Can We Afford Another Republican President?

Our national debt is at an all time high ... nearly 9.5 Trillion dollars, which will be close to double what it was ($5,727,776,738,304.64) by the time George W. Bush leaves office January 20, 2009.


Linked to: http://www.blueroomlounge.com/; http://zfacts.com/p/318.html. The data is from the historical tables in the 2006 OMB Budget as downloaded from WhiteHouse.gov Historical Tables. The data are plotted without modification. Here is the relevant two page Table 7.1 in PDF format. The data and graph are available in this Excel spreadsheet.

The National Debt as a percentage of Gross Domestic Product (GDP) was actually declining until the Reagan and George H. Bush years when it rose dramatically. During Clinton's term, it once again began to decline. However, during George W. Bush's term, it's risen to 66% of GDP.

According to the National Treasury, our government is spending money faster than it's coming in. All of us normal folks know that you can't reduce your debt if you're spending money faster than you're receiving it. If you want to reduce the debt, you have to tighten the purse strings, cut the waste, stop spending more than you make and start paying off your debt. Apparently, government bureaucrats haven't learned that lesson.

If you really want to keep tabs on just how fast the government is spending in terms of the National debt, the best site I've found is "The Skeptical Optimist." Widgets on that site update the Total National Debt, the Gross Domestic Product (GDP) and the ratio of National Debt to GDP twice each second.

The National Debt is in the Trillions! That's kind of hard to wrap your head around. $9,500,000,000,000 ... that's a lot of zeros, so let's see if we can make that number a bit more personal. Let's look at that number in relationship to the U.S. Population, which is estimated to be 303,824,646 by July 2008. If we divide the population number into the debt, that means every man, woman and child in the U.S. is in debt to the tune of $31,268 each.

Now, if we look at the two presumptive candidates and where they want to take us economically, McCain wants to extend the Bush tax cuts, and Obama wants to end them (which means that some folks are going to see some tax increases ... an unpopular concept in an election year). Given where we're at today ... the housing market in crisis, the mortgage industry in crisis, gas prices are through the roof, the energy policy is in conflict with the farm policy and food prices are skyrocketing ... do you honestly think the Reagan/Bush economics policies of yet another Republican presidency would somehow turn everything around, reduce the National Debt to GDP ratio and make things just hunky-dory? I, for one, don't think so. I'm also concerned that should Democrat Obama prevail, he'd better take a good hard look at a large number of government programs and cut or scrap programs that no longer make good economic sense, especially if he intends to add additional spending for a national health care program. Adding health care funding to an already bloated governmental budget will do anything but reduce the Debt to GDP ratio.

cross-posted from Rockspot

Something to think about

I received an email the other day with a bit of humor about the 'Economic Stimulus Payments' we should be receiving in the near future. It went like this:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.
Q. Where will the government get this money?
A. From the taxpayers.
Q. So the government is giving me back my own money?
A. Just a smidgen.
Q. What is the purpose of this payment?
A. The plan is that you'll use the money to purchase an HD-TV set,
thus stimulating the economy.
Q. But isn't that stimulating the economy of China?
A. Shut up.

I chuckled at the final line, but then I started thinking about it. Not only is China our second-largest supplier of consumer goods (13% of what hit the shelves in 2004), but China is a one of our 'major foreign holders of US Treasury securities' to the tune of $490.6 Billion as of March 2008 (only Japan holds more), and they're still buying us up.

Follow that up with another email that I received and it really makes you think. Here's how it went:

Are we Americans as dumb as we appear, or is it that we just don't think? While the Chinese, knowingly and intentionally, export inferior products and dangerous toys and goods to be sold in American markets, the media wrings its hands and criticizes the Bush Administration for perceived errors. Yet, 70% of Americans believe that the trading privileges afforded to the Chinese should be suspended. Well, duh ... why do you need the government to suspend trading privileges?

DO IT YOURSELF!!

Simply look on the bottom of every product you buy, and if it says 'Made in China' or 'PRC' (and that now includes Hong Kong), simply choose another product or none at all. You will be amazed at how dependent you are on Chinese products, however you will be equally amazed at what you can do without. Who needs plastic eggs to celebrate Easter?

If you must have eggs, use real ones and benefit some American farmer. Easter is just an example, the point is ... don't wait for the government to act.

Just go ahead and assume control on your own.

If 200 million Americans refuse to buy just $20 each of Chinese goods, that's a billion dollar trade imbalance resolved in our favor ... fast!! The downside? Some American businesses will feel a temporary pinch from having foreign stockpiles of inventory. Downside ??

The solution?
Let's give them fair warning and send our own message. We'll not implement this UNTIL June 4, and we'll continue it only until July 4. That's only one month of trading losses, but it will hit the Chinese for 1/12th of the total, or 8%, of their American exports. Then they will at least have to ask themselves if the benefits were worth it.

The call to action in the latter email is a double-edged sword. It would be wonderful if everything in the world was so simple, but it's not. We're a nation with an unfathomable national debt and an insatiable appetite for cheap consumer goods. (The current issue of FLYP has more about problems associated with Chinese imports.)

