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Reply #5: No, the anti-deficit thing is not "mass-hysteria". [View All]

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wtmusic Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-09-10 10:25 AM
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5. No, the anti-deficit thing is not "mass-hysteria".
Though some around here consider Democrat deficits to be superior to Republican ones - when interest on the national debt is the second largest federal expenditure after defense, there's a problem.

"The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the gross domestic product.

Back then, a disapproving Krugman called the deficit "comparable to the worst we've ever seen in this country. ... The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent." Take away the Social Security surplus spent by the government, he said, and "we're running at a deficit of more than 6 percent of GDP, and that is unprecedented."

He considered the Bush tax cuts irresponsible and a major contributor -- along with two wars -- to the deficit. But he also warned of the growing cost of autopilot entitlements: "We have the huge bulge in the population that starts to collect benefits. ... If there isn't a clear path towards fiscal sanity well before (the next decade), then I think the financial markets are going to say, 'Well, gee, where is this going?'"


Fast-forward to 2010.

The numbers: projected deficit for fiscal year 2010 -- over $1.5 trillion, more than 10 percent of GDP.

This sets a post-WWII record in both absolute numbers and as a percentage of GDP. And if the Obama administration's optimistic projections of the economic growth fall short, things will get much worse. So what does Krugman say now?

We must guard against "deficit hysteria." In "Fiscal Scare Tactics," his recent column, Krugman writes: "These days it's hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we're told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren't stated as opinions, as views held by some analysts but disputed by others. Instead, they're reported as if they were facts, plain and simple."
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  -We are in Trouble. The Deficit is the new Saddam Hussein. Kurt_and_Hunter  Aug-09-10 09:39 AM   #0 
  - More obsession over the so-called "deficit"  bluestateguy   Aug-09-10 09:42 AM   #1 
  - Ha! "So-called" Deficit .  earthside   Aug-09-10 10:27 AM   #8 
     - re: the elite, corporate ruling class  Kurt_and_Hunter   Aug-09-10 10:37 AM   #12 
        - Not necessarily.  earthside   Aug-09-10 10:50 AM   #13 
           - True, but TIPS are only 8% of treasuries  Kurt_and_Hunter   Aug-09-10 11:11 AM   #19 
  - ...  Kurt_and_Hunter   Aug-09-10 10:07 AM   #2 
  - K&R!  alberg   Aug-09-10 10:14 AM   #3 
  - The deficit issue is not a short term one  NoNothing   Aug-09-10 10:20 AM   #4 
  - That's what Reagan did for 8 years in the 80s  wtmusic   Aug-09-10 10:27 AM   #6 
  - No, it isn't  NoNothing   Aug-09-10 10:54 AM   #14 
     - If the GDP were larger that ratio would decline somewhat  Kurt_and_Hunter   Aug-09-10 10:59 AM   #16 
     - GDP could only be negative if more was destroyed than was produced  NoNothing   Aug-09-10 11:11 AM   #18 
     - You are correct. I was being silly.  Kurt_and_Hunter   Aug-09-10 11:12 AM   #20 
     - The GDP is not a percentage.  wtmusic   Aug-09-10 11:16 AM   #21 
     - Debt is never "basically cancelled" by economic growth.  wtmusic   Aug-09-10 11:25 AM   #24 
        - If it's less then growth  NoNothing   Aug-09-10 11:30 AM   #25 
           - A reckless strategy long-term.  wtmusic   Aug-09-10 11:36 AM   #27 
  - Mistaken  Kurt_and_Hunter   Aug-09-10 10:29 AM   #10 
     - If inflation goes up  NoNothing   Aug-09-10 10:59 AM   #15 
        - If your argument is that we shouldn't run infinite deficits forever...  Kurt_and_Hunter   Aug-09-10 11:05 AM   #17 
           - Obama's own budget  NoNothing   Aug-09-10 11:18 AM   #22 
              - Cutting spending will make those out-years even worse.  Kurt_and_Hunter   Aug-09-10 11:32 AM   #26 
                 - No, the nineties never broke 5%  NoNothing   Aug-09-10 12:00 PM   #31 
                    - My bad  Kurt_and_Hunter   Aug-09-10 12:45 PM   #34 
  - No, the anti-deficit thing is not "mass-hysteria".  wtmusic   Aug-09-10 10:25 AM   #5 
  - These would have been good points to consider when the economy  Doctor_J   Aug-09-10 10:27 AM   #7 
  - What frugality?  wtmusic   Aug-09-10 10:32 AM   #11 
     - Higher taxes and drastic spending cuts.  Common Sense Party   Aug-09-10 11:54 AM   #30 
        - Bingo.  wtmusic   Aug-09-10 12:09 PM   #32 
        - Or what? What will happen?  Kurt_and_Hunter   Aug-09-10 12:49 PM   #36 
           - From the CBO  NoNothing   Aug-09-10 02:32 PM   #39 
              - Nothing there that much disagrees with what I'm saying  Kurt_and_Hunter   Aug-09-10 04:45 PM   #40 
                 - Not all deficit spending is equal  NoNothing   Aug-09-10 05:16 PM   #42 
  - I'm much more concerned about the DEBT than the DEFICIT.  Common Sense Party   Aug-09-10 10:29 AM   #9 
     - The debt is the aggregate sum of budget deficits  wtmusic   Aug-09-10 11:19 AM   #23 
        - I know exactly what the national debt is. That's precisely my point.  Common Sense Party   Aug-09-10 11:53 AM   #29 
           - I don't buy your both Parties do it....  Winterblues   Aug-09-10 12:22 PM   #33 
              - Show me one for Congress, who has to vote on the budget  Common Sense Party   Aug-09-10 12:47 PM   #35 
              - At +10% so far Obama is right up there with Reagan.  wtmusic   Aug-09-10 12:49 PM   #37 
  - I think colin powell is going to the UN to show the deficits mobile labs. nt  Javaman   Aug-09-10 11:36 AM   #28 
  - If The Republicans Re-Gain Control of the WH  Yavin4   Aug-09-10 12:59 PM   #38 
  - Cheney - 2004 - "Deficits Don't Matter  Beaverhausen   Aug-09-10 04:47 PM   #41 
  - This is perhaps Obama's biggest test yet..  sendero   Aug-09-10 05:18 PM   #43 

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