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Readers' forum: The budget crisis

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  • RedShirt USS Enterprise, UT
    July 27, 2011 10:52 a.m.

    To "Truthseeker | 4:35 p.m. " how do you measure a job saved?

    Just to see how well the stimulus created jobs, lets look at how well it worked:

    According to "The 'Stimulus' Actually Raised Unemployment" at Investor's Business Daily, the stimulus added 2% to the unemployment numbers.

    From the Washington times we read "Barack Obama: Losing $84 billion big success" where they describe how thanks to the GM deal we lost $25 billion from repayment losses, an additional $45 billion because of GM filing bankruptcy AFTER getting stimulus money, then another $14 billion in special tax breaks given directly to GM.

    Now, read the Weekly Standard article "Obamas Economists: Stimulus Has Cost $278,000 per Job" and see how the President's White Houses Council of Economic Advisors wrote a report that showed that each job created by the Stimulus cost $278,000. That sure seems like a huge waste of money to me.

  • Truthseeker SLO, CA
    July 26, 2011 4:35 p.m.

    re:InvisibleHand
    Yes, though Krugman thought the stimulus was too small and included too many tax cuts. What he actually said about the stimulus:

    The actual lessons of 2009-2010, then, are that scare stories about stimulus are wrong, and that stimulus works when it is applied. But it wasnt applied on a sufficient scale. And we need another round.
    (2010)

    Furthermore:
    Four independent analyses by the Congressional budget office and three private economic analysis companies. Heres what the groups found:

    *CBO: Between 1.3 million and 3.6 million jobs saved or created.

    *IHS/Global Insight: 2.45 million jobs saved or created.

    *Macroeconomic Advisers: 2.3 million jobs saved or created.

    *Moodys Economy.com: 2.5 million jobs saved or created.
    (politifact)

    The Congressional Budget Office released a report that said the stimulus bill has "[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points" and "[i]ncreased the number of people employed by between 1.4 million and 3.3 million."
    (factcheck 2010)

  • Truthseeker SLO, CA
    July 26, 2011 4:07 p.m.

    re:RedShirt
    Yes, Obama did vote against raising the debt ceiling in 2006 and has since said he regrets that vote. I would point out that he was in the minority party at that time and his vote was inconsequential. It is quite another matter when the majority party is against raising the debt ceiling and is putting our entire economy at risk.

  • Invisible Hand Provo, UT
    July 26, 2011 4:03 p.m.

    @Samuelsen: If you want the truth on Obamacare you have to dig into HOW the CBO makes its calculations. They have to take the assumptions that are given them by Congress. I would argue that those assumptions are wildly optimistic. And do you really think the Medicare cuts will actually happen? That is what the Obamacare "savings" depend on. So cite all the "nonpartisan" studies you want, a more honest analysis shows that the proposed savings will actually be large deficits.

    Who are these "non-partisan" economists? Even many Democrats admit that the stimulus wasn't a success. Romer, Krugman and others say essentially that the stimulus didn't work because it wasn't big enough. It seems that there is broad agreement that the stimulus didn't work.

    Finally, the US government did NOT make money on the GM deal. If the government sold all its shares it would still not break even. But worse is the incalculable damage done to private enterprise by undermining rule of law and bailing out the unions at the expense of senior debt holders. This raises the risks of investing in the USA and is the worst outcome of the GM bailout.

  • Truthseeker SLO, CA
    July 26, 2011 3:59 p.m.

    re:RedShirt
    Obama did not double the debt. The debt owed to the public was $6.3 trillion the day he took office. A year later, it was $7.8 trillion, and as of June 1, it was $9.7 trillion. That's a huge increase, to be sure, but nothing close to a doubling, either in Obama's first year or in his first two-and-a-half years. The same holds true when looking at the total outstanding debt, which includes both the public debt and money the government owes to itself. That figure was $10.6 trillion on Jan. 20, 2009; a year later, it was $12.3 trillion, and its $14.3 trillion today.
    (factcheck)

    Bush took a surplus and instead of using it to pay down the debt or fund Medicare/Social Security for future years he enacted tax cuts in 2001 and 2003.

