Obama vs. Boehner

As John Boehner was leaving from giving his response to the President’s speech on the debt, he was heard to say “I didn’t sign up for mano-a-mano with Obama.”  Even he knew that his speech was small minded and weak compared to the President’s appeal to the public.

Regardless of who you think is right on the facts, Obama won the rhetorical war Monday night.   After admitting that the debt was a bipartisan problem resulting from not living within our means, he described the situation like the average American would:

“This is no way to run the greatest country on Earth. It’s a dangerous game that we’ve never played before, and we can’t afford to play it now. Not when the jobs and livelihoods of so many families are at stake. We can’t allow the American people to become collateral damage to Washington’s political warfare…Yes, many want government to start living within its means. And many are fed up with a system in which the deck seems stacked against middle-class Americans in favor of the wealthiest few. But do you know what people are fed up with most of all?

They’re fed up with a town where compromise has become a dirty word. They work all day long, many of them scraping by, just to put food on the table. And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can’t seem to come together and do what it takes to make life just a little bit better for ordinary Americans. They’re offended by that. And they should be.  The American people may have voted for divided government, but they didn’t vote for a dysfunctional government.”

Speaker Boehner’s short five minute rebuttal was red meat for the tea partiers, using one liners like “Obama wants a blank check.”  Never mind that the money has already been appropriated by Congress and Obama isn’t asking for more spending.   It was partisan, put blame on Obama, and essentially gave a performance that looked like the kind of thing most Americans, especially independents, are sick of.

Don’t get me wrong.  I like Boehner and Obama both.  I think one reason Boehner’s performance was poor is that his heart wasn’t into the speech.    It had to be written before they knew what Obama would say, so it was full of blame for the Democrats and claims that Obama was unwilling to make cuts.   But that was in direct contradiction to what the public had just heard from the President:

“Let’s live within our means by making serious, historic cuts in government spending. Let’s cut domestic spending to the lowest level it’s been since Dwight Eisenhower was President. Let’s cut defense spending at the Pentagon by hundreds of billions of dollars. Let’s cut out waste and fraud in health care programs like Medicare — and at the same time, let’s make modest adjustments so that Medicare is still there for future generations. Finally, let’s ask the wealthiest Americans and biggest corporations to give up some of their breaks in the tax code and special deductions.”

I daresay that if Obama is serious about this — and I suspect he is (much to the dismay of many in his own party) — then most Republican rank and file would be thrilled.    Yet the reason major cuts can’t happen is because Obama wants revenue enhancements — eliminating tax breaks and other so called loopholes — as part of the solution.  It would only touch the wealthiest, and amount to only 15% of the spending cuts.

In that the GOP is playing a dangerous game.   The gap between the middle class and the wealthiest Americans has been rising.    The budget cuts and poor economy will cause continued and increasing pain among the poor and working class.   Pain may be a metaphor, but in this case it’s also real — families will see their lives fundamentally altered in ways they would not have imagined just a few years ago.   The argument that the wealthiest shouldn’t pay part of the price, given they’ve gained the most in the last 30 years (while the bottom 60% haven’t even kept up with inflation), will lose its appeal.    When times are good the Republicans can say “they’re playing class war” and most people recoil.  When times are bad, there very well could be “class warfare.”

Right now we’re at an historic point.   We have a Democratic President who says we need severe budget cuts in order to stay solvent and be able to adapt to the demands of the 21st century.  He’s taking on the left of his own party to make that case.   He says we need structural reform of medicaid and medicare.   He is calling for deep cuts in domestic spending.   And all that Boehner can do is give a partisan speech and reject the package because the tea party wing in his own party won’t accept any new revenues?

Obama won the rhetorical war on Monday night with a call for citizens to contact their representatives and urge them to compromise (apparently the Congressional websites crashed from heavy volume right after his speech.)    Boehner vowed to try to win a partisan war to avoid tackling the issues and put off the question to another day.   His “super Congress” idea probably won’t yield anything not already discussed, it just buys him cover from the tea party faction of his own party.

I believe Boehner is better than that.   He knows not making an historic compromise now will threaten the American dream and risk putting the US on a path towards further dysfunction and severe economic crisis.    He has a good chance to win the partisan short term war and get his plan passed — but that might cause him to miss out on the long term compromise that’s needed to really get the country on the right track.    It’s time to put political posturing aside and make an historic compromise.   The economic future of the country is on the line.

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  1. #1 by Black Flag® on July 26, 2011 - 16:08

    The gap between the middle class and the wealthiest Americans has been rising

    …. as if this is a bad thing!

    But only envy-based personalities, who judge themselves based on another man’s wallet, use such infantile calculations as this as a measure of “good” society.

    The real measure: increase in wealth for the economy.

    Wealth is NOT a zero sum game – it matters not how rich I am getting; what should matter to you is how rich YOU are getting; and the fact is, we both can get richer at the same time.

