Politics (formerly Election 2012)

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Re: Election 2012

Postby Brekkie » Sat Sep 29, 2012 9:18 pm

The Bush administration gained office with a big budget surplus left over from Clinton's management.
They promptly spent it through the Medicare prescription drug entitlement, and the Bush tax cuts which disproportionately favored high-earners.

This isn't necessarily bad.
The GOP argument has been and continues to be that our tax rates do not occupy the optimal point on the Laffer Curve. Specifically that we overshot, and are taxing too much, and with a non-optimal distribution. That's a reasonably defensible argument.

The Laffer Curve basically predicts that if you cut taxes by X, government revenue will obviously decrease by X, but there will be more economic activity because people will have more money. Due to there being more economic activity, overall people will be making more money, and as a result pay more in taxes, even at the now-lower rate. This increase in tax revenue is Y.
If Y would be greater than X, than you are taxing at too high a rate, and should cut taxes. This would be both good for the population, good for the economy, and good for government revenue.

The Laffer Curve specifically talks about optimizing government revenue treating taxation as if were a business, essentially looking at the population as a resource to be "farmed" in the ideal way to maximize "profits". If you start to try to factor in what is best for the PEOPLE or the ECONOMY at the same time, things can get confusing.
If you go the the logical extreme, the more you cut taxes the more happy everyone will be and the more economic activity will increase. So cutting taxes by 100% would bring maximum happiness and maximum economic activity, assuming somehow that it occurs in a vacuum where all government spending and programs and services continue as normal.

When the Bush administration spent the Clinton surplus on the tax cut and the Medicare prescription drug benefit, and was then suddenly confronted with the expensive War on Terror, there were faced with the problem that they had to pay the bills for two occupations with no corresponding increase in revenue. They didn't want to back out of the tax cuts or the Medicare program, nor did they want to find any new sources of funding.
So they just borrowed, and covered up how much the war was costing by not including it in the budget, but instead periodically going to Congress for rubber-stamp one-time "Contingency Operations funding". Effectively the entire war was deficit spending within the Federal budget, they just refused to call it part of the budget and take responsibility for it.

When conservatives talk about how "Obama massively increased the deficit" compared to Bush, a big piece of that claim is really just that the Obama administration finally added the War on Terror to the official budget and properly accounted for it and how much it was costing. The remaining deficit spending by Obama have been recession-countering TEMPORARY tax cuts (for example the Making Work Pay tax credit, which was allowed to expire after 2 years) and one-off stimulus.

The difference between Bush deficit spending and Obama deficit spending is that, in macroeconomics, you are SUPPOSED to deficit spend during a recession, and then pay down the debt when times are good. But Bush's administration did the opposite, increasing the debt during good times, and leaving Obama with no choice but to continue increasing it during the bad times he inherited. This is why it is not inconsistent to consider Bush's deficit spending irresponsible, but Obama's to be OK. It's not partisanship.

Until recent decades, taxation was viewed as a relatively uninteresting way to pay the bills. Republicans and Democrats disagreed over exactly what money should be spent on, but after consensus had been reached there was a general understanding of the necessity to match taxation to the spending level that had been determined as necessary.

More recently, the Republican party has committed to a different tactic entirely, called "Starve the beast". They view Democratic programs such as the social safety net as unacceptable, but instead of arguing against them on their merits have instead started to combat such programs by making them unaffordable through irresponsible accounting.

The goal goes something like this:
-GOP leaders make an unbreakable commitment to NEVER raise taxes
-When the GOP is in power, they quietly deficit spend and increase the debt to set up further deficit spending in the next administration to look profligate
-When the GOP is not in power, they point at the deficit, the debt, and then at the social programs and demand that the only responsible thing to do is cut them in order to balance the books.

"Starve the beast".
There's a reason why Democrats are always complaining about having to do the hard work to clean up Republican financial messes.




As for Obamacare contributing to the deficit, I really am not sure on that. Conservatives claim doomsday scenarios where it costs huge sums of money. The CBO and the Obama administration, as well as independent think tanks and hospitals, seem to think it will be a wash and break even as revenue neutral. I don't know enough about the guts of the law or the relevant economics to have an informed opinion myself.
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Re: Election 2012

Postby Brekkie » Sat Sep 29, 2012 9:28 pm

He never extended an olive branch, he never gave them anything at all that they could go back to their constituency with, he ignored them and chastised them at the same time.


For the record, it was the House Republicans, Boehner and Ryan in particular, who sabotaged the Grand Bargain which included modest tax increases ONLY on high-earners, and $2 of spending cuts for every $1 of tax increases.

