Not a snowball's chance in hell that happens. The current group of political imbecile's wouldn't be able to balance a modest checkbook, let alone an economy this diverse and complex. I'd also argue that almost all estimates of growth relative to debt are hopelessly skewed to spin a positive story. Of course, that's the intent as it has been for years to confuse "growth" with "inflation". I'm with Achilles in this argument. There are far too many crosswinds for this story to end well, not the least of which is that we are living in the aftermath of the biggest credit bust known to mankind and have trillions of shadow banking liabilities that will hang over this economy for decades.
Ironically, the more the Republican establishment attacks Ron Paul, the better he looks to a lot of people. Listening to the nonstop attacks on him on Fox News has already shook me up. It's like Hannity, Dick Morris et al all slept through the Bush presidency and learned nothing. They actually seem not to see anything wrong with the Iraq and Afghanistan disasters, except maybe we're leaving too soon. They rightly excoriated Clinton for futile "nation-building" exercises, yet see nothing wrong about ones a hundred times more disastrous. They are big talkers when it comes to the budget, but when Paul actually talks about cutting $1 trillion, some of it from a bloated defense establishment, they go wobbly. They rail about the bailouts, but we know very well Paul and Bachmann are the only candidates who wouldn't have done pretty much what Bush and Obama did. I support Israel, but it was sickening to watch Romney and Gingrich arguing about who was tighter with "Bibbi" and who would do his bidding more perfectly. Guys, you're running for President of the US, not Israel. There's a difference. We're on the wrong track. Not just on one or two issues, but pretty much across the board. Maybe we need someone from outside the mainstream to get us headed in a different direction. I just don't see Romney or Gingrich doing it, even though they wouldn't do as much damage as another term of Obama would inflict on us. The Republican Party really needs to start treating Ron Paul and his ideas with some respect. He attracts voters they have no chance of getting otherwise. If they trash him, they will alienate his voters and a lot of other people, like me, who deeply admire him, even if they don't agree totally with him. An independent run by Paul would totally destroy them as well, and the best way to get that is to treat him like crap.
Aren't we already over 100? I know you love the democrats and the idea of high/higher taxes. But even if revenue were to increase, Obama and the democrats have made it abundantly clear they have NO interest in reducing spending overall. End a war(s) and they'll only increase welfare and entitlements. Underestimating our federal governments addiction to spending money we don't have on things we don't need is a mistake our electorate has been making for decades now.
I wish that were true. Unfortunately, the facts tell a completely different story. Between FED bond purchases and the Federal deficit, the economy is propped by at least 13% GDP. That's a huge number. Moodys research pegged the knock-on effects of deficit spending at around 1.8 for every dollar spent. Without getting lost in the reeds, for the sake of argument, lets assume the actual GDP shortfall is 17%. Then consider recent CBO budget projections (which are never right, btw). Even with a predicted 5% YOY REAL growth rate from 2012 onward (which hasn't happened since the end of WW2, at the height of US manufacturing dominance), the deficit is expected to still come in around 6-7% of GDP, per year. Next, look at BLS labor stats. Pure fluff. The unemployed are continually dropped off the rolls to make the headline numbers palatable and NFP's are juiced with all sorts of statistical chicanery to make crap numbers seem less crap. Essentially, in order to get the deficit under control (say, 5% GDP, per year), and get the jobs back we lost in the recession, we'd have to grow the economy by at least 12%, in real terms, over the next 3 years. Now the BLS can fudge the CPI all they want to make headline GDP seem great, even when the Country is shitting blood. Jobs are a more reliable metric of growth (even though NFP's are continually juiced and fabricated, too). All that said, in terms of jobs, NFP's must add 470K *private sector jobs* per month, for the next 36 months, to hit your target. Where do the numbers come from? During the 2008 Recession: Peak-to-trough, US GDP decline was around 5%, "officially". Jobs lost amounted to ~7 million, "officially" That means for every 1% drop in GDP, 1.4 million jobs are lost. Next. Consider the effect of Government and FED Reserve stimulus on the economy. Federal Deficit is 10% of GDP FED Reserve bond programs amount to around ~3% GDP = 13% GDP Next. Consider knock-on effects from stimulus money (TSA worker buys bread, which pays the distributor, who pays the baker, who pays the miller, who pays the farmer etc). Moodys pegged it around 1.8. But, for the sake of argument, we'll take a conservative estimate of 1.3 13% GDP x 1.3 (knock-on) = 17% GDP, all-in In order to get the deficit down to 5% of GDP, per year, the economy must grow in real terms 12%. 17% - 12% = 5% GDP Next. Every 1% tick in GDP = 1.4 million jobs. 1.4 Million jobs x 12% GDP = 17 Million jobs 17 Million jobs / 36 months (3 years) = 470K, per month Those are just the facts. And that's a rosey-colored, best-case scenario. The knock-on effect is greater. And the numbers are worse. Another way to calculate is consumer debt-to-equity. US GDP is ~75% consumption. The implication being, when the consumer recovers, the economy does, too. All the research I read suggests consumer debt-to-equity won't turn positive for another 5-7 years. That's another reason why the Fed resorted to pump-priming - inflate asset prices to favor the asset side and erode the value of debt by debauching the currency. One reason, anyway. Problem is, that's exactly what got us in this mess, in the first place! And it's having a more negative effect (commodity inflation) than positive effect (equity and real estate inflation). This is all the same shit that's happening in Europe right now. Same thing. Except countries like Greece, Portugal and Italy are a few years ahead of us. This is why all the economic pundits and those in the know call the deficit "structural". The US ran a deficit for a very long time. Largely because net job attrition has accelerated over the past 2 decades - despite punctuated good-time booms. The deficit + FED monetization + SS trust fund was used to keep GDP positive. Problem with that is every country has their credit limit, and we're nearly at ours. All to say Ricter, ol' buddy, remember that majik number: 470K jobs per month. We don't hit that from here on out, and we're phucked.
One more thing The economic pie is fixed in the short-term. It's not possible to "tax our way" out of this deficit. We collect 26 cents on every dollar now. But say, in the perfect world (where our leaders acted responsibly), we collected 36 cents of every dollar and put the additional 10 cents down to pay the debt. The problem there is the private sector has 10 cents less to spend (10% GDP), and we get a deflationary depression, instead of an inflationary one. The notion we can tax our way out of this debt is a liberal red-herring to gin up political support from their base who resonate with the class-warfare/higher-tax argument. I did some math on it in another thread. Even if tax rates were doubled for the top 20% of earners, the deficit would still come in around 7% GDP. We're in a real bind here.
some great posts... until you reflect on what they mean for your kids. Then they become almost morbid.