What Were The Causes Of This Fiscal Crisis?

[Guest]

There have been hundreds of postings here, back and forth, accusing one president or another of leading the country to the brink of financial ruin. Some have even accused our current president of being a closet socialist or even communist. Prior to that, there have been many terribly vituperative criticisms of George Bush. A good example is a recent post right here in the The Talk of the Villages Political Forum a few days ago...
"...Obama has driven spending to 24% plus of GDP from its historic level of 18-19%. I've presented REAL data...Go look at the data, find the specific cuts proposed by Obama (I'll save you time, there are none) and try to come to grips, difficult for a Dumbocrat, that this country is being destroyed by Obama and his blindly loyal followers."So maybe its time to revisit a few facts regarding our current fiscal crisis.

First it should be noted that no President, Obama or Bush, Republican or Democrat, can be legitimately accused of "driving spending" or "destroying the country". The executive branch of our government does not enact spending bills, the House of Representatives is the only branch of government with the authority to do that. Presidents can propose budgets and veto spending bills, but other than using the bully pulpit, which carries no voting power, that's pretty much the extent of their role in government spending. For the purpose of considering the numbers below, be reminded that the Republicans controlled the House from 2000 until 2008; the Democrats from 2008-2010; the Republicans returned to control in the 2010 mid-term elections and are in control now. So for the period being discussed here, the GOP was in control of the White House for 8 years and the House of Representatives for 9 years. The Democrats controlled the House for 2 years and President Obama is in his 30th month as POTUS.

So how did we manage to almost triple our national debt since 2001? This information comes from the Associated Press and the Government Accounting Office. If anyone chooses to impeach the accuracy of these sources, maybe you ought to stop reading right now.

Here are the elements of discretionary spending that resulted in our national debt increasing from a very manageable $5.8 trillion at the end of the Clinton administration (and declining rapidly at the time) to the current level of $14.3 trillion. Understand that Medicare, Social Security, and other entitlements already amount to more than 50% of federal spending. But they are not adjustable on a discretionary basis because the legislation underlying that spending is not included in any spending legislation. The other largest overall segments of federal spending are defense at 20% and interest on our debt at about 9%. All of the rest of government spending amounts to only 18% of expenditures. But that's what all the politicians (and many posters in this forum) want to talk about. Even if ALL government spending other than entitlements and defense were eliminated, the U.S. would still have to borrow almost 20% of it's annual spending to make up for tax revenue shortfalls.

Here's the list of what got us here according to the Government Accounting Office...
The largest contributor were the 2001 and 2003 tax cuts which resulted in $1.6 trillion in deficit spending.

Additional interest costs on the growing amount of federal borrowing contributed $1.4 trillion.

The cost of the wars in Iraq and Afghanistan resulted in increased deficits and debt of $1.3 trillion.

The Economic Stimulus package which was to address the financial crisis that began in 2007 was requested by President Bush and his Treasury Secretary and passed at the end of his presidential term in 2008. President Obama's administration executed the stimulus program under the terms of the legislation. The Economic Stimulus package contributed $800 billion in deficit spending and increased debt.

The 2010 tax cuts under President Obama were heavily negotiated between the political parties. They exchanged an extension of unemployment benefits demanded by the Democrats for an extension of the Bush tax cuts which were demanded by the GOP. Both parties claimed victory. This legislation has resulted in $400 billion of deficit spending and additional debt in less than two years. This legislation alone will add over a trillion dollars to the national debt in ten years.

The 2003 addition of prescription drug benefits to Medicare has added $300 billion in deficit spending since the bill was passed.

The 2008 financial industry bailout (TARP), passed at the end of the Bush administration, has added $200 billion in deficit spending and increased debt.

The most difficult factor to quantify is the reduction in tax revenues that resulted from the home mortgage-fueled recession that began in 2007 and continues until now. The "best guess" by the experts is that reduced tax revenues has probably accounted for as much as $1 trillion in deficit spending and the need to borrow additonal amounts to fund the government.
So by my calculations, these factors account for more than 80% of the deficit spending and increases in our national debt that has occurred since 2000. You can figure out which Congresses and which political parties were responsible. I won't even suggest that you consider which President was responsible...because in our system of government other than his veto powers, the President has no authority over government spending.

