Obama economy: Deficit shrinks by $1 trillion in Obama era

[zenkai]

It's interesting that I made a point regarding 1> unemployment, and 2> economic recovery from the 2008 recession, and you responded with a dismissive statement that didn't refer to either, but was entirely about 3> the deficit.

Why not respond to what I actually said, rather than moving the goalposts to a more convenient target? I know the OP referred to the deficit, but that doesn't explain why you thought it was a response to my post.

Oh you wasn't posting on topic but instead just attacking Republicans taking the thread off topic? My bad

[Endus]

Oh you wasn't posting on topic but instead just attacking Republicans taking the thread off topic? My bad

Broadening the discussion to other economic measures isn't "off-topic".

[Allybeboba]

Jobs may have been "added" but that does not count how many were lost.

Here are some facts. Of note are the increase of how many people are on food stamps(+36), gun production(+134%), Guantanamo prisoners(-74%), exports of goods and services(+28%).
He wants people dependent on government, lets foreign terrorist prisoners go free, exports our production to other countries...

And now there is talk of creating a 25% tax on guns. I would not be surprised if he owns stock in gun manufacturering.

http://www.factcheck.org/2016/10/oba...r-2016-update/

[Daelak]

The debt (which is what matters) hasn't shrunk by that much, the size at which it grows has shrunk. Not to mention that it has gone up this year from $500 billion to $600 billion.

I will save my praise for a president who can actually fix a problem, not cause it to be less terrible.

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Republicans stopped being the party of fiscal responsibility almost 50 years ago when they created the framework for the modern American welfare state. I'm not saying that all Republicans aren't fiscally conservative or that most Republicans aren't well intentioned but the public never wants to cut spending in any area when specifically polled and politicians lose nothing and often times gain a lot from increasing spending.

Obama has actually done some good in decreasing spending in wasteful areas like NASA or the military but increasing the welfare state was a terrible decision that has set a bad precedent for future presidents who have no intention of shrinking it.

Even proponents of the welfare state can't argue against the simple mathematical fact that it is the primary cause of the deficit and constitutes a much larger chunk of government spending than anything else.

The debt doesn't matter, if it did, the interest on our 10 year treasury bonds would be skyrocketing with global and domestic investors running for the hills due to the US unable to pay their interest.

That obviously isn't the case, you are fear mongering because it fits your delusional view of how a household pocketbook is equivalent to the credit rating of the most stable society in the history of mankind.

Like I say everytime someone like you start squawking about the debt; we, the US, have a functional unlimited credit line due to us being the world currency and the ability to steer global economics to any way we please. This is why the US government shouldn't take credence to your bullshit ideology and start leveraging future tax payments with the largest infrastructure/energy/green tech spending bill the US has ever seen to ensure global hegemony for another 100 years.

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Deficits are good.

With bond yields (i.e. government borrowing costs) at an all time historic low, there has never been a better time for government spending.

https://www.whitehouse.gov/sites/def...policy_cea.pdf

This. Everyone should read this, and all the debt doomsday delusionals should take a back seat and let real policy and public investment happen.

[Machismo]

This doesn't take government spending into account, which is getting out of hand. The economy has certainly improved since the recession, but the long-term liabilities will still come back to bite us in the ass. Our social programs are getting larger, and it's nearly impossible to close that dam once it's opened up. Social Security is still going to be insolvent in 17 years, which is when the real financial problems begin. At some point, taxes will have to be increased (again), people will have to wait to collect money, or benefits will be reduced. That wouldn't be such a problem, except Americans are really terrible about planning for the future.

[Glorious Leader]

The debt doesn't matter, if it did, the interest on our 10 year treasury bonds would be skyrocketing with global and domestic investors running for the hills due to the US unable to pay their interest.

That obviously isn't the case, you are fear mongering because it fits your delusional view of how a household pocketbook is equivalent to the credit rating of the most stable society in the history of mankind.

Like I say everytime someone like you start squawking about the debt; we, the US, have a functional unlimited credit line due to us being the world currency and the ability to steer global economics to any way we please. This is why the US government shouldn't take credence to your bullshit ideology and start leveraging future tax payments with the largest infrastructure/energy/green tech spending bill the US has ever seen to ensure global hegemony for another 100 years.

