As the debt ceiling talks slog on, the negotiations - necessary to stave off an unprecedented national default that could prove economically devastating - are testing the ability of leaders on both sides of the aisle to legislate effectively in an era of increasingly shrill and unyielding partisanship.
But what about the economic implications? Fareed Zakara talks to Tom Foreman on "In the Arena" about how the debt ceiling is "almost a sideshow" to the challenges of economic growth and job creation.
FOREMAN: Fareed, we've been hearing so much about what will go wrong if the debt ceiling is broken. And yet I feel this rising current of people saying, "Make no mistake about it – even if we solve this, there are going to be some hard times for this country as a result of the solution. "
ZAKARIA: Well, the debt ceiling itself is almost a sideshow. The fact that it has become center stage is just because one group, the Tea Party, within the Republican Party, decided to make it that.
The debt ceiling simply reflects the fact that we are spending more than we take in.
FOREMAN: And then we have an economy in shambles right now all over the country.
ZAKARIA: And that we don't have growth. The only way you're going to get this economy back on track is if you get growth. If you look historically, the times that the budget deficit has gone from being a number one concern to moving down when we've solved the problem, it's all been that we grew faster than we thought we would.
If you can get growth back, if we can get people employed, get them paying taxes, you can't cut your way to a happy future because the more you cut, you get yourself into a downward spiral like you see in Greece.
You know you - because what does it mean to cut government spending? It means to lay off people who now don't have jobs. They can't pay taxes, they can't go to the diner, they can't buy stuff. So it may work in theory, but in practice, the more you cut, the more you're depressing the economy.
FOREMAN: One of the predictions I've read is that the solution to the debt ceiling problem could cost us a million jobs over the next few years. We could lose, you know, what we've created in a very short period of time.
Do you think that's too dire? Do you think that's possible?
ZAKARIA: It depends on how much we cut and how fast we do. I think what President Obama has been trying to do - again, I think, quite wisely - is push some of these cuts off into the future. When you signal to the markets we're getting our budget deficit under control but don't do it in an economy that is fragile right now.
But if we were to precipitously start laying off wholesale school teachers, firemen, policemen, then, yes, because all of a sudden you have fewer people paying taxes, you have fewer people buying goods, you have fewer people buying products.
We really need to look at what's happening in Europe. The governments that cut too fast too far actually depressed their GDP growth and increased their budget deficits as a result.
FOREMAN: Talk to me about some of these key building blocks that have to be restored. I have had many conversations over months where people have said, if we do not restore the value of housing in this country and the construction market, nothing else we do will solve this.
Is that a fair building block to begin with?
ZAKARIA: I think it's absolutely fair. The problem is it is the most difficult building block to restore because housing went through probably the biggest bubble since the 1920s. It burst.
If you look at the Nasdaq bubble, the Nasdaq bubble burst at its peak at 5,000. What is the Nasdaq now? It's 3,000. In other words ... 21 years later, you're barely halfway back to the prices. I'm not suggesting that will happen in housing.
FOREMAN: Well, it might, though. I've had experts in housing who said it could be 15 years before markets recover in some places.
ZAKARIA: Certainly it's going to take a while. And so then the question becomes what can you do? And people say well, you need a lot of government support. Maybe, but part of the problem was too much government support and too much government encouragement to people to take on large debts.
FOREMAN: Let's say we can't - let's say we can't tackle housing right now or up front, give me a couple other building blocks that you think are critical to address right now so that we get beyond, not just the debt ceiling fight, but our overall inability to create jobs. Every politician says we got to create jobs and not one of them seems to have a clue how to do it.
ZAKARIA: There is one absolutely, obvious way we could do it. We have an infrastructure in this country that is in shambles, OK, point one. Point two, we have 20 percent unemployment in the construction industry. So there are millions of people out of work in that industry. Three, 30-year money - 30-year bond rates are 2 percent. So you could borrow money at 2 percent for 30 years, rebuild American infrastructure, put people to work.
All expenditure is not the same. When you build a bridge or expand a highway that is going to increase economic activity for the next 100 years, that's called an investment. That's not an expenditure.
FOREMAN: And as you know it was the theory behind all those shovel-ready projects. The idea was we will have these projects and yet we found that ultimately even the president himself said not all shovel-ready were shovel-ready.
ZAKARIA: Well, not all shovel-ready was ready, but let's remember ... of the $800 million stimulus plan, only $100 million was infrastructure. Most of that has actually turned out to be on time and on budget, but it's a $14 trillion economy. People say why did China manage an infrastructure program that worked?
Well, here's the main reason. They spent 10 times as much as we did as a percentage of GDP. So – you can't expect to get a big bang by putting $100 billion into a $14 trillion economy.
FOREMAN: Let me ask you one last quick question here. Does it trouble you that we keep looking at all of this so much in terms of the politics, which party comes out wining in this whole thing? Because I'm just convinced that both parties ultimately lose terribly because we all lose with problems like this.
ZAKARIA: I think it's the worst part of Washington right now, which is that it seems as though - you take something like infrastructure. Republicans have supported something I've been pushing, a national infrastructure bank to finance this kind of infrastructure, so it doesn't cost the public much. The private sector would do it.
Kay bailey Hutchinson sponsored a bill, Chuck - Richard Lugar, Chuck Hagel all support it. Can't any traction? Why? Because Obama proposed it. And it seems to be now a kind of almost idea in the Republican Party that anything Obama supports, they have to oppose.
We have to get to a point where we can actually get the business of the country done and not worry about who's going to get credit for it because if we get into this game, you know, we've got - we've national energy policy we have to solve, we've to solve immigration, we've got to solve health care. We've got to get these jobs done. And oh, by the way, we've got to deal with the debt ceiling.
We can't worry about who gets credit. We need to get these things done too fast.
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It's not a sideshow. It's a circus act!
Yes... how sad it is when politicians join the circus.
"And it seems to be now a kind of almost idea in the Republican Party that anything Obama supports, they have to oppose." Exactly, it seems that some politicians don't care about the wellbeing of the country but their self-interests.
Politicians don't join the circus. They ARE the circus.
Reminds me of the keystone cops. We are the laughing stock of the world!
Congress is a clown college and the head clown resides in the White House
this is what you get when you elect someone who has no experience in putting deals together in DC
if it's not on a teleprompter he can't say anything intelligent about it
the prez has surrounded himself with academics and think tank refugees who are truly clueless
both sides of the aisle should be voted out and we start over with a new third party as an option
This is what happens when you vote tea party ideologues who have no experience and are too angry to use their brains. All they know is to say no. Everyone misses the old GOP where experience counted.
After the progressives are outed from the GOP, the TEA folks are going to join the Democratic party next and chase them out of there also, should take 4 or 5 election cycles.
I thought Explanation ought to know what to expect.
Perhaps, but I think historians will look at this and blame many, foremost among them the Tea Party movement which has resulted in basically breaking our democracy. I understand they mean well, but I think they have brought our nation to it's knees.
You would have preferred some "Business Expert" like George W. Bush in the White House? If the President had a different-colored epidermis, the Debt Ceiling would have been raised, as it has for many, many years, with hardly a dissenting vote. When the GOP Majority Leader of the Senate stated that his party's primary goal was to make President Obama a one-term President, everyone should have known how little the GOP cares for the welfare of the country.
The Republicans are going to do whatever big business tells them to do and the Democrats are going to do whatever the unions tell them to do.
We have sold all our Treasury Bills to China. Now they will own us.Your right AmazonGirl, don't use borrowed money anymore. Let's start paying our bills, and that means cut expenses and raise taxes. This Government has grown out of control. Don't believe me. Just go to your nearest airport and look at how many TSA agents are present. What used to be done by lower paid private firms was taken over by the Federal Government and is now costing billions. My small airp[ort went from thirty six staff to over 130. The top dog is being paid over $120,000annually just to supervise these screeners. You can blame Bush or Obama or whoever you want but something has got to be cut.
Firstly Why CNN SHOW INCOMPLETE VIDEOS. Kindly Show complete videos. All repubs and tbaggers what rationale do you use for not raising taxes on the Billionaires, doles to Oil Companies compared to firing a teacher or Police Officer? People on crack have more clarity. Your Hate for a Black man has blinded your so called mind.
The only sane voice has been President Obama. He has supported cuts far beyond his own party and all he asks is sensible tax policies. He has also explained his reasoning for what he wants and what he opposes.
The Tea party are the clown college here. No policy except the destruction of the country for their ridiculous ideas. In fact the only thing the Tea party wants is opposing the president whether he is right or wrong. The Tea Party is going to destroy the Republican party and get President Obama elected. Just as some of the radicals in the Democratic party got Reagan elected a second term or Bush.
If you don't like Obama and Congress, move to some place that you can trust the government.
If you don't like Obama and Congress, move to some place else. The sooner the better. It has been so many decades since we have a great president.
What level headed and sensible comments. Obama's team could take some talking points from him, their public comments objections against the GOP plan are lacking the bite that Fareed delivers, simply by appealing to your common sense.
FOX news, take note, this is how good journalism is supposed to be done!
Amen!
Didn't you read the interview? FZ's point is that even WHEN the Prez offers ideas that the Repubs came up with, the new GOP opposes them. The last time we had GROWTH in the economy- was during the Clinton admin [Demo] & we ended his 8 years by turning a deficit to a surplus. The GOP is turning the US into a 3rd world economy.
As if you, or any Muslim for that matter, would know decent journalism. What an absolute stupid comment. By the way, you should watch more of Fox – you might be better informed.
Hey Big George,
Could you repeat that? It kinda sounds like you have your cranium planted in your rectum. You are a retard, an ignoramus, and a danger to civilization.
Blow me you tool.
That's a joke, right?
So how is this sensible? The government pays an employee $100,000 a year so that the employee continues to be a tax-payer, returning $10,000 in income taxes back to the government to be pooled to pay his $100,000 salary the next year. Just do the math. IT CAN'T SUSTAIN ITSELF!
I apologize for Big George... not all of us in Big D are idiots.
Amen. Pleased to read something that makes sense, a discussion by people who understand what matters. The discussion on infrastructure makes immense sense. With low interest rate, high unemployment in construction - now is the time to rethink American infrastructure. And not just the old idea of infrastructure, but the modern, future looking focus on URBAN infrastructure, a drastic departure from the traffic clogged cities, expensive utilities, and the skyrocketing urban maintenance budgets. These are the investments that will take this country into 22nd century, and make it again the place of creativity and innovation.
But we just tear each other down, indulge in petty grievances, and treat the abusive aspects of our financial system with leniency that will cost us dearly. Tea Party has been hijacked long time ago. Fox News, whose parent company is not paying taxes in US, as their income is hidden accross FOUR different islands - has always much to say about patriotism. And this is where we are. These are the people who sold their souls to the multinationals, and preach patriotism. But I am optimistic. People are slow to anger, and need to get their information. This seems to be happening now. Politicians from both sides of the isle, are getting scared. I think they understand that they have, without intending to, caused the giant to wake up.
Too many clowns, no ring leaders.
Ghadafi would get it done for us, maybe he can be persuaded to handle it?
Brilliant. (Don't get excited Brian, I'm being sarcastic.)
If only it were a circus. Unfortunately it's real life and many people will be effected by decisions made now. This is a holdover from George Bush. By cutting taxes and launching two wars with no means to pay for them… Well, what the he** do you expect?
Miss Jim, Bo-Bo has $5T to his credit in 3 years. Exactly how is that W's fault? At some point, you Dems are going to have to start taking rsponsibility for your own mess. In the beginning, Bo-Bo could get away with everything being Bush's fault. After 3 years? no. He owns the mess now, and has made it worse. We're headed towards a double-dip recession, and this second dip is his, and his alone.
"Miss Jim"? "Bo-Bo"? Why should we you seriously?
"Miss Jim"? "Bo-Bo"? Why should we take you seriously?
And What has the "O" Man done to fix things? Nothing. He starts another war in Libya and plays his fiddle while Washington burns.
Jim, go back to your couch and watch MSNBC and call in to "The Ed Show". He will agree with you. He also overlooks Obamas incompetence and blames Bush for everything. Don't forget to pay your union dues.
With Big Business selling tickets and the Unions selling popcorn. You idiots are spending money at the carnival games where your five dollars will win you a three-cent piece of junk.
Anybody who watches Fox or MSNBC should find careers as carnies. We're still paying for our debts from the Revolutionary War, never mind the dozens we've been involved in since. You could double the taxes of every American and we still wouldn't put a dent in our debt. It's pretty simple. It's just like your home budget. When you spend more than you earn your in trouble. You have to cut some spending or get a better paying job. If you don't you face bankruptcy. Sound familiar. It will after August 2nd.
Fareed makes good sense. Maybe our journalists are better suited to run our country than those clowns in Congress.
I agree with tutu....who gives a &^%^& what Zakaria says or thinks and CNN is just a mouthpiece for the Democrats. Ted Turner is a traitor.
bla bla bla crying baby. May be ted is the ony few good rich people in this country. I bet you are one of the fox clowns
Ted Turner? Are you a relic or what?
Fox Clowns as opposed to CNN/MSNBC clowns?
I'm sorry, CNN and Democrats? C'mon Tony. You know better than that.
People, please listen to me for I'm only trying to help: turn off CNN, Fox News, and MSNBC. Turn it all off. Let's start talking about the real issues. And I'll give you a starting "target": The war on Libya is illegal and innocent people are dying from bombs paid for by our tax money.
From Tony, a.k.a. the Murdoch Mouthpiece (or maybe the Koch Bros?).
When the Democrats are RIGHT, informed, and know what they are talking about, I don't care WHO the mouthpiece is. I DO know that conservatives are liars, ignorant, poorly informed, gullible, and basically full of crap. Which is clear, because Rupert Murdoch and his tabloids are THEIR mouthpieces. See, mainstream media is mainstream, because it is common-sense consensus. And anything that is NOT mainstream, logically, is suspect. Only FOX zombies are too gullible and stupid to pick up on that. They are an advertising demographic, purposefully fed crap to ensure that they watch more FOX. How stupid is THAT?
Well, Ted Turner has nowhere near the influence that Walter Cronkite has.
You got it !! I have said to friends if things aren't good for 2012 I'll "write in" Fareed !!!!!!!!!!!!!!
(pssst .... Fareed was not born a US citizen)
However, I do believe Fareed brings intelligence and balance to all discussions...I am a big fan. He may be the one journatlist I trust for informed opinion. (sigh)
This journalist shows much wisdom and good common sense. Because of his background and exposure to both the East and the West, he is cosmopolitan and open-minded. A lot of his thought has good common sense. This is an example of a successful (legal) immigrant who makes the top of the public media world.
lol@ COFFEEPARTY!
Thank you Osama – tha is constructive.....Hey...don't you know – Navy Seals killed you....
What I fail to understand is Republicans who say that the fact that we have 50% of the population paying no taxes we should cut spending. Why can't they see that only with economic growth will many of these 50% be paying taxes again. Firing government employees just exacerbates the situation, as Fareed pointed out.
.. *because of* the fact ..
They can not get beyond individual concern that they're being taken advantage of to embrace community effort & benefit.
Er, after spending all this money and still having little to show for it, jobs-wsie, you want to double down and spend even more. Remind me never to go to Las Vegas with you!
concerning the comment: And it seems to be now a kind of almost idea in the Republican Party that anything Obama supports, they have to oppose.
IMHO, It's because Obama's black. End of story. (for the record, i'm white)
You can't just give people jobs for the sake of having jobs, they have to actually be accomplishing something. Sure, nobody wants to put anybody out of work, but there are 10s of thousands of government jobs that are erroneous. These people take good salaries, insane benefits, and get pensions on the tax payers back! It's one of our #1 problems.
And adding more government jobs is not "growth", it's a charade. These people are paid with tax dollars to begin with, so they are adding nothing to the economy by working - unless their job is of actual value, of which many are not.
I implore individuals to stop paying attention to the government, stop waiting around for them to do something. They can't, and they shouldn't have to. Our government is a beast that is out of control. What we need in this country are individuals who are ready to start being PRODUCERS again. It seems as if the majority of people have been relegated to service workers who just wait around for whatever handouts they can have. Start growing food, start making furniture... start doing something that creates and actual product. That's how to stimulate the economy and start "growth". Ironically, that type of independence and individualism is NOT what our Government wants, and that's why we'll never hear them say those words.
