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The Latest on Our Sputtering Economy, by the Numbers

As Congress enacts a 10-year package of spending cuts, economists worry that the economy may be weakening and could actually benefit from a brief jolt of short-term spending. Here’s an overview of where the economy stands now.

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Jonathan Cornwell

Aug. 3, 2011, 3:53 p.m.

In this wake of the debt ceiling/deficit deal, I’ve had some thoughts… an epiphany, if you will…

IF, as Tea Party Republicans assert, the only way to reform our government’s finances is through cuts -and- IF it is true that we are currently borrowing $0.40 for every dollar spent by the government (I get $0.43 based on the 2011 federal budget) THEN we need to cut the federal government by 40% in order to balance the budget. IF we also wish to pay down the balance on the debt ($14.3T according to the Bureau of Public Debt within the Department of the Treasury) and we planned to do so over, say, 50 years (a not-unreasonable amount of time for such a large debt) THEN it would require approximately $286B in annual surplus which is roughly 7.5% of the current budget. THEREFORE, if I’m not completely in the weeds on this, our actual goal is to cut the federal government by around 48% while simultaneously maintaining at least a $280+B per year surplus for 50 straight years (something we’ve never been able to do before but, because we are can-do Americans, should be no problem now that we agree on the root principle of “cuts-only”). Since, as ProPublica’s numbers suggest, 1/3 of state funds are from federal distributions, state budgets would also be reduced by 1/6; another glorious accomplishment. Thus, we finally achieve the dream of less government and create a new utopian age for America with prosperity for all.

I also offer this thought: since relative spending priorities have already been negotiated across decades with a rough degree of stability from one budget year to the next, we should be able to accomplish a 48% reduction across the board without further negotiation, i.e. every program, department, bureau, etc. “right-sized” by 48% thus maintaining relative spending priorities. 48% less social welfare! 48% less roads! 48% less agricultural subsidies! 48% less student loans! 48% less education! 48% less basic research! 48% regulation of the nuclear industry! 48% more freedom for oil companies to drill how and where they want! 48% less military! 48% less TSA using 48% less fancy xray machines to look at my nibbly bits! 48% less air traffic control! 48% less intelligence agencies! 48% less border patrol! 48% less useless, annoying, and unprofitable environmental regulation! 48% less FDA getting in the way of revolutionary new medicines! 48% less federal courts! 48% less aid to Israel, Pakistan, and everyone else! I could go on and on but I’m just too giddy with the possibilities!

I used to consider myself a Great Society progressive but, thankfully, I’ve seen the light! We must win this good fight! We must hack and slash and bludgeon this evil beast we call government until it is finally 48% more under control. This is feasible! We can do this…

Let’s get cutting. Now!

—Jonathan Swift(boat)

dale Bohannon

Aug. 3, 2011, 4:16 p.m.

If you remove Government spending from GDP numbers, we are in a full blown depression, they can say what they want, but the numbers don’t lie.  It’s way worse than anyone is willing to admit, they are still trying to talk the patient off the ledge.

charles plancon

Aug. 3, 2011, 5:10 p.m.

Bubba, Now I am beginning to agree with “some of your point of view. More than less, we as a country have managed to give to all but our own ! The latest being, (I believe Haiti) I do my very best to care for two teens myself, let me tell you my friend, it aint easy ! You are right, I really know nothing of you or your past and I do appoligize for being so abrupt. It is just right now, with our way of life, our very ability to live with a roof and electricity, gas doesn’t hurt either. I hope you see my reason for panic (beside the fact that I have certified anxiety and panic disorder as well as being bi-polar) My only reason for living is these two babies (they would kill me if they saw that) In the last 6 months the V.A. through “Fee basis” has done a 450 stitch shoulder surgery, implanted an 8 inch titanium plate, took 4 1/2 inches of bone from my hip for the graft and then in May cut 6’ down the front of my throat to put 4 screws and a titanium plate in my cervical spine. All this was recommended by Bay Pines V.A. 26 years ago, they denied saying I was to young. I am just plain mad and scared at the same time. I do however salute you as a fellow soldier, always brothers despite any political differences. If you would rather e mail me at my yahoo it is .(JavaScript must be enabled to view this email address)

Chris Everett

Aug. 4, 2011, 8:01 a.m.

