Why don't Americans realize the deficit is falling?

[CJ7]

Originally Posted by JD Barleycorn

Yes and you need to remember that at the time I was saying Obama was taking from our Social Security on the front side at the expense of the back end. It is, and was, our money that he was playing with. When he ended his "temporary" tax cut (he called it a tax cut so to repeal must be a tax increase by his standard) we started paying more taxes again but we lost thousands (depending on your age) from our overall Social Security contributions. Why did Obama steal our money like that. If Obama really wanted to stimulate the economy then why didn't he include spending cuts along with real tax cuts. It seems like he got half the message. Tax cuts stimulate but he didn't include a real tax cut. So he had the idea but didn't follow through with action.

Or are you going to call Obama out as a liar?

lets just call you an IDIOT...

http://blogs.marketwatch.com/encore/...cial-security/

[JD Barleycorn]

I didn't get that. Are you saying that Obama was a lying thief?

[lustylad]

Originally Posted by bigtex

JD Idiot, you really are kind of stupid aren't you?

Originally Posted by CJ7

lets just call you an IDIOT...

Bigturd and CBJ7,

You guys really know how to keep the debate going, dontcha? Lots of substance and intelligence in your rebuttals, as usual. I for one am extremely impressed with your high level of thinking and articulateness! Kudos to both of yinz!

[CJ7]

Originally Posted by lustylad

Bigturd and CBJ7,

You guys really know how to keep the debate going, dontcha? Lots of substance and intelligence in your rebuttals, as usual. I for one am extremely impressed with your high level of thinking and articulateness! Kudos to both of yinz!

when people discuss the federal government’s fiscal issues, frequently heard complaints include “Social Security would be fine if the government stopped raiding the trust fund,” or “Make the government give back the money it borrowed/stole from Social Security.” Since the program is the backbone of the nation’s retirement system, it is important to understand whether these complaints are legitimate. The basic answer is “no,” but the full answer is a little complicated.

Let’s start with the easy part – looking just at the Social Security program in isolation. Here the answer is uncontroversial. Yes, a trust fund really exists. It holds 15-year government bonds, which the Treasury has issued in exchange for the excess payroll taxes collected. And when the commissioner of Social Security needs money to pay benefits, he can take his bonds to the secretary of the Treasury and redeem them for cash. In this sense, the trust fund is “real”; nobody has stolen or borrowed the bonds. The bonds will be there to pay benefits.
The controversy arises when considering Social Security in the context of the federal budget and the broader economy. The mechanics are clear. When the Social Security commissioner redeems his bonds, the secretary of the Treasury must get the money from somewhere. One obvious option is to go out and borrow it. At this point reasonable people may ask: “What good is the trust fund buildup if, when the time comes to use the bonds to pay benefits, the secretary of the Treasury has to borrow the money?”
To answer that question requires moving beyond the budget into a discussion of the economy more generally. The idea of building up a trust fund to pay benefits when the Baby Boom started to retire was never one of stockpiling cans of tomato soup, playing cards and walkers, but rather to increase national saving and investment so that the economy would be larger than it would have been otherwise. The dynamic at work here is that trust fund surpluses reduce the government’s need to borrow from the private sector, which makes more private capital available to finance private investment and boost economic growth. The mechanics for the Social Security program would be the same as described above: the commissioner of Social Security would take his bonds to the secretary of the Treasury who would borrow money to redeem the bonds, but more additional output would be left over for the non-elderly than would have been without the additional saving.
Now here is the controversial part: Did the surpluses in the Social Security trust funds really increase national saving and produce more output? Critics say no: They argue that the existence of the surpluses, and their inclusion in the total federal budget, led Congress to either keep taxes lower or spend more on non-Social-Security programs than it would have otherwise. Economists have tried to estimate how the surpluses affected congressional behavior, but the results are not very persuasive. My best assessment is that, before 2000, the Social Security surpluses added to national saving. After 2000, when the entire budget appeared to be moving toward rising surpluses, the optics made large tax cuts too tempting. In other words, I think that the Social Security surpluses enabled the George W. Bush tax cuts. To the extent that saving did not occur, the burden of the baby boomers was not prefunded.
This issue of prefunding will arise again when Congress turns its attention to eliminating Social Security’s long-term financing problem. An immediate increase in taxes will once again produce an increase in trust fund reserves. If these reserves are to increase saving rather than just cover current expenditures, we need a better set-up. One option is to change the budgeting so that Social Security is taken completely off the books as is the case of the pensions sponsored by state and local governments. Another option is to change the trust fund’s investments. When the money is invested in government bonds, it becomes immediately available for government spending. If it were invested in corporate bonds or even equities – an idea I like a lot – the money would not be available for government spending.
So while the government does not actually “steal” money from the Social Security trust funds, the prefunding exercise probably has not worked as well as envisioned. If we are going to build up trust fund reserves again, we need to do a better job of structuring the deal.


