What will make the stimulus successful?

[luxuryrules]

Empty words. None of the best minds in the country are in Washington. In fact, nothing but the worst minds are in Washington.

Let me correct that for you:

Empty words. In my opinion, none of the best minds in the country are in Washington. In fact, nothing but the worst minds are in Washington.

While there are plenty of folks in Washington without a clue what they are doing, I can also assure you there are plenty there who possess a much greater mind than you do. The issue is that they are not the ones who are making the decisions, lol.

Cal, when you say "Have you considered what might happen with free-market, capitalist solutions were applied instead of the big government, socialist approach?" I am interested in knowing what you have in mind. If, you don't mind us taking a slight tangent here.

Also, I note your comment about two years, and I think we should probably get into some specifics here. Two years is a fairly reasonable amount of time to get things turned around. To expect an economic recovery to where we were in, say, late 2007 (unemployment around 4.7%, inflation around 4%, Dow 13000-14000ish and *stable*) in less than two years is I think overly optimistic - the economy simply does not react that quickly to anything. After all, haven't we been pitched the argument that current economic conditions are a result of the previous administration? I seem to remember that coming from the Right a lot when blaming the Clinton administration for the 2001 recession. Then again, most of what I heard that from was college kids during the 2004 election season - an interesting time to be on a college campus.

However, if you think things should at least be turned around in less than two years, then I would agree. The trends (rising unemployment, limited fluctuations in the stock market, and potential deflation) should be reversed by then, if unemployment is high but falling and the market is still low but growing, etc, then we are on the right track. Fundamentally, things will still be tight for a couple years now, but as long as we have changed from "getting worse" to "getting better" then we should be alright. Is that what you're thinking of?

 

[foxpaws]

In January 1980 when Reagan took office unemployment was at 6.3%, and we were in Carter’s recession.

Unemployment finally bottomed out in December, 1982, 2 YEARS LATER, at 10.3%

It took Reaganomics until May, 1987 to return unemployment to 6.3 percent – the number when Reagan took office – 7-1/2 YEARS.

Would this be acceptable to you Cal? Are you going to let Obama get 3-1/2 years into his 2nd term before we see unemployment at today’s numbers, after they sink to double digits at the end of 2010 (if you go by Reagan's model)?

And, remember, Reagan added a very large number of government jobs to help offset the unemployment numbers, and he had the very large defense build-up for the cold war, along with huge tax cuts and still Reagonomics couldn't decrease unemployment in less than 7 years.

And, you might think I was factious about my 2010 and 2012 remarks regarding the party in power, but, I think the people will vote according to how they feel this issue has been handled, and how successful or unsuccessful Obama's solutions have been.

How much of this lies in perception? A lot - Reagan was voted back in even though his economic policies weren't overwhelming successful, especially during his first 4 years.

 

[Calabrio]

Would this be acceptable to you Cal? Are you going to let Obama get 3-1/2 years into his 2nd term before we see unemployment at today’s numbers, after they sink to double digits at the end of 2010 (if you go by Reagan's model)?

Are you saying that despite this massive federal spending and expansion of government we should expect to see 10% unemployment next Christmas? What about the stock market? What about consumer confidence? What about the value of the dollar? I'm sure you're aware of just how much confidence Wall Street has in Obama, or were you not aware with the fact the dow is flirting with 7000 right now?

You're now using Reagan as an example, but he used supply-side economics as his model, something that you would, and have, argued was wrong. So, why are you using him as the standard when you're confident that the Keynesian approach is not only better, but faster? Should we expected to see quicker and more positive results noting the speed at which this was passed and the massive increases in spending and power coming from D.C.?

But this thread isn't about me or Ronald Reagan.
Why don't YOU tell us YOUR definition of success in this case.

 

[foxpaws]

Benchmarks – that is why I am using the Reagan example – so people have an idea of what Obama is up against, and what realistic time frames should be.

Unemployment in January was at 7.6% almost 20% higher than when Reagan took office.

I believe if Obama’s plan keeps us under double digit unemployment (unlike Reagan) and if the unemployment numbers bottom by July 2010 (6 months earlier than Reagan) it should be considered a success.

I also think if GDP stops sliding within this year, it should be considered a success.

If the dow doesn’t go below 6,000 (my earlier prediction) I think he has done well. He took office when it was at 7900 and a 25% decrease would put it at 6000. The dow fell from a high in 1981 of 1,075 to a low in 1982 of 776 – a 25% drop.

But, most importantly I think if the banks don’t fail, then Obama will have succeeded. I don’t think people know how close we are to the big banks failing. If Citi or BOA were to fail, the FDIC would be wiped out. I think this could cause a run on the banks, similar to what happened in the 30s and we will head into a long depression.

It is why they keep harping on the situation of the fragile state of the large banks. We all know what happens when many banks fail – depression.

But, Cal, please answer my question – if Obama’s ecomonic numbers ran the same course as Reagan’s – would that be OK? Reagan took a very aggressive supply side economic stand against Carter’s recession, Obama is taking a very aggressive Keynesian approach against Bush’s recession. But, if Obama's results were the same - save the economy of the US, but at a price of almost tripling the deficit (so, if Obama triples the deficit it will be at 33 trillion), is that the benchmark we should be looking at?

And more importantly would you be able to say that perhaps supply side isn’t the success that it has been touted to be if Obama’s numbers best Reagan’s? Especially considering this recession is quite a bit worse than the one Reagan inherited, and Reagan didn't have the specter of the large banks failing as soon as he stepped into office.

 

[Calabrio]

Benchmarks – that is why I am using the Reagan example – so people have an idea of what Obama is up against, and what realistic time frames should be.

If you're arguing that the realistic benchmarks should be the Reagan recovery, then why aren't we just using the supply-side economist model that brought about the strong, prosperous Reagan recovery?

If you think supply-side economists doesn't work, then why would you use something you consider a failure as a reference?

You went on to elaborate though. So the trillion dollar stimulus will be a success provided:

*unemployment remains under 10% and the figure stops climbing by Summer 2010.
*If the GDP stops falling this year. So that the 2010 GDP is higher than the 2009.
*If the Dow doesn't fall below 6,000 this year.
*and if the banks don't fail

I assume you mean the banking system, and not any individual bank.
Did you support the stimulus bill that was passed, and the way it was passed without review or debate?

