Category: deficit



But much more of the increase in the deficit was because of tax cuts under George W. Bush, Medicare Part D (which expanded coverage for prescription medicines) and – most of all – the financial crisis that brought down the economy and sharply reduced tax revenue starting in September 2008.

Our modern debt surge is much more about declining federal government revenue than it is about runaway spending. If you believe strongly that our fiscal issues are primarily about “runaway spending,” please read our book.

The smart approach is to begin the long and not-so-nice work of controlling deficits while allowing the economy to grow.

http://economix.blogs.nytimes.com/2012/04/05/is-there-a-fiscal-crisis-in-the-united-states/

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Here’s a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

 

  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent)
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • The U.S. Treasury: $1.63 trillion (11.3 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

 

Who owns America? Hint: It’s not China – Global Public Square – CNN.com Blogs.


Hamsher calls S&P a “kingmaker” and this isn’t an exaggeration given the effect their actions are having. Either way, they will shoot the economy in the head. Either the negotiators come up with package that suits their demands, which will lead to steep enough cuts that the economy will weaken in 2012, making an Obama loss highly probable.

 

EconoMonitor : EconoMonitor » Has S&P Become Our Rupert Murdoch?.


Whatever S&P’s agenda, it has nothing to do with avoiding default risks or putting the US on sound fiscal footing. It appears to be intertwined with their attempts to absolve themselves from responsibility for their role in the 2008 financial crisis, and they are willing to manipulate not only the 2012 election but the world economy to escape the SEC’s attempts to regulate them.

It’s time the media and Congress started asking Standard and Poors what their political agenda is and whom it serves.

 

 

Is Standard and Poor’s Manipulating US Debt Rating to Escape Liability for the Mortgage Crisis? | Firedoglake.


msnbc.com Video Player.


The debt ceiling crisis is the latest case in which the radical right in the South has held America hostage until its demands are met. Presidents Andrew Jackson and Abraham Lincoln refused to appease the Southern fanatics. Unfortunately, President Obama and the Democrats in Congress chose not to follow their example and instead gave in. In doing so, they have encouraged the neo-Confederate minority in Congress to find yet another opportunity in the near future to extort concessions from America’s majority by sabotaging America’s government. 

 

The Tea Party, the debt ceiling, and white Southern extremism – War Room – Salon.com.


The Tea Party version of the American Revolution is not just fundamentalist: it is also Disneyfied, sentimentalized, and whitewashed. It rests on a naïve, solipsistic and exceptionalist faith that for America it will all work out in the end, because America is “the greatest nation in the world”. They take solace in tautology: America is great – this they know – because Fox News tells them so.

 

 

The Willful Ignorance That Has Dragged the US to the Brink | Common Dreams.


The Bush tax cuts did the opposite: $3 trillion worth of tax cuts were predicated on the premise that we were returning the people “their” money. As it turned out, the money wasn’t there to return. Even without the tax cuts, the wars, or anything else, the government would have entered 2011 with $1.3 trillion in debt, not $2.3 trillion in savings. Basically, in the grip of careless enthusiasm about the economic future, we borrowed $3 trillion from bond markets and handed it out to citizens in rough proportion to how rich they already were. In the middle of a recovery. This is not a useful thing for the government to do.

 

 

Deficits: There never was a surplus | The Economist.


The Chart That Should Accompany All Discussions of the Debt Ceiling – James Fallows – Politics – The Atlantic.


President Obama: Go ‘big’ on debt deal – USATODAY.com.


Washington’s spending has recently been higher as a percentage of the nation’s economic output than at any time since World War II. But by the same measure, Washington’s revenues are the lowest in more than 60 years.

So does the U.S. have “a spending problem,” as Republicans keep repeating in the current debate over how to reduce the nation’s record deficits? Or is the problem that taxes are not high enough? Those questions frame a long-running partisan debate, and as usual we won’t offer an opinion one way or the other. But for those seeking their own answers, we can offer some fiscal history and factual context.

Some key facts we think are worth considering:

 

Fiscal FactCheck | FactCheck.org.


Liaquat Ahamed: U.S. taxes are too low | Video | Reuters.com.


Yes, the rest of the world is watching this embarrassing debt ceiling nonsense, and it is growing dismayed. 

Der Spiegel has a roundup of commentary in German newspapers about the fight, and the universal message is this:

The US is holding the entire world hostage, and it’s the Republicans that are playing with fire.

Read more: http://www.businessinsider.com/its-official-the-whole-world-thinks-republicans-are-dangerous-maniacs-2011-7#ixzz1SCJ8FzLA

 

 

IT’S OFFICIAL: The Whole World Thinks Republicans Are Dangerous Maniacs Threatening Everyone.


The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts.

On road to surplus, U.S. detoured into debt.


What Ben Bernanke should’ve said – Ezra Klein – The Washington Post.

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