Bush to Project Record Budget Deficit.

Please don't misunderstand me, I'm all for lower taxes. But at what expense are we doing this? You can dance, but at some point you will have to pay the piper. When you borrow the money to do these things, you must always bear in mind that it needs to be paid back with interest. Oh, by the way, that interest currently accrues at approximately $1.45Billion per DAY, $529.25Billion per year... To truly put across how staggering this is, I'll also tell you that it is $1,006,944.44 per MINUTE.
The National Debt Clock... Click Refresh Several Times to Watch it Soar!

So, in all reality, even though we are only looking at a "modest" $307Billion dollar deficit, when you tack on that interest, the national debt will be increased by better than $836.25Billion next year alone. The following year, a similar deficit is being projected, and with even faster accruing interest on the debt, you can probably expect close to an additional $1Trillion! None of these figures even take into account the impending war with Iraq, expected to run into the 10's of Billions. Sound fiscal policy? I think not. Even if revenues do increase, it will take everything going in just to keep up with the interest on this rapidly spiraling debt. Lowering taxes now only ensures that they will have to be raised later to pay for it all.

Bush needs to learn that he can't please all of the people all of the time. IF he wants lower taxes just stop social security, medicare, and lower defense spending.

Bush is doing something with this money though! I mean look, he's helping the AIDS problem in Africa, he's helping us find a new fuel source and he is bringing mentors to children. And the icing on the cake is, we don't have to pay for it as much! whats the problem?

CP

What exactly does it mean, that we "don't have to pay for it as much"? If you mean that our children and grandchildren will be picking up the tab for this, instead of us, you're probably correct. In any case... At some point, the taxpayers of this country will have to cough up the dough to pay this debt.

As to the funding for AIDS, and the Hydrogen Fuel Cell research, I can only offer my prediction that the funding for both will be slashed and/or eliminated when the budget reaches congress. If I'm wrong, I'll eat my hat.

Stefan.

I have visited this site many times, and have passed comment on it in other posts, to no avail.

I constantly eludes me why Americans dont question the enormous balance of payment debt, foreign borrowing and foreign investments that has placed America in the precarious position it is now in.
We in OZ are constantly reminded of our balance of payments and Governments fall from miss-management of it.

I am reminded of something my accountant flippantly said..."The more you owe a bank, the better they look after you".
Perhaps it holds true in this case.
No-one wants to see America go down because they wont get their money back.

To me it seems reasonable to question the REAL motivations behind America's latest escapade, and of those who back it, based on the figures quoted within this site.
However it appears America is sliding into financial burn-out and Americans dont believe it.

Regards.......Alan

Clinton Budget Stats:
1992: - 290 billion dollar deficit
2000: +270 billion dollar surplus

Bush Budget stats:
2000 +270 billion dollar surplus
2001 -127 billion dollar deficit
2002 -158 billion dollar deficit***
2003 - 307 billion dollar deficit
War in Iraq Priceless

***In April 2001 the Bush administration predicted a surplus for 2002 of $231 billion but lowered that forcast to a surplus of $173 billion by that November, after the attacks. His math was a little off. Instead he ended up with a $158 billion deficit.

You know, I didn't think that anyone would actually criticize the US helping the AIDS situation in Africa, no matter how liberal they are. What are our motives? Is it possible that Bush is just being a good person [gasp] ? The US is giving money to other countries, what a travesty.

CP

The only ulterior motive I could see would be a way to help the drug companies. I got the impression that this would be retail priced for the drug companies. South Africa has already voted to violate the patents on drug companies. I wonder if they go ahead an do so if they would be eligible for aid. Drug companies are under intense pressure to waive patent rights during this crisis. This may be a way around that while spreading US good will.

Also, although it is not my position, I would think people who are very conservative about American foreign aid find this to be another gift from the government with taxpayer money to the citizens of another country. Just wait, this will cause some controversy somehow. Politics as usual.

Eeyore, that is exactly what I thought. I know it sounds cynical. But how do you explain this sudden interest in giving money for medical aid in Africa when he is doing nothing about the medical problem here? I have never heard him even utter the words AIDS and Africa in the same sentence before the SOUA. If he were a liberal I could see it...I would still think it was unwise...but I would probably not be wondering what the motive was. Liberals are always trying to save the world with tax dollars, at least that's what everyone says. But there is no way a conservative with a huge deficit is going to give away money to Africa unless there is something in it for special interests.

