U.S. Budget Deficit Ends Year at Lowest Level Since 2007

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

PkrBum wrote:The debt was 10.5 TRILLION when obama took office... and will likely be 20 TRILLION by the time he leaves office.

A STUNNING SUCCESS..!!

My response to your same complaint yesterday.  

Everyone note how republicans...err....high school libertarians aren't capable of engaging.  They're only capable of repeating things they have been told and then running off to the next thread where they can continue that process.

And there is no need to take my word for this.  Just watch.  

boards of FL wrote:Yes, because Obama inherited a $1.4 trillion deficit.  How many times must this be explained to you?  It doesn't matter who entered the white house in 2009; debt was necessarily going to skyrocket because we 1) cut taxes three times, 2) started two wars, 3) implemented a medicare prescription drug plan and then 4) the Great Recession came along.  These increases in spending, decreases in tax rates, and shitty economy all combined to produce the $1.4 trillion dollar deficit that Obama inherited.  Being it the case that debt is a function of annual deficits, of course debt increased.  It's not as if any politician can erase a $1.4 trillion dollar deficit overnight without there being dire economic consequences.  And it's amazing that this need be explained to anyone who graduated high school, which leads me to question your academic background.

Actually, it does matter who was elected to the presidency.  Someone who was intent on fiscal responsibility could have endeavored, cajoling the Congress, to reduce the size of the DEBT.  Yes, it would take some doing, and yes, it would cause some pain.  But do not think that it was INEVITABLE that the DEBT would increase to the size it is now.

So I have to ask, when you say "reduce the size of DEBT", how do you propose doing that?  I ask, because in my mind, that would involve steady reductions in the deficit until we eventually reach a surplus.  Once we have a government structured to yield a budget surplus, we will then begin to reduce our debt.

So that is my interpretation of how to reduce debt.  Clearly, yours differs from that.  Can you explain yours?

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

PkrBum wrote:The debt was 10.5 TRILLION when obama took office... and will likely be 20 TRILLION by the time he leaves office.

A STUNNING SUCCESS..!!

My response to your same complaint yesterday.  

Everyone note how republicans...err....high school libertarians aren't capable of engaging.  They're only capable of repeating things they have been told and then running off to the next thread where they can continue that process.

And there is no need to take my word for this.  Just watch.  

boards of FL wrote:Yes, because Obama inherited a $1.4 trillion deficit.  How many times must this be explained to you?  It doesn't matter who entered the white house in 2009; debt was necessarily going to skyrocket because we 1) cut taxes three times, 2) started two wars, 3) implemented a medicare prescription drug plan and then 4) the Great Recession came along.  These increases in spending, decreases in tax rates, and shitty economy all combined to produce the $1.4 trillion dollar deficit that Obama inherited.  Being it the case that debt is a function of annual deficits, of course debt increased.  It's not as if any politician can erase a $1.4 trillion dollar deficit overnight without there being dire economic consequences.  And it's amazing that this need be explained to anyone who graduated high school, which leads me to question your academic background.

Actually, it does matter who was elected to the presidency.  Someone who was intent on fiscal responsibility could have endeavored, cajoling the Congress, to reduce the size of the DEBT.  Yes, it would take some doing, and yes, it would cause some pain.  But do not think that it was INEVITABLE that the DEBT would increase to the size it is now.

So I have to ask, when you say "reduce the size of DEBT", how do you propose doing that?  I ask, because in my mind, that would involve steady reductions in the deficit until we eventually reach a surplus.  Once we have a government structured to yield a budget surplus, we will then begin to reduce our debt.

So that is my interpretation of how to reduce debt.  Clearly, yours differs from that.  Can you explain yours?

Our interpretations are not that different.
The deficit occurs only annually, the debt is the nation's "running tally".