    • #2 by Scott Erb on July 26, 2011 - 16:48

      In the last thirty years the bottom 60% have had incomes not keep up with inflation. The top 1% has grown nearly 300% in income, the top 20% have grown 95%. So no, both have not been getting richer at the same time. Meanwhile, class mobility has declined. This has nothing to do with envy, your desire to fantasize weird reasons for people thinking differently than you is silly. This has to do with hard working people suffering real hardships for no reason except the game is structured to shift money to the wealthy. That is simply ethically wrong.

      Now, if we could get to an economy where all are doing better, that would be great. The fact you thought that’s what we had speaks a bit about your error here, you aren’t seeing reality clearly. I certainly don’t want equal outcomes, I believe you need rich people and some people are poor by choice. Efforts to equalize outcomes would have disastrous consequences. In fact, I don’t think tax rates have to be all that much higher on the wealthy, especially once the debt problem is taken care of. Moreover, no body would argue that wealth equals true human value. Those are all straw man arguments. In order to go into ideological rhetoric you are painting things out as stark opposites when really it’s only common sense and recognition of reality.

  2. #3 by Black Flag® on July 26, 2011 - 16:15

    The economic future of the country is on the line

    There is nothing here that will change the economic future – it will be desperately bleak.

    The only real question is how long will the Greatest Depression last and how deep will it go in terms of massive unemployment and poverty.

    Of all the scenarios, I do not see the Forces of Evil vanquishing themselves. It will be in their best interests to not destroy the nation or potentially Western Civilization by allowing policies of massive debt and expenditures to turn into hyperinflation.

    They will stop the payments to the unproductive class of Americans, tossing the nation into a deep dark depression, but saving the nation.

    If they do not, the consequences of hyperinflation will destroy the nation, millions will die – you will die, you children will die, I will die.

  3. #4 by James P. Melcher on July 26, 2011 - 17:08

    Your column is very well spoken today, Scott. An old friend of mine from my Minnesota days, Mark Stahura, has written a different, but I think complementary analysis about the recession and societal values. Take a look here: http://markws.wordpress.com/2011/07/24/the-recovery-that-isnt-a-perspective/?blogsub=confirming#subscribe-blog

    • #5 by Scott Erb on July 26, 2011 - 17:27

      I like his blog, I read and commented on a few, thanks for pointing me to his work, it’s a blog I plan to follow!

  4. #6 by frank roberts on July 26, 2011 - 17:45

    I do not have the faith in Boehner I once did, ever since he waffled on affirming Obama was born in America, even after the birth certificate came out. He lacks courage. He is trying to lead a contingent of the Republican Party, and not trying to lead America. I wish Snowe or someone would jump out there and show us the party of Margaret Chase Smith or Eisenhower. As it is, it is becoming the party of small-minded, mean old men. The Democrats are not faring much better, with Weiner and Wu more interested in gratification than leadership. At this point, Obama is actually being presidential, and I applaud him. I hope it works.

  5. #7 by Black Flag® on July 26, 2011 - 17:58

    In the last thirty years the bottom 60% have had incomes not keep up with inflation.

    This could be true, but it has nothing to do with the top 40%.

    The top 1% has grown nearly 300% in income, the top 20% have grown 95%.

    This could be true, but it has nothing to do with the bottom 60%.

    So no, both have not been getting richer at the same time.

    This may be true, but it has nothing to do with wealth creation – but a whole lot to do with wealth distribution by force, – ironically, the very process you advocate~!

    This has nothing to do with envy,

    Of course it does!

    The very first thing you posited was a comparison of wallets which of all of them except one, you do not own!

    your desire to fantasize weird reasons for people thinking differently than you is silly.

    Where do you get such bizarre comments?

    This has to do with hard working people suffering real hardships for no reason except the game is structured to shift money to the wealthy. That is simply ethically wrong.

    I agree that the game is rigged.

    I posit the rigging is directly and solely due to forces that use legitimized violence to accomplish this, for there is no other way to rig the game otherwise

    You insist that the answer to the rigging is to increase the use of legitimized violence – that is, to force feed the poison in even greater amounts as if it would be a cure to the poison.

    Now, if we could get to an economy where all are doing better, that would be great.

    The Grand Manipulator strikes again.

    ….as if by some magic hand of some superman can force an economy to do “better”.

    The economy gets “better” by increasing productivity – and no other means.

    You do NOT improve productivity by stealing the productivity of people and transferring it to the unproductive part of society.

    • #8 by Scott Erb on July 26, 2011 - 18:05

      Ah, but these things are linked. The entire economy, like all of society, is linked. Your ability to make money depends on the actions of others, and impacted by power structured into social relations. The idea that it’s just individuals making choices is naive silliness. Nobody wants to “transfer wealth” to the “unproductive” part of society. What people are trying to do is help all be more productive. The game is rigged via money and the structure of relations far more than actual force. Seriously, you bought into some really misguided ideology out of touch with reality…I don’t think you subject your ideology to critical analysis, though — you seem to take it on faith.