[Guest]

Wow can't wait for the repub responses to this. I do want to see factual counters to your points not the same kool-aid jibberish we get from certain posters. I do know I can see one that says stop blaming Bush for our problems.

[Guest]

Hmmmm. During what Administration did the majority push to lay the laws for a clear path to the housing crisis? What political party are Dodd-Frank associated with? During what Administration did the majority, comprised of both parties agree to tax cuts and also agree with moving forward with our fight against terrorism? During what Democratic Administration with the majority in Congress move spending from 19% of GDP to 24% of GDP in two short years with spending in excess of $4 trillion. What is the causation of our economic crisis...housing. who were the major players involved in the housing crisis? What Admin istration continues via Fannie, Freddie, Ginnie and FHA to continue to finance mortgages that people will never be able to pay? During what Administration was the the death knell aka as the Affordable Care Act shoved through Congress in the twlight hours before anyone could read it....but then "you had to pass it to know what was in it"
Hmmmmmmmmmmmmmmmm

[Guest]

There have been hundreds of postings here, back and forth, accusing one president or another of leading the country to the brink of financial ruin. Some have even accused our current president of being a closet socialist or even communist. Prior to that, there have been many terribly vituperative criticisms of George Bush. A good example is a recent post right here in the The Talk of the Villages Political Forum a few days ago...
"...Obama has driven spending to 24% plus of GDP from its historic level of 18-19%. I've presented REAL data...Go look at the data, find the specific cuts proposed by Obama (I'll save you time, there are none) and try to come to grips, difficult for a Dumbocrat, that this country is being destroyed by Obama and his blindly loyal followers."So maybe its time to revisit a few facts regarding our current fiscal crisis.

First it should be noted that no President, Obama or Bush, Republican or Democrat, can be legitimately accused of "driving spending" or "destroying the country". The executive branch of our government does not enact spending bills, the House of Representatives is the only branch of government with the authority to do that. Presidents can propose budgets and veto spending bills, but other than using the bully pulpit, which carries no voting power, that's pretty much the extent of their role in government spending. For the purpose of considering the numbers below, be reminded that the Republicans controlled the House from 2000 until 2008; the Democrats from 2008-2010; the Republicans returned to control in the 2010 mid-term elections and are in control now. So for the period being discussed here, the GOP was in control of the White House for 8 years and the House of Representatives for 9 years. The Democrats controlled the House for 2 years and President Obama is in his 30th month as POTUS.

So how did we manage to almost triple our national debt since 2001? This information comes from the Associated Press and the Government Accounting Office. If anyone chooses to impeach the accuracy of these sources, maybe you ought to stop reading right now.

Here are the elements of discretionary spending that resulted in our national debt increasing from a very manageable $5.8 trillion at the end of the Clinton administration (and declining rapidly at the time) to the current level of $14.3 trillion. Understand that Medicare, Social Security, and other entitlements already amount to more than 50% of federal spending. But they are not adjustable on a discretionary basis because the legislation underlying that spending is not included in any spending legislation. The other largest overall segments of federal spending are defense at 20% and interest on our debt at about 9%. All of the rest of government spending amounts to only 18% of expenditures. But that's what all the politicians (and many posters in this forum) want to talk about. Even if ALL government spending other than entitlements and defense were eliminated, the U.S. would still have to borrow almost 20% of it's annual spending to make up for tax revenue shortfalls.

Here's the list of what got us here according to the Government Accounting Office...
The largest contributor were the 2001 and 2003 tax cuts which resulted in $1.6 trillion in deficit spending.

Additional interest costs on the growing amount of federal borrowing contributed $1.4 trillion.

The cost of the wars in Iraq and Afghanistan resulted in increased deficits and debt of $1.3 trillion.

The Economic Stimulus package which was to address the financial crisis that began in 2007 was requested by President Bush and his Treasury Secretary and passed at the end of his presidential term in 2008. President Obama's administration executed the stimulus program under the terms of the legislation. The Economic Stimulus package contributed $800 billion in deficit spending and increased debt.

