Chart of the Day - Deficit Hawks Are Idiots

Sal wrote:Short term deficits are needed to boost a weak economy. The hole from lost revenue must be filled. When employment returns to pre-recession rates, the deficit problem disappears even without budget cuts and/or tax increases.

Any measures designed to reduce deficits while the economy is weak will delay and weaken any recovery and increase unemployment. The only rationale for lowering the deficit would be that lower deficits could mean lower interest rates which could boost investment and consumption. With interest rates already at historically low levels, this is not a realistic expectation.

The long term deficit projections could be a real problem. But, those projections are driven solely by skyrocketing healthcare costs. Slow the costs and the scary deficit projections go away. We are working to reform healthcare as we speak, and the costs have already slowed dramatically over the last five years. It may be that we are getting this under control.

On the other hand, sequestration and other austerity measures may land us back into a full blown depression.

Deficit hawks are idiots.

Floridatexan wrote:

Actually, Sal, they're just using the deficit as an excuse to slow the recovery and GET OBAMA OUT OF OFFICE.

Floridatexan wrote:

Actually, Sal, they're just using the deficit as an excuse to slow the recovery and GET OBAMA OUT OF OFFICE.

Sal wrote:Short term deficits are needed to boost a weak economy. The hole from lost revenue must be filled. When employment returns to pre-recession rates, the deficit problem disappears even without budget cuts and/or tax increases.

Any measures designed to reduce deficits while the economy is weak will delay and weaken any recovery and increase unemployment. The only rationale for lowering the deficit would be that lower deficits could mean lower interest rates which could boost investment and consumption. With interest rates already at historically low levels, this is not a realistic expectation.

The long term deficit projections could be a real problem. But, those projections are driven solely by skyrocketing healthcare costs. Slow the costs and the scary deficit projections go away. We are working to reform healthcare as we speak, and the costs have already slowed dramatically over the last five years. It may be that we are getting this under control.

On the other hand, sequestration and other austerity measures may land us back into a full blown depression.

Deficit hawks are idiots.

Sal wrote:Short term deficits are needed to boost a weak economy. The hole from lost revenue must be filled. When employment returns to pre-recession rates, the deficit problem disappears even without budget cuts and/or tax increases.

Any measures designed to reduce deficits while the economy is weak will delay and weaken any recovery and increase unemployment. The only rationale for lowering the deficit would be that lower deficits could mean lower interest rates which could boost investment and consumption. With interest rates already at historically low levels, this is not a realistic expectation.

The long term deficit projections could be a real problem. But, those projections are driven solely by skyrocketing healthcare costs. Slow the costs and the scary deficit projections go away. We are working to reform healthcare as we speak, and the costs have already slowed dramatically over the last five years. It may be that we are getting this under control.

On the other hand, sequestration and other austerity measures may land us back into a full blown depression.

Deficit hawks are idiots.

Floridatexan wrote:

Sal wrote:Short term deficits are needed to boost a weak economy. The hole from lost revenue must be filled. When employment returns to pre-recession rates, the deficit problem disappears even without budget cuts and/or tax increases.

Any measures designed to reduce deficits while the economy is weak will delay and weaken any recovery and increase unemployment. The only rationale for lowering the deficit would be that lower deficits could mean lower interest rates which could boost investment and consumption. With interest rates already at historically low levels, this is not a realistic expectation.

The long term deficit projections could be a real problem. But, those projections are driven solely by skyrocketing healthcare costs. Slow the costs and the scary deficit projections go away. We are working to reform healthcare as we speak, and the costs have already slowed dramatically over the last five years. It may be that we are getting this under control.

On the other hand, sequestration and other austerity measures may land us back into a full blown depression.

Deficit hawks are idiots.

Actually, Sal, they're just using the deficit as an excuse to slow the recovery and GET OBAMA OUT OF OFFICE.

Sal wrote:

Here's a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it's falling now without a coincident recession.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn't. Either way, the two-year deficit reduction — equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not — would stand far above any other fiscal tightening since World War II.

