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DPChallenge Forums >> Rant >> Debt, National Debt, Inflation and more explained
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08/30/2009 09:24:37 PM · #1
I thought I would post these youtube videos from a man that talks in laymen terms to help a lot of people understand the difference between national debt and deficit.

He also explains why we need some debt but not too much and gauges it by the GDP. He explains the three ways the federal reserve works and what tools are at there exposure. Why they do some things they do; be it bad or good, wrong or right.

I donít feel these videos are weighted toward one party or the other, just good fundamentals.

View them and I hope it helps someone understand the ramifications of a wrong decision and the rewards of a good.

Let me know what you think after viewing.

Enjoy

Lesson 1 National Debt & Budget Deficit Explained
Lesson 2 - The Federal Reserve System Explained (pt. 1)
Lesson 2 - The Federal Reserve System Explained (pt. 2)
Lesson 3 - Inflation Explained [pt. 1]
Lesson 3 - Inflation Explained [pt. 2]
Lesson 3 - Inflation Explained [pt. 3]
Lesson 3 - Inflation Explained [pt. 4]
Lesson 4 - Personal Savings and Investment are Important for the Economy [pt. 1]
Lesson 4 - Personal Savings and Investment [pt. 2]

09/01/2009 01:18:35 PM · #2
I've only had time to listen to the first lesson, "National Debt and Budget Deficit Explained," and in that short 7-minute video the narrator makes at least one blatant misrepresentation, and it's a doozy!

Quoting from the video: "When Congress has a budget deficit for a given year, it asks for additional funds. It gets so much for taxes, then it wants to spend a whole lot more than it collected in taxes, and it has to get that money somewhere. That missing money it collects from the Federal Reserve." [emphasis added]

That statement is incorrect. The Congress, to finance its budget deficits, borrows money from the Treasury, NOT the Federal Reserve. The Treasury raises the funds (borrows the money) by issuing Treasury bonds and bills, etc., which are bought by the public, foreign governments, etc. Yes, the money is borrowed, but not by the Federal Reserve. I don't know about you, but if the author of that video can't get even that most basic fact right, I can't trust anything else he has to say.

Again quoting from the video: "As you can see in the graph, the national debt continued to grow year after year in the Clinton administration as well. So this idea that the debt can be easily paid off is clearly a misconception that was largely inspired by a couple of years when we had a budget surplus."

While the narrator is technically correct that in the aggregate the debt grew during the Clinton administration, it's misleading to suggest that budget surpluses have nothing to do with the level of debt. We may not necessarily decide to pay down the debt with budget surpluses, but we're certainly not adding to the debt in those years when there is a surplus. The narrator also misleads in omitting the fact that under the last three Republican administrations the national debt exploded by 36-plus percent, whereas in the last two Democratic administrations the national debt increased by a mere 4 percent. In other words, there are manageable, sustainable levels of debt and ridiculous, irresponsible levels of debt. And it would be nice if just once you Republicans would acknowledge what lousy stewards of the economy your leaders have been and who exactly is responsible for getting us into the predicament we now face. Maybe then we could have a reasonable discussion regarding what to do about it.

Message edited by author 2009-09-01 13:42:27.
09/03/2009 12:29:10 AM · #3
I will freely acknowledge what lousy stewards of the economy my ( our ) leaders have been. But the chart that you linked to is very, very misleading. You must admit, though it may be painful, that the REAL stewards of the economy - my ( our ) REAL fiscal leaders - have been the Congresses, not the Presidents.
As you are well aware, by law, it is the Congress that is responsible for enacting ALL federal spending and revenue bills. By that same law, the President has extremely limited control of federal spending and revenue - in fact, he/she is limited to only two options: sign a Congressional Bill into law, or Veto it ( either explicitly or implicitly ( the "pocket" veto )). And, of course, the Congress reserves the right to override a Presidential Veto, if they so choose.
So, rather than focusing on the President's political party, how about focusing instead on the party that actually controls the purse-strings - that is, the party that holds the majority(-ies) in the Congress.
Looking at the chart below, it would appear that the most fiscally responsible administration is one in which the President is a Democrat, and both houses of Congress are dominated by Republicans ( e.g. the last 6 Clinton years ). Try to remember that in Nov, 2010.

