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As federal debt reaches $22.5T, partisan hack flip flops stance on deficit spending

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https://www.businessinsider.com/trumps-economic-advisor-national-debt-deficit-spending-2019-7

Quote

President Donald Trump's top economic adviser Larry Kudlow downplayed the US record national debt of $22.5 trillion on Tuesday, claiming that it's not a cause of concern and the federal government is prepared to manage it.

"I don't see this as a huge problem right now at all," Kudlow said at CNBC's Capital Exchange event. "[It's] quite manageable."

So it's ok to run up debt during a good economy...

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Kudlow's remarks are a stark departure from his previously stated views in 2009, when he criticized the Obama administration's deficit spending aimed at stimulating the economy during the Great Recession. He called it "the most unbalanced fiscal story coming out of Washington, really, in our history."

But using a similar annual deficit to stimulate the economy during a recession is bad? mkay :rolleyes:

Quote

He also claimed that revenue analysis of Trump's tax cuts is "coming in very well" and expressed optimism their cost has already been covered.

"I would argue strongly that the corporate tax cut has already been paid for and that roughly two-thirds of the overall tax cut has been paid for," Kudlow said.

Kudlow is also sharply at odds with mainstream economic projections of the impact of the Trump administration's tax cuts passed in late 2017. Early last year, the Congressional Budget Office said that the tax law would slash government revenue by $1.9 trillion from 2018 to 2028.

Passed with mostly Republican support, the tax bill delivered permanent tax cuts to corporations while providing temporary ones to individual taxpayers. Republicans at the time argued that lowering taxes would propel economic growth that would bring in additional tax revenue for the federal government. But during Trump's presidency, their characteristic hawkishness on curbing deficit spending has evolved into a collective shrug over the practice.

While the economy is experiencing its longest sustained expansion in American history, the federal deficit is ballooning — when its supposed to shrink during strong economic times.

:sigh:

ETA: https://www.pgpf.org/blog/2018/11/we-will-soon-be-spending-more-on-national-debt-interest-than-on-these-vital-programs

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The Congressional Budget Office (CBO) projects that interest payments will continue to grow rapidly, rising from $389 billion in fiscal year 2019 (the current fiscal year) to $914 billion in 2028. Overall, net interest costs will total nearly $7 trillion over the next decade.

People from both sides need to realize that both sides seem to like to spend money, but as our interest payments balloon, programs championed by both parties will have to be cut.

https://www.thebalance.com/interest-on-the-national-debt-4119024

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The interest on the debt immediately reduces the money available for other spending programs. As it increases over the next decade, advocates of those benefits will call for a reduction in spending in other areas.

In the long-term, a growing debt burden becomes a big problem for everyone. That's called the tipping point. The World Bank says a country reaches that point when the debt-to-GDP ratio approaches or exceeds 77%. That's because gross domestic product measures a country's entire economic output. When the debt is greater than the entire country's production, lenders worry whether the country will repay them. In fact, they did become concerned in 2011 and 2013. That's when tea party Republicans in Congress threatened to default on the U.S. debt.

There are some who would say it was a foolish attempt to limit government spending. Why? Because the Constitution gives Congress the ultimate authority to spend and by ignoring their budget process may have needlessly worried the nation's lenders. 

Once lenders become concerned, they demand higher interest rates. Buyers of U.S. Treasurys appreciate the security of knowing they will be repaid. They'll want compensation for an increasing risk they won't be repaid. Diminished demand for U.S. Treasurys would further increase interest rates. That slows economic growth. 

Lower demand for Treasurys also puts downward pressure on the dollar. That's because the dollar's value is tied to that of Treasury securities. As the dollar declines, foreign holders get paid back in currency that is worth less. That further decreases demand. 

The rising interest on the debt worsens the U.S. debt crisis. Over the next 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to seniors. Congress would find ways to reduce benefits rather than raise taxes. For example, some are talking about privatizing Social Security. 

 

Edited by FF Ninja

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You're really worried about Larry Kudlow?

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3 minutes ago, rockaction said:

You're really worried about Larry Kudlow?

I'm sure he's more worried about the debt levels but just pointing out that all the fiscal conservatives seem to be MIA??

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Just now, yak651 said:

I'm sure he's more worried about the debt levels but just pointing out that all the fiscal conservatives seem to be MIA??

Understandable.

It's just that Kudlow in particular has always, always (since I've followed it) been a partisan hack. Totally in the bag and I have no idea why people take him seriously. 

