Mr Rattner, It's surprising that you don't know about Jude Wanninski and the 2 Santa Claus Theory! Republicans are doing the same thing they've done since St Reagan was president - spending like crazy when running the show and screaming about deficits when Democrats are in charge. They want to be the Santa Claus of tax cuts - and who doesn't love tax cuts? They scream about the deficit because they want to end Social Security so that everyone will be forced into the "market" and their donors will be ever richer. And of course when they get rid of Medicare everyone will be forced into private health insurance - donors again. See: http://wallstreetpit.com/26546-jude-wanniski-taxes-and-a-two-santa-theory/
61
A politically connected developer in a city with famously loose real estate regulation - where do you think The Trumps made their money? - who has paid out graft to scores of wannabe electeds, used the awesome anti-citizen power of eminent domain to fraudulently (ahem, through "legal" means) acquire the private property of others, and is a shady "bundler" of dirty campaign cash is a poor choice for poster boy of sensible fiscal policy, or even, as a neighbor. Just another one-percenter the NYT likes to present as men of the people. We see through it comrades.
19
What an abysmal failure this Republican controlled government is.
40
Does anyone believe anything a Republican says anymore?
38
we owe $20T and our GOP wants to add another couple. dems don't seem to care as long as they get some home state perks. this is insane. yes, you are right that reagan started this amassing, with that homespun smile of his. does everyone know that when bush 2 overhauled our healthcare, he forgot to tell everyone that Medicare Part D, the pills for which we do not negotiate w/ big pharma, was not budgeted, meaning it is all borrowed? and now trump's tax reform (like he had input, stupid clown that he is) will surely add another couple of trillion. do you realize that we have to pay over $300B a year on this deficit? and they just gave the pentagon billions more than they asked for (this, again, for congressional members' home state military contractors). my god, is there not a sane person in our entire government?
35
Republican policy:
If the president is a black Democrat, deficits are unconscionable.
If the president is a white Republican who praises white supremacists, even worse deficits are just fine.
54
In adddition to conspiring with our arch enemy, refusing to defend our country from cyber crime, choosing to not defend the constitution and rulle of law, they kept most the beans for themselves. The next phase is a melt down similar to 2008 or worse. Then it will be incumbent on Dems to rectify the situation but what will they do with ar party tht has gone criminal.
17
Our used to be Republican extremists have mutated capitalism into cancer eating our economy. But just to make it better. We are no longer a country we are a business product.
13
they make sense to the 1/10 of 1 and their quest for total ownership of everything that matters.
9
contract negotiators agree to issues knowing they will be long dead by the time issues become due
8
The silver lining of the past year: GOP hypocrisy is now the fiscal equivalent of Trump's naked scalp exposed by the wind. Not much there, there.
14
There is no margin for error in anything God's Own Piglets do. Everything hinges on magic.
12
Where are the Tea Party "patriots" when you need them? Remember how much they used to scream at town hall meetings ostensibly because they were outraged by Washington and Obama's "runaway" spending?
28
The bottom line is that no one in government, Senate and House, Democrat or Republican, cares. All talk of fiscal responsibility has been shown to be an utter sham. Any budget that may be written is likewise a sham, because Congress will simply put it on the Visa. Trump's wall? What's $25BN in multi-trillion-dollar floats? How 'bout another airfract carrier? Whatever you want, Congress is your go-to.
It is now impossible to teach one's children or grandchildren any concept of fiscal responsibility.
5
Republicans get everything backward.
Parades are for when a war ends, not before it begins unless the leader is fascist.
Tax cuts to stimulate the economy are best when the economy is down, not up.
Tax cuts for the rich do not stimulate the rich to spend more, they buy back stocks instead enriching the CEOs.
I wonder what it would take to get a WH insider to tape Trump when he's spouting off? Somebody should start start up a fund to do that!
I guess we'll just have to live with the wife-beater White House longer than we'd like too. The Democrats really should run Elizabeth Warren and Sanders (or somebody like Sanders) as Vice Prez in the next presidential election. I'd support a woman in the WH sooo easily right now. You know, somebody who can write a budget that makes sense and gets our country's priorities right!
9
Look at the photo; Mitch McConnell looks like an undertaker. In other words, for the past year he and his party have been doing a fine job of taking care of the USA -their client. R.I.P.
6
It's like Kansas, and look what happened in Kansas.
15
Hard to keep a straight face. This is steve rattner who was barred from the investment banking industry after settling with SEC for $6mm regarding allegations he was paid for steering NY Pension Fund $.
Also known for jamming auto manufacturers during financial crisis.
4
Rattner is right but CONGRESS DOES NOT CARE and niether do Americans.
7
Steve Mnuchin, Gary Cohn, Mick Mulvaney, Paul Ryan and Mitch McConnell malignly mean to manufacture G.O.P. " Fiscal Disaster" in America again one debt magnifying deficit at a time. They are not "flirting" they are fiercely focused on their goal to sacrifice entitlements to the corrupt crony capitalist corporate plutocrat oligarchs under the mundane cover of the military/prison -industrial complexes.
The Democrats are furtively flirting and flaunting like fools with no message nor messenger beyond fainting and feigning appalling rhetorical outrage. What and who Democrats are fighting for matters much more than what and who they are against.
9
A guy from the Obama administration commenting on economic policy? Oh well I guess useful as what not to do.
Is this Trumpomics? It wasn't that long ago that the GOP wanted to balance the budget or is it only when the Democrats want money for let's say, the ACA? Funny, the states that get the biggest handouts from the Feds are red states like Mississippi and Alaska.
7
Too bad the Democrats were unable to use their veto power to stop those Republican dolts. Where is Shumer when we need him? Nancy after negotiating the spending at least made an 8 hour talk=a=thon to try and block it!!
3
The Republicans are mad dogs foaming at the mouth for power. To get it, to keep it, and not to share it with anyone for any reason. They know that time and demographics are not on their side, no matter how many districts they gerrymander or elections they rig. For these reasons alone there is nothing they won’t do to stay in power, from cheating Obama out of a Supreme Court appointment to selling their vaunted “family values” out to a lying, cheating, philandering traitor to his country to racking up trillions in new debt to pay back their paymasters and throw a handful of dimes at their ignorant supporters in exchange for mortgaging their own and their children’s futures. In short, the Republican Party is a clear and present danger to the Republic.
11
And 5 year from now when these chickens come home to roost, the Dems will get blamed. You can book it.
11
Even though the goPee gave their wealthiest donors a huge tax cut, they seem still eager to see their inflated financial holdings to go up forever.
So, in a Vlad Putin-Charlie Manson attack puts us all into a "bounce-house" economy. What most average Americans may not realize are the “Salvador Dali-esque” typewriter key-to-font linkages that start tapping away when the markets go TIPPSY...!
Donor loses eventually become jobs lost, as a means when projections FAIL to live up to their HIGH expectations..! We had such HIGH expectations from this administration, didn’t we...?
1
If the orbiting Tesla convertible attracts far away intelligent life, how are we going to explain this bunch of Republicans? Are they actually British Tories sabotaging America for revenge. Would they believe Russian agents working to destroy democracy? The first religion invented without any morals? Greed crazed Constitution arsonists? A TV show? Ok, I give up.
5
Is it worth mentioning that Trump himself filed for bankruptcies numerous times in the past. Just replicating his own personal history writ large on our country's fiduciary situation. Add that to the abominable hypocrisy of the Republican party at large, and its a perfect recipe for disaster.
6
The GOP wants fiscal disaster so it can then argue that Medicare and Social Security should be abolished.
9
What is wrong with rIsing taxes on those who have the highest incomes. We survived 91% years past with little difficulty and put the nation roaring ahead. We could also cease our warring. Then there could be a tax on capital assets which I do not think has occurred. That might be extreme.
Perhaps it is time for all of us to think as a nation and act for the good of the nation. Certainly it would be a better way of “serving” than going to war.
3
when the government spends money it doesn't have,
it prints up a stack of paper with numbers and the words 'treasury note' on it.
then it gives it to the fed who gives back a stack of paper with numbers
and the words 'federal reserve note' on it.
then the government can go out and give this money to the big corporations and the big banks and all those people get rich.
its an incredible system which enriches the few with free money.
of course if you are not an insider you get nothing but a lecture in
free market economics and a bill at the end of the year . and of course
your kids will be ruined by this over time.
but who cares about losers or the next generation ?
its a small price to pay to enrich the wealthy today.
3
I lived through President Nixon's infamous "guns and butter" economy. That led to 22% inflation and I had to wait years to buy my first house at 11.7% interest. Many remember President Fords yellow "WIN" buttons. (whip inflation now). It took a decade to recover.
I'm eerily eyeing the same economy, albeit w/o Vietnam.
But why do I have this nagging feeling that those "who don't know history are destined to repeat it" comes into play here?
This will be bumpy.
7
The GOP is more than flirting with disaster. With their tax giveaway, the budget deal, all within their drive to deregulate businesses and eliminate consumer protections the GOP is more like a farmer planting the seeds for a bumper crop of fiscal disaster, that they will try to blame on someone else when it happens.
3
I have not read all of the comments to this article but I did note at least one that pointed to our excessive (indeed obsessive) military spending and forever wars as a major source of the deficit. Watch PBS or listen to NPR. Read this paper or read or listen to other center right to center left, i.e., mainstream news media.
You will rarely find any critique of what our slavish devotion to the military and law enforcement, our use of war and threats of war as diplomacy, and our impossible quest for absolute security is doing to the country. One of the things this almost mindless acceptance of a state of perpetual war and ever expanding bases in the counties etc. is doing, of course, is driving the deficit out of sight while lining the pockets of arms manufacturers. Somewhere around 57% of discretionary spending is for the military. The next step will be to cut social security and medicare because, after all, we can't cut back on the military. This is the way Rome went.
7
"While we all want to see pay go up, particularly for working-class Americans, excessive wage increases can become excessive price increases, which would in turn force the Federal Reserve to increase interest rates faster than it would otherwise."
What is excessive are the profit increases, while wages have been stale for over thirty years the wealth gap has grown steadily for the same period.
Right Rattner, blame it on the lowest rung of the economic ladder. A more likely scenario is that a irrationally exuberant Wall Street came to its senses and realized the tax bill was a suicide note.
This column is not passing the sniff test and I can't help but wonder if it was lifted straight out of the Peterson playbook or another economic think tank.
2
This is a deliberate and recurring strategy by the GOP. They cry that Democrats drive up the national debt and they block every effort to provide needed services to families, the poor and the elderly. When the GOP gets into power, they drive up the national debt with unneeded wars and tax cuts for their wealthy friends. They know full well that the economy will eventually suffer and that they'll lose seats in Congress over it. Then they leave it to the Democrats to clean up the damage. They will hector and vilify the Democrats for every effort to stabilize and grow the economy. They will scream that the Democrats are all about tax and spend and roll out the full compliment of divisive social issues, which by the way, they never "solve" when they are in office. That too is deliberate. The GOP leadership is rife with profiteers, manipulators, and cynics who will do the bidding of the Koch brothers and their ilk as long as the cash keeps flowing in their direction.
5
I fail to comprehend how Congress can choose to fan the flame through this coupling of tax cuts and a gigantic spending package. But I guess the shame is on me for being surprised. Our country is being lead by a person who loves declaring bankruptcy, and I suppose the minions around him have gotten greedy.
3
Put all of the responsibility of this mess on the Republicans. They are the ones who cut taxes without having a budget appropriation deal. And why should the Democrats, who were cut out of the tax cut deal, agree to cut domestic programs to accommodate Republican military spending increases?
That being said, the deficits are frightening. The tea party is nowhere to be found, now that Republicans are in power.
3
This Op-Ed should not be a small link on the side and should be on the front page as a stark warning about the dangers these debt levels pose to the US. Current debt levels threaten the entire western world and global economy, to the extent that the very idea of western democracy is at stake. If the United States continues on its current trajectory, given the likelihood of wars or major financial crisis's over the next 30 years, I don't think defaulting on our debt obligations is that far of a stretch. A general understanding of the consequences of debt is summarized by Moody's analytics as fiscal space.
Since the recession interest rates have been repressed and the yield on treasury notes has been low. Now that interest rates are rising the US will pay billions more to finance new debt. These factors create a major drag on US economy and jeopardize future financial stability for decades .
Republican hypocrisy is undeniable . Not raising the estate tax and cutting taxes on upper incomes was done for donors. Ironically destabilizing US financial stability which will cost them more then it saves. Cutting corporate taxes did need to happen. Democrats are no better, most of this debt is going to medicaid/care and social security, which will balloon. The money spent on these programs makes TOTAL military spending look trivial, and dems don't even mention or care about debt. This is far more serious then any other issue we are facing.
1
Finding spending that we're willing to cut?
Umm, thanks, Steve, for opening up a clear path for inhumane GOP-inspired cuts to Social Security, etc. If you don't specify, that's what'll happen. And maybe that's what your Wall Street buds want?
I'd prefer substantial tax hikes on very wealthy, cuts to defense spending, and sliding tax rates on large corporations based on their hiring of Americans.
4
We should have a high sales tax (10%) as well as a "luxury tax" (10%) on all political contributions over $10000. After all, it is a sale...you are buying a politician. Considering the hundreds of millions of dollars pumped into the elections by the likes of the Koch brothers, (and others) we could go a long way to paying off the debt.
3
Our Washington folk have played these political games so long they are not still in Reality, but in their little world of gotcha.
Unfortunately money screams while good intentions whisper to them, and we continue to be pawns of those who own Congress.
2
I do believe it's a strategy to convince the people that the government has to break their promises to them.
1
The biggest problem with GOP fiscal policy is that they spend our money and we get nothing in return. No highways, no bridges, no schools, no air traffic upgrades, no nothing. If you're not in the defense industry or a Wall Street investor, you get nothing.
3
The last time we had a federal budget surplus was during the Democratic administration of Bill Clinton ( Bill Clinton was president in 1998, when the government finally recorded a surplus. - There also were budget surpluses in 1999, 2000 and in 2001...). Since then the Republicans have been spending money like drunken sailors, beginning with George W's "tax cut" that immediately erased the budget surplus. When you give the Republicans the budget reins it's "Katie bar the door".
1
The GOP isn't flirting with fiscal disaster - they're all the way in bed with it. They want the deficits to explode - because they'll use that to 'prove' we have to cut Social Security, Medicare, and everything else in the 'safety net'. They will use it to dismantle everything that's part of the "librul agenda" - and then they'll turn around and say we need more tax cuts.
And if the economy crashes? Who cares? No bankers went to jail after the last one, and most of the gains from the recovery went right to the top. Sure they took a hit when things crashed, but they were the ones set up to cash in on the rebound.
This is an old, old game played by the 1%. Do a web search on "Disaster Capitalism" - the G.O.P. (Greedy Old Parasites) are playing us for suckers. They won't stop until there's nothing left to loot.
3
Every time there's a large fiscal disaster (housing crash, savings and loan crisis, etc), it is used as an excuse for a massive transfer of public tax dollars to the rich elites. Every single time. Gee, I wonder what might be going on this time?
4
In the Trump era, no one really cares anymore about inflation and debt. For Democrats and Republicans alike, it's party, party, party all of the time, eat, drink and be merry for tomorrow we die.
3
It seems to me that even a person that doesn't read the newspaper or have an education would be able to understand that this environment is not one that produces safety. There is no way that scared and vindictive Trump supporters can feel more comfortable in this environment. In the end they are just going to end up more scared and the ones that are broke are going to end up more broke.
For me this has shifted from primarily a Republican caused problem due to the ridiculous tax cut to a Bipartisan problem with this new spending bill. This is bipartisanism at its worst. Two huge pointless spending swings in a matter of months. This is not how an economy of the size of the USA's should work.
Are we in some kind of upside down world here? Do we (as a country) even have shared values and desires anymore?
2
BTW- I'm LOVIING these tax cuts which equate into almost $600 more a month for the household. (Net).
Never got a dime from the previous administration
It's a trap - all meant to justify cutting so-called 'entitlements', like SS and Medicare, that we have paid into all our working lives and that the gov has 'borrowed' from and never reimbursed. Outrageous.
1
The GOP seems to be coated in Teflon. Nothing sticks. November can't get here fast enough for me. If they survive that election, I will renew my passport and start making plans, since it will be evident that this is no longer the actual United States of America, nor is it ever going to be a safe place, again.
3
Another blow from the chaos of this administration. This time with the help of Democrats who cannot withstand being tarred with another government shut down. The tax legislation is projected to add $1.5 trillion to the debt within ten years. The budget legislation just passed today is projected to also add $1.5 trillion in a few years. Combined that is double the additional debt from the stimulus and recovery funds passed by Congress to move the country out of the 2008/9 "recession."
Who will pay the price? The size of the middle class in this country has been in a steady decline for the past couple of decades, and greatly accelerated in the recent recession. The stability of democratic countries is greatly dependent on a healthy middle class. This not simply about fiscal sanity, but about our democracy -- a reality our elected representatives choose to ignore. One is forced to ask whether they are simply foolish, stupid, or more likely arrogant and ignorant.
2
More hypocritical Republican maneuvering. Make the rich richer, slash services to the common citizen and make our deficits SOAR, while pretending to be the party that is responsible. Hah! They are responsible only to their power elite and their prejudices, and/or those of their promoters, i.e., voters.
1
Both parties in congress have just bought a Tesla on payments, with a balloon payment at the end (both parties contributed to riders and voted for this). There are only two pots of funding large enough to pay for what we have done: Defense Spending & Entitlements. We are either going to have to slaughter a Bull or a Sacred Cow.
Enjoy the ride while it lasts, because there is a trip to the slaughter house down the road.
1
Until inflation was in control people ignored the implications of fiscal profligacy but with the mounting debt burden of roughly $20 trillions, rising trend of fiscal deficit of about $1.5 trillion- result of the huge tax cuts to the wealthy-and debt ceiling hike nobody knows except the GOP, what would be the state of public finance?
4
An action that will would have good economic outcome would be a rise in the minimum wage. Not a small change but one with meaningful results. At least to $12/hr it would even be better at $15/hr. This tied to extending social security and medicare taxes to at least $160,000 in earnings. The result would be a serious increase to funding of these social programs that would lower debt financing . The combination of these 2 actions also would not put pressure on inflation since one offsets the other in consumer spending power.
14
This is why we need a new party. Neither one of them seems to focus on responsible stewardship of shared investments for the common good. As frustrating as Rand Paul can be at times, I felt for him standing up there all by himself knowing he couldn't win but making the necessary point.
9
Paul voted for tax cuts, for God's sake!
This is the GOP game they play very well. If Democrats had the power of 60 votes in Senate for more than 14 weeks in 2009, we would be in much better place now. Better yet, if Gore won the presidency in 2000 we would be in a much, much better place now.
Third party dream is so silly, and the outcome of 2010 midterms is a proof that Americans are way too ignorant to play with what they have.
Rand Paul voted for the obscene tax cut bill. He has only one leg to stand on. Congress should listen to him on the bloated cost of the military and defense, but his positions on domestic needs and the health and well-being of ordinary working Americans, and the care for the old, young and disabled should be seen for the uncaring, cold and calculating policy that it is.
3
What point was Rand Paul making a few days earlier when he voted for the trillion dollar plus tax cut? Of course we can't afford increasing domestic programs, or war (e.g. Iraq), if we cut taxes for the wealthy at the same time!
1
Where are all the Republican supporters who elected or reelected their respective representative or senator? Are they even paying attention to how they are voting and will they remember come election time? From what my conservative friends are saying, they will completely overlook the campaign promises on debt and deficit from the 2016 election and vote for them again in 2018 and 2020. Hypocrisy of the highest order and zero accountability.
