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Comments about ‘Robert Bennett: Contrary to Krugman, debt outlook looks dim’

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Published: Monday, Aug. 18 2014 6:22 a.m. MDT

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Kass
SLC, UT

How about naming some of the economists whom you trust so we can do our own evaluations of their opinion and yours?

marxist
Salt Lake City, UT

Why does the Federal debt grow and how? First, the Federal debt grows when revenues (taxes) do not rise to the level of expenditures. Second, the debt is incurred through the sale of U.S. securities of various types.

As a general rule to measure the burden of the debt, economists look at the ratio of debt to GDP. I believe that is appropriate, based on my work as an economist the last 40 years.

What has been the pattern of debt to GDP over the years since WWII? The debt to GDP ratio peaked in WWII. It fell steadily through the 50's, 60's and 70's. Why? Largely because taxes on the wealthy and corporations remained high. With the arrival of Reagan and his tax cuts for the top end, the debt to GDP ratio climbed steeply thorough the Reagan years and Bush I. It leveled off and began to decline under Clinton, because Clinton taxed the rich.

Of course the debt to GDP ratio grew rapidly under Bush II with his high end tax cuts.

The ratio is now declining under Obama. Conclusion: tax the wealthy! It's good for them and us!

JoeBlow
Far East USA, SC

current and future debt is driven overwhelmingly by 3 issues.

Medicare
Social Security
Defense

Everything else pales in comparison.

Rising health care costs, baby boomer retirements and our penchant to inject ourselves in every world conflict are the drivers of our debt

So, next time someone complains about the money spent on foreign aid, unemployment benefits or Obama's vacations steer them back to the real issues.

Would you rather attack the problem, or make insignificant political rants?

Focus on the real issues.

SS, Defense, Medicare

Fix those first, then hunt for the pennies.

Esquire
Springville, UT

Sadly, early in the Bush years, the Republicans gave us a tax cut, sending small checks to most of Americans in an amount that didn't really mean that much except to take out and spend for dinner and a movie, and not much more. Those checks took billions out of the federal treasury, and were accompanied by a permanent tax cut. While none of us like to pay taxes all that much, we also know that various government services, whether national security or a variety of domestic services, are important and wanted. So, most people don't want these services significantly cut. Now, take this tax cut, add to it the most costly foreign wars in history, ones we started, by the way, and increase other spending because it's good politics, and the GOP took a budget surplus and destroyed it. Bob Bennett was part of that fiasco. The lesson to be learned is don't let the Republicans be in charge of the budget. They talk a big game, but reality tells us a far different story. From Red Ink Ronnie to the modern era, the GOP is bad, bad, bad for the economy.

GaryO
Virginia Beach, VA

“Conservatives” continually harp now about the debt. But when Reagan TRIPLED the debt and when GW more than DOUBLED it again, they didn’t say a peep.

In fact, it was Dick Cheney who famously said, “Deficits don’t matter.”

Low Revenue – High Spending = High yearly deficits = High Debt

The problem is either high spending or low revenue, or a combination of both.

High Spending? Well yes. America spends more on our military then the next 8 highest spending nation’s combined. In fact, the over 50 BILLION dollars we spend on military retirement (for those who have served 20 years or over) is more than the ENTIRE military budget of Canada.

Low Revenue? Absolutely. In 1969 when we fought the cold war and the Vietnam war, spent billions on necessary social programs, and went to the moon, we still balanced the budget because we had enough revenue. Back then the highest tax bracket was 71%. Now it’s down to 38% because of trickle-down-economics forced upon us by the Reagan administration.

It was supposed to create jobs. Where are the jobs?

We need to stop coddling the rich and increase the high tax bracket again.

John Charity Spring
Back Home in Davis County, UT

Now is the time of the great battle for Americas economic future. Sadly, the left-wing proponents of entitlement programs are currently winning.

Charles Dunoyer famously stated that"one consequence of the industrial regime is to destroy artificial inequalities, but this only highlights natural inequalities all the more clearly." Dunoyer continued "superior abilities . . . are the source of everything that is great and useful . . . Reduce everything to equality and you will bring everything to a standstill. " This is why state intervention of any kind must be rejected. Natural inequalities such as differences in physical, intellectual, and moral capabilities are crucial to an economy of growth and innovation.

