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more on Creative Accounting Only Goes So Far
From: David Farber <dave () farber net>
Date: Thu, 09 Sep 2004 07:51:01 -0400
Begin forwarded message: From: Daniel Berninger <dan () danielberninger com> Date: September 9, 2004 12:28:39 AM EDT To: dave () farber net Subject: Re: [IP] Creative Accounting Only Goes So Far Dave, One does wonder how the candidates got this far without discussing the deficit and national debt.The supposed return of economic growth this year and last disappears if one subtracts deficit spending (the proportion of growth borrowed from future
generations) and adjusts for the effect of inflation. Doing the math over the years the "economic growth" in Reagan and Bush I similarly disappears if one takes into account the leveraging of future generations.The deficit as a percent of GDP happens to exceed GDP growth in 5 of 8 years during Reagan, 3 of 4 years during Bush I, and the last two years for Bush II for a net negative of 10% during these years. Looking at the chained numbers below you can see Clinton reversed the negative trend from Bush I
and Bush II reversed the positive trend received from Clinton. This would seem a repudiation of tax cuts = economic growth. Tax cuts = shift growth from future generations to the present and suffer enormous interest payments.Setting aside the dim prospect of reducing the $8 trillion national debt, the country now suffers annual interest payments of the same magnitude of
all discretionary spending - approx $350 billion. This number alsoapproximates the defense budget. Notice it also approximates the current
deficit. In other words, the current 400 billion deficit just pays the interest on previous deficits. National bankruptcy comes to mind. Dan ....................................... Daniel Berninger 202.250.3428 www.danielberninger.com
Real GDP Growth G = Percent GDP Growth minus inflation D = Deficit as percent GDP Year G - D = Real GDP Growth Reagan 1981 2.5 - 2.7 = -0.2 1982 2.0 - 4.0 = -2.0 1983 4.3 -6.0 = -1.7 1984 7.3 -4.8 = 2.5 1985 3.8 - 5.0 = -1.2 1986 3.4 - 4.9 = -1.5 1987 3.4 - 3.2 = 0.2 1988 4.2 -3.0 = 1.2 Bush I 1989 3.5 -2.8 = 0.7 1990 1.8 -3.9 = -2.1 1991 -0.5 - 4.5 = -4.0 1992 3.0 -4.7 = -1.7 Clinton 1993 2.7 -3.9 = -1.2 1994 4.0 -2.8 = 1.2 1995 2.7 -2.2 = 0.5 1996 3.6 -1.4 = 2.2 1997 4.4 +0.2 = 4.6 1998 4.3+ 0.8 = 5.1 1999 4.1 +1.4 = 5.5 2000 3.8+ 2.4 = 6.2 Bush II 2001 0.3+ 1.2 = 1.5 2002 2.4 - 1.4 = .8 2003 3.0-4.2 = -1.2 2004 (estimate) 3.0-4.2 = -1.2 ------------------------------------- You are subscribed as interesting-people () lists elistx com To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
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