The 2010 tax cuts under President Obama were heavily negotiated between the political parties. They exchanged an extension of unemployment benefits demanded by the Democrats for an extension of the Bush tax cuts which were demanded by the GOP. Both parties claimed victory. This legislation has resulted in $400 billion of deficit spending and additional debt in less than two years. This legislation alone will add over a trillion dollars to the national debt in ten years.

The 2003 addition of prescription drug benefits to Medicare has added $300 billion in deficit spending since the bill was passed.

The 2008 financial industry bailout (TARP), passed at the end of the Bush administration, has added $200 billion in deficit spending and increased debt.

The most difficult factor to quantify is the reduction in tax revenues that resulted from the home mortgage-fueled recession that began in 2007 and continues until now. The "best guess" by the experts is that reduced tax revenues has probably accounted for as much as $1 trillion in deficit spending and the need to borrow additonal amounts to fund the government.
So by my calculations, these factors account for more than 80% of the deficit spending and increases in our national debt that has occurred since 2000. You can figure out which Congresses and which political parties were responsible. I won't even suggest that you consider which President was responsible...because in our system of government other than his veto powers, the President has no authority over government spending.

First let me say I think BOTH parties are to blame.
Second: just because one party has more members does not mean the other party did not also vote for the spending.. so both are to blame for any spending they agreed with whether they had the majority or not.
Third: Which party is the strongest supporter of the social entitlement programs that make up the bulk of the budget.. ss, medicare, medicaid and which party refuses to change or cut them.. you know who.
Why are these social programs on auto pilot? you know and why.
Which party demagogues the other when the new fiscally conservative members (say tea party) wants to reduce spending.

You know the answer. Demos want huge social spending and high taxes, Repubs want a huge military industrial complex and low taxes, and the tea party wants to fix it by lowering spending and freezing taxes and they are the ones attacked by both parties. Gee .. is that fair? I dont think so.
JJ

[Guest]

First let me say I think BOTH parties are to blame.
Second: just because one party has more members does not mean the other party did not also vote for the spending.. so both are to blame for any spending they agreed with whether they had the majority or not.
Third: Which party is the strongest supporter of the social entitlement programs that make up the bulk of the budget.. ss, medicare, medicaid and which party refuses to change or cut them.. you know who.
Why are these social programs on auto pilot? you know and why.
Which party demagogues the other when the new fiscally conservative members (say tea party) wants to reduce spending.

You know the answer. Demos want huge social spending and high taxes, Repubs want a huge military industrial complex and low taxes, and the tea party wants to fix it by lowering spending and freezing taxes and they are the ones attacked by both parties. Gee .. is that fair? I dont think so.
JJ


JJ: Amen

[Guest]

VK-

Thank you for laying out facts in an unemotional, unbiased and non-partisan way.

[Guest]

barf barf, for those that can only think one dimensionally and always, ALWAYS feel the need to resort to the R VS D comparison. Pretty small sphere of knowledge!!!

How about a novel approach to the information presented by VK? It has been obvious for years (at least the last 50) that it does not matter who sits in what chair in Washington...politicians have not, do not and will not address ANY issue that affects their being re-elected or their special interest groups.

How about a couple of real examples that even those with the R & D infatuation/propensity might even be able to handle on face value of the problem and the underlying issue(s).
Last nights evening news featured the $1 coin. Referred to as a good idea that just did not and is not working. $300 million dollars later....that's what the program has cost the tax payer so far. Plus a new vault, $650,000 to store the minted coins...rows and rows of racks piled to the ceiling with un-circulated $1 coins.....up to a billion dollars worth. It has been determined, more than once the public just has not and will not accept the $1 coin. HOWEVER, like all things related to the public, it doesn't seem to matter to the politicians because the government continues to mint it's daily allotment of $1 coins as spelled out in the program approved by our so called lawmakers, too many years ago. They are running out of space again. There are still FIVE more years left in the program. It was stated there is little or no hope to get the program stopped. And it could take up to the 5 remaining years to get any agreement about what to do about it.
Politicians protecting the jobs, spending in their areas of responsibility...pure and simple. And for those that don't benefit from the program, they will not take a side in the matter....to keep the prying eyes away from their pet projects. Hence, admitted and knowledgeable wrong doing with nothing being done to stop the wasted money being spent.

