Let's talk about replacing GWBush in 2004.

Thomas, I see the same thing you do; Bush is mortgaging our children's future. Can't keep spending like a drunken sailor without any revenue to support it. Bush is not only spending future revenue, but limiting what our government can do after he is replaced. He's placed a noose on our economy that will be difficult to correct any time soon.

Voodoo economics!

This only works in a zero-inflation society. Which we do not have.

Don't let them fool you into thinking trickle-down works...

Cycloptichorn

Here's the problem with Bush's economics.
***************
Ex-Fed official: deficit a problem

Former Federal Reserve Vice Chairman Alice Rivlin says $450 billion deficit poses economic risks.
June 3, 2004: 7:51 AM EDT


SINGAPORE (Reuters) - Whoever wins this year's U.S. presidential election will inherit a massive fiscal headache, and international investors may dump dollar assets if the deficit is not tackled, a former top U.S. central banker said Thursday.

The deficit was so big that faster economic growth could not eradicate it, and tax increases would be needed, said Alice Rivlin, a former vice chair of the Federal Reserve.

Rivlin, speaking at a seminar in Singapore, was optimistic that a consensus would be reached among Republicans and Democrats that the deficit needed to be lowered.

Even if the U.S. economy performed well, foreign investors would not be willing to sustain the current high rates of investment in the country if fiscal imbalances were left unchecked, said Rivlin, a director of the budget office in the Clinton administration.

"Particularly at the moment, a very large portion of Treasurys are held by Asian central banks. That might begin to seem like not such a good idea to Asian central bankers after a while if we can't get our affairs in order," she said.

Heavy reliance on foreign funding of the deficit posed a risk of recession if sentiment on the United States changed suddenly.

"Whoever wins the election has got a problem," Rivlin told an Institute of Policy Studies-Economic Society of Singapore seminar.

While President Bush's tax cuts had helped when the U.S. economy slipped into recession, they were inappropriate when the economy was recovering and needed to prepare for retirement of people born after the World War II, she said.

The nonpartisan Congressional Budget Office has forecast the budget deficit would rise to around $450 billion this year, more than four percent of GDP.

Rivlin said it was projected to rise to five to six percent of GDP over the next decade as baby boomers retire.

Her current work at the Brookings Institution showed it was not politically feasible to balance the budget through spending cuts alone, she said. Bush wants to extend the tax cuts that he introduced in his first term, but has also indicated he wants to cut the deficit.

"He'd be in the position that his father was in. I think it wouldn't be possible to balance the budget without going back on his tax cut promises," she said.

Democrat John Kerry also faced a problem of funding his spending programs, as he needs to find a revenue source other than his plan to take back tax cuts given to high-income earners.

Asia's central banks hold more than $2.15 trillion of foreign exchange reserves, far more than the rest of the world. The majority of these are thought to be held in U.S. dollar assets such as Treasurys, reflecting the Asian policy of supporting the U.S. dollar to keep regional exports competitive.


Less foreign investment would put pressure on the U.S. dollar. Rivlin said a gradual weakening of the dollar could help boost U.S. exports and improve the current account balance.

But there was a risk of a precipitous fall in the dollar that could lead to a spike in interest rates, rising inflation and possibly recession.

"That risk is an important addition to the list of general negatives that one might have," she said.

****
This is the reason why I'm comfortable with bond funds. c.i.

Thomas-You ask for a source for the argument that tax revenues went up during the Kennedy and Reagan years although the tax rates went down.

go to http://www.cato.org/pubs/pas/pa-261.html

A great deal of information is given at that site. Among the information is the following:

quote:

"Real income tax revenue ROSE BY 16.3% FROM 1982 TO 1989 AFTER the top income tax rate had been reduced from 70% to 50% in 1983 and then to 28% in 1986>"

and

"Federal revenues doubled in the 1980's from 517 Billion to 1,031 Trillion"

and

"The Kennedy Income Tax cuts of 30% were enacted in 1964 and they resulted in five consecutive years of 5% growth per year in tax collections"
end of quotes-
on another subject---
The key to the economy is the GDP and its growth.

The government's ability to finance its debt is tied to the size and strength of its economy or GDP.

