Reality is what they define it to be, remember?

But I thought only liberals sipped lattes at Starbucks.

I really would like to see some history books printed about 40 years from now.

Kevin, why do you hate the freedom to make stuff up?

Late-breaking bulletin: the Germans won World War II, pizza is the official state bird of California, and from this day on, we are all Zoroastrians. Papers, please.

??? What??? The budget was a mirage based on the performance of the stock market? And yet people are supposed to believe that privatizing social security and/or investing in the stock market is planning for financial security?

Matt, you can tell the liberals at Starbucks because they arrive in Volvos -- and they order sushi.

And the moon is made of cheese.

This is what happens when a political movement believes it knows the truth, all things that make the movement look good are "true", anything else is "false".
Deficits, Darwinism, Disasters, Defeat; all are false because republican leaders say so.
La la la. I can't hear you negative ninnies Mr. Conservative says.

How unfortunate that we are riding in the same car as these clowns and will get hurt when they ineviatably drive the Nation into the ditch.

It's like what they were saying, to control pollution is to have tax cut and provide corporation with more lax controls.

Lots of faux thinking there.

This is an adminsitration drunken with their ability to get away with everything. They're just trying out how far they can take it.

Whom the gods would destroy, they first drive insane.

Well, sure. Clinton had it easy. He had all that revenue to work with.

Right now, I think I'd rather have Snow (the one-hit wonder Canadian rapper) than John Snow in a position to opine on the nation's finances.

But I thought only liberals sipped lattes at Starbucks.

That's just what I was thinking, mostly because I don't want to contemplate the total insanity of Snow's statement.

This doesn't deserve serious comment. Everyone involved in the Bush tax cutting program knows that the cuts are not in any way related to the projected costs of government.

You are just not going to get one of this group, whether sipping lattes at Starbucks or anywhere else, to admit either that fact or the fact that the actual cost of government should be some sort of factor considered in tax policy.

They know what reality is. They just don't particularly care.

Right now, I think I'd rather have Snow (the one-hit wonder Canadian rapper) than John Snow in a position to opine on the nation's finances.

And his cousin, Vanilla Ice, as SecDef...

Geez, latte-sipping Bush appointees chatting with reporters in Starbucks. What's next?

"While sipping chardonnay and nibbling a light meal of brie and sushi at a popular cafe in DC's popular Dupont Circle neighborhood, President Bush assured reporters that he is committed to staying the course in Iraq."

If the Clinton surplus was a 'mirage' were the Bush tax cuts also a mirage?

Right now, I think I'd rather have Snow (the one-hit wonder Canadian rapper) than John Snow in a position to opine on the nation's finances.

Inform-er! Ah yes, he's not allowed in the country do to a felony conviction in Canada, I believe.

There are two possibilities.

1. These guys know how full of shit they are. This is the possibility I prefer.

2. They actually believe this stuff. This frightens me more because it seems awfully close to the "divorced from reality" aspect of psychosis.

Oh, and by the way, the "consensus reality" that a Republican politician like Snow cares about is not what the deficit or surplus actually is, any idiot can look that information up in a matter of seconds.

No, the "reality" Snow is interested in is the "reality" that a critical percentage of the American voting public is, at the moment, convinced that the Republican party is the party to vote for if you like limited government.

Given the closeness of recent election cycles, if ANY significant portion of that precentage realizes that the Republican party is not the party of fiscal discipline, and represents a worse choice for their children and grandchildren than the Democratic party, then the game is up.

That "reality" must be preserved at any cost.

BS'ing concerning data which is readily available with reporters over a latte is not even remotely remarkable.

Alex, I agree. # 2 is the scarier option, but I'm afraid that might be the actual one.

There is actually a "2A." To the extent that this view is not complete b.s., the view would be that its unacceptable to actually take a look at the budget, and then raise revenue to cover it. Its better to set the tax law at what you would like it to be, and run deficits, because this puts pressure on spending.

Thank Grover Norquist for this. If this is Snow's view, the only b.s. is the failure to admit that Bush tax policy is squarely aimed at intentionally under-funding the government, with all that follows.

NOthing that Clinton did "on purpose" reduced the budget deficit. Once the surplus transiently occurred, the led the charge to increase spending. Clinton would deserve credit had he held the line at spending. So it wasn't a real surplus.

That said, Snow is exaggerating, just as you are exaggerating in mischaracterising what he said.

Right now, total US budget deficits (state and federal combined) are a smaller percent of the GDP than most other industrialised nations, and the US economy is growing faster than most other industrialized nations. Ignoring this in order to critique a petit remark by Snow is what will (amaong other things) prevent the Democrats from reducing the Republican majorities next year.

>"I really would like to see some history books printed about 40 years from now"

I afraid after Bush&Co is finished, there may be no humans left to remember 'history' in 40 years.

The above may be a moot point anyway, as we already know that Skynet becomes self-aware September 3, 2011 at 4:55pm PST.

Where have I heard this before? Oh yeah -

I was sitting around after a softball game talking to the captain of the opposing team. We were friends and it was a friendly game. "We beat you" he says. "Huh, the score was 10-6 our favor" I reply.

