The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.
Showing posts with label US debt. Show all posts
Showing posts with label US debt. Show all posts

Thursday, December 6, 2018

As Trump's World Turns: An Economy Teetering On The Brink

...of repeating economic history and the death of the Obama Economy

Related image

Two months ago Donald Trump posted a tweet which seemed to have been crafted by the likes of Steve Miller or one of his White House economic advisers. The tweet stated numbers related to the US economy and a claim of a 100 record performance As is always the case with Trump & Company the figures were a lie. 

Here is a one minute YouTube video of a Trump spox backing out the lie via a question from a White House reporter.

If you revisit the image in the lead portion of this post, you will find at least one glaring example of why Trump's economy will join others of GOP past presidents.

In July 2014, The Kansas City star made the grievous error of publishing an OP-ED from noted right-wing economic talking head: Stephen Moore.  The Star should have known better as Moore has been a long-standing conservative economic postulator who was undoubtedly has served in GOP economic policy for decades.  It takes nothing more than a quick Google search to determine the effectiveness of GOP economic performance compared to Democrat Party performance.  First, let's run through a quick set of charts and that promised perspective on GOP economic policy.

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Image result for US economy dem vs GOP

The GOP's challenge: denying Obama's

job creation by president


Graph depicting Poverty Rate By State

Republican vs Democrat on the US National Debt

Federal debt 1901 - 2010 (Obama first year in office). 
Image result for US economy dem vs GOP
( Graphic provided by The Creative Commons and found on Wikipedia at: )

Report: Deficit Falls to $483 Billion, but 
Image result for us deficit

What about Moore?

If you haven't followed US economic news you may not be aware of Trump's impact on the US Deficit. Herewith are two articles (Forbes, The Washington Post ) with frankly and honestly credible information of how Trump is following GOP economic policy which can only yield another Great Recession. We should hope the GOP doesn't drive the nation to a second Great Depression.  Lest we forget Trump's Trade Deficit.

Now, that was a lot of charts supported information regarding GOP economic policy and its failed results.  Key data as we consider the current economic team with Stephen Moore as an adviser and frequent talking head on CNN.  

Following an LA Times piece about how Tea Party tax cuts have turned Kansas into a state of economic ruin, Moore went to work while wearing his "GOP economic savior while wearing his tea party superhero suit) wrote the aforementioned OP-ED.  LA Times posted, here.

...So when his piece asserted that "over the last five years," the no-income-tax states of Texas and Florida gained jobs while the high-tax states of New York and California lost jobs, the editors waved it through.
Moore punctuated his statistical victory over Brownback's critics with the ironic refrain "Oops."
Read the facts via the LA Times link above.  

Moore is not only the most visible of Heritage Foundation conservatives who consistently speak of the virtues of GOP economic policy, but he has also been around for quite some time. Thus Moore's impact on the continuation of economic performance delineated various charts above is undeniable and very much unreliable. Trump's current Deficit run-up is proof positive of the failures of the Trump economy. The current spending validated the myth the GOP is the party of the fiscal conservative.

All said let's watch Moore along with the most verbose of Trump economic supporters (via television): Stuart Varney.  The backdrop of the following video is the current deep drops in stock market indicators. You will notice the show host's attempts to dismiss or make less critical matters related to economic indicators. 

Will America ever learn? 

The GOP is a party of social regression with a deep aversion to societal change. It is not a party imbued with an aversion to spending and it is a party which will forever advance policies which favor the rich And. those policies will always fail..and guess who suffers most? It is worth noting Moore nor Varney and by no means, any of the men pictured in the led photograph, are some of the nation's most wealthy.

And then there is this.

The stock market on the day Trump signed the tax bill: 24,754 The stock market today, nearly a year later: 24,480. That's a decrease of 1.1% since the tax bill was signed. And in the meantime, the US debt is exploding at an even more unsustainable rate.
Wake Up America!

