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March 23, 2015

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Rogue wrote:

"According to a 2013 study by the Center on Budget and Policy Priorities, Social Security keeps 22 million Americans out of poverty, including nearly 300,000 in Arizona."

Yeah, there's a reason why poverty rates in the United States are lower for seniors (age 65+) than adults 19-64 or children.

In Arizona (2013 data) 13 percent of seniors are below the poverty line, as compared to 19 percent for adults 19-64 and a whopping 28 percent for children.

Off Topic, but has anyone had the sheriff's office do a welfare check on Petro? Did he join ISIS?

The wife and I are disappointed in third season so far, having enjoyed the first two, despite the howlers that you reference. The HOC watchers aren't likely to be swayed by FU's attack on entitlements. I't seems a good thing to have this point of view joined to an unabashedly evil character.
It's also useful to see it coming from a "centrist" democrat. As someone who will probably be taking that schweet soc sec in the next few months, I have concerns that its viability might be threatened by the repubs, but am more worried about the Dems having enough in numbers and commitment to safeguard it.
I remember an upper middle class lady in the early 70's or so lament that it was so much harder to get good (somewhat aged, or widowed, white women) household help with SS in place.


http://www.cbo.gov/sites/default/files/44521-LTBO2013_0.pdf


Spend some time on page 11, although it uses only pct of GDP (rather than actual numbers), which is yet another indicator of the lunacy of government spending.

It ignores any current liability for future payments (which would be required by any corporation that publishes financial statements), but hey, it's only government anyway. And it excludes the wonderful financial situation of the states.

If the federal government doesn't spend a nickel and tax receipts stay the same, we'll get out of the current debt in about 4 1/2 years.

If the federal government increases all tax receipts by 25% (!!!!)and we spend the way we spend now, the deficit will be about zero but we'll make no headway towards the 73% of GDP debt that we've accumulated.

If the federal government increased all tax receipts by 50% (!!!!), we' would pay off the accumulated debt in a mere 15 years.

But only if you assume that those tax increases would not inhibit economic growth.

For years, politicians of all ilk have bestowed benefits without paying for them. And that's easy. And lazy.

I don't want to repeal the new deal. But I'm pretty sure the folks that out it together had no idea what it would wind up costing.

Who wants to increase every single federal tax by 50% so we can get the ship moving in the right direction?

BTW, better pray that interest rates stay at the current extreme lows, especially when yur country owes 73% of its GDP to creditors.

The foreshadowing of the original, British "House of Cards" is stunning. Netflix carries it.

Ruben I did check on Petro last week
He is being held hostage in a Oriental sweat shop
and forced to slave over boiling pots of noodles.
Bring $$ and we will pay the ransom.
At least enough for several cups of coffee

Net Flex is dat like twitter and facebook and cable and satellite connections. Don't have none of doz.

Episode One's credits list Jim Kessler as a consultant. Kessler is, as his IMDB biography notes, the co-founder of Third Way. That's a Wall Street-funded, so-called "centrist" Democratic organization with a mission: to promote neoliberal economics and make the world safe (at least financially) for its wealthy patrons.

http://www.huffingtonpost.com/rj-eskow/real-life-frank-underwood_b_6788674.html

Seriously, U all watch TV?
I heard from a guy that Barney Miler is a really good cop show.

Whether you watch TV or not, most Americans watch a lot of it and their perceptions of reality are unfortunately based on it.

The reality is that watching TV probably kills more people annually than TB.

I always feel like running into the night screaming when someone whines about the supposed high costs of Social Security, but doesn't say squat about military spending.

Sorry, I failed to post a supporting link. Poverty rates by age group for states and the U.S.:

http://kff.org/other/state-indicator/poverty-rate-by-age/

Also, it should be noted that cuts to Social Security will actually increase the national debt because the program is required to loan excess funds taken in (which has been the case since the 80s when they raised the payroll tax) to the US gov't general fund. About 1/3 of that OMG $16 TRILLIONZ!!1! in debt we are constantly hearing about is simply money owed to the Social Security fund. It's a big pile of money that Kessler and his ilk are desperately trying to get their hands on. Don't let them.