That is the problem. The left-wing egalitarian system attempts to put everyone on the same level, regardless of effort or ability. There is only one way to make everyone achieve an equal result, and that is by reducing everyone to the level of the lowest common denominator. Shame on those who are fostering mediocrity.

Mountanman
Hayden, ID

The national debt when Bush left the White House was about $10.6 trillion. When Obama leaves the White House it will be over $20 trillion! Obama ran up our national debt more than all other Presidents combined and that after he increased taxes on the "rich"! His foolish experiment with income redistribution came at the expense of our granchildren! They won't mind that Obama mortgaged their futures will they? Obama has purchased votes and got himself elected with entitlements paid for with borrowed money!

Invisible Hand
Provo, UT

@Kass: If you want to read economists who disagree with Krugman start with Rhinehart and Rogoff. Read "This Time is Different" for a realistic look at what debt levels like the current one have done historically.

@Marxist: You are attributing high tax collections to high tax rates. It's more accurate to say that high tax collections came because of a fast growing economy. The economy grew fast after WWII not because taxes were high but because there was massive growth in population around the world and a big bounce from depressed levels. The other instance of growth you cite was the internet boom. Neither of these can be fairly attributed to high tax rates. You can't just cherry pick a few instances where high tax rates DIDN'T appear to slow the economy and give the tax rates credit for everything good that happened in the complex economy at that time.

Mike Richards
South Jordan, Utah

If Obama taxes the rich, the rich will shut down their operations or move those operations to nations that have a more favorable tax rate. Companies have no reason to stay in a country where they are seen as the problem instead of being seen as the solution.

Most revenue comes from income taxes. Income taxes are generated when people work. People work when companies hire them. Companies hire employees when the need for their product or service increases. Obama's threats have made businesses reluctant to hire full time employees. Those companies don't know how much ObamaCare is going to cost them, so they refuse to hire new employees.

Obama created the mess. He is responsible for stagflation. His policies caused it. His rhetoric pushes it. His lack of business experience and his refusal to listen to business leaders destroys any trust he might have had with the business community when he entered office. Businesses will wait until he is out of office before expanding their operations.

JoeBlow
Far East USA, SC

" Obama ran up our national debt more than all other Presidents combined and that after he increased taxes on the "rich""

Did you know that Obama's" biggest debt year was 2009. This was using the budget established in 2008 before he became president.

The debt is almost entirely caused by lower revenue and higher "mandatory spending". This can be verified on several charts at the Heritage Foundation website.

Guess what? Had Romney been elected (or McCain) the debt would have still skyrocketed. That is just a verifiable reality.

Oh, and remember, Congress spends the money. 100% of it.

JoeCapitalist2
Orem, UT

Some people want to pretend that our deficits are caused by tax rates being lower than they should be. If you want to know the real story, google "federal tax receipts" and see the amount the federal government has collected and spent each year for the past 60 years.

The reason we are in debt is because we spend way too much. Period. The federal government now spends twice as much each year as it did just a dozen years ago.

The population has certainly grown, but it hasn't come close to doubling in that time. Total tax receipts have also continued to grow and the government takes in more each year than it ever has, but like the population, tax receipts haven't come close to matching the explosion in spending.

You could argue that the "evil Bush Tax Cuts" have added a few hundred billion to the deficit over the past 10 years, but that is a tiny sliver of the huge $Trillion dollar deficits.

We can go after "rich people's money" all day long, but until we get our spending under control the appetite of "the beast" will drive us to bankruptcy.

marxist
Salt Lake City, UT

Re: Mike Richards "If Obama taxes the rich, the rich will shut down their operations or move those operations to nations that have a more favorable tax rate. Companies have no reason to stay in a country where they are seen as the problem instead of being seen as the solution."

That's an easy one. Let's have Obama and the House Republicans pass a law making such abandonment illegal. Companies are all-powerful only to conservatives like yourself.

FT
salt lake city, UT

This has to be one of the Senator's weakest editorials that is poorly supported with few facts or references. Looking back over the past 6 years most everything Krugman had predicated has played out. The GOP is not concerned about our debt but they are concerned about the tax rates and social spending(income redistribution). They simply use the debt as a bogey man to encourage support for distributing less of their wealth to the balance of society.

