Obama Announces Deal To Raise Debt Limit, Cut Spending

[Jingthing]

Long term debt/fantasies about balancing the budget anytime soon are minor problems compared to the high probability that tea party economics will lead to a real depression. The crisis NOW is jobs, jobs, jobs, and the truth is the original stimulus spending wasn't nearly BIG ENOUGH (thanks to the republicans), and now with the hostile takeover by the tea party radicals, there can't be any more of that. Hoover redux. Another even more cynical way to view this is that the right wing is doing everything possible to PREVENT any turnaround in jobs before the 2012 election, so that then they may take the whole ballgame. Be afraid, very afraid, if a tea party president is elected. Look at the damage they have done just being a fanatic destructive minority in just the house.

Am I demonizing the tea party? You betcha. They are all about pain, suffering, and death for those in the USA who happen not to be wealthy.

I wonder what this insane rant would sound like translated into Norwegian?

I don't see any comparisons between current US politics and the Nordic terrorist's issues. He was mainly interested in immigration and immigration is a back burner issue in the US now. In fact, many of the Mexicans are flocking back across the border because there is very little for them in the US anymore. Perhaps a stretch here, both he and the tea party have issues with Islamophobia.

Just so you know, this isn't about being an Obamamaniac to me. He has been a piss poor negotiator and weak communicator and leader, but compared to the tea party occupied republican party, there isn't any other choice.

Edited August 2, 2011 by Jingthing

[Steely Dan]

Long term debt/fantasies about balancing the budget anytime soon are minor problems compared to the high probability that tea party economics will lead to a real depression. The crisis NOW is jobs, jobs, jobs, and the truth is the original stimulus spending wasn't nearly BIG ENOUGH (thanks to the republicans),

Thanks to the Republicans? Maybe you don't remember that the first two years Obama was in the White House the Dems had a Super Majority in the Senate and in the House of Representatives. The Republicans were totally incapable of stopping the Democrats. The TRUTH is, not all Democrats towed the party line of trying to bankrupt the country either with the stimulus or healthcare fiascos.

Obama and the house/senate leaders wanted a much LARGER stimulus but couldn't get the votes. Yes, there are right wing democrats as well.

The problem with the stimulus which started under Bush -- NOT BIG ENOUGH

The problem with the crappy health care bill -- NOT REAL ENOUGH. It's nothing like universal health care which is what the USA really needs, for the sake of real full access, real cost controls, and real competitiveness with nations which have solved this problem for their people. The cost issues in the US (because the system is NOT socialized) are another huge drag down the US economy compared to others.

Stimulus not big enough! <deleted>, Japan have tried exactly the same money printing for decades and still have deflation and a GDP debt ratio of 197%. The problem is structural, you can't magic jobs out of thin air and at the same time ensure they are productive jobs. The U.S is like an aged coke addict trying to burn the midnight oil with ever bigger lines whilst the body is falling apart from the ravages of abuse. To pour more debt on the fire is merely ensuring the Titanic hits the iceburg at an even faster speed..

[Ulysses G.]

The problem with the stimulus which started under Bush -- NOT BIG ENOUGH

That ptretty much says it all.

[chuckd]

Just for the record, following is the make-up of the past Congresses beginning with the first year of the Bush presidency:

2001-2002 : Republican controlled

2003-2004 : Control split

2005-2006 : Republican controlled

2007-2008 : Democrat controlled

2009-2010 : Democrat controlled

2011-2012 : Control split

To summarize, out of the past 12 years Republicans have controlled both houses of the Legislature a total of four years, Democrats have controlled both houses a total of four years and control has been split between the two parties a total of four years.

For the last 32 years, Democrats have controlled both houses a total of 12 years, Republicans have had control for 8 years and Congress has been split a total of 12 years.

Any sensible person would likely presume there is a good chance that both parties are to blame equally for the current financial situation.

Having brought up the sensible person possibility, one would further presume the sub-prime lending collapse in the housing industry, which is what caused the current recession, originally started with the enactment of the Community Reinvestment Act that was signed into law by one Jimmy Carter. The purpose of this legislation was to encourage/suggest/nearly require lenders to provide home loans to borrowers under relaxed requirements. This legislation had the lofty goal of providing home ownership to less than qualified borrowers. Nothing much happened on this legislation until Bill Clinton took over the Oval Office. His administration then began requiring banks and other lending institutions to provide loans to unqualified borrowers under the CRA legislation.

