published Sunday, July 25th, 2010

The Three Branches

about Clay Bennett...

The son of a career army officer, Bennett led a nomadic life, attending ten different schools before graduating in 1980 from the University of North Alabama with degrees in Art and History. After brief stints as a staff artist at the Pittsburgh Post-Gazette and the Fayetteville (NC) Times, he went on to serve as the editorial cartoonist for the St. Petersburg Times (1981-1994) and The Christian Science Monitor (1997-2007), before joining the staff of the ...

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Tax_Payer said...

Clay, you need to make your mind up on whose side your on instead of criticizing everybody like some self-loving narcissist.

July 25, 2010 at 12:29 a.m.
notlittletommy said...

I agree with Tax_Payer. Yaaawwwnnn.

July 25, 2010 at 2:49 a.m.
Glyph said...

Clay, great job. This is exactly the problem with the current system. Thanks for depicting it in such a clear way.

July 25, 2010 at 3:41 a.m.
LZSally said...

Clay, you've pinpointed a major problem we have in America. How money is handled in our government is a disgrace, the excess of money corrupts our whole political system.

July 25, 2010 at 4:01 a.m.
alprova said...

Ya' draw a completely non-partisan image...and they still keep a yappin' at your feet like chihuahuas.

Sigh...

July 25, 2010 at 5:21 a.m.
EaTn said...

The toon to me depicts the influential hand-picking money projects from D.C.(or state legislation), while the average citizen gets what money that falls to the ground. The problem is we voters will believe the politician lies that they are going to the "Hill" to make changes, but when they get there the money and influential sways them away. Of course it's the money that got them elected in the first place, so why should we expect any difference when in office.

July 25, 2010 at 5:23 a.m.
notlittletommy said...

Poor Alprova.

July 25, 2010 at 6:41 a.m.
moonpie said...

notlittletommy,

alprova makes a good point. Of course, by your name, you define your world view? Is that the primary lens you look through?

You seem to lack independent thought, rather simply recoil at all others say and do.

Why do you give others so much control over your thoughts?

(That being said, I do think the name is funny. Of course part of the reason why is because it's so petty and extreme. I've always been a fan of absurdity. The name reminds me of Monty Python's Argument Clinic.)

July 25, 2010 at 7:43 a.m.
lkeithlu said...

"Now,how are we going to stop the repub/conserv crowd from taking over? Any suggestions"

Stick to evidence, not anecdote. Keep true to the constitution, especially the separation of church and state.

July 25, 2010 at 9:59 a.m.
dss said...

Mr. Callahan,

If writing that a group of people is "not very smart" and "dumb," be sure that your post is mechanically and grammatically flawless.

Other than some cheerleaders who supported you yesterday, I can't imagine too many on your side welcoming your hate-filled posts, impropriety, and irrelevant links. But feel free to post; it makes the "repub/conservs" look better.

July 25, 2010 at 10:24 a.m.
hotdiggity said...

Great toon Clay. A good side panel toon to this would depict our current Supreme Court planting the apple seed for the tree that allows the special interests to influence and benefit disproportionately from our system. With the Court allowing unregulated spending by special interests for candidates, and the wealthy pushing to hold on to their Bush era tax cuts, the average person will continue to get only what is not picked clean from the tree. The toon also would seem to suggest the misguided policy of "trickle down economics".

July 25, 2010 at 10:58 a.m.
moonpie said...

Back to the cartoon.

The fruits of government are picked by the rich, mainly major corporation and industry. Like the AARP, the NCAAP, the NRA, monied interests represent either large numbers of people directly or through their employment opportunities for large numbers. Some monied interests have strong role over national security or energy.

In a free society, based on Capitalism, I'm not sure you will ever change this equation.

We, as Americans say we don't like this equation, but whenever government tries to change it we cry foul louder than ever before.

Just look at health care reform. We have/had the opportunity to have a single payer system -- but the forces for the status quo rallied powerfully against it...

With health care, we got a compromise. The little people get a little lift on the cherry picker, too, and conservatives decried Socialism.

Unlike alprova, I'm not sure this cartoon is totally non-partisan. I think it's anti big government, but I think leans anti-conservative.

Conservatives won't admit this is what they like, but this is how they vote. Democrats do this too, but whenever they try to break free, we hear people like Van Irion start spouting about the next holocaust.

July 25, 2010 at 11:37 a.m.
blackwater48 said...

I thought the cartoon was about "Trickle Down" economics, also referred to as "Voodoo" economics by George Bush I.

The economic policy which cut taxes on the rich and enabled Reagan to push the the federal budget deeply into debt. Ironically, George Bush I continued the same policy pushing us even deeper into debt.

Along came Clinton and tax cuts for the rich were returned to pre-Reagan levels. While the GOP wailed about economic collapse and financial ruin, the economy expanded and the new federal budget surplus started paying off the Reagan/Bush deficits.

George Bush II came along and we returned to the good old days of "Trickle Down." On top of that he also borrowed $1 trillion from China to invade the wrong country and relaxed federal regulation of the banking industry which led to an economic melt down.

Obama has instituted, among other things, the largest middle class tax cut in history to help turn things around. As all of you pointy headed conservatives SHOULD know, seventy percent of our economy is fueled by consumer spending. Not tax rates on hedge fund managers or capital gain taxes on investments.

Obama has only been in office 18 months. While there are positive economic signs there are also some nagging scars reminding us of Republican leadership.

The GOP, scared to death that Obama's policy would work, have stonewalled every piece of legislation and every appointment at every opportunity. They try to derail every new bill and then claim that Washington is ruled by partisan politics.

The right wing is calculating that "Trickle Down" will help them gain a majority of seats in the mid-term elections. It looks like that idiotic theory - which has never worked and never will - might appeal to enough of the idiotic electorate to actually wrest control of Congress from the Democrats.

Anyway, I think Clay was pointing out how it works in Washington today and how much more of it we have to look forward to.

July 25, 2010 at 11:44 a.m.
moonpie said...

Dewey, I think you missed dss's point.

The point is: your statements are frequently very stupid. Therefore, next to you, Republicans look intelligent.

It's a rare art form to so magnificently elevate those whom you claim to oppose.

That's why I have my suspicions that you are not genuine. I'd like to think you're a conservative, posing as a deranged liberal. (Sadly, this may be wishful thinking.)

Some of your posts can be quite funny.

Yesterday, though, you became very inappropriate.

Is it in you to apologize or acknowledge imperfection in yourself?

Others can see it clearly, even those on the same side of the ailse.

I think both you and canary should take a hard look at yourselves and ask yourselves why so many people associate the two of you together.

You are the Yin to canary's Yin.

I don't really think either of you have much Yang.

July 25, 2010 at 11:57 a.m.
SCOTTYM said...

"While the GOP wailed about economic collapse and financial ruin, the economy expanded and the new federal budget surplus started paying off the Reagan/Bush deficits."

Absolute B.S.

There was NO federal budget surplus. It never existed. It is an imaginary concept accepted by those who are too ignorant and or partisan to actually check the the numbers themselves.

I feel like a broken record, but every few months some new person comes along on this site spouting the "Clinton budget surplus" B.S.

Once more just for you BW. The total federal debt never moved in a negative direction while Clinton was in the W.H., and it hasn't done so since Ike was the Pres. Therefore, there was no "Budget surplus" no matter what the W.H. numbers say, as a budget surplus would result in a lowered year over year number.

It never happened.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

You can subtract one number from another, right?

July 25, 2010 at 1:36 p.m.
hotdiggity said...

Ho hum Scotty. Here you go...http://www.factcheck.org/askfactcheck/during_the_clinton_administration_was_the_federal.html

This has been accepted by almost everyone except some of the deluded right.

July 25, 2010 at 2:23 p.m.
nucanuck said...

It's about those apples. How and where can we harvest 1.5 trillion more than we grow? Yes,until recently we were getting some Chinese apples,but not that many. It seems that Chairman Bernanke is an apple magician. He has produced a Fed document showing that the beyond broke UK and the "household" sector have stepped up to the plate to provide us with the billions of extra needed apples.

We are supposed to be stupid enough to either believe this economic mythology or,at the least,not ask questions.

So where do all these miracle apples really come from? You guessed it. They come out of thin air from Mr Bernanke's digital wand. The small amount of quantitative easing that has been admitted to,is really a gusher of magic apples that will,if continued,make the US dollar absolutely worthless.

Hiding the money creation through creative deceptive accounting entries might work in the very short run,but the Fed apple cart is bound to tip.

July 25, 2010 at 3:08 p.m.

Why is the person of color the only one to eat and appears to be happy about the situation?

Clay?

July 25, 2010 at 3:39 p.m.
SCOTTYM said...

HD,

Numbers do not lie, but false "factcheckers" do.

