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Budget Control Act of 2011 is Biggest Day One Issue for Pres. Hillary

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  • Strongly Liberal Democrat
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    Dallas, TX
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    Please read Business Insider's Amanda Macias' "The legacy of the 2011 debt ceiling fight is the biggest issue the next president will face on day one."

    Deficit Terrorist laws passed in the Obama years have set up the next president for fiscal crisis after fiscal crisis. We live in the age of rolling "austerity" legislation. This is Congressional decision-making by legislatively imposed crises.

  • Strongly Liberal Democrat
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    Pensacola, FL
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    No solutions are represented. Just different sides. There should be a stadium built around Wall Street and tickets sold to watch the self destructive race to funnel money to the .0001. Hillary and a few close friends.
  • Liberal Democrat
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    Colorado Springs, CO
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    MSN Money: 6 myths about the US economy that are just plain wrong

    Soon after the sequestration was passed there were forecasts of gloom and doom by various economists. Even today, one can find articles on the internet that are all gloom and doom; however, there are others which are more positive. Which ones to believe? I suppose it depends on how it affects you personally. Or if you were a part of the military industrial complex.

    I am not one to take sides, but I cannot help but notice that the economy doesn't seem to be as bad as some politicians back in 2011 had predicted. The above article by Michael Bush can be dismissed by the gloom and doomers, but he does make some points that seem to contradict the populist gloom and doom views pushed by Sanders and Trump. A few key points:

    While the Gross Domestic Product (GDP) is trudging along at 1.1 percent in the first quarter, the Gross Domestic Income (GDI) was a more robust 2.9 percent.

    Auto sales are at record levels — 17.7 million expected this year to compare with the record 17.5 million in 2015.

    Employment growth is strong — 255,000-292,000 new jobs in June-July, and 204,000 a month on average over the past 12 months.

    Consumer spending is strong at almost 3 percent in the first half of the year.

    Wages rose 4.6 percent in the first quarter for those workers remaining in the same jobs. This goes against the myth that wages have been stagnant, which is true if you consider the wages of retiring baby boomers versus the younger less experienced workers replacing them.

    I will be the first to agree that the economic growth has been uneven, but it seldom is even. There are always sectors of the economy that do better than others, and some that just suck. If you are an unemployed oilfield worker right now you feel the economy sucks for you...ditto for an unemployed coal miner. We have booms, bubbles and busts. Always. Most people move on when jobs go away. Some cannot for whatever reason. We certainly need to do more to help those less fortunate, but lets not forget that many Americans will find ways to overcome hardships and move on. I guess it's in their DNA.

  • Strongly Liberal Democrat
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    Portland, OR
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    Carlitos Wrote: Please read Business Insider's Amanda Macias' "The legacy of the 2011 debt ceiling fight is the biggest issue the next president will face on day one."

    Deficit Terrorist laws passed in the Obama years have set up the next president for fiscal crisis after fiscal crisis. We live in the age of rolling "austerity" legislation. This is Congressional decision-making by legislatively imposed crises.

    Using words like deficit terrorist only muddies your argument.

    I read the BI article you asked us to read and it didn't say anything that wasn't previously known. John Boehner's House forced the Presidents hand and Obama decided to make a deal over defaulting on our nations debt. Should we blame President Obama for that or House Republicans?

    The law of unintended consequences took over after the 2011 debt-ceiling crisis. Both Obama and Boehner thought that cooler heads would prevail and compromise could be reached, but that didn't happen because the Tea Party and Freedom Caucus had other priorities.

  • Strongly Liberal Democrat
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    Dallas, TX
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    Schmidt Wrote:

    MSN Money: 6 myths about the US economy that are just plain wrong

    Soon after the sequestration was passed there were forecasts of gloom and doom by various economists. Even today, one can find articles on the internet that are all gloom and doom; however, there are others which are more positive. Which ones to believe? I suppose it depends on how it affects you personally. Or if you were a part of the military industrial complex.

    I am not one to take sides, but I cannot help but notice that the economy doesn't seem to be as bad as some politicians back in 2011 had predicted. The above article by Michael Bush can be dismissed by the gloom and doomers, but he does make some points that seem to contradict the populist gloom and doom views pushed by Sanders and Trump. A few key points:

    While the Gross Domestic Product (GDP) is trudging along at 1.1 percent in the first quarter, the Gross Domestic Income (GDI) was a more robust 2.9 percent.

    Auto sales are at record levels — 17.7 million expected this year to compare with the record 17.5 million in 2015.

