RoR: Forum

I agree that the problem exists. It is important to put the blame where it belongs: on the citizens, voters and non-voters both.

First, by the Constitution, Congress makes the budget. The president signs it or not. The president can submit a budget and lobby for it. You can, too.

By the Constitition, all money bills must begin in the House of Representatives. Now, the Republicans have a majority there.

Third:

... according to new data released by the Treasury Department. As of the close of business on Oct. 3, the total national debt was $14,837,099,271,196.71—up about $44.8 billion from Sept. 30.
That means that in the less-than-three-years Obama has been in office, the federal debt has increased by $4.212 trillion--more than the total national debt of about $4.1672 trillion accumulated by all 41 U.S. presidents from George Washington through George H.W. Bush combined.
At the end of January 1993, the month that President George H. W. Bush left office, the total national debt was $4.1672 trillion ...

That was almost 20 years ago. At 3% inflation - now it is estimated at 3.77% - you lose almost half the value of the federal dollar. And, of course, the federal government is the source of the inflation of the federal dollar. If it were backed in gold or silver, the problem would not go away. In fact, silver served as a fiat currency when the US was on the gold standard. At that time, also, silver coins occasionally became scarce as new gold discoveries lowered its price relative to silver, which means that gold was the fiat currency of the moment. Through all of this, the US government borrowed by selling bonds. The federal budget was balanced only rarely and the debt was paid off only twice.

The curve is exponential. 200 years ago, the budget was in millions. By the Civil War, it was billions. As the dollar shrinks, more are made to cover the gaps. And, of course, we, the people, demand more from the public treasury. This is nothing new. In the Anabasis of Xenophon, the Greeks are blocked at a mountain pass by locals who hold the high ground. Xenophon calls the Spartans. He says something like, "You train your boys to be thieves, so take your soldiers and steal me a mountain pass." And the Spartans replies something like, "You Athenians reward with re-election the men who loot the public treasury and distribute it to you, but OK, we will take the pass."

So, whatever Barack Obama's sins may be, this is not one of them.

Addendum: for historical inflation rates, use your browser. I found this from the Minneapolis Federal Reserve:
http://www.minneapolisfed.org/community_education/teacher/calc/hist1913.cfm
Here are some highlights.
1917 17.8%
1918 17.3%
1919 15.2%
1920 15.6%

1930 -2.7%
1931 -8.9%
1932 -10.3%
1933 -5.2%

The gold standard is no guarantee and falling prices are not an indicator of a sound economy.

(Edited by Michael E. Marotta on 10/12, 8:36am)

Post 1

Wednesday, October 12, 2011 - 4:49pm

"So, whatever Barack Obama's sins may be, this is not one of them. "

Michael, Obama is the strongest and most successsful advocate of spending we have ever had in that office. He is the leading exponent of progressivism which is America's biggest spending political position. He has spent more of that which is within his ability to spend without congressional approval than past presidents. His health care will be the biggest spending bill ever passed.

The citizens have been objecting to this level of spending and debt - the 2010 elections stand as proof of that.

It isn't the fault of the citizens by themselves. The politicians have been engaging in fraud of many kinds for many years and ignoring the constitution they swore allegiance to when taking office.

Nothing done by the Greeks, or during the Civil war will change the magnitude of of spending that Obama did (with congress).

Post 2

Friday, October 14, 2011 - 6:21am

Professor Albert Bartlett(no relation), Univ of Co, is famous for teaching the cold consequences of geometric growth.

1:2:4:8:16...

1] The fact is, every time something doubles, the new amount exceeds the sum of all previous doubling periods combined.

2] A ten year doubling time only requires about 7% annual growth.

3] A five year doubling time only requires about 15% annual growth.

We are so accustomed to hearing things expressed as "7% annual growth" with little alarm. But 7% annual growth is a 10 year doubling period.

The size of the federal budget, on average for the last 50 years, has grown at 7.5% (9.6 year doubling period.)

The population over the same 50 years has grown at just under 1% (approx 70 year doubling period.)

Federal budget since JFK's 60's: 38:1

Population: not even 2:1

So far beyond 'out of control' that we aspire to downshift to just 'out of control.'

Post 3

Friday, October 14, 2011 - 6:47am

Michael:

It is easy to gauge inflation over recent decades, since the price of a US First Class Postage stamp is officially tied to inflation. (Gee, if only the US Postal Service's costs were, too.)

It is also easy because the government tracks its self inflicted damage to our economies by publishing CPI.

So, from JFK's 60s, and his $100B in federal spending(over half of which was for defense at the peak of the Cold War), until today's nearly $3800B in federal spending, we find the following:

CPI/inflation: factor of 7.5

Population: barely factor of 2.0

So, we can adjust JFK's $100B to $1500B, and then compare to today's nearly $3800B.

Medicare: $3B in 1966. Apply same factor of 15 for CPI/population = $45B today. Actual amount spent on Medicare today is more than that by over a factor of 10:1.

Even though over half of JFK's budget was defense, if we eliminate 100% of defense today, and 100% of MEDICARE, then we would barely be half way adjusted back between today's nearly $3800B and JFK's fully adjusted $1500B.

?!?!?!?!?

It not only staggers the mind, but clearly also fully staggers the economies which are burdened under this bloated overhead.

GDP includes government spending; never mind the argument over whether government _should_ take a constant % of GDP from our economies, we could only wish! What was once under 20% of that historically has been jacked up to over 25% -- one quarter of GDP -- by the Obama Administration, in his 'last train out of FDR Station' orgy of public spending.

Public spending is not private spending -- even though it is equivalenced in the definition of GDP.

Public debt is not private debt.

Public saving is ... non-existing, except in some fringe school district capital accounts.

Public spending all comes from taxation on the private economies or borrowing to be paid by future taxation on the private economies, period. It is a necessary but parasitic drain on the beast that both requires it and sustains it. As such, it must be minimized, not maximized, no matter what fits of splendorous fantasy some spin off to when they think about all the good they could to if the tribe handed over its Magic Stick to them to spend 'the nation's' wealth as they see fit.

JFK's America was building brand new interstates. JFK's America was building schools. JFK's America was funding SS. JFK's America was spending $2B/yr to fund the Mercury/Gemini/Apollo Moon Program. JFK's America was not in constant fiscal crisis at every level. JFK's 60's American economies roared...

...with a federal government funded at an adjusted $1500B/yr in today's population-dollars, over half of which was spent on defense.

We can fairly adjust the Apollo program from $2B/yr to $30B/yr today, But we're not doing that.

It begs the question; what is it that the federal government is doing that justifies the extra 76 Apollo Moon programs above and beyond JFK's fully adjusted $1500B/yr?

I know what impact Apollo had and still has today on our existing economies.

And, I know what impact things like Solyndra has had.

So, where is the bang for the massive buck coming out of DC these days? How long before the nation wises up to the fact that the 'discipline' of spending OPM is not quite the best guidance for fully 25% of our economies?

Post 4

Sunday, October 16, 2011 - 12:24pm