Do the math for yourself and perhaps you will not fall for the propaganda being spread by leftist liars.

Or, just believe what you are told and continue being a useful idiot.

July 25, 2010 at 6:25 p.m.
lkeithlu said...

SCOTTY, I respect your opinion. How would you explain the information on factcheck? Do you reject that site (factcheck.org), and if so, why?

July 25, 2010 at 7:22 p.m.
nucanuck said...

SCOTTYM,

Then don't call the Clinton years a surplus,just call them far healthier budget numbers than the preceeding twelve years. Why argue about semantics when the overall point is about direction?

July 25, 2010 at 7:35 p.m.
SCOTTYM said...

IK,

The "factcheck" article does not explain away the fact that the total fed.gov debt number has not moved in a negative direction since the '50s.

Only those who believe that intra-governmental holdings are NOT debt can claim that that there was a surplus.

This is not an honest appraisal of the situation, as those intra-gov holdings are real dollars.

For example, when revenue monies are removed from the S.S. program "trust", and spent by Congress for the "normal" operation of government, those dollars are real, and are now owed back to S.S.

S.S. is not the only one of these intra-gov banks. They will all demand payment (with interest), the same as any other creditor.

It is real debt.

The number the liars and ignorant repeaters spout is the "publicly held debt" number.

It's a real number as well, but it is only a part of the total debt.

Yes, the "publicly held debt" went negative there for a little bit during the dotcom bubble, but the intra-gov borrowing increased more than enough to cover any negative movement in the "public debt" number.

The total debt did not move in a negative direction.

The rest is smoke and mirrors.

It's a commonly believed bit of propaganda, made up in the backrooms of the W.H. 30+ years ago, from what I can ascertain. It's an old one.

WJC didn't come up with it, but boy did he work it.

If a publicly held company acted like that, we'd call 'em Enron.

July 25, 2010 at 8:13 p.m.
SCOTTYM said...

NN

"Then don't call the Clinton years a surplus,..."

That's what I said.

July 25, 2010 at 8:15 p.m.
hotdiggity said...

Well Scotty perhaps you would believe Bush, who also acknowledged Clinton's surplus. This is from Bush's State of the Union address on February 27, 2001, “The growing surplus exists because taxes are too high and government is charging more that it needs. The people of America have been overcharged and, on their behalf, I am here asking for a refund.”

http://www.washingtonpost.com/wp-srv/onpolitics/transcripts/bushtext022701.htm

Perhaps you will recall that this was his reason for his tax cuts. He said we need to give back these surpluses as tax cuts. Fact check that!!

July 25, 2010 at 8:21 p.m.
lkeithlu said...

Are we confusing "debt" with "deficit"? They are not quite the same thing.

July 25, 2010 at 8:28 p.m.
hotdiggity said...

Scotty, perhaps the ultra right Cato Institute's comments in 2001 is more to your liking. The first two paragraphs from Bush's surplus projections should do. http://www.cato.org/pub_display.php?pub_id=3921

Fact check that!!

July 25, 2010 at 8:31 p.m.
blackwater48 said...

After Reagan's tax cuts for the rich, the annual federal DEFICIT exploded.

Thanks to Republican efforts to protect the poor abused and forgotten millionaires and billionaires, the federal DEBT - the accumulation of drunken sailor spending - is nearly incalculable.

To call our economic catastrophe nothing more than smoke and mirrors is ignorant, naive, and self aggrandizing.

July 25, 2010 at 9:23 p.m.
SCOTTYM said...

hd,

You'll find no "facts" to dispute the numbers.

A video of a statist_lite president using the same myth to further his own agenda is not refutation.

It is merely more proof that our fed.gov does not mind lying to the citizens.

Do you believe that conservative types are eager to embrace whatever the perceived highest guy on the totem pole is spouting? Do you believe that by going to the "authority" of W. you'd squirm around the actual numbers?

Critical thinking skill set to 2 on a sale of 10?

The total debt never moved from a larger negative number toward a smaller negative number during the 1990s or the 2000s. The total debt never shrank. It grew. Therefore, there was no surplus.


IK,

I'm not confused. Others may be.

"national debt" = total fed.gov liabilities (all monies owed to creditors as accumulated over time) In red all the way to the right on a ledger. It is currently a negative number. (A very large one.)

"budget deficit" = total fed.gov spending for one budget period that is not covered by revenue, which is borrowed, and added to the total debt. It will move the debt number away from zero debt and toward a larger debt number.

