Tell me there was no backlash from the huge deficits. The fact that we pay so much into the interest on the deficit is the thing that tanked the economy under Bush Sr. I also like your revisionist history. Clinton did nothing to reduce the deficit, but the deficit under Dubyah is Clinton's fault. Whatever.

JCG

You contention that if the debt were repaid Social Security would have no interest income is incorrect. If there were no Federal Government bonds, the trust Fund could purchase high grade corporate bonds and equities the same as state pension plans. The truth is that when the social security system needs to begin using the money in the Trust Fund (Govt. Bonds) the Fed will have to turn arround and borrow money to repay the bonds held by Social Security and Medicare.

If we did not have the national debt, the federal budget would be 330 Billion less (interest on the debt) and we might have a shot at having a balanced budget. The increase in the Debt under Bush will drive the interest up to $ 500 billion per year in the near future.

Daiwa

You asked what do we want? Very basic - JOBS for the 5 Million new workers and a balanced budget. Sounds good to me!

Daiwa You asked what do we want? Very basic - JOBS for the 5 Million new workers and a balanced budget. Sounds good to me!

You make it sound like the government can just snap it's fingers and make jobs appear.

Federal policies on taxes, federal spending and interest rates do have a big impact on jobs . The tax and spending policies is responsible for the deficit. Thus policies that would be more effective in stimulating jobs, not just corporate profits and productivity, would add jobs. This is one of the first economic recoveries that has not produced enough new jobs to keep up with population growth. The fiscal policy of cutting tax revenue while increasing spending has created the deficit. It is the same policy we followed in the 1980's with the very same result! In 1980 it was Reaganomics or "voodoo economics" as Bush 41 called it and today it is Reaganomics II and it is still not working.

stimulating jobs, not just corporate profits and productivi

I hate to tell you this....But these 2 Must go hand in hand. You want jobs then you have to encourage corp profits. No profits, no new jobs. And personally I can't see what your refering to. Here are the figure from the dept of labor.

Seasonally Adjusted Unemployment Rate: 5.2% in Jan 2005 Change in Unemployment Level: -310,000 in Jan 2005 Change in Employment Level: +85,000 in Jan 2005 Change in Civilian Labor Force Level: -224,000 in Jan 2005 Civilian Labor Force Participation Rate: 65.8% in Jan 2005 Employment-Population Ratio: 62.4% in Jan 2005 Annual Averages Unemployment Rate: 5.5% for 2004 Unemployment Level: 8,149,000 for 2004

I just know your going to say that these are not correct.

drmiler

There needs to be increased demand and a company must believe they can only meet that added demand by increasing their labor force. What we have sceen is that increases in productivity have occurred which has enabled companins to increase production without adding jobs. Without jobs the ability of the new workers to purchase goods and services does not take place.

The unemployment data is not reportring the fact that job growth has NOT kept up with population growth. The reason is that workers have been unemployed so long that they are not being included in the unemployment numbers. The proof of that is that by the most inclusive measure of the number of jobs we have only slightly more than in 2001. However, there are 5 million new workers looking for work. The only way the unemployment rate could be the same is if we had created the 5 million new jobs over and above the number that existed in 2001. That is NOT THE CASE> Estimates have been made that include ALL unemployed workers, not just those that fit the definition of the Bureau of labor Statistics, that show a unemployment rate of about 7%

If you're going to change the yardstick for unemployment, you have to do it on both ends, Gene, which means the unemployment rate is still lower than it was 4 years ago. The administration isn't fudging the numbers, because the numbers aren't theirs to fudge. What you are ignoring is that many have gone into small business for themselves and are falling outside the labor statistics - there are not 3 or 4 million more people just sitting around looking for work.

Cheers,
Daiwa

You make it sound like the government can just snap it's fingers and make jobs appear.

The Bush administration does a good job of making it seem like they can appear.

Is this another in a line of people saying the President can't really effect the economy. Tell me how control over $3 trillion annually cannot effect the economy. When the economy goes badly for Republicans then the President can't effect the economy. But when there appears to be growth, its all because of the tax cuts.

Daiwa

I believe there are jobs that have been created that escape the BLS data. Many have been created because the existing companies have not expanded their employees. The household survey is a more comprehensive measure of the total jobs but there is no evidence that the creation of small business jobs has added anything close to 5 million new full time jobs. In addition, small business, especially new small businesses hire part time people and generally have lower total compensation including benefits than established companies. The quality of the jobs that have been created during the past two years are very often not equal to the jobs that were lost. The policy of Bush of tax cuts to the wealthy rely on supply side and not the more powerful demand side. If more good paying jobs were created, that middle income workers would stimulate the demand side and better GDP growth. Higher productivity and corporate profits without jobs is not effective to improve the overall economic growth. This is part of the reason the deficit is growing. The economy must add $4 dollars in new taxable income for every cut of $1 in Federal Income Taxes to just break even. That is not happening!

Can you name a single negative real world side effect of the deficit?

I can name three:
1 - Simply put, debt is the opposite of both freedom & wealth. Real conservatives know this.
2 - The miracle of compound interest --in reverse.
3 - Decline of market confidence due to unsustainability. As a taxpayer & an investor, I think adding $400 B a year to the national debt & paying around the $200B a year in interest stinks. Period.

Because the theory of deficits is that they will raise interest rates because the government is competing with private investors to get loans. But the interest rate is also at a near all time low as well.

That's right. Short-term anomolies (such as bubbles) occur in the market, which eventually reverts to the norm. Bond rates will go up as the Fed continues to raise rates to 'equilibrium' & as the supply of bonds exceeds the demand for US treasuries in the market. Just don't ask me when.

In the meantime, Red China will continue to buy them with all the US dollars they hold in reserve from our trade imbalance.

ProgressiveUSA

The total interest last year paid on the $7.4 trillion national debt was $321.566 Billion. The reason is was so low is that interest rates are at a 46 year low. The OMB projection has the national debt at 9.994 trillion by 2008 and 11.114 trillion by 2010 . The historic interest rate paid on the national debt by the treasury is 5.1%. We could see the annual interest that American taxpayers will be shelling out by 2010 as high as $500 Billion or more. People do not seem to understand that the interest we must pay is on the cumulative debt. That interest does not pay for a single thing. Not one prescription drug, one salary for our military. Not one cent to educate our children. It pays for two decades of spending more than we were willing to tax year after year! Bush has added to this debt at a faster rate than ANY OTHER PRESIDENT in history and his plan NEVER reaches a balanced budget much less to begin repaying the debt to lower the interest requirement. We have paid $6.5 Trillion in interest on the debt since 1980!

The unemployment data is not reportring the fact that job growth has NOT kept up with population growth. The reason is that workers have been

Baloney! Then just what is this?

Change in Civilian Labor Force Level: -224,000 in Jan 2005

The total interest last year paid on the $7.4 trillion national debt was $321.566 Billion.

I stand corrected. I was lazy & didn't look it up. I relied on the 17 percent borrowed money (which I knew to be $420 & 7 percent interest paid figures (which I estimated) in the 1040 booklet.

Hey, since when is a ticking bomb a crisis for the borrow & spend GOP?

There is one flaw in your doomsday scenario, Gene -

That interest doesn't just disappear into thin air when paid. It recirculates in the global economy and much of it comes back in the form of payments for goods and services. I agree that we should be working to reduce the cumulative deficit, but it is a little misleading to suggest that the interest payments just end up sequestered on Mars or something.

Cheers,
Daiwa