Newt Gingrich: Tea Party and NAACP Should Cohost Town Hall Meetings

The US federal deficit isn't as large as it seems.

"For the federal government, the relevant debt-income measure is the ratio of outstanding debt of the federal government to gross domestic product. (Outstanding debt is the total amount owed at a particular time, roughly the result of debt accumulated over time by annual budget deficits; GDP, the value of goods and services produced, is equal to total income.) In 2009, this ratio was 53%. Although higher than the recent low point of 33% at the end of the 1990s expansion, the ratio in 2009 was still far lower than the record peak of 109% in 1946—after which the U.S. economy in the post-World War II period experienced the strongest economic growth in its history. The U.S. ratio of 53% actually compares favorably to those of other advanced industrial countries. For example, IMF data indicate the following debt-to-GDP ratios for 2009: France (67%), Germany (70%), Japan (105%), and Italy (113%)."

Again, only stimulus can bring recovery; budget surplus' have historically led to recessions. Government spending is what has really driven the US economy under all administrations.

"Borrowing money to put people back to work does make sense. It helps people most in need, the unemployed. It provides them with income that they can use to pay taxes and to buy goods and services that create more jobs, more income, and more tax revenue. Indeed, our inability thus far to seriously tackle the unemployment problem is what has worsened the budget problem, as tax receipts have fallen and spending for unemployment benefits and food stamps have risen. An analysis by the Economic Policy Institute reveals that the largest source of the 2009 budget deficit (42%) was actually the recession itself."

http://www.dollarsandsense.org/archives/2010/0510wolfson.html

Also, like the IMF, bond holders have a great deal of power over the setting of economic policy in highly indebted countries. The reason is the risk/reward ratio. The higher the risk, the more interest they demand as an offset. High interest rates hurt the growth potential of the local economy. High rates also strengthen the local currency and prevent capital flight making debt repayment easy but exports uncompetitive, thus hurting employment and putting downward pressure on wages.

Bond market pressure has an underlying class power issue that is very important to the understanding of the Greek Crisis. Banks always advise governments lower wages and social spending, not raising taxes on the rich.

"Unwilling or unable to tax the rich, governments borrowed to pay for their operations in good times. Having run budget deficits in good times, these authorities are in a poor position to add more debt when it is most needed—in the current recession in particular. So now, when governments really need to borrow to run deficits, they—and, more important, their people—are at the mercy of the “bond markets.”

http://www.dollarsandsense.org/archives/2010/0510macewan.html

steve of IL 4:43PM July 18, 2010

Here's the truth about the shutdown.

The Republicans tried to blame Clinton for the shutdown, but Clinton got a break two days later when Gingrich made a widely-reported complaint about being snubbed by Clinton; Tom DeLay called it "the mistake of his [Gingrich's] life".

DeLay writes in his book No Retreat, No Surrender:

"He told a room full of reporters that he forced the shutdown because Clinton had rudely made him and Bob Dole sit at the back of Air Force One...Newt had been careless to say such a thing, and now the whole moral tone of the shutdown had been lost. What had been a noble battle for fiscal sanity began to look like the tirade of a spoiled child. The revolution, I can tell you, was never the same."

Gingrich's complaint resulted in the perception that he was acting in a petty, egotistical manner, and Clinton defended the seating arrangement as a courtesy to Gingrich, the back of the plane being closer to his pickup car. Later polling suggested that the event badly damaged Gingrich politically.

The shutdown also influenced the 1996 presidential election. Bob Dole, the Senate Majority Leader, was running for president in 1996. Because of his need to campaign, Dole wanted to solve the budget crisis in January 1996 despite the willingness of other Republicans to continue the shutdown unless their demands were met.

http://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_1995

steve of IL 4:12PM July 18, 2010

Newt is of a lower standard of human, much less presidential material.

His behavior is dispicable and his hypocrisy is comical. So, Bill, the contract with america, in your opinion, was a good thing. As it relates to infidels, so was the nice budget that clinton left lil bush and the Dick cheney.

But do you recall the onslaught that the repubs put upon mr. clinton and his family, although, he was doing the job and looking out for america, as it relates to the surplus, this is the same surplus that you repubs are claiming that obama is taking away from our kids and grandkids. Go figure, lil bush and the Dick cheney have already done what you are claiming obama is going to do...wow!

Mitchell of NC 3:32PM July 18, 2010

President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.

UPDATE: Many Obama defenders in the comments are claiming that the numbers above do not include spending on Iraq and Afghanistan during the Bush years. They most certainly do. While Bush did fund the wars through emergency supplementals (not the regular budget process), that spending did not simply vanish. It is included in the numbers above. Also, some Obama defenders are claiming the graphic above represents biased Heritage Foundation numbers. While we stand behind the numbers we put out 100%, the numbers, and the graphic itself, above are from the Washington Post. We originally left out the link to WaPo. It has now been added.

http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/

This was posted March 24th, 2009.

Considering obama claims obamacare will save money why are we waiting YEARS to fully implement. If I was a tea party liar as Steve likes to say, I would agree with CEO that if doesn’t and robs from other broke social services.

……….

“CBO report: Debt will rise to 90% of GDP”

March 26, 2010

“President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.”

“In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade. ”

No so called exaggerated tea party numbers Steve. No Fox slide of hand numbers. None from liberal side either.

Now don’t write a comment Steve that gets eased. Calm down.

http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/

“In Greek Debt Crisis, Some See Parallels to U.S.”

By DAVID LEONHARDT

Published: May 11, 2010

“The numbers on our federal debt are becoming frighteningly familiar. The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today."

http://www.nytimes.com/2010/05/12/business/economy/12leonhardt.html

Bill Hedges of MO 2:59PM July 18, 2010