Where the "deficits do not matter" mentality came. RR

[WTF]

Originally Posted by Tiny

Enough so that the social security trust fund reserves won't become exhausted until 2037

Is that what you told Paul Ryan when he proposed this?

https://www.cbpp.org/research/ryan-p...ocial-security

The Ryan plan would also make the Social Security trust funds responsible for guaranteeing that individuals who opted for private accounts would get back at least as much as they contributed, plus an adjustment for inflation. This guarantee could require Social Security to bail out private accounts when the stock market performed poorly.

[Tiny]

Originally Posted by WTF

I seem to remember a thread where you said public debt should not be taken in to consideration when discussing this!

I'm getting tired of discussing this. We've already destroyed your arguments and are going around in circles. Ronald Reagan deserves his sainthood.

However you do have a good point, above. About 43% of federal intragovernmental debt is owed to the social security trust funds. On the other hand, a lot of intragovernmental debt is owed to the Fed, and undoubtedly should come off.

When you look at the net amount the government has to pay to finance the debt, the net interest expense, the right number to use is debt held by the public. I'd also argue that markets react to the net debt number. For currencies, it's the external debt, public and private, that's of primary concern, and intragovernmental debt is internal. Now, if a central bank like the Fed goes on a buying binge, admittedly interest rates should go down, all else being equal. But still, as far as the public's demand for government securities goes, and its effect on interest rates, the level of net debt is what markets would look at, not the level of gross debt.

So anyway, irrespective of social security, in determining whether the national debt is too high, I think it makes more sense to focus on the net number. But yes, you've got a good point, the part of the intragovernmental debt that's held by the Social Security Trust Funds will have to be used to shore up the Ponzi scheme at some point.

[Texas Contrarian]

Originally Posted by WTF

What do you think a rate increase to SS was?

Eminently predictable. Once again, when another portion of your disingenuous, incoherent narrative collapses, you whiplash back to the Social Security reform legislation of 1983, even though that was wholly bipartisan and would have been signed by any president of either party. Do you not recall that outlays began outstripping receipts by the late 1970s, and that there was widely reported angst about the growing gap?

Originally Posted by WTF

... And I trust his former budget director over any posters in this forum

Well, there you go! That's a good bit of your problem right there.

Regarding this issue, David Stockman is about the least credible and least unbiased source you could possibly find. He was frustrated from the outset and had no idea what he was up against.

Then he became bitter and vengeful after getting into shouting matches with Jim Baker in the White House one too many times and told to not let the door hit him in the ass on the way out. Following that was a vengeance tour during which he vented his resentment and frustration on numerous occasions.

For at least a dozen years, he's been one of the leading purveyors of what we refer to as "doom porn." In 2010-2011, he was all over Bubblevision telling everyone they needed to stay away from stocks and load up on gold and commodities. "Anything Bernanke can't destroy the value of," as he put it.

Other than that, I'm sure he's an excellent go-to source for objective commentary and excellent investment advice!

[lustylad]

Originally Posted by Texas Contrarian

Other than that, I'm sure he's an excellent go-to source for metaphysical and epistemological advice!

FTFY.

If I recall correctly, he earned a PhD in theology, nothing in economics.

But I give him credit for being a good number-cruncher at OMB. And his "doom porn" can be fun to read... in small doses! He could have avoided his famous woodshed whupping if he had learned how to be a smoothie like Jim Baker.

[Texas Contrarian]

Originally Posted by lustylad

FTFY.

If I recall correctly, he earned a PhD in theology, nothing in economics.

But I give him credit for being a good number-cruncher at OMB. And his "doom porn" can be fun to read... in small doses!

I'll readily admit to enjoying some doom porn from time to time! (As you say, in limited doses.)

Yeah, as I recall he was an undergrad history major and then a divinity student at Harvard.

My take:

David seems like a bright guy, and he was certainly a true-blue-believer in bringing about a fiscally conservative revolution, but I'm afraid it just wasn't in the cards.

In the "How are we going to pay for all this shit?" thread, I posted that Jim Baker, the GHW Bush man, pretty much ran Reagan's White House, and he really wasn't a conservative. Maybe a center-right moderate.

In any event, other than Stockman, there was no one eagerly pursuing the idea of a partial rollback of the New Deal, which Stockman envisioned. And few in congress were on board for the idea of even throttling down the rate of growth of federal government spending, let alone actually cutting anything.

[Tiny]

Very informative and interesting, about David Stockman. Thank you gentlemen. I read his book many years ago but never knew "the rest of the story."

[WTF]

Originally Posted by Texas Contrarian

E.

Other than that, I'm sure he's an excellent go-to source for objective commentary and excellent investment advice!

Except I'm not going to himvfor investment advice....I'm listening to the person who was crunching the numbers.

Should you, lusty or Tiny cop to a closer view that that, I'd be all ears as is, a yawn.

This is a simple strategy of "shoot the messenger"...and evidently "change the subject" because none of you have addressed the facts as Stockman laid out. Laid out and backed up by actual numbers ( debt and deficits increasing...you know, the subject matter of the thread!)

[Tiny]

Originally Posted by WTF

Except I'm not going to himvfor investment advice....I'm listening to the person who was crunching the numbers.

Should you, lusty or Tiny cop to a closer view that that, I'd be all ears as is, a yawn.

This is a simple strategy of "shoot the messenger"...and evidently "change the subject" because none of you have addressed the facts as Stockman laid out. Laid out and backed up by actual numbers ( debt and deficits increasing...you know, the subject matter of the thread!)