I'm really stunned by how modest everyone's expectations are considering we are spending over a TRILLION DOLLARS for this stimulus. Don't you think it could have been done a hell of a lot cheaper?

But, Cal, please answer my question – if Obama’s ecomonic numbers ran the same course as Reagan’s – would that be OK?

In this situation, you've chosen to conveniently view the economy only in terms of unemployment figures. You haven't noted the rise in GDP, the bull market that started in 1982, and the incredible period of economic growth and mild nature of the cyclical recessions that came after wards as well.

But if by summer 2010 we see a bull stock market and recovery that eventually led to 18 consecutive years of business expansion (1982-2000), yeah, I'll consider the Obamanomics a success.

However, I don't think it's possible for any hypothetical Obama recovery to run the same course as the Reagan one because of the manner in which they are being done. Reagan was successful because he freed up the engines of our economy, Obama is doing something completely contrary. The Reagan recovery was not driven by deficit spending. And no, it's absolutely unacceptable for Obama to run the deficit up to $33 trillion dollars.

Reagan took office with a deficit of about 710B, and in 1988 it was about 2.1T.
Rather than tripling the debt, why don't you say merely expanding it by $1.5T
But we're only talking about first term figures here. In 1984 the deficit was still $1.3T- an increase of only about 500B.
If we adjust 500B 1984 dollars into real dollars, we'll get about a trillion dollars.
So, if Obama can do all of this while only expanding the federal deficit by a trillion dollars, then you have a fair comparison.

 

[foxpaws]

If you're arguing that the realistic benchmarks should be the Reagan recovery, then why aren't we just using the supply-side economist model that brought about the strong, prosperous Reagan recovery?

If you think supply-side economists doesn't work, then why would you use something you consider a failure as a reference?

I am using Reagan as a benchmark because it is what the right always points to as a success. I also think that Reagan's marks will be easy to hit, that is why I am not using Clinton's marks, I don't think that Obama will be able to best Clinton.

I also am enough of a realist to know that we are in a lot worse shape then we were in 1980.

assume you mean the banking system, and not any individual bank.
Did you support the stimulus bill that was passed, and the way it was passed without review or debate?

Yes, my 'banks' meant the banking system... sorry about the confusion

I think there is a lot of questionable stuff in the stimulus package. The 1/3 that went to tax cuts seems like a good investment. The 1/3 that went to long term investment seems good. The middle 1/3 - for shorter term investment seems sort of a 1/2 good, 1/2 iffy ground for me. About 1/2 of that short term investment program is going for roads and various infrastructure (about 10-11 percent of the overall package) and another hunk of change (about 6%) for investments in healthcare. That last 1/6th is not what I would have liked to see in this package. So, a little over 130 billion dollars (yikes).

I am for 5/6th of the stimulus package - so, in today's world, yes. All bills are compromises...

I'm really stunned by how modest everyone's expectations are considering we are spending over a TRILLION DOLLARS for this stimulus. Don't you think it could have been done a hell of a lot cheaper?

I look at the actual 'spending' part which is about 1/2 trillion dollars - I don't look at the tax breaks as 'spending'. It is still more money than I can even imagine. Cheaper - I don't know, some have said it wasn't enough.

In this situation, you've chosen to conveniently view the economy only in terms of unemployment figures. You haven't noted the rise in GDP, the bull market that started in 1982, and the incredible period of economic growth and mild nature of the cyclical recessions that came after wards as well.
But if by summer 2010 we see a bull stock market and recovery that eventually led to 18 consecutive years of business expansion (1982-2000), yeah, I'll consider the Obamanomics a success.

I think we will see decent recovery by 2010, but that long of recovery - I don't think we will see that type of expansion ever again. It will be too difficult with the expansion of world powers such as China. Limited resources are probably going to reduce our chances achieving total world domination in the economic playground as we have in the past.

However, I don't think it's possible for any hypothetical Obama recovery to run the same course as the Reagan one because of the manner in which they are being done. Reagan was successful because he freed up the engines of our economy, Obama is doing something completely contrary. The Reagan recovery was not driven by deficit spending. And no, it's absolutely unacceptable for Obama to run the deficit up to $33 trillion dollars.

Reagan took office with a deficit of about 710B, and in 1988 it was about 2.1T.
Rather than tripling the debt, why don't you say merely expanding it by $1.5T
But we're only talking about first term figures here. In 1984 the deficit was still $1.3T- an increase of only about 500B.
If we adjust 500B 1984 dollars into real dollars, we'll get about a trillion dollars.
So, if Obama can do all of this while only expanding the federal deficit by a trillion dollars, then you have a fair comparison.

Why don't I say expand the debt - I am, Obama could expand the debt by 3 times...

And, there is no way the deficit can increase by just that trillion dollars - we spend almost 500 billion each year on interest alone for that 11 trillion dollar debt we now have. That little payment is the same as the deficit that Reagan took over, in just one line item.

So, let's say percentage wise - Obama can increase the debt to 1.5 times what it is now - same as Reagan his first term - to 16 trillion dollars. Heck just the interest payments on the debt left by Reagan/BushI/BushII will take over 2 trillion dollars in the next 4 years.

 

[shagdrum]

In January 1980 when Reagan took office unemployment was at 6.3%, and we were in Carter’s recession.

More misrepresentation.

Reagan wasn't sworn into office until January 20, 1981. You are attributing a whole year to Reagan that was still under Carter's watch.

Unemployment finally bottomed out in December, 1982, 2 YEARS LATER, at 10.3%

Reagan's tax cuts weren't even signed into law until August 13th, 1981 in the Economic Recovery Tax Act. The cuts weren't even in full effect until January 1, 1984. They were mostly in effect by January 1, 1983.

It took Reaganomics until May, 1987 to return unemployment to 6.3 percent – the number when Reagan took office – 7-1/2 YEARS.

Leave it to foxpaws to mischaracterize and misdirect.

The unemployment rate when Reagan took office in January of 1981 was at 7.5%. It was fluctuation between 7.2 and 7.9 from may of 1980 to October of 1981 (when Reagan's tax cuts were signed into law). It then jumped up to 8.3 and steadily rose to top out at 10.4 in Febuary of 1983.

Reagan's first set of tax cuts came into effect in January 1982. It was a small 5% accross the board tax cut. There wasn't really any positive effect on unemployment as the rate continued to climb and topped out at 10.8% in November and December of 1982.