If, in any given fiscal year, we set a budget and keep to that budget - meaning we didn't spend more than we took in - then there is no deficit for that year.  That, however, does nothing to reduce the accumulated debt.  In order to reduce the debt, we (Congress) have to intentionally budget less.  That means, for example, if we have revenues of $2T, the approved budget might be set at, say, $1.5T.  The difference in what spend vs what we take in, can be "applied" to the debt.  In this example a $500B reduction.

I like to look at it as a household would. We earn (take in) $100K per year. If, in that year, we spend $105K, by using our Visa, we end the year with a deficit of $5K. The next year we earn $100K.  Since we still owe Visa that $5K we need to spend only $95K, so that the remaining $5K can be paid to Visa. At the end of the 2nd year we have no deficit and no debt.  Very simplified - but it can work similarly with the massive National Debt too.    

OK.  So we at least agree on where debt comes from.  

In my view, if we have a government structured to yield a deficit of $1.4 trillion dollars, we can't necessarily erase that entirely in one year, or even in two years, or even in three years, or even in four years, particularly given the context in which these numbers emerge (Multiple wars, worst recession since the great depression, etc.).  We can't simply erase all of that overnight.

Now, clearly you disagree.  So what is your view on a reasonable time frame in which to erase a $1.4 trillion dollar deficit?  Could Obama have managed to do that with his first budget in 2010?  If not, when?

The following chart shows us deficit/surplus by year.  I have color coded this to reflect the party of each budget.  What you are effectively saying here when you complain about debt added during the Obama administration is that what we're seeing happen from 2010 to present - the blue bars that exhibit a clear and sharp downward trend towards a balanced budget - is bad.  That is what you're saying.  And your reasoning there is because debt increased during that time.  Am I understanding you correctly?  

Salinsky wrote:I would agree that the level of debt increases we've been experiencing are unsustainable over the long term.

But, the brakes must be applied thoughtfully and with great care to prevent unnecessary harm to the economy.

I think that's what we're seeing with the graph Boards posted.

That having been said, the U.S. government budgetary concerns are not the same as the management of a household budget.

They behave quite differently, and history has shown that steep and sudden reductions of debt are precursors of disaster for the economy.

Salinsky wrote:I would agree that the level of debt increases we've been experiencing are unsustainable over the long term.

But, the brakes must be applied thoughtfully and with great care to prevent unnecessary harm to the economy.

I think that's what we're seeing with the graph Boards posted.

That having been said, the U.S. government budgetary concerns are not the same as the management of a household budget.

They behave quite differently, and history has shown that steep and sudden reductions of debt are precursors of disaster for the economy.

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

colaguy wrote:

Salinsky wrote:I would agree that the level of debt increases we've been experiencing are unsustainable over the long term.

But, the brakes must be applied thoughtfully and with great care to prevent unnecessary harm to the economy.

I think that's what we're seeing with the graph Boards posted.

That having been said, the U.S. government budgetary concerns are not the same as the management of a household budget.

They behave quite differently, and history has shown that steep and sudden reductions of debt are precursors of disaster for the economy.

I am in agreement that households and governments are vastly different.  My illustrative comparison was to simplify the numbers. It's easier to grasp a shortfall of $5.00 than $5,000,000,000.   And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

colaguy wrote:

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

PkrBum wrote:The debt was 10.5 TRILLION when obama took office... and will likely be 20 TRILLION by the time he leaves office.

A STUNNING SUCCESS..!!

My response to your same complaint yesterday.  

Everyone note how republicans...err....high school libertarians aren't capable of engaging.  They're only capable of repeating things they have been told and then running off to the next thread where they can continue that process.

And there is no need to take my word for this.  Just watch.  

boards of FL wrote:Yes, because Obama inherited a $1.4 trillion deficit.  How many times must this be explained to you?  It doesn't matter who entered the white house in 2009; debt was necessarily going to skyrocket because we 1) cut taxes three times, 2) started two wars, 3) implemented a medicare prescription drug plan and then 4) the Great Recession came along.  These increases in spending, decreases in tax rates, and shitty economy all combined to produce the $1.4 trillion dollar deficit that Obama inherited.  Being it the case that debt is a function of annual deficits, of course debt increased.  It's not as if any politician can erase a $1.4 trillion dollar deficit overnight without there being dire economic consequences.  And it's amazing that this need be explained to anyone who graduated high school, which leads me to question your academic background.

