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View Diary: Boehner just shot himself in the foot (170 comments)

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  •  Clinton and the Republicans kept spending (2+ / 0-)
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    VClib, MrSpock

    in line with receipts.  That is the point.  No one in government requires actual decrease in dollars spent to constitute a "cut."  In government speak, a slowing in the projected growth of spending is a "cut."  

    And yes, part of the "balance" was the growth in GDP.  But the fact that spending was kept at below 20% of GDP also played a part.  Clinton and the Republican Congress did not increase spending to keep pace with, or exceed, that growth in GDP.  

    My point was that the Clinton record was not just increasing revenues as a part of GDP, it was keeping spending in line with that 18% or so of GDP.  The low spending as a % of GDP also played a role in the Clinton economic record.  

    What the President is proposing -- increasing revenues as a percent of GDP but keeping spending some 5 - 6 percentage points greater than revenues (depending on the growth projections) -- is not the Clinton model.  And neither is what the Republicans are proposing, by the way.  

    My point is that it is overly simplistic and misleading to say, "Clinton increased taxes and growth was fine" as if  there was a unilateral cause and effect there.  There were a whole lot of things at play, including the boom and the fact that outlays were low as a percent of GDP.  It would as if the Republicans were to say, "Clinton kept spending below 20% of GDP and  we had a lot of growth, so let's cut spending to 20% of GDP."  That would be equally misleading.    

    •  Clinton .... (4+ / 0-)
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      bluezen, Odysseus, MrSpock, lostinamerica
      kept spending in line with receipts.
      ...during GOOD times with near-full employment.   Like a good Keynesian.  In case you hadn't noticed we are a long way from full employment now...keeping spending in line with receipts right now would be not only stupid but actually counterproductive in terms of deficit reduction (see: most of Europe).

      Oh, and you can cut that "Clinton & the Republicans" bullshit.  Most of us are old enough to remember how Clinton had to drag Newt & Dole kicking and screaming every step of the way....

      •  I don't think we should have a surplus (2+ / 0-)
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        MrSpock, VClib

        as they did at the end of the Clinton term.  I understand that times are different.  My point was only that the statement "Clinton raised taxes, and growth didn't slow" was overly simplistic and misleading in and of itself.  A lot of things happened during those years, and the combination of those things -- including raising taxes, limiting spending, and the boom -- lead to the growth of that period.  

        And I say "Clinton and the Republican Congress" because a President doesn't authorize spending.  It takes a combination of a President and Congress. And, during the years of surplus,Clinton was President and  the Congress was controlled by Republicans.  

        My personal view is that tax revenue needs to go back up to about 18% of GDP, and spending needs to come down to about 21% of GDP, so that the annual deficits are once again on a sustainable level.  

        •  The most important factor rarely discussed (1+ / 0-)
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          is that the supply of dollars will grow rapidly  because the government demand to fund deficits will decrease and competition for new borrowers will intensify . Supply and demand will allow banks and lenders to have beaucoup bucks to lend to home buyers, small business and consumers and they'll respond by loosening qualifying and allow commercial borrowing to foresee-ably explode . The demand for loans is great right now, the supply is limited because of government deficits and debt; reduce deficits and debt and whoosh the real estate market, entrepreneurs, credit lines and cash flow will expand dramatically as it did in 1995 under the same scenario.

          So there is a cause and effect. A dramatic one. If the economy expands to 3-4-5-6 % because of expanded cash supplies, then the outlays to GDP will drop below any arbitrary magical number of 18-19-21% of GDP. The projections through 2014 already project us at 22% from our current 24%. Any surge in the economy (which I predict ala Warren Buffet) will render equal 20% ratios or lower and Obama will be master of the universe just in time for Hillary to step in.

          After all is said and done, a lot more is said than done.

          by Brahman Colorado on Sun Dec 02, 2012 at 06:34:36 PM PST

          [ Parent ]

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