I've been known to publish a few charts and graphs on the debt from time to time, but this latest gem from the Center on Budget and Policy Priorities is especially important.
Center on Budget and Policy Priorities
We talked earlier this week about a policy detail much of the political establishment chooses to overlook: the fact that policymakers have already adopted a series of measures that will sharply reduce growth in the national debt. Indeed, just since the start of fiscal year 2011, President Obama has signed $2.4 trillion of debt reduction into law. If one includes the projected savings from the Affordable Care Act, that total is even higher.
For the right, which ironically was responsible for creating a fiscal mess during the Bush/Cheney era but which now inexplicably claims the high ground, the progress isn't good enough. We need more austerity, conservatives argue, to address the "debt crisis."
Of course, there is no debt crisis right now -- the U.S. can borrow as much as it wants, cheaply and easily -- and the CBPP's report reminds us that there's no real crisis on the horizon, either.
See the orange line in the image? That shows the debt trajectory under the status quo -- which includes the Budget Control Act approved in 2011 and the American Taxpayer Relief Act (the bipartisan Biden/McConnell fiscal deal) signed into law last week. Under this scenario, the debt, as a percentage of the economy, will dip through the end of the decade before climbing again.
Which is why that red line in the image is interesting.
As the CBPP sees it, if policymakers agreed to about $1.4 trillion in additional debt reduction, the country would be on a "sustainable path." This does not, to answer your next question, include the sequestration savings, which are due to kick in next month.
In other words, for all the handwringing, if policymakers can agree to a balanced deal to replace the sequester sometime over the next seven weeks, they'll practically be done with debt reduction for a long time.
As Paul Krugman explained, "[T]he larger message here is surely that for the next decade, the debt outlook actually doesn't look all that bad."
True, there are projected problems further down the road, mainly because of the continuing effects of an aging population. But it still comes as something of a shock to realize that at this point reasonable projections do not, repeat do not, show anything resembling the runaway deficit crisis that is a staple of almost everything you hear, including supposedly objective news reporting.
So you heard it here first: while you weren't looking, and the deficit scolds were doing their scolding, the deficit problem (such as it was) was being mostly solved. Can we now start talking about unemployment?
That sounds good to me.
Leave a Comment:
Time after time, the GOP endlessly groans and whines that we just can't do anything to raise revenue. Or if we do, we gotta tax the poor and middle class.
What this fails to take into account is that cutting taxes on the rich, on corporations, and on investment stimulates supply. If you don't have equal demand to off set this, you will get more debt.
http://02ae523.netsolhost.com/globalfinancialcrisis.htm
What we need to do is cut supply and increase demand.
You can cut supply by raising taxes on the rich, on corporations, and on investment. Taxes on the rich used to be 92%! It was 70% for most of the 20th century! The fight we just had is on whether the rich should pay 35% or 39.6%!
We desperately need to increase demand. But sadly and stupidly, the Democrats have focused on using gov't spending to increase aggregate demand. That would be great if we could get enough infrastructure bills passed, but since we can't right now, we have to focus on something else. And people who are unemployed can't wait.
The single best thing we can do to help our economy is to RAISE THE MINIMUM WAGE. It would cost taxpayers nothing, it would immediately put more money in the pockets of people who spend it, and that would start creating jobs instantly.
Raising the minimum wage? Great idea. But if you think that will be easier to pass than a stimulus package, you're dreaming. The GOP will just roll out the "don't hurt the job creators" meme...Again.
Alva: You seem so reasonable on every issue but guns. When firearms are mentioned, you turn into a strawman-spewing machine on a binder...
Lebowsky, #1.2
You noticed that, too. LOL
Alva, perhaps you should read this article?
http://changingminds.org/explanations/theories/cognitive_dissonance.htm
Why should I trust any chart that doesn't even have the debt to GDP ratio right? Currently the ratio is over 100%. The usual rejoinder would be the difference represents Govt debt like SS bonds. Really? You're not planning on paying on Govt debt? I don't think so.
People, don't be gullible. Any economic numbers from Mr. Benen have been massaged for Govt's favor.
Right shooter you have Fox news to give you all your answers. We already knew that.
True that.
The fastest way to increase demand is immigration (click here).
The second fastest way to increase consumer demand is education (click here).
Republicans consistently do the opposite, which is why they consistently collapse the economy.