Actually, it does matter who was elected to the presidency.  Someone who was intent on fiscal responsibility could have endeavored, cajoling the Congress, to reduce the size of the DEBT.  Yes, it would take some doing, and yes, it would cause some pain.  But do not think that it was INEVITABLE that the DEBT would increase to the size it is now.

So I have to ask, when you say "reduce the size of DEBT", how do you propose doing that?  I ask, because in my mind, that would involve steady reductions in the deficit until we eventually reach a surplus.  Once we have a government structured to yield a budget surplus, we will then begin to reduce our debt.

So that is my interpretation of how to reduce debt.  Clearly, yours differs from that.  Can you explain yours?

Our interpretations are not that different.
The deficit occurs only annually, the debt is the nation's "running tally".

If, in any given fiscal year, we set a budget and keep to that budget - meaning we didn't spend more than we took in - then there is no deficit for that year.  That, however, does nothing to reduce the accumulated debt.  In order to reduce the debt, we (Congress) have to intentionally budget less.  That means, for example, if we have revenues of $2T, the approved budget might be set at, say, $1.5T.  The difference in what spend vs what we take in, can be "applied" to the debt.  In this example a $500B reduction.

I like to look at it as a household would. We earn (take in) $100K per year. If, in that year, we spend $105K, by using our Visa, we end the year with a deficit of $5K. The next year we earn $100K.  Since we still owe Visa that $5K we need to spend only $95K, so that the remaining $5K can be paid to Visa. At the end of the 2nd year we have no deficit and no debt.  Very simplified - but it can work similarly with the massive National Debt too.    

OK.  So we at least agree on where debt comes from.  

In my view, if we have a government structured to yield a deficit of $1.4 trillion dollars, we can't necessarily erase that entirely in one year, or even in two years, or even in three years, or even in four years, particularly given the context in which these numbers emerge (Multiple wars, worst recession since the great depression, etc.).  We can't simply erase all of that overnight.

Now, clearly you disagree.  So what is your view on a reasonable time frame in which to erase a $1.4 trillion dollar deficit?  Could Obama have managed to do that with his first budget in 2010?  If not, when?

The following chart shows us deficit/surplus by year.  I have color coded this to reflect the party of each budget.  What you are effectively saying here when you complain about debt added during the Obama administration is that what we're seeing happen from 2010 to present - the blue bars that exhibit a clear and sharp downward trend towards a balanced budget - is bad.  That is what you're saying.  And your reasoning there is because debt increased during that time.  Am I understanding you correctly?  

The graph shows only a comparison of each year's budget.  For every year there is a deficit - meaning we spent more than we took in - that amount is added to the Debt.  E.g., in year 2010 slightly less than $1.3 trillion was added to the National Debt.  The National Debt is a running tally.  

Each year in the graph stands alone; it is not cumulative.  While it is a good sign that the annual budget deficit has been declining in recent years - it still adds to the National Debt (currently over $18Trillion).  What we need to lower the National Debt is either annual budget surpluses or intentional debt reduction by Congress.  A year in which there is a budget surplus means that we spent less than was budgeted, or possibly we had higher revenues than were expected. That surplus can be used to reduce the National Debt.  The Congress can, using projected revenue expectations, write into the annual budget "payments to reduce the National Debt".

I do agree that the National Debt cannot be erased overnight.  It is probably getting to a size that will require many years (possibly decades) to eliminate the National Debt.  The issue I have is that there has not been much, if any at all, effort to at least reverse the increases, never mind a reduction.  Further, there does not seem to even be an appetite for serious Congressional discussions about getting the finances of the country under control.  And, it should be crystal clear that the ramifications of such a large (and still increasing) Debt are a serious detriment to our continued existence.

