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Study: "Debt Problem Began Four Decades Ago"
Townhall.com ^ | January 21, 2013 | Kevin Glass

Posted on 01/22/2013 3:48:01 AM PST by Kaslin

A new report from the Federal Reserve Bank of St. Louis reminds Americans that, contrary to the narrative that huge deficits and debt are merely a recent product of the Great Recession, the problem began over forty years ago.

Daniel Thornton, the St. Louis Fed's Vice President and economic adviser, finds what conservatives have been saying all along is true: it's steadily increasing government spending, not a lack of tax revenues, that's causing all of this.

[A]fter 1970, both revenues and expenditures increased on average relative to the previous two decades; however, revenue increased marginally while expenditures increased significantly... on average, the government spent 2.4 percent of GDP more than it received in revenue during the 38-year period.

The new study confirms that what's been driving the increases in spending hasn't been that old liberal boogeyman defense spending. It's entitlement programs - Medicare, Medicaid, Social Security, and other transfer and welfare programs.

Finally, Thornton concludes, the progressive response that all the U.S. has to do is raise taxes is bankrupt.

The long-run perspective offered here shows that there is a deeper and more fundamental issue that must be addressed if the problem is to be resolved solely or primarily by raising taxes. Specifically, the analysis shows that the deficit/debt problem began when the government decided to increase spending significantly without increasing taxes.


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: budgetdeficit; debt; deficit; kevinglass

1 posted on 01/22/2013 3:48:16 AM PST by Kaslin
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To: Kaslin

I vividly remember the day my grandmother (Grhs), a NYC public school teacher for 50 years, brought home a news article about a new business venture called “a VISA card”. It was about the time they were taking silver out of the coins. She could barely contain her amusement.

She then went on and predicted the next 50 years history with what was in retrospect amazing accuracy.


2 posted on 01/22/2013 3:52:12 AM PST by Jim Noble (When strong, avoid them. Attack their weaknesses. Emerge to their surprise.)
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To: Kaslin

Only four decades?

More like eight decades, back in the FDR administration.

But still - does any previous action justify Obama’s fiscal insanity?


3 posted on 01/22/2013 3:53:26 AM PST by Iron Munro (I Miss America, don't you?)
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To: Kaslin

Duh.

Conservatives have been pointing this out for te last 40 years.


4 posted on 01/22/2013 3:53:26 AM PST by Kozak (The Republic is dead. I do not owe what we have any loyalty, wealth or sympathy.)
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To: Kaslin

As a branch of the Fed oughtta know, it was renders inevitable in 1913. The watershed was 1932, of course, and the murder of the gold standard. The rest is trivial.

Heck, we haven’t had an actual balanced budget and no debt since, what, Jackson? Odd to say the debt problem derives from the 70s.


5 posted on 01/22/2013 3:54:50 AM PST by Tublecane
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To: Kozak

The problem is that every President is guilty. In the 80’s we did not care much for the debt at all. Now suddenly we do?


6 posted on 01/22/2013 3:55:54 AM PST by napscoordinator (GOP Candidate 2020 - "Bloomberg 2020 - We vote for whatever crap the GOP puts in front of us.")
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To: napscoordinator

In the 80s the deal worked out by Reagan with the Rats was 3,dollars in cuts for every dollar in tax increases. The taxes went up but, we know the rest.....


7 posted on 01/22/2013 4:02:03 AM PST by Kozak (The Republic is dead. I do not owe what we have any loyalty, wealth or sympathy.)
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To: Kozak

“Conservatives have been pointing this out for te last 40 years.”

And willingly participating and perpetuating the tragedy, unfortunately.

Everyone should look at the success they’ve seen in the past 30-40 years, and then consider if it is even possible to have a period of austerity, reduced services, higher taxes, and harder word that lasts the same amount of time to pay the bill.


8 posted on 01/22/2013 4:02:53 AM PST by RFEngineer
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To: Kaslin

Uh, yeah...


9 posted on 01/22/2013 4:05:14 AM PST by jimfree (In November 2016 my 12 y/o granddaughter will have more quality exec experience than Barack Obama)
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To: Kaslin

BTTT


10 posted on 01/22/2013 4:07:21 AM PST by HangnJudge
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To: Kaslin

BTTT


11 posted on 01/22/2013 4:08:29 AM PST by HangnJudge
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To: Kaslin

Both sides are guilty. Only one side sees it as a problem. That’s the issue.


12 posted on 01/22/2013 4:10:11 AM PST by muir_redwoods (Don't fire until you see the blue of their helmets)
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To: Kozak

True. Everyone always talks about cuts in Medicare as if that is the be all end all. I don’t see what they can use some imagination and cut the real fat which is the so called disability SSI and other nonsense like the study on the minsi fly....sure they will yell that studying different insects MIGHT find the cure from cancer but after 50 years, how long do you need to study the dang insect. Our Government can cut many areas but the only discussion is medicare which actually is the only area where people ACTUALLY pay into it. Such a weird direction we are going towards.


13 posted on 01/22/2013 4:11:14 AM PST by napscoordinator (GOP Candidate 2020 - "Bloomberg 2020 - We vote for whatever crap the GOP puts in front of us.")
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To: Iron Munro

It went back to the 20’s and 30’s. The interstate/intrastate.


14 posted on 01/22/2013 4:23:32 AM PST by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: Kaslin

We’ve all been living WAY too ‘high on the hog’ for the entire length of my lifetime to date! ;)


15 posted on 01/22/2013 4:42:43 AM PST by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: Jim Noble

Silver coins were last minted in 1964, Bank Of Americard changed it’s name to Visa in 1975.

Just sayin’.


