The Next President's Already Screwed

Democrats have high hopes for the 2008 election.  And they should.  Bush’s policies have done an incredible amount of damage to the Republicans.  It’s doubtful they will recover anytime soon.  But should a Democrat win, the fiscal mess left by Bush has already predetermined the next president’s primary policy goal: to clean-up the mess Bush is leaving behind.

There are two inter-related data sets that illustrate this problem.

The first comes from the Treasury Department:

09/30/2006   $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06

Total Debt Outstanding: $9,016,288,006,279.21

From the and of fiscal 2001 to the current total debt we have a total increase of about 3.2 trillion dollars in total debt outstanding.  Also notice the total amount of debt outstanding has been increasing at a high rate per year for the last 5 years.  This indicates the deficit – despite claims to the contrary -- is nowhere near under control.  Basically, somewhere in the US budget structure there is a serious problem that needs to be addressed now.

The second data set is a long-term chart of the dollar.

Notice the dollar is currently trading near its lowest level in over 35 years.  This tells us a very simple fact: foreigners are losing confidence in the dollar’s value.  This makes the dollar extremely vulnerable to a random economic event.

The combined reality of these two data sets is simple.  Either we start to realistically deal with the deficit now, or the deficit will start to deal with us.  And frankly, it’s best for us to deal with it.  If random economic events make us deal with it, it’s going to hurt a whole lot more.

The bottom line is Bush has already made it impossible for the next president to do anything accept raise taxes and cut spending.  That of course makes electoral victory beyond 4 years from now extremely difficult.

•  yeah

  One is tempted to hope that the filthy r's have to clean up their own mess.  But then the Supreme Court would be even more screwed, so....

  by tcdup on Sun Sep 16, 2007 at 07:46:43 AM PDT

  •  They won't, they never do, they just

    keep on piling on the debt..fiscal conservatives, my ass!!! The total national debt for the US since 1789, or whenever they started keeping track of national debt, is $9 trillion. That is TOTAL for the entire existence of the country. Out of that $9 trillion, over half of it has been incurred by Presidents named Bush. If you add in Ronald Reagan, three Republican Presidents are responsible for 70% of the entire national debt since the US became the US. So, how in the world can the Republican Party claim to be fiscally responsible?? They don't tax and spend, they borrow and squander. Not a fiscal policy that works for me, or even makes sense. But, I guess IOKIYAR, sigh, and the rest of us pick up the tab.

    by Demfem on Sun Sep 16, 2007 at 08:47:53 AM PDT

    •  why

      So, how in the world can the Republican Party claim to be fiscally responsible??

      because that's what the TV says...is there any other information source the public defers to?

      by surferal on Sun Sep 16, 2007 at 09:09:53 AM PDT

      •  It's simple

        They are fiscally responsible to the super-rich. In the sense that they report to them.  And the super-rich are not fiscally responsible.  They don't like taxes, but they REALLY like leverage -- mortgaging assets to the hilt to generate enough cash to service the debt, in anticipation of selling the assets when underlying asset values go up enough to justify even higher levels of debt by the next buyer.

        Sound familiar?

        by litigatormom on Sun Sep 16, 2007 at 09:24:43 AM PDT

        •  shorter republicans:

          Take the money and run.

          by clyde on Sun Sep 16, 2007 at 09:36:12 AM PDT

          •  Take the money and run

              Oliver: "I have no idea - I can't tell you whether or not the money went to the right things or didn't - nor do I actually think it's important."

               Q: "Not important?"

               Oliver: "No. The coalition - and I think it was between 300 and 600 people, civilians - and you want to bring in 3,000 auditors to make sure money's being spent?"

               Q: "Yes, but the fact is that billions of dollars have disappeared without a trace."

               Oliver: "Of their money. Billions of dollars of their money, yeah, I understand. I'm saying what difference does it make?"

               The difference it made was that some American contractors correctly believed they could walk off with as much money as they could carry. The circumstances that surround the handling of comparatively small sums help explain the billions that ultimately vanished. In the south-central region of Iraq a contracting officer stored $2 million in a safe in his bathroom. One agent kept $678,000 in an unsecured footlocker. Another agent turned over some $23 million to his team of "paying agents" to deliver to contractors, but documentation could be found for only $6.3 million of it. One project officer received $350,000 to fund human-rights projects, but in the end could account for less than $200,000 of it. Two C.P.A. agents left Iraq without accounting for two payments of $715,000 and $777,000. The money has never been found.

               To Frank Willis, a senior adviser to the Iraqi transportation ministry, the presence of so much cash circulating so freely gave the Green Zone a "Wild West" feel. A moderate Republican who worked for Reagan and voted for George W. Bush, Willis spent many years in executive roles in the State Department and the Department of Transportation before leaving government service in 1985. He was a top executive of a health institute in Oklahoma when, in 2003, an old friend from Washington called and asked if he would come to Iraq to help the C.P.A. get the various transportation systems running again.

            http://www.truthout.org/...

            by fugue on Sun Sep 16, 2007 at 10:23:01 AM PDT

            •  oil war

              GREENSPAN: "what everyone knows: the Iraq war is largely about oil,"

              read obamas plan on iraq
              it says oil twice, in context of the evil hydrocarbon law!

              read hillarys plan
              it does not use the word oil

              "I think Iraq is the most serious and imminent threat to our country."
              -- John Edwards, CNN Late Edition, Feb. 24, 2002

              by carlos oaxaca on Sun Sep 16, 2007 at 01:21:15 PM PDT

        •  Which i one reason I disagree

          with one conclusion Bonddad made; that raising taxes and cutting spending will make electoral victory difficult in 2012. Lots of studies coming out have found that Americans as a whole don't perceive "cutting taxes" to be a priority. And it seems to me that for the average American, the issue of taxes is one of perceived fairness and return on money. If Americans feel that everyone is pitching in and paying their fair share to achieve laudable goal, I think this Republican meme about cutting taxes at all cost loses a lot of its power. I think it already has due to the fact that most people don't see much benefit in their own pocketbooks and strongly suspect the benefits are going primarily to the wealthy, even if they have not read studies to that effect.
          Anger comes from the feeling that someone else -- someone better off -- is getting off easy. For instance, I'm working to defeat a school levy here for several reasons but one is the tax abatement of upscale luxury townhomes I could never afford while owners of 100-year-old condos like mine bear the freight.