20
On being willing to raise taxes, we in NJ have never been reticent to do so; only some of our Republican "leaders" have balked on taxing the wealthy. In NJ, historically and still now, the burden of state taxes arise by local option. Each municipality creates its own budget and levies property taxes to support that budget, of which 50% to 70% typically goes toward the costs of educating its children. Additionally there are some taxes levied by the state government. So the decision to raise the bulk of one's taxes is made locally, the state is not the culprit, and the decision is made willingly; many, if not most, Jerseyans have demonstrated we are willing to pay for what we want, we are willing to pay for a better quality of life. In fact it was a Democratic governor, John Corzine, who decided he needed to protect us from ourselves and, so he imposed a 2% cap on municipal tax increases in any given year. Of course, his Republican successor, Chris Christie, was only willing to continue such practice and also to prevent the "millionaire's tax" from being instituted.
So, despite what the Republicans say, we the people are willing to pay more taxes, especially if they go for improving our quality of life.
12
Agreed, we pay more taxes on our home in NJ than Fla, but NJ uses the monies wisely, such as Education, NJ wins hands down. This is similar with infrastructure.
1
The GOP can't govern, but as long as it keeps playing its culture cards -- against abortion, for guns, against LGBTQ and for restricting immigrants -- it will lock up every election in the forseeable future. It has mastered the art of appealing to single-issue voters to advance its Trojan Horse agenda.
32
I'm no educated man, just the proverbial 800 lb. gorilla.
Anyone please explain to me: how can tax cut be compatible with billions in deficit spending, formulated by an erstwhile G.O.P which has always 'cried wolf' on budgetary deficits, such incompatibility without throwing the economy, or the dollar, off kilter, let alone, comes next election for the GOP stand accused as fraudsters by the voter ?
Rhetorical Q, I suppose.
9
The answer to your question in the first sentence is that Republicans are hypocrites.
1
Anything is possible where everything is fake.
2
My Mom used to warn me that hanging out with bad people would lead me to make poor decisions and forget how I was raised. Somehow, everyone who hangs out with Trump seems to forsake their values and their guiding principles on how they were raised. Apparently, she was also right when she said, "You lay down with dogs, you get up with fleas." And the GOP has a mess of them.
27
Perhaps some thought should be given to cutting ludicrous spending, like:
-medicare costs at end of life that are fruitless
-welfare for those who chose not to work
-welfare for those who chose to have kids they cannot afford
-dollars towards educating illegal kids
-dollars towards supporting illegals
I could go on and on. Stop demonizing my success when I pay a far larger percentage of my income to various governments than those who make less money than I do. Increase their taxes for a change. We got Trumped because those that work got sick of being called out as the problem in the economy during the Obama disaster. Learn from it.
5
I agree in general. However we all need to make sacrifices because of the mistakes the current and past 2-3 administrations. Two wrongs does not make a right especially with debt obligations. Serious cuts to welfare i.e. medicaid/care social security as well as tax increases where they are least harmful to the overall health of the us economy are needed to avert serious problems.
Cutting taxes for high income earners and not raising estate tax to pay for corporate cuts were mistakes. Most wealthy individual own stocks and other assets, their appreciation due to a healthier economy will far out weigh a 2 percent lower tax rate which will be paid for by debt at its cost plus the cost of its interest.
We cannot jeopardize future economic prosperity and national security so we can pay a slightly lower income tax rate.
1
These reasonable sounding phrases do not hold up to scrutiny when one considers the consequences: loss of dearly won freedoms, worse results than stated, loss of the contributions that DACA kids now make, and that few people who can work, choose not to. I could go on as you say, but each of these topics has been the subject of years of good research and are often involved with agonizing family issues. And if you think Obama was a disaster, IMO you have been paying attention to very selective news sources.
1
I don't recall the Obama administration demonizing anyone's success. I agree with your points regarding welfare and educating and supporting illegals. However, let's not forget that the Obama administration tried to resolve some of the issues regarding illegal immigrants and had a bipartisan agreement to address these and related issues including DACA, border security and working VISAS, but was stymied by the just-say-no G.O.P.
Regarding Medicare spending as referenced above, I don't recall any complaints from Doctors, hospitals, nursing homes etc. regarding this ludicrous spending.
What's ludicrous is my spending $361 for a ten minute meeting with my Oncologist every Monday during my three month radiation treatment.
This is absolutely on the money. The resemblance with Reagan tripling the debt is uncanny. At some point it's going to hit the buffers. Not sure when but to be running trillion dollar deficits when the economy is operating at or close to full capacity is reckless in the extreme. The economy is probably going to tick up a little in the short term with all this additional spending it's going to hit a wall probably in about three years time.
11
The debt problem is so much worse then during the Reagan years that it is impossible to compare the two. Obama, Bush and many others share as much if not more blame then current policies.
Too late.
That $5 trillion ship sailed on December 22.
4
This tax cut for the big corporations and extremely wealthy needs to be undone asap--in our system that means in 2021. Otherwise the good ship USA is going to the bottom of the sea.
If work working-class Republican voters were good with math they wouldn't be working-class Republican voters.
28
If they were good at financial diligence, they would have discarded any notion of voting for Trump without seeing his tax returns.
1
The GOP is flirting with disasters in addition to fiscal disaster---the disaster of war with North Korea, the disaster of not being a world leader, the disaster of our infrastructure crumbling into uselessness, the disaster of a president who doesn't know what he is doing...
20
They're trying to get God to intervene. This nation is supposed to be "under God". They know we need to see proof of this.
"The G.O.P. Is Flirting With Fiscal Disaster" - Headline to this column
Wait a minute. This was a bipartisan deal supported by Chuck Schumer.
If it becomes a fiscal disaster shouldn't the Democratic Party shoulder a good part of the blame? Rattner is a longtime Democrat. Perhaps NYT readers should factor that in before limiting blame to the Republican Party.
And maybe we should wait to see if tax reform on this scale does in fact become a net revenue producer for the government.
4
Deficits should be reduced during times of prosperity and full employment. If we drive up interest rates with excessive borrowing, the interest cost of the deficits will accelerate and cause misery for everyone. It will keep us from investing in our infrastructure and necessary government services. We need to increase taxes on the billionaires who got the major benefits of the tax cuts as a first step.
8
It would be insane for Schumer not to try to get help for those in need when the Republicans keep shoveling borrowed money at the wealthy, big business and the defense establishment. Ordinary workers and small businesses have been shafted since Reagan, and there needs to be a reckoning paid for by the 1% who just received 80% of the borrowed and unpaid for tax cut.
Rattner blames the tax cut as well as the budget deal, and that is arguably the greater of the two contributors to the deficit - Democrats had nothing to do with that.
1
Even though the goPee gave their wealthiest donors a huge tax cut, they seem still eager to see their inflated financial holdings to go up forever. So, in a VV Putin-Charlie Manson attack puts us all into a "bounce-house" economy. Donor loses become jobs lost..!
A friend that I worked with took a vintage 80's heavily fortified Mercedes Benz that needed a new engine and pops in a Chevy V-8 and matching tranny. Thus the beast was known from then forward as the "Bow-Tie Benz."
What 45 didn't take into account when he decided not to ask Ms. Yellen to stay for another term, was the equivalent to ripping out the engine, tranny, and all the linkages involved from Bernanke to Yellen before ordering the NEW tRump-grade engine, tranny and all the wiring harnesses, hoses, belts and linkages.
All in all the Bow-Tie Benz was a project that took my friend months and months to get it road worthy and registered again in the state DMV. He didn't mind that it wasn't drivable for so long, because he had another dependable vehicle and he loved working in the garage in his spare time.
Unfortunately, the US economy tho has a vast, complicated, interlocking systems that may be dependent and/or independent, that act together like a very large air-worthy/sea-worthy vessel.
When you disable the rudder and GUIDANCE SYSTEMS (Janet Yellen) and decide to overhaul it completely from stem to stern, don't expect when you bring it in on Friday late afternoon to be ready the first thing Monday morning...!
5
US monetary policy doesn't even operate with any logical connection to what gives intrinsic value to fiat currencies: their capacity to make more of themselves when deposited in banks that steer money to its most urgent demands.
Mr. Rattner blames the excess spending on the G.O.P. (see title), but acknowledges the role of the Democrats in insisting on matching the increase in defense spending with an increase in domestic spending. He will say that he did not write the title, but however did misled the readers.
2
My father told me, when I told him that I was concerned that my then-husband was spending money as fast as I was saving it said I had two options: 1. Spend with him so you'll both be broke together. 2. Have a separate bank account so he can only throw away his money.
The country can only do option one. They can't set up separate funding accounts, so spend with him because the other side will take your money when they run through theirs.
1
What else is new?
If the government: a) lopped off 10 percent of the 0.01% corporate tax break, b) made each of the 4 military branches pick one pricy land, sea, or air vehicle, and c) dumped the dumb wall idea, we could save all sorts of money.
2
It’s ok. Republicans will pay for this yawning deficit with your social security.
11
And Medicare as well.
A Wall Street financier telling us to beware of wage increases for regular Americans? That's rich...really rich...
9
They are fools. But we all are fools. Only a nation of dunces would have let Congress repeal the Glass-Steagall Act, and a Democrat, Bill Clinton, signed that repeal into law.
I'm aware that we ran some small surpluses in the Clinton years and actually began to play down this debt. But he and the GOP Congress together set the stage for the Wild-West style banking that ended any notion that you could save money and earn interest. When consumer banks got into equities, we became a nation of gamblers.
And now this. It is more gambling and it will end our time as a major nation. We'll be insolvent in a generation.
8
Glass Steagall became unworkable after Congress dumped the "dual mandate" onto the Fed and it began to move interest rates all over the board trying to influence employment rates.
Glass Steagall was predicated on monetary policy that maintains stable interest rates and stable risk and term adjusted yield curves.
The logic is not difficult to understand. Spending (in favour of everyone) more is in Democrat's political genes. Raising taxes or borrowing is a less important question. They stick to this political ideology whatever. Republican's political gene is to be in power to serve the affluent, whatever other considerations. If Democrats hold the presidency or congress, they will adopt whatever ideology makes Democrats (and America) fail, so they can win the next election. Therefore the 'no stimulus, debt matters' position when economics required it. But when they are in power, they go for the normal 'spend (for the rich) and don't charge (to win the next election) policy.
2
Steven Rattner does well to remind us of the perilous journey facing our already overly indebted country as reckless political leadership from both parties increase spending and decrease tax rates in tandem. Hopefully the worst economic consequences of this macabre political theater will never be realized. But capital markets have a way bursting bubbles. Excessive borrowing precipitated the infamous Latin American debt crisis of the 1970's-80's, the foreign currency free fall of many Asian economies in the 1990's, and the collapse of the real estate market in the U.S. circa 2008-9. The extraordinary rise of crypto currencies, notwithstanding more recent declining valuations of bitcoin, further remind us that uncontrolled speculation is running rampant amid the practice of spending today what we hope to earn tomorrow. Fiscal reality television permeates the corridors of Congress, orchestrated by the maestro of debt in the White House.
6
The likely route out of this mess is printing more money to make a debt of trillions paid off in ten years only billions in today’s dollars. Unfortunately for the rest of us, in ten years our saved dollars will buy only 10 cents worth of goods, and a living wage will be $1,000,000/year.
2
What doesn't get mentioned much is the incredible cost of war. An unbelievably expensive indulgence. How many are we running now? Does anyone even know? They're spending another umpteen billion? If the military gets much bigger, it will just take over, if it hasn't already done so. I see they have their own insurance companies. Police forces are militarized. Bush's Iraq War, otherwise inexplicable, set the whole thing in motion.
8
I was wrong, at least so far.
At first I believed that the U.S. Treasury would be looted by well-placed members of the Trump administration, in an underhanded manner... whether by accounting means, bogus contracts, kickbacks, you name it.
Instead, the heist was done in open sight with the aid of a uniformly complicit GOP congress. Their mantra was that the middle class would benefit with bigger paychecks and lower taxes.
Really? Most people pay minimal income taxes, but significant sales tax, lotto fees, etc.. As for bigger paychecks (ha ha), the increase might pay for an extra latte or so each week at Starbucks. Do the math.
Any of that "bonus income" for the masses that is left over would be overwhelmed by increased prices for imported goods due to the trade sanctions.
Like anything else, when it becomes extremely top-heavy, as with our highly skewed income concentration , it will eventually topple, sooner or later. (Oh, and for good measure, to perpetuate and exacerbate the problem from one generation to the next, how about chipping away at the estate tax for those poor millionaires?)
3
Our nation's debt is a huge problem but even HUGER is the debt of a growing number of Americans who will never make enough money to pay what they currently owe. And Americans are not saving these days, either.
To date a large percentage have defaulted on student loans with many more nearing that point. No one mentions what a terrible hit tourism in the USA has taken under Trump -- in the billions -- not only because people from other countries hate Trump and his policies, but they also mention they're concerned about taking bullets while sipping a Miller Lite at a concert or a shopping mall.
What's more, if the tax cut is so beneficial, why are so many GOPers running for the hills? Is it perhaps because they got what they wanted and now they're cashing in?
Our infrastructure is crumbling but Trump says he saved that for later because "it's easy." Yet members of congress admit to having no idea where they'll get the money for infrastructure needs. I know it's a tough choice, but who's the most credible and informed on that topic?
5
It's hysterical that Mr. Rattner would label this a G.O.P. problem.(Not a Trump or Republican supporter). Congress and various Administrations have been passing the buck on spending for years.
Mid-terms are just around the corner and this budget is a big piece of cake for the American people to keep everyone satisfied.
4
What's shamelessly hysterical as well as hypocritical, is how the G.O.P.'s position on deficits and fiscal conservatism/federal spending has shifted 180 degrees since being in control of Congress. Their irrational justifications for this is political hubris and is in direct contradiction to their icons: Abraham Lincoln, William Buckley Jr. and Ronald Reagan.
1
Tax cuts for wealthy people who don't need them, plus new and extensive military spending for a nation that already outspends the rest of the world exponentially, led by a President who's had a minimum of 4 bankruptcies in his pre-political life abetted by a Congress who's willing to give him anything because they don't know how to do anything except worship moneyed interests and warmonger. What could possibly go wrong? After all, this is the American dream. Get rich, gain power, kill.
9
His hubris at Davos jinxed the market, and the market responded on ground hog day so it could do it over, and over, and over.... So why should investors fund the risk of a ballooning deficit? When bankrupting the economy is the republican game, what is the most likely dollar exchange rate with the Euro on January 20, 2020? $3:1? $5:1?
1
Oh stop.
Every administration "flirts" with it. We run huge deficits and liabilities every year, why would it change now?
We're all going to be fine.
Guns and butter, too! This was the ludicrous fiscal policy pursued by President Johnson during the Vietnam years, which later evolved into roaring inflation. At least then Johnson had the excuse of not wanting the American public to feel any fiscal pain from an increasingly budget-busting war. But what is Trump's excuse for his trillion dollars deficits when we are at near full employment? Why, tax cuts for the rich!
6
The repubs are not flirting with disaster, they invited disaster in and gave it a seat at the head of the table. All they need to do now is start a war and spend even more on some half baked to-do that we have no business messing with. Every republican recently in office has started a war of some kind, think about it, Reagan, Bush, the war on drugs, Iraq, Afghanistan, their answer is always war. Now the war is honed in on the American people and our way of life. There is no "flirting" here, make no mistake it's a war, and "we" out here are the target. They are so out of touch with the rest of us they are not even in the same stratosphere. But no flirting, no dancing around the issue(s), we are in it full tilt.
1
no problem - they will cut Social Security and Medicare and blame everything on the Democrats
4
They are totally okay with this because this will give them a reason to gut social spending which people like Rand Paul and Paul Ryan don't believe in. During Ronald Reagan's administration they promoted a bogus economic theory called the Laffer Curve which posited among other things that tax cuts would stimulate the economy to the point that it would make up for the lost revenue lost to tax cuts. David Stockman, Reagan's cheif economic advisor admitted that they all knew this wouldn't happen and even better it would give them further impetus to make deep cuts in social spending such as Medicare and Social Security. If and when this happens, many members of Trump's base will discover that they are going to get reamed in a "bigly" way.
6
I one can only hope that none of that so-called military budget includes the Trump Wall...or I personally will be putting up another billboard outside of Ebbings...
When the US economy implodes or explodes with all this free spending and no income, the Republican party will be out of power and it'll be up to the Democrats to save the system. This is what happened in 2008 and Obama put in policies that prevented US bankruptcy. For that he was hated by every Republican especially the white ones.
9
It is one thing for the GOP to flirt with disaster. It is quite another for that party to propose, engage, and marry yet another beautiful tax cut bill, then run off on spending sprees with Other People's Money yet again.
You would thing that after Miss Reagan Cut quadrupiled the national debt in 11 years and Miss WBush Cut doubled that higher level, it would become clear that a third such marriage was not likely to be 'the charm'. Yet here we are, increasing spending after a massive Miss Trump Cut charms the GOP into yet another 4 to 8 year marriage.
Does this GOP behavior remind anybody else of Donald, Ivana, Marla and Melania?
2
Always puzzled why the Grey Lady thinks that massive deficit spending by Dems is good while massive deficit spending by Republicans is bad.
"Always puzzled why the Grey Lady thinks that massive deficit spending by Dems is good while massive deficit spending by Republicans is bad."
Read Keynes.
1
I'm always puzzled how some commenters seem to have a 2-week memory span and only read headlines.
1
You mean as if anyone really believes that Keynes has anything to say about real-world macroeconomic systems?
And all this before the undoubtedly crony-infrastructure farce!
Will that add $1-2, or 3 trillion to the very likely $2 plus trillion they put on the tab already?
RIP the "fiscally responsible Republicans" charade.
Americans, wake up.
1
The process we are seeing is not government in any sense. Congress is simply buying votes while lining their pockets with campaign contributions. There is no ideology or grand concept of governance involved. Organized "special" interests have simply determined that they can bribe congress to pay them off with borrowed money or through tax loopholes.
The process will continue until the treasury has been cleaned out so to speak, and can't find anyone to sell bonds to at reasonable yields. At which point the US will find itself in extreme financial distress, with tax yields stagnant and interest costs skyrocketing.
I'm sure that this represents some sort of "standard" late stage of imperial decline, although knowing this doesn't make it easier to watch.
The answer to Franklin's comment that we've got "A republic, if you can keep it." would appear to be no. Venal legislators combined with an apathetic public have proven to be lethal combination.
3
Can’t we just slash the military instead?
Bring them home.
4
You can't do everything for everybody all the time. Cut expenses
Socialist governments always run out of other people's money.
"Cut expenses" Or, cancel the tax cuts. Why should taxpayers subsidize corporations, business, and the lifestyles of the rich and famous?
6
Do we eliminate the tank program the Army doesn't want, the ever costly and unneeded F-35s and the tax breaks for horse owners or end CHIP and slash SNAP and Medicare?
"The ratio of debt to gross domestic product) could reach a record 109 percent by 2027, exceeding even post-World War II levels". (Steven Rattner NYT 2/9/18).
That statement from Steven Rattner's article in todays NY Times should awaken even the most casual economic thinkers to the fact that our economy is unsustainable. Trump will rant on about how everything is coming up roses because of his polocies as leaks in the ship of state defy all the calking that Republicans have tried to reassure the public that life is beautiful.
3
The GOP married fiscal disaster when it passed it's ludicrous tax "plan" last year. It is absurd to get wound up about this spending outline when they signaled their intention to break the bank months ago. I am stunned at the number of pundits who either can't say what they mean, promptly and straightforwardly, or who appear to have come out a coma yesterday.
4
Flirting with? They've already bought the cubic zirconium engagement ring and are looking at honeymoon sites. Just saying.
2
15 trillion dollars.
Split 326,000,000 ways (the population of the US in 2017) is about $46,000, or for a family of 4, $184,000. How's that tax cut looking now?