    On the other hand, Obama's spending has been targeted toward trying to dig us out of an economic hole left by the former Administration. I don't recall ever "praising" Obama but he's better than any Republican. I'm not happy with everything Obama does--for example, extending the Bush tax cuts.

  • KM Cedar Hills, UT
    July 26, 2011 3:43 p.m.

    pragmatist

    Yes it did come from the 1960's and resides with us still....Bill Ayers still has the presidents ear, as does Francis Fox Piven. They never went away, they just continued to teach their brand of radicalism to young idealistic college kids, like Obama. Put that on your black board with the diagrams of Alinsky, just like professor Obama used to before he took the White House.

  • RedShirt USS Enterprise, UT
    July 26, 2011 3:35 p.m.

    To "Truthseeker | 3:03 p.m." You are omitting the fact that within Obama's first couple of months in office he signed into law $1.2 Trillion in deficit spending. I think that we can call that his deficit and not a holdover from Bush.

    You say that Bush doubled the debt, but the sad fact is that if you compare the 2000 debt levels to Obama's deficits, Obama has already more than doubled the debt when compared to the same point in time. If you look at the debt in terms of GDP, Obama has added more to the debt in 3 years than Bush did in 8.

    If what Bush did was so wrong and bad, why do you praise Obama for doing the same things? If Bush's expansion of government was bad, why is Obama's good?

  • Truthseeker SLO, CA
    July 26, 2011 3:03 p.m.

    Re:RedShirt
    Spending between Oct 2009 and Oct 2010 was Obama's first fiscal year. Prior to that it was holdover from Bush's tenure.
    Obama's spending was the Stimulus, and the extension of unemployment. Though TARP was signed by Bush, Obama can take partial responsibility since he supported it. Obama should also take responsibility for extending the Bush tax cuts. The decrease in revenues due to the economic crisis also adds to the deficit. However a large contributor to the current debt were the tax cuts, Medicare Part D, and 2 wars all undertaken by Republicans and Bush. Vice Pres Cheney even stated "deficits don't matter."

    There was not a word from Republicans when Bush doubled the debt.

  • Esquire Springville, UT
    July 26, 2011 2:54 p.m.

    Want some interesting numbers? See the NYT editorial "How the Deficit Got This Big" published 7/23/2011, republished by the Washington Post on 7/25/2011 "Obamas and Bushs effects on the deficit in one graph". To quote: "A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up." Read the pieces and study the numbers.

  • Eric Samuelsen Provo, UT
    July 26, 2011 2:50 p.m.

    Invisible Hand

    Obamacare will certainly cut the deficit, according to every non-partisan economic analysis conducted on it. Likewise, the stimulus was a success, in that it prevented much greater job loss than actually occurred, again according to the consensus view of non-partisan economists.
    TARP was distasteful. We agree there. You seem to agree that it was also necessary. The moral hazard argument is a compelling one, but certainly Lehman Brothers wouldn't agree that moral hazard was removed. I do think Goldman Sachs should have paid a higher price.
    Most of the TARP money has been repaid, and the US government made money on the GM deal.
    But what nobody seems willing to acknowledge is just how huge and how damaging the sub-prime catastrophe really was. It was devastating to our economy, and to the economies of most countries in the world. No nation's economy could possibly recover from it as quickly as the Right seems to expect.
    I do think President Obama erred in suggesting that recovery would take less time than it's taken, or by offering rosier forecasts for unemployment than turned out to be realistic. But he made the right decisions. And they worked.

  • Invisible Hand Provo, UT
    July 26, 2011 2:33 p.m.

    @Samuelson: Your sweeping assertions that TARP was a success, Obamacare cuts the deficit and and the stimulus worked cannot go unchallenged. Obamacare only cuts the deficit if you believe in unrealistic projections and you really think that doctors are going to accept massive medicare payment cuts. The term "garbage in, garbage out" applies to the CBO analysis.

    As for the stimulus being a success, you must be joking. What kind of criteria are you using for success? Unemployment didn't go down, which was the stated purpose.