          I think a smart Democratic president who focuses on everyone paying their fair share and redirecting money into rebuilding the country and away from boondoggle military spending will have a lot of support, especially if coupled with sane economic and trade policies that don't primarily reward corporations for taking jobs overseas.

          by anastasia p on Sun Sep 16, 2007 at 09:50:30 AM PDT

          •  Bonddad doesn't mention option three...

            Cutting taxes or raising them: A false dicotomous choice.

            The truth is there is a third, much more viable option: Prioritize spending. Look at the excessive looting going on in Iraq, the gutting of our country's money for pet projects, corporate welfare, tax cuts for the rich that will expire. Add all this up, it equals a hell of a lot of money. Prioritize spending, and we will be able to pay off this national looting of our treasury. Heck, we might even have some left over to do some good in this country.

            Of course, it all depends on the type of leader we pick and their priorities :-)  

            by redhaze on Sun Sep 16, 2007 at 10:01:05 AM PDT

            •  Not a chance in hell we'll have

              ANYTHING LEFT OVER.

              This is so much worse than anyone realizes yet.
              It just breaks my heart...

              by illyia on Sun Sep 16, 2007 at 11:13:05 AM PDT

          •  I think that's a BIG consideration

            People want to feel that THEY get something for their taxes. The wealthy do - they get big tax breaks, they get investments taxed at lower levels, they get to pass on huge amounts to charities, gifts, and to their heirs.

            And what does everybody else get? Precious little, unless you're over 65 or have a military pension.

            We pay a greater burden in taxes, don't get out of Social Security taxes on a percentage of our income, don't get taxed at a lower level because of investment income, don't get to write off our health insurance costs unless they're a huge chunk of our income, etc. And more than that, the govt doesn't do things that might help us in other ways, like regulate banks and credit card companies, provide help for college (for anybody other than the desperately poor), provide paid maternity leave, environmental standards, quality control on much of anything, etc.

            People want to get something for their taxes. And they want the govt to provide a safety net, but not tell them what to do.

            Right now, the safety net is only for the rich - and they really don't need much of one.

            by mmacdDE on Sun Sep 16, 2007 at 10:19:00 AM PDT

          •  and I hope that this message gets out there in

            the starkest terms.  A leader cannot dance around the fact that Republicans have looted and conned the country to the brink of financial calamity.

            There needs to be an accountability moment for what the Bush era has "accomplished."

            by dash888 on Sun Sep 16, 2007 at 10:23:05 AM PDT

          •  Bill Clinton raised taxes and got

            re-elected.

            The issue of fairness is key.  Not to brag, but my family income is in the low seven figures.  I SHOULD pay more taxes than ordinary middle class and working class folks -- I have always accepted this, and I always will.

            However, I do get pissed off by the fact that I actually pay a higher percentage of my income -- and sometimes, more in actual dollars -- than people who make many, many times what my husband and I do.  People who benefit from all kinds of write-offs and shelters that are not available to people who, however successful and fortunate, live off a salary.  People who get to treat enormous, multi-million dollar fees as if they were capital gains.  People who benefit from millions of dollars in perks and benefits that somehow don't get reported or taxes.  And, not surprisingly, they don't get audited as much in this Administration by the IRS.  Tax audits overall are down, but they are increasingly focused on ordinary Americans.

            The answer, to me, is not to lower MY taxes -- it's to make those who are truly rich pay their fair share.  The myth that higher taxes discourage investment and economic growth is just that -- a self-interested myth.  What people really mean when they say that is that it would decrease the rate at which THEIR own wealth expands.  The so-called economic growth of the last six years has barely touched most Americans.  There is more disparity in wealth in this country since before the Great Depression.  How is THAT progress?

            I should add, on a personal note, that I am very much an American dreamer. My grandparents were impoverished farmers from Puerto Rico who came to NYC in the early 1930s.  My father worked his way through night school on the GI Bill and earned his B.S. when I was eight years old, and had two siblings. He and my mother sent their four children to elite colleges on financial aid, loans, and many summer and after-school jobs.  My siblings and I are lawyers, a doctor and a computer expert.

            What haunts me is how much harder it is today, nearly eighty years after my grandparents arrived in Spanish Harlem, for people like my parents to give their children what my parents gave me.

            by litigatormom on Sun Sep 16, 2007 at 10:39:51 AM PDT

            •  Congrats on being in the top 1%

              If all is well you probably won't suffer much. The fact that you make your money from salaries though may be worrisome. I imagine if you aren't bringing in enough billing  then those salaries will waver some.

              I do think even 7 figure income earners have a bit to worry about. Lifestyle choices may have to be made.  It's the ones that you mentioned that have hidden their assets and don't really depend on a salary that will barely feel what's coming.

              They didn't during the depression either. In fact many of them were downright pissed at FDR for trying to put people back on their feet when there was no safety nets. FDR was taking away their buying opportunities and 25 cent per day laborers.

              No matter how rich people like that get, they always want more. It becomes either a score or opens the doors to the corridors of real power. Also many have a unearthly fear of losing it and having to face what ordinary Americans face. That's why many financial advisers operate under the assumption that their job is to  insure their clients stay rich before they take any chances.

              by Dburn on Sun Sep 16, 2007 at 11:03:01 AM PDT

              •  It's not really a salary

                It's a (very small) share of a big firm's profits for me, all the profits for my husband's small company. They can go up, or down, in any particular year.  But even if the economy goes into a recession, we'll still do better than most folks, even if our income drops significantly.  We'll have more than everything we need no matter what.  A condition I tell my girls they must always be grateful for, even if we don't have a country house and they don't carry Marc Jacobs purses, like some of their schoolmates.  (They used to ask me if we can't afford such things, I tell them that we can, but that instead we're saying money for their education, our retirement, charitable and political contributions, and a rainy day. Over the years, they've gotten the point.)