1
This is like paying your credit card bill with money taken from another credit card. Just keep kiting payments from one card to another while watching the interest accrue.
4
The GOP returns again and again to Grover Norquist's nihilistic plan to drown government in a bath tube. Then, what? The real plan is the same one Ronald Reagan planned for in the late 70's: to deprive citizens of their right to control plutocrats.
Great Britain is a perfect example of a government that serves plutocrats. Many of these are the aristocracy. Prior to several rebellions that nearly destroyed the country, bread was sold with saw dust. And, there is the story of "Humbug Billy." Billy was a rich merchant who poisoned hundreds because in 1858 he sold candies laced with arsenic. Billy tried some of the candies and they made him sick. But, that didn't stop him from selling them.
Given the nature of the courts in England, Billy's stature as rich, the courts blamed a pharmacist. Do we really want to go back to these days of unregulated crooks literally getting away with murder?
2
I'm sorry but the 1% just wrote themselves enormous checks and they're too busy endorsing them to hear what you're saying.
8
White and 65+ may now rue the days they shouted 'give us Barabas' at the poll booths 2016 in contempt of their heirs and for their short term retirement comfort.
With fixed and limited income they will render their assets to the financial bottom-feeders awaiting their distress calls. Inflation and high interest rates will come and enable their head pillage.
It will be a sorrowful tragedy.
We could follow the Presidents experiences as a fake businessman and just not pay our creditors until they won't lend us anymore money.
2
This is so predictable and certainly planned by the GOP. Very simple strategy. Drive up the debt and then scream to high heaven "we are all going to die, the debts too high! Our poor children!"
Then they will proceed to try to "rein in entitlements" as they call it. They will throw the poor, the aged, children under the bus.
Of course, one thing that Steve fails to say is, and this is a fact folks, we are one of the lowest taxed countries in the world. We want everything and don't want to pay for it.
8
GOP mind set - debt created by Republicans is good, anything created by Democrats is bad. One wonders how many new aircraft carriers the new budget is paying for. Considering we have more than 100 percent more aircraft carriers than all of our "enemy's" combined this isn't a flippant question
4
In my lifetime, the Republican Party has only ever talked about fiscal responsibility when they are out of power, and they spend like drunken sailors when in power. It is absolutely clear that they are hypocrites and liars when it comes to fiscal management. If you want responsibility, vote for the other party, not them. The myth of fiscal conservatism should catch up to reality: Republican fiscal conservatism died many decades ago (with George HW Bush, who got pushed out of town for attempting to fix the sins of his predecessor).
3
The debt is not as big a problem as Mr. Ratner asserts. The Republican tax cuts are far more irresponsible than anyone will admit. Government must collect the money it spends, whether through taxes or borrowing.
If government could only choose taxation, it would be forced to collect slightly more in taxes than it spends, otherwise it would have to print enough money to cover the shortfall. If government fails to collect enough in taxes and prints too much money, we have inflation. If government collects too much money in taxes, we have depression.
If government could choose only borrowing, it would have to offer a high enough interest rate to attract lenders and then print the money required to meet the interest payments on the debt. If government offers too low an in interest rate it prints too much money, and we will have inflation. If government offers too high an interest rate, it forces individuals and businesses to pay higher interest rates and we will have bankruptcies, business failures and depression.
In the real world government both taxes and borrows. Good governance is hitting the sweet spot, collecting just enough in taxes and borrowing just enough from lenders to cover spending while avoiding inflation and preventing depression. The sweet spot is an elusive target because government, the population and the economy comprise a constantly changing dynamic system. Tax cuts, spending decisions and borrowing must be coordinated.
1
Tinkering with the time value of money (interest rates) to regulate employment levels is just plain wacky.
Republicans don't care about fiscal disaster. Democrats have been there to clean up every one of those disasters since 1933. Republicans just want to take the money and run, knowing that they'll get bailed out in the end. And then they'll scream about the deficit, insuring that the needy, instead of the greedy, are left to pick up the tab.
"From each according to his gullibility, to each according to his greed."
13
We are spending our way into bankruptcy. Isn't this what basically caused the collapse of the former Soviet Union? They tried to keep up with our spend-thrift Capitalistic ways and couldn't. It appears we won't much longer be able to do so, either, will we?
John~
American Net'Zen
4
We shouldn't be surprised by the actions of Trump (and his stooges, ie, McConnell and Ryan). Why? Trump has a history of bankruptcies. He has demonstrated in his business life that he is not fiscally responsible. But what child is?
4
Time to reform entitlements. you cannot tax your way out of $20B in debt. Anyone who suggests otherwise has some nice swamp and near Clewiston you can buy!
Right! Time to take away the trillions in entitlements that have just been granted to the rich in the recent tax "reform." Then maybe, just maybe, we can also make the neo carpetbagger rich make contributions, based on the TOTAL of their income, into the Social Security and Medicare funds like everybody else. That would make those EARNING based funds more that solvent. How's that sound to you?
1
"...you cannot tax your way out of $20B in debt." But, you can take enough money from the poor and aged to accomplish that feat?
Take a look at the top five tax expenditures:
1. "Exclusion of employer contributions for medical insurance premiums and medical care." Cost: $2.9T during the period 2017-2026
2. "Deferral of income from controlled foreign corporations (normal tax method)" Cost: $1.3T during the period 2017-2026
3. "Exclusion of net imputed rental income" Cost: $1.2T during the period 2017-2026
4. "Capital gains" Cost: $1.1T during the period 2017-2026
5. "Defined contribution employer plans" Cost: $1T during the period 2017-2026
Total savings: $7.5T over ten years
https://www.treasury.gov/resource-center/tax-policy/Documents/Tax-Expend...
Trump and the GOP finally realize that most of the American public does not care about the debt anymore. Just keep the money flowing and let the good times continue. Of course Rattner puts a partisan spin on this because he was an Obama flunky with his own nefarious past which includes kickbacks and multi-million dollar settlements.
1
Actually a majority of Americans were very opposed to the obscene Greedy Old Pr__ks tax cuts, but just as with their sickening "health care" for the wealthy few proposals, the GOP ignored Americans, and so far they have gotten away with drastically increasing the Trump Swamp.
Trump told everyone during his campaign that he was the King of Debt. He bragged about all the money he made by being in debt. If that sounds like an oxymoron, just shorten it to "moron" and you have a good idea of the White House fiscal policy.
Nonetheless, his compliant Congress made sure that his campaign pledge of big tax cuts became a reality. The caveat again is that the big tax cuts went predominantly to the very wealthy and large corporations. The rest of us will get a small bump but that will be lost to rising interest rates. Meanwhile, if the President were shown to the door tomorrow, he would laugh all the way to Mar-A-Lago. He made sure he will reap billions in new profits from his tax legislation.
This could turn out to be the most lucrative year yet for the Trump Organization. If you're angry now, make sure you attend the next community meeting of your GOP Member of Congress.
4
where was this mandarin when Obama took 8 years to explode the accumulated deficit of 10 trillion to 19 trillion?
1
As much as I hate Trump, you are correct. Yet in the midst of an economy teetering on the verge of a Great Depression 2.0, deficit spending made some sense from 2007 to, say, 2012. It's unfortunate that we had 10 trillion at the start. I don't think we should have a national debt, period, no matter how many mandarins tell us that borrowing is good. What is good is to put money away in good times and accept slightly less growth, then spend it as needed when hard times come.
A household usually starts with a mortgage on the house and the householders spend a good portion of their lifetime paying off the mortgage. The government is not a household with a kitchen table. The government will never pay off its debt. What should be debated is the size of the debt and the reasons for the money borrowed.
This must be Obama's fault; according to the Republicans, isn't everything?
6
But they used to tell us everything was Bill Clinton's fault.
I think the Republicans are not just flirting with disaster, they are working to stimulate it. Imaging a budget crisis where the deficits can no longer be funded because the US government has lost the faith of those who buy its debt. It's not so hard to imagine. How many idiot presidents do we have to elect before the rest of the world looks at the American people as the irresponsible children they are who elect any fool who tells them whatever they want to hear. We're already there. Check out the pictures of Trump sitting alone at a table at an international summit. Why is he sitting there alone? No one has any reason to talk to him. And soon no one will have any reason to buy our debt. When that happens, it's over. And when that happens Social Security can no longer be paid, nor Medicare, and the Republicans will have succeeded in killing both of those programs, and they can claim that they simply had no choice but to kill them because there was no money to pay for them. They may actually succeed in killing the Federal Government as we know it. For Republicans this is the end result they dream of.
2
Next election, Rand Paul for president !
It's all been planned by the republicans. Run the deficit up into the stratosphere then wring their hands and wail that they will have to cut the social programs, namely Social Security and Medicare. They have already taken an axe to Medicaid. This has been the conservative goal since the beginning of Social Security. They have always hated it. Anyone who denies the truth of that is either a liar of a fool.
8
People when are you going to realize the obvious......the GOP wants to eliminate the New Deal programs; primarily Social Security. The new age of the robber barons is fast approaching. Combined with military industrial complex and the “treasonous” lot in the White House.....God help us.
2
The bawdy attention craving charlatan hawking populist patent medicine is there to distract us from the plutocrat pickpockets who now have access to loot the Treasury.
2
Voodoo economics perpetuated by uninformed hacks. This, almost 40 years after
1
They know exactly what they are doing. Cut taxes (cut revenue for gov.) as far as they can, then enlist the Dems to help them drive the govt. bankrupt. Are the Dems that stupid? Hard for me to believe that, I think they're in on the scam. Welcome to the end.
3
It's too late. We already are a banana republic and have a clown dictator who loves military parades to prove it.
3
Actually the public debt ratio in 1946 was exactly 109% so the predicted debt is not a record. But more important, what happened after we reached such a high debt ratio. Did the economy crumble? Were people living in tents on the Mall? Did we tighten out belts and eliminate deficits, and pay down the debt?
NO! and NO! and NO!
From 1946 to 1973 GDP growth averaged 3.8% and real median household income surged 74%.
There were no tents on the Mall.
We did not pay down the debt. In fact, from 1946 to 1973 we INCREASED the debt by 75%. Here are the figures:
06/28/1946 $269,422,099,173.26
06/30/1973 $458,141,605,312.09
(If you want to raise the "Europe was Rubble Myth,". look at http://piketty.pse.ens.fr/files/capital21c/en/pdf/F1.1.pdf which shows that the output of Europe was about the same as the US in the Great Prosperity of 1946 - 1973).
Now it just so happens we had a previous experiment when we had a large debt and were "fiscally responsible," namely post WWI. Although the debt was not as large as post WWII, it did set a record for the largest debt ratio up to that time. We did eliminate deficits from 1920 to 1930 and did pay down the debt by almost 40%. Here are the figures:
07/01/1920 $25,952,456,406.16
06/30/1930 $16,185,309,831.43
Well, the economy did crumble.
People were living in tents on the Mall.
But this is just what has ALWAYS happened when we had a period when we paid down the debt 10% or more--see 1819, 1837, 1857, 1873, and 1893.
What drove the postwar prosperity was savings and demand. The nation had full employment from the war effort and production of consumer goods was cut back leaving nothing to spend it on. When the war ended people had enough money to buy capital goods. The war effort gave thousands of people industrial skills creating a workforce ready for the delayed demand. What is different today we not only have the national debt but loads of personal debt and no unmet consumer demand. We are cutting back on public infrastructure and education. Our industrial base has moved abroad. The debt we are piling on will not drive a new boom. Drivers of growth are tapped out.
1
Also jobs are going to robots now, and many more people will have no way to make money to pay their bills. A government that will not insure healthcare for all will also not provide a basic income. There will need to be war, famine and disease to kill off enough rabble to keep the rich on top of their guarded piles.
Adonato - Look at
https://fred.stlouisfed.org/series/HDTGPDUSQ163N
This shows we do not have a lot of personal (household) debt.
Furthermore there is a lot of unmet consumer demand because consumers just do not have enough money. We have just have 2 studies that showed if the typical American family had a real emergency & had to come up with some money, they couldn't do it. One said the half the people couldn't come up with $400 & the other that 2/3rds couldn't find $1,000.
We are cutting back on public infrastructure and education, but that is precisely because the government is not spending enough money which it can spend in ways to bring back industries.
You are correct that the debt we are incurring will not help much, but that is because it is the wrong kind. We need more money in the private sector. Tax cuts do that, but in a very inefficient manner.
First of all, they have to be for those who need money and will spend it, and not to for those who do not need the money and will use most of it for financial speculation. Trump's bill does just the opposite.
Then think about this. Suppose we cut poor Joe's taxes $1,000. That gets $1,000 into the private sector because Joe will spend it, and it will go to help producing jobs for others. But suppose we pay Joe, $1,000 to cut the White House lawn. We still get the $1,000 into the economy, but we ALSO get the lawn cut.
That is why federal spending is a better way to get money into the private sector than tax cuts.
In the 80s, as I recall, the Soviet system was spent to death by the West. Unable to keep up, it crumbled. Is Mr. Trump and the GOP assisting Mr. Putin in spending the U.S. to death? Payback?
3
What has happened to the party that swore, during the Obama presidency that increasing the deficit was off the table at all levels. They just increased the deficit by over a trillion dollars giving the 1% a huge tax break and are continuing to raise it more. It is really hard to understand how the Republican Party thinks this is good for the country? Actually the Republican Party has been hijacked by the Tea Party, so who knows the actual intent? The United States of the Koch Brothers?
2
Let m paint you a picture of economic disaster. The United States has an aging population , everyday hundreds of thousands are joining the rolls of social security, which means they also receive Medicare ( we have the highest medical costs per patient in the world, no one is even close, and these costs continue to rise), people are living longer, many into their late 80s, while at the same time Americans are having less and less children. To make matters worse ,now, in the midst of an economic boom, we are running a trillion dollar budget debt ( which means : we can’t pay our bills unless we borrow in the trillions) this debt adds to the national debt which has already blown past 20 trillion on the way to a number that will get so big that it can never be repaid. A succession of bad decisions by both Democrat and Republicans have brought us here. The writing is on the wall: The United States is headed for an economic catastrophe, and the World will follow. Every single member of Congress now serving will be responsible.
Let us hope and Pray that another man like FDR will appear in the hour of crises to save us.
The American people are living fat and happy while an economic tsunami approaches . They will finally wake up when the social security checks stop arriving , by then it might be too late.
1
Actually the majority of Americans are living paycheck to diminishing paycheck while the top 1% have raked in the 80-90% of the economic gains since 1980.
Americans may be fatter because of lack of primary care and healthy food and the rise in poverty, but we certainly are not happy.
I am tired of hearing that the republicans or democrats or both have put us into "arrears". They both have and it will only bankrupt us. The rich keep getting richer and the middle class bears the brunt of this all. The politicians have had their hands in the cookie jar that the sugar rush will never change their taste. The current president talked a good game about cleaning the swamp but... lets be real. We need to elect honest hard working politicians. One sniff of them getting an extra campaign pledge to do the country bad they are out of office on the next term. Once we go through a few elections cycles that will change the culture. I do not understand how families who have children have voted this way for years and years.
Mitch McConnell, Kentucky wind at its finest. Go to Congress.gov and look up S. Con. Res. 3. agreed to in Congress on January 13, 2017. That was the leader's means to the end of Obamacare. Hiding in plain sight is the declaration of Congress "... that this resolution is the concurrent resolution on the budget for fiscal year 2017 and that this resolution sets forth the appropriate budgetary levels for fiscal years 2018 through 2026." Here the Republican majority agreed to change the aggregate levels of Federal revenue over the course of 10 years by nothing - $0.00, not a single red cent! They also agreed on deficit levels that go from $583 billion in 2017 to $1 trillion 2026 Their projections for US public debt were $20 trillion in 2017 to $29 trillion in 2026. Look it up, and think about that shinny object the Senate majority leader placed his flag on for 8 years - repeal Obamacare.
Now, let's consider the antics of Paul Ryan, the cheesehead in charge of the House. His brainchild was the tax cut, et al. The means to that end? The 2018 fiscal year budget. It too can be found on Congress.gov. Just look for H. Con. Res. 71. Here we see revenue projected to decrease over 10 years by $1.6 trillion. The debt runs from $21 trillion in 2018 to $26 trillion in 2027.
McConnell and Ryan flirted with fiscal disaster long before last night. Wake up America. Vote them and all who aid and comfort them, out in November! Or pay the fiscal price for generations.
6
Trillions of dollars of deficit and debt that Republicans attribute to Obama were incurred by GW Bush and his tax cuts that were concurrent with the initiation of war in Iraq and Afghanistan -- guns & butter.
Moreover, Bush categorized the war spending to emergency spending, thereby keeping such costs from appearing as deficit spending. Obama did away with this dishonest bookkeeping, and Bush war spending appeared as Obama deficit spending.
2
"Just like every household and business must"? Did Rattner really write that? The US Treasury is the opposite of every business and household. Businesses and households must earn money or borrow money from banks; the US doesn't have to earn it or borrow it. Our luxury and our dilemma is that we have the reserve currency. That means the dollar economy is much bigger than the US economy. It also means that we don't need to sell exports to earn foreign currency to buy from other countries. They will take dollars and hold Treasuries or US stocks or real estate or pay other countries for things like oil. That luxury allows us to import without exporting, but also allows us to let our industry erode without losing the goods we need. Our public intellectuals and politicians don't understand our financial system, or they deliberately mislead us. Either way, it's scary.
3
It is as if they took an economics textbook, condensed it into a few pages, and did the complete opposite of centuries of good practices.
I'm delighted to see a mention that Mr. Reagan introduced the practice of deficit as policy. Famously, he never proposed a balanced budget nor signed one. But he campaigned knowing that California was becoming a majority-minority State and that the United States would soon follow. (The Census Bureau just released an estimate that by 2045 a majority of Americans will be of other-than-European ancestry. Reagan and the GOP knew this was coming, and he campaigned on a racist platform promoting the transfer of wealth from the poor to the rich, by raising payroll taxes (which take money from the poor) and lowering income taxes (which would otherwise take money from the rich). Grover Norquist was explicit about it: the GOP plan was, and remains, to increase the federal debt until interest payments on that debt overwhelm all social services, infrastructure, parks, environment, and natural resources. In other words, the GOP plans to leave only scorched earth behind for when the minorities take over. Most Americans appear not to notice that this will leave 150 million Americans of European ancestry in exactly the same position as those minorities: poverty.
2
Its clear what the Republicans are up to: they know that Americans have short attention spans, and most don't really care about the deficit (they care much more about shiny objects like abortion), so they may still be able to maintain control of the government. But, even if they do lose control of Congress in this election or the next, these huge deficits will eventually force huge cuts in government programs, especially as interest rates grow along with the size of the national debt. Then, they will haul out their hypocritical accusation that Democrats are at fault with their tax and spend nature. And it is likely that enough "low information" voters, or those fed a steady diet of Fox News will nod their heads and allow congress to accomplish the real republican goals: privatize Social Security, cut Medicare and Medicaid, and more importantly, slash the puny portion of the federal budget that goes to federal regulatory agencies like the EPA, OSHA, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Federal Reserve (Fed), the Securities and Exchange Commission (SEC), the Consumer Financial Protection Bureau etc.
Republicans are mainly interested in eliminating that part of the federal government that provides direct support to low income citizens, and to destroying the ability of the feds to regulate how they do business. And they are more than willing to explode the debt in order to do it.
2
The GOP routinely causes disasters -- and then routinely blames the Democrats. It's an old game plan that never seems to fail. The health of the American economy or the future of the US are subordinate to the main project: obtaining power. In a way, they have the same mentality as Robert Mugabe or Nicolas Maduro: holding power no matter who it hurts.
