We recently addressed the federal government’s worsening debt situation … which is about to explode again under the “leadership” of new U.S. Speaker Paul Ryan, the latest in a long line of status quo “Republicans.”
Well guess what: The debt exploded by a whopping $339.1 billion on Tuesday – the largest single-day increase in history. Then it rose another $40 billion yesterday.
That puts the current government debt at $18.5 trillion – or $18,532,338,091,711.40 for those of you keeping score at home.
What gives? The recent increases are tied to the debate over the federal debt limit – which lawmakers agreed to suspend this week (basically giving the administration of Barack Obama a blank check).
Once the suspension was lifted, the debt spiked up as the U.S. Treasury no longer had to pretend that it wasn’t spending hundreds of billions of dollars it didn’t have.
Were there any concessions related to this debt ceiling suspension? You know, like the spending cuts agreed to in 2011?
Don’t be silly …
Besides it wouldn’t have mattered if there were concessions. Those 2011 cuts were never going to happen … and they didn’t happen.
Once again, Washington, D.C. is simply pressing down the accelerator on the same fiscal excess and recklessness that has landed our country in its current economic malaise. Anybody care to guess how this movie ends?
Because it’s not going to be with economic growth, new jobs and higher incomes …
Bank of America upped our Master Card limit honey, steak dinners for everybody!!!!
Government buying everyone a steak dinner is better use of tax dollars than half of what they spend money on.
Could well be. How do you like your steak, medium rare sir? Would you like a Merlot with that?
The Ponzi scheme continues to work, until one day it doesn’t.
Madoff was small time.
Debt is a two way street. There are solutions, that Republicans are not willing to accept to deal with debt, that will not further devastate the middle class in this county. It involves cuts to defense, cuts to corporate welfare, and slightly higher taxes for the mega wealthy. We do not need to spend on defense what the next three largest countries combined spend. We need higher taxes on the mega wealthy. If we could return to the tax structure we had under Clinton and reduce Defense spending to where it was under Clinton plus the rate of inflation, we would be running annual surpluses. As we did briefly under Clinton.
The annual deficit spiked after the great recession. That is because revenues went through the floor. That was exacerbated by the tax cuts for the wealthy enacted during the Bush Administration and keeping the wars out of the budget, but still having to pay for them. The annual deficit has been dropping steadily since 2011 and this year is projected to be less than under Bush in 2008.
So there are answers, but if the only answer the Republicans are willing to accept is cut Social Security, cut Medicare, cut education, cut health care for middle class people and cut taxes on the wealthy. Then to hell with them.
To hell with the Democrats who have either championed or cheered the increase of debt with their only solution being to “tax the wealthy”. Tax cuts under Bush caused tax receipts to increase. You always ignore that. You always try to make these correlating arguments, yet fail to establish root cause. The deficit is and always will be a result of increased spending. What tax rates are is irrelevant as far as proposing solutions. Until you bring up the unintended revenue and economic growth consequences of raising rates on anyone, don’t try and propose a solution including it. Yes, please cut education spending (which has not resulted in any real benefits) and healthcare (which has driven up costs of services). We already have a social safety net poor individuals in healthcare, in addition to massive requirements that private insurance companies must abide by for coverage (driving up the price of basic insurance). So, you can talk out of your Republican derangement all you want, but your solutions have failed time and again.
Tax cuts under Bush did not cause tax receipts to exceed the tax cuts. That is a Republican fable. The Laffer curve only works when you are near the bend, we are not. Tax cuts have failed to do anything for anyone except the wealthy. The middle class has seen no gains in income since 1980.
The most prosperous times in the history of this country was the middle of the 20th century. Tax rates were much higher, and no one was talking about throwing the middle class under the bus the way Republicans are today.
The Laugher Curve, too funny.
Wrong again. Your notions regarding receipts and cuts are just meaningless talking points. You ignore the behavioral and growth stimulus fact. Not only that, you hone in on the mythical positioning of “middle class” to the “wealthy”. Comparing post-1950s to post-2000 has too many variables to count if you are going to come up with numbers to measure “prosperity”. Tax increases (to whichever group) are nothing more than cover ups for out of control government. You cannot tax increase your way to prosperity or social welfare.