                But I do worry, a great deal, about all the "old" industry workers, all the people who are barely making ends meet, who are choosing between paying their mortgages or their credit card bills, the kids who can't afford even state colleges or universities. Every day is a rainy day for these people. If they don't have a real opportunity to create a stable environment for their families, or to move up the socioeconomic ladder, how much moral legitimacy can our country have? Not nearly enough.

                by litigatormom on Sun Sep 16, 2007 at 11:44:16 AM PDT

                •  Congrats to you and your Husband

                  Owning one's own business is the hardest thing in the world. Making it profitable while keeping that size is a sign of superhero stuff.

                  I have known the small business persons fear for 25 years. Every morning you pretty much wake up at zero.   People think it's great to be your own boss until they get into business and then they realize they have many bosses to please and you pretty much come in last.

                  I'm really happy for you. I love great success stories and love to hear about people raising their kids right who have money.

                  I think if I had gotten married and had kids the stress would have been too much for me. Of course I chose to get into businesses that were basic commodity businesses , completely vulnerable to changes in technology, the economy and even the weather. (smile).

                  But the great part about it, we'll never go to our graves saying "shoulda, coulda, woulda".  People sometimes don't realize that small business people have the weight of the world on their shoulders every day and they can't run to the govt to bail them out when they make bad decisions. They have to live with it. But if you do good the feeling is indescribable.

                  I've also turned out to be great at begging and groveling. One of my greatest skills.

                  I'm really impressed that you've don't  have that  "F-You I got mine attitude". I've seen that in so many successful entrepreneurs over the years. I'm always reminded of what I was told when I started my first one at age 25. "Treat the people you meet well on the way becuase you might meet them on the way down."

                  The second one was " DBurn, you are 25 and I'm 55 and there is no time between your age and mine. Make good use of it. " I thought the guy was crazy at the time. thirty years? Shit. Then one day I woke up and I was 50. I swore I was 35 the day before. Strange how that happens.

                  Good luck to you and your family, you certainly deserve it.

                  by Dburn on Sun Sep 16, 2007 at 04:13:03 PM PDT

            •  ah ha!

              Somebody who probably likes those flat banana slices dipped into a garlicy chilie sauce. i forget what they are called.

              A real TexMex, I learned alot about Puerto Rican culture in my years teaching in Buffalo.  A bit more island influenced than my own gente del rancho folks, but wonderful folks.
              Read my post on Kozol but then scoll down to my comment about being a nutso teacher.

              http://www.dailykos.com/...

              What haunts me is how much harder it is today, nearly eighty years after my grandparents arrived in Spanish Harlem, for people like my parents to give their children what my parents gave me.

              Sad but true.

              by TexMex on Sun Sep 16, 2007 at 04:04:26 PM PDT

          •  Whoever is in the white house

            has nothing but major problems in front of him. No one minds (much) seeing their taxes raised when they was a surplus from their own finances. But since most Americans household Debt is 130-140% of income, there isn't much surplus to tax unless people start making wholesale cuts in their standard of living. (I see that as inevitable anyway. It won't be by choice. It will be forced on them.) The only ones that have seen real hardship are those that were in the rust belt in the Early 80s and the few left that can remember the great depression.

            They didn't have credit cards readily available in the early 80s for low to middle income people without jobs or anything at all except the soup kitchen in the depression, so we pretty much took the medicine when it happened.

            I spent a year living a auto garage with noxious fumes trying to start a business becuase there just wasn't any jobs. Good thing I didn't have a family eh?

            In My opinion the next big crash that we're going to hear is from credit card issuers of all stripes.

            As credit tightens up and interest is raised, numerous households have financed their lifestyles through home equity loans. They are now switching to credit cards ( not by choice) and are astonished when Credit card companies double and triple interest rates with no warning. The added pain;  None if it's it's tax deductible. Then ya got your fees. Loan sharks have nothing on credit card issuers and don't hold your breath waiting for congress and the next president to clamp down on them. Don't want to hurt the banks.

            70% of the economy is consumer driven. Once the  rich see the economy faltering they tend to stop spending to conserve assets as a defensive measure and for some to have plenty of cash to buy assets sold at panic prices from stocks and bonds to property and just stuff!. That's how they get rich.
            Then the lay-offs start. Non-profits see donations die. It 's a fast rolling shitball of bad news.

            Tax collections don't have anywhere to go but down when the economy hits that kind of speed bump. We really don't know how bad a financial shape we are in. The GAO can't really audit many of the department's books, like the Dod. It's said that 25% of the annual budget for the Dod just disappears.

            Those unknowns make it hard for the GAO to put out accurate financial pictures of where we are. They put it based on legislation currently in effect and assume growth rates in GDP they I don't think are sustainable. I don't they they are going wild with their predictions, but I don't see anything but a decline in GDP once the second crack of the credit whip is felt.

            The Govt will run at least even becuase, like many Americans , they will be forced too when the lenders run, (that includes buyers of treasuries and no more money to steal from public trust accounts) and the printing press blows for the Fed.

            When the Govt is forced to balance it's books and pay down debt, they will need to somehow cut expenses and raises taxes to get close to 700 Billion a year at the minimum. It could very well go up to a trillion or more near term as 2008 is the year the a baby boomers retire and the annual surplus in the Social security account will actually be needed by those who paid into it.

            Look at it this way, we are borrowing 500 Billion a year now while we claim the deficit is under 300 Billion. How can that be? Someone is bullshitting someone. If we could no longer borrow that 500 billion, the govt cuts and reciepts would be pretty tough. Imagine if it was double that or triple that considering 500 Billion is over 20% of receipts.

            Think any party is going to have luck at the polls when taxes need to rise by 30% and ALL govt programs are cut across the board by mouth dropping percentages including the entitlements. Look at cutting DoD for example. If we do that, who is going to suffer first?  All middle class workers in the defense industry who will no longer be paying taxes in and soon the govt will be paying out money to support them.  