  6. #9 by Black Flag® on July 26, 2011 - 18:13

    Scott,

    Ah, but these things are linked.

    This is not accurate at all.

    One can most certainly steal – which by the loss of one is the gain of the other – also know as wealth distribution.

    This is a method which holds your dear support but only if the direction of the distribution favors you.

    When it disfavors you, you complain like hell.

    . Your ability to make money depends on the actions of others, and impacted by power structured into social relations.

    No, it does not one little bit.

    My ability earn income is solely based on my ability to serve others. They trade their goods and services for my goods and services – enriching both sides of the bargain.

    ONLY when violence force interferes with such transactions does the massive distortions occur.

    Nobody wants to “transfer wealth” to the “unproductive” part of society.

    Yet, that is what you argue for!!

    What people are trying to do is help all be more productive.

    You do not help productivity by paying people who do not produce.

    The game is rigged via money and the structure of relations far more than actual force. Seriously, you bought into some really misguided ideology out of touch with reality…I don’t think you subject your ideology to critical analysis, though — you seem to take it on faith.

    Pointless jingoism.

  7. #10 by Kristine on July 26, 2011 - 22:21

    I read a version of the Obama speech in USA Today Saturday night (not my normal news outlet, but it was free in the hotel!) and was struck but some of the things that were “un-Democratic” or “un-liberal”, particularly calling for such deep cuts in spending.

    Now, I totally agree with the idea that you have to cut spending if you are in too much debt. It’s just common sense. I know that the federal economy is far more complex than my household budget, and sometimes the same principles don’t apply at different scales, but here I think they do. Credit is credit on any scale. As is debt and the ability to repay it.

    • #11 by Scott Erb on July 27, 2011 - 03:13

      Actually households haven’t been much better — private debt is about three times as high as public debt (though that includes businesses)! I do find myself being fiscally conservative these days, I look at the debt and it seems insane. I also see how it grew — through tax breaks for the wealthy, who were the only ones to benefit in the last run up — bubble economies enabled by de-regulation, and massive debts run up by wars and the hand outs to the pharmaceutical industry under Bush. Democrats went along with a lot of these things, so it is a bi-partisan debt.

  8. #12 by Black Flag® on July 26, 2011 - 22:34

    Kristine,

    But the real question regarding “cuts” … Cut where?

    There is no part of the government budget that does not impact a significant segment of the American population.

    2/3 of Americans depend on some sort of government hand out to make ends meet.

    Even Geitner said: “We send out 80 million checks a month…”

    So cut .. what?

    This is the Public Choice Doctrine in play.

    Any cut risks raising massive political pain from a minority, but very vocal segment of society affected by the cut. Against the majority passiveness about the cut (since it does not directly affect this group), the massive outcry from the small minority has no resistance – the political pain is too great – so there will be no cut.

    No where in the budget exists any serious place to make such cuts.
    SS, no.
    Health Care, no.
    Not even the military as that risks “jobs”….

    No where.

    So it is all fine and good to understand “cuts must be made” – but that avoids the real questions “…where are you going to cut that does not cause massive pain???….”

  9. #13 by Alan Scott on July 27, 2011 - 02:08

    Cut where ? Cut where ? Department of Energy, Department of education . I’m sure there are also bureaus of BS everywhere that would not be missed .

    And as far as President Obama offering cuts . The man is a walking, talking contradiction . He will not put down in writing any specific cuts . In Washington you raise spending 7% and then cut 1% and claim you cut spending . Smoke and mirrors are what Reid and Obama offer. Give them revenue now and they will swear on what ever Liberals swear on to give you imaginary cuts . Like cuts in the projected budget as the wars in Iraq and Afghanistan maybe wind down . Those are not cuts . Obama knows it and Reid knows it and Boehner knows it .

    • #14 by Black Flag® on July 27, 2011 - 02:41

      Alan,

      Being on the same page…. however….

      Cut the Dept. of Energy:
      $27 billion dollars…. or, 0.2% of the deficit — not the budget!! – it insignificant to the 3 TRILLION+ dollar budget.

      Yet, they cannot cut this.

      Cut the Dpt. of Education: (god, I wish):
      $69.9 billion (2011)

      …really?… this makes a dent????

      As I stated, the areas the are necessary for cuts cannot be cut

      The man has left the airplane without a parachute. Whether flapping his arms or making an air brake with his T-shirt will not mitigate to any significant degree the impact with the ground.

