Cartoon of the Day: Fiscal Child Abuse
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Friday, February 27, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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16 Comments:
Very nice. However, to be perfectly truthful, instead of a mountain that should have been a heaping pile of doo-doo. ;)
I like the Lion King reference, though like the previous commenter said, a pile of trash or shit would have been a big more realistic.
surprisingly, we can thank the reagan and bush administrations for most of that national debt mountain
[yes, the repubs are responible for the reagan admin deficits.; 1. control of congress was split (repub senate/demo house) during most of reagan's administration and reagan had a veto. 2. most importantly
"starwars" was not the democrat's idea]
Bobble,
One still has to ask:
Whither dost thou goest?
"surprisingly, we can thank the reagan and bush administrations for most of that national debt mountain"...
Unsuprisingly bobble again shows us what he doesn't know in regards to how the three different branches of federal government work...
Let Deroy Murdock explain it to you: Americans Flunk Basic Civics...
Put your tax dollars (you do pay taxes, right?) to work with this federal site: Civics and Citizenship Study Materials
I found your source nothing short of hilarious: At heart, I’m a scientist; that means I’m a skeptic. I don’t trust easy answers especially from politicians. I also don’t trust extremists, either left or right. But I don’t think these are biases; they’re based on observation. It’s hard to know your own biases, but I believe openness, information, and clear thinking are helpful—maybe those are my bias...
copied this from CNN bit regarding the deficit, don't know if Cheney actually said that but it blurs that fact that both political parties have run up the current deficit and have used SS receipts to hide huge budget shortfalls while protecting friends in high places.
Both political parties are to blame and look forward to the day when Americans quite electing them clowns.
"In 2002, Vice-President Dick Cheney and the Bush administration’s economic team met to discuss a second round of tax cuts, which would follow Bush’s 2001 cuts. At the meeting, “then-Treasury Secretary Paul H. O’Neill pleaded that the government — already running a $158 billion deficit — was careening toward a fiscal crisis.” Allegedly, Cheney replied by saying that “deficits don’t matter.”
Six years later, the Bush administration’s consistent belief that deficits don’t matter has increased the national debt to over $10 trillion. This is the highest dollar amount ever, and pushes the debt to 69% of the gross domestic product, which is the highest percentage since 1955.
""starwars" was not the democrat's idea]"
That's the truth....Dems don't really like spending on one of the few things that the government should do...national defense. From someone who served in the military when the threat of Soviet invasion of Europe was still a very realistic scenario, I give Pres. Reagan his props. He understood that Star Wars didn't have to work...the Soviets just had to think that it did and adjust their own military spending accordingly. The showdown between Command Economy and Market-based Economy exploited the weakness in the Soviet system. And before you go off half-cocked about what "free markets" have left us, consider the alternative a' la the USSR. Besides, we will never agree on the idea that we truly have free markets in the U.S.
I was serving in Germany when the Wall came down and was on the tip of the spear into Iraq during Gulf War I, when the Soviet military hardware proved its real worth. Having experienced that put me firmly in the "Jedi" camp when it comes to belief in Star Wars. Kudos Mr. President, wherever you are.
Bobble:
We'll practice trickle down economics and you can give trickle up poverty your best shot.
Bobble,
Let's see Brother Love said he is going to cut the deficit by 50%. One half of $1.7 trillion is $850 billion. Boy, everyone should be happy about that.
Both political parties are to blame ...
Democrats always trot out this crap every time their mask slips and we see Karl Marx staring back at us. The entire Democrat project can be summed up simply: use government money to buy peoples votes. It's ironic that the same leftists, whose every campaign promise is a claim on the public treasury, whine endlessly about the need for public financing of elections.
Bobble says that Reagan and Bush were responsible for "that national debt mountain", bullshit. Lyndon Johnson is responsible. Not content to wage war on Vietnam, he declared an "unconditional war on poverty". He launched the "Great Society" project. He created Medicare and Medicaid, the two biggest contributors to our fiscal nightmare. He increased the welfare rolls and destroyed inner city families resulting in increased crime and dropout rates. Not surprisingly, poverty survived. I remember reading in a really great book once that "The poor will always be with you". Oh well, never mind.
Democrats demagogue and resist every effort to reform and rationalize these programs, knowing full well that they are unsustainable. You see, for Democrats, it's not about peoples welfare and security - it's about political power. They want and need people to be dependent. Dependent voters are reliable voters. That is why Obama wants to expand the government and the welfare rolls. If you are dependent for your livelihood on the government you have a very powerful incentive to vote for the party that keeps you fed. That is the end of freedom.
Obama is going to spend as much in 4 years as Bush's last 5 years. That's even counting the extra $1 trillion in this year as Bush's last year.
Sad to see this year's $3.9 trillion in spending go away?
