The deficit doesn't matter

[WVUforREDSKINS]

Can someone explain why the politicians keep saying this? And what they mean?

http://www.youtube.com/watch?v=uAKK0uKMwCI

Cheney said it a while back as well.

[Burgold]

It means...

People always want you to ignore the man behind the curtain.

[mjah]

Because they'll be dead by the time the reckoning arrives.

My neighbor Racist Bill says the same thing all the time. I think Hannity actually lives inside of him and manipulates him like a puppet from within.

[jnhay]

I guess they mean that a deficit now is okay if it stimulates the economy somehow. In the future, when the economy is better they can start worrying about the deficit, but right now we'd just be in worse condition if we just tried to balance the budget.

Does our deficit still rank somewhere in the middle as far as the world's economy goes?

[SkinsHokieFan]

Because they'll be dead by the time the reckoning arrives.

My neighbor Racist Bill says the same thing all the time. I think Hannity actually lives inside of him and manipulates him like a puppet from within.

Exactly

WE (being those 35 and under) will have one big ass bill to pay

And its not going to be pretty

You want to address the national debt? You gotta go after entitlement spending and raise taxes.

If we don't do that soon, 20 years from now this country will NOT be financially solvent

[Burgold]

It is interesting how defecits only seem to matter to the party out of power, isn't it :doh:

[jnhay]

Exactly

WE (being those 35 and under) will have one big ass bill to pay

And its not going to be pretty

You want to address the national debt? You gotta go after entitlement spending and raise taxes.

If we don't do that soon, 20 years from now this country will NOT be financially solvent

How would that address the recession though? If they raise taxes now people are going to spend even less when the economy needs more spending. I hate making the comparison, since times are drastically different now, but didn't the Great Depression come about because the government was too focused on the budget?

[BRAVEONAWARPATH]

With the current condition of the economy....NO. The deficit doesn't matter.

The majority of economists (both liberal and conservative) agree on this.

[The Sir]

The deficit does dictate the value of the dollar, to start paying it off is a much better idea than trying short term fixes (which add to the deficit) for a long term problem.

[jnhay]

The deficit does dictate the value of the dollar, to start paying it off is a much better idea than trying short term fixes (which add to the deficit) for a long term problem.

How does that stimulate the economy though? Don't you think that will just make things worse?

[BRAVEONAWARPATH]

How does that stimulate the economy though? Don't you think that will just make things worse?

:applause:

[twa]

It's all play money anyway:) and with our economy and monetary policies it is not a critical factor.

It only matters if we wish it too.

[GibbsFactor]

The deficit does matter to an extent but not as much as some think it may.

To understand our monetary system you would know that debt is natural and not a red flag. The way our economy works there has to be debt.

It's not as if we owe 5 trillion in real solid sound monies. The 5 trillion we owe is all paper and has nothing tied to it other then the governments word to repay it.

[jnhay]

The deficit does matter to an extent but not as much as some think it may.

To understand our monetary system you would know that debt is natural and not a red flag. The way our economy works there has to be debt.

It's not as if we owe 5 trillion in real solid sound monies. The 5 trillion we owe is all paper and has nothing tied to it other then the governments word to repay it.

That's about 17k per person in a lifetime, and considering I read recently how an average person makes at least a million in their lifetime (I think that's what my book said) that doesn't sound too bad.

[ChocolateCitySkin]

Because they'll be dead by the time the reckoning arrives.

My neighbor Racist Bill says the same thing all the time. I think Hannity actually lives inside of him and manipulates him like a puppet from within.

its like a car wreck for you... you don't want to listen to your neighbor but you can't help listening to him.

[Larry]

It means:

1) If a politician votes to raise taxes (or simply votes against tax cuts), the voters will kick him out of office in the next election.

2) If a politician votes to cut spending (or simply votes not to increase spending), the voters will kick him out of office in the next election.

3) If a politician votes to simultaneously cut taxes and increase spending, no one will blame the politician for the deficit, and there will be no political repercussion. In fact, the voters will be grateful.

"Deficits don't matter" means "deficits don't matter politically".

[Larry]

It is interesting how defecits only seem to matter to the party out of power, isn't it :doh:

I point to my rules #1 and #2 above. And observe that (minority party) thinks that it would be a great idea if (majority party) would violate Rules #1 and #2.

[PeterMP]

1. Any comparision to any other depression is meaningless because the goverment has never run such a debt.

2. People always say that increasing taxes will cause people to spend less money. I've yet to see anybody actually support that with some facts.

3. What we don't have a good idea is how the goverment borrowing money affects the credit market for other (and arguably more productive) investment.

[Larry]

People always say that increasing taxes will cause people to spend less money. I've yet to see anybody actually support that with some facts.

Somehow, the theory that people who have less money, spend less money, seems like a logical one, to me.

[chipwhich]

Somehow, the theory that people who have less money, spend less money, seems like a logical one, to me.

Thats one is a classic response.... Good one.

[GibbsFactor]

1. Any comparision to any other depression is meaningless because the goverment has never run such a debt.

2. People always say that increasing taxes will cause people to spend less money. I've yet to see anybody actually support that with some facts.

3. What we don't have a good idea is how the goverment borrowing money affects the credit market for other (and arguably more productive) investment means.

1. I'd be interested in seeing the ratio of GDP/deficit from 1929 to today.

2. Ever heard of the Union of Soviet Socialists Republic?

3. Sure we do. If the Government can't loan money, it loses it's credit rating which cancels out the value of the dollar which affects everything in our economy.

[PeterMP]

Somehow, the theory that people who have less money, spend less money, seems like a logical one, to me.

I'd question if the level w/ respect to a normal tax increase makes a significant affect w/ respect to all of the variables related to people's spending.

[PeterMP]

3. Sure we do. If the Government can't loan money, it loses it's credit rating which cancels out the value of the dollar which affects everything in our economy.

I'm not sure I understand your point here. I'm talking more from the perspective of the goverment borrowing money not loaning it.

[wilsonian]

The United States government is broke. We can't afford anything else. Once other countries (our creditors) wise up to us, we are in for serious trouble. In addition, all these bailouts are going to set the stage for massive hyperinflation. The U.S. government is devaluing the dollar. What happens when China and Japan retire all the bonds they own? All the Greenspan dollars we have printed will come home to roost, and we will be in store for massive hyperinflation. Prepare yourselves.

[jnhay]

The United States government is broke. We can't afford anything else. Once other countries (our creditors) wise up to us, we are in for serious trouble. In addition, all these bailouts are going to set the stage for massive hyperinflation. The U.S. government is devaluing the dollar. What happens when China and Japan retire all the bonds they own? All the Greenspan dollars we have printed will come home to roost, and we will be in store for massive hyperinflation. Prepare yourselves.

You'll have to explain how we're broke first. Also, Greenspan printed too much money? I don't get it, isn't that just monetary policy? I would think we would've seen the effects by now had he gone overboard.

1. Any comparision to any other depression is meaningless because the goverment has never run such a debt.

2. People always say that increasing taxes will cause people to spend less money. I've yet to see anybody actually support that with some facts.

1. Actually, we've had higher debt in comparison to GDP. During WWII our debt was twice as bad.

2.I'll find something better later, but I can tell you right now that Kennedy cut personal and corporate income taxes in 1964 and the economy saw real GDP growth. Clinton raised taxes and saw good results probably because of the technology boom.