"budget surplus" = the exact opposite of "deficit" and will result in the year over year "total debt" number being reduced toward zero total debt as shown by a numerically smaller negative number.

If there was no movement towards zero in the total debt between any two years, there was no "surplus". (Unless someone put it in their pocket while no one was watching.)

It's not a very sophisticated accounting process once you remove the sophistry. LOL

There was no surplus, as the debt continued to grow.

July 25, 2010 at 9:24 p.m.
SeaSmokie59er said...

If I made 250 grand a year I would be for extending the tax cuts for the high-end. But I don't, so they should pay the same as I do.

Who likes eating scraps?

July 25, 2010 at 9:46 p.m.
lkeithlu said...

I wasn't accusing you personally of confusion, but that all of us, in that there were budget surpluses during Clinton but the debt remained and continued to grow, as they are defined differently. Clinton did produce surpluses (in part because of the dotcom boom) yet did not pay down the debt.

July 25, 2010 at 9:47 p.m.
SCOTTYM said...

IK,

There were no "budget surpluses" during WJC's time at the W.H. It is a fictional contrivance.

That is the whole point. Only by ignoring a large part of the borrowing (intra-governmental dollars) can the anyone claim that there was a surplus.

It is the equivalent of your household budget being short by one mortgage payment in a single month, you borrow the amount of that mortgage payment plus 20%, on a credit card, and declaring that you've not only balanced your budget, you've created a surplus.

It is an absurd proposition.

You've not created a surplus in anything but your current cash position, as your actual debt level grew. The hole got deeper.

Stringing together the words "federal", "budget", and "surplus" concerning any year since the 1950s is a lie.

As I wrote before, this is the sort of thing publicly traded company officers would go to federal prison for saying in public.

"Clinton did produce surpluses (in part because of the dotcom boom) yet did not pay down the debt."

This sentence is not logical. In this fictional scenario, where did the "surplus" monies go?

No offense taken IK, and I mean none toward you when I say that I believe you may be confused.

That is the designed effect of propaganda.

Even when confronted with irrefutable numbers which disprove the myth of Clinton surpluses, the brainwashed will retort the same myth, as though willing it to be true.

It isn't true, and no amount of repeating the words can change the numbers.

July 25, 2010 at 10:21 p.m.
nucanuck said...

SCOTTYM,

Your certitude is your greatet weakness,on this and other topics. IMO.

July 25, 2010 at 11:27 p.m.
SCOTTYM said...

NN,

So in your world, a firm understanding of basic (non-postmodern) math is a weakness?

When someone can show that my assertion is incorrect, I will concede the point, as I have before on other topics.

Argument from authority does not refute the numbers, and in this situation, the relevant numbers are the year to year total debt numbers.

Take note of the fact that I'm not being partisan with my observation as it flies into the face of the statements of multiple administrations from both sides of the aisle.

You want to believe the W.H. numbers because they justify and support many of the your opinions about other things. IMO.

July 25, 2010 at 11:43 p.m.
hotdiggity said...

Here Scotty, let me make it easy to understand. A budget surplus is when revenue exceeds expenditure. Excess of income over spending. The amount over a defined period of time by which government income exceeds government spending etc. Period!

When you bring in more monies than the total funding authorized to be spent in a fiscal year by the government this is called a budget surplus, i.e. actual cash collections vs budgeted spending. The total debt does not enter the equation or definition of budget surplus.

This might help.. http://definitions.uslegal.com/b/budget-surplus/

http://www.answers.com/topic/budget-surplus

http://www.qfinance.com/dictionary/budget-surplus

This is a good primer http://en.wikipedia.org/wiki/United_S...

July 26, 2010 at 1:12 a.m.
hotdiggity said...

Scotty, July 25, 2010 at 11:43 p.m. "When someone can show that my assertion is incorrect, I will concede the point, as I have before on other topics.

So Scotty, do you now understand the definition of budget surplus? Please feel free to post an opposing definition. It is not an "imaginary concept" created by Clinton partisans. The definition is what it is.

July 26, 2010 at 1:19 a.m.
alprova said...

Scotty, I'm going to illustrate why you are incorrect and why there were indeed BUDGET SURPLUSES during Clinton's last three years and up to GWB's 1st year in office.

Any premise that you have offered that the country's DEBT was never paid down is indeed correct. The problem with all that you offer, is that you are tying everything into one neat bundle and referring to the NET WORTH of this nation as if it were part of the BUDGET, which is simply not the case.