Pasquale – Americans weren't and aren't willing to pay the cost for products made here in the US. Don't you remember the old "Made in America" public service announcements? Well, we'd rather get two cheap sweaters from China than one made in the US. So in our GREED for more, we've put ourselves out of business. Add to that the fact that the top 10% has significantly stopped investing in the US because they can make more money other places...well, greed seems to be our downfall.
I agree with you He has always been quite sensible. I am not sure how he can be seen as a mouth piece when he has his own independent point of view on issues. People have lost all of their common sense and ability to think for themselves when they follow their political ideologies to riigidly.
Different agendas. Politicians want to hold onto power. Journalist want to get to the story. Persuasion, not truth is the prize in a political debate.
Fareed makes sense only if you do not know economics.
The US debt is $14 trillion dollars. Based on current deficits, it will rise over $1 trillion a year for the next several years. Even at full employment, we will still have massive deficits and more borrowing.
The interest on $14 trillion in debt is $381 Billion in the last fiscal year at rates that are historically low. If the rates increase to a more normal 4-5% we can expect twice that amount of interest AND the additonal debt will make the interest cost grow faster. The additional interest will not go to US citizens – over 50% of our debt is held outside the US so doubling the interest cost doubels the outflow of dollars.
Fareed proposes borrowing to fund infrastructure replacement. That action will, of course, increase the debt, increase the interest load and will eventually have to be repaid. The proposal is nothing more than Keynes' deficit spending to spur a weak economy. The spending may be needed and perhaps desperately slow but it is not affordable when our defiict is alread $1.7 trillion for one year.
Do you have any plans for Growth? If you don't grow, increase revenues, how in the world you would pay interest? China will be making collection calls pretty soon.
While working on Infrastructure projects may increase the debt AT THE BEGINNING, putting people to work on such projects puts more money in the coffers because these folks start paying taxes again, start buying again, putting even MORE people back to work. This is the REAL trickle down economics that the GOP just never grasps. It's not cutting taxes on the rich that trickles down, it's JOBS that does it. Plain and Simple. Hey GOP, hear this loud and clear: The needs of the many outweigh the needs of the few.
You are right. Government is similar to administration in a private business. It must be reduced to mininum to obtain the maximum profit margin. Therefore, government spending must cut.
Oh my God...someone with a brain and common sense, thank you Morris.
There are so many things wrong in the above article its hard to know where to start. FZ's says the problem in Greece and other area's of the EU are caused by cutting too much, too quick...not that they have overspent..setting up welfare states that are un-sustainable. Geez I thought it was due to the fact that banks would no longer invest is Greece's sovereign debt and Greece has had to borrow money just to sustain the system. But no...its because they cut to much to quick. Thank you CNN for thinking for me
Fareed makes sense?!? He wrote: "you can't cut your way to a happy future because the more you cut, you get yourself into a downward spiral like you see in Greece." Really? The problem is Greece is because they cut spending too much? Zakaria is either wholly ignorant of the causes of the Greek financial problem, or is LYING to you. Take your pick: liar or fool.
Excellant
Excellent points Wooga. F.Z. entire opinion is based on the concept that keynsian economics is the way to go. When will people learn you can't incorporate socialists principles into capitilism, the two are like oil and water, they don't mix.
I'd trust Matt's opinion if he actually knew how to spell. Since he doesn't, i'm discounting everything he says as stupid T-bagger rhetoric.
Z simply regurgitates DNC talking points. You'll never hear a solution to any problem from him that doesn't involve higher taxes and more government spending.
You are a one among the dirty, racist, dumb, idiotic teabaggers.................
Exactly! We have to work our way out of it, not take an ax to it!
What is the "it" that we have to work our way out of? Isn't it the massive debt? So we get out of this hole by digging it deeper? Think, mon, about what you are saying/
Rufus, cutting programs will only make unemployement go up. The economy is in the hand of the American people. The more they work, the more they spend and the better the whole system works. Taxes need to go up. Not for 98% of the population that can barely spend but for the 2% that have too much and have already everything and are not buying things anymore. Compagnies are not hiring not because they pay too much taxes but because there isn't enough demand out there. Cutting more taxes for them is a waste of money. We have such a large deficit because 2 wars have been funded while taxes have been cut when they should have been hiked up. The government programs are not spending too much, people are not paying enough taxes to fund them. If people want to receive benefit from SS when they get old, they should pay more out of their paycheck every month when they work. That is as simple as this.
Republicans have made this a sideshow. Wanting to play politics with the American economic system. I think the policies of their party have forgotten what happened when we had the last adiministration in place. The debt and economic catastrophe left us provided money for wall street and the rating agencies, but little for the American public but higher unemployment, lower confidence, lower dollar resulting in higher gas prices. The republicans have forgotten why they are in congress, to serve Americans, all Americans.
As opposed to the democrats that pushed through Obamacare despite > 50% of the country not wanting that...
Forget it. Both parties are only interested in their own money, power and fame. Only difference is that democrats are smarter. They realize it's easier to buy votes by taking money from the successful and giving it to the unsuccessful. Otherwise, they're both the same.
You just proved Zak's point. "Obamacare" was Bob Dole's plan. The insurance Co.'s were to handle the whole thing & still make $ as the Middle Man. They got scared about how the number crunching was working out so they pulled out & got the U.S. Chamber of Commerce to try & kill ti. But it was a Repub. Model from the start.
i bet youre probably uneducated on the health care law as well. i challenge you to name a specific section of the bill you oppose, outside the individual mandate. i guarantee you cant
Agreed with the two posters above. Obama care is good for the country, and good for everyone but the insurance companies and pharmeceuticals. Republicans are so brainwashed. When will you wake up, seriously just turn off fox news for a month and try getting news elsewhere.
Do you have an original thought, or do you always parrot the media conventional wisdom? Why did you bother posting, since all you did was repeat Z's blather?
Here is more CNN objective reporting. You libs get upset with Fox over leaning right yet you have articles like this on all of the other news sites. Talking about how tax cuts don't work and blah blah.
This country is in deep trouble. The media runs the show. Then you have people commenting that media should run for office
.. good god.
I love how "chuck" declares that Fareed is totally wrong about the short-term economic impact of austerity programs ... without even bothering to explain why. And then he declares that because Fareed is so wrong (again, without explaining why), it proves that CNN is also wrong, and that FOXNews is the best news source. Hey "chuck", if you were trying to disprove the stereotype that FOXNews watchers are brainwashed knuckle-draggers, you failed spectacularly.
I never said he was wrong. And I never said I was a Republican/conservative. Once again, typical liberal nonsense.
People who watch CNN are no less brainwashed than those who watch Fox. Its simply a different doctrine that you buy in to.
Why are we even having this discussion? We don't have the money... so you don't spend it, just like every other responsible individual with half a brain.
Government does not create jobs, people do. Those people who create jobs are overtaxed to begin with. Can they afford extra tax burden? Yes, but do they pass those extra taxes on to their business decisions and hire slower and spend less? Yes. You want to tell me how simple it is and stupid I am and you wonder why we have such a disconnect in this country.
Socialism failed. Big government doesn't work. Now take your ball home.
actually the government does create jobs. fire fighter, police, teachers, park rangers, the IRS, the FDA, the FBI, the CIA, every government agency employee people. all of whom pay taxes and contribute to the economy.
also the reason fox news has lost credibility in the minds of the educated, is the fact that they openly admitted in court that they do no have to tell the truth on tv. yup, they argued that they can lie on air.
Chuck's response kills me. How many euphamisms for "I *am* a Republican" are in this one post alone.
That said, you are both on a red herring. It's the Chewbacca Defense. I submit for discussion that it is not about tax cuts. It is not about political parties (directly). It is not about debt ceilings.
This whole circus is about spending and control. It is *fine* to cut or increase taxes as needed. It is *fine* to raise the debt ceiling temporarily. It is *not* fine to spend what you can't generate or don't have. Quit focusing on taxation, recognize your debt capacity and start asking what you are spending your money on. Cut spending, not taxes.
Note: I am neither a financial advisor, political pundit nor an economist, but I play one on CNN.
Chuck, the job creators are overtaxed? Are you kidding? Everybody is experiencing the lowest taxes they've seen in decades. And if you think raising taxes as the dems propose is anything remotely near socialism, then you clearly have no understanding of the actual distribution of wealth in this country. Currently, it's the exact opposite of socialism. Even if all dem proposals went through, we still wouldn't even be close to socialism.
Also, the right always says increasing taxes means the costs will get passed down. Yet, they trust these same people with tax cuts to spend this extra money investing in new workers, etc, instead of just taking it as additional profit. It's just unbelievable.
The "job creators" are new startup businesses, not the top 2% – they just circle jerk each other.
What is it about conservatives that they can't distinguish between "reporting" and opinion/editorial pieces? I see this over and over again on the CNN pages. Is it because they get their "news" from sources where the two aren't distinguished?
Such as CNN and MSNBC???
This piece is very well balanced – which Fareed typically is – but please don't call it the "norm".
Unfortunately neither left nor right can possibly consider anything in the center.
Pot, meet kettle. Project much?
As someone noted recently, Fox "news" only attracts about 1% of the population during their primetime shows (@ 2.5 million viewers for a few hours at most). That's not a good cross-section of American, to be sure. It's a lunatic fringe. And related to talk of lunatics, it's estimated that 1% of any population are sociopaths. Could there be some kind of correlation between these two groups?
That's beautiful, man! I am headed to ultra conservative territory next week...Alaska. I'm going to use your response. Wonder if I'll come back alive?
So what % of the American population is attracted to MSNBC (the liberal equivalent to Fox)???
It is simply common sense. Cut government spending, means less jobs, less jobs mean less taxes and less spending, means less jobs in the private sector, Sooner or later you are going to have to join the rest of us in reality. Watch what is about to happen in Texas, the economy is going to take a hit because of the cuts in Texas government spending, especially education. More people will be out of work, less taxes, more on unemployment, less spending, more job loss, it is a spiral. Really check it out in the next year or so, Texas economy will shrink.
Hey Mark...I live in Texas, Austin to be exact...I am willing to bet you are wrong, dead wrong. Could you tell us when you see the implosion happening in Texas? 3 months from now? 6? Just ballpark it, circle it on your calendar and lets see if you are right
Sorry..I didn't see the one year prediction. I predict it will not implode in 1 year and will continue to lead the nation in job growth as it has for quite some time now
So to you, and the other leftists here, government is the source of jobs... interesting.
Matt-I'd also bet that Texas probably has more federal money coming into it than is going back to Washington in terms of taxes. This would mean that some of Texas growth is due to this uneven distribution and the state getting more than their fairshare of the pie.
The government isn't the source of jobs. But there is some lubrication that government spending adds that I doubt our system would survive well if it completely disappeared. Spending should decrease, but dropping the e-Brake is going to cause damage or an accident. I think a metered response is all some folks in the center are asking for. Those at the fringes are being completely unreasonable. Both on the right AND the left. We need to cut spending. We don't need to slit our wrists. Metered. Smart. Just. Do. It.
Chuck, I hate to brake it to you, but Fox News is not 'leaning right'. They tipped over quite a while ago.
as opposed to the monolith BIg Media left that is ABCNBCCBSNPRPBSHuffPoWaPoNYTCNNTimeNewsweek? Read one/see one and you've read/seen them all. Listen to the White House, and you don't even need to see/read any of them, since all they'll do is parrot their savior. Bo-Bo has increased spending $1T more each year since he took over, and still you folks think it isn't enough, that we need more. I wonder how many of you are among the 51% that don't pay any income taxes...
Hey, Chuck
Reagan's budget director himself said trickle-down doesn't work. Tax cuts don't create jobs. Take an economics class. This article is not about liberals and conservatives, it's about cooperation.
Great so one person out of many has determined in his mind that trickle down doesn't work.
Wait, I know what works. Give 100% of our money to the government who will employe 100% of us. Makes sense.
The thing is that trickle down like any major economic effort takes many many years to work. It's easy to destroy economies quickly but takes a long time to build them. Anything faster is fake.
In a perfect world you are probably right. But let me be clear on this, wealthy people and business owners do not pay taxes.
Who does? Consumers and employees. Businesses raise prices to include tax burden and employees hire less and slower because of tax burdens.
We own 5 companies and you can bet one of our huge considerations when hiring is tax burden and how to coop huge percentages lost to our government. Just to watch them squander it away and ask for more.
Our government is like a crazy uncle in trouble every few weeks asking for more and more money each time. You know he doesnt spend it right, and you want him to learn from his mistakes through tough love, but when he has a gun to your head you don't have much a choice do you?
Hey, chuck...
No company ever went under because of taxes. They go under because they have no CUSTOMERS. Pour money in the top, it stays there (that's how people get rich, they're really good at funneling money to themselves). Support the middle and lower class, and guess what? They become customers to businesses. Trickle down is a lie meant to keep the rich rich (sorry, the "job creators" "job creators"). Unfortunately for everyone, it squeezes the middle and lower classes further. If you want to lift everyone, you have to pull from the bottom.
Honest to God, I have no idea what chuck is talking about. Its like he had his comment thought out before he read the article.
Amen to that.
The economists (especially the lamebrain Krugman) and wanna be economists posting here crack me up. Gee, if we just keep incurring more debt eventually things will turn around. Is that how you manage your personal finances?
Ok chuck.. we need facts. zakaria posits that tax cuts dont work, that cutting spending during a recession doesnt work, and leads to financial troubles, as is happening in europena countries that tried the same thing. Now give the other side, with facts and refences, why we need to cut spending and taxes further. Im waiting.
" zakaria posits that tax cuts dont work, that cutting spending during a recession doesnt work, and leads to financial troubles, as is happening in europena countries that tried the same thing."
This is simply not true...this is not what happened to 'europena' countries. They overspent, they spent money they did not have, then when they went back to borrow more they found they couldn't or the terms were so onerous as to make it unworkable. At no time did they cut taxes, they didn't cut spending until the markets forced them to...and that is now what is happening here. You ask for facts and the only 'fact' you have is that Zakaria posits it.
I really wonder the average age of a lot of people posting here...we have been down this road before
Another socialist promoting deficit spending and goverment solutions! Obama is "smart" pushing budget cuts off to the future that will NEVER happen while spending $1.7 more then revenues for 2012. If that is "smart" I will take an idiot that understands basic accounting.
Mark, how about taking advice from an economist or someone who at least understands it. Deficit spending and tax cuts have long been a proscribed remedy for recession/depressions for both [R] and [D] presidents. It has worked, yet during political milesones creates the opportunity to focus and mislead the public by using a big scary number. If you think deficit is bad, wait and see what is on the horizon if a default occurs. There are huge reserves of us dollars held around the world – should people lose faith in them as a backing, foreign nations will cease to invest, we will cease to have access to lower cost foreign goods, domestic wages will plummet, foreign nations will demand reimbursement, or even demand higher interest for holding our junk.
Methinks even the most basic educated accountant will understand that you cannot run a globalized nation which provides for and maintains the welfare of millions on your silly little backwater piggy bank concept of personal finance. And DO NOT throw around the socialist label – it may be cool to repeat what the adults say, but you just sound uneducated. do some research
You, sir, are the one who sounds like an idiot, referring to this "globalized nation" which provides for the "welfare of millions."
Durundal, your statments are at once lucid and well thought out.
Rufus, you're a P'taK ... "Wellare of millions" is 100% correct and is not, by any means, realted to what you're thinking when hearing "welfare" ... perchance Durundal could have used "well being" instead but the point remains. Pull your head out, man ... There are those in the world, and on this site, that are educated.
Say "welfare" and the right immediately jumps to its beloved, racist "welfare queen" stereotype. Welfare includes public education, police officers, fire and emergenct crews, decent roads, the hope that our drinking water will be safe and that businesses won't find it profitable to peddle poison. (Ha! Alliteration. Get a dictionary) I'm almost amused to hear the same people who blame Obama for not straightening this mess out in 2 years, tell me that Reagan's "trickle-down" economic theory needs more time. Who sat quietly by while Bush created this deficit, and who sat passively (well, except for when they were calling me a traitor when I went to a Dixie Chicks concert) while Bush expanded federal government power to Orwellian levels, now telling me that the problem with the deficit and "Big" govenrment is untenable now that Obama's in office. Who also, of course, LOVE big government when they see a possibility of pushing religious law down the throats of all of us. The New Deal gave us the middle class, and the Republican efforts to destroy the New Deal are putting an end to the middle class.
