The ever-growing Nanny State and how it came to be

Yeah but the moderate republicans are mostly polite/well-mannered (unlike most liberals and admittedly, unlike me on here) so they get some credit for that.

 

...and then there are those (like University employees) who are chronically on the dole their whole lives and don't have the ability to look in the mirror and go, "yep, I'm a parasite"

 

One of my undergraduate research students has recently been accepted to a top medical school. He'd probably disagree on the notion that professors are parasites.

 

I gave you context in relation to deficits under Reagan. Just because you can not handle the facts is no reason to ignore them and try to deflect by giving your "unsubstantiated opinion" false narrative.

What opinion was unsubstantiated in relation to the context given ? Were interest rates not above 10% during Reagan's term ? Was the economy not doing well such that income was increasing ?

You keep going on about inflation and GDP but you have not stated how this justified the massive spending and deficits under Reagan and the Bush Brothers spending money like princesses with credit cards.

I await your well thought out and coherent explanation - (see my previous posts as to what that looks like)

 

Credit for being milquetoasts??

 

It came to be because most people are not libertarian and not widely enthusiastic about corporate America or economic elites. It going to grow stronger for the same reason.

 

Providing opinions along the lines of "in 2008 there was a crisis so we had to spend more and thus Obama's deficits increased" or "Reagan increased military spending dramatically and ran up deficits in doing so, thus his deficits were 'high'" --> these are written, not mathematical/quantified explanations as to why spending was what it was. Basing your argument on this is not a form of coherency, and it's not a valid explanation. I could spew my opinions all day too on why deficits were what they were in the past, but it's the wrong approach.

Let's go back to the "spending as a percentage of GDP/output" statistics one more time.

Average Percentage government spending relative to GDP:

Reagan (1981-88 )– 34%
Clinton (93-2000) – 34%
Bush (2001-2008 ) – 34%
Obama (2009-2016) - 38%

Now, these averaged out figures factor in:
- inflation (your graph doesn't)
- GDP growth (your graph doesn't)

Further, and this is just a side note (please focus on the big increase, after accounting for inflation and GDP growth, in spending under Obama) but we know who has been pushing for increased spending by government. Per your own words, the GOP pushes for military increases while the left pushes for other spending increases like healthcare.

And the following fact, is, a fact: US defense spending is only 3-5% of total output for our economy. So the GOP is pushing for proportionately small increases while the Left is pushing for increasing the whole ~35% - the 35% remaining in government spending as a percent of economic output.

Conclusion: I don't care about your opinions on why deficits rose or fell. Anyone can make up narratives, it's not difficult. What we need to focus on, which you haven't been focusing on, is proportionate spending adjusted for GDP/Inflation (statistical numbers that we can verify, not your opinion).

 

You put up figures of spending in relation to GDP - fine .. what does this have to do with how much debt was being accumulated at those spending levels - other than ZERO.

Spending as a ration of GDP does not tell us what the Gov'ts income is nor does not tell us how much debt is being created nor does it take interest rates into account.

You are not making up a narrative ... you do not even have one . You post spending as a ratio of GDP but then make no commentary on how this is a valid measure of fiscal responsibility.

Lastly you whine and whine about "context" and then completely fail to put the Obama ratio of spending to GDP into context.

Your argument consists of finding one metric that seems to support your case and ignoring anything else that conflicts with your perspective.

I hate to burst your bubble but - deficits and debt matters.

 

1. Re-read post #32, it explains why spending as a percent of GDP adjusts for inflation (which takes interest rates into account) and other variable factors. This is the only valid way to look at spending - raw deficits numbers tell you nothing and the reason why should be obvious.

2. You can just admit now that graph you pulled from google images is a misrepresentation. I mean, the numerous text qualifiers on it and pointing arrows were a dead giveaway, but....

edit: Caught ya! I just googled "GOP spending deficits" and this was one of the first images that showed up. Source:

https://crooksandliars.com/susie-madrak/study-bush-tax-cuts-cost-more-twice-m

...

 

I got this chart from a different link



Your claim that the trend lines somehow distort or misrepresent the information is laughable nonsense.
How do the trendline's misrepresent anything ? All they do is illustrate the outrageous deficit spending habits under republican Presidents while under Dem presidents deficits are relatively moderate.

Saying that the spending as a ratio of GDP is inflation adjusted (while an interesting factoid) does not justify in any way shape or form, the massive deficit spending habits under Republican Presidents.

The activity of the overall economy does not tell us how much revenue the Gov't is collecting nor tell us how much debt the Gov't is accumulating.

It does not tell us anything about the interest rate on the debt.

Putting up stats .. without explaining how those stats are relevant to how much the Gov't is spending in excess of income over time ... is not an argument for anything.

