So the US and CAD dollar is the same now!

[Jason Harris 31]

I just tried searching for this answer but can't find it: How often has Congress dramatically overridden the Presidential Budget?

I don't recall too many times when it has occurred. I understand Congress has culpability, but if my memory is correct, then the political reality is each Administration has effectively set the fiscal direction for the country, regardless of how our checks and balances are set up.

That said, you raised some interesting points. However, considering we've run trade deficits for the last 33 years, including at least two sustained occasions when our economy and dollar have been soaring, I still believe the budget deficits/debt is shaking currency traders' confidence more so than the trade deficit.

However, I freely admit I'm no economist and have just enough understanding to be dangerous. :D

[Jarick 5]

Actually, we are in uncharted waters and there is discussion among economists about the long-run implications of large deficits and debts. Some think that it's a ticking time bomb that will destroy the country and/or economy, others think that it's a manageable way to spur the economy. Now common sense says you can't hold this massive debt and that's where I stand.

The problem is the country wants an entitlement system--free health care, free retirement, free social services, free education, free unemployment, etc--but they don't want a large tax burdern to pay for it. Furthermore, Americans have an unrealistic view that you can have unprecedented growth as we saw in the 1990's and have no ill effects. That's how the budget was "balanced" in the late 90's, not by the bravery of Bill Clinton, but because the economy was roaring. But when the tech bubble burst and the housing bubble became apparent and oil sent a supply shock through the economy, businesses practically stopped investing and growth slowed, resulting in large deficits again.

The Keynesian idea is to balance government spending/investment with taxation over the course of a business cycle. In times of recession/depression, the government can jump start the economy through public works projects, lowering the prime rate and Fed discount rate, etc. But in boom times, they need to do the opposite by taking in taxes and saving them, raising the prime rate, and the Fed discount rate and selling T-bills. Instead, we have decided that the government should always be stoking the flames of the economy, almost as if there were a permanent recession. The result is large inflation, deficits, poor exchange rate, and when a REAL recession/depression hits, we're going to be in BAD shape.

Anyways, we're seeing some of the effects with the exchange rate. And inflation, GDP stalling, etc. But this has been going on for decades, not just Bush or Reagan or Clinton or pick your least favorite president.

[Jason Harris 31]

I understand what you are saying and must say, "We're not worthy...." :D

But I still hold Junior accountable for pushing through massive tax cuts without complimentary reductions in spending; at least I don't recall complimentary spending cuts. My memory was the tax cuts were presented as economic stimuli; i.e., put more money into peoples' pockets and they'll spend it, spurring the economy and sending new money into the tax rolls. The problem was too much of the cuts have been shown to have benefitted the wealthy. That may be okay in terms of fairness, since the wealthy contribute a disproportionately higher percentage in taxes,. However, common sense says the lower to middle class will more readily spend their $500 tax savings, out of necessity, than millionaires will spend their $10K savings, since they already own what they need. (I'm just making up numbers here....)

Add it up, and I think these massive deficits could have been avoided or greatly lower.

[rel017 0]

Republicans are fiscally conservative, right? Running on the platform that too much government and excessive taxes are bad for our economy?

I read an article a couple of weeks ago that 70% of the accumulated debt in US history has occurred during the Reagan and two Bush administrations.

There just seems to be a disconnect to me.

The total number of years of Reagan, Bush, Clinton, Bush is 26 years. If we only count the Reagan, Bush Sr., Bush Jr. years it's 18. That is 69.23% of the total number of years. 70% of the U.S. debt was accumulated during the 69.23% of the time a Republican was president. WOW!!!!! Time for a special prosecutor. Further more.....

You think today is bad. I remember the 70s when my parents mortgage was 18%. I remember my parents quietly worrying if my dad's company was going to be shut down. I remember lines at the gas station---THAT HAD NO GAS! I remember investors dumping stocks for gold. I remember millions of people being killed in Cambodia by the communist Khmer Rouge. I remember a million boat people escaping communist Vietnam. I remember over a hundred thousand Cubans fleeing Castro's communist Cuba in the Mariel boat lift. I remember when the Soviets attempted to add Afgahnistan to its empire. I remember a rag head ayatollah in Iran rendering the President of the U.S.A. impotent for four hundred and fourty-four days.

The only disconnect I see is the one of the individual from its society. Have you ever served in the military? Do you know anyone under the age of 40 who has? Do you attend church or synagogue? Do you belong to any community group or attend any community functions? How many of your neighbors do you know? When is the last time you spoke with our local police officer about local crime? Do you vote? Are you even registered to vote? What is the name of your local alderman, councilman, etc?

Is the only thing you know how to do is complain? The government should pay for my health care, college loans, get me a job, give me a low interest loan for a home, make the bad oil companies lower gas prices(by the way gov't makes more money from a gallon of gas than anyone in the supply chain), pay someone to care for my elderly parents and young childern, pay for my retirement, and save the world (tsunami? The good'ol U.S Navy to the resucue!).