Thank you for this, Jon. My enjoyment of HoC has turned to hate-watching due to this very thing.

Emil, the Granny Starvers are really pushing that disparity in poverty rates to create the (false) impression that cuts to the retirement safety net will be given to young people. I've recently seen respected child advocacy groups like the Annie E. Casey Foundation push the hair raising sounding stat of the federal gov't spending 7x as much on seniors as children without providing any important context for it.

If younger Americans think they are struggling now, wait until they also have to support their elderly parents because conservative/centrist crooks stole the New Deal.

INPHX, you're assuming that paying down the debt is a rational policy goal. When was the last time that the dollar value of the national debt was significantly reduced? Even the mammoth debt outstanding after WW II (which was much higher than today as a percentage of GDP) wasn't paid down: but the dollar amount was made to grow slower than the evonomy, so that debt as a percentage of GDP decreased.

There is a reason why percentage of GDP is used when discussing debt. First, the value of a dollar changes over time. But the main reason is that as the economy grows, so do government revenues, provided they haven't been undercut by tax cuts. If revenues grow faster than the debt, then the cost of servicing the debt (interest payments to bondholders) becomes a smaller percentage of both revenue and spending and thus less of a burden to taxpayers.

Also, the Federal Reserve needs some public debt outstanding in order to be able to influence interest rates.

So, a more rational goal than paying down the debt is to shrink it as a percentage of GDP. However, timing is everything. If the economy is running on all cylinders that's one thing. If it's not, then a decrease in government spending (or rather, government spending that grows slower than GDP) will decrease total demand in the economy and as sales in the private sector slow, it slows economic growth and reduces federal revenues as well.

Taking money out of the hands of those who will spend it on consumption of goods and services, by means of benefits cuts, while transferring the savings to wealthy bondholders by paying down the debt is a recipe for recession. The wealthy will only use a fraction on consumption while reinvesting the rest in some other speculation or storage of funds.

This is why smart liberals harp about income inequality and concentration at the top. See Rogue's imbedded link above re "rent seeking".


Donna is right that intra-governmental debt isn't real debt, which is why gross federal debt is such a misleading figure, and debt to the public is more meaningful. Debt to the public net of Federal Reserve held debt is even more meaningful because unlike the private debtors the Fed works with the government; and much of the increase in debt in recent years is from the Federal Reserve increasing its holdings as it conducted "quantitative easing" and other programs related to the recession and financial crisis.

That said, there is no money in the "trust funds" for anyone to get their hands on. Those surplusses were spent and IOUs the government writes to itself do not provide a form of funding.

Those surplusses are at an end, however.

The increase in payroll taxes enacted by Reagan served only to partially offset his income tax and capital gains tax cuts. The claim of "pre-funding" future Social Security and Medicare liabilities was a despicable fraud.

Hey Donna - this elderly parent is supporting a few "youngsters"; these folks have been put out to pasture prematurely and can't find work. When I'm tapped out, what then?

Terry,
Your real life situation doesn't compute with the big thinkers here.
You're on the ground.
They're in the clouds with the gods.

Sorry to interrupt the Greek chorus, Common Cents, but Terry's comment is vague. Is she saying something about the Social Security program (or other social safety net programs)? If so, what?

Thunder and lightning.

Terry, the gods are angry at your insolence.

Speaking of government revenues and funding, I never figured out why the federal government doesn't use its leverage as a LARGE depositor to negotiate interest payments from private banks.

The government has a constant revenue stream coming from payroll tax withholdings, park fees, and the like. It keeps these as demand deposits with private banks, so that it can draw on them to fund ongoing expenses. The total amount of cash in these deposits varies but there are always vast revenue collections coming in.

The private banks have use of these funds since they operate under a fractional reserve system (i.e., they only have to keep a small fraction of demand deposits on reserve); so they're using federal money to make profit-returning loans and investments.

Imagine if these (hypothetical) interest payments were deposited into a savings account or other investment with a higher rate of return. The combination of a constant injection of additional principal together with the magic of compound interest ought to make for one hell of a rainy day fund.

So, why do the banks get a free ride? I've heard Republicans (and some Democrats) make vague noises about "market distortions" and "socialism" but it seems to me that the principles involved have a basis in free market common sense.