Friday, September 18, 2015

Connect The Dots USA: Spending, Deficits, Debt et al

During the run-up to the 2010 signing of the Affordable Care Act, (ACAConnect The Dots USA, was a frequent read. The ACA was signed into law and has managed to readout $100 million plus in frivolous US House of Representatives and US Senate votes. The life sustaining law has also withstood two major Supreme Court cases; sadly the GOP still speaks of repealing ;the law.

Connect was also instrumental in galvanizing social media towards participation 2014 mid-term elections. A gallant effort, but the effort was unfortunately met with progressives and Independent stay home (itis) and handed the GOP moderate wins in 2014. Maybe Connect among others of us (on social media) helped to whittle away at the GOP seat dominance in the House and may have helped to ward-off even more US Senate seat losses.

During the recent GOP debate, Donald Trump again mentioned the reality of excessively high US Debt. If someone has an article or video of Donald Trump ;berating the US Debt before Barack Obama won the US Presidency, please share the details. 

Let’s zoom in on the deficit graph to see what happened since this devious “tax cuts” strategy took off in the 1980s when the GOP got control of the White House. President Reagan started slashing tax revenues and discovered it was a lot harder to cut spending (because folks like those govt programs). And the deficit gap widened.

Note that the last five times we’ve had budget surpluses (four of them were Clinton budgets), revenue was near 20% of GDP. But the Clinton surpluses were squandered in the Bush years when revenue dropped to below 15% of GDP and spending soared to 25%.

Remember, GDP in 2014 was about $17 trillion, so each 1% is a $170 billion — a huge difference. Last year, the deficit was just under $500 Billion or 2.8% of GDP, which is down from the whopping 10% of GDP deficit ($1.4 Trillion) when Obama took office. Note that the deficit gap was closed by both bringing down spending AND bringing up revenue.

This bar chart illustrates Obama’s rapidly shrinking deficit as a percent of GDP — that’s the size of the gap between the red spending line and the yellow revenue line in our last graph.
Unfortunately, according to a recent poll in reality-free America, a whopping 73% mistakenly thought the deficit was getting bigger over the last six years. Geez, I sure hope they don’t vote based on that issue!
    Connect The Dots USA
                              September 15 
Here we see all those deficits added together to form the long-term debt. We were paying down the old WWII debt and only had less than $1 Trillion to go. Then Reagan came in with his wild tax cuts and kicked the doors off, leaving a $2.9 Trillion debt to Papa Bush, who quickly ran it up to $4.4 Trillion in just four years.
Clinton was bringing it down with higher taxes and more sane policies. Had “Dubya” done the fiscally responsible thing by consistently applying the then $130 Billion annual surplus toward the country’s “credit card,” we would have had the $5.7 Trillion debt paid off years ago.
d the debt, gave us more tax cuts, two wars, a Medicare drug benefit, a Wall Street bailout (all unfunded mind you), an economy on the brink, a $10.6 Trillion debt with the juice compounding, and a projected 2009 deficit of $1.4 Trillion there to greet Obama on day one.
Republicans are fiscal conservatives? Hello! Three-plus decades ago, they abandoned “balanced budgets” for tax cuts and endless war. Don’t let them get away with invoking the old GOP brand anymore.

During the GOP clown show debate this week, you heard many of the candidates complain about our $18 Trillion in debt and then — sometimes in the same sentence — insist on how we must spend endlessly on more and more military. No one ever mentions a reasonable budget, audit or tax offset for the Pentagon or war activities— just more, more, more. Apparently, under GOP logic, only military spending is not subject to “pay fors” or the law of diminishing returns.

Most folks who scream about the debt don’t realize that we owe more than half of that $18 Trillion debt to ourselves — not to China. And Social Security — far from adding to the deficit or debt — is America’s largest creditor. Failure to grasp this distinction is like not understanding the difference between your home loan and the bank to whom you owe the money.

Social Security gradually redeems its treasury bonds as needed to make up any shortfall from payroll taxes. The rest sits there earning interest — just like if you own treasury bonds in your portfolio. What the federal govt chooses to spend that loan on — waging senseless wars or investing in worthwhile infrastructure — is the debt driver, NOT the Social Security trust fund.