However, most tax cuts take at least a full year to be fully realized. In January of 1983 (when an additional 10% across the board tax cut came into effect), unemployment started dropping; from 10.4% in January of 1983 to 8.3 by December of that year.

When the the 1984 tax cuts came into law (an additional 10% across the board cut), unemployment was at 8% and by the end of the year it was at 7.3%. In 1985, tax rates were indexed to inflation per the 1981 legislation.

Would this be acceptable to you Cal? Are you going to let Obama get 3-1/2 years into his 2nd term before we see unemployment at today’s numbers, after they sink to double digits at the end of 2010 (if you go by Reagan's model)?

Again, the Reagan model you go by is a distortion of the actual Reagan record. Unemployment when Reagan took office was at 7.5%, not 6.3%.

In fact, this is a fairly common distortion of Reagan's record from the left; to claim his record starts in 1980. Very few people actually check on that. Many liberal talking points are built on this distortion. Might wanna fact check those talking points before you repeat them. Otherwise you tend to stick your foot in your mouth.

And, remember, Reagan added a very large number of government jobs to help offset the unemployment numbers, and he had the very large defense build-up for the cold war,

More distortion. Reagan never added a large number of jobs to offset unemployment. It may have had that effect (arguable at best), but that was never his reasoning for doing it. You are attributing reasons behind the job creation that simply were not there. This is a lie that you keep perpetuating and refuse to give any evidence to support. Another fallacious argument. This time; proof by assertion.

along with huge tax cuts and still Reagonomics couldn't decrease unemployment in less than 7 years.

Actually, it took Reagan only 2 years and 9 months from when the legislation was signed to reduce unemployment to below where it was when he took office. That also included a rise from 7.5% unemployment to 10.8% unemployment (Nov./Dec. 1982). So Reagan's policies actually seemed to reduce unemployment by 3.5% in the course of 1 year and 11 months.

You think Obama will reverse and reduce unemployement in 2 years?

How much of this lies in perception? A lot - Reagan was voted back in even though his economic policies weren't overwhelming successful, especially during his first 4 years.

Reagan was elected back to office in 1984 in a landslide victory. He won 49 of the 50 states, 525 electoral votes and 58.8% of the vote. A "mandate", any way you slice it. His policies where sucessful enough, apparently.

Remember, Mondale campaigned on the idea of raising taxes. And the whole idea of the "Reagan Democrat" were people who supported him, in large part due to the economic boom that they credited to Reagan, according to pollster Stan Greenberg.

By November of 1984, Reagan's tax cuts dropped unemployment from a high of 10.8% (December of 1982) to 7.2%.

Reagan effectively returned real economic growth back to pre-1973 levels by 1983. From 1950 to 1973, real economic growth in the U.S. economy averaged 3.6% per year. From 1973 to 1982, it averaged only 1.6%. From 1983-1990, real economic growth averaged 3.5%. In fact, in 1984, economic growth was actually at 7.2%.

In January 1981, inflation was at 11.83%. In August of 1981 (when the tax cuts were signed into law), inflation was at 10.8%. Despite Keynsian economic predictions that Reagan's policies would lead to higher inflation, by November of 1984, inflation was at 4.05%. For the rest of Reagan's time in office, inflation never rose above 4.7%.

According to this article, " He [Reagan] won an estimated $35 billion in spending cuts in 1981, his first year in office."

Reagan campaigned on four major policy objectives during his campaign:

• Reduce the growth of government spending
• Reduce the marginal tax rates on income from both labor and capital.
• Reduce government regulation of the economy.
• Control the money supply to reduce inflation.

By any standard, looking at the true Reagan record, he was overwhelmingly successful going into 1984. He didn't get much in the way of spending cuts, but he had bigger fish to fry; namely the Soviet Union.

And remember, Reagan did all this without his party controling both houses of congress, let alone having them with strong majorities.

Unemployment in January was at 7.6% almost 20% higher than when Reagan took office.

Wrong again!

You are still running with a distortion of Reagan's record. How about you look at the actual record instead of liberal propaganda for your information. The liberal propaganda is notoriously lacking in credibility here.

When Reagan took office, unemployment was at 7.5% (not 6.3%, as you claim). When Obama took office, it was at 7.6% (according to your numbers). Not much difference there.

You also need to consider the fact that massive inflation is inevitable due to the insane monetary policy Obama is pushing. Will Obama be able to control inflation and reduce it like Reagan? That is highly doubtful. More likely, in 4 years, inflation will have skyrocketed. The only way to fix that is to elect a new president so he can appoint someone with a very restrained and tight monetary policy. We know Obama won't do that.

If you truely want benchmarks to make your comparison, unemployment alone will not do it. Inflation, economic growth, and other factors also play a major role in that equation and are needed for an accurate comparison.

So, let's say percentage wise - Obama can increase the debt to 1.5 times what it is now - same as Reagan his first term - to 16 trillion dollars. Heck just the interest payments on the debt left by Reagan/BushI/BushII will take over 2 trillion dollars in the next 4 years.

Again, Reagan didn't increase that debt, the legislature did. Reagan's defense spending only contributed some to that. Most was domestic spending by the democrats.

 

[fossten]

More misrepresentation.

Reagan wasn't sworn into office until January 20, 1981. You are attributing a whole year to Reagan that was still under Carter's watch.

LOL - *owned*

By her logic, the entire American economic crisis is Obama's fault.

 

[shagdrum]

LOL - *owned*

By her logic, the entire American economic crisis is Obama's fault.

It is annoying. As I pointed out, that is a very common claim in liberal propaganda; that Reagan's record started in 1980. Very few people are going to go back and check. She has obviously not examined the propaganda on which she is basing her claim. That is all too common on the left.

 

[foxpaws]

i am sorry Shag, I really did just get the number wrong - I know you won't believe me - but I really was trying. I usually get this right - but, I messed up.

It was a mistake - I was in a typing frenzy Friday afternoon...

So, yes, you are correct, numbers are similar - Reagan at 7.3 and Obama at 7.6, and it took Reagan only 4 years to get unemployment to where it started - the end of 1984, as you state shag.. not 7-1/2 years.

I feel silly - sorry again.

I think Obama will not see double digit unemployment, unlike Reagan. And Obama will not take 4 years to get unemployment back to 7.6 percent. And we won't be losing jobs for 17 months, like Reagan did in 81-82. I believe by the time 2012 rolls around unemployment will be in the 5-6 percent range.