It's true that under a deficit spending regime, saving these funds would mean forgoing their immediate use. On the other hand, isn't that true of all saving? The interest payments by banks would represent an additional income stream with no tax increase, so the amount saved would not come from existing budget revenues.

Common Cents, your remarks are baseless and irrationally hostile. They are also non-responsive. I asked the simple question: Exactly what is Terry talking about and what does it have to do with Social Security (e.g., its funding, its status as a public program, etc.)?

You claim to know what Terry means (otherwise, your remarks are wholly empty). So please enlighten us instead of using misrepresentation to smear other readers of the blog.

common cents "gods " did U mean AI?

Emil:

When this country (or a state) borrows money to pay for things, it results in pricing distortions. Again, it's easy and it's lazy.

In 2012, the net interst on the debt was about $200 billion, which is about the same as Medicaid:

http://www.usnews.com/news/articles/2012/11/19/how-the-nations-interest-spending-stacks-up

In 2014, it was $231 billion:

https://www.cbo.gov/publication/45684


Let me ask you a question-

Do we just keep borrowing forever? When would total govt. debt and debt service concern you? What if there's another recession? What is we have years of Japan type slow growth?

What about demographics? Unfunded accrued medicare and social security liabilities?

Assume we have 5 years of solid 4-6% GNP growth, but the debt (even as a pct. of GNP) remains the same? What then?

INPHX what U think of Germany ' s Austerity philosophy?

Unable to respond cal.

The wrath of the gods have me shatting my drawers.

Terry, please redirect them back to you. Say something, please.

Yes, INPHX, the US government should continue to issue debt as part of its management of government finance. Cash flush Apple corporation and many others still issue corporate debt. Social Security would be in surplus throughout the 21st with a few modifications to the revenue stream and no benefit cuts.


It is clear from your comments that you are not a CPA and have little personal experience with corporate finance, equity markets or the financial statements of publicly traded companies.

Were interest rates to increase rapidly as you suggest, it would be in response to rapidly increasing inflation. Significant inflation would significantly reduce the debt burden of the US government on a price adjusted basis.

Your right wing fellow travelers have been predicting runaway inflation for more than half a decade now. Your comments regarding the future of the US budget are just as inaccurate and serve only your rightist political agenda.

I bet you made a lot of money in sales.

INPHX, most businesses (especially large corporations) have outstanding debt. They borrow to get started. They borrow to make payroll. They borrow for capital investment to grow the business or modernize it. They borrow during recessions which cause sales slumps. They borrow for all kinds of reasons.

Nobody in the world of business accounting says "all debt is evil". Nobody says "we need to put debt repayment above all other goals. Nobody demands zero debt. Borrowing is an essential part of business, the consumer economy, and government finances.

Governments have the ability to raise revenue through sovereign powers of taxation. If debt itself was a problem the country would have tanked long ago.

INPHX wrote:

"Assume we have 5 years of solid 4-6% GNP growth, but the debt (even as a pct. of GNP) remains the same?"

Why should it?

I don't like the rapid debt growth of the federal government from Bush's last year to just recently. But it's important to understand why that debt grew, and how it grew. It's also important to understand that it isn't growing at present. Even with current economic realities debt to the public as a percentage of GDP is expected to decrease from FY 2015 to FY2020. See Table 7.1:

https://www.whitehouse.gov/omb/budget/Historicals

The link you provided to U.S. News doesn't seem to correspond to a real server.

Medicaid spending is more than $200 billion. The federal component alone is closer to $300 billion.

Thanks for the interesting comment, Muhasib. I'm particularly interested in this:

"Social Security would be in surplus throughout the 21st with a few modifications to the revenue stream and no benefit cuts."

Could you elaborate?

Net interest payments on federal debt to the public were about 7 percent of GDP in 2014:

http://www.cbpp.org/cms/?fa=view&id=1258

Sorry, I meant that net interest payments on federal debt to the public were about 7 percent OF THE BUDGET not of GDP.