            As the head of the GAO tried to tell us starting a few years back, there is no growing out of this. He was especially worried about the Medicare freight train that's about to hit. Add the forever war and the contigent liabilities that creates and no one is talkig about a  few extra dollars deducted from paychecks. Assuming one has a paycheck, assume it will be heavily taxed.

            Yes the rich will get whacked hard, but they are already preparing for it. So we may take little satisfaction when they get hit with a huge tax increase on incomes that have mysteriously disappeared.

            Now tell us again how in four short years how any President with a compliant congress or a divided one is going to fix that shit. If you know of anyone with those creds, they aren't working in the public sector. What worries me is that it will be forced on congress and the White house just like it will be on low income- once upper middle class-then middle class people who never seemed to pay attention to a rising debt. They did Balance transfers.

            What's worrisome is none of the candidates on either side have spent much time in explaining how constrained they are going to be in fixing our finances. They really can't if they want to get elected. Most Americans, even Wall Street types don't want to hear about it or address it. We live in "the right now". The problem is in the very near term, "the right now" is going to bring hardship that is hard to measure.

            Look at it this way: if the middle class is getting ravaged now when things aren't "too bad". Imagine what things will look like when some high profile Pol says "wow this shit is really bad".

            by Dburn on Sun Sep 16, 2007 at 10:49:06 AM PDT

            •  Depression, round 2.

              I have to agree with your rather bleak assessment, Dburn.  I think we are about to enter another Great Depression.

              My parents lived through the first one and still talk about it, but they were the lucky ones--they lived on a farm.  They never went hungry and never had to lower their standard of living--they just didn't have any money to buy extras, and there weren't any extras to be had anyway.  They were self-reliant and self-sustaining in a way that is beyond the reach of most Americans today.

              I fear for my family now.  We kids abandoned the farm years ago and, like most people, rely on salaries in cities to get by.  It's going to be a tough ride for most of us.

              And I'm expecting my third child.  Yeesh. What was I thinking? I just love the little tykes too much...

              by MTgirl on Sun Sep 16, 2007 at 11:34:55 AM PDT

              •  I guess the only thing to do is to

                cut back on everything to the bone. Operate like you are in a small business. Everyday could be your last day with a job.  Don't stop until you have a year or two of living expenses in liquid assets. Even if you have to take a salary cut or live on unemployment and money you bring in adds days and weeks to the amount of prep time you have saved. I try to keep to that. My goal is to get it to 10 because of my age.

                If you get credit cards, pay them down and just stop using them. Worse comes to worse. Order up that hardship insurance that makes your minimum payment when your out of work when you have a zero balance. Then if you get into dire straights, run em up fast and put the money away. Then call and tell em your out of work.

                Don't buy it on cards you have balances on. It's like adding 300 basis points on. Order it when it's at zero and it might run $8.00 or sometimes nothing if it's based on a percentage.

                I doubt they'll change the bankruptcy laws back, but when the courts get run over they'll pretty much rubber stamp everyone. That way if you have to take the ultimate dive, you can use your funds to make home improvements, stock up on food and medicine, prepay a few things if you see you can't get the income to pay it back becuase of the economy, you'll be well stocked.

                You just can't have any money and not much in the way of possessions. Food and Medicine don't count. Basic survival plan for 5 years or more.

                Meet humility if the great depression comes: Any work that pays real money or something that will feed your family should never be turned down.

                Just a small survival plan to put in place to relieve some stress. All that matters is family.  

                by Dburn on Sun Sep 16, 2007 at 04:31:06 PM PDT

              •  Here you go..rooftop gardening

                You can grow your own veg and probably enough to can or freeze for winter...and offset your carbon footprint at the same time. And it's close to home where the kids can go with you to "help".

                Rooftop gardening

                by Demfem on Sun Sep 16, 2007 at 05:22:17 PM PDT

          •  We have to turn this around...

            ...on the republicans.

            For years they have been thumping their chests all proud about their TAX CUTS.  But when you have deficits (even if it's not RECORD deficits like you see now) There is no such thing as a TAX CUT, it's just a TAX DEFERAL.

            Someday we have to pay off this debt, the alternative is completely disaterous (not to mention unconstitional).  The ONLY way to pay off debt like this is to bring taxes back up.  But republicans have been "cutting taxes" like they're giving the American people some kind of gift.  They're not, they're just defering payments for a later date.

            It's like those "90 days same as cash" credit lines.  Eventually you will have to start paying that loan off.  Eventually you have to give back the money you borrow.

            They don't cut taxes, they create massive ammounts of debt, and then attack democrats for trying to fix their messes.

            It's ridiculous and I hope to God people are starting to see past that "TAX CUT" scam they've been running.

            by DawnG on Sun Sep 16, 2007 at 05:36:11 PM PDT

            •  Same cure for different problems.

              For years they have been thumping their chests all proud about their TAX CUTS.  But when you have deficits (even if it's not RECORD deficits like you see now) There is no such thing as a TAX CUT, it's just a TAX DEFERAL.

              What's more, their singning praises for the tax cuts sounds like talking about how well a coat kept you warm through a North Dakota winter, you're going to wear it all summer in Arizona. The deficit is a drug, and they think it did so great on one set of symptoms; they want to prescribe it for the exact opposite symptoms.

              by Judge Moonbox on Sun Sep 16, 2007 at 06:10:33 PM PDT

        •  for sure

          reverse Robin Hood...
          former Bechtel CHM George Shultz interviewed GWB for the job :

          Meanwhile George Shultz the former Chairman of Bechtel whose assurances persuaded a skeptical business community that George W Bush was the man they wanted in the White House:
          This Sunday in a book review on Vice President Cheney, the New York Times writes, "As the Republican Party was settling on its presidential nominee seven summers ago, no less venerable a statesman than George Shultz was assuring skeptical conservatives that George W. Bush had the potential to be another Ronald Reagan. One reason for his confidence was the 'Stanford shuttle' between Palo Alto and Austin, which carried such Hoover Institution luminaries - and White House veterans - as Martin Anderson, Michael J. Boskin and Condoleezza Rice (Shultz's own protégé) on regular treks to Texas."

          http://www.democracynow.org/...