Until the aftermath of the Great Recession, there were only three such periods in which the deficit shrank by a cumulative 2% of GDP or more. The 1960-61 and 1969-70 episodes both helped bring about a recession.

Far steeper deficit cuts during the demobilization from World War II and in 1937-38 both precipitated economic reversals.

Now the deficit is shrinking about 50% faster than it did during the booming late 1990s, when the jobless rate was falling south of 5% and tax revenues were soaring — without tax hikes.

That's not to say that a recession is in the cards now, as the Federal Reserve applies its might to keep housing on a recovery path and helps propel the stock market higher. But growth is likely to be disappointingly weak yet again.

The Congressional Budget Office projects just 100,000 jobs will be added per month this year, the jobless rate will remain stuck around 8% and the economy will grow 1.4% if the sequester takes effect, but that may be too optimistic.

There was certainly no good economic reason for policymakers to risk the hit to growth that came with the roughly $200 billion fiscal cliff tax hike. Now they risk compounding the fiscal drag with poorly targeted budget cuts.

History suggests that there's little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That's especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm#ixzz2KidXjMq1

Sal wrote:

Here's a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it's falling now without a coincident recession.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn't. Either way, the two-year deficit reduction — equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not — would stand far above any other fiscal tightening since World War II.

Until the aftermath of the Great Recession, there were only three such periods in which the deficit shrank by a cumulative 2% of GDP or more. The 1960-61 and 1969-70 episodes both helped bring about a recession.

Far steeper deficit cuts during the demobilization from World War II and in 1937-38 both precipitated economic reversals.

Now the deficit is shrinking about 50% faster than it did during the booming late 1990s, when the jobless rate was falling south of 5% and tax revenues were soaring — without tax hikes.

That's not to say that a recession is in the cards now, as the Federal Reserve applies its might to keep housing on a recovery path and helps propel the stock market higher. But growth is likely to be disappointingly weak yet again.

The Congressional Budget Office projects just 100,000 jobs will be added per month this year, the jobless rate will remain stuck around 8% and the economy will grow 1.4% if the sequester takes effect, but that may be too optimistic.

There was certainly no good economic reason for policymakers to risk the hit to growth that came with the roughly $200 billion fiscal cliff tax hike. Now they risk compounding the fiscal drag with poorly targeted budget cuts.

History suggests that there's little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That's especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm#ixzz2KidXjMq1

Markle wrote:

Sal wrote:

Here's a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it's falling now without a coincident recession.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn't. Either way, the two-year deficit reduction — equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not — would stand far above any other fiscal tightening since World War II.

Until the aftermath of the Great Recession, there were only three such periods in which the deficit shrank by a cumulative 2% of GDP or more. The 1960-61 and 1969-70 episodes both helped bring about a recession.

Far steeper deficit cuts during the demobilization from World War II and in 1937-38 both precipitated economic reversals.

Now the deficit is shrinking about 50% faster than it did during the booming late 1990s, when the jobless rate was falling south of 5% and tax revenues were soaring — without tax hikes.

That's not to say that a recession is in the cards now, as the Federal Reserve applies its might to keep housing on a recovery path and helps propel the stock market higher. But growth is likely to be disappointingly weak yet again.

The Congressional Budget Office projects just 100,000 jobs will be added per month this year, the jobless rate will remain stuck around 8% and the economy will grow 1.4% if the sequester takes effect, but that may be too optimistic.

There was certainly no good economic reason for policymakers to risk the hit to growth that came with the roughly $200 billion fiscal cliff tax hike. Now they risk compounding the fiscal drag with poorly targeted budget cuts.

History suggests that there's little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That's especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm#ixzz2KidXjMq1

Do you know the difference between the deficit and the National Debt?

We do not have a 2013 budget, so how can we have an increase or decrease in the deficit? We have not had a budget in four years.

By law, President Barack Hussein Obama was responsible to provide his 2014 budget to Congress on the first day of February. They do not have it yet. How would anyone know if there is a deficit or not?