    • #15 by Scott Erb on July 27, 2011 - 03:10

      I posted a link in reply to RG that shows most of the deficit and debts are from President Bush’s programs, not Obama’s. Obama’s cut proposals are very real, and the GOP could sign on. Of all the plans, Obama’s approach had the deepest cuts, four times as deep as Boehner’s, over twice as deep as Reid’s. All they had to do was close some tax breaks for the wealthiest Americans. Going into an election year, Obama would have to act on those cuts. Remember “only Nixon could go to China.” I bet that to get real cuts you need a Democratic President with a Republican House. I mean, the biggest debt creators have been Reagan and Bush the Younger.

      • #16 by Black Flag® on July 27, 2011 - 03:34

        Scott,
        Smoke and Mirrors.

        Everyone knows no cuts will happen.

        The poly-ticks are maneuvering to be the ones calling for cuts, but not irritating the local voters with such cuts – thus no cuts will happen.

        I find it amusing at how many are so moved by this display.

  10. #17 by renaissanceguy on July 27, 2011 - 02:13

    If President Obama wants the members of Congress to compromise, then one easy way would be for the Democrats to give in. Otherwise, it sounds like he just wants the Republicans to give in.

    I have to laugh, in derision, when he says, “Finally, let’s ask the wealthiest Americans and biggest corporations. . .” The governent doesn’t ask. I would be happy if they did, but they don’t. They force.

    As for what to cut, it seems to me that whole departments and agencies could be cut and the rest could be drastically gutted. Career bureaucrats should have to go out and get a real job. Grants and subsidies for “projects” should be reduced and gradually phased out. That is where I would start.

    • #18 by Scott Erb on July 27, 2011 - 03:06

      Obama was working on an historic compromise, cutting more than either the Reid or Boehner plans — and I think he still wants it. He isn’t demanding massive tax increases either, they are very small and have the support of many Republicans. The left hates Obama’s compromise plan because they think he’s going too far. They are glad that the tea party is preventing the Republicans from taking a good deal — the extremes are in charge!

      Also, note that most of the debt and deficit we now pay is being caused by Bush Administration policies, not Obama’s. Obama added debt with one big stimulus program, but that was a one time shot. Bush’s programs keep costing and costing. This graph shows it:

      http://www.washingtonpost.com/blogs/ezra-klein/post/obamas-and-bushs-effect-on-the-deficit-in-one-graph/2011/07/25/gIQAELOrYI_blog.html?fb_ref=NetworkNews&fb_source=home_oneline

      I

      • #19 by renaissanceguy on July 27, 2011 - 09:27

        I’m no fan of Bush or of the spending that occurred while he was President. It’s not an argument to me to say that Bush started it. It’s time to end it.

    • #20 by classicliberal2 on July 27, 2011 - 19:05

      “If President Obama wants the members of Congress to compromise, then one easy way would be for the Democrats to give in. Otherwise, it sounds like he just wants the Republicans to give in.”

      Good grief, are you paying no attention at all? Obama has bent over backwards to get a deal in this case, while Republicans haven’t given an inch. He’s repeatedly offered up massive–indeed, ruinous–cuts to things like Social Security and Medicare, cuts which are absolutely anathema to his party, his base, and the overwhelming majority of the public. He’s offered these up in exchange for a few minor revenue increases (which are supported by the overwhelming majority of the public), and Republicans have rejected his proposals because of this. What planet are you on?

  11. #21 by Scott Erb on July 27, 2011 - 14:05

    There have been significant cuts and austerity programs in Europe. If they can do it, we can do it. There has to be compromise though. Taxes can increase a bit on the wealthy. Cuts have to include the Pentagon. When they made cuts in Germany, France and especially recently in Britain and Greece, no one was happy. The leaders put their careers in peril. But they knew it had to be done. We’re in the same boat.

    • #22 by Black Flag® on July 27, 2011 - 14:38

      Scott,
      Where?

      There has been lots of talk about cuts, but nothing has happened significantly as far as I know.

      • #23 by Scott Erb on July 28, 2011 - 00:32

        Europe’s made massive cuts since the initial cuts in the 90s to prepare for the Euro zone. The US made cuts to help balance the budget at the end of the Clinton years. Austerity programs and cuts are common world wide. The fact you think government can’t ever cut should be evidence that your world view is too simplistic and has flaws.

  12. #24 by Alan Scott on July 27, 2011 - 21:59

    Scott ,

    You believe what you want . President Obama will not voluntarily cut anything . He has refused to submit a written plan . Like his $ 38 Billion in cuts the last time he bargained with the Speaker. They ended up being accounting tricks . The man is a dishonest negotiator, period . Any bargain will have to be signed in blood, triplicate, and still won’t be worth the paper printed on .

    The President has offered exactly nothing . You guys keep saying he has offered cuts. They are all tricks . Once he gets his tax increases and debt increases, the spending cuts will be just like the spending cuts they promised Reagan . In Obama’s imagination .