The Tea Party Republicans killed it with their mantra of "No Compromise". The Democrats sacrificed all their sacred cows, and the GOP was willing to give them nothing in return.
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Re: Election 2012

Postby Fridmarr » Sat Sep 29, 2012 10:13 pm

aureon wrote:Enriching the higher shrines brings more investment and less spending, for even more overproduction.
Wasn't the sole cause, or perhaps not even a major one, but to say it had no responsibility at all is quite debatable.
A crisis this long is triggered by something (Oil shock + housing bubble burst), but then keeps going due to worse underlying issues (In this case, overproduction and sticky prices/wages, and if we want to go there, misallocation of talent and capital into non-producing zero-sum schemes such as derivative markets, but that's.. debatable again)

The deregulation didn't happen under Bush (we've seen it going since Reagan), but more than that, what was needed in the wake of electronic fast-communication explosion was the regulation of shadow banking, which didn't happen. And yes, that responsibility was Bush's.
Of course, i highly doubt Gore or Kelly would've done that, either. But "tu quoque" isn't a valid justification.

Overproduction is pretty debatable and certainly I would think that the effects of the US tax cuts would be pretty inconsequential on a global production scale for whatever value you assign to the overproduction issue as a whole.

I think saying that deregulation wasn't an issue (which is what I said), is fairly different than saying a certain set of regulations could have helped. So what I think you are finding debatable is not something that I did say. In other words, I'd agree that some regulations on the subprime market could have helped, I'm simply saying that there wasn't particularly problematic deregulation under Bush.

I don't think subprime regulation in 2000 would have prevented things, but yes we probably would not have been as leveraged nearly as far. Subprimes ballooned in the early/mid 90s, and I really do not think that even if the Bush administration wanted to reign them in that he could have, because they were happening disproportionately for minorities, and any attempt to stop them would have racial implications in congress.

aureon wrote:The truth is, this is the first time that Filibuster became standard operating procedure. Not counting Lieberman, Obama had filibuster-proof majority for less than six months.
Sure, he could've rushed more in those six months, but telling anyone that there wasn't a ridicolous amount of scorched earth opposition from the GOP is laughable.
Even before i actually sit down and studied what had happened in America in the last years, the whole debt ceiling debate over anything makes one notice that something is wrong in the GOP's idea of "compromise" and "politics".
It certainly is not the first time it was SOP. Bush found it pretty regularly with his judicial nominations...I think it reached double digits. However, the filibuster proof majority doesn't really matter to my point, and I'm aware it only existed for a short time. Obama had a handfull of GOP votes for the stimulus which is when he lost control with his divisiveness and he's never made even the smallest effort to do anything about it.
The debt ceiling debate was hardly one sided if you want to talk about things that are wrong with compromise and politics. It's amazing what had to be at risk to get a bi-partisan bill passed on any contentious issue in this administration (70% Rs and 58% Ds voting for it). Scorched earth on one side, zero level of compromise on the other...they just beget each other. There's no right side there, but there is a leader who has done much more to cause it than to solve it.
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Re: Election 2012

Postby Fridmarr » Sat Sep 29, 2012 10:44 pm

Brekkie wrote:The Bush administration gained office with a big budget surplus left over from Clinton's management.
And I bet republicans would counter that it wasn't from Clinton's management but rather it stemmed from their management being the first time in 40 years that they had control of congress. Remember the whole republican revolution and all that.

Starve the beast isn't meant to be accompanied by increases in deficit spending or some conspiracy to bring down the government. The idea actually has quite a bit of merit because you will never get congress to not spend their expected revenue. Bush took a lot of shit over Plan D, in fact it was part of what brought about the tea partiers, in theory deficit spending was their primary aim and many of them (at least early on) chided Bush. Keep in mind their initial focus in elections was on republicans who they felt were not pushing for corresponding spending cuts.

I do think Obama gets a bit of a pass on his deficit spending...to a point. The various stimulus packages have been pretty big and of bleh effectiveness. He also, as you point out now takes ownership of the Bush tax cuts, at least on the part for income earners of less than 250k (all of it for a little while), but that comprises about 75% of the cost if I remember right.
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Re: Election 2012

Postby Paxen » Sun Sep 30, 2012 1:00 am

Starve the beast: "Government doesn't work, and here's how we'll prove it"
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Re: Election 2012

Postby Brekkie » Sun Sep 30, 2012 2:35 am

Here's the problem I have with fiscal conservative ideology:

When I look at government spending, I start from the goal, and work backward.

I evaluate proposed government programs by the following criteria:
1)Is it something worth doing that betters society?
2)Is it something it appropriate for government to be doing, according to the Constitution?
3)Is it something that government is capable of doing more effectively than alternatives, such as private businesses, or that government assistance would complement through a joint effort?

If a program meets all three criteria, I add it to the list of things I want my government to do.
When I've done all my evaluating, I tally up the cost of everything on my list. That is the price of government. I then figure out the most effective way to raise that revenue through taxes.



Fiscal Conservatives look at the problem from the opposite direction. Their process seems to be something like:

1)How much money am I comfortable being taxed/the government having?
2)The government has that much money to use as best it can.
3)Anything more than that is "big government", and must be cut at all costs.


I don't like this. It seems to say "cut things that are worth doing and make society better and that only government is really capable of, for no other reason than my arbitrary discomfort with big numbers".
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Re: Election 2012

Postby Fridmarr » Sun Sep 30, 2012 4:32 am

Brekkie wrote:Here's the problem I have with fiscal conservative ideology:

When I look at government spending, I start from the goal, and work backward.