"Well yeah" he replies "But if you ignore your two runs in the second when Tommy dropped the ball and if we get the three runs from that time you robbed us on the long fly ball in the fourth then we beat you 9-8. Except for a couple plays we beat you, 9-8."

Consensus reality
Consensus reality? What, did Krugman weigh in on this? Or did the consensus determine that the dot com boom never happened? And what about the Contract with America? Did the consensus say that never happened either?

I agree that Bush hasn't done squat for fiscal responsibility;, but let's not polish Clinton too hard, he was little more than a bystander.

By his own standard that we are in "wartime", I'm downright puzzled that Bush can even imagine it a priority to cut the deficit. In wartime, one would suspect taxes to be raised and deficits to rise temporarily, not taxes to be cut and deficits to be cut.

Wow, I want to live in these guy's world, because you know it sounds much better than the one I live in. If I lived in their universe instead of longing for the high salary I had during the Clinton years I could be thanking god the horrible Clinton economy is finally behind us.

That's how you know these guys are sheisters and fantasical, if not liars, because they act as if there are no limits, and they can offer everything to everyone, meet all desirable goals, as if there are no tradeoffs. As anyone with a small dose of wisdom knows, such people are not to be believed, and are certainly not desirable in leadership positions.

hank:Its better to set the tax law at what you would like it to be, and run deficits, because this puts pressure on spending.

witness what they did with the "deficit reduction" bill which cut money from MCaid, child support enforcement, student loans to cut $40B, and then turn around and add $70B in tax cuts. i'd say that's exactly what they're going for. the question is, how long are we going to let them try to drown us before we start fighting back? cuz it's not the Gov't that Grover's drowning in the bathtub, it's us.

I wondered how long before a nut like papageno came along, ignoring the much higher rate of non-working people, much higher poverty rate, the S&P lower than when ShrubCo stole the 2000 election, record surpluses turned into record deficits, increased numbers of abortion, etc.

"Growth rate is strong!"

Yeah, allow China and Japan to pump half a trillion dollars in the economy, and you can have some growth ... now. Good thing the bill will never come due.

>NOthing that Clinton did "on purpose" reduced the budget deficit.

So why do you morons continually scream about his raising of taxes?

Sigh. I can already see the trolls getting shriller and just plain insane as this thread goes on...

The data is in. The Republicans are used car salesmen, and you little Bushlickers bought a lemon and can't face it. Too bad.

I can understand the criticism and need for scrutiny... but rather than just wax on about flights of fancy, let’s really look at the numbers and theories which favor Bush fiscal policies (this may be a difficult request for some).

The 2003 Bush tax cuts have increased tax revenue for the federal government. Bureau of Economic Analysis:

2000: 3,125.9
2001: 3,113.1
2002: 2,958.7
2003: 3,018.1
2004: 3,208.2
2005: 3,576.0 (est. after 2 quarters)

The tax cuts themselves appear sound as they generated all-time record high federal revenues for both 2004 and will do so again for 2005.

So you can't claim that these tax cuts "caused" the deficit. It has improved it. Therefore, the current deficit obviously is the result of increases in government spending.

Now, many people here assume that a deficit is a bad thing. Is it?

Two thoughts: First, our current is often characterized as out of control, which it is not. Although the actual number is the largest in history, it is average as a percentage of our economy, so no Armageddon there.

Second, there are strong economic indicators that the best thing for the economy IS a trade deficit. Look at the numbers and theory as presented by this article entitled: "'Bad News' on the Trade Deficit Often Means Good News on the Economy"

Link: http://www.freetrade.org/pubs/FTBs/FTB-014.html

An excerpt: "An expanding economy fuels demand by American consumers and producers to buy more imports as well as domestically produced goods and services while rising domestic output attracts the foreign investment that finances an expanding current account deficit. In contrast, slowing domestic demand not only depresses output and employment growth but also demand for imports and the inflow of foreign investment."

I'm the first to quote/paraphrase Mark Twain in the three great evil's of the world are "lies, damn lies, and statisitics", but I believe reasoning like this is what Snow is refering to. Despite my simple presentation, the argument appears valid and worth consideration. Thoughts?

1. These guys know how full of shit they are. This is the possibility I prefer.

2. They actually believe this stuff. This frightens me more because it seems awfully close to the "divorced from reality" aspect of psychosis.

You omit the most important option:

3. Does it matter? Me and my pals got ours. Screw you, suckers.

Pretty much the same mindset you see among the well-connected in Moscow, who are also busy carving up public wealth.

Adventuregeek:Wow, I want to live in these guy's world

me too, cuz then all my credit card and student loan debt will really be assets, and the more i spend the more i'll make!! yippee

Gore/Obama '08: allow China and Japan to pump half a trillion dollars in the economy, and you can have some growth ... now. Good thing the bill will never come due.

Sounds like you're one of those "reality based" types who believes in "arithmetic" and "financial responsibility". Have you always supported the terrorists?

