I think the budget with Beshear is a political move to get casinos through.

 

This is possible but I think its still a 2 part scenario. I do think we have a budget and spending problem. do you?

First of all, many business have revolving lines of credit to finance operating costs. And many consumers use credit cards to purchase dinners and other operating needs and don't pay them off at the end of the month.

 

Second, I agree with you the useful life of a home usually exceeds the loan term. I'm not sure how that's germane here however.

 

And we'll definitely end up paying the taxes to pay for the war, we'll just do it with future tax revenue, the same way a business or home owner makes its payments on its loan debt. What you seem to be saying is that a business or a home owner should not do that; rather, if a business wants to purchase a new piece of machinery today it should lay off workers and cut back or sell off other revenue producing assets so as to be able to pay for the machinery in cash. Which may make sense in certain circumstances; but in plenty of circumstances, the business does not do that, rather it borrows the funds with the expectation that it will be able to make the loan payments with future revenue. Jacking up taxes to pay for the war today would have, if you believe in the economic theory that raising taxes hurts the economy (which I do), an adverse impact on the federal govt's income. While I'd have greatly preferred that the President and Congress dramatically cut back or eliminated all social entitlement programs and eliminated the pork barrel products so we could finance the war without increasing the deficit, I'm not naive enough to think that Congress was going to permit such to occur.

 

If (and I realize its a big if for a lot of you) we can avoid future terroristic attacks in our country which would have a toll not on human life but our economy, if we can bring some sort of democracy and stability to the middle East by the removal of Hussein, if we avoided the great loss of U.S. military life in the future by removing Hussein before he restarted his WMD programs, and if we are able to bring a free society to Iraq where people become better educated and have a reason to live and such spreads to other middle Eastern countries, the borrowings we make today in the form of the deficit will have turned out to be a very wise investment.

 

And for the record, I fully realize that we can not have long term budget deficits. But there are many a learned economist that say we need not get our boxers in a bunch about short term deficits. Just Google "effects of the federal budget deficit" and you'll find all the articles you want to find about it. And if you do so and report back, be fair about it (not saying you wouldn't). Some economists predict doom and gloom; others say as long as it's not a long term pattern, our economy will be fine. History would indicate we've worked our way out of deficits before and I believe we can do so again.

 

There is a huge difference between borrowing for capital expenditures and borrowing for operating expenses. There is also a huge difference between short term borrowing to ease cash flow (revolving credit for a business) and long term borrowing to cover operating losses. The government is borrowing money to cover current operating expenses. Most of the trash you inferred from my earlier post is just the opposite of what I said, since I mentioned CAPITAL expenditures. We can grow our way out of debt ( we did it in the 90s for a while) but not until we are willing to match our spending to our taxing.

 

By the way, the useful life of a home exceeding the life of the loan because the capital asset will still be there when the loan is paid off. Borrwing for operating expenses (going out to dinner or the war in Iraq or current social programs) is long term ruinous. Are we beyond revovery? Of course not. Will our current borrowing restrict future economic growth? You bet it will.

You guys can try and shift blame back and forth but the reality is that the BOTH can share blame. And with $3 trillion be asked, there is plenty of out of control spending blame to go around to all.

 

 

Nice try, but the blame rests squarely on those in charge. Supposedly conservative, fiscally-responsible Republicans controlled the White House and both houses of Congress from 2000 until early 2007, and that is when spending exploded. Bush did not use his veto power and did not make any serious attempt to reign in his own party as spending ballooned. It has only been after Democrats took control of Congress in the fall 2006 elections that Bush bothered to reach for his veto pen.

This is possible but I think its still a 2 part scenario. I do think we have a budget and spending problem. do you?

 

State and Federal politicians have a budget and spending problem. Absolutely.

 

Again, my biggest complaint with GW was he ran as a fiscal conservative and has never shown that in 8 years. My biggest complaint with the Republican controlled Congress was they had no fiscal restraint.

 

While the Dems will tell you it was the war that won them the prize of Congress control in 2006, I think the Republicans were not supported more because of they spent like a drunken liberal more than a drunken liberal would have.