The drug companies have benefited from everything else so why not this? They got a free pass on their legal problems with the parents of autistic children through our Homeland Security Bill. When this was questioned no one seemed to know how or why that little gem was thrown in or who was behind it. The drug companies said they were as surprised as everyone else.

They have benefited from Bush's controversial Small Pox plan. And they will now benefit from Bush's new Bioshield plan. So, pardon me if I don't think Bush finally gives a damn about the AIDS problem in Africa.

I do think Bush has a significant amount to gain from this politically if it goes through. I think (as I believe Stefan pointed out) that some of these measures would be difficult to move through Congress. I hope congress will not be so carried away with the spending freedom that goes with tough times and move to limit the deficit.

(Actually I was going to continue but I saw the title of this topic thread. Hi Jaime!)

We had a paper billionaire down here that gave heaps of money to worthy causes.
The trouble was that it was borrowed money and he served his term for cooking his companies books.

While I would never condem America for aiding those in need I sometimes question the wisdom of it in the light of the current financial position.

Regards.....Alan

In order to avoid straying too far from the topic here, which is the deficit and the debt, I've started a thread specifically about Bush's Plan to Aid Africa with Aids Epidemic, here.

I still don't understand how anyone can blame Bush for a bad economy. If we had no pres at all, the day to day economy would still continue along it's merry way. Up and down and up and down, the economy has done so for as many years as it has existed.

And you also can't give credit to Clinton for a good economy. It was the dot com boom, and the explosion of technology that lead to that all-time high. It wasn't because Al Gore invented the Internet, or because something great Clinton did.

The deficeit, well, yeah, Bush is only PARTLY to blame for that. Remember, nothing is law, budgets are not finalized, unless passed through Congress first. They are ALL to blame for a deficeit.

--cheers

Since the subject of interest paid on the national debt has come up, I'd like everyone to think about who gets that money.

Have you thought about it? Do you have an idea who might be getting these hundreds of billions of your tax dollars each year?

Okay, now think about who will be paying less into the Treasury to support these hundreds of billions of dollars in interest payments going out each and every year.

Got a clue? All right, now connect those two dots. It shouldn't take a very long line.

Investing in the US debt through Treasury bills and bonds is the safest investment anyone can make.

The stock market is now a very risky investment, possibly more risky than commodity futures.

Can you connect those two dots? Very good. Now you have a fair idea why the federal budget looks like it does. If you are still not sure what I mean, let me spell it out:

P-r-e-s-e-r-v-a-t-i-o-n o-f w-e-a-l-t-h.

Money taken from the stock market has gone into T-bills and bonds. This money is almost frozen in that it isn't invested into anything that will generate new wealth. What happens is money collected in taxes goes to those holding the bills and bonds. This money tends to be rolled back into more bills and bonds, and so more of the wealth of this nation becomes frozen.

Granted, the principal of the bills and bonds comes back into the economy. However, that principal doesn't generate any new wealth, unlike stock market and other investments that generally do generate new wealth.

The upside is that everyone knows this situation is doomed to fail, so at some point the bills and bonds need to be sold off to other holders, through the commodity markets, and the resulting revenue rolled back into the active economy, i.e., stock market; venture capital; capital expenditures for goods, services, and employees.

So this situation can explain why the Bush administration has been pushing the war with Iraq so much. The Treasurey needs to issue more bills and bonds to preserve more wealth until the economy turns around. Am I being too cynical? Maybe.

Digital Patriot,

Yes, and you can't give Reagan credit, nor can you blame Carter. At least not logically, but many do.

Both big parties are guilty of taking credit where it is not due and laying blame where it is not deserved. It's disgustingly idiotic, but it does seem to work politically for winning elections.

Whoops, I shoulda rolled this into the previous post. Jaimie and Mike will be ticked at me now

An upcoming war might be a small factor in asset preservation, but I think the real factor is that the stock market is so unstable right now.

As to the national debt, I too am extremely concerned about it. How can the government get away with constant deficit spending? One day, somebody is going to have to pay for the debt.

As for Clinton's surplus, it was never really there. It was all based on projected income. With the stock markets growing at bubble speeds, it would be easy to say that tons of more money would be coming in.

As for Clinton's surplus, it was never really there. It was all based on projected income. With the stock markets growing at bubble speeds, it would be easy to say that tons of more money would be coming in.


WELL SAID !!!!

And even more importantly it is a fact.

Now what Bush is doing is dealing with real numbers. Bush is doing what every company in the world does. Do you think Ford, GM, or DuPont started with billions in assets? Nope they built their assets up from virtually nothingness via OPM...yup other peoples money also known as deficit spending. How many American family's have more debt than they can possibly pay in a single year. What they count on is an increasing income as well as multiple years to pay it down. As long as the interest rate is manageable they succeed just before or after they die. Any adult on this board is most likely spending his entire life in deficit spending.