A budget surplus is defined as income exceeding expenses. A budget deficit is defined as expenses exceeding income. Are we in agreement so far? We should be.

Consider your personal checking account representative of your income and your expenses, assuming that all income and expenses flow in and out of that personal checking account. It also represents the limits of your BUDGET.

Your DEBT is not part of your personal checking account. It is a separate financial category that MAY be paid down THROUGH the issuing of funds from your checking account. Your NET WORTH is the difference between the balance of your checking account at any given moment and the balance of your debt at that same moment.

The DEBT of this nation has increased as you have stated with the exception of the years 1998-2002. During those four years, the Government took in more in terms of income than it spent in expenses. That is the very definition of a budget surplus.

You are correct in stating that none of the surplus was applied to the debt owed by this nation. The surpluses were spent by the end of 2002, when borrowing resumed and was needed to pay the Government's budgeted expenses.

If you will look at any public debt graph, the source you choose yourself to verify the facts as they were, you will see that the debt plateaued in 1998 and 1999, and even dropped in 2000 and 2001 for one simple reason; There was no borrowing of money from any source to deposit into the Government's checking account(s) during those four years.

No one has ever claimed that this country's DEBT was paid-off or even reduced with budget surpluses. But there is clear evidence that for four years, this country DID have a running balance in it's checking account(s) and DID NOT have to borrow any money to pay it's budgeted expenses.

Our country has a budget, a huge amount of debt, and indeed a negative net worth.

However, kept in their proper context, this nation did indeed have a budget surplus for four years in a row, three years under Clinton, and most of one year under GWB.

July 26, 2010 at 1:57 a.m.
alprova said...

Hotdiggity, I was working on my post when you posted your information. I did not mean to duplicate any points you were making, nor was I aware of them.

My apologies for anything in my post that mimics or duplicates any point in yours.

July 26, 2010 at 2:01 a.m.
hotdiggity said...

Alprova, no problem. Scotty, despite all his assertions, is somewhat confused about what the term means.

I always enjoy your posts. You are always concise and erudite in your presentations.

I am waiting on Scotty to follow through on "When someone can show that my assertion is incorrect, I will concede the point, as I have before on other topics". LOL

July 26, 2010 at 2:45 a.m.
alprova said...

Of all the people who frequent this forum, Scotty is among the most frequent to fess up very quickly if he is indeed proved to be incorrect.

On this one though, he is rather set in stone. We've haggled over the subject a time or two in the past.

I understand his argument well. Rush Limbaugh was among the most vocal proponents that the Clinton Administration was guilty of clever bookkeeping. The fact is however, that it's always been the Republicans who have attempted to change the bookkeeping methodology.

It's a simple as pie and it's documented clearly in the following Excel document.

"Table 1.1—SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (−): 1789–2015

Budget deficits and surpluses dating back to 1789"

(Years 2010-2015 are estimated)

http://www.whitehouse.gov/omb/budget/fy2011/assets/hist01z1.xls

In the past 50 years, only six times has the Government ran budget surpluses. Those years were;

1960 -- $301 million; 1969 -- $3.242 billion; 1998 -- $69.27 billion; 1999 -- $125.610 billion; 2000 -- $236.241 billion, and; 2001 -- $128.236 billion.

How can anyone argue with the Office of Management and Budget?

Coincidentally, Democratic Presidents were in the White House during each of those six years that surpluses were evidenced.

July 26, 2010 at 4:52 a.m.
SCOTTYM said...

"The DEBT of this nation has increased as you have stated with the exception of the years 1998-2002."

Wrong.

Here are the numbers from the Treasury, which is required by law to keep a true accounting.

The years are inverted with later years first. Notice that as you move forward through time (up the list) the numbers never get smaller. They grow continuously.

09/30/2004 7,379,052,696,330.32 09/30/2003 6,783,231,062,743.62 09/30/2002 6,228,235,965,597.16 09/30/2001 5,807,463,412,200.06 09/30/2000 5,674,178,209,886.86 09/30/1999 5,656,270,901,615.43 09/30/1998 5,526,193,008,897.62 09/30/1997 5,413,146,011,397.34 09/30/1996 5,224,810,939,135.73 09/29/1995 4,973,982,900,709.39 09/30/1994 4,692,749,910,013.32 09/30/1993 4,411,488,883,139.38 http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

The OMB is mis-representing the true status of the debt by not counting intra-government debts.

In 1960 Eisenhower was President.

