They Screwed Up The Shutdown, But Republicans Are Right To Insist That Any Increased Borrowing Today Should Require Spending less In The Future
” Can anyone other than doctrinaire Democrats and members of his immediate family keep a straight face when President Barack Obama insists that he is “prepared to negotiate on anything” while simultaneously saying that “until we make sure that Congress allows Treasury to pay for things that Congress itself already authorized, we are not going to engage in a series of negotiations”?
Reining in the national debt is not an accounting fetish, especially when we’re talking about being in the hole to the tune of 100 percent of GDP when it comes both to debt held by the public and intra-governmental IOUs. Sustained and massive levels of debt foist obligations on future generations via future taxes and inflated currency; they also correlate with slower average economic growth. Indeed, even critics of the influential “debt overhang” thesis propounded by Carmen Reinhart, Kenneth Rogoff, and Vincent Reinhart grant that “the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is…2.2 percent,” an amount actually below what Reinhart, Rogoff, and Reinhart found in a 2012 paper detailing debt’s correlation with reduced growth. Debt has a habit of spiraling out of control and thus “fragilizing systems,” as Nassim Taleb puts it. When an increasing amount of your income is going to pay down loans taken out by your dead grandparents for stuff that was gone before you were born, you’ve got less cash for your own future.“
Tag Archive: Gross domestic product
” The Congressional Budget Office (CBO) recently released updated projections of the United States’ long-term budget outlook that confirm that we’ll be drowning in debt over the next couple of decades. This chart examines CBO’s extended debt projections, which are estimates beyond the 10-year period covered by its regular baseline projections. This provides a more realistic picture of our fiscal outlook since it accounts for the harmful effects of debt on the economy, as well as lower levels of savings and revenue.
Accounting for these long-run economic changes, or what CBO’s calls “economic feedback,” and more realistic assumptions regarding the continuation of certain fiscal policies set to expire, the federal debt held by the public under CBO’s alternative scenario would reach about 190 percent of GDP by 2038. Under the alternative scenario, debt reaches 100 percent of GDP in 2028—ten years earlier than the widely reported 2038 date under the extended baseline scenario.”
No need to go to Greece folks , Greece is coming here .
” China is on track to overtake America as the world’s biggest economy in 2016 as its growth accelerates, according to a report by the Organisation for Economic Co-operation and Development.
“China has weathered the global economic and financial crisis of the past five years better than virtually any OECD country and than many other emerging economies,” said the OECD.
“It is well placed to enjoy a fourth decade of rapid catch-up and improving living standards,” the tank added. However, it did point to risks such as property prices and potential tension arising from social inequalities and an ageing population.”
- China ‘To Overtake America By 2016′ (patdollard.com)
- OECD: China forecast to overtake U.S. by 2016 (cnn.com)
- Chinese economy set to overtake US by around 2016 (gulfnews.com)
- China’s Economy To Overtake U.S. In 2016, Really? (valuewalk.com)
- China predicted to surpass US by 2016 (pi4aguy.com)
” While President Obama claimed repeatedly during both the fiscal cliff and the sequestration debate that America’s problem lay just as much on the tax revenue side as it did on the government spending side, new statistics show what a lie that is. According to the Congressional Budget Office, federal tax revenue will hit $2.7 trillion in 2013, the highest number ever.
Liberals will hang their hat on the fact that tax revenue totals 16.9 percent of GDP this year, as opposed to 18.5 percent in 2007, but that is because people earn less taxable income during recessions.”
- Fed. Government has more tax revenue than ever before in history (bellalu0.wordpress.com)
- Tax revenue to hit record this year. So is spending ‘the problem’? (csmonitor.com)
- Analysis: Cuts unlikely to deliver promised U.S. budget savings (reuters.com)
- Renaissance or collapse? The choice is ours (triblive.com)
- Wealthy’s Tax Bill Will Hit 30-Year High in 2013 (cnbc.com)
” What’s that Liberals? You don’t want to let some Republican politician tell you how bad the budget looks? Okay, then let the non-partisan Congressional Budget Office Director tell you.”
Seven TRILLION dollars in additional debt over the next decade !
