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Chart of U.S. Budget Deficit or Surplus (1980-09)

 
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PostPosted: Fri Feb 13, 2009 3:55 am    Post subject: Chart of U.S. Budget Deficit or Surplus (1980-09) Reply with quote

Percent of annual GDP:

http://4.bp.blogspot.com/_otfwl2zc6Qc/SZPXZQzBx8I/AAAAAAAAJOg/XbgQMdpVM9E/s1600-h/wsjpic.gif

WSJ Article:

We aren't deficit scolds, but these levels are uncharted territory, especially if any economic recovery is weak because the spending doesn't stimulate. The new spending means new federal debt in the trillions of dollars over the next few years, which will test the limits of America's credit-worthiness. To the extent that taxes rise to pay for it all, the U.S. will become less desirable as a destination for the world's capital. Perhaps the Federal Reserve will try to inflate away this growing debt, but the world's bond vigilantes will get a vote on that.

We recognize this bill is going to pass as early as today. But Americans need to understand the vast expansion of government they are getting -- and who voted to pass it.

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Obama has repeatedly stated he doesn't want to go back to the failed policy of tax cuts:

Bush's timely tax cut in 2001, after the end of a spectacular structural bull market from 1982-00, over the worst stock market crash since the Great Depression, and during a quick and massive Creative-Destruction process turned a potentially severe recession into a mild recession.

Bush's timely tax cut in 2008, after the biggest global economic boom in history, a huge U.S. housing boom, severe global imbalances, and after the S&P 500 hit an all-time high turned a potentially severe recession into a soft-landing, until September 2008 (when Lehman was allowed to fail freezing the credit market). The tax cut allowed the Fed to catch-up easing the money supply.

A tax cut will have an immediate and powerful effect stimulating the economy, unlike Obama's spending programs, which are slow, inefficient, and unfair.
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