deficits to continue breaking records
 

http://www.washingtonpost.com/wp-dyn...l?hpid=topnews



Federal budget deficit to exceed $1.4 trillion in 2010 and 2011
By Lori Montgomery
Washington Post Staff Writer
Saturday, July 24, 2010

The federal budget deficit, which hit a record $1.4 trillion last year, will exceed that figure this year and again in 2011, the White House predicted Friday, providing fresh ammunition to Republicans who are hammering President Obama for all the red ink as they campaign to regain control of Congress in November.

The latest forecast from the White House budget office shows the deficit rising to $1.47 trillion this year, forcing the government to borrow 41 cents of every dollar it spends. Contrary to official projections, the budget gap will not begin to narrow much in 2011, because of an unexpectedly big drop in tax receipts.

and further down:

But the long-term forecast stayed about the same, with the White House predicting additional borrowing of $8.5 trillion through 2020, a sum that would drive the national debt to more than 77 percent of annual economic output. That would be the highest percentage since 1950.

Independent forecasters, such as the Congressional Budget Office, say that number will probably be significantly higher if current policies remain unchanged. Obama has created a bipartisan commission to develop a strategy for stabilizing the debt by 2015.

So?

a:a needle pulling thread

Eye see.

We could let the unfunded Bush tax cuts expire. That would take out a huge portion of the deficit (that they caused)

that's already part of the plan, they expire in january. yet, the next two years are going to continue to break records. also noticed the continued war funding. those two wars are sucking us dry, with nothing to show for it.



But the forecast provides no relief from the gloomy outlook that has been forcing Obama to consider deeper cuts to defense and non-security programs as well as additional tax increases. This week, the administration also repeated its intention to let tax cuts for the wealthy expire in January.

...the White House predicting additional borrowing of $8.5 trillion through 2020, a sum that would drive the national debt to more than 77 percent of annual economic output. That would be the highest percentage since 1950.

Independent forecasters, such as the Congressional Budget Office, say that number will probably be significantly higher if current policies remain unchanged. Obama has created a bipartisan commission to develop a strategy for stabilizing the debt by 2015.

now, this is interesting:

http://www.newsmax.com/Headline/bern...7/22/id/365426

Bernanke Urges Congress to Renew Bush Tax Cuts

Thursday, 22 Jul 2010 08:13 PM
By: David A. Patten

Federal Reserve Chairman Ben Bernanke dropped a major bombshell on Democrats seeking massive new revenues to narrow the deficit, announcing Thursday that he favors preserving the Bush administration tax cuts to help a faltering U.S. economy.

“In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,” Bernanke told the House Financial Services Committee. “There are many ways to do that. This is one way.”

Bernanke's statement put him directly at odds with White House officials and House Speaker Nancy Pelosi, who favor raising taxes on wealthy Americans by letting the tax cuts the Bush administration passed in 2001 and 2003 expire.

Bernanke's views also conflict with those of his predecessor, Alan Greenspan, who told Bloomberg TV's Judy Woodruff just last week that lawmakers should allow the Bush tax cuts to expire as scheduled at year's end.

Greenspan conceded, however, that doing so probably would slow growth.

Bernanke emphasized the importance of giving the economy a boost. But he also told the House committee that dealing with the deficit, which has ballooned during the Obama administration, remains a major consideration.

“We need to be taking steps to reassure the American people and the markets that our fiscal situation is going to be well controlled,” Bernanke said. “That means that, if you extend the tax cuts, you need to find other ways to offset them.”

Bernanke's comments came on a day when the Dow Jones Industrial Average jumped 201 points, in part on reports of strong corporate profits.

But the markets were also encouraged by the news that two more Senate Democrats — Sen. Kent Conrad, D-N.D., and Sen. Ben Nelson, D-Neb. — are joining the growing number of voices urging an extension of the tax breaks enacted under the Bush administration to stave off the possibility of a double-dip recession.

7 hours??


Losing the passion?

you piqued my curiosity, so i googled. interesting...

http://online.wsj.com/article/SB1000...831199046.html

OPINIONJULY 13, 2010.
The Bush Tax Cuts and the Deficit Myth
Runaway government spending, not declining tax revenues, is the reason the U.S. faces dramatic budget shortfalls for years to come.

By BRIAN RIEDL
President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this "tax cuts caused the deficits" narrative. Consider the three most persistent myths:

and later:
• Declining revenues are driving future deficits. The fact is that rapidly increasing spending will cause 100% of rising long-term deficits. Over the past 50 years, tax revenues have deviated little from their 18% of gross domestic product (GDP) average. Despite a temporary recession-induced dip, CBO projects that even if all Bush tax cuts are extended and the AMT is patched, tax revenues will rebound to 18.2% of GDP by 2020—slightly above the historical average. They will continue growing afterwards.

