Larry Johnson posted this article on his blog No Quarter last night after the ObamaTV event. Whew, he was hot under the collar and used some rather colorful language but the meat of his contentions bear repeating so I am posting here (excuse the profanity):
"I am livid. Your stupidity on the fundamentals of economics is breathtaking. You blame Republican tax cuts as “not working?” Jesus Christ, man!!! George Bush’s tax cuts cost a total of $1.4 trillion dollars over 8 years. Here’s the link. Not my opinion, it is a fact.
Meanwhile, the Federal Government spent an additional $4.9 trillion dollars. Barack, open your taxi cab ears and listen–the Federal Government, thanks to Republican negligence, doubled the national debt from $5.7 trillion to $10.6 trillion in eight years. That means the U.S. borrowed more money than it could repay.
Do you understand, sir?
Tax cuts did not break the Federal budget. Tax cuts did not immerse the Federal Government in a level of debt not seen ever in the history of the United States. Spending by the Congress and the President helped break the bank. And your “solution” to the current crisis–which was brought on by people and institutions spending money they did not have and borrowing money they could not repay–is to have the Federal government borrow more money it cannot repay and spend it? Are you shitting me?
I am not defending those Republican assholes who acted so recklessly and irresponsibly. They are guilty. But their stupidity does not give you license or excuse to be equally idiotic.
Here’s the scary number. U.S. GDP (i.e. Gross Domestic Product or the output of goods and services produced by labor and property located in the United States) is $14.2 trillion. Our Federal debt is approaching $11 trillion. In other words, our debt represents almost 80% of our annual economic output and GDP is shrinking while the amount of the debt is increasing.
Do get it? If you are in a lifeboat in the midst of the ocean and it is taking on water the last thing you want to do is start pouring more water into the boat.
Sorry, I cut you no break on this. Stupid is as stupid does. Only in this case your monumental ignorance is putting a nation at risk.
UPDATE–As is typical of the obama disciple, SFHillary, he reads things into my observations that are not there. Who has called for “doing nothing?” Not me.
Let’s focus the stimulus on where if should be.
First, cut government spending. How? Every employee of the Federal Government who is in the Senior Executive Service (i.e., holds the equivalent of a senior rank, starting at the 1 star general level) should take a 20% pay cut. Employees at the GS 11-15 should take a 15% pay cut, and those at GS 10 and below should take a 10% cut. Lead by example and make the government lead.
The money freed up by those cuts can be redirected to pay to help people who are in debt over their heads stay in their homes.
This much is certain–adding to the size of the Federal Government will not stimulate the economy and provide for sustained growth.
Second, a reduction on the interest rates of adjustable home loans. This will be arbitrary and costly but the Federal Government will offer to buy up bad mortgages and in turn will charge the folks paying on those mortgages a lower interest rate. The goal is to keep people in their homes, reduce their monthly expenses, and give them a reasonable chance of saving their property. That offers a better chance of stimulating economic growth than having houses go vacant.
Third, no matter how noble or necessary you may think an investment in infrastructure is you must understand that such public works projects do little by way of general economic stimulus. Rebuilding roads, sewers or schools may give us a spiffier nation down the road but it is like any project–if you want to remodel your home you still have to come up with the cash or get a loan. Just because it is the Federal Government does not mean those rules no longer apply."(Source) - emphasis added
12 comments:
Oooooooh. He is so on. The things Bush screwed up are things he handled like a Democrat, like the prescription drug bill and other spending decisions.
I don't think these bills come out of just stupidity, but arrogance. Government leaders and the American public in general think that the great United States is immune to massive disaster, like economy collapse or government collapse kind of disaster. Like needing a truck load of cash to buy a loaf of bread kind of stuff.
A time is coming very soon where the national debt is going to bite us - hard. We owe that debt to our enemies-like China. The treasury is printing money like it's going out of style, which is going to lead to inflation.
It won't happen, but I wish these arrogant politicians would wake up. Their own arrogance will be our downfall, and they don't even see it coming.
Excellent blog. I wrote one myself concerning this stupid stimulus plan. Obama is no better than Bush.
Same President. Different Party.
"George Bush’s tax cuts cost a total of $1.4 trillion dollars over 8 years." (Larry Johnson)
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Why do people keep repeating this untruth.
Yes IF everyone paid their taxes upfront at the HIGHER tax rates that they do when tax rates are lowered....those tax cuts would COST money.