And, it is not I who have complained about the increases in the National Debt under the Obama administration.  I know that there are many players involved in the Debt's increase over several administrations.  My issue is with the misunderstanding of a deficit compared to the debt. Some think they are one in the same. They are not.  

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

boards of FL wrote:

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

http://www.fool.com/investing/general/2012/03/14/ratings-agencies-are-always-the-last-to-know.aspx

knothead wrote:

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

If we're structured to bleed money, a good president should structure us to bleed less, and less, and less...until we eventually have a balanced budget.

Thank you for proving the point of the thread, the President has lowered the deficit every single year of his administration . . . . . . carry on counselor.

colaguy wrote:

knothead wrote:

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

If we're structured to bleed money, a good president should structure us to bleed less, and less, and less...until we eventually have a balanced budget.

Thank you for proving the point of the thread, the President has lowered the deficit every single year of his administration . . . . . . carry on counselor.

As the OP, I realize your message is to point out that the annual budget DEFICITS have, in recent years, under the Obama administration, been getting smaller. That, I get.  Please explain how these reduced DEFICITS are addressing the ever increasing DEBT, which now stands at $18,800,000,000,000, which is of tremendously more financial importance than the annual budget DEFICIT.  

colaguy wrote:They address the ever increasing debt because debt is a function of annual budget deficits/surplus. This can't be stated any more simply, and yet you don't seem to understand this. You misunderstand me if you that's what you think.  I understand that the Debt is a function of annual budget deficits or surpluses.

colaguy, if in year 1 we have a budget deficit of $1 trillion and then in year 2 we have a budget deficit of $500 million, wouldn't you agree that our budget situation improved? Granted, debt still increased by $500 million, but didn't our deficit situation improve?

colaguy, have a look at these two scenarios. Which president is doing better with respect to managing deficits and debt?

President 1: Inherits a $1 trillion budget deficit and by way of gradual, annual reductions, we eventually reach a balanced budget during this president's 4th and final year in office. So, year 1 = $1 trillion deficit; year 2 = $750 million deficit; year 3 = $250 million deficit; and year 4 = $0.00 deficit. In total, debt increased by $2 trillion during President 1's time in office.

President 2: Inherits a $1 trillion budget surplus and leaves a $250 deficit. So, year 1 = $1 trillion surplus; year 2 = $250 million surplus; year 3 = $0.00 deficit; and year 4 = $250 million deficit. In total, debt decreased by $1 trillion during President 2's time in office.  You realize that you have used three different terms in this paragraph: surplus, deficit, and debt.  They are not interchangeable.  Annual deficits/surpluses are discrete. The Debt is cumulative. I do not understand your assertion that a president can inherit a deficit.  A budget deficit is simply the result at year end, just as is a budget surplus. Now, a debt can be inherited. E.g., Obama inherited the debt (meaning the debt already totaled $11T) when he took office. The subsequent deficits added to that Debt total.  And, again, for clarity, I do believe that reducing the size of each annual deficit is going in the right direction, as it pertains to our national finances.  But, the result is just a slowing down of the still increasing debt.  So, to be clear, it is projected that when Obama leaves office the Debt will have grown to $20T.  It can not be said that he will be leaving a $20Trillion Deficit.

colaguy, which president did a better job with respect to managing deficits and debt? I didn't directly answer your question because I am uncertain of your terminology.  When you say "inherited a $1Trillion deficit, do this mean a $1Trilliion Debt?

boards of FL wrote:

colaguy wrote:

knothead wrote:

Markle wrote:

boards of FL wrote:

colaguy wrote:

Salinsky wrote:

colaguy wrote:

And, I know the government doesn't have a Visa card.  Although, if they did it would be a huge one.  

No, much better.

The federal government is the issuer of our currency.

IOUs are always accepted.

And, those IOUs are in demand.