- Charts: 10 Years in the U.S. Economy, According to CBO (blogs.wsj.com)
- CBO Predicts Dreary Economic Outlook (independentsentinel.com)
- The most depressing graph in the new CBO report (washingtonpost.com)
- COLLAPSE IMMINENT?: Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon? (secretsofthefed.com)
- CBO – Everything Is Going To Be Really-Really Great! (brucekrasting.com)
A simple perusal of the above table will show that in 19 quarters of Obama governance there have only been 8 quarters with growth at 2% or above . That is anemic “growth” at best . Three quarters with negative growth and three quarters with growth in the 3% range . Pathetic . For a sitting president to be re-elected with this economic record is not only unprecedented but an embarrassment .
” The American economy has taken a nosedive.For the first time in over three years, the U.S. Gross Domestic Product shrank. Between October and December of 2012, the GDP had a negative growth of 0.1. And let’s remember that this is the same quarter where we saw the media go into hyper-drive to spin Obama’s anemic job and GDP growth into a repeat of the Roaring Twenties.”
Media corruption is the obvious answer . If the MSM did their job even half a diligently in the age of Obama as they did with Bush we would all be better off .
” The media is just as bad. The biggest story in our country today should be the increase in poverty and an unemployment crisis so dire our labor force has shrunk to thirty-year lows. But neither will speak of it. We do, however, know all about some idiot and his phony girlfriend. We know all about a “heckle” that didn’t happen. One wonders which is the bread and which is the circus.”
We anxiously await the ” unexpected ” nature of the first quarter report for 2013 . With the tax hikes and Obamacare mandates kicking in as of January first we wager that this quarter is going to be a real winner .
- U.S. Economy Unexpectedly Contracted in Fourth Quarter (americanfreedombybarbara.com)
- GDP Drop (pointsandfigures.com)
- Thanks Barack… GDP Drops .1% in Last Quarter of 2012 (thegatewaypundit.com)
- US economy shrinks 0.1 pct., 1st time in 3 1/2 years (kansascity.com)
- U.S. Economy Contracts -0.1% in Q4, Led By Reduced Defense Spending (tempusfx.typepad.com)
- US Ends 2012 With 103.8% Debt To GDP (zerohedge.com)
- US GDP contracts for first time since end of recession (telegraph.co.uk)
- Economy Shrank At 0.1 Percent Annual Rate In Fourth Quarter (npr.org)
- Breaking: Q4 GDP drops to -0.1% (hotair.com)
” When we talk about “economic freedom,” what do we mean—and why does it matter?
Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state.
Since reaching a global peak in 2008, sadly, economic freedom around the world has continued to stagnate.
What are the reasons for the worldwide sluggishness? As Ambassador Miller writes in The Wall Street Journal, “Particularly concerning are the rise of populist ‘democratic’ movements that use the coercive power of government to redistribute income and control economic activity.”
While “corrupt political and legal environments cause underdevelopment in poorer countries,” Miller writes, “unfortunately, economic favoritism and cronyism exist in advanced democracies, too.” Americans are well aware, and the overall U.S. score has been dropping since 2009. From 2009 to 2010, the U.S. declined from being a “free” economy to “mostly free.” This year, it ranks 10th in the world. “
So , economic freedom in the US has taken a downturn since 2009 . What came about in 2009 to cause our precipitous drop in the rankings ? Where will we being after four more years ?
” One reason for America’s lack of freedom is that its scores on regulatory efficiency—which include business freedom and labor freedom—have dropped. The editors point to the fact that “over 100 new major federal regulations have been imposed on business operations since early 2009 with annual costs of more than $46 billion.” ”
Surprise , surprise … Regulation is the culprit . Who would have guessed ?
” It is no exaggeration to blame the recent slowdown in economic liberalization around the world on the lack of U.S. leadership. Trade flows—the engine of world growth—have declined as the U.S. economy has stagnated. Protectionism threatens consumers and businesses with higher costs and restrictions in supply. Ill-conceived banking regulations such as the Dodd-Frank law generate uncertainty and anxiety. And investment freedom declines in the face of higher costs and new legal and tax liabilities such as those introduced by ObamaCare. These misguided U.S. policies hurt Americans first, but others feel the harm as well. “
Lack of leadership in the ” Leader of the Free World ” is very costly , not just to Americans but to all the citizens of the world .
” Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on an aggregate score, each of 177 countries graded in the 2013 Index was classified as “free,” “mostly free,” “moderately free,” “mostly unfree,” or “repressed.”
The broader areas are broken down into 10 measures: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom.
The New Website
The updated website, launched today, is interactive:
- Compare up to three countries of your choice on all 10 measures of economic freedom with an interactive, color-coded chart feature.