With all the abuse of tax loopholes, I have to wonder if there might be a way to better use the tax code to create incentives for American-made products. What if Congress set a standard for what products can be called “Made in America” (e.g., at least 80% of labor comes from US taxpayers, 70% of parts come from companies that pay US taxes, and at least 60% of profits go to US tax-paying businesses)? What if Congress created a hefty tax break for any business or individual who bought a certified “Made in America” product that costs more than $200? You would still have the “freedom” to buy a car or refrigerator made in Korea, but you wouldn’t get the tax break. Currently, you cannot even find an American-made computer or television. With the right market-driven tax incentives, computer and appliance manufacturers would open facilities in the US and there would be lots of new jobs here. If a local or state govt (or agency) receives federal funding, they would have to buy certified American products or explain why they didn’t. I’m not talking about the old school protectionist tariffs that raise prices and would only lead to retaliatory tariffs and trade wars with foreign countries. Other nations subsidize their own industries, so why can’t we?

Note: the percentages cited in my example above are just arbitrary for the purpose of demonstration - actual numbers would vary.

zekedog

Aug. 4, 2011, 8:06 p.m.

Let’s compare:
Growth in spending at current rate, 1y, 5y, 10y
Growth in spending under compromise

Anyone got the numbers?

Jim Ensinger

Aug. 5, 2011, 9:02 a.m.

Chris, all of your suggestions to use the tax code to promote the use of American made products are good ideas, but I would guess that every one of them violates one trade agreement or another. All efforts would have to be voluntary, whether by consumers, governments or companies. And if every item of a certain kind, power drills, for example, is made overseas whether or not it has an American brand on it or not, there is nothing you can do. American companies have sold out the country by shifing manufacturing overseas and by out sourcing many of the remaining good jobs. This could never have happened in Germany, France, China or many other countries. And, really, what’s so bad about a trade war? You can’t lose if you are already running a huge deficit.

Graydon DeCamp

Aug. 5, 2011, 9:48 a.m.

Martin McGraw has it right. ProPublica promises the “investigative reporting” it says all those failing newspapers can’t do anymore, but never asks why they’re failing. The future of journalism depends on credible journalism, not subsidy.
  “Most economists” falls into the same dubious file as “most scientists” and “most researchers.” How many weasel words can we take?
    Historically, “most economists” are wrong much of the time. How much? Well once is enough, if you’re President Obama and were listening in the spring to economists who said the slowdown was temporary and recovery would resume with new vigor in the second half.
  If all we need is a short-term infusion of stimulus, why not just spend the $150-odd billion remaining unspent from last year’s colossal failure of a politically-motivated “stimulus” plan? But PLEASE don’t ask for more. America is tapped out. End the experiment. Hand the reins back to the Republicans.

George Reed

Aug. 6, 2011, 8:16 p.m.

If you use the realistic U6 unemployment rate that includes long-term unemployed and discouraged workers, it has been hovering around 16%.  The U3 number of 9% that the Administration likes to use is designed to undercount, which is why they like it.

Important to remember the role of population growth in the need for job creation.  Given our annual population growth of over 3 million/year, we need to create about 120,000 jobs/month to keep up—quite aside from recovering jobs for those who had been employed.  So looking at the 1.8 million jobs created since January 2008, that actually means we are actually 1,920,000 further behind!  120,000 x 31 months - 3,720,000 jobs needed for population increase.  Actual performance is 1,800,000 - 3,720,000 = -1,920,000.  Many reporters who write for the media do not seem to understand this arithmetic, or at least they don’t report it.  This gap does show up in Krugman’s recent report that the percent of the population in the workforce has declined.

Shah Islam

Aug. 7, 2011, 4:29 a.m.