I evaluate proposed government programs by the following criteria:
1)Is it something worth doing that betters society?
2)Is it something it appropriate for government to be doing, according to the Constitution?
3)Is it something that government is capable of doing more effectively than alternatives, such as private businesses, or that government assistance would complement through a joint effort?

If a program meets all three criteria, I add it to the list of things I want my government to do.
When I've done all my evaluating, I tally up the cost of everything on my list. That is the price of government. I then figure out the most effective way to raise that revenue through taxes.



Fiscal Conservatives look at the problem from the opposite direction. Their process seems to be something like:

1)How much money am I comfortable being taxed/the government having?
2)The government has that much money to use as best it can.
3)Anything more than that is "big government", and must be cut at all costs.


I don't like this. It seems to say "cut things that are worth doing and make society better and that only government is really capable of, for no other reason than my arbitrary discomfort with big numbers".

Meh, that's a slippery slope. I don't think people are particularly good at accurately describing the logic of those that they are ideologically opposed (especially as it turns out, when the left attempts to understand the right). I think we should tread very lightly here, or the thread could quickly get out of hand. Further, when you say fiscal conservatives, that term covers a rather broad set of beliefs.

I'd argue that your first list explains the more main stream fiscal conservatives fairly well, although there would be something there dealing with the level of government (ie. local/state/federal) with a preference towards better accountability in that regard, and a notion of fiscal stewardship all around. Of course, the first item on your list is incredibly subjective too, and can be molded to fit about anything from either perspective.

Your second list seems silly to me and doesn't follow any logic path that I've really ever come across. I don't think it's accurate at all. I believe we ran into this issue pretty frequently in a previous thread (or maybe earlier in this thread?) where you were articulating your perception of conservative ideals.
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Re: Election 2012

Postby Skye1013 » Wed Oct 03, 2012 6:13 pm

Presidential debates ongoing. Should be somewhat interesting to watch.
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Re: Election 2012

Postby Klaudandus » Wed Oct 03, 2012 6:24 pm

Skye1013 wrote:Presidential debates ongoing. Should be somewhat interesting to watch.


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Re: Election 2012

Postby Skye1013 » Wed Oct 03, 2012 7:10 pm

Debate drinking game:
Take Two Big Gulps If...
•One of the candidates says the word "marriage"
•One of the candidates says "equality"
•One of the candidates says "civil rights"
•One of the candidates mentions "Defense of Marriage"

Take One Drink If....
•One of the candidates says the word "Arizona"
•One of the candidates says the term "DREAM act"
•One of the candidates says the term "Deferred"
•One of the candidates says "Job Creators"
•One of the candidates says "Small Business"

BONUS RULES:
•Chug Your Drink If... the term "47%" come up
•Chug Your Drink If... either of the candidates says the whole terms "marriage equality," "traditional marriage," OR "a man and a woman."
•Toast the person to your right if someone says "Obamacare"
•Toast the person to your left if someone says "Romneycare"
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Re: Election 2012

Postby Fridmarr » Wed Oct 03, 2012 7:34 pm

Lol, I didn't watch the debate, but my guess (not being a big drinker), is that I'd be passed out in about 45 minutes by those rules.
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Re: Election 2012

Postby Fetzie » Wed Oct 03, 2012 7:58 pm

My impression (I have no idea how one decides a winner in these debates):

Romney: "I'm going to name as many policies as I can, say we can make them happen while not making the deficit even larger, but not tell you how we'll do it"
Obama: "I'm going to say lots of numbers, but not really say how those numbers make for better policies than Romney's"

Romney showed off how slippery he really is by the way that he avoided responding to Obama's comments and went on to say something else. Also, Obama's closing statement sounded more realistic, Romney's "I'm going to halve unemployment" wouldn't happen if he forced people to work.
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Re: Election 2012

Postby Skye1013 » Wed Oct 03, 2012 8:12 pm

Missed the end of it because of lunch, but I'm not sure Fox News' "fair and impartial" view that Romney "stomped" Obama is true.
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Re: Election 2012

Postby Skye1013 » Wed Oct 03, 2012 8:14 pm

Fridmarr wrote:Lol, I didn't watch the debate, but my guess (not being a big drinker), is that I'd be passed out in about 45 minutes by those rules.

Three rules were hit (from what I heard), but they were definitely hit enough for all but the heaviest drinkers to have at least a good buzz going:
Take one drink if...
•One of the candidates says "Job Creators"
•One of the candidates says "Small Business"
And:
•Toast the person to your right if someone says "Obamacare"
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Re: Election 2012

Postby Klaudandus » Wed Oct 03, 2012 8:18 pm

Skye1013 wrote:Missed the end of it because of lunch, but I'm not sure Fox News' "fair and impartial" view that Romney "stomped" Obama is true.


