Watch Out, Here It Comes!

It has finally dawned upon the Washington Post news staff that the new crowd of deficit hawks in Congress may not portend well for the regional economy. Indeed, it won’t. The only thing that could be worse than the rough patch we’ll experience if Republicans make good on promises to slash federal spending by $100 billion would be continuing down the budgetary path to Boomergeddon (when Uncle Sam defaults on his debts and investors refuse to lend anymore), in which case the shortfall could exceed $1 trillion.

Here’s my favorite line in yesterday’s story, “Federal austerity could hit the region’s economy hard“:

Some forecasts suggest that the growth of federal spending and procurement could plunge to 1 percent or below in 2011 from an average of about 8 percent annually during the past several years. That could hurt even if the local economy benefits from improvements this year in the U.S. economy.

Oh, horrors, growth in federal spending could slow to one percent? Welcome to our world, Washington!

Actually, you ain’t seen nothing yet. If Congress does its job and acts to close the budget gap by a full $1 trillion over the next decade or so, Washington could see something unknown along the banks of the Potomac — what a recession feels like. A decade-long recession. Alternatively, we could just conduct business as usual, wait for the government to go into default and see what it feels like to suffer a $1 trillion cutback all at once.

Federal cutbacks do pose a problem for Virginia conservatives. The federal government is the economic engine for Northern Virginia and Hampton Roads, and the ultimate source of a lot of the commonwealth’s tax revenues…. Which brings us to the point I’ve been hammering on for so long. The joy ride cannot continue forever. Sooner or later, you run out of gas. Virginia absolutely must prepare its own state and municipal budgets for the inevitable adversity to come.

Some people, like Rodger Provo who alerted me to the WaPo article, find it incomprehensible that conservative Virginians would “continue their assault on the federal government,” the cornerstone of the state economy. I consider it a sign of good sense. First, because growing federal command over the economy through direct spending, regulations and allocation of capital is bad for the economy generally. That would include Virginia. Second, because something that can’t go on forever… won’t. I’d much rather have a prolonged but gradual slowdown that we can adapt to rather than a crash that induces blind, mind-numbing panic.

In either case, we can only hope that our representatives of the General Assembly see what’s coming and prepare accordingly. That means tightening our belts, eschewing new debt and foregoing the creative accounting.

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Comments

47 responses to “Watch Out, Here It Comes!”

  1. Defense, fossil fuel subsidies vs. health care, Social Security

    After the above dust-up, I am hoping any remaining federal funds can be put towards transportation, single payer health care, education, and renewable energy to make the country competitive in this century.

  2. Larry G Avatar

    re: " …find it incomprehensible that conservative Virginians would "continue their assault on the federal government," the cornerstone of the state economy."

    pretty ironic , eh?

    Of course, we've already got a preview with the proposed closing of the Joint Forces Command which brought out such stalwart fiscal hawks as Eric Cantor to bleed all over from the mere prospect of cutting some of that "runaway govt spending".

    I think I'm going to enjoy the show no matter how it turns out.

    And I'd be curious to hear from Groveton on how the "visionary" business leaders of NoVa will deal with this revolting development!

    How about we put the Govt Teat for NoVa on a diet and see which "fiscal conservative" Virginia politicos squeal the loudest.

    squeal piggies … SQUEAL!!!!

  3. Anonymous Avatar
    Anonymous

    "Visionary business leaders from NoVA" It may only be January, but that pithy phrase may be the best of 2011. Most business leaders in NoVA are clueless about most things except federal contracting. They routinely pay higher taxes and see the quality of life for their employees and themselves deteriorate as local officials continue to approve development that exceeds the capacity of the infrastructure. They nod approvingly as the developers support legislation that transfers money from NoVA south so that downstate legislators won't let any land use legislation out of committee.

    I think a federal government cutback in spending is great. The feds need to cutback and defense has to be part of the cutbacks.

    A few local and state officials I know from both Parties are scared to death. And they should be. They won't be able to approve spending plans that increase outlays beyond growth in income. "It's not much fun being a supervisor in tough times." Well said.

    At the same time, I expect that Webb, Warner, Moran, Wolf and Connolly will fight to save federal dollars for Virginia. I hope they don't succeed.

    TMT

  4. Gooze Views Avatar
    Gooze Views

    Big Bacon,
    You fail to note how the federal largesse floats your boat regardless of your views.

