Trick Or Treat

Halloween is fast approaching, but this Halloween is unlike any we have seen in the last 60 years. Ya see, in about a week or so two divergent economic lines, which in healthy vibrant societies have no business keeping company with each other, will intersect. Of course after that, they go their separate ways again, with us the poorer for it:

Yes, ladies and gentlemen: All Hallows E’en will be doubly scary this year: for the first time since World War II, US debt will officially surpass GDP on Halloween 2011.

Double clicking that chart will enhance it, making it more readable, if you are really a masochist. Notice that the chart starts at about the time Obama took the helm. Not only are these lines glaring, but notice those black lines, how quickly they drop, and consistently quarter after quarter.

And what do we have to look forward once they decide they have had enough of each others company?

I’ve done posts like this before, not that we can really do anything about it or prepare better for it (except maybe build that bomb shelter and stock it with supplies, guns and ammo paramount), we all know its coming, all we can do is flinch.

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  1. TxAg94

    The debt ceiling debate was a pain the rear but sadly that’s the only level part of the debt line. I guess gridlock at least keeps the debt from going up. Maybe we should lower our bar for success and just root for gridlock.

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  2. CM

    Some partisans offer a simple explanation for the depth and severity of the recession: It’s the stimulus’s fault. If we had done nothing, they say, unemployment would never have reached 10 percent.

    That notion doesn’t find much support even among Republican economists. Doug Holtz-Eakin is president of the right-leaning American Action Forum and served as Sen. John McCain’s top economic adviser during the 2008 presidential campaign. He’s no fan of the stimulus, but he has no patience with the idea that it made matters worse.

    “The argument that the stimulus had zero impact and we shouldn’t have done it is intellectually dishonest or wrong,” he says. “If you throw a trillion dollars at the economy, it has an impact. I would have preferred to do it differently, but they needed to do something.”

    A fairer assessment of the stimulus is that it did much more than its detractors admit, but much less than its advocates promised.

    “The thing that people who want to argue that the stimulus failed have to deal with,” Bernstein says, “is that if you look at the trajectory of job losses, you will find that right on the heels of the Recovery Act, the rate of job losses began to diminish and then the jobs numbers turned positive. The Recovery Act worked. The problem is we didn’t keep our foot on the accelerator.”

    http://www.washingtonpost.com/blogs/ezra-klein/post/could-this-time-have-been-different/2011/08/25/gIQAiJo0VL_blog.html

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  3. richtaylor365 *

    Some partisans offer a simple explanation for the depth and severity of the recession

    I don’t know who these “partisans” are you speak of but when dealing with a multi trillion dollar economy affecting 300 plus million people, things are rarely “simple”.

    If we had done nothing, they say, unemployment would never have reached 10 percent.

    Again, not sure who “they” are, but I have heard some pundits complain in language intimating that the problem was not the spent money per se, but it was the promises attached to that money, that it not only did not come to fruition but did little (if anything) to the unemployment rate to begin with.

    “The argument that the stimulus had zero impact and we shouldn’t have done it is intellectually dishonest or wrong,”

    Who has made that argument? Who has said ,”The stimulus had zero impact”? For my own self, I think it is clear that it did do “something”, but that something was not the “everything” it was packaged as, so the money was not well spent given the minimalist impact and the maximumist (?) costs. And I’m really not that ticked off about it given that they tried to do something, but what is annoying is this:

    The problem is we didn’t keep our foot on the accelerator.”

    It’s like, if 1 trillion was good then 5 trillion would of been much better, yep, spending 5 trillion would have definitely done the job.

    A fairer assessment of the stimulus is that it did much more than its detractors admit, but much less than its advocates promised.

    I totally agree with this, with a kicker, the disagreements will inevitably lie with degree, meaning that on a scale of 1 to 100, where 1 equals “did nothing at all” and 100 equals “did everything we wanted it to do”, where I would say it was a 33, you might give it a 66.

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  4. AlexInCT

    I hope you mean out of a hundred and not out of 10 SO.

    As Rich pointed out, your opinion of how successful this trillion dollar give-away was depend on where you are coming from. That is, if you measure success by how much money you funneled to democrat friends, lobbyists, union and corporate interests, public sector voting block, special interests like the green lobby, and finally democrat campaign coffers. It scored in the high 80s out of a hundred. This thing did all of that very well.

    If you are scoring it for successfully creating/saving jobs, keeping unemployment under 8%, and getting the economy back on track – these are the very things that the democrats promised it would do, and insinuated would be hammered if they didn’t do it, BTW CM – it scores in the single digits, even if you are inclined to be generous. The numerous and varying jobs saved/created claims from the WH, all were so ridiculous they don’t even use them any more. And we have evidence that it served primarily to save some 300K public sector jobs at the expense of over a million private sector ones (I have linked this repeatedly before you ask for proof again).

    The unemployment numbers? I don’t even want to bother with that one, that is, other than to say that I totally dispute the notion/claim by the left that without this big waste of money, unemployment would be far higher than it is now. That’s because the economic impact on the private sector would definitely have been minimal, if anything, and that’s where jobs come from, despite the fantasies of leftists and Team Obama. There is no way to slice it: public sector jobs generate no economic positive. Sure many can be considered as valuable services, often depending on your priorities, but the great majority of them are crap too. Governments consume wealth: they don’t create it. See communism.

    I can say the same about the economic situation. I guarantee you that had Obama simply handed the cash out to people, especially small business owners and definitely not all these crony capitalism entities like GE or Solyndra, it would have resulted in a far better positive bump than the fizzle we got from this plan.

    In short, the cost only was worth it if you are a democrat politician or a recipient of that largesse. Otherwise, it was a freaking epic fail.

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