Bud, when you accuse Steve of not having his figures correct and deliberately slanting them for the benefit of the progressive faction, you really should have the integrity of checking out where he got them. As the graph makes quite clear, the Center on Budget and Policy Priorities is the source of the graph and they got the figures from "Source: Center on Budget and Policy Priorities based on Congressional Budget Office and Joint Committee on Taxation data." That you seem to think you know more than the CBO does says a lot about your credibility. Why should anyone take you seriously on anything if you get this wrong?
http://www.cbpp.org/cms/index.cfm?fa=view&id=3885
When the numbers were crunched to get the data in the graph, what were the assumptions about jobs, wages and infrastructure spending?
All I hear about is reducing the deficit/debt by raising revenue by increasing taxes or closing loopholes and cutting spending.
What the heck happened to Jobs Jobs Jobs???
Jobs, jobs, jobs was a ruse, ruse, ruse.
For jobs, jobs, jobs, we need adults, adults, adults in Congress.
US businesses are sitting on record mountains of cash. In order to invest that cash, they need to know what the tax rates and regulatory environment will be over the next few years. Engineering a new crisis every couple of months, refusing to confirm appointments that have overwhelming support, and letting our infrastructure crumble are not the way to create a stable environment.
Congressional obstruction for the sake of obstruction has hurt the nation and continues to hurt the nation. And the fault lies primarily with the GOP.
Jobs maphi? Why would anyone need a job? You would just spend the money. No, lets just follow the republican path to prosperity. Cut your spending. Prices rise, cut spending, family member gets sick, cut more spending. Why would you need revenue coming in when all you need to do is cut spending?
Re: #2.3
Right.......
Following that same logic - if the roof is leaking, cut a hole in the floor - (no money to buy buckets).
Of course, after a while the house is not livable and then you need to ......um......????
John, #2.2 Absolutely. The GOP is the reason for our decline in virtually every way you can imagine. There are a few Dems who vote with them to obstruct, but mainly it is the Republicans, especially the right wing.
Use your guns to take over someone else's home and use up all their resources!
Holy @!$%#balls Batman! Are we talking about Republicans or locusts here?
LOL, Cartoon.
As Violet Crawley said, "a job??!!"
Cartoon, you jsut described Govt's power of eminent domain. They use their guns (eventually) to take one man's house to give it to another man. It's always interesting to see people advocate Govt do what individuals can't. As always, IOKIYAD.
Maphi, where do jobs come from? Who is supposed to be stimulated by all this Government spending? Where do tax revenues come from?
The answer to all the above is business. You folks on the left are going to have to resolve the paradox of hating profit, while demanding the products of profit.
Re: #2.10
So many questions. (Wait - haven't we had this discussion before?)
Jobs come from businesses that can't keep up with the demand by customers for their goods or services with the employees they have. When demand rises, the first thing that a business needs to do is to maximize efficiency - use their workforce most wisely - and work overtime if needed until it is clear that the increase demand is certain. If the business does not have customers, it does not matter what the tax rate is - or what the regulations are - there is no need to add jobs.
Also, government spending for things that government is responsible for results in jobs. Sometimes you have to borrow in order to fix the leaking roof because if you put it off (and assuming you need to stay living in the house) it will only be more expensive to fix. I'm thinking about roads and bridges - you know - infrastructure.
Tax revenues come from individuals making income that they pay a portion of in taxes. Tax revenues also come from businesses that make a profit (BTW profit is good). Sales tax comes from stuff that is, well, sold (meaning there are people that can actually buy the stuff).
People who have jobs are not reliant on the safety net spending - resulting in costs going down.
Now now now, shooter was told by St Ronnie himself that all debt comes from spending on the poor. shooter doesn't accept that St Ronnie was a habitual liar.
Shooter,
While I can only speak for myself, profits are not hated or a problem. The problem is the well-connected maximizing their profits by abusing workers and poisoning the public.
Prime examples of this can be seen in the fossil fuels industries. Oil and gas production is largely exempt from EPA oversight, resulting in opportunities for violation of the Clean Air and Water Acts because state authorities simply are not equipped to do this job. This is largely why hydrolic fracturing is so controversial, for there is no agency empowered to monitor and verify claims made by the drillers (and if they are as safe and clean as they say then they need not lobby for exemption from the EPA). Certain coal-fired power plants have been exempt from Clean Air Act standards, allowing them to pump mercury into the atmosphere and poison the oceans. When EPA finally issues regulations requiring coal-fired boilers to use decades old technology to stop mercury pollution, the right runs ads on 'Obama's War on Coal'.
One dollar of profits at the expense of ten dollars of harm is not a good deal for our citizens or our economy.
Maphi, you've come a long way...
And where do customers get their money? Business. More specifically, profits from business. Why? Because business is the only creator of economic wealth (goods and services).