 

They deserved to be voted out because they did not do as they ran to do.

Nice try, but the blame rests squarely on those in charge. Supposedly conservative, fiscally-responsible Republicans controlled the White House and both houses of Congress from 2000 until early 2007, and that is when spending exploded. Bush did not use his veto power and did not make any serious attempt to reign in his own party as spending ballooned. It has only been after Democrats took control of Congress in the fall 2006 elections that Bush bothered to reach for his veto pen.

I think you'll find that spending was only marginally higher during those years if you remove Iraq/Afghanistan spending. The explosion was pure Mideast spending. I'm still unhappy about how fiscally irresponsible the Republicans were. I expect that from the Democrats.

Nice try, but the blame rests squarely on those in charge. Supposedly conservative, fiscally-responsible Republicans controlled the White House and both houses of Congress from 2000 until early 2007, and that is when spending exploded. Bush did not use his veto power and did not make any serious attempt to reign in his own party as spending ballooned. It has only been after Democrats took control of Congress in the fall 2006 elections that Bush bothered to reach for his veto pen.

 

No try. I agree with all you said.

 

And Clinton's Presidency and the economic good times that is promoted was with a whom controlled Congress?

 

And once the Dems got into power, the report came out that every single newly elected Dem in Congress was rewarded with earmarked money to their home district.

 

If this $3 tril budget goes through or if the spending in it mostly goes through, would you concede that the Dems have a spending problem too?

 

Remember also, wasn't this spending issue that we have came about with a Rep President and Dem Congress in the 80's?

There is a huge difference between borrowing for capital expenditures and borrowing for operating expenses. There is also a huge difference between short term borrowing to ease cash flow (revolving credit for a business) and long term borrowing to cover operating losses. The government is borrowing money to cover current operating expenses. Most of the trash you inferred from my earlier post is just the opposite of what I said, since I mentioned CAPITAL expenditures. We can grow our way out of debt ( we did it in the 90s for a while) but not until we are willing to match our spending to our taxing.

 

By the way, the useful life of a home exceeding the life of the loan because the capital asset will still be there when the loan is paid off. Borrwing for operating expenses (going out to dinner or the war in Iraq or current social programs) is long term ruinous. Are we beyond revovery? Of course not. Will our current borrowing restrict future economic growth? You bet it will.

 

 

I never said there wasn't a difference between borrowing for capex and opex, did I? Nope. Heck, I represent banks for a living and deal with the issues every day. I fully understand the difference.

 

The federal deficit borrowing is for short term operating expenses true, but those expenses are need to make the long term investment in the benefits that hopefully will be realized in Iraq (I assume that's the "trash" you are referring to, although I'm not sure and I appreciate the less than respectful reference to my post. Nice.) I truly believe that if we make the investment in Iraq that we are, it will reduce middle East costs to the U.S. in the long run and will make this country safer. You can disagree with that all you want. The truth is you and I won't know that for 30 years.

 

I never said anything to the contrary to what you posted concerning the economic/useful life of a home exceeding the loan term so I'm not sure why you think I'm disagreeing with you. Bottom line is that some posters have said the fed govt should be forced to have a balanced budget like business and people do. Lots of businesses incur debt for not only capex but also opex. Lots of people incur home loans and use credit cards. Borrowing money is the norm with businesses and people; not the exception. If left unchecked or not used for legit expenditures, it can be disastrous. Never said anything to the contrary. However, I believe that the use of deficit spending to fund what we are doing in Iraq is a legit and necessary expense, thus I have no problem with having short term deficit spending. We may be leaving our kids with the debt; then again, if we are going to play the emotional card that some have dealt, I'd rather leave them with debt to service than terrorists blowing up office towers.

 

Hey, but we don't disagree on everything. I don't think we are beyond recovery either and I do think we can again grow our way out of debt. I also agree (as previously stated) that if we were to keep this up long term, it would present major economic problems for us. I'm just not jumping off bridges yet because of short term deficits.