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This. Everyone should read this, and all the debt doomsday delusionals should take a back seat and let real policy and public investment happen.

In point of fact the us government has been in debt every year of its existince save one when it was paid off and a massive depression soon followed. Everytime the US government runs a surplus a recession soon follows. Its simple accounting people.

That money to shrink the deficit has to come from somewhere. Either the from the private domestic sector or from trade.

[Deletedaccount1]

The debt doesn't matter, if it did, the interest on our 10 year treasury bonds would be skyrocketing with global and domestic investors running for the hills due to the US unable to pay their interest.

That obviously isn't the case, you are fear mongering because it fits your delusional view of how a household pocketbook is equivalent to the credit rating of the most stable society in the history of mankind.

Like I say everytime someone like you start squawking about the debt; we, the US, have a functional unlimited credit line due to us being the world currency and the ability to steer global economics to any way we please. This is why the US government shouldn't take credence to your bullshit ideology and start leveraging future tax payments with the largest infrastructure/energy/green tech spending bill the US has ever seen to ensure global hegemony for another 100 years.

People usually think of our debt as government debt. But total total private and public debt is more like 350 percent of the debt to GDP ratio, more than double than in 1980. Most of the increase in the past 20 years or so has been in household debt and financial sector debt. That is enormous and significant for obvious reasons.

Here are two facts:

1. By 2030, U.S. debt will be 117.6 percent of GDP, roughly the same as that of Greece at the height of their slump. And that is with total non-interest, non-entitlement spending of only 8.5 percent of GDP.

2. In 20 years there will be double the number of people aged 65-74, who get Medicare as well as doubling the number of people 75 and up, where medical expenses get really high.

The government's current solution to this, which is reducing health care costs between now and 2080, is just not going to cut it. We will not get to 2080, not even 2030 likely. Our government will be in complete paralysis, public sector employees and people who rely on pensions will be in a state of hysteria. Like Greece, we will have no options. At that point, "inflating away the debt" will not be some mild, harmless act. It will require an insanely large and devastating inflation rate or government acquisition of private wealth that will target the savings of everyone who does not have their wealth tied up in a foreign country.

You can act like it isn't an issue because you pulled some random fact out of your ass and can somehow relate the power of the dollar as a reserve currency to how government spending and debt as a share of GDP is increasing rapidly. It does matter and there will be consequences.

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This doesn't take government spending into account, which is getting out of hand. The economy has certainly improved since the recession, but the long-term liabilities will still come back to bite us in the ass. Our social programs are getting larger, and it's nearly impossible to close that dam once it's opened up. Social Security is still going to be insolvent in 17 years, which is when the real financial problems begin. At some point, taxes will have to be increased (again), people will have to wait to collect money, or benefits will be reduced. That wouldn't be such a problem, except Americans are really terrible about planning for the future.

This is correct.

[Annoying]

The debt doesn't matter, if it did, the interest on our 10 year treasury bonds would be skyrocketing with global and domestic investors running for the hills due to the US unable to pay their interest.

That obviously isn't the case, you are fear mongering because it fits your delusional view of how a household pocketbook is equivalent to the credit rating of the most stable society in the history of mankind.

Like I say everytime someone like you start squawking about the debt; we, the US, have a functional unlimited credit line due to us being the world currency and the ability to steer global economics to any way we please. This is why the US government shouldn't take credence to your bullshit ideology and start leveraging future tax payments with the largest infrastructure/energy/green tech spending bill the US has ever seen to ensure global hegemony for another 100 years.

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This. Everyone should read this, and all the debt doomsday delusionals should take a back seat and let real policy and public investment happen.

I say it all the time, but we could quadruple the debt and spend it on infrastructure, science, and energy. The world would eat the debt up, and the resultant gains from that spending would easily balance out the GDP-to-interest payments in short order. Zero solvency issues and huge economic and social gains.

[Deletedaccount1]

I seriously don't know how someone can argue that the debt doesn't matter on the grounds of some pseudo-American exceptionalism narrative based on the power of the dollar as a reserve currency or the US being able to "steer global economics to any way we please". Do you actually believe the US has the ability to do that? If that is true why does the US need to use trade deals like the TPP to economically bully countries like China?

Why does the US need to use sanctions on dozens of countries to promote its foreign policy if our reserve currency has much weight and impact as you say?

