7 ms·

History indicates that running at a deficit did indeed become the new normal. "There is nothing so normal as a temporary government program."

by dgordon 17y ago

tptacek 17y ago
That's some quality snark there, but as the Fed does in fact routinely increase interest rates, I think your comment is basically content-free.
- anamax 17y ago
  > That's some quality snark there, but as the Fed does in fact routinely increase interest rates, I think your comment is basically content-free. The question is not whether the Fed increases interest rates, it's how close the budget is to balanced.
- jeremyw 17y ago
  Hard to argue with the data. The norm is deficits. http://en.wikipedia.org/wiki/File:US_annual_federal_deficits_over_receipts_1901_to_2006.svg http://en.wikipedia.org/wiki/File:US_annual_federal_deficits...
sethg 17y ago
Does your history include the Clinton Administration, which ran a surplus?
- anamax 17y ago
  > Does your history include the Clinton Administration, which ran a surplus? Yes, it does. Clinton benefitted from the end of the cold war and a repub congress. They couldn't figure out how to spend the "savings" fast enough. (A Repub president with a dem congress might have had the same problem.) What "war" do you see ending that will produce comparable savings? (Obama is winding down Iraq on Bush's schedule.)
  - patio11 17y ago
    Clinton benefited from the end of the Cold War and having a Republican Congress, but he benefited a lot more from the surge in government tax receipts caused by the contemporaneous economic boom. In constant 2000 dollars, in 1992, the US took in 1.2 trillion. In 2000, we took in 2 trillion. You presumably didn't remember the 150 billion added in yearly expenditures over the same interval because it got swallowed by the boom-fueled taxes. Then, the boom ended, as boons are wont to do...
    - guelo 17y ago
      Clinton's deficit also benefited from passing in 1993 "the biggest tax increase in American history"(http://www.factcheck.org/treasury_tax_expert_to_bush_clintons_increase.html http://www.factcheck.org/treasury_tax_expert_to_bush_clinton...) The economy then proceeded to have the longest expansion in American history thus disproving all Republican tax-cut theories, though no one seems to have told them.
      - anamax 17y ago
        > The economy then proceeded to have the longest expansion in American history thus disproving all Republican tax-cut theories, though no one seems to have told them. reply You use "disprove" in a very odd way. No one has said that tax increases necessarily kill economic growth. The claim is that tax increases hurt economic growth. A dollar taxed (or borrowed) and spent by govt accomplishes something. A dollar left in the private sector accomplishes something else. Do you really think that the average govt spending is more valuable than the average private spending?
        guelo 17y ago
        "The claim is that tax increases hurt economic growth." You still have to square that claim with the fact that the 1993 tax hike was followed by the longest expansion in US history. As far as the value of "average govt spending" vs "average private spending", it obviously depends. When the markets decided that the best use of capital was to build a massive oversupply of houses and condos that was not very valuable, when the government decides to fund more college tuition that's a pretty good investment in society's future. When private money decided to fund Brin and Page that was very valuable, when the government decides to spend billions on unneeded fighter jets that's not valuable at all.
- philwelch 17y ago
  The Clinton "surplus" was created by raiding the Social Security trust fund. While every administration in the history of Social Security has raided the trust fund, nearly every administration in that period also ran a deficit, so the problem didn't really come up before. The president who continues running a surplus while leaving the trust fund alone (say, in a "lock box") would get full credit for running a true surplus. That may have been Gore, had he been elected. Or maybe he would have gone apeshit over 9/11 too and spent us into a deficit again. In any case, the best we can reasonably hope for is kind of a seasonal surplus, where the government runs a surplus during boom times and a deficit during recessions. That might average out to a roughly balanced budget over the course of 10-20 years. What really happens is that in boom times, the government rushes for ways to spend all their new tax revenues, and in recessions, the government looks for ways to run up spending in order to fix the recession.
  - dminor 17y ago
    Nobody "raids Social Security" -- please stop perpetuating this silly meme. Social security and other entitlement surpluses are automatically loaned to the government in exchange for non-marketable debt. The alternative would be a larger deficit, for which you'd sell more UST bonds, which the entitlement programs would then buy since they need a safe place to park their surplus. Voila, you're basically right back where we are now - entitlement surpluses funding a portion of the deficit. We don't need a lock box, we just need a more accurate definition of deficit.
    - anamax 17y ago
      > The alternative would be a larger deficit, for which you'd sell more UST bonds, which the entitlement programs would then buy since they need a safe place to park their surplus. It's not clear that UST bonds are a safe place.... SS has made a lot of promises. It's unclear that they'll be satisfied. And, to be fair, there's no legal obligation to satisfy them. The whole "we lent the money to the federal govt" angle will make it harder to fix SS.
    - philwelch 17y ago
      The alternative would be to actually balance the federal budget before taking into account entitlement surpluses, something that not even Clinton ever accomplished. It's a huge violation of the idea of a trust fund to invest that trust fund in loans to oneself.
dgordon 17y ago
Of course, I meant "There is nothing so permanent..."