What actually was happening?
The magic of thirteen stars at the back of US$ 1 bill may have lost it’s ‘Magical influence’ for now, but with the unknown approval of the unearthly cosmic power, if somehow (with somewhat risks, of course) our 50% matches the other unseen 50%, we may print it in unusual big volumes for the last time.
We-the Great North-Americans this time will play an absolutely honest game by simply changing a number of laws and policies. Firstly, to begin with, regarding our pioneering credit system we developed which for at least quarter of a century, allowed opportunist stingy guys (economic migrants from poor nations, who could never expect living luxurious lives on this Earth) from all over the world to take advantage of our generous economy and build personal small fortunes for them by savings only and not spending here enough of the funds they earned here to help keep the financial system running healthy but siphon outside to help develop small private enterprises in their back homelands of which collective national enterprise is e.g. today’s China.
You may trust the calculations of my economics: 21st Century cannot belong to any nation of frugal minded guys and when hopefully, we will be changing among many: our international trade policies to include a “new balanced one without any trade deficit” and show the way how to build multiple industrial nations like China elsewhere or (Bangladesh, Indonesia, Philippines etc.) in all corners of the world, the world economy will become a much bigger bubble and ‘become meaningless or just the opposite at the same time’.

I am saying so, because not a single drop of water or oil or any chemical goes out of this planet: the Earth, they just continue to get recycled.

Oil crisis actually is false, just like the ‘not too useful metal: the gold’ now in the hands of stock exchange gamblers for personal profiteering private businesses and with Mr. Obama as the virtual world leader, we may succeed to change the world to be a better place by controlling those money-greedy guys without any kind of violent means.

There can never be any shortages of energy,oil etc. under the sun. Researches once in a while 350 kilometers above the Earth is Okay but that’s it. The researching for cosmos is too expensive for mankind with earthly limitation. More to be cont….....................................

Rowdy Boots

Aug. 7, 2011, 11:47 a.m.

YES WE CAN!

HOPE AND CHANGE!

WE ARE THE PEOPLE WE HAVE BEEN WAITING FOR!

yeah, right…

YOU LIBS WHO HAVE NO JOBS…THANK YOURSELF…

YOU CONSERVATIVES WHO HAVE NO JOBS…

VOTE IN 2012 AND GET RID OF THIS DENNIS THE MENACE!

OBAMA IS THE GREATEST SCAMMER IN HISTORY—EVEN BETTER THEM MADOFF!

Shah Islam

Aug. 7, 2011, 6:37 p.m.

What actually was happening?
Every intelligent human being on earth believes in the power of cosmic creator but globally most of the government heads and the public will now laugh at the idea of discovering a politically usable new tool “unseen earthly involvment of an unearthly power” behind politics of mankind on earth, although, wise ones truly believe and say:‘in God we trust’. The reason for confusion is incomplete knowledge in each human mind as creation and is set by default. The modern or old economists are time to time being proved as failed experts like unproductive but expensive rocket scientists who will never be able to import foods or chemicals from Mars but impractical fanciful stories just like the holy books of all kinds with humanly flaws. 
The magic of thirteen stars at the back of US$ 1 bill may have lost it’s ‘Magical global influence’ for now, but with the unknown approval of the unearthly cosmic power, if somehow (with somewhat risks, of course) our 50% human effort matches the other unearthly 50%, we may print it in unusual big volumes for the last time.
We-the Great North-Americans this time under a good role player (e.g. Mr. Barack Obama) have the opportunity to play an absolutely honest game by simply changing a number of laws and policies (For example: globally effective ununionization of jobs, production of arms, new mandatory strict but same taxation and liberal immigration laws (e.g. every Mecca visitor will have a right to apply for a immigration or refugee status in the same manner as a Saudi-Arabian has been always capable to do as a visitor or traveller in the generous West), voting, education, entertainment, etc. systems by using today’s available digital system of Microsofts Corporation at a cheapest possible price.
Firstly, to begin with, regarding our pioneering credit system we developed which for at least quarter of a century, allowed opportunist stingy guys (economic migrants from poor nations, who could never expect living luxurious lives on this Earth) from all over the world to take advantage of our generous economy and build personal small fortunes for them by savings only and not spending here enough of the funds they earned here to help keep the financial system running healthy but siphon outside to help develop small private enterprises in their back homelands of which collective national enterprise is e.g. today’s China.
You may trust the calculations of my economics: 21st Century cannot belong to any nation of frugal minded guys and when hopefully, we will be changing among many: our international trade policies to include a “new balanced one without any trade deficit” and show the way how to build multiple industrial nations like China elsewhere or (Bangladesh, Indonesia, Philippines etc.) in all corners of the world, the world economy will become a much bigger bubble and ‘become meaningless or just the opposite at the same time’.