In reality things aren't so bad right now. My wife is a nurse and I am a police officer, blue collar jobs which allow us to live in a nice house, drive nice cars, have two sons in travel hockey($$$$$$$$$), and take nice vacations. Even in the "ghetto" parts of my city I see new businesses, new housing going up, cell phoes and ipods galore, and lots of SUVs with shinny spinners. Take a look around your town. Are things really so bad? Or are people just pissed-off that they can't afford a new BMW or Range Rover. Stick it to the "rich" with taxes because you don't have a 5000sq ft home? Every time I hear that the rich got tax breaks from Bush I think to myself, "I'm not rich. I work damn hard for what I have, and Bush cut my taxes." Remember envy is one of the seven deadly sins.

[Jason Harris 31]

The total number of years of Reagan, Bush, Clinton, Bush is 26 years. If we only count the Reagan, Bush Sr., Bush Jr. years it's 18. That is 69.23% of the total number of years. 70% of the U.S. debt was accumulated during the 69.23% of the time a Republican was president. WOW!!!!! Time for a special prosecutor. Further more.....

Your math is off. If you only want to look at the Reagan, Bush, Clinton and Bush years, then 100% of the debt during the past 26 years occurred during the Reagan and two Bush administrations. However, the debt has been around since at least 1790, when it was $52 million. Thus, the point of the article I mentioned is 70% of the debt we've accumulated over the past 225 or so years has occurred during those three administrations.

I'm not sure why you're making the connection that those of us who want the government to make a better attempt at balancing its budget are simultaneously looking for handouts. I think it's because I alluded to the Republicans not living up to the agenda they espoused, but I don't belong to any party. I believe partisan politics leads to "company line" rhetoric/decisions, versus actual consideration of each issue. When I vote, which I've done in every election since 1982, I'll flip back and forth from what would be perceived to be a conservative or liberal position, depending who the candidate or the issue is.

[Wolfpack_1986 154]

Atta boy, Bush.

+1

so putting the country into debt with china for trillions is a bad thing then?

I assume you're talking about the 'trade deficit'. to which my answer is:

No, and saying otherwise (without some sort of backing, as there are two schools of thought) is ignorant. Having a 'trade deficit' is not a bad thing in the least. Since goods and services are being imported, we export securities to balance that. Resulting in a capital inflow (or net borrowing). Now, what we do with the money is where you can get in trouble. If you move the capital into investments, running a deficit (trade or otherwise) is sustainable. If we use it for consumption, it is not, and that's where you get screwed. Picture taking a loan out from the bank and buying groceries. Or a car. That's just stupid. But if you buy a house, you're putting your money into an investment, and end up with an increase in net worth.

As far as the dollar strength is concerned, there's evidence that a weaker dollar leads to more of a demand for US goods, increasing our exports. Now, the same people that bitch about how much we import, are the same ones who bitch about the dollar strength... You cant have one without the other. Do you want more exports or a stronger dollar?

A few economics classes wouldn't hurt anyone. Especially anyone in office, or that can vote.

[RadioGaGa 162]

With the dollar even (or close) it's making ebay very tempting. I've been good (lately) so, I'm hoping not to fall off the wagon.

[hockeyherb 1]

Republicans are fiscally conservative, right? Running on the platform that too much government and excessive taxes are bad for our economy?

I read an article a couple of weeks ago that 70% of the accumulated debt in US history has occurred during the Reagan and two Bush administrations.

There just seems to be a disconnect to me.

In reality things aren't so bad right now. My wife is a nurse and I am a police officer, blue collar jobs which allow us to live in a nice house, drive nice cars, have two sons in travel hockey($$$$$$$$$), and take nice vacations. Even in the "ghetto" parts of my city I see new businesses, new housing going up, cell phoes and ipods galore, and lots of SUVs with shinny spinners. Take a look around your town. Are things really so bad? Or are people just pissed-off that they can't afford a new BMW or Range Rover.

This reminds me of that tv commercial where the guy is listing off all the stuff he has and at the end says with a smile pasted on his face, "Please help, I'm in debt up to my eyeballs". That is more the reality of America today, not the families that have all the things you listed AND are living within their means and saving at least 10% of their income. The consumer spending that's been driving the country has been built on debt, pure and simple.

It's going to take a few years to really kick in, but this country is going to have a big attitude adjustment between what they expect and what they get.

