Anybody still think the economy has turned the corner?

[Bevo16]

This is pretty nuts.

The key point from the article is this:

The deficit for October totaled $176.4 billion, even higher than the $150 billion of debt that economists expected us to pile up.

The shortfall came mostly from lower receipts of individual and corporate taxes (people who are out of work and can't find a job don't pay income taxes). Receipts were down to $135.3 billion, a 17.9 percent drop from last October. Given the rate of inflation, this number is just staggering.

Our government spent all tax receipts plus 130% more that it borrowed and spent. Put another way, the government borrowed over $1,000 this month for each and every working American. This is simply insane.

The good news is that the multi-trillion Obama care bill seems to be DIW in the Senate. I don't care what your politics are, the simple fact is that we can't afford the price tag on this thing right now.

The bad news is that this is going to hit us really hard. It has to. The military budget is always the first place politicians go. The trillion dollar stimulus has flopped, and there simply isn't money for another round. The government has taken over the auto industry (to save them), the banks (to save us), now what? Thoughts?

 

[desertoasis]

Someone proposed term limits for Senators and Congressmen...sounded like a good, REAL, TANGIBLE step that can be taken in Washington to try to clean up in there. The people who are Senators and Congressmen for their entire lives are in the pockets of the lobby groups and the rich party contributors, they don't care about what their constituents are actually saying.

And yes, both parties are guilty of this. In the end, it really doesn't have much to do with which party you're in, since both the Democrats and the Republicans in Congress are preaching pretty much the same thing, they're just doing it with different bents. The party in power tends to show it a little more dramatically, though, and its only gotten worse with each 'realigning' election.

And to those who say 'No, the Republicans are campaigning for a smaller government/personal freedom/small business owners/whatever', I would say they certainly were years ago, but when they were hijacked by the 'Moral Majority' and came under the control of the conservative rich elite and the religious Right, their message pretty much became just as self-serving as the Democrats'; we will do what it takes to remain in power and push our own agenda, and screw all of you who disagree with us.

Point is, it's not necessarily that the adminstration aren't doing all they can do to save the economy; I'm sure their intent is not to deliberately bankrupt the nation or starve millions of people out of jobs and livelihoods. No one could possibly be that evil (except maybe Kim Jong-il). What is more likely happening is they are not focusing on anything past their next election and worrying more about their incorrect perception of the 'greater good', which translates into preserving the biggest businesses and the biggest economic movers and shakers in the nation, which in the end only fills campaign coffers and NGO guest speaker calendars, and does nothing to put food on the tables of almost all of the Joe Q. Citizen's in the country.

.......and I rambled a bit.....sorry.

PS I'm not trying to be an apologist for the Obama administration. Just saying what I see happening.

 

[squorch2]

I don't care what your politics are, the simple fact is that we can't afford the price tag on this thing right now.

The military budget is always the first place politicians go.

Thoughts?

Thoughts - I has em!

The implementation of the health care overhaul wouldn't start until 2011 and will be phased in over a DECADE.

The first place that gets cut are services - such as education, transportation, etc. The budget for this year is bigger than the last - as it has been for the past twelve years.

Thoughts!

 

[helolumpy]

Since the DOD is the largest 'discretionary' portion of the federal budget, it's the logical place to cut first. Problem is that cutting the DOD budget causes jobs to be lost downstream in other Congressmen's districts...

Sen Michael Bennet (D Colorado) recently introduced a new bill that would limit Congress' power to spend if the deficit reaches a certain level. This bill is very similair to the Gramm-Rudman bill of the 1980's. Congress shot that down since it would tie thier hands in the event the deficit reached a certain cieling.

That being said, I'm curious what is going to happen when China decides to collect on all the bonds they have been buying up over the past few years.
Knowing how they take a longer view of the situation than Americans typically do, I wouldn't be surprised if they happen to mention how much money is owed to them just before they attempt a 'peacefully' annexation of Taiwan...

 

[squorch2]

I should have been more explicit - the DoD budget is bigger this year and has been increasing for the past twelve years.

 

[PropStop]

What's the big deal man? Just print some more money. Pretty obvious really.

 

[E26]

The first place that gets cut are services - such as education, transportation, etc. The budget for this year is bigger than the last - as it has been for the past twelve years.

He's right. DoD budget has been steadily growing for a long while now. In Federal and State levels, the first to usually get hit is either Education or Public Safety [Police, Fire, etc].

 

[exhelodrvr]

Don't confuse "cuts" with "smaller than requested increases."

 

[statesman]

Someone proposed term limits for Senators and Congressmen...sounded like a good, REAL, TANGIBLE step that can be taken in Washington to try to clean up in there. The people who are Senators and Congressmen for their entire lives are in the pockets of the lobby groups and the rich party contributors, they don't care about what their constituents are actually saying.

I'm not usually one to defend Congress, but this statement I find to be a little less than educated.