Bachmann is available.
Zoiks...we're doomed.
Why doesn't Zakaria talk about what is hindering growth and jobs? That would be the president and Congress and the uncertainy when it comes to new taxes, regulations, Obamacare, etc. Zakaria mentioned the private sector once in this interview.
So you want no regulations from the government, but you do think the government should somehow provide jobs to people? You mean like socialist governments provide jobs to everyone? Many in the US believe in a free market economy, wherein companies may pursue profit as main goal, and individuals sink or swim as a measure of thier own merit. In a true free market theri is no central economic planing like some old-style Soviet state, and the government should not intervene to provide jobs.
have you already forgot that it was deregulation and the free market that led to the financial collapse and housing collapse? business will always find a way to profit, whether that be by not paying taxes, sending jobs overseas or paying lower wages.
The only reason there's "uncertainty" is because the GOP is resistant to any action Obama takes and all these things get stretched out for months and months... His agenda is pretty clear if you actually listen to the man, and companies have professionals specifically meant to calculate such "uncertainties".
It's just more GOP soundbite nonsense.
We need a guy like this for President.
This guy already rulles. Did you miss how he gives ideas to Obummer??? Look at the mess we are in. Obummer made this deficit worse than before!!!!
This makes sense. FDR saw the wisdom of putting people to work and invested in America. The slash and burn mentality of the Tea Party is short-sighted and self-serving.
Ya, and it worked so well. Oh, right, no it didn't. It took a world war to get us out of the depression. Hitler did more to end the great depression than FDR ever did.
You FAIL for mentioning Hitler. oops!
Bone up on your history, mon. FDR's policies were actually conterproductive. And, his New Deal programs have been a major cause of our current fiasco.
Rufus,
that is patently FALSE. yes, FDR could have done things better and differently but they had never had an experiance like that before and were flying by the seat of their pants. if you actually study hisotry and economics you would see that in 1936/37 Republicans started ranting about the deficit and pushed through massive budget cuts which litterally lead to a second dip into recession (link provided http://www.forumoecon.com/poloecon.htm ) and after that, FDR reworked some of his ideas and we started to get out again in 1939 (prior to our involvement in WW2). again, FDR made some mistakes and could have done it better, but to quote Joe Wilson "You Lie"
BOOM! FACTS! KNOWLEDGE WINS.
Floyd: read the book "FDR's Folly" and learn something. It is completely factual so I know you will like it.
No.
FDR spent tax money paying people government money to do "make work" projects. Kind of like the bailout. Those jobs disappeared when we went to war but the bills are still being paid.
Had enough?
Will Americans stop complaining and do something about Washington?
Are you ready to march into Washington and arrest the congressional republicans and hold a public trial on the steps of the capital?
Put your money where your mouth is...
Zakaria makes two rather obvious mistakes. The first is the Nasdaq at 5000 was in 2000 or 11 years ago not 21. The second is the 30 year 2 % money.The yield today on the 30 year Treasury is is 4.28% so he is off by well over 100%. The yield on 30 year municipal debt is over 5%. Other than that it is a pretty good interview
Zakaria is close but still misses the mark. There is only 1 way out of the mess we are in and it is the same way we got out of every economic mess we have been in before.
We must go back to creating true wealth in away from creating the counterfeit wealth that comes from simply increasing the money supply. Nobody talks about why we have not been to the defult crisis sooner. It is because the fed was printing money out of thin air to fund givernment spending. When they stopped, it was like draining the swamp.
How do you create wealth? Not by government projects, I can assure you. Wealth is created from great ideas - the car, the light bulb, the semiconductor.
When you are out of ideas, you are out of wealth. When you are out of wealth, you are broke.
You have the answer, but where is your great idea to pull us out of the quagmire?
How about getting serious about alternative energy?
Energy alternatives, exploration, fuel efficiency in all end user products even at an industrial level, food production as we have no surpluses anymore, cut back military operations, etc.
The warfare and its cost are ridiculous. Like all other things, if you can pay for it perhaps you have the luxury but we can't pay for it so it needs to get stopped.
Also, why can't they just cut spending straight across the board on EVERYTHING? How about a fixxed tax rate on everyone. All this projected to pay off the debt in 15 years or so? Then investors would continue to come to the table with some confidence in the future.
But none of this will ever happen and I'm sure my thoughts are oversimplistic. Still, I think a few level headed working class people could solve this better than politicians trying to get re-elected.
FYI, oobie, right now there are several very-large-scale renewable energy projects (solar and wind) under construction in many different states. These are not purely-private ventures, not by a long shot. They are closely related to government projects, and many of them are actually government-sponsored projects.
They also are considered infrastructure projects, which is precisely what Zakaria is calling for in the above article.
The internet, originally known as ARPANET, was created by the U.S. government.
How much would cars be worth, oobie, without the interstate highway system?
Obama,"Shovel ready is not really shovel ready, ha, ha, ..." It is 787 billion dollar joke. What infrastructure you are talking about?
Mark, you confuse socialism with what is good for society. You live in the society, what is good for you is good for us all. Socialism is not communism, but that is another topic.
So if it profits me to build a 24 hour, loud, drug infested, truck-stop strip club across the street from your Synagogue, your saying that would be good for you also?
The fact of the matter is your truck stop strip club is not good for you too.
Don't even try with gestapo. They speak in soundbites, cleared by Fox. Then they argue with bizzare strawmen like the reply to your post here about truck stops and synagogues?! They don't want to learn. They don't want what's best for the country. They want what their media hacks tell them to want.
Americans are to blame ultimately for voting for these guys, so Ha ha ha to those who vote, your getting your reward in full!
All these idiots in Washington are doing is posturing for their supporters. The all mighty teaparty movement has their lackeys so scared of losing their jobs that they will do anthing,even at the expense of the people who put them in there on the promise of more jobs. Term limits on all these " lawmakers " is the only way were going to get our country back from these lifer politicians. They are so beholding to the special interest groups that they can't take one step without them pulling their puppet strings. END OF RANT
Let's face it, if Obama said the world was round, the Republicans would say it's flat.
It's sad, but you are probably right (oops, I mean correct).
No! He's wrong! Ha!
The world IS flat.
duh. Go read a Bible.
And if the world is not flat, we will legislate the curvature to equal zero.
And if Obama said raising the debt ceiling was bad (which he did in 2006) but now says it is good, the Kool Aid drinkers say "yeah, that's right. This time is is different."
So, Rufus ... how many times did your BOY Dubya raise the debt ceiling? Do you have any idea? Did you even know that he raised it, all without nary a peep from the GOP? Part of the problem we're facing right now is that Dubya got us involved in two wars, one considered HIGHLY illegal at so many levels ... and he kept it all off the books. So guess what? We're spending trillions without any means of paying for it all.
P'taK !!
Michael: Dubya ain't my boy. Never was, never will be. He is probably more to blame than Obama because of his far flung wars. But, Obama is continuing the nonsense and he is after all our current POTUS so he has to take some heat. Any fair, objective person who does not take the time to read Ron Paul's positions is doing our country a disservice. Why repeat the inane "Democrat", no "Republican" chants. It is sort of like "taste great", no "less filling." The truth is we don't need to be drinking this putrid beer. Wake up people and google Ron Paul.
My husband and I have been saying all this to each other since the recession began. I hope seeing the same conversation in the media means we'll soon be hearing more from clear-thinking moderates who are willing to work with each other for the common good.
taxes have to be raised. two wars started by bush made many people wealthy. has made the debt huge.
You can volunteer to pay more. No kidding. The government allows this. Please be a team player and pay until it hurts. It is for the greater good.
Rufus, you P'taK !! naDev vo' yghoS !!
I pay my share ... do you? You abuse the rewards of living in the country but have you paid into the system? Have you served this country? I'll bet not ...
Michael: You are awfully big on assumptions today. I suspect I have paid more in taxes over my working career than you have earned in income. If, you have EARNED more than $3M in income let me know. I have paid more than that in TAXES.
Those of you who vote for these people are just getting your cake served to you, now shut up and eat it , after all you ordered it didn't you?
Makes good sense? He says to not lay off government employees because we need the tax revenue. So the 10k in tax revenue is worth the other 50k being paid in salary? Do the math. -50k 10k still leaves you with a -$40,000 balance. That tax revenue does nothing to help balance the budget
Excellent comment!!
DURH! Most of the $50k earned by each government employee that you would like to see fired is recirculated into the economy and is subject to taxes, such as sales tax. Unemployment helps neither a nation's economy nor its debt. If you weren't completely ignorant of the federal government and the output of its employees, you would realize that we get a pretty good deal with federal employees most of the time, considering the ration of their productivity to what we pay them.
You must work for the federal government. Are you serious? I'll just give you just one example; the INS employees about 30,000 federal employees. We have over 18 million people living in our Country that are illegal, we had over 3000 AMERICANS killed on 911 by people who were living in this Country ILLEGALLY. The problem has only gotten worse since then. For the amount of money that goes to hiring those 30,000 INS employees, I'd say we are not getting a "good deal".
The local airport used to screen fliers with a private firm of thirty six employees with two supervisors making about $12.00 per hour. Now the TSA has taken over with a staff of over 130. They have more than twelve supervisors making over $75,000 ea annually. When 9/11 happened, it wasn't the screeners fault, Federal Regulations allowed box cutters as carry on items. Look it up.
9/11 was just an excuse to grow big government even bigger. You won't be told what the Department of Homeland Securitys actual budget costs because thats considered a security risk to give out that information.We don't want the terrorists to know how much they're costing us. But I have a feeling that what they failed to do on 9/11 was just starting the bubble thats about to burst on August 2nd.
Congratulations Osama!
Wow you guys are extremely misinformed and can't even digest what he's saying. If you lay off those people the 40k you claim you're saving is offset completely by the decrease in goods bought by those people.
It's much better to pay them the 50k because they will go spend almost all of it in the economy which is what creates jobs and demand.
You wouldn't be saving anyone anything. You fired the public employees and then the private companies would have to lay people off as well due to a downturn in demand.
Ok then, tell me what is the break even point? How many employees and how much can the Fed pay those employees before it's an actual net-loss? If there is not a net loss no matter how many employees the Fed has, then I guess we all could become Federal employees and this whole employment and debt issue would go away then...right?
This Canadian reader was often puzzled to see how the US per capita GDP was higher than the Canadian one, while the 'average Joe' seemed to have a tougher time than its Kanuck counterpart.
Then I saw figures that showed that if you actually exclude the richest 5% of each country, Canada's per capita GDP is higher.
My take on America's main problem : too much money in too few peoples hands, and not enough of it going back as government revenue. Granted that there's a lot of government waste, but we have that too. But the inescapable fact is the 95% of Canadians are better-off than their American 'counterpart'; they also live longer, and are less likely to be victims of violent crime.
In the light of America's past achievements, this simply shouldn't be the case.
How did it go wrong ?
You are so right Michel. The republicans in DC have driven a wedge into the population to create a deep caste system. They handed the country over to corporations and lobbyists which started the major outsourcing of American jobs around the globe. Money became the religion and the idiots in this country chose not to be educated on current affairs, they instead chose to watch tv and be told how to think by Fox 'news'.
"And it seems to be now a kind of almost idea in the Republican Party that anything Obama supports, they have to oppose."
Seems to be? Our political system has been hijacked by hate almost as much as the Islamic religion.
Companies will start hiring again...as soon as this loser is out of the white house.
"Loser?" Have you earned a political science degree from Columbia and a JD from Harvard, you ignorant bumpkin?
This "loser" has had to grapple with the result of 8 years of really peculiar tax cuts in the face, now, of self-centered people solely out for their own souls. You'll be really surprised at what happens if Obama is out and someone like Bachmann in.
So let me get this right, Fareed's idea to get the US out of debt and put people back to work is to borrow more money? He should stick to journalism and stay away from economics!! You can't borrow your way out of debt!!
It's called investing. Business invest in things all the time to create more demand for their product. It's not just borrowing more money to spend it frivolously. Why can't republicans who are so "pro-business" understand such a basic business concept.
If businesses could create more demand simply by cutting costs and programs within their business they would. But it doesn't work like that. Demand creates jobs. Not having a small amount of debt.
I've been a business owner for 8 years and can tell you from experience that borrow money does not create demand! Products & ideas create demand!!! Microsoft has more money than Apple, Apple makes better products therefore makes more money due to the greater demand for their products. Pierre Omidyar wasn't rich when he created and founded ebay, he just had a great idea and sold it. Believe me, there are plenty of investors looking for the next great product or idea to invest in!!! We don't need the government to do that, just look how much the Federal government lost on the Chrysler deal!!
@Dale: I hope that when people get in their car to drive to one of the stores that sell your product, the bridge doesn't collapse beneath them and thus you can make the sale.
It's true that innovation and good products create profits, but without infrastructure you can't sell your products to consumers.
Oh, mon! i can't believe you have bought into the Obama newspeak that says spending money is "investing." How many businesses have you run?
the majority of this debt was caused by the trillions of dollars we spend on our defense budget. i think this is a quick fix. stop this unjustified occupatipn of the middle east.
Totally agree! That would do wonders. But Obama is no better than Bush when it comes to far flung wars. Oh, I forgot. Our troops are over there to preserve our freedoms and way of life. Ha!
Growth is only possible if we increase the size of our planet – since we are already consuming more resources than can sustainably be replaced – we need to rethink what is our economy based on – if it is based solely on growing per capita consumption we are doomed in the long view. The economy is stagnant exactly because we have come face to face with the limitations of growth. Paul Gilding's book "The Great Disruption" has it right. You can see it all around us – we as a people on this earth must rethink what is of real value. It is not how much we consume that makes us human.
This guy zakaria- what the fk do you know- paki- the guy is been in the u.s. 20 yrs and now he is an expert on this country, please. What sideshow you wanne be- the country is operating on loans- that is a problem jerk- what do you know, people like you just come to this country to educate yourselves- mooche of our financial aid and other perks and leave back to your 3rd world countries. You should leave too- u sack of poop.
^^^TROLL ALERT^^^
Not a very effective troll at that.
Apparently he is not just an expert on Afghanistan and the Middle East, US Politics, but now, also, economics. What a Renaissance man
At least Ben is able to recognize a renaissance man when found.
For all of you who thinks this guy makes sense, think abot where we are heading as a country and how bad it got last two years. He is upset with Rpublicans/tea party, but Dems are worse than Republicans. They shoved stimulus package and Obamacare down our throat because they had all the votes.
If you read the article, you find out that the $700B stimulus you speak of is heavily criticized by Zakaria as (1) being too small, and (2) having the wrong focus.
The stimulus sent $100B to infrastructure and $600B mostly to demand-side consumers in the form of social security tax holidays and trying to prop up financial markets to loosen up cash flows. Zakaria calls for spending $1,000B on infrastructure.
Zakaria is being quite critical of Obama and the Democrats here. Pay attention. He is not a mouthpiece for the DNC.
And Mr. Guest, pay attention to what happened in the Busch Administration, tax cuts for his wealthy friends together with an expensive war, resulting in the crisis Obama has been wrestling with. What you call ObamaCare is in part a result of obstruction by the Republicans. Read up on the health care systems in place in the UK and Sweden, for example. Pay attention, Mr. Guest!
We have to confront free trade with low-wage countries. Apple has 25,000 U.S. employees with 250,000 overseas doing the manufacturing. A similar 10-1 ratio exists in other tech companies (Dell, Seagate) according to former Intel CEO Andy Grove. We had 17 million manufacturing jobs in 2000 and now we have 12 million. Excluding home equity extraction fueled consumption made possible by the housing bubble, our economy only grew 1% annually from 2001-2008.
Our economy has stagnated. It is because our jobs are overseas and we have refused to insulate our economies from low-wage developing nations. This is a policy choice that can be reversed, not as easily as the Bush tax cuts and the doubling of defense spending, but a choice nonetheless.
So, the solution to our problems is paying $1,500 for an iPad rather than $700. Gotcha.
Zakaria is a sidehow himself, though he probably doesn't realize it.
It is definitely a big sideshow, and everyone knows the debt ceiling is rasied as a matter of course. It's been raised 102 times since 1917, when it became necessary to so. It's political theater. If the Republicans are so worried about spending, why did they allow thier last President to create such debt through the two wars and the tax cuts. When the chickens come home to roost, you should at least have the courage to admit that they're your own chickens. What a bunch of brouhaha from a group of drama queens. The GOP must think Americans are idiots.
Give me a break, Obama is just a clueless on the economy as Bush was. Chill out with the Bush's war garbage, last I remember the Democratic congress voted with Bush in support of the Iraq invasion. This partisan crap has got to stop, the only people benefiting from this are the politicians and the large corporations that support them. You have no idea had bad our debt problems are!!! Every child born today in America is born with a tax burden of $46,000.00. This is not sustainable I don't care how much you raise taxes, without a major reform and cuts to SS, Medicare, Defense, and Discretionary spending, and a new tax system the US will default within 3 years.
Thank you Dale for that voice of reason
If we stop the wars, Jimbo, we have to lay off soldiers and cancel lots of defense contracts. That's a reduction in jobs and will hurt growth.
Bruce, I actually agree with you on this war issue. No President wants on his resume thousands of soldiers to return home from years of war and then not be able to get a job! In addition to that, most Americans have no clue how many civilian Americans are employed both here and abroad as a direct result of the wars.
Dale, the fact is that no matter what happens, for every $1 trillion of government spending cuts over the next ten years, roughly 0.5 to 1 million jobs are lost in the public sector. This includes government workers AND nongovernment workers who are employed by government contractors. Military personnel (i.e. soldiers) are government workers, fyi. It doesn't matter where you cut–the number is roughly the same.
It may be that the 0.5 to 1 million jobs lost in the public sector are picked up by the private sector somehow, but even in the best of cases it takes time for the private sector to pick up those extra workers. Right now the 9% unemployment rate represents 14 million people. Another 1 million jobs lost means the unemployment rate goes up by about 0.6%. It goes down before it goes up.
This means that if the GOP got their way and we blasted $4 trillion in only spending cuts over the next 10 years, unemployment would go up from 9% to 10% or maybe even 11% in the short term. This is the best-case scenario even if those people eventually find jobs.
Of course, that's exactly what the GOP wants. If the unemployment rate goes to 10% or above in the next year, Obama loses the election. Remember McConnel's #1 legislative priority wasn't to fix the economy, but to make Obama a one-term president.
Bruce you make another good point, and yes with cuts people will lose their jobs. I believe some of those jobs will be picked up by the private sector as some of those jobs (airport screeners) already were private sector jobs that unfortunately became government positions. I didn't vote for Obama and I can't stand Mitch McConnell, but at some point we are gonna have to say enough is enough and live off of what we have and not what we can borrow. I'm not saying that it's not gonna hurt a lot of people, but if we don't do something now we will become insolvent as a Nation and at that point everyone would then be hurt.
Dale, the point is look at where this type of austerity you propose has been tried. Look at Greece. Austerity failed. They slashed the budget and revenues went down faster than the budget went down and deficits in fact increased.
Bruce, I don't believe Greece is a fair comparison; we control our currency and Greece doesn't. A default would be much worse for the United States, it would probably lead to a major war....
Let's hear it for Bruce. He has found the solution to our problems. We simply start more wars and bingo more growth!
After reading all these comments, I would have to say that Americans are idiots.
You blame the economy on the past president for starting two wars, so what do you do you elect this one who not only continues those wars but starts another one in Libya to help the French and British get cheap oil.
With every election America seems to producing more and more idiots. Is this any way to run a country?
I am tired of the bias reporting from CNN (COMMUNIST NEWS NETWORK), whos agendis to get this side show clown reelected. OBAMA HAS SPENT MORE THAN ALL THE PRESIDENTS COMBINED. But now hes talking about a nation in default.
Did you have to take your shoes off to do the math? Where in the world did you come up with that? This is not about the debt ceiling ... that has been raised over and over since 1917, usually without any fanfare. This is about the future of our country and the simple fact that you have to spend money to make money. Drastic spending cuts will put people out of work, increasing Unemployment ($$) decreasing the tax base and, gasp, creating the TRUE trickle down effect. Cutting taxes on the wealthy does not create jobs; the exact opposite has been shown true. If everybody's all up in arms about raising or lowering taxes, here's a radical thought ... go to a FLAT TAX where everyone above the poverty level pays the same percentage with NO EXCEPTIONS and NO LOOPHOLES.
Quad Erat Demonstratum ...
What we need is,......SARAH PALIN! She nowz how too fiks this ekonomick stuff, cuz she buhleevs in the pagan holi triniti gawd that her fals religun tawt her. Go PALIN!
The flip side of the coin is that if you don't cut the budget, then we"ll have to raise taxes to pay for the additional debt. If we raise taxes, there's less money in people's pocket to spend - thus hurting the economy. Additionally, if we tax businesses too much, they'll respond by laying people off.
Either way, we're going to have to pay the piper, folks.
Our deficit issue is a symptom, not the problem. Our nation is like a young married couple that has maxed out their credit cards and yet are still unwilling to give up their daily $4 cup of coffee.
That's not the flip-side of the coin, Devon. Without raising tax rates, revenues increase when GDP increases. Growth can pay off the debt.
Don't count your chickens...
Devon, don't assume ALL the chicks will die before hatching...
Not government growth!
Bruce, I have read a few posting from you. You are definately support the view of Zakaria. However, growth requires investers to invest in USA. All the time, you are talking about "grow and tax". Now the investers are looking for certainty of earning. Obama's policy gives the investers the feeling of uncertainty and heavy taxation. I am a invester and I will certainly invest in somewhere else. When Obama is gone in 2012 and Zakaria shut up, I will think about invest in USA.
So, where is your growth!
Devon you are 100% correct!
Down wit the tea party and the ignorant backers
American and the rest of the world has been mislead by false religion into believing that human governments are the solution to our problems when the bible teaches that Jehovah has established a heavenly government that will soon act and destroy these other governments. Daniel 2:44
America that is.
Nuetral is not exactly neutral.
ZAKARIA is lying to promote the socialist agenda of CNN. His arguement that cutting spending will cut jobs is a lie. Here is the real math. Lets take a Federal worker making 75k. Considering his future retirement obligations, its more like 125k. He pays 10k in taxes after his deductions. So the government is in the hole 115k for him. If we simultaneously cut him, and reduce taxes for private companies who hire by 10k per person, he now costs the government 10k and gets a private sector job for 75k. He pays the same 10k in taxes so the net result is 115k saved from the deficit.
Right, because there are hundreds of private sector jobs just hoping the government worker will apply for them, and we don't have a near-10% unemployment rate already.
Seriously, dude. What fantasy land do you live in?
Everybody always talks about job growth. Stimulis this, investment that! Since 2008, when this mess really started falling apart, hundreds of thousands of jobs were outsourced to foreign countries for the mere purpose of enhancing corporate profits. When jobs are eliminated here, unemployement and welfare costs go up. Tax revenues, Social Security, Medicare/Medicade revenues decrease. People are forced to take lower paying jobs just to stay employed. Why hasn't Congress addressed this issue in these talks? Stopping oursourcing will be an increase in revenues and is NOT a tax increase.
The American people are the real side show. Ever since Bush was in office the politicans have been showing the rest of the world how stoopid American really are with what we let them get away with. Year after year Washington does things that get Americans P O and yet nothing is done about it. Remember when you travel abroad and let everyone know that you are an American they will be laughing their a$$ off when you walk away!!!!!
As long as the media has folks like Fareed spouting off the usual junk from the liberal checklist (Tea Party is the boogeyman, excuse the mistakes of the Obama admin, etc.) the situation aint' going to get better any time soon.
BS thinks the L-word defeats all argument.
A Mere Drama.
In No CA the Bay Bridge is being replaced with a new, more Earthquake resistant version. Several new sections were just completed, in China. Yes, rebuilding our infrastructure will create jobs, but again many will be in other countries while the U.S. taxpayer is on the hook for the bill.
Its not the economy, its not even political. The crux is psycho social. When we change our way of life and can adapt to it (remember Carter's minimalism?), then things won't seem so bad. Bhack to basic values. How to get there takes practice, patience, and a reorientation.
Funny, that's the same motto the Taliban have.
This display of American politics reminds me of the keystone cops. We are the laughing stock of the world.
Yet you can sense that jacknapes like Cantor go home and think, "I'm just awesome!"
The solution is VERY SIMPLE. Whatever the President wants and feels is best for the country, he simply ASKS FOR THE OPPOSITE!
All national problems solved!
I hate statements like "both parties ultimately lose terribly." These speaker seem to like to sound smart and impartial. We have a two-party system, one of which is going to win the next election, and the next after the next, and continue to ruin the country, until people like Foreman can say something constructive and doable for either party to adopt.
Bringing home the troops would save 300 million a day. How much we have spent to police the middle east is astounding. No one talks about that.
The whole debt 'circus' is embarrassing. As a country, we have no common sense and no civility.
You know what else would solve the deficit "problem"? Inflation!
Here's how it works. Say you own a $200,000 house and owe $175,000 on it. You struggle to make the mortgage payment.
Then, we undergo a few months of rampant inflation, and wala! A loaf of bread now costs $432,356.26 and your house is worth several billion dollars. You cut a $175,000 coupon out of the newspaper on your way to buy bread and use the savings to pay off your mortgage in full. Yay! Problem solved...
I am disappointed in the discourse. Most of your opinions unfortunately represent views of uneducated polarized masses. Texan is right. And Obama is not just some spend happy liberal whose every solution is to spend more money. Their is economic theory behind it. It is called Keynesian economics. Not everything is always right with the theory but it is general academic knowledge that in a recession you increase govt spending to increase gdp. But the prescription also calls for tax cuts. The problem is of course is how would such affect the deficit. This leads to the need to increase revenue by raising taxes or at least cutting loopholes. Or better yet both. We are in a quagmire. The possibilities are certainly that these solutions will also stunt economic growth. Having to deal with the deficit while simultaneously addressing economic growth makes this problem much more complex indeed.
Well said – and accurate.
Exactly. What's really frustrating is that most of the comments here seem to imply that Zakaria didn't just lambast the President's economic policy.
He was highly critical of Obama in this article, but people can't even see it because they have no idea what John Maynard Keynes had to say and why an understanding of that set of economic theories is quite necessary to understanding what is going on, and that is true even if you disagree with Keynes.
You and Bruce speak fluently in Keysian economic theory. No matter how much you praised the Obama's policies which make a lots of economic sense and Zakaria's view is so accurate that will help to solve the debt problem, the reality is the investors will not invest in a sink ship which its captain don't know how to sail. A new captain is needed to restore the passengers' confidence. So far the Keysian economic theory is telling me the the overhead has to be trim, that is the size of the government spending! Bruce, you are in business for 8 years, maybe you should thinks about trimming your management branch to get better profit magin and your investors will be more please with you business decision.
We need to stop giving aid to countries. Apparently we need the aid now. We should boycott the election until the Gov gets their act together. We have had enough...The free ride is over and the Government should be paid by the hour as we are. They need to start earning their money and show results.
I adamantly disagree with Fareed, borrowing money without the ability to pay it back is exactly what has gotten us in this problem. Thank God for people like Ron Paul and the Tea Party!!! The GOP and Dems have put this Country in a hole that they cannot and don't really care to get us out of. The Tea Party is doing what the media has failed to do and that is hold our "leaders" accountable!!!!!
I agree with this. Everyone wants to get the credit..or make sure the other party doesn't get the credit. Get passed your ego....and do your job.
America is so disfunctional. Personally, I'm moving any of my retirement savings that have US Bonds, or US Governement connections (big millitary providers) to safer investments. I can't imagine that millions of people are not doing the same thing. No matter what happens, the world has lost confidence in the American juggernault. In Canada, I see dozens of companies developing connections and trade with Chinese companies. That is where the money is, where the people are, and where the future markets are going to be. America is coming to it's twilight years. Much like Spain, France, and England. All led the world for awhile, but history moves on.
Greece will sell you bonds. They're offering great interest rates!
Good idea, Byron, except that so many people have lost their life savings with big surprises from our inadequate health care system. Some have lost savings to nursing home care. Some, like those with military pensions, do not have significant life savings independent of the health of our economy.
The Tea Party's uncompromising, theocratic ideas are holding the entire country hostage while the Repubs will suffer for having leapt so far to the right.
RE:"If you can get growth back, if we can get people employed, get them paying taxes, you can't cut your way to a happy future because the more you cut, you get yourself into a downward spiral like you see in Greece."
Actually, we need to repeal the bush tax cuts IMMEDIATELY.
Tell thye boy sand girls down in DC if they don't pass a budget, they and their staffs don't get paid.
Also, every state should have the right to re-call any person in public office.
It is a terrible thing, but they all make me not even care about casting my veto at election time. I am feeling, what is the point because it the same old thing every time, all the the time. I voted for children when I was in High school. Can't you people in Washington get it right. You all appear to be very self serving.
Zakaria has been a financial advisor to Prime Ministers in France Germany, and England. Additionally, to U, S, Presidents. He is no a dummy that some of these conser try to dismiss simply because he doesn't parellel opinions of the infamous Tea Party Express. That know-it-all group wants to destroy the economy of the United States and start from scratch as though thats a logical solution. Sure, I made a mistake in 2010- BUT not one that can't be corrected in 2012. Those AH need to outta there before we all go down tha tube.
The Economy is already destroyed!!!! At least they (The Tea Party) are demanding something be done to help it by speaking up and holding BOTH the GOP and Dems accountable. Doing the same thing (borrowing money you can't pay back) and expecting a different result is called insanity (AKA. Trillions in debt, real un-employment 20%, unfunded liabilities, etc.).
Corrupt DoJ, DoD and CIA employees had taken bribes from Al Quida in exchange for information and logistics support during the four years prior to 9/11.
When one considers that the 9/11 terrorists could take jumbo jet flying lessons, move about the US unobstructed, live for several weeks less than 2 miles from NSA head quarters and be on State Department watch lists, this makes sense.
Why not replace these people with housewives or businessmen who regularly balance their budgets and are out of debt? Everyone is blaming the other person while they may be the actual cause why we're so far in massive debt.
This guy in the video is a joke! "It's all that we grew faster than we thought we would..." We can't cut government spending otherwise we fall into a downward spiral?!?! OMG!!! This kind of mind set is ridiculous! Our government does NOT add to GDP. They do not produce any thing! We will get out of debt by cutting and allowing the people decide what they want and not the government... We grew under falsehoods. The sub-prime mortgage and real estate boom made it look to the rest of the world and our selves that we were growing... Doesn't seem they are able to get any new bubbles started as quick as they'd like. We are done for America!
RIGHT ON!!! I actually like Fareed, but he has no idea what he is talking about on this issue.
Cutting government spending has a positive effect on the GDP, but also has a negative effect as well. If a bunch of government employees are laid off, we save on paying their salary, but then they stop buying things. We also have to pay them unemployment, so we don't save as much as we think we might. If we lay off a huge number at once, we trigger another recession and EVERYBODY spends less. Businesses go out of business, and the GDP declines even though we cut spending. That is why the smart people want to cut back government spending, but just a little at a time so that the economy can absorb the ex-employees.
The fact is that no matter what happens, for every $1 trillion of government spending cuts over the next ten years, roughly 0.5 to 1 million jobs are lost in the public sector. This includes government workers AND nongovernment workers who are employed by government contractors. Military personnel (i.e. soldiers) are government workers, fyi. It doesn't matter where you cut–the number is roughly the same.
It may be that the 0.5 to 1 million jobs lost in the public sector are picked up by the private sector somehow, but even in the best of cases it takes time for the private sector to pick up those extra workers. Right now the 9% unemployment rate represents 14 million people. Another 1 million jobs lost means the unemployment rate goes up by about 0.6%. It goes down before it goes up.
This means that if the GOP got their way and we blasted $4 trillion in only spending cuts over the next 10 years, unemployment would go up from 9% to 10% or maybe even 11% in the short term. This is the best-case scenario even if those people eventually find jobs.
Of course, that's exactly what the GOP wants. If the unemployment rate goes to 10% or above in the next year, Obama loses the election. Remember McConnel's #1 legislative priority wasn't to fix the economy, but to make Obama a one-term president.