Now just what can the expectation be for this so called government of the people, by the people and for the people be for some of the more serious problems/issues this country is dealing with at any point in time..... it matters not whether R or D or other.

And what are we the people doing with such knowledge about programs like the $1 coin program? NOTHING!!!!!!!!!!! And the politicians know and count on it.

You want another example? There is an article in one of the internet news agencies about the length of time it takes from when a battle field commander request life saving equipment to when they get what was requested. At best...3-6 months. Again for known needs for equipment that will save lives. The KNOW beuracracy, the so called lack of funds in a given state(?) program(?) that have to be over ridden by the Pentagon....finding the money where they can....remember the politicians are not going to take from their favorites to pay for the needed equipment. Some requests take a year or more...pure unadulterated, disgusting, known problem. With not only nothing being done about it, but knowingly looking the other way and not drawing attention to themselves.

Google it. Look it up.

These are the basic issues that are not being dealt with by whoever sits in Washington. These are the issues that we the people will look at and say isn't that terrible.....and continue as Washington has come to expect ....to do nothing.

So what can be expected from a system such as we have? And please you R & D mongers...see if you can stay on topic for once!!

btk

[Guest]

...for those that can only think one dimensionally and always, ALWAYS feel the need to resort to the R VS D comparison...I couldn't agree more, BK. Both parties are at fault for getting this country where it is. The scary thing is that it only took about a decade to get us here.

Your examples are excellent. There are probably tens of thousands of examples of government mis-spending our dollars. I'll give you a couple more from my own personal consulting experience.

In a job we did for the Federal Supply Service (the purchasing/distribution agency that buys, stores and distributes all non-military items for use by the government) they asked us to review and make recommendations regarding their system of 27 warehouses scattered thruout the country which stored and shipped "stuff" to government agencies. We did a very thorough job, using a team of consultants from the private sector who were truly expert in supply chain management. They determined that the job could be done--better and far cheaper--with only three warehouses. After Congress reviewed the recommendation in several hearings, guess how many were closed? One! The one in the District of Columbia, which has no representative in Congress.

On the same job we reviewed the expanding role of a part of the FSS that wrote specs for various high volume or expensive products where there appeared to be minimal competition on the bids. One such item was a standard 4-by-4 five-ton truck made by International Harvester. The government bought hundreds of these trucks each year and the average cost (at the time) was about $28,000. The new government spec writers wrote a whole new spec for the truck and put it out to bid to a bunch of truck manufacturers. When the bid date came and went they got only one bid, for $79,000 per truck from a group of four lawyers in Cleveland who put together a company which would buy components and then subcontract the assembly of the truck. The FSS quickly called IH and asked where their bid was? The answer was that IH was not interested in bidding on the cobbled up and complicated spec written by the government. If FSS wanted to buy their standard, right off the assembly line five ton truck, they'd bid. But for any special specs, they had decided they would not bid. It took about a year for the new truck spec to be rescinded, but in the meantime FSS bought 116 trucks from thre lawyers in Cleveland for $79,000 each!

There were other stories we discovered regarding the spec and design of government furniture where the drawers wouldn't open, and electric typewriters that were designed so that IBM didn't get all the business with their Selectric model. Then there was the discovery that FSS had over 200 years worth of horse blankets in stock because a Congressman with a blanket comapny in his district "encouraged" FSS to buy more than they needed.

Yep, you're right BK. Our politicians are all at fault, from both parties over a long period of time. The problem I see in trying to get out of this pickle is that the system...our system...democracy...doesn't work!

Please don't someone respond that "if only we all got together and voted", or worse yet recommended that we vote for one particular party (usually the one not in power). With the system of campaign finance laws and the army of lobbyists paying off the members of Congress, I don't see any way that it's going to change...at least not democratically!