For some reason you think $10/wk/household (i.e. payroll tax cut) will stimulate demand. It didn't. Yet, it cost hundreds of billions. No, Govt can't tweak demand in a debt driven recession. People are too busy hoarding.
John, I'm going to disagree with your characterization of the EPA. From Forbes....
"In a talk to colleagues about methods EPA enforcement, Armendariz can be seen saying, “The Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years.”"
Shooter,
The EPA enforces the law by means of lawsuits against violators.
If you have a problem with the law, argue to change it. I would love to hear your justification for promoting heavy metal poisoning world wide.
If you have a problem with enforcing the law, then you have more problems than can be dealt with here.
Re: #2.14
I have not come a long way. This is what I have been thinking and saying all along!
Correct - customers get their money from their jobs or investments from business (this is greatly simplified).
The profit a business makes is the cost of doing business (raw materials, keeping the lights on etc, and the employee costs) minus the income from sales of goods or services.
If a business does not make a profit, the business closes and the workers are out on the street. (Bad for everyone)
A business that keeps costs down and increases income (more sales or charge more) can end up with a bigger profit.
When wages are kept low, the workers do not enjoy a benefit from the bigger profit. (except for keeping their job)
When the prices are increased, the customer does not enjoy a benefit from the bigger profit.
When wages are low, the business shows a bigger profit, but the business down the road, where the workers spend their money has fewer customers - so their profit is lower and may go out of business.
I never thought it was a good idea, because tax cuts DO NOT STIMULATE DEMAND. That is why tax cuts for the "JOB CREATORS" do not work!!!!!!
What the economy needs is jobs for everyone who is able to work and a living wage for every job.
Maphi, if not tax cuts then what? Building anything takes years just to get through the permit process. Besides, what would another bridge in Iowa do for Montana? Zip, zero, nada.
How about my suggestion to go ahead and print that trillion dollars and send every household $10,000?
John, I'm going to invite you to google "EPA abuse". The EPA is not a benign organization just following the law.
Right just like ACORN helped pimps import under age illegals, here is a clue shooter those screaming the loudest about the EPA are the same people who violate EPA laws. Here is another clue shooter before the EPA came along people thought running their raw sewage into lakes and rivers was a good way to cure the septic tank problem. Really shooter foaming at the mouth because you were told the EPA was bad just shows why you don't understand the world around you and your impact on said world.
Why can't the Dems make this case? Why does Obama totally endorse the framing that cutting the debt is all that matters, and continually float ideas to hurt people (chained CPI) (and never really touch war profiteers).
#3 How often have I asked myself that question! I still can't figure it. My best answer is insufficient but it goes like this:
Both Dems and GOP are one vulture feeding from the same carrion.
Democrats need to change the narrative in American politics regarding spending in much the same way they they have done with National Security and Defense issues.
The Bush administration demonstrated that Republican policies are not only noneffective but detrimental to the national and global economy.
I think that America needs a reminder not only about the unfunded mandates and the huge cost expansions of the Bush years but also of the insane disregard for any kind of oversight and governance that got us into this mess.
We need to change the narrative the GOP has stuck us with, for openers. It is not Obama who is a tax and spend president, nor have Democrats been big taxers and spenders in the past. Bush was the worst offender for expanding government and reckless spending and we see where that got us.
Obama has been slowly and steadily bringing the economy and debt in line, into the black. We need to fix the income disparity in this country as it is always a flourishing middle class, able to spend money, which drives the economy. This is not rocket science, just supply and demand.
I believe in Keynesian economics, and if we stay on this path, without disruption and obstruction from the right wing, we can get the country on track. Above all, we need to keep the entitlements off the table, as it is these important entitlements which the vultures in Boehner's congress, and the other Republicans want to sink their talons in. To lose the entitlements is a step back into dire poverty and economic chaos. We must not go there.
The sacred GOP cow which needs to be butchered is the defence budget. It is absurdly out of line and bloated. It is NOT social security.
No one knows that better than the Republicans, BTW.
it goes beyond defense spending or things like Commodore Romney's request for more "ships of the line".
Remember the old favorites like Medicare part D, or the "bridge to nowhere"?
The Republicans don't mind "Stimulus Spending" as long as it's "Stimulating" them
Keynes was a capitalist and only advocated government spending when the country was in recession he believed in priming the pump. What democrats always forget he also intended to PAY BACK money borrowed during recession when the recession was over. That part is always conveniently forgotten by dems who have bastardized he philosophy into CONSTANT government deficit spending. He was trying to find a cure for the low end of the business cycle as opposed to simply waiting it out.