P.S. Sounds like you're one of the few that appreciates the international financial imbalance thing. I wish more did. With a big enough credit card, you too can live high on the hog (for a while).

Plus, don't these guys want to cut the capital gains tax in order to stimulate investment in the stock market? If stock market growth can merely be a "mirage," Then wouldn't it be irresponsible to artificially stimulate its growth?

These guys have to wake up every day thinking their lucky stars that the media is more concerned with self-censorship and access than the truth, and that the average, center-right American is as dumb as a post.

Cue the troll response:
"with comments like that, it's no wonders you guys can't get anybody to vote for you."

Secretary Snow will also be remembered for the wonderful job he did increasing shareholder value while CEO at CSX.

Roll us another one, John, and this time don't Bogart.

Roll us another one, John, and this time don't Bogart.

Puff, puff give! You're fucking up the rotation!

It's just that darn fuzzy math.

Some conservative blogger, I forget who, posted that Clinton's surplus was still a deficit w/o social security.

When I challenged him on it, he produced as his proof a paper published in Jan. 1998 that projected flat revenue into 1999 and 2000.

What else is there to think except that these guys have a deep seated need for Clinton to not be as good of a president as he was?

That gives me a great idea! I'm going to gain 100 pounds, lose 5, and then market myself as a weight-loss expert!! Only in the New America!!

Yo Jimbo, the figures from the Bureau of Economic Analysis indicate a *falling* federal revenue up till 2004, where it is marginally higher than 2000, and 2005 figures are estimated. So, black is white, up is down, on your planet? COOL.

OT.

Found this comment in some other blog.

Kevin's posters are pretty lame compared to this gem.

Dear "Ms. Thailand Inner Beauty Pageant",

Liars will always be with us. The sinners are the reporters and commentators who give these evil doers currency.

Big Lies need enablers.

Kevin: Consensus reality just doesn't exist for these guys anymore.

That's silly. They are just lying. They know that they can tell outrageous lies and the so-called "journalists" who work for the corporate-owned, pro-Bush mass media will not only not challenge them on their absurd lies, but will bullhorn their lies to the public like the slavish, obedient and obsequious courtiers to right-wing corporate power that they are.

Something's outta whack with your numbers, Yo Jimbo.

According to the total tax reciepts look more like this:

2000: 2,052.2
2001: 1,991.2
2002: 1,853.2
2003: 1,782.3
2004: 1,880.1
2005: 2,052.8 (est.)

Can you offer any plausible cause-and-effect explanation why the Bush tax cuts brought about this turnaround in government receipts? (I mean other than "the tax cuts happened and then revenues went up.")

You'll note that federal tax revenues have hit "historical highs" in 46 out of the last 55 years. Are the Bush tax cuts responsible for all of those too?

Yo Jimbo: The tax cuts themselves appear sound as they generated all-time record high federal revenues for both 2004 and will do so again for 2005.

Ceteris paribus (not). Ever hear of the business cycle? Whenever the economy is not in a recession, it's growing (with the possible exception of a single quarter).

Now, many people here assume that a deficit is a bad thing. Is it?

Is that how you preface a discussion that confuses the federal budget deficit with the current account deficit?

our current [account deficit?] is often characterized as out of control, which it is not. Although the actual number is the largest in history, it is average as a percentage of our economy

5.7%/GDP for 2004 (and higher for 2005) is not average. Tipping point for currency crises is usually around 7% (Asia, Brazil, etc.). Being the world's reserve currency and our Chinese friend's ulterior motives for giving us all the rope we need to hang ourselves, our number may be different. Clearly though we're skating on thin ice.

Second, there are strong economic indicators that the best thing for the economy IS a trade deficit.

Running a reasonable current account deficit is ok if the surplus on the capital account is being used to finance productive investment. It's not. It's simply being used to finance consumption.

Mark Twain in the three great evil's of the world are "lies, damn lies, and statisitics", but I believe reasoning like this is what Snow is refering to.

Leaving aside that Mark Twain didn't coin that phrase, my take on it is that some fools will believe irrelevant statistics have meaning (like the ones Snow quoted).

Thoughts?

You can't analyze increase in tax revenue without including growth of GDP. In real terms, Bush's tax cuts have decreased tax revenue. Take a look at the numbers you posted, apply annual growth, and you'll see in real terms tax revenue has decreased.

Daddy!!! I need more money but the Chinese won't give me any!(stomps feet in childish fit)

I think that Hank lays out the harder political problem for the Democrats: the popular perception that the GOP is the party of limited government and thus, axiomatically are the party of tighter spending.

The reality of course is anything but. The trolls above put out the statistics that revenues are going up under Bush (but of course don't adjust for population or economic growth, let alone account for the hyper-Keynesian deficit spending..)

Or they put out nonsense that Clinton didn't do anything. (so that whole tax increase, spending cut package in 1993 that the GOP howled about never happened? )

But that just puts the question back of how an opposition should change that perception. My only suggestion is that maybe a few of those really cheesy Ross Perot charts would do well.