    Peter Galuszka

  5. Groveton Avatar

    I can almost see the venom dripping from Jim's keyboard as he writes about the long overdue recession in Washington, DC. I guess Jim has forgotten that almost none of the politicians in Congress or the White House actually come from Northern Virginia. No, we get geniuses like Eric Cantor from places like Henrico County. But no mind. It's important that construction workers and waitresses in Prince George's County, MD suffer so that Richmonders can feel superior to somebody I guess.

    As for the belt tightening Republicans – I seem to remember another Republican revolution in 1994. Yeah, those guys really eviscerated the federal government. It just about disappeared after Newt & Co were done.

    Finally, I really hate to muddy the waters with facts but people keep track of the ratio between federal taxes paid and federal spending received by state. Latest data I have is for 2005. Virginia was the #10 beneficiary. Maryland was #18. The biggest slurper of the federal surplus? New Mexico. The least piggish? New Jersey.

    Taxes by State

  6. Groveton Avatar

    And I'd be curious to hear from Groveton on how the "visionary" business leaders of NoVa will deal with this revolting development!

    I suppose we'll have to ask for help in business development from one of Virginia's economic tigers – Fredricksburg or Richmond.

    Actually, some people will leave. The same thundering herd who came during the boom times will take off when growth slows. It will be good to see fewer Philadelphia Eagles and Pittsburgh Steeler bumber stickers anyway. Many of the RoVa transplants will amble back down to southern Virginia. When that happens, the average IQ of both NoVa and RoVA will go up.

    We'll end up with the non-drifter transplants, natives and (of course) the immigrants. You know, the Indians, Chinese, Vietnamese, Arabs and Africans who came to NoVa looking for work. Most of these folks either came legally or are legal now.

    None of us will leave.

    Just like the core population of Silicon Valley stays put throughout a sili – cycle. Bozos come and go in Palo Alto, San Jose, Sunnyvale and all the other towns along US 101. Home prices rise and fall like a sine wave. But the core stays. And the valley endures as chip manufacturing is moved to places like Costa Rica and software testing goes to India.

    We've got plenty of educated people. Plenty of entrepreneurs. Plenty of money to risk. From Marriott to MCI, from WebMethods to CarFax – there have been plenty of start-ups in the DC area. With lower federal related employment comes a surplus of available talent. Data enter operations, networking and IT security in Virginia, biotech in Maryland.

    No, its the fossilized throwbacks from places like Richmond who should worry our state budgeteers. You know – the guys who planted tobacco until the soil wouldn't grow anything, the guys who thought being the capital of a failed and immoral Confederacy would be a good idea, the guys who built plenty of statues of losing southern generals (especially a NoVa guy named RE Lee)but couldn't stomach the idea of a statue of a winning black tennis player, the guys who didn't really integrate their public schools until 1986.

    Yeah, bet on them.

    Face it guys, the educated talent in the state sits in NoVa and Tidewater. If a lack of government spending causes that talent to go elsewhere Virginia will become West Virginia.

    At least the "Masters of the Universe … er, I mean Plantation" in Richmond will be able to look down their noses at the rest of the state again.

  7. Groveton Avatar

    How to make a clickable link in a Blogger comment …

    NoVa Teaches RoVA Tricks

  8. James A. Bacon Avatar
    James A. Bacon

    Groveton, You misread my sentiments. Although I do have contempt for "Washington," as in, the Washington political establishment, that does not extend to Northern Virginia. I wish NoVa no ill. It is implicit in my post that NoVa accounts for a disproportionately large percentage of Virginia tax revenues. If NoVa catches a cold, Virginia catches pneumonia. That is why I insist that the General Assembly be exceedingly cautious about spending and borrowing.

  9. James A. Bacon Avatar
    James A. Bacon

    Groveton said: "I guess Jim has forgotten that almost none of the politicians in Congress or the White House actually come from Northern Virginia."

    Regarding Groveton's utter disdain for the Virginia General Assembly: I guess he forgot that twice as many representatives to the General Assembly, which he refers to as "Richmond" and conflates with the people who actually live there, come from…. Northern Virginia.

  10. James A. Bacon Avatar
    James A. Bacon

    Normally, I find Groveton to be highly logical and persuasive. But logic flies out the window when he perceives someone dissing Northern Virginia!

    Groveton said: "It's important that construction workers and waitresses in Prince George's County, MD suffer so that Richmonders can feel superior to somebody I guess."

