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OMB: $1.39 trillion in deficit spending over 6 years

Discussion in 'BBS Hangout' started by Major, Feb 4, 2003.

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  1. Major

    Major Member

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    Major, do you know what the average growth was during the Clinton years, and what the projections were 5 years before that? For instance, what was the average growth in, say, '97, compared to what it was projected to be in 1992. Just curious.


    I'm not sure off-hand. I know that at least for some of those years, it was well above this 3.3% range. However, most economists right now think its excessive to predict that rate, especially over that long a period (6 years) which is pretty long for a sustained expansion. If growth is better than that, great - but its dangerous to build a budget on any better a forecast than OMB used.

    Another question. What evidence do you have that your proposal generates more tax receipts, both in the short and long-term? How do you know consumers wouldn't spend even less as a result of your proposal? This may be obvious, but I'm not an economist and I don't mind looking like an idiot to get a stupid question answered.

    My proposal didn't need increased tax receipts - just the tax receipts not collected due to the cuts. If it was a $1.6 trillion tax cut, then presumably had their been no cut, the government would have pulled in an extra $1.6 trillion (or it wouldn't have been a $1.6 trillion tax cut...).

    As for consumers -- that's very much a possibility. However, it's accounted for in two ways:

    (1) I allocated $500 billion in short-term stimulus spending. This would be as big or larger a stimulus than the Bush tax cut; there's no reason to think it would be any less effective.

    (2) $300 billion in debt reduction. Perhaps if the economy recovers a bit more slowly, we have maybe $200B or $100B in debt reduction. It's still far better than a $1.39 trillion increase.

    Basically, there's $800 billion in "leeway" there which is a pretty substantial amount. You could just do a $200B stimulus and $600B debt reduction or whatever, depending on how much stimulus is really needed. I just picked random numbers to divide the $800B.
     
    #21 Major, Feb 5, 2003
  2. Dreamshake

    Dreamshake Member

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    If you point to that graph and say its bad, you will be labeled unAmurecan.


    That graph speaks volumes of Bush's campain ability to do his fundemantal economic aspect of his job.

    Honestly did anyone think such a turn was even possible in such a short time? Anyone?
     
    #22 Dreamshake, Feb 6, 2003
  3. Timing

    Timing Member

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    Big deficit spending/tax cutting Republicans passing the bill to our kids.
     
    #23 Timing, Feb 6, 2003
  4. Desert Scar

    Desert Scar Member

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    Sure their are economics folks using those theories. However chaos theory doesn't allow from prediction (unless somehow you could assess every level of relevant variables at all times throughout history--and even then it might not be enough), merely description. We are not that much further along predicting weather than we are the economy.

    Another problem with predicting human behavior (individual or collective like an economy) with great accuracy is whenever people know they are being obsevered or they are aware of predictions made of them they may change simply because of the prediction/their awareness. For instance, say a macro-economist was able to predict what would happen to the US economy to a T based on all data imaginable (e.g., "we will have 3 years of growth and modest inflation followed by 2 years of no-growth and...."), a bunch of people would then make investments based on that prediction so that then the original prediction would no longer account for all the variables and their proper levels. In summary, in predicting people or groups of people, because they themselves are active agents and respond to predictions of them they become aware of, the best we can do is provide a range of most probable outcomes.
     
    #24 Desert Scar, Feb 6, 2003
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