    Employment growth is strong — 255,000-292,000 new jobs in June-July, and 204,000 a month on average over the past 12 months.

    Consumer spending is strong at almost 3 percent in the first half of the year.

    Wages rose 4.6 percent in the first quarter for those workers remaining in the same jobs. This goes against the myth that wages have been stagnant, which is true if you consider the wages of retiring baby boomers versus the younger less experienced workers replacing them.

    I will be the first to agree that the economic growth has been uneven, but it seldom is even. There are always sectors of the economy that do better than others, and some that just suck. If you are an unemployed oilfield worker right now you feel the economy sucks for you...ditto for an unemployed coal miner. We have booms, bubbles and busts. Always. Most people move on when jobs go away. Some cannot for whatever reason. We certainly need to do more to help those less fortunate, but lets not forget that many Americans will find ways to overcome hardships and move on. I guess it's in their DNA.

    Schmidt, my point was not to get into a state of the economy debate.

    The BCA of 2011 has done to the government sector what the Balanced Budget Act of 1997 did to Medicare with the creation of the Sustainable Growth Rate mechanism for deriving Medicare reimbursements. The result was that Congress had to pass a Medicare doc fix 17 times cuts to prevent automatic Medicare reimbursement rate cuts from taking place. Congress must now do the same to prevent automatic cuts government sector wide. That's the rolling sequestration or fiscal cliff. Since the BCA was signed into law, there have been numerous compromises to prevent these "mindless" automatic cuts. So one could say it worked in theory to force compromise, but on preventing the self-imposed consequences of not compromising on bigger budget deals.

    I'm more about what happens next than about blaming people for what has happened. And getting the policy wrong doesn't make someone a bad person or even a bad politician. But for the record, the Simpson-Bowles commission was started in advance of the Republican take over, and the deficit hysteria it reinforced and affirmed was a big contributing factor to the loss of the House.

  • Strongly Liberal Democrat
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    Dallas, TX
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    jaredsxtn Wrote:
    Carlitos Wrote: Please read Business Insider's Amanda Macias' "The legacy of the 2011 debt ceiling fight is the biggest issue the next president will face on day one."

    Deficit Terrorist laws passed in the Obama years have set up the next president for fiscal crisis after fiscal crisis. We live in the age of rolling "austerity" legislation. This is Congressional decision-making by legislatively imposed crises.

    Using words like deficit terrorist only muddies your argument.

    I read the BI article you asked us to read and it didn't say anything that wasn't previously known. John Boehner's House forced the Presidents hand and Obama decided to make a deal over defaulting on our nations debt. Should we blame President Obama for that or House Republicans?

    The law of unintended consequences took over after the 2011 debt-ceiling crisis. Both Obama and Boehner thought that cooler heads would prevail and compromise could be reached, but that didn't happen because the Tea Party and Freedom Caucus had other priorities.

    As I said to Schmidt, I care more about what happens next.

    Republicans were swept into power largely due to the off year election controversy of Obamacare, but the deficit hysteria at the time was also a contributing factor, as the Tea Party rose up before the Obamacare debate.

    Over the course of 2010 thru 2012, Obama offered extreme concessions, which were rejected by Republicans who could or would not agree on what constitutes 'enough.' Nevertheless, Republican Congressional campaigns subsequently appeared featuring attacks against Obama for his proposed Medicare and Social Security cuts.

    The strategy of compromising with Deficit Hawks is horrible politics and have costed Democrats elections.

    Thankfully, Obama and the Republicans did not reach agreement on a Grand Bargain and the status quo was marginally maintained, otherwise, he might not have been re-elected in 2012.

    New Economic Perspectives on the Government Budget, Deficits, and the National Debt

    youtube.com/watch?v=pCrn4lfwQLc

  • Strongly Liberal Democrat
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    Dallas, TX
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    Schmidt Wrote:

    MSN Money: 6 myths about the US economy that are just plain wrong

    Soon after the sequestration was passed there were forecasts of gloom and doom by various economists. Even today, one can find articles on the internet that are all gloom and doom; however, there are others which are more positive. Which ones to believe? I suppose it depends on how it affects you personally. Or if you were a part of the military industrial complex.

    I am not one to take sides, but I cannot help but notice that the economy doesn't seem to be as bad as some politicians back in 2011 had predicted. The above article by Michael Bush can be dismissed by the gloom and doomers, but he does make some points that seem to contradict the populist gloom and doom views pushed by Sanders and Trump. A few key points:

    While the Gross Domestic Product (GDP) is trudging along at 1.1 percent in the first quarter, the Gross Domestic Income (GDI) was a more robust 2.9 percent.