Why worry about $1 trillion in spending cuts over 10 years? What you should worry about is that we spent $1.5 trillion more in 1 year (this year) than we brought in... and it is projected to increase next year!
FYI, mucklucky, the most aggressive debt reduction proposal I've seen so far (by Coburn) reduces the debt by $10T over the next 10 years. This isn't to say that the now $14T debt will be $4T debt in 2021, but that if we did nothing that the debt would be $35T and if we adopt Coburn's proposal the debt will "only" be $25T.
Even reducing deficits by $1T per year for ten years does not actually balance the budget. Nobody is actually proposing a balanced budget, let alone one that would generate a surplus, inside of ten years.
You are losing sight of a basic economic fact – outside of the printing presses there is a finite amount of money in the system. The more you give to the government – the less the people have to spend and the less you give to government, the more the people have to spend. We have already given the government 1 trillion and it hasn't worked. I bet if we gave the people 1 trillion we would be better off now. How about we give that a try that now. I keep going back to the definition of insanity when it comes to government spending their way out of this recession. More like spending us into a depression. The only way to fix this is to starve the beast. He will not go on a diet on his own.
You are wrong, Tony. You are losing sight of a basic economic fact of what it means for a nation to have a sovereign currency. To contrast, compare the sovereign US dollar to the non-sovereign Euro.
There is not a finite amount of money in the system, at least not one with a sovereign currency. People really really need to come to terms with basic economic ideas such as what currency is and what it actually represents.
Zakaria doesn't know SQUAT. He clearly does nothing more than regurgitate the same tired leftist economic concepts. they are trying to repeat Keynsian economic theory that we now know prolonged the Great Depression and repeatedly destroyed economic progress that was made at various times under Roosevelt. Government does NOT create jobs. Even when it puts people to work on public work projects, they are taking money from productive companies to give to those people, which then limits private industry's ability to expand and hire. So when Zakaria says that cutting govt spending means people will lose jobs, that's ONLY true if you are talking about government workers–but we need to reduce that number anyway. If they impose taxes on corporations at the same time consumer spending is down and produts are not being sold, that will cause additional layoffs, another decrease in consumer spending, and worsen the situation. Why do they let this moron speak on camera?
OK, genius – explain what would have happened had the government NOT intervened in 2008. As I recall, the private sector was CLAMORING for bailout. Why? Because they recognize, with housing bubble bursting, they faced disaster. Just as they do now. Proof? Where is the investment in the American economy, when companies are recording record profits? Where is the job growth? Money is cheap, so, according to prevailing economic theiry, the private sector should be expanding all over tyhe place – but they are not. Bubbles are a by-product of capitalism, and the less regulation, the bigger the bubble. Before you start bashing Keynesian policies (which, in fact WORKED to some extent, and what pulled us OUT of Depression was GOVERNMENT SPENDING ON INFRASTRUCTURE in WWII), at least try to understand something beyond a paragraph of partisan economic criticism. Keynes was not 100% right, and some of his actions remained in effect too long, but the economy IMPROVED – it just didn't fully recover until other events took place (after a HUGE investment in infrastructure, that included the GI Bill, and even union wages, which created a middle class that would not have existed without government support. So prove your point – second-hand rhetoric from third rate FOX paid bozos doesn't fly with folks with brains.
Bruce, Obama is probably gonna lose the election anyway, I don't care if you are a Democrat or Republican, he has done a poor job. Almost a poor a job as Bush. I do have a question for you since you are bringing more then just emotion to this discussion. At what point in your opinion is government spending out of control? Are we there yet?
We've been there for a while, Dale. The solution to reigning in government spending, however, is a measured response that gives the economy time to recover. If we take the bitter pill of austerity right now and try to solve the problem in the next couple of decades, however, government budget-slashing will create an economy that will only make the deficit problem worse, not better. Revenues will go down faster than expenditures will go down, causing deficits to actually increase.
It took us the greater part of a century, perhaps a century and a half, to get to where we are today. It will take at least that amount of time to get to a better place, if we're lucky. If you are 500 pounds overweight, you don't try to lose all 500 pounds in 4 or 5 months. To do it correctly, it takes more like 4 or 5 years.
I'm not a fan of Obama, either, for many of the reasons Zakaria lambasts the President in this article.
Bruce, it's been a pleasure; I look forward to debating these issues again with you; I can tell by your comments you have done your homework. Have a great day!
You too, Dale.
More than ½ of the national debt is owed to US accounts… Federal Reserve (11.3%), Social Security Trust Fund (19%), and other US accounts (mutual funds (4%), saving bonds, retirement funds (2%), commercial banks (2%), US households (7%)); and 31% is owed to foreign investors (8% to China)
"We really have no choice; you need to pay the interest," Powell said. "If we default on a bond, no one knows what would happen… “
So, pay the bonds that you issued to Americans when you stole their Social Security withholdings.
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. "
last statement is quote from Obama 2006
It's even more convoluted than that, mucklucky. The profits that the Fed makes on the Treasury bonds it owns are taxed by the federal treasury at a rate of 100%.
We have a 3 party House already : Democrats, former Democrats who do not like where their party is heading so they switched over to the Republicans, and real Republicans
I am a conserative. I will welcome those dems to switch off. At least, they know something is wrong in their party.
obama will agree to anything that allows him to go back on vacation!
Fareed is comparing apples to oranges... and a lot of you are eating it ALL up. Of course Greece suffers with a cut in govt... they've got nothing else to fall back on. The govt. is basically the economy. Second to the govt, they've got tourism, and that waxes and wanes. It's not reliable. When you're entire economy is a spoof... and you pretend that it's somehow paying dividends then, like the classic pyramid scheme, it's only a matter of time before the whole house comes crashing down, hence what we're seeing today. The only countries that suffer with govt cutbacks are those that are wholly dependent on govt. Is that what the US is? Have we reached the point where without a collosal govt we can't sustain ourselves? Sad if true.
HERE'S A WIN-WIN! Include in your talks to begin taxing corporations who send American jobs "outsourced" to foreign countries. Since 2008, hundreds of thousands of American jobs have been lost to shops in China, Singapore, Philippines, Indonesia, India, Mexico, Canada, Costa Rica, and many more. The result is more unemployment expenses, more uninsured state and local medical expenses, less tax revenues, less social security, medicare/medicade contributions. Stopping the "outsource" bleeding is a major increase in revenue resources for the U.S. and puts more Americans back to work. It's a win-win situation!!!
The Nasdaq didn't hit it's high 21 years ago. It was in 2000, only 11 years ago.
What a moron. Zakaria thinks government workers are a SOURCE of revenue rather than a USE of revenue. When a gov worker pays taxes they are just recycling the money that was taken from the productive part of the economy. By his logic, we need only massively increase government workers to get prosperity. They tried that in Greece. Not working so well.
Now in Greece they are laying off and cutting government worker pay to "fix" the problem. How is that working out?
The international comunity is bailing them out. The fix is painful because their government works will receive reduced benefit. This is the punishment for ripping off the people of Greece.
And after slashing the government budget, joe, are the deficits in Greece going up or down?
The fact is that revenues are going down faster than the budgets are going down, making deficits actually go up. Watch and see. This "bailout" will be either followed by another, larger, bailout in the future or Greece will go bankrupt.
Drastic austerity simply doesn't work, joe. If you are 500 pounds overweight, you don't lose all 500 pounds in a few months. If you try, you will die. You need to spread it out over years.
Ummm... Bruce, they have NO other choice. They created a little monstrosity out of nothing. That little monster keeps growing and it wants more and more... they had nothing more to give. At the risk of COMPLETELY imploding they've had to starve that little monster back to something sustainable. What you're suggesting we do today in the USA is what Greece was doing 10 years ago. Instead of weening that little monster off of the milk, Greece kept feeding it. Learn from history and learn from others... don't follow in Greece's footsteps.
Chris, what people are suggesting is that we do what Greece is doing TODAY to solve our problems.
I'm not against weaning. What I'm against is the rampant balance-the-budget-NOW approach that tries to answer the problem of our deficits and debt by slashing our annual budgets, which involves laying off thousands of government workers and cancelling trillions of dollars in government contracts. (And some will say just pay senior citizens 50 cents on the dollar for their social security pensions, as if that won't have non-political repercussions on top of the obvious political repercussions.)
We can't balance the budget in 10 years. We can't seriously make a dent in the deficit in 20 years through austerity measures without causing a bigger problem than we already have. The road to fiscal responsibility at this point is a really really long road we won't reach in our lifetimes. It may take a century or longer to fix this. Trying to fix it faster by slashing the federal budget will only result in economic calamity. We are seeing this happen in Greece today.
Bruce, I am telling you Greece is bailed out. I didn't say their problem is over. Greece cut the benefit to their workers such that they will slash the size of their debt. Doing that will help them to recover sooner.
Bruce, GDP is the indicator of profit of a economy.
No, joe, GDP is not the indicator of profit for an economy.
The federal government's annual budget, in fact, represents about 25% of total GDP. If you slash the federal government by, say, 10%, then GDP will go down by 2.5%.
Bruce, GDP is the sum of products, services, and investment. Which component indicate a profit? No profit, no investment. Is it clear? This is from macro economic textbook. Your % here and % there is not in the book! That is why you speak Keysain fluently, but, I doubted that you tell me the truth!
In economy, government is overhead. It has to be reduced to mininum to increase the profit margin.
The economy doesn't turn a profit, joe.
I think if we could maybe set up an offshore acount and have the US government literally be a computer that put's money into that account and if that off shore account were set up to distribute money into every citizen's personal account on a monthly basis, that might solve our problem and streamline the government at the same time...I mean what's a computer with an internet connection cost these days. Let the Gx's collect good ole government dole and buy lots of dishwashers and such.
To escape inflationary pressure the computer could put more money in every month on an exponetional basis to achieve a nice steady growth curve.
When the price of a gallon of milk get's to $1,000,000 (just so we don't have to deal with so many zero's) the whole system will reset and start over again with the cost of milk set at 1$.
This may wreak havoc on international trade so we'll just have to ask them how much copper they'll give us for a gallon of milk and sort it out that way.
According to DALE above, the economy is alreay destroyed. I still draw my paycheck. I visited Krogers this morning and picked up groceries. The economy didn't look destoyed to me. The Republicans did destroy the economy back in 1929 under Herbert Hoover; and almost again in 2008 under the Republican George Bush. During the 1930's, I saw with my own eyes the works of FDR, the Democrat, that pulled us out of the gap. It took ten years and WW2. AGAIN,
Obama inherited a REAL mess from the Republican George Bush. Its probably gonna take longer than ten years on this one. BUT for sure, its not gonna be conser ideas that pull us out......hell....they got us in....and now we have the same bunch of conser in Washington lecturing us on HOW to get out of THEIR mess.
Missiondweller: You just can't be that uneducated, Fox News fried your brain beyond irreparable.
If you built a widget to sell, and your potential buyer " a consumer" walks by, but make no attempt to buy, because he does not have a job, you as a business or investor can't sell your product, then you go out of business, the consumer does not get to pay any sale taxes and the government does not collect revenues, I made it as simple as I can for you to understand.
Well geez... I've got a better idea... more efficient... why not have the govt. just subsidize your business for all of the "widgets" it makes. We can cut your fabricated middle man.. the govt worker.
This is the first time I post in CNN. I am surprised that I find conserative firends here. Zakaria propose we should pay value-added-tax (VAT). This is a joke. This is really a job killer. In this article, he recommened growth is the solution. This is exactly spend to the wealthy. Obama's stimulus policiy. We all know the stimulus did not reduce unemployment to 8%. As is now, 9.2%. He mentioned the government job lost will has adverse effect. But, private sector jobs are the real indictor of growth. Holding the size of the government will impede the growth of the private sector. It is because we borrow without the growth of the private sector, we have no way to pay back our debt. The world is watching at our ability to pay the debt. Cut the government spending first. We will move to a better position.
This little pencil necked geek can just shut his big mouth!
We can all see ralk has this figured out! I wonder what country ralk would like to live in.
Without Eliot Spitzer on, In the Arena is just another generic, establishment news media zoo full of caged actors. Everybody should take a lesson from what Cenk Uygur, former MSNBC anchor, did in walking away from a lucrative offer so he could avoid compromising his principles and views on what the function of the media should be. I can see the minute twitch in Foreman's movements and can already tell he's more of an actor/caged animal rather than a true anchor or journalist.
This entire charade has made the U.S. government the laughing stock of the entire world and the IIMF. The levels of sheer hypocrisy at play boggle the mind. It is a CLEAR CUT and TEXT BOOK example of showing once in for all, that the entire government is broken, and that racism is alive and well in Washington. ANY OTHER PRESIDENT WOULD HAVE GOTTEN NOT ONLY THE RESPECT BUT SOME SORT OF A DEAL BY NOW. But we have a black President in office and from the day he was elected there has been a clear cut conspiracy to defame, undermine, disrespect all his credibility. The GOP should be ashamed of themselves, and they are the last party to put forth any advice on how to deal with the economic chaos since they were the ones who sewed the seeds and created this entire mess. Perhaps when the doo doo hits the fan on Aug 2/3 ... the people will finally take notice of just how corrupt and unworkable the entire system of government has become. It has NOT been for nor accountable to the people for a very long time.
I think some posts have touched on this. No-one at the top making decisions appears to have any clue what the underlying problem is. But that's because they and the rest of our citizens are 120% invested in a debt based monetary system. Their (our) only solution in 'the' system is to increase debt which is what they are saying. By growth what they mean is increase the amount debt and the amount of interest owed on debt. If we all stop playing the game the whole system collapses into ruin. Talk about slavery. And who are we all enslaved to? Private banks and our government.
I keep thinking....now what would encourage me to borrow more in this economy? Then it hit me. Cancel all of the interest I owe on the amount of my debt that was not derived from a deposit at the federal reserve and I think that would do it. Watching my mortgage interest drop below my principle payment might just might encourge me to borrow more.
If your not sure what I'm getting at then you might do some research on the fraction reserve system.
Mike
The Federal Reserve could this very day buy out, say, $4 trillion of US Treasury bonds on the open market, and then forgive the US Treasury the entire $4 trillion debt by "tearing up" the notes (not a literal tearing up since the notes are not on actual paper any longer). This of course would increase inflation, perhaps dramatically.
In fact, 100 million individual US citizens could each scrounge up $40,000 somehow and buy treasury bonds today and do the same thing. I wonder if this would have the same effect on inflation?
The problem is systemic and would naturally include the inner workings of the fed and the treasury. Inflation is a byproduct of our monetary system because it does not really allow anyone to know the real value of their assets. Banks don't know the real value of thier assets especially when the loans are in default which is interesting because if they loaned out what they had and stopped when the vault was empty, then why did they go out of business, assuming all thier deposits were backed by the FDIC?
Fareed is bang on!
@ Dale. But you do ?
Yeah, it's crazy that Obama is out doing fundraising events while we are about to default in a matter of days. By the way Mr. President, if we default then you are not going to get re-elected
If we default, that's Obama's straight up ticket to re-election. Independant voters always vote against extreme and Rebup party has shown its very extreme side now.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!
And we should listen to this Pakistani because?????????????????
Listen more carefully at what he says, Fly, and very possibly you'll figure it out.
You do show your ignorance. He is not a Pakistani. He is from India.
JOE........We didn't get in this fix yesterday OR the day before that. We evolved over the past forty years of Repub AND Demo spending. AND the Rights hero Ronald Reagan was the biggest spender of all. Its simply gonna take time to get OUT. From my observation spot, the conser want great sacrifice from the poor BUT little from the wealthy. This
old song about taxing the wealthy which does away with jobs has been preached by conser all my life. To hear conser tell it, IF the wealthy was not taxed at all, the economy would leap to its feet and run like the wind. ALL this bull has been tried and simply doesn't work. The Republican Party no longer represents America- just the waelthy in it.
as I said previously, the debt ceiling issue and tax cut and spending cuts is all part of the TeaParty and GOP strategy to win the next year election: they want to sack the economy so that it becomes easier to win the elections. The TeaParty members are just not very bright, since a slow economy puts them out of work as well. The GOP instead is made up of people who can afford to sack the economy .. so they don't care.
But in the end, it's the Amercian people who are to be blamed, ... gullible enough to fall for this ..