While term limits may or may not be a good idea (I personally am in favor of term limits), Congressman are rarely entirely in the pocket of special interest... for several reasons.

1. The majority of campaign contributions come from private citizens like you and I

2. Special interest rarely attempts to change the mind of an elected official by throwing around money. Rather they find someone who is going to vote their way regardless and then try to get them elected. You're not going to buy a pro-choice vote from John Cornyn no matter what.

3. Special interest is often a way that the people are represented. Yes there are corporate interests in Washington no doubt. However the largest interest groups are funded the same way political campaigns are, through small contributions from many private individuals. NRA, GOA, DU, CCA, etc. are all privately funded special interest lobbying groups.

they don't care about what their constituents are actually saying.

4. This statement is by and large false. Members of Congress MUST care about what their constituents think.

In "American Congress" and other publications on Congressional behavior it is argued that members of Congress have 3 main goals.

1. Get re-elected
2. Pass good public policy
3. Institutional promotion

Number 1 is the most important because you cant fulfill 2 and 3 without it, and Number 1 depends on votes, not just money, and not corporate/special interests.

 

[Random8145]

The bad news is that this is going to hit us really hard. It has to. The military budget is always the first place politicians go. The trillion dollar stimulus has flopped, and there simply isn't money for another round. The government has taken over the auto industry (to save them), the banks (to save us), now what? Thoughts?

As the debt increases, the interest that has to be paid on that debt will increase, and that is going to consume a larger and larger portion of the federal budget (probably defense), or force higher taxes (which will hurt the economy).

On the stimulus, I am not so sure it has flopped. I think the administration was foolish to say it would stop unemployment from going above 8%, but remember the Volcker Recession under Ronald Reagan lasted from I think July 1981 to November 1982 (over a year). There were critics claiming that Reagan's tax cuts and such had failed to stimulate the economy back then, and the Republicans got hammered in the 1982 (I think 1982) Congressional election.

If the administration can't get this healthcare bill passed, and then the political ability is gone to do things like raise taxes, implement carbon cap-and-trade, and so forth, the economy could well turn around, part of it possibly due to the stimulus, I'd think within the next year. Maybe not in time to stop the Democrats from likely getting hammered some in the Congressional elections (time will tell), but it should turn around. Or maybe the stimulus is completely worthless, just being a leftwing wishlist of spending. Also historically stimulus doesn't work. But the economy should still turn around on its own if not hampered (although I just remembered, the Dems don't need to raise taxes, the Bush tax cuts will expire on their own unless renewed).

Also big-time inflation could be coming, if that hits, then the economy will be hurting even more. With this current level of spending, inflation will hit at some point if it isn't curtailed.

 

[Flash]

That being said, I'm curious what is going to happen when China decides to collect on all the bonds they have been buying up over the past few years. Knowing how they take a longer view of the situation than Americans typically do, I wouldn't be surprised if they happen to mention how much money is owed to them just before they attempt a 'peacefully' annexation of Taiwan...

I think China threatening us with their investments is a bit of a fallacy, they need us as healthy and happy as we can be to protect their investments. Long term they are probably looking to 'spread the wealth' a little more but for now they are stuck with us.

 

[Rocketman]

The shortfall came mostly from lower receipts of individual and corporate taxes (people who are out of work and can't find a job don't pay income taxes). Receipts were down to $135.3 billion, a 17.9 percent drop from last October. Given the rate of inflation, this number is just staggering.

Well the economy sure hasn't turned the corner at my house. My co-workers and I contribute to the tax shortfall Bevo describes.

I work in the IT industry selling systems and services to large corporations like BOA, Time Warner and Hanesbrands. Depending on how Q4 goes my W2 will be $50-70K light compared to '08. Everyone I know in my industry has the same story to tell. I'm not bitching. So far I still have a great job and I'm making more than enough money to support my BRD. I'll just keep plugging along until the "recovery" (if it ever comes).

In the mean time, if I'm not making it, Uncle Sugar can't tax it. I hope....

 

[The Chief]

Interesting source of information for those who may not know of it:

http://usdebtclock.org/

While I cannot vouch for the accuracy of the data, former colleagues at BEA say that it's fundamentals are sound but one may quibble around the margins.

It is entertaining.

 

[kmac]

And to those who say 'No, the Republicans are campaigning for a smaller government/personal freedom/small business owners/whatever', I would say they certainly were years ago, but when they were hijacked by the 'Moral Majority' and came under the control of the conservative rich elite and the religious Right, their message pretty much became just as self-serving as the Democrats'; we will do what it takes to remain in power and push our own agenda, and screw all of you who disagree with us.

Exactly what was the message? And who are these conservative rich elite? If you are referring to the New England Republicans, I believe the title is "Eastern Establishment" or "Rockefeller Republicans" and is certainly not described as conservative. It seems to me that your argument holds more water when describing the centrist Republicans rather than that conservatives.

 

[squorch2]

Ah yes, the military, always the first to be cut: