David Kirkpatrick

February 17, 2010

White House announces debt commission

Hopefully this group will be more than window dressing for a serious problem. I’m not too certain there are many decent short-term public debt fixes out there, but both the mid- and long-range fiscal outlooks need a basic road map at the very least.

Entitlement spending — Medicare, Social Security, etc. — combined with the ever growing black hole that it is the defense budget will bankrupt the United States before the middle of this century without an application of serious fiscal conservatism. This was the kicker from a link I blogged about yesterday, “At stake ultimately is the United States’ status as a first-class economy.” The subject in question there? The federal deficit.

From the first link:

President Obama will sign an executive order Thursday to set up a bipartisan fiscal commission to weigh proposals to rein in the soaring federal debt, according to a White House official.

The official, who requested anonymity because the President has not made the announcement yet, said the co-chairs of the commission will be Democrat Erskine Bowles, former White House chief of staff for Bill Clinton, and Alan Simpson, former Republican Senator from Wyoming. It’ll be officially titled the National Commission on Fiscal Responsibility and Reform.

December 10, 2009

TARP costs coming in $200B under expectations

Looks like the Obama administration is going to put some toward the deficit and some toward Main Street. Given the facts on the ground, this sounds like fairly conservative fiscal policy to me. Quite a revelation after the last eight years.

From the link:

The government recently announced that the Troubled Asset Relief Program (TARP), established at the height of the financial crisis last year to recapitalize the nation’s banking system, will cost $200 billion less than expected. Obama wants that money redeployed into additional stimulus initiatives: “This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street,” Obama said Tuesday.

Getting Main Street hiring again is key to job recovery: Small businesses have created 65% of new jobs in the past 15 years, according to government estimates. Obama’s latest set of proposals includes several brand-new measures, as well as extensions of existing stimulus acts.

November 12, 2009

TARP funds for deficit reduction?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 11:35 am

Even though this move really smacks of naked politics there are far worse things TARP money could go toward than helping to drive down the outrageous deficits racked up over the last eight fiscally irresponsible years.

From the link:

The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.

The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter. It is also expected to lower the projected long-term cost of the program — the amount it expects to lose — to as little as $200 billion from $341 billion estimated in August.

The idea is still a matter of debate within the administration and it is unclear how much impact it would have on the nation’s mounting deficit levels. Still, the potential move illustrates how the Obama administration is trying to find any way it can to bring down the deficit, which is turning into a political as well as an economic liability.

February 22, 2009

Obama’s first budget …

Filed under: Politics — Tags: , , , — David Kirkpatrick @ 4:06 pm

… looks to be pretty dramatic. I think this is an area, unlike the unprecdented stimulus plan, to do some tea leaf reading on Obama’s fiscal governing style.

From the link:

President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.

In addition to tackling a deficit swollen by the $787 billion stimulus package and other efforts to ease the nation’s economic crisis, the budget blueprint will press aggressively for progress on the domestic agenda Obama outlined during the presidential campaign. This would include key changes to environmental policies and a major expansion of health coverage that he hopes to enact later this year.

A summary of Obama’s budget request for the fiscal year that begins in October will be delivered to Congress on Thursday, with the complete, multi-hundred-page document to follow in April. But Obama plans to unveil his goals for scaling back record deficits and rebuilding the nation’s costly and inefficient health care system tomorrow, when he addresses lawmakers and budget experts at a White House summit on restoring “fiscal responsibility” to Washington.

Yesterday in his weekly radio and Internet address, Obama said he is determined to “get exploding deficits under control” and said his budget request is “sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline.”

Reducing the deficit, he said, is critical: “We can’t generate sustained growth without getting our deficits under control.”

June 15, 2008

Ross and his charts

Filed under: et.al., Politics — Tags: , , , , , , , — David Kirkpatrick @ 11:54 pm

Ross Perot, the founder of EDS and one-time presidential candidate who pretty much put Bill Clinton into the White House, is known (and parodied) for his love of charts. To that end he has an interesting website full of various charts — Perotcharts.com.

Two particularly outline the out-of-control budget deficit, and the GOP’s complicity in the situation.

Here’s one on surpluses and deficits over the last 40 years:

Federal Surpluses and Deficits 1968 - 2007

This next chart and analysis covers the national debt for the same time period. Notice how the debt fell only during Clinton’s time in office. It’s distressing to me how fiscally irresponsible the GOP has become. There’s absolutely nothing conservative about the fiscal policy this nation has operated under the last seven-plus years.

The Growing National Debt Debt Held by the Public 1968 - 2007

But wait a minute! All of the so-called “debt clocks” show that the national debt is now in excess of $9 trillion. Where is the $4 trillion discrepancy? Answer: See the next two charts (Growing National Debt: Intragovernmental Holdings and The Growing National Debt: Combined).

This is the cumulative amount of money that the government has borrowed from outside sources to meet its obligations during the years that it runs deficits. Debt Held by the Public includes domestic buyers, such as mutual funds, state and local governments, Federal Reserve banks, commercial banks, insurance companies, and individuals, as well as private foreign entities and central banks of foreign countries. Of the $5.1 trillion in outstanding public debt at the end of 2007, domestic investors owned 55 percent ($2.8 trillion) and foreign investors held 45 percent ($2.2 trillion). When the government runs surpluses, the debt gets paid down as can be seen from the trough in the late 1990s.

(Hat tip: the Daily Dish)