For a quick review of the Social Security balance sheet, see my post on 8/15/15:

As is the model on the TPI: we believe in information feed the brains of those who care to adsorb and assimilate information we no long find on network and cable news.

Yes, President Obama has added to the US Debt. Is it feasible to consider the nation's 44th President's first order of business upon assuming the White House was to reverse the killing years of George W. Bush?

Let's take a look at history as it relates to US Presidents and their debt accumulation.  

The US Deficit and the US Debt are different, but related economic "animals" that feed off each other. 

ederal Deficit


The amount by which a government's expenditures exceed its tax revenues. The difference is made up for by borrowing from the public through the issuance of debtalso called Federal Debt.

Read more:

As we watched and listened to a number of Republican hopefuls rail about the need to increase US militarism, we should wonder: "How are they going to pay for it?"

Saturday, May 10, 2014

Connect The Dots USA: Debt Increase By President And The Holders of our Debt

 April 28 

Here we see all those deficits added together to form that long-term “credit card” debt. We were paying down the old WWII debt and only had less than $1 Trillion to go. Then Reagan came in with his wild tax cuts and kicked the doors off, leaving a $2.9 Trillion debt to Bush I, who quickly ran it up to $4.4 Trillion in just 4 years. Clinton was bringing it down as a % of GDP with higher taxes and more sane policies. 

Had “Dubya” done the fiscally responsible thing by consistently applying the then annual surplus toward the country’s credit card, we would have had the $5.7 Trillion debt paid off within a decade. Instead, Bush II ignored the debt, gave us more tax cuts, two wars, a Medicare drug benefit, a Wall Street bailout (all unfunded mind you), an economy on the brink, a $10.6 Trillion debt with the juice compounding, and a projected 2009 deficit of $1.2 Trillion there to greet Obama on day one. 

Republicans are fiscal conservatives? Hello! As I pointed out earlier, Republicans stopped actually caring about balanced budgets in the mid-1970s when they became obsessed with tax cuts. Brands change and American voters need to realize that the Republicans are no longer the party of fiscal responsibility just because they keep saying so.

Most folks who scream about the debt don’t realize that we owe most ($9.1 Trillion) of our $16.7 Trillion debt to OURSELVES — not to China. And as this chart shows, we owe about the same amount to Japan as China, so why does the propaganda machine always fixate on “borrowing from China.” Perhaps because they are the “Big Commie” enemy?

Also notice that Social Security — far from adding to the deficit or debt — is America’s largest creditor. Failure to grasp this distinction is like not understanding the difference between your home loan and the bank to whom you owe the money. 

For the last few decades, Social Security has generated a surplus every year (in anticipation of the Baby Boomers retiring), so the trustees invest the surplus in U.S. Treasuries that generate interest of about $100 Billion per year, which gets credited back to the Social Security Trust Fund. That makes more fiscal sense than sticking the surplus in the sock drawer (i.e. lock box) where it would earn nothing and get eaten up by inflation.


Friday, November 15, 2013

The Daily GOP Ignominious: Palin Part II via Martin Bashir


Martin Bashir "clears the air." 

Earlier in the week we published about Sarah Palin's excursions (for money) into using slavery as a metaphor in reference to the US Debt. We feel she should avoid references to US slavery (and slavery in general). As we developed the earlier piece we added a passage about slavery as an affinity endemic in conservative America. An affinity that coincided with the election of Barack Obama as 44th President of the United States of America.  We will leave past TPI screeds (on the topic) and nuances of GOP use of slavery as a metaphor to your thought processes.  Yet, we will challenge you to find examples of slavery as conservative 'code.' prior to Obama's election. 

The metaphor as reality is particularly disgusting when it emanates from a veritable walking clodpoll. Any use of slavery to make a political point is, in my mind, comparable to mounting a white horse and leading a Confederate Army rebel yell charge against a Union Army cannon platoon. There is no good outcome beyond temporarily exciting those who blindly follow into the canon fire and exploding cannon balls. Once outside the scope of the metaphor's impact on the frothing audience, the analogy stands for more intellectual scrutiny.

There are few who can intellectually destroy Palin's 'red meat" than MSNBC Martin Bashir.