    The jury is still out on the success of TARP. It did stabilize the financial system and avoid a complete meltdown, so I won't argue that it wasn't necessary. But every bailout sows the seeds of the next one, and they get successively bigger by removing moral hazard.

  • Brother Chuck Schroeder A Tropical Paradise USA, FL
    July 26, 2011 11:27 a.m.

    All this Wisconsin Tea Party kid Reince Priebus will say is, Obama took to the airwaves once again to distort and demagogue Republicans serious solution?, to the debt crisis that cuts spending and ensures Washington lives within its means. Now the man who didn't want to bore the American people with the details of every plan because he doesn't have one of his own wants to blame Republicans who want to cut and cap spending and pass a balanced budget amendment. WELL I SAY THIS to him, raise the taxes on the rich, raise the debt ceiling and cut spending after that GOP. How can you succeed unless you stop big corporations from escaping their fair share of taxes by manipulating foreign jurisdictions against our tax laws, for example, or by letting trillions of dollars of speculation on Wall Street go without any sales tax, while you pay six, seven or eight percent sales tax on the necessities you buy in stores?. $32.5 TRILLION in TOTAL WEALTH was created in the markets since 2009. Guess what, NO ONE paid any taxes nor created any job's with this money. All their monies went to off shore tax safe havens.

  • Ultra Bob Cottonwood Heights, UT
    July 26, 2011 11:22 a.m.

    KM.

    No! No! No! The issue of the debt ceiling and the non-budget are only smokescreens set up by the conservative commercialist to hide the war between business and the government. They are trying to establish the same kind of government in America that people in other parts of the world are rebelling against.

    Corporate government will bring mass economic oppression on our people as it has done overseas. The purpose of government should not be profits and the making people rich and powerful. Government should be for the betterment of it's people, it's society, it's collective world.

    Ordinary people just want to have the means to survive and have progress in rights and freedoms. Business and businessmen desire government to give the ability to control workers and customers to their own goals.

    In order to do the job we ask government to do, it must remain bigger and stronger than the commercial forces that would take away the rights and freedoms of the American people.

  • Ultra Bob Cottonwood Heights, UT
    July 26, 2011 11:00 a.m.

    The only hope for the survival of the American government and the rights and freedoms it has given the American people is to not let the Tea Party have it's way.

  • RedShirt USS Enterprise, UT
    July 26, 2011 10:55 a.m.

    To Pagan | 10:04 a.m lets take a look at what your dear leader has done for us.

    From October 18, 2010 at CBS News National Debt Up $3 Trillion on Obama's Watch. That was less than 2 years after he took office, and he allowed nearly as much debt as Bush did in 8 years. That doesn't look good for Obama.

    Lets see what Obama was saying during Bush's term in office about raising the debt ceiling. From USA Today, January 6, 2011 in a story titled "Obama once opposed lifting debt ceiling." we read a nice quote from 2006 Senator Obama. He said "I therefore intend to oppose the effort to increase America's debt limit." So, which Obama do we listen to?

    How about the June 16, 2011 LA Times article "Obama's unauthorized war on Libya costs $9,421,000 a day: Are you getting your money's worth?" Why do you not complain about that like you do Iraq and Afghanistan which were authorized?

    Your arguements seem to be too one sided, and ignore fact that Obama is equal to or worse than Bush.

  • Brett Marietta, GA
    July 26, 2011 10:22 a.m.

    Blue "The credit card bill is due and must be paid. If you regret some of the purchases you've made, that's fine and by all means, think through your plans to spend less in the future."

    That's not a bad analogy. Though Dave Ramsey would tell you that there are times when it's okay to stop paying some bills.

    Sometimes if your spending has you on a course that you will never be able to reconcile, it is time to stop paying your bills and prioritize your debts, that is the only way to get your house in order. It may cost you up front, but you'll be far better off at the end of the day.

    Its ironic how for years many have said politicians will never cut spending or reform entitlements because they do not have the political will to do it. Now they are criticized for trying.

    In fact, if they can't cuts spending and reform entitlements now, under what circumstances will they ever be able to do it?

  • Pagan Salt Lake City, UT
    July 26, 2011 10:04 a.m.

