He's like (nearly) every other politician. He wants to scream and shout but he doesn't want to do anything. It's one thing to say we need a chicken in every pot but quite another to wring the chickens' necks.

He's had some interesting votes for a budget hawk...he voted to spend the money for TARP for example. I don't necessarily think that was a bad idea but it certainly is not consistent with his stance. It's interesting that the tea-baggers love him for that and hate Obama, Hillary, and others for the same vote.

Hmmm...according to BusinessWeek, no matter who wins, we lose.

Things suddenly got very interesting.

Ahead of Convention, GOP Dumps Mortgage Deduction

Desperate is probably a more appropriate word. As soon as the proles realize that this would kill the economy the election will be over.

I noticed yesterday that Zogby has the chance of Obama winning the election at 89% with Mitt at 10%. That seems far-fetched until you look at the electoral map.

Given the housing market was hard hit in Florida, which is an important electoral state, this announcement seems like R-R are unhappy with only having shot one foot and are now trying to blow the other one clean off.

I can understand putting out the message that there are no sacred cows, but this sent the message to the markets that the Republicans want to kill the recovery entirely by destroying the housing market.

Actually, I think it's neither a bold move nor a desperate one. They're not actually saying that they'll kill the mortgage deduction; they're just taking off the protected list.

Frankly, I think this is a good thing. The Dems will scream that the GOP is trying to kill the middle class by taking away a deduction they need and the GOP will reply that the this is a way to make the tax code fairer and help for a tax deduction for all income levels. Then there will be charges and countercharges.

What makes this a good thing is that it might force a few more open-minded individuals to understand that it's not all gravy. Somewhere along the way, some cattle (or chickens or pigs) have to be killed in order for there to be a meal. Hopefully, it will open the door to a fuller discussion of how to deal with the National Debt. While the Simpson-Bowles report is an ugly thing with pain for everyone, it's the only thing I've seen so far that's mathematically feasible. Whether it's politically feasible is another story but it's still a good platform from which an intelligent discussion can be started. The Tea Party folks on the right and the 99 Percenters on the left generally don't like to be bothered by inconvenient things like facts, but hopefully a few on each side will recognize the realities of the situation and start a meaningful dialog.

Maybe it's just cynicism but I don't think this or any other political move will lead to meaningful dialog.

In the short term is will lead to financial uncertainty and that is a terrible thing. Perhaps we need to get rid of the mortgage interest deduction. But we don't need to scare the market into thinking that the pool of home buyers might shrink over the next decade or so. The time to do this is during the next boom.

I was driving home yesterday, listening to Marketplace on NPR, and I heard something interesting relating to the debt. They were interviewing Scott Nelson, the author of a new book, A Nation of Deadbeats: An Uncommon History of America's Financial Disasters, and he said:

And what this implies is that the National Debt itself is not a bad thing, but that the failure on the part of the nation to pay that debt down is what's problematic. Any thoughts on this?

I think that is accurate. It's virtually impossible for any nation to grow without borrowing. But most countries have to repay the debt before growth starts to slow.

The US has been in a unique position since WWII. We were essentially the only industrialized economy left intact and our currency was the de facto (and in facto?) world currency. That position was unsustainable after almost 30 years so Nixon had to take us off the gold standard. That shock caused the inflation of the 70s/80s (IMO). Now, 30 years later, we're nearing another point of unsustainability. We can't keep relying on debt that we don't have a plan to repay.

I think if the USG could commit to a long term plan to repay the debt, even if it spanned 100-200 years, we'd be in much better shape. I think the world could accept that. Our real problem is not financial. It is political ineptness. We cannot get politicians to put the long term viability of the country ahead of their own stupidity.

I don't completely blame the politicians (though they do get some blame). We the public vote for the politicians promising us short term benefits. We would never elect someone who promised current discomfort (even if only a little) for future benefits.

That's true. So what we need is some politicians that will lie to us. We need them to tell us everything will be good while actually causing us short term pain but helping us in the long term. The current batch seem to do most of those things already so maybe we just need a slight tweak.

There seems to be some movement in the gridlock. A letter was sent to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell on Monday. It was signed by 6 other senators -- 3 Democrats, 3 Republicans, warning of the dangers of sequestration in January and imploring them to enact a deficit reduction package.

What do you think? Real movement or election-year posturing? My own take is that it's election year posturing. If they really wanted it, a bipartisan group of 6 Senators would have written and introduced such legislation themselves.

