WSJ on the amazing shrinking deficit

[beefncheddar]

Interesting read, though I'm sure the thread will turn into a pissing match soon enough.

http://www.opinionjournal.com/editorial/feature.html?id=110009630

Politicians are typically late in picking up trends, so it will be interesting to see how long it takes Washington to acknowledge the big story in the Fiscal 2008 budget that President Bush unveiled yesterday: To wit, with a little spending restraint, Congress could balance the budget in no time.

 

[D-Backs Hack]

You might have a balanced budget -- even a surplus -- in 2012 if Congress lets the tax cuts expire after 2010.

Anyone offering projected numbers to this effect with the tax cuts intact is delusional. No one within a 500-mile radius of Washington is going to cut spending enough to make that happen.

And are war costs included in this budget? The writer seems to suggest that. That hasn't been the case before.

 

[EStreetJoe]

Interesting read, though I'm sure the thread will turn into a pissing match soon enough.

http://www.opinionjournal.com/editorial/feature.html?id=110009630

Politicians are typically late in picking up trends, so it will be interesting to see how long it takes Washington to acknowledge the big story in the Fiscal 2008 budget that President Bush unveiled yesterday: To wit, with a little spending restraint, Congress could balance the budget in no time.

Let's see... in Clinton's final years we had a budget surplus. For fisical 2007 the Wall Street Journal is doing carwheels over a $172 billion deficit.
I didn't take any economics courses in college, but to me isn't a deficit that big a bad thing, while a budget surplus is a good thing?

The editorial also makes the claim:

This also means that the federal debt burden will continue to fall. Alarmists point to the $1.4 trillion rise in total federal debt from 2003-2006, but that amount is dwarfed by the $14 trillion in new household wealth created over the same period.

But the editorial neglects the fact that the last two years in a row the average American spent more than he/she earned -- had a negative savings rate. So although household wealth might have grown by $14 trillion, none of it got saved, and more than that got spent. http://www.savingwithoutabudget.com/

 

[Fenian_Bastard]

The phrase, "Wall Street Journal Editorial" has been a synonym for "largely worthless swill" since about '80.

 

[Flying Headbutt]

The non-partisan CBO took a decidedly different tone. Which one should I really believe?

 

[Fenian_Bastard]

The non-partisan CBO took a decidedly different tone. Which one should I really believe?

Use the Force, Luke.

 

[zeke12]

Call me when the war's on the books.

 

[Boom_70]

The phrase, "Wall Street Journal Editorial" has been a synonym for "largely worthless swill" since about '80.

"Who Is Fenian *******? " ..... was the heading

 

[Fenian_Bastard]

Eh?
Gubba. Gubba.

 

[Boom_70]

Eh?
Gubba. Gubba.

don't you recall those famous WSJ editorals of the clinton years that started out with heading

Who is .... such as Who Is Vince Foster or Who is Web Hubbell

 

[Fenian_Bastard]

Eh?
Gubba. Gubba.

don't you recall those famous WSJ editorals of the clinton years that started out with heading

Who is .... such as Who Is Vince Foster or Who is Web Hubbell

I remember "Who Is Vince Foster?"
They don't have the blood off their hands yet.

 

[daveevansedge]

I don't want the country sold out to a big national debt any more than the next person. However, as a very middling middle class person, with wife and two kids in tow, I can't argue that more money has stayed within my family with these cuts. And the people in Washington, regardless of party, are going to spend their asses off on all manner of unnecessary **** 'til death do us part, whether the tax cuts remain in place or not and no matter what level the deficit is at.

With that being the case, I prefer to continue keeping a little more of my money -- and I have been saving more because of it, between 401k and now starting a money market account. And the missus has been able to start contributing to her 401k because we've got a few more dollars around. Now I just hope I don't get my ass blasted off for making an honest assessment of my situation. Thanks in advance for your restraint.

 

[Fenian_Bastard]

I respond only that, with Oliver Wendell Holmes, a Republican, I believe that taxes are the price we pay for a free society. And what makes me crazy about some people -- but not you, daveevans -- is that they'll take the "they're al swine anyway" approach and then wonder why the political system is not responsive to their concerns.
A republic, if you can keep it.

 

[JackS]

But the editorial neglects the fact that the last two years in a row the average American spent more than he/she earned -- had a negative savings rate. So although household wealth might have grown by $14 trillion, none of it got saved, and more than that got spent. http://www.savingwithoutabudget.com/

Household wealth refers to net worth, which can also include asset ownership. That's not to say I think the editorial should have ignored the negative savings rate, but the way you express it above is not the correct way to put it.

 

[daveevansedge]

Nice post, F_B. I totally agree with the OWH point, and I understand the need for taxes and don't mind paying them. I just think what I pay at this point is adequate. And I don't think the politicians are all swine. I just think money is going to be spent in Washington -- by both major parties and anybody else who can get their hands on it -- regardless of how large or small the deficit is, and a lot of it will be spent on unnecessary stuff.

So if that's going to be the case, if me and my family can manage to keep a little more of our earnings, sock some of it away appropriately and maybe even be able to have a little more fun with some disposable income, I'll take it.

 

[standman]

Think about all the people who have been able to own homes and the net worth that has created in the latest housing boom. I have friends in the D.C. area who aren't necessarily wallet rich, but they have considerable equity in their homes and have increased their net worth. If they choose, they can take money out of that equity although that increases their long term debt. The downside of the rising home prices is the increase in property taxes.

 

[Ghost of Biff Pocoroba]

You might have a balanced budget -- even a surplus -- in 2012 if Congress lets the tax cuts expire after 2010.

Anyone offering projected numbers to this effect with the tax cuts intact is delusional. No one within a 500-mile radius of Washington is going to cut spending enough to make that happen.

No, Joe, that's not quite right. Because of the tax cuts, tax revenues have actually grown by leaps and bounds. This ain't a zero-sum game. As Kennedy and Reagan proved before Dubya, tax cuts fuel economic growth. It's a paradox, but an important lesson to remember.

The problem's not the tax cuts. It's the spending discipline. Remember, Congress spent away the Social Security Trust Fund because it couldn't balance a budget — and now, Social Security isn't just a partial pyramid scheme, it IS a pyramid scheme, bound for collapse. Never mind that there are so many unnecessary government programs no one has the will to cut loose.

 

[Boom_70]

I respond only that, with Oliver Wendell Holmes, a Republican, I believe that taxes are the price we pay for a free society. And what makes me crazy about some people -- but not you, daveevans -- is that they'll take the "they're al swine anyway" approach and then wonder why the political system is not responsive to their concerns.
A republic, if you can keep it.

Fenian can we assume that you sent back your $300 tax rebate check as your small way of helping to cut the deficit.

If so - a hearty thank you.

 

[micropolitan guy]

$234 BILLION for the wars in Iraq and Afghanistan in fiscal '07 and '08.

Now that's money well-spent.

 

[cranberry]

I respond only that, with Oliver Wendell Holmes, a Republican, I believe that taxes are the price we pay for a free society. And what makes me crazy about some people -- but not you, daveevans -- is that they'll take the "they're al swine anyway" approach and then wonder why the political system is not responsive to their concerns.
A republic, if you can keep it.

Fenian can we assume that you sent back your $300 tax rebate check as your small way of helping to cut the deficit.

If so - a hearty thank you.

As I understand it the tax breaks only work if they're reinvested in the economy, so I used my check toward a flat-screen so my money could trickle down to Best Buy. I'm pretty sure Best Buy put my money toward hiring another sales clerk. Made me proud to be a 'merican.