More distortion. Reagan never added a large number of jobs to offset unemployment. It may have had that effect (arguable at best), but that was never his reasoning for doing it. You are attributing reasons behind the job creation that simply were not there. This is a lie that you keep perpetuating and refuse to give any evidence to support. Another fallacious argument. This time; proof by assertion.

Reagan may not have added government jobs to purposely offset unemployment, but it was an indirect result of his adding jobs. The reasons are irrelevant, the results in this case are. Without those jobs, his employment numbers would not have looked as good as they did.

You think Obama will reverse and reduce unemployement in 2 years?

I think Obama will not see double digit unemployment, unlike Reagan. I believe the quick action he took will keep us out of that problem. And I think the unemployment rate in 2 years will be below the current unemployment rate.

In January 1981, inflation was at 11.83%. In August of 1981 (when the tax cuts were signed into law), inflation was at 10.8%. Despite Keynsian economic predictions that Reagan's policies would lead to higher inflation, by November of 1984, inflation was at 4.05%. For the rest of Reagan's time in office, inflation never rose above 4.7%

You also need to consider the fact that massive inflation is inevitable due to the insane monetary policy Obama is pushing. Will Obama be able to control inflation and reduce it like Reagan? That is highly doubtful..

Well, it will be interesting to see what happens, but short term forecast is the first 9 months of this year we will be in a deflation mode, at about -2% in Sept. 2009. We are at 0% inflation in January 2009. It is looking bleak - deflation is really hard on the economy. And at this point any inflation will be an increase - from 0% Obama really has no where to go but up. If you start at over 11%, like Reagan did, it is easier to decrease inflation, than if you start at 0%.

According to this article, " He [Reagan] won an estimated $35 billion in spending cuts in 1981, his first year in office."

Shag - did you read the rest of the paragraph in the article you quoted?
He won an estimated $35 billion in spending cuts in 1981, his first year in office. After that, spending soared, so much so that his budget director David Stockman, who found himself on the losing end of spending arguments, wrote a White House memoir with the subtitle, "Why the Reagan Revolution Failed."

Again, Reagan didn't increase that debt, the legislature did. Reagan's defense spending only contributed some to that. Most was domestic spending by the democrats.

Shag - where in the heck did you get that chart? I have never, ever seen where they just pull out SS, Medicare and interest for mandatory spending - there are lots and lots more - like Veteran's benefits, Medicaid, food stamps, Goverment pensions. There are so many more entitlement spending programs than just those 2 and there is a huge amount of required spending by the government.

I don't see a credit on it anywhere.

Everything I have ever seen is Reagan spent more on defense then he did on 'discretionary' domestic spending. There is a lot more to mandatory spending than just those 3 items, that I am sure they have rolled them into the domestic spending line, which would be wrong.

 

[shagdrum]

i am sorry Shag, I really did just get the number wrong - I know you won't believe me - but I really was trying. I usually get this right - but, I messed up.

It was a mistake - I was in a typing frenzy Friday afternoon...

Fair enough...

So, yes, you are correct, numbers are similar - Reagan at 7.3 and Obama at 7.6, and it took Reagan only 4 years to get unemployment to where it started - the end of 1984, as you state shag.. not 7-1/2 years.

Actually, it was 7.5% when Reagan took office in January 1981 , not 7.3%. That is per the source you gave. So it took Reagan only 2 years and 9 months from when the legislation was signed (2 years and 4 months from when it was enacted) to reduce unemployment to below where it was when he took office.

In fact, Reagan reduced unemployment by 3.5% in the course of 1 year and 11 months (from a high of 10.8%).

I think Obama will not see double digit unemployment, unlike Reagan. And Obama will not take 4 years to get unemployment back to 7.6 percent. And we won't be losing jobs for 17 months, like Reagan did in 81-82. I believe by the time 2012 rolls around unemployment will be in the 5-6 percent range.

You have to consider the times as well. unemployment and inflation were feeding off each other (proving Keynes wrong; specifically with regards to the Phillips Curve).

We are virtually guaranteed very high inflation due to the monetary policies in place right now.

Reagan may not have added government jobs to purposely offset unemployment, but it was an indirect result of his adding jobs. The reasons are irrelevant, the results in this case are. Without those jobs, his employment numbers would not have looked as good as they did.

You connected the intention of purposely offseting unemployment to Reagan adding jobs in you original statement that I was responding to.

I think Obama will not see double digit unemployment, unlike Reagan. I believe the quick action he took will keep us out of that problem. And I think the unemployment rate in 2 years will be below the current unemployment rate.

Obama is putting in place policies that will lessen the incentive to produce and grow a business. Can't decrease unemployment without that.

Well, it will be interesting to see what happens, but short term forecast is the first 9 months of this year we will be in a deflation mode, at about -2% in Sept. 2009. We are at 0% inflation in January 2009. It is looking bleak - deflation is really hard on the economy. And at this point any inflation will be an increase - from 0% Obama really has no where to go but up. If you start at over 11%, like Reagan did, it is easier to decrease inflation, than if you start at 0%.

Not so sure about that projection. Every projection concerning this recession (especially those comming from the White House) has been wrong; too much on the wishful thinking end of the spectum. I don't put much faith in those projections.

However, every economist will tell you that you cannot have the loose monetary policy we currently have without seeing massive inflation down the road. Mark my words; inflation will be a problem that Obama will have to face. Reagan wrote the book on dealing with that. Obama would do well to learn from that.

Shag - did you read the rest of the paragraph in the article you quoted?
He won an estimated $35 billion in spending cuts in 1981, his first year in office. After that, spending soared, so much so that his budget director David Stockman, who found himself on the losing end of spending arguments, wrote a White House memoir with the subtitle, "Why the Reagan Revolution Failed."

Yeah, I know. I was pointing out that he did get some cuts in his first term.

Shag - where in the heck did you get that chart? I have never, ever seen where they just pull out SS, Medicare and interest for mandatory spending - there are lots and lots more - like Veteran's benefits, Medicaid, food stamps, Goverment pensions. There are so many more entitlement spending programs than just those 2 and there is a huge amount of required spending by the government.

I got the chart from here. It was compiled from info in the U.S. Office of Management and Budget's Budget of the United States Government, Fiscal Year 2001: Historical Tables. Specifically table 1.3, p. 23., and table 8.1, p. 117.