    Why is Obama trying to raise the debt ceiling?

    Because Repulicans did it...seven times.

    'Bush Administration Adds $4 Trillion To National Debt' - by Mark Knoller - CBS News - 09/29/08

    'It'll be the 7th time the debt limit (ceiling) has been raised during this administration. In fact it was just two months ago, on July 30, that President Bush signed the Housing and Economic Recovery Act, which contained a provision raising the debt ceiling to $10.615 trillion.'

    So, the Republican party can raise the debt ceiling...seven times...double the national debt...

    but when Obama wants to do it, it's 'bad.'

    Double. Standard.

    And if you vote for the GOP, they will go RIGHT BACK to spending again.

    Example:

    *'Bush Administration Adds $4 Trillion To National Debt' - by Mark Knoller - CBS News - 09/29/08

    *'AP: Lawmaker seeks hearing on NJ gov's chopper use' - By Angela Delli Santi - AP - Published by DSNews - 06/02/11

    'TRENTON, N.J. A Democratic state lawmaker said Thursday she'll convene a hearing into (Republican) New Jersey Gov. Chris Christie's use of a state police helicopter to fly to his son's baseball game.'

  • Eric Samuelsen Provo, UT
    July 26, 2011 10:03 a.m.

    Brett,

    I'll take you at your word that the Tea Party is merely opposed to increased government spending, and that TARP, the stimulus and Obamacare are at the heart of it. None of that has anything to do with raising the debt ceiling. This isn't an opportunity to re-examine spending priorities. It's deciding whether or not the United States of America will honor debt obligations already passed by Congress.

    Here's how refusing to raise the debt ceiling damages Obama's Presidency--a refusal to raise it would lead to economic catastrophe. It would lead to a Great Depression, or worse. For which-- Republicans think--Obama would be blamed.

    As for the specific complaints of the Tea Party, we should remember that a) Obamacare will reduce the deficit (according to the non-partisan CBO), that b) TARP was repaid, with interest, and the stimulus worked, saving thousands of American jobs (again, according to the CBO). So if the Tea Party genuinely wants to reduce federal spending, they've picked some silly things to complain about.

  • Blue Salt Lake City, UT
    July 26, 2011 9:16 a.m.

    Brett,

    My reference to Somalia was to their "small government, free market" society.

    Yes, of course the Tea Party calls for less spending. The billionaires who organize and fund the Tea Party crave a small, weak government. The last thing in the world they want are people telling them that thay may not dump poison into the air and water, they may not game the tax code in their favor, they may not make sweetheart real estate and construction deals paid for by the public, etc.

    The Tea Party is an intellectually bankrupt bad joke. Angry outbursts and fear-mongering are always great for generating political contributions, but they offer nothing useful to a policy discussion regarding complicated issues.

    The credit card bill is due and must be paid. If you regret some of the purchases you've made, that's fine and by all means, think through your plans to spend less in the future.

    But for now - - pay your bills!

  • Moderate Salt Lake City, UT
    July 26, 2011 9:15 a.m.

    Republicans would of course like to see President Obama be a one term president, but they may have shot themselves in the foot (or worse) to do it.

    They embraced the Tea Party to make some political gains in the House. Speaker of the House Boehner negotiates in good faith as a Republican, but his terms are rejected by the RINO Tea Party members. You hope that the person who comes to the table has control over their party members, but that can never be the case.

    Political blame will be a repeat of the 90's, with most Americans pointing at the Republicans. Republicans normally would point blame at Democrats, but the Republicans are in a fight for their own party now. This may be their opportunity to fix blame on the Tea Party who campaigned on the idea of being obstructionists. It will be interesting to see how this unfolds. Will we see the GOP rise again? Will the Tea Party crumble or become a viable 3rd party?

  • homebrew South Jordan, UT
    July 26, 2011 8:56 a.m.