          Here's a link to the revealing story about the struggle by peasants in Bolivia to stop Bechtel from privatizing their rainwater which they use for farming:
          http://www.democracynow.org/...

          This is about a ruling class that is hellbent to enrich themselves through theft and war.
          Their good judgment went on public display when they picked Georgie boy for president and the icing on the cake was throwing Cheney in for good measure and to keep the boy on the right track.

          by eve on Sun Sep 16, 2007 at 04:25:31 PM PDT

          •  "privatizing their rainwater"???

            WTF? What's next for these greedy assholes, privatizing the very air we breathe? When will this greed stop?

            by Logical One on Sun Sep 16, 2007 at 04:47:19 PM PDT

            •  the peasants revolted

              and I think they now have back their rights to their own water.
              Political corruption in third world countries can be devastating to people living at subsistence levels. These large corporations seem to have no shame.

              by eve on Tue Sep 18, 2007 at 01:27:01 PM PDT

    •  its simple

      they are not conservatives in any sense of the word.  I would love to see have full public disclosure of all their investment portfolios, their gains summarized since bush has been in office and blind trusts not allowed... such a mandate would have the fake conservatives screaming bloody murder...when, in fact, murder is what they profit on.

      by FreeTradeIsYourEpitaph on Sun Sep 16, 2007 at 09:17:00 AM PDT

      •  The profits and capital gains from

        companies dealing in patented drugs or weapons should be extracted from the blind trusts and given to the US Treasury.

        by SingleVoter on Sun Sep 16, 2007 at 09:48:09 AM PDT

    •  Actually that's not true

      We've been in high debt before.  The post WWII period saw a 1.25% ratio of debt to GDP, which we had reduced to a manageable .46 ratio by a mere 20 years later.

      The mechanism?  70-80% taxation on the incomes of the wealthy.

      The next Democratic president will certainly have to deal with this, but as far as his impact on the regular taxpayer, Clinton proved that fixing the deficit doesn't have to be a complete pain.  Our move to a credible fiscal policy will have an instant payoff in increased dollar valuation.

      Clinton had a 60+% approval rating throughout most of his Presidency as he cleaned up after deficit levels very nearly as bad as what we're dealing with today.  I don't agree with bonddad that a Democratic president is going to be challenged in 4 years by anti-tax Republicans with any credibility.   We've got a plethora of historical neglect by Bush, Bush, and Reagan to demonstrate that they're wrong, wrong, wrong, wrong.

      by slippytoad on Sun Sep 16, 2007 at 09:40:17 AM PDT

      •  To that huge Debt, add a Recession

        The next (Democratic) president will likely inherit a recession in addition to the over-sized debt.  So, a tax cut may well be needed to provide a stimulus to the economy.  I think the best mix of tax policies may well be: 1) a cut in payroll taxes, paid for by (2 an increase in the taxation on the incomes of the wealthy.

        by rmx2630 on Sun Sep 16, 2007 at 10:33:23 AM PDT

        •  Yep

          It's going to be such a big, gristly load the wealthy are going to have to swallow after all these years of givin' it to us.  The longer they've hustled for free, the more unpleasant the payment is going to be.

          by slippytoad on Sun Sep 16, 2007 at 11:26:53 AM PDT

        •  Like pushing a string.

          The next (Democratic) president will likely inherit a recession in addition to the over-sized debt.  So, a tax cut may well be needed to provide a stimulus to the economy.

          I suspect that the stimulative effect of tax cuts has been overexploited by the Bush administration. For just about all of his term, the deficit was twice as high as it would have been if he had simply hired the unemployed.

          I think we should start looking for those public works projects that'll pay for themselves in the long run. It's true that they won't employ as many as they would have back in the Depression, but it'll be something that's visible and that fills a need when finished.

          by Judge Moonbox on Sun Sep 16, 2007 at 05:33:20 PM PDT

      •  If only is was that easy

        Yes in WW11 the Govt was spending up to 140% of GDP on defense. They just weren't borrowing it from China. As far as taxing the wealthy, see my comments above. Clinton didn't hit the wealth with 70% tax rates. Yes he raised taxes, but then again so did Bush 1.

        Truman was almost drummed out of office after the slump that occurred post war. 70-80% taxes rates were possible becuase there was a different type of mentality then. People didn't pay large account firms millions to come up with illegal tax dodges after they cashed in options that brought them 100s of millions in wealth each. When the IRS broke that one, they picked up 6.4 Billion. That was a tiny lesson to the collectors that if they go where the money is, they will get money back.

        That does bring up a point that could lesson the pain. If the IRS is equipped with the technology and the resources including outside forensic accounting firms and spent their budget going after corporations and high net worth individuals even though they know they are going to be facing a bevy of high paid tax lawyers. The ROI will be much higher than going after 50K earners who they know can't afford an attorney for a few thousand bucks. They may not even collect it either. High net worth people will pay becuase the IRS has a certain threshold where they work a debt out and where they decide Prison will set a better example.

        That could reduce the pain. Just like the GAO can't really give us a good picture of what our finances are becuase of lousy accounting, we really have no idea how much money could be collected in taxes if the tax laws were adjusted and the enforcers were going after the right targets armed with more than a spit gun. The one thing all the terror scares did do is put in place a country to country asset tracing system second to none. It's getting much harder to hide that shit.

        Let's not forget that Clinton was blessed with a stock market boom that brought in massive receipts that  surprised people in government so much that no one knew a surplus was anywhere near term until they saw massive amounts of capital gains tax pour into the treasury.

        While  FDR was smart enough to bring millions into the middle class with a GI Bill which created a prosperous time where debts could be paid down.

