Right Thinking From The Left Coast
I find that the harder I work, the more luck I seem to have. - Thomas Jefferson

You Owe Half A Million Bucks
by Lee

Via Drudge, we get this report on the economy.

The economy nearly stalled in the first quarter with growth slowing to a pace of just 0.6 percent. That was the worst three-month showing in over four years.

The new reading on the gross domestic product, released by the Commerce Department Thursday, showed that economic growth in the January-through-March quarter was much weaker. Government statisticians slashed by more than half their first estimate of a 1.3 percent growth rate for the quarter.

The main culprits for the downgrade: the bloated trade deficit and businesses cutting investment in supplies of the goods they hold in inventories.

I smell a recession coming.  Now read this.

The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.

“We’re on an unsustainable path and doing a great disservice to future generations,” says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don’t show up when the government reports its financial condition.

Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

All this falls right on Bush’s lap.  He’s the guy who signed all this crap into law when he could have vetoed it.  Bush is under 30% right now.  I the economy continues on a downward slide toward recession, it will be right in time for the elections, and a massive Democrat takeover of Congress and the presidency.

The Bush Legacy, ladies and gentlemen.

Posted by Lee on 05/31/07 at 09:03 AM (Discuss this in the forums)

Comments


Posted by bb on 05/31/07 at 10:52 AM from United States

It’s pretty tough to say whether the number obtained by using pro forma corporate accounting for government budgets is worthy of note without comparisons to prior years.

I deal a lot with corporate accounting (I’m not an accountant, but I am a securities lawyer and I have to deal with accounting issues in SEC filings and M&A;transactions) and I know enough about government budgets to conclude that the only value you’ll get out of applying corporate accounting methodologies to the government is shock value.

If you were to show the last 20 years of budgets calculated in this manner maybe we could draw some conclusions, but even then it would be pretty remote.

Posted by on 05/31/07 at 11:04 AM from United States

It’s pretty ironic that Bush and others constantly harp about corporate corruption, accounting irregularities, etc. (e.g. Enron). If you held the government to the same standard, just about every government official who had anything to do with the budget would be in jail right now.

Walter Williams gives a good explanation (as always) here.

Posted by on 05/31/07 at 12:51 PM from United Kingdom

Hanging all that on Bush is simply wrong.  A whole generation of baby boomers all over the developed world have voted themselves generous benefits in retirement, then given up smoking and taken up exercise so they’ll live long enough to collect them.  The problems are far worse in other developed countries like Italy and Japan, and even in China, where the one-child policy has meant that it will be the first country in history to grow old before growing rich.

Anyway, there will have to be a solution involving some combination of later retirement, less generous benefits, higher taxes and moderate inflation.

Posted by on 05/31/07 at 12:57 PM from United States

Based on the amount of your posts that have:

The Bush Legacy, ladies and gentlemen.

I’d say you have enough posts to create a new category.

Posted by on 05/31/07 at 01:44 PM from United States

Just imagine how it will be under Clinton’s ”Shared Prosperity” programs......

Posted by Miguelito on 05/31/07 at 04:10 PM from United States

I smell a recession coming.

Yeah, one reason I’m trying to dump some options and payoff my heloc now… want to keep the debt down as much as I can if we slide into another one. 
My mortgage is enough to have to pay regularly (which I’ve been paying off faster then owed continually anyway).

Posted by West Virginia Rebel on 05/31/07 at 04:42 PM from United States

I don’t think the presidency will be in that much danger if Rudy is the nominee but the GOP can kiss any chance of regaining majority status for the foreseeable future if the economy goes south. And for all those who would say that the Dummycrats would be worse, I’d just like for them to explain how.

Posted by on 05/31/07 at 04:45 PM from Australia

Hanging all that on Bush is simply wrong.  A whole generation of baby boomers all over the developed world have voted themselves generous benefits in retirement, then given up smoking and taken up exercise so they’ll live long enough to collect them.  The problems are far worse in other developed countries like Italy and Japan, and even in China, where the one-child policy has meant that it will be the first country in history to grow old before growing rich.