[Guest]

The problem I see in trying to get out of this pickle is that the system...our system...democracy...doesn't work!

And you're proposing................................?

[Guest]

And you're proposing................................?I've accepted that I won't outlive the problem. It'll be up to coming generations to solve...in between complaining about that *#+&!@#?^ generation that acted so selfishly, stupidly and irresponsibly and screwed up their lives so badly.

If someone would organize a coup d'état that looked like it had a chance of success, I'd be willing to listen. I'm not so sure that King James influence on the lives of those that came over on the Mayflower will turn out to be a whole lot worse than what's likely to happen as the result of what our "representatives" have done and are doing.

Short of that, maybe a tea party insurrection? Oh, I forgot, we have a bunch that call themselves that now. But all they seem to do is posture and pontificate. All talk and no action. Doesn't appear to be much hope from that bunch.

[Guest]

I've accepted that I won't outlive the problem. It'll be up to coming generations to solve...in between complaining about that *#+&!@#?^ generation that acted so selfishly, stupidly and irresponsibly and screwed up their lives so badly.

If someone would organize a coup d'état that looked like it had a chance of success, I'd be willing to listen. I'm not so sure that King James influence on the lives of those that came over on the Mayflower will turn out to be a whole lot worse than what's likely to happen as the result of what our "representatives" have done and are doing.

Short of that, maybe a tea party insurrection? Oh, I forgot, we have a bunch that call themselves that now. But all they seem to do is posture and pontificate. All talk and no action. Doesn't appear to be much hope from that bunch.

I suspect every previous generation said the same thing. Vote tea party candidates:D

[Guest]

I've accepted that I won't outlive the problem. It'll be up to coming generations to solve...in between complaining about that *#+&!@#?^ generation that acted so selfishly, stupidly and irresponsibly and screwed up their lives so badly.

If someone would organize a coup d'état that looked like it had a chance of success, I'd be willing to listen. I'm not so sure that King James influence on the lives of those that came over on the Mayflower will turn out to be a whole lot worse than what's likely to happen as the result of what our "representatives" have done and are doing.

Short of that, maybe a tea party insurrection? Oh, I forgot, we have a bunch that call themselves that now. But all they seem to do is posture and pontificate. All talk and no action. Doesn't appear to be much hope from that bunch.

I have read most of your posts and you are a very intelligent fellow, HOWEVER, as much as your preach NEVER vote for an incumbent I am betting you are going to vote for the guy presently in the WH, and NO MATTER who runs against him you will claim not worthy of your vote....at least based on your posts that would be my bet.

We need some leadership in the oval office. He is peforming like a political hack and not a leader of any type. He conned us all. Right now, we need a leader in that job....those in congress are a bit strapped because of him.

Having said that, I agree that both parties had a hand and continue to have a hand in the mess, but until we get true leadership in the White House, we do not stand a chancel Everyone is reacting to him.

[Guest]

...I am betting you are going to vote for the guy presently in the WH, and NO MATTER who runs against him you will claim not worthy of your vote....at least based on your posts that would be my bet....There's only one GOP candidate that I'd vote for right now. There are a couple of others that keep saying they won't run, who I'd vote for in a nanosecond.

But if the final Republican candidate is as ill-prepared for the job as several of those who have announced their candidacies, yeah that would cause a problem for me. I'd be torn between voting for the guy with four years' experience and who has done some good things, and a lot of things that I didn't like...or simply witholding my vote from anyone.

If you said I had to make up my mind right now, based on those running, I'd probably not be checking a box for POTUS and VPOTUS. I will vote for those running for the House and the Senate, and I can say for sure that I will NOT be voting for the incumbents in those positions.

My logic is that the two votes I'll have for Congress will send only 2 of 535 to Washington. There's a chance they might be able to withstand the political and financial pressures to make them toe the party line. But there's only one POTUS, and he speaks for the country. I couldn't purposely vote for a candidate that I believed to be incompetent to fill that position.

[Guest]

VK: Do what I did for years and I encourage other to do.

Vote 3rd party - wait and hear me out.