        Plus both starting points was not nearly as serious as the one we are in now. In the 50s and 60s everyone wanted our goods as our manufacturing prowess was second to none

        It was bad coming out of the Bush 1 recession. But the underlying foundation of the country was much stronger than it is now. We had an across the board boat lifting tide as the new economy saw the Internet become a major player. Some of the companies were nuts. But the sector is heating up now as mainstream business realizes that's where they want to be.

        But still :

        Bush and his cronies still have 500 days left to make it worse too. Lets not forget that.

        by Dburn on Sun Sep 16, 2007 at 11:31:47 AM PDT

    •  As I recall years ago

      When all of these policies were being set, all of those 'tax breaks' for the wealthy, when Alan Greenspan was objecting to the last one, I think, to huge Republic criticism, then Greenspan took a two week 'vacation' came back and 'supported' those policies,

      well, back then I know there was much discussion in my groups about how these policies were specifically designed to get the most for the duration of the Bush administration, almost like the Republics knew they were going to be voted out of office, a kind of 'take the money' and run attitude.

      They knew what they were doing, they knew that these policies were going to help destroy the US economy some day, they knew that, but they went ahead anyway just to see how long it would take, and with some kind of faint 'hope' they could continue in power, that the American people would 'buy' it--but if we didn't, then they had gotten what they wanted, a good return on thier campaign contribution investiments--so they could just go away wealtheir and happier.

      Anyway, that's the discussions my friends and I had over the years--now, look's like it's happening.

      by Wary on Sun Sep 16, 2007 at 10:41:25 AM PDT

    •  Demfem

      ..write a diary on this and expand it, please! Great comment, well written. I'd love to read a whole lot more of your writing on the subject.

      by eyeswideopen on Sun Sep 16, 2007 at 01:33:31 PM PDT

    •  A theme for a bumper sticker...

       
        Since 1789-Total National Debt- $9 Trillion
      Since 1981-Added by 3 Republicans- $6.7 Trillion
        George Bush will add $4.8 Trillion by 2009
                Vote Democratic in 2008  

      by NC Dem on Sun Sep 16, 2007 at 02:08:42 PM PDT

    •  Demfem-- I would love to have sources for this so

      I could quote it often.

      In part, the numbers are an illusion.  Becuase of inflation, it always looks as if the most recent presidents were much more profligate than earlier ones.  But it's only partly an illusion. They really are the borrow-and-squander party (great phrase), and their policies since Reagan have been incredibly irresponsible.  Not reality based.

      We need to spread the information around so Dems can nail them to the wall every time they start sneering about "tax and spend" Democrats.

      by Fiona West on Sun Sep 16, 2007 at 07:35:44 PM PDT

  •  And ... this was discussion in 2004 ...

    there were many who argued that it would be better if Bush won since then he (Republicans) would have to deal with the reprecussions of the messes that they had created:

    • Fiscal ... a la this diary
    • Iraq ...
    • Implications of bad policy like NCLB ...

    Truth is that these years have enabled the Bush-Cheney misAdministration to worsen things and kick them down the pike.

    Honestly, among many of the reasons Why Energize America is, it seems to me, that this is one of the few ways to help dig out the nation fiscally from the Bush-Cheney mess. Some deficit spending today to improve the economy today and indefinitely into the future.  

    by A Siegel on Sun Sep 16, 2007 at 10:02:07 AM PDT

  •  How to Survive the Death of the Dollar

    This is only an issue if you hold your wealth in stable currencies, such as the Swiss Franc, the Euro, the Pound, etc.

    Many American banks allow you to do that, including Everbank.com. (You just exchange back into dollars as you spend them -- a lot more dollars than you started with!)

    As for the long-term effects of the dead dollar:

    If the dollar is devalued to about 10 cents (which it will be) we can pay our debts off lickity split. That's been the plan all along.

    Just make sure you're not one of the suckers holding the dollar (or dollar-based equities). Big cash-rich corporations, such as 3M, do not hold their cash in dollars. No serious US business does.

    by Pluto on Sun Sep 16, 2007 at 10:30:27 AM PDT

    •  When the US gets a cold

      the rest of the world gets pneumonia.  Foreign currencies may not fare as poorly when the US $ goes down, but everyone will suffer.  The US consumer purchases everyone's output.  Without that income, tens of millions (billions?) would starve.

      The US has a responsibility to maintain fiscal dicipline for more than the 300 million residents of the US.

      by AppleP on Sun Sep 16, 2007 at 05:07:19 PM PDT

      •  Sweetie Pie...

        ....the US $ goes down, but everyone will suffer.

        That was decades ago. If you want to survive, you need to retire that meme.

        It's wrong.

        by Pluto on Sun Sep 16, 2007 at 09:59:48 PM PDT

  •  Greenspan: House Prices to Fall Significantly

    US house prices are likely to fall significantly from their present levels, Alan Greenspan has told the Financial Times, admitting that there was a bubble in the US housing market.

    In an interview ahead of the release on Monday of his widely-anticipated memoirs, the former chairman of the Federal Reserve said the decline in house prices "is going to be larger than most people expect".
    ...
    Mr Greenspan said he would expect "as a minimum, large single-digit" percentage declines in US house prices from peak to trough and added that he would not be surprised if the fall was "in double digits".
    ...
    As Fed chairman, Mr Greenspan had talked about "froth" in the housing sector, but never said there was a bubble in the market as a whole. His successor Ben Bernanke has also avoided the word "bubble".

    But Mr Greenspan told the FT that froth "was a euphemism for a bubble".

    http://calculatedrisk.blogspot.com/...

    The economic pain for many people that bought homes over past few yrs is going to get severe.

    No more MEW, cut backs on consumer spending, it's going to get ugly for US economy and recession is coming.

    Bullshit economics and bubbles, tax cuts for the rich, spending like a drunken sailor, and going to war is all attributed to Bushco.

    That's what ALL Dems should be saying because they will be cleaning up this asshats mess for at least a decade.

    by 4km on Sun Sep 16, 2007 at 04:13:39 PM PDT

•  I remember Paris seeming to be on sale

  in the summer of 2001. The Dollar was worth ~ €1.25 then.

  by andgarden on Sun Sep 16, 2007 at 07:48:32 AM PDT

  •  Well, now the US is on sale for us Europeans.

