The Deficit could be the main issue in 2012

[Lief 🗽]

The way to deal with deficits is by raising taxes and massively cutting military spending. Will the republicans ever do that? We would also need to reconcile the rising cost of healthcare, another thing republicans just aren't willing to do. Seriously what else will you cut? Anything you try to cut that hurts our economy won't be acceptable to our creditors.

As for the current stimulus spending....I hope republicans understand what will happen if we do stop it and the bailouts. And it's their trusted market fairy that will sh**t itself if these actions are taken currently. If Obama goes out there tomorrow and announces he is stopping the stimulus the dow will drop 500 points easily.

Ever since this country went off the gold standard, we've been going through these boom-and-bust cycles

Please go read a book about United States history (not written by Ron Paul).

[pbrower2a]

The way to deal with deficits is by raising taxes and massively cutting military spending. Will the republicans ever do that? We would also need to reconcile the rising cost of healthcare, another thing republicans just aren't willing to do. Seriously what else will you cut? Anything you try to cut that hurts our economy won't be acceptable to our creditors.

As for the current stimulus spending....I hope republicans understand what will happen if we do stop it and the bailouts. And it's their trusted market fairy that will sh**t itself if these actions are taken currently. If Obama goes out there tomorrow and announces he is stopping the stimulus the dow will drop 500 points easily.

The stimulus and the bailouts are reactionary government interventions to attempt to correct the faults of....government intervention!!  Our entire economic crisis is the result of a government-controlled monetary system.  Ever since this country went off the gold standard, we've been going through these boom-and-bust cycles and neither Republicans let alone Democrats have done anything to address this flawed currency system.  The way to deal with a deficit is to put a cap on spending (military and domestic) and learn to live within our means.  When are Obama and his Democrats going to realize that raising taxes, creating inflation (the hidden tax) and spending like mad is only going to drive us deeper into debt (not to mention backed up behind ever bigger, authoritarian government)?  We're in a hole and the heavy spending is only digging us down deeper and the higher taxes/inflation is the dirt being poured on us.

In the last seventy years the boom-and-bust cycles have been quite tame in contrast to those that happened while the US was on the gold standard -- except for the current one. The current one has nothing to do with the gold standard, and more to do with intensified inequality, economic corruption on a large scale, accounting fraud, reckless private lending, and the inevitable result of reality biting back.

At a few points the current Bad Bear Market paralleled the one of 1929-1933:



At points well into the downturn the blue line (the current downturn) went below the gray line (1929-1933)! We were on the way to a full-blown depression, but it now looks like a more ordinary recession.

The Dow just went back above 10K (10-14-2009), through which the stock market was going into free fall in September 2008. We have a recovery, slow and weak as it is, without the government going back to the gold standard.   

[Sbane]

The way to deal with deficits is by raising taxes and massively cutting military spending. Will the republicans ever do that? We would also need to reconcile the rising cost of healthcare, another thing republicans just aren't willing to do. Seriously what else will you cut? Anything you try to cut that hurts our economy won't be acceptable to our creditors.

As for the current stimulus spending....I hope republicans understand what will happen if we do stop it and the bailouts. And it's their trusted market fairy that will sh**t itself if these actions are taken currently. If Obama goes out there tomorrow and announces he is stopping the stimulus the dow will drop 500 points easily.

The stimulus and the bailouts are reactionary government interventions to attempt to correct the faults of....government intervention!!  Our entire economic crisis is the result of a government-controlled monetary system.  Ever since this country went off the gold standard, we've been going through these boom-and-bust cycles and neither Republicans let alone Democrats have done anything to address this flawed currency system.  The way to deal with a deficit is to put a cap on spending (military and domestic) and learn to live within our means.  When are Obama and his Democrats going to realize that raising taxes, creating inflation (the hidden tax) and spending like mad is only going to drive us deeper into debt (not to mention backed up behind ever bigger, authoritarian government)?  We're in a hole and the heavy spending is only digging us down deeper and the higher taxes/inflation is the dirt being poured on us.

I am not a fan of the current monetary system but it is vastly superior to the gold standard. We actually haven't faced that many boom and bust cycles since we switched to the gold standard (the 1800's were just one big boom and bust cycle). Of course if we don't have prudent monetary policies we do run the risk of creating bubbles and this is exactly what Greenspan did. This in conjunction with lower government oversight and regulation of the financial industry led to where we are now. The deficit was also created by reckless tax cuts followed by reckless spending. Whether you like it or not taxes have to go up or spending has to be cut drastically. We seem to agree with cutting military spending, but where else would you cut? Get rid of the already scant social safety net?