    • #25 by Scott Erb on July 28, 2011 - 00:31

      Alan, that’s plan ridiculous. The President is negotiating and there are ways to make sure agreements are meant. The fact is he is NOT calling for new spending, the Bush programs are the real problem, and he IS calling for deep cuts. If one irresponsibly just dismisses any chance for an agreement, it is the worst kind of disingenuous. It is demonization of the other in order to have an excuse to not give in and not compromise. That kind of attitude is the essence of the problem. It is the red meat of the talk radio emotion-driven pundits, but it is not rational, and it is not grounded at all in reality. If the President calls for deep cuts and the Congress gives them to him, then he’ll have to sign it. There is no reason to simply yield to the fantasy that Obama won’t cut anything. After all, the LEFT is angry with Obama for giving too much, and claims he’s been a pushover for the GOP. You’re believing partisan rhetoric that has no basis in reality. That is the kind of thing that has gotten this country so close to crumbling from within. Either the politicians and public have to stop demonizing the other side and recognize that compromise is the ONLY THING that will safe this country, or be prepared to be part of a declining and crumbling society. Those are the options.

      • #26 by Black Flag® on July 28, 2011 - 03:50

        Scott,
        save the country

        *blink*
        Saving the government saves the country????

        No. Saving the government will destroy the nation.

        The People must cut loose the government and their infantile irrationality – just as Iceland did.

        The People will have to demand that the government default and that the People WILL NOT bail them out.

  13. #27 by Black Flag® on July 28, 2011 - 02:01

    Scott,

    Europe’s made massive cuts since the initial cuts in the 90s to prepare for the Euro zone. The US made cuts to help balance the budget at the end of the Clinton years. The fact you think government can’t ever cut should be evidence that your world view is too simplistic and has flaws.

    *scratch head*

    So, you believe they made “cuts” in the 90’s that -somehow- merit some benefit today.

    But the fact is, your claim is not true.

    Germany has generally run a deficit since 1996. If Germany has done this poorly, I cannot expect the rest to have done better.

    http://www.tradingeconomics.com/germany/government-budget

    The US made cuts to help balance the budget at the end of the Clinton years

    There was no “balanced” budget in the Clinton years. You are so easily fooled by bait-and-switch accounting tricks.

    He ran a deficit like every President has since Jackson. He merely “transferred” monies designated for other purposes into the general account, printed unmarketable bonds as an IOU from the government to the government, and claimed “oh, we don’t have a money problem!”.

    Austerity programs and cuts are common world wide.

    Bull crap.

    Nearly every government has run deficits for decades. Your “austerity” is merely a change of rate of falling into debt, but not a reduction of debt …. I am sure glad you don’t run my household budgets!

    • #28 by Scott Erb on July 28, 2011 - 02:10

      Running a deficit is irrelevant to whether not cuts are made. You can make cuts and still run a deficit. Governments can and do make cuts. You seem to be shifting your argument from “government can’t make cuts” to “governments run deficits.” But of course — the US government has been in debt pretty much since its founding (and most US households have debt). If you’re shifting to that argument, then you’ve pretty much surrendered the point.

  14. #29 by Black Flag® on July 28, 2011 - 03:36

    Scott,

    Running a deficit is irrelevant to whether not cuts are made. You can make cuts and still run a deficit. Governments can and do make cuts. You seem to be shifting your argument from “government can’t make cuts” to “governments run deficits.” But of course — the US government has been in debt pretty much since its founding (and most US households have debt). If you’re shifting to that argument, then you’ve pretty much surrendered the point.

    *blink*

    The problem is debt which is a direct consequence of deficits

    This is not a shifting of an argument but a point to your irrelevant posturing.

    Your inability to understand the relationship of deficit/debt demonstrates perfectly the underlying problem with governments – they don’t seem to understand that either.

    They must have taken the same courses in fiance as you did.

    • #30 by Scott Erb on July 28, 2011 - 03:53

      Yet the point I make: governments can cut spending, stands. That is all that matters to me.

      • #31 by Black Flag® on July 28, 2011 - 04:24

        Scott,

        What???

        Show me where a government has reduced its debt and then you can claim it has “cut” spending.

  15. #32 by Scott Erb on July 28, 2011 - 07:04

    Those are unrelated. You are being like jello here.

  16. #33 by Black Flag® on July 28, 2011 - 15:25

    Scott

    What??

    You mean the deficit has nothing to do with increasing the debt???

    What school of basic economics and finance did you go to???

    • #34 by Scott Erb on July 28, 2011 - 15:34

      You can’t admit when you’re wrong can you? I said governments could cut spending. That was the point I made. Rather than admit that you try to pretend like the point was different — that’s jello tactics. My point stands: governments can and have cut spending, and in fact have often lowered their debt to GDP ratio (through 1980 the US lowered its from 120% to 30%). This was to reply to an historically inaccurate claim that governments can’t cut spending. They can and have — and they have often in the past reduced debt. It’s possible. Will they this time? I believe they have to, and will.

