Greenie Spills The Beans

[VJW]

GREENSPAN FINALLY ADMITS: "WE HAVE LOST CONTROL" OF THE BUDGET


(IND) – Bitter disagreements over global economic policy broke out into the open yesterday as the French Finance Minister claimed that Alan Greenspan had admitted America had "lost control" of its budget.

In an extraordinary revelation after a meeting between Thierry Breton and Mr Greenspan, M. Breton told reporters: "'We have lost control,' that was his [Mr Greenspan's] expression.

"The US has lost control of their budget at a time when racking up deficits has been authorised without any control [from Congress]," M. Breton said.

"We were both disappointed that the management of debt is not a political priority today. The situation that is creating tension today on the currency market ... is clearly the American deficit."

http://news.independent.co.uk/busine...icle315144.ece

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[jmjj215]

Hear hear. It's one of my biggest economic/political concerns. Congress has got to reign it in.

[VJW]

Don’t get your hopes up. Here is the response from the Bushies representative, a senior U.S. Treasury source:

"Things can get lost in translation."

UH HUH. SURE.

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[CRFSaver]

Seriously, take my 300 dollar refund back. Not like it did anythign but sit in the savings account.

[jmjj215]

I lean towards having them cut spending rather than take more money. They are so wasteful it makes me sick. I know that's a gross generalization, but I'm sticking to it.

VJW, inflation-adjusted, how much more does the US Govt spend now than it did in previous periods?

[rchiang]

With regards to government spending, there are two places I recommend
looking:

1) Office of Management and Budget

This is the site which offers the President's budget and projected
spending.

2) Governmental Accountability Office

These guys are the government accountants. From what I've read, they
do the GAAP (Generally Accepted Accounting Principles) accounting of
the government books.

<PRE>
OMB GAO
Year Income Expense Surplus Income Expense Surplus Unrecog
2004 1.880T 2.292T -412B 1.912T 2.525T -616B -3B
2003 1.782T 2.159T -377B 1.796T 2.485T -665B 25B
2002 1.853T 2.010T -157B 1.877T 2.259T -365B 17B
2001 1.991T 1.863T 128B 2.013T 2.546T -515B 17B
2000 2.025T 1.789T 236B 2.044T 1.999T 46B 7B
1999 1.827T 1.702T 126B 1.832T 1.756T 101B 24B
1998 1.721T 1.653T 69B 1.720T 1.854T -133B 24B
1997 1.580T 1.601T -22B 1.577T 1.603T -15B 12B
1995 1.352T 1.516T -164B
1990 1.031T 1.253T -221B
1985 734B 946B -212B
1980 517B 590B -74B
1975 279B 332B -53B
1970 192B 195B -3B
</PRE>

A few things to note:

1) In general, you can see that the government makes about 2 trillion
per year now. and anywhere from 1T to 1.8T through the 90s.

2) Why the difference? From what little I understand, the GAO puts back
in certain numbers, like what the government owes to Social Security.
This fine accounting trick was done back in the LBJ days to hide the
costs of the Vietnam War.

3) Unrecog is a category for "We have no idea where this money comes from
or gets spent". Your government in action...

I'll leave it as an exercise to the reader (at least for those of the
Austrian school of thought) to compare government income with M3 money
levels.

-Ray

[jmjj215]

Ray, thanks for these numbers. I'm going to have a gander at these sites.

[VJW]

You’re wasting your time with this administration’s OMB numbers, as they’ve returned to the Smoke & Mirrors and Rose-colored Glasses of the previous Reagan/Bush years.

As you can see in the following chart, in 2002 they projected a $262 billion SURPLUS for FY2004, in 2003 they projected a $14 billion deficit for FY2004, and in early 2004 they projected a deficit of $521 billion for FY2004.

http://lilt.ilstu.edu/gmklass/COW/ar...202005.xls.JPG

The actual federal budget deficit for FY2004 was well over $800 billion. They were only off by more than a TRILLION dollars just for one year.

The most useful link for historical budget data is at the CBO:

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0

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[VJW]

Originally Posted by rchiang

From what little I understand, the GAO puts back in certain numbers, like what the government owes to Social Security. This fine accounting trick was done back in the LBJ days to hide the costs of the Vietnam War.

Actually, that’s a myth.

The Johnson administration merely combined the budget numbers ON PAPER, but no monies were ever unified. It was the Reagan administration, in 1982, that unified the federal budget, utilizing the Social Security and other trust fund surpluses in a desperate attempt to cover the massive exploding federal deficits from the failed supply-side policies that were implemented.