The U.S. economy is the best bet in town.

Debt accumulation at the rate we've been experiencing is a problem in the long term, but modest and prudent measures which don't impede economic growth is the curative.

Credit rating agencies have, over the last few years made downgrades to the United States.  S&P, for the first time ever, I believe, from AAA to AA+.  Several other raters have done similar.  If that isn't a Cassandra warning, I don't know what is.  The point is that the U.S. may not continue to be the "best bet in town".  

Credit agencies are pretty worthless.  They gave AAA+ ratings to companies that aided and abetted - and in many cases, failed - in the 2008 financial crisis.  If that type of failure is looming and clearly present on balance sheets, and if entities whose sole source of value is to provide top notch analysis of said balance sheets don't see the 2008 financial crisis coming...well...how valuable is that analysis?

Please show us your reliable source and link to that allegation.

Myself and many others saw the 2008 collapse coming definitely by July 2007.  I and many others saw it coming six months to a year before.  No one I know realized how bad it was going to be and that there would only be a mediocre recovery before it started to fall again.

If we're structured to bleed money, a good president should structure us to bleed less, and less, and less...until we eventually have a balanced budget.

Thank you for proving the point of the thread, the President has lowered the deficit every single year of his administration . . . . . . carry on counselor.

As the OP, I realize your message is to point out that the annual budget DEFICITS have, in recent years, under the Obama administration, been getting smaller. That, I get.  Please explain how these reduced DEFICITS are addressing the ever increasing DEBT, which now stands at $18,800,000,000,000, which is of tremendously more financial importance than the annual budget DEFICIT.  

They address the ever increasing debt because debt is a function of annual budget deficits/surplus.  This can't be stated any more simply, and yet you don't seem to understand this.  

colaguy, if in year 1 we have a budget deficit of $1 trillion and then in year 2 we have a budget deficit of $500 million, wouldn't you agree that our budget situation improved?  Granted, debt still increased by $500 million, but didn't our deficit situation improve?  

colaguy, have a look at these two scenarios.  Which president is doing better with respect to managing deficits and debt?

President 1:  Inherits a $1 trillion budget deficit and by way of gradual, annual reductions, we eventually reach a balanced budget during this president's 4th and final year in office.  So, year 1 = $1 trillion deficit; year 2 = $750 million deficit; year 3 = $250 million deficit; and year 4 = $0.00 deficit.  In total, debt increased by $2 trillion during President 1's time in office.

President 2:  Inherits a $1 trillion budget surplus and leaves a $250 deficit.  So, year 1 = $1 trillion surplus; year 2 = $250 million surplus; year 3 = $0.00 deficit; and year 4 = $250 million deficit.  In total, debt decreased by $1 trillion during President 2's time in office.

colaguy, which president did a better job with respect to managing deficits and debt?  

Markle wrote:You just can't bring yourself to admit that the DEFICIT is nothing more than a figure on paper.

The DEBT, growing larger by the day, is REAL.

The debt today is $18.9 TRILLION and undoubtedly will be $20 TRILLION by the time this ruinous president leaves office.

A step toward reducing our deficit would be doing away with Base Line Budgeting.

Another is to reinstate the 1996 Welfare Reform Act.

boards of FL wrote:

colaguy wrote:They address the ever increasing debt because debt is a function of annual budget deficits/surplus. This can't be stated any more simply, and yet you don't seem to understand this. You misunderstand me if you that's what you think.  I understand that the Debt is a function of annual budget deficits or surpluses.

colaguy, if in year 1 we have a budget deficit of $1 trillion and then in year 2 we have a budget deficit of $500 million, wouldn't you agree that our budget situation improved? Granted, debt still increased by $500 million, but didn't our deficit situation improve?

colaguy, have a look at these two scenarios. Which president is doing better with respect to managing deficits and debt?