    Seriously, I've heard of shopping expeditions being organised because of the favourable exchange rates.

    by Dauphin on Sun Sep 16, 2007 at 07:53:44 AM PDT

    •  I bought many la coste shirts that summer

      by andgarden on Sun Sep 16, 2007 at 07:54:36 AM PDT

      •  With my measurements I usually have to go to

        a tailor. The funny thing is that if I buy the cloth and specify the style I'm far better off financially than I would be if I bought clothing in a store (especially designer clothing).

        Plus, the damn things actually fit.

        by Dauphin on Sun Sep 16, 2007 at 07:57:45 AM PDT

        •  I work in Ireland in the summer. Our main grant

          in in Euros, but we also have a small research grant in dollars. the value of the dollar gant has fallen dramatically since last year.

          by blue jersey mom on Sun Sep 16, 2007 at 09:22:01 AM PDT

    •  The foreign Thoroughbred racing

      people are already here shopping at the major sales. And paying some big money for horses. Some of them are the regulars, Arabs with more money than they can spend, but this year many of them are European newcomers who are coming to take advantage of the exchange rate.

      by Demfem on Sun Sep 16, 2007 at 08:14:14 AM PDT

      •  uh absolutamento baby

        N sum Canucks, too!
        check out my little line about me buying a home.  We would not have done it but for the good rate of exchange with the Canadian dollar.  And now with a wedding in the works yippy! Double the savings.  Now we will hopefully be able to retire in the States in the next few years. Now if ya'll could just fix health care and TexMex can disconnect with the Canadian health care thingie and come home for good instead of being a "snow bird".  
        Keep them dollars coming ya'll, Alberta can use the cash!  and ya don't  teven have to go to war for it.

        by TexMex on Sun Sep 16, 2007 at 04:12:10 PM PDT

    •  The US is on sale to Europeans, but

      ... we're making it harder than ever for them to come here and spend their money.  

      by lineatus on Sun Sep 16, 2007 at 08:17:48 AM PDT

      •  Thank you.

        Since it's important to keep the import/export ratio balanced, the strong euro is creating problems for our exporters.

        Isn't it wonderful when someone shoots himself in the foot for you? A weak dollar makes exports easier, and the US isn't willing to capitalise on this fact.

        by Dauphin on Sun Sep 16, 2007 at 08:21:15 AM PDT

        •  Hard to export after exporting all the Mfg plants

          We can export agricultural products - but almost everything else is manufactured overseas. We shut down our manufacturing plants and shipped them overseas thinking the dollar would be strong forever.  OOPS!

          It's hard to export stuff (other than agricultural goods) when your economy is based on importing everything from countries with no environmental laws and cheap, easily exploited labor - and selling it to consumers who lost their high-paying manufacturing jobs when the plant shut down.

          The problem with an economy supported by consumer spending and exporting those same consumers jobs overseas to achieve cost-savings is the obvious train crash when the laid-off consumers have no more money to spend.  Greenspan's cut the interest rates to near-zero and let them re-finance and spend the equity on plasma TVs trick covered his retirement, but now the rest of us are stuck with the check. (Greenspan's post-9/11 economic plan is strikingly similar to Bush's Iraq War plan: come up with a flashy distraction, leave office, wait for the disaster to become obvious, then blame someone else.)

          by RepubAnon on Sun Sep 16, 2007 at 08:48:03 AM PDT

          •  You can also export services.

            Furthermore, whatever a foreigner buys in a country counts as an export, and whatever a citizen buys in a foreign country counts as an import, although it's extremely difficult to keep track of the last two factors.

            by Dauphin on Sun Sep 16, 2007 at 09:04:15 AM PDT

          •  it never ceases

            to amaze me how short sighted the people on Wall Street and in the political/trade arena really are. Oh wait, the IMF has $64 billion in gold assets...I see what the end game is now ... destroy currencies and their 'value' goes way up by engineering the whole quagmire.

            by FreeTradeIsYourEpitaph on Sun Sep 16, 2007 at 09:41:38 AM PDT

            •  It like retail

              the profits are multiplied by rapid turnover.

              by SingleVoter on Sun Sep 16, 2007 at 11:37:21 AM PDT

          •  I believe we now import

            more agricultural products than we export.

            by SingleVoter on Sun Sep 16, 2007 at 09:50:02 AM PDT

            •  How about selling land?

              As a last resort, I mean. Invite some affluent people from the Pound- or Euro-zone, sell them half your land, show them how to plant corn and squash, ...

              Reading this diary I couldn't help imagining that the Wampanoag around 1600 had this brilliant fiscally conservative chief who would encourage consumer spending on cheap imported goods, no matter the mortgage. Not to forget sold out the fishing industry to international big business, let skilled workers in on greenwampums, pandered to the evangelical base, ...

              Honestly, I wouldn't mind a few square miles if you have some spare in a nice place.

              /snark
              (ok, a bit tasteless)

              by intruder from Old Europe on Sun Sep 16, 2007 at 07:10:09 PM PDT

        •  Ssshhhh! Don't tell them! (nt)

          -

          by intruder from Old Europe on Sun Sep 16, 2007 at 06:47:54 PM PDT

      •  So the travel market loses but the 401k gain

        As Americans moved to euro-based funds our retirement investments are doing quite well...a wee bit of consolation.  

        by kck on Sun Sep 16, 2007 at 09:26:30 AM PDT

    •  You'll come here to shop?

      Watch out for the poisoned imports from China...

      by AnotherMassachusettsLiberal on Sun Sep 16, 2007 at 09:06:56 AM PDT

      •  Well, China has just returned 42 tons of pork

        back to the US and Canada for being tainted with the forbidden drug residue ractopamine. The hog growers and CAFO industries use this drug to promote growth.  

        Most countries in the world have forbidden the use of this drug in feedstuff and edible animals.

          Ractopamine is a kind of adrenal stimulant, which may promote the growth of pigs and ox and help them grow more lean meat. It was forbidden for use as veterinary medicine in most of the countries across the world.

