Wikinvest Wire

The national debt road trip

Thursday, June 11, 2009

In case you haven't already seen this...

6 comments:

Tony said...

The problem I see with this analogy is the confusion between "spending" versus "bailouts", among other oversimplifications.

Much of what is included in Obama's Budget is the purchase of troubled assets which pay preferred dividends until the principal is eventually paid back.

Certainly different from turning over the sand dunes in Iraq at a cost of $6 billion per month.

bevo said...

Tony is correct. The argument in the video treats a $1 of debt as the same.

Philosophically, I do not agree with Obama's deficit. I did not agree with Reagan's deficit, or Bush the Junior's deficit. Yet, I understand that Obama is cleaning up (Wall Street, auto companies, banks, insurance companies) or continuing (Iraq war, Afghanistan war) the mess inherited from Bush the Junior, whose follies and misdeeds created the largest debt.

Tim said...

Not a very popular video here, apparently, NDD writes:

This video is dishonest.

"Ronald Reagan and a democrat Congress sped up".

No. For 6 of Reagan's 8 years, including in 1981 when the tax but not spending reduction was passed, the Senate was Republican.

"Under Clinton and a Republican Congress, we slammed on the brakes."

No. The tax increases of 1993 that moved towards a balanced budged were passed without a single GOP vote by a democratic-controlled Congress.

The difference between George W. Bush's deficit spending and Obama's is that Bush was overspending taxpayer money -- and raiding the trust fund to boot -- during an economic expansion; Obama is using fiscal stimulus to try to counteract the most severe economic contraction since the Great Depression.

Bruno T said...

Hilarious. Even in the comments section people still find rationalizations so they can root for "their team" and excuse anything they do, while criticizing anything "the other team" does.

My guess is even if you subtract "debt" the govn't has incurred that will be actually paid back by banks (much of it won't ever be paid back), the rest of the debt is still accelerating at an incredible pace.

But when your hopes lie with the cult of personality, not the rule of law, you can't really admit that, can you, or the entire pretty picture falls apart and hope is lost.

I'd like to see a list of nations where a "charismatic leader" actually made the nation peaceful and prosperous in the long run.
Alexander the Great? Julius Caesar? Napoleon? Frederick the Great? Oliver Cromwell? FDR? Mussolini? Hitler? Saddam Hussein?

It's great to listen to stirring speeches and admire someone with superior abilities and intelligence in certain areas. It's not always great for the people, though. Following a constitution seems to have worked better, even with boring old men running things.

AJ said...

There are several issues I have with this video.

First, debt/GDP is more important than absolute debt. This is why the first 80 years or so of the journey is so slow compared to now. Given equal amounts of debt, a larger GDP will make it easier to pay that debt off. It's kinda like someone from the 30s bringing their old rickety car into the future and driving it on the highway - I don't think they would like highway speeds.

Second, as suggested by some and detailed by the NYT here, a lot of this was many years in the making. Clinton's $800b surplus was squandered just by the dot-com bust and Bush's "cut-taxes-while-going-to-war" philosophy.

Third, not all of the debt that Obama racked up will be paid back by taxpayers. Aren't some corporations already trying to pay back TARP money?

Fourth, there's a big difference between squandering a surplus during a boom time, and deficit spending our way out of a recession.

Sure. I don't like the idea of big deficits. I don't like the idea of social security going broke before I get a chance to get my first check. I don't like the idea of growing old without reliable health care. There's a lot of things I don't like, but this is life, and you gotta do what you gotta do.

BTW, Bruno, nice job comparing a list of people who drove their countries into debt by waging war on other nations, to a man who is driving our country into debt by HELPING OUR OWN PEOPLE.

Anonymous said...

By the way Obama is also waging war against other nations and that has to be adding to the debt somehow ... I know hard to believe, but actually true!!

I'm not sure even a constitution proved a very good way to run a government. The whole thing devolved to this in less than 200 years. So much for that idea.

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