Take a look at the chart again. It does include social security and medicare, just in a different line. Domestic spending is separated from the those two things, but they are not taken out.

Including them in the domestic spending figure will only make the difference between domestic spending and defense spending all the more profound.

Everything I have ever seen is Reagan spent more on defense then he did on 'discretionary' domestic spending. There is a lot more to mandatory spending than just those 3 items, that I am sure they have rolled them into the domestic spending line, which would be wrong.

There is a lot of distortion on the left concerning Reagan's record. I pointed out one of the very typical distortion used that it appeared you were either using or repeating.

Most any claim on Reagan's record you need to examine closely.

 

[foxpaws]

Take a look at the chart again. It does include social security and medicare, just in a different line. Domestic spending is separated from the those two things, but they are not taken out.

Shag, that line that is on that chart only includes SS, Medicare and interest. Usually that line also includes all mandatory spending, such as the items I listed above, veteran benefits, government pension, food stamps, medicaid, things that have been 'legislated' in as far as spending. Those items are not 'discretionary' spending. They are all lumped together in the mandatory spending category, because the president has no control over those items, and actually congress doesn't either, unless they change laws. Like social security, veteran's benefits are regulated by law. Like Medicare, government pensions are a 'mandated' item.

That is why it looks really strange - If you look here, on page 125, at the white house budget reports, you can see what the spending was for Reagan's years. It separates defense and domestic in the 'discretionary' columns, and then it has the 'big' mandated amounts.

Most any claim on Reagan's record you need to examine closely.

Yep, on both sides...

 

[shagdrum]

Shag, that line that is on that chart only includes SS, Medicare and interest. Usually that line also includes all mandatory spending, such as the items I listed above, veteran benefits, government pension, food stamps, medicaid, things that have been 'legislated' in as far as spending. Those items are not 'discretionary' spending. They are all lumped together in the mandatory spending category, because the president has no control over those items, and actually congress doesn't either, unless they change laws. Like social security, veteran's benefits are regulated by law. Like Medicare, government pensions are a 'mandated' item.

That is why it looks really strange - If you look here, on page 125, at the white house budget reports, you can see what the spending was for Reagan's years. It separates defense and domestic in the 'discretionary' columns, and then it has the 'big' mandated amounts.

Domestic spending is not purely "discretionary" spending. It encompasses both discretionary and mandatory. The "domestic spending" line just shows the increases in domestic spending (with SS and Medicare separated out of the general domestic spending column).

Here is the line from the article that cites that chart:

Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts​

Here are a few other little tidbits from that article that you seemed to miss...

• Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent
• As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990
• Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since

It is clear that the growth of the deficit was due mostly to growth in the "mandatory" area of domestic spending; that wasn't due to inflation, but due to Congress being unable to rein themselves in. To try and separate "discretionary" out is deceptive and doing exactly what you are trying to say this chart is doing; distorting the picture. Again, you should check those liberal talking points before you run with them as they are full of distortion and deception.

Basically, the chart is not making any distinction between "discretionary" and "mandatory" spending, but you seem to be assuming that distinction. The only distinction is between domestic (subdivided into into two categories) and defense spending. Those numbers include all "discretionary" and "mandatory" spending. You are trying to force a distinction on the chart that is not there and would only serve to decieve and distort the real picture.

A key point that ties back into this is this issue is the deal between Reagan and Democratic leadership in 1982. They had a verbal agreement that for every dollar Reagan approved in tax increases, Congress would approve three dollars in spending cuts. Reagan held up his end of the bargain and, as is typical, the democrats turned out to be decieving Reagan. They never cut spending.

Here is a chart of the differences in Reagan's proposed budget and the budget passed by Congress.

On average, Congress spent 2.8% more than Reagan asked for. In 1982 the spending was 7.3 percent higher then Reagan asked for.

You also need to take a look at the cumulative effect (which the chart shows as "compound % difference"). That ended up being a 24.8% difference! That is very relevant because each budget increase carries with it the excess spending from the previous year. That causes programs with mandatory spending increases to balloon after a while due to the principle of Geometric progression. It is the biggest reason why our budget has gotten out of control (until Obama came on the scene).

Reagan wanted Congress to exercise fiscal restraint, and was even willing to raise taxes to do it. The Dems in power never had any interest in doing that and kept increasing spending.

Yep, on both sides...

Not really. That distortion has only been shown to come from the left; both in distorting Reagan's record and mischaracterizing counterarguments.

 

[foxpaws]

Domestic spending is not purely "discretionary" spending. It encompasses both discretionary and mandatory. The "domestic spending" line just shows the increases in domestic spending (with SS and Medicare separated out of the general domestic spending column).

But, you never just break out those two items, you include all mandatory spending along with SS and Medicare. That is why it is sooo weird Shag.

Here is the line from the article that cites that chart:

Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts​

See shag - they know the difference between mandatory and discretionary accounts, they even separated them out here - why didn't they do the same in their chart? It is very irregular.

Here are a few other little tidbits from that article that you seemed to miss...

• Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent
• As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990
• Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since

It is clear that the growth of the deficit was due mostly to growth in the "mandatory" area of domestic spending; that wasn't due to inflation, but due to Congress being unable to rein themselves in. To try and separate "discretionary" out is deceptive and doing exactly what you are trying to say this chart is doing; distorting the picture. Again, you should check those liberal talking points before you run with them as they are full of distortion and deception.

Shag - it is Mandatory spending that creates our biggest share of government spending, but it is 'mandatory'. It is like paying the rent - and unless you move, you will continue to pay your rent, and any increases with that rent. The figure is 'fixed'. So, unless congress votes changes in medicare (or in the rent scenario, moves), this figure isn't going to change

And it is easy to separate discretionary out of those figures - the White House does it all the time - did you even look at the source I pointed you to? They very pointedly list discretionary domestic spending and mandatory domestic spending.

Basically, the chart is not making any distinction between "discretionary" and "mandatory" spending, but you seem to be assuming that distinction. The only distinction is between domestic (subdivided into into two categories) and defense spending. Those numbers include all "discretionary" and "mandatory" spending. You are trying to force a distinction on the chart that is not there and would only serve to decieve and distort the real picture.

But it is making distinctions, it is taking out a couple of the mandatory spending items and creating a new line with them, but it doesn't place all of the mandatory spending items into that list - it leaves a bunch of it in the 'domestic' spending category - you need to either place all mandatory spending (inc. ss and medicare) in their own line, or place it all in the domestic spending line. To just take a couple of items isn't standard form.