    The writer of this comment should get his facts straight. First: Nancy Pelosi passed a budget in the house, that was fillabustered by McConnel and the republicans in the senate. The republicans in the senate fillabustered everything the house passed. The debt ceiling was raised 8 times under George Bush, once a year usually by unanimous consent. Next time you write a letter, try to get the trith, not just yours or Fox news spin on the story. The republicans priority is to defeat Obama in 2012. They dont care if it destroys the recovery in the process. Recovery from what?? George Bush's depression. Wake up you sheep and turn the channel.

  • Brett Marietta, GA
    July 26, 2011 8:30 a.m.

    "This whole controversy is about destroying the President" "I honestly believe that Senator McConnell and his pals would happily turn America into a giant Somalia"

    That doesn't make any sense. For the last year years the Tea Party has been focused on less spending and less government. On April 15, 2009, when the Tea Party first got national attention, it was because they were outraged with TARP, the bailouts, and the stimulus.

    From 2009-2010 they were a strong force against ObamaCare because of the increased spending and government control.

    Now, as we face raising the debt ceiling, which forces us to reexamine out spending, they continue wanting what they've always wanted, less government and less spending.

    More importantly, how does opposing raising the debt ceiling without spending cuts "bring down Obama?"

    It could only "bring down Obama" if the American people are for cutting spending and Obama CHOOSES to ignore the people.

    Obama has choices here. Only he can allow himself to be brought down.

  • pragmatistferlife salt lake city, utah
    July 26, 2011 8:20 a.m.

    So KM do you get all of your information from blackboards? First of all the whole Cloward Piven thing came from the mid 1960's..nothing radical going on then was there? Seocndly the aim wasn't to destroy the economy..(that's Becks version), it was to reform the welfare system with a guaranteed income system. The two were social workers not revolutionaries. Lastly it is you who are trying to fundementally change America. You are trying to secede from the social contracts establised over the last 6 decades. America has establised contracts with it's citizens for social welfare, including Social Security, Medicare, and Medicade, education. It is you who are trying to change this.

  • Blue Salt Lake City, UT
    July 26, 2011 8:09 a.m.

    Esquire: "This whole controversy is about destroying the President, and as a result, the country, all for political purposes, not what is good for the nation."

    You've got to take Republican leadership (Mitch McConnell) at his word when he said in 2009, "The single most important thing we want to achieve is for President Obama to be a one-term president."

    I honestly believe that Senator McConnell and his pals would happily turn America into a giant Somalia if it meant they could regain the White House.

  • KM Cedar Hills, UT
    July 26, 2011 7:45 a.m.

    Roland and Esquire

    Yes it is about the debt ceiling and the non-budgets by the ruling politicians in Washington. They didn't pass a budget the last couple of years because they didn't want the public to see they were using an open checkbook to rack up as much debt as possible, with the end result of destroying our economy. Please read Cloward and Piven and discover that its this president and his cohorts that are trying to "fundamentally transform America." It is time to stop borrowing to pay the bills. The bills are overwhelming the system. (cloward and piven) This is a planned destruction, its not a mistake.

  • Esquire Springville, UT
    July 26, 2011 6:50 a.m.

    This is such nonsense from beginning to end. It is nothing more than parroting Republican talking points, all of which are not true. The debt is an issue contributed to by both parties. As the WaPo stated: "...were not raising the debt ceiling because of the new policies passed in the past two years. Were raising the debt ceiling because of the accumulated effect of policies passed in recent decades, many of them under Republicans. Its convenient for whichever side isnt in power, or wasnt recently in power, to blame the debt ceiling on the other party. But it isnt true." Enough of the propaganda. This whole controversy is about destroying the President, and as a result, the country, all for political purposes, not what is good for the nation.

  • Roland Kayser Cottonwood Heights, UT
    July 26, 2011 12:08 a.m.

    This author is seemingly confused about the difference between the budget and the debt ceiling. I agree that congress should have passed a budget instead of relying on continuing resolutions to fund the government, but that has nothing to do with the debt ceiling.

    The debt ceiling needs to be raised to accommodate spending that congress has already authorized. Not raising it will mean that congress authorized the expenditure of funds, but now refuses to pay for them. That is why our credit rating will fall drastically if it is not approved. This will, paradoxically, make the deficit much worse, due to the increased interest costs we will have to pay.