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6 minutes ago, rockaction said:

You're really worried about Larry Kudlow?

I'm worried about our debt, so naturally I'm worried about the guy who is advising the nutjob with six bankruptcies who is doing the spending.

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3 minutes ago, rockaction said:

Understandable.

It's just that Kudlow in particular has always, always (since I've followed it) been a partisan hack. Totally in the bag and I have no idea why people take him seriously. 

He’s the hand picked Director of the NEC. You and I know he’s a bum, but I disagree that he’s not to be taken seriously, as obviously the Republican Party and their voters feel differently. 

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14 minutes ago, FF Ninja said:

https://www.businessinsider.com/trumps-economic-advisor-national-debt-deficit-spending-2019-7

So it's ok to run up debt during a good economy...

But using a similar annual deficit to stimulate the economy during a recession is bad? mkay :rolleyes:

:sigh:

I applaud your efforts to bring attention to this issue but it will go nowhere in this forum (as in the real world). The left will blame Trump's tax cuts and the military, and the right will blame entitlement programs. In reality it's the Fed. We're too numb and living too large to want to rein in debt.

It's like climate change...until the inevitable crisis happens it will be talked about with faux concern...until boom the world changes and everyone will say they saw it coming a mile away.

Whoever is in office at that moment in time will get all the blame when the bomb goes off, poor sod.

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6 minutes ago, PhantomJB said:

I applaud your efforts to bring attention to this issue but it will go nowhere in this forum (as in the real world). The left will blame Trump's tax cuts and the military, and the right will blame entitlement programs. In reality it's the Fed. We're too numb and living too large to want to rein in debt.

 

It's not the Fed's fault.

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4 minutes ago, Juxtatarot said:

It's not the Fed's fault.

Whatever. I'm pretty sure I understand what the Fed's mandate is and how it is (ostensibly) overseen by Congress.

If you want to take my comments and create a blame game then that just reinforces my overarching point.

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I don't fault Kudlow for making contradictory comments now that he is in his current position.  He has to defend the administration's policy.  The fault lies in him even taking the job which he knew he would have to do it.  Maybe he thought he could help make a difference and steer the ship in a better direction.  But the optics are he is a sellout.  

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51 minutes ago, yak651 said:

I'm sure he's more worried about the debt levels but just pointing out that all the fiscal conservatives seem to be MIA??

Have been for a while.  Each party loves to spend and spend and spend.  At this point the disagreement seems more about what to spend it on.  Part of what has turned me left is spending priorities.

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Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

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57 minutes ago, rockaction said:

Understandable.

It's just that Kudlow in particular has always, always (since I've followed it) been a partisan hack. Totally in the bag and I have no idea why people take him seriously. 

Because he is presented as an "expert" and people believe what he says because they are told he's telling the truth.

TL'DR:  Because some people are sheep.

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1 minute ago, The Commish said:

Because he is presented as an "expert" and people believe what he says because they are told he's telling the truth.

TL'DR:  Because some people are sheep.

I guess that's where my econ undergrad degree (which is thoroughly useless otherwise) comes in handy. I listen to these guys' positions on the economy. His changes not just with administrations, but with different congressional compositions.

It's nakedly bad. 

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Just now, rockaction said:

I guess that's where my econ undergrad degree (which is thoroughly useless otherwise) comes in handy. I listen to these guys' positions on the economy. His changes not just with administrations, but with different congressional compositions.

It's nakedly bad. 

I don't disagree, but clearly the president and the GOP do.  That's why it matters.

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1 minute ago, The Commish said:

I don't disagree, but clearly the president and the GOP do.  That's why it matters.

Oh, I'm not really questioning why it matters; it's sort of an off-handed comment on my end. Kudlow makes me shake my head, and I'm conservative. 

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7 minutes ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

Realize that climate change is a scam, like it has been every other time throughout our history as a nation, and not spend money on it.

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9 minutes ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

Raise taxes.

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34 minutes ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

Bernie and Warren have some nice ideas on how to finance some of their social programs. I say we roll with those ideas and hold off on those programs until the budget is balanced.

25 minutes ago, boots11234 said:

Realize that climate change is a scam, like it has been every other time throughout our history as a nation, and not spend money on it.

:doh:

Shame on you. Do some damn research.

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36 minutes ago, timschochet said:

So how do we deal with this issue? 

