If Bush is considered 'What is Republican'...

[Lawrence of Arabia]

it should be illegal for the US government to run a deficit. If they do, for whatever reason (unless we are in a state of war with another country (AND I DONT MEAN WAR ON DRUGS, OR WAR ON GAYS)) we should cut all senator and US rep salaries in half that year.

[Ned]

Originally posted by Imran Siddiqui

Never is the right answer.

Oh lord... if you were running the economy, I'd flee the country. As interest rate increases to such a point that the country goes under, you'd still want a higher deficit!

as el freako said:

If nothing is done, and Bush's tax cuts are made permanent (as seems likely) then the US will face budget deficits of 10% to 15% of GDP 15 to 20 years time.

I doubt we'll grow at 15% anytime soon.

I'm sorry, Imran. But did you simply IGNORE what I said and have been saying? Your condemnation assumes I said the OPPOSITE of what I did say.

[Ned]

Originally posted by Lawrence of Arabia
it should be illegal for the US government to run a deficit. If they do, for whatever reason (unless we are in a state of war with another country (AND I DONT MEAN WAR ON DRUGS, OR WAR ON GAYS)) we should cut all senator and US rep salaries in half that year.

Lawrence, exactly the traditional position of the Republican party that brought on the Great Depression, caused the balanced budget recession during Eisenhower's presidency, and force us into a near depression this time until Bush came to the rescue with tax cuts.

[Imran Siddiqui]

No, what you've been saying is a bunch of BS. When we hit a recession are you going to say that we should grow our deficit less than the negative GDP growth? Of course not. You'll want to deficit to explode. So you are being totally disingenous.

[The Templar]

Originally posted by Ned


I just noted the timing of events. The wheels came off when we went into a surplus due to a large spike in tax revenues as a percentage of GDP. Saying the wheels came off because of x or y in the private economy is little better than saying he wheels came off because the wheels came off.

That is correlation, not causality.

As long as I've had my lucky mug, I've never had a lion in my apartment. On your position this means my lucky mug is the cause of never having a lion in my apartment.

Shall I assume then that you cannot demonstrate causality? If so, argument - Templar, because I do not accept your mere assertion of causality.

[Lawrence of Arabia]

Lawrence, exactly the traditional position of the Republican party that brought on the Great Depression, caused the balanced budget recession during Eisenhower's presidency, and force us into a near depression this time until Bush came to the rescue with tax cuts.

uh no. the great depression was brought on by a lack of loosing of the monetary policy. id never thought that id meet a keynsian republican.

[MrFun]

Originally posted by Imran Siddiqui
No, what you've been saying is a bunch of BS.

You're such a turn-on when you're so blunt.

[Kidlicious]

Originally posted by Imran Siddiqui

Never is the right answer.

Oh lord... if you were running the economy, I'd flee the country. As interest rate increases to such a point that the country goes under, you'd still want a higher deficit!

Ned is right. There is no reason to ever pay off the debt. And I think he is arguing for deficits while interest rates are low anyway, which makes sense. Low interest rates mean that cutting taxes or increasing spending will have a greater effect on the economy than leaving the capital in the private market.

[Kidlicious]

Originally posted by Lawrence of Arabia


uh no. the great depression was brought on by a lack of loosing of the monetary policy. id never thought that id meet a keynsian republican.

Loosening the money supply is Keynesian. The orthodox economists wanted to stay on the gold standard.

[Ned]

Imran, what the Reagan boom showed is that sustained deficits can maintain growth for very long periods of time. True, I advocate "continuing" deficits during downturns. Any one who does not is a fool, given history. But surpluses are dangerous as they seem to cause or worsen recessions.

Your argument back to me speaks of "ruinous interest rates" and "exploding" deficits. No one here has argued for either. Yet you declare my ideas unreasonable because of both strawmen.

[Imran Siddiqui]

But surpluses are dangerous as they seem to cause or worsen recessions.

This is an utterly silly statement. Can you name ONE surplus which 'caused' or 'worsened' a recession?

Your argument back to me speaks of "ruinous interest rates" and "exploding" deficits. No one here has argued for either. Yet you declare my ideas unreasonable because of both strawmen.

It ain't a strawman because it is exactly what your plan offers. Run deficits during recessions, but continue to run deficits during prosperity! That is the road to ruin due to high interest rates and exploding deficits.

[Ned]

Ok, Imran, read it as weap,

http://www.levy.org/1/docs/pn/99-3.html

"History suggests that over the longer run, deficits stimulate the economy and surpluses are harmful.

"Since 1776 there have been six periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson's efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. Further, every budget surplus has been followed, sooner or later, by renewed deficits. However, correlation—even where perfect—never proves causation. Is there any reason to suspect that government surpluses are harmful?"

There follows a detailed explanation on how deficits stimulate the exconomy and how surpluses harm it. The history of surpluses is far worse that I described.

[Fake Boris]

Of course, Ned. When a gov spends more than it is receiving, it is actually borrowing money on behalf of the citizens. The question is, when will it be payback time?

[Ned]

Oncle, Just read the linked article first.

[Ned]

As I said, it is interesting how the parties seem to have switched on this issue. Historically, Republicans have been balanced budget/surplus freaks.