The Socialist Senator from Oklahoma?

[Mr. Big Dog 10,747]

The lies continue. I thought so.

The lies will stop once you discontinue telling them.

Damn right they are, it maybe convenient to ignore Dubya's legacy, but their is no getting away from the fact that he helped a great deal to put the US in the position it is currently in with regards public pending!

And it was a Republican controlled Congress that helped him do it. Remember the GOP principle? Deficits don't matter!

[Póg mo 1,749]

And it was a Republican controlled Congress that helped him do it. Remember the GOP principle? Deficits don't matter!

Ya, but that was before Obama!

[aaydrian 479]

The lies continue. I thought so.

I don't know much but based on the table you posted, Mr Big seems to be right. Since you say he's wrong, can you use the figures from the table you provided to prove how you're right?

[Mr. Big Dog 10,747]

I don't know much but based on the table you posted, Mr Big seems to be right. Since you say he's wrong, can you use the figures from the table you provided to prove how you're right?

He knows I'm right. He just can't get himself to admit it.

[Póg mo 1,749]

http://en.m.wikipedia.org/wiki/Cognitive_dissonance

[bsd058 296]

Just in case I didn't explain myself well enough, I quickly put together an argument as to why I believe government spending, G, probably won't decrease right now, and why I think the government wants tax cuts to be extended for the middle class and not the upper class.

My assumptions for the argument are as follows:

1) Ceteris Paribus (in order to show the effect of a single factor on AE that Government has control of)

2) Unemployed resources implies that Real GDP is below Potential GDP (not a crazy assumption, since we all agree that real GDP isn't what it should be anyways.

3) Short Run Analysis

G: Government Expenditure

AE: Aggregate Expenditure

AS: Aggregate Supply

AD: Aggregate Demand

GDP_R: Real GDP

GDP*: Potential GDP

v: output gap

I've numbered the pages to make it a little easier to follow. Good thing, because I put them on the photocopier backwards.

Conclusion of argument: If G were to increase, |v| would increase. If |v| increases then greater economic instability would be induced.

In arguing all of this, I understand that if the Government were to decrease taxes, the AE curve would pivot in a positive direction, but decreasing taxes might also reduce revenue that the Government needs to pay off debt. The middle class at least should have their taxes kept low, otherwise the paradox of frugality might take hold of the economy, and instead of everyone spending any extra money they have, they save it and cause sales to decrease which would cause more layoffs, lower wages, and even more frugality, and so on, and so on.

This is what the Government did during the Great Depression (decreased spending and increased taxes). But if you increase taxes on the wealthy, the economy will not be affected as much since, even though a proportion of their total income would be reduced, in reality their actual income would allow them to continue their spending and living their at their current lifestyle. And I think this is what the Government is doing with the extension for the middle class but not the upper class. I think this is the theory behind their moves to protect the middle class (not out of compassion, but out of concern for the economy) so that the economy doesn't sink into loss of GDP due to these factors above.

That's my logic. Though I admit there might be flaws that I'm not seeing due to bias.

I mean, it's basic, but I think it's a good reason to wait for unemployment to decrease a little more (so that GDP_R -> GDP*, and |v| -> 0), before decreasing spending. By the time |v| -> 0 with v < 0, if the government decides to lower spending, their execution of this plan will probably occur after GDP_R > GDP* and |v| starts increasing again, thereby stabilizing a possible boom. And booms aren't necessarily bad things, but sometimes the landing after a boom can be hard. If the Government reduces spending to pay debts off in a boom, it could soften the landing since once a new recession hits it will make it easier to keep the economy afloat while people are struggling and the Government isn't going bankrupt because of interest on its debt (which is the situation we are in right now).

Like I said, there might be flaws, but this is what I'm basing my opinion on right now. My mind could change tomorrow with a better argument.

[bsd058 296]

Conclusion of argument: If G were to increase decrease, |v| would increase. If |v| increases then greater economic instability would be induced.

Sorry. Didn't realize I put that.