In 1994, President Clinton, by Executive Order, removed the Social Security agency from the Executive Branch and made it a free-standing independent federal agency, and segregated the trust funds surpluses from the federal budget.

In 2001, this administration returned to utilizing the Social Security/Medicare surpluses in an attempt to mask the actual size of the once again exploding federal deficits.

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[CRFSaver]

VJW, isnt Reaganomics in fact not supply side economics? My understanding of supply side economics was cutting taxes AND cutting government spending. Reaganomics was actually cutting taxes and increasing spending. I thought that was the fundamental flaw with Reaganomics?

[jmjj215]

VJW thanks for the alternative links.

[VJW]

Originally Posted by CRFSaver

VJW, isnt Reaganomics in fact not supply side economics?

No, "Reaganomics" was classic ‘Supply-side’ economics, which was the insistence that the cutting of federal income tax rates (particularly upper income tax rates) would stimulate the national economy so much, that it would increase federal income tax revenues, as expressed by the laughable "Lafer Curve".

It’s never happened. Every single time it has been attempted, the economy either entered recession or slowed dramatically, as well as federal income tax revenues plummeted.

My understanding of supply side economics was cutting taxes AND cutting government spending.

No, those are both definitely agendas of the RightWing, but spending cuts have nothing specifically to do with ‘Supply-side’ economics. The Reagan administration made a lot of noises about cutting spending, but they never actually proffered any such overall spending cuts in their federal budget proposals.

As we’ve seen then, as with the current administration, the RightWing’s fondness for budget cuts is limited to areas of the federal budget that benefit the typical American family.

Reaganomics was actually cutting taxes and increasing spending.

Exactly, and it would have been much worse, as the Democrat Majority Congress passed federal budgets that were smaller than those submitted by the Reagan White House for eight straight years.

I thought that was the fundamental flaw with Reaganomics?

Some say that the “fundamental flaw” with “Reaganomics” was that they falsely believed that cutting federal income taxes would bring in more federal income tax revenue, but in my opinion, they got the exact result they wanted, namely to transfer trillions of dollars of our nations wealth to Corporate America, the Military Industrial Complex, and their wealthy friends, and then present the bill to the Middle-calls, the Working Poor, and future generations of our children.

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[VJW]

UPDATE:

* The US Treasury Department reports that the US National Debt increased $553.7 Billion in fiscal 2005 (more than $800 Billion with the off-budget items like Iraq, Afghanistan, etc.).

* The total National Debt is now $7,932,709,661,723.50

* The initial estimates for fiscal 2006 are for a new record of approximately $650 Billion in new debt (including all off-budget items, our nation’s first ONE TRILLION DOLLAR DEFICIT).

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[jmjj215]

This has got to stop.

[CRFSaver]

As much as I can't stand Georgie, my income (salary and bonus) has gone up more under him then at any time in my career...

[jmjj215]

Wasn't there a study shown recently that that's basically how people vote for the president? I could swear I saw or read that somewhere.

[CRFSaver]

Its very possible Jesse. I don't vote Republican or Democrat. I vote with who I think the best candidate is. Sometimes thats a Republican, sometimes a Democrat and sometimes a Libertarian (though no one can explain to me what a libertarian is).

[sweeps]

Voting for the best candidate (and not for a party) is definitely the responsible thing to do.

But how do you know who the best candidate is? Everything comes down to photo ops and 30-second TV ads. When candidates are forced to talk about issues, they talk in the most general terms possible. And then even if they had a particular stance before they took office, special interest groups quickly change their mind with the almighty dollar.

[CRFSaver]

Well one of the things I did like in California. On local election issues you coudl go online. and for different propositions they posted commentary from a group in favor and a group not in favor of the proposition.

[VJW]

My sympathies if you are represented by this TWIT:


FAIRBANKS, Alaska (AP) - The federal government could sell bonds to cover the cost of disaster recoveries under legislation introduced by U.S. Rep. Don Young (R-Alaska). Young introduced the bill Tuesday and spoke in favor it on the floor of the House of Representatives.

"When a natural disaster, be it a hurricane, earthquake, tornado or flood, hits a particular region or state, the rest of us can often feel disconnected because it's happening to 'them' and not 'us,'" Young said. "Buying bonds that are specifically designated for these types of disasters can help bring together Americans and create a sense of patriotism."

"We must find a way to meet the inevitable needs that will arise after future disasters," he said. "We cannot continue deficit spending."


How does a U.S. Congressman not comprehend that having the federal government sell additional bonds does indeed “continue deficit spending” ?????

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