- See a colorful heat map of the spread of economic freedom around the world, or select a specific region.
Each country’s profile includes quick facts such as its population, gross domestic product (GDP), unemployment rate, and the amount of foreign investment flowing into the country—and you can embed this data in your blog or website.
- If You Want Freedom Forget Horace Greeley … Go North Young Man (youviewedblog.wordpress.com)
- Economic Freedom Heads North (athomesense.com)
- Occupy Pennsylvania Avenue: How the Government’s Unconstitutional Actions Hurt the 99% (cato-at-liberty.org)
- Looking for Economic Freedom in North America? Head Northwest (blogs.wsj.com)
- Creating a Human Freedom Index (cato.org)
- Alberta leads North America in economic freedom: Fraser Institute (calgaryherald.com)
- Bahrain, UAE top Arab list for economic freedom (en.trend.az)
- Declining Economic Freedom Means Lower Expected Returns (blogofberk.typepad.com)
- Maine ranked “least free” in North American index of economic freedom (themainewire.com)
- Canada, Now More Economically Free Than U.S.? (realclearpolitics.com)
” You know, Republicans, if you spent half as much time marketing good policy as you do bending over backwards to please your ideological opponents, we might actually have a deal worth talking about.
In addition to the basics, there are some other interesting facts to note about this deal.
ABC News reports:
But it also includes these:
- $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects.
- $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
- $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.
- $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
- $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
- $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.
*Note the price tags above reflect estimated forgone tax revenue if current credits – which have been due to expire – are extended for one year as included in the Senate bill, per Joint Committee on Taxation.
Jim Pethokoukis writes:
What will Americans pay in taxes this year vs. last year in light of the fiscal cliff deal? Well, let’s run the numbers (with some help from JPMorgan):
– Payroll tax hike: $125 billion
– Income tax hike and the phaseout of exemptions: $35-50 billion
– Investment tax hike: $5 billion
– PPACA healthcare taxes: $38 billion
So that works out to roughly $220 billion, or 1.2% of GDP. It’s a deal that, as The Washington Post puts it, ”takes money out of the hands of many Americans, sucking it out of the economy and slowing economic activity.”
Illustration By Steve Sack
- ‘Cliff’ Deal Also Helps Hollywood, Railroads, Rum Producers (abcnews.go.com)
- Welcome to 2013 and your $200 billion tax hike – and more uncertainty (aei-ideas.org)
- ‘Cliff’ deal also helps Hollywood, railroads, rum producers (whas11.com)
- Fiscal cliff deal could cost Florida billions (bizjournals.com)
- Congressional Budget Office Shows Senate Bill Is $600 Billion Tax Hike (heritage.org)
- White House declares a victory (politico.com)
- Why the Obama tax hikes have only just begun (aei-ideas.org)
” Budget policy in 2012 was characterized by deficit spending, major increases in the national debt, and a heated debate over the “fiscal cliff.”
With just days left for President Obama and lawmakers in Congress to avert a major tax hike, sequestration, and other major policy changes, today we bring you a list of the top 10 facts on federal spending in 2012:
- Four years of trillion-dollar-plus deficits. Fiscal year 2012 concluded with a $1.1 trillion deficit, marking the fourth year of trillion-dollar-plus deficits. Too much spending is the root cause of the federal government’s deep and sustained deficits. At 23 percent of gross domestic product (GDP) in 2012 and on track to rise further, federal spending is growing at a dangerous pace.
- National debt hit $16 trillion. On September 4, the U.S. national debt hit the $16 trillion mark. We owe more on the national debt than the entire U.S. economy produced in goods and services in all of 2012. Sixteen trillion dollar bills stacked one on top of the other would measure more than 1 million miles high, which would reach to the moon and back more than twice.
- The debt limit was raised by $1.2 trillion. On January 30, the federal government raised its debt limit from a staggering $15.194 trillion to an even bigger $16.394 trillion. This increase was the last one of three granted in the Budget Control Act of 2011, a result of that summer’s debt ceiling negotiations, which allowed for a total debt limit increase of $2.1 trillion. “
- What is the fiscal cliff? (abc.net.au)
- The Deficit: Not as Bad as They Want You to Think – Bloomberg (bloomberg.com)
- President Obama’s Legacy: $20 Trillion in Deficits for 2016 Victor (forbes.com)
- 10 Facts on the Fiscal Cliff, Debt and Spending (themainewire.com)