Fannie Mae and Freddie Mac were formed to guarantee these loans so they could be sold off to investors, and I am sure any sensible person knows what effect this had on the housing bubble.

So, in summary, is all this the fault of GW Bush, as some have claimed, or does it actually predate GWB by some 30 years to the Carter administration. I'm going to lay it at the feet of Carter with the help of each and every President and Congress since the law was enacted, but Clinton really got the ball rolling in the sub-prime loan department.

And the Tea Party movement had NOTHING to do with it.

[uptheos]

I'm afraid Obama folds easier than a garden lawn chair.

[michaeljordan]

Well oh well.

Politics and dirt bags go together well.

Do you realize that the so called great cut in spending results even when you include the bigger cuts that kick in later, only result in 3 trillion dollars over 10 years. That is 300 million dollars a year with most of it end loaded to the latter years. Now given that the current US deficite is near 1.5 trillion dollars for per year, this cut is comical. You cut the deficite from 1.5 trillion to what?

Let me get this right.

1.5 trillion minus less that 100 million in cuts this year is a joke.

America is a fat dumb piggy going toward the slaughter.

Of courser taxes will go up massively there in the years ahead and it does not matter who is in charge. Of course the poor have to be fed.

The GOP is a clown group that tells their idiots who follow them that they do not need to raise taxes.

That is a lie.

The Democrats tell their people they do not need to cut social security and medicare or at least freeze the hikes.

That too is a lie.

The pres sits there looking powerless.

You can be sure that this train wreck will be on going for years to come.

Oh well--at least as the money chokes the nation it will have to end its stupid and immoral wars.

The dollar is going to crash.

TIMBERRRRRRRR

PS--I am American and can tell you all that Americans really are this stupid.

The house is burning and they argue over nonsense.

[flying]

Long term debt/fantasies about balancing the budget anytime soon are minor problems compared to the high probability that tea party economics will lead to a real depression. The crisis NOW is jobs, jobs, jobs, and the truth is the original stimulus spending wasn't nearly BIG ENOUGH

This is the thinking that is the problem

You have it backwards.

Looking for a solution is not the problem.

Stimulus? Not big enough? The word is Bail Out... of top campaign contributors...aka: Too Big Too Fail

It stimulated nothing at all.

Jobs? Watch the report coming out this Friday. Better yet get the real numbers even today.

This new increase has not job 1 in it. There is nothing good in this for true financial reform...just as there was nothing good in the Bail Outs nor the QE 1 or 2

Except for making the problem bigger. Kicking the can once again while growing the problem

Lastly how stupid is it to allow a bunch of folks together who took us to this place & spent what they did not have.....

Nor did they have the brains to budget or to even stop spending like drunken sailors when they knew we were in trouble....

Then ask THEM???? to vote on whether THEY should be allowed more money to spend the rest of our futures.

INSANE

Better to have let those who will be expected to pay it back vote.

Have an emergency vote & let the people decide not the drunken sailors.

We always knew which way they would vote.

Same as allowing heroin addicts to vote on whether they want rehab or more heroin

Edited August 2, 2011 by flying

[Jingthing]

I wouldn't call Paul Krugman, the esteemed economist, insane.

I would call him CORRECT.

http://www.newser.com/story/52813/stimulus-not-big-enough-to-save-us-krugman.html

http://krugman.blogs.nytimes.com/2010/07/28/how-did-we-know-the-stimulus-was-too-small/

How Did We Know The Stimulus Was Too Small?

So this wasn’t a test of fiscal stimulus, even though it has played out that way in the political arena: the whole thing was obviously underpowered from the start.

The trouble now is that the right wing is FRAMING the debate based on their own agenda. Another Fox News type issue.

Edited August 2, 2011 by Jingthing

[koheesti]

Lastly how stupid is it to allow a bunch of folks together who took us to this place & spent what they did not have.....

Nor did they have the brains to budget or to even stop spending like drunken sailors when they knew we were in trouble....

Then ask THEM???? to vote on whether THEY should be allowed more money to spend the rest of our futures.

INSANE

It's time for Obama to start with the "they drove us into the ditch now they want the keys back" rhetoric except this time target both parties.

[Ulysses G.]

I wouldn't call Paul Krugman, the esteemed economist, insane.

A deluded left-wing putz would be more accurate.

[Jingthing]

I wouldn't call Paul Krugman, the esteemed economist, insane.

A deluded left-wing putz would be more accurate.

Not exactly. I'd trust a Keynesian liberal against a Reagan supply sider (an economic theory that is fully discredited) any day of the week.