As Bashir said, he could go one with one overseers book for a long time. The two examples Bashir broadcast indicate physical abuse associated with human bondage in Jamaica. I would imagine the institution of slavery has far more horrific stories. And, one should never underestimate the significance of slavery on the family of slaves and the long-term impact on a people in and out of slavery.

The topic is without doubt far more than comprehensible for a 'gold-bricking" GOP idiot like Sarah Palin. I have visions of Palin falling out of a boat and being unable to hit the water in a lake. 

Her comments about slavery did not end her attack on human decency. She also attacked the Pope as she sat for CNN interview. Her comments were in response to a question about Pope Francis. 

It should be noted Palin has apologized for comments made in reference to Pope Francis.  Even, if you, as a reader are atheist or agnostic you have to find her comments completely off base, unnecessary, crass and gold-bricking. 

We feel that Sarah Palin is beyond any semblance of decency. Your support for Palin contributes to her crass actions and makes you an enabler. If gold-bricks like Palin have smaller or no audience, they are forced to find other means of extracting income from people. 

Saturday, February 9, 2013

The Sequester: Federal Government Post George W. Bush

It seems objections to "paying our national debts" via raising the debt ceiling became unacceptable once President Obama took office.  Now, that beckons questions as to why?

Recognizing the Federal Deficit at $16 trillion in 2013 Vs. the following reference to 2011 $14 trillion, we find the follwoing graphic relevant and expedient in locating. 

It is noteworthy to point out Obama's deficit increases are distributed between fighting off an economic depression, healthcare reform and a 'surge' in Afghanistan (foolish decision).

Which US President is "king' of Debt Ceiling increases through 2011? Remember, the 'sequester' was hatched in the fall of 2011. 

As we come closer to yet another artificial deadline in the nation's battles over the deficit, we thought it might be good to find as basic an explanation of the "mess" as we can locate.

Govloop dot com provides such an opportunity.  Emily Jarvis keyed a piece easily readable in three minutes. The piece is also accompanied by an audio embed.

Be honest. You have heard us all talking/worrying/complaining about the potential for sequestration since August of 2011, but do you actually know how it would work? I, for one, only had a loose understanding of the process. 

Todd Harrison is a senior fellow at the Center for Strategic and Budgetary Assessments. He gave Chris Dorobek on the DorobekINSIDER a detailed breakdown of sequestration and its impact government wide.

Harrison's Take

First Off: A History Lesson 
Back in July/August of 2011 when we were approaching the debt ceiling, Congress came together for some last minute negotiations to raise the debt ceiling. That agreement was called the Budget Control Act of 2011. The Act formed the Super Committee tasked with finding $1.2 trillion in deficit reductions. But, the Act also created a binding way to force the cuts in the case the Super Committee failed -- that binding resolution was sequestration.

Sequestration was created from an old 1985 law that Congress amended to make sequestration legal. 
Not surprisingly the Super Committee failed. So that leaves us with the January 2nd deadline for all agencies to cut their accounts across the government not just at the Defense Department. 

How Sequestration Actually Works 
Agencies must calculate the amount of cuts required overall. That's roughly $109 billon that they have to find in savings by fiscal 2013. Half of that (roughly $55 billon) will be taken from DoD.
The cuts have to be applied as a uniform percentage cut across all accounts down at the project level. That amounts to a roughly 10% cut on all projects.
There is one exception, the President has the option to exempt military personnel accounts. President Obama has indicated that he will do that. 

White House Sequestration Plan 
Congress started to get nervous with what the cuts would actually look like, so they passed a new law to force the White House outline in a transparent way what sequestration will look like. 
In a 300 page document the White House went line by line through the budget to show what would by cut and by how much. 

