Why are people always ranting about this? Would these people try to run a corporation with no debt in its capital structure? If they would, shouldn't the shareholders fire them? |
Posted on 02/03/2006 8:05:10 PM PST by NormsRevenge
A longtime friend who served with me from across the aisle in Congress, the late Bob Wilson, enjoyed self-deprecating stories.
Addressing a party rally in his first campaign more than 50 years ago – in conservative Coronado, yet – Bob inveighed against government spending. Someone in the audience asked him about a law to limit the amount of debt our federal government should be allowed to run up on taxpayers.
“That sounds like a fine idea,” the eager young candidate responded. “I'd surely vote for it.”
The questioner seemed less pleased than Wilson expected.
“That's already the law,” the fellow explained with a touch of exasperation. “What I want to know is whether you'll help make it work.”
Ever adept on his feet, Wilson hastened to change the subject. What he might have explained quite truthfully, after he'd been in office a couple of years, would be that he'd join fellow Republicans in citing the debt limit if a Democrat were in the White House – but maybe take it easier on Republican presidents.
And with Democrats, yes, vice versa. Roll calls raising the debt limit have been taken more than 100 times in the half-century since Wilson first served. I remembered his tale of that early embarrassment while listening to this week's State of the Union. You'll have noted that deficits went unmentioned through nearly 55 minutes of presidential oratory. But if Congress should fail to jack up the debt limit yet again within the next week or 10 days, the direst of consequences might ensue – rattled bond markets, upward pressure on interest rates, a sadly shaken economy.
Worst of all, the U.S. Treasury would lack authorization to pay 150,000 troops in the line of fire overseas.
For that reason alone, we may be certain Congress will act. But not before milking the situation for all the political value some members will seek to derive from it. Our government is within days of reaching an $8.18 trillion level of debt, the limit last agreed to in November 2004. And that (gulp, gulp) will be $2.4 trillion higher than the encumbrance President Bush inherited upon taking office in 2001. We'll cadge future generations to pay it off.
All this is exquisitely appealing to presidential detractors. After spiraling upward through administrations of both parties since World War II, America's annual deficits had finally been halted under President Clinton. But now again, the United States is spending more each year than it takes in. The deficit for fiscal 2006 alone will be around one-third of a trillion dollars.
Republican spinners are free to make of this what they will. To be sure, hardly anyone anticipated the terrorist attacks of Sept. 11, 2001, the enduring agony of war in Iraq or the devastation caused by Hurricane Katrina. But would anyone with a sophomore's sense of fiscal responsibility choose such a time to slash taxes?
Allow me to share the following from Bush's address to Congress:
“The tax relief you passed ... has produced more than four years of uninterrupted economic growth. Yet we need more than temporary tax relief. I urge the Congress to act responsibly, and make the tax cuts permanent. We will ... stay on track to cut the deficit in half by 2009.”
There's no point in haggling over the president's description of his first term as a time of economic growth. Assembly-line workers at Ford and General Motors might see it differently. But someone should challenge his math. Bush asks Congress to enshrine those budget-busting tax cuts – as an act of responsibility? Please.
The factors contributing to deficits can be debated. To what extent are economic cycles beyond control of any administration? Do increased “entitlements,” as Bush suggests, claim too large a share of government budgets? Should an economy-minded president have employed the veto now and then? Can it ever be deemed wise to cut taxes in wartime?
All such questions bear on deficits, and on the debt limit that Bush finds unmentionable. But one set of facts is beyond the vagaries of political discussion. To wit:
In the past quarter-century, the national debt has soared by $7.38 trillion under three Republican presidents and a lone Democrat. The only balanced budgets in that stretch of time were achieved in Bill Clinton's final four years. George W. Bush, now just over a year into a second term, has amassed deficits totaling two and one-third trillion on his watch alone.
That's the bottom line. As the late Casey Stengel liked to say: you could look it up.
He has a point, although the NASDAQ bubble that happened during Clinton's watch was hardly Clinton's doing, he was merely the fortunate recipient of it. But it's true that presidents lately spend like drunken sailors. It's hard to talk about "limited government" when the government's budget spirals to the sky as it does. I'm expecting a major hit to the economy, when all of this deficit spending and the "culture of debt" finally comes due.
On the bright side, we're still here and the Soviets and Saddam Hussein aren't. Oh, and Osama bin Laden is in hiding.
We need to do something about the debt, but it isn't as dire as the Democrats suddenly want us to think. There was no surplus or pay down of the debt when Clinton was President. When liabilities are greater than income, there is no surplus.
The best method of dealing with the national debt is to restrain the budget and encourage economic growth. Any other proposals are likely to restrict economic growth for short term pay downs on the debt. In those scenarios poverty will run rampant and the money raised in increased taxes would go to welfare programs rather than debt reduction.
Lionel Van Deerlin is one of the biggest lefties that there is.
I want to quit the paper every time I read one of his columns.
Why are people always ranting about this? Would these people try to run a corporation with no debt in its capital structure? If they would, shouldn't the shareholders fire them? |
OR rather the GOP controlled Congress. AND an economy that was already in recovery by the end of Bush I's term.
But in any case, 9/11 was Clinton's fault, as was his allowing international terrorism to go on unfettered, his decimation of our Armed Forces, and the necessary rebuilding of post 9/11 security and the war.
I think that major hit to the economy will come this year in the form of outrageously high oil prices. We should get ready for the rough ride.
Quiet! You're going to wake the Bush-bots!
;)
| Lets say however that deficits are no big wup and really don't matter economically. If thats the case then why need fiscal restraint? anyone could have anything they wanted then.
Horsefeathers. It is a sign that you know how to invest money at a higher return than the people who are loaning you the money. Nothing wrong with that.
What does that have to do with whether they are taking on debt? Taking on debt to cover operating losses is indeed the path to destruction. But taking on debt to speed investment in things that have a higher return than the interest rate is the path to higher growth and higher profits in the future. Those who cannot tell the difference should stop trying to scare the animals with spurious hoo-hah about how all debt is bad. They sound like frigging Muslims. If you want to see what happens if you eliminate debt from your economy, take a look at your local Moslem nation. |
HAVE YOU EVER NOTICED THAT THE NATIONAL DEBT GOES UP EVEN WHEN THERE IS A BALANCED BUDGET OR EVEN A SURPLUS?...
http://www.publicdebt.treas.gov/opd/opdhisto4.htm
"Debt in and of itself is not bad. It depends how much debt you have relative to GDP"
It's a big wup WHEN you spend too much of your income as debt service. As Nick pointed out it is the Debt to Income ratio that matters. Seems you just decided to skip right over that point Nicks was making Hmm Spike?
Mark my words: this will be the Bush Jr. legacy.
A 41% increase in 5 years. What an idiot, squandering our future in a feeble attempt to buy votes from other idiots.
Thanks, George. Thanks, Republicans.
Really - that's where $2.4 TRILLION overspent dollars went? In addition to the $2.5 TRILLION the Republican Administration steals and squanders every year before it overspends?
Mighty expensive bullets.
Would oil be any cheaper if Uncle Sam didn't owe anybody a dime?
Better the Bush Bots then the Knee Jerk Bush haters and their Losetarian Party nonsense. Actually managed to get even 1% of the vote ANYWHERE for ANYTHING yet Losers?
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I don't understand what is wrong with having debt in the capital structure of the United States government. Are we expecting the United States to go out of business tomorrow? Is the Gross Domestic Product of the United States declining, leading to a decline in tax revenues? What is the big deal with taking on more debt as the economy grows?