[sabre09923 0]

In reality things aren't so bad right now. My wife is a nurse and I am a police officer, blue collar jobs which allow us to live in a nice house, drive nice cars, have two sons in travel hockey($$$$$$$$$), and take nice vacations. Even in the "ghetto" parts of my city I see new businesses, new housing going up, cell phoes and ipods galore, and lots of SUVs with shinny spinners. Take a look around your town. Are things really so bad? Or are people just pissed-off that they can't afford a new BMW or Range Rover. Stick it to the "rich" with taxes because you don't have a 5000sq ft home? Every time I hear that the rich got tax breaks from Bush I think to myself, "I'm not rich. I work damn hard for what I have, and Bush cut my taxes." Remember envy is one of the seven deadly sins.

Just to answer your question, yeah, things ARE really that bad. The ghetto parts of the city are really bad (poverty galore; typical ghetto) and the city is hardly bringing in any money for itself. Shootings aren't totally uncommon, and there are barely any successful businesses -- I guess that's what happens when your town's chief product was paper, and those mills are gone. There are 4 police officers patrolling the hallways of my high school, to keep the peace -- though nothing really bad has happened lately. Drugs and crime are major issues, and the schools have the 10th worst test scores in the state (although, I don't put much stock in those).

Luckily, I live in the outskirts of the city, and my parents make a good amount of money -- enough to get everything we really need and then some (hockey equipment, for instance). Still, we need newer cars (while they still do their job, they have some hiccup or another every 3 months or so and are in the 160,000+ mile range), and my brother's in college, so that lowers the amount of money we get. My mom works two jobs, just to pay for tuition and food, while my dad's a computer programmer, so he makes a pretty good sized paycheck. Though, his company, in a move straight out of Office Space, cleaned house, so he has to work on Saturdays and sometimes Sundays.

But how does this apply to the value of the dollar? No clue.

[Wolfpack_1986 154]

dont confuse inflation with exchange rates when talking about the value of the dollar

[hockeyherb 1]

dont confuse inflation with exchange rates when talking about the value of the dollar

Why not? They're inextricably linked. A high rate of inflation erodes the value of currency thus driving exchange rates lower relative to other currencies.

[Jarick 5]

Yes, as a former conservative turned libertarian, I can say there really is no reason to vote for a Republican anymore. Unless you REALLY like war.

Unfortunately, just because one party is wrong doesn't automatically make the other party right. Lesser of two evils is still evil.

[Chadd 916]

Yes, as a former conservative turned libertarian, I can say there really is no reason to vote for a Republican anymore. Unless you REALLY like war.

Unfortunately, just because one party is wrong doesn't automatically make the other party right. Lesser of two evils is still evil.

In our political system it's generally the evil of two lessers.

[rel017 0]

The total number of years of Reagan, Bush, Clinton, Bush is 26 years. If we only count the Reagan, Bush Sr., Bush Jr. years it's 18. That is 69.23% of the total number of years. 70% of the U.S. debt was accumulated during the 69.23% of the time a Republican was president. WOW!!!!! Time for a special prosecutor. Further more.....

Your math is off. If you only want to look at the Reagan, Bush, Clinton and Bush years, then 100% of the debt during the past 26 years occurred during the Reagan and two Bush administrations. However, the debt has been around since at least 1790, when it was $52 million. Thus, the point of the article I mentioned is 70% of the debt we've accumulated over the past 225 or so years has occurred during those three administrations.

I'm not sure why you're making the connection that those of us who want the government to make a better attempt at balancing its budget are simultaneously looking for handouts. I think it's because I alluded to the Republicans not living up to the agenda they espoused, but I don't belong to any party. I believe partisan politics leads to "company line" rhetoric/decisions, versus actual consideration of each issue. When I vote, which I've done in every election since 1982, I'll flip back and forth from what would be perceived to be a conservative or liberal position, depending who the candidate or the issue is.

[/quote

The last 225 years? You mean that we are still paying for the U.S.S Constitution that fought in the War of 1812? Or the costs of building the Panama canal? How about the ill fated Apollo 13 mission, is that in the 30% of debt accumulated in U.S. history? Did that article say when the other 30% was accumulated? That article is bunk. Debt is retired, and new debt is accuired continously in government, business, and households.

So why are we deficit deficit spending? Because 2/3 of the federal budget goes to "entitlements". Cash that is taken from your check and given to another person. Social security, welfare, medicare, section 8, food stamps, and the list goes on and on.

No single administration or party is at fault. Its the American people who give away their freedom everytime a politician dangles a new program in front of their face.

[Wolfpack_1986 154]

dont confuse inflation with exchange rates when talking about the value of the dollar

Why not? They're inextricably linked. A high rate of inflation erodes the value of currency thus driving exchange rates lower relative to other currencies.

of course it's linked, everything in economics is linked. however, theres a huge difference between the two. While the exchange rate has dropped significantly, my domestic purchasing power has not adjusted quite as fast or as severe. thats the point i was making...