    Auto sales are at record levels — 17.7 million expected this year to compare with the record 17.5 million in 2015.

    Employment growth is strong — 255,000-292,000 new jobs in June-July, and 204,000 a month on average over the past 12 months.

    Consumer spending is strong at almost 3 percent in the first half of the year.

    Wages rose 4.6 percent in the first quarter for those workers remaining in the same jobs. This goes against the myth that wages have been stagnant, which is true if you consider the wages of retiring baby boomers versus the younger less experienced workers replacing them.

    I will be the first to agree that the economic growth has been uneven, but it seldom is even. There are always sectors of the economy that do better than others, and some that just suck. If you are an unemployed oilfield worker right now you feel the economy sucks for you...ditto for an unemployed coal miner. We have booms, bubbles and busts. Always. Most people move on when jobs go away. Some cannot for whatever reason. We certainly need to do more to help those less fortunate, but lets not forget that many Americans will find ways to overcome hardships and move on. I guess it's in their DNA.

    Here's a YoY chart on bank loans. The ebbs and flows correspond with Congressional fiscal/debt deals, repeal of the 2% FICA tax cut, and the rise and fall of fracking/domestic oil.

    8-14-2

  • Strongly Liberal Democrat
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    Dallas, TX
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    Here's consumer credit. Notice the rise in debt to income ratios even while consumer credit growth has decelerated.

    8-5-13

  • Strongly Liberal Democrat
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    Dallas, TX
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    Reminder that auto sales' "record levels" aren't all time highs and we've previously sold more cars with less population and jobs.

    7-3-3

  • Strongly Liberal Democrat
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    Pensacola, FL
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    Cheap gasoline is one of the biggest moral boosters ever . The average person associates that with all is right in the world. They are clueless to each individual OPEC member going crazy trying to cut everybody elses's supplies but their own to skyrocket oil prices. USAmericans hit the road. USAmericans are also clueless to the US factions trying to skyrocket prices also. The only substantial surmise from increased auto sales is the majority are cluless.
  • Strongly Liberal Democrat
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    Pensacola, FL
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    BTW and PS: Most of the conditions that precipitated 2008 are still in the mix.
  • Strongly Liberal Democrat
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    Dallas, TX
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    By the way, the 4.6% wage increase was revised down to 0.2% wage decrease per the BLS.

    "Due to a 4.7-percentage point downward revision to first-quarter hourly compensation, unit labor costs decreased 0.2 percent in the first quarter of 2016, rather than increasing 4.5 percent as reported June 7."

    bls.gov/news.release/prod2.nr0.htm

  • Liberal Democrat
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    Colorado Springs, CO
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    Carlitos Wrote:

    By the way, the 4.6% wage increase was revised down to 0.2% wage decrease per the BLS.

    "Due to a 4.7-percentage point downward revision to first-quarter hourly compensation, unit labor costs decreased 0.2 percent in the first quarter of 2016, rather than increasing 4.5 percent as reported June 7."

    bls.gov/news.release/prod2.nr0.htm

    The 4.6 percent wage increase number did not come from the BLS, but rather an ADP report dated April 20th. The ADP report is only the wages of those continuously employed. The BLS report includes all wages, which tend to be lower because of the higher paid baby boomers leaving the workforce. I don't know if ADP will update their numbers.

    Take a look at their numbers in their report.

    http://investors.adp.com/releasedetail.cfm?releaseid=965936

  • Strongly Liberal Democrat
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    Pensacola, FL
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    The type of unregulated trades that caused 2008 have increased many fold with only a slight drop in USA volume this past year.
  • Liberal Democrat
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    Colorado Springs, CO
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    The only point that I will make is that there are a multitude of factors affecting the economy and many of them are outside of the president's ability to do anything about them. We have had booms, bubbles and busts over history, and I accept that monetary policy and Congressional tax and spending policies can influence the magnitude of these swings. But overall focusing on one or more factors as being the culprit in this political fairy land often misses the bigger picture.

    Globalization is a significant factor in our current and future economy. Trade in goods and services, for example, is misunderstood by many as emotional populist rhetoric by presidential candidates trumps critical thinking. Overall, though I do not see the economy as bad as depicted by the media and politicians pandering solutions that have little chance of being implemented.