2
What needs to be done urgently, before the country goes into a full-scale recession, or worse yet, a depression:
1. Repeal the tax cut
2. Repeal today’s spending bill
3. Enact a continuing resolution until December 2018, complete with sequestrations
4. Return Obamacare to its pre-2017 status, except fully funded this time
5. Repeal all new tariffs and quotas. Do not enact any new ones
6. Eliminate the debt ceiling
7. No changes to NAFTA for now
8. No border wall
9. No military parades
Consider:
1. Lowering he age for Medicare eligibility to 60
2. Lowering the Obamacare mandate penalty by 25% for 2017 and by an additional 25% for 2018
3. Raising the federal minimum wage by $1 per hour effective immediately, and by an additional $0.25 per hour for 2018.
3
This essay exists because of a context that the GOP actually has an interest in governing and the welfare of the average US citizen - they don't.
This party controls the Congress, Senate and the Executive and their *one* achievement of the first year of Mr. Trump's term is looting the Treasury on behalf of their donor class.
1
To reduce inflationary pressures, why don't the Republicans just cut the minimum wage?
What happened to Grover Norquist?
Did Obama have him jailed at Guantanamo?
It's almost beyond anybody's ability to predict.
Except for one salient reality.
The very rich will continue to get richer paying less taxes.
Why don’t we claw back that $1.5 Trillion tax cut the GOP just gave to it’s rich donor class?
1
Deficits and debt went way up under Reagan. We got 16 million jobs.
Clinton raised taxes and got a balanced budget. We got 23 million jobs, almost 50% more.
W Bush gave us two "tax cuts for the job creators" and took the balanced budget, zero deficit, from Clinton and gave Obama a whopping $1.4 Trillion deficit. We got 3 million jobs.
Obama raised taxes and gave us the "jobs killing" Obama care and cut the deficit by almost 2/3 to $550 Billion. We got 11.5 million jobs almost 400% more than W Bush.
And 20 million people got health care.
Deficits go up under Republicans.
Deficits go down under Democrats.
Job creation is better under Democrats.
Billionaires get richer under Republicans.
2
Speaker Ryan has already picked (re. last paragraph) what he wants to do: "reform"--code for *destroy*-- Medicare, Social Security, and Medicaid.
He will be ably assisted in that endeavor by the Trumpians and the Make America White Again party, who don't like poor/old people hanging around making their sidewalks and park benches look bad, and all the TeaPot loonies, who really still don't think their taxes should be raised, since Medicare comes from the sky. All of them really want the military budget raised, since that Makes America Great Again, but don't ask them to pay for it. Just starve the poor and the old. Who needs them?
2
Every time the Republicans inflict this trickle down fraud on the country it ends in disaster. Kansas, wisconsin, Reagan, W - the results are always the same. Thie rich get richer, the economy crashes and the middle class and the poor get nothing. And some Democrat has to come in and clean up the mess over Republican objections and obstruction.
1
Mr. Rattner, a millionaire, cites the U3 unemployment rate, 4.1%, as being low. The U6 unemployment rate is 8.2%. (https://www.bls.gov/news.release/empsit.t15.htm)
There is still a need for jobs; many people are suffering on the sidelines. I hope that this spending bill can provide it to the people who want to work but cannot find it.
The NYT reported on the glut of STEM degrees. (https://www.nytimes.com/2017/11/01/education/edlife/stem-jobs-industry-c... Many Juris Doctor degree holders are in the same position (also written about in the NYT).
Many middle-class jobs have been sent out of the country, through outsourcing, while there has been little job creation for the many (without unemployment insurance) still searching for work. For example, for 50 trademark examiner positions at the U.S. Patent and Trademark Office, the agency received 500 applications. In Baltimore City, Md., 3,500 people applied for 1,200 arduous jobs at an Amazon fulfillment center there.
1
Deficits have always gone up in Republican administrations because they always give themselves a generous tax cut. Check it out. Always!
1
While I often disagree with the general take on conservative agenda items, in this case moderate conservative Republicans might just have a valid point. But can they connect that point about bankruptcy to Trump's anti-immigration agenda? Does the House Freedom Caucus, for one, understand what is going to happen to Social Security by 2050? Estimates are that each worker in the year 2050 will be supporting 2.8 elderly on Social Security!! By limiting legal immigration, removal of DACA people (soon to start with no solution,) arrest and detention at enormous costs of undocumented people, their ultimate deportation, and general anti-immigrant sentiments and policies, the US government is designing its own economic apocalypse. Young immigrants bring a lifetime of work and paying taxes with them to this country; they do not "steal jobs" from Americans, certainly not at 3% unemployment rates!
Perhaps religiously conservative Republicans believe that curbing women's reproductive rights, along with driving the young brown and dark skinned folks, who have higher birth rates out, may increase the white birth rate sufficiently to compensate with lots and lots of new babies to grow up and support them in their old age!
1
I am not sure the debt matters. If so the first trillion should have sounded an alarm.
Great. So now the GOP won't be content with stealing the money we've paid in to SS; they're going to use inflation to wipe out our savings as well. Can the wealthy just not stand for anyone other than themselves to have anything at all? Will they not be happy until they've pauperized everyone beyond the security patrol at the gates of their stockades?
1
The G.O.P. is not flirting with disaster, they're been married to it for years and the relationship couldn't be stronger.
1
This is bad and, it seems to me, almost completely wrong. Readers would do well to remember this NYT piece from economist Stephanie Kelton: https://www.nytimes.com/2017/10/05/opinion/deficit-tax-cuts-trump.html
It is distressing that Rattner, a purported expert, uses the false analogy national debt being equivalent to business or household debt. He also seems to think that taxes fund federal spending, which is wrong.
Per Kelton:
"Of course, there are real limits to what can be done. No country can commit to large-scale infrastructure investment unless it has the available labor, machinery, concrete and steel. Trying to spend too much will cause an inflation problem. The trick is to adjust the budget to make efficient use of the people, factories and raw materials we have.
But all of this goes unrecognized on Capitol Hill, where the very words “debt” and “deficit” have been weaponized for political ends. They serve as body armor to politicians who would deny resources to struggling communities or demand cuts to popular programs."
Not just politicians but pundits too, it would seem. Or maybe they all just don't know? That's certainly possible.
I suspect the United States could afford to spend more than it does already - it is, after all, an intensely powerful economy. Don't tell the people that though.
1
I keep reading commentators here pointing out that Speaker Ryan (and most Republicans) want to destroy the New Deal programs. The 1st big step was the recent tax cuts.
Why doesn't the NYT write an in-depth story that focuses on the impact that the recent tax changes will have on Social Security, Medicare, Medicaid, etc.? Will the Republicans actually use the deficit to attack SS? What will they propose? Exactly how many people will be impacted? Indeed, why do they want to do this? Have the story interview the architects of this "plan" and force them into the light.
It would be very helpful to many Americans to see clearly how life in America will change without these programs. It might also wake them up to the fact that they have been paying into an essential safety network and they may soon see their benefits lowered or cut in order to line the pockets of Americans who didn't need tax cuts.
This is truly one of the most frustrating things for me to understand about Americans. Do they really want the 60+ million Americans who currently collect SS benefits to be negatively impacted? And even if reforming SS and other programs is necessary, will we the people who pay into this system have a say in how it's changed? If the last round of tax cuts is any indication, the Repbulicans will simply wake up one day, eliminate SS, Medicare, etc. and call it a day!
2
I cannot get the nightmare thought of George W. Bush running around the country giving cheerleading lectures trying to convince Americans to privatize Social Security. At least back then we thought Social Security would be around for another fifty years. Now, I'm not so sure any safety net will survive Trump.
2
Presumably Trump and the GOP aren't completely oblivious to the consequences of their current trajectory. It may be that all the bravado and largesse represents not so much the combination of avarice and ineptitude, but the combination of avarice with little aversion to welching.
Impose heavy sanctions and close all trade with offshore and onshore tax havens (um, including the UK), and lo and behold, the missing tax base, even at lower rates, is enough to finance the government and end the deficit.
Fat chance. That would actually be a substantial and real change, gosh, something even fair and equitable, and not just cosmetics to once again disguise and distract from the global return to monarchy and oligarchy. Minority rule is already the case; more to come.
People need to understand that for Republicans pouring on debt is their method of making it difficult, if not impossible to add new government programs. Rather then ever being against debt and deficits as they claimed, Republicans actually used every device they could including tax cuts for the wealthy and military spending to create as big a deficit as possible. They did it under Reagan, Bush, and now Trump. It is not a consequence of misguided policies but an intentional result of their policies in order to strangle new or expanded government programs that actually help our citizens. Ultimately, their goal is to create so much debt and deficits that they can kill Social Security, Medicare, and Medicaid. That is the ultimate holy grail of these despicable people.
1
The GOP Game Plan for years now has been to get complete control of the gov't, then debase the economy so much that it fails completely, allowing them to then use that failure as a basis to eliminate non-discretionary spending on programs like Medicare and Social Security. And that's exactly what they are doing. "Make the federal gov't so small you can drown it in the bathtub." What's happening is not a surprise. Not a surprise at all. They fully intend to do it.
1
The tax cuts were too large and were not needed (the economy is doing fine). In fact, they were irresponsible.
4
Republicans AND Democrats vote to increase spending (and the national debt) the VERY SAME WEEK as the stock market underwent a correction due to fears of inflation on the horizon.
How stupid can our lawmakers be? They are doing exactly the opposite what they should be doing - leaving taxes where they were or even increasing them, and maintaining spending levels (or cutting them).
This is obvious to anyone who's taken any economics classes (which should be mandatory knowledge for anyone in government).
Instead, they run up an annual deficit that greater than it was when the economy was in the worst downturn since the 1930s.
What on earth are we going to do when the next downturn hits. It will be impossible to lessen the blow through stimulus spending, as the Obama administration did in 2009.
This is just the start.
Two things to remember. One, Congress is primarily millionaires. They will stay rich and they don't care about us. This is, in part, because of Two: Trump has won the War on Truth. The next economic disaster will be blamed successfully on Obama, or Hillary, or the Democrats. If we can't vote in a Democratic majority in the House or Senate, we're doomed.
How curious that it is always the conservative, budget-minded GOP who bust the budget. Could it be that this has nothing to do with fiscal policy?
Perhaps it instead has everything to do with "starve the beast". The Republicans are prepared to destroy the government in order to save it.
"Flirting with fiscal disaster?" As many commentators are stating, and stating the obvious, this is right out of the Republican playbook. The goal is to cut back the size of the federal government, a central tenet of Republican political philosophy. The more apt phrase to describe the playbook is "starve the government." They were right on track with the massive tax cut bill. The latest agreement to increase spending (borrowing) will only add to the interest payments due on the federal government debt, hastening (they think) the moment when they can call for massive spending cuts (but of course no massive tax increases). Now, if only the IMF could dictate fiscal retrenchment terms to the United States!
1
You just don't get it. The Republicans floated a trial balloon in trying to repeal Obama care. They saw how unpopular it was and backed off. They gave the tax cuts and gave into the demand for more discretionary spending. Yes, deficits will rise. But they got their military spending increase. And once the panic button gets pushed because of the deficits, they will cut a lot of discretionary spending and eliminate health care for millions. Make no mistake, there will be a huge price to pay. And the 99% will then have to decide if they want higher taxes or far fewer government services. The tax cuts on corporations are permanent. They won't have to do what Reagan did. Because they set it up that way. And Republicans are betting, just like Trump did, that their voters would much rather watch others suffer at their level or below, than pay more in taxes. They are creating the conditions where the chickens are going to start pecking each other in the cage. And Republicans are going to sit outside, rattle the cage, and bet on the winners. And the wealthy will enjoy the show from their yachts and resorts.
What is truly disturbing is that the richest among us who demand that their taxes be continually lowered, also demand more and more control over how tax revenues are spent. It is obscene.
1
Parties in power want to use all levers of government to show their constituents that they are doing something for them. This includes spending money. When Democrats have the power of the purse they will spend it on social programs and infrastructure. When Republicans have it they will spend it on military, police, and cutting taxes. Neither party is a party of fiscal constraint when they have the ability to spend money as their platforms dictate. For one party to cry about debt continuously while they are in the minority, then spend so carelessly when they hold executive and legislative control is hypocrisy. Republican voters that continually worried about the national debt when their party wasn't spending the money but are pleased now that billionaires and the military are going to benefit from a spending boom are hypocrites as well. Now they really focus on cutting those awful and frivolous entitlements.
There are many ways to enrich yourself through government. Tax giveaways are a GOP favorite, and now we see massive expenditure of taxpayer money to corporations owned by the GOP's owners. Sure it's hypocritical of Republicans to spend even worse than the Democrats they accuse, but as long as they're spending money, their doing what their bosses demand.
I call it the big squeeze. Cut taxes, spend like crazy and keep piling up the debt until you can sell the country on the fact that it can no longer afford Social Security, Medicare, and Medicaid any longer. If they don't buy it, run up more debt until they do. It's been the Republican plan for decades and it won't stop until they force the country to stop providing for it's poorest and elderly citizens.
Who knew America could turn into a Hugo Chavez's Venezuela so fast
1
The GOP core objective is to redistribute wealth to the top 10% and stick everyone else with the tab. Then, when there's nothing in the pot to build the military (forget roads bridges and schools) they make faux-concerned noises about the deficit and target entitlements. Tax-cut and spend – then repeat. The fools that ingest the propaganda spewed by state-run-Fox are the ones at the bottom who lose the most. We must be a nation of compete idiots.
32
These deficits probably won't be spent in any way to produce future income to service the debt, either.
6
Mr. Rattner, you've apparently forgotten the lesson taught to us by Ronald Reagan, and famously recounted to us by Dick Cheney in 2002 when he reasserted that ""Reagan proved deficits don't matter."
Don't matter, of course, unless Democrats control Congress, or there's a Black President in the White House, either case dictating that the Conservative propaganda machine foments panic among "True-Believer" Conservative supporters who immediately take up pitch forks and rush to the barricades.
20
Deficits don't matter because 30 years later some other President will pay $69.94 for every dollar borrowed ( 30 year T-Bonds issued in 1983 at 15,31%).
1
I think we have all been lulled into a false sense of security over the past few years in regard to the possibility of inflation. Only people my age remember and can imagine what the consequences will be in the present era. However, at some point, the bond vigilantes (those who can see inflation coming), will not buy bonds until the price is lowered and rates for lending go up. This will choke off growth and at the same time the yields of bonds will keep going up and will make it even more expensive to buy anything, houses or things, on credit. The destructive power of stagflation will take over.
As far as raising taxes, they can easily be raised on those who make over 250,000 dollars per year and can be raised higher on the super rich. I am certain also that military spending is far too great as we already spend many times over what our potential enemies spend for defense. The absolute last option is to cut so called entitlement spending, that is Social Security and Medicare. Medicaid should be left intact. Of course a national health insurance would lower medical costs and be a way to save money also.
8
At 17-18% of the federal budget, Defense costs are hardly the best place to start. One might consider a hard look at the overall federal bureaucracy...has it been best-sized to take advantage of technological change? My own experience as a Civil Servant indicates that most federal agencies could actually do a better job with 30% fewer employees. Why not run that number and see how much government costs should be reduced? Why did the number of Foreign Service Officers skyrocket from 8,000 to 13,000 in the Obama years? These questions need to be asked.
1
Why did total federal government workers stay flat during the Obama administration despite a more than 11 million total nonfarm payroll increase? Why did total government capital investment shrink from 2008 to 2017?
Trump's already doing that with non crucial areas such as the State Department, DOJ, EPA NASA, GISS......
When the government can no longer fund essential services, from S, to Medicare, to roads and bridges, anything other than the military the police and the courts, it will be the Libertarian country of Ayn Rand's dream.
McConnell and Ryan are her fans, this is the government they want,it is the small government of St. Ronnie. Everything else is to be privatized, no more regulations that cost business money, not more FDA regs that keep untested drugs off the market, and if your meat is infected, well just sue the packing house. If you get bronchitis from the factories next door emissions, just sure them, that is the purpose of this deficit, it will force the government to cut back on everything, or, Increase taxes to pay for those services.
Some of that is in progress now, instead of taxes, they are called fees. That is what the GOP wants, it has to be destroyed, it is no longer an American institution, it is an organization of liars and frauds.
25
WE are well on the typical road to the end of another democracy
The courts will soon be choked with their judges too.
David: Don't you know all those poor people have to do is get a job.
Get a job like the ones that Congress have. They get paid big salaries and benefits to DO NOTHING. Welfare at its best.
So all the talk and the protest from the Republican Party and Mitch McConnell during the Obama years about being fiscally conservative, that Obama was ballooning the debt, that the Democrats were acting irresponsibly etc. etc. was just that, talk.
I cannot I think of a bigger bunch of hypocrites than the GOP. Where are the deficit hawks now? Pathetic.
32
The GOP played 2016 well Make the Demos believe Hillary was in so they failed to vote but the GOP overtook the ballot...Remomeber that
The GOP is a disaster!
20
After we get rid of Trump the next Presidet and the 2020 Congress should rescind the Trump Tax Cuts. Then on top of that, taxes should be further raised on corporations and on the very wealthy. Also, much can be saved by cutting waste in the military and cutting our totally unnecssary nuclear arsenal. Do we really need enough nuclear weapons to split the earth in two and destroy all of humankind. Trump will go down as the absolute worst President in history.
24
I think North Korea would love to see the U.S. get rid of it nuclear weapons. And yes, everyone wants to pay more taxes!
Your party is no better when it comes to deficits and spending, Mr. Rattner. The Democrats have signed on equally enthusiastically and are just as guilty. It is like the Pot calling the Kettle black.
4
True to a point. However Obama, who came to office with a ballooning deficit due to a financial crisis caused by unregulated financial markets, was the first Democratic president since Roosevelt to not have a balanced budget while in office. And he cut the deficit in half. No Republican since Eisenhower has not had a single balanced budget. Democrats believe in tax and spend. Republicans believe in cut taxes and spend. That is a crucial difference. Bush 1 did reduce the deficit considerably by raising taxes (St Ronald raised taxes 3 times after exploding the budget in 82, but never got close to getting it under control). As a side note: Bush 1 would have easily won re-election had Ross Perot not siphoned off a significant amount of support. And Ross was pushing fiscal responsibility and balanced budgets. In other words Bush did not lose because he raised taxes, that is a Norquist wing of the party lie. He lost because he did not raise taxes enough to balance the budget and that left him vulnurable to Perot.
4
I agree, Rahul. I consider myself a progressive Democrat, usually at odds with Senator Rand Paul. However, his February 8 speech resonated with me, as he criticized Republicans and Democrats for agreeing to a budget deal that gave each of them programs they wanted while ignoring the effect of such spending on the Federal deficit. If these are good times, with a booming economy and low unemployment, shouldn't the Federal Government be running surpluses and saving for a rainy day?
1
Dismiss the message by dismissing the messenger, eh? Well, part of the problem with that strategy here is that the budget busting tax give-away passed with only Republican votes in both houses of Congress and was signed by a Republican president. Not one Democrat supported it. No pot and kettle there.
Whether the huge deficits we will now have cause an economic disaster remains to be seen. However, one thing is already clear. The Republicans have once again proven themselves to be hypocrites. We already knew they were moral hypocrites when they turned a blind eye to Trump's racism and bigotry even as they claimed the moral high ground. Now we see they are economic hypocrites as well. When Obama was in the White House, the GOP was all about fiscal responsibility and limiting government spending. Of course, this was just their way of thwarting Obama. Now that the Defaulter-in-Chief is in the White House they spend like drunken sailors. The hypocrisy is truly staggering. The one good outcome of all this is that the GOP has stuck its thumb in the eye of the Tea Party and that's fun to watch.
11
Take the money and run, $15 trillion worth. Why does this piece fail to mention where all the borrowed money is going?
10
The GOP will just blame it on the Dems........
And more than not will believe them.