Spending—which has averaged 20.3% of GDP over the past 50 years—won't remain as stable. Using the budget baseline deficit of $13 trillion for the next decade as described above, CBO figures show spending surging to a peacetime record 26.5% of GDP by 2020 and also rising steeply thereafter.
Putting this together, the budget deficit, historically 2.3% of GDP, is projected to leap to 8.3% of GDP by 2020 under current policies. This will result from Washington taxing at 0.2% of GDP above the historical average but spending 6.2% above its historical average.

That's an interesting opinion piece, but I haven't seen that opinion shared by many. Making a contention about absolute amounts then segueing into percent of GDP as one's support is a bit of a straw man IMO.

Here's some more on what Congress might be thinking of regarding the tax cuts.

^^^^"Be a peckerwood with your word. Speak with a muzzle."

what about bernanke's statements, and greenspan conceding that allowing the cuts to expire would slow growth?

They are far smarter than I am about it.

Get Quiet!! something good to drink--quick!

here's the main issue...if the tax cuts are just allowed to expire, they don't just raise the tax rate on the rich. they raise them on everyone. so, when obama says just let them expire, which is his plan, he's advocating a huge tax increase on the poor and the middle class, not just the wealthy as he would have you believe. and that's why many democrats are speaking out against the plan, they don't want across the board increases.

http://www.msnbc.msn.com/id/38400016...new_york_times

Epic battle looms in Washington over expiring Bush tax cuts
Fight to serve as proxy for bigger political clashes

From both political and policy perspectives, the tax issue is dizzyingly complex, and even some of Washington’s most grizzled legislative operatives say they cannot predict the outcome.

Some liberals want Mr. Obama to keep his promise to raise taxes on the rich, and the White House’s budget forecasts rely heavily on rolling the top income tax rates back to their pre-2001 levels. Some fiscal hawks warn that extending the tax cuts would add more than $2 trillion to the federal budget deficits at a time when the national debt is becoming an economic concern and a political issue. Political economists are fiercely divided.


The issue is further complicated by the rising concern among voters about the federal deficit, which would be increased by roughly $1.5 trillion over 10 years just by continuing the tax breaks for the middle class. Many economists say the nation’s debt load is already headed to risky levels.

But some lawmakers, including Mr. Wyden, say the deficit concerns and the attention on the debt commission could help forge a deal: a short-term continuation of the tax cuts for the middle class, and perhaps some new tax breaks for businesses, that would buy lawmakers time to undertake a broad overhaul of the tax code in the next Congress.

Danny..please.



This thread has been destroyed.

:zz: No, Obama's recommendation is to let the tax cuts on the wealthiest expire (the top 2-3%) - which is Bernanke & Geithners recommendation, too - and to extend the tax cuts for everyone else.

What Congress will end up doing we'll have to see.

it's going to be rather tricky for them to extend some, while cutting others. the whole thing has to be settled somehow. we're in quite a pickle. i'm not quite sure how they're going to reconcile this. or how they can add to the deficit while keeping tax cuts for some. or how they can chance stalling any gains by eliminating tax cuts that could affect small business.

What seems to be your primary malfunction here, ma'amski?

This is also called the redistribution of wealth.

[quote=Riot;673822]:zz: No, Obama's recommendation is to let the tax cuts on the wealthiest expire (the top 2-3%) - which is Bernanke & Geithners recommendation, too - and to extend the tax cuts for everyone else.

What Congress will end up doing we'll have to see.[/QUOTE]



my guess is that all the rates on personal income levels will go up

it's very possible that the whole thing is allowed to expire. unless they pass something saying otherwise, that's what will happen. what are the odds of congress getting something passed between now and then? with elections coming up, people will be afraid how to vote. after elections, who knows? not much time to get something done.

taxes are already going up on the poor and middle becuase of the new health care bill , making the bush tax cuts expire for them on the personal rate would be suicidal for the dems

At least something good would happen from it.

It's also called trying to keep the economy stimulated, not putting additional burdens on the middle class, while trying to lower the deficit a bit.

To reduce the burdens on the middle class and reduce the deficit, cut spending.

I'm getting dizzy.

Great: what spending, specifically,would you like to cut in the middle of a recession recovery?

Start with all foreign aid. Eliminate all of it.

a drop in the bucket i'm afraid.

http://www.federalbudget.com/


seems the biggest burdens are our interest payments on debt, defense, and of course, social spending (medicaid, social security).

so, if you wish to balance the budget, guess what needs to be cut? defense and social programs. believe it or not, military spending could definitely be cut-by quite a bit.

hey, here's a thought. get us the eff out of afganistan and iraq. they just voted on yet another war bill, to the tune of 80 billion if memory serves. yeah, we can afford that.

and i have no idea what all is involved with the site above, but the graph is very telling at a glance, isn't it?

and i just found this:

•US military spending accounts for 46.5 percent, or almost half, of the world’s total military spending
•US military spending is 7 times more than China, 13 times more than Russia, and 73 times more than Iran.
•US military spending is some 44 times the spending on the six “rogue” states (Cuba, Iran, Libya, North Korea, Sudan and Syria) whose spending amounts to around $16 billion.
•US spending is more than the next top 14 countries at least.
•The United States and its strongest allies (the NATO countries, Japan, South Korea and Australia) spend something in the region of $1.1 trillion on their militaries combined, representing 72 percent of the world’s total.
•The six potential “enemies,” Russia, and China together account for about $169 billion or 24% of the US military budget.


got them from:

http://www.globalissues.org/article/...RestoftheWorld

Oh boy...could ink blots be next?