Be sure to scroll down to the pie-chart:

http://www.cbpp.org/cms/?fa=view&id=1258

"A CBPP analysis using Census’ Supplemental Poverty Measure shows that government safety net programs kept some 39 million people out of poverty in calendar year 2013. Without any government income assistance, either from safety net programs or other income supports like Social Security, the poverty rate would have been 28.1 percent in 2013, nearly double the actual 15.5 percent."

http://www.cbpp.org/cms/?fa=view&id=1258

Hewwo?

C.C. - whatever I say is distorted by the "purists" on this blog, with one or two exceptions. I have said all I will say on this subject - the future is playing out NOW. And Emil, get your head out of your behind - Social Security is a joke!!

That's all she wrote, Tuesday evening, 3/24/15.

And Eisenhower was a commie?
And how about that Trust busting red Republican, TR?

Terry the Delphic Oracle has spoken. Respect her authori-tay.

Cal, there,s no "AI" from my end. I'm just a poor wayfarer without so much
as a moon to guide him; or worse still, a false moon that populates my world with twisted and grotesque shadows. Or are those on the cave wall?

No luck mastering bullet-time so far. A reality weaver would be more powerful: you wouldn't need to dodge bullets because you'd never get shot at. Flying would be nice. I'm still waiting for the telekinesis to kick in.

Tonight I found a business card for Cyberstation, which bills itself as an "Internet business center". Turned the card over and read "Come Aboard To Your Final Destination" above the advertising graphic. Doesn't sound like Willoughby to me.

AI. I was just jostling. May you evolve into Duncan Idaho.

"Hey Donna - this elderly parent is supporting a few "youngsters"; these folks have been put out to pasture prematurely and can't find work. When I'm tapped out, what then?"

You definitely shouldn't be listening to fictional Frank Underwood. The real people advising House of Cards have no intention of giving the money they rob from your Social Security to job programs for young people. It's as Underwood says, "You are entitled to nothing!" That means you, and your progeny.

An aside to main conversation: this report by U.S. Census Bureau.
http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-251.pdf
Concern poverty rates with adjustments of regional housing costs, assistance programs, etc. Another measure of the “new Appalachia.
Adj Poverty rate US 15.9%
Az 19.0
Cali 23.4
NM 16.0
Nev 20.0

FYI Ala 14.0
Miss 15.3

Note 1: I think there are BIG differences between Northern Cali and Southern (i.e. Appalachian) Cali.

@Emil: Thanks for the link to COB report. Interesting stuff. Still wading through but it doesn’t paint a pretty picture.

From the summary “CBO projects that federal debt held by the
public would reach 100 percent of GDP in 2038,
25 years from now, even without accounting for the
harmful effects that growing debt would have on the
economy (see Summary Figure 1). Moreover, debt would
be on an upward path relative to the size of the economy,
a trend that could not be sustained indefinitely.”

On the spending side of things (2013 - % of GDP)
Defense Discretionary 4%
Non Defend Discretionary 4%
Other Mandatory 3+%

Social Security 4%
Medical 4%
Interest 1%

Total Spending 21%
Via revenue 16%
Via new debt 5%


wkg:

Great post.

No need to worry about the CBO grim outlook, though. Based on Emil's plan, we'll just tax the rich more, get more money to the non rich, and they'll buy more stuff.

No sweat.

Equity markets got hammered today. At lease two major investment firms downgraded 1Q 2015 GDP growth to 1.2% and 1.8%.

But I'm sure we;ll grow our way out of the deficit.

Per CBO numbers: trends in budget spending: (% of GDP) (2013-2038)
Medical Pgms: 4.5% to 8.0 %------ +0.14% per year
Soc Sec 5.0 to 6.2 %--------- +0.05% per year
Discretionary 7.8 to 5.2 %--------- -0.10% per year
Other Mandatory 2.3 to 2.0 % -------- -0.01% per year
Interest 1.0 to 5.0 %-------- +0.16% per year

Wondering why the pluses do not sum to the minuses? Debt used to cover the gap. That is why interest is growing so fast.

@ Muhasib re your snark filled posting of 3/24/15 at 4:59:

Re: “Cash flush Apple corporation and many others still issue corporate debt.” They do because they can. This is called using leverage – but then I’m sure you’re up to speed on the topic. The Feds are borrowing because they have to: big difference. Only “cash flush” or “asset rich” businesses can borrow money; hence the SBA.

