This was only nine years ago:
Republicans said the surplus provided more than enough room for a tax cut and other needs…
[….][Fed Chairman Alan Greenspan] said, there is a greater likelihood that the government will run surpluses for years to come — and that the government will soon confront the welcome but tricky question of what to do with surplus revenue when the debt is zero.
Lacking anything else to do with the money, Mr. Greenspan said, the government might eventually end up buying stocks and corporate bonds on Wall Street, involving Washington heavily in private enterprise.
To avoid that outcome, he said, the government should act now to put fiscal policy on a ”glide path” that pays off the debt and leaves little or nothing in the way of additional surpluses once the debt reaches zero.
There’s some old saying about addiction, that an addict gets high to celebrate something good, to take the edge off something bad, to ward off the boredom of the in-between. It’s pretty much the same with conservatives and tax cuts. Economy’s good? The surplus creates a need for tax cuts. Economy’s bad? Cut taxes to stimulate it. Economy’s in-between? Cutting taxes will make it better.
You don’t need to know the question to know what the answer is.
Alex
“Whatever the result, the
ColonelChairman always new the cause. And in this little world ofbaseballeconomics, he is not alone.”Jim Bouton, in a slightly altered version.
burnspbesq
I remember having a conversation with a couple of valuation geeks early in 2000, about what they would use as a risk-free rate if the government stopped issuing T-Bills.
Seems like eons ago. Sigh.
c u n d gulag
Tax cuts.
The only ‘original’ Republican idea since Goldwater was a pup.
It’s like they have Tourette’s and the only thing they can say is “Tax Cuts!!”
Their entire platform:
Cut taxes for the rich.
No, bimbo, you have to carry the child to term.
Get off my fucking lawn or I’ll shoot you, you (substitute race/nationality).
Bow down to Christ.
Give me a blowjob, I’ll give you one, but don’t tell anyone, or I’ll kill you.
Who do we invade next?
Mumphrey
I remember, too, that Greenspan seemed worried that we might pay off the debt too soon. I forget now why he said that could be a bad thing, and not being an economist, I’m sure I didn’t understand it at the time, but also not being an idiot, I understood that they wanted a huge tax cut, and this bullshit was a way to excuse the endless deficits they were going to run with their lousy tax cut.
And this asshole (Greenspan) just gets to retire and take it easy for the rest of his sorry life. Just like Bush and Cheney and all the other assholes who fucked over our country. They break everything they get near, and somebody else has to come behind and clean it up.
Stooleo
Tax cuts are the laudanum of the 21st century. There is absolutely nothing that they won’t cure. Then you become a junkie.
Joseph Nobles
This should be engraved on his masoleum.
bemused
It defies logic that tax cuts should be the same policy for 3 different economies but conservatives prefer magical thinking if they are lower/middle class & if they are well off, they just want to be fabulously wealthy.
The question of why tax cuts are always, always pushed by R’s whether the economy is good, bad or in between would be a great question to ask one’s rightwing friends & relatives & hear what the responses are.
wheaton pat
I remember the meme—“It’s our money (surplus) give it back (tax cuts)”
Can’t trust the get of my lawn crowd
That's *Master* of Accountancy to You, Pal (JMN)
@wheaton pat:
My suggestion, then, is that this is their deficit, so pay up with tax hikes.
Ailuridae
You don’t need to know the question to know what the answer is.
That should be abbreviated like IOKIYAR.
As an aside, Bob Somerby’s time be better spent chasing down the innumerable examples of the above from 1998-2003 from GOPers (it was basically Bush’s entire economic policy) than what he has spent the last three years doing (although he has been very good on Blumenthal today) which essentially amounts to a trivial personal grudge match because he thinks MSNBC was unfair to Hillary in the primary.
licensed to kill time
Yes, I remember those dark days of surplus as far as the eye could see. It was a terrible thing, wondering how we were going to deal with it. Thankfully, Dubya came along and took care of that little problem for us.
Heckuva job, Dubbie!
bootsy
Slightly (only slightly) OT: One of the conservative ‘benefits’ of Reagan-Bush-Clinton-Bush Voodoo economics…
A new study has found that the gap in wealth between white and black Americans increased by more than four times between 1984 and 2007.
Tax Analyst
This reminds me that Greenspan was once actually picked by Time Magazine as “Man of The Year”.
Kinda makes me wanna puke.
Citizen Alan
This was always absolute bullshit. Greenspan’s real fear (along with that of the GOP) was that if we paid off the National Debt, we would then be able to spend the surplus to improve the social safety net and the general quality of life for all Americans, and once we made such improvements (paid for by the Clinton tax increases), it would have been almost impossible for the Repukes to undo them and very difficult to even get major tax cuts in place.