Either we as a nation "grow up" and start voting for the "we will both raise your taxes, but I'm honest about it" candidates or we "hurt" one way or another.  (And I'm using "taxes" loosely such that it includes things like tariffs paid by China.

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39 minutes ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

We cant. We are incapable. It will have to handle itself. 

It will take catastrophe. 

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27 minutes ago, parasaurolophus said:

We cant. We are incapable. It will have to handle itself. 

It will take catastrophe. 

yep

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1 hour ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

The answer is simple.  We must reduce spending.  The Green New Deal is a pipe dream that will never happen.

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3 minutes ago, joffer said:

yep

Your optimism knows no boundaries, sir.

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1 hour ago, boots11234 said:

Realize that climate change is a scam, like it has been every other time throughout our history as a nation, and not spend money on it.

That still doesn't address the current deficit though.  We need to cut spending and keep these politicians who want to start new entitlements from ever sniffing the white house.

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1 hour ago, boots11234 said:

Realize that climate change is a scam, like it has been every other time throughout our history as a nation, and not spend money on it.

Scam?

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1 hour ago, jon_mx said:

I don't fault Kudlow for making contradictory comments now that he is in his current position.  He has to defend the administration's policy.  The fault lies in him even taking the job which he knew he would have to do it.  Maybe he thought he could help make a difference and steer the ship in a better direction.  But the optics are he is a sellout.  

You don't fault him for lying but fault him for taking a job that he knew he'd have to lie for?

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1 hour ago, jon_mx said:

I don't fault Kudlow for making contradictory comments now that he is in his current position.  He has to defend the administration's policy.  The fault lies in him even taking the job which he knew he would have to do it.  Maybe he thought he could help make a difference and steer the ship in a better direction.  But the optics are he is a sellout.  

He's the Director of the NEC.  He absolutely has influence over this administration's tax policy.  I don't understand this line of thinking - he's not a press secretary.  Kudlow is in favor of these policies that are resulting in higher deficits and increasing aggregate public debt.  

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1 hour ago, timschochet said:

Let’s put aside the blame. 

What are we to do about this? As I look at the future, particularly with regard to climate change, we’re going to need more spending, not less. A whole lot more. 

So how do we deal with this issue? 

Climate, healthcare, even immigration reform...infrastructure is in bad need as well.

What gets cut? Do we keep increasing the debt? Or do we raise taxes?

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5 minutes ago, Don't Noonan said:

That still doesn't address the current deficit though.  We need to cut spending and keep these politicians who want to start new entitlements from ever sniffing the white house.

Cut from where?  This is where many will disagree.

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1 minute ago, sho nuff said:

Cut from where?  This is where many will disagree.

We could cut back on the war business

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Just now, ffldrew said:

We could cut back on the war business

I agree.  But as soon as anyone says cut defense spending the attacks will start that they hate the military.

 

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11 minutes ago, Don't Noonan said:

That still doesn't address the current deficit though.  We need to cut spending and keep these politicians who want to start new entitlements from ever sniffing the white house.

:wall:

If anyone wonders why Kudlow and the GOP in general run nakedly irresponsible fiscal policies and not only get away with it, but get elected and promoted, see Noonan's post above.  Conservatives eat this economic malpractice for breakfast and then BLAME Democrats for the resulting problems.  Yes it's insane.  But it works.  Until conservative voters start prioritizing fiscal responsibility over tax cuts, we'll continue to see this same pattern continue. 

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6 minutes ago, tommyGunZ said:

:wall:

If anyone wonders why Kudlow and the GOP in general run nakedly irresponsible fiscal policies and not only get away with it, but get elected and promoted, see Noonan's post above.  Conservatives eat this economic malpractice for breakfast and then BLAME Democrats for the resulting problems.  Yes it's insane.  But it works.  Until conservative voters start prioritizing fiscal responsibility over tax cuts, we'll continue to see this same pattern continue. 

:lmao:. So I will put you in the responsible camp that wants to spend billions on climate change, free healthcare, free education right?  :lol:

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Climate change denial is not going to be a good look. I mean, it's already a bad look, but history won't be kind to those who bury their heads in the sand on this one.

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2 minutes ago, Don't Noonan said:

:lmao:. So I will put you in the responsible camp that wants to spend billions on climate change, free healthcare, free education right?  :lol:

Exactly, just like all of those "free" corporate subsidies and wars I currently get.

