Republican Austerity Killing Economy

[Rohirrim]

While debt projections have improved, CBO’s economic outlook has deteriorated significantly. Not only is the economy continuing to operate below its potential, but also CBO has grown more pessimistic about how much potential the economy actually has. Economists use potential GDP to measure how much an economy could produce if it were operating at full steam—that is, with low unemployment, high rates of capacity utilization, and stable inflation—or what CBO calls maximum sustainable GDP.

To understand the impact of spending cuts on the overall economy, we can look at CBO’s changing estimates of potential GDP in the first quarter of 2014 and its estimate for potential GDP at the end of 2020. Relative to CBO’s estimates made in 2010 about the state of the economy, its most recent estimate shows growth of the U.S. economy’s supply-side potential is $351 billion smaller now after three years of spending cuts. CBO estimates also indicate the potential future growth path for the U.S. economy decreased by $633 billion through the end of 2020, following the austerity-burdened recovery.
http://www.americanprogress.org/issu...akes-no-sense/




Keep voting for those right wing morons, dimwits.

[Guess Who]

it is holding back the economy. What they fail to realize is that smart spending like "high speed rail", infrastructure repairs will stimulate the economy, put people back to work and they will pay more in taxes and spend more money and the deficit will go down. That is the way it always has been. No one has ever cut themselves into prosperity.

[Rohirrim]

Let's see: So far, tax cuts for the rich have failed. Tax cuts for corporations have failed. Deregulation of corporations, banks and the financial sector have failed. Supply side economics has failed. "Free Trade" deals have failed. A trillion dollars flushed down the ****hole of Iraq has failed. Austerity has failed.

I've got a great idea! Let's vote for more Republicans!

[Rohirrim]

it is holding back the economy. What they fail to realize is that smart spending like "high speed rail", infrastructure repairs will stimulate the economy, put people back to work and they will pay more in taxes and spend more money and the deficit will go down. That is the way it always has been. No one has ever cut themselves into prosperity.

The Right freaks out because we might print up some more money and give it to government to fix our infrastructure and create jobs, but they have no issue with printing up a bunch and feeding it to the financial sector so they can hide it in offshore accounts.

I guess they thought it would "trickle down."

[BroncoBeavis]

What's the Keynetasmic solution du jour?

A couple more Naval Carrier Groups? No of course not. Keynesianism only works when you spend on stuff Proggies like.

I got it. How about a trillion or so getting to the bottom of the federal government's spontaneously combusting hard drive problem.

Think of duh jobz.

[SoCalBronco]

The first sentence threw away any credibility that was there. They are claiming the exact opposite of what the CBO is saying.

[cutthemdown]

Unless our govt decides to change the corporate tax law and break it into domestic and foreign we won't grow. It has to happen.

We cant have corporations making money overseas but not getting any of it back in taxes and re-investing. We need to drop that rate way below 35%. Then after that require them to bring 25% of all foreign profits home to be taxed.

Then drop our domestic rate very low. Like 10-15%. The kicker would be to eliminate all subsidies and write offs to the big top corporations. You know the Walmarts, fortune 500 etc. They would actually pay more, it would be a tax hike in many ways. But it would be a huge tax cut for small businesses that make up the bulk of the jobs anyways.

[Rohirrim]

The first sentence threw away any credibility that was there. They are claiming the exact opposite of what the CBO is saying.

Not really. Last year the CBO projected debt to be 77% of GDP on an upward climb. This year they're projecting 74%. Still not good by any means.

[SoCalBronco]

Not really. Last year the CBO projected debt to be 77% of GDP on an upward climb. This year they're projecting 74%. Still not good by any means.

Roh....the piece initially claims the debt outlook is improving when the CBO is saying despite falling debt this year it is expected to rise again in 2015 and but for changes it will explode in the coming decades to well over 100% of GDP

[Rohirrim]

Roh....the piece initially claims the debt outlook is improving when the CBO is saying despite falling debt this year it is expected to rise again in 2015 and but for changes it will explode in the coming decades to well over 100% of GDP

No. It says the immediate "projection" is lower than last year's, which it is. Anyway, the thrust of this article is the economic projection with, and without, austerity.

[BroncoBeavis]

Not really. Last year the CBO projected debt to be 77% of GDP on an upward climb. This year they're projecting 74%. Still not good by any means.

Undone by your own math.

Your first graph showed us how significant $633 billion is in lost GDP through 2020. But you say a 3% GDP shave off of the debt is nothing?

3% of current GDP over 6 years is $2.8 trillion.