What to say here...I don't know. I would be a tea partier but I'm just too lazy to get to one of the rallies. Perhaps I'm not very bright...would it be ok if I assume the same of you?
I am a member of the GOP and sadly, much to my regret, I'm not rich enough to survive losing my job without finding another....so I certainly wouldn't want to "sack" the economy just to win an election.
Mike, McConnell's #1 legislative priority isn't to fix the economy–he said it's to make Obama a one-term President. Those are his words.
If the economy gets fixed in the next year, the President will win in a landslide. McConnell's #1 legislative priority is incompatible with fixing the economy.
30 year bonds at 2%? Check your facts, Zak. Also, infrastructure is something that is generally maintained at the State/Municipal level. Your solution is for Washington to borrow more money and decide how to allocate it nation-wide? Stimulus with borrowed money is temporary, eventually you have to pay it back.
Obama thinks he should know everything, but he has no experience except as a politician. His wants to be seen as in control; frankly though you never know what he's going to support next. He's gets his opinions from what he thinks are the polls.
Chris, we've never payed it back before, and chances are we never will.
In fact, there really isn't any long-term plan to run a budget surplus and use that money to buy back bonds. Nobody is proposing that. The closest we come is to pretend that the US dollar isn't actually a sovereign currency, to enforce a debt ceiling that tells the Treasury that it can't sell bonds without permission, and to make it against the law for the Fed to print money to pay the nation's bills.
Remember when JP Morgan bailed out the US?
in one of them book thingys (House of Morgan – Chernow). Don't remember it though- even before my time.
A question – can it be confirmed that Ms. Bachmann never voted for a debt limit hike when the 2nd Bush was in the WH?
The last such hike was included in PL 110-91 (9-29-07) which started life as HJ 23. I couldn't run it down because my wonderful IE9 (flog the programmers) was having a bad time interacting with GPO's site (Cong. Record).
Zakaria, here's how to pass the impasse-overt bribery: Heavily increase tax for those with >$200,000 income, Republican Congressmen exempted.
Well, do tell. Encouraging GROWTH is what REPUBLICANS have been supporting all the time. But, NO, Obama and his faithful following want to tax industry to death. They will NOT listen to what industry has to say about Obamacare. Industry is NOT going to do any five-year planning with the chaos that calls itself a government in Washington. No way. Either support industry or get ready to lose your job! It is that simple.
Zakaria is absolutely right on one thing - if Obama is for something, they're against it - it doesn't matter if Obama is willing to deal - McConnell has publicly stated that the GOP won't "deal" with Obama while he is office –
If Obama gave the GOP & TP the sun, they would want the moon, if he gave them the stars they would want the entire universe - actually, that's what the GOP & TP want - the entire universe to control....
Two things I find interesting in this article and reading the comments. One is that so much authority or knowledge is attributed to Mr. Zakaria when he is just another journalist with an opinion. The convention of using someone to "interview" him, I believe is a purposeful attempt to position him as a great authority on the economy.
Secondly and more important is the recent unwitting acceptance of trickle down economics by liberals. Conservatives don't want job creators overly taxed because history shows when entrepreneurs are liberated from excessive taxes, in whatever form they take, jobs are created and more people pay taxes and have money to spend thus the trickle down. For years, liberal dismissed this concept. Now we find that liberals favor trickle down economics as long as the Government is doing the "trickling down" by taxing and spending on "shovel ready jobs" etc.
In a way, this second point is a good revelation. If we agree that trickle down works, let's just debate whether the trickling should start from the inefficient monopoly called government or the more efficient business community where there are choices.
Rob, you misunderstand "trickle down" economics. Trickle down is also known as "supply-side" economics. This means that the economy is boosted by the suppliers, aka the "job creators" if you listen to the GOP mantra. Government is not a supplier, but a consumer. So, government-centered solutions are a part of "demand-side" economics. Another example of demand-side is to give poor and middle-class people a tax break or even a negative tax rate (e.g. unemployment benefits, payroll tax holidays for social security taxes, social security pension checks, etc.) in order to put money in the hands of people who will spend it.
So no, Democrats are not embracing "trickle down" economics by asking the government to consume more or to put more money in the hands of consumers. They are still the "bubble up" economists that they've always been.
Bruce,
Great points and description of supply side economics. Actually, I completely understand what you are saying but read the excerpt below and you will see how Mr. Zakaria is the one positioning the Federal Government as an employer rather than a consumer. President Obama has done the same in many of his recent speeches as well. Same thing with liberal talk radio commentators like Ed Schultz and Democrats in congress. It seems to me that the growing, if not prevailing, new liberal school of thought is that the economy will only improve by lowering unemployment which they feel is accomplished through government spending to directly create jobs. ..not create demand that will in turn create jobs like previously espoused.
From Fareed...
"if we can get people employed, get them paying taxes, you can't cut your way to a happy future because the more you cut, you get yourself into a downward spiral like you see in Greece.
You know you – because what does it mean to cut government spending? It means to lay off people who now don't have jobs. They can't pay taxes, they can't go to the diner, they can't buy stuff. So it may work in theory, but in practice, the more you cut, the more you're depressing the economy."
All those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy...
Trickle down effect is a Republican term, meaning very little tax, or none, on the wealthy. They say it will create jobs.
If that is the case , Bush tax cuts must be at least six years old, and look at the unemployment we have now. It is a big
lie.Republicans cater to large corporations and are willing to sacrifice Americans for the sake of their buddies.
Perfect example of leftsit stupidity that actually believes Obama......an abortionist.liar...when asked about his favoraite ball player in interveiw...couldn't name ONE!! Point is...He's lies about anything.............His wife was a voluteer??/She worked aprt-time and got over 300000 for VOLUNTERRING>>..Thinks Jeusu is not only way for salvation......said he was Christian.........all Chrsitian believe JESUS!..........His former henchman...now Chicago mayoor,,,had to use court to even RUN!! Chicago corrupt judges at it again........you bllame tea partiers?? You're stupid....Jim
Whoaaaa, you're comparing apples to oranges Rob. Government creats jobs that private enterprise won't because there's no profit in it. I haven't seen any private companies build a highway because they won't profit from it. They don't fight fires because there's no profit. Government created jobs provide a function valued by our society, providing infrastructure and basic human services (safety, for instance). Companies create jobs only if they can profit from their employees' work. So the source of the trickle down is quite different. As far as not taxing the 'job creators', who is that exactly. My wife and I made over 250k a few years ago. Does that qualify me as a job creator? Is the surgeon that makes 400k a job creator? Or by job creator do you mean that wealthier people should have more money so they can buy stuff that the rest of us have to make for them thereby creating jobs for us? In that case, reduce taxes for the low wage earners as they HAVE to spend what they get becasue they don't get that much. As for my wife and I, we SAVE as much as we can so any tax cut that we get will not be spent. So much for your trickle down...
David, 200k is not a lot of money, hate to break it to ya.
Oh sorry, SLK 65, did I leave you out of the tax break? Of course, you could become a Congressman.
Test
Fail
Nobody's buying goods because the wage dollars are being sent overseas by U.S. corporations. Until U.S. corporations are forbidden from outsourcing everything, the jobs, the consumer spending, and the economy will continue to be in the toilet.
Anybody who buys anything Made In China is an idiot. Especially beware companies who won't tell you where their stuff is manufactured.
So the solution to all our problems is to pay $1,500 for an iPad instead of paying $700. Gotcha.
If the debt ceiling isn't raised by August 2nd, on August 3rd it is the President and his Treasury Secretary who will prioritize who gets checks and who doesn't get checks.
For some reason, the Tea Party seems fine with handing President Obama this kind of unmitigated power. I would laugh hysterically if he said, "well, the social security recipients in all the states whose representatives voted against raising the debt ceiling are dead last on my list of priorities and they will not get paid until the debt ceiling is raised."
Mr. Zakaria – Please, please, please run for President of the United States. You are exactly what most people had hoped Obama was or would become. Yours is a voice of truth, reason, and common sense that every politician in Washington seems to be completely devoid of. God bless you, sir.
FYI, Zakaria was born in Mumbai, India.
It is fortunate this is the fact. God bless America!
Do you know what is VAT?
Sounds good to me "Z"
"I think what President Obama has been trying to do – again, I think, quite wisely" Sorry Fareed. I used to look forward to learning something from listening to you... but yo've cecome too much of an apologist for Obama. In the parlance of the hoi poloi... you're jumping the shark.
As Mr.Z said, anything that Obama proposes the GOP is against. That explains why Obama hasn't been "leading" by pushing any plan he favors. If he did that, that plan would automatically be DOA.
He's the President. The GOP has 1/2 of 1/3 of the government and he can't lead because of this? Holy cow. That's some serious excuse making.
This is what happens when people who think they're smarter than others get together. I'm an idiot and I think I could run this country better. One problem is that my fellow Americans are sadly so blase' towards the system, many don't have stones to start something or even care to. Remember, this country belongs to the legal citizens including the dolts we voted into office who are teraing it down for their own benefits. I know there is a great deal in running this country but if the smart guys in the room can't figure it out then, whoever you might pray to, help us all.
Folks...it aint the Dems and it aint the Repubs....it's US, because we keep electing and re-electing people who are only looking out for their own good. We have elected "a bag-full of cats with clothes pins on their tails"...all noise, always fighting, and nothing, but nothing ever gets done. Remember, the largest expenditure, EVER in American history, and the Leader of the House told us to "vote for it, so they could see what's in it"...and you know what??...we did!! We are reaping what we have sowed...we are our own worst enemy. Until we have term-limits and some testing means to insure who we elect is of sound mind (ha!) and has 'some' experience, then what we have now is what we are always going to get...cats in a bag!
jackson, the cost of the health care reform law isn't all that significant for another year or two. While I don't deny it's expensive then, it's not expensive NOW, and it hasn't been expensive for the last 2 years since it was passed.
While HCR might indeed be a long-term deficit problem, it is not the cause of the problems we have today, and it did not increase the debt to the $14.3 trillion in any meaningful sense.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!!
So let me get this straight; the Tea Pary's to blame for bringing the debt ceiling debate to the center ring. Remember that story about the emperor's new clothes? Who was at fault there; the kid stated the obvious when no one else had the cajones to do so, or the guy who was parading down the street naked?!
As for both the Dems and the GOP, their debt reduction strategy is simple; screw whoever can't fight back, isn't politically correct enough, or doesn't have the clout to vote you or your party out of office in 2012.
I've said it before, and I'll say it again: if the ORIGINAL stimulus had been a giant infrastructure project instead of handouts to unions and lackluster attempts to prop up local and state governments, I think A. people would have been more supportive and B. it might have actually worked.
When you do these cuts to eliminate federal jobs , cut federal spending which in turn employs people through the federal money spent, continue to let illegals pour into our country to tak American jobs and continue to export jobs to China and India, how will that lower unemployment? I request one of our GOP bloggers explain that to us.
Federal jobs aren't even the low-hanging fruit that need to be cut. It's the handouts that are killing all of us. When they are reduced our finances can heal, and motivation to rely on yourself and your family and friends will be increased. It's not the 'police, teachers, and firefighters' that are dragging us to oblivion.
All those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!!!
Yes, these are very important topics and Fareed Zakaria makes an awful lot of sense. I wish he were eligible to be President some day.
what i find funny is how everyone is blaming the tea party. this is not a tea party event..this is obamacare, stimulus 1, stimulus 2, cash for clunkers, tarp. the tea party is the only sane people in washington. they are the ones who want to stop all the waste and restore responsibility in our representatives. the attacts on the tea party are nothing more than a veiled attempt at denegration because both the republicans and the democrats see their power base eroding. it's time for the silent center to stand up and lead this country back to great nation it used to be.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!
"in the Republican Party that anything Obama supports, they have to oppose", and there is the real problem in Washington and nothing gets done.
Fareed Zacharia is an advisor to Obama. Another leftist egghead, whose ideas fail again and again.
Whatever Fareed has advised the presdient to do , it obviously hasnt worked. So your credibility is gone, Fareed!
Right, because we all know that whatever Zakaria tells the President to do, the President goes out and does exactly that. And we also know that whatever the President wants to do he does, and there is nobody who can stop him.
You are not talking about the president of United States of America. You are talking about a dictator!
My god, Bruce, wake up before it is too late!
Tell you what, Joe. I'm not a member of the GOP, so I can't affect the Republican primary.
Why don't you go and find a good solid candidate, have them win the GOP primary, and I'll consider voting for them instead of voting for the President. Of the dozen or so candidates who have expressed an interest so far, I might vote for Ron Paul, but who are we kidding? No way he wins the primary.
As far as being a "dictator," I imagine that's kind of like your contention that the GDP is like "profit." That is, since the GDP is nothing like "profit," the President is nothing like a "dictator." That must be what you meant. It's opposite day!
Serioulsly, joe. The President's efficacy in accomplishing his political will is near-zero. A real dictator would get his way a lot more often than Obama does.
You wrote "... nobody who can stop him". This is scarely. Dictator is the only thing come to my mind. If you are member of GOP and you voted for him, I like you to correct this mistake in the 2012 election. Support any GOP candidate!
..... Mr. Zarkaria: "Shrill" partisanship implies an incoherent thought process. I believe there is a lot of very sound reasoning on each side of the debt-related issue. The emotional aspect of it all tends to arise from the fact that there's no painless way out of the spot we are now in. We're in a situration very much like that of the young fellow whose hand became ensnared between a rock and a cliff, and whose only options were to maintain status quo and die, or cut the hand off. It's a very tough situation indeed.
Since when has Zakaria become an expert economist? All he is doing is repeating his party's line. Gov't spending IS the problem. There might be some pain in the short term but over the long haul we need to solve the fundamental problem; not dig ourselves a deeper hole. Once we do we will see increased dynamics in the economy that will lead to growth. Kensyians just don't get that and like a repeated lie this stuff just doesn't go away.
http://en.wikipedia.org/wiki/We_are_all_Keynesians_now
Since when does the US economy look to other countries to make our decisions? Now we are looking to VZAKARIA? No won herd of this guy a year ago, now he has more respect than our own Republican senators? Also the Obama administration, has been blowing money like there is no tomorrow. Check out the White house staffs pay raises? This administrations trips with their entourages, Wake up America!
Zakaria is a naturalized American citizen and has been a prominent journalist for decades now. He has the ear of the President. He has a PhD from Harvard. He's no slouch.
And he's also largely correct on most of these issues.
Your "no won herd of this guy" must be a parody. Please please tell me it was a parody.
Bruce, you have not answer Zakaria's VAT is good recommendation or not from me. Now, I am telling you that Zakaria kissed some Chinese leader's fanny in an interview and has his fanny kicked. I don't care about his credential, but, he is certainly a liberal crown! I have watched GPS Zakaria for a little while and I know what he is! Any president list to him will be doomed!
joe, if Zakaria says that the VAT is a good idea and you–who think that the GDP is like profit–think it's a bad idea, then I'm inclined to side with idea that the VAT is a good idea.
But at the end of the day I don't really know how good or bad a VAT would be. I imagine it would be as good or bad as any other kind of sales tax depending on how it was applied. We use taxes like this in many places.
In general, taxation by many different paths is necessary to fund government services. Also selling bonds does this as well. People like their military, their highways, their fire departments, their air traffic controllers, and a bunch of other services that the private sector just isn't good at doing, so government grows into something that can provide these services.
Bruce, GDP is the sum of products, services, and investment. Which component indicate a profit? No profit, no investment. This is from macro economic text book. You already failed in the fundamentals of economy. I don't believe I can talk to to about the harm VAT will do to us. This is not politics. It is about capitalism and socialism.
joe, NONE of the components indicate a profit. The economy is not a business that produces a product at a certain cost and sells that product at a price where the profit is the price minus the cost. The economy does not turn a profit. Stop talking about profit. The economy is not a business. The economy is not run like a business.
Bruce, once again, business is modeled under micro-economics. The top level is the macro-enocomics. Obviously, you don't know about that. I am not trying to insult you. You need to have a minimal background of the subject to understand the issues. Please, by all mean, take a look at some good textbooks in economics. After the fall of USSR, the CIA has a new task. They have to study the world economics because it is no longer following the Keysian model. In oeder to model the enconomy accurately, CIA considered the economy is a system and require a set of new control laws to operate it. A number of control system engineers were hired to do such research. The new theory will be beyond many ordinary people to understand, however, the Keysian model is still good for you. Enjoy the reading.
all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!