Also, better a putz than a terrorist.

Back to the stimulus issue. You can't honestly say that stimulus tactics don't work IF the stimuli aren't in fact BIG ENOUGH. That's like treating a disease with a short dose. I do realize that ship has sailed though and it is academic now. A new adequate stimulus is now impossible politically.

Political views

Krugman describes himself as liberal. He has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe."[73] In a 2009 Newsweek article, Evan Thomas described Krugman as having "all the credentials of a ranking member of the East coast liberal establishment" but also as someone who is anti-establishment, a "scourge of the Bush administration," and a critic of the Obama administration.[89] In 1996, Newsweek's Michael Hirsh remarked "Say this for Krugman: though an unabashed liberal ... he's ideologically colorblind. He savages the supply-siders of the Reagan-Bush era with the same glee as he does the 'strategic traders' of the Clinton administration."[81]

Krugman has advocated free markets in contexts where they are often viewed as controversial. He has written against rent control in favor of supply and demand,[127] likened the opposition against free trade and globalization to the opposition against evolution via natural selection,[128] opposed farm subsidies,[129] argued that "sweatshops" are preferable to unemployment,[29] challenged living wage laws,[130] and mandates, subsidies, and tax breaks for ethanol,[131] questioned NASA's manned space flights,[132] and written against some aspects of European labor market regulation.[133][134]

Edited August 2, 2011 by Jingthing

[cloudhopper]

OOPSIE! Was it Pelosi who said we won't know what's in the bill til we approve it?

http://brucekrasting.blogspot.com/2011/08/biggest-middle-class-tax-increase-in.html

[Ulysses G.]

Krugman describes himself as liberal.

Well, he is right on that anyway.

How about providing a link?

Edited August 3, 2011 by Ulysses G.

[Jingthing]

http://en.wikipedia.org/wiki/Paul_Krugman

[Steely Dan]

I wouldn't call Paul Krugman, the esteemed economist, insane.

A deluded left-wing putz would be more accurate.

Not exactly. I'd trust a Keynesian liberal against a Reagan supply sider (an economic theory that is fully discredited) any day of the week.

Also, better a putz than a terrorist.

Back to the stimulus issue. You can't honestly say that stimulus tactics don't work IF the stimuli aren't in fact BIG ENOUGH. That's like treating a disease with a short dose. I do realize that ship has sailed though and it is academic now. A new adequate stimulus is now impossible politically.

Political views

Krugman describes himself as liberal. He has explained that he views the term "liberal" in the American context to mean "more or less what social democratic means in Europe."[73] In a 2009 Newsweek article, Evan Thomas described Krugman as having "all the credentials of a ranking member of the East coast liberal establishment" but also as someone who is anti-establishment, a "scourge of the Bush administration," and a critic of the Obama administration.[89] In 1996, Newsweek's Michael Hirsh remarked "Say this for Krugman: though an unabashed liberal ... he's ideologically colorblind. He savages the supply-siders of the Reagan-Bush era with the same glee as he does the 'strategic traders' of the Clinton administration."[81]

Krugman has advocated free markets in contexts where they are often viewed as controversial. He has written against rent control in favor of supply and demand,[127] likened the opposition against free trade and globalization to the opposition against evolution via natural selection,[128] opposed farm subsidies,[129] argued that "sweatshops" are preferable to unemployment,[29] challenged living wage laws,[130] and mandates, subsidies, and tax breaks for ethanol,[131] questioned NASA's manned space flights,[132] and written against some aspects of European labor market regulation.[133][134]

It's a great word stimulus, it's as if a stimulus of any size required can be pulled out of a hat any time it's needed. The trouble is said stimulus can't be paid for now so ever increasing debt is added on the never never. The burden of interest on this debt means that every new job so created is having to carry this dead weight meaning marginal jobs increase debt more than they raise consumption.

I suggest you google self liquidating debt to appreciate the distinction. If a gardener buys a pickup to take plants to market the debt incurred buying it makes sense, not if he buy a top of the range sedan for the same purpose.

Krugman is a dangerous idiot who will risk a Weimar style collapse of the dollar if given free rein, a nobel prize in the dismal science is like one for theocracy.

[Steely Dan]

I prefer the likes of Peter Schiff who predicted the last leg of the economic crisis, imho the only thing more deluded than U.S foreign policy is it's economic policy.

http://wallstreetpit.com/20859-peter-schiff-on-krugman-and-the-end-game-for-the-dollar

[snarky66]

More backroom deals from the Charlatan President. Now back to the golf course.