Either you're exaggerating the impact of those cuts or sweeping the impact of trillions in debt under the rug. Which is it?

[Rohirrim]

Undone by your own math.

Your first graph showed us how significant $633 billion is in lost GDP through 2020. But you say a 3% GDP shave off of the debt is nothing?

3% of current GDP over 6 years is $2.8 trillion.

Either you're exaggerating the impact of those cuts or sweeping the impact of trillions in debt under the rug. Which is it?

Once again, you pretend I said something I didn't and then argue against that to deflect the thread. Also, you just assume the 3% is caused by cuts, when the evidence of that is not there. And besides, the 3% is only a change in projection. The article states, "One of the major reasons for the improved budget outlook is that health care costs are growing more slowly than expected, which may be due in part to the Affordable Care Act, or ACA."

Here's the meat of the article:
To understand the impact of spending cuts on the overall economy, we can look at CBO’s changing estimates of potential GDP in the first quarter of 2014 and its estimate for potential GDP at the end of 2020. Relative to CBO’s estimates made in 2010 about the state of the economy, its most recent estimate shows growth of the U.S. economy’s supply-side potential is $351 billion smaller now after three years of spending cuts. CBO estimates also indicate the potential future growth path for the U.S. economy decreased by $633 billion through the end of 2020, following the austerity-burdened recovery.

In other words, debt continues to rise and the economy gets worse. You know how to get the debt down? Put everybody to work and raise revenue. More cuts make the economy weaker.

Final line: After this latest CBO report, it is clearer than ever that our ongoing experiment with austerity has failed, and it is long past time for Congress to focus on growing the economy instead.

[B-Large]

Unless our govt decides to change the corporate tax law and break it into domestic and foreign we won't grow. It has to happen.

We cant have corporations making money overseas but not getting any of it back in taxes and re-investing. We need to drop that rate way below 35%. Then after that require them to bring 25% of all foreign profits home to be taxed.

Then drop our domestic rate very low. Like 10-15%. The kicker would be to eliminate all subsidies and write offs to the big top corporations. You know the Walmarts, fortune 500 etc. They would actually pay more, it would be a tax hike in many ways. But it would be a huge tax cut for small businesses that make up the bulk of the jobs anyways.

go flat corporate and individual tax. this of how simple it would be to do business knowing you pay 10, 15, or whatever percent- no accouting gimmicks, no games, no BS.

[peacepipe]

Do a flat rate of 30%. Corporations via loopholes are paying 10-15% anyway.

[BroncoBeavis]

Once again, you pretend I said something I didn't and then argue against that to deflect the thread. Also, you just assume the 3% is caused by cuts, when the evidence of that is not there. And besides, the 3% is only a change in projection. The article states, "One of the major reasons for the improved budget outlook is that health care costs are growing more slowly than expected, which may be due in part to the Affordable Care Act, or ACA."

Comical beyond all measure.

You start a thread based pretty much entirely on a projection then pooh pooh anyone else using projected numbers. News flash. There's no way to debate the impact of one future projection without using another. Nobody knows for sure until it happens.

As for 'reduced' spending on the ACA? Uh, that's pretty much a forgone conclusion when you refuse to implement most of it.

"We're not spending as much as projected because we're basically not doing most of the things we budgeted for" is only a mark of reason in Progtopia. Until the ACA's employer mandate kicks in, it's essentially all window dressing.

Here's the meat of the article:
To understand the impact of spending cuts on the overall economy, we can look at CBO’s changing estimates of potential GDP in the first quarter of 2014 and its estimate for potential GDP at the end of 2020. Relative to CBO’s estimates made in 2010 about the state of the economy, its most recent estimate shows growth of the U.S. economy’s supply-side potential is $351 billion smaller now after three years of spending cuts. CBO estimates also indicate the potential future growth path for the U.S. economy decreased by $633 billion through the end of 2020, following the austerity-burdened recovery.

In other words, debt continues to rise and the economy gets worse. You know how to get the debt down? Put everybody to work and raise revenue. More cuts make the economy weaker.

Roh/AmericanProggie Translation: "Anything we project that's good (lower debt) probably has nothing to do with Republicans (spending less). Anything we project that's bad (lower GDP) is all Nasssty Republicansis faults!"

In the real world, today's borrowed spending to prop up "GDP" is tomorrow's hangover. If you don't believe me, we can hop in the time machine and ask all the 2008 Progressives again.

As for the significance of 0.6 trillion over a decade? A decade where the government may spend $35-40?

Comedy gold.