           The European Union had forbidden the use of it in edible animals in a decree published in 1996, and China banned the drug in feedstuff and potable water for animals in 2002.

           Only 24 countries, including the U.S., Canada and Brazil, allow the use of ractopamine in edible animals.

        Our... constitutional heritage rebels at the thought of giving government the power to control men's minds. Thurgood Marshall

        by bronte17 on Sun Sep 16, 2007 at 10:10:23 AM PDT

        •  note the lack of public outrage [nt]

          by wu ming on Sun Sep 16, 2007 at 11:26:09 AM PDT

    •  The party's over for American consumers

      The new numbers on consumer confidence are out. They show American consumers very confident that the economy is going down the tubes.

      http://seattletimes.nwsource.com/...

      by 4km on Sun Sep 16, 2007 at 10:14:55 AM PDT

  •  in July 01

    these were theprices
    07/01/2001 1.17720
    07/02/2001 1.17720
    07/03/2001 1.18110
    07/04/2001 1.17670
    07/05/2001 1.18190
    07/06/2001 1.19430
    07/07/2001 1.18080
    07/08/2001 1.18150
    07/09/2001 1.18120
    07/10/2001 1.17910
    07/11/2001 1.16890
    07/12/2001 1.16410
    07/13/2001 1.17150
    07/14/2001 1.17050
    07/15/2001 1.17070
    07/16/2001 1.17070
    07/17/2001 1.16990
    07/18/2001 1.1640
    07/19/2001 1.1460
    07/20/2001 1.1480
    07/21/2001 1.14760
    07/22/2001 1.14850
    07/23/2001 1.14740
    07/24/2001 1.15090
    07/25/2001 1.14090
    07/26/2001 1.13640
    07/27/2001 1.13980
    07/28/2001 1.14060
    07/29/2001 1.14040
    07/30/2001 1.14050
    07/31/2001 1.14380

    (I just don't have anything better to do today)

    by duende on Sun Sep 16, 2007 at 08:21:59 AM PDT

    •  So I was off by ten cents

      Still, it shows how far we've come.

      by andgarden on Sun Sep 16, 2007 at 08:28:29 AM PDT

  •  Hilton? N/T

    by Lib Rule Guy on Sun Sep 16, 2007 at 08:42:31 AM PDT

•  On the other hand

  a low value of the dollar vis-avis the euro makes it hard for us Europeans to export anything to the United States, while it facilitates US exports to Europe.

  Not that it matters much with the, well, lack of US exports (via China doesn't count).

  Just a question, Bonddad: What would be the major consequences of printig money in order to cover the US' outstanding debt? Yes, the primary effect would be inflation, of course, possibly hyperinflation if things get out of control, which would really shaft the lower and middle classes, but I was thinking of international macroeconomic consequences.

  by Dauphin on Sun Sep 16, 2007 at 07:52:31 AM PDT

  •  Lack of US exports?

    You have to be kidding.

    US exports in Q2 2007 annualized were $1.6 Trillion, up nearly 11% from a year ago.

    That makes US exports larger than the entire economy of any other country in the Western Hemisphere including Mexico and Canada.

    If exports were all the US produced, the US would still have the 8th largest economy in the world.

    by daisycolorado on Sun Sep 16, 2007 at 08:03:09 AM PDT

    •  How much of what does the US export

      and where? If memory serves, the United States exports less to Europe than vice versa.

      Call me a Europocentric, but that was the perspective I was writing from.

      by Dauphin on Sun Sep 16, 2007 at 08:05:45 AM PDT

      •  And, lest I forget,

        the truly important thing is the import/export ratio, which is rather unfavourable, if I'm not mistaken?

        by Dauphin on Sun Sep 16, 2007 at 08:11:50 AM PDT

        •  US trade deficit

          When U.S. companies offshore their production for U.S. markets, the consequences for the U.S. economy are highly detrimental. One consequence is that foreign labor is substituted for U.S. labor, resulting in a shriveling of career opportunities and income growth in the United States. Another is that U.S. Gross Domestic Product is turned into imports. By converting U.S. brand names into imports, offshoring has a double whammy on the U.S. trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.

          The United States now has a trade deficit with every part of the world. In 2006 (the latest annual data), the United States had a trade deficit totaling $838,271,000,000. It equates to over $1.5 million dollars flowing into foreign hands every minute. This is the money foreigners use to buy our assets and major companies.

          The U.S. trade deficit with Europe was $142,538,000,000. With Canada, the deficit was $75,085,000,000. With Latin America, it was $112,579,000,000 (of which $67,303,000,000 was with Mexico). The deficit with Asia and the Pacific was $409,765,000,000 (of which $233,087,000,000 was with China and $90,966,000,000 was with Japan). With the Middle East, the deficit was $36,112,000,000. With Africa, the it was $62,192,000,000.

          Public worry for three decades about the U.S. oil deficit has created a false impression among Americans that a self-sufficient America is impaired only by dependence on Middle East oil. The fact of the matter is that the total U.S. deficit with OPEC, an organization that includes as many countries outside the Middle East as within it, is $106,260,000,000, or about one-eighth of the annual U.S. trade deficit.

          Moreover, the United States gets most of its oil from outside the Middle East, and the U.S. trade deficit reflects this fact. The U.S. deficit with Nigeria, Mexico and Venezuela is 3.3 times larger than the U.S. trade deficit with the Middle East, despite the fact that the United States sells more to Venezuela and 18 times more to Mexico than it does to Saudi Arabia.

          What is striking about U.S. dependency on imports is that it is practically across the board. Americans are dependent on imports of foreign foods, feeds and beverages in the amount of $8,975,000,000.

          http://www.economyincrisis.org/...

          by junta0201 on Sun Sep 16, 2007 at 08:21:25 AM PDT

          •  Now THAT is bad news if I ever saw it,

            since, sooner or later, you have to balance imports and exports.

            by Dauphin on Sun Sep 16, 2007 at 08:24:50 AM PDT

        • &