[rebeltarian]

I actually do not have a solid opinion one way or the other on the gold standard vs. fiat currency, but either way, something needs to be done about the rabid printing of money and manipulation of interest rates every time the bubble bursts.  When we had the gold standard, government couldn't micro-manage monetary issues to their favor, for instance, during times of war.

Indeed, Bush screwed up badly by cutting the corporate tax while simultaneously waging 2 wars and governing like a rockefeller republican on domestic issues.  But whether it's domestic programs or foreign wars, it's still the same government with the same problem.  In addition to scaling back the military and ending the wars, I would have the welfare state gutted--spending on education, social security, bureaucracies, economic intervention packages, corporate bailouts, etc.  After scaling down the "welfare-warfare state", we could go to a low, flat tax, and lower taxes have great value, not just for business, but for customers in, for example, the housing market.

[CatoMinor]

Not if taxes are not increased.  The government has the ability to spend more than it takes in and is often the only driver of growth in bad economic times. 

Anyone can spend more than they make with credit or borrowing but it always catches up.

[Marokai Backbeat]

Not if taxes are not increased.  The government has the ability to spend more than it takes in and is often the only driver of growth in bad economic times. 

Anyone can spend more than they make with credit or borrowing but it always catches up.

RPP voter upcoming. Just wanted to call it here first.

[Marokai Backbeat]

I actually do not have a solid opinion one way or the other on the gold standard vs. fiat currency, but either way, something needs to be done about the rabid printing of money and manipulation of interest rates every time the bubble bursts.  When we had the gold standard, government couldn't micro-manage monetary issues to their favor, for instance, during times of war.

We also had horrific deflation and incredibly frequent recessions. Good times!

[12th Doctor]

No, it won't.  Obama said he would stop it, and he will use the powers of the magical Nobel to bring it under control.

[pbrower2a]

No, it won't.  Obama said he would stop it, and he will use the powers of the magical Nobel to bring it under control.

What the heck? FDR campaigned against Hoover's reckless deficits -- and soon found Hoover's deficit spending wholly inadequate.

[Badger]

Based on the GOP's record with "handling" deficits since 1981, and as whoever the 2012 nominee is will run on essentially the same economic and budgetary policies the GOP has followed since then, I'd hazard that whatever the state of the deficit then the Republicans will hold little credibility on the issue.

[The Duke]

Can anyone show me a presidential election where the deficit was or was at least perceived to be the main issue?

1992

[The Duke]

Unfortunatly, for the Reps, putting up a conservative former southern governor is probably enough to guarantee a loss.

Well, since Huck isn't a conservative, that shouldn't be a problem!

[The Duke]

I think its telling that Democrats make no effort whatsoever to defend Obama's economic policies, they just attack the Republicans as not being credible.

[The Age Wave]

I think the most prevalent issues in the 2012 campaign will be social issues. The public option is seeming to have found the votes necessary to pass and from the looks of it, an economic recovery will be about complete by this time next year.

What I'm saying, is that if Obama's policies are indeed successful, he may find himself in a bit of a bind. With the economy no longer the focus of the race, social issues and wedge issues like abortion will garner more attention and will actually end up hurting Obama. I can see myself voting for a Republican if social issues are the focus. Without the economic reforms to campaign on as he did in 2008, Obama will look quite out of touch with mainstream America- or at the very least, swing state America. States such as Ohio, Iowa, Pennsylvania, Michigan, Florida, and New Mexico are quite culturally conservative. This is a hole Obama may not be able to climb out of, especially against a moderate on economics like Huckabee. This is the same reason I believe Huckabee performs better against Obama in the polls than other GOP potential candidates, he has a moderate record on economics that is much more fitted for mainstream America and swing voters alike.

[pbrower2a]

I think its telling that Democrats make no effort whatsoever to defend Obama's economic policies, they just attack the Republicans as not being credible.

Results, and not spin, will show the validity or inappropriateness of Obama's economic policies. Revived and even-handed prosperity will itself either solve deficits or lessen their effect. Obama knows the old trick of successful salesmen: when one has sold one's wares, quit talking.

