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

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  •  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 dot.com 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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      MrSpock

      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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