So ... are you just going to chuckle at the first email, bite a hand that's feeding you by taking the action proposed in the second email, or more than likely, are you just going to pay down a bit of your own debt when you get that stimulus check? If you're like me, you're just going to pay down some of your own debt. But, you might just want to go one step further ... you just might want to consider writing your elected representatives, and ask them to stop borrowing and spend significantly less as they conduct the business of our nation. Afterall, each family's share of the national debt is now: $73,733.00. That's a sum equal to 3 years of my gross pension income. Hello ... is anybody in Congress even thinking about this?

Overnight Express News Roundup

The House of Representatives passed the Energy Independence and Security Act (H.R. 6) today by a 235-181 vote. The bill raises fuel economy standards to 35 mpg by 2020 for new cars and trucks, and increased the Renewable Fuels Standard to 36 billion gallons in 2022. It also requires that 15% of our electricity come from renewable sources. [The Gavel] Needless to say, Representatives Porter (R-NV3) and Heller (R-NV2) voted against the measure; Representative Berkley (D-NV1) voted in favor. Equally predictable, the President is threatening a another veto: “It appears Congress may intend to produce a bill the President cannot sign," top White House economic adviser Allan Hubbard said in a letter to House Speaker Nancy Pelosi.” [Reuters] Someone please explain to the President the crucial difference between “cannot” and “will not.”

This takes a level of cynicism that is hard to comprehend: When the Senate passed the AMT patch without an offsetting increase to avoid adding to the federal debt, “With paygo breached, Republicans were almost gleeful."They had painted themselves into a corner," said Sen. John Thune (R-SD). "That's a huge concession on their part, completely repudiating one of their core principles." [WaPo] So, Senator Thune is happy that we’ve added $50 billion to the national deficit because it makes the Democrats concede? So, what has happened to the definition of fiscal conservatism? Now, it’s OK to be fiscally irresponsible if it makes the other party look bad? [The Hill]

Senate Majority Leader Harry Reid (D-NV) would like to end the first session of the 110^th Congress by December 21, but hinted that it might be possible they might still be at work Christmas week. [The Hill]

Not that they’ll quit trying, but “California electoral vote plan won’t make June ballot” [LAT]

Auntie Neo Kwan has a well crafted post on the Mortgage Mess that explains in lay terms how the mortgage market functions after the lender makes the initial loan. The three basic types of “bundles” explained in this short piece help explain the current situation, and why the Bush proposal today falls short of being significantly helpful. And, by the way, “advocates say far fewer than estimated 1.2 million homeowners will quality,” according to the AP. See also: NYT and NYT “House prices seen falling 30%” [Reuters]

While the nation awaited a speech that would sound like Kennedy’s, what Romney delivered was more like Dobson’s.

For some refreshing honesty, there was Olbermann’s “Bush: Pathological liar or idiot-in-chief?”

He’s been fired by the U.S. Ambassador to Iraq and is under Justice Department investigation, but James L. Golden is still managing the $740 million American Embassy project. Why?

The former CEO of UnitedHealth will forfeit more than $400 million in stock options and other compensation in addition to a $7 million fine to settle an investigation into the company’s health insurers’ options practices. He had accumulated more than $1.6 billion in stock options by the end of 2005. [Reuters] Yes, this is the same UnitedHealth that House Small Business Committee Chair Nydia Velazquez wants the Justice Department to investigate in regard to the merger with Sierra Health. [TMkt]

Middle East and Asia:

“Iraqi parliament closes shop for a month” [AP]

“Iraq legal system burden by war’s wake” [AP]

“Top U.S. military brass in Iraq resist quick drawdown” [LAT]

“Military families question Iraq War as support for Bush slips” [Bloomberg]

“Violence marks Gates’ trip” [LAT]

“Iraqi officers go missing in U.S.” [WashTimes]

“U.S. military deaths in Iraq at 3,886” [AP]

“Protests as Pakistan opposition argue boycott terms” [Reuters]

“Pakistani protesters eager for Bhutto-Sharif deal” [CSM]

“Pakistan: Judges involuntarily retired” [NYT]

“Pushed out of Baghdad, insurgents move north” [NYT]

“Lebanese presidential vote unlikely on Friday” [Reuters]

Economic news:

“Dollar slide threatens African cotton farmers, splits families” [Bloomberg]

“U.S. hiring probably slowed, unemployment rate rose in November” [Bloomberg]

Going somewhere? “New passport rules are about to get even stricter.” [USAT]

Environment:

“Easter Island stone heads are ‘dying:’ Gigantic statues will vanish without preservation effort” [SFC]

“Forest loss in Sumatra becomes a global issue” [NYT]

“Major oil spill off South Korea” [Time]

“Emissions bill heads to fight on Senate Floor” [SFC]

“U.N. hails Senate climate steps” [Reuters]

Department of Homeland Insecurity:

“DHS launches pilot to integrate fingerprint databases with FBI” [GovExec]

“Former senator decries DHS as ‘mess’ urges reorganization” [GovExec]

Nevada:

“Poor medical care at Nevada prison cited: Inmates at the Ely facility have been denied help for heart problems, diabetes, and other serious medical conditions, records show” [LAT]

“Some in union see tilt to Edwards: State SEIU endorsement process for caucus raises concerns about fairness” [LV Sun]

“Is that clean coal in your stocking?” [LV Sun]

“No nuclear loans! No nuclear loans! [LV Sun]

“Renown nurse negotiations continue” [RGJ]

“McAuliffe in Elko Friday for opening of Clinton’s office” [EDFP]

Lists: “Rock List – 50 best songs over seven minutes long” Rolling Stone