[Jason Harris 31]

The last 225 years? You mean that we are still paying for the U.S.S Constitution that fought in the War of 1812? Or the costs of building the Panama canal? How about the ill fated Apollo 13 mission, is that in the 30% of debt accumulated in U.S. history? Did that article say when the other 30% was accumulated? That article is bunk. Debt is retired, and new debt is accuired continously in government, business, and households.

I thought the debt had never been retired, but after a bit of research this evening I discovered the debt had been paid off in 1835, then almost immediately returned and been around since. So the accurate description is the US has had 172 straight years of debt and three particular Presidents, regardless of their political party, have accounted for 70% of the total that has accrued since 1835.

So why are we deficit deficit spending? Because 2/3 of the federal budget goes to "entitlements". Cash that is taken from your check and given to another person. Social security, welfare, medicare, section 8, food stamps, and the list goes on and on.

No single administration or party is at fault. Its the American people who give away their freedom everytime a politician dangles a new program in front of their face.

I found a breakdown of Bush's 2007 budget proposal. Social Security, Medicare, Medicaid and unemployment added up to 24.3%, with another 5.8% for Veterans' benefits, but I don't know if you would classify that as an entitlement.

$699 billion (+4.0%) - Defense

$586.1 billion (+7.0%) - Social Security

$394.5 billion (+12.4%) - Medicare

$367.0 billion (+2.0%) - Unemployment and welfare

$276.4 billion (+2.9%) - Medicaid and other health related

$243.7 billion (+13.4%) - Interest on debt

$89.9 billion (+1.3%) - Education and training

$76.9 billion (+8.1%) - Transportation

$72.6 billion (+5.8%) - Veterans' benefits

$43.5 billion (+9.2%) - Administration of justice

$33.1 billion (+5.7%) - Natural resources and environment

$32.5 billion (+15.4%) - Foreign affairs

$27.0 billion (+3.7%) - Agriculture

$26.8 billion (+28.7%) - Community and regional development

$25.0 billion (+4.0%) - Science and technology

$20.1 billion (+11.4%) - General government

$1.1 billion (+47.6%) - Energy

Sp perhaps 1/4 of the budget goes to entitlements, but that probably wouldn't be accurate, since I don't think that anyone who has contributed 45 years toward Social Security thinks of their checks as entitlement -- it's a payback. Although I do believe most of us understand there's a bit of robbing Peter to pay Paul going on. The same thing with Medicare and Medicaid; the majority of the people who will use them also contributed to them.

(One could say that each of us would be better off in the long term to not contribute to the government and leave those items to private industry. I have no idea whether an economist would say that's true but, clearly, someone would still have to set aside this savings, just to a private firm.)

I'm just like you in not wanting some slacker living off the rest of us. But the unemployment rate is 4.6%, and a good portion of those people have legitimately contributed, been legitimately laid off, and are legitimately collecting, so I don't think "entitlements" are draining our coffers.

I think it's politicians who run for office on a promise to cut taxes, but then don't simultaneously cut government spending, who are deferring the stress on our economy to the future. And it's up to us to determine who are the lesser of the charlatans.

[willy0314 0]

Atta boy, Bush.

+1

so putting the country into debt with china for trillions is a bad thing then?

I assume you're talking about the 'trade deficit'. to which my answer is:

No, and saying otherwise (without some sort of backing, as there are two schools of thought) is ignorant. Having a 'trade deficit' is not a bad thing in the least. Since goods and services are being imported, we export securities to balance that. Resulting in a capital inflow (or net borrowing). Now, what we do with the money is where you can get in trouble. If you move the capital into investments, running a deficit (trade or otherwise) is sustainable. If we use it for consumption, it is not, and that's where you get screwed. Picture taking a loan out from the bank and buying groceries. Or a car. That's just stupid. But if you buy a house, you're putting your money into an investment, and end up with an increase in net worth.

As far as the dollar strength is concerned, there's evidence that a weaker dollar leads to more of a demand for US goods, increasing our exports. Now, the same people that bitch about how much we import, are the same ones who bitch about the dollar strength... You cant have one without the other. Do you want more exports or a stronger dollar?

A few economics classes wouldn't hurt anyone. Especially anyone in office, or that can vote.

actually I was talking about how a good amount of the actual debt itself is owed to banks in china and japan.

[604bullet 0]

For me, since I live in Canada, I'm loving the exchange rate right now.

I've bought so much stuff in the past week or so from US based online retailers/Ebay.

I guess each person has it's own opinions

[Cove 38]

Its great for me :) Im 2 hours from Buffalo.

[bdj 0]

I went down a couple weeks ago and got some merch, also me and my friend both found trucks that we are going to pick up next week. Gonna save 5k+ by just doing a bit of driving.

[joelnmich 0]

All that funny money left over from my one trip to Canada isn't so funny anymore. First investment that's paid 40% for me.

[kosydar 0]

Whats with this bullshit of the Canadian Duty Free stores not giving you back your taxes anymore? Ruined my weekend.