WHOSAYS: If the Clinton surplus was a 'mirage' were the Bush tax cuts also a mirage?

Consensus reality? How about reality reality doesn't exist for these guys?

I mean, I've heard about a faith based business model (Enron), faith based design science (intelligent design), faith based legislating (Jack Abramoff) and faith based fund raising (Tom DeLay), but this is faith based delusion.

The same Congressional Budget Office (probably a more hostile one, given the Bush penchant for hiring only yes men) had a surplus and now has an almost insurmountable deficit.

No geology.

No accounting.

No biology.

No econometrics.

No physics.

No economics.

No .....

Welcome to Bushworld.

(Why am I doing this?)

Yo Jimbo stop being an idiot. Check the OMB's own data here:

http://taxpolicycenter.org/TaxFacts/TFDB/Content/Excel/fed_receipt_funds_historical.xls

In 2005 we will finally have as much revenue as we did in 2000. That doesn't account for population growth or inflation. There has been a significant amount of both.

Yo Jimbo:

The 2003 Bush tax cuts have increased tax revenue for the federal government. Bureau of Economic Analysis...2004: 3,208.2...2005: 3,576.0 (est. after 2 quarters)

Your numbers are off -- you perhaps are using numbers for total public sector revenue (not just federal). This cite from Heritage shows total federal revenues at a bit over $2 trillion this year:

http://www.heritage.org/research/features/budgetchartbook/charts_C/c1.cfm

Your numbers state that total federal revenues are nearly 30% of GDP. But total federal spending isn't even 25% of GDP. Thus, the numbers you cite would imply a federal budget surplus of at least half a trillion -- a situation we know doesn't comport with reality.

"It's like what they were saying, to control pollution is to have tax cut and provide corporation with more lax controls."

Or that global warming is a liberal hoax because it's soooooo cold outside.

22state: I mean, I've heard about a faith based business model (Enron), faith based design science (intelligent design), faith based legislating (Jack Abramoff) and faith based fund raising (Tom DeLay), but this is faith based delusion.

Remember the sign that (supposedly) used to be displayed in stores that didn't take credit:

In God We Trust, all others pay cash.

I have one for the modern era:

In God we have Faith, all others provide evidence.

Someone said it well here yesterday. In every debate, these guys (and the trolls here who support them) reserve all sides of the argument for themselves. They focus on revenue coming in, and when you point out the increasing deficit and the evaporating surplus, they say, "Oh, that's not our policy, that's increased spending by Congress." When you point out that the GOP Congress abetted by a President who has never vetoed a bill is repsonsible for that spending, they say, "Oh, that's not our policy, we have had to spend more because we are at war." Then you point out that they are the ones who started the war ...

Yo Jimbo!

Those numbers you cited are Government Current Receipts for federal, state, and local government combined!

(Since it appears that you uncritically CnP'd your numbers straight from a dicey post in Wikipedia, I'll give you a link to the BEA source. Take a close gander at tables 3.1 through 3.3)

Bush's performance would have been even better if it hadn't been for the impact of the huge Easter Bunny bailout last Spring, and declining revenues from the Tooth Fairy department.

Yo Jimbo,

Thanks for your mention of the Bureau of Economic Analysis from the Department of Commerce. Also thank you for mentioning the reporting by Mark Twain of Benjamin Disreali's quote "Lies, damn lies and statistics.

As to the Bureau, suggest you read the 2nd and 3rd Quarters of this year - For the 2nd, revenues were 3,564.3 B with spending of 3,840.3 B leaving a deficit of 276.1. For the 3rd and last reported Quarter, revenues were DOWN to 3,478.8 B with spending of 3,900.4 creating a deficit of 421.6.

The last reported surplus was for the 2nd quarter of 2001. It was 149.4 B - Revenues of 3,199.6 B and spending of 3,050.2 B.

So, the difference from the 3rd Q of this year to the 2nd Q of 01 is an increase in revenues of 279.2 and spending of 850.2. Of course as the Democrats have controlled spending in Congress ever since....................

John Snow is not the first or only conservative saying the Clinton economy was not real. It is pretty common "knowledge" amoung my conservative friends that Clinton's financial skills were not good, but that he got lucky because of the increased efficiency due to the internet, and the resultant stock boom/bubble.

As others point out earlier in the comments, if Clinton's stock market was a mirage, then how does that jibe with counting on an entity capable of mirage behavior for retirement and health care? You can't have it both ways.

Also, the internet may have increased efficiency in the 90's but the efficiencies and the increased productivity of the internet did not just disappear when GWB took office. Those efficiencies still exist (For instance, half of the applications at work now are browser based applictions written in one place and used by many businesses ) But in spite of increased productivity in our workplace, our deficit grows. The reason for deficits is primarily tax cuts. (9/11 helped, and so did the economic slowdown, but account for only about a third of the deficit) . But, facts matter not at all. Continue to cut taxes and continue to watch the deficit grow, it is just temporary because freeing up that money for "free enterprise capitalism" will eventually cause those revenues to jump up again. I have no idea how to dispute a true believer whose facts can't be contradicted because thier facts lie in a future they have faith in. Those deficits are just temporary.