keep that going dilbert

[Mr MojoRisin]

In 2008 the National Deficit was around 455 Billion. In 2009 it was hovering at around 1.4 Trillion then dropped slightly to 1.3 Trillion in 2010 and 2011 and again to 1.1 Trillion in 2012. In Sept. 2013 it was recorded the Deficit was at 680 Billion. If the numbers are accurate a promising trend indeed. The National Debt however still remains overwhelming high at 17 Trillion.


Jim

[JD Barleycorn]

It's really simple, if Obama wanted to be a hero then he would reduce the deficit to zero. How can anyone from the most obstinate conservative to the most foolish liberal argue with that? Of course they have already destroyed the sequester that had the effect of reducing some of the spending (there by reducing the deficit). Some libs on here wanted to blame the GOP for the sequester so I guess they should give credit to the GOP for reducing the deficit.

Of course reducing the deficit to zero is only the beginning. The spending must be reduced so that a yearly surplus is created to start reducing the debt. Another thing that Obama could do (and this completely against what he believes in) is sell off large parts of the property that the government owns. It is worth hundreds of billions of dollars if not a few trillion.

[Guest040616]

Originally Posted by lustylad

Bigturd and CBJ7,

You guys really know how to keep the debate going, dontcha? Lots of substance and intelligence in your rebuttals, as usual. I for one am extremely impressed with your high level of thinking and articulateness! Kudos to both of yinz!

Originally Posted by JD Barleycorn

You really are kind of stupid aren't you.

Is there any particular reason that yinz failed to acknowledge JD Idiot's substantive and intelligence post in his original rebuttal? It should be noted that JD threw out the first (stupid) pitch (post #21 of this thread) in the current pissing contest, not CJ or I (posts # 29 & 31 of the same thread).

Or were you not intelligence enough to locate it? Speaking of which, had you paid closer attention you would have probably noticed that my remarks about JD were a direct, and almost quoted, response to his original "stupid" remark.

Move over JD Idiot, stupidlad wants to join you at yinz "stupid" table.

[JD Barleycorn]

There is a difference between a direct retort and a general comment. It is the difference between someone who always wants to start a fight and the person who pops someone in the nose AFTER being attacked first. If you are so agrieved then you could pledge to us that you will never again do either and only contribute quality to the discussion. You could do that...

[Texas Contrarian]

Originally Posted by lustylad

I have seen estimates that the various tax increases that kicked in a year ago (payroll, income, and Obamacare) are slowing annual growth in real GDP by almost a full percentage point. The fastest way to reduce the deficit is to grow the economy, not slow it.

The estimates to which you allude may very well be accurate.

The obvious problem is that we've dug ourselves a deep hole, and getting out of it ain't going to be easy. A total lack of any degree of seriousness regarding entitlement reform, health care reform, financial sector reform, tax reform, or much of anything else only exacerbates the problem.

Federal government spending in nominal dollars has doubled since the late '90s. Even after adjusting for inflation, it has increased by about 50%.

And we simply don't have a fiscally conservative major party, as anyone who recalls the disingenuousness of the Romney/Ryan campaign obviously realizes. Although the policy agenda shoved through during the 2009-2010 period was manifestly a failure, just look at what George W. Bush and a Republican congress did during the prior years when they had a chance to govern responsibly. It wasn't a pretty picture.

