House votes to take on $1.9 trillion more nation

[rstones199]

From The Washington Post: (http://www.washingtonpost.com/wp-dyn/content/article/2010/02/04/AR2010020400354.html?hpid=moreheadlines)

The House on Thursday voted to allow the government to go $1.9 trillion deeper in debt - or about $6,000 more for every U.S. resident.
The measure, approved 217-212, would raise the cap on federal borrowing to $14.3 trillion. That's enough to keep Congress from having to vote again before the November elections on an issue that is feeding a sense among voters that the government is spending too much and putting future generations under a mountain of debt to do it.


When will this madness stop? :shrug:

[Americano]

When interest rates have to be increased to sell debt and debt service overwhelms tax revenue. The end.

Our representatives did use hard numbers to achieve their political objective, enough congressional approved federal debt to operate the country until after mid-term elections. Then our federal government is, again, temporarily broke.

[Michael]

From The Washington Post: (http://www.washingtonpost.com/wp-dyn/content/article/2010/02/04/AR2010020400354.html?hpid=moreheadlines)



When will this madness stop? :shrug:

You realize that if Congress did not pass that bill, the US Government would have been in sovereign default the next day... that would represent a potential $10 trillion hit to the US economy and would wipe out Wall Street and most of the US banking sector entirely.

And that vote carried on a party-line vote with 100% of the Republicans in the Senate voting against. :eek:

I'm all for addressing US fiscal problems. But voting in favor of sovereign default is a bit on the radical side for me. :rolleyes:

[rstones199]

You realize that if Congress did not pass that bill, the US Government would have been in sovereign default the next day... that would represent a potential $10 trillion hit to the US economy and would wipe out Wall Street and most of the US banking sector entirely.

And that vote carried on a party-line vote with 100% of the Republicans in the Senate voting against. :eek:

I'm all for addressing US fiscal problems. But voting in favor of sovereign default is a bit on the radical side for me. :rolleyes:

All we are doing is delaying the inevitable.

Running a 1.9 trillion dollar deficit each year is unsustainable.
In order to meet the US governments appetite for spending you need some massive job expansion. The US needs to create 110,000 jobs a month just to keep up with the population growth, That is unsustainable.

The 'official' unemployment rate in this country is 9.7%. If the US has 150 million eligible workers, that means ruffly 15 million people are out of work. That means 256,000 million jobs needs to be created (including the 110,000 to keep up with the population growth) in the US each month for the next 4 years to get the unemployment rate down to 5%.

But here is the kicker, the real unemployment rate is at 16.77 (http://www.commondreams.org/newswire/2010/02/05-1)%. That is ruffly 25 million people out of work. In order to cut that in half, that means 362,000 jobs each and every month needs to be created (including the 110,000 to keep up with the population growth) for the next 4 years This is simply unattainable.

And Im probably being conservative with these numbers.

Tax revenues will never be able to catch up with the governments appetite for spending.

All we are doing is delaying the inevitable.

[Michael]

All we are doing is delaying the inevitable.

Running a 1.9 trillion dollar deficit each year is unsustainable.
In order to meet the US governments appetite for spending you need some massive job expansion. The US needs to create 110,000 jobs a month just to keep up with the population growth, That is unsustainable.

The 'official' unemployment rate in this country is 9.7%. If the US has 150 million eligible workers, that means ruffly 15 million people are out of work. That means 256,000 million jobs needs to be created (including the 110,000 to keep up with the population growth) in the US each month for the next 4 years to get the unemployment rate down to 5%.

But here is the kicker, the real unemployment rate is at 16.77 (http://www.commondreams.org/newswire/2010/02/05-1)%. That is ruffly 25 million people out of work. In order to cut that in half, that means 362,000 jobs each and every month needs to be created (including the 110,000 to keep up with the population growth) for the next 4 years This is simply unattainable.

And Im probably being conservative with these numbers.

Tax revenues will never be able to catch up with the governments appetite for spending.

All we are doing is delaying the inevitable.
US did have a balanced budget in 2000 (last year under Clinton).

I'd say that Bush's tax cuts are responsible for creating about two-thirds of the present structural deficit.

So the US could easily balance the fiscal budget by reversing those tax cuts. They were dumb policy when they were adopted and have only done damage since.

I'm all for cutting taxes, but only when it is part of a comprehensive fiscal approach and won't cause deficits. Simply cutting taxes just cuts revenue. Supply-side theory doesn't work. The theory has been tried several times already and has failed every time - tax cutting does NOT improve the economy and pay for itself with higher revenues. It just lowers the revenue.

And a growing US economy theoretically is capable of delivering 300-400,000 jobs per month as it has done in the past, so this is not the end of the world.

The US is just in the midst of a long recession - exactly as it was predicted two years ago. US growth is going to be sluggish for a while as all the unsound economic policies of the past work themselves out of the system.

The Bush Admin did a lot of damage to the US economy. Its going to take years to undo that damage.

[rstones199]

US did have a balanced budget in 2000 (last year under Clinton).

I'd say that Bush's tax cuts are responsible for creating about two-thirds of the present structural deficit.

So the US could easily balance the fiscal budget by reversing those tax cuts. They were dumb policy when they were adopted and have only done damage since.

I'm all for cutting taxes, but only when it is part of a comprehensive fiscal approach and won't cause deficits. Simply cutting taxes just cuts revenue. Supply-side theory doesn't work. The theory has been tried several times already and has failed every time - tax cutting does NOT improve the economy and pay for itself with higher revenues. It just lowers the revenue.

And a growing US economy theoretically is capable of delivering 300-400,000 jobs per month as it has done in the past, so this is not the end of the world.

The US is just in the midst of a long recession - exactly as it was predicted two years ago. US growth is going to be sluggish for a while as all the unsound economic policies of the past work themselves out of the system.

The Bush Admin did a lot of damage to the US economy. Its going to take years to undo that damage.


I would completely disagree that the US is capable of adding 300-400K job per month needed to cut the real unemployment rate in half in a 4 year period.

Non-Farm Payrolls Chart and Historical Data (http://www.tradingeconomics.com/Economics/Non-Farm-Payrolls.aspx?Symbol=USD)

No time since 1980 has the US had that many jobs being created month in and month out.

The best you will get is mid 93 to mid 95.

This is beyond a recession, this is a depression.

[Americano]

I would completely disagree that the US is capable of adding 300-400K job per month needed to cut the real unemployment rate in half in a 4 year period.

Non-Farm Payrolls Chart and Historical Data (http://www.tradingeconomics.com/Economics/Non-Farm-Payrolls.aspx?Symbol=USD)

No time since 1980 has the US had that many jobs being created month in and month out.

The best you will get is mid 93 to mid 95.

This is beyond a recession, this is a depression.

The US needs around 150k NEW jobs per month just to meet new entries into the work force.

Every time I read a comment about unemployment being a lagging indicator
my first thought is yes, it normally is, and my first question is where are those jobs going to come from? I ask why capital, which is now global, would find US industry attractive with its high labor costs, lack of protective tariffs and failing infrastructure?