Papageno wrote:

Right now, total US budget deficits (state and federal combined) are a smaller percent of the GDP than most other industrialised nations, and the US economy is growing faster than most other industrialized nations. Ignoring this in order to critique a petit remark by Snow is what will (amaong other things) prevent the Democrats from reducing the Republican majorities next year.

From the Congressional Budget Office:
2003 US Deficit 5 % of GDP
2004 US Deficit 4.9% of GDP
Meanwhile Germany and France ran deficits
just above 3.5% of GDP in 2004 and the deficits
of several other European countries was about
3 % of GDP.

Papageno, where did you get your data?

The surplus was real enough for BushCo to use it to get two huge tax cuts passed.

CLINTON GOT A BLOWJOB IN THE OVAL OFFICE AND SOLD OUT OUR COUNTRY'S LINCOLN BEDROOM TO THE CHINESE WHERE SANDY BERGER WAS HIDING WHITEWATER DOCUMENTS IN HIS PANTS AND KILLED VINCE FOSTER SO THAT BUBBA'S DRUG SMUGGLING IN MENA ARKANSAS WOULDN'T BE FOUND OUT AND THEN CLINTON WOULD BE UNABLE TO RAPE KATHLEEN WILEY IN THE WHITEHOUSE TRAVEL OFFICE WHILE CHARLIE TRIE DISCUSSED HILLARY'S STOCK DEAL AND THE BEST WAY TO SHOOT RON BROWN BEFORE THEPLANE CRASHED.

sglover: I think it does matter whether they believe it or not, but I must confess that, despite the fact that I grew up with a lot of ideologues who make statement like that of John Snowe, I never could answer the question for sure (do they believe their own BS?).

I do know that people can believe what they want to believe to an amazing degree. But, as an optimist, I think that since their “belief” is shallow (not based on reality) that there is always hope.

I’ve had many “budget” arguments with such people, starting way back with Reagan’s first budget that mainstream economists, all the major financial houses, and the CBO predicted would produce a big deficit. It was Reagan and a few seemingly ideological supply-side economists against everybody else. Who turned out to be correct? “Everybody else” was right on the money. And not only with Reagan first budget, but all his other budgets. So, Reagan ended up producing more national debt and all previous Presidents combined. Since “conservatives did not seem to care, I concluded that they really do not care about fiscal responsibility.

The Clinton years certainly reinforced my conclusion. The Clinton Administration applied tremendous focus and energy to the deficit problem, alienating many “liberals”. He hired serious mainstream economists and financial advisors and their projected expenditures, incomes, and deficits were quite accurate. The hardest sell by far was the first Clinton budget, which passed Congress without a single Republican vote of support. Well, Clinton and the mainstream folks were right and the Republicans were wrong about what the deficit would be.

So, now days, if for example the CBO and the major financial houses (e.g., Goldman Sachs) pretty much agree on what the real numbers are, I tend to believe those numbers are reasonable. I note what the conservative republicans say, but I don’t put any stock in it. Literally. Who would? Probably, not even John Snowe.

Actually, the Clinton surplus was from social security revenues. It's the difference between on-budget expenditures and off budget receipts that reduce the on-budget deficit. The deficit in FY05 at around $319 billion was actually $159 billion higher due to borrowing fron the SocSec Trust. The on-budget deficit in 05 then was $478 billion. There's a difference between what is spent on budget and how that deficit is financed through borrowing from the public ($319B)and interagency borrowings ($159B)

It seems to me that the conservatives do not think that the money they made during the Clinton era is real as the whole economy was a mirage.

In the spirit of the holidays I will be very happy to help them, and take all this unreal money from them. Please email me as soon as possible so I can do my good deeds during the holiday season. Any goods such as houses and cars that you acquired with this 'unreal' money will also be gladly accepted.

lib, you can't use the term, 'holiday' this time of year. The correct term is Jesus-day. If you start using secular progressive terminology to talk about jesus-day, the whole country will become less christian, thus losing our moral compass and then the islamo-fascist will continue to blowup our buildings, convert our churches into mosque and force our women into burqas. In short, the terrorist will win.

Thanks to elfranko, quaker, alex, paul and the rest.

I had forgotten where I had gotten the numbers from (got 'em from something I was working on last week and neglected to note the source)sorry for not double checking the citation. My mistake and thanks for correcting.

But what of the trend? Strictly in terms of (corrected) numbers, what do they say to you?

What do you think Snow is looking at, in all seriousness, and making his claims?

I'm curious as hell considering these are the people in countrol.

TJM,

The surplus in 1999 and 2000 was on-budget. Tax receipts for social insurance were not used to finance current spending. That's why Al Gore, during the 2000 campaign, was able to amuse 'wingers with his all his silly talk of "lock boxes" and "paying down the debt."

What do you think Snow is looking at, in all seriousness, and making his claims?