Cut the side show! Lets get on to Greece! Only after full collapse will Democrats realize what a sweet deal America was. WW-II ended the Great Depression; it will take suffering on that scale to discipline us for another advance. Unfortunately, the oceans will not protect us this time. Who will be left standing to repopulate the industrial world? Australia?
Here's an idea. Let's take care of Obama's share of the debt with spending cuts and the Republicans share of the debt with taxes. Everyone agree?
After the past 3 years of profligate spending, (1.3B lost on Chrysler, cash for clunkers, 8,000+ million for the stimulus, 99 weeks unemployment, etc), projection into the future of every-bigger deficits and debt, and what we have to show for it is our current state? And F.Z. says cutting won't work and will damage the economy?! We just created a new word called 'trillion' and made it common with money we don't have. Sheesh. It doesn't even matter what will happen if we don't spend it.....what part of 'we don't have; it doesn't he understand? Once again, concerning what is happening to the economy, the only question is can they be that stupid or is it entirely on purpose. Given all the historical evidence, I don't think they can possibly be that stupid.
Okay, Joel, let's start by slashing all social security pension checks to you and everyone in your family. Let's say 10 cents on the dollar based on current obligations. Everyone in your family who isn't receiving social security now will, instead of receiving it when they hit 65 or 67, will receive their 10 cents on the dollar after they turn 85.
Oh, and health care? Don't get sick, and that goes for your whole family.
If you aren't making at least $254,323.21 every year and saving at least 45.678% of that amount, and investing it in a portfolio of investments that is beating inflation by at least 8.453%, then that's your fault. Stop your whining already.
You can't be that stupid.
That's the real debate behind the debate. Stupidity, vs. Ignorance, vs. Willfull recklessness. And then there's the people that voted for these friggin' goofballs.
All those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!
So translation; "Pretty much whatever Keynes said".
[youtube http://www.youtube.com/watch?v=GTQnarzmTOc&w=560&h=349%5D
im learning a lot. what effect can i make with it. knowing is half the battle. Now what?
Now, when it all falls apart, you can watch and say, "oh, THAT's what they meant..."
What a bunch of nonsense! I have never seen so many poorly-presented, opinionated fallacies presented as fact. Some of his fallacies:
1) "But if we were to precipitously start laying off wholesale school teachers, firemen, policemen, then, yes, because all of a sudden you have fewer people paying taxes, you have fewer people buying goods, you have fewer people buying products." Laying off government employees doesn't help? It helps in real business, where unlike the government people are paid by what they produce. If you lay off a government bureaucrat, making $100k/year, you are losing money because now he can't pay $20k back in taxes? By my math, you have still cut the budget by $80k...
2) "We have an infrastructure in shambles." Really? I seem to recall being able to drive to work today without blowing out a tire, can drive on the interstate without my car being damaged, and unless my memory doesn't serve me correctly, every "infrastructure" project I've seen has consisted of 1 guy working, 5 guys standing around. No one seems to be able to explain how this "infrastructure" nonsense will make the country any money, but they think its a great idea. Make money by spending it (on infrastructure), says the government. Not surprising that that kind of logic got us where we are today.
3) He acknowledges that housing is a building block, probably the biggest, to economic recovery, and then offers no suggestions on how to fix it, but changes the subject. Fine journalism, that.
4) He states, and the whole point of the article is, "The debt ceiling simply reflects the fact that we are spending more than we take in." Then proceeds to criticize suggestions on how we can spend less, and offers no options to take in more. What a waste, how did he become a journalist?
This piece is a weak bunch of drivel. At least present some ideas on how to fix this stuff, don't just spout a bunch of nonsense.
1) If you lay off a worker that was making $80k and paying $20k in taxes, now he is unemployed. You have to pay them unemployment benefits for roughly a year at roughly half their salary, so you lost another $40k. Now instead of paying you $20k in taxes and pumping $60 into the economy, they are paying you nothing and pumping only $40 into the economy. You "save" $80k – $20k – $40k = $20k, but you lose $20k into the economy. That $20k lost means that people who sell this guy food and beer and family vacations and cable TV services will get $20k less from him. Put 4 of those together and you lose another job in the private sector at $80k because the effect of lowering demand is for private companies to lay people off.
4) Perhaps deficit spending isn't a problem. Dick Cheney said that, "Reagan proved that deficits don't matter." Perhaps he doesn't suggest a path to a balanced budget through spending cuts and/or tax increases because he's already told you how we've balanced the budget in the past–through GDP growth. He suggests that GDP growth would come from a very large infrastructure project. He even put a price tag on what we should be spending on it: $1 trillion.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!
We couldn't address these issues in the years the democrats controlled both houses and the Whirt House. The truth is we need to cut medicare, social security and public union pensions. All have been slush funds for the goverment since their creation. Business won't get serious about ecomomic improvement until government does. Government is driving the bus right now and Obama is afraid to take the wheel. Time to elect someone who will.
All those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!
What's HAPPENING, is that the right has decided that if they can't be in charge, they'll ruin the country or try to until people get so tired of their tantrums that we give it back to them. Look at our history. The stock market debacle, Iraq, tore/abuse scandals, the cost of the Bush tax cuts, and all that other stuff...even AFTER all the bad ideas Republicans gave us that made things worse and worse, what was their solution? To elect Srah Palin, who didn't even know what a vice president DOES(she admitted it, check youtube), and John McCain, who said he didn't know much about economics.
The problem is clear: Conservatives are nothing but imperialists who only love this country if they're in charge of it. No matter how bad things got in Iraq or how many troops died, they stuck to their "Don't cut and run!" blind optimism. No matter how bad things got on Wall Street when Bush was in office, they held out hope for TARP bailouts(John Boehner begged them to pass it). But the SECOND the next guy shows up, they began an endless chorus of demanding results from the same govt they let slide for years and years no matter how much money they spent or how many American lives were lost. It's just telling the TRUTH to say they DON'T CARE about this country. They care about rich peoples' money(whether they personally have any or not, they just love pretending to be rich fat cats). They care about their party. They care about their ideology...but NOT the country they spent 8 years messing up.
40 lbs of crap shoved into two paragraphs. Where to begin...the field is completely unplowed. Exhibit A of the problem ya get when the uninformed have a computer....
Your RESPONSE was a whole lot of crap full of denials based on nothing that didn't disprove a word I said. Like ALL tea nuts, you try to claim credit for supposed intelligence that you never show OR prove. Shut up and crawl back in your hole.
Your crazy, hyperbolic rants aside, your facts are just plain unsupportable. Worse and worse? According to the treasury department, the national debt went from $6Trillion to $9 Trillion in 8 years under Bush. In the first 2.5 years under Obama, it has gone from $9T to $14T. So for those keeping track at home (obviously not AmazonGirl),
8 years of "OMG Bush is screwing up EVERYTHING" Cost = $3T
2.5 Years of "The Savior" Obama, Cost = $5T.
A little fact check next time would be nice.
@bb ARGH you tea tards are morons. Let's start with this:
"Last week, we took a look at new data about the period of 2001-2011, and concluded that the biggest contributor to the disappearance of vast estimated surpluses was additional spending ($4.3 trillion)"
(washington post "Revisiting the cost of the Bush tax cuts" 2011)
So already, we know YOUR math is FUBAR but that's typical.
Bush didn't even include the cost of the wars in his budgets(they were often counted separately), OBAMA started putting those back in. The total cost of the war on terror as of 2008 was around $1T. The TARP bailouts cost around $700B. The Bush tax cuts killed off the projected surplus, so all that adds up to the "fact" that you're a LIAR. Now shut up before I get irritable enough to make an effort.
Ah yes, the teabag reference. One can always tell the intellect when this is invoked. Thank you for proving my point. You're not worth educating because you don't wish to be. Continue worshipping at the altar of Big Government little girl.
You're still here? Isn't there a pic of Sarah Palin in running shorts you could be "researching"? Go find it and don't bother coming back.
hemipristis – he he very true. Name calling – truly an act of strange desperation when logic fails. Are we in second grade? Amazing how quickly it showed itself in this case.
LMAO Ohhh here we go. They failed to disprove a word I said, then they failed to explain their messed up numbers and lies, and now they're trying to use the "buddy system" to save their dignity. Really, just STFU when I'm around to avoid EXPOSING your idiocy.
why can't all the people and companies who have milions of dollars. Give a million or more to goverment to takecare of most of the money problems. Let them give help to United States like they do other countries. Then they can write it off at tax time like they do other write offs.
Don't quite grasp the economic situation much, do ya? If the gubmint seized all the assets of those making over $1Mil a year, we could fund the gubmint for only 8 months. So clearly, they're not the solution. CUT SPENDING!
that's just plain ignorant. One percent of the population controls 95% of the wealth. While nobody has advocated taking all of it away, they can certainly afford to give up more than they do. I'll never understand why so many middle class and poor Americans are so damn concerned about the welfare of the super rich. Are you all really that stupid? Do you expect to be a multi-millionaire some day?
why does anyone even bother printing what Zakaria blathers on about? all he does is parrot the White House.
Except that he doesn't. In this article Zakaria lambasts the President on many counts. He is sharply critical of Obama's fiscal stimulus and of the President capitulating to calls to reduce deficits NOW rather than over the long term.
Perhaps that is the case, but I have yet to see one of his columns where he diverges from WH talking points.
Looks like I'm not even the ONLY one on here who only needed a few seconds to prove you're wrong.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!
I disagree with the fundamental problem. The US debts is stacked up too high now, that I would we hopefully balance (pay off and move on) within 60 years without add in too much, I assumed that the balance rate is 3 trllions pr 10 years as Obama and this congress talking about. It is not a sideshow , in fact it is the edge of US bancruptcy that we are irresponsible imposing to the nexr 2 generation. I do not like the way tgat this president and ckngress handle the crisis, both Republican and Dems. We are handling our beautiful country to China And others by our irresponsible actions. Just tell American : How do we balance tbe budget, pay off the debts, saving budget, stop uncontrolled and unnecessary spendings, stop reforms of reform.. Because we are living on loan and debts, there is no others way out!
donob, nobody is talking about paying off the debt. They are only talking about slowing down the growth in the debt.
When Obama speaks of a "grand compromise" of $4T over 10 years he is not talking about making today's $14T debt into a $10T debt in 2021. He is saying that if we do nothing our debt in 2021 will be $30T and if we do what he's talking about the debt will "only" be $26T in 2021, or $12T higher than it is today.
Obama decided to turn on the Debt Ceiling Fan in hopes of cooling CON GRESS down, But all it accomplished was to create a bigger economic DRAIN and DRAIN on the Grid !!!
Obama Town Hall Meetings are informative but they leaves many of his supporters frustrated, and unable to show their immediate support for his debt/budget/economic solutions.
I have a suggestion: Why can't the White House set up a "Texting" computer response program, whereby in answer to a set of questions set forth, the public can respond yea/Nay via Text. (Similar to the set-up on Dancing With the Stars). It would require massive servers, and safeguards to limit question responses to to one set per cell-phone to prevent jamming...but it just might work. Gotta reach the citizens on this...NOW. Too important. On this issue, the President has got it right!!
Jon Mattoon
Aiken, SC
Remember what Obama told us all about the massive near trillion dollar stimulous bill? He told us that if we just passed it, without reading itfirst, and gave him all that money to spend he would spend it on shovel ready projects that would rebuild or decaying infrastructre and create so many jobs UNEMPLOYMENT would never go over 8%. Remeber that, I do? Yet now we find out all that endless talk about shovel ready projects was just a lie to get the money. That very little of the money was spent on infrastructure creating jobs, and UNEMPLOYMENT went over 10% and is still at 9.2%, and going up again! Yet left wing supporter like Mr Zakaria just pass the lies and the hundreds of billions of wasted dollars as nothing, and wonder why we don't just give Obama a few more trillion dollars to borrow and spend? Nobody will hire Mr Zakaria because Obama is the most hostile President to business to ever sit in the White House, nobody wants to give him more trillions of borrowed dollars because it always goes to fill the pockets of democratic and left wing special interest, not to fund the needs of the nation like infrastructure. Obama's done everything wrong and made everything worse Mr Zakaria! You can keep drinking his Kool-Aide if you wish, but the rest of the nation is tired of his massive failures, leading from behind, arrogance, outright lies, and we're ready to move on. We just have to hope that we can muddle through without him doing to much more damage until Nov 2012!
All economists with at least a little brain wre saying at the time that 1 tril is not enought to help with the size of our economy after all the years of Bush. So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at al (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!
I stopped reading after a few paragraphs. Mr. Zakaria always seems to play loose with facts and did so yet again. Once that starts, I discount the entier article.
Statement: "But if we were to precipitously start laying off wholesale school teachers, firemen, policemen,...."
What do teathers, firemen, policeman have to do with federal debt/jobs. I don't believe you'll find any on the federal budgets. There are local positions. Usually people hit firemen, teachers, policemen to strike emotional reponses. Some were supported dthorugh the similus, but those jobs that do dissapear go with end of stimulus.
Statement: If you look at the Nasdaq bubble, the Nasdaq bubble burst at its peak at 5,000. What is the Nasdaq now? It's 3,000. In other words ... 21 years later, you're barely halfway back to the prices"
21 years puts the bubble at around 19990. I seem to recall it being around 2000. Sloppy midstake, but that's where I left the article. Mr. Zakaria seems to do this too often. And when you don't care about accuracy then I don't feel I should rely on anything else in the article.
Local budgets depend heavily on federal aid thus less fed aid makes local lay offs especially in states with Repub governors (like NJ) where they refuse to raise local taxes to compensate for fed aid cuts.
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at al (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!
Lower your voices people. wiat, this could be a government computer with multiple personalities.
"The fact that it has become center stage is just because one group, the Tea Party, within the Republican Party, decided to make it that." Fareed Zakeeria
I can't help but think, is this the same Tea Party that you chose not to cover at first, tried to cast as racist, tried to say they were irrelevant, said that they would fade away, and now give them credit for deciding to make this issue center stage. Not too bad for an irrelevant group of racists that will never make it. LOL
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at al (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!
"So you could borrow money at 2 percent for 30 years" Let's get our facts straight. The 30 year bond is not at 2%. Durrently 4.26%. You have to go well under 10 years to get to a 2% rate. Is this proposed borrowing still a good idea at the real interest rate?
So, all those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? Oh, I know what the solution is – let them pay no taxes at al (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!!
Young Americans are so confuse and aimless. Are they equip to be US future leaders?
It is time to have a new immigrant as US president.
How about we start using money that has ACTUAL value.. since every dollar bill is a federal reserve note it is only a promise to pay it has no value. Hey congress one day the american people will realise u robbed us and we will come to collect whats owed to us . USA!
Yes Yes, these debt talks are a "sideshow" of the asinine circus that is American Politics. The truth is none of them want you to know that soon our currency will be WORTHLESS.
The only number the US should be concerned about is the TRADE-DEFICIT that went from $86 billion to $816,000,000,000 a year, a 1000% increase in imports. Try to find 10 things in your home "Made in USA"
Yep, Fareed's got it right. All we have to do is borrow more money; that will certainly fix the problem. And nice to hear that psending ourselves into oblivion is simply a "sideshow."
Zakaria you are nothing more than a mouthpiece for this administration. Nothing this president or his drones have done has worked. He has spent more than any onther president in only his first two years and unemployment has gone up to 9.2%. He is a child in a mans position and has put this country on the wrong track. One term and out!! Worst president of all time!!
you are 100% correct! Fareed is nothing more than a modern day Goebbles for the obama administration!
but after reading all of the comments from the self appointed economist who posted their dribble, one can only conclude that they are worst than Zakaria. none of them,including Fareed want to tell the truth on america and how it became so rich in the first place,and why we are getting more poor by the day.
america's economy was built and created from the land that it stole from the indigenous people who lived here before europeans arrived. this country was then built with free slave labor by the africans that were kidnapped and abducted from africa.
this country then became rich through the resources that we have been stealing from africa and other poorer nations around the globe. what the obama psycophants will not tell american citizens is the truth, and that truth is that africa has cut us off from their resources.
all of europe,england and america are now suffering economically because the african countries are now selling their resources to China and other eastern countries. our illegal involvement in Libya was only for their oil. england and france gambled that gadaffi would cave in and they would then get FREE oil again as they did before he kicked them out back in 1962.
our economy will NEVER rebound or be what it was before. we have simply run out of resources to steal,and other nations are tired of us stealing their resources then trying to preach DEMOCRACY to them. tighten your wallets folks,this gravy train ride for america is over!