What Bush is counting on with lower taxes is an increase in federal income. The difference is the income stream. Rather than projecting tax dollars based on a fictitious volatile stock market Bush wants to work with real tax dollars from an increased tax base.

See if this makes any sense to any of you.

Take the average Joe who two years ago was making 50k, has 2.5 kids and a wife and girlfriend. Typical middle class life.. j/k ladies.

Anyway Joe lost his job when the Dot com, he went to work for a few years earlier out of college, went bust. So he started drawing unemployment. Now Joe was paying lets say $5,000 in federal income taxes. Now he is collecting about 32k in unemployment for 6 months. That isnt quite enough so he gets food stamps as well. Around $600/month. So now rather than paying in 5k/yr he is costing the government roughly 39.2k/yr. IS Joe better off? Nope he has had to change his lifestyle drastically and he is concerned what will happen when his unemployment runs out.

The democratic plan would extend Joes benefits and continue to cost the taxpayers almost 40k/yr.

Bush's plan will lower the taxes for the software firm down the street from Joe. The software firm will enjoy other tax benefits to do new research and development. This requires them to hire someone with experience. Joe sees the job t the unemployment office and starts working again. Now he gets only 45k /yr maybe until he an get back in the groove etc. But Joe is no longer a 40k/yr liability he is a 3k/yr asset...

Manufacturing is where the USA is taking a hit right now. We cannot compete with the cheap labor of China and Mexico. What Bush wants will spurn new manufacturing technologies in the USA. Instead of making cars etc or cell phones we will be making the next generation vehicles and airplanes etc. If Bush can get his way we could be on the verge of a new technology boom that makes the 90's pale in comparison.

So what is better lying to the public based on volatile projections? Or using real numbers that can be used to balance the budget based on a stable growing tax base? The federal government should NEVER have a surplus. If they do someone got screwed. With Clinton it was ALL of us by way of his fuzzy math...


out!!!

GBYA

Aahz

One day the public will realize that "cutting taxes"(easy) means nothing if you dont curb spending (very very hard). Bush knows they dont understand this.

The Clinton surplus was not only imaginary and it wasn't just a paper surplus. When he got into office the budget deficit was $255.3 billion.
1994 $203
1995 $164
1996 $107
1997 $22
1998 $70 surplus
1999 $125 surplus
2000 $237 surplus
2001 $127 surplus (budgeted in 2000)

Let's not pretend the budget accomplishments of the Clinton years were only on paper. I firmly believe that investors have more faith in our economy when we pay our bills. Why be in dollars if you are not sure about the future of the American economy. No country can run up bills year after year and have a stable economy that way.

Any budget surplus data from the CLinton years is totally unreliable. These figures are as honest as a financial statement from Arthur ANderson. Of course with all the money CLinton saved by ignoring the terrorist threats to AMerica, we could have bought all the cuban cigars he could handle.

Uhh, we paid the bills and had money left over. I didn't e-mail Clinton for my numbers I took them from a newspaper article distributed by Cox News Service and printed in the local paper, the Tennessean.

There is a difference between projecting surpluses and deficits and the results of a fiscal year.

Aahz in response to The federal government should NEVER have a surplus.

I like this in principle, but you need a "surplus" to pay down debt. We could have used this revenue to paid down debt which would have lowered our annual interest payments and provided more room for cutting taxes, or more importantly shoring up social security and maybe medicare.

If our inflation rate starts climbing again, we are going to have a difficult time maintaining our debt payments. Did these big companies of today use OPM (other people's money) to get started and keep borrowing more and more of it for decades? Did they invest in programs like military spending that does not promise a return of investment. If we are never supposed to go for a profit or surplus like you say, then why would we model our fiscal policy after capitalism which is all about seeking out profits or surpluses?

This thread is about GEORGE W. BUSH'S PROJECTED BUDGET DEFICITS, and has ABSOLUTELY NOTHING TO DO WITH BILL CLINTON! If you'd like to discuss the old news of Bill Clinton's economic policies, surplusses and the like, kindly start your own thread, thank you. Stay on topic, please.

I don't necessarily blame any president for the economy. But I believe that the fiscal policies set by the government play a significant role. The CURRENT administration's fiscal policies are based on spending beyond our means, and borrowing more, when we are already over-extended. Does anybody have anything to offer on THIS topic?