Find a candidate you like, no matter how "fringe" and vote for him or her. Encourage others to the same.

Imagine, for a moment, what would happen if all the people who didn't like the GOP or Democrat candidate did that. We have 50% non-voting in this country right now. For the most part, those who DO vote split it 50-50 plus or minus a couple percentage points. But what if the next election looked like this:

Obama: 25%
GOP Candidate: 25%
Hundreds of 3rd party candidates: 50%

*THAT* would be a wake-up call to Washington and MAYBE we could at least get a viable THIRD party going here.

Right now, people say they don't vote for their person because they have no chance of winning - well, winning isn't everything.. If you don't vote, your voice is SILENT.

[Guest]

I think that if you go back to 1900 or even earlier you will find there are recovery periods and recessions which are typically 1/2 of the length of
the recovery period. Under Bush and Clinton attempts were made to avoid
a recession after the recovery and some terrible steps were taken by both
to avoid a recession during their administration. By doing this they only set
up conditions that a recession would occur and it would be one heck of a
length of time since they extended the recovery period. Just before this recession I predicted it and recommended to all of my friends and family to pull out of the market to protect their investiments. Most thought I was saying the sky was falling and did not pay attention. It was a shame they
lost some large investments which could have been avoided.
The best way of handling the problem was to let things fail and the free market work. But even now that lesson is being missed and everyone is
talking about how they should do more unnatural things to stop the tide.
It will not work..The free market must be left alone to recover. There
are major changes in the way business's are doing "business'..All the money
you float at them will go down the black hole as they must find their
natural ways to continue to grow. We are the greatest country in the world
in making the democratic system work and only screw it up when we try to
"fix it" with some cash, social programs that allow people to collect money
without earning it, and so on. Remember the CCC camps under Roosevelt,
the work programs for roads, etc. His greatest give away was Social
Security and that was to protect the "older or disabled" and not the ones
fit to work.
Back to the point. We are under the longest recession because the last
administrations tried to ensure re elections and fooled around with our
system. It did not work in the past and it will not work now..The sham is
now hiring into the Government with extended programs. This does not put
the people back to work (e.g. 9.2 unemployment) it only makes it worse. :grumpy:

[Guest]

I thought that we already had a third party birthed since the last election...the Tea Party! Now all we need to do is cut the ridiculous umbilical cord to seperate further from the GOP. :cool:

[Guest]

I've accepted that I won't outlive the problem. It'll be up to coming generations to solve...in between complaining about that *#+&!@#?^ generation that acted so selfishly, stupidly and irresponsibly and screwed up their lives so badly.

If someone would organize a coup d'état that looked like it had a chance of success, I'd be willing to listen. I'm not so sure that King James influence on the lives of those that came over on the Mayflower will turn out to be a whole lot worse than what's likely to happen as the result of what our "representatives" have done and are doing.

Short of that, maybe a tea party insurrection? Oh, I forgot, we have a bunch that call themselves that now. But all they seem to do is posture and pontificate. All talk and no action. Doesn't appear to be much hope from that bunch.

VK despite some differences I believe most involved in the political threads are tired of ineffective, do-nothing,I am entitled to more perk politician. so you never vote for an incumbent takes on more and more meaning each time I read it. It certainly is the only way we can get term limits

[Guest]

VK: Do what I did for years and I encourage other to do.

Vote 3rd party - wait and hear me out.

Find a candidate you like, no matter how "fringe" and vote for him or her. Encourage others to the same.

Imagine, for a moment, what would happen if all the people who didn't like the GOP or Democrat candidate did that. We have 50% non-voting in this country right now. For the most part, those who DO vote split it 50-50 plus or minus a couple percentage points. But what if the next election looked like this:

Obama: 25%
GOP Candidate: 25%
Hundreds of 3rd party candidates: 50%

*THAT* would be a wake-up call to Washington and MAYBE we could at least get a viable THIRD party going here.

Right now, people say they don't vote for their person because they have no chance of winning - well, winning isn't everything.. If you don't vote, your voice is SILENT.

a vote for a third-party for Barack Hussein Obama, because of the financial crisis.

Don't fall for that line.