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09/03/2009 01:14:19 AM · #4
Originally posted by RonB:

I will freely acknowledge what lousy stewards of the economy my ( our ) leaders have been. But the chart that you linked to is very, very misleading. You must admit, though it may be painful, that the REAL stewards of the economy - my ( our ) REAL fiscal leaders - have been the Congresses, not the Presidents.
As you are well aware, by law, it is the Congress that is responsible for enacting ALL federal spending and revenue bills. By that same law, the President has extremely limited control of federal spending and revenue - in fact, he/she is limited to only two options: sign a Congressional Bill into law, or Veto it ( either explicitly or implicitly ( the "pocket" veto )). And, of course, the Congress reserves the right to override a Presidential Veto, if they so choose.
So, rather than focusing on the President's political party, how about focusing instead on the party that actually controls the purse-strings - that is, the party that holds the majority(-ies) in the Congress.
Looking at the chart below, it would appear that the most fiscally responsible administration is one in which the President is a Democrat, and both houses of Congress are dominated by Republicans ( e.g. the last 6 Clinton years ). Try to remember that in Nov, 2010.

' . substr('//i44.tinypic.com/34g1xu1.jpg', strrpos('//i44.tinypic.com/34g1xu1.jpg', '/') + 1) . '


That's misleading too. The President presents congress a budget proposal. The congress then debates and tunes the budget items. Point being, the President sets the budget agenda, Congress fiddles with the numbers.

Case in point, most the of Reagan budgets were reduced by the Democratic congress at the time, giving Reagan less money than he requested. So which branch was more fiscally responsible?

To say the President isn't all that involved in the budget process is just wrong.

It's always amusing to me how the right tries to blame everything on either a Democratic president or a Democratic congress. How'd the GOP do for 6 years when they contraoled both the Congress and the Presidency? No very well, IMO.

And I WILL remember that in Nov 2010.

Message edited by author 2009-09-03 01:15:01.
09/03/2009 09:41:12 PM · #5
Originally posted by scarbrd:

That's misleading too. The President presents congress a budget proposal. The congress then debates and tunes the budget items. Point being, the President sets the budget agenda, Congress fiddles with the numbers.

Exactly. Just as I said. Note that setting "the budget agenda" is not actually passing a budget bill - the Congress is the only branch that can "fiddle with the numbers".

Originally posted by scarbrd:

Case in point, most the of Reagan budgets were reduced by the Democratic congress at the time, giving Reagan less money than he requested. So which branch was more fiscally responsible?

If we judge in accordance with Judith's logic, Reagan should receive any credit due for lower spending bills. On the other hand, if we judge in accordance with my logic, the Congress should receive the credit - but please note that it wasn't a "Democratic Congress at the time" - it was a Democrat controlled House, but a Republican controlled Senate, at least for the first 6 years.

Originally posted by scarbrd:

To say the President isn't all that involved in the budget process is just wrong.

I agree, but then, I never said that the President wasn't involved in the budget process.

Originally posted by scarbrd:

It's always amusing to me how the right tries to blame everything on either a Democratic president or a Democratic congress. How'd the GOP do for 6 years when they contraoled both the Congress and the Presidency? No very well, IMO.

Given that this is a response to MY post, I can only infer that you are accusing ME of trying to blame everything on either a Democrat President or a Democrat Congress. If my inference is correct, then your accusation is totally unfounded, since, in my post, I didn't try to place BLAME on ANY President ( rather I blamed the Congresses ), nor did I try to place blame on a particular majority party of Congress. I agree with your opinion that the Republicans did a horrendous job vis-a-vis the Budget when they controlled both houses of Congress and the Presidency. And I think that the current triumvirate ( House, Senate, and Presidency all being controlled by Democrats ) is doing just as horrendous a job.
09/03/2009 09:59:43 PM · #6
Originally posted by RonB:


Originally posted by scarbrd:

It's always amusing to me how the right tries to blame everything on either a Democratic president or a Democratic congress. How'd the GOP do for 6 years when they contraoled both the Congress and the Presidency? No very well, IMO.


Given that this is a response to MY post, I can only infer that you are accusing ME of trying to blame everything on either a Democrat President or a Democrat Congress.


I don't think the attack on "Tax and spend liberals" was being blamed on you, but it is a common attack that is pretty silly given the horrible job both parties have done to keep spending and revenues in balance. Before Regan embraced Galbraith economics, the Republican party of Goldwater and Buckley was distinct from the more free spending Roosevelt Democratic party, but both of the major parties seem to reflect the attitude of the average American, we would like to have a lower deficit, but aren't willing to live within our means.
09/04/2009 03:35:39 AM · #7
I think when people wake up and decide that both parties are close to equally responsible for the situation we are in, maybe we can do something about it. In the meantime we continue to play this game that to me is like Stalin fans arguing with Hitler fans: "I will continue to support Hitler because Stalin killed far more millions of people" ...and vice versa. Not the greatest analogy, but just trying to make a point that as long as people back into their corners and blindly defend their own, the more everyone loses.