I can only speculate, but it sounds like Snow is whining that Clinton didn't actually have to work hard for his surplus. To be sure, Clinton had the wind at his back, what with the dot-com boom producing personal income, capital gains, and corporate profits in great big taxable bushel basketfuls.

Bush, on the other hand, is saddled with the burden of sheperding the economy through leaner times and he insists on further handicapping himself by reducing the bite the federal government takes from personal, corporate, and investment income.

Snow seems to suggest that since Clinton didn't deliberately put himself at a disadvantage, the surpluses of his time in office aren't "real."

Quaker in a Basement: I'm concerned, given your handle.

Casually, push yourself away from the keyboard, turn around, look behind the hot water heater. There could be a federal agent hiding back there.

well, Yo Jimbo, let's try and help you out.

Clinton (and Rubin) (and congressional republicans) cobbled together a plan for fiscal responsibility that went like this: a.) targeted tax hikes; b.) control spending through paygo; c.) count on this demonstration of fiscal discipline to impress the hell out of the bond market and encourage it to lose the fiscal irresponsibility premium that had been part of bond pricing since the early '70s; d.) count on lower interest rates to set off an investment-led boom.

The problem that Snow et al face is that they don't believe in "a" and they have failed abysmally on "b." (well, ok, let me phrase that more carefully: they have allowed spending to run amuck on their favorites - iraq, farm supports, anti-missile defense - and are about to let it run amuck on the phony prescription drug benefit. as a result, they are enabling interest spending to jump considerably as well. they have - as today's vote helped show - clamped down fairly tightly on everything else.)

so they have to say something.

and the best they can come up with is to say that the clinton/rubin/gop congress economy didn't really happen.

as for the reality of the dot-com boom, it was a very small part of the economy, and the cap gains that resulted from it, while contributing marginally to the overall improvement in fiscal discipline, were just that, a marginal contributor, compared to the two biggies: increased tax rates on upper-income earners and paygo.

Alex said
“There are two possibilities.
1. These guys know how full of shit they are. This is the possibility I prefer.
2. They actually believe this stuff. This frightens me more because it seems awfully close to the "divorced from reality" aspect of psychosis.”

How right you are!
I don’t want to believe #2 because that means this country is in way deeper trouble than my tinfoil moments could ever imagine. But if it is #1 then whom does this twit think he is fooling? Your average person may pay attention to some finance sector news but would never read every comment made by this clown. So that begs the question – does Snow think that those in banking and finance that are concerned about the deficit will believe as Kevin put it that black is white? If Snow thinks that those people betting money on the US will believe such total and complete BS, then he is nuts. I’m surprised that T-bills didn’t tank the next day. But maybe the market is to the point that they know that the statements of the Bush morons are always BS.

Quaker in a Basement: Very reasonable speculation. Certainly Clinton was lucky.

But I admire the fact that he contributed to his luch by submitting responsible budgets based upon real numbers. Like a professional should

Carter was not so lucky, but he did the same thing. He submitted responsible budgets based upon real numbers and his deficits did go down a bit.

I gotta believe that the serious players in the economy have much more confidence when the federal government is acting fiscally responsible.

"NOthing that Clinton did "on purpose" reduced the budget deficit."

Except, like, the 1993 Budget. The one that increased taxes. The one that passed with Al Gore using his casting vote in the Senate in the teeth of GOP opposition. The one after which Newt Gingrich predicted a recession (hey, he was only 8 years off), and where other GOP pundits/luminaries (like Steve Forbes) told investors to pull their money out of the stock market (showing that stock investing tips from morons who inherited their wealth are worthless).

You guys Just Make Shit Up, don't you.

"But what of the trend? Strictly in terms of (corrected) numbers, what do they say to you?"

1. Inflation.
2. Business cycle.
3. Secular trend of GDP upwards.

Now, if you talked about the productivity numbers, you'd have more ground to stand on.

let's not polish Clinton too hard

Your hero, President Bush, is the knob polisher, if you know what I mean.

If Clinton engineered the economic miracle without doing anything on 'purpose', imagine what he would have accomplished if he actually did do things on purpose.

That guy must be a real genius. Of course he has some stupid body parts.

I always thought Clinton's budget surplus was tied quite tightly with the run up in the stock market/bubble.

I do think he reduced quite a bit, but the soaring surplus, I always assumed had addition benefit from the bubble.

No?

Kevin is correct. You can't make this stuff up.

But...

"Sipping a latte at a Starbucks coffee shop..." must be CODE for "We were at a bar, and after knocking back twelve stiff drinks, Snow popped off with this one..."

klevenstein: Roll us another one, John, and this time don't Bogart.

Don't be ridiculous. Something this powerful has to be administered intravenuously.

"Don't be ridiculous. Something this powerful has to be administered intravenuously."

Yes, the Repugs learned a lot about IVs during the Schiavo fiasco. Eventually, they'll have us all on feeding tubes.

"While sipping chardonnay and nibbling a light meal of brie and sushi at a popular cafe in DC's popular Dupont Circle neighborhood, President Bush assured reporters that he is committed to staying the course in Iraq."

