The budget proposal no one is talking about....

I already did so. You said the projection is based on 8% unemployment and 1.4% economic growth for ten years. That isn't true. Those numbers were used for the remainder of the current year, and are normalized for the remainder. Growth and unemployment are never carried forward at current levels and always normalized for long term trends.

Geeze you really aren't reading what I am typing. I have clearly said three times now, that passing a budget with policy inniatives like the one in the OP would take us down the same road as Europe. I never said we are there, or that we were heading there. I said IF we passed this so called progressive budget that is where we would be.

Economic growth and unemployment are normalized not baselined. Budgets are baselined.

Here is a more detailed dig on the same projection.

http://thehill.com/blogs/on-the-mon...177-cbo-projects-845b-budget-deficit-for-2013

Note this... which shreds your point about the CBO assumptions on unemployment and economic growth.

 

We agree that the budget posted in OP is a non-starter. It is also a few years old and, thus, irrelevant.

No, friend, that statement actually validates my argument. Think about what you are telling me: The CBO says that we are in a three year window where deficits will decrease but then they are going to spike due to an aging population (which, by the way, we already have an aging population). Yet in the same breath these CBO economists are predicting that unemployment will fall to five and half percent, but not until the three year window is done. None of that makes sense. Look, if unemployment dropped to 5.5% and we were growing at a clip of 3.5% can you really foresee that we will have greater budgetary issues than we do now with 7.7% unemployment and 2% growth? So, going back to what I said before: The CBO projections are based on where we are now, not where we think we'll be five years from now. If things remain status quo, and we do not experience better growth in the next five years, yes, our deficit issues will rear their nasty heads again. But things are getting better. Seriously Dude, google us economic news and just read the top five articles that pop up and tell me what you find. I did so last night and it's all about housing picking up dramatically, hiring picking up, layoffs going down, etc.

 

You are missing the point. You are also dead wrong on the CBO projections. They are a snapshot of where we are now AND a projection of where weare heading. The CBO projections assume a steadily dropping unemployment rate, to a low of 5.5% by 2018 and healthy economic growth. Yet inspite of a projected improved economy we have massive deficits looming AND the debt as a percentage of GDP will continue to rise. It is because of out of control government spending. If the economy grows at 3.5% and government grows at 8.5% then deficits will continue to rise...just as the CBO predicts.

So your point that we will soon start paying down the deabt is simply foolish. We are going to have a gross debt increase as well as an increased debt as apercentage of GDP.

 

I'm not going to get in this argument because i just don't have the time or energy but you are badly mischaracterizing that report. Supa is right.

 

Since when has the CBO ever been right? When they say something will cost X amount of dollars. Just double it. And add $1000000000

 

Supa, please read the paragraph that you just wrote. You are a smart guy....I know this. Can you see the contradiction in what you are saying? And government spending has been reigned in significantly over the past 4-5 years. We still have work to be done but we are not in the position that you seem to think. I am puzzled as to why you are having such a hard time with this.

My point that our debt to gdp ratio has been essentially stabilized is sound. I am sorry that you cannot see this. My brother in law is the number four finance guy for Ingersall-Rand and he is also very conservative. He is no fan of this administration but even he admitted to me just the other night that our debt to gdp ratio has been stabilized and that we are on a more sustainable path. There is still work left to do, don't get me wrong, but the worst of it is behind us. IMO, there will be new legislation introduced within the next 5 months that will be a budgetary compromise that will probably include raising the medicare and social security eligibility age to offset the cost of baby boomers retiring in droves. Governing is always a work in progress so the work of balancing spending and revenue will go on, just as it has since our inception.

 

No, I am not. Time will tell.

 

Government spending has not been reigned in significantly over the past 4-5 years, and it is out of control going forward. The major drivers of spending growth have never even been sniffed at.

No it isn't. It is rejected by the CBO study posted above. In spite of sequestor the debt to GDP ratio will continue to grow. We would need sustained 5% economic growth to stabalize the ratio coupled with a reduction in the 8% annual government spending growth.

 

sorry for the delay in responding, supa....I've been in Vegas since Saturday evening.

I do not think you and I are going to reach any unanimity of belief as it pertains to this matter. Time will tell which of us is more correct and I am willing to delay my gratification.

In all seriousness, let me ask you this: If I were right would you be happy? Not that I am right and you are wrong, but that things are better than most believed.

 

its the fallacy of democracy, the people are too stupid to support what needs to be done. even moreso now with the teabaggers, its all about me me me and not about whats best for the country.