Exactly right, and nicely put.

I smell a recession coming.

And yet the Fed says inflation is still the largest threat to the economy. Who to believe? Hmmmm… I’ll go with the Fed.

Posted by on 05/31/07 at 05:14 PM from United States

And for all those who would say that the Dummycrats would be worse, I’d just like for them to explain how.

Well, for starters, you can kiss all of Bush’s tax cuts goodbye, thus removing the engine that has spurred one the greatest bull markets in history.
Hilliary (the probable winner if the dems get the white house)said in a speech in New Hampshire last week ,"it’s time to replace President Bush’s ‘ownership society’, with one based on shared responsibility and prosperity.”
You don’t need tea leaves to divine what comrade Clinton meant by that.
She has already been on record for raising taxes on the rich so that they can pay their fair share, and by rich she means you, unless you are living in a refrigerator box.

Posted by on 05/31/07 at 05:26 PM from United Kingdom

And yet the Fed says inflation is still the largest threat to the economy. Who to believe? Hmmmm… I’ll go with the Fed.

They are actually very much linked together.

Inflation goes up, $US goes down, People holding foreign US debt get fed up and require higher interest rates to compensate. Americans can’t pay it back at higher interest rates so there is less debt avaliabile to fund existing debt. Crash follows.

The US is not the only country in this situation, in the UK we have a property market which is literally a house of cards an interst rate point or two away from an utter disaster. With global interest rates rising to reign in excess liquidity - it’s going to be messy.

Have fun everyone, off on holiday for a couple of weeks :)

Posted by Manwhore on 05/31/07 at 05:41 PM from United States

The Bush Legacy, ladies and gentlemen.

Well, to everyone reading you can’t blame Lee for not driving a theme home. :-)

Posted by on 05/31/07 at 06:36 PM from Australia

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.

Lee said:

All this falls right on Bush’s lap.  He’s the guy who signed all this crap into law when he could have vetoed it.

Lee, it was Bush who proposed reforming social security and retirement savings, even devoting 90 days of his presidency to traveling the country trying (unsuccessfully) to sell the reforms. It was the Democrats who stopped it. Blaming Bush for this is just plain wrong.

Posted by Para on 05/31/07 at 07:21 PM from United States

Blaming Bush for this is just plain wrong.

Don’t you get it. EVERYTHING IS BUSH’S FAULT.

At least on this site it is.

In non-bizarro world, Bush didn’t create social security, he tried to reform it. Bush didn’t lower revenue and raise taxes, he lowered taxes and raised revenue, the most in history last month in fact.

Oh and we also know Bush arranged for 9/11, so that part of the economic slump might have been his fault.

Posted by Lee on 05/31/07 at 07:59 PM from United States

In non-bizarro world, Bush didn’t create social security, he tried to reform it.

Yeah, he really put a lot of effort into it, didn’t he?  If he’d put 1/100 the effort into SS reform that he put into keeping Terri Schiavo alive we might have gotten somewhere.  But SS reform wasn’t what Bush was concerned with, keeping his fundamentalist Christian support base happy was his highest priority.

Bush didn’t lower revenue and raise taxes, he lowered taxes and raised revenue, the most in history last month in fact.

And, by raising spending and entitlements by such a massive amount, we’ll eventually end up with the largest tax increase in history.  But that won’t be Bush’s fault because it will be some other president signing that legislation.

Oh and we also know Bush arranged for 9/11, so that part of the economic slump might have been his fault.

Now you’re just being a dickhead.

Posted by on 05/31/07 at 08:42 PM from Australia

Yeah, he really put a lot of effort into it, didn’t he?  If he’d put 1/100 the effort into SS reform that he put into keeping Terri Schiavo alive we might have gotten somewhere.  But SS reform wasn’t what Bush was concerned with, keeping his fundamentalist Christian support base happy was his highest priority.

Are you joking? Let me get this straight; firstly you blame Bush (in your original post) for causing the continual deficit in social security, and then when confronted with the fact that this is undeniably incorrect you now say it’s his fault because he didn’t put enough “effort” into the Social Security reforms he championed to fix the problem that you incorrectly blamed on him in the first place.

