From: rja@mahogany126.cray.com (Russ Anderson)
Subject: Re: Conservative Values (Re: New group proposal:  alt.conservative.forum)
Originator: rja@mahogany126
Organization: The 1991 World Champion Minnesota Twins!
Date: 5 Jan 93 12:24:15 CST


In article <C0D6CF.IG7@unix.portal.com>, mykes@shell.portal.com (mike myke schwartz) writes:
> Russ Anderson (rja@mahogany126.cray.com) wrote:
> : In <C02Mws.CtK@unix.portal.com>, mykes@shell.portal.com (mike myke schwartz) writes:
> : > Mike Jones (mjones@fenway.aix.kingston.ibm.com) wrote:
> : > : mykes@shell.portal.com (mike myke schwartz) writes:
> : 
> : > : :                                        The most successful governmental
> : > : : economic policies in this century, known as trickle-down, were a Kemp/Reagan
> : > : : implementation.  Reagan's terms not only produced enormous prosperity and
> : > : : growth, but year after year the debt and defecit as a percentage of
> : > : : GDP _decreased_ (source: Milton Friedman, interviewd on Wall Street Week).
> : > :
> : > : This claim is so vague as to be meaningless. It is true that you can pick
> : > : starting and ending points to illustrate this fact, but there's no independent
> : > : reason to pick those points. If you take "the 80's" (1980-1989), or "the
> : > : Reagan years (1980-1988), that isn't a true statement. (I'll welcome FACTS
> : > : to prove me wrong, because I don't have the numbers handy.) The growth was
> : > : largely fueled by massive increases in public and private debt, which has
> : > : been very much responsible for the mess we're in now.
> : >
> : > I did not video tape Wall Street Week, nor do I have a transcript of it.
> : > The best of my recollection is what I wrote.  I apologize for saying that
> : > the DEBT decreased.  But the defecit did indeed decrease.  Since you ask
> : > me to do your research for you, I will provide you with the data, as found
> : > in my 1992 Universal Almanac.  All dollar figures are in BILLIONS.
> : >
> : > 1980 GNP 2732.0, defecit = 73.8, %GNP = .0270
> : > 1985 GNP 4014.9, defecit = 212.3, %GNP = .0529
> : > 1987 GNP 4536.7, defecit = 148.0, %GNP = .0327
> : > 1988 GNP 4864.3, defecit = 155.1, %GNP = .0319
> : > 1989 GNP 5200.8, defecit = 152.0, %GNP = .0292
> : 
> : Mike, unless you plan on arguing that .0270 > .0292, you just disproved your
> : own assertion.
> : 
> : The deficit as a percentage of GNP was higher at the end of the 1980's than
> : it was at the start of the 1980's.
> 
> Russ, the assertion was made that the defecit DID not decrease at all,
> as %GNP, and someone questioned Milton Friedman's claim that it did.  It did.
> In fact, the consistent yearly decrease from 85-89 was deliberate and
> healthy.

The point is that Friedman said "Reagan's terms [...] year after year the debt 
and defecit as a percentage of GDP _decreased_".  Reagan's term did not
begin in 1985.  It began in 1981.

In billions (%GNP):