On average, Congress spent 2.8% more than Reagan asked for. In 1982 the spending was 7.3 percent higher then Reagan asked for.

But, that increase in spending was almost entirely due to Reagan's military increases - look again at the white house link shag, between 1981 and 1988 defense spending increased by 84% (from 158 billion to 290 billion, and note, unlike your bulleted points I only use Reagan's years - why they pull in other years I haven't any idea, other then maybe to skew the figure down to 50%, which it isn't) however discretionary domestic spending only increased by 15% (from 150 billion to 173.5 billion). Even mandatory spending only increased 62% (once again, I use only Reagan years, your bulleted points Shag include all of BushI, and one year each of Carter and Clinton - why, maybe once again to skew the numbers so they look worse then they really are).

It was Reagan's military spending increases that you are looking at in that chart, which also creates the compound effect - compounding the 132 billion increase in defense spending is a lot more than compounding the 23.5 billion increase in discretionary domestic spending.

Reagan wanted Congress to exercise fiscal restraint, and was even willing to raise taxes to do it. The Dems in power never had any interest in doing that and kept increasing spending.

Congress didn't do too badly, if Reagan had kept defense spending to the same increases that congress did on discretionary domestic spending he would have saved the country 650 billion dollars (and then you have to compound that of course...)

 

[fossten]

Fox, none of this matters. It's one thing to spend federal money when times are good and there is a big revenue surplus.

But government should tighten its belt when times are tough. Instead, this government is out of control, spending like a drunken sailor and borrowing from China to do so, right in the middle of an economic collapse.

Can you honestly say that you believe the government will eventually rein in its spending, or do you agree that it will always increase no matter what? And if the latter, what will be the eventual result?

 

[sid grubbs]

What do you expect to happen now that the bill has been signed?

How long will it take before we see the recovery, and how will we know?

Do you expect to see unemployment at or above 7% in six months or a year from now?

What, if anything, would indicate that it was a failure?

Would anyone support another trillion dollar stimulus if nothing happens in six months?

The Liberals never met a downturn they didn't LOVE. Gives them the PERFECT STORM to take over more. "WE CAN SAVE YOU" just sign here.

 

[fossten]

The Liberals never met a downturn they didn't LOVE. Gives them the PERFECT STORM to take over more. "WE CAN SAVE YOU" just sign here.

Hell, they're not even asking us to sign anymore.

 

[sid grubbs]

Fox, none of this matters. It's one thing to spend federal money when times are good and there is a big revenue surplus.

But government should tighten its belt when times are tough. Instead, this government is out of control, spending like a drunken sailor and borrowing from China to do so, right in the middle of an economic collapse.

Can you honestly say that you believe the government will eventually rein in its spending, or do you agree that it will always increase no matter what? And if the latter, what will be the eventual result?

I want them to spend the money to NAIL the SOB's that thought the way to help poor people with little credit was to give them a HOME and more. Here in Fla. a developer took 39 acres behind us and put 110 homes on it (4 YEARS AGO) and I saw families living in those homes THAT I EVEN KNEW DIDN'T HAVE A STEADY JOB AND GOOD CREDIT. I rem. telling my wife "HOW THE HELL DID THEY GET A NEW HOUSE".

 

[sid grubbs]

Domestic spending is not purely "discretionary" spending. It encompasses both discretionary and mandatory. The "domestic spending" line just shows the increases in domestic spending (with SS and Medicare separated out of the general domestic spending column).

Here is the line from the article that cites that chart:

Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts​

Here are a few other little tidbits from that article that you seemed to miss...

• Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent
• As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990
• Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since

It is clear that the growth of the deficit was due mostly to growth in the "mandatory" area of domestic spending; that wasn't due to inflation, but due to Congress being unable to rein themselves in. To try and separate "discretionary" out is deceptive and doing exactly what you are trying to say this chart is doing; distorting the picture. Again, you should check those liberal talking points before you run with them as they are full of distortion and deception.

Basically, the chart is not making any distinction between "discretionary" and "mandatory" spending, but you seem to be assuming that distinction. The only distinction is between domestic (subdivided into into two categories) and defense spending. Those numbers include all "discretionary" and "mandatory" spending. You are trying to force a distinction on the chart that is not there and would only serve to decieve and distort the real picture.

A key point that ties back into this is this issue is the deal between Reagan and Democratic leadership in 1982. They had a verbal agreement that for every dollar Reagan approved in tax increases, Congress would approve three dollars in spending cuts. Reagan held up his end of the bargain and, as is typical, the democrats turned out to be decieving Reagan. They never cut spending.

Here is a chart of the differences in Reagan's proposed budget and the budget passed by Congress.

On average, Congress spent 2.8% more than Reagan asked for. In 1982 the spending was 7.3 percent higher then Reagan asked for.

You also need to take a look at the cumulative effect (which the chart shows as "compound % difference"). That ended up being a 24.8% difference! That is very relevant because each budget increase carries with it the excess spending from the previous year. That causes programs with mandatory spending increases to balloon after a while due to the principle of Geometric progression. It is the biggest reason why our budget has gotten out of control (until Obama came on the scene).

Reagan wanted Congress to exercise fiscal restraint, and was even willing to raise taxes to do it. The Dems in power never had any interest in doing that and kept increasing spending.



Not really. That distortion has only been shown to come from the left; both in distorting Reagan's record and mischaracterizing counterarguments.

WELCOME BACK CARTER,,,"FUNNY" but TRUE. WAY TO DO IT "create as many dependents as possible.

 

[shagdrum]

But, you never just break out those two items, you include all mandatory spending along with SS and Medicare. That is why it is sooo weird Shag.

Again, all mandatory spending is included!

The chart is aimed at looking at the entire budget. You don't need to make the distinction between discretionary and mandatory. It is irrelevant to issue being looked at.

See shag - they know the difference between mandatory and discretionary accounts, they even separated them out here - why didn't they do the same in their chart? It is very irregular.

So because it is irregular it should be disregarded? You need to show that the distinction is somehow relevant to the point being made or let it go.

Of course the budget is going to broken down into discretionary and mandatory accounts. It is going to break down the numbers in every way imaginable; it is easier to use in different unforseen analyses later on. However, the various breakdowns are not all relevant to all analyses. You only go with the breakdowns that are relevant to what you are analyzing.

