Topic: Federal Budget
The Club's David Keating on the Debt Ceiling Compromise
Posted on Aug. 04, 11 | 11:14 AM by Andrew Roth | Topic: Federal BudgetTom Coburn: Politicians Won, American People Lost
Posted on Aug. 02, 11 | 09:56 AM by Andrew Roth | Topic: Federal BudgetSpending Caps: Boehner v Reid
Posted on Jul. 26, 11 | 12:38 PM by David Keating | Topic: Federal BudgetIt's remarkable how little difference there is. In fact, over the 8 years, the total is exactly the same, $9.17 trillion! At most, Boehner's amount in any given year is only lower by 0.36%.
Now, there may be more difference than it appears. The Reid bill allows the OMB to make adjustments to the caps.
To the numbers (amounts in billions):
| Year | Reid | Boehner |
|---|---|---|
| 2014 | $1,068 | $1,066 |
| 2015 | $1,089 | $1,086 |
| 2016 | $1,111 | $1,107 |
| 2017 | $1,134 | $1,131 |
| 2018 | $1,156 | $1,156 |
| 2019 | $1,180 | $1,182 |
| 2020 | $1,204 | $1,208 |
| 2021 | $1,228 | $1,234 |
Permalink: http://www.clubforgrowth.org/perm/?postID=15423
Member Comments (1)
"Hysteria and the Debt Debate"
Posted on Jul. 26, 11 | 11:21 AM by David Keating | Topic: Federal BudgetContrary to popular belief, the “debt ceiling” has turned into the investor’s best friend. Professional politicians don’t like it, because they don’t want to limit their degrees of freedom. But the “limit” on debt, forces a debate about the size of government (and spending) before a country gets to the point of no return. In other words, the debt ceiling is a good thing.
Moody’s (the rating agency) has said that the US should get rid of the debt ceiling altogether, but this has it exactly backward. Greece never had this debate and spent its way into oblivion. The debt ceiling could very well keep the US from that fate. Nonetheless, the professional political class (and this includes the ratings agencies), are trying to scare people with a forecast of Armageddon.
Later in the article:
Three things about this really bother us. First, where were the rating agencies when spending was ratcheted up so much? Why are they only speaking out now? Second, massive amounts of spending were done in the name of short-term economic stimulus. Forget whether it worked or not – how did this become permanent spending? And third, what about the economy? The huge increase in government spending has hurt the economy, cutting it back will boost growth.
Our models suggest that without the large increase in government spending that has occurred over the past five or six years, real GDP would be 3.2% larger today ($450 billion) than it is, the unemployment rate would be 7.6%, the US would have 2.5 million more jobs, and the stock market would be 24% higher (Dow 15,650 and S&P 1660).
The debt ceiling seems to be the only tool that might work. The benefits of using it, if successful in cutting the size of government relative to GDP, could be huge. Not only would jobs and growth pick up, but the stock market would rise, too.
What investors should be worried about is if this debate fails to limit the size of government, not that it leads to a pointless and unjustifiable downgrade by ratings agencies. Investors need to remain calm. Let the politicians be hysterical.
Member Comments (3)
Boehner Plan Would Probably Prompt Downgrade
Posted on Jul. 26, 11 | 10:24 AM by Andrew Roth | Topic: Federal Budget20 Democrats Support a Balanced Budget Amendment
Posted on Jul. 22, 11 | 01:37 PM by Barney Keller | Topic: Federal BudgetRep. Walsh Takes on Chris Matthews on MSNBC's Hardball
Posted on Jul. 20, 11 | 12:01 PM by Andrew Roth | Topic: Federal BudgetRep. Tom Graves Previews the Cut, Cap, and Balance Vote
Posted on Jul. 18, 11 | 03:39 PM by Andrew Roth | Topic: Federal BudgetRep. Chaffetz Calls McConnell's Idea "Stupid"
Posted on Jul. 13, 11 | 04:16 PM by Andrew Roth | Topic: Federal BudgetCut, Cap, and Balance! - Pence Says It's Time for the States to Decide
Posted on Jul. 08, 11 | 11:57 AM by Andrew Roth | Topic: Federal Budget
New Video: 20 Democrats Support a Balanced Budget Amendment
Posted on Jul. 07, 11 | 03:54 PM by Barney Keller | Topic: Federal Budget