Until we hit bottom nothing will be done.
5
The GOP destroying the economy again? Color me surprised.
10
Republicans badmouthed and fought against every Obama stimulus attempt. Then they go ahead and pass a stimulus 3 times as large...and cheer.
12
About 95% percent of the comments here identify the 2018 budget as a Republican scheme to ruin the country.
But 73 House Democrats voted for it and 67 House Republicans against it.
One Senate independent and 35 Senate Democrats voted for it; 16 Senate Republicans voted against it.
So, whether its effects are good, bad, or indifferent, if this is a Republican conspiracy to steal from the poor or plunder the Treasury, it certainly fooled at least one left-wing Senate Democrat and many of his center-left and centrist colleagues.
Interestingly, it appears that Congress gutted-and-stuffed an obscure bill as a capsule for the 2018 budget, since the law's short title and title are the "Honoring Hometown Heroes Act," "A bill to . . . provide for the flying of the flag at half-staff in the event of the death of a first responder in the line of duty."
https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cf...
https://www.congress.gov/bill/115th-congress/house-bill/1892
3
It's not the budget. It's the unfathomably enormous and irresponsible tax cut, shifting the country's wealth into the pockets of the 1%, that is the villain here. Those who already take the lion's share of this country's wealth get to take more, and for what? To drive this country into bankruptcy so that what's left of the safety net can be shredded and public assets can be sold for pennies on the dollar. The scale of theft from current and future generations, from my children and grandchildren, is beyond the human mind's ability to grasp. Surely this theft was decades in the planning.
It brings to mind the words of C.S. Lewis: "The greatest evil is not now done in those sordid "dens of crime" that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices. "
Such are the so called leaders of the GOP.
The scheme is not in the budget. Everyone needs to support the military or be crucified, and everyone needs to bring home the bacon, or be... The conspiracy to reduce our government to a size suitable to be drowned in the bathtub is in the tax cut. And it is a purely Republican plot. The plan, clearly stated repeatedly, is to starve the beast into submission by reducing revenue to the point that social programs will have to be cut.
This was never ever a decision based upon sound fiscal policies. It was and is a blatantly political choice, in which both parties made a deal with the devil to appease their strident constuents: the military-industrial complex for the Republicans, and the progressive wing of the Democratic Party, which has generally never meant a cause that didn’t need funding.
The losers in this are my kids and grandchildren, and yours.
4
The ACA, love it or not, was funded. That's what Democrats do when they have control. Medicare medication expansion, love it or not, was not funded. That is what Republicans do when they have control.
Under Obama, Republicans were pro-FBI, anti-Russia, and anti-deficits.
Under Trump, Republicans are anti-FBI, pro-Russia, and pro-deficits.
But all the time, Republicans are pro-billionaires.
20
"Flirting" with disaster? The GOP embraced it and just made love to it. (Cleaned it up for the children that may be reading).
9
The answer to irresponsible government is to shrink the government.
There used to be a party for that.
3
As long as runaway deficit spending is to fund wars of choice, the military and national defense industries, any homeland security programs arguably tied to "terrorism", and MOST ESPECIALLY, when their billionaire sponsors/donors demand unprecedentedly large tax cuts for themselves and their businesses as the price of staying in office (no matter what 75% of the voters think), well for these things, Republicans are fine with running up the national credit card.
Oh, but the horror! The utter fiscal irresponsibility of anyone that ever proposes doing so to maintain funding for Medicare, Social Security, or Medicaid, funding of the ACA, providing insurance to children of working poor or unemployed, creating federal stimulus programs to rescue an economy about to implode, funding of scientific, health and medical research, national parks, diplomacy, "foreign aid", drug addiction programs, etc.
Anyone proposing any deficit spending for those things, well.. those people are liberals and Socialists--maybe communists (or is it fascists?)--and devotees to the failed and long-disavowed economic theories of John Maynard Keynes! Those reckless people of the Blue Tribe who would destroy your economic liberty and that of your children and their futures; those who want endless government giveaways to the poor, minorities, foreigners, and those too lazy to work, just to get their votes in the next election, who would have everyone enslaved to [fill in] just to stay in political power.
7
The plan is so obvious.
"We are very sorry that we have to cut down on medicare+soc security. They are just not sustainable"
Signed, McConnell&Ryan
11
The G.O.P.'s "flirting" with fiscal disaster makes complete sense. Their next play is to defund or eliminate government social programs based on the premise that we can no longer afford those programs and will have to balance the budget.
The folks in the G.O.P. are incapable of governing.
13
I have always heard that the first thing Republicans do when they get into the White House is to create an economic downturn so that they can justify decimating social programs. Let's wait and see if this is true.
7
See NBER website on recession dates. Nine out of the last ten recessions started during Republican presidencies.
Fiscal disaster is a feature of the Republican plan, not a bug. Next comes the all out attack on Social Security and Medicare, because after tax cuts for the wealthy and huge increases for defense, well, where is the money going to come from? I hope Democrats know what they are doing signing on to this budget plan.
5
When democrats start talking about being fiscally conservative you know that just another jab at Trump and not any meaningful intent to stop spending. Democrats have never be fiscally conservative and never will. 2/3 of the total $4 trillion budget is mandatory spending on social programs that democrats have championed and would never, under any circumstance, allow anyone to touch. The issue here is how do you pay for it and the democrats have always favored raising taxes. That is obvious by noting that blue states like California and New York have the highest state tax rates and that a red state like Texas doen't have a state income tax. These same blue states have solved nothing with these higher taxes. Income inequality is high, homelessness is high, home prices are high, property taxes are high, in California education ranks near the bottom for all states, New York city has some of the most segregated school districts in the country and so on. High taxes solve nothing.
Look at personal credit card debt. Americans today seem to care not about the balance but rather whether they can handle the monthly payments. Talk about national deficits and debt and eyes glaze over. This may be why the two political parties, which each have opposed debt if for different reasons, embrace it now: It was the vehicle that also delivered other things that more people really do care about. Plus, it's someone else's problem sometime in the future. Or is it? Rattner is undoubtedly right: This new slug of debt is a invitation to big trouble.
5
Simply evidence that the Republicans are unable to manage this country and its economy, with the aid of the reckless spending of its president and his cabinet.
4
These kind of fiscal problems beset every empire in history. And usually those are the signs of imminent collapse. Rome in the 3rd century with debased coinage comes to mind or the slow decline of the British Pound.
Once the politicians try to install the old glory with new money, the gig is up.
5
"I recognize that those of us who have warned of the ominous consequences of deficit and debt have yet to be proven right by a market crisis or the like"... but I'm going to go ahead and argue like this time it's different.
This is not helpful. Magical thinking (or it's terrible twin, moralizing) about debt is unhelpful and dangerous. Mr. Rattner needs to think hard about the interplay between a government, its people and its finances. Here's a hint: Governments are NOTHING like households and the household analogy has wrought a near infinite deluge of terrible economic policy.
2
The Republican deficits make perfect sense in this way. When you are in power, you drive up deficits with tax benefits for the wealthy. When you are out of power, you campaign against deficits and rail against any new spending for social programs because “of the existing deficits.” It is a hypocritical and unconscionable position, but it is the Republican game plan played out over and over again.
1
One principle of American government I thought we shared: be fair.
Our central government is willfully ignoring this principle. It is not being fair to the youngest Americans. Wasteful military spending, wasteful wars of choice, wasteful tax cuts, will predictably yield an uncertain future to the ones we care most about -- our children.
1
The only people who will suffer or afflicted by the disastrous results of bad policy will be poor and middle class. Republican senators and Congressmen will have their free pensions and medical benefits for life even if they loose by landslide.
1
This headline is biased since the Democrats demanded the domestic spending increases dollar for dollar with the military ones. With the Sec of Defense claiming that they are stretched to the breaking point the correct response would be to cut domestic spending to meet the military needs but instead the Democrats just break the budget more to please their base. Maybe the Republicans should have shut down the government over this or ended the filibuster in the Senate so they could vote for a truly fiscally responsible bill but there is plenty of blame to go around.
The public has not become inured to deficits - the public has been misled to think that the GOP will decrease them. They have never done it. This time the wild eyed GOP didn’t get guns or butter - but handed buckets of cash to those least in need or deserving of it in the tax scam. The American 99% got ripped off in the Great Recission, lived through the devastation of savings depletion, unemployment and wage stagnation and are now being told that any rise in wages will set off financial ruin such that we need to sacrifice old age insurance and minimum health care coverage - stop the propaganda.
They don't want to abolish government. They simply want to reduce it to the size where they can drag it into the bathroom and drown it in the bathtub. This is the mentality first articulated in 2001. Or simply run up the tab, and it will wither away all by itself.
If the social safety net is pulled out from under us, individual states will be left to pick up the pieces, and it won't be pretty.
2
I don't disagree with Rattner's defense of what are time-tested Keynesian principles. But I do see this column, and many others magically appearing out of nowhere the last week or so, as so much armchair quarterbacking. The tax bill passed weeks ago, groups like the Congressional Budget Office crunched the numbers. So why all of a sudden are the geniuses on Wall Street reacting to what everyone knew was coming? Interest rates were going to rise, they couldn't drop any lower and employment is near historic lows. (We'll leave the discussion that many of those jobs don't pay well or offer benefits or any job security whatsoever for another day.) Everyone already knew the deficit was going to rise even more with the new tax bill, the likes of Koch and Adelson don't believe that trickle-down poppycock for a second. They just laugh while they count their growing piles of gold. Even without the tax bill, deficits always rise when the GOP is in charge. I can't remember the last time that wasn't true.
This column would have been far more impressive had it been written a week before the market started its long overdue correction. I'm completely unimpressed, like a sports commentator going on TV to tell everyone why the Trojans lost to the Spartans after the game ended, instead of saying the exact same thing the day before kickoff. Talk about an easy gig!
1
Reagan, Bush and Trump have all engaged in gratuitous and ultimately calamitous enlargements of the national debt. They did it with unnecessary tax cuts for their 1 percenters who would then deign to trickle down their largess on the rest of us. And as the middle class has suffered economically ever since the Regan years it is easy to see that ultimately we are going to get even less of the national pie than ever before with their latest self-enriching gambit.
The problem before us now thanks to Trump is the hidden GOP design on Social Security and Medicare which will come to the fore once the debt issue starts making loud public noises. What to do? What to do? They will say.
Their answer: cut entitlements.
1
God help us if we go into another major recession with a deficit already of $1.5 trillion.
1
The writer assumes that everyone sees an exploding deficit as a problem rather than a desirable side effect of the recent tax cut. I believe that Paul Ryan and many others in the Republican Party see a massive deficit (leading to a much bigger debt) as a good thing, because it will -- in their eyes -- force a quick and seemingly unavoidable hatchet to all three of the major social support programs, Medicare, Social Security, and Medicaid.
I believe they're wrong, I believe they should stop hoping for such a nasty outcome, but I can also see that I'm on the losing side. The R's have outmaneuvered the D's time and time again, and they're doing it again now.
All income should be taxed as ordinary income using a progressive rate table that charges higher rates for those that earn the most
The 2017 Donor Relief Act took the carried interest loophole and expanded it to all business owners. We are on the fast track to a Banana republic kleptocracy
Vote in November like your life depends on it
2
We can begin to try to balance the federal budget by eliminating the salaries of all Republicans in congress--it's honor enough to serve--and besides, they are the ones who are trying to buy 2018 votes with the new tax cuts.
1
There goes the dollar's exchange rate, down and down.
Military spending is at Cold War levels even though there is nothing comparable to the Soviet Union as an adversary on the world stage today. The military industrial complex about which President Eisenhower warned is sacrosanct in today's political environment. To argue prudent reductions in military spending is tantamount to treason. There is waste everywhere, but none in the Pentagon? What nonsense. We were promised a peace dividend in the 90's after the collapse of the Soviets; instead, it's the same old song, and no one has the guts to point that out - except for perhaps some Libertarians such as Rand Paul (who may just as well yell in a mausoleum).
1
Trump has bragged that he's the "king of debt" so he's a perfect fit as the leader of the gop.
The gop hypocrisy on deficits is not surprising... they've lied about their fiscal concern for years. It's only catastrophic to them when a Democrat is president.
The military was barely getting by with a 600 billion dollar budget (no waste there). Thank goodness it's now up past $700 billion... I feel safer already.
I am surprised at the Dems though... they're supposed to be the adults in the room. What will they say/do when, inevitably, the gop moves to cut SS and Medicare citing deficits? It also puts them in the position to have to raise taxes next time they're in power...which gives, ironically, the gop an issue to use against them in some future election. Like we haven't seen this movie before.
1
The title of this article is misleading. Republicans are not "flirting" with fiscal disaster, they are openly inviting it! After radically slashing taxes (mostly for the upper crust) they now boost spending, primarily for the military of course, which again mainly benefits their corporate donors.
The looming financial crisis is not a bug here, but actually part of the GOP plan. Once things get out of control, they can get to work on slashing their two most hated "entitlement" programs: Medicare and Social Security. You know, the programs that all U.S. workers pay into during their working lives and that benefit all those lazy old folks and disabled people who, if they are not busy being sick, are wasting their money on booze, women, movies and maybe some cat food.
3
Nothing the republicans do is done without some purpose. One they hope to stimulate the economy enough to do better in 2018 and 2020. They do not care about the welfare of the US. They obstructed obama stimulus for political purpose to the detriment of the US. Second, this recent economic injustice will hamstring the next president, almost undoubtedly Democratic and will inhibit the public option for health care and public help for higher/post secondar education, etc.
The Republican Party is a criminal organization!
2
Good analysis. Wrong lens.
Economic logic is irrelevant.
It's all a desperate, hurried lunge to pay off campaign donors and tilt the table in a structural way. Because the policies this craven crowd seek are anathema to the American public.
3
The Koch brothers should be ashamed. They certainly don't appear to be worried about what they have created. And why would they be? There are still plenty of other economies to plunder once they have completely destroyed ours.
1
Why didn't they call it, "The Democrats Are Flirting With
Fiscal disaster," during President Obama's eight years? During the downturn that happened during the end of President George W. Bush's second term, and the first term of President Obama, the Treasury should of fixed the financial downturn of Wall Street by taking all of the interest off the books of the mortgages from the bottom up, rather than bailing out the big banks. The fact that they didn't do this, made the housing crisis worse for the average person who had taken out too large a loan, or had one with a variable rate loan. I have been over debt and deficits for over 40 years. Congress and Presidents decided years ago, not to tax for all the legislation they passed, as then the average taxpayer would of paid attention to what war, how long, whether being fought the right way, how much in new spending, and whether our country could sustain both the growth, and the amount of all of the entitlement programs, and how not having a single payer system, run at the state level, has wasted trillions of dollars over the last 30 or more years because of fraud. When you don't tax for everything you pass legislation for, you just put off being closer to insolvency for the Medicaid within 7 years. In 2008, our debt was $10 trillion, and now by the end of 2018, it will be almost $21 trillion, Neither party gets a pass, as each side borrows for different items in the budget. The bankruptcy President?!
3
The Republicans are only interested in taking care of a select set of super-rich donors. Slashing taxes and running a deficit will be used as a powerful argument for pulling more money out of Social Security and eliminating Medicare, and any other federally supported social program on the books. Only the military budget will survive intact. This is in fact what the right wing coup of 2016 is all about. We have a corporate fascist state and the bosses behind the scenes will look after their own best interests - what ever it takes. We are already witnessing a massive cutback in Wall St. regulation put in place after the Crash of 2007/8. We can expect more of the same. Follow the cash flow from the Federal Government coffers to the pockets of 0.1% - it says it all.
1
Flirting with disaster? The Republicans have gone full out spousal abuse of the budget.
There is no way in heaven the deficit will be the projected $1.5 trillion, it will be much higher, especially if the GOP's heavy borrowing jacks up interest rates and it leads to inflation and we find ourselves in another GOP caused recession.
The Republicans are praying to God the results disaster they've unleashed with their tax scam bill holds off until after the election. It's not clear at all that they'll be that lucky. Or rather we'll be lucky if it doesn't, because the vast majority of voters will see the GOP's full scale abuse of our economy, and everyone can vote accordingly.
1
Starve The Beast - lower taxes to unsustainable levels that creates a mountain of debt. Spend spend spend. Debt rises so high that the safety net programs must be cut. That is how you get rid of medicare.
1
To be clear – The GOP is not flirting with disaster, the ARE a disaster.
And it has been evident to reasonable, rational, logical minds for quite some time.
1
Wow! The Trump tax break came due for me today! As a high school teacher the extra $120 a month will come in handy... especially since my 403b has lost $20,000 since January 1, and I haven't even see what the cost of my family health plan will be yet! God bless us everyone right Mr. Trump.
1
The GOP doing their level best (fiscally AND regulatory-wise) to crash the economy (again) so that the democrats have to come in and clean up the mess (again).
welcome to Greece.
1
Tried to warn you...
I am wishing that financial writers stop referring to the big tax cut as a "fiscal stimulus". It is only a fiscal stimulus to the extent it is pumped back into the economy. But clearly that's not going to happen. That money is going to people who already have more than enough. They just sock it away, whether it's buying back stock, giving out big executive bonuses, or just sitting on it. Yes, it's a fake fiscal stimulus, but it is leaving a real budget hole.
Smoke the planet's resources down to the butt, go on a needless military spending spree that will cause our kids' generation to suffer, and have poorer lives. History will hate us.
The thing that is most important to Republicans in Congress (especially the House of Representative) is that they get reelected, with another round of elections right around the corner. To them, everything else really pales in comparison. Its about job survival, which is essentially the first concern of almost everyone. In that context isn't it obvious why the Republican take these two actions, massive tax cuts for business and big government spending? Both will lead in the short-term to happy businesses and happy people who will then tend more to vote Republican. On average, the Republicans clearly don't care what is right or wrong morally, or what is true or false scientifically. If they can keep the economy humming at least for the next year or so.....they're in and damn the theoretical consequences!
I no longer trust or have any faith in our political system.
If nothing else Mr Trump has exposed our system as a game which is easily rigged by the very people we elect to oversee our interests. My sense is our children will be handed a rather large bill and their response to our profligacy may turn over the apple cart.
As an aside, the guy in the photo defines the word "dour"
1
But why cast blame on the entire political system when the blame surely lies with only one part of it -- the Republicans. They gerrymandered congressional districts back in 2011 to give themselves free rides to Congress. They now control both houses of Congress and the White House, and they've voted for massive tax cuts and thrown out their own policy of fiscal restraint. It's all Republican doing. Don't blame the Dems for this. Instead, consider voting Democrat in November.
J
1
I think there will be a military coup in the United States, sometime in the 10-15 years. Like Al-Sisi in Egypt, I think the people will probably welcome it.
Deficit spending, in the form of tax cuts for the already wealthy, in a boom period, is pure insanity. Deficit spending should have been used to end the Great Recession. In 2010 the real unemployment rate was 17.9%, it's come down, but it has been a long, slow, and painful recovery for many people. And many who are now employed are employed in gig or other low-wage work, which is hardly anything to celebrate. There period from 2006-2015 is when we should have been aggressively deficit spending the most. We insufficiently deficit spent to deal with the depression, and yet, even now, when we ought to be raising revenues to pay for the paltry amounts that we did spend, the decision has been made to cut revenues even further, so that the richest can buy themselves more Ferraris and private jets and so they can play around with the Wall Street casino.
This is madness.
2
While I certain concede Rattner's point regarding the need for fiscal responsibility, it seems more than a bit partisan that he is touting the need to balance our books now but had no issue with Obama's deficits each exceeding $1 tn for four years - all but one after the recession ended.