When looking at the increase in the debt during Reagan's term to see if it was his defense spending or the domestic spending of Congress, the distinction of discretionary and mandatory spending is irrelevant. To make that distinction only clouds the issue.

And you are missing the point in the quote that you are referencing; domestic spending is made up of both discretionary and mandatory accounts.

Shag - it is Mandatory spending that creates our biggest share of government spending, but it is 'mandatory'. It is like paying the rent - and unless you move, you will continue to pay your rent, and any increases with that rent. The figure is 'fixed'. So, unless congress votes changes in medicare (or in the rent scenario, moves), this figure isn't going to change

Mandatory doesn't mean that the increase in spending for those entitlements is already set. Congress sets the amount of increase every year in the budget. You are missing that point. If they continually increase it every year, even by a little bit, it ballons the spending.

Ironically, Congress does have discretion in determining the amount of the increase in mandatory spending. They can even choose to not increase it. The President proposes an increase and Congress either runs with it or choose their own increase.

If the mandatory account in question is set at a 100 million dollar baseline for the past year, Congress has three options; leave it at 100 million for the next year, increase it by the rate the president recommends, or increase it a different amount from what the president recommends. Let's say they choose to increase it by 10%. So for the next year it is now 110 million.

Now the budget for the following year comes around. Again, Congress has three options; leave it the same, increase per the President's recommendation, or increase it as they want. However, instead of working with the 100 million baseline, you are now working with the 110 million baseline. So if you choose to increase it by another 10%, you now add 11 million instead of 10 million for a total of 121 million. If you keep up that rate, the next year you increase to 133.1 million, the next year you go to 146.41 million, next year 161.051, and so on. After 8 years you cross over the 200 million mark (214.358881 specifically).

So...in 8 years at a 10% increase per year you increase the amount budgeted by over 114%.

So that power to set the amount of the increase is very important.

you need to either place all mandatory spending (inc. ss and medicare) in their own line, or place it all in the domestic spending line.

why? You need to give a reason for that.

SS and medicare are not "means tested entitlements". Most all the other stuff in question are means tested entitlements.

It was Reagan's military spending increases that you are looking at in that chart, which also creates the compound effect - compounding the 132 billion increase in defense spending is a lot more than compounding the 23.5 billion increase in discretionary domestic spending.

That chart includes the compound effect.

You are forgeting that mandatory spending is a much greater total starting out then the defense budget. by your standards, mandatory spending increased by $163.2 billion (1981-1988) while defense spending only increased by $132.9 billion. 163 looks like a bigger number then 132 to me...

Also, Reagan's first proposed budget was for FY1982 and his last one was for FY1989. So the correct years to use in evaluating Reagan's record is 1982-1989. Mandatory spending increased by $169.3 billion while defense spending only increased by $118.1 billion.

Congress didn't do too badly, if Reagan had kept defense spending to the same increases that congress did on discretionary domestic spending he would have saved the country 650 billion dollars (and then you have to compound that of course...)

First, we are not only focusing on discretionary spending. You haven't (and can't) justified doing that.

Second, you don't figure out the savings over a time period and then compound them over that same time period. The savings you have figured out already include the compound effect.

 

[foxpaws]

Again, all mandatory spending is included!

It is just that most of the mandatory spending is included in the wrong line on the graph.

So, on mandatory spending levels – Much of it increases according to set levels… SS increases every year, a mandated increase, veteran’s benefits increase every year – mandated by law. That is why it all is usually broken out into it’s own category.

The chart is aimed at looking at the entire budget. You don't need to make the distinction between discretionary and mandatory. It is irrelevant to issue being looked at…
You only go with the breakdowns that are relevant to what you are analyzing.

When looking at the increase in the debt during Reagan's term to see if it was his defense spending or the domestic spending of Congress, the distinction of discretionary and mandatory spending is irrelevant. To make that distinction only clouds the issue.

Yes, you do shag. If you don’t have any leverage over a large part of the budget . You are claiming that the congress increased spending by this huge amount, you need to break out what they have control over and what they don’t have direct control over unless they go back and change the laws that increase SS, etc.

And you are missing the point in the quote that you are referencing; domestic spending is made up of both discretionary and mandatory accounts.

Ironically, Congress does have discretion in determining the amount of the increase in mandatory spending. They can even choose to not increase it. The President proposes an increase and Congress either runs with it or choose their own increase.

Many of those programs are cued to cost of living, cost of living is indexed to inflation, inflation was huge those first couple of years in Reagan’s administration, so those expenditures grew a lot, even without congress touching it.

Oh, I know all about ROR Shag – you don’t have to give me a primer – heck, I even know about diminishing returns along with annual geometric average returns.

You are forgeting that mandatory spending is a much greater total starting out then the defense budget. by your standards, mandatory spending increased by $163.2 billion (1981-1988) while defense spending only increased by $132.9 billion. 163 looks like a bigger number then 132 to me...

And It is, but much of that spending in mandatory spending congress has no control over – that is why it is ‘mandatory'..

Also, Reagan's first proposed budget was for FY1982 and his last one was for FY1989. So the correct years to use in evaluating Reagan's record is 1982-1989. Mandatory spending increased by $169.3 billion while defense spending only increased by $118.1 billion.

Nope, just like now, the 2009 budget is being re-done to reflect Obama and his agenda, It is what happens – the outgoing president last year, when he handed in his budget pretty much knew it was a moot point, that the incoming administration would be altering it within the first 60 days of taking office.

Reagan dramatically altered spending, especially defense in 1981, he went back in and got what he wanted, and changed Carter’s budget. And the same with Bush I – although I would imagine he probably didn’t alter Reagan’s budget by much, and may have had some input in it in 1988 before Reagan left office.

 

[shagdrum]

Fox, you are right and you are wrong here. Yes, some of the mandatory spending increases are due to cost of living increases or similar mechanisms. I found the COLA for the various years here. I went back and calculated the increases per year for SS and it lines up with the cost of living increase. SS was tied to the COLA in 1972.

However, you are wrong in saying that Congress doesn't, "have any leverage over a large part of the budget". Only certian programs have permenant appropriations in them (COLA, tied to CPI/inflation, etc.). All others require annual or periodic appropriations bill and are reconsidered every year or few years. So Congress has a lot of leverage in determining those spending increases.

