Actually, they didn't enjoy surpluses in the 1990s. They were able to borrow from Social Security which is "off budget" but count that money as money available to pay for budget items.
So when you can call your borrowing something other than borrowing, you can say your budget is "balanced"
It's just like saying there are funds in the Social Security Trust Fund. No, there are IOUs and if not now, soon it will be even harder to balance the budget because not only will they no longer be able to borrow since SSI income will not meet SSI obligations, but they will also need to pay off more and more of those IOUs every year, leaving less money for day to day operations.
Since SSI was set up such that they could only loan any surplus to the Federal Government, I'm not sure they earned a market rate of return or even a sufficient return to fund the future obligations to pay SSI benefits to those who paid in.
The whole SSI system is proof that we really can't trust those who are in charge in DC. It doesn't matter which party they claim, both major parties have not demonstrated fiscal responsibility.
Yet it seems "we" keep looking to them for solutions. It seems a large part of the problems are created by the people looked to for the solutions.
I'd call that either insanity or ignorance. Probably a bit of both.
Originally Posted By: Tempest
Quote:
The answer, far from fiscal austerity, is probably fiscal stimulus in the form of tax cuts for the masses and increased federal spending.
Tax cuts are not fiscal stimulus, they are allowing people to keep more of their property.
Quote:
That spending can be on things that bring lasting benefits and should really be calculated as depreciable assets, not current spending.
Infrastructure spending would be a good example.
So you can just take out of work secretaries, IT people, and engineers and throw them on a government construction project and all will be well? You view people as "production units" that can be easily interchanged in an economy.
And precisely how much spending would it take to achieve the "results" you are looking for and what specific projects should be undertaken?
Quote:
Anyone should ask themselves why the federal government enjoyed a couple of years of current budget surpluses back in the mid 'nineties.
Massive increase in productivity due to computers becoming more common.
So when you can call your borrowing something other than borrowing, you can say your budget is "balanced"
It's just like saying there are funds in the Social Security Trust Fund. No, there are IOUs and if not now, soon it will be even harder to balance the budget because not only will they no longer be able to borrow since SSI income will not meet SSI obligations, but they will also need to pay off more and more of those IOUs every year, leaving less money for day to day operations.
Since SSI was set up such that they could only loan any surplus to the Federal Government, I'm not sure they earned a market rate of return or even a sufficient return to fund the future obligations to pay SSI benefits to those who paid in.
The whole SSI system is proof that we really can't trust those who are in charge in DC. It doesn't matter which party they claim, both major parties have not demonstrated fiscal responsibility.
Yet it seems "we" keep looking to them for solutions. It seems a large part of the problems are created by the people looked to for the solutions.
I'd call that either insanity or ignorance. Probably a bit of both.
Originally Posted By: Tempest
Quote:
The answer, far from fiscal austerity, is probably fiscal stimulus in the form of tax cuts for the masses and increased federal spending.
Tax cuts are not fiscal stimulus, they are allowing people to keep more of their property.
Quote:
That spending can be on things that bring lasting benefits and should really be calculated as depreciable assets, not current spending.
Infrastructure spending would be a good example.
So you can just take out of work secretaries, IT people, and engineers and throw them on a government construction project and all will be well? You view people as "production units" that can be easily interchanged in an economy.
And precisely how much spending would it take to achieve the "results" you are looking for and what specific projects should be undertaken?
Quote:
Anyone should ask themselves why the federal government enjoyed a couple of years of current budget surpluses back in the mid 'nineties.
Massive increase in productivity due to computers becoming more common.