We've addressed it until we're blue in the face. I backed up what I wrote up with data from the St. Louis Fed and the Social Security Administration. Again, federal debt held by the public at the end of the Clinton administration was 33%. That's a very reasonable level. Ronald Reagan had nothing to do with what came afterwards. He died in 2004.

You and David Stockman are just plain wrong. If you want to pin the blame on people, as opposed to events like wars, recessions and a pandemic, then blame it on Congressmen and presidents who were in office after January of 2001. And the voters who elected them.

[WTF]

Originally Posted by Tiny

Very informative and interesting, about David Stockman. Thank you gentlemen. I read his book many years ago but never knew "the rest of the story."

Well you're not getting it here!!!

All you're getting is a" Shoot the messenger!"

TC and lusty sound like Custer when he didn't believe his scouts and their "Shit load of Injuns" report.

Despite the person with the front row seat, laying out exactly wtf happened and exactly why the deficits and debt increased exponentially, you are falling into the Silo of "Reagan is God".

Logic and facts will never sway those that believe in Gods and the afterlife....so I suppose these continued diversions are expected.

Please at least tell me you sacrifice an economic guru once a year like the Mayanians.

[WTF]

Originally Posted by Tiny

We've addressed it until we're blue in the face. I backed up what I wrote up with data from the St. Louis Fed and the Social Security Administration. Again, federal debt held by the public at the end of the Clinton administration was 33%. That's a very reasonable level. Ronald Reagan had nothing to do with what came afterwards. You and David Stockman are just plain wrong. If you want to pin the blame on someone, as opposed to events like wars, recessions and a pandemic, then blame it on Congressmen and presidents who were in office after January of 2001. And the voters who elected them.

Are you fucking kidding me....you yourself are a shining example of a Reagan clone. You think tax cuts are the answer. You didn't get that from Bush Sr, Clinton, Bush Jr, Obama or Trump! You got that from Ronnie!

Now take a look at this graph and enough of this nonsense of 33% at the end of Clinton's term.

https://fred.stlouisfed.org/series/GFDEGDQ188S

[Tiny]

Originally Posted by WTF

you yourself are a shining example of a Reagan clone.

Thanks WTF, that's the nicest thing anyone's ever said about me. Regretfully I don't have his charisma, oratory abilities, or leadership skills.

[Tiny]

Originally Posted by WTF

Now take a look at this graph and enough of this nonsense of 33% at the end of Clinton's term.

https://fred.stlouisfed.org/series/GFDEGDQ188S

You're looking at a graph of gross debt WTF. Please see my post #107 above for why you should prefer to look at federal debt held by the public, instead of gross debt. This shows federal debt held by the public as a % of GDP:

https://fred.stlouisfed.org/series/FYGFGDQ188S

Federal debt held by the public was 32.7% at the end of the Clinton Administration, in 2001.

But gross debt at 54% of GDP isn't unreasonable either. The gross debt included lots and lots of treasury securities held by the Social Security Trust Funds, thanks to Ronald Reagan and Congressional Republicans and Democrats, who came together to save Social Security in 1983.

You worry when net debt as a % of GDP in a developed country hits around 100%. That's when people started seriously worrying about Greece and Spain, to name a couple.

[Tiny]

And why did you choose to go after Ronald Reagan, the greatest president of our lifetimes? What's next? Are you going to start attacking Santa Claus?

Give up. Choose your battles more wisely. Learn how to be a good loser.

[WTF]

Originally Posted by Tiny

Thanks WTF, that's the nicest thing anyone's ever said about me. Regretfully I don't have his charisma, oratory abilities, or leadership skills.

There you go again...

Tiny, I started a thread that is showing all the evidence points to Reagan administration as the starting point of the mentality of debt and deficits do not matter. The numbers do not lie....just look at the graph!

Despite TC best efforts to redirect the subject to show what a wonderful progressive Ronnie was....that wasn't the subject.

[WTF]

Originally Posted by Tiny

You're looking at a graph of gross debt WTF. Please see my post #107 above for why you should prefer to look at federal debt held by the public, instead of gross debt. This shows federal debt held by the public as a % of GDP:

https://fred.stlouisfed.org/series/FYGFGDQ188S

Federal debt held by the public was 32.7% at the end of the Clinton Administration, in 2001.

But gross debt at 54% of GDP isn't unreasonable either. The gross debt included lots and lots of treasury securities held by the Social Security Trust Funds, thanks to Ronald Reagan and Congressional Republicans and Democrats, who came together to save Social Security in 1983.

You worry when net debt as a % of GDP in a developed country hits around 100%. That's when people started seriously worrying about Greece and Spain, to name a couple.

So your reply is that you do not worry about debt util it hits 100%?

That is like worrying about monkey pox after getting poked raw in the bung! Kinda late then don't you think?

All you've done is confirm what I've been saying.

Reagan started this mentality of deficits not mattering and fooled you and others by the combining of discretionary and nondiscretionary budgets. He did this by hiking the SS tax (a huge tax increase on the poor and middle class over 40 years) which covered the bulging gross debt because folks like you seem to think public debt does not matter.....and I suppose it doesn't if you have no intention of paying SS and Medicare in the future!

Which is really the point I've been trying to make for the last 20 years.

Reagan started the mentality of it not being a problem overspending....without ever a worry about getting that debt to GDP ratio down to a reasonable number.

See Tiny, that 50% number leads to a 70% number and then a 120% ratio and pretty soon in the scheme of things you've got a problem....and Reagan was the impetus. The numbers do not lie. Just look at the graph.