Re: “few modifications” to SS: We’re still waiting.

Re: “Were interest rates to increase rapidly as you suggest, it would be in response to rapidly increasing inflation. Significant inflation would significantly reduce the debt burden of the US government on a price adjusted basis.” Good for Feds. Bad for the rest of us. Not quite sure it’s even good for the Feds. Many of the programs are very sensitive to price levels.

Re: “Your right wing fellow travelers…” I haven’t heard of a corollary to Godwins’s Law, but surely one must exist for this type of comment.

thar you go wkg making me look up words that I don't have a clue about. Needless to say I came away not undrrstanding. Oh well I am going to fill the bird and animal watering trough and sit in the shade.
Trough it's like a long dish.

@Cal: sorry about that. Pollen season (at least the spring version of it) kicking in an affects my mental abilities and general level of iritatibility.

I suggest a desert island.

@Cal: While not exactly a desert island, probably moving “home” to Cocoa Beach, Florida. With respect to culture and intelligent thinking, it’s certainly a desert.

you can setup a clubhouse professorship and teach old people new tricks.

"Re: “Your right wing fellow travelers…” I haven’t heard of a corollary to Godwins’s Law, but surely one must exist for this type of comment."

Only for people who want to embrace many, if not most or all, of Ted Cruz's ideas without being associated with him. I have no sympathy for that, given how "liberal" (and its analogous descriptors) have been deliberately and relentlessly made into a pejorative for the past four decades. I still wear the label proudly and comfortably and am happy to travel with my fellows. I have no problem being likened to Jimmy Carter.

If being described as "right wing" offends you then perhaps you should consider why that might be instead of demanding that others parse their words to make you more comfortable.

I apologize for "backing up"
I just returned from a week in Seattle wathching Ncaa Bball at Key Arena. You had better be prepared to walk in Seattle. The traffic is horrible. I5 is basically a parking lot all the time. You cannot park your car anywhere without paying exorbitant fees, ifyou can find a spot. I will take Phoenix traffic over Seattle any time. Lots of great things to do I the area though.

@Donna Re: “ If being described as "right wing" offends you then perhaps you should consider why that might be instead of demanding that others parse their words to make you more comfortable.“

I would have to classify myself as a “righty” and have no problem being described as one. But I would endorse many ideas that would be considered “lefty”. I do object to the “fellow traveler” part of the phrase. There is a clear linkage to the attempts by the Soviets to infiltrate the highest levels of US Government. I find the term “denier” equally upsetting; the association being equivalent to refusing to believe in the Nazi holocaust.

Back to the CBO report; I have had a chance to read some of the narrative and the story is chilling. Without some significant changes to the Federal taxing/spending plan, we are clearly headed for bankruptcy.

Your arithmetic is off, wkg. No need for complicated derivations, either, just go to the source. From Table 1.2:

Deficit as percentage of GDP:

2013: 4.1%

2014: 2.8%

The reason it went down is twofold: revenues went up (from 16.7% of GDP to 17.5% of GDP); and spending as a percentage of GDP decreased (from 20.8% to 20.3%).

https://www.whitehouse.gov/omb/budget/Historicals

If you check the deficit figures from 1976 forward, you'll find that a deficit of 2.8% of GDP is on the lowish side (though not by much). See for example the Reagan years, when deficits were generally much bigger as a percentage of GDP.

Also note that from 2016 to 2020 deficits are projected to be about 2.5% of GDP. I'll admit that projections can be mistaken, and that after 2016 we'll have a different president and a somewhat different Congress.

Net interest as a percentage of GDP (Table 6.1, bottom):

2013: 1.3%
2014: 1.3%
2015: 1.3% (est.)
2016: 1.5% (est.)

https://www.whitehouse.gov/omb/budget/Historicals

That isn't much growth. By 2020 the figure is higher (2.4%) but that reflects assumptions about higher interest rates by then. Whether those assumptions will be correct is another question. Central banks the world over (developed countries) have agreed to keep interest rates low; if and when that changes is open to question.

I saw Ted Cruz interviewed on Hannity the other evening (though I missed large portions).