In 1969 LBJ was in office for 20 days. The same as Clinton in 2001.

July 26, 2010 at 5:23 a.m.
alprova said...

Scott wrote: "Here are the numbers from the Treasury, which is required by law to keep a true accounting.....The OMB is mis-representing the true status of the debt by not counting intra-government debts."


No matter how you slice it or dice it Scott, you are attempting to attach the ENTIRE National Debt to hip of the budget, and they are two separate and distinct monetary issues.

Deficit spending absolutely has a direct effect on the debt, as borrowing must take place to cover the checks written by the Government. During those four years that we had budget surpluses, that you now are no longer protesting I assume, no borrowing occurred, so the TOTAL debt did not rise as a result of borrowing any funds.

So why did the TOTAL debt rise during those four years? Interest on the outstanding debt continued to accrue. Interest rates went up during those years as well. And as has been the case for decades, people continued to invest in our Government through the buying of securities. Securities are issued for every cent that comes into Government trust funds and THAT IS ALSO counted as intra-governmental debt.

For a lack of a better way to describe it, It is nothing more than an exchange of paper, representing dollars and cents that allows the Government to shift cash around to where it is needed.

Combining the public debt and the intra-governmental holdings into one nice, neat figure does not tell the entire story, and you have to know that. It is a right-wing rouse.

Debt held by the public absolutely and positively went down in 1998, 1999, 2000, and in 2001. in 1997, the outstanding public debt was $3.772 trillion dollars. In 1998, it fell to $3.721 trillion dollars. In 1999, it fell to $3.632 trillion dollars. In 2000, it fell to $3.410 trillion dollars. And in 2001, it fell to $3.320 trillion dollars.

The public debt was reduced by $452 billion dollars during those four years. The Bush Administration however declared war in Afghanistan and in Iraq, and it was all uphill from there. Then the economy tanked in 2008, tax revenues fell dramatically, and here we are two years later.

http://docs.google.com/viewer?a=v&q=cache:wb6jwq--MYYJ:www.cbo.gov/budget/data/historical.pdf+historical+Debt+held+by+the+public&hl=en&gl=us&pid=bl&srcid=ADGEESiQ7VPzWTcfABGbE8URp8bDQbtBsMSk5C0GECzmmKMHIXyylljKjVfumYo0PgTkopW25B6qIk16Y85BTBjcfGsh_-H7ved11azcUDPpPkLIukYexeDUvHsmpDGN_Wfu3EHOTRgT&sig=AHIEtbRynuxTtRZBT39ppuBL729lLZBlIg

July 26, 2010 at 9:46 a.m.
alprova said...

Scott wrote: "In 1960 Eisenhower was President. In 1969 LBJ was in office for 20 days. The same as Clinton in 2001."


I stand corrected and thank you for doing so. I ripped that off the top of my head, rather than to have researched the proper election years.

I shouldn't have even wrote that comment. It was an irrelevant factor in 1960 and 1969 anyway. The status of the economy has far more to do with any achievement of budget surpluses than who happens to be in the White House.

Clinton's success could very well have been pure luck when it comes right down to it. But there is no denying that times were pretty good while he was in office. I sure had eight years of some rather hefty profits during those years.

Sigh...

July 26, 2010 at 9:52 a.m.
moonpie said...

Scotty and alprova and hotdiggity,

Thanks for all the useful information. You've made my research into this a bit easier. I don't know where you all find the time, but I appreciate it.

Scotty, In a post many months ago, I thought your main argument about the balanced budget was that there were several large items, including some entitlements, left out of the official budget. Am I remembering this correctly? These arguments seem different than before.

July 26, 2010 at 10:24 a.m.
nucanuck said...

alprova said," Securities are issued for every cent that comes into government trust funds..."

al,I know that is how it is supposed to work,but with quantitative easing,I'm not at all sure that bonds or bills are created as those funds are pushed into the system. I believe it to be purely dilutive,massive,and being obscured by bookkeeping that intentionally obscures the creation.

As I said in an earlier post,the likelyhood that the UK and the US household sector bought 7-800 billions of treasury paper in the last nine months,more than strains credulity when the same catagories accounted for far far less in the prior year.

Quantitative easing seems to be the only avenue open,short of outright default or RADICAL (can you say military) spending reductions. We are in a box. We need a lot of money and surplus nations are beginning to back away from our debt.

I believe we will only find out the current monetary machinations years and tears later.

July 26, 2010 at 12:37 p.m.
SCOTTYM said...

moonpie,

Same point w/ less detail.