The GOP remains committed to trickle-down economics that require great sacrifices from the non-rich on behalf of the rich and powerful with vague promises of economic gain for all because the benefits can't be stopped from finding their way "down".  We now find that those "trickle-down economics" have been more effective at squeezing the multitudes than at creating wealth; such wealth as they seemed to create proved illusory as they promoted a credit-driven boom in imports and a bubble in asset valuations.

Nations do not get wealthy through imports, and bubbles (like stock valuations in the 1920s and the real estate bubble of recent years) implode with bad consequences.     

[paul718]

I think the most prevalent issues in the 2012 campaign will be social issues. The public option is seeming to have found the votes necessary to pass and from the looks of it, an economic recovery will be about complete by this time next year.

What I'm saying, is that if Obama's policies are indeed successful, he may find himself in a bit of a bind. With the economy no longer the focus of the race, social issues and wedge issues like abortion will garner more attention and will actually end up hurting Obama. I can see myself voting for a Republican if social issues are the focus. Without the economic reforms to campaign on as he did in 2008, Obama will look quite out of touch with mainstream America- or at the very least, swing state America. States such as Ohio, Iowa, Pennsylvania, Michigan, Florida, and New Mexico are quite culturally conservative. This is a hole Obama may not be able to climb out of, especially against a moderate on economics like Huckabee. This is the same reason I believe Huckabee performs better against Obama in the polls than other GOP potential candidates, he has a moderate record on economics that is much more fitted for mainstream America and swing voters alike.

Afghanistan would be the focus of the race before social issues.

[pbrower2a]

I can think of only four things that can cause the defeat of Obama in 2012:

1. Economic collapse

2. International calamity

3. Major scandal involving personal corruption for gain

4. A tryst with a non-black woman.

Your guess is as good as mine on whether any of those will or can happen. George W. Bush got away with #2 and #3, and Obama either won or won bigger than he might otherwise have won because of #1. #4? This is still America.

Otherwise a map of political culture practically begs showing:

Hasn't voted for a Republican nominee after least 1988
Voted for Dubya once, but otherwise for Democratic nominees after  at least 1988
Clinton twice, Dubya twice, Obama
Clinton once, Dubya twice, Obama
Obama but otherwise never for Democrats
Clinton twice, but Obama was absolutely crushed in 2008
Clinton once or twice, but reasonably close in 2008 (under 6% or under 10% with Favorite Son)
Hasn't voted for any Democratic nominee since Jimmy Carter in 1976
Hasn't voted for any Democratic nominee since LBJ in 1964

This by no means predicts how any state will vote; for example, Mike Huckabee has a far greater chance of winning Arkansas than of winning North Dakota. Political culture matters greatly. Indiana and Virginia would both have been in the deep blue category had they not voted for Obama in 2008.

Eighteen states and the District of Columbia haven't voted for any Republican nominee since at least 1988, and the likelihood of such happening by random chance is 1 in 2 to the 85th power. 2 to the 85th power is a figure with 27 digits. Although those states have some economic, social, and political diversity, they are tough ones for Republicans to win. In 2008 they weren't close. Almost the same can be said of Iowa, New Hampshire, and New Mexico; under the right circumstances they can go Republican (Wisconsin and Pennsylvania are almost in that category) but they weren't close in 2008, either. Those 21 states and the District of Columbia put him in a position (264 electoral votes)  would force his opponent to defend everything with little room for error. At that point, if Obama had a 50-50 chance of winning any one of Ohio, Florida, Colorado, and Nevada he had 15 chances in 16 of winning. (Nevada would have thrust the vote to the House of Representatives, where House statewide delegations would have determined the President -- in Obama's favor).

Of course a politician tries to make his likelihood of winning a non-random chance. Obama found that he could exploit some political drift in Virginia that bode well for him; figured that Greater Omaha wasn't that different from Kansas City, Des Moines, St. Louis, the Quad Cities, or the Twin Cities that generally vote Democratic; and that he could capitalize on unusual circumstances in Indiana. He campaigned in those places and invested heavily in advertising in states that seemed likely to break from the GOP if they had a chance. Add to that, he tried to make his chances of winning in such places as Ohio, Florida, Colorado, Nevada, and Virginia anything but random.  Obama wasn't going to win Indiana without winning Ohio or North Carolina without winning Virginia, so those didn't figure in the calculation of chance.

It will be very difficult for any Republican to dislodge the political culture of the Blue Firewall (here shown in maroon because Leip sticks to the old color pattern), or even Iowa, New Hampshire, and New Mexico. Because of re-apportionment of House seats likely after the 2010 Census, Obama will either have to win the one state from among Ohio, Florida, Virginia, or the combination of Colorado and Nevada. He's not going to win Indiana without winning Ohio, North Carolina or Georgia without winning Virginia,  or either Montana or Arizona without winning Colorado and Nevada.   

