U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-13-2019, 12:04 PM
 
Location: Nebraska
3,280 posts, read 1,664,413 times
Reputation: 2925

Advertisements

Makes sense looks like the strategy is have them near zero for a very long time. So households, business and government can continue their massive spending spree.

Looks like deficits will have to be very low for a very long time for the spending spree that is about to ramp up seriously.

The interesting thing is deficits are projected to increase from about 5% of GDP yearly to 10% in about 20 years and that is the baseline situation which includes lots of tax increases from when the tax cuts expire and with the government projecting no recession, very little inflation in the future.

It is more the calm before the storm as deficits are due to increase rapidly each year until at least 2049.

https://www.cnbc.com/2019/08/13/a-1-...cut-rates.html

https://fiscal.treasury.gov/files/re...ts/mts0719.pdf

https://www.cbo.gov/publication/55331
Reply With Quote Quick reply to this message

 
Old 08-13-2019, 02:25 PM
 
Location: Ohio
20,187 posts, read 14,385,660 times
Reputation: 16400
Quote:
Originally Posted by lovecrowds View Post
Makes sense looks like the strategy is have them near zero for a very long time. So households, business and government can continue their massive spending spree.
There's no good reason to raise interest rates. Interest is akin to a tax and the fact that tax doesn't go to any government doesn't alter the fact that it's akin to a tax.

The Free Market should be setting interest rates based on Supply & Demand, not government fantasies.

Increasing interest rates is one of several methods to control Monetary Inflation, the others being reducing the money supply, raising taxes or decreasing spending, or any combination of those.

However, Monetary Inflation is practically non-existent in your economy. Since 2000 it's been less than 0.5% per year.

Your problem is Cost-push Inflation and Demand-pull Inflation and interest rates have no bearing on them.

And contrary to your false beliefs, households and businesses have been borrowing money for 10,000 years to operate. It's perfectly normal.
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 02:34 PM
 
30,256 posts, read 15,727,034 times
Reputation: 20360
Remember, only spending causes a deficit. Period.
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 02:38 PM
 
16,161 posts, read 4,267,388 times
Reputation: 11437
Of course - to afford the interest on the debt they have to make sure it is low.

Mortgage debt today just hit the highest even...same there...to stave off a crash, they have to lower and lower and lower.

BUT, there comes a time when even low interest can't easily be paid. As it stands the interest on our national debt is 30-40% of the Fed. Income Tax collected.

It's no wonder they have to cut every program...putting us even further behind. And, they are even borrowing the money to pay that interest (Trump's "tax cuts" made sure of that).
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 02:43 PM
 
16,161 posts, read 4,267,388 times
Reputation: 11437
Quote:
Originally Posted by PedroMartinez View Post
Remember, only spending causes a deficit. Period.
Only air cause a deficit. Only the Sun causes one also.

Be real. MONEY SPENT LONG AGO THAT WE HAVE ZERO CONTROL OVER means we have a deficit even if we don't spend one cent over and above what we need for the basics.

Tax cuts to corporations means we have deficit....if you have $10 in your pocket from collecting gas taxes to fix the road..and you give back $15 to Oil Companies just because...you like them...well, you have a DEFICIT.

You didn't "spend" money. You gave away money you didn't have...or, if you had a little you gave it plus other money away.

That is what Trump has done...in spades and for decades to come. We were getting the deficit whittled down until he blew it all up.

So, "Remember", if one is fiscally conservative they make plans to not vastly increase the deficit during times when the economy is growing
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 02:45 PM
 
Location: Bellingham, WA
975 posts, read 1,144,042 times
Reputation: 1097
Not new news, higher interest rates means its more expensive for government to service it's own debt.
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 02:59 PM
 
Location: Bellingham, WA
975 posts, read 1,144,042 times
Reputation: 1097
Quote:
Originally Posted by craigiri View Post
Of course - to afford the interest on the debt they have to make sure it is low.

Mortgage debt today just hit the highest even...same there...to stave off a crash, they have to lower and lower and lower.

BUT, there comes a time when even low interest can't easily be paid. As it stands the interest on our national debt is 30-40% of the Fed. Income Tax collected.

It's no wonder they have to cut every program...putting us even further behind. And, they are even borrowing the money to pay that interest (Trump's "tax cuts" made sure of that).
I'm all ears for your idea of a fix, would you rather they default and crash the dollar/USA? This is a bit bigger deal than someone who is in over their head in credit card debt and decides to file chapter 7. Faith will be lost in our dollar and all but ensure our countries slide into a 3rd world nation.
I think the tax cuts have merit in a way that we try to increase our domestic business "base" such that more taxes are collected despite the lower tax rate. Add in the "bonus" of more domestic jobs and those workers "consuming" and I think it will pan out in the long run. It will take time and some faith(which I'm not sure many have the understanding or patience for), but it's better than the alternative, is it not?
Reply With Quote Quick reply to this message
 
Old 08-13-2019, 03:23 PM
 
11,609 posts, read 6,053,251 times
Reputation: 3720
Quote:
Originally Posted by craigiri View Post
Only air cause a deficit. Only the Sun causes one also.

Be real. MONEY SPENT LONG AGO THAT WE HAVE ZERO CONTROL OVER means we have a deficit even if we don't spend one cent over and above what we need for the basics.

Tax cuts to corporations means we have deficit....if you have $10 in your pocket from collecting gas taxes to fix the road..and you give back $15 to Oil Companies just because...you like them...well, you have a DEFICIT.

You didn't "spend" money. You gave away money you didn't have...or, if you had a little you gave it plus other money away.

That is what Trump has done...in spades and for decades to come. We were getting the deficit whittled down until he blew it all up.

So, "Remember", if one is fiscally conservative they make plans to not vastly increase the deficit during times when the economy is growing
Always oversimplifying for political points, both sides do this so I don't blame you specifically, but it just adds to the great divide we see in the political landscape.

https://www.forbes.com/sites/chuckjo.../#7b9aaab49d10

Quote:
Federal deficits are one way to measure how well a President manages the economy. However, for a number of reasons a President can’t control the deficit; Congress is the governing body that decides the budgets (but the President does have to approve them), entitlement programs will grow unless they are changed and the economy goes through expansions and contractions (sometimes violently). A President can propose and get policies implemented that impact the budget and therefore deficits, but to a large degree, economic forces can overwhelm the best policies and intentions.
Reply With Quote Quick reply to this message
 
Old 08-14-2019, 08:29 PM
 
Location: Long Island
33,643 posts, read 14,177,148 times
Reputation: 7209
So what are the options if a recession hits with a $1T deficit this year.
Reply With Quote Quick reply to this message
 
Old 08-14-2019, 08:33 PM
 
16,161 posts, read 4,267,388 times
Reputation: 11437
Quote:
Originally Posted by Goodnight View Post
So what are the options if a recession hits with a $1T deficit this year.
There comes a point, which I suspect we are already at, when "they" can't control events. We go into the "anything can happen" mode. Too many possibilities.

It is even remotely possible that good things will happen.....because sometimes when you throw a coin up in the air (a nickel) it will land on its edge.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top