Well, even though it wasn’t planned for in the budget, the war in Iraq currently costs us $5.8 billion a month, according to our generals. I guess that’s part of the reason why we’ve had to cut our contribution to the AIDS fund. And even while we’re pumping all that money into the military, the generals say that our military is under a terrible strain, both financially and in terms of personnel.
Continue reading →Well it seems that Bush isn’t going to go for a flat tax or a sales tax after all. Instead, he’s going to cut capital gains taxes again, eliminate the alternative minimum tax, and otherwise shield income for wealthy people. How can he pay for all this without driving the deficit even higher? He plans to increase taxes on the middle class and working poor, by eliminating your tax deduction for state and local taxes, and eliminating the tax deductions businesses can take for providing health care. Not only does this stick it to working people in favor of the … Continue reading →
For the third time in as many years, Congress voted to raise the debt ceiling, allowing the government to keep functioning by running up the deficit even further. There was a time when Republicans were seen as the party of limited government and balanced budgets. But no more! They have become the party of no-taxes-but-spend anyway. I call them “red ink Republicans”. The measure was passed by a nearly straight party-line vote. The new debt ceiling is $8.2 trillion, up from a ceiling of $5.9 trillion when Bush took office.
Continue reading →Brad deLong, who has forgotten more about economics than I ever knew, has a post about the effects of the deficit on the general decline in strength of the dollar. If I’m reading him correctly (numbers give me a headache), he’s predicting a slow decline of the dollar’s buying power as we rely on other countries to hold our national debt. People in the administration are claiming that the deficit is actually a sign of economic strength, but I don’t buy that, and I don’t think deLong does either. Of course, just this morning I see that the dollar has … Continue reading →
While the U.S. dollar weakens due to increasing debt and trade deficits, the Euro is growing stronger. Some think the Euro will replace the dollar as the cornerstone of world currency. If it does, that will be one more sign of failing U.S. influence in the world at large. Oh, and inflation took a surprising jump last month as well.
Continue reading →When you run a large federal deficit, that means some one else is financing your spending. Just as when your household budget gets out of balance and you end up at the mercy of the credit card companies, when the nation carries debt we are the mercy of those who buy our bonds. China and other nations currently hold a huge amount of American debt, and when they stop buying, our economy is going to feel it.
Continue reading →Over at Angry Bear, the Angry Bear himself lays out the statistics which show that red states can’t support themselves very well. In fact, the blue states are the generous givers of money while the red states, mostly, suck it up. Isn’t it time we put an end to this welfare relationship?
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