trainers (all users needed training). All the server part of software would have to run a a new server - and not just one - but typically at least three, one for development, one for testing, one for production. Large projects would buy dozens of new servers for this new software.
Not to mention - every company in the 1990s was figuring out that that they needed a website. Again, it was a new subject they knew nothing about - all this work went to consultants, and ran on -— all new server machines.
IT labor was in such short supply that wages rose so fast that it was typical that a IT employee’s earnings would double or triple in a few years as they changed jobs. People working in non-computer fields rushed into the IT job market, quickly learning a skill and getting hired in an IT job. And still the labor supply was incredibly tight for IT and IT salaries remained high.
The economy was boosted even more by all the other effects this technology boom; the networking industry (H/W and consulting) needed for the internet, IPOs, the stock market, travel & entertainment for consultants on the company dime, real estate market and every other thing consumers buy for newly high-income people, etc., etc.
It was an upward spiral that the government, the Fed and most of Wall Street did not understand and still don’t.
I remember talking with another consultant in the fall of 1999, laughing, agreeing, one needed to be “all cash” in about February 2000.
Software implementation contracts started ending in droves; it took several years for a new normal to be established that had much lower software and consulting sales.
None of this was orchestrated by Washington DC. In fact, in the slow times after 2000, software companies targeted governments and made versions of their software tailored to the government, who bought it to get in on the coolness of the new technology. Higher Ed is more fertile ground where the sell new implementations these days. (The initial implementation is the big sale, after that, the consultants and software companies don’t make as much off the client).
FANNIE and FREDDIE had big hip, cool software implementations going on while they were collapsing. Completely bogus.
Very true. All government workers are paying their taxes with the money of those who produce who paid taxes and hence, their salary.