    What? Perhaps Groveton is suffering from jet lag. That sentiment exists only in his imagination. I take no pleasure in any other region's economic pain. But I am amused to read the panicked reaction of a WaPo reporter writing about the reduction in the growth of federal spending from 8% a year to 1% a year. Perhaps that will teach Washingtonians a little empathy about what other parts of the country experience.

    Does that make me a Northern Virginia hater? C'mon, Groveton. I think you need a cocktail.

  11. Larry G Avatar

    I take no joy in economic downturn in NoVa or any other place in Va or other places but we've heard over and over that NoVa is the legendary place of visionary business leaders transforming NoVa from RoVa and into the economic heart and soul of Virginia.

    When, instead, NoVa is your basic Federal Enclave on steroids and the proof of it is the "sky is falling" attitudes of those same "visionary" leaders at the prospect of cuts in the Federal budget.

    I just think it's pretty ironic that the Republican stalwarts in the State and NoVa who blather incessantly about "out of control" govt taxation an spending – are bleating the loudest over the potential impacts of deficit reduction.

    What would NoVa look like without the boated Federal Teat?

    Probably like Richmond or Charlottesville or Roanoke.

    NoVa is like the Rich Republican real estate tycoon that made his millions off of selling office space to the Feds and the man votes Republican religiously so that they don't tax him to death to pay for all that spending.

    Obviously just the mere mention of this irony sends Groveton off in a tizzy.

  12. Anonymous Avatar
    Anonymous

    Larry,

    The bulk of the NoVA real estate people are big Democrats. Or give lots of money to Democrats.

    TMT

  13. Larry G Avatar

    TMT – the real estate people – yes… many real estate people are Democrats … because infrastructure investments from the govt are required for their business.

    I'm talking about the traditional corporate businesses…especially those who hail from the military industrial complex world.

  14. Groveton Avatar

    "Perhaps that will teach Washingtonians a little empathy about what other parts of the country experience.".

    As I have clearly documented with unemployment statistics, the level of unemployment spiked in Washington, DC during the recent recession just like it spiked in the City of Richmond.

    In fact, I believe the level of foreclosures in many parts of Northern Virginia has been considerably worse than in other areas of Virginia.

    Jim, I read your post, I read your comments, I read you book. You are a reasonably logical man for a non-technical person. However, you have a real blind spot when it comes to writing about Washington, DC or Northern Virginia. You willfully ignore the fact that the recent recession clearly hurt Washington, DC and its suburbs. If you have some data that shows Wash Met did not see increased unemployment or that Wash Met was immune to foreclosures and short sales or that home prices were stable in Wash Met – please present that data. Otherwise, please admit your inability to discuss Northern Virginia through anything other than the lens of red eyed emotional rage.

    You also rant about Northern Virginia being nothing more than soul-less suburbs littered with strip malls. I have been to Henrico County many times. What's the difference? In fact, I have been to many different suburbs in many different cities. What's the difference?

    "A little empathy …"? Where do you get this stuff? Half the small business owners I know up here went bankrupt over the last few years. Many of my friends are currently unemployed. I don't know what you are talking about and I suspect you don't know what you are talking about either.

    I need a cocktail? Jim, you need a valium every time you even think about Northern Virginia.

  15. "….because infrastructure investments from the govt are required for their business."

    =================================

    BAH!

    Government loves growth because that is how they grow, build their pyramid under them, and get more budget and power.

    This cuts both ways.

    The only brake or drawback is from those people who (most probably wrongly) percieve that growth is costing them money or detracting from benefits that they feel they have, own, or control now (even though they do not).

    They have a political voice that helps control what the politcians give away.

    But all of this can be fixed with a proper focus on property rights, so that those who feel they are being cheated can participate in the benefits produced.

  16. I find it amusing that the same people concerned about growth, sprawl, and mass overconsumption are suddenly worried that one sector of the economy might grow at only 1%,

  17. "I believe the level of foreclosures in many parts of Northern Virginia has been considerably worse than in other areas of Virginia."

    ================================

    Probably for the same reason Phoenix was hurt badly. NOVA is a highly mobile, and growing, area so there are a higher percentage of people with small equity

  18. NoVa accounts for a disproportionately large percentage of Virginia tax revenues.

    ============================

    At least we got that settled.

  19. James A. Bacon Avatar
    James A. Bacon

    Groveton said: "You also rant about Northern Virginia being nothing more than soul-less suburbs littered with strip malls. I have been to Henrico County many times. What's the difference?"