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Re: Election 2012

Postby Brekkie » Wed Oct 03, 2012 8:30 pm

Those rules are kind of terrible, and clearly written by someone who didn't realize that these debates are themed. This one was specifically focused on the economy.


Anyway,
Romney was incredibly rude and un-presidential. He got defensive early on in particular, practically yelling at the moderator and demanding that he get the last word. He was constantly interrupting, and his smile seemed forced and artificial.

Obama, on the other hand, was really off-form. He kept his dignity, but let Romney jump all over him without really putting up much of a defense. He stuttered a lot, and seemed distracted at some points.


As for substance, looks like my prediction was right:
2) Romney just paints a picture of an entirely different, and contrasting, reality from anything Obama says, and claims that all Obama's statistics are lies and propaganda.

This is probably the best chance Romney has of pulling out at least a draw, and seems to be the strategy his campaign is tending towards (they've issued several statements and articles laying the groundwork for a "Obama is lying about everything! All that stuff about us being in recovery? Don't believe it!" narrative).
If this happens, the liberal-leaning FactChecker sites will declare all of Romney's claims to be bologna, and all the conservative-leaning FactChecker sites will declare all of Obama's claims to be similarly bunk, and no one will be quite sure who to believe.



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Re: Election 2012

Postby Fridmarr » Wed Oct 03, 2012 11:32 pm

Brekkie wrote: So they just borrowed, and covered up how much the war was costing by not including it in the budget, but instead periodically going to Congress for rubber-stamp one-time "Contingency Operations funding". Effectively the entire war was deficit spending within the Federal budget, they just refused to call it part of the budget and take responsibility for it.

When conservatives talk about how "Obama massively increased the deficit" compared to Bush, a big piece of that claim is really just that the Obama administration finally added the War on Terror to the official budget and properly accounted for it and how much it was costing. The remaining deficit spending by Obama have been recession-countering TEMPORARY tax cuts (for example the Making Work Pay tax credit, which was allowed to expire after 2 years) and one-off stimulus.
I got reminded of this today with all the budget talks, and I remember when I read this (and I think it had been mentioned at least once before) it didn't pass the sniff test with me, so I checked into it a bit more and I don't think this is correct.

My skepticism with this comes from the notion that somehow this money wouldn't be included in the deficit. Now, I do realize that there are quite a few articles (and even wikipedia) out there that suggest that it was not, but the data doesn't agree with them. I really think there is just a bit of confusion dealing with timing, and things getting repeated that aren't quite right.

At the time Bush would have submitted any base budget, obviously future supplementals were not known and so they were not included in the deficit projections. Those supplementals weren't hidden however, they were approved by congress and on the books. So after the fiscal year ends and all the financial data comes in, those projections get adjusted by actuals. Since they were asking for these supplementals each year, you could argue he was temporarily trying to dodge responsibility for the cost of the war, but while those supplementals were a lot of money, they were not the bulk of the war spending and any such "dodge" would have been pretty temporary.

The point is, total outlays and receipts are now known, and those supplemental budgets are included because like anything else they are on the books even if they are not part of the regular budget. Probably the best place to get the data is from the White House's OMB webpage ( http://www.whitehouse.gov/omb/budget/historicals ) which has plenty of spreadsheets with total outlays and receipts, which do in fact show a large surge in the deficit over the last couple of years. One easy way to confirm that all the sudden the costs of the wars is not now unfairly contributing to Obama's deficit while Bush managed to avoid them with budget tricks is to look at the breakdown by function and you'll see that defense spending on the books does not spike in 2010, like such accounting shenanigans would require.

Ultimately, the conservatives' claims that the deficit has increased greatly under Obama is true and not enhanced by budget tricks from the Bush administration, but I think you and I both know that that doesn't mean Obama is ultimately to blame. Spending is up a bit under Obama, but also receipts are down a good bit too, which is just a reality of a struggling economy, which isn't really the fault of either administration as we covered earlier.
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Re: Election 2012

Postby Klaudandus » Thu Oct 04, 2012 6:14 am

p.s. "Cutting PBS support in order to bring the deficit under control is like deleting .txt files on your 1TB drive to make more room" -Neil DeGrasse Tyson

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Re: Election 2012

Postby Brekkie » Thu Oct 04, 2012 10:19 am

Fridmarr wrote:
Brekkie wrote: So they just borrowed, and covered up how much the war was costing by not including it in the budget, but instead periodically going to Congress for rubber-stamp one-time "Contingency Operations funding". Effectively the entire war was deficit spending within the Federal budget, they just refused to call it part of the budget and take responsibility for it.

When conservatives talk about how "Obama massively increased the deficit" compared to Bush, a big piece of that claim is really just that the Obama administration finally added the War on Terror to the official budget and properly accounted for it and how much it was costing. The remaining deficit spending by Obama have been recession-countering TEMPORARY tax cuts (for example the Making Work Pay tax credit, which was allowed to expire after 2 years) and one-off stimulus.
I got reminded of this today with all the budget talks, and I remember when I read this (and I think it had been mentioned at least once before) it didn't pass the sniff test with me, so I checked into it a bit more and I don't think this is correct.