President 1: Inherits a $1 trillion budget deficit and by way of gradual, annual reductions, we eventually reach a balanced budget during this president's 4th and final year in office. So, year 1 = $1 trillion deficit; year 2 = $750 million deficit; year 3 = $250 million deficit; and year 4 = $0.00 deficit. In total, debt increased by $2 trillion during President 1's time in office.

President 2: Inherits a $1 trillion budget surplus and leaves a $250 deficit. So, year 1 = $1 trillion surplus; year 2 = $250 million surplus; year 3 = $0.00 deficit; and year 4 = $250 million deficit. In total, debt decreased by $1 trillion during President 2's time in office.  You realize that you have used three different terms in this paragraph: surplus, deficit, and debt.  They are not interchangeable.  Annual deficits/surpluses are discrete. The Debt is cumulative. I do not understand your assertion that a president can inherit a deficit.  A budget deficit is simply the result at year end, just as is a budget surplus. Now, a debt can be inherited. E.g., Obama inherited the debt (meaning the debt already totaled $11T) when he took office. The subsequent deficits added to that Debt total.  And, again, for clarity, I do believe that reducing the size of each annual deficit is going in the right direction, as it pertains to our national finances.  But, the result is just a slowing down of the still increasing debt.  So, to be clear, it is projected that when Obama leaves office the Debt will have grown to $20T.  It can not be said that he will be leaving a $20Trillion Deficit.

colaguy, which president did a better job with respect to managing deficits and debt? I didn't directly answer your question because I am uncertain of your terminology.  When you say "inherited a $1Trillion deficit, do this mean a $1Trilliion Debt?

You don't understand how a president inherits a deficit?  Obama took office in 2009.  At that time, spending for 2009 had already been determined for the most part - hence the 2009 Bush budget.  2009 saw a deficit of $1.4 trillion, therefore Obama inherited a $1.4 trillion budget deficit.  Budgets are produced in advance and are lagged one year.

What's amazing is that you seem to be under the impression that each year is a blank slate that is completely independent of what happened last year.   That is, you seem to be under the impression that we could very well have a $1.4 trillion deficit one year, and then a surplus the next, and then maybe an even larger deficit the next.  That is completely wrong.   If a government is structured in a way that it bleeds $1.4 trillion in a year, it's not as if on January 1 of a new year we get to completely start over and restructure government however we like.  You do realize that that isn't how the real world works, right?  I ask you this, because your comments here in this thread suggest that you don't understand that.

And my question to you was simple.  President 1 inherits a government structured to produce a $1 trillion deficit and eventually balances the budget in four years.  President 2 inherits a government structured to produce a $1 trillion surplus and then leaves us with a $250 million deficit.  Common sense would dictate that President 1 did a better fiscal job given the fact that he inherited a mess and left a balanced budget - this is true in spite of the fact that debt increased under President 1 and decreased under President 2.  Though I suspect you would disagree.  Do you disagree?

colaguy wrote:

boards of FL wrote:

colaguy wrote:They address the ever increasing debt because debt is a function of annual budget deficits/surplus. This can't be stated any more simply, and yet you don't seem to understand this. You misunderstand me if you that's what you think.  I understand that the Debt is a function of annual budget deficits or surpluses.

colaguy, if in year 1 we have a budget deficit of $1 trillion and then in year 2 we have a budget deficit of $500 million, wouldn't you agree that our budget situation improved? Granted, debt still increased by $500 million, but didn't our deficit situation improve?

colaguy, have a look at these two scenarios. Which president is doing better with respect to managing deficits and debt?

President 1: Inherits a $1 trillion budget deficit and by way of gradual, annual reductions, we eventually reach a balanced budget during this president's 4th and final year in office. So, year 1 = $1 trillion deficit; year 2 = $750 million deficit; year 3 = $250 million deficit; and year 4 = $0.00 deficit. In total, debt increased by $2 trillion during President 1's time in office.