    There is very little difference. Henrico has made a hash of growth, especially in the last 10-15 years. So has Chesterfield. The main difference between NoVa and Henrico/Chesterfield is that NoVa had growth on steroids. If the Richmond metro area had experienced growth on steroids, we'd look just like NoVa. Maybe worse.

    You seem to think I have some double standard. I don't. If you need convincing, I can point you to essays on the old Bacon's Rebellion newsletter in which I skewer Henrico for its planning.

  20. James A. Bacon Avatar
    James A. Bacon

    Groveton, I have plenty of sympathy for the construction workers and waitresses in the Washington region who are the victims of the recession. What you won't find in Washington are many victims of the recession who have some affiliation, direct or indirect, with the federal government. My ire at "Washington" is directed at the political class, not the poor schmoes just trying to make a living.

    I'm still baffled at why you think I'm so anti-Northern Virginia, as if my animus against big government in Washington were directed at the people who live in Northern Virginia, as opposed to Washington's political class who are wrecking the country or NoVa's own municipally based political class which has laid waste to the human settlement patterns.

  21. Groveton Avatar

    "I take no joy in economic downturn in NoVa or any other place in Va or other places but we've heard over and over that NoVa is the legendary place of visionary business leaders transforming NoVa from RoVa and into the economic heart and soul of Virginia.".

    So, why are the most affluent counties in the Washington area always in Virginia? LarryG – take a look at a map. Maryland has counties right next to Washington, DC – not even a river separates Maryland from Washington.

    Of the top 10 wealthiest counties in the US from 2006 – 2008 (median household income), three were in Northern Virginia and only one was in suburban Maryland. Why? If you go to the top 15, the tally changes to Virginia – 5, Maryland – 2. Why? By the time you get to the Top 25, all of Northern Virginia is on the list. But not all of suburban Maryland. Why isn't Prince George's County, MD on the list? Hell, even Stafford County, VA is on the list. But not a Maryland County which directly abuts DC, the center of the federal teat.

    As a final point, let me get something straight LarryG …

    The federal trough has been open for 200+ years.

    The federal feed bag is so easy to access that anybody can just walk up and start eating.

    All the Northern Virginia counties near Washington, DC are enriched solely by dint of being close to Washington, DC and the federal government.

    The median household income in Spotsylvania County is $72,453. The median household income of Loudoun County is $107,207.

    All the people of Spotsylvania County have to do in order to add $34,754 per year to their annual family income is to move a couple of counties closer to the federal teat?

    And yet they don't?

    What does that say about you and you neighbors LarryG?

    I mean, according to you, this is a no brainer.

    All your neighbors could earn "half again" their household income just by moving a couple of counties over within Northern Virginia.

    And yet they don't?

    What does this say, LarryG?

  22. Groveton Avatar

    You wish for a recession in Washington while admitting that it will hurt the construction workers and waitresses. You do that because you are angry about the political class built by elected officials from all over the country? Really?

    Yes, I have contempt for the Virginia General Assembly. Yes, I have described that group as "Richmond". That is colloquial writing just like calling the US Congress "Washington".

    The difference is that I wish for no recession in Richmond. I don't believe that truck drivers and bookkeepers in Richmond would learn a lesson in empathy by being unemployed.

    In fact, I have the minimal economic understanding to realize that recessions always hurt the poor more than the rich – by wide margins. It wouldn't be the lobbyists who suffer from a recession in Richmond, it would be the bar tenders. The lobbyists would just move to DC or Sacramento or take positions suing doctors for malpractice. Like cockroaches, lobbyists are hard to destroy.

    That's why I see no reason to hope for a recession in Richmond to hurt Virginia's entrenched political class. It wouldn't really hurt them.

    Wake up, Jim! The politicians in Washington are elected by their local constituents not appointed by the residents of Fairfax County. If you want to change the political class you have to get them voted out of office. When voted out of office they can go home to Minnesota or Georgia or Richmond where they will be a blight on local society rather than a blight on the whole country.

  23. James A. Bacon Avatar
    James A. Bacon

    Groveton, I have a simple request. Please indicate where in my post I indicated, or even hinted, that I wished a recession upon the Washington area.

  24. Groveton Avatar

    Jim:

    "If Congress does its job and acts to close the budget gap by a full $1 trillion over the next decade or so, Washington could see something unknown along the banks of the Potomac — what a recession feels like. A decade-long recession. ".