BUT that's not what happens or what SHOULD happen!
Fact is, income tax and Capital Gains RATE CUTS increase tax revenues!
How?
Because when income and Cap Gains RATES are lowered, the top 10% of income earners (who pay 71% of ALL U.S. income taxes) take MORE of their money upfront, INCREASING those tax revenues, compared to pre-RATE cut levels.
Likewise, when income and Cap Gains RATES are HIKED, more of those top 10% of income earners (those with more disposable income) choose to defer more of their income in various tax-deferred vehicles, thus when income and Cap Gains RATES go UP, those tax revenues go DOWN.
On the spending end, Larry Johnson is right on the money. G W Bush has been as Keynesian (pro-big government) as his Dad, who called Reagan's Supply Side policies "Voodoo Economics."
The Democrats are now continuing the reckless spending that got us into this mess.
Don't worry folks - after 4 years certain talking points will be cleared off of the table BUT they will try to spin it.
After 2 weeks ago seeing Michelle Obama speaking in front of the Department of Education and then the other day Obama speaking in Florida I saw Mrs and Mr Santa Claus with respect to all that they had promised to give away.
Where as evil Bush's reckless spending was termed irresponsible and blood thirsty - Obama's spending will exceed Bush BUT it will be justified because "he had to repair the damage that Bush has created".
The facts don't matter folks.
Only the NARRATIVE matters.
CBW:
You are a sellout.
Why did you allow this WHITE MAN to call the first Black president an "ignorant ass"?
Don't worry UptownSteve - I got your back man. We can't allow these Uncle Tom Black conservatives to treat Obama as Bush was treated. Obama's Black. CBW just wants the Republicans to run her head. Right?
:-/
The righties keep yapping that Bush behaved like a Democrat yet they refuse to acknowledge that Democrat Bill Clinton left office with a substantial budget surplu which George Bush and the Republicans promptly pissed away while cutting taxes and increasing spending (the war in Iraq anyone?)
Oh BTW, Conservative god Ronald Reagan also left office with a substantial budget deficit, rising unemployment and poverty.
Larry Johnson is a buckdancing Uncle Tom.
Psst...UptownSteve--Larry Johnson is white...Does that still make him an Uncle Tom? Or is he just a "Massa"?
UptownSteve~Do you really believe that just because someone white disagrees with Barack Obama that they are racists, and any black person that doesn't see him as a BarackStar is a lawn jockey? Come on now. So then you believe that the BarackStar is beyond reproach? Really, my friend get a grip.
[quote]Democrat Bill Clinton left office with a substantial budget surplu which George Bush and the Republicans promptly pissed away while cutting taxes and increasing spending[/quote]
WhiteBowieSteve:
1) What SPECIFIC Democratic Policies created the so called Budget Surplus that Clinton Left?
2) What policies that elected officials who are likely to take root in Prince Georges County were responsible for this surplus?
3) If evil Bush entered office with a $5 trillion debt and exited with an $11 trillion debt - where did the $6 trillion spread go?
3a) $850 billion Iraq War + $880 billion Tax cuts + $750 TARP spending
Why don't you include the $2.5 TRILLION in ENTITLEMENT SPENDING to this hit against Bush?
4) Do you see President Obama SLOWING SPENDING and reducing the debt?
My prediction is that the $11 trillion debt will be $16 trillion after 4 years of Obama and the Democrats.
Obama should start wearing a red suit because he is the Presidential Santa Claus with respect to what he is promising to give away to everyone.
"If evil Bush entered office with a $5 trillion debt and exited with an $11 trillion debt - where did the $6 trillion spread go?"
What smelly orifice did you pull this crap from?
Clinton left Bush with $127 billion budget surplus.
Get your facts straight Rastus.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGqLx61MRY6w
"If evil Bush entered office with a $5 trillion debt and exited with an $11 trillion debt - where did the $6 trillion spread go?" (CF)
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“What smelly orifice did you pull this crap from?
“Clinton left Bush with $127 billion budget surplus.
“Get your facts straight Rastus.” (uptownsteve)
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WoW! That was an astoundingly DUMB reply. In fact, it was so dumb that, to paraphrase that line from Billy Madison, “We are all dumber for having heard/read it.”
OK, DEBT and DEFICIT...two different and DISTINCT things. Budget surpluses refer to the DEFICIT and “deficit spending” NOT the national DEBT.