This is a disturbing trend. The Republicans are going to have to work double time to blow up the remaining debt reduction talks. Can you imagine what a disaster for liberty it would be if the nations finances were solid? Financial doom is an important part of keeping the population receptive to wholesale looting by corporations.
lb22, #5
I have heard a strange theory about that phenomenon: Fear keeps us spending recklessly. and keeps us distracted. I have no empirical evidence to support this, but lots of anecdotal.
The government has always sold us on some boogeyman, haven't they. When I was a child, it was the Soviets and the cold war. The boogeymen change, but the principle is always there. Now it is terrorism. Or the deficit. Or whatever.....
As my late friend, Gilda Radner, used to say, "It's always something!"
I totally understand why Cockroaches have a higher approval rating than congress,, Cockroaches are cute,,, And Smart too,,,
GreggR,
Well, I'm no fan of roaches, but they are cuter than Mitch McConnell, Lindsay Graham, and John McCain....not to mention that alien looking creature who governs FL, Rick Scot. LOL
but they are more popular than gonnoreah!! Yeah, I know I spelled it wrong but it's just one of those words..
Governments at all levels from national to local, have become smokescreens, through "privatization" (i.e. public money becomes private money, without the benefit of oversight) for wholesale looting by corporations. It's time for a Federal Bureau of Accountability, to track every contract and jail the looters.
I watched a show about Haliburton and they were charging the government $100 per load to do the soldiers laundry and it wasn't even clean when they got it back. I'll gladly do it for $12 a load if they'd like to hire me.
Or at least until the Republican take control of the Government again.
DC Sessions, I think you forgot to add, "God forbid" to that last sentence.
Rachel, what I would really like to see happen- though i know it may seem to be in another universe- is a show on debunking these extremist pieces of "news" by organizations like Newsmax that is claiming that our stocks are set to fall by 90% and billionaires are selling off bank stock like hotcakes. (does anybody actually look at- e.g., Buffetts holdings after reading such things...) Anyway, there are millions of people shaking in their boots in middle america, who are told by their churches and these news people that inflation will be so high and stocks will be so bad, that they may starve. Especially if they are living on their retirement only. Theyre not spending, or selling, etc. How can this be good for our economic recovery?
i cannot wait to hear the state of the union address on feb. 12, 3 days before the debt cieling deadline. it's either going to be amazing or full of anger and frustration. i just hope it doesn't come down to the wire but so far it has every time.
Whats needed is not more Taxes, but tax in a different way.
I can Plant crops on a Rock or in Soil. The Investment will be the same, but the Outcome will be Totally different. One way I Eat, The Other I Starve.
Investments are the same. How it's invested makes a big difference & Tax Policy has a huge Effect on how these investments are made.
Money Invested to make money for Moneys sake is good only for the Few. Money invested to create Actual Jobs is good for everyone Top to bottom. Rich, Poor, & The IRS.
Many argue that Bush Tax cuts didn't work. Actually they did, just not so much to our benefit. In the End we had more jobs. We also shipped millions of Jobs overseas at the same time. So, No We didn't get the bang for the buck we should have. What went Wrong. The TAX Policies as in How we tax.
The Rich should be Taxed. The Loop holes should be geared towards Job Creation. The More Jobs created, the less tax they pay by exemption/credits whatever. And these Jobs should be based in the U.S.. Not Overseas. The Loop holes can be adjusted according to circumstances & Results.
Before someone pounces on me that you need demand for product before people invest to Create Jobs. YOU SIR/MISS/??? ARE 100% CORRECT.
Millions of products are sold everyday due to demand. NOT MADE HERE.
Tax breaks/Loop holes whatever you call them, for NEW Manufacturing products made Here. Bring the Jobs Back. It will take time. We have to relearn how to manufacture certain products. We no longer know how or the technology has changed so much We're obsolete. Can't compete.
People don't realize that this actually falls under National Security. There are half a dozen Countries in the World including China that could bring the U.S. to it's knees by merely cutting of certain supplies. We can't even build military equipment without them to defend ourselves. Even Green Technologies can't be built. They require Rare Earth Elements that We don't mine. We have them. We just don't mine them, And it could take 10 to 20 years to develop. Need a Pace Maker. To Bad & their are many more. A new Car. Backstep about 50 years in technology. We may have to go back to horse & Buggy & Band aids & aspirin. Wait. Do we make aspirin in the U.S. anymore???
Government Stats say it costs them $80K plus per household per year to take care of them when totaled from Fed to city/county level. 15 Million unemployed. 30 Million on Welfare. With Each Job- That's a lot of debt reduction. It could be turned into a surplus.
Good. It looks like with all the cuts we can start another war by as soon as 2017 !!