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1 hour ago, rockaction said:

Oh, I'm not really questioning why it matters; it's sort of an off-handed comment on my end. Kudlow makes me shake my head, and I'm conservative. 

Why does it say about the current state of conservatism that the foremost experts hand chosen to enact conservative policies are con men and economic clowns like Peter Navarro?  And if you want to say these people aren't really the foremost experts on conservative economic policy (I would agree), how do you wrestle with the current evidence that debt levels aren't nearly disaster that conservative (and many liberal) economists have been warning about for decades?  In essence, don't current interest rates and bonds yields suggest that monetary policy in our lifetime has been far too tight, and that economic growth has thus been negatively impacted for decades due to prevailing conservative economic thought?  

 

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3 minutes ago, Don't Noonan said:

:lmao:. So I will put you in the responsible camp that wants to spend billions on climate change, free healthcare, free education right?  :lol:

Climate change?  Yes...its a need.

Healthcare?  Yes...it needs major reform.  And offset by an increase in taxes and decrease in what you pay on your own (and what employers pay for insurance).

Education?  Not initially but something must be done to continue to compete globally.  Id push more a plan similar to TN where community college is paid for.  Or learning a trade.

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6 minutes ago, tommyGunZ said:

Why does it say about the current state of conservatism that the foremost experts hand chosen to enact conservative policies are con men and economic clowns like Peter Navarro?  And if you want to say these people aren't really the foremost experts on conservative economic policy (I would agree), how do you wrestle with the current evidence that debt levels aren't nearly disaster that conservative (and many liberal) economists have been warning about for decades?  In essence, don't current interest rates and bonds yields suggest that monetary policy in our lifetime has been far too tight, and that economic growth has thus been negatively impacted for decades due to prevailing conservative economic thought? 

I think both sides have economists that believe in both balanced budgets and running up deficits. It truly is BOF SIDEZ, IIRC. I would agree that, in general, economists to the left of the spectrum argue more for deficits than those on the right side of the spectrum, but I'm not sure it says as much as you want it to say.

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3 hours ago, rockaction said:

You're really worried about Larry Kudlow?

It should be a universal opinion that Kudlow is a total hack. Now that we resolved that, crank up them printing presses, we're gonna need more cash.

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26 minutes ago, FF Ninja said:

Climate change denial is not going to be a good look. I mean, it's already a bad look, but history won't be kind to those who bury their heads in the sand on this one.

Lol. This has been said many times in the past. But I’m sure this time, this time , global warming is true. 

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10 minutes ago, lod001 said:

It should be a universal opinion that Kudlow is a total hack. Now that we resolved that, crank up them printing presses, we're gonna need more cash.

Should be, but it's not

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2 minutes ago, boots11234 said:

Lol. This has been said many times in the past. But I’m sure this time, this time , global warming is true. 

It always has been true.

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2 minutes ago, boots11234 said:

Lol. This has been said many times in the past. But I’m sure this time, this time , global warming is true. 

When did they say it before? Are you referring to recent decades?

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I appreciate the responses to my question. Let me offer some of my own thoughts. 

1. Climate change isn’t a hoax and we’re going to have to spend a LOT of money on it. That doesn’t mean we have to adopt the Green New Deal. I still believe, for now, we can make the transition to a non carbon fueled economy with less draconian solutions. 

2. Whatever we do with healthcare should be a wash hopefully. The point is to have a more efficient system spending less than we do now. 

3. Cutting the military at this point is problematic because so many people in this country have jobs connected in some way to it. It’s also politically untenable: there were slight cuts under Obama and they’ve all been reversed. 

4. Raising taxes runs the risk of stifling economic growth. In addition if we raise taxes to spend more money rather than to pay off the debt, what exactly are we accomplishing in terms of the debt? Nothing. We’re going to have to raise taxes but cautiously. 

As you guys can tell, I don’t have any good answers here. 

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4 minutes ago, boots11234 said:

Lol. This has been said many times in the past. But I’m sure this time, this time , global warming is true. 

It's rather easy to see the predictions made in the 70s,80s,90s and compare them to the actual milestones....you should try it.

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8 minutes ago, timschochet said:

I appreciate the responses to my question. Let me offer some of my own thoughts. 

1. Climate change isn’t a hoax and we’re going to have to spend a LOT of money on it. That doesn’t mean we have to adopt the Green New Deal. I still believe, for now, we can make the transition to a non carbon fueled economy with less draconian solutions. 

carbon fee and dividend is revenue neutral

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