History indicates that running at a deficit did indeed become the new normal. "There is nothing so normal as a temporary government program."

by dgordon 17y ago

History indicates that running at a deficit did indeed become the new normal. "There is nothing so normal as a temporary government program."

tptacek 17y ago

That's some quality snark there, but as the Fed does in fact routinely increase interest rates, I think your comment is basically content-free.

anamax 17y ago
> That's some quality snark there, but as the Fed does in fact routinely increase interest rates, I think your comment is basically content-free. The question is not whether the Fed increases interest rates, it's how close the budget is to balanced.
jeremyw 17y ago
Hard to argue with the data. The norm is deficits. http://en.wikipedia.org/wiki/File:US_annual_federal_deficits_over_receipts_1901_to_2006.svg http://en.wikipedia.org/wiki/File:US_annual_federal_deficits...

sethg 17y ago

Does your history include the Clinton Administration, which ran a surplus?

anamax 17y ago
> Does your history include the Clinton Administration, which ran a surplus? Yes, it does. Clinton benefitted from the end of the cold war and a repub congress. They couldn't figure out how to spend the "savings" fast enough. (A Repub president with a dem congress might have had the same problem.) What "war" do you see ending that will produce comparable savings? (Obama is winding down Iraq on Bush's schedule.)
- patio11 17y ago
  Clinton benefited from the end of the Cold War and having a Republican Congress, but he benefited a lot more from the surge in government tax receipts caused by the contemporaneous economic boom. In constant 2000 dollars, in 1992, the US took in 1.2 trillion. In 2000, we took in 2 trillion. You presumably didn't remember the 150 billion added in yearly expenditures over the same interval because it got swallowed by the boom-fueled taxes. Then, the boom ended, as boons are wont to do...
  - guelo 17y ago
    Clinton's deficit also benefited from passing in 1993 "the biggest tax increase in American history"(http://www.factcheck.org/treasury_tax_expert_to_bush_clintons_increase.html http://www.factcheck.org/treasury_tax_expert_to_bush_clinton...) The economy then proceeded to have the longest expansion in American history thus disproving all Republican tax-cut theories, though no one seems to have told them.
    - anamax 17y ago
      > The economy then proceeded to have the longest expansion in American history thus disproving all Republican tax-cut theories, though no one seems to have told them. reply You use "disprove" in a very odd way. No one has said that tax increases necessarily kill economic growth. The claim is that tax increases hurt economic growth. A dollar taxed (or borrowed) and spent by govt accomplishes something. A dollar left in the private sector accomplishes something else. Do you really think that the average govt spending is more valuable than the average private spending?
      - guelo 17y ago
        "The claim is that tax increases hurt economic growth." You still have to square that claim with the fact that the 1993 tax hike was followed by the longest expansion in US history. As far as the value of "average govt spending" vs "average private spending", it obviously depends. When the markets decided that the best use of capital was to build a massive oversupply of houses and condos that was not very valuable, when the government decides to fund more college tuition that's a pretty good investment in society's future. When private money decided to fund Brin and Page that was very valuable, when the government decides to spend billions on unneeded fighter jets that's not valuable at all.
philwelch 17y ago
The Clinton "surplus" was created by raiding the Social Security trust fund. While every administration in the history of Social Security has raided the trust fund, nearly every administration in that period also ran a deficit, so the problem didn't really come up before. The president who continues running a surplus while leaving the trust fund alone (say, in a "lock box") would get full credit for running a true surplus. That may have been Gore, had he been elected. Or maybe he would have gone apeshit over 9/11 too and spent us into a deficit again. In any case, the best we can reasonably hope for is kind of a seasonal surplus, where the government runs a surplus during boom times and a deficit during recessions. That might average out to a roughly balanced budget over the course of 10-20 years. What really happens is that in boom times, the government rushes for ways to spend all their new tax revenues, and in recessions, the government looks for ways to run up spending in order to fix the recession.
- dminor 17y ago
  Nobody "raids Social Security" -- please stop perpetuating this silly meme. Social security and other entitlement surpluses are automatically loaned to the government in exchange for non-marketable debt. The alternative would be a larger deficit, for which you'd sell more UST bonds, which the entitlement programs would then buy since they need a safe place to park their surplus. Voila, you're basically right back where we are now - entitlement surpluses funding a portion of the deficit. We don't need a lock box, we just need a more accurate definition of deficit.
  - anamax 17y ago
    > The alternative would be a larger deficit, for which you'd sell more UST bonds, which the entitlement programs would then buy since they need a safe place to park their surplus. It's not clear that UST bonds are a safe place.... SS has made a lot of promises. It's unclear that they'll be satisfied. And, to be fair, there's no legal obligation to satisfy them. The whole "we lent the money to the federal govt" angle will make it harder to fix SS.
  - philwelch 17y ago
    The alternative would be to actually balance the federal budget before taking into account entitlement surpluses, something that not even Clinton ever accomplished. It's a huge violation of the idea of a trust fund to invest that trust fund in loans to oneself.

dgordon 17y ago

Of course, I meant "There is nothing so permanent..."