Look at Japan's debt to GDP ratio as a good example of what is likely going to happen to the US if spending isn't better managed soon or taxes don't radically increase to account for the rate at which spending is increasing.

No professional economist of any school would argue that having debt twice the annual GDP is a good thing from Paul Krugman to any Austrian and everything in between.

[zenkai]

I seriously don't know how someone can argue that the debt doesn't matter on the grounds of some pseudo-American exceptionalism narrative based on the power of the dollar as a reserve currency or the US being able to "steer global economics to any way we please". Do you actually believe the US has the ability to do that? If that is true why does the US need to use trade deals like the TPP to economically bully countries like China?

Why does the US need to use sanctions on dozens of countries to promote its foreign policy if our reserve currency has much weight and impact as you say?

Look at Japan's debt to GDP ratio as a good example of what is likely going to happen to the US if spending isn't better managed soon or taxes don't radically increase to account for the rate at which spending is increasing.

No professional economist of any school would argue that having debt twice the annual GDP is a good thing from Paul Krugman to any Austrian and everything in between.

These are probably the same guys who run their CC dept through the roof then claim bankruptcy every 10 years.

[Cthulhu 2020]

These are probably the same guys who run their CC dept through the roof then claim bankruptcy every 10 years.

Except, you know, they said talking about the federal debt like it's akin to someone's private debt is moronic. And it is. They work completely separately. The federal debt isn't one single loan or credit card. We're literally borrowing money all the time from banks that will give us the best rates, and paying off the oldest and/or most costly loans. As long as banks keep giving the US great rates, because they KNOW those loans will eventually be paid off with interest, there's little to worry about, and our debt could be much, much higher before we got to that point.

Is being in debt good? No, that's not what I'm saying, before you erect a similarly silly strawman to punch down.

Conservatives (and those who claim they're neutral or "awake" but are extremely prone to parroting conservative rhetoric) always point the debt like it's some big scary number. And it's big. And scary. And BIG, like whoa, we owe A LOT of money. Like holy shit, not even the richest person will ever have that much money! Oh my god, we're in big trouble!

And they fail to explain WHY that big scary number is a danger. They fail to explain what threat it poses to us. Just that... "it's a threat, it's scary, trust us, we know things."

[Kapadons]

These are probably the same guys who run their CC dept through the roof then claim bankruptcy every 10 years.

Way off topic , but my household credit card debt is around $8000 (includes furniture cards) and I hate that it's that high. (It's really only like 35% of the available credit)I pay extra every chance I can. We were talking to some friends and they both have like $30,000 in CC debt or $60,000 for their house hold. I about fell over. I couldn't understand how or why someone would do that. At this point they just pay the minimum payment and it doesn't even cover the interest. Without major changes to their income or spending or bankruptcy , they will likely spend the rest of their life with that debt just paying interest.

[Kelathos]

Deficits, now only as bad as the Bush era.

[Vargur]

I'm not American and I'm all for Obama, but wouldn't it have shrank regardless of who's president, after the 2009 economic crash?

[zenkai]

Except, you know, they said talking about the federal debt like it's akin to someone's private debt is moronic. And it is. They work completely separately. The federal debt isn't one single loan or credit card. We're literally borrowing money all the time from banks that will give us the best rates, and paying off the oldest and/or most costly loans. As long as banks keep giving the US great rates, because they KNOW those loans will eventually be paid off with interest, there's little to worry about, and our debt could be much, much higher before we got to that point.

Is being in debt good? No, that's not what I'm saying, before you erect a similarly silly strawman to punch down.

Conservatives (and those who claim they're neutral or "awake" but are extremely prone to parroting conservative rhetoric) always point the debt like it's some big scary number. And it's big. And scary. And BIG, like whoa, we owe A LOT of money. Like holy shit, not even the richest person will ever have that much money! Oh my god, we're in big trouble!

And they fail to explain WHY that big scary number is a danger. They fail to explain what threat it poses to us. Just that... "it's a threat, it's scary, trust us, we know things."

Way to miss the point guys, way to miss the point. It was that people who are advocating bad government financial decisions probably made bad personal financial decisions.

[wheresmywoft]

The debt (which is what matters) hasn't shrunk by that much, the size at which it grows has shrunk. Not to mention that it has gone up this year from $500 billion to $600 billion.