Instead, thanks to that Randian pig Greenspan, we got huge tax cuts while two wars were going on, and now things are so bad the Democrats considering massive cuts to Social Security, which, of course, was the plan all along. As Mr. Orwell said: “The primary aim of modern warfare … is to use up all the products of the machine without ever raising the general standard of living.” To Randians and Repukes alike, tax cuts are simply warfare by other means.
Michael
@Tax Analyst:
Hitler got that nod, too.
So they have that in common.
Ailuridae
@Tax Analyst
This reminds me that Greenspan was once actually picked by Time Magazine as “Man of The Year”.
So was Hitler!
Sorry about that. Never had a chance to Godwin a thread around here.
Short Bus Bully
So much stupid over there. In the Bob Dole days it used to be about “how will you pay for that you silly Democrats?” whereas now it’s just TAXCUTSTAXCUTSTAXCUTS…
We are entering the final days of the Roman Empire with a spoiled and lazy population who have forgotten everything but how to ask for more.
ed
Nice goin’, Maestro, you fucking asshole.
How’s that “glide path” workin’ out fer ya?
Napoleon
@Citizen Alan:
.
Relatedly it should be noted that Greenspan was instrumental in pushing/brokering the deal around 84 where it was represented that SS payroll taxes would be raised on the working class so that the system ran a surplus, banked in the form of purchases of federal debt, then as those people retired taxes on people at that time would pay back that debt. The surpluses raised the specter that the deal as sold to the public would actually be realized upon.
Now with the deficits that are being run the very same crowd are saying SS benefits need to be cut which directly repudiates the deal that was cut in 1984.
By the way, this is something that I have been thinking about since Bush raised the possibility of simply having the government default in repaying the bonds to the SS system. I am going to write my Senator Brown (OH) and suggest they pass a law that the government can not selectively default on bonds owned by the SS system and that the SS trustees be permitted to force a prorate default onto private investors who also own bonds (ie, if SS owns 10% of the outstanding bonds the gov could only default 10 cents on the dollar to the SS trustees.)
The Moar You Know
@Joseph Nobles: I’ve got a battery-powered Dremel. I may not leave him the choice.
toujoursdan
Boy does that bring back memories…
The Canadian government ran big surpluses during the early 2000s and started to pay down the debt under the previous Liberal government. The Conservative Party hacks kept protesting that the surpluses were too big and that taxes should be cut to give people their money back.
Then the Conservatives took power and dropped the national sales tax (GST) by 2%. The recession hit and bang: the country is in deficit, so more taxes need to be cut AND the government needs to give subsidies and stimulus to the economy.
Yet they call themselves fiscally responsible and 35% or so of the country goes along with it.
They want the lifestyle that being in a developed nation gives them but they don’t want to pay for it and they don’t care what it means for their own children.
“Fuck everyone else. I’ve got mine (and why won’t you fix that pothole on the road I take to work!1!?!)” It’s the entitlement mentality (which they project onto welfare recipients) at its worst.
Zifnab
@Mumphrey:
Well, in Greenspan-world, we would pay off the debt and then shut down all government services. Hand over the keys to private industry. And then walk away whistling.
Of course, all at once that would be a catastrophic jolt to the economy. So Greenspan argued for phased-in feudalism.
@Napoleon: Cheers to that. If nothing else, it would be good times watching the Republicans vote for defaulting on US Treasury Notes. Even the most die-hard conservative millionaire would blanch at the idea of the government not paying him back for his most stable investment.
liberal
@Mumphrey:
To be honest, I’m somewhat surprised that Greenspan hasn’t committed suicide. He is more responsible than any other single human being for the tanking of the world economy. The fact that he hasn’t committed suicide shows he has no honor whatsoever.
frankdawg
What? You just noticed? Boy Blunder began his campaign to destroy America in 1999 saying we needed tax cuts to stave off the disaster of paying down the debt. Then when things turned to shit he said we needed tax cuts to stimulate the economy. Fortunately the liberal media was so focused on Al Gores wardrobe & sighing they never got around to asking W about the apparent inconsistency.
tenkindsofgrumpy
@The Moar You Know: I say go for it!
Calouste
Somewhat on topic:
The Euro drops 1.7% against the dollar because Germany is going to implement an immediate (immediate as midnight local time tonight) ban on naked short selling.