"That would mean that the amount of debt relative to the size of our economy (the ratio of debt to gross domestic product) could reach a record 109 percent by 2027, exceeding even post-World War II levels." To be clear, debt as a percent of GDP was only 77% when Bush left office in Jan 2009. Under Obama, it increased to 104% - the largest increase both in aggregate terms ($10 tn) and percent of GDP in US history. Moreover, the debt/GDP has only improved since Trump too office.
But partisanship aside, this constant pointing fingers is why we need compulsory fiscal discipline. Though it unfortunately required a government shut-down to force Obama to the negotiating table, the resulting Budget Control Act of 2011 was the only thing to slow Obama's inexorable spending (which increased by $600 bn in just one year).
The recent budget deal certainly loosened the constraint - albeit only for two years. Since Mr. Rattner cares so much about fiscal discipline, perhaps he will join those of us calling for a Constitutional Balance Budget Amendment ? That's the only way to counter the incentive for politicians to pile debt onto our children.
I first learned about money -- cash is; cash out, and debt -- when I had a San Francisco Chronicle paper route in the late 1960s & early 70s.
If I fell behind in paying my bill to the Chronicle, I lost my route. No if's ands or buts, boom, I'm out. So, if I wanted my job, I had to pay off my debt to the Chronicle, so they'd keeping providing me the daily newspapers that I delivered to my customers that paid me for the effort.
I learned that I needed to pay off my debt FIRST, then I could spend.
I guess our politicians never received that lesson. As for the GOP, they're simply political animals grubbing whatever they can, whenever they can, however they can. The cry for "fiscal responsibility" is simply a political card played as necessary by Mitch and boys.
your paper route and our economy have zero in common.
Where was Rattner while Obama presided over doubling the debt in only eight years? Neither party has the appetite to tax at levels sufficient to fund the government. Both parties simply borrow money and let the dollar depreciate. This strategy is the ultimate in regressive taxation.
1
Deficits are not all bad.
They, for example, make the rich richer. Surely you'd agree that our Makers deserve a break for their hard work.
If you're nice to the rich, they're more likely to flip you a quarter as they drive by.
1
I find it interesting that the points this article raises in support of their argument that More DEFICIT IS BAD (an up and down stock market, wage increases-> inflation->interest rate hikes, increases in bond yields) all point to Republican policy failures, when in reality each could easily be disentangled from the other. Bond yields in particular-- the author completely omits the possibility of a government shut down, which has been looming over the country for the past few weeks and has a tangible affect on the possibility of a pay out on a government bond. The up and down stock market has been said to be a result of a fear of wage hikes, but is it really? Or is the stock market simply enjoying its random walk per usual? No one can predict the stock market, not even institutional investors. They can only put up capital to hedge against risk.
The fears of increased deficit spending are overblown. The dollar is a sovereign Fiat currency. The deficit is owed to no one. The US Dollar is not the pengő, mark, or the Zimbabwean dollar. Money is printed as needed through a complex arrangement of banks and the Federal Reserve. We need to get over this idea of the deficit as something to be feared and instead put it to use in service of a more democratic and egalitarian society.
Stop blaming the Republicans for increasing the deficit and start criticizing them for rolling back social welfare programs and excessive spending in the military.
Anytime a reporter, economist, politician, or citizen says that the government needs to act like families or a business, I pretty much write them off. When families and businesses establish their own currencies, raise armies, build roads, establish pension funds, issue treasury bonds, etc. I will concede that they have a point. But I'm sick of the family / business analogy where we are all supposed to nod our heads and say amen.
1
Grover Norquist's words are the guiding principles of GOP tax policy: create a fiscal crisis so severe that the only solution is to cut government down to the size where it can be drowned in a bathtub. Since Reagan, GOP leaders have been telling us that government is the problem. They now control all three branches of government; they are determined to prove that government is the problem, regardless of its effect on working American men and women. Mr. Rattner is under the mistaken opinion that GOP leaders have no plan or understanding of the ramifications of their actions---but this IS the plan.
When the Repubs cut corporate taxes, they could have raised taxes on dividends and capital gains to the same rates paid on earned income to pay for it. Instead, they raised some taxes on higher income middle class employees by eliminating SALT deductions and individual deductions which was too little to pay for the corporate cuts. Now is the time to vote the Repubs out and get some responsible Dems in Congress later this year to raise those taxes from the 1%ers that will substantially close the deficit. If not, the Repubs will be aiming at cutting Social Security, Medicare and Medicaid.
Several commenters have already pointed out the Republican embrace of unstoppable deficits, and pointed out they will face a reckoning.
But that is too simplistic.
The Republican party belongs to the 1% wholly. And the 1% regard Democracy as a fundamental threat to their power.
The actions taken since 2010 and now increasingly are just part of the strategy. In the very near future, the Republicans and Trump will successfully persuade the majority of us that the deficits are unsustainable and the only way to eliminate them is to privatize whatever public possessions remain: the roads and highways, public education, publicly-owned utilities, publicly-funded healthcare (Medicare, Medicaid, VA care, etc.), etc.
Taxes are the fuel of a republic that works for the majority of its members. Paint taxes as evil and you guarantee the transfer of ownership of society to the 1%.
And that is the ultimate goal. And that is succeeding.
Make America Great Again (For A Few Years Before It All Collapses)
or, as Mme de Pompadour put it, "Après nous, le déluge".
Now, why were the Trump haters not focusing more on this, where it actually makes sense to be critical, at the time of the election? Because he said he would do this, i.e. lower taxes while increasing spending. I'm mostly fine with what he does otherwise, but I can't se anything good coming out of these measures, other than in the very short term. Boom-bust cycles are the major scourge of the capitalist economic system and should not be accentuated.
If ever in doubt, the truth is patently clear now.
Republicans never cared about deficits. They cared about two things:
1. Denying Obama any legislative or policy victories. For years they refused to spend money on anything he wanted to do, even if it was consistent with what the GOP wanted (like infrastructure), and cited their dogmatic opposition to raising deficits as the reason.
2. Rewarding their uber-wealthy donors, like the Kochs, Mercers, Ricketts, Schwartzmans and Adelsons, with huge tax cuts even though it added $150 trillion to the deficit.
Quite simply, Republicans have thrown their bedrock belief in fiscal conservatism out the window. They stand for nothing except their naked desire for power. That's all there is.
"excessive wage increases.......which would in turn force the Federal Reserve to increase interest rates ..."
Yes, please sir, can we have more. THe 1% may be doing great, but lthe folks out here in the hinterlands aren't doing so well. we could use a few more buck in interest. The banks are certainly NOT PASSING ALONG ANY INCREASES.
2.8 on US debt makes these new deficits 20% more expensive.
Amazing that policy makers don't heed the advice of economic experts and are so cowardly when confronted with the tough choices (raising taxes or cutting spending); which means that our policy makers (leaders) are failing to lead.
Well... inasmuch as Republicans can't govern -- remember repeal and replace? -- they had to do something. And Every Republican wants a tax cut, even when it makes no sense. So they did what they could.
Sometimes, it's better to have people in place who understand economics and have a record of being right.
It all began with Ronald Reagan. Those old enough to remember those years can remember being told that government is the problem not the solution and that we know better than the government how to spend our money. Since then the Republican party has been very consistent in making tax cuts, which always favor the rich and create enormous debt, their highest priority. Reagan, however, was pragmatic enough to realize that his tax cuts did create too much debt and was willing to support higher taxes to at least partially offset the debt. Not so for George W. Bush and Donald Trump. Debt was apparently of no concern for G. W. Bush and is of no concern for Trump. One other important change should be noted. As the Republican party has drifted further to the right, creating debt has become their justification for cutting social programs. According to their "reasoning," we can no longer afford government support for programs like Social Security and Medicare because our country is going broke. Well, that last statement is true, and if tax cutting continues in the future, the problem will only get worse. If we don't elect Democrats in the future, we may well see the social safety net destroyed.
Deficits are the GOP brand, while claiming to be fiscally conservative. Tax cuts and defense increases under Reagan, Bush (pick one) and now Trump.
It is up to the electorate to recognize they are being duped.
Perhaps we need a new electorate?
These GOP "leaders" are counting on the fact that most Americans don't understand economics. Since almost half of this country voted for the Con Man in Chief, I think we can rest assured they are probably right. Few voters seem to be catching on to the fact that these guys are doing the trickle-down boogie to the tune of raking in profits for themselves.
Trump may be a liar, but he's their liar. Besides, R's in Congress don't mind lies, it's their bread and butter. They think they're winning. They think "god" told them to loot and hurt and exclude. Christians they're not.
Don't forget, your Medicare and Social Security are yours, you paid for them all your life. R's have their eyes on that kitty, the last one for the looters. They've already borrowed every last penny of your savings, and a bit more. After they gamed the rules with an eye to stealing, they'll claim they "have to" take your savings to help their kleptocratic donors and buddies.
R's destructive agenda is at its peak with destroyers in every cabinet position. They're defunding public services at speed and increasing the military. They're encouraging the vast proliferation of high-powered killing machines and worldwide distribution of weapons for profit.
Shockingly, Trump encourages "second amendment solutions" for those who can't win under an already cheat-ready election system. The white supremacists and otherblamers and their dupes buy more weapons with each public catastrophe, to "defend" themselves. The mayhem of the wild west has nothing on the plans of the Bundy-like takers. They're really good at blaming victims.
There is one thing the USA is really good at. They're uniting the world against us. Making America Small and Mean, and destroying the planet at speed. Nothing could be more stupid.
15
We're heading back to the future aka 1972-1977.
Few have memory of those times when bank CDs (remember those?) paid out 18%. Long gas lines (that won't happen) and malaise.
There's a series of ads running on e-Trade, replacing the funny ones of the "dumb guy from high school who just bought a boat". They focus on the future, specifically for geezers who didn't save.
After showing oldsters trying to work into their 90s, the new tag line is, "This is old", don't get mad, get e-Trade.
Too much truth in the fact that when the GOP comes gunning for the retirement of people who weren't able to save because of all the decades of lousy policies favoring consumption over savings, it's not going to be pretty.
Young, old, and in-between--few will be spared except the guys who voted for tax cuts the country didn't need but donors wanted.
Thanks, SCOTUS--you played a major role in this great tax heist in declaring that corporations were people in Citizens United.
14
This ignores the political strategy recognized more than 30 years ago by the late Aaron Wildavsky (Reagan as a Political Strategist). The deficit can be used as an anvil to hammer away at social safety net programs, which is the whole point. It is the epitome of what James Robinson (Why Nations Fail), points out as a direct result of clientelism. It happens when regimes become obsessed with providing private goods to specific interests instead of public good available to everyone.
24
The only way to reverse the current downward spiral of the middle class is to impose new taxes on the donor class e.g. a wealth/asset tax.
27
Really? The only way?
Any consideration to cutting spending on waste, like providing welfare to people who sneak into the country illegally, or have kids they cannot afford? Or how about getting some taxes from the masses that work off the books?
We got Trumped because the left demonized those who work hard and succeed during the 8 years of Obama. Don't continue that charade.
1
I feel like I live in an alternate reality where everyone is acting like this is something new. It's not. This happened in the Reagan and Bush administrations and now it's happening again. LARGE tax cuts for the wealthy followed by huge deficits. It's called starve the treasury and you starve democrats when they get back in power. The Republicans do this on purpose --
it's part of their playbook.
129
yes it is...... and it is also part of the seemingly impossible to stop transfer of wealth to the top. every time they get richer and we get poorer.
And Obama was excoriated for the deficits he was handed by the Bush recession. Meanwhile, even before the ridiculous corporate tax cut and the latest military spending splurge, the Trump Administration budget deficit had already exceeded any of the previous four years of Obama. And folks, the next time a Republican wants your vote reminded them that there are two ways to work toward a balanced budget, and one of them (sorry Norquist) is to increase revenue.
91
Historically, the CBO has underestimated tax collections after a reduction in tax rates and overestimated tax collections in the event of a tax rate increase.
Bush left Obama with a budgeted $400 billion deficit for the year 2009, which the Democrats promptly raised to $1.3 trillion.
The just passed budget involves about 20% of annual spending. The rest, Social Security, Medicare, Medicaid, Obamacare, food stamps, farm subsidies, credits to renewable cronies, is covered by other permanent or five year plans that are already funded.
A little tinkering with the 80% of federal spending on autopilot will address the deficit. All that is necessary is to pare back corporate welfare, and welfare payments to the rich.
Some tweaks in the Medicaid rules, and Democrats will not get to inherit all of grandma's fortune, they will have to settle for the portion left over after she pays for her own long term care. Same for rich granny's food stamps. Warren Buffet will have to cover the full cost of his medical care instead of relying upon taxpayer subsidized Medicare.
4
ebmem, Bush bequeathed an economic crash on Obama, and the measures he took caused the economy to rally, credit for which has been taken by Trump though he's actually not improved the rate of gain. Sadly, when Trump and the R's crash our economy to profit the superrich and the greedy there will be no wise thoughtful intelligent Obama to rescue us. All this looting isn't doing any good.
Trump's stimulus of an economy that didn't need it is causing all sorts of trouble.
Meanwhile, the planet is getting ready to show us what earth has in store for predators who get too big for her hospitality. Nature is Speaking:
https://www.youtube.com/watch?v=E8d_JvMpoY4&list=PL5WqtuU6JrnXjsGO4W...
3
FY2009 was Bush's last budget - $1.4T of red ink - Bush signed the CR 9/30/2008 that called for a $1.3T deficit (that grew as the economy shrunk). Your disingenuous $400B number came in February '08, well before the financial crisis.
FY2017 was Obama's last budget that called for a $570B± deficit and came in at $666B. Obama actually took the deficit under $500B before an aging America - SS & Medicare - brought it back up and a Congress that will not raise revenues to pay for it.
Trump's FY2019 budget - his first - will nearly double the one he inherited. It continues the pattern of Reagan and Bush.
Flirting? Not courting? Not salaciously colluding with disaster? Just flirting? Tax cuts for billionaire extractors, exporters, con men and frauds? Disappear the social safety net! Environment be darned!
36
Yes, the Republicans have sent the USA down a risky road and their cries for "fiscal conservatism" are without the slightest value. Their tax cut was without any purpose other than further enriching the already quite rich. Now massive deficit spending is their second gift. A seriously conservative party would at least aim to conserve the nation's long term well being, to govern for the long term, and bring in higher taxes and efficiencies in spending. A genuine conservatism would conserve the health and opportunities of all people, and not magnify the power of a few. It is conservative to want to slow global warming and end carbon pollution, but this crowd hangs on to denial and declaims against science. The Republican Party does not conserve what needs to be conserved, and promotes policies which will handicap the future. But there are to be bright, shinny parades of military might on the streets of the capital, so one person's "needs" will be served, and that is such a wonderful thing! And this will put France in its place, thus making America great again, or something.
70
of course this is not a serious conservative party. That party disappeared prior to the Trump take over. What we have now is a party that is robbing the poor to give to the rich while they have that previously unthinkable three, both houses of congress and the executive office, to rake as much swag off the table before the American people get wise (if they ever do). They may never have this opportunity again (and probably wont). What their actions will do is to wreck the economy and the country for decades to come, leaving poorer Americans barely able to hold their heads above water. With global warming that might not be such a stretch. The anger then, when we find out how much of a ride we have been taken on this time, should be about enough to tiger that hot class war we've been anticipating.
1
Seems to me this excellent comment deserves to be a “Pick.”
Mr. Rattner makes great points. I'm just troubled by the constant refrain that rising wages puts pressure on prices and rising inflation. I get it, but how come the wages, earnings of the top 10% which accounts for at least 40% of America's wealth doesn't trigger inflation?
53
Maybe it's because spending the money on another mansion or a new plane or a collector Ferrari has no effect on the general economy. Added labor costs to the production and delivery of your groceries or your gasoline get passed along to everyone, but more profoundly impacts those making less.
14
Agreed, so giving the largest slice of tax cut tax cut to 1% instead of everyone else is another example of not wanting to heat up the economy. So, Controlling the money flow up and down the economic ladder keeps the 1-10% money safest and of highest value?
4
The wealthiest worry about inflation far more than their own unemployment.
the gop trickle down plan is based on the laffer curve that has been the main stay of republican economic policy for the last 40 years. the laffer curve predicts that as tax rates are lowered from very high levels federal revenue will increase due to increased economic activity. this will more than make up for the revenue lost due to the reduced tax rate. economic activity may greatly increase from a large decrease in tax rates but the laffer curve also predicts that tax revenues will at some point fall because the decrease in revenue due to the tax cuts will not be made up by the increased economic activity. furthermore the large increases in the budget deficit and the national debt will at some point result in hyper inflation and economic stagnation or even a significant recession. part of the republican tax plan has therefore always been to drastically reduce federal spending to reduce the impact on expanding deficits that would result from their tax cuts. we know from experience that given the ever increasing levels of spending on the military, medicare and social security federal spending will never be reduced enough to make up for the lost revenue from republican tax cuts. so even though there is not a shred of evidence to support the laffer curve lets all accept it as a proven hypothesis and also accept as fact its prediction that government revenues will fall as a result of cuts to the tax rates and that this will inevitably result in economic disaster.
10
If the wealthy relinquished some of their welfare benefits: food stamps, Social Security. Medicaid and Medicare would have enough money to cover the poor and middle class.
1) That is partially due to the financialization of the country, as the literal value of the currency become less meaningful over time, and an exponential increase in spending may reflect less-than-expected structural problem in the economy than it appears to be ( pause the politics for a moment). You can ask an economist how the 2% targeted inflation rate comes from, and you might be surprised by their answer.
2) Spend more and gain less of course doesn't make sense. However, the current system doesn't make sense either as now the debt can be reconstruct into asset. And I don't think it can be done without the help of the political power. In other words, the political power in this country is also benefiting from the financialization of the debt.
3
There is a hidden agenda behind the current GOP fiscal approach. If the tax cuts and deficit spending lead to a fiscal crisis the GOP will immediately call for drastic reductions or outright elimination of Medicare, Medicaid, and Social Security, claiming that this is the only way out of the crisis that they created.
254
It's not hidden at all and never has been. Their only fiscal interest is tax cuts for the rich. They've been after Social Security and Medicare since they started. The only way to stop them is understand what they're doing and to vote them out. It's the understanding part that eludes the American people.
1
As though democrats don't like spending. As though under Obama, the federal debt didn't balloon to the tune of $9 trilliion. So much whining, but so little substance.
When was that agenda ever hidden. Republicans have said for decades that welfare benefits to the rich needed to be pared back. Democrats respond with accusations that Republicans want children to starve and want to throw grannie off a cliff. Reality is the Democrats want taxpayers to cover food and care for their wealthy family members so that they can inherit the remains. Look up "Medicaid planning" and figure out their strategies.
For more decades than I can remember, I have heard the monotonous drone of economic writers predicting doom and oblivion as a result of the spiraling national debt. They have been wrong for decades but that does not mean that some day, some how, they may not be proven correct.
One thing that economics does not do well is deal with change in a disorderly system that has unpredictable segments. What that means is that it is distinctly possible, possibly even more credible, that the U.S. is so rich and its economy growing so large that it can sustain and service the debt that is being incurred.
7
True, but as decades ago, when there was a real interest rate, a large percentage of every dollar in revenue went to pay for interest on the debt, thus unable to go towards services, infrastructure or defense. We're going back to that situation with a tremendous deficit, the interest on the debt, and rising interest rates. This will be greater than ever before.
12
So playing with fire MIGHT not burn everything down, so it's OK?
Piling up debt does ensure more required future interest payments, instead of some other spending. Thus it's a bad idea, by either side of the aisle (and BOTH sides love to spend more than they take in in taxes, in order to curry short term favor with most (short-sighted) voters.
Or perhaps the top .01% is getting even richer off the deficits created by borrowing. After all, that money's gotta go somewhere and where better than their greasy pockets. This administration has no intention of sustaining or servicing the debt they're incurring. It's a giant smash and grab of the nation's treasure and credit worthiness.