Much as I try to avoid political discussions here in my second home with my extended family, the current situation in the US is getting to me. If I were to get involved in any kind of national activism, it would be one whose agenda would be to get everyone to disassociate themselves from any political party and become an independent. In my entire voting life, we have always had to choose from the lesser of two evils, so to speak. Down with the two party system!

For those of you on DPC that have your partisan hats screwed on so tight (not pointing fingers, you know who you are), I would ask that you try to be more concerned about truth and consequences rather than being on a winning or losing team. I find it impossible to relate to attitudes of "we are always right and they are always wrong. ...on EVERY issue." Ridiculous.

That is all. Carry on while I find a Godzilla pic to throw into the thread. ;-)
09/04/2009 03:54:04 AM · #8
Originally posted by RonB:

Given that this is a response to MY post, I can only infer that you are accusing ME of trying to blame everything on either a Democrat President or a Democrat Congress. If my inference is correct, then your accusation is totally unfounded, since, in my post, I didn't try to place BLAME on ANY President ( rather I blamed the Congresses ), nor did I try to place blame on a particular majority party of Congress. I agree with your opinion that the Republicans did a horrendous job vis-a-vis the Budget when they controlled both houses of Congress and the Presidency. And I think that the current triumvirate ( House, Senate, and Presidency all being controlled by Democrats ) is doing just as horrendous a job.


It was more of a respnse to your last line of remembering it in November, seeing as we can only vote for Democrats or Republicans (most of the time).

I will point out that there was a considerable surplus in 97 and 98. I attribute that to the effects of the 93 budget that no republican voted for, in fact they stood up on the floor of the house and senate warning of the dire consequences of the 93 budget, only to see the greatest expanse of the economy in history. Of course, they will credit Reagan for the good ecomonic times, as they credit Reagan with everything, even though it was 12 years and 4 recessions later.

So I do say that Democratic leaders have a much better track record of stewardship of the economy in the last century. Of course, I only have history on my side.

Message edited by author 2009-09-04 03:54:52.
09/04/2009 10:10:03 AM · #9
Originally posted by Art Roflmao:

I think when people wake up and decide that both parties are close to equally responsible for the situation we are in,


It's nice to have a party or mindset, like liberal or conservative to pin our blame for the countries problems. Actually it's each and every citizens fault. How many of us do more than vote in the occasional election? Millions don't even do that. How many have mailed a letter to their congressperson regarding the current healthcare bill? The million man march and the million mom march on DC were nice. But have we had a 10 million citizen march on DC for an issue? Have we truly shown the congresscritters that we're serious about anything lately? They know that they can continue to operate with their own and big monies interests in mind because we're sheep. We're too busy playing with our Ipods, widescreen TVs, computers, and other distractions to fulfill our civic responsibility. So rather than belly ache and moan about liberals, conservatives, Dems, Repubs, lets set aside an hour our two a week to read about current events and then personally interact with people at the local, state, and national level to try and communicate the true wishes of the American people.
09/04/2009 10:23:36 AM · #10
Originally posted by FireBird:

Originally posted by Art Roflmao:

I think when people wake up and decide that both parties are close to equally responsible for the situation we are in,


It's nice to have a party or mindset, like liberal or conservative to pin our blame for the countries problems. Actually it's each and every citizens fault. How many of us do more than vote in the occasional election? Millions don't even do that. How many have mailed a letter to their congressperson regarding the current healthcare bill? The million man march and the million mom march on DC were nice. But have we had a 10 million citizen march on DC for an issue? Have we truly shown the congresscritters that we're serious about anything lately? They know that they can continue to operate with their own and big monies interests in mind because we're sheep. We're too busy playing with our Ipods, widescreen TVs, computers, and other distractions to fulfill our civic responsibility. So rather than belly ache and moan about liberals, conservatives, Dems, Repubs, lets set aside an hour our two a week to read about current events and then personally interact with people at the local, state, and national level to try and communicate the true wishes of the American people.


I like how you think. If Afghan people can find the courage to vote while ignoring the threats, maybe we can fin dthe time to fullfill our duty as a citizen (In our society, voting and making the government accountable is a duty, not a right)

Originally posted by Art Roflmao:


that to me is like Stalin fans arguing with Hitler fans


Carefull.... you're getting awefuly close to an infraction to Godwin's Law, but yes, people should think by themself before making an informed opinion rather than just going with the party.

09/06/2009 02:14:24 AM · #11
There is no "party of fiscal conservatism" in the US, hasn't been for decades.
Most recent thing to a fiscal conservative in the White House was Eisenhower (sort of).

And Congress? Fuhgeddaboudit.
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