I think you're part right. We've been floating this phantom economy for decades by taking advantage of inexpensive resources and labor markets. All our chickens are going to come home to roost. This only means we've got to get smarter and balance our overblown globalism with some localism. Too far in either direction and we're in for trouble. America still has plenty of fight, invention, and productivity left in it. Things just can't continue the way they have been.
I don't like Obama, in fact I think he sucks as President, but he could murder a girl scout on National TV and still not be half as bad as Bush the 2nd. Not even close.
Getting warmer. here is a hint. "Global Economy".
Zakaria needs to shut up and go back to Pakistan. Remember the good ol' days when CNN actually reported the NEWS? Now you have to watch three different networks including Fox just to see all sides of the story. Dems couldn't pass a budge with control of the house, senate and WH. Now we are broke and the Tea Party is the only reason we are facing reality.
The richest in this country are not the only rich getting richer. They came to the front door asking for a hand out. we said no. then the next day it seems they had their money. now there at the back door cause some money was spotted in the cookie jar. guess what. no one is argue about that either. just cookies.
I GOTTA laugh at tea tards who accuse Obama of being the worst president ever because they don't of his ability to clean up THEIR ECONOMIC MESS. "You didn't finish the war we started! You didn't find a way to pay off the debt we created! You didn't create the jobs our foolish policies lost!" Bunch of tea-drunk monkeys who think walking upright proves they're human, when all it REALLY does is prove they've been TRAINED well.
All those years with Bush's tax cut's were so beneficial for our economy and made so many billionaires to invest those billions they saved back that we have 9.2% unemployment and no growth? I know what the solution is – let them pay no taxes at all (so that people making under $250K would pay more taxes) – so may be after the billionaires save more billions, THEN they'll take the money from the offshore accounts and finally put them back into economy!!
Monkeys in a tree.
This may sound simplistic, but this crisis could really be in the hands of ordinary Americans. How you wonder? Buy American. It may be difficult but it can be done. The big problem in the USA is no jobs, right? How do you create jobs? By producing things. Something we no longer do. What do these large Amercan corporations such as GE, Black and Decker and other large companies think that Amercans will be able to buy after the rest of their jobs are exported to China and other countries. How many Chinese or Koreans are buying GE microwaves? Or Dewalt drills? I bet nearly none. Am I missing something here?
There is a proverb that says, "The borrower is slave to the lender." Debt is not a tool. It's a means of slavery. Digging a bigger hole doesn't dig you out of a hole. You cannot borrow yourself into prosperity. The global economic collapse we are experiencing is because we bought into the lie that "debt is a tool." If you are borrowing in hopes that you will eventually see a larger return than you took out– that isn't investing, that's gambling. There is no guarantee that says you will see a return on your "investment." In fact, you may end up losing your shirt. Our nation has borrowed 14 trillion dollars that it can't pay back. 5 trillion of that has happened in the last few years alone. So you really expect me to believe that borrowing more money is going to solve this problem? If so, you really need to think again. Keep diggin that hole boys, and you may just manage to dig your way to China.
You can't borrow your way out, but DEFAULT means that all the money you took and SPENT will still be owed and if you haven't got the money, you BETTER borrow to cover it. Sound crazy? It is. But that's what happens when you fight wars on borrowed cash while cutting taxes on all the people who should have paid for it THEMSELVES.
Why do we have a Marxist commentator with a strange accent named FARRED? Oh! I forgot he is like our president. He is just another Communist change agent. You go . . . Democratic Socialist Marxist Communist Party. We want a dictatorship and no food in on our table because we worship at your feet and you are so much like Jesus except your Satin is the only different. I get it. Please Just stay the Hell away from me.
You can't even spell his fkkin name right and you want to act like you're more informed than he is? Whatever.
America doesn't "make things" anymore because Americans are EXPENSIVE! NONE of the tea tards in here would tolerate being paid what Mexican and SE Asians make at overseas US companies. NONE of the tea tards could afford to pay 100% of all their health care(if everyone could do that, insurance companies wouldn't be worth billions). So when you hear some tea-bagger tell you that Medicare is to blame, ASK him if he has a job with benefits and if they do anything more than flip burgers, they not only GET benefits, they wouldn't accept a job WITHOUT them.
What does all this mean? It means that behind all the talk, all the posturing, and all the yelling about the poor, Americans have ALL done what we can to demand more and more from employers and WHY? Because it is IMPOSSIBLE to afford a decent life in this country anymore without A)Good credit, B) A decent wage, and C) Insurance of some kind. 3rd world people have never even HEARD of "OSHA" or regulations about worker safety. You think anybody manufacturing US goods in China or Thailand knows what the F "carpal tunnel" is? Forget it.
Employers are complicit. They wanted to make more, so they charged more, but charging more means people NEED more to afford it. When people needed so much that employers couldn't afford it, the banks jumped in with easy credit so people could buy what they couldn't afford and businesses could keep raising prices. Now EVERYTHING is too expensive, and all the lazy Americans who created the situation blamed their problems on taxes, even when they're corporations that don't even PAY taxes. How the F does some conservative running a defense corporation complain about paying millions in taxes when most of his revenue is govt contracts? How does a tea bagger who got a LOAN to buy a house complain about govt spending money it doesnt have when that's EXACTLY WHAT HE DOES? THINK people.
What is wrong with our leaders? They are scaring the hell out of americans > Make a compromise and learn to work together.They are acting like children by playing with fire. SHAME on the speaker and the Republicans!!!!! If they cause US TO FAULT THERE WILL BE AN UPRISING AND RIGHTFULLY SO!!! They will lose my vote for good.
Debt ceiling or debt or deficit, no political party whether it GOP, Democrat or Tea Party Rep can be called winning if America is losing & get into default with irreparable loss of face of dollar in global market setting out a Tsunami in international trade & commerce & value structure of national currency. Republican& Democrats being only accepted national parties have more obligations to people of America & America itself than Tea Party who are politically young & too immature to put whole of America in economic jeopardy. Increase in debt ceiling is just book balance to keep the trade & commerce going. Budget deficit, cut in spending, tax cuts, reforms should not have been linked to cash balance in books. Budget, budgetary constraints, cut in spending; reforms are separate issues of national importance. Still there is time for GOP & Democrats to come on compromise & increase the debt ceiling without further delay & pass the budget with necessary elements & reforms acceptable to people of America in national & political interest to uphold image & repute of America established over years since WW I & WW II. Let GOP & Democrats write history with compromise on the issue & make democratic process successful & relieve the American people from financial & political stress.
Circus Maxamus; finally comes to the American people, sit back and enjoy your self destructive my way or the highway politics. It has led to the fall of many countries and empires. With all your reliance on electric communications you still fail to effectively communicate with each other, nobody seems to want to listen. I was taught that it is the sign of a mature adult to be able to entertain an idea with our having to except it; to be able to modify your opinion with others to be able to get the job done. I have seen America's enemy and it is ourselves and and no other. Sic glorium transit mundi !
Let's just "forgive" all debt the world over. No one owes anyone anything anymore. Let's go back to bartering and live by the Golden Rule. We need politicians as much as we need a hole in the head. They have corrupted the profession and have taken it way off track. What we need are public servants who help to facilitate what the people want. Look around the world and notice all the corrupt governments. Who needs it?
Zacaria's reference to Greece is BS. Greece got into the mess its in because it never stopped spending. Saying we'll be just like Greece if we don't go further into debt is stupid. Suggesting that Government spending affects employment is BS as well. The majority of tax payers are not Government employees, so how will reducing Government spending reduce the number of taxpayers? it won't.
Not raising the limit doesn't equal default. It means you can't borrow more. It means the Government will have to cut something to pay for something else it wants, instead of just confiscating as much of our wages as it wants for every pet project it has.
I work with the US Government every day. From you comments I can tell that most of you here do not. Make no mistake, every day a Government bureaucrat comes to work and spends his or her time trying to figure out how to spend more of your money. EVERY. DAY. Millions of Gov employees are thinking of how to spend more money. Because managing larger projects or supervising more staff gets them a pay raise.
You get what you reward. In the case of US Government employees we reward undesirable behaviour handsomely.
The republicans only care about two things: keeping the fat cats rich and destroying anything Obama touches. You can dress it up any way you like but that's the bottom line. I hope Obama has the balls (for a change) to call their bluff. But most likely he'll cave.
Nice article. Poor editing. What is being spent on waste? What is the waste? I don't support cuts that hurt us but, I do support cuts to funding that is silly. Like money going to afghanistan and pakistan. Opulent offices for Home Land Security people etc... Why can't we find out where the waste is being funded and cut it out? Our political leaders need to learn that an idea does not suck because it is not their own. They need to stop using every potential issue as a scare tactic and a point the finger fest.
Should the public get ready to march into washington and arrest
the congressional republicans for treason?
What do you think?
What a clueless totalitarian totally ignorant of history.
Economic strength comes from having a solid PRIVATE economy of ENTREPRENEURS and people providing VALUABLE goods and services. If government spending and control were the answer to a weak economy, the USSR wouldn't have becomes a starving rustbucket by the time it collapsed from within...
CNN doesn't have the guts to post this:
Should Americans march into washington and arrest the republicans for treason?
The Republicans only care about the tax breaks for the rich, and destroying our country, and destroying the presidency of President Obama. Republicans don't care about the middle class – they only want do take away social security, medicare, and medicaid from the middle class Americans.The TEA Baggers are driving this country to Hell.
Wow... that was absolutely the most awe inspiring analysis. I mean that was on the depth of Water is Wet analysis...
Here's a real piece of information that all the experts are overlooking. A key component of the problem is the reliance on the housing market. In several past recessions the early indicators was housing. That's actually a lie. People didn't buy houses unless there was a stable income and a line of credit.
However today, the housing prices are so high, that people are out of their homes and etc. On top of it, they are still building homes, that people cannot afford to buy. So there is surplus houses on the market with more houses being added.
So what is the real solution.... Let the real estate bubble burst. House prices will drop dramatically. It will hurt those who got in on the wrong end of the timeline. Once prices get to what the market can sustain, people will buy. Otherwise they will rent until they can buy.
But local governments do not want the bubble to burst because a large part of their income stream is based on property tax. At which point, if the values go down, the budgets have to go down. Bureaucratic systems are designed to prevent their termination.
I agree with what Fareed is saying and both sides of the parties are playing chiken game on the table on behalf of the peoples lives. I think we should highly consider infrastructure investments as suggested by the PRESIDENT to help fuel growth back to a downly driven economy 5-10 yrs from now.
Fareed makes an excellent case for what should be done but hardly anyone with the power to make the decisions necessry is listening. Negativity and finger pointing seems to be both sides solution. It would be nice if we quit electing politicians and start electing legislators who are there to work "FOR" the people not for their next election. We really need legislators that can create solutions to our country's problems, make adjustments to laws and policies that need it and improve the citizens daily lives. This goes for any legislature, state or federal, county or city. Discuss it all you want, argue about possible solutions but for "OUR SAKE" be good enough to get it done.
Mr. Zakaria, an excellent article. I liked that part you said Republican policy is that oppose everything that Obama propose. It is unfortunate that now Obama has to propose something exactly opposite to get something done in Washington.
There is a saying in one of the local languages of India that "the mother-in-law only wants to see tears in her daughter-in-law even if that means the death of his son". Here Republicans is the mother-in-law, Obama the daughter-in-law, and the son in the country". The policies that Republicans in the recent past follow are going to kill this country but it seems they don't care. They just want to see tears in Obama's eye.
$14 trillion + $2.5 Trillion(proposed increase) + $6 trillion from Fannie and Freddie = Debt to GDP higher than Greece. The only thing saving us now is the Dollar is still the Reserve Currency of the world but that is changing daily by other countries agreeing to swap goods and services in currencies other than the Dollar. This is not a complicated issue. The bill is due or we will no longer have the safety of the reservr currency status.
The GOP let a radical, ill-educated, incompetent and fear-based minority take charge of their party. Even the more moderate members of the party are painted into a corner they can't get themselves out of. This is the party that covets winning uber alles, including well being of the country.
This is the party who says they hate PC, but they've created an even more rigid and diabolical version of political correctness and actually make party members sign pledges to it!
I don't know how much more of a mess these people have to cause (that even they can't blame on Dems), before the majority of voters rebel and the country swings back towards the middle.
George W's legacy proves that once you go far enough down the road of fear and stupidity, the damage done becomes almost impossible to undo. As the poet said, "This is how the world ends, not with a bang but a whimper."
Anyone who thinks that one single party or contingency is to blame here is sadly mistaken. The last Congress was supposed to put this to bed, but the Dems knew that they were going to lose the House, so they left it for the current Congress to take care of. The Republicans foolishly took the bait, made worse by the freshman Congressmen, who have little or no political experience, who are now trying to humble a weak and effete president, who in turn wants to portray himself as being tough, while making concessions that tick even his own party off. What a turkey shoot!
Anyone who thinks that one single party or contingency is to blame here is sadly mistaken. The last Congress was supposed to put this to bed, but the Dems knew that they were going to lose the House, so they left it for the current Congress to take care of. The Republicans foolishly took the bait, made worse by the freshman Congressmen, who have lit-tle or no political experience, who are now trying to humble a weak and feckless president, who in turn wants to portray himself as being tough, while making concessions that tick even his own party off. Meanwhile all of the parisan hacks like our friend Fareed want to make sure that everyone knows that the other side is to blame. What a turkey shoot!
It would help if CNN and every other news organization did their job and actually hammered these truths to the public. Instead you in the media give us 3hrs a night of Casey anthony nonsense & 1-4 minutes on what Washington & its elected officials are doing.
It's a mystery to me how giving oil companies big tax breaks helps the rest of us? And cutting stimulative projects helps the GDP. This is a side show iand it s another version of the blame game.
What I'd like to see and hear much more of are the success stories. They don't just offer hope, but practicle ideas can be copied and improved on. Newark NJ. seems to me to be an example of a government making progress. Integrative medicine pioneer Dr. Andrew Weil is a great spokesman for sanity in the private sector and the health care mess. Even southwest airlines bucks the negative trends in an irritating industry.
Fareed you are also a positive example and a force for improving our situation. keep up the great thinking and work you are doing! We need innovation, education, prevention instead of cure, and more examples of success to be celebrated.
I don't think we can just invent a cause to rally the nation, but if we don't start focusing on our strenghts and using them creatively we'll continue to fall back into blame games that lead us nowhere!
"You know you – because what does it mean to cut government spending? It means to lay off people who now don't have jobs."
Zakaria always adds some nonsense like this into his work. Cutting government spending does not = cutting government jobs of Americans. Our government spends more on military than the rest of the world COMBINED. Or what about the hundreds of billions in foreign aid taken from the taxpayers of America and given to foreign governments? That is not cuttable spending, but American jobs are? Zakaria is guilty of the fear mongering he accuses the "Tea Party" of.
Obama has shown very little leadership and bring any message or relationship with the people. Seems distant to me as a leader and really bothers me why he doesn't. Ronald Regan I believe use to have a saying on his desk that was something like " One can accomplish great things when you don't worry about getting credit for it". I agree an infrastructure bank would create jobs no brainer. But I never heard about it from the president? Like I said he never gets the public involved and shows leadership.
48% don't pay income taxes. Yet the GOP wants to cut "SS" and Medicare. Change the tax code.
I always find it amusing when people compare the Federal Budget to their home budget. Just wondering...if you get in a fight with someone in another neighborhood, do you borrow money from another neighbor to buy a weapon?
Defaulting is not like cutting up the credit cards, it's just cutting up the bill. What you owe is still there.
It's clear to most moderate independents: The Republican House would hurt the country to get back at Obama. We will remember in 2012, believe it.
Meatheads – The DEBT CEILING is a self-imposed artificial limit that has nothing to do with the USA's credit worthiness. Our DEBT as a function of GDP is the measure of the USA's credit worthiness. Raising the DEBT CEILING only exacerbates the DEBT problem.
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