President 2: Inherits a $1 trillion budget surplus and leaves a $250 deficit. So, year 1 = $1 trillion surplus; year 2 = $250 million surplus; year 3 = $0.00 deficit; and year 4 = $250 million deficit. In total, debt decreased by $1 trillion during President 2's time in office.  You realize that you have used three different terms in this paragraph: surplus, deficit, and debt.  They are not interchangeable.  Annual deficits/surpluses are discrete. The Debt is cumulative. I do not understand your assertion that a president can inherit a deficit.  A budget deficit is simply the result at year end, just as is a budget surplus. Now, a debt can be inherited. E.g., Obama inherited the debt (meaning the debt already totaled $11T) when he took office. The subsequent deficits added to that Debt total.  And, again, for clarity, I do believe that reducing the size of each annual deficit is going in the right direction, as it pertains to our national finances.  But, the result is just a slowing down of the still increasing debt.  So, to be clear, it is projected that when Obama leaves office the Debt will have grown to $20T.  It can not be said that he will be leaving a $20Trillion Deficit.

colaguy, which president did a better job with respect to managing deficits and debt? I didn't directly answer your question because I am uncertain of your terminology.  When you say "inherited a $1Trillion deficit, do this mean a $1Trilliion Debt?

You don't understand how a president inherits a deficit?  Obama took office in 2009.  At that time, spending for 2009 had already been determined for the most part - hence the 2009 Bush budget.  2009 saw a deficit of $1.4 trillion, therefore Obama inherited a $1.4 trillion budget deficit.  Budgets are produced in advance and are lagged one year.

What's amazing is that you seem to be under the impression that each year is a blank slate that is completely independent of what happened last year.   That is, you seem to be under the impression that we could very well have a $1.4 trillion deficit one year, and then a surplus the next, and then maybe an even larger deficit the next.  That is completely wrong.   If a government is structured in a way that it bleeds $1.4 trillion in a year, it's not as if on January 1 of a new year we get to completely start over and restructure government however we like.  You do realize that that isn't how the real world works, right?  I ask you this, because your comments here in this thread suggest that you don't understand that.

And my question to you was simple.  President 1 inherits a government structured to produce a $1 trillion deficit and eventually balances the budget in four years.  President 2 inherits a government structured to produce a $1 trillion surplus and then leaves us with a $250 million deficit.  Common sense would dictate that President 1 did a better fiscal job given the fact that he inherited a mess and left a balanced budget - this is true in spite of the fact that debt increased under President 1 and decreased under President 2.  Though I suspect you would disagree.  Do you disagree?

And, yet, that occurs twice in your deficit/surplus graph.

boards of FL wrote:

colaguy wrote:

boards of FL wrote:

colaguy wrote:They address the ever increasing debt because debt is a function of annual budget deficits/surplus. This can't be stated any more simply, and yet you don't seem to understand this. You misunderstand me if you that's what you think.  I understand that the Debt is a function of annual budget deficits or surpluses.

colaguy, if in year 1 we have a budget deficit of $1 trillion and then in year 2 we have a budget deficit of $500 million, wouldn't you agree that our budget situation improved? Granted, debt still increased by $500 million, but didn't our deficit situation improve?

colaguy, have a look at these two scenarios. Which president is doing better with respect to managing deficits and debt?

President 1: Inherits a $1 trillion budget deficit and by way of gradual, annual reductions, we eventually reach a balanced budget during this president's 4th and final year in office. So, year 1 = $1 trillion deficit; year 2 = $750 million deficit; year 3 = $250 million deficit; and year 4 = $0.00 deficit. In total, debt increased by $2 trillion during President 1's time in office.