    Then, from your commentary:

    "Perhaps that will teach Washingtonians a little empathy about what other parts of the country experience.".

    Please do me a favor … don't go Clinton-esque and claim that the words don't convey the thoughts you intended. Your meaning was clear.

    You wrote what you wrote.

    You meant what you meant.

    You want the newly elected, more Republican, (theoretically) more fiscally conservative Congress to do its job. That will bring a decade long recession to Washington which will teach Washingtonians empathy for others.

  25. Larry G Avatar

    ouch! ouch! ouch!

    looks like JB got into Groveton's knickers big time…. eh?

    all things considered – the thing not discussed much is that the vast majority of "govt" – like the Depts of Interior, Energy, Education, Commerce, even the EPA – have not grown much at all since 2001 when the trillion dollar deficit came into existence.

    And I don't think you're going to find a trillion dollars in savings from non-military, non-homeland Defense budgets.

    The trillion dollar deficit was created from two things:

    1. – tax cuts
    2. – military spending

    And now you know why the Republicans and folks like Eric Cantor will not tell you what cuts they would make to get the trillion dollars.

    So, no worries Groveton.

    NoVa is safe.

    Fort Belvoir and Quantico and the rest of DOD an Homeland Security will keep on trucking for as long as the Republicans are involved in "cutting" govt spending.

  26. Groveton Avatar

    LarryG:

    I have long suspected that both you and Jim have some simmering jealousy of Northern Virginia. I don't feel that way about any of the other people who post on this site.

    I know the feeling. When I attended UVA I hated Duke along with everybody else. We didn't hate Maryland, we didn't hate Virginia Tech. But we all hated Duke. One day I was thinking about it. Why Duke? They had a good basketball team but not much else in athletics. So, it wasn't a legitimate athletic rivalry. One day it hit me … Duke was a better school academically. The specific hatred of Duke was jealousy. After that, I had to discount anything the Duke-haters said about Duke. It just wasn't completely credible once I realized it was jealousy induced.

  27. Groveton Avatar

    LarryG:

    Somebody told me that Obama raised the national debt more in two years than GW Bush did in eight.

    Is that true?

  28. I don't believe that is exactly correct. I beleive the system is so big and has so much inertia, that we would be well advised to give a president credit or blame for everything from two years after hes is inaugurated until two years after he leaves office.

    Even then we are probably giving him more credit or blame than he deserves. I see a lot more trusses and house parts going down the road these days than last year. I don't think Obama has much to do with that, actually.

    For one thing, Obama put the wars on the books. That little bit of accounting would make him "responsible" for huge deficits.

    We only have one economy, so we have no independent trial to compare it to. He might have done NOTHING and made the deficit even worse. All we know for certain is that he would be blamed either way, for not creating a miracle that erased overnight the biggest sharpest slump in recent memory.

    That debt calim sounds to me like a case of deliberate innumeracy.

  29. Groveton Avatar

    Say, Jimbo …

    Maybe not the best time to mention this but …

    The Blogger invitation has once again expired.

    If you renew it, I'll post the next installment of Politics and the Chesapeake Bay and promise not to include any anti – Richmond diatribes.

    Really, I promise.

  30. Groveton Avatar

    Hydra:

    Why do simple facts constitute deliberate innumeracy?

    Either the debt increased more in Obama's first two years than it did under Dubya's eight or it didn't.

    Your explanation of why that happened may be valid.

    How about this definition of innumerate:

    Unfamiliar with mathematical concepts and methods. (Source: http://www.thefreedictionary.com).

    How does the simple fact that the debt climbed faster under two years of Obama than under eight years of Bush constitute any lack of familiarity with mathematical concepts?

  31. Darrell Avatar

    When cruisers run out of gas, they don't fill it back up. They go out and steal another car. If I were you I would watch the joy riders of both parties like a hawk.

  32. Anonymous Avatar
    Anonymous

    It is a pain to see Mr. Groveton and Mr. Bacon hacking away at each other, both accusing the other of not paying close attention to what they actually write.

    Perhaps they have too much time on their hands, and / or they have not taken AZA’s advice (in the Catnip post) to read AFTERSHOCK. At AZA’s instance we finished it this PM.

    WHAT A SHOCK.

    We had no idea the cause and effect of the Wealth Gap could be spelled out so clearly.