As if we needed further clues that the vaunted “market” isn’t anything more than a c a s i n o where the gamblers spite at the house for asking them for a check before they give them any more chips.
Bill Jones
What is this “Surplus” bullshit?
The National debt has increased every year since 1957.
How the fuck can there have been a surplus?
What do you morons smoke?
liberal
@Napoleon:
I’m pretty sure Greenspan himself has repudiated the deal, if not directly and openly. For that alone the bastard will rot in hell for all eternity.
(Jeesus Christ, isn’t that scumbag still appearing before Congressional committees as some kind of expert? He should be grabbed by the sargeant-at-arms and summarily shot.)
The government of course cannot default on the bonds—even if they’re not privately held, it’s illegal (IIRC actually against the Constitution). What they _can_ (AFAICT) do is a “soft” default—pay back the bonds, but never let the trust fund balance go back down to zero. (I.e., instead of using the bond revenue to maintain SS benefits, the revenue would be used to just roll the bonds in the trust fund over.)
tenkindsofgrumpy
@frankdawg: Ya, all kinds of sh*t happened while we were all focusing on Al Gore’s wardrobe.
Michael
Speaking of Hitler, you know who actually is just like Hitler?
Obama, according to the GOP deep thinker.
http://www.youtube.com/watch?v=mh4zG083rH8&feature=player_embedded
schrodinger's cat
DougJ did you read Cohen’s op-ed in your favorite newspaper this morning? Liberal media indeed!
liberal
@Joseph Nobles:
The irony is that big bad guvmint did end up taking over much of corporate America (GM, and the banking system except of course in the latter case most of the banks were bailed out instead of seized).
schrodinger's cat
I have two questions for the proponents of tax cuts and the Republican presidential candidates who bash “big government”
1) What tax rate do you think is appropriate is it 0%?
2) If you hate the government so much, why do you want to be a part of it, why are you running for office?
Ailuridae
@Bill Jones:
Let me guess: you’re not very bright are you? And you might not understand how simple interest works, nonetheless compound interest.
DougJ
@schrodinger’s cat:
Yes, I did.
Randy P
@Bill Jones:
Taking in more money than you spend. No matter how you do the accounting.
http://www.factcheck.org/askfactcheck/during_the_clinton_administration_was_the_federal.html
If that is true during the surplus years, it must have been because the surplus wasn’t used to pay down the debt, or even the interest on the debt.
Calouste
Dragging my previous comment (I hope) out of moderation:
Somewhat on topic:
The Euro drops 1.7% against the dollar because Germany is going to implement an immediate (immediate as midnight local time tonight) ban on naked short selling.
As if we needed further clues that the vaunted “market” isn’t anything more than a c-a-s-i-n-o where the big stake gamblers spite at the house for asking them for a check before they give them any more chips. The small stake gamblers of course still need to put down the cash before they get any chips.
El Cid
Debt is different than deficit. The surplus was on the deficit, not the debt.
JGabriel
@Randy P:
It’s not true. The debt went down very slightly in the last couple years of the Clinton administration. Admittedly, though, we’re talking about a couple/few hundred billion in a, at the time, 5 trillion dollar debt load. Basically, we just sold a few less T-bills than we paid off – which, of course, is exactly what paying off the debt means.
It was, however, a start that could have been built upon, but was instead squandered, on tax cuts that didn’t help the economy, by the Bush administration.
.
El Cid
This is pretty typical of the Reaganite strategy — spend the nation into massive debt with defense wastage and giveaways to the super-rich and ultra-corporations, so that Democrats have to come in and get tight with social benefits while being blamed for the debt.
And then a bunch of liars come out to scold on the debt and fearmonger on the deficit so we call all get ready to privatize Social Security and make old people eat cat food so billionaire bond and treasury holders like Pete Peterson can hire front groups and get on every news page and TV show in order to get paid higher interest on his investments.
Lather. Rinse. Repeat. Cleanup on aisle White House.
Ailuridae
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
If someone wants me to play with a spreadsheet for this I suppose I could but the annual surpluses of the late 90s were slowing the rate of growth of the debt. You can just look at the declining deltas in the difference in debt size from year to year or you can look at it by percentage. Obviously there were other conditions on this but if we had stayed with the Clinton tax rates debt when Bush left office would have been much, much lower than it was and likely far lower than it was when Bush entered office.
Comrade Dread
That quote is all the reason America should need to go to every Republican congressperson who was serving in 2001 and punch them squarely in the balls until they apologize and offer to pony up some personal income to pay down the debt.
Or, if they are lacking balls, a punch to the gut works too.