The dotcom bubble caused large surpluses to flow into the Social Security system. There were also surpluses collected by gov workers' pension programs and a few other programs.

The fed.gov exchanged paper (treasury bonds?) for the cash in those accounts and spent the money as general funds.

The OMB booked those dollars into the asset column only, as though they were regular tax receipts with no future liability. Much like free money from the ether, which must never be repaid.

The Treasury booked them as an asset with the future liability attached. It was treated as the borrowed money that it is. The treasury is acknowledging that the money must be repaid at some point in the future.

As I said earlier, only by ignoring those dollars that are owed to S.S. and those pension plans, among others, can a surplus be claimed.

The OMB has pulled an Enron by disappearing real debts from the books.

The Treasury is keeping a real set of books. (Kind of, but I won't even go into that.) Suffice to say, the Treasury numbers are a closer approximation of the real debt levels, and the OMB can't be trusted to add 2 and 2 and end up with 4.

July 26, 2010 at 3:03 p.m.
SCOTTYM said...

NN,

"quantitative easing"

Go ahead and call it what is, an attempt to inflate away the debt load, along with any U.S.$ based assets held by anyone, including most everyone on this board.

I agree with most of your assessment.

On the upside, we wouldn't need pennies anymore. Or $5 bills. Or $10s, $20s, or $50s. Individual food items would be bought with $100s.

It'll be fun. Just the Weimar Republic, or Zimbabwe.

All we have to do is keep believing the lies, and let the fools in D.C. continue along the current trajectory.

July 26, 2010 at 4:22 p.m.
nucanuck said...

SCOTTYM,

The SS funds and others you refer to go straight into the general treasury and is spent as any other form of income. There is no offsetting treasury note or other type of liability. The fact that those monies are collected under various programs actually means absolutely nothing. The US Treasury keeps a record of the amount owed,but it doesn't mean a thing. The OMB numbers are as close to accurate as you will find.

July 26, 2010 at 4:36 p.m.
SCOTTYM said...

Al,

Nice hedge. I notice you are specifying "public debt" now.

It's true if you put that qualifier in there.

Because, by ignoring the actual bottom line, and only pointing at one line way up in the calculation, you get to cherry-pick a "surplus".

It's still B.S. though, as it tricks people into believing that there was an actual surplus of funds booked by the fedgov.

There wasn't any "free" money taken into the general fund, as those of us (including you) who have paid into those programs are darn sure going to want our money back. In full, adjusted for inflation and plus interest. (Good luck, eh?)

It is real money and the OMB pretends it doesn't exist, you are happy to play along. Me, I'm to tired from working my butt off everyday, supporting a government I despise, to play pretend.

July 26, 2010 at 4:42 p.m.
SCOTTYM said...

"The US Treasury keeps a record of the amount owed,but it doesn't mean a thing."

The delusion is strong in this one.

July 26, 2010 at 4:44 p.m.
nucanuck said...

SCOTTYM,

Quantitative easing isn't an ATTEMPT to inflate,it's the real thing. Should the economy turn down again,a new stimulus bill probably won't pass and QE will be the only trick left. Added to what is already being created,it could get very interesting.

And yes,all dollar denominated savings would be at high risk.

July 26, 2010 at 4:51 p.m.
alprova said...

Scotty Wrote: "Nice hedge. I notice you are specifying "public debt" now."


Wait just a minute. If you will go back and look at my post of late last night, you will read that I referred to the public debt. Read the words..."If you will look at any public debt graph, the source you choose yourself..."

I did fail to make the important distinction in every reference I made to the debt, which is a fair criticism.


"It's true if you put that qualifier in there."


Thank you for acknowledging it.


"Because, by ignoring the actual bottom line, and only pointing at one line way up in the calculation, you get to cherry-pick a "surplus"."


The TOTAL debt figures you quote are very true and correct as well. But, they are categorized for a reason. The public debt generally refers to treasury certificates issued and sold to the public for a guaranteed rate of return.


"It's still B.S. though, as it tricks people into believing that there was an actual surplus of funds booked by the fedgov."


There was, but it was in the form of a balance left in various checking accounts.


"There wasn't any "free" money taken into the general fund, as those of us (including you) who have paid into those programs are darn sure going to want our money back. In full, adjusted for inflation and plus interest. (Good luck, eh?)"


The United States Government has yet to have defaulted on a dime of the obligations it takes on. We as a nation, have excellent credit.