Maybe if the USA would quit aiding all these counties the deficit would be less than what it is going to be. Are all the countries we are giving aid to helping the USA out? Probably not, yet the people in DC would rather take care of another country then thier own country. Pretty bad if you ask me. Lets give Pakistan more aid so they can keep on hiding Bin Laden from us and help out the Taliban. The same for Afganistan, lets give them aid so they can support the Taliban.

did you even pay attention to what i posted above? did you read any of it? it's all well and good to say cut foreign aid, but again, it's a negligible amount when you compare it to our overall budget. it would be luck you attempting to help your personal budget by not buying a bottle of water once a month. as for what you wrote above, that has a lot more to do with military spending than foreign aid. but i'd imagine the thought of cutting military spending would throw you into hysterics, without you actually even looking at what our military spending entails.

OK, by foreign aid I also meant all contributions to the IMF. And, reduce our contributions to the U.N. -- an organization that always seems to act against our interests anyway.

The U.N. will probably "vigorously condemn" us for that, but when was the last time that mattered?

ok--how much would that save? what are those budgeted amounts compared to the real drains on the treasury?

It would help. But you have a good point -- the real drains on the treasury are the "unfunded mandates", a term that can only exist in Washington, calloquially equivalent to "you must pay for this, no matter how much it costs, and regardless of whether you actually have the money." It's absurd.

This is compounded by the fact that at least some of the programs, like Social Security, are in fact unsustainable due to their mathematical resemblence to other Ponzi schemes. These programs ought to be first on the chopping block since they are guaranteed to fail once the paying population is less than the collecting population -- the "Baby Boomer" bubble.

Other things, like maintaining a nuclear arsenal, are expensive and continuing drains as well, but may be planned for and will likely improve as technology improves. Lower maintenance designs will be made.

Only the roads we can't seem to make indestructible. Those government contracts to repair highways, that go on for 5, 6 years at a time at a snail's pace, they seem to wrap up just as the road needs to be redone. Amazing.

sure, it would help. it just seems that instead of obama forming commissions to study the problems, they should take real steps to fix the actual problems that are right in front of them.

i read a line in a book yesterday, it seems to fit d.c. and it's politicians pretty well:

'the first inclination of the uncertain is to accept that which seems easy.' from rise to rebellion by jeff shaara.

the pols know we have a serious crisis on our hands, yet they are uncertain what to do. no one wants to take on a difficult task, one that will anger too many voters. after all, they want nothing more than to be re-elected. so, the true drains on the treasury are left alone, while talk of allowing tax breaks to the rich will be allowed to expire-yes, that will accomplish soooo much overall :rolleyes:-while in fact, nothing of note will have been done. no deficit attacked, no debt reduced. that increase in funds will be spent elsewhere. two wars will continue, their funding will continue. we will continue to have bases worldwide, with tens or even hundreds of thousands of troops at the ready. for what? why do we have nato, if we still must keep bases in europe? why a un, when we still keep bases in far east? why do we remain in germany? why is nearly half of the entire worlds spending on military our expense alone? we can't afford it. it is unnecessary. why can't we project our strengths worldwide by spending half that? we would still, alone, account for one quarter of the worlds military spending if we did so. still a huge amount.

I agree with you about the military being a vast amount of the budget. If we would get out of Iraq and Afganistan and let them blow up thier own country the budget could possibly have a even less of a deficit. We have no business in either country especially Iraq. BTW I am a 20 year retired Navy person.

http://www.washingtonpost.com/wp-dyn...l?hpid=topnews


Pentagon can't account for how it spent $2.6 billion in Iraqi funds, audit finds

By Ernesto Londoño
Washington Post staff writer
Tuesday, July 27, 2010

BAGHDAD -- Because of poor record-keeping and lax oversight, the Department of Defense cannot account for how it spent $2.6 billion that belonged to the Iraqi government, according to the inspector general for Iraq reconstruction.

An audit of a $9.1 billion fund of Iraqi oil proceeds showed that most American military agencies entrusted with spending the money on reconstruction projects failed to adhere to U.S. rules on how such money must be tracked and spent, the inspector general found.

U.S. officials failed to create bank accounts for $8.7 billion in the Development Fund for Iraq, as mandated by the Department of Treasury, creating "breakdowns in controls [that] left the funds vulnerable to inappropriate uses and undetected loss," according to the report, which is scheduled to be released Tuesday.

The audit is the latest probe to fault the U.S. government for mismanagement of Iraqi funds in the years following the U.S.-led invasion in March 2003, which led to an insurgency and a years-long occupation.