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Thanks.  I'd be interested in hearing about deficit bullshit if you find the time, but this is plenty for me to digest in them meantime.

(By the way:

The Laffer Curve has been understood for centuries, if not longer.  You can trace it back, at the very latest, to Islamic scholars in the Dark Ages.

It will definitely surprise a few folks I know to hear that one of their cherished economic policies can be traced back to medieval Muslims.)

Truth unfolds in time through a communal process.

by marco on Sun Oct 8th, 2006 at 08:01:10 AM EST
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Actually, I'm not certain, but I think it can be traced back to ancient China.

The budget deficit is much more simple: The $250b deficit does not, I believe, include "emergency provisions" for Iraq and Afghanistan, which tend to run about $70-100b per year.  It also does not include borrowing from the Social Security surplus, which runs about $125-150b per year.  That borrowing from SSA is supposed to be paid back, not that it ever will be.  Adding all of that yields a deficit of $445b to $500b, which, not surprisingly, is roughly the amount by which the national debt increased, according to the Bureau of Public Debt.

The WSJ has been pulling this stunt for years.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Oct 8th, 2006 at 08:09:27 AM EST
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The $250b deficit does not, I believe, include "emergency provisions" for Iraq and Afghanistan, which tend to run about $70-100b per year.
This is not accurate.  This spending is included in the spending, and included in the deficit.
It also does not include borrowing from the Social Security surplus, which runs about $125-150b per year.  That borrowing from SSA is supposed to be paid back, not that it ever will be.
This is accurate, but has been government policy for decades.  Both Clinton and Bush have made recommendations that would begin to address this issue, but Congress, has not had the political will to address this (social security and medicare).  Not that this should make you feel good, but our European friends are also ignoring the same issue.  They are also not including this future liability in their budget deficits.  None of us are funding our obligations for our future retirees.  I have written at least one diary on this, focusing on France and the US.  The comments to this diary seemed to support the same view as the US Congress and European parliaments, ie.  this is no big deal, let's just ignore it and fix it later.

Adding all of that yields a deficit of $445b to $500b, which, not surprisingly, is roughly the amount by which the national debt increased, according to the Bureau of Public Debt.
So the $450--500 number is not accurate, and not consistent with the way the US historically reports the number, nor the way other countries report.
by wchurchill on Sun Oct 8th, 2006 at 02:50:01 PM EST
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The $250b deficit does not, I believe, include "emergency provisions" for Iraq and Afghanistan, which tend to run about $70-100b per year.
The more I thought of this, it sounded vaguely familiar.  I think there may be seem congressional rules that prevent certain "non-repetitive" expenditures from being included in the spending forecasts (not the actual spending, but the forecasts).  Or it may be that the Bushies are taking advantage of certain practises regarding the budget, that keeps the "one time?" nature of the Iraq war expenditures out of some of the forecasts.  I can't recall the exact reason, but i'm pretty sure it relates to forecasting spending and deficits, and not to the reporting of spending and deficits.  Don't know if that helps, but it has kind of stuck with me all day.
by wchurchill on Mon Oct 9th, 2006 at 02:12:35 AM EST
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Oh, and on my comment about the WSJ pulling the "Let's not and say we did" schtick on inflation: Watch out for the WSJ and the CNBC crowd when they use the term "inflation-adjusted," because you always have to ask, "Which figure are you adjusting for?"  There are about four thousand CPIs to choose from at the BLS website.  More often then not, they'll use the core index and call it the official inflation rate, which makes economists pull their hair out, because it doesn't include food and energy prices.  (And, as we all know, energy and food prices don't impact our budgets, right?)  The CPI tends to about double the CPI-core, or even higher, so it's incredibly misleading to adjust for core prices and present it as the true picture, even if the impact doesn't seem very large.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Oct 8th, 2006 at 08:17:39 AM EST
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