  17. #35 by Black Flag® on July 28, 2011 - 15:49

    Scott

    You can’t admit when you’re wrong can you?

    Only when I am.

    I said governments could cut spending.

    Yes you did.
    …to which I replied, paraphrased, “Could but that is worthless – show me who has

    …to which you pointed to countries like Germany

    ..to which I pointed to you that the had done no such thing with the evidence of the last 16 years as demonstration….

    So you are WRONG – you morphed a “could” into a falsehood.

    My point stands: governments can and have cut spending

    Yep, there you go again. A “could” morphs into a “have” and I will ask – again – who and where?

    Answer: no one and no where.

    and in fact have often lowered their debt to GDP ratio (through 1980 the US lowered its from 120% to 30%).

    Economic idiocy!

    You are claiming that a ratio of debt to some sort of measure is a cut!

    This was to reply to an historically inaccurate claim that governments can’t cut spending.

    I didn’t say they “can’t” – I asked “who and where” and you have nothing to show.

    • #36 by Scott Erb on July 28, 2011 - 16:05

      I’m not in the mood for jello now, I’ll let my point above stand. My points were very specific: governments can and have cut spending, and debt has been cut. It has been cut by many countries over time in real terms, but for me the most important thing is to lower the debt to GDP ratio. In claim that government “can’t” do this because of the nature of government is categorically false.

  18. #37 by Black Flag® on July 28, 2011 - 16:15

    Scott,

    My points were very specific: governments can and have cut spending, and debt has been cut.

    My point is equally specific: you live in a fantasy.

    No one has cut and no debt has been cut.

    You have yet to give a single, serious, example.

    Your bizarre economic calculation is this:
    “I have a pay raise, therefore that means I have less debt – even though my credit card bills are getting larger”

    • #38 by Scott Erb on July 28, 2011 - 16:45

      Yes, I pointed out cuts. Only someone with no knowledge of history would ever say countries never have cut their budgets. A couple of examples:

      Cameon’s cuts in Britain

      http://www.slate.com/id/2271943/

      And note how this article says France’s cuts will be compared to Germany’s earlier cuts:

      http://www.breitbart.com/article.php?id=CNG.5fd9d9aca2e24cbdb73350eb1197d306.7b1&show_article=1

      My prediction: you’ll find some squirmy way to weasel out of it, saying these aren’t “serious” or “significant” or some other weasel word. You’re wrong. Admit it. Governments can and do cut, and these were not only significant, but the start of a larger process. That is my point. Your ignorance is willful because you want to hold on to a fantasy.

      Also, if you ever took an economics class you’d know that debt is best measured in debt to GDP ratios. Debt has declined in real terms quite often, but that’s irrelevant – only debt to GDP ratios count. That’s what I’m worried about, that’s my focus — that’s the focus of all who study this. If you think that’s misguided, well you stand against basic economics. Get the debt to GDP ratios down, the problem is solved. Governments can and have done that. Period.

      • #39 by Black Flag® on July 28, 2011 - 18:22

        Scott

        Also, if you ever took an economics class you’d know that debt is best measured in debt to GDP ratios

        Perhaps you need a refund for the economic course you took.

        The best measure of debt is the amount of debt and if it goes UP, means you are getting deeper into debt

        As I pointed out already, your economic bizzaro world believes a pay raise means you have less debt!

        I do agree the powers that be wish everyone to focus on the GDP/debt ratios – because it is utterly meaningless.

        The belief is if the ratio is “good” – (whatever “good” means in the ratio), the debt will be repaid “someday”.

        But the debt will never be repaid, so holding on to a mythical ratio is delusional.

        Get the debt to GDP ratios down, the problem is solved.

        LoL!

        Of course, the concept of repayment is utterly foreign to you.

  19. #40 by Black Flag® on July 28, 2011 - 17:54

    UK budget 2010-2011
    697 billion EURO
    (www).thisismoney.co.uk/money/news/article-1716370/Budget-2011-Key-points-at-a-glance.html

    UK budget 2011-2012
    710 billion EURO
    (www).thisismoney.co.uk/money/news/article-1716163/Budget-2011-What-it-means-for-you.html

    But in your bizarre world, this is cut.

    The will go into debt another 122 billion in 2012 on top of the 157 billion they will go into debt in 2011 – the spend in which they go into debt slows, but to you that is a “cut” in the debt.

    Further 2012 is merely a projection as they are depending on increase in revenues to make up the increases in the budget.

    But an increase in revenue in your bizarre world equals a “cut”

  20. #41 by Black Flag® on July 28, 2011 - 18:16

    Scott,

    Yes, facts are “Squirmy” irritating things to your bizarre economics.