Cruz was asked if he had experiences that would allow him to relate to the common man and if he had ever worked a minimum wage job. He dodged the second part of the question, saying only that he worked two part-time jobs while in college, but no mention of what they were. He also didn't say that he worked them at the same time, though he phrased this in a way as to allow audiences to draw that conclusion. I suspect that these were (paid or unpaid) internships related to his education and/or career aspirations.

He also said that he took out a $100,000 student loan which he "only paid off just a few years ago".

This part interested me. Cruz went straight into Princeton University from high school. From Princeton he went straight into Harvard Law School, where he seems to have attended on a fellowship grant from the John M. Olin Foundation.

Directly after graduation from Harvard law, he served a clerkship with a federal appeals court judge. Then he immediately joined a prestigious law firm (working on lawsuits, one on behalf of the National Rifle Association and another preparing testimony for impeachment proceedings against President Clinton).

Just a regular joe, huh?

What puzzles me is why he waited so long to pay off his $100,000 student loan, given the lucrative positions he obtained. I think there may be a story here, somewhere. Somebody needs to dig into his education financing as well as other sources of funding/income. That's a huge loan, for 1989, and Cruz may have understated it to give a nice round figure. Admittedly, Princeton is expensive, but I smell something fishy.

http://en.wikipedia.org/wiki/Ted_Cruz#Education

wkg wrote:

"I do object to the “fellow traveler” part of the phrase. There is a clear linkage to the attempts by the Soviets to infiltrate the highest levels of US Government."

Nobody called you a fellow traveller. It was in a comment by Muhasib replying to INPHX, though he didn't call INPHX this, either. He said to INPHX "Your right wing fellow travelers have been predicting runaway inflation for more than half a decade now."

Obviously, he simply meant other individuals from INPHX's part of the political spectrum.

Fellow traveller does not suggest anything about infiltration of government or espionage. It refers to someone who tends toward particular viewpoints without fully or formally embracing the political position in question.

Emil:

The 2020 projection relects higher interest costs primarily because there's more outstanding debt.

You seem complacent about annual deficits of 2.5% of GDP from 2016 to 2020. The problem is that those numbers accumulate; 5 years of 2.5% of GDP debt results in another 12.5% of GDP debt in total. That's how (according to the CBO calculation) accumulated debt will approach 100% of GDP by 2038.

Remember, at this time, it takes about a 25% increase in ALL federal revenue just to get us even without spending decreasing. With no hit to the economy.

And that excludes the states.

"Fellow Travler" is that like being a hunter/gatherer.
I'm in.

INPHX wrote:

"The 2020 projection relects higher interest costs primarily because there's more outstanding debt."

Nope. Debt to the public as a percentage of GDP was 74.1 percent in 2014. In 2020 the estimate is 74.0. See Table 7.1:

https://www.whitehouse.gov/omb/budget/Historicals

INPHX wrote: "That's how (according to the CBO calculation) accumulated debt will approach 100% of GDP by 2038."

Nope. CBO simply makes a set of assumptions about spending and revenues, and without changes to one or the other, the cash deficits in the Social Security and (especially) Medicare programs will result in increasing debt. But that comes after 2020, and not as a result of accumulated deficits through 2020.

There is no reason to expect that such figures will ever become real, however. Neither the Congress nor the presidents will allow such a deterioration to occur.

Also note that from 2010 through 2014 debt held by the Federal Reserve has increased from 5.5 percent of GDP to 14.2 percent of GDP, because of its recession related "quantitative easing" and other such programs.

Net of that increase of 8.7 percentage points in Federal Reserve held debt, federal debt to the public only rose from 55.5 percent of GDP in 2010 to 59.9 percent of GDP in 2014. See Table 7.1:

https://www.whitehouse.gov/omb/budget/Historicals

It's important to understand the difference. Debt to foreign or domestic private investors is one thing. The Fed is quite something else.

INPHX wrote:

"Remember, at this time, it takes about a 25% increase in ALL federal revenue just to get us even without spending decreasing. With no hit to the economy."

Nope. In 2014 federal revenues were about $3.021 trillion; the deficit was $484.6 billion. Divide the latter into the former and you get 16%; so the deficit in 2014 was 16 percent of revenues. That means a 16 percent increase in revenues, all else being equal, would balance the budget.