Clinton did. I’d love an answer to this question. What would tax receipts look like today if we had sunset the Bush tax cuts. Probably around $3.4 trillion – or essentially – the same as outlays.
Really? Tax increases were responsible for the growth? Tax increases were responsible for the tech bubble?
Tax increases significantly reduced the deficits between 1993 and 1996 and here’s what tax increases didn’t do – they didn’t preclude the growth – now did they? They didn’t stop growth – now did they? If anything, it was the boomiest boom boom time since the 1950s.
Tax increases reduced the deficit or increased revenue/reduced gov’t spending reduced it? We know that increases in revenue can result regardless of whether rates are low or high, depending on numerous other variables. Tax rates of any type don’t necessarily preclude growth, whether increasing or stopping. Again, my whole point has been that tax rates are a side issue. The tech boom was going to create growth no matter what the rates were. The only question is would the growth have been bigger with higher rates or lower rates. That’s the only issue and, to me, that only takes a little common sense to figure out. You aren’t doing anything but making Bayesian inferences.
Just start with your first sentence. Based on the figures I gave you from tax policy center – tax receipts fell from 2001 through 2006. OK. Fact. And at the same time government spending increased – creating deficits. Period. The tech boom aside, the late 1990s were not just driven by a “tech” boom. There was strength in manufacturing (fueled in part by tax credits to manufacturing companies to retool in the early to mid-90s), there was booming service sector growth, and solid wage gains. If the premise is that lower taxes would have made it even stronger, but the economic performance of the 2001 to 2008 period was actually crap, then your theory is incorrect. As for spending, I would agree we need to bring spending levels down.
your comment on late 1990s prosperity really depends on where you were viewing the game. Anybody familiar with small city, and rural SC would tell you that late 1990s was the end of times per NAFTA effect and wholesale loss of textile industry in SC.not saying it wasn’t coming anyway, but a blanket statement that the late 1990s were the good times only views things from a macro perspective. I had a front row seat to the demise of SC’s principle employer in places like Lancaster, Cheraw, Barnwell, etc. The departure of apparel sewing plants, and packing plants, sock plants, dye plants, print works, etc devastated many a town in SC and put an entire way of life that had existed for generations on the trash heap. Economic forces would have likely created that result over time due to the natural cycle of migration of low technology work like textiles to more developing nations, but NAFTA was essentially an overnight kick in the nads to the industry in SC, and the human cost was staggering if you got to see it up close.
Of course growth is not the only issue. Who the growth benefits is an issue? Who the spending cuts hurt is an issue?. Your argument appears to be we should cut taxes and cut spending because that causes growth for somebody, end of story. Well all you have to do is look at my earlier charts to see that is not the end of the story.
All the tax cuts by Republican since 1980 have resulted in wealth creation, but only for one group of people. The vast majority of American have seen absolutely no benefit from these cuts; but now they are stuck with the deficits these cuts created created. And as far as cutting more spending. I agree. What Republicans and I do not agree on is where the spending cuts should be. They do not want to cut spending in the areas that affect the same people who they benefited from the tax cuts. They want to cut things that benefit the people who did not benefit from the tax cuts.
Your notions of tax cuts paying for themselves are mythical. You ignore reality. Of course you don’t want to compare post 1945 to 1980 to post 1980 because it just proves how bankrupt Republican trickledown economics truly are.
These Graphs show it all
Tax cuts may or may not pay for themselves. Not all taxes are created equal, nor are the effects of the cuts/increases created equal. In truth, even having to “pay” for a tax cut is a myth. What you are paying for is spending. Gov’t never wants to actually have to work responsibly as we all have, they just get to “make it up” elsewhere, meaning increasing taxes.
And the Bush Tax cuts were the worse kind. Targeted at a very small group of very wealthy people. Of course they did not to improve anything for anybody except those people and they made the deficit worse.
But no one can discuss common sense with Republicans, because they don’t want government to do anything that they don’t feel they personally benefit from. Republicans espouse this insane notion that we all benefit equally from government. In fact we do not. the wealthy benefit far more from government than the than the middle class, yet they pay a significantly lower percentage of their income and net worth in taxes; and they are always trying to lower that at the expense of everyone else.
