Texas Governor Reaffirms States’ Rights Under 10th Amendment!!!!

[DinoDoc]

Sorry Doc. Normal EEZ is 200 nautical miles, not 12.

[Ramo]

I agree that it is not dangerous yet. But it is starting to get into a regime where it becomes so. The most important part of that spreadsheet is the Net Debt Interest table.

The numbers for the US are not at all high....yet. But that includes the effect of very low interest rates. It will start to be a problem if interest rates go up (which they will in a while).

When that happens, and assuming that the debt as a percent of GDP continues to grow (which it certainly will for the foreseeable future) then you can have net interest payments placing significant constraints on the government.

You are fast approaching the point Canada was at in the mid-90s when government debt reached a scale where it became THE political issue. For much of the next decade it remained such. The government cut spending massively in order to pay down the debt (more importantly to stop it from growing in nominal terms, allowing GDP growth to take care of it).

I think it would be better to think about it BEFORE it reaches that point.

Well, we have a gaping hole in our financial sector that needs money. We also have more serious long term balance sheet issues in health care and oil supply/climate change. The political capital for getting more money into the banks, universal health care, and some form of carbon taxation is only barely there. Throw a balanced budget into that, and one or two of these three priorities are going to be sacrificed. That would unacceptable.

The American political system is extremely resilient to change. The last time a comparable agenda was passed, the President had a neat little martyr, plus dirt on most of the Senate; the previous time, the world was so ****ed that the President was toying with becoming a dictator. We don't have the luxury of putting these priorities off till the next Admin.

And looking at the debt interest payments/GDP, we're less than half of where Canada was in the 90's. We can easily afford to pay a little more.

[KrazyHorse]

Ramo, yes, less than half.

But again, that includes a very low interest rate, which is bound to increase.

So under a more "normal" regime it's a lot closer. Now add in what are doubtless going to be large deficits over the next couple of years. And you see that the problem is BOUND to be much more pressing very soon.

[Ramo]

We'll that'd depend how deeply we're in the hole. If the banks can't be recapitalized at a relatively small price, we don't have to worry about rising interest rates since T bills would still look mighty appealing; if the banks can, we're going to get more revenue, and tax increases will be more politically feasible.

[Ramo]

The basic problem is that the Admin is trying to sell cap and trade by allocating its revenues to FICA cut. I'd really like to see the FICA cut gone. If we do that, our balance sheet will be a lot more reasonable.

[KrazyHorse]

I have no idea what you mean by that post.

The US will run large deficits until there is a recovery. It was running deficits before the recession, and tax receipts go down when there is a recession.

This is PRIOR to any spending on stimulus and the like.

Once the recession closes interest rates will go up. And the debt will have increased significantly. And you'll be a lot closer to the limit.

Structurally the US is not in a good financial position. There doesn't seem to be any political will to run a balanced budget, much less a surplus. Conservatives try to cut taxes, liberals try to maintain or increase spending. Both have been getting what they want. That can't last.

[Arrian]

[Ramo]

I have no idea what you mean by that post.

The US will run large deficits until there is a recovery. It was running deficits before the recession, and tax receipts go down when there is a recession.

This is PRIOR to any spending on stimulus and the like.

Once the recession closes interest rates will go up. And the debt will have increased significantly. And you'll be a lot closer to the limit.

Structurally the US is not in a good financial position. There doesn't seem to be any political will to run a balanced budget, much less a surplus. Conservatives try to cut taxes, liberals try to maintain or increase spending. Both have been getting what they want. That can't last.

Raising taxes after the recession is over will be a lot more practical. Until then, the imperative to run something closer to a balanced budget isn't as high since, among other things, interest rates will be lower.

Carbon credit revenue could be pretty decent. The budget document put out by the Admin is probably low balling it by a very large amount (~$1 trillion over a decade). As long as the revenues aren't all put into a payroll tax cut, we shouldn't that bad off.

[Jon Miller]

Both liberals and conservatives try to raise spending.

JM

[The Mad Monk]

No, both Democrats and Republicans try to raise spending.

I think it must be something in DC's water.

[SlowwHand]

It's because of the things you take for granted.

[chequita guevara]

No, both Democrats and Republicans try to raise spending.

I think it must be something in DC's water.

No, it's because it's political suicide to cut spending.

[The Mad Monk]

That too.

[asleepathewheel]

Governor goodhair is such a joke. I will vote for KBH before him, I might actually vote in the repub primary to do just that.