Nah, Bush doesn't like brie.

Or cheese.

While I'm far from conservative, I have to agree with Snow in believing that the surplus was largely an illusion. We were in a bubble economy that was inevitably going to burst, which it did on Bush's watch.

You can't make this stuff up.

Maybe you can't, but apparently John Snow has absolutely no problem whatsoever making stuff up.

the other day last i observed a young man wearing a white tee shirt with this logo. ' IF YOU ARE IN THE DITCH UPSIDE DOWN AND IN YOUR CAR , YOU DID SOMETHING WRONG. the observer

"It's no wonder that truth is stranger than fiction. Fiction has to make sense." - Mark Twain

Of course Twain was a member of the reality based community who could scarcely have imagined Bushco's untruths which make no sense. This country suffers from acute batshit insanity.

Quaker, the on-budget surplus in 1999 was $1.9 billion or 0.1% of revenue,a rounding error in unaudited financials. The on-budget surplus in 2000 was $89 billion in a year that saw individual income taxes rise $125 billion from '99 and corporate taxes up 22.6 billion from '99 while total outlays increased $87.2 billion. Had the NASDAQ not gone in the tank, both revenue categories would have been lower (probably). Seems here that it is better to be lucky than good.

Steve: While I'm far from conservative, I have to agree with Snow in believing that the surplus was largely an illusion. We were in a bubble economy that was inevitably going to burst, which it did on Bush's watch.

Yes it was a stock market bubble to a certain extent, just as now we're in a housing and consumer credit bubble. Frankly I liked the last bubble better.

However Clinton and Congress (first Democratically controlled, and then Republican) did put serious work into reducing the deficit. It wasn't only the stock bubble that did it.

By contrast, over half of the current deficit is caused by the Bush (and Republican Congress) tax cuts. While their is an argument for Keynesian stimulus during a recession, you're supposed to balance the budget over a business cycle by removing the stimulus after the recession is over. By contrast Bush wants permanent tax cuts.

Oops, I blasphemed. "Keynesian stimulus" is supposed to be "supply side stimulus". I'll explain the difference. Supply side cuts are of greatest benefit to the wealthy. Keynesian spending or tax cuts go mainly to the less well off. The Keynesian approach also gives you a higher multiplier (more stimulus for each dollar of deficit). GHWB was right - "supply side" is voodoo economics.

As for Clinton's luck in riding a stock market bubble and Bush's bad luck... Do you really think the bubble burst under Bush? It just moved over to the real estate market. You think that was a burst bubble? When Asia stops propping this country and the dollar up with massive infusions of their trade surpluses, you're gonna see the bubble burst to end all bubble bursts. And since we won't have most of our factories anymore, we're gonna be paying out the nose for those imports that are so cheap now.

jussumbody: When Asia stops propping this country and the dollar up with massive infusions of their trade surpluses, you're gonna see the bubble burst to end all bubble bursts. And since we won't have most of our factories anymore, we're gonna be paying out the nose for those imports that are so cheap now.

Ok, so far it's you, me, Gore/Obama '08, Paul Volcker, Stephen Roach, Warren Buffett and Brad Setser that "get it". Seven people - I think we're 50-100M shy. Why don't more people get it, even discounting those in fantasy land. It would be nice if the MSM (or even Kevin Drum) talked about this.

alex: the Chinese get it, you can be sure.

floopmeister: the Chinese get it, you can be sure

The Chinese may be in a better spot than the US with this, but still not a great spot. However they (presumably) think the current policy is the lesser evil for them. Some folks honestly disagree and think they're being foolish too. Either way, I'm sure the US is being foolish.

BTW, did you know that Australia is one of the very few countries that the US runs a trade surplus with?

alex: yep. What the hell are we doing wrong?

;)

Who you gonna believe? Snow or your own decietful lying eyes?

i once worked out the exact numbers, but you'll have to rely on memory.

Compared to forecast when he took office, Clinton made something like a $2T improvement in the fiscal picture over his 8 years (although net, national debt very slightly increased on his watch).

If you assume a rolling average real level of cap gains (a "normal" year) and compare it to the actual level of clinton era cap gains revenues, depending on the assumptions you use, there was maybe as much as $200B in "excess" cap gain revenues (and that's a very generous assumption; i personally believe the case is for a much lower number).

so roughly speaking, bubble cap gains returns maybe accounted for 10% of the fiscal picture improvement.

The rest was increased taxes thanks to '93 and spending controls.

now, the broader question of whether the internet bubble inflated the overall strength of the economy, perhaps it did. we don't have a test tube to run a parallel universe with less of a dot-com bubble taking place.

but i do know that an expansion that is inevstment-led is different than the expansion we have today, which is real estate-led and dependent upon enormous fiscal stimulus and household equity extraction to sustain consumption....

floopmeister: What the hell are we doing wrong?

What are you doing wrong? Obviously trade deficit w/ USA means little, as only the overall counts. USA actually makes (ok, made, before we shipped the factories to China) good stuff - just stay away from the US brand cars. Airplanes (aeroplanes?) have been our biggest export to you for a while. They were American too until the far-sighted management of Boeing decided to become a systems integrator (instead of manufacturer) and have Kawasaki in Japan make the wings (the most critical and difficult part).