My skepticism with this comes from the notion that somehow this money wouldn't be included in the deficit. Now, I do realize that there are quite a few articles (and even wikipedia) out there that suggest that it was not, but the data doesn't agree with them. I really think there is just a bit of confusion dealing with timing, and things getting repeated that aren't quite right.

At the time Bush would have submitted any base budget, obviously future supplementals were not known and so they were not included in the deficit projections. Those supplementals weren't hidden however, they were approved by congress and on the books. So after the fiscal year ends and all the financial data comes in, those projections get adjusted by actuals. Since they were asking for these supplementals each year, you could argue he was temporarily trying to dodge responsibility for the cost of the war, but while those supplementals were a lot of money, they were not the bulk of the war spending and any such "dodge" would have been pretty temporary.

The point is, total outlays and receipts are now known, and those supplemental budgets are included because like anything else they are on the books even if they are not part of the regular budget. Probably the best place to get the data is from the White House's OMB webpage ( http://www.whitehouse.gov/omb/budget/historicals ) which has plenty of spreadsheets with total outlays and receipts, which do in fact show a large surge in the deficit over the last couple of years. One easy way to confirm that all the sudden the costs of the wars is not now unfairly contributing to Obama's deficit while Bush managed to avoid them with budget tricks is to look at the breakdown by function and you'll see that defense spending on the books does not spike in 2010, like such accounting shenanigans would require.

Ultimately, the conservatives' claims that the deficit has increased greatly under Obama is true and not enhanced by budget tricks from the Bush administration, but I think you and I both know that that doesn't mean Obama is ultimately to blame. Spending is up a bit under Obama, but also receipts are down a good bit too, which is just a reality of a struggling economy, which isn't really the fault of either administration as we covered earlier.


Hmmm...

I dug all through those links, and couldn't really find enough information to clarify. I expected it to be easy, because such a discrepancy would appear NOT under DoD funds, but under "Overseas Contingency Funds". However, nothing of the sort was listed under the budget breakdown.

So, from what I can tell, there are three possibilities:

1) I was mistaken about the entire thing.

2) Overseas contingency funding was not, in fact, included under Bush's budget (as I stated), but Obama's budget has not correct the issue (contrary to what I stated).

3) These spreadsheets simply don't document the relevant expenditures under the breakdown of expenditures by function and subfunction. If this were true, the Total expenditures would add up to be less than those show under the Surplus/Deficit spreadsheet. This is not the case, the two numbers match up. So the only way for this to be true is if the expenditures are not documented AT ALL on the budget site, which seems unlikely.

This needs more digging.


One observation I will make is that the DoD numbers I am seeing on these spreadsheets are very surprising to me. Almost as soon as Obama took office, DOD civilian pay was frozen (and still is), projected procurement was gutted, Training slots were massively reduced, retention spending plummeted, refits and renovations were postponed, and shortly thereafter we withdraw from Iraq.
So am I am having trouble reconciling these facts which I can readily observe, with the numbers on these spreadsheets which state that Defense Spending went UP under Obama. Not a sharp spike, but it went up.

Actually, maybe that is the explanation for the main question. All the cuts and squeezing counteracted the big increase of including Overseas Contingency Funds under the DoD umbrella somewhat, resulting in an increase, but not the sharp spike we were looking for in the data.
It's difficult to tell without a much more detailed itemized break-down, but that is a potential explanation.


At the time Bush would have submitted any base budget, obviously future supplementals were not known and so they were not included in the deficit projections. Those supplementals weren't hidden however, they were approved by congress and on the books. So after the fiscal year ends and all the financial data comes in, those projections get adjusted by actuals. Since they were asking for these supplementals each year, you could argue he was temporarily trying to dodge responsibility for the cost of the war, but while those supplementals were a lot of money, they were not the bulk of the war spending and any such "dodge" would have been pretty temporary.


As for this point...
It is important to make a distinction between "adds to the DEBT" and "adds to the DEFICIT". The Bush supplemental Overseas Contingency Fund procurement bills were treated as one-time things. In other words, not a continuing budget element. Remember that the Bush administrative expected the wars to be over fairly quickly.
Thus, they claimed that such spending added to the DEBT, but not the on-going DEFICIT. Therefore there was no need to account for it in budget projections for the deficit of FUTURE budgets, because the money had already been spent and, in theory, they wouldn't need more.
This IS reflected in the Federal Debt Spreadsheet. Yesterday, Mr. Romney accused Obama of "doubling the Federal Debt", but let's look at the numbers:

When Obama took office, Federal Debt was a little under $10 Trillion. It is currently approximately $16 Trillion.