16 posted on 01/22/2013 4:46:46 AM PST by biggerten (Love you, Mom.)
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To: Diana in Wisconsin
"We’ve all been living WAY too ‘high on the hog’ for the entire length of my lifetime to date!"

I am 66 and I agree. Wolf has been cried too many times.
What scares me is that ZERO may get away with it.
The alternative is not pleasant. I hate ZERO with every molecule in my body. But I love my country. I do not want to see us go down. . . . .

17 posted on 01/22/2013 4:49:28 AM PST by DeaconRed (Japan said after WW2 they never considered invading US. Too many with Guns. 2nd amendant worked.)
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To: Kaslin

Shortly after the welfare state started in earnest. Shocking. /s


18 posted on 01/22/2013 4:53:35 AM PST by jospehm20
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To: biggerten

OK, maybe she remarked about Bankamericard, or Master Card and not VISA. The story stands.


19 posted on 01/22/2013 4:54:50 AM PST by Jim Noble (When strong, avoid them. Attack their weaknesses. Emerge to their surprise.)
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To: muir_redwoods

Once important to remember:

(A) Things that do not change remain the same, and

(B) You can never get the time back.


20 posted on 01/22/2013 5:11:44 AM PST by jamaksin
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To: Kaslin

Debt problem began in 1913 when the central government began taxing incomes. As if that wasn’t enough the president at that time, Woodrow Wilson, decided to involve this nation in a strictly European war.

Thus began the guaranteed decline of the USA.


21 posted on 01/22/2013 5:20:12 AM PST by IbJensen (Liberals are like Slinkies, good for nothing, but you smile as you push them down the stairs.)
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To: Kaslin
This is a long slide as the Middle Class is being Pauperized.
The TOTAL Credit market Debt profoundly dwarfs the Federal Debt.
We are approaching a zero crossing for Worth vs Total Debt


22 posted on 01/22/2013 5:27:48 AM PST by HangnJudge
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To: freekitty

The interstate hwy system was brought to life in the 50’s by President Eisenhower. It was based upon military requirements as well as public transportation needs.


23 posted on 01/22/2013 5:32:46 AM PST by billhilly
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To: Kozak

I clearly remember all the gnashing of teeth over LBJ’s welfare programs, deficits, bankrupting the country, “guns and butter” re Vietnam...this debate has been around at least 40 years. I think it really took center stage with LBJ’s “Great Society” programs. What a resounding success hat was — decaying country and social values, no jobs, disappearing middle class, blacks worse off than ever due to government “largesse.”


24 posted on 01/22/2013 5:58:01 AM PST by ProtectOurFreedom
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To: Kaslin

bttt


25 posted on 01/22/2013 6:25:42 AM PST by sphinx
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To: Kozak
How could the ‘Rats keep the spending up as well as get plenty of what they wanted (And Keep) with only a majority control of the House during that time? Lol...
26 posted on 01/22/2013 6:36:54 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: IbJensen
“Debt problem began in 1913...”

Ditto, the seeds of mischief were set during that time (Also Judges began attacking weak points in the US Constitution). Another reason why the word/movement of “progressive” in the realm of politics means malignancy, not proficiency.

27 posted on 01/22/2013 6:46:03 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: IbJensen
“Debt problem began in 1913...”

Ditto, the seeds of mischief were set during that time (Also Judges began attacking weak points in the US Constitution). Another reason why the word/movement of “progressive” in the realm of politics means malignancy, not proficiency.

28 posted on 01/22/2013 6:46:14 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: IbJensen

Apologies for the double post


29 posted on 01/22/2013 6:47:01 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: Kaslin

So it’s not really Obama, Bush, Clinton’s fault??!!!


30 posted on 01/22/2013 6:48:14 AM PST by stuartcr ("I upraded my moral compass to a GPS, to keep up with the times.")
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To: Kaslin

We are so detached from reality, Washington and the American people. They can’t even talk seriously about real cuts, just a slow down of an increase of the budget is cast as an affront to decency and people will suffer and die if the budget increases 1% instead of 4%.


31 posted on 01/22/2013 7:00:36 AM PST by Brett66 (Where government advances, and it advances relentlessly , freedom is imperiled -Janice Rogers Brown)
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To: billhilly

No it started in the 20’s and 30’s. Commerce, etc.


32 posted on 01/22/2013 7:12:20 AM PST by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: Tublecane

Yep...It was Andy Jackson.

http://www.youtube.com/watch?v=7Au2-J-3on0


33 posted on 01/22/2013 7:13:21 AM PST by maxsand
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To: stuartcr
Well Obama has a weak excuse that historians will probably touch on (Since exorbitant public spending keeps looking to the winning policy).

"Congress was not very forthcoming in terms of sending him a yearly budget to sign during the aftermath of the Great Bush depression which would have destroyed the human race. The savior Obama, who was in fact reality's version of Superman, refused the call towards austerity. Obama pushed back the demon possessed Republicans with their spending cuts thus, humanity was saved."

But yes, (Crap, Captain Obvious, with a little disingenuous facts thrown in the mix) articles like this are designed to remove the culpability of present day politicians.
34 posted on 01/22/2013 7:13:34 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: stuartcr
Sorry stuart, meant "...looking to the be the winning policy."
35 posted on 01/22/2013 7:16:19 AM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
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To: freekitty

I entered the United States Air Force in 1956 and President Eisenhower was my commander in chief. You don’t have to take my word for it, here is a reference to the Interstate Highway
system and its development if you care to see it. http://www.fhwa.dot.gov/interstate/history.htm


36 posted on 01/22/2013 9:09:20 AM PST by billhilly
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To: billhilly

I believe you. But the 20’s and 30’s were when this stuff began.


37 posted on 01/22/2013 10:22:18 AM PST by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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