Waiting for Fitzgerald

[Spanky]

Originally posted by Tyrone Slothrop
Watch to the end.

(work-safe)

Delay should be expelled for the comment "everything in the budget is essential". That is the most unRepublican comment of all time. It is time to get rid of him.

[Mmmm, Burger (C.J.)]

Originally posted by SlaveNoMore
I blame it on gerrymandering. Unless someone retires from their seat - what is the average percentage of incumbant re-election? Something like 95%

Congressmen from both sides of the aisle can spend like drunken sailors because there is never any reprisal on election day.

And Bush doesn't have to veto anything for the same reason.

(whatever happened to the line-item veto?)

I'm not sure your reason is quite right, because it "proves too much". One could explain any bad law by the same rationale. With spending, if it's pork, that will get them more votes not less. If it's not pork, they can blame the wasteful spending on 534 other people, not themselves.

[Captain]

Originally posted by Spanky

For the past fifty years we have learned.

Dem Congress = deficits in growing economy and recession.

Repub Congress = declining deficits in a growing economy and increasing deficits in a slowing economy.

Please look at the chart again. I would generally view a balanced budget as a budget where expenditures and receipts are within 0.5% of GDP of each, and a surplus as there being more than 0.5% more in receipts over expenditures and a deficient as there being more than 0.5% more in expenditures over receipts. In the 50s and 60s, despite a Democratic dominated house, there is not much to complain about on the balanced budget side. You can complain some about growth in government if you are so inclined, but there is not deficit spending to cause that growth.

If you have to find a change that might cause something, the election of Nixon seems to precipitate the first significant and consistent budget deficits. As noted, I would blame this mostly on the Vietnam War.

There is plenty to complain about in terms of deficits in the late 1970s and through the 1980s. But ultimately taming that deficit was, I expect, the combination of a steadily improving economy during the 1990s and a governmental policy of legislating to reduce the deficit, the most significant component of which was the 1993 deficit reduction legislation. I do not believe there are many politicians or political parties ready to devote themselves to deficit reduction, which, even though good public policy, generally has no natural constituency.

[Spanky]

Originally posted by Mmmm, Burger (C.J.)
And Bush doesn't have to veto anything for the same reason.

(whatever happened to the line-item veto?)

I'm not sure your reason is quite right, because it "proves too much". One could explain any bad law by the same rationale. With spending, if it's pork, that will get them more votes not less. If it's not pork, they can blame the wasteful spending on 534 other people, not themselves.

We are trying right now to pass redistricting in California. Iowa has had redistricting reform and I think the statistic was that three out of five of its congressional seats were competitive. In California, where we don't have redistricting reform, we only had one competitive seat out of 52.

both Nancy Pelosi and Tom Delay are against the California Redistricting reform so you know it is a good idea.

[Captain]

Originally posted by Spanky
We had slight surpluses in 1960 and 1969. Every other year was deficits. We did not get sustained surpluses until the Repubicans took over. There were plenty of times of growth when the Dems controlled congress and we did not pull out of our deficists.

And if you are going to blame Vietnam, funny that we are in war on terror right now.

I would point out that most economists would define a balanced budget to include very slight deficits and surpluses, and that a 0.3% deficit or a .5% deficit (which is what you are labeling a "deficit" in the 1960s) is a very different thing than a 3.5% deficit (last years).

While we are noting that military expenses do go up when at war, I would also not that there was certainly a "peace dividend" in the 1990s that contributed to deficit reduction. Forgive me if I am venturing into Captain Obvious territory again!

[Spanky]

Originally posted by Captain
the most significant component of which was the 1993 deficit reduction legislation.

Dems keep referring to this act was so significant. During this year we increased spending but increased taxes even more. After the Republican took control we were able to get rid of the rest of the deficits by not raising taxes (and even cutting some). After the 1993 budget act long term interest rates stayed high (I think they even increased). It was only after a Repub congress did long term interest rates come down and growth really picked up thereby balancing the budget.

[Captain]

Originally posted by Spanky
Dems keep referring to this act was so significant. During this year we increased spending but increased taxes even more. After the Republican took control we were able to get rid of the rest of the deficits by not raising taxes (and even cutting some). After the 1993 budget act long term interest rates stayed high (I think they even increased). It was only after a Repub congress did long term interest rates come down and growth really picked up thereby balancing the budget.

I am not an economist, but isn't the Federal Reserve's policy to let interest rates float up when the economy is good and to bring them down when the economy requires stimulus?

I sense that everyone is looking for a formula that says their party does the right thing and the other party the wrong thing. I do not think that is the case; I would challenge anyone to try to defend economic policies at any level during the Ford and Carter administrations. Both administrations seemed to have little control over the economy and little ability to do much right, and congress was no better, on either side of the aisle.

[Spanky]

Originally posted by Captain
I would point out that most economists would define a balanced budget to include very slight deficits and surpluses, and that a 0.3% deficit or a .5% deficit (which is what you are labeling a "deficit" in the 1960s) is a very different thing than a 3.5% deficit (last years).