I will save my praise for a president who can actually fix a problem, not cause it to be less terrible.

So you will be praising the successor to the president that actually did something?

[Deleted]

I hope the next president can do as well.







In the not-too-distant past, talk in the political world of the U.S. budget deficit was all the rage. As the Tea Party “movement” took shape, conservatives quite literally took to the streets to express their fear that President Obama and Democrats were failing to address the “out of control” deficit.

Congressional Republicans agreed. As recently as 2013, Sen. Rand Paul (R-Ky.) was asked about the radicalism of his political agenda and he responded, “[W]hat I would say is extreme is a trillion-dollar deficit every year.” Around the same time, then-House Majority Leader Eric Cantor (R-Va.) argued that Congress should be “focused on trying to deal with the ultimate problem, which is this growing deficit.”

The Republican rhetoric was ridiculously wrong. We don’t have a trillion-dollar deficit; the deficit isn’t the ultimate problem; and it’s not growing.

Strong growth in individual tax collection drove the U.S. budget deficit to a fresh Obama-era low in fiscal 2015, the Treasury Department said Thursday.

For the fiscal year that ended Sept. 30 the shortfall was $439 billion, a decrease of 9%, or $44 billion, from last year. The deficit is the smallest of Barack Obama’s presidency and the lowest since 2007 in both dollar terms and as a percentage of gross domestic product.

Keep in mind, in the Obama era, the deficit has shrunk by $1 trillion. That’s “trillion,” with a “t.” As a percentage of the economy, the deficit is now down to just 2.5%, which is below the average of the past half-century, and down from 9.8% when the president took office.

Revisiting our coverage from several months ago, I looked for press releases from the “Obama is turning us into Greece!” crowd, eager to see them celebrate President Obama’s striking record on deficit reduction, but so far, nothing has turned up. Maybe they’re busy.

And in practical terms, that’s a shame. The vast majority of Americans are absolutely certain – thanks to deceptive Republican rhetoric and unfortunate news coverage – that the deficit has soared in the Obama era. Late last year, a Bloomberg Politics Poll found that 73% of the public believes the deficit has gotten bigger over the last six years.

The year before, the same pollster found that only 6% of Americans realized the deficit was shrinking. It helps explain why the president hasn’t gotten any credit for deficit reduction, which seems like the sort of development Tea Partiers and the Beltway’s Very Serious People should consider an extraordinary accomplishment.

As we talked about last year, it’s tempting to conclude that the public’s confusion doesn’t matter. In the Clinton era, the deficit disappeared entirely, and Americans had no idea.

But there’s another side to this. Whether or not Americans know and/or understand the basics of the fiscal argument may not have a practical impact on the debate itself, but the fact remains that voters are ultimately responsible for electing policymakers. If Americans believe, incorrectly, that the deficit is getting bigger, these same voters may be inclined to vote for candidates who’ll slash public investments and undermine social-insurance programs – which would have real-world consequences.

Postscript: To reiterate a point that bears repeating, I don’t necessarily consider this sharp reduction in the deficit to be good news. If it were up to me, federal officials would be borrowing more, not less, taking advantage of low interest rates, investing heavily in infrastructure and economic development, creating millions of jobs, and leaving deficit reduction for another day.

That said, if we’re going to have a fiscal debate, it should at least be rooted in reality, not silly misconceptions. And the reality is, we’re witnessing deficit reduction at a truly remarkable clip. Every conservative complaint about fiscal recklessness and irresponsibility in the Obama era is quantifiably ridiculous.

Thanks, OBAMA.

[wheresmywoft]

Way to miss the point guys, way to miss the point. It was that people who are advocating bad government financial decisions probably made bad personal financial decisions.

Except they gave examples of what the borrowed money could be spent on. Items that would further stimulate growth and create whole new sectors.

I have no idea why you are still trying to compare government financial practices with personal.

[zenkai]

Except they gave examples of what the borrowed money could be spent on. Items that would further stimulate growth and create whole new sectors.

I have no idea why you are still trying to compare government financial practices with personal.

I gave an example of out of control spending, or do you believe all government spending stimulates grown and creates jobs? LOL

[Endus]

I gave an example of out of control spending, or do you believe all government spending stimulates grown and creates jobs? LOL

Your "example" was in personal finances, not national budgeting. That's comparing apples to aircraft carriers.