President 2: Inherits a $1 trillion budget surplus and leaves a $250 deficit. So, year 1 = $1 trillion surplus; year 2 = $250 million surplus; year 3 = $0.00 deficit; and year 4 = $250 million deficit. In total, debt decreased by $1 trillion during President 2's time in office.  You realize that you have used three different terms in this paragraph: surplus, deficit, and debt.  They are not interchangeable.  Annual deficits/surpluses are discrete. The Debt is cumulative. I do not understand your assertion that a president can inherit a deficit.  A budget deficit is simply the result at year end, just as is a budget surplus. Now, a debt can be inherited. E.g., Obama inherited the debt (meaning the debt already totaled $11T) when he took office. The subsequent deficits added to that Debt total.  And, again, for clarity, I do believe that reducing the size of each annual deficit is going in the right direction, as it pertains to our national finances.  But, the result is just a slowing down of the still increasing debt.  So, to be clear, it is projected that when Obama leaves office the Debt will have grown to $20T.  It can not be said that he will be leaving a $20Trillion Deficit.

colaguy, which president did a better job with respect to managing deficits and debt? I didn't directly answer your question because I am uncertain of your terminology.  When you say "inherited a $1Trillion deficit, do this mean a $1Trilliion Debt?

You don't understand how a president inherits a deficit?  Obama took office in 2009.  At that time, spending for 2009 had already been determined for the most part - hence the 2009 Bush budget.  2009 saw a deficit of $1.4 trillion, therefore Obama inherited a $1.4 trillion budget deficit.  Budgets are produced in advance and are lagged one year.

What's amazing is that you seem to be under the impression that each year is a blank slate that is completely independent of what happened last year.   That is, you seem to be under the impression that we could very well have a $1.4 trillion deficit one year, and then a surplus the next, and then maybe an even larger deficit the next.  That is completely wrong.   If a government is structured in a way that it bleeds $1.4 trillion in a year, it's not as if on January 1 of a new year we get to completely start over and restructure government however we like.  You do realize that that isn't how the real world works, right?  I ask you this, because your comments here in this thread suggest that you don't understand that.

And my question to you was simple.  President 1 inherits a government structured to produce a $1 trillion deficit and eventually balances the budget in four years.  President 2 inherits a government structured to produce a $1 trillion surplus and then leaves us with a $250 million deficit.  Common sense would dictate that President 1 did a better fiscal job given the fact that he inherited a mess and left a balanced budget - this is true in spite of the fact that debt increased under President 1 and decreased under President 2.  Though I suspect you would disagree.  Do you disagree?

And, yet, that occurs twice in your deficit/surplus graph.

No, it doesn't.  Here is the graph again:




Never do we go from a $1.4 trillion dollar deficit to a surplus in one year.  Never on this graph and never in US history.  Why?  Because each budget is very much dependent to some degree upon what occurred the year before.  Anyone with an inkling of common sense looks at this graph and sees clear and obvious trends.  Trends aren't compatible with your view of how budgets work.  You appear to believe that each year is a blank slate, independent of what occurred the year before - and you're wrong.  If that were true, we should see randomness in the above chart - not trends.  But trends are obviously present.  

My hypothetical scenario cuts down to the fundamental difference in the way that you view budgets versus the way that I view budgets.  Putting deficits and debt aside, I think what you don't get is that a president can do an excellent job with respect to fiscal policy and yet still see debt explode.  And, vice versa, a president can do a terrible job with respect to fiscal policy, and yet see debt increase.  You're still trying to place blame.  You clearly don't understand this because you regularly point out "But debt increased!" each time we see that our budget is continuing to move in the right direction, or any time when you are shown data that suggests our fiscal situation is improving.  It's as if the concept of the second derivative escapes you entirely.

boards of FL wrote:

Markle wrote:You just can't bring yourself to admit that the DEFICIT is nothing more than a figure on paper.

The DEBT, growing larger by the day, is REAL.

The debt today is $18.9 TRILLION and undoubtedly will be $20 TRILLION by the time this ruinous president leaves office.

A step toward reducing our deficit would be doing away with Base Line Budgeting.

Another is to reinstate the 1996 Welfare Reform Act.

Markle, please.  Your rocking chair is over the corner.  Here, have a snack or something.



(sprays air freshener)  Sorry, everyone.