I agree with your take.

But I've become much less worried about this in the last few days.

If Obama wins it will essentially force the republicans to accept his version of the fix to the fiscal cliff. His fix is to extend the tax cuts and such for all but "rich people." The republicans agree with this except that they want the cuts extended to rich people as well. If he is elected and the republicans do not go along with his plan then they are responsible for everyone's taxes going up and the inevitable recession. They don't want to own that.

If Romney wins, which seems highly unlikely right now, his fix will be to extend the tax cuts to everyone.

I'm not saying I like this whole business of kicking the can down the road but that seems to already be baked into the political cake no matter what happens.

Re-read this thread. Thought this was interesting...



The previous graph started with Roosevelt provided by Vintek I believe so we should start with 1933 to compare apples to apples.

1933-1947 both Senate and House were Democrat Party controlled. (Roosevelt President)
1947-1949 both Senate and House were Republican Party controlled. (Roosevelt, Truman Presidents)
1947-1953 both Senate and House were Democrat Party controlled. (Truman President)
1953-1955 both Senate and House were Republican Party controlled. (Eisenhower President)
1955-1981 both Senate and House were Democrat Party controlled. (Eisenhower, Kennedy/Johnson, Nixon, Nixon/Ford, Carter Presidents)
Split 1981-1987 Senate is Democrat Party controlled. House is Republican Party controlled. (Reagan President)
1987-1993 both Senate and House were Democrat Party controlled. (Reagan and Bush Senior Presidents)
1995-2001 both Senate and House were Republican Party controlled. (Clinton President)
Split 2001-2003 Senate is Democrat Party controlled. House is Republican Party controlled. (Clinton President)
2003-2007 both Senate and House were Republican Party controlled. (Clinton President, [color=#ff0000][b]W. Bush [/color]Presidents[/b])
2007-2011 both Senate and House were Democrat Party controlled. (W. Bush, Obama Presidents)
Split 2011-2012 Senate is Democrat Party controlled. House is Republican Party controlled. (Obama President)

Conclusion?

Democrats have been in control of both wings of Congress fpr 28 terms (56 years out of 79)

Republicans have been in control of both wings of Congress for 7 terms. (14 years out of 79)

Interesting to say the least...

So in 1933 we were in the depths of the Great Depression and in late 1941 we entered WW2. Since the end of the war, we'd been reducing the deficit -- right up until Reagan got elected. So let's look at the impact Congress had on deficits beginning with that period. Remember, budgets passed by Congress are predicated on requests from the administration.

As the figure shows, Reagan and Bush senior got almost exactly the budgest they requested in each of their 12 budget years.

Reagan:
The first budget — passed by all Republicans and a few conservative Southern Democrats.
This increased the debt by $144 Billion.
The next 5 budgets — passed by the Republican Senate and signed by Reagan.
The last 2 budgets — passed by a Democratic Congress
Totalled slightly less than Reagan requested.
G. H. W. Bush:
Democratic Congresses under Bush passed smaller budgets than he requested in 3 out of 4 years.
These four Democratic budgets totalled $14.6 Billion less than Bush requested.
G. W. Bush:
The first two budgets — Senate was split 50/50 and the House was Democratic.
Bipartisan and totalled $20 Billion less than Bush requested.
The biggest cause of deficits was Bush's enormous tax cut, mainly for the rich.
The next 4 budgets — the Congress was solid Republican.
The last 2 budgets — Bush vetoed modest Democratic attempts at spending.

In summary: Democrats controlled Congress during 8 out the 20 years. During 4 of those years, Democrats decreased the budgets proposed by the Republican presidents. Their total effect during those 8 years was to reduce Republican budgets by $17 Billion (which is only 0.2%).

As you say, interesting to say the least...

The truth is, we did not get into the situation we are in without BOTH democrats and republicans being irresponsible and incompetent.

We also have an objective, unbiased, self-interested mechanism to judge how bad things really are. It's called the capital markets. With interest rates on US government debt at record lows, the market is saying that there is no serious problem.

Does that mean I think we should spend wildly and run up even bigger deficits? No way. But our incompetent congress needs to stop focusing on the politics and do what is good for the country. They have a losing hand politically. They are going to be responsible for the biggest tax increases and defense cuts this country has ever had. Yep. Good things ahead.