    Now France:
    And the central government’s budget deficit will hit 152 billion euros (207 billion dollars), falling to 92 billion euros in 2011.

    Again, to you, the speed in which one is falling into debt “slows” means to your bizzaro economics “cut” in the debt.

    (www).tradingeconomics.com/france/government-budget

    France has run a deficit for decades – but to you this is a cut in debt.

    And here is a 2008 article quote, claiming the French are going to “cut”
    Announcing cuts of €7 billion to be realised by 2011, Sarkozy tried to give the impression of having things under control: “It is not savings that make reforms but the reform which permits savings.” France takes over the presidency of the European Union in June, and has committed itself to reducing its public deficit to zero by 2012, an unrealisable target without making big inroads into social gains.

    France has public spending levels at 53.4 percent of GDP, the highest in the euro zone. A recent meeting of EU finance ministers has backed the call for France to cut its deficit and reform public spending more quickly. The EU Commission is demanding a balanced budget by 2010, while France pushed this date back to 2012. The deficit for the first two months of 2008 alone stands at €22.7 billion euros-

    So, let’s see, did they do it?
    NO

    Yet, google “France government spending” and article after article saying:
    “France promises to cut deficit”
    “France intends to freeze spending”
    “France sets goal in cutting deficit”

    …yet, reality it never happened

    You get so fooled by proclamations and believe what they say they will do – yet, they do not “do” at all – but you continue to argue “they will” LoL!

    Here is the French debt clock:
    cluaran.free.fr/dette.html

    Gee, it is getting bigger! But to you that means they are cutting back

    Here is the UK debt clock:
    (www).debtbombshell.com/

    Gee, it is getting bigger! But to you that means they are cutting back

    Here is the German debt clock:
    (www)steuerzahler.de/Home/1692b637/index.html

    Gee, it is getting bigger! But to you that means they are cutting back

    Scott, frankly, you hold bizarre economic understanding – believe debt increases means they are cutting back, budget increases meaning they are cutting back, and believe that if they say they will “get it under control, real soon now“, they will.

  21. #42 by Scott Erb on July 28, 2011 - 18:27

    God, the jello is thick here. I said government can make cuts — they have made cuts. Because of the recession, the deficit grows anyway. But cuts were made. That’s a fact you can’t deny (and your verbose rambly response suggests to me you KNOW it!) The US debt to GDP ratio went from 120% after WWII to 30% by 1980. You have not denied my point at all: governments can cut budgets and have. If you cut in a recession, your deficit still might rise — or other costs might go up offsetting the cut. But it’s still a cut and a start. Debt levels can decrease. I believe that’s what you do. You can’t counter that argument so you try to drown it with jello and verbosity.

    You’re wrong and you know it.

  22. #43 by Black Flag® on July 28, 2011 - 18:30

    Scott

    Article two days ago:
    Tue, Jul 26 08:58 AM BST

    By Leigh Thomas

    PARIS (Reuters) – French President Nicolas Sarkozy’s key role in calming the euro zone crisis helps to take some of the heat off his own country’s simmering debt troubles in the run-up to a presidential election.

    But with French finances the weakest among the six AAA-rated euro zone countries, the conservative leader is still under pressure to ensure that France is not ejected from this elite club as he struggles for reelection in April 2012.

    Last Thursday’s deal on a second Greek bailout, which Sarkozy was particularly keen to secure, gives France more breathing room just as financial markets were beginning to take a second look at its poor public finances.

    Before the summit, the premium Paris pays investors to hold its debt rather than fiscally correct German bonds more than doubled in a matter of weeks, showing investors doubting that France was as safe a financial haven as the other AAA euro countries — Austria, Finland, Germany, Luxembourg and the Netherlands.

    “We’re on the edge, we’re the worst among the AAA countries. France needs to make a big effort to stay among the AAA countries,” said Philippe Delienne, president of Convictions Asset Management, which has 1.2 billion euros of assets under management.

    The three major ratings agencies have all reaffirmed France’s AAA ratings over the past eight months.

    But Alessandro Giansanti, a senior interest rate strategist at Dutch bank ING, said they were going too easy on France because it is an important player in the euro zone.

    “There is some complacency on France because if you look at the fundamentals, especially deficits, it should be downgraded,” he said.

    ING calculates that France’s finances and economy are more consistent with an AA+ rated country such as Belgium, although Giansanti puts France ahead of the United States, which the bank reckons now merits only an A+ rating.

    If France lost its AAA rating, it could unravel all attempts to calm the euro zone crisis because it is the bloc’s triple A countries that underwrite the European Financial Stability Fund at the heart of the rescue effort.

    Standard and Poor’s said last month that it would probably cut France’s AAA rating in the long term if the government did not push through further reforms.

    S&P said that if France is to hold onto its AAA rating until the middle of the century, it needed to balance its budget in the next five years, something that successive French governments on the right and left have not achieved since 1974.