BTW, what is the overall (not just US) Australian current account deficit as %/GDP? I tried to infer from the CIA World Fact Book, and get 6.3%/GDP for 2004. It can't be that high, can it?

howard: so roughly speaking, bubble cap gains returns maybe accounted for 10% of the fiscal picture improvement

Wow, I knew it wasn't the whole picture, but 10% is amazingly small %.

The rest was increased taxes thanks to '93 and spending controls.

The old-fashioned way. Fancy that. Means doing arithmetic though.

but i do know that an expansion that is inevstment-led is different than the expansion we have today, which is real estate-led and dependent upon enormous fiscal stimulus and household equity extraction to sustain consumption....

Not to mention that the funding for it is largely from foreign sources. While there was a stock bubble (P/E's were what?), there was also real growth under that. Houses are nice, but don't produce anything and are rather difficult to export.

Can I make you #8 on the "get it" list? We're on a roll here - only 49,999,992 more people to make it a national issue.

alex, it's pretty bloody high, and just got higher for this quarter. Don't know the exact figure.

What saves us, of course, is China and, to a growing extent, India. They need what we can just dig up and send to them... They did a major national survey early this year which showed that a majority of Australians think China is becoming more important to us now than the US.

Regarding planes - Qantas has just signed up for the new Airbus A380. Not sure how many.

Just happen to have a copy of The Economist in my bag.

Current-account balance forecast as percentage of GDP for 2005

Australia -4.7%
US -6.5%
Britain -2.2%
Switzerland +12.3%
Canada +1.2%
Germany +3.7%

I'm not an economist, but I know damn well that my 401(k) was booming under Clinton, and has flopped under Bush. (And it's professionally managed, too.) The value of my house has jumped like nobody's business under Bush, but since we're in it for the long haul, I'll only benefit from that when we have to sell it, probably to pay for health benefits after the Constitution is suspended after the next terrorist attack. Gee, thanks for nothing, George.

John Snow is a friggin' idiot, and so is his boss.

Talk about historical revisionism . . .

snicker-snack: Current-account balance forecast as percentage of GDP for 2005 ...

Thanks. Looks like the Aussies are in pretty bad shape, though we're worse. 6.5% is what Brad Setser has been predicting for a while (up from 5.7% in 2004). We've been on this trajectory for a while - anybody want to take bets on 2006?

BTW, snicker-snack, any thoughts on the significance of the current account deficit?

I'm just reading Bob Rubin's autobiography, "In An Uncertain World: Tough Choices from Wall Street to Washington."

Can somebody send Snow a copy?

If the Clinton Surplus was a "mirage", where did the money come from that GWB said had to be given back. he said something along the lines of "the gov't has a surplus, and the U.S. citizen is better qualified to spend the money, so we need to give it back" (not an exact quote, just summary of his 2000 campaign promise/statement). So basically, if the surplus was a mirage, GWB just gave back money that was still needed to pay off the gov't's bills. So he either lied then, or is lying now. But sadly, I would assume he was lying both times. peace.

'papageno' posted:

"NOthing that Clinton did "on purpose" reduced the budget deficit."

False.

He raised taxes on the top 1.2% of the wealthiest taxpayers (which is where the bulk of the increased revenue came from) and cut federal spending.

.

"Once the surplus transiently occurred, the led the charge to increase spending. Clinton would deserve credit had he held the line at spending. So it wasn't a real surplus."

Nonsense.

The Clinton administration paid down more than $600 billion of the Reagan/Bush federal debt.

.

"Right now, total US budget deficits (state and federal combined) are a smaller percent of the GDP than most other industrialised nations"

False.

.

"and the US economy is growing faster than most other industrialized nations"

Not in real GDP.
.

'TJM' posted:

"Actually, the Clinton surplus was from social security revenues."

Nope.

Not according to the Congressional Budget Office (which has been under the control of the Republican Majority since 1995):

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0
.

'Yo Jimbo' posted:

"The 2003 Bush tax cuts have increased tax revenue for the federal government."

Nope.

It was the expiration of a tax cut that did that. Therefore, it was a TAX INCREASE that raised revenues.

.

"So you can't claim that these tax cuts "caused" the deficit."

Of course you can, as that's EXACTLY what happened. Check the blue line from 2001-2004 in this chart (after 2004 it's a projection):

http://angrybear.blogspot.com/rev_spen_exss3.jpg
.

One of George Bush the First's most revealing malaprops was, "Saying is believing."

Now more than ever!

As Joseph Welch said so famously to Senator Joe McCarthy -- "Have you no sense of decency, sir? At long last, have you left no sense of decency?"

I guess decency and honesty and a proper sense of shame at Bushian lies departed the Treasury Department along with Paul O'Neill.

Now, we are left with a prevaricating poodle named Snow.

At least "Barney" has an excuse for rolling over and peeing on himself.

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