Well don't worry. after dropping to $3.6 trillion for 2 years, then $3.7 trillion, it gets right back there in 2013, so plenty of stimulus to go around. And for a long long time.
Usually, Canada follows along in the footsteps of the U.S. In this instance, Canada already had a charismatic, eloquent, intellectual, superstar leader, Pierre Elliott Trudeau.
16 years of Trudeau and the national debt skyrocketed from 16.7 billion to 200 billion (1200% increase). High global interest rates in the 1980s grew the debt to about 700 billion.
It doesn't take a chartered accountant to figure out that taxing rich folks will not close the funding gap. Don't be surprised when you suddenly find yourself richer than you think. This profiligacy will have to be paid for by the vast majority of middle class voters as well as those rich folks. In Canada, we are still paying for Trudeaumania.
Obama seems to be intent upon transforming the U.S. along European lines. Europeans have made a tradeoff in their desire for great social programs and peace in exchange for lower GDP growth rates, higher unemployment, higher taxes and lower per capita income.
Fortunately, the U.S. has a system which pits the different branches of government against one another which is a distinct advantage.
In Canada, the majority party basically rules enabling Trudeau to introduce all manner of uncontrolled spending often unaudited. Crown corporations and regional spending are not subject to auditory oversight by the Auditor General for example. Regional spending became a way to influence voters while crown corporations offered plumb appointments for political cronies.
Since the prime minister appoints all federal and provincial supreme court justices as well as senators, 16 years of Trudeau permanently changed our country along the ideological preferences of a single individual.
The founding fathers of the U.S. understood the threat to democracy of a king or an oligarchy. By contrast, Canada was designed along the British model which has an unelected House of Lords assured vested interests against the dangers of democracy (mob rule).
The real danger is that the present financial crisis will be used to introduce measures which would otherwise never be acceptable. It seems prescient to remember Rahm Emmanuel's words "Rule One: Never allow a crisis to go to waste. They are opportunities to do big things." One might be well advised to check the fine print on these fine gentlemen.
Take it from a Canadian whose tax free day is in JUNE!
Fortunately, the U.S. has a system which pits the different branches of government against one another which is a distinct advantage.
I hope you're right. The Democrats plan is to build a base of dependency i.e.,government workers, welfare recipients, etc. They want people dependent on the government for their health care and retirement. If they can create an army of serfs, desperate to be fed, they can control the ballot box.
Only time will tell if the free minded, hard driving, independent American character has been replaced by a groveling, security seeking malignancy.
"Those Who Sacrifice Liberty For Security Deserve Neither"
- Benjamin Franklin
Thank you, President Obama!! He thinks of everything.
Anon.,
Love the "3 selective initiative reuptake inhibitors in a pork flavored capsule". :D
Have a great weekend.
> Dems don't really like spending on one of the few things that the government should do...national defense.
One of the few things it's actually SUPPOSED to do by instruction in the Constitution.
Granted, it does that very poorly in terms of financial efficiency ( see Boyd and his successor, Spinney), but that is what it's there for.
And complaining about Star Wars is just flat out stupid -- that was one of the causes for the Soviet collapse -- Reagan raised them on a busted flush. They had no option but to cash out, since they were no longer able to match the USA's ability to Do Impressive Things at the same time as they satisfied -- in spades, for the USA -- the demands of their people.
The Soviets were impoverishing themselves attempting to keep up with the USA in the DIT category (which was needed to claim any sort of superpower parity with the USA), due to the fact that the Soviet system -- indeed, socialism in general -- flat out doesn't work.
Having surprised us with Sputnik, we kicked it all into high gear, and left them in the dust.
As far as the Deficit goes, there are several thoughts on this of relevance -- up through to the recent economic issues, the amount wasn't an overwhelmingly significant fraction of GNP. The USA owing 8 trillion on 14 trillion GNP is not that different from you making $40k a year and owing (including mortgage, etc.) 20k. Placed in that context it's a lot less frightening.
Further, as of 2000, near as I can see, the net worth of the USA was ca. 43 trillion. Given the last 8 years that probably well more than doubled, and has probably slipped back somewhat notably in the last 8 months, but I'll bet it's still in the viscinity of doubled -- or about 90 trillion. In this context, too, the amount isn't that high, an asset-to-debt ratio of 1:11 isn't at all unreasonable or atypical.
I could easily go on further about how I think the actual value of US creations is vastly underestimated, as all too much of it is in the form of digitized IP, for which the cost of production is entirely front-ended, and thus borne by the USA, while the entire world gets the benefit of it, often via pirated means. Much as Canadians and the rest of the world get all the benefits of the USA's pharma industry's R&D, while paying a fraction of the costs involved in said development.
If all this sort of thing were reasonably distributed, then the USA would be much, much richer on paper, and there would be much less of both the deficit and also so-called "trade imbalances"
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