That's why so many people seem to have decided that as ugly as it may be, divided government is less bad than handing all of the power levers to either of our corrupt and dysfunctional major parties.

Originally Posted by JD Barleycorn

Of course reducing the deficit to zero is only the beginning. The spending must be reduced so that a yearly surplus is created to start reducing the debt. Another thing that Obama could do (and this completely against what he believes in) is sell off large parts of the property that the government owns. It is worth hundreds of billions of dollars if not a few trillion.

You'd better forget about reducing spending to the extent that we'll start paying down the debt. The probability of that occurring is about the same as that of your winning a Powerball mega-jackpot. The best that can be hoped for is that we'll eventually limit deficit spending to a level that doesn't exceed the long-term growth rate of NGDP, and thus stabilize the debt/GDP ratio at some semi-acceptable level that doesn't gradually crush the economy.

Yes, the federal government does own a lot of assets. They add up to quite a few trillions of dollars if you include all the land and the oil and gas resources. Don't look for any of that to be sold off in substantial parts any time soon, though.

As all of this plays out, expect the political process to be chaotic and ugly.

[Texas Contrarian]

Originally Posted by JD Barleycorn

There is a difference between a direct retort and a general comment. It is the difference between someone who always wants to start a fight and the person who pops someone in the nose AFTER being attacked first. If you are so aggrieved then you could pledge to us that you will never again do either and only contribute quality to the discussion. You could do that...

Go back and read post #21, professor. You're the one who "started the fight" by hurling a gratuitous insult at Bigtex while failing to make even the most rudimentary effort to understand the topic under discussion.

And speaking of "contributing quality" to a discussion, would someone please alert the participants of this forum when Professor Barleycorn actually does that?

Rarely does he offer anything but confused babble to accompany his insults of others' intelligence.

(And he claims that he actually teaches! What an embarrassment.)

[JD Barleycorn]

Captain Nightie lies in the weeds looking to attack from behind. Not that anyone notices when he does attack but it makes him feel good.

One of the first rules of teaching is to teach to the level of your audience. A teacher with years of experience at the post-graduate level will have problems if they try to teach elementary school. The same for here. Every once in a while something will sneak in that I am sure goes over some heads but I try to keep it down to slow pitch. There are some college grads here and they seem to get it.

Still....none of this has anything to do with the OP. Despite the claim the deficit is being reduced (which is technically correct) the major crux is that the deficit should be zero. These latest claims are designed to obfusticate the truth.

[WTF]

Originally Posted by JD Barleycorn

It's really simple, if Obama wanted to be a hero then he would reduce the deficit to zero. How can anyone from the most obstinate conservative to the most foolish liberal argue with that? Of course they have already destroyed the sequester that had the effect of reducing some of the spending (there by reducing the deficit). Some libs on here wanted to blame the GOP for the sequester so I guess they should give credit to the GOP for reducing the deficit.

Of course reducing the deficit to zero is only the beginning. The spending must be reduced so that a yearly surplus is created to start reducing the debt. Another thing that Obama could do (and this completely against what he believes in) is sell off large parts of the property that the government owns. It is worth hundreds of billions of dollars if not a few trillion.

So where is the outrage on the Trump trillion dollar deficit?

And JD wanted to sell off out public lands!

[bb1961]

Bumping a thread almost SIX YEARS OLD...YOU ARE PATHETIC!!!

[Tiny]

Obama, Trump,Congressmen, almost all want to spend us into oblivion for their own selfish short term political gains. Handouts and pork buy votes and campaign contributions. The few exceptions like Jeff Flake and Rand Paul get forced out or coopted. WTF does the federal government do for us anyway? Mostly take our tax dollars and run up the debt. Move the power and the spending back to the people, to the communities and the states where it should be

[WTF]

Originally Posted by bb1961

Bumping a thread almost SIX YEARS OLD...YOU ARE PATHETIC!!!

Pointing out hypocrisy is now called pathetic?

We are back to Trillion dollar deficits btw....so it is still relevant.

What are your thoughts on Trumps Trillion dollar deficit?

You seem to have no problem with Redhot bumping a God damn thread continually. Why is that?