This is in large part due to the $0.5 Trillion drop in federal yearly revenues when comparing 2009 (the results of the crash) to 2007 (pre-crash). Some of this was emergency tax cuts (some of which have been allowed to expire), but most was simply the economy tanking.
Bush left office with a budget deficit of just under $0.5 Trillion per year, so adding the $0.5 Trillion reduction in revenue equals $1 Trillion added to the debt every year, without doing anything. It is reasonable to assume that a static continuation from Bush's policies would have us with at least a $14 Trillion debt right now, just due to the math. Obama's actions really only account for a minimum of $2 Trillion, and a maximum of $4 Trillion of that increase, depending on whether you believe the economy would have rebounded quicker without the government having spent any money.
At any rate, an increase from $10 to $16 is hardly doubling.

Let's compare to Bush:
When Bush took office, the debt was at about $5.6 Trillion. At the time, he entered with a $0.24 Trillion per year surplus, left over from Clinton.
The debt rose to $7.4 Trillion in 2004, and a whopping $10 Trillion by 2008.
If anyone is guilty of doubling the debt, it's Bush.
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Re: Election 2012

Postby Fridmarr » Thu Oct 04, 2012 2:41 pm

I'm pretty certain that those expenditures would have fallen under national defense. If I remember right, Obama did authorize a troop surge at one point and we also had the egypt/libya stuff. I imagine that, along with the ongoing stuff elevated spending for a time. However, you can see that the projections have that spending drawing down as deployments end in the future.

As far as budget, debt, deficit, I think you are munging terms a bit. It's true that those supplementals were not factored into the "projected" deficit, but there is no real concept of excluding them when looking at a historical deficit. An outlay is an outlay, a receipt is a receipt, the difference at the end (assuming recepits are less) is that year's deficit. What spending is considered on budget and off (debt spending) is a totally different matter.

Bush's base budget accounted for the vast majority of the spending on the wars, the supplementals were to fund (in theory) certain temporary additional expenditures. I can't get to the data from here at the moment, but if I remember correctly the supplementals were just around 10%. That's another indicator that the sorts of fiscal trickery claimed could not possibly yield the results of a massively unfair deficit account.

As far as doubling the debt, I am not able to speak to a claim that it has currently doubled, (frankly I think the whole discussion is of very limited usefulness) but I think you need to at least compare an equal time duration. If you are going to compare 8 years of Bush, then you should use projections to 2016 for Obama, and many of those suggest a debt in the low 20s, which would be more than double.

The only factchecking I read of the debates last night was what the AP had put out late in the evening. In terms of fiscal numbers, it was pretty harsh on both, but particularly on Obama.

I didn't watch the debates at all, although the media is an absolute circus at the moment. I swear that they want this thing to be competitive (it would afterall be in their vested interest) so they are making what I guess many people believe as Romney getting the better of it, into some sort of actual chance of his victory in November. I think that's laughable, but certainly not unexpected.
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Re: Election 2012

Postby Treck » Thu Oct 04, 2012 2:59 pm

Not relevant, but amusing (read the fine print ^^
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Re: Election 2012

Postby Brekkie » Thu Oct 04, 2012 6:02 pm

Fridmarr wrote:I'm pretty certain that those expenditures would have fallen under national defense. If I remember right, Obama did authorize a troop surge at one point and we also had the egypt/libya stuff. I imagine that, along with the ongoing stuff elevated spending for a time. However, you can see that the projections have that spending drawing down as deployments end in the future.


Upon reflection, I've realized something I'd forgotten. The majority of Defense Spending is manpower costs. Towards the end of his second term, Bush authorized an expansion in the size of the military, which took place in 2007-2008. I, myself, joined during the beginning of that surge.
My branch, the Marine Corps, expanded from 175,000 Active Duty troops, to 202,000, and increase of a little over 15%. The increase in the size of the Army was comparable.

This, to me, explains the increase in Defense spending that I had been unable to reconcile with all the belt-tightening I've observed in the DoD over the past 4 years compared to the relative days of plenty pre-2008.
With that comes all the ripple effects on other mandatory spending, such as more Veterans Affairs disability claims and GI Bill payments.

So the bottom line is that Obama inherited a military which suddenly cost significantly more. I know conservatives are tired of the constant trope of everything being Bush's fault, and I know it feels like an evasion of responsibility, but I really think it is true with things like this. Authorizing a big increase in the military with no corresponding increase in revenue to pay for it, and then handing it over to a successor, is not something that Obama would ever be able to undo easily, cheaply, or quickly.

And that is proving to be the case. Opposing any reductions in Defense spending is a key plank of the conservative platform, so accomplishing it is politically difficult. And the service chiefs have been refusing to reduce in size back to the original levels, claiming they "would be unable to accomplish their missions". (So, they were unable to accomplish their missions under Bush? Questionable, at best.)
Again, using the Marine Corps as an example, the Commandant, with the support of congressional Republicans, has drawn a line in the sand at 185,000 troops; still 10,000 more than we had during the twin invasions of Iraq and Afghanistan. And the service chiefs have (quite rightly, but inconveniently from a budgetary perspective) refused to implement the draw-down faster than over a 6-year timetable.

It is things like this that make me consider Bush's actions so unforgivable. Turning a 1/4 Trillion dollar per year surplus into a 1/2 Trillion dollar per year deficit was totally, absolutely, flagrantly irresponsible.
It is MUCH easier to piss away a surplus, than it is to claw back a deficit. Even completely disregarding the recession.