[Ulysses G.]

Krugman is a dangerous idiot who will risk a Weimar style collapse of the dollar if given free rein, a nobel prize in the dismal science is like one for theocracy.

Point taken.

In a review for The New York Times, Pulitzer prize-winning historian David M. Kennedy stated, "Like the rants of Rush Limbaugh or the films of Michael Moore, Krugman's shrill polemic may hearten the faithful, but it will do little to persuade the unconvinced".[79]

Krugman's The New York Times columns have drawn criticisms as well as praise. A 2003 article in The Economist questioned Krugman's "growing tendency to attribute all the world's ills to George Bush," referencing critics who felt that "his relentless partisanship is getting in the way of his argument" and citing what it contended were errors of economic and political reasoning in Krugman's columns.[70] Daniel Okrent, a former The New York Times ombudsman, in his farewell column, criticized Krugman for what he asserted was "the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults."[88][89] Krugman's columns are seen by some as those of a pundit who uses illogic knowingly ("Krugman's Sophistry," Red Maryland, February 21, 2011) for persuasive advantage.

http://en.wikipedia.org/wiki/Paul_Krugman

[snarky66]

Here is mister Obama discussing one of his favorite topics, "Soak the Rich" This along with global warming keeps him awake at night.

speech

[up-country_sinclair]

^Actually, it's President Obama, and taxes are at their lowest levels in approximately 60 years.

I read recently that if the tax rates were brought back to the levels they were at during the 1990s (arguably the largest economic boom in the history of the US), it would wipe trillions of dollars off the deficit.

Edited August 3, 2011 by up-country_sinclair

[flying]

^Actually, it's President Obama, and taxes are at their lowest levels in approximately 60 years.

I read recently that if the tax rates were brought back to the levels they were at during the 1990s (arguably the largest economic boom in the history of the US), it would wipe trillions of dollars off the deficit.

Actually it is anything we want to call him

As for increasing taxes....

How does that work with 24 Million unemployed,

45 Million on food assistance

More than 1.5 million bankruptcies in 2011 alone

988,000 foreclosures in 2011 alone

Is this another one of those tax the rich all will be fine deals?

Because as this year gets rolling there will be less not more taxes paid...much less. More assistance needed as more & more go without shelter & food in what was once the Greatest Nation On Earth

Tax the rich till the cows come home if you like but it will not scratch the surface nor will it stimulate jobs.

The rich are after all the ones who can pick up & leave anytime they like.

Edited August 3, 2011 by flying

[snarky66]

It's ironic isn't it. Sarah Palin took on big oil in Alaska & increased the states revenues dramatically. That's despite Repubs being thought of as in the pocket of big oil, banks, wall street & giant multi-national corps.

Yet here we have the community organizer in chief who is the close friend of wall street banks , JP Morgan Chase, Citi Merrill Lynch & Golden Slacks. So the roles are reversed.

And the pas de resistance is the titular head of GE Jeffery Immelt who has underlings running GE so he can concentrate on his real job of advisor to the community organizer in chief. Both of them stink at economics.

The prez is so tone deaf he repeats this taxation should be balamced or whatever he calls it. He is too insulated from reality to know that resonates with only the 10% left wing loons that backed his candidacy. Real Americans know that small business earn 250,000 per year, create jobs & these are the people he attacks continuously. Then and anyone who uses a private jet. Like his Hollywood pals.

Barry you are talking yourself out of a job.

[chuckd]

^Actually, it's President Obama, and taxes are at their lowest levels in approximately 60 years.

I read recently that if the tax rates were brought back to the levels they were at during the 1990s (arguably the largest economic boom in the history of the US), it would wipe trillions of dollars off the deficit.

You really should do a little research before making such statements.

Taxes are not at their lowest level in approximately 60 years. In 1991 the tax rate was raised from 28% to 31% where it remained until 1993 when it was raised to 39.6%. In 2001 the tax rate was lowered to 39.1% and was lowered again in 2002 to 38.6%. It was then lowered to its current 35% in 2003.

http://www.taxfoundation.org/publications/show/151.html

Now let's examine your statement that raising the tax rate to the levels in 1990 would wipe trillions off the deficit.