In short, a budget surplus does NOT mean there is no national debt at that time.
We had, thanks to the Gingrich Congress’ cutting the federal budget, a series of budget SURPLUSES in the late 1990s, which G W Bush indeed inherited.
We were, thanks to those spending cuts (enacted by the Gingrich Congress, over Bill Clinton’s objections - they shut down the government for a few weeks in 1995 to get'em done), able to run a few BUDGET surpluses - which only means that we spent less during those years than we took in - but we STILL had a HUGE national DEBT, despite those few years where we had some budget surpluses INSTEAD of running our customary deficits.
Our national DEBT has risen EVERY year over the past three decades. It had hit a record high of right after 120% of GDP after WW II and went down to a low of about 21% of GDP by the early 1970s. It began a gradual rise and has risen steadily ever since.
In FACT, the national debt in September 2000 was $5,674,178,209,886.86! (http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm) Ironically enough, just as CF said it was.
The debt had soared to $10,024,724,896,912.49 (http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm) by September of 2008,
due to things like the wars in Iraq and Afghanistan, the NCLB Act, the prescription drug boondoggle, more reckless social spending (even adjusted for inflation than LBJ), the domestic WoT, that $720 BILLION Bank bailout, etc.
So, DEBT and DEFICIT uptown...there IS a HUGE difference!
It kinda pays to know such things before you jump ugly on someone (CF, in this case). There’s no reason to get irritated merely because someone else happens to know more than you on a given subject...after all, it’s not their fault.
"The righties keep yapping that Bush behaved like a Democrat yet they refuse to acknowledge that Democrat Bill Clinton left office with a substantial budget surplu..." (uptownsteve)
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Oh snap....uh......wait a minute, Bill Clinton (as noted above) left a $5.6 TRILLION National DEBT, despite a few years of running BUDGET SURPLUSES....that DEBT & DEFICIT thing again.
Funny story...those budget SURPLUSES? Yeah, they came about when the federal budget was cut for a few years in the mid-1990s.
What's so funny about that?
OK, this is a riot, but Bill Clinton...remember him? He OPPOSED those federal budget cuts, which means he OPPOSED the very thing that created those budget surpluses...turns out that they were forced on him, when the Gingrich Congress shut down the federal government for a few weeks in 1995!
Crazy funny, right?!
It gets better.
Bill Clinton was indeed a Democrat, but he was INDEED a Blue Dog (largely Conservative - the DLC he helped start was set up to move that Party to the Right and away from the DNC's more Liberal stands) Democrat.
As an example, Bill Clinton pushed for and got NAFTA passed with a Democratic Congress back in January of 1994.
When the Gingrich Congress took power in 1995, Clinton fought those federal budget cuts and the slashing of the Capital Gains tax RATE from 30% to 20%, but after that one showdown, he jumped to the Gingrich beat - welfare reform (a HUGE success), the whole nine!
Bill Clinton was MORE of a Supply Sider than either GW Bush or his Dad.
Lucky for GW those two Supply Side tax cuts - cutting the Cap Gains rate down even further to 15% and those across-the-board income tax rate cuts - INCREASED tax revenues to such an extent that they were able to mask some of the ill effects of all that excessive spending, at least for awhile. In fact, by 2006, those cuts had increased revenues by so much that they halved the DEFICIT (that means we cut our "deficit spending" NOT our national debt).
And here's the kicker; we're currently in a vicious global credit freeze and a massive economic crisis, because of...?
Come on....
Because of excessive government SPENDING...AND wrong-headed regulation (telling business folks how to run the businesses that THEY'VE been running all their lives)...like the Sarb-Ox Bill that came in after the business scandals (Enron, Tyco, Arthur Anderson, etc.) that had flourished in the mid to late 1990s and broke in the summer of 2001. Sarbannes-Oxley (the cure) was so costly, that it resulted in that "jobless recovery" of 2002 - 2003...and government guaranteeing all the bad debt it had earlier MANDATED, by backing it through its GSEs (Fannie & Freddie).
So, the current administration is following up G W's orgy of spending and bone-headed regulation with....(this is too funny)....yup, even MORE government spending AND more bone-headed regulation.
It's as though someone started a fire with gasoline and you decide to try and put it out by throwing MORE gasoline on it!
Funny stuff, alright.
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