Fridmarr wrote:As far as budget, debt, deficit, I think you are munging terms a bit. It's true that those supplementals were not factored into the "projected" deficit, but there is no real concept of excluding them when looking at a historical deficit. An outlay is an outlay, a receipt is a receipt, the difference at the end (assuming recepits are less) is that year's deficit. What spending is considered on budget and off (debt spending) is a totally different matter.

Bush's base budget accounted for the vast majority of the spending on the wars, the supplementals were to fund (in theory) certain temporary additional expenditures. I can't get to the data from here at the moment, but if I remember correctly the supplementals were just around 10%. That's another indicator that the sorts of fiscal trickery claimed could not possibly yield the results of a massively unfair deficit account.


You are right. I think the evidence indicates that I was mistaken. Looking in detail at the itemized DoD budget for the relevant years would confirm. Thank you for challenging my misconception.


Fridmarr wrote:As far as doubling the debt, I am not able to speak to a claim that it has currently doubled, (frankly I think the whole discussion is of very limited usefulness) but I think you need to at least compare an equal time duration. If you are going to compare 8 years of Bush, then you should use projections to 2016 for Obama, and many of those suggest a debt in the low 20s, which would be more than double.


Most the the reason why claims regarding everything from debt to unemployment from both sides differ is what baseline they decide to compare to.
To me, I think the most intellectually honest baseline to compare to when talking about debt is how the the person compares to a hypothetical scenario where they did nothing at all, and just continued the policies previously in place. So, in other words, measure the IMPACT of their decisions, not the CHANGE in the overall situation.

So:
Bush inherited a budget with a $0.25 Trillion/year surplus, and $5.6 Trillion in debt.
If he had done NOTHING for 4 years, and used the surplus to pay down the debt, he would have ended with a $0.25 Trillion/year surplus, and $4.6 Trillion in debt.
IMPACT: +$1 Trillion/4 years, and preservation of the $0.25 Trillion/year surplus. This is his baseline.

So how did he do?
By 2004, the budget had swung to a deficit of $0.41 Trillion/year, and debt had increased to $7.4 Trillion. Compare that to his baseline:
IMPACT: -$2.8 Trillion, plus a -$0.66 Trillion/year impact on the budget

By 2008, the budget deficit was $0.46 Trillion/year, and debt had increased to $10 Trillion.
IMPACT: -$6.4 Trillion, plus a -$0.76 Trillion/year impact on the budget


Now let's run the numbers for Obama.
Obama inherited a $0.46 Trillion/year deficit, and $10 Trillion in debt.
If he had simply continued his predecessor's policies with no change, by 2012 the debt would be $11.84, and the deficit would remain $0.46 Trillion/year.
IMPACT: -$1.84 Trillion/4 years, and preservation of the $0.46 Trillion/year deficit. This is his baseline.

How did he do?
In 2012 the budget deficit has risen to $1.33 Trillion/year, and debt has risen to $16.3 Trillion.
IMPACT: -$4.46 Trillion in debt, and a budgetary impact of -$0.87 Trillion/year.

All of the above makes the following assumptions:
1) The new president faces no new circumstances which require additional spending, whether they like it or not
2) The economy remains equally strong throughout, and therefore revenue stays exactly the same, meaning the only impact on the budget are the president's policies.

Neither of the above are fair, to either President. So putting their fiscal impact in context is important. Obviously Bush HAD to react in some manner to 9/11, and obviously Obama's budget would be impacted by an increased deficit due to decreased revenue during the recession.
But framing things in this light serves the useful purpose of holding the President accountable only for the decisions he made, not the wider state of affairs beyond his/her control.

As I mentioned in an earlier post, a big portion of the increased deficit, and therefore by extension the increased debt, under Obama is the result of decreased government revenue due to the recession. Adding up the difference based on the spreadsheet indicates that, compared to a baseline of 4 years of average 2nd Bush-term revenue, the actual revenue for the past 4 years is approximately $1.24 Trillion less.
I think it's fair to subtract this from Obama's debt impact above, bringing his score from -$4.46 Trillion to -$3.22 Trillion. Still an extremely large contribution, by any standard.

The next step is to delve into exactly where that $3.22 Trillion went.
-About half of it is Keynesian stimulus to save the economy (the ARRA alone represents $0.8 Trillion).
-Another portion of it is increased participation in social safety net programs such as Food Stamps and Medicare, as can be expected during a period of high unemployment
-The bulge of Baby Boomers are all starting to hit retirement age, naturally increasing participation in Social Security and Medicare.
-Mandatory spending requirements went up, such as the DoD spending I mentioned before

For the most part, that is it. Libya was extremely low-impact and low-cost, and while troop presence in Afghanistan was surged by 30,000 troops (at the urging of Republicans and the military commanders), that has since been drawn back down and was compensated for by the full withdrawl from Iraq. We have had no significant presence in Egypt or any other Arab Spring country, apart from foreign aid we were mostly already providing.