Across the Board Cuts 
Across the board cuts are a cop out. But the real problem, is cuts can have some unintended consequences. Imagine your family budget. You budget so much money every month for rent, food, car and insurance. Imagine if you had to cut each of those areas by 10%. Some things like your grocery bill you can cut fairly easily. But your rent for example you just can't cut by 10%. That would mean moving and breaking your lease.
This is the same problem for the DoD.
Take the 200 tomahawk cruise missiles the DoD buys each year from the contractor Raytheon. The contractor is set up to build at that production rate. So if the DoD comes to Raytheon and says I've got to cut 10%, I can only buy 180 units. The government is going to have to break the current contract and negotiate a new deal. Raytheon is going to need to adjust it's production so maybe they have to lay off some people or change the price per unit. So really with that 10% cut you are paying more for each missile. So in the end you don't end up with 180 missiles you end up with fewer for the the 10% cut. 
Some Program Just Can't Be Cut 
For example the Defense Health Program is the military help system. It is not covered under the military personnel exemption so by law it will have to cut its services by 10%. That means about $3 billon will have to come out of the budget. But they system provides health benefits to 10 million active and retired military personnel. It's not possible for them to make the cuts. So they will have to go to Congress and submit a re-programming request and hope for Congressional approval. 

Will Sequestration Happen? 
It may depend on the election outcome.
If Congress/White House maintain the status quo: Its reasonable that there would be an incentive for lawmakers to work out a compromise in the lame duck session.
If there is a significant change in control in either branch: there may be incentive for the party that is going to gain power to delay things and not work out a compromise until they take power. But sequestration goes into effect on the 2nd of January, the President gets sworn in on the 4, and Congress not until the 20th, so in that case sequestration could go into effect.
A last minute compromise is also possible where they delay starting sequestration until April. Pass the ball down the field a little bit to take the pressure off.
Either way, we won't know until the last minute. 
How Should You Prepare? 
Plan for uncertainty. But that's hard because a 10% cut is a big uncertainty.

Agencies should be looking at funding sources and how they would be affected, they should start to develop contingency plans. This is especially important for civilian employees because they will be the first to be affected. So if sequestration happens, furloughs will also happen to reduce funding in all accounts. Contractors have a little more time to deal with sequestration. The impact will be delayed because they depend on the outlays for funding. Sequestration acts on budget authority (how much money an agency actually has). Contractors probably won't feel a huge delay for 3 years. But uncertainty makes it almost impossible for contractors to hire new employees or build new factories. 
Cuts No Matter What  
No matter if sequestration happens are not the government needs to understand that cuts are coming. It's two fold. First we are facing a record federal deficit. Second, we have very low revenues.
The President has proposed reducing the war budget and reducing the DoD's base budget slightly, and then keeping it stagnant for a few years. 

But if you really want to see major deficit reduction you need to look at Medicare and Social Security. Currently the DoD accounts for 15% of the budget, Medicare 14% and Social Security 22%. But the Social Security and Medicare percentages will continue to grow with the babyboomers expected to retire over the next 10 years. We are facing a big deficit no matter what unless we reform those two elements 
We understand US Politics, and we understand the nature of US politics since the late 1970s and early 1980s.  For the informed, we know GOP mantra about fiscal conservatism is nothing more than the party's egregious use of a southern strategy as a campaign tool in national elections.  As tragic as anything political in 2012/13, 47% of voters fell for GOP mantra, political acuity (even with horrid candidates), and mind altering propaganda from highly compensation media demagogues.  We do not understand how people who consider themselves conservatives have little to no influence over forcing their obstructionist representatives to "See the light". The "light" of potential progress in ridding ourselves of the vestiges of the Bush financial record.  How can so many Americans avoid empirical data, and avoid post election observation (post 2010) as factors that influence their votes.

I find so many conservatives expended inordinate energy and cognitive processes following right-wing social biases, bigotry and divisiveness. 

They watch their politicians write and propose legislation after legislation related to abortion while not taking a moment to rial about jobs.  They fully support GOP efforts to cut Human Services programs without one iota of contemplation of future personal need.  And they do so without pressing for reduction defense spending and raising taxes on the nation's wealthy.

The Federal Deficit is fed by expenditures that costume 57% of the nation's discretionary spending.

The GOP lives and breathes defense spending. Yet, for some reason post 2009 after supporting Bush for eight years, they obstruct at paying debts they helped to accumulate.

Additional Sequester basics source: 2012: