deficits to continue breaking records

[Danzig]

http://www.washingtonpost.com/wp-dyn...l?hpid=topnews



Federal budget deficit to exceed $1.4 trillion in 2010 and 2011
By Lori Montgomery
Washington Post Staff Writer
Saturday, July 24, 2010

The federal budget deficit, which hit a record $1.4 trillion last year, will exceed that figure this year and again in 2011, the White House predicted Friday, providing fresh ammunition to Republicans who are hammering President Obama for all the red ink as they campaign to regain control of Congress in November.

The latest forecast from the White House budget office shows the deficit rising to $1.47 trillion this year, forcing the government to borrow 41 cents of every dollar it spends. Contrary to official projections, the budget gap will not begin to narrow much in 2011, because of an unexpectedly big drop in tax receipts.

and further down:

But the long-term forecast stayed about the same, with the White House predicting additional borrowing of $8.5 trillion through 2020, a sum that would drive the national debt to more than 77 percent of annual economic output. That would be the highest percentage since 1950.

Independent forecasters, such as the Congressional Budget Office, say that number will probably be significantly higher if current policies remain unchanged. Obama has created a bipartisan commission to develop a strategy for stabilizing the debt by 2015.

[clyde]

So?

[Danzig]

Originally Posted by clyde

So?

a:a needle pulling thread

[clyde]

Eye see.

[Riot]

Originally Posted by Danzig

The latest forecast from the White House budget office shows the deficit rising to $1.47 trillion this year, forcing the government to borrow 41 cents of every dollar it spends. Contrary to official projections, the budget gap will not begin to narrow much in 2011, because of an unexpectedly big drop in tax receipts.

We could let the unfunded Bush tax cuts expire. That would take out a huge portion of the deficit (that they caused)

[Danzig]

Originally Posted by Riot

We could let the unfunded Bush tax cuts expire. That would take out a huge portion of the deficit (that they caused)

that's already part of the plan, they expire in january. yet, the next two years are going to continue to break records. also noticed the continued war funding. those two wars are sucking us dry, with nothing to show for it.



But the forecast provides no relief from the gloomy outlook that has been forcing Obama to consider deeper cuts to defense and non-security programs as well as additional tax increases. This week, the administration also repeated its intention to let tax cuts for the wealthy expire in January.

...the White House predicting additional borrowing of $8.5 trillion through 2020, a sum that would drive the national debt to more than 77 percent of annual economic output. That would be the highest percentage since 1950.

Independent forecasters, such as the Congressional Budget Office, say that number will probably be significantly higher if current policies remain unchanged. Obama has created a bipartisan commission to develop a strategy for stabilizing the debt by 2015.

[Danzig]

now, this is interesting:

http://www.newsmax.com/Headline/bern...7/22/id/365426

Bernanke Urges Congress to Renew Bush Tax Cuts

Thursday, 22 Jul 2010 08:13 PM
By: David A. Patten

Federal Reserve Chairman Ben Bernanke dropped a major bombshell on Democrats seeking massive new revenues to narrow the deficit, announcing Thursday that he favors preserving the Bush administration tax cuts to help a faltering U.S. economy.

“In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,” Bernanke told the House Financial Services Committee. “There are many ways to do that. This is one way.”

Bernanke's statement put him directly at odds with White House officials and House Speaker Nancy Pelosi, who favor raising taxes on wealthy Americans by letting the tax cuts the Bush administration passed in 2001 and 2003 expire.

Bernanke's views also conflict with those of his predecessor, Alan Greenspan, who told Bloomberg TV's Judy Woodruff just last week that lawmakers should allow the Bush tax cuts to expire as scheduled at year's end.

Greenspan conceded, however, that doing so probably would slow growth.

Bernanke emphasized the importance of giving the economy a boost. But he also told the House committee that dealing with the deficit, which has ballooned during the Obama administration, remains a major consideration.

“We need to be taking steps to reassure the American people and the markets that our fiscal situation is going to be well controlled,” Bernanke said. “That means that, if you extend the tax cuts, you need to find other ways to offset them.”

Bernanke's comments came on a day when the Dow Jones Industrial Average jumped 201 points, in part on reports of strong corporate profits.

But the markets were also encouraged by the news that two more Senate Democrats — Sen. Kent Conrad, D-N.D., and Sen. Ben Nelson, D-Neb. — are joining the growing number of voices urging an extension of the tax breaks enacted under the Bush administration to stave off the possibility of a double-dip recession.

[clyde]

Originally Posted by Riot

We could let the unfunded Bush tax cuts expire. That would take out a huge portion of the deficit (that they caused)

7 hours??


Losing the passion?

[Danzig]

Originally Posted by Riot

We could let the unfunded Bush tax cuts expire. That would take out a huge portion of the deficit (that they caused)

you piqued my curiosity, so i googled. interesting...

http://online.wsj.com/article/SB1000...831199046.html

OPINIONJULY 13, 2010.
The Bush Tax Cuts and the Deficit Myth
Runaway government spending, not declining tax revenues, is the reason the U.S. faces dramatic budget shortfalls for years to come.

By BRIAN RIEDL
President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this "tax cuts caused the deficits" narrative. Consider the three most persistent myths:

and later:
• Declining revenues are driving future deficits. The fact is that rapidly increasing spending will cause 100% of rising long-term deficits. Over the past 50 years, tax revenues have deviated little from their 18% of gross domestic product (GDP) average. Despite a temporary recession-induced dip, CBO projects that even if all Bush tax cuts are extended and the AMT is patched, tax revenues will rebound to 18.2% of GDP by 2020—slightly above the historical average. They will continue growing afterwards.

Spending—which has averaged 20.3% of GDP over the past 50 years—won't remain as stable. Using the budget baseline deficit of $13 trillion for the next decade as described above, CBO figures show spending surging to a peacetime record 26.5% of GDP by 2020 and also rising steeply thereafter.
Putting this together, the budget deficit, historically 2.3% of GDP, is projected to leap to 8.3% of GDP by 2020 under current policies. This will result from Washington taxing at 0.2% of GDP above the historical average but spending 6.2% above its historical average.

[Riot]

That's an interesting opinion piece, but I haven't seen that opinion shared by many. Making a contention about absolute amounts then segueing into percent of GDP as one's support is a bit of a straw man IMO.

Here's some more on what Congress might be thinking of regarding the tax cuts.

Republican leaders have opposed much smaller spending bills that would add to the national debt — most recently a $34 billion extension of unemployment benefits, approved by Congress on Thursday. But they endorse more federal borrowing to make all the tax cuts permanent.

The tax cuts were enacted in 2001 and 2003 after Bush made them the centerpiece of his election campaign. They provided help for rich and poor alike, reducing the lowest marginal rates as well as the top ones and several in between. They provided a wide range of income tax breaks for education, families with children and married couples.

Taxes on capital gains and dividends were reduced, while the federal estate tax was gradually repealed, though only for this year.

Obama wants to make the tax cuts permanent for middle- and lower-income taxpayers, allowing the top rates to increase next year for individuals making more than $200,000 and couples making more than $250,000.

Obama's plan would cost $2.5 trillion over the next decade, including the cost of an annual fix that spares the middle class from being hit with the Alternative Minimum — a hit of about $3,700 a year.

It would cost $2.9 trillion over the next decade to extend all the tax cuts, including AMT relief, according to estimates from the Tax Policy Center, a Washington think tank.

House Majority Leader Steny Hoyer, D-Md., first raised the possibility of a temporary extension during a speech in June about the budget deficit. In the Senate, Finance Committee Chairman Max Baucus, D-Mont., favors a permanent extension of the middle-class tax cuts, but the issue is not settled.

Finance Committee Democrats circulated a proposal Thursday that would let tax cuts for the wealthy expire next year while permanently extending the middle-class tax cuts. It would patch the AMT for two years and extend the estate tax for two years with a top rate of 45 percent. The cost: $1.55 trillion over the next decade.

Committee members met behind closed doors for more than hour Thursday to discuss the tax cuts. Afterward, Baucus said no decisions had been make.

Some rank-and-file Democrats are arguing to extend all the tax cuts, including those for high earners, for a year or two, until the economy recovers. But House Speaker Nancy Pelosi, D-Calif., said Thursday she won't consider extending the tax cuts for the wealthy.

[clyde]

^^^^"Be a peckerwood with your word. Speak with a muzzle."

[Danzig]

Originally Posted by Riot

That's an interesting opinion piece, but I haven't seen that opinion shared by many. Making a contention about absolute amounts then segueing into percent of GDP as one's support is a bit of a straw man IMO.

Here's some more on what Congress might be thinking of regarding the tax cuts.

what about bernanke's statements, and greenspan conceding that allowing the cuts to expire would slow growth?

[Riot]

Originally Posted by Danzig

what about bernanke's statements, and greenspan conceding that allowing the cuts to expire would slow growth?

They are far smarter than I am about it.

[clyde]

Get Quiet!! something good to drink--quick!

[Danzig]

here's the main issue...if the tax cuts are just allowed to expire, they don't just raise the tax rate on the rich. they raise them on everyone. so, when obama says just let them expire, which is his plan, he's advocating a huge tax increase on the poor and the middle class, not just the wealthy as he would have you believe. and that's why many democrats are speaking out against the plan, they don't want across the board increases.

http://www.msnbc.msn.com/id/38400016...new_york_times

Epic battle looms in Washington over expiring Bush tax cuts
Fight to serve as proxy for bigger political clashes

From both political and policy perspectives, the tax issue is dizzyingly complex, and even some of Washington’s most grizzled legislative operatives say they cannot predict the outcome.

Some liberals want Mr. Obama to keep his promise to raise taxes on the rich, and the White House’s budget forecasts rely heavily on rolling the top income tax rates back to their pre-2001 levels. Some fiscal hawks warn that extending the tax cuts would add more than $2 trillion to the federal budget deficits at a time when the national debt is becoming an economic concern and a political issue. Political economists are fiercely divided.


The issue is further complicated by the rising concern among voters about the federal deficit, which would be increased by roughly $1.5 trillion over 10 years just by continuing the tax breaks for the middle class. Many economists say the nation’s debt load is already headed to risky levels.

But some lawmakers, including Mr. Wyden, say the deficit concerns and the attention on the debt commission could help forge a deal: a short-term continuation of the tax cuts for the middle class, and perhaps some new tax breaks for businesses, that would buy lawmakers time to undertake a broad overhaul of the tax code in the next Congress.

[clyde]

Danny..please.



This thread has been destroyed.

[Riot]

Originally Posted by Danzig

here's the main issue...if the tax cuts are just allowed to expire, they don't just raise the tax rate on the rich. they raise them on everyone. so, when obama says just let them expire, which is his plan, he's advocating a huge tax increase on the poor and the middle class, not just the wealthy as he would have you believe. .

No, Obama's recommendation is to let the tax cuts on the wealthiest expire (the top 2-3%) - which is Bernanke & Geithners recommendation, too - and to extend the tax cuts for everyone else.

What Congress will end up doing we'll have to see.

[Danzig]

it's going to be rather tricky for them to extend some, while cutting others. the whole thing has to be settled somehow. we're in quite a pickle. i'm not quite sure how they're going to reconcile this. or how they can add to the deficit while keeping tax cuts for some. or how they can chance stalling any gains by eliminating tax cuts that could affect small business.

[clyde]

Originally Posted by Danzig

it's going to be rather tricky for them to extend some, while cutting others. the whole thing has to be settled somehow. we're in quite a pickle. i'm not quite sure how they're going to reconcile this. or how they can add to the deficit while keeping tax cuts for some. or how they can chance stalling any gains by eliminating tax cuts that could affect small business.

What seems to be your primary malfunction here, ma'amski?

[joeydb]

Originally Posted by Riot

No, Obama's recommendation is to let the tax cuts on the wealthiest expire (the top 2-3%) - which is Bernanke & Geithners recommendation, too - and to extend the tax cuts for everyone else.

This is also called the redistribution of wealth.