The gross national income for the US in 2010 was $9.78 Trillion. Raising the tax rate from the current 35% to the highest rate during the 1990s, as you have read, would raise a total of $449.88 Billion. It would take nearly two years simply to pay for Obama's failed stimulus package, much less reducing the national debt.

http://www.nationmaster.com/graph/eco_gro_nat_inc-economy-gross-national-income

The problem isn't the tax rates at all. The problem is the out of control spending that is going on in Washington. Obama's proposed budget for the current year was $3.7 Trillion. It was rejected in the US Senate by a vote of 98-0. Hardly a ringing endorsement of his spending policies.

[Ulysses G.]

Actually, it's President Obama, and taxes are at their lowest levels in approximately 60 years.

Wrong!

[flying]

The problem isn't the tax rates at all. The problem is the out of control spending that is going on in Washington. Obama's proposed budget for the current year was $3.7 Trillion. It was rejected in the US Senate by a vote of 98-0. Hardly a ringing endorsement of his spending policies.

That is the truth of it...But amazing how many think the overspending could be cured by higher taxes....especially now.

Also what kind of meglomaniac proposes 3.7T in spending when they know what current revenues are? Must be that Yes We Can thing?

[chuckd]

Following is an Executive Order signed by Obama in 2009, seven days after he took office. Does it show anybody where his priorities were?

Not signing this would have saved the US Treasury $20.3 Million. The purpose of this expenditure is to assist in relocating Palestinians from Gaza to the US.

I realize $20.3 MILLION isn't much when the new buzz word in DC is TRILLION, but it might be a start.

_______________________________________________________

Presidential Determination No. 2009-15 of January 27, 2009

Unexpected Urgent Refugee and Migration Needs Related To Gaza

Memorandum for the Secretary of State

By the authority vested in me by the Constitution and the laws of the United States, including section 2©(1) of the Migration and Refugee Assistance Act of 1962 (the ``Act''), as amended (22 U.S.C. 2601), I hereby determine, pursuant to section 2©(1) of the Act, that it is important to the national interest to furnish assistance under the Act in an amount not to exceed $20.3 million from the United States Emergency Refugee and Migration Assistance Fund for the purpose of meeting unexpected and urgent refugee and migration needs, including by contributions to international, governmental, and nongovernmental organizations and payment of administrative expenses of Bureau of Population, Refugees, and Migration of the Department of State, related to humanitarian needs of Palestinian refugees and conflict victims in Gaza.

You are authorized and directed to publish this memorandum in the Federal Register.

(Presidential Sig.)

THE WHITE HOUSE,

Washington, January 27, 2009

[FR Doc. E9-2488

Filed 2-3-09; 8:45 am]

Billing code 4710-10-P

http://www.thefederalregister.com/d.p/2009-02-04-E9-2488

[cloudhopper]

Stimulus per Mish-

Let me ask a question: Where would the US economy be had we done that?

The answer is certainly in a better position than the alternative of dropping bombs in Iraq. For starters the US would have better bridges instead of holes in the Iraq desert and millions of destroyed lives (and millions more enemies on top of that).

However, the US economy would still be where it is now. Why? Because of the three cardinal rules of stimulus.

• First rule of stimulus: It always runs out.
• Second Rule of stimulus: All it can do is create a greater pile of debt.
• Third rule of stimulus: Spend enough money and interest on debt will eventually consume you.

Three Cardinal Rules of Stimulus

[koheesti]

^Actually, it's President Obama, and taxes are at their lowest levels in approximately 60 years.

I read recently that if the tax rates were brought back to the levels they were at during the 1990s (arguably the largest economic boom in the history of the US), it would wipe trillions of dollars off the deficit.

ONLY if any increased revenue was put aside to service the debt. More likely Congress would just use it to increase spending.

[InterestedObserver]

Nothing Obama and Congress did reduces the National Debt or balances the budget. The US is still spending far more than it collects in revenue and the budget will be in deficit well into the foreseeable future. Just a matter of time until the US has to officially devalue its currency and monetize debt, or become insolvent. The grand deal just concluded does nothing to forestall that end.

Edited August 3, 2011 by InterestedObserver

[koheesti]

Stimulus per Mish-

Let me ask a question: Where would the US economy be had we done that?

The answer is certainly in a better position than the alternative of dropping bombs in Iraq. For starters the US would have better bridges instead of holes in the Iraq desert and millions of destroyed lives (and millions more enemies on top of that).

That's only assuming the money saved would have been spent on bridges. The last couple years of the Clinton administration we had a surplus. It would have been nice if some of that went to repair bridges, strengthen the levees in New Orleans or even feed the poor. BUT IT DIDN'T.