And of course the self anointed 'King of Debt', Donald Trump, is ecstatic over the humongous (even more than yuge) tax cuts just passed, which will benefit him, his family and cohorts in Congress and the business world. And they cry, what could be more patriotic than more and more spending on military and defense. It does not matter that the U.S. already spends as much on defense spending than the next dozen countries of the world, combined.
Don loves debt because he has a perfect solution to it, he declares bankruptcy! Remember during the campaign he said that if government debt just became too burdensome, well then, we can just look at the option of never paying it back.
73
The problem with deficit hawkishness, in general, is that deficits may be good or bad; may or may not pay for themselves in the long run depending on their source. If they finance spending on infrastructure, for example, that would boost aggregate demand in the near future and productivity growth in the long run. The boost to economic growth would tend to reduce the deficit and debt-to-GDP ratio in long run. But deficits that result from tax giveaways to the rich do nothing for future economic growth but will only worsen already extreme wealth and income inequality.
The problem today is not the deficits themselves but that they will be the direct result of huge tax giveaways to the rich, pass-through businesses and corporations. As such, they will not act as an economic stimulus and will not pay for themselves as proponents claim. The deficits created by the tax bill will also be used by GOP lawmakers as an excuse to cut spending programs for the poor and middle class which would tend to create a fiscal drag on growth. Then, when the Democrats retake control they will be expected to reduce the deficit by passing unpopular tax increases.
So, the federal deficit is more a political football than a useful measure of fiscal sustainability over the long run.
44
The Budget and Deficit are very much a football, and the Republican Party is best represented by the Peanut's Cartoon character Lucy, who ALWAYS pulls the football away from Charlie Brown.
And the Public, like Charlie Brown in being Blockheads never learn they are being baited and conned by the Republicans Again, no matter What they say, they Always DO the same things, cut taxes, raise the debt and deficit expansively and then pass it on to the Democrats and point at the Dems and say it is THIER Fault for the high spending, even when the Repubs force the budget reconcilliations that freeze the last (their) high spending-low tax budget into place, they blame said spending on the Democrats anyway.
Very tired of the bait and switch with the Public always laying on it's back yelling "ARRRGGGGHHHHHH!" And Lucy, with her cute smile, gets away with it again.
1
Very insightful comment.
Is there any way to keep politicians from hard-selling "free lunch" tax cuts and spending programs until a terrible financial crisis hits?
Who is there to "bell the cat" of free-lunchism in the federal government?
While all this is going on, our country is failing to make the investments in education, labor mobility, R&D and infrastructure to keep it competitive with, for example, China. This failure to act while "free-lunchism" runs rampant threatens much more than just a financial crisis in our future.....
55
Is there a way to keep politicians from hard-selling "free lunch" tax cuts...?
Yes, elect responsible leaders. Of course, to do that you'd need a well-read populace and a strong leader to persuade the country that we don't need such a large military or tax cuts for the ultra rich. Of course, the Republican solution will be to strip the elderly of their (already-paid-for) Social Security and Medicare benefits. Who cares if they lose their houses and don't have healthcare?
1
No, the GOP is committed to CAUSING fiscal disaster to make the case for elimination of social programs. What other possible conclusion could you come to? Was there a need for a tax cut when when the deficit was already at a record level? Would a household say "My mortgage is too high so I'm going to ask for a paycut". That's in essence what the Republicans did. Now it's been followed with "My mortgage was too high so I took a pay cut and went out to buy a car! I'm doing great"!
As I've said before, Republicans wail and cry about the spend thrift Democrats taking all the working peoples money for "those people". Working folks believe it and vote in Republicans. Republicans trash the economy and get voted out by the working folk who belatedly figure out they've been had. Democrats come in and have to make the hard decisions to get the economy and nation back on track whereupon the Republicans start the song all over again.
To even bring up rising wages instead of excessive profits (not to mention CEO pay) as a precursor to inflation is a smack in the face to every struggling person working multiple jobs to put together a living wage. That's why states had to act to raise the minimum wage when the federal government failed to act. Those rosey unemployment figures don't count the folks who are out of unemployment insurance and don't have a job or income. They are the monetary equivalent of "disappeared".
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Yes, the G.O.P. is flirting with a fiscal disaster. But when that disaster comes, like it did for the Reagan administration (how quickly we forget), it will be levied on those without a voice: the poor, unemployed and the elderly. When the fiscal disaster comes the G.O.P. will finally have the means to justify cuts to social welfare programs, so called entitlements, and perhaps even social security.
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And, if so, spark a revolution.
Conservative activist and strategist Grover Norquist has said, "“I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” It seems entirely plausible to me that inflating the deficit beyond all ability to repay it will achieve the objectives of Norquist and his conservative and Republican allies. Apart from defense and some diminished outlays for Medicare and Social Security to avoid full revolt, the federal government will be transformed into a debt-service organization with no ability to initiate policies, actions or initiatives to build the country's intellectual assets through research and education, repair its infrastructure, provide any significant services or support for science and education, or, happiest of all for conservatives, offer any support to the poorest and sickest of Americans.
Exploding the federal deficit promises to destroy the strength and capabilities of the federal government, delivering to Norquist and his compatriots, in short, final victory. Rather than avoid this catastrophe, it makes sense conservatives and Republicans would seek to create it.
47
just wait until they try to fix the deficit by cutting medicare, medicade and social security. the fur will be flying
37
Yes, but when that becomes a critical necessity, the Democrats will occupy the White House and both branches of Congress, and will take all the blame.
9
It won’t be fur that flys
The GOP screeching about deficits in the middle of a terrible recession made no economic sense. The GOP ignoring ballooning deficits in the middle of a thriving economy makes no sense. What is common in those two sentences, the GOP, and the lack of sense.
142
We could "take on the challenge" by cutting or eliminating some of the programs and departments that have been created in the free-spending last 50 years: Medicare, Medicaid, food stamps, Dept of Education, Department of Energy, Department of Homeland Security.
5
Yes hurt the poor rather than taxing the rich. This deficit wouldn't be so large without that giveaway to the rich of one trillion dollars. Do away with all the welfare that the rich get and the budget would be balanced. Do away with the bloated military budget and we would have surpluses to pay down the debt.
2
Stop right there. Every recipient of Social Security and Medicare paid into those funds every pay day their entire lives. If Republicans didn't take a substantial amount of money out of the Social Securiry fund in W's day, it would be in much better shape. But, hey, let's just throw those elderly folks off those two programs. They don't really need their homes or healthcare.
3
How about getting an instant trillion and a half by repealing tax cuts for rich people who have zero need of more money? That makes a lot more sense than wrecking programs our nation needs.
4
It is all about driving up the debt and the deficit so that when the time comes, the Republicans can live up to their long-term goal of dismantling the social safety net: Social Security, Medicare, Medicaid, CHIP, etc.
They would like to go back to the good old days of serf-like employment conditions and streets decorated with the bodies of the homeless and elderly.
63
You have hit the nail on the head there. That is exactly the unspoken motivation for the Republicans and their rich donors.
1
Could it be that they are setting up the Democrats and leaving the mess to them to resolve? After all if Dems change one iota of that tax bill affecting the take home pay of millions by making it smaller it makes them look great. The future increase in taxes has been kicked down the road for someone else to deal with. Same as the next budget decision two years hence.
9
"As the price for their cooperation, the Democrats won an equal increase in domestic spending."
You stated in your piece that the blame for the deficit spending increases "fall squarely on the back of the party in governance."
And then you noted that the opposition party had its list of goodies to add to the country's debt as its price "for cooperation."
Aren't then both parties equally irresponsible?
Or are some more irresponsible than others?
Shouldn't the Dems play here to be the new "party of fiscal responsibility"?
Or is the American public so used to spend and tax Dems that the Dems just feel required to behave accordingly?
7
Hey Jube, don't feel let down, take a dumb song, and keep singin' it.
All too many folks, media and so-called citizens alike seem to think this a sporting contest where some folks win and other folks lose. Well, that's partially true, but history has shown over and over (and over and over and over and over and over and over and over) that governments who keep picking only the richest and most powerful (and in our sorry example, the least capable) as the winners in the contest end; they end simply and that end tends to be bloody. In other words, everybody loses when it's a contest and not a government. If no one is considering the health of the entire population, the country will die.
Paul Ryan has always been clear that his goal as a member of Congress is to limit/cripple/abolish entitlements like Medicare, Medicaid, Social Security. Just watch, as soon as this big tax cut and spend budget fueled deficit increase is locked into law Ryan and the Republicans will start talking about how entitlements need to be reigned in. Yes, it is cynical toosuggest, but it is very apparent Republicans like Ryan have no real problem with deficits as deficits are a hammer they can smash the programs working class people rely on for a dignified life and retirement.
32
And yet "serving" in Congress is really one of the most wasteful entitlement programs in existence. And it deserves the name "entitlement," whereas programs like Medicare and Social Security is our own money being returned to us. Folks in Congress just take a free ride.
Time for a return to tying the dollar to some commodity or set of commodities, like the gold standard? Otherwise, i see no end to this ever rising deficit. Bad enough that the dollar is unmoored, and all too predictable that it would lead to something even wackier like Bitcoin.
5
There is not enough gold for the US to tie its' monetary system to it. It is why we did away with it, it was stopping the economy from growing. The value of gold would be extremely high.
The current amount of gold is 147.3 million ounces of gold and at 1776$ an ounce worth 216.6 billion$. The economy is 19.739 trillion $. Which means each ounce of gold would have to be worth 1,340,054.3 $ an ounce. And as the economy grows, that ounce would have to be worth more.
IF we had all the gold in the world, gold would be worth over 17,000$ an ounce.And there is no way to get all the gold in the world.
And that is why we don't tie our economy to a material standard.
They should not be negotiating a way to blow more money on defense and non-defense, they should be negotiating necessary cuts on the two instead.
We can not keep writing a blank check to military bloat that we simply can no longer afford. I pray we come to acknowledge that before it is too late.
13
So now that deficits don't matter to the Repubs, I'm glad the Dems managed to get at least something for the rest of us.
Oh, I know sooner rather than later they will start crying about the debt so they can take even more away from the 99% by killing Medicare and Social Security but that's tomorrows battle.
11
The Trump presidency has been good for America in that it unmasked the cruel hypocrisy which has paralyzed our political system for a very long time. Whether it is the religious right's vilification and efforts to exclude from public life those they consider immoral in their personal lives, or the selfish opposition to Obama's stimulus package during the most recent recession, Republicans have have unmasked themselves as self serving and insincere. Seared into our consciences must be the images of Paul Ryan and Mitch McConnell positioning themselves as the last defenders against debt and protectors of our children's futures. Juxtapose those images with the ease with which they propose and support the policies of the present administration. One can only hope that this generation of young people will just as easily disregard them as worthy caretakers of our their economic and political futures.
12
Seared into my mind was the "Rose Garden Celebration" where Mitch, Paul, and Don gleefully posed when their second attempt passed in the House to overturn Obamacare and ultimately eliminate healthcare for 23 million people. "Hey everyone, especially all you forgotten men and women, this is what winning bigly looks like."
Why anyone would consider the Republicans as the party of fiscal responsibility I'll never understand. Now, while the economy is strong, tax receipts should be up, and the deficit should be paid down. When the next Republican recession hits, after another stretch of wild, GOP enabled, financial speculation and fraud, it will be far worse than the Bush debacle of 2007/2008. Thanks to record deficits locked in by the new GOP/Trump tax law, the federal deficit will explode. There will be no room for the deficit spending Obama used in 2009/2010 to bail out the auto industry and so many other failing enterprises. Remember how the Republicans said that General Motors should be allowed to go bankrupt? Next time that will look like the tip of the iceberg. After the Republicans wreck the economy yet again, the Democrats will have no resources to bail out the economy. Trump's working and white collar supporters will be thrown out of work, thrown out of their homes, and be without hope. The problem is, the rest of us, who loathe GOP voodoo economics, will see our lives destroyed as well.
17
Trump wants inflation of three to four percent to "inflate away" borrowing costs of the nation's debt. Ryan and Congressional Republicans intend to use massive deficits to strip mine entitlements just as the bulk of baby boomers start to retire and need Social Security and Medicare. But it is hard to hit an inflation target that cleanly, and the GOP sure can't predict what will happen to entitlements, much less predict if they will retain power in ten years' time.
It is a very dangerous game; one that, when coupled with the levels of income inequality we now have, will doubtless grind up a lot of Americans along the way. My only hope is that American voters improve their ability to remember who put us in this predicament. But that is unlikely....
22
Deficits, in and of themselves, are not necessarily bad things. Much like taking on a loan to buy a house, incurring a deficit can be beneficial to the economy if it's a wise investment. It all depends on what the money the government is effectively borrowing is used for. If it's to build infrastructure, educate our workforce, or improve the health of our citizens, a deficit may be worth incurring.
The problem with the current jump in the deficit arising from the changes to the Internal Revenue Code is that it is aimed solely at providing the Koch brothers and their fellow ultra-rich con artists a tax break at the cost of the average American. These tax-cuts do not represent an investment in the country, but instead an opportunity for the dark money crowd to grow even richer.
109
Or: if you understand these cuts as a looting of the US economy, they make perfect sense.
1
My complaint with this article as well as the many others like it that are being written today is that the commentary is too little too late. Where was this realistic yet harsh assessment of our fiscal policy back in December when the deficit-busting tax plan was passed? Indeed, where was Senator Rand Paul? That legislation was way worse public policy than the budget bill just passed because the tax cuts were so heavily weighted towards corporations who are doing exactly what economists SAID they would be doing - using the money for stock buybacks, with very little being offered to workers and little to no investment in workers. Why cut tax cuts in a period of expansion? Where were the budget hawks then? Senator Rand Paul's hypocrisy was predictable but still dishonest and dangerous. How convenient to argue NOW that we cannot afford to support vulnerable citizens or spend money to fight the opioid crisis, all in the name of fiscal responsibility. And how generous of the media to offer free, unquestioning publicity to the Senator.
40
The deficit hawks are hoping that as the deficits grow, they can get rid of programs to help the poor and destroy SS and medicare.
You mean like here:? https://mobile.nytimes.com/2017/11/27/opinion/senate-tax-bill-scam.html?
Many are framing the tax cuts as a bad economic decision as it will inevitably increase the rate of inflation and the need for the Fed to step in with higher interest rates. If however, you have listened closely to Paul Ryan and others in the conservative movement who have always wanted to cut social programs based on a far-right ideological vision of the world; the tax cuts make sense. Ryan et al believe that tax increases have become so antithetical to the American psyche that by creating massive deficits, they can begin making a broader-based argument for cutting into the very social programs they so ideologically despise.
When the wealthy face inflation, it is not a crisis, it is an irritant. When working families face inflation and the ensuing raising of interest rates they face multiple risks; from the higher costs of goods and services, to the higher costs of credit, to the very real threat of losing jobs, as companies cut back.
The tax cuts were not just economically absurd. For some on the right, they were a convenient methodology to further their belief that they can finally begin disassembling the social programs they have despised for decades.
The GOP is not just flirting with fiscal disaster, they are setting up an ideological battle that will either move the country backwards by a century, or break this far-right fever they now display.
59
You got it right.
Considering the fact that the G.O.P. is little more than the party of obstruction -- and one that shows little concern for financial austerity when it comes to lining their own pockets, the news of their "flirting with fiscal disaster" comes as no real surprise.
From the recent so-called 'tax reform plan', which is nothing more than a gift to the corporate elite and the über wealthy, to the recent government shut-down in order to placate the demands of the fringe conservative Tea Party; the only thing the G.O.P. has consistently done is take credit for an economy they had little to do with in its recovery from a recession, while finding more ways to squeeze the average hard-working American with a heavier tax burden,
And while we're on the subject of piling on more debt, don't forget the price tag for that looming military parade.
This is nothing more than breaking America -- one debt at a time.
16
I wonder what impact the US military budget has on the economy overall.
Nearly $1 trillion spent each year on the military. How productive is that investment? Is it truly necessary for national security?
It is certainly a lot of money, and if the history of many of these programs is considered, resulting in a great deal of waste and corruption.
Perhaps it’s time the military budget came under much closer scrutiny from citizens and the media.
14
Government spending is inherently inflationary, since at least a portion of it (wages of government workers) contributes to demand, while supplying no goods for general consumption. Military spending is the perfect example: just what is the market for an F-35 or an M-1 tank?
The programs decried by the GOP (Medicare, Social Security) are much less problematic since the necessary money is collected on a pay as you go basis, and is expended primarily in the real economy: medical care, and pensions that buy food, pay rent, etc.
1
It’s good for Halliburton
The DoD budget has never been more bloated and in fact Trump and Congress just gave DoD an extra $80 Billion to spend. If the public only knew the waste of the DoD contractors and the Military/Civilian apparatus that supports it, they would be very upset.
Republicans and their wealthy donors have argued for cutting safety net programs since 1936 when Alf Landon ran on a pledge to eliminate the Social Security Act of 1935 if he defeated FDR. Speaker Paul Ryan recently said he wants to dismantle Medicare. A huge federal deficit provided Republicans with a reason for reducing and/or eliminating government programs that feed the hungry and care for the sick.
11
We should wean ourselves off deficit spending in good times, as was done in Bill Clinton's second term. We need to elect sensible people who support fiscal responsibility in good times and deficit spending in bad times to smooth out the edges. Keynes was right.
11
It is clear that we did not need the tax cut, at all. It benefits the least, the people that need help. And it gives away too much to those that do not need it. When we should be spending that money on defense, or infrastructure, or healthcare, or whatever the voters think is best. But not on billionaires and large cap corporations and billion dollar inheritances. The voters have been cheated.
11
It would be good to mention just who is getting the wage increases. This paper reported that the increase was going to upper echelon employees, not the lower level workers who have suffered the most from wildly excessive executive and managerial salaries at their expense.
The Trump/Republican boast that workers are finally getting a fair shake is not true, and that should be noted in these kinds of overview articles and columns. Democrats should not be fooled either.
8
An alternate interpretation of the apparent conservative capitulation to deficit spending? This may be a purely political calculation. Both parties are now free to rant about the dangers of debt — without necessarily ever paying a political price for it.
The current state of affairs frames the defining issue of the mid-terms as a choice between “solving” the debt problem by either rolling back recent tax cuts for the “rich” (Democrats), or cutting “wasteful” entitlement programs (Republicans).
This binary choice is politically attractive to each party’s base. Never mind the fact that achieving either of these “solutions” would be difficult or impossible to achieve in the real world. That failure can later be blamed on the other party’s intransigence ... and thus is the eternal conflict maintained as the stalemated discourse of our political universe.
I hate to be so cynical. Must be something in the air recently.
1
"While we all want to see pay go up, particularly for working-class Americans, excessive wage increases can become excessive price increases,"
What's an "excessive " wage increase? 1 dollar an hour?
10
Not to worry on 2021 a Democratic House and Senate will sent to a Democratic emergence legislation which will repeal the Trump tax cuts for the rich and corporations to cut the deficit if it is not required sooner. A lot depends on what Trump gets Putin to agree to.
4
Gee, Steve, here's an idea for how to prevent salary increases for the rank and file from fueling an inflationary cycle: cap the salaries for the executive suite!
The workers need the increase; the executives do not. Not in the least. As Kayne's observed decades ago, the cry is always that the executives won't work for less money, but that is not true. They want the power of their positions at least as much as they want the cash. In fact, if they all had compensation caps they would continue to compete for the power and influence of their positions, anyway, and compensation would cease to be the element that determined which of them was on top.
Wage caps for executives would be a good start to reining in inequality, which is ripping our society apart. So, it would be a win/win. Less money in the hands of the few that already have more than they can ever spend; more in the hands of the many where it gets put to work growing the economy. Nobody goes hungry; nobody goes homeless. What's not to like?
