Government Shut Down

[Griff]

Originally Posted by glatt

That's the interest the federal government has to pay, expressed as a percentage of GDP.

I like that graph. It really cuts to the bones of the spending vs revenue problem. It shows that we maybe were dead wrong in the eighties and should check out some pie charts from that time vs now for comparison. Big defense is big government...

[Lamplighter]

Amen Griff.

To hear today's GOP, Reagan was the master of an astute economic theory.

Wiki:

The four pillars of Reagan's economic policy were to reduce
the growth of government spending, reduce the federal income tax
and capital gains tax, reduce government regulation, and control
the money supply in order to reduce inflation

But... after a long association with GE, Reagan was the darling of the defense industry.
We are still living with his "star wars" (Strategic Defense Initiative), and to some extent
his 600-ship Navy, with their resulting and ever-increasing (supply-side) deficits -> debt.

[glatt]

My only gripe about it is that I don't have a good understanding of what percent of GDP really means. I would more easily understand percent of annual budget, or dollars adjusted for inflation. I'm not sure percent of GDP is a good measure.

[Lamplighter]

Glatt, "deficit" is for a particular period of time, whereas "debt" is the cumulated deficits

So I look on GDP as the total output of energy and resources ($) of the country.
So, looking at a given year's deficit as a %GDP is a measure of what
the country would have to expend to reduce that deficit (to zero).

OTOH, higher inflation has the effect in future years of
reducing the subsequent debt-to-%GDP ratios
... i.e., older debts can be paid off with "cheaper" dollars

BUT, I'm open to being educated out of the error of my ways.

.

[glatt]

Originally Posted by Lamplighter

Glatt, "deficit" is for a particular period of time, whereas "debt" is the cumulated deficits

So I look on GDP as the total output of energy and resources ($) of the country.
So, looking at a given year's deficit as a %GDP is a measure of what
the country would have to expend to reduce that deficit (to zero).

OTOH, higher inflation has the effect in future years of
reducing the subsequent debt-to-%GDP ratios
... i.e., older debts can be paid off with "cheaper" dollars

BUT, I'm open to being educated out of the error of my ways.

.

My issue with % of GDP is that the government doesn't have access to the entire GDP to spend it. I think a more useful statistic might be to see a % of the total revenue.

But I'm no economist.

[Lamplighter]

Such as this ... From here

[Lamplighter]

Truckers are trying to organize a strike and occupy DC this weekend.

The first come-on is to protest the government shutdown.
But then if you drill down one step, it is to protest "government corruption"
And then if you drill down further, it becomes a far right-wing jumble.

Some trucker groups are backing away, some large outfits are too.
So if you plan to be in DC this weekend, don't be surprised by some big-rig traffic jams.

[Lamplighter]

Originally Posted by Lamplighter

Truckers are trying to organize a strike and occupy DC this weekend.

The first come-on is to protest the government shutdown.
But then if you drill down one step, it is to protest "government corruption"
And then if you drill down further, it becomes a far right-wing jumble.<snip>

More recent articles are pretty much just copying the following...


Fox News
10/11/13
Dozens, not thousands, show up for DC trucker protest

Virginia state police say they stopped four tractor-trailer drivers on the Beltway,
pulling them over after they began driving side-by side across
all four northbound lanes of the Beltway in Fairfax County.
Their actions slowed traffic to about 15 mph.
Officers warned the drivers not to impede traffic and did not write any tickets.

Police say a convoy of about 30 trucks began traveling north on Interstate 95
from Doswell, Va., on Friday morning. The truckers are circling the Beltway.

However, the presence was not quite the thousands of truckers that organizers had predicted.
On Friday morning, just a handful of people had showed up at a key staging area.

On its website, the group lists several demands, including
that President Obama resign immediately,
that the debt ceiling not be raised and that
National Security Agency surveillance of communications be ceased.

The group is also complaining about low wages and rising fuel costs.

[gvidas]

Originally Posted by glatt

My issue with % of GDP is that the government doesn't have access to the entire GDP to spend it. I think a more useful statistic might be to see a % of the total revenue.

But I'm no economist.

It isn't that the number is literally relevant. The point is that neither the deficit as an absolute number, nor the GDP as an absolute number, is terribly meaningful -- they both need to be contextualized. To do this, you can compare them to one another, and look at relative changes.

A crude example: spending $100 a month on a cell phone with a good data plan is a big deal if you're 16 and work part-time at McDonalds; if you're an investment banker pulling in 6 figures a year, it's a fairly minor expense. You can represent this in general by looking at an expenditure as a percentage of annual income.