As a percentage of GDP, debt held by the public was highest at the end of WORLD WAR IIin 1945( wars do that) at 109 percent. As a percentage of GDP, debt held by the public fell to 24%( as a percentage of GDP by 1974.

It is vital to note that the decline of 109 percent in 1945 to 24 % in 1974 was accomplished even though debt was added in every year between 1945 and 1974 BECAUSE THE ECONOMY- THE GDP GREW FASTER.

Perhaps, Thomas, the reason why the Democrats are staying away from Statistics in Economics with regard to the election in November, is that the Economic news is very good at this time:

I will again quote parts of Mortimer Zuckerman's column in US News and World Report giving the pertinent FACTS and FIGURES.

1. We will probably see a five percent growth in the GDP for 2004.

2. 61 percent of private industries surveyed have added workers.

3. Business confidence has surged to a 20 year high.

4. Capital spending now constitues over 20 percent of the growth in GDP

5. Corporate profits have surged over 25% for this year and corporations are now starting new projects.

6. Sales have improved in 58 out of the 60 scoreboard industries with the first back to back quarters of double digit revenue growth in three years.

7. Household wealth has passed the 45Trillion mark, a new peak.

The Economic News is very very good.

What does Posner say about it? ;-)

With the utmost of respectfulness.
Does nimh know that quotations from The Honourable Judge Posner whose comments are superiour to any others are not posted at this time?

I am not sure of the Socialist nimh is aware that this only happens between about 6 am and 10:30 am Dutch Summer Time.

I am very sorry to tell you this Mr NIMH.

Walter...that was very funny.

As to another instance of a reason to get rid of these guys...
http://www.salon.com/politics/war_room//index.html

These guys in the administration are good! They play this government like a fidel with good sounding music while crapping on the citizens and enriching their family and friends.

Out-of-production since 1965, KC-135 "Stratotankers" comprise the bulk of the USAF's In-Air Refueling capability (approx 545 aircraft of a current fleet total of approximately 600 In-Air Refuelers, the also long-out-of-production KC-10 "Extender" accounting for 59 aircraft, the last of which entered the Airforce inventory over 15 years ago). The planned replacement of these planes is now nearly a decade postponed.



Most of the crewmen assigned to the KC-135 fleet are far younger than they plane in which they fly. While constant modernization and upgrading of the fleet has extended its service life beyond even the most optimistic expectations when the plane's design was approved and committed to production half a century ago, time has caught up to the old beast. Metal fatigue is beginning to show up in key structural components, some of which simply are not replaceable short of the prohibitively ridiculous, patently impracticable extreme of remanufacturing the entire aircraft, an undertaking which would cost far more than replacing the fleet with the currently proposed 767s. What the Airforce needs, and needs urgently, is a contemporary replacement for the sturdy antiques (which, if they were automobiles, would qualify for Classic Car Collector license plates in every State in the Union), not political wrangling and porkbarrel stuffing.

This is not to say "Cost be damned", but I'm quite peeved that the lives of our military personnel, and the overall mission-readiness of our military, is being held hostage to partisan carping and self-serving grandstanding by politicos who care more about votes and snappy soundbites than the security and wellbeing of The United States.

Hey, we were using B52's when I was in the US Air Force half century ago.

I hadn't realized we had bombers in WWI

Bill, Ya gotta study your world wars history. LOL

LOL!, Walter

McG

I think your signature is a bit long....and screwing up our format here.

Just go with "naught one" for short

Likely, you've all now seen coverage on the Justice Department memo revealed in the Wall Street Journal yesterday which advised that the President was not bound by conventions and military protocols regarding torture...that torture could be used on prisoners.

http://www.washingtonpost.com/wp-dyn/print/image/

http://www.nytimes.com/2004/06/08/politics/08ABUS.html

Thanks for getting something started on this topic, bernie.

It deserves its own high-profile thread, but I'm going to just respond to it here.

Phil Carter's analysis is the most cogent I have read so far; he posts the must-read weblog Intel Dump. He hasn't yet passed the bar exam, but he exquisitely scrapes the veneer off the DoD's situationalist approach. An excerpt:

I think Bush has received much bad advice - he asked for it, he took it, he made the decision - he should do the time...........