[I AM NOT THAT GUY 5,715]

I don't know much but based on the table you posted, Mr Big seems to be right. Since you say he's wrong, can you use the figures from the table you provided to prove how you're right?

2009-2012 are all higher than 2001-2008.

Edited December 7, 2012 by The Patriot

[I AM NOT THAT GUY 5,715]

He knows I'm right. He just can't get himself to admit it.

The worst lies are the ones you tell yourself.

[JohnR! 5,495]

The worst lies are the ones you tell yourself.

The worst are the ones who refuse to see...

Edited December 7, 2012 by Gegel

[Mr. Big Dog 10,747]

2009-2012 are all higher than 2001-2008.

W's first budget was that FY 2002. His last was that for FY 2009. Using your data, what was the spending to GDP ratio in W's first budget and what was it on his last? By how much did federal spending increase under W?

The worst lies are the ones you tell yourself.

At least you acknowledge the issue you're having. That's an important first step.

[I AM NOT THAT GUY 5,715]

W's first budget was that FY 2002. His last was that for FY 2009. Using your data, what was the spending to GDP ratio in W's first budget and what was it on his last? By how much did federal spending increase under W?

That is total spending for FY2009, not just what is on budget, including all the additional spending the Democrats wanted, both after the election, and after Obama took office, which he signed into law.

[Mr. Big Dog 10,747]

That is total spending for FY2009, not just what is on budget, including all the additional spending the Democrats wanted, both after the election, and after Obama took office, which he signed into law.

What did Obama spend in 2009 that wasn't already on the docket? Fact is that the deficit for FY 2009 was projected to be $1.2TN BEFORE Obama took office. Think we ended up a little above that actually but not by much. Try as you may, you cannot credibly pin this on Obama. It was done by the time he took office.

[aaydrian 479]

2009-2012 are all higher than 2001-2008.

You are correct if you just look at the numbers but considering that Bush is responsible for the budget of 09 (with Obama adding about 300 billion to it), government spending rocketed by about 7% under Bush's hand and has decreased by about 1% under Obama's. Since you said Government spending should be proportional to GPD growth, it seems as if that is what is happening. Spending is trickling down and GDP snail pacing up.

If your problem it that government spending is still about 24.5% of GDP where you'd like to get it back to around 20% then that's a different kettle of fish. Obama (or that guy he ran against in 08 & 12) doesn't have voodoo hands to correct this ####### in the face overnight.

Edited December 7, 2012 by aaydrian

[Mr. Big Dog 10,747]

You are correct if you just look at the numbers but considering that Bush is responsible for the budget of 09 (with Obama adding about 300 billion to it), government spending rocketed by about 7% under Bush's hand and has decreased by about 1% under Obama's. Since you said Government spending should be proportional to GPD growth, it seeks as if that is what is happening. Spending is trickling down and GDP snail pacing up.

If your problem it that government spending is still about 24.5% of GDP where you'd like to get it back to around 20% then that's a different kettle of fish but not Obama's.

There wasn't that much of a spending increase in 2009 that Obama signed into law. I know that we often look at the stimulus that Obama signed and like to pretend that that $800BN was all spending and that is was all spent in 2009. That's not what happened. That $800BN was spread over a couple of years and about 2/3 of it was not actually increased spending but reduced revenue - i.e. tax cuts. Yes, Republicans opposed hundreds of billions of dollars in tax cuts in 2009 and actually oppose tax cuts ever since. They still oppose tax cuts today which is why they won't pass the tax cuts that Senate passed in the House. But back to the issue at hand. At most, Obama added $200BN of spending in FY 2009. The rest of the huge spending increase from previous years was already done. It was not Obama that did it.

Federal spending was 2TN in FY 2002. That was W's first full fiscal year in office. What he left for the next guy was federal spending of $3.3TN in FY 2009. That's over a 50% increase in federal spending in 8 years. Federal spending in 2012 was about $3.6TN - that's a rather modest increase over the last 3 years.

Edited December 7, 2012 by Mr. Big Dog