US borrowing tops 100% of GDP: Treasury

[The Northerner]

US debt shot up $238 billion to reach 100 percent of gross domestic project after the government's debt ceiling was lifted, Treasury figures showed on Wednesday.

Treasury borrowing jumped on Tuesday, the data showed, immediately after President Barack Obama signed into law an increase in the debt ceiling as the country's spending commitments reached a breaking point and it threatened to default on its debt.

The new borrowing took total public debt to $14.58 trillion, over end-2010 GDP of $14.53 trillion, and putting it in a league with highly indebted countries like Italy and Belgium.

Public debt subject to the official debt limit -- a slightly tighter definition -- was $14.53 trillion as of the end of Tuesday, rising from the previous official cap of $14.29 trillion a day earlier.

Read more: http://news.yahoo.com/us-aaa-rating-still-under-threat-204040123.html

[ClarkUSA]

1. The legacy of Bush II lives on...

[Angleae]

2. And just when will it be Obama's legacy?

Or does he get a free pass because there's a (D) after his name. Keep in mind it's been 2 1/2 years.

[cherokeeprogressive]

3. Not even after 8 years will current events be "Obama's Legacy".

Not even.

If the economy is shit the day after the end of Obama's second term, the all or nothing club will still be gasping "Bush... Bush... Bush..."

[ClarkUSA]

6. Why should it? Unbiased economic analysts and presidential historians know better unlike some folks.

[ClarkUSA]

4. Pres. Obama inherited Bush's $2 trillion deficit & a nation teetering on the verge of econo collapse

Are you seriously blaming this shit on him? If you are, then you've been listening too much to Faux News.

[emilyg]

7. How much did he add?

[ClarkUSA]

9. Look it up. I'm not your gofer.

[bhikkhu]

13. Some things can't be fixed

I recall reading the analysis, looking at the numbers and the costs, and agreeing with the long list of well-informed people who said - if bush goes to war with Iraq, we're screwed - seriously screwed. Not because we couldn't win, but because we had barely climbed out of one recession, then passed his idiotic tax cuts (at which point other well-informed people also argued convincingly - "we're totally screwed now!"), then tumbled back into recession, then started another trillion dollar pointless war...

So in spite of plenty of basic soundness, you can't go through 8 years crashing around like a drunk and doing every stupid self-destructive thing there is, and then expect to make it all better again. The marks are still very clear in a divided and conflicted and mostly deluded nation, in a gutted treasury and a mountain of debt, in an economic upside-down world where the poor have gotten poorer for so long, and where the rich have become accustomed to having all the stuff and none of the responsibility.

Maybe in a generation good government and good citizenship can be relearned.

[emilyg]

5. Who is President now.?

[ClarkUSA]

8. Who has been blocking every single piece of economic legislation since January 2011?

Do you not think that the actions of the Teabagger House has had repercussions? Did you forget that the economy was recovering reasonably well, given the abyss it came back from, from January 2009 to December 2010?

[mmonk]

10. Interesting how everything is framed.

[LiberalAndProud]

11. must not raise taxes

The debt ceiling/budget cutting deal was a negotiated victory for conservatives. But overlooked in that outcome it how dangerously close it came to tax increases. Such tax hikes would damage a still-weak economy, but more consequentially for the long-run would undo the basis for successful tax reform.

The basis for tax reform was laid out in the 1986 deal: the reduction of tax rates in exchange for the elimination of loopholes. The resulting system was simpler, more equitable, and usually raises more revenue. The ’86 deal that passed through a Democrat-controlled Senate and signed by Ronald Reagan was far from perfect. It raised the capital gains tax just before the savings and loan meltdown and high interest rates would slow the economy. But what emerged was a clear improvement of the tax code, with a top statutory personal income rate of 28 percent and the doubling of the standard deduction. In exchange, the consumer interest deduction and an array of special breaks were tossed out.

On the way to its grand deal with President Obama, GOP leadership trampled on this legacy of Reagan, Jack Kemp, and Bob Packwood. House Speaker John Boehner, goaded on by Senate Republicans led by Tom Coburn, flirted with eliminating some special breaks such as the ethanol tax credit as a way to add revenue to a debt reduction package. The Wall Street Journal in its recap of the debt negotiation saga Tuesday reported that Boehner and Obama had a tax deal going for $800 billion in revenue enhancements. Boehner only walked away when the Senate “Gang of Six” came back in the picture with a doubling of that figure and the White House moved up its ask by $400 billion in revenue. When Obama circled back to Boehner with the original $800 billion figure, he finally put his foot down on tax hikes.

But by coming so close, Boehner showed that he never internalized the lesson of 1986 that breaks and loopholes should only be traded away for rate cuts. While the shadow tax system of credits and deductions that enrich various business interests is far from equitable, it does offer protection to the private sector from the high corporate tax rate and other anti-growth policies. Therefore it doesn’t make sense to gut it unless lower overall rates come in exchange. The end goal should be the lowest possible top income tax rate with zero or few tax expenditures.

http://blogs.forbes.com/richdanker/2011/08/03/the-republicans-shouldnt-attempt-any-tax-deal-with-president-obama/

My magic 8 ball says "The outlook is bleak"

[Gregorian]

12. This political stuff is far more complicated than I realized.

What a joke. This isn't about the average person. It's as though Congress is really a club for the wealthy. Screw the rest of us. I never heard about the '86 deal. And the notion of "deals" really stinks. I know people have said there is inherently something wrong with a flat tax, but we have to do something to level this rotten playing field.

Thanks for posting that.

[LiberalAndProud]

14. I think they may succeed in drowning our government in the bathtub.

They have a powerful messaging and control system. I fear this will spell the end of even the pretense of democracy for us. We should, perhaps, begin to hope for a benevolent dictator.

[Oasis_]

15. Electing a Republican House

That flatly refuses to offer a jobs bill, and has made it priority one to makes things as economically tough as possible in the hopes (and they're succeeding) of pinning it on Obama makes a sustainable recovery nearly impossible.

Things were heading in a positive direction in quarter four of '09, but then came the elections.

To be fair, quantitative easing (I and II) has had a substantial negative impact on commodity prices, but coupled with Republican (premeditated) inaction has placed us in the economic position we currently find ourselves. Both the aforementioned are beyond the control of the President, however, and it's up to us and President Obama to continuously remind the voting public.

Oasis

[Igel]

16. That's pretty impressive.

Maybe next year'll we'll beat projections and have a $2 trillion deficit.