After establishing where all that money was spent, the next question becomes: "Was that expenditure justifiable, and the right thing to do?"

From my perspective, Obama's fiscal decisions have been little different from what any Republican would have done. If anything, a Republican would have been more likely to get involved in additional costly foreign entanglements. And there is almost no intelligent argument to be made that stimulus to save the economy was a bad thing, though disagreement over methodology and specifics are reasonable.

This reputation for fiscal profilgacy he has been branded with seems unfounded in data, and unfair. As far as I can see, Obama has been relatively moderate when it comes to spending policy.

Fridmarr wrote:If you are going to compare 8 years of Bush, then you should use projections to 2016 for Obama, and many of those suggest a debt in the low 20s, which would be more than double.

This is reasonable, to an extent, but needs to be compared to the proper baseline context, as I described above.
I don't think it is fair, though, to project a 8-year Obama Debt increase as being a 4-year Obama Debt increase multiplied by 2, as you would have to do in order to arrive at the low-20 Trillion dollars figure. The worst of the recession is over, GPD growth is trending upward, median income is trending upwards, unemployment is trending downwards. So any kind of debt increase projection needs to calculate using those figures projected forward at their current positive trajectory.

Unless you expect there to be a SECOND recession of equal severity, which is different matter entirely.

Fridmarr wrote:The only factchecking I read of the debates last night was what the AP had put out late in the evening. In terms of fiscal numbers, it was pretty harsh on both, but particularly on Obama.

They both said some incredibly stupid and misleading statements in the debate. I walked away from it rather pissed at them both.

I didn't watch the debates at all, although the media is an absolute circus at the moment. I swear that they want this thing to be competitive (it would afterall be in their vested interest) so they are making what I guess many people believe as Romney getting the better of it, into some sort of actual chance of his victory in November. I think that's laughable, but certainly not unexpected.

Romney came out hard and swinging, because it's what his handlers told him he had to do to stay remotely relevant. He was clearly very well rehearsed, and many of his lines seemed prepared specifically to preempt the likely arguments Obama might make, and throw them in his face before he could make them. My Facebook feed will not shut up about the "Mr. President, you are entitled to your own House, and your own Airplane, but you are not entitled to your own facts!" line, as if it was even remotely original. I half expected him to parrot Ronald Reagan's "Here you go again..." from the Reagan-Carter debate.



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Fridmarr,

I want to thank you sincerely for participating in these conversations with me. I value your opinion quite a bit, and value the fact that you help me counterbalance my biases and ensure my positions are grounded in evidence.

Thank you.
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Re: Election 2012

Postby Klaudandus » Thu Oct 04, 2012 6:10 pm

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Re: Election 2012

Postby Fridmarr » Thu Oct 04, 2012 6:43 pm

Brekkie

Yeah that's mostly reasonable not much there I'd disagree with. I don't really hold much value in deficits/debts within the term, most of this stuff has much more long lasting affect, and very few things can generate much of a return in a short time too. I mean most of a president's first year budget is set by the previous session, and since we have all this debt each is inheriting a silly interest payment that is akin to burning our hard earned dollars. I do agree that budgets wouldn't be much different regardless of who is in office.

Those numbers are valuable in a larger sense to evaluate the state of things and projections, but as an indictment or glorification of a single president, I think they are of limited use.

Though I would say, that you have to be careful about the whole surplus coming after Clinton. When Bush took office the economy was in a downward swing that eventually hit a pseudo recession as unemployment crept up (dot com/market burst) which started (after being adjusted re: NBER) Q4 of 99. He inherited an economy that had just peaked, but even with the tax cut, receipts dropped pretty significantly over the next few years as unemployment climbed. Of course, the big war expenditures were his choice, certainly you could argue that the Iraq war would not have occurred without him, though I suspect at least to some extent Afghanistan would have. Also, one of his big domestic expenditures, Plan D almost certainly would have occurred if not more. So yeah, he does have a really really big expenditure on there that you can probably address fully to him, but we were going significantly into the red either way.

One of the difficulties many politicians have is that they want to claim support for some flavor of limited government, lower taxes, spending controls, efficiencies, etc but ultimately that causes a problem with a populace that has, at least indirectly, learned how to vote itself money even money that it doesn't have. I think that's far more responsible for the "starve the beast" sort of data than any real sort of cohesive plan. I don't see that changing any time soon.

I also value your perspective, openness, and level headedness in these discussions. As you know these sorts of discussions are notorious for bad results. But I think most of this thread people have kept themselves fairly objective when their ideas have been challenged and have learned from other opinions. I know I've gleaned quite a bit from your posts and others that challenge me.
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Re: Election 2012

Postby Skye1013 » Thu Oct 04, 2012 7:03 pm

Discussion question:

If we hadn't entered Iraq, do you think the situation in the Middle East would be better/worse than it currently is and would we have wrapped up in Afghanistan before Bush left office?

Additionally, do you think entering Iraq would have been forced at a later date, had Bush not pushed us there when he did?
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