"It is real money and the OMB pretends it doesn't exist, you are happy to play along. Me, I'm to tired from working my butt off everyday, supporting a government I despise, to play pretend."


Scott, we in this country are nowhere nearly as taxed as highly as those of other nations. Only seven countries have lower income tax rates than ours.

July 26, 2010 at 7:16 p.m.
alprova said...

nucabuck, I am concerned to some degree about the debt this nation has on it's books, but at the present moment, it's very manageable. Interest rates are rock-bottom.

What this nation has got to do, is to stand behind our President, set aside their partisan politics, and to get this country back on track.

But I fear that the Republicans have no intention of doing a doggone thing at all, but to do whatever it takes to regain control of this nation, in order to resume the plundering of the lower and middle income classes, and to continue to makes them economic slaves to those who have the bulk of this nation's wealth.

I wonder when it will be that those who fall into the lower income classes will wake up and realize that the Republicans don't care one whit about them, and will stop voting for them.

Tax breaks for the wealthy? Why in the world do they need them? There is not a shred of evidence that tax cuts to those above a certain benchmark have ever contributed to having any positive impact on an economy.

Consumer spending is what drives the economy, and that has been proven time and again. Right now, far too many of the middle and lower income folks are barely getting by. Their incomes have been dropping sharply over the past decade and a half. Spending has tanked.

A fourth of them have no health care insurance. Half of America has no savings to fall back on. A third of Americans have either lost most of the value of their 401k's or have cashed them in to pay their bills.

And there are people who DARE blame the Democrats for all of this? And they think that the Republicans have their backs?

Who do they think has been behind the moving of manufacturing jobs off-shore for the past 20 years? Democrats?

Who were the three men who are no longer in office, that allowed banks, insurers, and investment houses to commingle funds and to manipulate Wall Street? Democrats?

Who has been responsible for the twenty year slide in average incomes of the people in this nation, along with the transformation to a service based economy? Democrats?

Not on your life. The Republicans have sold the soul of those who are under the 50% income threshold to those who would love nothing more than to exploit us all for profit potential.

And with every vote you cast for a Republican, you are empowering them to do more of the same.

I'll be alright. I'm practically debt free and I'll stay that way from now until I can no longer work or until I die. My kids are grown and doing okay for now. But I do worry about others in this nation who are totally blind to what some of our politicians are up to.

July 26, 2010 at 7:42 p.m.
alprova said...

Nucanuck, I made a typo when I addressed you in my last post. It was in no manner a slant on your name. Sorry!!

July 26, 2010 at 7:44 p.m.
FM_33 said...

The three branches of government are this.

  1. Get

  2. Your

  3. Money

That about it !

July 26, 2010 at 7:46 p.m.
FM_33 said...

Username: alprova | On: July 26, 2010 at 7:42 p.m.


Good post and now your eyes are open to the fact that both the DNC /RNC are for big government and there is no difference between either one of them.

  • WAKE UP VOTERS OF AMERICA *
July 26, 2010 at 7:50 p.m.
FM_33 said...

Username: dewey60 | On: July 25, 2010 at 10:31 a.m.


Great post Dewayne but now it's time for you to hit the "Lighthouse" and be free from the pain that both party's have inflicted on your heart mind and soul.

Any time you're more then welcome.

July 26, 2010 at 7:54 p.m.
FM_33 said...

George W.Bush paid both DNC / RNC voters in the $250.000 and higher income levels with the great and magical " Tax Break ".

Everybody in those income levels was loving it until now that we all have to pay the piper for doing it for more longer then Bush should have done it in the first place.

He was pre-paying for his votes like every other president has done in that White House for years. Obama will cut the same deals when it comes time for him to run again.

July 26, 2010 at 8:02 p.m.
FM_33 said...

I did not vote for either Bush or Bill Clinton and glad that the country has woke up at last about these political party's that are under the control of the spider that is in the center of the corp America knee deep on Wall St near the coil of the sinister octopus.

I like Hillary better and would have voted for her but history changed that outcome and now we have Obama a one term black president. If i was a Democrat my mind would be upset at the fact that if Obama's approval rating is lower then 35% coming into the 2012 election cycle then you can hang it up about him running another term.

Joe Biden will have a better chance of being the next president then Obama rewinning another term in office. The Democrats better start lowering the home property tax so that family's that can afford to keep a home and can continue to do so under this very stressful recession that we face at this moment in this country.

July 26, 2010 at 8:16 p.m.
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