Ailuridae
@Comrade Dread:
I’m still waiting for someone to show up on Morning Joe and run him over with some Lexis Nexis research on his stance on the Bush tax cuts.
In fairness there were some Republicans who at the time of the surpluses said plainly that the great majority (90% or more) should go to paying down the debt. JC Watts comes to mind. That being said, Watts supported both the Bush income tax cuts and an even more aggressive estate tax cut (the Bush plan to eliminate the estate Tax, once implemented, would have cost the federal government 1T a decade; Watts plan was more like 1.5T a decade) so he was likely posturing and not wanting Clinton to spend any of the surplus to win votes.
eyepaddle
@Citizen Alan:
Wow. That pretty much gets right to the point of it all, doesn’t it?
srv
Seems the Schaivo family has found a real cash engine.
Lisa K.
Tax cut Tourette’s.
jl
As long as we are taking a walk down memory lane, I wonder if anyone coodanode? I do wonder. I wonder if any economist from any school of economic thought, say, I dunno, a Keynesian economist…
“This book Is not a mystery novel, so let me start by giving away the ending. Is the tax cut being proposed by George W. Bush a good idea? No. It is much too large, even given the optimistic forecasts of future surpluses. And it is all the more irresponsible given the high probability that those forecasts, like all long-run budget forecasts in the past, will turn out to be wrong.”
Fuzzy Math, Paul Krugman, May 4, 2001, p 7.
Joseph Stiglitz was saying the same thing, but I cannot find the oped now.
Edit: Nah, that is crazy talk. Hoocoodanode? Especially Keynesian economists, who just want to spend spend spend and never worry about deficits and surpluses, nor nothing like that. Nobody coodanode.
comrade scott's agenda of rage
@liberal:
Fixed.
jl
Can’t find Stiglitz warning about Bush tax cut beforehand.
Do have link from late 2002 where he warns that Bush tax policies will not be good stimulus policy for the 2001 recession, and that recovery will continue to be slow and weak.
In economics, you are lucky if you are right much more than half the time. But I think some schools of economics are right somewhat more than half the time, and some economists are not always humiliated by looking back at what they said in previous years.
White House Economoic Policies are Bankrupt.
Joseph Stigltiz, LA Times, Oct 2, 2002
http://www2.gsb.columbia.edu/faculty/jstiglitz/download/2002_LATimes.pdf
Quiddity
@Napoleon: I totally agree with your analysis. It’s disgusting that the opportunity to pay down the debt (so that it could be raised later while redeeming SS bonds) was missed. At the time (ca 2001) I was furious that the press didn’t inform the public about the need to think long-term about SS debt redemption.
Brandon
Why Greenspan’s official title has not now become digraced former Fed Chairman is beyond me and a prime example of the “accountability free zone” that exists among our ruling elites. I get the feeling that one of these folks could gun down a baby in drive by and not only would the whole establishment rally behind them to escape jail, but they would additionally get a job on the editorial pages of the Washington Post as an “important voice”.
It’s a sickness, it truly is.
someguy
@El Cid:
Are you calling Obama a Reaganite? Because he’s doing a pretty good job with the big money giveaways. Can’t think of any other reason why the insurance companies would be on board with HCR, and why Goldman would be on board with financial reform, and the oil companies begging for cap & trade. I don’t know what is in these bills, precisely, but the mega rich seem to love them, and the alternative to “jam packed with stuff that benefits the mega rich” is the implausible “measures that stick it to the mega rich.”
Raaaaaaaaaaahm
@someguy:
So do you actually think financial reform will increase the deficit with giveaways to the mega rich or is your vapid pseudo-leftist rhetoric generator just set to “auto-response?”
Raaaaaaaaaaahm
@someguy: Also, AHIP opposed HCR to the end but don’t let a few inconvenient facts get in the way of playing stenographer to Jane Hamsher’s id.
Raaaaaaaaaaahm
Finally, hate to comment spam, but the consciously “sticking it to the mega rich” isn’t the “only” alternative to “jam packed with stuff that benefits the mega rich.” Those alternatives are benefits to the non-mega-rich.
And that, you see, is what separates internet-dwelling, ideologically incoherent pseudo-leftists like yourself from progressives who are actually out in the real world acting on their values. While you’re primarily concerned with hurting someone (the wealthy), actual progressives are primarily concerned with helping someone (the poor and lower-middle class).
Bill Arnold
Greenspan is complicit in the loss of a million human working lifespans of productivity worldwide. Pushing 2 million.
I have a hard time forgiving his ideology-driven mistakes that contributed to the deep global recession.