Chrissy wrote:

Markle wrote:

Sal wrote:

Here's a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it's falling now without a coincident recession.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn't. Either way, the two-year deficit reduction — equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not — would stand far above any other fiscal tightening since World War II.

Until the aftermath of the Great Recession, there were only three such periods in which the deficit shrank by a cumulative 2% of GDP or more. The 1960-61 and 1969-70 episodes both helped bring about a recession.

Far steeper deficit cuts during the demobilization from World War II and in 1937-38 both precipitated economic reversals.

Now the deficit is shrinking about 50% faster than it did during the booming late 1990s, when the jobless rate was falling south of 5% and tax revenues were soaring — without tax hikes.

That's not to say that a recession is in the cards now, as the Federal Reserve applies its might to keep housing on a recovery path and helps propel the stock market higher. But growth is likely to be disappointingly weak yet again.

The Congressional Budget Office projects just 100,000 jobs will be added per month this year, the jobless rate will remain stuck around 8% and the economy will grow 1.4% if the sequester takes effect, but that may be too optimistic.

There was certainly no good economic reason for policymakers to risk the hit to growth that came with the roughly $200 billion fiscal cliff tax hike. Now they risk compounding the fiscal drag with poorly targeted budget cuts.

History suggests that there's little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That's especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm#ixzz2KidXjMq1

Do you know the difference between the deficit and the National Debt?

We do not have a 2013 budget, so how can we have an increase or decrease in the deficit? We have not had a budget in four years.

By law, President Barack Hussein Obama was responsible to provide his 2014 budget to Congress on the first day of February. They do not have it yet. How would anyone know if there is a deficit or not?

March should be fun. i wonder what crisis we will have to distract usin march

Chrissy wrote:

Markle wrote:

Sal wrote:

Here's a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it's falling now without a coincident recession.

To be specific, CBO expects the deficit to shrink from 8.7% of GDP in fiscal 2011 to 5.3% in fiscal 2013 if the sequester takes effect and to 5.5% if it doesn't. Either way, the two-year deficit reduction — equal to 3.4% of the economy if automatic budget cuts are triggered and 3.2% if not — would stand far above any other fiscal tightening since World War II.

Until the aftermath of the Great Recession, there were only three such periods in which the deficit shrank by a cumulative 2% of GDP or more. The 1960-61 and 1969-70 episodes both helped bring about a recession.

Far steeper deficit cuts during the demobilization from World War II and in 1937-38 both precipitated economic reversals.

Now the deficit is shrinking about 50% faster than it did during the booming late 1990s, when the jobless rate was falling south of 5% and tax revenues were soaring — without tax hikes.

That's not to say that a recession is in the cards now, as the Federal Reserve applies its might to keep housing on a recovery path and helps propel the stock market higher. But growth is likely to be disappointingly weak yet again.

The Congressional Budget Office projects just 100,000 jobs will be added per month this year, the jobless rate will remain stuck around 8% and the economy will grow 1.4% if the sequester takes effect, but that may be too optimistic.

There was certainly no good economic reason for policymakers to risk the hit to growth that came with the roughly $200 billion fiscal cliff tax hike. Now they risk compounding the fiscal drag with poorly targeted budget cuts.

History suggests that there's little good to be gotten from cutting the deficit much faster than 1% of GDP per year. That's especially true at the moment, given the nature of our related demographic and budget challenges.

Both of those challenges suggest that growth should be our paramount concern, far ahead of near-term deficit reduction, even as we work to improve the intermediate-term budget outlook.

http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm#ixzz2KidXjMq1

Do you know the difference between the deficit and the National Debt?

We do not have a 2013 budget, so how can we have an increase or decrease in the deficit? We have not had a budget in four years.

By law, President Barack Hussein Obama was responsible to provide his 2014 budget to Congress on the first day of February. They do not have it yet. How would anyone know if there is a deficit or not?

March should be fun. i wonder what crisis we will have to distract usin march