I am saying so, because not a single drop of water or oil or any chemical goes out of this planet: the Earth, they just continue to get recycled.

Oil crisis actually is false, just like the ‘not too useful metal: the gold’ now in the hands of stock exchange gamblers for personal profiteering private businesses and with Mr. Obama as the virtual world leader, we may succeed to change the world to be a better place by controlling those money-greedy guys without any kind of violent means.

There can never be any shortages of energy,oil etc. under the sun. Researches once in a while 350 kilometers above the Earth is Okay but that’s it. The researching for cosmos is too expensive for mankind with earthly limitation. More to be cont….....................................

Dale Thorn

Aug. 8, 2011, 2:34 p.m.

“America has become a second-rate power”
“Its trade deficit and its fiscal deficit are at nightmare proportions”
“Management has no stake in the company”
“The new rule is survival of the unfittest”
“Greed is good. Greed is right. Greed works.”

—Gordon Gekko, 1987.

teresa smith

Aug. 8, 2011, 9:42 p.m.

Why is it that the credit rating agencies are stellar institutions until it affects the US?  Now it seems that Standard and Poor’s are of questionable credibility. Why only a few days ago there was n mention of Standard and Poor;s, Moody’s or the other ones I can’t name right now. 
This kind of discussion is so far removed from the real America that struggles every day to feed their kids, sent them to a school that isn’t going to cost anymore than they are taxed, not to mention health care that is never going to be gotten in my lifetime.
How did we get to this point?  Few were paying attention and fewer still were paying bills.  The US needs to fight from here on out and when I say the US, I mean everyone who has been affected by this government, of which I use the term loosely.  I would love to see everyone of them ousted this next election, even the good ones, and see what we have then.  They all purport to be schooled in the Constitution so where does it say in the Constitution that it is a good idea to spend your whole adult life as a senator, representative, or for that matter, president?  We have to void them all out, clean house, and take back what was stolen.  O’bama kept the crooks GB enlisted which makes everyone from the top down suspect.  I would gladly appreciate any other ideas for the halting of our inevitable implosion.

Bill

Aug. 9, 2011, 5:32 p.m.

testing the site

margret

Aug. 19, 2011, 12:43 p.m.

Starting with campaign finance reform could get things going in the right direction.

E. R. Kelly

Aug. 19, 2011, 12:45 p.m.

Too many people refer to the government as a “business”.

A successful business needs to make money to be profitable.

The government is not intended to make a profit.

Because it is a service.

And the only way it can provide services is through taxes.

The Republikan Propaganda machine calls for “no new taxes”, elimination of “regulations”, and saving the wealthiest from increasing taxes so that they can send extra campaign funds to the congressmen and women who can be corrupted by big bucks.

Thus we get Enron, Bernie Madoff, hundreds of Medicare and Medicaid frauds of well over a million dollars, and wealthy corporations that set up phony offices in low-tax overseas so that they can cheat the U.S. Government.  Then there are the “favors” done by people like a former vice president who pushed through tax relief for his former business buddies.

Does anyone remember the “death panels” that the Republikan Propaganda Ministry ranted about during the “Obamacare” negotialtions?

Arizona is reported to have removed 98 people from Medicaid who were in need of organ transplants.  The Governor claims that the state could not afford the costs involved.  Two have already died.  The blood of each and every one of these people should be poured over the head of Arizona’s Governor while the relatives and friends of the victims stone her to death.  (Sometimes Sharia Law penalties are justified.) 

At the same time Arizona is branding any “illegal immigrant” as a “criminal”.  Given the Governor’s cold-heartedness, how soon will the Governor buy some of the Third Reich’s specialized ovens?

Shah Islam

Aug. 19, 2011, 1:54 p.m.

Dear Dave, Your thoughts are honest but in this cosmic world of creations banning of political parties is impossible. The good findings like yours definitely can help generating public awareness in trying to balancing two sides:1.  hidden strictness of dictatorship and 2. free democracy.

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