Those programs with permenant appropriations? Social Security and Medicare. You just answered your own question. The reason to separate out SS and Medicare is because the spending there (as well as net interest, effectively) is not annually (or periodically) appropriated by Congress. But all other "mandatory" spending is annually or periodically appropriated.

So the logical place to draw the line to examine where the spending increases came from in the 1980's (due to legislation passed in the given years) is between spending that already had fixed increases (SS and Medicare) and spending that was set annually by Congress (all other spending; discretionary and mandatory). Basically, you are assuming permenant appropriations for all mandatory spending when really, there are only two programs with permanant appropriations. All other mandatory spending programs are either annually or periodically appropriated. Here is a Harvard Law School breifing paper that spells the different ways funds are appropriated for mandatory spending accounts.

Congress has many tools in setting the spending level. They can set an actual monetary figure or percentage increase or they can change the formula in determining payouts, etc. For all mandatory spending baseline projections, the CBO does assume that existing policies remain unchanged. But that is only in the forming of the baseline from which the budget is created. Outside of SS and Medicare, Congress can do pretty much whatever they want in setting the budget. They can accept the baseline projection as is, or (as they usually do) change it however they see fit. Typically it is to increase the amount of spending on top of the baseline (which already assumes the same increase as last year). That is why a spending "cut" in Washington is usually just a reduction in the amount or rate of increase from the baseline budget.

Back to Reagan.

Here is the proposed budget from Reagan for the various years and the actual budget for the various years. 1982 was the first budget proposal by the Reagan administration and 1989 was the last, so those years are used. info comes from the Budget Message of the President, FY's 82-89 and The Budget of the United States, FY 1993, part 5, table 1.3, pages 5-18. All numbers are in billions:

• 1982: 695.3 (proposed), 745.8 (actual); a difference of 7.3%
• 1983: 773.3 (proposed), 808.4 (actual); a difference of 4.5% and a cumulative difference of 12.1%
• 1984: 862.5 (proposed), 851.8 (actual); a difference of -1.2% and a cumulative difference of 10.8%
• 1985: 940.3 (proposed), 946.4 (actual); a difference of .7% and a cumulative difference of 11.6%
• 1986: 973.7 (proposed), 990.3 (actual); a difference of 1.7% and a cumulative difference of 13.5%
• 1987: 994 (proposed), 1003.9 (actual); a difference of 1% and a cumulative difference of 14.6%
• 1988: 1024.3 (proposed), 1064.1 (actual); a difference of 3.9% and a cumulative difference of 19.1%
• 1989: 1094.2 (proposed), 1144.2 (actual); a difference of 4.6% and a cumulative difference of 24.5%

What is interesting is that, if the budget in 1989 had been 24.5% less, the deficit would have actually been around a $130 billion surplus.

It sure doesn't look like the deficit came from Reagan's defense buildup, does it.

 

[THEMOJOMAN]

To make it completely clear, I opposed the so-called "stimulus" from it's inception. I think it will do damage to the country, and in the best case scenarios, we're passing a debt burden to future generations that is unethical and inexcusable.

But it's abundantly clear that there are some here who supported it. While I'm inclined to ask why, I'm really interested in knowing how will you measure its success?

This bill was passed in very quickly, with virtually no opportunity for debate. It was sold to the public with a sense of dire urgency. Speed was of the essence.

So, what do you expect to happen now?
How long will it take before we see this trillion dollar recovery?
Do you expect to see unemployment at or above 7% in six months or a year from now?

What, if anything, would indicate that it was a failure?

Also, would anyone support another trillion dollar stimulus if nothing happens in six months?

(I'm going to use my mod powers to try to keep things on topic in this thread as to not discourage others from participating. Don't take offense if I clean up the thread.)

When I was young and newly married,,I ask my rich uncle who made a fortune in stripmining coal during and after WWII,,,to loan me some money,,advice he gave me I carry to this day,,HE SAID I WILL LOAN YOU DOUBLE WHAT YOU CAN SAVE UP YOURSELF. He later told me YOU CAN'T BRROW YOUR WAY OUT OF DEBT.

 

[THEMOJOMAN]

Domestic spending is not purely "discretionary" spending. It encompasses both discretionary and mandatory. The "domestic spending" line just shows the increases in domestic spending (with SS and Medicare separated out of the general domestic spending column).

Here is the line from the article that cites that chart:

Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts​

Here are a few other little tidbits from that article that you seemed to miss...

• Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent
• As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990
• Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since

It is clear that the growth of the deficit was due mostly to growth in the "mandatory" area of domestic spending; that wasn't due to inflation, but due to Congress being unable to rein themselves in. To try and separate "discretionary" out is deceptive and doing exactly what you are trying to say this chart is doing; distorting the picture. Again, you should check those liberal talking points before you run with them as they are full of distortion and deception.

Basically, the chart is not making any distinction between "discretionary" and "mandatory" spending, but you seem to be assuming that distinction. The only distinction is between domestic (subdivided into into two categories) and defense spending. Those numbers include all "discretionary" and "mandatory" spending. You are trying to force a distinction on the chart that is not there and would only serve to decieve and distort the real picture.

A key point that ties back into this is this issue is the deal between Reagan and Democratic leadership in 1982. They had a verbal agreement that for every dollar Reagan approved in tax increases, Congress would approve three dollars in spending cuts. Reagan held up his end of the bargain and, as is typical, the democrats turned out to be decieving Reagan. They never cut spending.

Here is a chart of the differences in Reagan's proposed budget and the budget passed by Congress.

On average, Congress spent 2.8% more than Reagan asked for. In 1982 the spending was 7.3 percent higher then Reagan asked for.

You also need to take a look at the cumulative effect (which the chart shows as "compound % difference"). That ended up being a 24.8% difference! That is very relevant because each budget increase carries with it the excess spending from the previous year. That causes programs with mandatory spending increases to balloon after a while due to the principle of Geometric progression. It is the biggest reason why our budget has gotten out of control (until Obama came on the scene).

Reagan wanted Congress to exercise fiscal restraint, and was even willing to raise taxes to do it. The Dems in power never had any interest in doing that and kept increasing spending.



Not really. That distortion has only been shown to come from the left; both in distorting Reagan's record and mischaracterizing counterarguments.

I love the WELCOME BACK CARTER picture. It's all about control.

 

[alexfranke]

HE SAID I WILL LOAN YOU DOUBLE WHAT YOU CAN SAVE UP YOURSELF.

IMHO, that should be how mortgage loans work, too.