 

Let's take *one* point in time on your graph to illustrate the point. It doesn't really matter, let's pick....Reagan! 1984! Since we've been discussing him so much! And because your views are just so Dystopian, like the book, “1984”! It should be obvious, but I'll show why your graph doesn't mean anything:

1984:

US annualized inflation rate – 3.8%

US annualized GDP growth rate – 7.3%

US deficit increase rate – ~5%

US deficit increase-to-GDP (inflation adjusted): -1.1%

Now, we look at your chart, and we see a deficit increase and then we draw an arrow upwards and go “oh my god Reagan increased the deficits!” But let’s look at the actual stats, not the raw (meaningless) data:

- GDP grew by an average of 7.3% annualized

- Inflation averaged 3.8%

- This resulted in a net deficit increase of 4.5%. Now, you, being who you are, look at your graph and see an increase in the deficit. But then we look at inflation, which we would expect to increase the deficit proportionately, and GDP growth, which we would expect to increase the deficit proportionately, and the net result, highlighted in bold, which shows the deficit fell relative to the inflation-adjusted GDP growth rate. And we can easily conclude that the deficit actually fell in proportionate terms.

This seems to be a theme of Reagan – he saw huge growth during his era, and relatively high inflation. Of course the deficits went up! Would you expect them not to?

Conclusion: I’ll tell you this once more. Raw deficit numbers (from charts pulled on google that are misleading) mean nothing. They have to be put in the context of the economic statistics at the time. This doesn’t mean you toss in your vague opinions on the matter – I don’t care about your opinions whatsoever – but rather that you put those numbers in the context of inflation/GDP growth.

 

Also, I just took a look at an actually *accurate* graph of what you were trying to show. You shouldn't just grab the first one that supports your opinion from Google:



https://www.economicshelp.org/wp-content/uploads/2013/10/budget-deficit-46-13.png

You'll take note where the massive spike comes - Obama's term. You'll also note how it compares deficit spending to GDP (similar to what I advocated earlier, because it's not misleading). This is how the government websites typically look at deficit spending because it...makes sense...

 

Makes sense to who ? - certainly not you as you have yet to explain how GDP and debt are related such that you can justify the massive deficits under Republican Presidents.

At least this chart actually mention's deficits which is a step in the right direction.

As you can see from the chart, deficit spending as a ratio of GDP is huge during the time of Reagan and Bush 1 (larger than any time period outside of wartime)

After 16 years of reckless spending the debt is so big that interest payments on the debt exceed 25% of income which is getting dangerously high. (a fact not shown by your myopic focus on GDP ratio's).

Clinton and congress are forced to work together to deal with the debt problem and they take measures to reign in spending and raise revenue. Taxes are raised on high income earners and military spending is reigned in. In addition a white swan comes to the rescue ... the internet/tech revolution which increases revenues and the crisis is averted.

In your partisan haze you hate to admit that this happened under a Blue president. Worry not as it had less to do with Blue and a lot to do with congress and the president being forced to work together to clean up the massive debt mess that Red had made through 16 years of fiscal irresponsibility.

Bush 2 is handed a near balanced budget but .. the economy is weakening and revenues are flat or decreasing due to the dot com crash. The Bush admin forgets the lessons of the past and tries the same tactics as Reagan. The problem is that the economic situation is completely different.

As per the chart ... Bush again starts running big deficits. Then the housing bubble kicks in and revenues start to increase big time as can be seen from the chart. The problem is that this increase in revenue is due to a massive ponzi scheme which then crashes (we will leave the blame game for another day) Not only does the housing bubble burst but the stock market crashes (from 14000 down to 6500) and the entire financial system is in peril.

Bush's last fiscal year (2009) hands off a 1.4 Trillion dollar deficit to Obama (the biggest negative red line on the chart).

The reason it is so big is because GDP takes a huge hit in 2009 due to the stock market crash. Revenue drops from 2.7 Trillion down to 2.1 Trillion.

Commercial paper markets freeze. It is unlikely you know what this means (no offence as most don't).
When GE gets a 5 Billion dollar contract to build a nuclear power plant they have to come up with say 25% of that money up front. They do not have this money sitting in some bank account so they borrow it from the commercial paper markets. If these markets freeze - the whole thing stops .... we are talking 1930's style global meltdown.

In any case... the biggest red line is Bush 2. It takes a few years for revenue to reach previous levels and for the economy to pick up again.

Any fool can increase deficits (increase spending). Decreasing deficits is a whole other kettle of fish. Obama does not actually decrease spending ... he waits for the revenue to increase which is why the deficit comes down.

The idea that Red has been some model of fiscal responsibility since Reagan is preposterous nonsense.
Red has been a fiscal sht show.

The only reason our ship has not sunk due to the massive 20 Trillion dollar debt is because from 2000 to present ... ave interest rate on the debt has decreased from over 7% to 2.25%.

Interestingly ... the amount of interest is not much more today than it was during the Clinton era ... just to give you an idea of how bad things actually were back then.