    Perhaps Mr. Groveton and Mr. Bacon missed the new report out of the Economic Policy Institute that in spite of, or because of, The Great Recession the Wealth Gap has widened dramatically. (Dec 23 CNNMoney.com by Chris Isdore.)

    If they need a quick summary of what Dr. Risse calls ‘the current trajectory’ try the Harold Meyerson column in the 5 Jan Wash Post “America’s Downward Slide.”

    As Reich points out forcefully in AFTERSHOCK, the Wealth Gap is the real Black Hole. Meyerson sings the same tune but does not credit Reich with laying the groundwork.

    By the way it was good of Mr. Bacon to post on the Dion Hayner story. Better than Catnip

    Observer

  33. Groveton Avatar

    Observer:

    You wrote …

    "Perhaps Mr. Groveton and Mr. Bacon missed the new report out of the Economic Policy Institute that in spite of, or because of, The Great Recession the Wealth Gap has widened dramatically. (Dec 23 CNNMoney.com by Chris Isdore.).".

    In my 11:33 post, I wrote …

    "In fact, I have the minimal economic understanding to realize that recessions always hurt the poor more than the rich – by wide margins. It wouldn't be the lobbyists who suffer from a recession in Richmond, it would be the bar tenders.".

    As you might imagine, I am hardly surprised to hear evidence that the recent recession made the wealth gap wider.

    My belief is that a fast growing economy shrinks the wealth gap while a shrinking economy widens it.

    Unfortunately, recent data (in the last 10 – 15 years) indicates that the wealth gap may widen regardless of the trajectory of the economy. I personally believe this is a consequence of the way in which technology impacts different levels of the wealth hierarchy. If so, economic growth won't ever narrow the wealth gap again.

  34. Innumeracy is a logical fallacy, usually deliberately contrived to misstate or misrepresent the facts, often by omitting salient facts. It is a particularly egregious fallacy because the number supplied confer a veneer of authority and fact.

    It is one of EMRs favorite tricks.

    Suppose I run concentrated PCB through the chromatography for several hours and the shoot in pure ethanol mixed from several vendors. I can report that commercial pure ethanol on average is contaminated with PCB.

    So far as it goes the statement is true, but it omits salient facts.

    No matter how true a half truth is, it isn't the truth.

  35. Gooze Views Avatar
    Gooze Views

    Groveton,
    You state (accurately):

    "You also rant about Northern Virginia being nothing more than soul-less suburbs littered with strip malls. I have been to Henrico County many times. What's the difference?"

    I'll tell you. Lots of blond people driving Beemers, Mercedes (periwinkle blue) and Land Rovers with a very smug sense of entitlement (and little else).

    That describes Henrico County Peter Galuszka

  36. Wealth gap.

    The poorest person will always have zero, or maybe less.

    An expanding economy will always make the wealthiest person richer (though it might not be the same person) .

    Therefore the wealth gap increases.

    However, you might define the wealth gap as the middle of the lowest quintile to the middle of the top quintile. There are a lot more people in the lowest quintile. So, if you take a weighted average you might show that the total wealth gained at the bottom is more than the total wealth at the top.

    Cleverly stated you could use this to suggest that the bottom was catching up.

    Even though the average of pairs selected at random would still exhibit the same trend as the extreme trend first presented.

    In short, I doubt your belief has any basis.

    In fact, one such study across six western countries suggests that no matter the social policies, the tax burden, or the economic trends, the top quintile always does better than the bottom one.

    This makes sense because with more to work with they have more opportunities.

  37. Two years under Obama

    ==============>

    Post hoc, proofed hockey fallacy AND an unequal boundary condition. Compare eight years of Obama to eight years of bush. Obama may make money on the auto bailout, and the stimulus may yet expand the economy enough to recover some of what was spent. Then subtract out the money that he was committed to spend before he took office.

    I'm not saying the argument is wrong, but it sure sounds simplistic and suspicious.

    Even if it is technically correct, so what? It is one FACTOID in a writhing competing mountain of them. Somewhere in all That manure, there must be a pony.

    Nah, even a pony is smarter than that. He has moved on to greener pastures, leaving the stable hands to argue over which shit happened.

  38. Larry G Avatar

    I'm not jealous of NoVa but I don't buy the "we are visionary leaders who make our own good luck".

    NoVa is a direct beneficiary of big spending Federal government.

    and Va is the better for it – no two ways about it.

    Still… they're sort of like the snotty rich kid who did not earn his wealth but got it from his Daddy….