While we are noting that military expenses do go up when at war, I would also not that there was certainly a "peace dividend" in the 1990s that contributed to deficit reduction. Forgive me if I am venturing into Captain Obvious territory again!

In a growing economy you should consistently reduce the deficit without raising taxes. Since 1960, as far as I can see on that chart, the only congress that was able to pull this off was the Repub congress of the late 1990s. Every other congress has not been able to sustain significant and continuous deficit reduction during times of growth (especially without raising taxes).

If the economy continues to grow this decade, and we continue to decrease the deficits, that will be twice for the Republican congress.

[Spanky]

Originally posted by Captain
I am not an economist, but isn't the Federal Reserve's policy to let interest rates float up when the economy is good and to bring them down when the economy requires stimulus?

The Feds do not control long term interest rates. The long term interest rates reflect the markets confidence in the government to have fiscal discipline. After the 93 deficit act i believe that the long term interest rates spiked showing that the markets had no confidence in the Dems. Once the Repubs took congress, long term interest rates came down showing the markets had decided that the adults were in charge.

When the Dems were in control of congress the talk was about reducing the deficit in half in the next eight years. When the Repubs took over there was no question that the budget was going to be balanced. It was just a question of how long Clinton could prolong the deficits by fighting the Republican discipline.

The government was shut down because Clinton thought that the deficit was being reduced too much.

[Spanky]

Originally posted by Captain
I would challenge anyone to try to defend economic policies at any level during the Ford and Carter administrations.

Carter, much to his credit, vetoed many appropriation bills but was overriden by congress (he tried to veto some Dams). Same thing happend to Ford. After Watergate, the Dems were so powerful that Ford had no influence on the budget. Watergate diminished the power of the presidency, so when Carter came in, even though he wanted some fiscal discipline he could not work with the Dems in Congress.

[SlaveNoMore]

13-5

Gee, Biden, Kennedy, Feinstein, Durbin, and Schumer voted against.

Seeing that these 5 would have voted "nay" even if Bush had nominated Larry Tribe, this vote total is encouraging.

[Hank Chinaski]

Originally posted by Spanky
Carter, much to his credit, vetoed many appropriation bills but was overriden by congress (he tried to veto some Dams). Same thing happend to Ford. After Watergate, the Dems were so powerful that Ford had no influence on the budget. Watergate diminished the power of the presidency, so when Carter came in, even though he wanted some fiscal discipline he could not work with the Dems in Congress.

Sometimes when i read these long arguments I start thinking I'm way too lacking in substance and knowledge to post here. then I remember Penske started the PB and I realize I am far closer to original intent than most who post here today.

On Infirm I'd say 60% of the posts were funny or at least intended to be. We'd catch a tax thread every few months but that was it.

[Secret_Agent_Man]

Originally posted by Spanky
We had slight surpluses in 1960 and 1969. Every other year was deficits. We did not get sustained surpluses until the Repubicans took over. There were plenty of times of growth when the Dems controlled congress and we did not pull out of our deficists.

Bottom line, you were and are wrong, so be a man and take responsibility. Your absolutist claims don't hold up.

ETA -- Plus, the link shows both that there were also surpluses in 1956 and 1957, and that the deficits for the other years in the 1950s and 1960s were (with _very_ few exceptions) less than 1% of GDP. This level of fiscal restraint under those Democratic Congresses would make fiscal conservatives cream their pants, by comparison to what your party is doing today.

S_A_M

P.S. Your minimization of the role of the Presidency in the budget process is striking. Did you invent that approach to deal with he cognitive dissonance caused by the truly enormous deficits of that conservative hero - RR? ETA - (A true radical, actually.)

Sure, Congress passes the budget, but the President has to sign it before it becomes law.

Moreover, the President each year sends down a proposed budget resolution which serves as the starting point and frames the debate. I would have thought that an experienced political hand like yourself would be aware of the basic procedure.

[Captain]

Originally posted by Spanky
In a growing economy you should consistently reduce the deficit without raising taxes. Since 1960, as far as I can see on that chart, the only congress that was able to pull this off was the Repub congress of the late 1990s. Every other congress has not been able to sustain significant and continuous deficit reduction during times of growth (especially without raising taxes).

If the economy continues to grow this decade, and we continue to decrease the deficits, that will be twice for the Republican congress.

I am sorry, but I am just not sure what you are saying here. Of course, in a growing economy receipts will increase while tax rates remain stable, and presumably some expenditures will also go down because more people will be employed. But other expenditures, such as wages, may increase. So I'm not sure what you mean by "you should reduce deficits without raising taxes". Are you saying that the deficits should be reduced because of increase receipts? Or are you saying that the right policy is to reduce the deficit, but only as long as that doesn't entail raising taxes.

The chart, of course, has nothing to do with tax rates, but only receipts and expenditures. Receipts depend on the amount of activity as well as the tax rate.

I also don't understand your last paragraph, where you say we would "continue" to decrease the deficits. I thought deficits were on the increase right now?

[Gattigap]

Originally posted by Spanky


The government was shut down because Clinton thought that the deficit was being reduced too much.

Clinton actually put it a bit differently, but I'm sure he would appreciate your recharacterizing it for him as a refusal to save money.