year  GNP    receipts     outlays        deficit      N Debt    president*
====  ====   ===========  ============   =========    ======    =========
1945   213     45 (21.1)     93 (43.6)    48 (22.5)   258(133)  Roosevelt
1950   268     39 (14.5)     43 (16.0)     3 (1.1)    256(95.5) Truman
1955   384     66 (17.2)     68 (17.7)     3 (0.8)    273(71.1) Eisenhower
1960   505     92 (18.2)     92 (18.2)     0 (0.0)    284(56.2) Eisenhower
1965   715    117 (16.4)    118 (16.5)     1 (0.1)    314(43.9) Johnson
1966   685    131 (19.1)    135 (19.7)     4 (0.6)              Johnson
1967   774    149 (19.2)    158 (20.4)     9 (1.2)              Johnson
1968   798    153 (19.2)    178 (22.3)    28 (3.5)              Johnson
1969   730    187 (25.6)    184 (25.2)    +3 (+0.4)             Johnson
1970   989    193 (19.5)    196 (19.8)     3 (0.3)    370(37.4) Nixon
1971  1055    187 (17.7)    210 (19.9)    23 (2.2)              Nixon
1972  1155    207 (17.9)    231 (20.0)    23 (2.0)              Nixon
1973  1281    230 (18.0)    246 (19.2)    15 (1.2)              Nixon
1974  1415    263 (18.6)    269 (19.0)     6 (0.4)              Nixon
1975  1522    279 (18.3)    332 (21.8)    53 (3.5)    533(35.0) Nixon
1976  1698    298 (17.5)    372 (21.9)    73 (4.3)    620(36.5) Ford
1977  1929    356 (18.5)    409 (21.2)    54 (2.8)    699(36.2) Ford
1978  2175    400 (18.4)    459 (21.1)    59 (2.7)    772(35.5) Carter
1979  2446    463 (18.9)    504 (20.6)    40 (1.6)    827(33.8) Carter
1980  2674    517 (19.3)    591 (22.1)    74 (2.8)    908(33.9) Carter
1981  2986    599 (20.1)    678 (22.7)    79 (2.6)    998(33.4) Carter
1982  3130    618 (19.7)    745 (23.8)   127 (4.1)  1,142(36.5) Reagan
1983  3325    601 (18.1)    808 (24.3)   207 (6.2)  1,377(41.4) Reagan
1984  3688    666 (18.1)    852 (23.1)   185 (5.0)  1,572(42.6) Reagan
1985  3958    734 (18.5)    946 (23.9)   212 (5.4)  1,823(46.1) Reagan
1986  4177    769 (18.4)    990 (23.7)   221 (5.3)  2,125(50.9) Reagan
1987  4442    854 (19.2)   1004 (22.6)   150 (3.4)  2,350(52.9) Reagan
1988  4771    909 (19.1)   1064 (22.3)   155 (3.2)  2,602(54.5) Reagan
1989  5121    976 (19.1)   1137 (22.2)   152 (2.9)  2,857(55.8) Reagan
1990  5396                 1252 (23.2)                          Bush
1991E 5679   1094 (19.3)   1363 (24.0)   269 (4.7)              Bush
1992E 6117   1132 (18.5)   1462 (23.9)   330 (5.3)  4,000(65.4) Bush

* the president that signed that fiscal year's budget.

source: Statistical Abstract of the US, US Treasury Dept.
        OMB, Budget_of_the_United_States_Government:_Fiscal_Year_1991,
        pp. 281-82; CBO, "The 1990 Budget Agreement: An Interim Assessment,"
        December 1990, p.4.

Oh yea, when looking at the yearly deficit, we should remember that social
security is currently running a surplus (which masks the true size of the
deficit).  For 1986 the surplus was $64,378M, making the deficit $285,518M
(6.8% of GNP) and 1989 it was $105,080, making the deficit $257,466 (5.0%
of GNP).

> The assertion that defecit spending is the cause of any problems is false.
> Tell that to people who buy homes with mortgages of (at least) 4x their
> gross earnings.  The assertion that defecit spending every year is bad is
> also false.  If, yearly, you get a $100/month pay raise ($1200/year), you
> do indeed have the ability to pay $100/month on new debt costs.

For relatively small deficits, I agree.

> If the current debt is (rougly) $4 Trillion and federal revenues are $1.2
> Trillion, then the debt is not the problem.  If you look at the debt in
> relationship to the GNP as a whole, the nation is incredabily healthy.

The debt/GNP ration is ~65% which is the same as in the late 50's.
The problem is that the percent of debt is increasing, instead of decreasing
as it had from WWII to 1981.

> I'm sure we would al be saying "borrow more!" if the govt. invests
> the money in things that give back a good yield.  For 3/4 of the debt,
> we could have set up an annuity to fund the defense budget (or half the
> entitlement budget) for perpetuity and paid for it for 30 years.
> 
> The bottom line is that govt. won't stop defecit spending.  There is no
> compelling reason to.  By the time the GNP triples, the debt will too.
> The only negative we will feel is during recessions, which will hurt the
> govt's ability to pay for everything.
> 
> A trend as shown by the above debt vs. GNP figures illustrates how strong our
> economy was/is and if continued, the debt would disappear in 40-50 years.
> The debt starts disappearing the day defecit spending stops...

-- 
Russ Anderson    |  Disclaimer: Any statements are my own and do not reflect
------------------              upon my employer or anyone else.  (c) 1992
EX-Twins' Jack Morris, 10 innings pitched, 0 runs (World Series MVP!)
Newsgroups: alt.fan.rush-limbaugh,talk.politics.misc