So the social security deficit is his fault, and it’s also his fault his reforms aimed at fixing the problem were blocked by other people. This is quite possibly the most ridiculous argument I’ve heard by you in the 4 or so years I’ve been reading your blog. 

Bush devoted 90 days of his second term into selling the reforms. That is not an insignificant amount of time and effort. You can fault Bush on many, many things – but the failure of meaningful social security reform is certainly not one of them.

Posted by Para on 05/31/07 at 08:54 PM from United States

Yeah, he really put a lot of effort into it, didn’t he?  If he’d put 1/100 the effort into SS reform that he put into keeping Terri Schiavo alive we might have gotten somewhere.  But SS reform wasn’t what Bush was concerned with, keeping his fundamentalist Christian support base happy was his highest priority.

Lee, seriously , what the fuck are you smoking.

Did Bush travel the country giving speech after speech about keping Schaivo alive?

Bush tried and tried, and the FUCKING LIBERAL MEDIA demonized him for as they always do.

Posted by Manwhore on 06/01/07 at 07:45 AM from United States

Bush tried and tried, and the FUCKING LIBERAL MEDIA demonized him for as they always do.

What a fucking scapegoat.

Posted by Lee on 06/01/07 at 08:38 AM from United States

Did Bush travel the country giving speech after speech about keping Schaivo alive?

Nope.  But he and the rest of the raving fundie lunatics were on TV every night for weeks, maybe longer.  That message completely dwarfed anything the president was saying about SS.

Bush tried and tried, and the FUCKING LIBERAL MEDIA demonized him for as they always do.

Oh, poor president!  Let me ask you this, Para.  Look at all Reagan was able to accomplish.  He had a far more liberal media to deal with than we do today.  Reagan didn’t have FOX News, or the online media, or the blogs, or the Drudge Report.  He had the big three networks plus PBS, How was it that Reagan was able to get out his message and implement his agenda?  Think of the Newt-era House.  They got all kinds of shit accomplished, with that same pesky liberal media.

You can sit there all you like, and believe that if it wasn’t for the media George W. Bush’s face would be on Mt. Rushmore, but it’s a fucking lame weak-ass argument.

Posted by Manwhore on 06/01/07 at 10:31 AM from United States

I’ll never understand why attacking Bush’s performance is an attack on Bush himself. Everyone is responsible for thier job and criticisms therein.

Posted by Lee on 06/01/07 at 10:40 AM from United States

I’ll never understand why attacking Bush’s performance is an attack on Bush himself.

Bingo.  This gets to something I’ve said a million times, that I’m not “bashing” Bush.  If he started acting like a goddamn halfway decent president you’d find nobody more praising of him than me.  There isn’t anyone in the world who wants more than me for Bush to be a better president, except maybe for his father. 

When Bush stops acting like a big-government puppet of big business and the fundamentalist Christians, then you won’t see me “bash” him as much as I do.

Posted by Brian at Tomfoolery on 06/01/07 at 12:05 PM from United States

Ah, and the Dems will say “We need to raise taxes!” That’ll fix everything.

Take a look at the article closely.  It isn’t saying that we are falling apart, it says we aren’t growing as fast as before.  Well, duh!  The economy works that way.  If it was growing too much, we’d get the “here comes inflation” articles.  I’ve heard it all before.  Besides, government can’t build the economy, it can only destroy it, and raising taxes will go along way towards that once it happens in the next few years.  Remember, as Hillary just say, no more of this “on your own” society if she is elected Premier, uh, President.  What this article is is (I love using “is is” in the same sentence as Willy C.!) Bill Clinton’s brilliant 1992 strategy of “it’s the economy stupid” and “worst economy since the Great Depression” redux in preparation for the 2008 elections.  Kerry and Gore tried to emulate it and they failed.

If this economy sucks, then the liberals will really hate my guts when it “rebounds.”

God Bless Capitalism.

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