    ODD MAN OUT IN AAA CLUB

    France has the highest deficit, debt and primary deficit – the deficit before taking interest payments into account — among the AAA-rated euro zone countries.

    ……….and this is the government you hold up as an example for your argument….

  23. #44 by Scott Erb on July 28, 2011 - 18:48

    Nothing you posts contradicts my claim. You’re becoming redundant and really hijacking this whole post thread. I’m turning off comments.

  24. #45 by Scott Erb on July 28, 2011 - 19:08

    OK, I’ll turn comments back on, but Black Flag, your argument tactics disgust me. Here is the point I made: governments can cut budgets. It’s physically possible and they have made cuts. Moreover, the important number, debt to GDP ratio, has been cut. Italian cuts lowered its ratio in the 90s and early 00s, has have many other countries before the great recession put huge strains on their economic system. That’s it. These are historical facts. Now, you play a game of shifting definitions, squish words like “serious” or “significant” and then equate cuts with deficits and a whole bunch of other stuff, all with verbosity and long rambling posts that obscure the point so that you can shift the argument away from that which you cannot refute.

    Play that game if you want, but until you actually show you can make concise on the point arguments and responses, then you’re not going to be worth time for me to respond to. I gave you too much attention, and I’ll not repeat that mistake again. Countries can and have made budget cuts, and they have lowered their debt to GDP ratios. They’ve been making cuts across Europe, they are going to make cuts in the US, and that’s simply reality.

  25. #46 by Black Flag® on July 29, 2011 - 00:43

    Scott,

    Nothing you posts contradicts my claim.

    You claim “they are making cuts”

    The only evidence you have provided requires your readers to transport themselves back to 1945 and the end of WW2.

    You have zero recent evidence.

    You hang your hat on their statements of intention.

    You have ZERO evidence that they will do what they say, whereas for decades they have done opposite of what you say.

    You’re becoming redundant and really hijacking this whole post thread. I’m turning off comments.

    It is your blog. You can use censorship to enforce your irrational claims as you wish.

    OK, I’ll turn comments back on, but Black Flag, your argument tactics disgust me.

    Facts do disgust those that find it necessary to promote fantasy.

    Here is the point I made: governments can cut budgets.

    I have said this back to you:
    CAN does not equal HAVE

    You have pointed to Germany (they have not).
    You have pointed to France (they have not).
    You have pointed to UK (they have not).

    NOT ONE OF YOUR EXAMPLES HAVE

    You are basing the entirety of your argument on a fantasy.

    You have not provided any rational to show how they can, that is, you have NOT shown any argument against Public Choice Doctrine.

    You want your readers to belief in fairy tales.

    It’s physically possible and they have made cuts

    Yes it is possible – and cats can fly if you throw them hard enough. It’s the landing that’s the problem for both of them.

    And no, they have not made cuts – they have made a whole bunch of shuffling, but all their budgets are larger than the year before and all their debts are larger then than the year before

    Only under the most irrational economic theory could such a situation be declared “cuts”.

    . Moreover, the important number, debt to GDP ratio, has been cut.

    It is a meaningless ratio.

    As repeatedly (and irrefutably) presented, increasing your pay does not lower your debt.

    Further, such a ratio assumes government will engross 100% of the economy – without consequence – to make its payments.

    Further, such a ratio assumes government will – one day – pay off all of its debts.

    Do you hold these assumptions, Scott? (because if you do, not only are you economic bizarre but economically naive)

    Italian cuts lowered its ratio in the 90s and early 00s, has have many other countries before the great recession put huge strains on their economic system

    The ratio is meaningless – and as you prove that it made no difference to their economies nor the outcomes years later – there were and still are in economic wonderland of a mess.

    They remain so because they are married to the same irrational measures of “success” as you promote.

    Now, you play a game of shifting definitions

    Please demonstrate where I have ‘shifted’ definitions.

    I do believe that you have tried to do what you complain of me – that is, proclaim “cuts” where precisely the opposite has been the fact.

    , squish words like “serious” or “significant”

    We certainly can debate on what counts as “serious” or “significant”

    I believe we can both agree that making a 0.001% dent in a deficit is neither serious or significant.

    We can mutually work up from there until one of us proclaims “serious” or “significant” but I know that measure will so in excess of the reality as not to be a point of debate between us right now.

    and then equate cuts with deficits

    The concept of “cuts” is easy.

    Only years of university indoctrination could possibly confuse a mind to believe that an increase in budget and debt could be a “cut”

    l you actually show you can make concise on the point arguments

    Yet, I have done so.

    I have shown, with no doubt, that every example you highlighted completely contradicted your claim.

    I gave direct evidence, from the government’s themselves, of the precise economic figures.

    None – no one – demonstrated your claim.

    In response, you deny I have done this.

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