See Table 1.1:

https://www.whitehouse.gov/omb/budget/Historicals

That said, there is no projection by the current White House for a balanced budget. The deficit is however projected to decrease from 2.8 percent of GDP in 2014 to 2.5 percent in 2020. See Table 1.2

If we get a Republican president, or a Democratic one who leans far enough to the right on fiscal issues to keep the veto pen holstered, I predict that a Republican congressional majority will cause a massive increase in deficits by means of tax cuts. They will then use the manufactured crisis to demand spending cuts in social programs. Meanwhile, they will increase Defense Department spending and very possibly, depending on the Executive in 2016, embroil the country in another expensive military adventure. Unfortunately, Hillary is all too likely to embrace a neo-con foreign policy viewpoint.

Also note that the Federal Reserve remits all interest payments it receives on the Treasury debt it holds, back to the Treasury, after deducting operating expenses. So debt held by the Fed doesn't cost the government interest charges. Something worth remembering, since the Federal Reserve accounts for 2/3 of the increase of federal debt since 2010.

P.S. Sorry, I should have said that the Federal Reserve accounts for 2/3 of the increase in federal debt to the public since 2010. I'm pleased to see that INPHX is savvy enough to talk about debt to the public, not gross federal debt (which includes the fake intra-governmental debt between government accounts).

Why isn't there a liberal version of CPAC?

There is. The Clinton Foundation.

$1 out of every $100 goes to a charitable cause. The other $99 goes into the Clintons pockets.

@Emil: My numbers. I’m working off the CBO numbers. I don’t believe much of anything that comes out of Washington, but if it comes down to the CBO or the White House, I’ll take the CBO every time.
From table 1-2 (page 11 of the report or page 15 of the PDF):
2013:…Spend…….20.8% (of GDP)
………..Revenue…17.0
………..Deficit.…...3.9

Normalizing the above:
Spend:……100%
Reveneue… 82%
New Debt…18%

(Imagine trying to put 18% of your personal expenses on a credit card every month!)

…Debt held by pub…73% of GDP

By 2023 deficit declines to 3.3% and Debt held by public = 71%
But steady increase in deficit past 2023…6.4% by 2038
I’ll try to find the reference, but ran across the assumption of GDP growth is 2% per year.

Given all of this the net interest paid by Feds is:
2013 1.3%
2023 3.1
20138 4.9

@Emil: one can only hope that you will exercise your curiosity into the HRC saga; or better yet that of BHO.

wkg wrote:

"My numbers. I’m working off the CBO numbers. I don’t believe much of anything that comes out of Washington, but if it comes down to the CBO or the White House, I’ll take the CBO every time."

First of all, the CBO report you're quoting from was published in September 2013. Fiscal year 2014 doesn't begin until October 1, 2013. CBO didn't have final figures for 2013 because Treasury hadn't issued them yet. The header of the table you quote from reads: "Projected Spending and Revenues..."

"Projected" means it's an estimate of a future value, whose true value is yet to be determined.

The fact that 2013 is the latest year you had figures (an estimate) for was another clue.

Also note that the "White House" (OMB) factual figure for the 2013 deficit is LESS flattering than CBO's projection: 4.1 percent of GDP vs. 3.9 percent of GDP. If you're a pessimist when it comes to government, you should have been happier with the White House figures.

Second, preferring CBO to the Office of Management and Budget (White House) might be defensible if we were talking about projections, since the White House and CBO commonly make different assumptions about such things as future GDP growth. But when we're talking about things like actual, historical spending levels and deficits, CBO gets the data from the same source that OMB does: the United States Treasury Department. That's because it's the sole source for the information.

Third, in an earlier comment you seemed to be suggesting that the 2013 deficit was 5 percent of GDP. Under the header "On the spending side of things (2013 - % of GDP)" you wrote "Total spending...Via new debt: 5%". It wasn't. But your new figure of 3.8% seems to suggest that you either meant something else in the earlier comment or else changed your figure.

Finally, you keep confusing deficits as a percentage of GDP with deficits as a percentage of total federal spending, or deficits as a percentage of revenues.

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