Current interest as a ratio of income is roughly 12.5 % (half the 25% during the Clinton era and well below the 30% IMF red light warning zone)

We are doing great right ? ... not so fast. The Fed used up every bullet in its arsenal and this has messed with the "invisible hand" - market anomalies are starting to show.

If you want details I can get into that but, there are major forces pushing interest rates up.

Historical average for the 30 yr bill is around 5-6%. Remember that it is supply and demand that sets this rate. We are now at the historical low. If rates rise just 1.125% ... the interest payments increase by 50%. If the ave rate on our debt rises to 4.5% (which is under the historical ave) our interest payments double to 900 Billion/yr and we are at 25% of income in a blink of an eye. This assumes a Total debt of 20 Trillion (and its already 21 Trillion).

Now Trump is trying the same old trick. He was handed a 500 billion dollar deficit and in his first year he we are once again going to be running Trillion dollar deficits. The problem is that this is being done in a rising interest rate environment.

By the time Trump finishes his Term the debt will be near 25 Trillion and ave interest rates on that debt will be higher than they are today and they could be much higher.

Then you will be very aware of the Debt as the interest payments will have a crushing effect on our economy. If there is no "white swan" event like happened to Clinton ... the cuts will have to be deep and Taxes have to be high.

 

Partisan comedy hour at its finest. What have the republiklowns done to stem spending? Nothing. Not even when they are in control.

 

I disagree with your slant and take on much of what you claim. Obama was far and away the biggest culprit, doubling the operating debt in his 8 years. And kill that slight of hand trick, long debunked, of tagging Bush43 for Obama's 2009 trillion dollar deficit. Obama inherited a CR, then passed the stimulus package and then the massive 2009 increase in March of 2009 -- it was all his.
The economy grew like gangbusters under Reagan, though it took a while to work out of Carter's stagflation economy. It might have been even better with less deficits if Tip O'Neill hadn't reneged on his promise to reign in spending.
Clinton and congress didn't work together. Gingrich beat the crap out of Clinton to get the surplus over Clinton's vetoes and government shutdowns.
You are correct that, if it holds up (a big if), Trump's budget is going fast in the wrong dirextion.

 

LOL, you realize that the data you post doesn't help your argument -- unless you want to blame the deficits caused by the 2008 recession on Obama. I know the conservatives have a tendency to do that, especially our friend Bluesguy.

 

The 2009 budget was actually submitted in Feb 2008. The fiscal year starts in October 2008 thus it is Bush's last Budget and rightly attributed to him. https://en.wikipedia.org/wiki/2009_United_States_federal_budget

This does not get Obama completely off the hook however.

The estimated deficit was for 400 Billion. Spending was estimated at 3.1 Trillion and income at 2.7 Trillion. So (400B) was already baked to the cake prior to Obama setting foot in the Whitehouse.



The deficit for 2009 ends up at 1.4 Trillion ... so where does the other 1 Trillion come from ?

Due to the housing bubble, stock market crash and financial system meltdown - revenue for 2009 dropped from 2.7 Trillion down to 2.1 Trillion. This then accounts for (600 Billion)

The other 400 Billion comes from TARP (roughly 250 Billion enacted under Bush) and other stimulus spending (roughly 150 Billion) which we can attribute to Obama.

The CATO institute - hardly a bastion of Liberal thought (quite the reverse to be factual), concurs. https://www.cato.org/blog/dont-blame-obama-bushs-2009-deficit

Now to your other points.

You are correct that the economy grew like gangbusters under Reagan. This was mostly due to the baby boomers coming into their high spending years but, it matters not to my argument where this growth came from. The fact that the economy was growing - and income rapidly increasing - makes Reagan's deficit spending even worse ! It is for this reason that by any reasonable standard Reagan was the most fiscally irresponsible of the bunch.

1) Clinton has veto power 2) he increased taxes and held defense spending in check (hardly a conservative agenda). The idea that Gingrich was solely responsible simply false. I also note that you do not hold Republican congress responsible for the Obama years. Stop the partisan hypocrisy.

("A big if") This ignores history. Reagan did the same thing - it did not work - deficits soared. Bush did the same thing - it did not work - deficits soared.

I agree that some of what Trump is doing (in particular getting rid of some stupid regulations) is very helpful. That said, it takes years for policy to affect the overall economy and in general the overall economy is outside the control of any President.

Trump must be very careful with his protectionist policies (and this is not what he is doing). While I agree that we need to change some of our trade relationships ... we do not want a trade war and we do not want wholesale protectionism. This is a lose lose game.

The Atlanta Fed had predicted a 5.4% GDP growth rate (ridiculously high and economists are notorious for getting such predictions wrong but .. OK) Just over a month later - as more data came in - they reduced their prediction to 1.8% - hardly robust.

 

And the 2009 deficit is Bush. The 2009 Budget was submitted in Feb 2008 and the 2009 fiscal year begins in October 2009. See post 42.