[Person Man]

Ummm...how does the deficit actually affect the average American? Yes. There are doomsday scenarios about foreign states and banks calling our debt, but 1) the destruction would be mutual and 2) there is always military intervention.

[President Mitt]

I honestly believe nobody will give a sh**t in 2012. The two issues in 2012 will probably be a fake copy of Obama's Indonesian Birth Certificate, and a fake photocopied picture of him smoking with Saddam Hussein's ghost, and Bin Laden's severed head.

[Vepres]

Ummm...how does the deficit actually affect the average American?

It was a big deal 1992. Many Amercians care about the deficit, a lot, even if it doesn't affect their day to day lives.

[Marokai Backbeat]

Ummm...how does the deficit actually affect the average American?

It was a big deal 1992. Many Amercians care about the deficit, a lot, even if it doesn't affect their day to day lives.

Its one of those issues that everyone claims to care about, but at the end of the day, doesn't affect the way they vote at all. As I've said before, Americans were "concerned" about the deficit and said we should balance the budget back in the days of FDR, but re-elected him 3 times and then elected his New-Deal-Democrat VP to the Presidency.

People also elected Reagan, who broke deficit records and tripled the debt, re-elected him, and now hail him as a hero. They also were "concerned" about the deficit last year, but elected someone who admittedly wanted to spend more.

So yeah, people say they care about the deficit, but they don't really care.

[Rob]

So yeah, people say they care about the deficit, but they don't really care.

It's an issue that makes dumb people feel "smart." They can pronounce a three-syllable word!

[paul718]

Ummm...how does the deficit actually affect the average American? Yes. There are doomsday scenarios about foreign states and banks calling our debt, but 1) the destruction would be mutual and 2) there is always military intervention.

It's not the doomsday scenario that people worry about.  It's the government's inevitable desire to pay off the debt (via taxation).  The voters aren't going to be happy when their taxes are raised in order to pay off an unnecessary Iraq adventure and (possibly) toothless "stimulus" initiatives.  It's more of a fear of taxation, than the deficit itself.

[Obnoxiously Slutty Girly Girl]

Ummm...how does the deficit actually affect the average American? Yes. There are doomsday scenarios about foreign states and banks calling our debt, but 1) the destruction would be mutual and 2) there is always military intervention.

Yep, live it up way beyond our means running up the debt to astronomical levels, and then when the time comes to pay up, get the guns and bombs and ready to start World War III in order to avoid taking responsibility.

Truly a moral "city upon a hill" this country is.

[12th Doctor]

As I have said before, cite Bush as an example of a GOP President who didn't care about the deficit, but you can't fault Reagan.  The main economic goal of the Reagan Administration was to get inflation under-control without the economy plunging into a depression.

Inflation prior to year 3 of the Reagan Administration was so high, by Western standards, that it was creating significant drag on the economy.  Price controls, which had been tried by Nixon, Ford, and Carter, were miserable failures.  Price controls... exactly what you need in an economy where supply shortages were an issue. [sarcasm]  This killed the economy.  The government's solution... print more money to spend on more programs.  Hence, stagflation.

Reagan came into an economy that was already in ruin.  The money supply had to be controlled, but but more money had to be put into the economy to get it moving again.  That is the real essence of "Reaganomics" not tax cuts and deficit spending, but rather holding down inflation, while ensuring that people still have money to spend.

No one who has any clue what they are talking about doubts that is worked to solve the problems inherited by Reagan.  Yeah, we had deficits, but that was incidental.  We had to have them.

To compare the Bush approach with the Reagan approach demonstrates a clear lack of knowledge about both, as Bush consistently increased money supply throughout his Administration to artificially keep the economy out of recession.  Increasing money supply and decreasing taxes is a sure way to guarantee problems down the road.

That being said, we are fortunate that the countries that buy up our debt are also those that most depend on our continued out-of-control spending to function.  China needs its economy to keep growing at a ridiculous rate to prevent it from crashing down, and so they cannot allow the United States to tighten it's belt.  That means they will never call in the debt.  However, in the long run, it would be advantageous to the world if we stopped what we are doing now, and tried to bring our spending habits and the money supply back under control, because the longer we go on like this, the worse the economy is going to get.