Mike Richards
South Jordan, Utah

Marxist,

You may believe that the government owns a company's private property, but the Constitution doesn't support you. The Federal Government is limited to "owning only a ten-mile square District, and the land and buildings required for forts, magazines, and federal buildings. In other words, your idea is unconstitutional.

People have no requirement to provide jobs for others. People have no requirement to keep their businesses inside the United States. Private property does not become public property just because you want to redefine words.

Government got us into this mess when FDR started promising people that the government would be responsible for their personal welfare. Most presidents since then have continued to misuse tax revenue. Instead of obeying the constitution and only handing duties in the 17 areas authorized by the constitution, they have squandered America's wealth by signing pork projects - vote buying.

Government cannot save itself by increasing taxes. If it hopes to survive, it must decrease spending and it must stop paying people to NOT work. Tax revenues come from income taxes. Income taxes are paid by people who work.

Invisible Hand
Provo, UT

@marxist: Make "abandonment" illegal? You might as well reinstate slavery. You want to make business owners continue to operate where you tell them to and they aren't allowed to stop working lest they be charged with abandonment. How about we try more freedom instead of less. Lower the corporate tax rate, simplify the regulatory regime and make America a place where people WANT to do business instead of forcing them to do it here.

JoeBlow
Far East USA, SC

"The reason we are in debt is because we spend way too much"

JoeCap

I can agree with that.

But, While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts.

Cutting taxes is easy. It cutting what those taxes cover that gets tough.

SS, Medicare and Defense are the deficit drivers. What has the GOP done to cut costs of those while they push for tax cuts and more defense spending?

What did the GOP house and senate do under Bush? Cut taxes, go to war and pass Medicare part D.

Hardly the party of fiscal responsibility.

I am not suggesting that the dems are fiscally responsible. But it is unreasonable to blame them without looking at the historical realities of what the GOP has done.

Both parties overspend. But one wants to do it while lowering taxes.

JustGordon
Cottonwood Heights, UT

Our former senator accuses Professor Krugman of "cherry picking" dates for comparisons, but conveniently ignores the professor's comments about those who are debt-phobics, like the senator, were warning about inflation and hyperinflation that never happened. Folks from the senator's own party were lamenting that we were on the road to becoming the next Greece, yet the senator cavalierly dismisses Greece now as "too small." That snacks of being two faced, senator! Your party brought us the Great Recession and then did nothing to help the Nation fix it! Your concern and advice rings hollow!

Tyler D
Meridian, ID

@JoeBlow – “While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts.”

Because that’s not the GOP plan – their plan is to “starve the beast” and come to the rescue when the economy tanks. It’s a reckless and dangerous plan made all the more difficult by facts on the ground (i.e., the tax cut policies have not lead to long term economic growth and in many ways have simply created a less stable economic environment complete with 1920’s style faux-booms & busts).

The GOP has zero credibility on this issue and only found religion on it the day after Obama took office.

That said – both Cheney and Krugman are wrong about debt. It does matter if for no other reason than it is morally wrong to force your children & grandchildren to pick up your dinner tab.

george of the jungle
goshen, UT

Before the Federal Reserve there wasn't any inflation. after they took control every thing started to increase. Then we went off the gold standard. Things went into outer space. When you make $25. an hour and spend $35 dollars an hour then think that to not spend $8 is going to fix the problem.

JoeCapitalist2
Orem, UT

JoeBlow: "But, While I see the GOP pushing for tax cuts, tax cuts, tax cuts, I never see them make any significant spending cuts."

On the tax front, the GOP believes that if you have reasonable tax RATES that the government will maximize its tax REVENUES. Obviously, you can't get the rate too low and still generate enough money, but liberal proposals to take more than half of anyone's income will never generate more tax revenues. Rich people will just spend more time and energy looking for tax loopholes. A flat tax of about 15% for all income above the poverty line would spur economic growth and maximize revenues.

You are right about the GOP doing too little to stop the growth of government spending. While they are way better than tax and spend liberals, they are more Dem 'lite' than anti-Dem on the spending front.

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