Tax cuts under Bush caused tax receipts to increase.
2000 – $2.5 trillion
2001 – $2.4 trillion
2002 – $2.2 trillion
2003 – $2.0 trillion
2004 – $2.1 trillion
2005 – $2.3 trillion
2006 – $2.5 trillion
2007 – $2.6 trillion
2008 – $2.5 trillion
Where was that increase again? Right………
Oh, for the record –
2009 – $2.1 trillion
2010 – $2.1 trillion
2011 – $2.2 trillion
2012 – $2.4 trillion
2013 – $2.6 trillion
2014 – $2.8 trillion
More for the record. Revenue increased from 2001 to 2008 overall with most of the gains in 2004 to 2007, solidly in the heart of the tax cuts.
Use the adjusted constant FY2009 values – so we’re using the same basis. Also, then run the tax cuts full through 2012 and see what the net increase over 2000 levels were. Woopsie!!!
Why do Republicans hate facts? I guess they have been fed this tax cuts benefit everyone crap for so long they just believe it without checking.
The CBO calculated that the 2003 tax cuts would most likely lower 2006 revenues by $75 billion, yet 2006 revenues came in $47 billion above the pre-tax cut baseline released in March 2003. Why? Federal spending was $237 million more than projected, so none of your numbers refute my contention that it has everything to do with spending, and cuts in rates are just the natural scapegoat.
You said the Bush tax cuts raised revenues – clearly – unless you’re using the wrong glasses, that’s a false statement that does not pass the test of empirical data. But nice try on the deflection to the CBO blah, blah, blah.
Or even better, as Kasich plainly spelled out in the last debate, the Bush tax cuts also squandered a projected $2 trillion surplus over 8 years that would have reduced the debt. Ooops – let’s not forget to add those numbers into the mix.
Are you even looking at the numbers you posted? Tax cuts were implemented April of 2003. Look at the revenues after that. Besides, my point has nothing to with Bush and everything to with people constantly bringing up the same nonsense about tax cuts and Republicans. The surplus was squandered by spending. Cuts in tax rates have nothing to do with it or any other problem regarding the national debt. Bush is at fault and so is the Democratic House that took over in 2006.
Mark, I don’t know how old you are, but the tax cuts started in 2001 with the “rebate” to everyone – mine was $360 that year I think. Either way, compared to 2000 – total fail.
But we need three $90 billion new carriers with those special soft toilet seats that cost $1,000,000 each, and we need more $74 trillion airplanes. Geesh – get with it.
“If we could return to the tax structure we had under Clinton and reduce Defense spending to where it was under Clinton plus the rate of inflation, we would be running annual surpluses.”
Those surpluses were with Social Security “off the books”, when accounted for there was still deficit spending under Clinton. Carter was the closest to balancing a budget since the gold disconnection in 71′.
I suppose it should be pointed out that if both parties wanted a solution it would entail cutting BOTH the welfare and warfare state….but really, there’s no real sense of urgency by either party because the Ponzi scheme has worked for some time.
The Fed monetizes the deficit spending and debt carrying costs, so the game will continue until one day something happens to change it.
Myself, I think it’s a symptom of government in general- meaning it always spends more than it takes in…there is never “enough” tax money to sustain empire over the long term. History shows this to be true, from the great Roman Empire all the way down to Zimbabwe…it’s the same cycle repeated over and over again throughout history.
That’s why no government has ever lasted longer than 2000 years & very rarely do 99% of them make it 1000 years….hell, our government is pretty long in the tooth at over 226 years more or less(depending on when people define it’s existence).
Getting closer and closer to the time we run out of other peoples money.
The Democrat way : “Ice cream for everybody.”
Sprinkles are for winners and we don’t have any of those in this mess, so no sprinkles.
Everybody bringing ice cream to the billionaires, and licking up anything that drops on the floor. The Republican way.
You know I’m a pretty straight shooter and somewhat non partisan. I think real Conservatives are the least damaging of the political factions. Our best hope is a new political class that is capable of turning their backs on the current DC system. I’ve got to tell you though, the George W Congresses spent like drunken sailors. I think 911 was used to explain away a lot of needless spending and government expansion. Lastly, you are right “Ice cream for everybody” won’t ever fix anything.