298
While attempting to place legal 'caps' on executive pay would be virtually impossible politically; what is possible is to again address the tax code.
The specific changes would address executive pay in increments of 'factors of executive pay over average worker pay' as it relates to the corporate's tax rate. A company compensating an executive four times more than their average worker would have a higher tax rate levied. A company compensating an executive 10 times more, would pay a much higher rate of taxes.
Decisions regarding executive pay would look very different for companies if tax rates were tied to executive pay.
2
While wage caps would certainly be a step in the right direction, it will take more aggressive taxation of wealth, closing of tax havens and loop holes and regulation of the financial sector to redistribute wealth and save our chances of a democracy. We have just moved a long ways in the opposite direction.
Elizabeth Warren and Thomas Pickity have better explanations of this process than I can make.
6
And how exactly would this be done?
It's great in theory but how could it possibly be enacted in real life?
1
As I wrote earlier, where was all this pro-deficit spending when the nation actually needed it, right after the crash that George W brought on?
Oh, right, the GOP said we couldn't afford to rebuild the nation's infrastructure and invest in education and other programs that would not have only jump started the economy, but would have also helped build a better future for all Americans. And all because, sigh, they didn't want to help Obama succeed even if it meant the nation as a whole had to struggle.
Just think where we would have been now had they not used the economy for their own political gains. One hint: those who are still struggling may not have voted for Donald J Trump.
22
For many years now the GOP 's goals have consistently NOT been for the long term health of the nation; in fact, they seem to care little for the health of our nation at all. Instead, their actions have been for the short term gain of the wealthy, even knowing that the Democrats will, when they regain governmental influence, work furiously to reverse those trends to the best of their limited ability.
21
There is a bright side to this pending disaster. It totally knocks the legs out from under the Republican austerity machine. It's dead. The GOP has now embraced government spending as a useful and necessary thing to do.
What should happen now is that the deficit hawk section of the GOP will break away and form a new party. What remains is the party of Trump. The Republican establishment made a deal with the devil. He broke the place.
Senseability now has a chance to return. There is so much that needs to be built regarding transportation, water and wastewater, energy production, and reduction of CO2 emissions. The task is mind boggling. It will take many decades and trillions of dollars. Most of it is public infrastructure.
We have to do this and do it now. If blowing up the deficit is the motivator to rebalance the tax system and extract revenue from the top 1% and big corporations, then it will be worth whatever damage occurs to the economy in the interim.
The budget crises is like a fever that has to run its course. We are currently on path to nowhere. We have to break the budget to break the fever. That is the only way to motivate legislators into prudent action. They have to be looking down the precipice of doom to act and jettison their puppet masters.
Market capitalism does not plan for the distant future. It only reacts to current conditions. Federal budgets can plan for the distant future and that is what we must do, but we must suffer first.
14
Over 40 years ago I was privileged enough to attend Economy 101. I learned:
"The federal government is the only institution that has the credibility in the marked to pump large amounts of funds into the economy during a recession. During prosperity the private industry should be the one that leads investment."
Enough said - this budget and tax cuts are a disaster in the making.
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But Jzuend, the federal government can create as much money as it needs; private industry cannot. So where is the money supposed to come from for private industry to invest? Will it fall like manna from the heavens?
2
The stridency of Democratic objections over first the tax bill and now the spending guidance that adds hundreds of billions to spending that initially had Schumer grinning like the cat who ate the canary and claiming that – somehow – he’d pulled a fast one … is entertaining. After all, it was done by Republicans in what normally would be a suspicious manner if he hadn’t allowed his eyes to grow so saucer-like. But it’s too late now. So we have all the decidedly UNusual suspects wringing their hands with SUCH unaccustomed concern over … deficits! From Democrats!
Republicans will now face November with a booming economy, an improved labor participation rate, millions of new jobs, higher wages AND the ability to tell Democratic constituencies that we’re looking out for them with all this new spending, because they’re SUCH GREAT GUYS and gals. After reinforcing Republican congressional and state-level majorities in the midterms, they’ll cut taxes again in 2019 and start REALLY playing catch-up on spending reductions. And Schumer will shake his head in admiration – cuckolded by … Republicans!
Until Dems can manage to emerge from the political wilderness, the winners will cut taxes, not increase them. But if Schumer and Steve Rattner truly are worried about deficits, I’m sure that Republicans would be willing to talk about reducing non-military expenditures.
Oh … that’s not REALLY what Steve had in mind. I get it.
To me, it’s Dems who now are flirting with ELECTORAL disaster
1
Things sure seem to be awfully rosey over there in make believe land, where apparently hypocrisy is ok so long as it's employed by the "winners" (cringe) and nobody need pay any mind to the obvious real portent of the mid-terms. I'm glad the Democrat position on deficits amuses you more than the about face from the Republicans on the same - who cares about principle when we're willing to supply fantasy in exchange for reality, right? Maybe what the money gets spent on and the economic context during which it is spent have some bearing on running deficits though - or is that too much reality impinging on a fairy tale more caught up in cynical and puerile notions of "winning" where actual principle used to be. After all, it's only in the un-nuanced heads of today's partisans that Democrats run deficits merely for the sake of deficits.
3
Richard, you've outdone yourself with convoluted logic that blames the Democrats for this fiscal disaster-in-the-making. Perhaps your memory is short now; it was the Republicans who rammed through the tax bill in December that will add $1.5T to the long-term debt over 10 years. And on top of that, here's a spending bill that just lards another trillion or so, all passed under the "leadership" of a Republican majority. The same Republicans who lamented deficits for a decade since the Great Recession...but only until they were in charge of House, Senate and White House. Now those deficits don't matter.
3
When the republicans start cutting SS, medicare, and other programs that their base needs, it will be the republicans who lose. And that is precisely what Paul Ryan and the republicans want to do because of the deficit they created with a 1 trillion $ giveaway to the rich.
Those people as Ryan bragged about the secretary who would get 1.50$ a week increase in pay will take the hit for their tax cut. Meanwhile the rich get tens of thousands a week extra money.
If the republicans had truly cut taxes for the middle class, you might be right. Except there still would have been the need to cut social programs which the republican base uses and needs. It is the red states that get the bulk of federal money. If that gets cut, those people will suffer. Of course then the republicans will appeal to the racist nature and declare that it is the 'others' who are hurting them and taking their money. Works every time on those suckers. As Barnum said, there is a sucker born every minute and the republican base proves it.
3
'we would all be well advised to take on the challenge before it is too late.'
Hardly a clarion call to action, Mr. Rattner.
While neither party seems to care much about fiscal responsibility, the Dems, at least, don't pretend to. With Republicans in control of all branches of government, Republicans could easily take real measures commensurate with their austerity mantra to cut spending. It is clear they have no interest in doing so.
Ultimately, the market rules. When deficits finally offend the market, the cost of selling debt will make change imperative. Fiscal discipline will be rapid...and painful.
5
Don't worry, if the Chinese don't but the debt the FED always can just monetize it. Higher interest rates will lead "investors" away from stocks and into bonds. High interest rates also will tame inflationary pressures, but the public sector will grow relative to the private sector. Higher US interest rates will increase capital account "exports" creating USD appreciation and more current account imports. Overall, the Balance of Payments deficit will remain close to where it is now.
Conservatives will find "religion" again and demand reductions in entitlement programs. Democrats will rediscover their "social conscience" and will counter by pointing to bloated defense spending (what about the unaccounted $800 million).
Nothing much will change: investors will remix their portfolios; consumers will save more and reduce personal indebtedness; and The Swamp will overflow.
If you believe James Madison, taxing and spending is limited to the enumerated powers that immediately follow. He told us it meant this in the Federalist papers before the Constitution was ratified.
Hamilton contradicted him, not when he too was writing the Federalist papers, but when he was Secretary of the Treasury where expanded spending would increase his own power.
Later, during the deptession, FDRs supreme court decided spending outside of the enumerated powers was fine if the spending was general in nature.
Nearly all social welfare spending is outside the enumerated powers. There is no power to fund education or healthcare at the Federal level unless you reject what James Madison, Father of the Constitution tells us the taxing and spending clause means.
I firmly believe few in government care about their oath to the Constitution when it comes to limits on government. That's why we have so many twisted interpretations of the Constitution.
Where is Social Security in the Constitution? National Health care?
2
The constitution is a living document, not dead-- at least not yet. If it were not living, why did the framers include amendments? Why was it amended after that, while some of the same were still alive? Your comment about social security is specious-- the average American lifespan in the Liberty Years was 36. No need for a retirement plan! As far as National Health care-- this is a feature of modern times, that is OUR era. It is reflective of longer life spans and the ability for docs to intervene without resorting to leeches. (or are you suggesting we return to that as a treatment and skip the rest?) Long lives and life-saving medical treatment are expensive-- too expensive for the current American economy to bear-- at 20% of our GDP (double countries WITH something in place) and costs to the individual that are crippling to them. This is why every civilized country has some sort of care-- we truly are exceptional in our no-care.
8
Perhaps we should have a social security Amendmend then rather then relying on what many consider to be legislating from the bench.
The Constitution lives through Amendments, not reinterpretation of you follow it. Much of the original content is invalidated by Amendments, and much new content is added including the outlaw of slavery and addtition of women sufferage.
The Intended Federalism provided by the Constitution as Madison described it in Federalist 45 is
"The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected.
The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State."
People who disagree will likely make twisted arguments to change the plain meaning to something else.
Why does it have to be in the Constitution? Anything in there about Net Neutrality? Vaccinations or disease control? Avionics?
Hopefully people will be able to make the best of the situation (e.g., more jobs, higher pay and more money) until new policies are put into effect.
At some point there will be a reckoning. Will it be a Grover Norquist-style push to cut Social Security, Medicare and other "big government" programs that benefit the majority of Americans who have lost ground over the last 30 years? Will it be a Bernie Sanders-style push to raise taxes on the increasingly wealthy 1 percent who have done so well over the same period? Or will it be an irresponsible bi-partisan inflationary spiral that gets out of hand and finally causes a "hard landing" when the world moves on from depending on the US dollar as its "reserve" currency?
For my money, raising taxes on the 1 percent is the best choice for our nation's future, but I don't think our current political system is up to the task and I don't think Elon Musk and technology can save us either. Things fall apart.
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Guy, one other possibility is that the billionaire class that engineered the current policies DESIRE disaster. As democracy comes to its knees, they will step in to rescue us all. Of course, the fine print will look nothing like the Declaration of Independence, US Constitution or Bill of Rights.
7
I doubt most billionaires desire a disaster, but many seem heedless of the consequences of their greed and that's making such a political crisis ever more likely. Very hard to maintain a functional democratic political system if the underlying economy stops working for most people most of the time. Intended or not, we're moving in that direction. It's a path other countries have been down.
1
@GuyBahr: Of one thing you can remain certain. Enough money will be found to fund military adventures in Asia. The military-industrial-complex will be fed.
3
Unfortunately spending cuts usually mean the loss of health and social services for the people who need them most. I have little doubt we could achieve the same level of services for half the cost, or twice the benefits for the same cost if our state and federal governments were more efficient and effective in what they deliver -especially the military. Once medicare and social security are cut to reduce rampant deficits, most of us will realize that the federal government delivers little of immediate benefit to the average taxpayer.
27
Please remember that inefficiencies in delivery still deliver dollars to the economy: we just hope that some of these end up with the bottom part of our society. And one benefit to them would be better health outcomes.
Is the alternative better?
2
Unfortunately much of social welfare spending has enabled irresponsibility and created needyness and dependant that need not have be.
Consider the great Society and the sharp growth in broken families. Single parent work less families was made a viable choice by the Great Society, and many have taken that choice because it is a funded choice.
How many fatherless welfare households has the great society created with children who care little about education because they see themselves as living off the tax payers or children who care little about responsibility and the law. When a child and their parents see the child as having to support themselves in adulthood education becomes important and by extension so does attendance, respect for authority and hard work.
How much responsibility for degraded families and poverty do those who advocate progressive social welfare bare? I would say quite a lot.
I wonder if people who think they get little to no benefit from the government have considered living without it. Say, move to Somalia or Haiti for five years. Come back and tell us how that was.
Sanitation? Clean water? Clean air? Food and drug inspections? Emergency services? FEMA? The infrastructure that moves everything and everyone around? Education? Public health? Have you ever benefited from these? Of course, you benefit from them every day taking them so for granted that you don't even see them. Your life would be both immeasurably worse and shorter without them.
The military is over half of our discretionary spending. What does it produce? Waste. Pumping more money into it is disgusting. That is where there is waste, corruption, and abuse. The Pentagon has never been audited. It has over $2 trillion in assets. Would you be interested in knowing where the money goes? I am. Inquiring minds surely want to know since - unlike Social Security - it is part of the national budget.
Every dime of Social Security comes from worker's salaries and an employer match that is compensation re-directed. All money goes to the Social Security Trust Fund, which is solvent and has enough to pay out about 70% of the benefits even after 2035 because, although the trust fund will be depleted, the program will continue to receive contributions. Even you will benefit. Most everyone does.
4
Though I am a supporter of fiscal responsibility at the level of the federal government (and all other government levels), is the following consideration a "mitigator" of federal deficit spending: When the federal government spends money on a domestic project, some of that project funding goes to pay salaries for those working on that project. Those individuals pay federal income tax, and the federal expenditure becomes reduced by that returned income tax to the US Treasury. The non-tax dollars are used by the employee for good and services which support employment and salaries of others often in the same community, which leads to further federal income tax coming back to the US Treasury, etc. Additionally, supplies for a federal project ( be it weapons or infrastructure or computer hardware/software) supports salaries of individuals that further enriches the US Treasury from that Federal expenditure.
Has there been a study of this return of federal expenditure that points to the lessened impact of each federal dollar spent as "bounceback'" to the Federal treasury?
9
I believe your analysis is right on. But note that some spending bounces back though higher future tax and fee returns to the government than others. Much military spending, for instance, creates no assets that can contribute to productivity, welfare, or future job growth, while investments in infrastructure and labor mobility can. What we need is a formularization of "Government Return-on-Investment" calculation methodology and a demand that the CBO report this as well as impacts on deficits.
19
Or we could put back the taxes on the billionaires.
With this crowd, no time is spent on analyzing outcomes, and it they were to and the results contradicted their underlying beliefs they would call it politically motivated fake news
"in the ninth year of a recovery, with unemployment down to 4.1 percent"
This understates the depth of the disaster inflicted on us by the Bush Admin and its financial cronies.
This overstates the depth of the recovery, which has not been even across the country or the workforce. There are instead hot spots amid a wide, vast chill still lingering from Bush.
While the Labor Dept's measure known as U-3 may be down to 4.1% that is a very artificial number. Broader measures of unemployment like its own U-6 are still much higher, and the gap is unusually wide. That again shows all that the recovery has not yet reached.
Rattner here simply writes off the people and regions that did not get the benefit of the narrow stimulus and narrow recovery it led.
Normally Democrats would be up in arms about this, but this time they'd rather claim credit for Obama's recovery being wider and deeper than it was than they'd call out Republicans for abandoning everyone not already wealthy.
46
Your final paragraph is patently false.
I rarely see a democratic politician, or even left leaning pundit, 'claim credit' for the recovery without also qualifying it by also saying that income inequality is still a serious issue and/or that the recovery hasn't fully reached all regions and segments of the economy yet.
Additionally, just about every democrat, when addressing the GOPs 'not-tax-the-rich and not-help-the-poor' plan, seems very willing to call out republican's fealty to their 'donor class'.
9
Are you suggestive the republicans have NOT created a system that delivers the bulk of the benefits to the wealthy?
all of what you say is why i believe that GWB did more to destroy this country than trump could dream of..... without bush II there could be no trump.
2
Another side-effect of the large deficits is that they also exacerbate trade deficits (the so-called Twin Deficits). The US just had its largest trade deficit in nine years.
The President is fixated on trade deficits, blaming them on bad trade deals. That's only a small part of the problem. Massive fiscal deficits are the major drivers behind our current trade deficit. It's so easy for politicians to cut taxes and put spending on the credit card. Unfortunately, we are nearing a day of reckoning.
11
When we need more revenue we can just slash social security and Medicare. If that's not enough we can mandate that all retirement accounts must purchase Treasuries. I don't understand why anyone is worried.
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These days you need to indicate if this is snark...or not.
1
I'd like to think of this comment as sarcasm, but I'm absolutely sure that somewhere in DC there's a very nice looking Power Point presentation describing this exact plan.
4
This is The Setup, and next comes The Play, aka cutting Medicare and Social Security. That's when the duped masses will feel The Sting. And, just as in the classic movie, the sucker (us) will walk away with cleaned pockets while the scammers enjoy their fat cigars.
490
That's it in a nutshell, yet our elected reps in Congress don't acknowledge or seem to care that the Republicans just cut one of the two fraying chords holding together our social safety net. We're going to get it, good and hard.
4
Supposedly the poor masses can only be exploited for just so long before they rise up en masse, so perhaps these actions of the paid henchmen for the elites will be what lights the fire of a resounding social revolution. The Trumpers supposedly wanted a topsy-turvy world, and they may well get it--just not as they had imagined it.
2
Sadly Trump and his GOP enablers will blame any negative policies they introduce on Obama/Hillary/Democrats. What is hard to believe, is that many who will be hurt by Trump, will still believe whatever unreality he continues to tweet.
3
All of today's elected officials in Congress have signed a pledge to a Conservative Group that they will not increase taxes. And as we saw with the Trump Tax Legislation, these same Members were warned by their funders that they would receive no more campaign contributions unless they enacted The President's tax bill, which lobbyists for these same contributors had actually written. The bill disproportionately cut taxes for those same rich funders.
Today's Republican officials in Congress are campaign fund indentured servants to donors who are the U.S. version of Russia's Kleotocrats. This cycle can only be broken by reversing the Supreme Court's Citizen United Citizens Campaign finance decision which effectively allows a rich few to buy control of the Republican Party and with that the U.S. Government.
519
You're right, when tax increases are not allowed then the only way to pay for the tax cut for the rich is that the poor pay more (or we run deficits and the poor pay later. As for wage increases, the same paradigm applies, the companies can only increase the pay of their workers if the CEO pay reduces (or the shareholders get less).
Wealth imbalance is what is wrong with the USA and that is a symptom of greed.
4
Guns and butter, and no taxes to pay for either. Nothing good can come of this.
2
I agree with you completely but the door for Citizen's United was opened in 1976.
The 1976 decision of the US Supreme Court in Buckley v. Valeo struck down various FECA limits on spending as unconstitutional violations of free speech.
This is where the notion that "money is free speech" came from.
4
If the tax rates were brought back to the Eisenhower or Kennedy era 91% or 70% on incomes over 1,000,000. This will probably right the problem provided corrupt loopholes are not exercised. In fact 75% of the debt is help by non-government. The rest is owned by government agencies likely the Federal Reserve which in fact is no burden on investing or the taxpayer at all.
All of this being said, raising interest rates can hobble the Fed but we are far from these levels yet. Not to say it cannot happen. The burden of debt for the creditors is the product of the interest rate X level of debt. Indeed Japan who has borrowed much more than we have relative to GDP interest rates are often negative. With negative interest rates the larger the debt the better from the standpoint of the government.
17
What likelihood do you see, in the current political climate, of returning to a tax rate of 70% or higher? Or that there will not be loopholes to exploit? Japan has been in fiscal trouble for decades and does not have the added burden of a large military to pay for. They are hardly the model for us to follow.
6
The difference may lie in the fact that the Japanese save and the Americans spend.
2
Sticks and Stones,
"They are hardly the model for us to follow."
Then change the models. Nothing is set in cement, not even the Norquist pledge. We can take the country back. We just have to adopt the Republican mantra: By any means possible.