  39. Larry G Avatar

    re: Obama raising the debt.

    GB inherited a 5 trillion debt.

    When GB left, there was a 10 trillion debt and an economic meltdown that required a TARP and a Stimulus – Obama alone could ot approve the stimulus – Congress had to also and it had to be supported by mainstream economists.

    The big difference to not is that the trillion dollar deficits that started in 2001 are STRUCTURAL whereas the Stimulus is not – it's a one shot deal.

    The structural deficit is not. It will go on year after year after year until and unless Congress finds a trillion in cuts and/or tax increases.

    Two deficit commissions identified a path to do this.

    Obama has said that he intends to try to implement based on them.

    The Republicans – you know – the guys who say they are fiscal conservatives even though they created the structural deficits – are ALREADY … BACKPEDDLING.

    They have said that the best they will be able to do is ..MAYBE 100 billion.

    What a bunch of FRAUDS.

    Here we have not one but TWO different deficit commissions that have found a way to cut those trillion dollar deficits and the Republicans won't sign on to either one nor will they offer a competitive alternative.

  40. Anonymous Avatar
    Anonymous

    Mr. Groveton:

    Thank you for your note on the Wealth Gap.

    While you have expressed concern for the Wealth Gap in the past, you owe it to yourself to read AFTERSHOCK. It is very short and well stated.

    There is a problem with Reich’s ‘solution’ because there is a finite limit to the resources needed for ‘growth.’

    I saw a note recently that Professor Risse is going to do a review of the book – similar to the ones on Reich’s “Supercapitalism” and Owen’s “Green Metropolis.”

    I hope he has time soon but in the meantime, both you and Mr. Bacon would benefit from reading it.

    Tossing rocks at empty pigeonholes does not become either of you.

    Observer

  41. "Despite the Great Recession, the per capita GDP of the average human being – that is to say, the value of goods and services that she consumes in a year – is now just over $11,000, up from about $8,500 (in today’s dollars) at the start of the century. If it continues to increase at this rate of just under 3% a year – as it has more than done for 60 years – then by the year 2050 the average citizen of Earth will be earning and spending over $30,000 a year in today’s money, roughly the same as the average American spends today. By 2100 she will be spending nearly $150,000 a year, or five times what an American now consumes (see chart above).

    This is almost unimaginable. Try to get your heads round the prospect of Africans and Afghans having the disposable income of today’s Americans within the lifetime of your own children, let alone grandchildren. If it seems fanciful, consider this. If my great grandfather had made a similar forecast in 1910, based on the then growth rate of the world economy, then even assuming he would not have predicted two world wars and a Great Depression, he would still have hugely underestimated the average income of today."

    From Carpe Diem

    ==================================

    There is the problem in a nutshell with doomsaying: It is almost always wrong.

  42. Larry G Avatar

    A lot depends on how many people will be on the earth in 2100.

    If there are twice as many as now – I'm not so sure the rosy predictions will pan out.

    If we don't curb our worldwide population growth – we're going to end up with mass starvation in some places and/or major disease outbreaks and die-offs.

  43. How do you propose reducing the number of people?

  44. "It's easy to be a pessimist in a world full of calamities. But for those worried about the continuing availability of natural resources, data from the ocean makes a good case for optimism, says economic geologist Lawrence Cathles.

    In a review paper published June 23 online in the journal Mineralium Deposita, Cathles, Cornell professor of earth and atmospheric sciences, writes that while land-based deposits may be a dwindling source of valuable minerals, deposits on the ocean floor could power humanity for centuries."

    =================================

    From Carpe Diem

  45. Anonymous Avatar
    Anonymous

    How does one become a Certified Moron?

    Site as a rational source of information the blabberings of a paid flack at the American Enterprise Institute – case in point ‘hydra’ citing Mark Perry.

    Get real!!

    The AEI acolytes are the original tiger riders.

    Ride the tiger of Mass OverConsumption as long as possible and hopejyou die of natural causes before you are lynched for crimes against humanity.

    Larry is right about the number of consumpters.

    Sure, the earth’s crust has remaining resources but what is the COST?

    The cost is too high for BP and its contractors to get out easy to pump liquids.

    Hydrofracking will provide cheap gas for a few more years at what total cost?

    What will the cost of underwater mining be in terms of marine ecosystems?

    It will make mountain top removal look like organic farming.

    MGM

  46. Chicago cleaning service Avatar
    Chicago cleaning service

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